FRSX - Foresight Announces Second Quarter 2023 Financial Results

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Foresight AutonomousHoldings Ltd., an innovator in automotive vision systems (Nasdaq andTASE: FRSX) (the “Company” or “Foresight”), today reportedfinancial results for the second quarter of 2023. Foresight ended thefirst half of 2023 with revenues of $55,000 and with $17.8 million incash, cash equivalent, restricted cash, and short-term deposits.

The Company reported aU.S. generally accepted accounting principles (“GAAP”) net loss of$6.1 million and a non-GAAP net loss of $5.6 million for the secondquarter of 2023, compared to a GAAP net loss of $10.1 million and anon-GAAP net loss of $9.7 million for the second quarter of 2022,reflecting a decrease of 40% and 42%, respectively.

“At the end of thesecond quarter, we recorded a significant milestone with the signingof our exclusive commercialization agreement with Elbit Systems LandLtd. (“Elbit”) (Nasdaq and TASE: ESLT),” said Haim Siboni,Foresight’s CEO. “This agreement will put our technology directlyin the hands of Elbit customers in the defense, paramilitary andhomeland security industries. We believe that this is an importantstep forward for Foresight, as well as notable validation of ourtechnology by one of the world’s leading defense suppliers. Thecommercialization agreement may result in revenues of up to $4 millionover a five-year contractual period.

“Foresight’s ongoing strategy of collaboratingwith global leading Tier One suppliers continues. During the secondquarter, we signed a memorandum of understanding (MOU) with KONEC, aleading South Korean Tier One automotive supplier. This MOU is animportant first step as we enter one of the world’s most importantautomotive markets, and it builds off our previous successes workingwith leading Tier One suppliers in Japan, China, Europe, and theUnited States. Tier One suppliers value the benefits of our 3Dperception stereo vision solutions, and we expect this widespreadinterest to convert into paying customers in the comingquarters.

Second Quarter Corporate Highlights:

? Foresight Secures Revenues of Up to $4 Million with Signing ofExclusive Commercialization Agreement with Elbit Systems : In July,Foresight announced the signing of an exclusive agreement with Elbitfor the integration, marketing and licensing of Foresight’s imageprocessing software solution. Foresight anticipates revenues of up to$4 million over a contractual period of five years, with minimumguaranteed revenues of $1 million over the same period. According tothe agreement, Elbit will commercialize Foresight’s softwaresolution in the form of a software license. Foresight’s solutionwill be offered to Elbit’s end customers as a component of advanceddriver assistance systems (ADAS) for driving safety, as well as asolution for semi- and fully autonomous platforms used in unmannedcombat and security ground vehicles in the defense, paramilitary andhomeland security markets.

? Foresight Signs MOU withSouth Korean Tier One Supplier KONEC for Cooperation in ADAS andAutonomous Driving Solutions : In June, Foresight signed amemorandum of understanding (MOU) with KONEC, a South Korean Tier Oneautomotive supplier. According to the MOU, Foresight and KONEC willcollaborate to develop ADAS and autonomous driving solutions, whichwill expand KONEC’s product offering to global customers such asHyundai, Tesla and Magna. The MOU represents Foresight’s first entryinto the thriving South Korean automotive market.

? Foresight Regains Compliance with Nasdaq Minimum Bid PriceRule : In early May, Foresight received a letter from the NasdaqStock Market confirming that Foresight regained compliance with theminimum bid price requirement under Nasdaq Listing Rule 5550(a)(2).Foresight can now continue its listing on the Nasdaq Stock Market, andthe previous matter of non-compliance is now closed.

Second Quarter 2023 FinancialResults

• Research anddevelopment (R&D) expenses, net for the three months ended June30, 2023, were $3,150,000, compared to $2,806,000 for the three monthsended June 30, 2022. The increase is mainly attributable to anincrease in payroll and related expenses in the amount of $335,000.
• Marketing and sales (S&M) expenses for the three monthsended June 30, 2023, were $484,000, compared to $605,000 for the threemonths ended June 30, 2022. The decrease is mainly attributable to adecrease in professional services expenses in the amount of $62,000and a decrease in payroll and related expenses in the amount of$63,000.
• General and administrative (G&A) expenses forthe three months ended June 30, 2023, were $715,000, compared to$837,000 for the three months ended June 30, 2022. The decrease ismainly attributable to a decrease in professional services expenses inthe amount of $78,000.
• Finance expenses, net for the threemonths ended June 30, 2023, were $1,715,000, compared to $5,991,000for the three months ended June 30, 2022. The decrease is mainlyattributable to expenses from the revaluation of the Company’sinvestment in Rail Vision Ltd. (“Rail Vision”) to its fair valuein the amount of $1,666,000 for the three months ended June 30, 2023,compared to expenses from the revaluation of the Company’sinvestment in Rail Vision to its fair value in the amount of$5,588,000 for the three months ended June 30,2022.
• GAAP netloss for the three months ended June 30, 2023, was $6,064,000, or$0.02 per ordinary share, compared to a GAAP net loss of $10,116,000,or $0.03 per ordinary share, for the three months ended June 30, 2022.
• Non-GAAP net loss for the three months ended June 30, 2023,was $5,651,000, or $0.02 per ordinary share, compared to a non-GAAPnet loss of $9,663,000, or $0.03 per ordinary share, in the samequarter last year. A reconciliation between GAAP net loss and non-GAAPnet loss is provided in the financial statements that are part of thisrelease.

First Half2023 Financial Results

• R&D expenses, net for the six months ended June 30, 2023were $6,269,000, compared to $5,498,000 in the same period last year.The increase is mainly attributable to an increase in payroll andrelated expenses in the amount of $592,000.
• S&M expensesfor the six months ended June 30, 2023, were $1,188,000, compared to$1,229,000 for the six months ended June 30, 2022. The decrease ismainly attributable to a decrease in payroll and related expenses inthe amount of $88,000, to a decrease in consultants in the amount of$88,000 offset by an increase in exhibitions, conventions and travelexpenses in the amount of $116,000.

• G&A expenses forthe six months ended June 30, 2023 were $1,573,000, compared to$2,025,000 in the same period last year. The decrease is mainlyattributable to a decrease in professional services in the amount of$204,000 and from a decrease in payroll and related expenses in theamount of $115,000.

• Finance expenses, net for the sixmonths ended June 30, 2023, were $1,655,000, compared to $3,519,000 inthe same period last year. The decrease is mainly attributable toexpenses from the revaluation of the Company’s investment in RailVision to its fair value in the amount of $1,544,000 for the sixmonths ended June 30, 2023, compared to expenses from the revaluationof the Company’s investment in Rail Vision to its fair value in theamount of $2,788,000 for the six months ended June 30,2022.

• GAAP net loss for the six months ended June 30, 2023 was$10,651,000, or $0.03 per ordinary share, compared to a GAAP net lossof $12,140,000, or $0.04 per ordinary share, in the same period lastyear.

• Non-GAAP net loss for the first half of 2023 was$9,894,000, or $0.03 per ordinary share, compared to a non-GAAP netloss of $11,191,000 or $0.04 per ordinary share, in the same periodlast year. A reconciliation between GAAP net loss and non-GAAP netloss is provided following the financial statements that are part ofthis release.

BalanceSheet Highlights

• Cash, restricted cash and short-term deposits totaled$17.8 million as of June 30, 2023, compared to $26.5 million as ofDecember 31, 2022.

• GAAP shareholders’ equity totaled$18.9 million as of June 30, 2023, compared to $28.8 million as ofDecember 31, 2022. The decrease is attributed mainly to the net lossfor the period.

Use of Non-GAAP Financial Results

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.

Forward-Looking Statements

This press release contains forward-lookingstatements within the meaning of the “safe harbor” provisions ofthe Private Securities Litigation Reform Act of 1995 and other Federalsecurities laws. Words such as “expects,” “anticipates,”“intends,” “plans,” “believes,” “seeks,”"estimates" and similar expressions or variations of suchwords are intended to identify forward-looking statements. Forexample, Foresight is using forward-looking statements in this pressrelease when it discusses the Elbit commercialization agreement is avalidation of its technology by one of the world’s leading defensesuppliers, the potential revenues that may be realized under thatagreement, that Tier One suppliers’ interest in its products areexpected to convert into paying customers in the coming quarters, thatthe ADS ratio change ensures that it will be able to focus on businessexpansion and technological innovation as the Company takes advantageof the transition to autonomous driving solutions. Because suchstatements deal with future events and are based on Foresight’scurrent expectations, they are subject to various risks anduncertainties and actual results, performance or achievements ofForesight could differ materially from those described in or impliedby the statements in this press release. The forward-lookingstatements contained or implied in this press release are subject toother risks and uncertainties, including those discussed under theheading “Risk Factors” in Foresight’s annual report on Form 20-Ffiled with the Securities and Exchange Commission (“SEC”) on March30, 2023, and in any subsequent filings with the SEC. Except asotherwise required by law, Foresight undertakes no obligation topublicly release any revisions to these forward-looking statements toreflect events or circumstances after the date hereof or to reflectthe occurrence of unanticipated events. References and links towebsites have been provided as a convenience, and the informationcontained on such websites is not incorporated by reference into thispress release.

Investor Relations Contact:

Miri Segal-Scharia

CEO

MS-IR LLC

msegal@ms-ir.com

917-607-8654

AboutForesight

Foresight Autonomous Holdings Ltd. (Nasdaq andTASE: FRSX) is a technology company developing smart multi-spectralvision software solutions and cellular-based applications. Through theCompany’s wholly owned subsidiaries, Foresight Automotive Ltd.,Foresight Changzhou Automotive Ltd. and Eye-Net Mobile Ltd., Foresightdevelops 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 aboutForesight and its wholly owned subsidiary, Foresight Automotive, visit www.foresightauto.com ,follow onTwitter, or join on LinkedIn.

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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