TDLR: $RVSN is still at a very reasonable SP and has the potential to climb much higher. In light of the rapidly evolving situation, I have decided to issue a new DD for the end of January 2025. In addition to this, I also believe the probability of double-digits by the end of January is continually increasing. The company, even at $3 is still undervalued. Whilst the price may fluctuate and fall below $3 in the coming days, I am confident that the price will still increase from here by the end of January 2025. In this post, I will explain my reasons why. **Introduction** • When considering that the stock has run up so much without these primary catalysts, I believe that the stock has much further to climb, and the increase we have seen is only just the beginning. **Breakdown of the 400% run** • The catalyst of the 400% run has been membership of the MxV railroad program and the announcement of the Israeli patent which saw $300,000 in additional immediately available cash. • These catalysts are relatively minor compared to my two main catalysts, which I originally thought would drive a huge run-up: **Section 1: Financials** H2 2024 Financials Since my first DD, my confidence that the H2 2024 earnings will be released in early January has increased. The reason why I’m intrigued by DD is that the senior management team will be strategically attempting to consolidate the SP above $1 as far as possible in advance of the 21 Jan NASDAQ compliance deadline. Since then, an increasing number of stock brokers are beginning to call the earnings for early January. For example, the NASDAQ website lists their production for earnings as the 3rd of January. I believe that any share price before the release of the earnings will be a fantastic buy-in as I expect that the earnings will trigger a major run-up in the SP. **Financial Analysis** • Revenue Improvements: 2023-year financials indicate quite an intimidating EPS of -$4.31. Comparing this to the H1 2024 report, however, it is more promising, as the EPS loss decreased by 53.8% to $-1.99 (swinging towards profit). There are multiple reasons for this which also explain why I think the EPS is only set to improve in the H2 2024 financials. • From June to EOY 2023 R&D expenses were $3.682m. By June 2024 this had decreased to $2.458m. I believe that the reason for this is that they are beginning to exit their growth stage where they burn through cash to develop their products. Now, they are developed, so are beginning to decrease R&D spending. • They have secured contracts internationally, showing that they are capable of penetrating the rail industry. This also indicates there is indeed demand for the products they have spent millions on developing. I will explore these in the next section. • Financial Health: Despite operating at a loss since 2022 when it became listed (and likely before that since 2016), financials indicate that $RVSN has maintained good financial health. • Debt-to-equity ratio: 0.2216 - this is huge. This indicates that they have far more equity than debt. Considering that they have been losing millions for years, this is a testament to the competence of their senior management team. Revenue: Although 2023 showed alarmingly little revenue ($142,000) this can be put down to GAAP principles 2023 earnings report says a $500,000 c v for a mining company was fulfilled, but only in December. Thus it is likely the case that they did not receive the $500,000 in time to be able to declare it on their financials. Consequently, this is instead reflected in the H1 2024 financials, where $761,000 in revenue was declared. This is AT LEAST a 57.7% increase. I say at least because this does not include the money from the installation of their systems at a "leading global mining company", as well as other potential sources of revenue indicated by PRs. • Even more important to note is that this only includes the first contract with the first LATAM mining company, and smaller deals implementing their systems in Israel (worth $261,000). • As a result these financials do not include the massive $1m contract with a "leading US-based rail" service. The contract also allows for an additional $5m in follow-on orders, $200,000 of which was declared shortly after the initial $1m contract was closed. • On the $1.2m contract alone their revenue will be at an ATH, surpassing the high of 888K USD in 2021. • The as-of-yet undeclared revenue is NOT factored into the share price. • P/B Ratio: 0.451 — this means that the stock is trading at 45.1% of the value of its assets. This indicates it is undervalued relative to its assets. • EV/Sales: -2 — this indicates mark revenue is lower than its cash holdings. This further underscores its undervaluation. • (This is another reason why the EPS will become even smaller, as revenues increase and R&D spending decreases.) • **Standby Equity Purchase Agreement**: In October 2024 RVSN announced a deal with Yorkville Advisors Global giving RVSN to sell this hedge fund $20m in shares at a 3% discount. Whilst this may cause you to be bearish as it suggests financial difficulties and potential dilution, my view is still bullish. • Securing a deal with a large holding company, holding assets >$6bn, indicates that they are also bullish on this stock and see high potential value in it. The backing of such a large institutional investor is more reason to be bullish than bearish. • This seems to me more of a safety measure, indicating good financial practice on behalf of the senior management team. I do not think they will need to execute this for the time being given the promising financials I have already explored. They are just securing this as a "fail-safe" (in my interpretation). • Additionally a SEPA is far better than going into debt by taking loans. **Section Summary**: Reading between the lines, the financials are incredibly promising and indicate an upward trend. The company will see its highest-ever revenue in the H2 2024 earnings report. The size of the loss will substantially decrease and EPS will decrease even more. This is not taken into account in the market price, further entrenching my bullish view of the stock. Explaining the sources of revenue for H2 2024 • Recent PR: Since the H1 earnings report there are numerous instances of PR which I believe will be significant sources of revenue, which will add on to the $1.2m we are already expecting. • Global Mining Company: In July 2024, $RVSN announced the completion of a contract with a "leading global mining company" to install their MainLine product. This is the second contract with a LATAM mining company, showing that they are successfully penetrating this market. It was likely a very large order, given that the mining company operates "2000km" of track (vertically integrated). For reference, this is 2x the length of the AMTRAK northeastern corridor from Boston to DC. • This means they will have a large cargo fleet, suggesting a higher-value contract. Revenue generated from this has not been formally announced but will be in the H2 2024 financial report in March. This will add at least another $200,000 to the initial $1.2m. ———— • After some more in-depth analysis I believe I have pinned down the client: Vale SA. It is the only company I have found that operates >2000km track and owns 10+ ports. This makes sense given it is perhaps the largest mining company in South America. If it is indeed Vale SA, this would likely be a huge deal. Vale SA owns 8000 locomotives. A deal to fit the Al systems on the Vale SA fleet would be monetarily significant. I would predict $1m+. This guesstimate and prediction that the client is Vale SA is, however, speculative. • Active Control System: In November 2024, $RVSN announced the completion of another one of their products: an Al system to make trains semi-autonomous. In the PR it becomes clear that they have formed a partnership and potentially contract with "a major US-railway company". It was developed in "collaboration" with them and will have rolled out on the "customer's" (indicating a financial transaction → more revenue) fleet by the end of 2024. • Another source of revenue, adding on to the others... ———— • RVSN Roadmap Program: Just yesterday (24 Dec) RVSN announced that they will be joining MxV's roadmap program to lobby to improve the efficiency and safety of rail across North America. In doing so, they are positioning themselves as a leader in this industry, opening up even more potential sources of revenue as their Al systems become integrated into the roadmap program. • MxV is the subsidiary advisory body to the Association of American Railroads, meaning this program is centrally directed by them. The AAR contains 18 of the largest railway companies in North America, including Union Pacific and AMTRAK (together with over $40bn in revenue). • Thus, RVSN is positioning itself to be the provider of their safety systems to these American titans. Currently, there is no information indicating any of RVSN's competitors are in the MxV program as well, meaning RVSN is strategically positioned to outperform its competitors. ——— **Section 2: Confirmation of NASDAQ** Compliance At the time of my first DD, a significant concern was that $RVSN was at risk of NASDAQ delisting as a deadline had been set for 21 Jan to regain compliance. As a result, many had anxieties that $RVSN was at risk of a reverse stock split, diluting existing shares. However, as I predicted after $RVSN first ran above $1, the share price has not since fallen below it, and will continue to remain firmly above it for the remainder of the countdown days until NASDAQ recompliance. ——— Thus, once compliance is confirmed at the end of the 10 days, I expect that the stock will see a significant uptick as buying pressure increases. This will contribute greatly towards achieving the PT of $7. Section 3: Shift toward perfect information As awareness of $RVSN has increased, there has been an increasing number of people investigating this stock and its potential. ——— 1. $2.4bn government investment to "improve safety, strengthen supply chains" in freight and passenger rail networks • $RVSN could directly benefit from these efforts to modernize American rail, suggesting further opportunities for growth and scalability. 1. $RVSN secures Israel Railways certification, unlocks approval for MainLine product • Additional $300,000 revenue. Whilst unlikely to be reported in the H2 2024 financials, this is an early source of revenue that will be reported in H1 2025. • Increasing confidence that this stock is good for a long hold. ————— 1. Feb 2024: $RVSN forms collaborative partnership with $NVIDIA alongside market leaders such as Dell, Supermicrocomputer • Strategic positioning to receive the best Al technology worked on by the current Al giants. • Possible decrease in R&D costs due to collaboration. Section 4: Institutional ownership Institutional Ownership and Shareholders • Rail Vision Ltd. (US: RVSN) has 14 institutional owners and shareholders that have filed 13D/G or 13F forms with the Securities Exchange Commission (SEC). These institutions hold a total of 1,032,609 shares. The largest shareholders include AMH Equity Ltd, UBS Group AG, LPL, Financial LLC, Cambridge Investment Research Advisors, Inc., MMCAP International Inc. SPC, Federation des caisses Desjardins du Quebec, Geode Capital Management, Lic, Sanctuary Advisors, LLC, Peapack Gladstone Financial Corp, and Jump Financial, LLC. • Rail Vision Ltd. (NasdaqCM: RVSN) institutional ownership structure shows current positions in the company by institutions and funds, as well as the latest changes in position size. Major shareholders can include individual investors, mutual funds, hedge funds, or institutions. The Schedule 13D indicates that the investor holds (or held) more than 5% of the company and intends (or intended) to actively pursue a change in business strategy. Schedule 13G indicates a passive investment of over 5%. Although, there are some concerns that RVSN has 0.30% Insider ownership, for a micro-cap company.