On February 12th, Eevia Health Plc (publ) (“Eevia”) announced that the Company has signed a term sheet agreement with an international partner for a global supply agreement of a nutraceutical ingredient. Additionally, Stein Ulve, CEO of Eevia, has, through a family holding company, subscribed to his pro-rata portion of shares (5,892,334 shares), amounting to SEK 530k, in the ongoing rights issue. Moreover, he has purchased an additional 219,450 shares and 31,350 TO1 warrants outside the market, also through a family holding company.
Analyst Group’s View of the News
The signing of a Term Sheet Agreement (TSA) with a global partner marks a significant milestone, offering Eevia access to an extensive international sales network. Albeit no final agreement has been signed, the TSA outlines key commercial terms that lay the foundation for an exclusive global supply agreement, signaling strong progress in Eevia’s partnership with the international corporation. While management anticipates steady rather than dramatic revenue growth, the agreement is expected to enhance revenue predictability and drive long-term demand, positioning Eevia for sustainable growth from 2025 onwards.
Simultaneously, Stein Ulve’s participation in the ongoing rights issue through Orcator Oy, along with the additional purchase of shares and warrants, signals strong confidence in Eevia’s future prospects, highlighting his belief in the company’s strategic direction and financial outlook.
The Term Sheet for Global Supply Agreement
The international partner, which Eevia has signed a term sheet agreement with, is part of a corporation generating over EUR 36bn in revenue with more than 66,000 employees. This agreement outlines key commercial terms for an upcoming exclusive Global Supply Agreement related to a nutraceutical ingredient.
Since signing an NDA in October 2023, the two companies have collaborated on a feasibility study, safety audits, and regulatory reviews, confirming the product’s safety. Eevia has also provided industrial-scale production and technical support, alongside ongoing clinical studies.
The final agreement, expected in the coming months, will grant Eevia access to the partner’s global sales network, enhancing potential revenue growth from 2025 and onward. The deal allows Eevia to focus on manufacturing and supply chain operations, while the partner drives sales and market expansion.
Share Purchase and Increase in Total Guaranteed Subscriptions
Eevia Health’s CEO, Stein Ulve, has reorganized his shareholdings by selling 2,726,717 shares to Orcator Oy, a holding company jointly owned with his spouse. In return, Ulve received shares in Orcator Oy, with both holding 50% stakes. Orcator Oy is classified as a Person Closely Associated (PCA) and now holds 2,946,167 shares (4.39% of Eevia’s outstanding shares), after acquiring an additional 219,450 shares and 31,350 Warrants (TO1) through off-market transactions.
Orcator Oy also subscribed to its pro-rata share in Eevia’s ongoing rights issue, amounting to 5,892,334 new shares for an investment of SEK 530k. Orcator Oy had previously provided a EUR 200k guarantee commitment in the current rights issue. Together with today’s subscription, the underwriting commitments amount to 23.8% of the total offering in the rights issue. Including guarantee commitments from other investors, 31.8% of the rights issue is now secured.
In summary, Eevia Health’s recent developments signal strong strategic progress. The Term Sheet Agreement with a global partner has the potential to be converted into a concrete contract, potentially generating additional revenue streams from 2025 onwards. Additionally, CEO Stein Ulve’s increased ownership highlights his strong belief in Eevia’s strategic direction. The increase in total guaranteed subscriptions, totaling approx. 32% of the rights issue, reflects solid support for the capital raise and boosts confidence in Eevia’s ability to secure the necessary funding for its growth plans.
How Analyst Group views Eevia Health as an investment
In Q4-24, Eevia launched a transformational restructuring plan to become a specialized provider of high-margin, science-backed health solutions, focusing on gut, kidney, and urinary health. By divesting assets related to Retinari™ and berry extract manufacturing, Eevia aims to streamline operations, enhance profitability, and adopt a capital-light business model, leveraging the Company’s expertise in bioactive compounds. This turnaround plan allows investors to retain exposure to former operations without the financial risks of plant extract production. With a clear strategy set by the new and experienced board, Eevia is well-positioned to capitalize on the expanding gut health market and recover to profitable growth, thereby unlocking the underlying value within the Company. Overall, Analyst Group believes the ongoing rights issue presents an attractive entry point for investors at a Pre-Money valuation of SEK 6.0m.
