Rail Vision(RVSN) - 2024 Q4 - Annual Report

Company Overview & Highlights Rail Vision reported strong revenue growth and significant operational progress for the full year 2024, driven by key orders and market expansion Executive Summary Rail Vision achieved strong revenue growth and operational progress in 2024, securing over $34 million in funding and transforming its business model to a comprehensive railway safety and analytics ecosystem - 2024 was a transformative year for Rail Vision, securing over $34 million in funding, delivering key orders to global industry leaders, and strengthening its U.S. market presence[2] - The company is moving beyond hardware to a complete railway safety and analytics ecosystem by expanding fleet management, data services, and cloud integration[2] About Rail Vision Ltd. Rail Vision is an AI-based technology company revolutionizing railway safety and data, aiming to enhance efficiency and advance autonomous train operations - Rail Vision is a development stage technology company seeking to revolutionize railway safety and the data-related market with cutting-edge, artificial intelligence-based technology[13] - The company's railway detection and systems are designed to save lives, increase efficiency, dramatically reduce expenses for railway operators, and potentially advance autonomous trains[13] Operational & Strategic Progress Rail Vision achieved significant commercial milestones in 2024-2025, securing new orders, completing national rail installations, and entering the Indian market Commercial Execution & Global Expansion Rail Vision achieved significant commercial milestones in 2024-2025, securing new orders, completing national rail installations, and entering the Indian market - Received a purchase order from a Central American freight operator for its MainLine system in early 2025[4] - Completed the first deliveries of MainLine systems related to a $1.4 million order from Israel Railways in 2024, marking the first-ever national rail installation of the Company's AI-based tech[4] - Secured an initial $1 million order in January 2024 from a leading U.S.-based rail services company, followed by a $200,000 follow-on order in June 2024[4] - Entered the Indian market through a non-binding MOU with Sujan Ventures, targeting thousands of locomotives operated by Indian Railways[4] Product Innovation The company advanced its product portfolio by launching an Active Control System for semi-autonomous train operation and introducing D.A.S.H., a proprietary SaaS platform designed to provide real-time operational insights and enhance safety - Launched an Active Control System enabling semi-autonomous train operation in collaboration with a U.S. rail company[4] - Introduced D.A.S.H., a proprietary SaaS platform delivering real-time operational insights and enhanced safety[4] Milestones and IP Protection Rail Vision gained regulatory approval for its MainLine System, triggering a $300,000 payment, and strengthened IP with new patents in the U.S. and Japan - Gained regulatory approval from Israel Railways for its MainLine System, unlocking a $300,000 milestone payment[5] - Secured a U.S. patent and received a notice of allowance in Japan for its AI-powered obstacle detection system[5] Financial Performance & Position Rail Vision's financial performance in 2024 showed significant revenue growth, but also a widened GAAP net loss primarily due to revaluation expenses, while its cash position substantially improved from financing activities Full Year 2024 Financial Results FY2024 revenues surged 815% to $1.3 million, operating loss decreased 21%, but GAAP net loss widened 175.5% to $30.7 million due to revaluation expenses Full Year 2024 Key Financials (in thousands) | Metric | FY2024 | FY2023 | Change (%) | | :-------------------------------- | :----- | :----- | :--------- | | Revenues | $1,300 | $142 | 815.5% | | Research & Development Expenses | $5,279 | $7,145 | -26.1% | | General & Administrative Expenses | $4,175 | $4,339 | -3.8% | | Operating Loss | $(9,004) | $(11,403) | -21.0% | | Revaluation of derivatives and warrants liabilities | $(20,181) | $0 | N/A | | Other financial expenses (income), net | $(1,523) | $255 | N/A | | GAAP Net Loss | $(30,708) | $(11,148) | 175.5% | | GAAP Loss Per Share | $(1.85) | $(4.30) | -57.0% | | Non-GAAP Net Loss | $(10,129) | $(10,875) | -6.9% | | Non-GAAP Loss Per Share | $(0.61) | $(4.20) | -85.5% | Second Half 2024 Financial Results H2 2024 revenues grew 380% to $539,000, operating loss decreased 11.1%, but GAAP net loss widened 20.2% to $6.4 million due to revaluation expenses Second Half 2024 Key Financials (in thousands) | Metric | H2 2024 | H2 2023 | Change (%) | | :-------------------------------- | :------ | :------ | :--------- | | Revenues | $539 | $142 | 279.6% | | Research & Development Expenses | $2,821 | $3,463 | -18.5% | | General & Administrative Expenses | $2,059 | $2,036 | 1.1% | | Operating Loss | $(4,819) | $(5,418) | -11.1% | | Revaluation of derivatives and warrants liabilities | $(1,346) | $0 | N/A | | Financial expenses (income), net | $(219) | $155 | N/A | | GAAP Net Loss | $(6,384) | $(5,313) | 20.2% | | GAAP Loss Per Share | $(0.30) | $(1.77) | -83.0% | | Non-GAAP Net Loss | $(4,736) | $(5,204) | -9.0% | | Non-GAAP Loss Per Share | $(0.23) | $(1.74) | -86.8% | Balance Sheet Highlights As of December 31, 2024, Rail Vision's cash and cash equivalents significantly increased to $17.5 million from $3.3 million at the end of 2023, primarily driven by proceeds from various financing activities Cash and Cash Equivalents (in millions) | Metric | As of Dec 31, 2024 | As of Dec 31, 2023 | Change | | :---------------------- | :----------------- | :----------------- | :----- | | Cash and cash equivalents | $17.5 | $3.3 | +$14.2M | Cash Position and Financing Activities Rail Vision secured over $34 million in gross proceeds during 2024 and Q1 2025 through a private placement, warrant exercises, and the establishment of an equity line facility. This funding significantly bolstered the company's cash position - Secured over $34 million in gross proceeds during 2024 and the first quarter of 2025 to fuel its business through various financing transactions, including a private placement, warrant exercises, and an equity line facility[9] - Established an equity line facility in October 2024 (amended in February 2025) with the right to sell up to $30.0 million of ordinary shares over 36 months[9] - As of the report date, the Company has issued 22,210,892 ordinary shares for aggregate gross proceeds of approximately $18.3 million under the equity line facility[9] Use of Non-GAAP Financial Results Rail Vision presents non-GAAP net loss, excluding stock-based compensation and derivative revaluation, to provide clearer operational insights, emphasizing its use alongside GAAP measures - The company's earnings release contains non-GAAP financial measures of net loss that exclude stock-based compensation expenses and revaluation of derivative warrant liabilities[11] - Management believes non-GAAP information is useful for investors' understanding and assessment of ongoing operations and uses both GAAP and non-GAAP internally[11] - Non-GAAP financial measures should not be considered in isolation or as a substitute for GAAP measures, and investors are encouraged to review reconciliations to GAAP[11] Consolidated Financial Statements This section presents Rail Vision's audited consolidated financial statements, including balance sheets, statements of comprehensive loss, changes in shareholders' equity, and cash flows, providing a detailed view of the company's financial position and performance Balance Sheets The balance sheets present Rail Vision's financial position as of December 31, 2024, and 2023. Key changes include a substantial increase in cash and cash equivalents, total current assets, and total shareholders' equity, reflecting successful financing activities Balance Sheet Summary (U.S. dollars in thousands) | Metric | As of Dec 31, 2024 | As of Dec 31, 2023 | | :-------------------------- | :----------------- | :----------------- | | Cash and cash equivalents | $17,238 | $3,066 | | Total current assets | $19,703 | $4,602 | | Total assets | $20,597 | $5,921 | | Total liabilities | $2,895 | $3,134 | | Total shareholders' equity | $17,702 | $2,787 | Statements of Comprehensive Loss This statement details the company's revenues, expenses, and net loss for the full year and second half ended December 31, 2024. It shows significant revenue growth but also a substantial increase in net loss, primarily driven by the revaluation of derivatives and warrants liabilities Statements of Comprehensive Loss Summary (U.S. dollars in thousands) | Metric | Year ended Dec 31, 2024 | Year ended Dec 31, 2023 | Six months ended Dec 31, 2024 | Six months ended Dec 31, 2023 | | :-------------------------------- | :---------------------- | :---------------------- | :---------------------------- | :---------------------------- | | Revenues | $1,300 | $142 | $539 | $142 | | Cost of revenues | $(850) | $(61) | $(478) | $(61) | | Gross profit | $450 | $81 | $61 | $81 | | Research and development expenses | $(5,279) | $(7,145) | $(2,821) | $(3,463) | | General and administrative expenses | $(4,175) | $(4,339) | $(2,059) | $(2,036) | | Operating loss | $(9,004) | $(11,403) | $(4,819) | $(5,418) | | Revaluation of derivatives and warrants liabilities | $(20,181) | $0 | $(1,346) | $0 | | Other financing income (expenses), net | $(1,523) | $255 | $(219) | $105 | | Net loss for the period | $(30,708) | $(11,148) | $(6,384) | $(5,313) | | Basic and diluted loss per share | $(1.85) | $(4.30) | $(0.30) | $(1.77) | | Weighted average number of shares outstanding | 16,625,543 | 2,587,290 | 20,984,913 | 2,998,278 | Statements of Changes in Shareholders' Equity The audited statements of changes in shareholders' equity for 2023 and 2024 show a significant increase in total shareholders' equity, primarily driven by substantial increases in additional paid-in capital from new share issuances and warrant exercises, despite a growing accumulated deficit from net losses Changes in Shareholders' Equity (U.S. dollars in thousands) | Metric | As of Jan 1, 2023 | As of Dec 31, 2023 | As of Dec 31, 2024 | | :-------------------------- | :---------------- | :----------------- | :----------------- | | Ordinary Shares (Number) | 1,987,005 | 2,998,278 | 37,943,891 | | Ordinary Shares (USD) | $46 | $68 | $0 | | Additional paid in capital | $63,033 | $68,681 | $114,372 | | Accumulated deficit | $(54,814) | $(65,962) | $(96,670) | | Total shareholders' equity | $8,265 | $2,787 | $17,702 | - During 2024, significant increases in additional paid-in capital resulted from the issuance of shares and pre-funded warrants ($1,404k), exercise of warrants ($25,561k), and issuance of ordinary shares related to the SEPA ($12,117k)[21] Statements of Cash Flows The statements of cash flows highlight that while the company continued to use cash in operating and investing activities, significant cash was provided by financing activities, leading to a substantial increase in cash, cash equivalents, and restricted cash at the end of 2024 Cash Flow Summary (U.S. dollars in thousands) | Metric | Year ended Dec 31, 2024 | Year ended Dec 31, 2023 | Six months ended Dec 31, 2024 | Six months ended Dec 31, 2023 | | :-------------------------------- | :---------------------- | :---------------------- | :---------------------------- | :---------------------------- | | Net cash used in operating activities | $(9,682) | $(10,518) | $(5,087) | $(5,109) | | Net cash used in investing activities | $(30) | $(152) | $(24) | $(15) | | Net cash provided by financing activities | $23,918 | $5,397 | $12,644 | $(63) | | Increase (Decrease) in cash, cash equivalents and restricted cash | $14,179 | $(5,203) | $7,562 | $(5,117) | | Cash, cash equivalents and restricted cash at the end of the period | $17,468 | $3,289 | $17,468 | $3,289 | Reconciliation of GAAP to Non-GAAP Results This section provides an unaudited reconciliation of GAAP net loss to non-GAAP net loss, adjusting for stock-based compensation expenses and revaluation of derivative warrant liabilities. The non-GAAP net loss was lower than the GAAP net loss for both the full year and second half of 2024, offering an alternative view of operational performance GAAP to Non-GAAP Net Loss Reconciliation (U.S. dollars in thousands) | Metric | Year ended Dec 31, 2024 | Year ended Dec 31, 2023 | Six months ended Dec 31, 2024 | Six months ended Dec 31, 2023 | | :---------------------------------------- | :---------------------- | :---------------------- | :---------------------------- | :---------------------------- | | GAAP operating loss | $(9,004) | $(11,403) | $(4,819) | $(5,418) | | Stock-based compensation in R&D expenses | $120 | $62 | $102 | $34 | | Stock-based compensation in G&A expenses | $126 | $212 | $48 | $75 | | Non-GAAP operating loss | $(8,758) | $(11,129) | $(4,669) | $(5,309) | | GAAP Revaluation of derivatives and warrants liabilities expenses | $(20,181) | $0 | $(1,346) | $0 | | Revaluation of derivative warrant liabilities | $20,181 | $0 | $1,346 | $0 | | Non-GAAP Revaluation of derivatives and warrants liabilities expenses | $0 | $0 | $0 | $0 | | GAAP Other financing income (expenses), net | $(1,523) | $255 | $(219) | $105 | | Revaluation of derivative warrant liabilities (adjustment) | $152 | $0 | $152 | $0 | | Non-GAAP Other financing income (expenses), net | $(1,371) | $255 | $(67) | $105 | | GAAP net loss | $(30,708) | $(11,148) | $(6,384) | $(5,313) | | Stock-based compensation expenses | $398 | $273 | $302 | $109 | | Revaluation of derivative warrant liability expenses | $20,181 | $0 | $1,346 | $0 | | Non-GAAP net loss | $(10,129) | $(10,875) | $(4,736) | $(5,204) | | GAAP Basic and diluted loss per share | $(1.85) | $(4.30) | $(0.30) | $(1.77) | | Non-GAAP Basic and diluted loss per share | $(0.61) | $(4.20) | $(0.23) | $(1.74) | | Weighted average number of shares outstanding | 16,625,543 | 2,587,290 | 20,984,913 | 2,998,278 | Other Information This section provides supplementary information including details on SEC filings, forward-looking statements, and company contact information SEC Filings Rail Vision's annual report on Form 20-F for the year ended December 31, 2024, has been filed with the U.S. Securities and Exchange Commission and is available on the company's investor relations website. Shareholders can request a hard copy free of charge - A copy of Rail Vision's annual report on Form 20-F for the year ended December 31, 2024, has been filed with the U.S. Securities and Exchange Commission and posted on Rail Vision's investor relations website[10] - Rail Vision will deliver a hard copy of its annual report, including its complete audited consolidated financial statements, free of charge, to its shareholders upon request[10] Forward-Looking Statements This standard disclaimer indicates the press release contains forward-looking statements subject to risks and uncertainties, with no obligation to update except as required by law - This press release contains 'forward-looking statements' based on management's current expectations, beliefs, and projections, many of which are inherently uncertain[14] - Actual results may differ materially from forward-looking statements due to risks and uncertainties detailed in the Company's reports filed with the SEC, including its annual report on Form 20-F[14] - The Company assumes no obligation to update forward-looking statements to reflect actual results, subsequent events, or changes in assumptions, except as required by applicable securities laws[14] Contacts This section provides contact information for Rail Vision Ltd.'s Chief Executive Officer, Shahar Hania, and for Investor Relations inquiries - Contact information for Shahar Hania, Chief Executive Officer, and Michal Efraty for Investor Relations is provided[15]