Exhibit 99.2
Rail Vision Ltd.
INTERIM CONDENSED FINANCIAL STATEMENTS
As of June 30, 2024
U.S. DOLLARS IN THOUSANDS
(Except share and per share data)
(UNAUDITED)
Rail Vision Ltd.
INTERIM CONDENSED FINANCIAL STATEMENTS
As of June 30, 2024
U.S. DOLLARS IN THOUSANDS
(Except share and per share data)
(UNAUDITED)
INDEX
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Rail Vision Ltd.
INTERIM CONDENSED BALANCE SHEETS
(U.S. dollars in thousands, except share data and per share data)
| June 30, 2024 | December 31, 2023 | |||||||
| Unaudited | Audited | |||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | $ | ||||||
| Restricted cash | ||||||||
| Accounts receivable | ||||||||
| Inventories | ||||||||
| Other current assets | ||||||||
| Total current assets | ||||||||
| Non-current Assets: | ||||||||
| Operating lease - right of use asset | ||||||||
| Fixed assets, net | ||||||||
| Total assets | ||||||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
| Current liabilities | ||||||||
| Trade accounts payables | ||||||||
| Current operating lease liability | ||||||||
| Other accounts payable | ||||||||
| Total current liabilities | ||||||||
| Non-current operating lease liability | ||||||||
| Total liabilities | ||||||||
| Shareholders’ equity | ||||||||
| Ordinary shares | ||||||||
| Additional paid in capital | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Total shareholders’ equity | ||||||||
| Total liabilities and shareholders’ equity | ||||||||
The accompanying notes are an integral part of the financial statements.
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Rail Vision Ltd.
UNAUDITED INTERIM CONDENSED STATEMENTS OF COMPREHENSIVE LOSS
(U.S. dollars in thousands, except share data and per ordinary share data)
| Six months ended | ||||||||
| June 30, | ||||||||
| 2024 | 2023 | |||||||
| Revenues | $ | $ | ||||||
| Cost of revenues | ( | ) | ||||||
| Gross profit | ||||||||
| Research and development expenses | ( | ) | ( | ) | ||||
| General and administrative expenses | ( | ) | ( | ) | ||||
| Operating loss | ( | ) | ( | ) | ||||
| Financial (expenses) income: | ||||||||
| Revaluation of derivative warrant liabilities | ( | ) | ||||||
| Other financing income (expenses), net | ( | ) | ||||||
| Net loss for the period | ( | ) | ( | ) | ||||
| ( | ) | ( | ) | |||||
The accompanying notes are an integral part of the financial statements.
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Rail Vision Ltd.
UNAUDITED INTERIM CONDENSED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY
(U.S. dollars in thousands, except share data and per share data)
| Ordinary Shares | Additional | Total | ||||||||||||||||||
| Number of shares | USD | paid in capital | Accumulated Deficit | shareholders’ equity | ||||||||||||||||
| Balance as of January 1, 2024 | ( | ) | ||||||||||||||||||
| Cancelation of the par value of ordinary shares (See Note 3E) | – | ( | ) | |||||||||||||||||
| Issuance of units of ordinary shares and pre-funded warrants, net of issuance costs (*) | (**) | |||||||||||||||||||
| Exercise of warrants to ordinary shares, net of issuance costs (***) | ||||||||||||||||||||
| Classification of warrant liabilities to equity warrants (See Note 3A) | – | |||||||||||||||||||
| Share-based payment | – | |||||||||||||||||||
| Net loss for the period | – | ( | ) | ( | ) | |||||||||||||||
| Balance as of June 30, 2024 | ( | ) | ||||||||||||||||||
| (*) | |
| (**) | |
| (***) |
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Rail Vision Ltd.
UNAUDITED INTERIM CONDENSED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (Cont.)
(U.S. dollars in thousands, except share data and per share data)
| Ordinary Shares | Additional | Total | ||||||||||||||||||
| Number
of shares | USD | paid
in capital | Accumulated Deficit | shareholders’ equity | ||||||||||||||||
| Balance as of January 1, 2023 | ( | ) | ||||||||||||||||||
| Issuance of shares as a result of exercise of warrants | ( | ) | ||||||||||||||||||
| Issuance of units of ordinary shares and warrants, net of issuance costs (*) | ||||||||||||||||||||
| Share-based payment | – | |||||||||||||||||||
| Net loss for the period | – | ( | ) | ( | ) | |||||||||||||||
| Balance as of June 30, 2023 | ( | ) | ||||||||||||||||||
| (*) |
The accompanying notes are an integral part of the consolidated financial statements.
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Rail Vision Ltd.
INTERIM CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED)
(U.S. dollars in thousands)
| Six months ended June 30, | ||||||||
| 2024 | 2023 | |||||||
| Cash flows from operating activities | ||||||||
| Net loss for the period | $ | ( | ) | $ | ( | ) | ||
| Adjustments to reconcile loss to net cash used in operating activities: | ||||||||
| Depreciation | ||||||||
| Share-based payment | ||||||||
| Change in operating lease liability | ( | ) | ( | ) | ||||
| Effect of exchange rate changes on cash and cash equivalents | ||||||||
| Revaluation of derivative warrant liabilities | ||||||||
| Amortization of a discount related to a convertible loan credit facility | ||||||||
| Changes in operating assets and liabilities: | ||||||||
| Increase in accounts receivables | ( | ) | ||||||
| Increase in other current assets | ( | ) | ( | ) | ||||
| Decrease (increase) in Inventories | ( | ) | ||||||
| Increase (decrease) in trade accounts payable | ( | ) | ||||||
| Increase (decrease) in other accounts payable | ( | ) | ||||||
| Net cash used in operating activities | ( | ) | ( | ) | ||||
| Cash flows from investing activities | ||||||||
| Purchase of fixed assets | ( | ) | ( | ) | ||||
| Net cash used in investing activities | ( | ) | ( | ) | ||||
| Cash flows from financing activities: | ||||||||
| Proceeds from a convertible loan credit facility and issuance of warrants | ||||||||
| Payments on convertible loan credit facility | ( | ) | ||||||
| Proceeds from exercise of warrants, net of issuance expenses | ||||||||
| Proceeds from issuance of shares and warrants, net of issuance expenses | ||||||||
| Net cash provided by financing activities | ||||||||
| Effect of exchange rate changes on cash and cash equivalents | ( | ) | ||||||
| Increase (Decrease) in cash, cash equivalents and restricted cash | ( | ) | ||||||
| Cash, cash equivalents and restricted cash at the beginning of the period | ||||||||
| Cash, cash equivalents and restricted cash at the end of the period | $ | $ | ||||||
| Non Cash Activities: | ||||||||
| Conversion of a convertible loan credit facility to ordinary shares | ||||||||
| Issuance expenses recorded in other accounts payables | ||||||||
The accompanying notes are an integral part of the consolidated financial statements.
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Rail Vision Ltd.
Notes to the Interim Condensed Consolidated Financial Statements (Unaudited)
(U.S. dollars in thousands, except share and per share data and exercise prices)
NOTE 1 – GENERAL
| A. | Reporting Entity |
Rail Vision Ltd. (the “Company”) was incorporated and registered in Israel on April 18, 2016. The Company is a development-stage technology company that is engaged in the design, development and assembly of railway detection systems designed to solve the challenges in railway operational safety, efficiency and predictive maintenance. The Company’s railway detection systems include different types of cameras, including optics, visible light spectrum cameras (video) and thermal cameras that transmit data to a ruggedized on-board computer which is designed to be suitable for the rough environment of a train’s locomotive.
These interim condensed financial statements should be read in conjunction with the Company’s audited financial statements as of December 31, 2023 and for the year ended on that date, and the accompanying notes included in the Company’s Annual Report on Form 20-F, filed with the Securities and Exchange Commission on March 28, 2024.
The Company’s activities are subject to significant risks and uncertainties. The Company has incurred significant losses since the date of its inception, and anticipates that it will continue to incur significant losses until it will be able to successfully commercialize its products. Failure to obtain this necessary capital when needed may force the Company to delay, limit or terminate its product development efforts or other operations. In addition, the Company is subject to risks from, among other things, competition associated with the industry in general, other risks associated with financing, liquidity requirements, rapidly changing customer requirements, the loss of key personnel and the effect of planned expansion of operations on the future results of the Company.
To date, the Company has not generated significant revenues from its activities and has incurred substantial operating losses. Management expects the Company to continue to generate substantial operating losses and to continue to fund its operations primarily through the utilization of its current financial resources, sales of its products, and through additional raises of capital.
As described in note 3A and note 3B,
during the reported period and subsequent to the balance sheet date, the Company raised approximately $
NOTE 2 – BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES
| A. |
The accompanying unaudited interim condensed financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information. Accordingly, they do not include all the information and footnotes required by GAAP for complete financial statements. In management’s opinion, the unaudited interim financial statements have been prepared on the same basis as the annual financial statements and reflect all adjustments, which include only normal recurring adjustments necessary for the fair presentation of the Company’s financial position as of June 30, 2024, and the Company’s results of operations and cash flows for the six months ended June 30, 2024, and 2023. For further information, reference is made to the financial statements and footnotes thereto included in the Company’s Annual Report on Form 20-F for the year ended December 31, 2023.
The results of operations for the six months ended June 30, 2024, are not necessarily indicative of the results that may be expected for the year ending December 31, 2024.
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Rail Vision Ltd.
Notes to the Interim Condensed Consolidated Financial Statements (Unaudited)
(U.S. dollars in thousands, except share and per share data and exercise prices)
NOTE 2 – BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (Cont.)
| B. |
The significant accounting policies followed in the preparation of these unaudited interim condensed financial statements are identical to those applied in the preparation of the latest annual financial statements, other than:
Warrants liabilities
The Company evaluated the warrants in accordance with ASC 815 “Derivatives and Hedging - Contracts in Entity’s Own Equity” (“ASC 815”) and concluded that a provision in the warrant agreement related to certain tender or exchange offers precludes the warrants from being accounted for as components of equity. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent period end date while the warrants are outstanding. As the warrants meet the definition of a derivative as contemplated in ASC 815, the warrants are recorded as derivative liabilities on the balance sheet and measured at fair value at inception and at each reporting date thereafter in accordance with ASC 820 “Fair Value Measurement” (“ASC 820”), with changes in fair value recognized in the condensed statements of comprehensive loss in the period of change.
Fair Value of Financial Instruments
ASC 820 “Fair Value Measurements and Disclosures” (“ASC 820”), defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required to be recorded at fair value, the Company considers the principal or most advantageous market in which it would transact. The Company also considers assumptions that market participants would use when pricing the asset or liability, such as, inherent risk, transfer restrictions and risk of nonperformance. Hierarchical levels are directly related to the amount of subjectivity with the inputs to the valuation of these assets or liabilities as follows:
Level 1 - Observable inputs such as unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date;
Level 2 - Inputs (other than quoted prices included in Level 1) are either directly or indirectly observable inputs for similar assets or liabilities. These include quoted prices for identical or similar assets or liabilities in active markets and quoted prices for identical or similar assets of liabilities in markets that are not active;
Level 3 - Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.
The carrying values of cash and cash equivalents, restricted cash, accounts receivable, trade accounts payable, accrued expenses and employees and related expenses recorded in other accounts payable, approximate their fair value due to the short-term maturity of these instruments.
The Company’s warrants liability was classified within Level 3 of the fair value hierarchy because of the volatility input incorporated in the Company’s Black-Scholes model at inception and on subsequent valuation dates involves unobservable inputs. The warrant liability was classified to equity on June 29, 2024. As of June 30, 2024, no liabilities were classified within level 3 of the fair value hierarchy.
| C. |
The preparation of financial statements in conformity with GAAP requires management to make estimates, judgments and assumptions that affect the amounts reported in the financial statements and accompanying notes. Management believes that the estimates, judgments and assumptions used are reasonable based upon information available at the time they are made. Actual results could differ from those estimates.
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Rail Vision Ltd.
Notes to the Interim Condensed Consolidated Financial Statements (Unaudited)
(U.S. dollars in thousands, except share and per share data and exercise prices)
NOTE 3 – SIGNIFICANT EVENTS IN THE REPORTING PERIOD
| A. | Execution of Credit Facility Agreement and Issuance of Facility Warrant |
On January 9, 2024, the Company entered
into the Facility Agreement for a $
The Credit Facility, which had an initial
term of 10 months, accrued interest at a rate of
After the Credit Facility was exhausted,
the Company was able to draw down the Additional Loans in an aggregate amount up to $
In the event that the Company entered
into an alternate credit facility on more favorable terms, the Lender’s funding obligations under the Credit Facility were to decrease
with respect to the amount actually received by the Company under such alternate credit facility. The Lender’s financing obligations
were to terminate in the event the Company drew down $
Until the Company closed one or more
equity financing transactions in an aggregate amount of at least $
In addition, the loan, together with
accrued interest, was required to be repaid at a rate of
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Rail Vision Ltd.
Notes to the Interim Condensed Consolidated Financial Statements (Unaudited)
(U.S. dollars in thousands, except share and per share data and exercise prices)
NOTE 3 – SIGNIFICANT EVENTS IN THE REPORTING PERIOD (Cont.)
| A. | Execution of Credit Facility Agreement and Issuance of Facility Warrant (Cont.) |
As part of the Facility Agreement,
the Company issued a warrant (the “Facility Warrant”) to the Lender to purchase
The Facility Warrants were classified on the issuance date to warrant liabilities, as they were not considered indexed to the Company’s own equity.
The fair value of the Facility Warrants
at issuance date was $
The January 2024 PIPE, as defined and
detailed in Note 3B below, triggered an anti-dilution protection and accordingly the exercise price of the Facility Warrant was adjusted
to $
As of June 30, 2024,
The Facility Warrant agreement includes
some provisions that expired on June 29, 2024. The Company reassessed the Facility Warrants’ current terms and concluded that they were
no longer classified as a liability and that they are considered indexed to the Company’s own equity. As a result, the Company classified
its warrant liabilities to additional paid in capital in the amount of $
Subsequent to June 30, 2024 additional
| B. | January 2024 private placement (“PIPE”) |
On January 18, 2024, the Company entered
into a binding term sheet directly with a global investment firm (the “Lead Investor”) for the purchase and sale in a private
placement (the “January 2024 PIPE”) of units (the “Units”) to the Lead Investor and other investors (collectively,
the “Investors”). Each Unit consists of (i)
On January 30, 2024, the Company entered
into the definitive securities purchase agreement with the Investors for the issue of
The PIPE Pre-Funded Warrants are immediately
exercisable at an exercise price of $
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Rail Vision Ltd.
Notes to the Interim Condensed Consolidated Financial Statements (Unaudited)
(U.S. dollars in thousands, except share and per share data and exercise prices)
NOTE 3 – SIGNIFICANT EVENTS IN THE REPORTING PERIOD (Cont.)
| B. | January 2024 private placement (“PIPE”) (Cont.) |
In
connection with the closing of the January 2024 PIPE, the Company exercised its conversion
right pursuant to the Credit Facility to convert $
The PIPE Common Warrants and the Facility Conversion Common Warrant were classified on the issuance date to warrant liabilities, as they were not considered indexed to the Company’s own equity.
As
of June 30, 2024, all of the January 2024 PIPE Pre-Funded Warrants, the Facility Conversion
Pre-Funded Warrants, the Facility Conversion Common Warrants and the January 2024
PIPE Warrants have been exercised resulting in gross proceeds of approximately $
| C. | A Leading US-Based Rail & Leasing Services Company Orders Rail Vision Switch Yard Systems Valued at Up to $5 Million |
On January 17, 2024, a leading US-based rail and leasing services company signed a supply contract with the Company for the purchase of the Company’s Switch Yard Systems.
The first phase of the contract is
valued at $
In April 2024, the Company received
an initial purchase order amounting to approximately $
In June 2024, the Company received
a follow-on order from this customer in the amount of approximately $
As of June 30, 2024, a payment received
from this customer in the amount of $
| D. | In January 2024, investors from a private placement from May 2023 exercised |
| E. | On February 21, 2024, the Company convened an extraordinary general meeting of shareholders (the “Meeting”).
At the Meeting, the shareholders of the Company approved (i) the cancelation of the par value of the Company’s registered and issued
ordinary shares; (ii) an increase of the Company’s registered share capital from |
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Rail Vision Ltd.
Notes to the Interim Condensed Consolidated Financial Statements (Unaudited)
(U.S. dollars in thousands, except share and per share data and exercise prices)
NOTE 3 – SIGNIFICANT EVENTS IN THE REPORTING PERIOD (Cont.)
| F. | Purchase Order from Loram, a Top US-Based Railway Track Maintenance Supplier |
In April 2024, the Company received an order for its Switch Yard System from Loram, a leading US- based provider of railway track maintenance equipment and services.
In June 2024, the Company completed
the successful delivery and installation of its Shunting Yard product to Loram. This installation fulfills the above mentioned purchase
order and marks the beginning of a pilot project aimed at enhancing Loram’s rail track maintenance operations with the Company’s
advanced technology. During the six months ended June 30, 2024, the Company recognized revenues from the sale of the system and the related
services in the total amount of approximately $
| G. | Israel Railways Commercial Agreement: |
In January 2023, the Company signed
an agreement with Israel Railways for the purchase by Israel Railways of ten Rail Vision Main Line Systems and related services for a
total amount of approximately $
In February 2024, the Company completed
the first installation of its Main Line Systems in Israel Railways. During the six months ended June 30, 2024, the Company recognized
revenues from this agreement in the total amount of approximately $
| H. | Purchase Order from a Leading Latin America Mining Company |
On October 17, 2023, the Company received
a purchase order in the amount of $
In June 2024, the Company received
a follow-on order from this customer for additional services, in the amount of approximately $
In June 2024, the Company completed
a successfully installation of its system at the LATAM mining company and led training sessions for the mining company’s team.
Accordingly, during the six months ended June 30, 2024, the Company recognized revenues from the above mentioned purchase orders, in the
total amount of approximately $
| I. | Purchase Order from a Class 1 US Railroad Company |
On March 11, 2024, the Company received an order for its Switch Yard System from a Class 1 freight rail company in the US. The freight rail company will install and use the system on its locomotive for evaluation and testing different scenarios related to safety.
On June 10, 2024, the Company completed
the successful installation of its Shunting Yard product for this customer and the customer will use the system on its locomotive for
evaluation in different scenarios related to safety and efficiency during a few months trial, expected to be completed in November 2024. As
the delivery of the system and the provision of services during the trial period were identified by the Company as a single performance
obligation, as of June 30, 2024, a payment received from this customer in the amount of $
NOTE 4 – SUBSEQUENT EVENTS
| A. | Exercise of Facility Warrants - see Note 3A above. |
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