The IPO Buzz: Tiny Israeli IPO Rail Vision Ltd. Slides in NASDAQ Debut

Rail Vision Ltd., an Israeli tech start-up focused on rail safety, crashed as it pulled out of the IPO station on Thursday. The stock fell 24 percent when it opened Thursday (March 31) on the NASDAQ – trading at $3.14 on volume of 144, 848 shares. The railway safety company priced its small-cap IPO at $4.13 – the bottom of its range – on Wednesday night (March 30). This IPO – and a SPAC deal – wrap up the sparse IPO Calendar for March 2022. (Editor’s Note: This column, initially published Thursday, March 31, was updated Friday, April 1, with pricing and trading news on Metal Sky Star Acquisition Corp. and Expion360, Inc.)

Both Rail Vision’s stock (RVSN) and its warrants (RVSNW) started trading today on the NASDAQ. The stock’s decline marked Rail Vision as a broken deal on its first day of trading. Shares of Rail Vision closed Thursday at $3.09, down 25.18 percent from their IPO price.

Rail Vision Ltd. raised $15.64 million – 12 percent less than its projected proceeds from the IPO’s revised terms disclosed last week. The Israeli company priced 3.79 million (3,787,241) units, up from 3.55 million (3,550,000) units in the prospectus. The IPO price of $4.13 was at the bottom of the $4.13-to$5.87 range. Last week, the IPO was revised to 3.55 million units, up from 1.97 million units initially, while the price range was cut from its initial $8-to-$10 level.

Aegis Capital Corp. was the sole book-runner of Rail Vision’s IPO.

Rail Vision, founded in 2016 in Israel, is a development-stage technology company seeking to revolutionize railway safety and the data-related market. The company says its AI technology – specifically designed for railways – uses high-resolution cameras and an on-board computer with AI-driven algorithms –  to identify people and objects up to 2,000 meters (about 6,561.7 feet) away to warn the train driver of potential danger.

“Deutsche Bahn, Germany’s national railway company, recognized us in September 2016 as the winner of its MINDBOX competition for our automated early warning systems to prevent railway accidents,” the prospectus says.

Knorr-Bremse AG, a manufacturer of braking systems and a leading supplier of safety-critical sub-systems for rail and commercial vehicles, has invested about $20 million in Rail Vision. The Munich-based company is the largest shareholder with a stake of about 31.3 percent after the IPO.

 Like many start-ups, Rail Vision is not profitable. The company reported minimal revenues and a net loss of $5.13 million for the last 12 months.

Clean Energy SPAC Redwoods Priced

Redwoods Acquisition Corp. (RWODU), a SPAC focused on the carbon neutral and energy storage industries, priced its IPO on Wednesday night (March 30) in line with the terms in its prospectus: 10 million units at $10 each to raise $100 million. Redwood’s search for acquisition or business combination targets will concentrate on clean energy companies with enterprise values between $250 million and $1 billion. 

Redwoods Acquisition’s stock opened at $10.05, up a nickel or up 0.5 percent, on the NASDAQ on volume of 407,000 shares. Shares of Redwoods Acquisition closed at $10.03, up 0.3 percent from their IPO price.

Chardan was the sole book-runner of Redwoods Acquisition’s IPO.

Based in New York, Redwoods Acquisition says it will not enter into a business combination with any entity or business in China, Hong Kong and Macau.

Redwoods Acquisition became the 54th SPAC IPO priced so far this year.

1 SPAC IPO & 1 Mini-IPO 

Thursday night’s pricing roster included two deals: Metal Sky Star Acquisition Corp. (MSSAU proposed), 10 million units at $10 each, from sole book-runner Ladenburg Thalmann, and Expion360 (XPON proposed), 2.2 million shares at $7 to $9 each, from  Alexander Capital, LP, the sole book-runner, with Paulson Investment Company, LLC as the co-manager.

Metal Sky Star Acquisition priced its SPAC IPO on Thursday night (March 31, 2022) in sync with the terms in its prospectus. The stock opened Friday, April 1st, at $10.02 on volume of 853,600 shares, according to NASDAQ. Metal Sky Star Acquisition’s stock rose as high as $10.03 and closed its first day of trading on Friday at $10.00, unchanged from its IPO price, on volume of 4,912,216 shares.

Expion360 priced its IPO at $7 – the bottom of its range – on 2,145,000 shares, the number of shares in the prospectus, to raise $15.02 million. The stock opened Friday (April 1) on the NASDAQ at $7.90 on volume of 181,237 shares. Expion’s stock hit an intraday high of $11.29 and closed its first day of trading on Friday at $7.93, up 13.29 percent, on volume of 10,470,885 shares.

Both Metal Sky Star Acquisition and Expion360 go into April’s books because they began trading on April 1st. But their pricing stats belong to March, in conjunction with their pricing dates of March 31, 2022.

March 2022 Stats

Bankers priced 17 deals in March, raising about $1.5 billion in proceeds. Most of that money came from SPACs, with $1.375 billion raised by 11 SPAC IPOs this month.

That’s a far cry from a year ago, when the IPO market was roaring at a record pace. For perspective: On the night of March 1, 2021, alone, a total of 15 SPAC IPOs were priced – raising $4.34 billion. Notable IPOs of March 2021 included Coupang (CPNG), which raised $4.55 billion, and Oscar Health (OSCR), which raised $1.45 billion.

Only three traditional IPOs – Akanda Corp. (AKAN) and AN2 Therapeutics (ANTX) – were priced in March 2022. Akanda, a cannabis company, raised $16 million. AN2 Therapeutics, a clinical biotech targeting non-TB mycobacterial lung disease (NTM lung disease), raised $69 million. Expion360, a lithium battery maker, raised $15.02 million.

Rounding up the month’s sparse volume: The Marygold Companies, Inc. (MGLD), a holding company’s NYSE-American uplisting, $3.3 million, and two tiny unit IPOs – Locafy Ltd. (LCFY/LCFYW), an Australian SaaS online publishing platform company, $6.0 million, and Rail Vision Ltd. (RVSN/RVSNW), the Israeli rail-safety company, $15.64 million.

This month is the slowest March since 2020 when five deals – two IPOs and three SPACs – were priced early in the month before the COVID-19 pandemic lockdown went into effect on March 12, 2020, according to IPOScoop data.

Looking Ahead

The IPO pipeline is building steadily, stirring investors’ hopes that more sizable and playable deals will get done in the second quarter. So far, no traditional IPOs have been set for pricing during the first week of April. But that could change on Monday morning, April 4th.

Stay tuned.

(For more information about these companies, please check our IPO Calendar and click on a company’s name; the hyperlink will take you to the IPO Profile, which includes a link to the prospectus.)

(Never trade on proposed symbols. You might wind up owning something on the OTC Bulletin Board.)

Disclosure: Nobody on the staff has a position in any stocks mentioned above, nor do they trade or invest in IPOs. The staff does not issue advice, recommendations or opinions.

Disclaimer: A SCOOP Rating (Wall Street Consensus of Opening-day Premiums), is a general consensus taken, at press time, from Wall Street and investment professionals concerning how well an IPO might perform when it starts trading. The SCOOP Rating does not reflect the opinions of anyone associated with The SCOOP ratings should not be taken as investment advice. The rating merely reflects the opinion of the professionals at the time of publication and is subject to last-minute change.