Business Context and Reporting Period
This Form 6-K filing by Saverone 2014 Ltd. (the "Company") covers the month of July 2024, with a report date of July 17, 2024. The filing discloses the execution of a Standby Equity Purchase Agreement (SEPA) and related convertible promissory notes with YA II PN, Ltd. ("Yorkville"), a fund managed by Yorkville Advisors Global, LP.
Key Financial Metrics and Transaction Terms
- Commitment Amount: Up to $15 million in aggregate subscription for American Depository Shares (ADSs) over a commitment period ending July 16, 2027.
- Pre-Paid Advance: A total principal amount of $3,000,000 advanced via convertible promissory notes.
- $1,000,000 advanced on the Effective Date (July 16, 2024).
- $1,000,000 to be advanced upon filing of the Initial Registration Statement.
- $1,000,000 to be advanced on the second trading day after the effectiveness of the Initial Registration Statement.
- Original Issue Discount (OID): 3% of the principal amount of each Pre-Paid Advance, netted from the purchase price.
- Conversion Price: The lower of $0.5284 per ADS or 95% of the lowest daily VWAP during the 7 consecutive trading days preceding the conversion date, with a floor of $0.0868 per ADS.
- Maturity Date: January 16, 2026, unless converted or redeemed earlier.
- Interest Rates: Standard interest accrues on the notes; 18% per annum applies upon an event of default.
- Payment Premium: 10% of the principal amount paid upon optional redemption or monthly amortization payments.
Material Changes and Transaction Structure
The primary material change is the establishment of a new financing facility. The Company has secured a $15 million equity commitment and immediate access to $3 million in debt financing convertible into equity. The transaction includes a "Payment Premium" of 10% if the Company exercises its option to redeem the notes early or if an "Amortization Event" triggers mandatory monthly payments of $500,000 principal plus premium and interest. Yorkville has the right to require the Company to issue shares to offset the outstanding promissory note balance, subject to a 9.99% beneficial ownership limitation.
Guidance, Risks, and Contingencies
- Registration Rights: The Company must file an initial registration statement for the resale of ADSs within 21 calendar days of the agreement execution.
- Ownership Cap: Yorkville is not obligated to subscribe for shares if doing so would cause them to beneficially own more than 9.99% of the outstanding ADSs or Ordinary Shares.
- Default Risks: Upon an event of default, Yorkville may declare the full unpaid principal and interest immediately due and payable, with interest accruing at 18% per annum.
- Prepayment Restrictions: The Company generally may not prepay or redeem the notes except as specifically permitted (e.g., Optional Redemption with notice and premium).
Investor Verification Checklist
- Verify the current trading price of the Company's ADSs relative to the conversion price floor ($0.0868) and cap ($0.5284).
- Confirm the filing status and effectiveness date of the Initial Registration Statement required within 21 days of July 16, 2024.
- Review the definition of "Amortization Event" in the Promissory Notes to assess the risk of mandatory monthly principal payments.
- Assess the Company's current cash position to determine if the 10% Payment Premium on potential early redemption is financially viable.
- Check for any existing outstanding balances under prior promissory notes that might restrict the Company's ability to draw on the SEPA without Yorkville's consent.