FRSX - Foresight Announces Third Quarter 2023 Financial Results

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Foresight AutonomousHoldings Ltd., an innovator in automotive vision systems (Nasdaq andTASE: FRSX) (“Foresight” or the “Company”), today reportedfinancial results for the three and nine months ended September 30,2023. Foresight ended the third quarter with $14.2 million in cash,cash equivalents and restricted cash.

The Company reported revenues of $304,000, comparedto revenues of $203,000 for the third quarter of 2022, reflecting anincrease of 50%. The Company reported a U.S. generally acceptedaccounting principles (GAAP) net loss of $4.2 million and a non-GAAPnet loss of $3.8 million for the third quarter of 2023, compared to aGAAP net loss of $5.7 million and a non-GAAP net loss of $5.3 millionfor the third quarter of 2022, reflecting a decrease of 26% and 28%,respectively. A reconciliation between GAAP net loss and non-GAAP netloss is provided in the financial statements that are part of thisrelease.

Third Quarter and RecentCorporate Highlights:

• Foresight Signs Exclusive Agreement with Elbit Systems toCommercialize Software for Autonomous and Semi-autonomous DefenseSystems: In July 2023, Foresight announced an exclusivecommercialization agreement with Elbit Systems Land Ltd.("Elbit") for the integration, marketing, and licensing ofForesight’s image processing software solution. Pursuant to theagreement, Elbit will commercialize Foresight’s software solution,exclusively and globally, in the form of a software license. Foresightbegan to recognize revenues from the agreement during the thirdquarter of 2023. The Company expects revenues of up to $4 million overa contractual period of five years, with minimum guaranteed revenuesof $1 million over that period.
• Foresight Partners withFortune 500 Industrial Equipment Manufacturer for POC Project: InAugust 2023, Foresight was selected by the Chinese subsidiary of aFortune 500 company, and of one of the world’s leading manufacturersof industrial equipment, heavy machinery, construction, and miningequipment for a paid proof of concept (POC) project. The subsidiary ofthe Fortune 500 company selected Foresight's technology over otherthree-dimensional (3D) perception vision solutions due to itsaccurate, high-resolution point cloud and all object detectioncapabilities in harsh weather, environments, and lighting conditions.A successful POC project may lead the industrial equipmentmanufacturer to integrate Foresight’s technology into itsconstruction and mining trucks.
• Foresight SignsAgreement with Leading Global Vehicle Manufacturer for Two POCProjects: During the third quarter of 2023, Foresight announcedthe signing of an agreement for two POC projects with a leading globalvehicle manufacturer. The two POC projects will evaluate Foresight’sautomatic camera calibration and stereo vision enhancement solutions.The vehicle manufacturer will also assess Foresight’s Mono2Stereo™perception enhancement solution to be used together with its existingmono cameras which have different fields of view. Upon successfulcompletion of the projects, the vehicle manufacturer may integrateForesight’s technology into its passengervehicles.
• Eye-Net Mobile Announces Collaboration withSoftBank to Introduce Cross-Collision V2X Solution: Eye-Net MobileLtd. (“Eye-Net” or "Eye-Net Mobile"), a wholly ownedsubsidiary of Foresight, announced an agreement for a paid POC projectwith SoftBank Corp. (“Softbank”), a Japan-based telecommunicationsand IT operator. The POC project is part of a multiphase work planwhich could potentially lead to a commercial deployment of Eye-Net’ssolutions in the Japanese market. SoftBank’s multiple businesspartners include vehicle manufacturers, third-party applications,local authorities, and insurance companies. The POC project aims tovalidate the integration of Eye-Net’s server-side technology withSoftBank’s multi-access edge computing (MEC)infrastructure.
• Foresight Announces Multi-Phase Partnershipwith Leading Global Electric Vehicle (EV) Manufacturer: InSeptember 2023, Foresight announced the signing of a multi-phasecooperation agreement with a leading Chinese original equipmentmanufacturer (OEM) specializing in EVs, rechargeable batteries andrelated products. The first phase of the agreement consists of a POCproject to evaluate Foresight’s 3D perception capabilities forpossible enhancement of the OEM’s current automotive visionsolution. Upon successful completion of the POC project, the partiesintend to negotiate a definitive commercial agreement for the jointdevelopment, integration, and commercialization of Foresight’stechnology into the OEM’s automotive visionsystems .

“Foresight continues to make important strides inboth the defense and automotive industries, as demonstrated by oursignificant milestones recorded during the third quarter,” commentedHaim Siboni, chief executive officer of Foresight. “We believe thatour global exclusive commercialization agreement with Elbit, one ofthe world’s leading integrators for the defense industry,demonstrates the exceptional quality of our vision systems for defenseapplications. This software license agreement has the potential tosignificantly accelerate the commercialization of our solutions, bothfor semi and fully autonomous platforms, in the defense, paramilitaryand homeland security markets.

“We continue to execute our strategy ofdeveloping joint projects with leading automotive and OEMmanufacturers around the world. We announced multiple new POC projectswith global Chinese manufacturers during the third quarter, expandingour presence in this significant market. The third quarter also saw abreakthrough achievement for Eye-Net Mobile, our fully ownedsubsidiary, as the Company announced a paid POC project with SoftBank,one of Japan’s most important companies. In the fourth quarter of2023, we expect to build on these successes and enhance our globalexpansion.”

Three months endedSeptember 30, 2023, Financial Results

• Revenues for the three months ended September 30, 2023,amounted to $304,000, compared to $203,000 for the three months endedSeptember 30, 2022. The revenues were generated primarily from thecommercialization agreement of the Company with Elbit and from asuccessful POC agreement of Eye-Net Mobile with SoftBank for aCross-Collision prevention V2X solution utilizing 5GMEC.
• Research and development (R&D) expenses, net for thethree months ended September 30, 2023, were $2,886,000 compared to$3,001,000 for the three months ended September 30, 2023. The decreaseis mainly attributed to a decrease in expenses relating tosubcontractors and consultants in the amount of $72,000.
• Sales and marketing (S&M) expenses for the three monthsended September 30, 2023, were $460,000, compared to $530,000 for thethree months ended September 30, 2022. The decrease is mainlyattributed to a decrease in payroll and related expenses in the amountof $70,000.
• General and administrative (G&A) expenses forthe three months ended September 30, 2023, were $872,000, compared to$877,000 for the three months ended September 30, 2022.
• Finance expenses, net for the three months ended September30, 2023, were $209,000, compared to finance expenses, net of$1,420,000 for the three months ended September 30, 2022. Financeexpenses, net for the three months ended September 30, 2023, consistedof finance expenses from the revaluation of the Company’s investmentin Rail Vision Ltd. (“Rail Vision”) to its fair value in theamount $31,000, compared to finance expenses from the revaluation ofthe Company’s investment in Rail Vision to its fair value in theamount $686,000 in the three months ended September 30, 2022, byfinance expenses from exchange rate differences in the amount of$354,000, compared to finance expenses from exchange rate differencesin the amount of $956,000 in the three months ended September 30,2022, offset by interest income and other income in the amount of$176,000, compared to interest income and other income in the amountof $222,000 in the three months ended September 30, 2022.
• TheGAAP net loss for the three months ended September 30, 2023, was$4,206,000, or $0.01 per ordinary share, compared to the GAAP net lossof $5,716,000, or $0.02 per ordinary share, for the three months endedSeptember 30, 2022.
• The non-GAAP net loss for the threemonths ended September 30, 2023, was $3,781,000, or $0.01 per ordinaryshare, compared to the non-GAAP net loss of $5,283,000, or $0.02 perordinary share, for the three months ended September 30, 2022. Areconciliation between GAAP net loss and non-GAAP net loss is providedin the financial statements that are part of this release.

Nine months ended September 30, 2023,Financial Results

• R&Dexpenses, net for the nine months ended September 30, 2023, were$9,155,000, compared to $8,499,000 in the same period last year. Theincrease is mainly attributable to an increase in payroll and relatedexpenses in the amount of $607,000.

• S&M expenses for the nine months ended September 30,2023, were $1,648,000, compared to $1,759,000 in the same period lastyear. The decrease is mainly attributable to a decrease in payroll andrelated expenses in the amount of $158,000, and to a decrease inconsultant expenses in the amount of $108,000.

• G&A expenses for the nine monthsended September 30, 2023, were $2,445,000, compared to $2,902,000 inthe same period last year. The decrease is mainly attributable to adecrease in professional services in the amount of $208,000 and from adecrease in payroll and related expenses in the amount of$110,000.

• Finance expenses, net for thenine months ended September 30, 2023, were $1,864,000, compared to$4,939,000 in the same period last year. The decrease is mainlyattributable to expenses from the revaluation of the Company’sinvestment in Rail Vision to its fair value in the amount of$1,575,000 for the nine months ended September 30, 2023, compared toexpenses from the revaluation of the Company’s investment in RailVision to its fair value in the amount of $3,475,000 in the sameperiod last year, and from exchange rate differences in the amount of$948,000 for the nine months ended September 30, 2023, compared toexchange rate difference in the amount of $1,570,000 in the sameperiod last year.

• The GAAP net loss forthe nine months ended September 30, 2023, was $14,857,000, or $0.05per ordinary share, compared to the GAAP net loss of $17,856,000, or$0.06 per ordinary share, in the same period last year.

• The non-GAAP net loss for the ninemonths ended 2023 was $13,675,000, or $0.04 per ordinary share,compared to the non-GAAP net loss of $16,473,000 or $0.05 per ordinaryshare, in the same period last year. A reconciliation between the GAAPnet loss and the non-GAAP net loss is provided following the financialstatements that are part of this release.

Balance Sheet Highlights

• Cash, restricted cash, and short-termdeposits totaled $14.2 million as of September 30, 2023, compared to$26.5 million as of December 31, 2022.
• GAAP shareholders’equity totaled $15.2 million as of September 30, 2023, compared to$28.8 million as of December 31, 2022. The decrease is mainlyattributed to the net loss for the period.
• The Companymaintains an at-the-market facility pursuant to a sales agreement itexecuted on January 22, 2021. During the three months ended September30, 2023, the Company utilized sales in the amount of $137,000, net ofissuance costs.

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.

About Foresight

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 visionsolutions include modules of automatic calibration and densethree-dimensional (3D) point cloud that can be applied to differentmarkets such as automotive, defense, autonomous vehicles and heavyindustrial equipment. Eye-Net Mobile’s cellular-based solution suiteprovides real-time pre-collision alerts to enhance road safety andsituational awareness for all road users in the urban mobilityenvironment by incorporating cutting-edge AI technology and advancedanalytics.

Formore information about Foresight and its wholly owned subsidiary,Foresight Automotive, visit www.foresightauto.com, follow onTwitter, or join on LinkedIn.

Forward-Looking Statements

This press releasecontains forward-looking statements within the meaning of the “safeharbor” provisions of the Private Securities Litigation Reform Actof 1995 and other Federal securities laws. Words such as“expects,” “anticipates,” “intends,” “plans,”“believes,” “seeks,” “estimates” and similar expressionsor variations of such words are intended to identify forward-lookingstatements. For example, Foresight is using forward-looking statementsin this press release when it discusses the timing and expectedrevenues from its exclusive agreement with Elbit, that its successfulPOC project with the Chinese subsidiary of a Fortune 500 company maylead the industrial equipment manufacturer to integrate Foresight’stechnology into its construction and mining trucks, the potential forEye-Net’s POC project with SoftBank to culminate in the commercialdeployment of Eye-Net’s solutions in the Japanese market, its beliefthat its agreement with Elbit demonstrates the exceptional quality ofits vision systems for defense applications, and that its softwarelicense agreement has the potential to significantly accelerate thecommercialization of its solutions, both for semi and fully autonomousplatforms, in the defense, paramilitary and homeland security markets,and that it expects to build on its successes and enhance its globalexpansion in the fourth quarter of 2023. Because such statements dealwith future events and are based on Foresight’s currentexpectations, they are subject to various risks and uncertainties andactual results, performance or achievements of Foresight could differmaterially from those described in or implied by the statements inthis press release. The forward-looking statements contained orimplied in this press release are subject to other risks anduncertainties, including those discussed under the heading “RiskFactors” in Foresight’s annual report on Form 20-F filed with theSecurities and Exchange Commission (“SEC”) on March 31, 2023, andin any subsequent filings with the SEC. Except as otherwise requiredby law, Foresight undertakes no obligation to publicly release anyrevisions to these forward-looking statements to reflect events orcircumstances after the date hereof or to reflect the occurrence ofunanticipated events. References and links to websites have beenprovided as a convenience, and the information contained on suchwebsites is not incorporated by reference into this press release.

Investor RelationsContact:

MiriSegal-Scharia

CEO

MS-IRLLC

msegal@ms-ir.com

917-607-8654

FORESIGHT AUTONOMOUS HOLDINGS LTD.

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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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