FRSX - Foresight Announces Fourth Quarter and Full Year 2023 Financial Results

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Foresight Autonomous Holdings Ltd., aninnovator in automotive vision systems (Nasdaq and TASE: FRSX)(“Foresight” or the “Company”), today reported financialresults for the fourth quarter and full year ended December 31, 2023.Foresight ended the full year 2023 with revenues of $497,000 and with$15.7 million in cash, cash equivalent and restricted cash.

The Company reported a U.S. generallyaccepted accounting principles (GAAP) operating loss of $16.3 millionwhich is approximately a 7% decrease from the GAAP operating loss of$17.5 million reported for the full year 2022. Foresight reported aGAAP net loss of $3.6 million for the fourth quarter 2023, compared toa GAAP net loss of $3.8 million for the fourth quarter 2022, and anon-GAAP net loss of $3.3 million for the fourth quarter 2023,compared to a non-GAAP loss of $3.4 million for the fourth quarter2022. A reconciliation between GAAP net loss and non-GAAP net loss isprovided in the financial statements that are part of thisrelease.

“In 2023, the world wascaptivated by the potential of artificial intelligence (AI) torevolutionize the ways in which we live, work, and travel,” saidHaim Siboni, CEO of Foresight. “This excitement extended to themobility and transportation industries, as Foresight and itssubsidiaries and affiliates gained momentum and drew global interestin their AI-based technologies and other innovative solutions.Foresight recently completed two paid proof of concept (POC) projectswith a leading Japanese vehicle manufacturer, demonstrating thewidespread commercial viability of our solutions for 3D depthperception. These successful projects follow similar collaborationswith leading manufacturers in China, Israel, and South Korea.Foresight continues to execute on its strategy of collaborating withsome of the world’s largest Tier One automotive suppliers,indicating expansive and diverse potential for long-termgrowth."

“Foresight recentlyannounced several milestones together with its wholly ownedsubsidiary, Eye-Net Mobile Ltd. (“Eye-Net Mobile” or“Eye-Net”). Eye-Net has successfully completed the technologyvalidation phase of a multi-phase collaboration project with SoftBankCorp. (“SoftBank”). Moving forward, SoftBank will collaboratewith its business partners to initiate sales efforts for Eye-Net'sproducts in Japan. Together, we believe that Foresight and Eye-Net arepoised to achieve commercial breakthroughs in 2024,” concludedSiboni.

Recent CorporateHighlights:

• Eye-Netand Softbank Corp. Successfully Complete Technology Validation Phasefor Connected Mobility Applications in Japan : In March 2024,Eye-Net announced that SoftBank will collaborate with its businesspartners to initiate commercial validation efforts of Eye-Net'sproducts in Japan. This follows the successful completion of thetechnology validation of Eye-Net’s products. SoftBank and Eye-Nethave entered into a multi-phase agreement initiated in a paidtechnological POC, of which the first phase was successfully completedin November 2023. Through this collaboration, SoftBank will initiatesales efforts with its key business partners to move forward with thecommercial validation of Eye-Net’s solutions, paving the way forimproved collision prevention in Japan.
• Eye-Net SecuresFollow-up Order from Leading Japanese Vehicle Manufacturer : InMarch 2024, Eye-Net announced that it has received an additional orderfor a paid development project from a leading global Japanese vehiclemanufacturer, following the successful completion of the first twophases of a paid POC project. The parties engaged in a POC projectback in February 2023. The successful completion of that phase is asignificant milestone, demonstrating the feasibility and potentialbenefits of Eye-Net's technology for the automotiveindustry.
• Foresight Successfully Completes Project withLeading Japanese Vehicle Manufacturer : In February 2024, Foresightannounced the successful completion of two POC projects with a leadingJapanese vehicle manufacturer. The vehicle manufacturer evaluated theaccuracy of Foresight’s unique automatic calibration capabilities toenhance 3D depth perception. Following satisfactory results, theparties are exploring co-development initiatives for furtherevaluation of the solution’s capabilities. Potential collaborationmay involve integration of Foresight’s technology into themanufacturer’s passenger vehicles.

• Foresight Announces Pricing of $4.5 Million Registered DirectOffering : In December 2023, Foresight announced it entered intodefinitive agreements with institutional investors and insiders of theCompany, including the Company’s Chief Executive Officer (through acompany under his control), for the purchase and sale of 4,500,000 ofthe Company’s American Depositary Shares (“ADSs”) at a price of$1.00 per ADS pursuant to a registered direct offering. The grossproceeds of the offering amounted to $4.5 million before deductingplacement agent fees and other offering expenses.

• Eye-Net Selected by European SoftwareRépublique Consortium to Take Part in the Road Safety Revolution :Foresight’s wholly owned subsidiary, Eye-Net Mobile, signed anagreement to join Software République in November 2023. SoftwareRépublique is a European innovation ecosystem for intelligent,secure, and sustainable mobility, founded by Dassault Systèmes SE,Eviden, Orange S.A., Renault Group, STMicroelectronics N.V and ThalesGroup. Eye-Net was selected to join Software République’sincubation program for a project that will deliver an accessiblevehicle-to-everything (V2X) road safety solution for all roadusers.

• Foresight Receives Notice of U.S. PatentAllowance for 3D Image Analysis System and Calibration Technology :in October 2023 Foresight received a notice of allowance from the U.S.Patent and Trademark Office for its patent application, number17/982,691, for “System and Method for Stereoscopic ImageAnalysis.” The patented technology enables the generation of 3Ddepth perception from any given pair of cameras, even those that havedifferent optical properties and fields of view. The patent serves asthe underlying technology of Foresight’s Mono2Stereo™ andMono2Stereo™ 360° perception enhancement solutions.

Fourth Quarter 2023Financial Results

Revenuesfor the fourth quarter of 2023 increased by 39.4% to $138,000,compared to $99,000 for the fourth quarter of 2022. The revenues weregenerated primarily from the successful completion of a POC projectwith a leading Japanese vehicle manufacturer in the amount of $60,000,and from the commercialization agreement with Elbit Systems Land Ltd.("Elbit") in the amount of $57,000.

Research and development (R&D)expenses, net for the fourth quarter of 2023 were $2,430,000, a 20%decrease compared to $3,035,000 for the fourth quarter of 2022. Thedecrease is mainly attributed to a decrease in payroll and relatedexpenses and a decrease in subcontracted work and consultants.

Sales and marketing (S&M) expenses forthe fourth quarter of 2023 were $290,000, a decrease of 38.4% comparedto $471,000 for the fourth quarter of 2022. The decrease is mainlyattributed to a decrease in payroll and related expenses and adecrease in consultants.

Generaland administrative (G&A) expenses for the fourth quarter of 2023were $675,000, a decrease of 37.9% compared to $1,087,000 in thefourth quarter of 2022. The decrease is primarily attributed to adecrease in payroll and related expenses and in professionalservices.

Financial expenses, netfor the fourth quarter of 2023 were $255,000, compared to financialincome, net of $718,000 in the fourth quarter of 2022. Financialexpenses, net for the fourth quarter of 2023 consisted of a loss fromthe revaluation of the Company’s investment in Rail Vision Ltd. toits fair value in the amount of $759,000, offset by exchange ratedifferences and others in the amount of $383,000 and by interestincome in the amount of $121,000. Finance income, net for the fourthquarter of 2022 consisted of profit from the revaluation of theCompany’s investment in Rail Vision Ltd. to its fair value in theamount of $1,267,000 and interest income in the amount of $387,000,offset by exchange rate differences and others in the amount of$936,000.

GAAP net loss for thefourth quarter of 2023 was $3,551,000, or $0.011 per ordinary share,compared to a GAAP net loss of $3,820,000, or $0.012 per ordinaryshare, in the fourth quarter of 2022.

Non-GAAP net loss for the fourth quarter of 2032 was $3,293,000,or $0.01 per ordinary share, compared to a non-GAAP net loss of$3,377,000 in the fourth quarter of 2022, or $0.01 per ordinary share.A reconciliation between GAAP net loss and non-GAAP net loss isprovided following the financial statements that are part of thisrelease. Non-GAAP results exclude the effect of share-basedcompensation expenses.

FullYear 2023 Financial Results

Revenues for the full year ended December 31, 2023, decreased by9.6% to $497,000, compared to $550,000 for the full year endedDecember 31, 2022. The revenues were generated primarily from thecommercialization agreement of the Company with Elbit in the amount of$250,000 and from the successful execution of several projectsincluding: POC project with two leading Japanese vehicle manufacturersin the amount of $106,000, POC project of Eye-Net with SoftBank in theamount of $34,000 and from a POC project of Eye-Net with a leadingJapanese vehicle manufacturer in the amount of $28,000.

R&Dexpenses, net for the full year ended December 31, 2023, were$11,587,000, compared to $11,534,000 for the full year ended December31, 2022.

S&M expenses for the full year endedDecember 31, 2023, were $1,939,000, a decrease of 13% compared to$2,230,000 for the full year ended December 31, 2022. The decrease ismainly attributed to a decrease in payroll and related expenses and adecrease in consultants offset by an increase in exhibitions andtravel.

G&A expenses for the full year ended December 31, 2023 were$3,119,000, a decrease of 21.8% compared to $3,989,000 for the fullyear ended December 31, 2022. The decrease is mainly attributed to adecrease in payroll and related expenses and in professionalservices.

Financial expenses, net for the full yearended December 31, 2023 were $2,119,000, a decrease of 49.8% comparedto financial expenses, net of $4,221,000 for the full year endedDecember 31, 2022. Financial expenses, net for the year ended December31, 2023, consisted of loss from the revaluation of the Company’sinvestment in Rail Vision Ltd. to its fair value in the amount of$2,333,000 and from exchange rate differences and others in the amountof $453,000, offset by interest income in the amount of $667,000.Financial expenses, net for the year ended December 31, 2022,consisted of loss from the revaluation of the Company’s investmentin Rail Vision Ltd. to its fair value in the amount of $2,208,000, andexchange rate differences and others in the amount of $2,202,000,offset by interest income in the amount of $189,000.

GAAP netloss for the full year ended December 31, 2023, was $18,410,000, or$0.056 per ordinary share, a decrease of 15.1% compared to a GAAP netloss of $21,676,000 for the full year ended December 31, 2022, or$0.067 per ordinary share.

Non-GAAP net loss for the full year endedDecember 31, 2023, was $16,969,000, or $0.051 per ordinary share,compared to a non-GAAP net loss of $19,850,000 for the full year endedDecember 31, 2022, or $0.061 per ordinary share.

Balance Sheet Highlights

Cash andrestricted cash totaled $15.7 million as of December 31, 2023,compared to $26.5 million in cash, restricted cash, and short-termdeposits as of December 31, 2022.

GAAP total equity totaled $16.0million as of December 31, 2023, a decrease of 44.4% compared to $28.8million as of December 31, 2022. The decrease is mainly attributed tothe net loss for the period in the amount of $18,410,000 and fromshare-based payments in the amount of $1,441,000, offset by issuanceof ordinary shares, net of issuance expenses, in the amount of$4,183,000.

Use of Non-GAAP FinancialResults

In addition todisclosing financial results calculated in accordance with UnitedStates generally accepted accounting principles (GAAP), thecompany's earnings release contains non-GAAP financial measures ofnet loss for the period that exclude the effect of stock-basedcompensation expenses. The company’s management believes thenon-GAAP financial information provided in this release is useful toinvestors’ understanding and assessment of the company's ongoingoperations. Management also uses both GAAP and non-GAAP information inevaluating and operating business internally and as such deemed itimportant to provide all this information to investors. The non-GAAPfinancial measures disclosed by the company should not be consideredin isolation or as a substitute for, or superior to, financialmeasures calculated in accordance with GAAP, and the financial resultscalculated in accordance with GAAP and reconciliations to thosefinancial statements should be carefully evaluated. Reconciliationsbetween GAAP measures and non-GAAP measures are provided later in thispress release.

AboutForesight

Foresight AutonomousHoldings Ltd. (Nasdaq and TASE: FRSX) is a technology companydeveloping smart multi-spectral vision software solutions andcellular-based applications. Through the Company’s wholly ownedsubsidiaries, Foresight Automotive Ltd., Foresight ChangzhouAutomotive Ltd. and Eye-Net Mobile Ltd., Foresight develops both“in-line-of-sight” vision systems and “beyond-line-of-sight”accident-prevention solutions.

Foresight’s vision solutions include modules of automaticcalibration and dense three-dimensional (3D) point cloud that can beapplied to different markets such as automotive, defense, autonomousvehicles and heavy industrial equipment. Eye-Net Mobile’scellular-based solution suite provides real-time pre-collision alertsto enhance road safety and situational awareness for all road users inthe urban mobility environment by incorporating cutting-edge AItechnology and advanced analytics.

For more information about Foresight and its wholly ownedsubsidiary, Foresight Automotive, visit www.foresightauto.com, follow@ForesightAuto1 on X, or join Foresight Automotive on LinkedIn.

Forward-Looking Statements

This press release contains forward-looking statements withinthe meaning of the "safe harbor" provisions of the PrivateSecurities Litigation Reform Act of 1995 and other Federal securitieslaws. Words such as "expects," "anticipates,""intends," "plans," "believes,""seeks," "estimates" and similar expressions orvariations of such words are intended to identify forward-lookingstatements. For example, Foresight is using forward-looking statementsin this press release when it discusses that its collaborationagreements indicate expansive and diverse potential for long-termgrowth, the belief that it and Eye-Net are poised to achievecommercial breakthroughs in 2024, the potential for SoftBank toinitiate sales efforts with its key business partners to move forwardwith the commercial validation of Eye-Net’s solutions, paving theway for improved collision prevention in Japan and that it expects toexplore co-development initiatives with a leading Japanese vehiclemanufacturer, for further evaluation of its solution’s capabilities.Because such statements deal with future events and are based onForesight’s current expectations, they are subject to various risksand uncertainties, and actual results, performance or achievements ofForesight could differ materially from those described in or impliedby the statements in this press release.

The forward-looking statements contained or implied in thispress release are subject to other risks and uncertainties, includingthose discussed under the heading "Risk Factors" inForesight's annual report on Form 20-F filed with the Securitiesand Exchange Commission ("SEC") on March 27, 2024, and in anysubsequent filings with the SEC. Except as otherwise required by law,Foresight undertakes no obligation to publicly release any revisionsto these forward-looking statements to reflect events or circumstancesafter the date hereof or to reflect the occurrence of unanticipatedevents. References and links to websites have been provided as aconvenience, and the information contained on such websites is notincorporated by reference into this press release. Foresight is notresponsible for the contents of third party websites.

ContactDetails

Investor Relations Contact:

MiriSegal-Scharia, CEO, MS-IR LLC

+1 917-607-8654

msegal@ms-ir.com

CompanyWebsite

https://www.foresightauto.com/

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