Press Release

Foresight Announces Second Quarter 2023 Financial Results

–News Direct–

Foresight Autonomous Holdings Ltd., an innovator in automotive vision systems (Nasdaq and TASE: FRSX) (the Company or Foresight), today reported financial results for the second quarter of 2023. Foresight ended the first half of 2023 with revenues of $55,000 and with $17.8 million in cash, cash equivalent, restricted cash, and short-term deposits.

The Company reported a U.S. generally accepted accounting principles (GAAP) net loss of $6.1 million and a non-GAAP net loss of $5.6 million for the second quarter of 2023, compared to a GAAP net loss of $10.1 million and a non-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 the second quarter, we recorded a significant milestone with the signing of our exclusive commercialization agreement with Elbit Systems Land Ltd. (Elbit) (Nasdaq and TASE: ESLT), said Haim Siboni, Foresights CEO. This agreement will put our technology directly in the hands of Elbit customers in the defense, paramilitary and homeland security industries. We believe that this is an important step forward for Foresight, as well as notable validation of our technology by one of the worlds leading defense suppliers. The commercialization agreement may result in revenues of up to $4 million over a five-year contractual period.

Foresights ongoing strategy of collaborating with global leading Tier One suppliers continues. During the second quarter, we signed a memorandum of understanding (MOU) with KONEC, a leading South Korean Tier One automotive supplier. This MOU is an important first step as we enter one of the worlds most important automotive markets, and it builds off our previous successes working with leading Tier One suppliers in Japan, China, Europe, and the United States. Tier One suppliers value the benefits of our 3D perception stereo vision solutions, and we expect this widespread interest to convert into paying customers in the coming quarters.

Second Quarter Corporate Highlights:

Foresight Secures Revenues of Up to $4 Million with Signing of Exclusive Commercialization Agreement with Elbit Systems: In July, Foresight announced the signing of an exclusive agreement with Elbit for the integration, marketing and licensing of Foresights image processing software solution. Foresight anticipates revenues of up to $4 million over a contractual period of five years, with minimum guaranteed revenues of $1 million over the same period. According to the agreement, Elbit will commercialize Foresights software solution in the form of a software license. Foresights solution will be offered to Elbits end customers as a component of advanced driver assistance systems (ADAS) for driving safety, as well as a solution for semi- and fully autonomous platforms used in unmanned combat and security ground vehicles in the defense, paramilitary and homeland security markets.

Foresight Signs MOU with South Korean Tier One Supplier KONEC for Cooperation in ADAS and Autonomous Driving Solutions: In June, Foresight signed a memorandum of understanding (MOU) with KONEC, a South Korean Tier One automotive supplier. According to the MOU, Foresight and KONEC will collaborate to develop ADAS and autonomous driving solutions, which will expand KONECs product offering to global customers such as Hyundai, Tesla and Magna. The MOU represents Foresights first entry into the thriving South Korean automotive market.

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

Second Quarter 2023 Financial Results

  • Research and development (R&D) expenses, net for the three months ended June 30, 2023, were $3,150,000, compared to $2,806,000 for the three months ended June 30, 2022. The increase is mainly attributable to an increase in payroll and related expenses in the amount of $335,000.
  • Marketing and sales (S&M) expenses for the three months ended June 30, 2023, were $484,000, compared to $605,000 for the three months ended June 30, 2022. The decrease is mainly attributable to a decrease in professional services expenses in the amount of $62,000 and a decrease in payroll and related expenses in the amount of $63,000.
  • General and administrative (G&A) expenses for the three months ended June 30, 2023, were $715,000, compared to $837,000 for the three months ended June 30, 2022. The decrease is mainly attributable to a decrease in professional services expenses in the amount of $78,000.
  • Finance expenses, net for the three months ended June 30, 2023, were $1,715,000, compared to $5,991,000 for the three months ended June 30, 2022. The decrease is mainly attributable to expenses from the revaluation of the Companys investment in Rail Vision Ltd. (Rail Vision) to its fair value in the amount of $1,666,000 for the three months ended June 30, 2023, compared to expenses from the revaluation of the Companys investment in Rail Vision to its fair value in the amount of $5,588,000 for the three months ended June 30,2022.
  • GAAP net loss 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-GAAP net loss of $9,663,000, or $0.03 per ordinary share, in the same quarter last year. A reconciliation between GAAP net loss and non-GAAP net loss is provided in the financial statements that are part of this release.

First Half 2023 Financial Results

  • R&D expenses, net for the six months ended June 30, 2023 were $6,269,000, compared to $5,498,000 in the same period last year. The increase is mainly attributable to an increase in payroll and related expenses in the amount of $592,000.
  • S&M expenses for 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 is mainly attributable to a decrease in payroll and related expenses in the amount of $88,000, to a decrease in consultants in the amount of $88,000 offset by an increase in exhibitions, conventions and travel expenses in the amount of $116,000.
  • G&A expenses for the six months ended June 30, 2023 were $1,573,000, compared to $2,025,000 in the same period last year. The decrease is mainly attributable to a decrease in professional services in the amount of $204,000 and from a decrease in payroll and related expenses in the amount of $115,000.

  • Finance expenses, net for the six months ended June 30, 2023, were $1,655,000, compared to $3,519,000 in the same period last year. The decrease is mainly attributable to expenses from the revaluation of the Companys investment in Rail Vision to its fair value in the amount of $1,544,000 for the six months ended June 30, 2023, compared to expenses from the revaluation of the Companys investment in Rail Vision to its fair value in the amount 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 loss of $12,140,000, or $0.04 per ordinary share, in the same period last year.

  • 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 net loss of $11,191,000 or $0.04 per ordinary share, in the same period last year. A reconciliation between GAAP net loss and non-GAAP net loss is provided following the financial statements that are part of this release.

Balance Sheet Highlights

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

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

Use of Non-GAAP Financial Results

In addition to disclosing financial results calculated in accordance with United States generally accepted accounting principles (GAAP), the Company's earnings release contains non-GAAP financial measures of net loss for the period that exclude the effect of stock-based compensation expenses. The Companys management believes the non-GAAP financial information provided in this release is useful to investors understanding and assessment of the Company's ongoing operations. Management also uses both GAAP and non-GAAP information in evaluating and operating business internally and as such deemed it important to provide all this information to investors. The non-GAAP financial measures disclosed by the Company should not be considered in isolation or as a substitute for, or superior to, financial measures calculated in accordance with GAAP, and the financial results calculated in accordance with GAAP and reconciliations to those financial statements should be carefully evaluated. Reconciliations between GAAP measures and non-GAAP measures are provided later in this press release.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and other Federal securities laws. Words such as expects, anticipates, intends, plans, believes, seeks, "estimates" and similar expressions or variations of such words are intended to identify forward-looking statements. For example, Foresight is using forward-looking statements in this press release when it discusses the Elbit commercialization agreement is a validation of its technology by one of the worlds leading defense suppliers, the potential revenues that may be realized under that agreement, that Tier One suppliers interest in its products are expected to convert into paying customers in the coming quarters, that the ADS ratio change ensures that it will be able to focus on business expansion and technological innovation as the Company takes advantage of the transition to autonomous driving solutions. Because such statements deal with future events and are based on Foresights current expectations, they are subject to various risks and uncertainties and actual results, performance or achievements of Foresight could differ materially from those described in or implied by the statements in this press release. The forward-looking statements contained or implied in this press release are subject to other risks and uncertainties, including those discussed under the heading Risk Factors in Foresights annual report on Form 20-F filed with the Securities and Exchange Commission (SEC) on March 30, 2023, and in any subsequent filings with the SEC. Except as otherwise required by law, Foresight undertakes no obligation to publicly release any revisions to these forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events. References and links to websites have been provided as a convenience, and the information contained on such websites is not incorporated by reference into this press release.

Investor Relations Contact:

Miri Segal-Scharia

CEO

MS-IR LLC

msegal@ms-ir.com

917-607-8654

FORESIGHT AUTONOMOUS HOLDINGS LTD.

INTERIM CONDENSED CONSOLIDATED BALANCE SHEETS

U.S. dollars in thousands

As of

June 30, 2023

As of

June 30, 2022

As of

December 31, 2022

ASSETS

Current assets:

Cash and cash equivalents

$

17,033

$

25,024

$

19,173

Restricted cash

97

102

102

Short term deposits

662

10,506

7,216

Marketable equity securities

2

5

2

Other current receivables

569

573

842

Total current assets

18,363

36,210

27,335

Non-current assets:

Operating lease right of use asset

2,056

2,398

2,156

Marketable equity securities

1,260

2,223

2,804

Fixed assets, net

575

646

598

3,891

5,267

5,558

Total assets

$

22,254

$

41,477

$

32,893

LIABILITIES AND SHAREHOLDERS EQUITY

Current liabilities:

Trade payables

$

242

$

251

$

315

Operating lease liability

456

617

527

Other accounts payables

1,297

1,542

1,792

Total current liabilities

1,995

2,410

2,634

Non-current liabilities:

Operating lease liability

1,370

1,625

1,476

Total liabilities

3,365

4,035

4,110

Shareholders equity:

Common stock of no par value;

Additional paid-in capital

130,453

129,032

129,810

Accumulated deficit

-112,131

-91,944

-101,480

Total Foresight Autonomous Holdings Ltd. shareholders equity

18,322

37,088

28,330

Non-controlling interest

567

354

453

Total equity

18,889

37,442

28,783

Total liabilities and shareholders equity

$

22,254

$

41,477

$

32,893

FORESIGHT AUTONOMOUS HOLDINGS LTD.

INTERIM CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

U.S. dollars in thousands

Six months ended

Three months ended

June 30,

June 30,

2023

2022

2023

2022

Revenues

55

248

213

Cost of revenues

-21

-117

-90

Gross profit

34

131

123

Research and development expenses, net

-6,269

-5,498

-3,150

-2,806

Sales and marketing

-1,188

-1,229

-484

-605

General and administrative

-1,573

-2,025

-715

-837

Operating loss

-8,996

-8,621

-4,349

-4,125

Finance expenses, net

-1,655

-3,519

-1,715

-5,991

Net loss

-10,651

-12,140

-6,064

-10,116

FORESIGHT AUTONOMOUS HOLDINGS LTD.

INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW

U.S. dollars in thousands

Six months ended

June 30,

Three months ended

June 30,

2023

2022

2023

2022

Net cash used in operating activities

Loss for the Period

-10,651

-12,140

-6,064

-10,116

Adjustments to reconcile loss to net cash used in operating activities:

2,668

4,033

2,555

6,838

Net cash used in operating activities

-7,983

-8,107

-3,509

-3,278

Cash Flows from Investing Activities

Changes in short term deposits

6,554

7,008

-6

3,074

Investment in marketable securities

-1,001

-714

Purchase of fixed assets

-101

-249

-17

-70

Net cash provided by (used in) investing activities

6,453

5,758

-23

2,290

Effect of exchange rate changes on cash and cash equivalents

-615

-713

-335

-720

decrease in cash, cash equivalents and restricted cash

-2,145

-3,062

-3,867

-1,708

Cash, cash equivalents and restricted cash at the beginning of the period

19,275

28,188

20,997

26,834

Cash, cash equivalents and restricted cash at the end of the period

17,130

25,126

17,130

25,126

FORESIGHT AUTONOMOUS HOLDINGS LTD.

INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW

U.S. dollars in thousands

Adjustments to reconcile loss to net cash used in operating activities:

Six months ended

Three months ended

June 30,

June 30,

2023

2022

2023

2022

Share-based payment

757

949

412

453

Depreciation

125

106

65

55

Revaluation of securities

1,544

2,796

1,666

5,589

exchange rate changes on cash and cash equivalents

615

713

335

720

Changes in assets and liabilities:

Decrease in other receivables

362

88

184

355

Increase in trade payables

-73

-2

-19

-30

Changes in operating lease liability

-166

-292

-127

-233

Increase (decrease) in other accounts payable

-496

-325

39

-71

Adjustments to reconcile loss to net cash used in operating activities

2,668

4,033

2,555

6,838

FORESIGHT AUTONOMOUS HOLDINGS LTD.

SUPPLEMENTAL RECONCILIATION OF GAAP TO NON-GAAP RESULTS

U.S. dollars in thousands

Six months ended

Three months ended

June 30,

June 30,

2023

2022

2023

2022

GAAP operating loss

-8,996

-8,621

-4,349

-4,125

Stock-based compensation in cost of revenues

2

8

8

Stock-based compensation in research and development

488

461

261

247

Stock-based compensation in sales and marketing

73

129

42

40

Stock-based compensation in general and administrative

194

351

109

158

Non-GAAP operating loss

-8,239

-7,672

-3,937

-3,672

GAAP net loss

-10,651

-12,140

-6,064

-10,116

Stock-based compensation expenses

757

949

412

453

Non-GAAP net loss

-9,894

-11,191

-5,652

-9,663

About Foresight

Foresight Autonomous Holdings Ltd. (Nasdaq and TASE: FRSX) is a technology company developing smart multi-spectral vision software solutions and cellular-based applications. Through the Companys wholly owned subsidiaries, Foresight Automotive Ltd., Foresight Changzhou Automotive Ltd. and Eye-Net Mobile Ltd., Foresight develops both in-line-of-sight vision systems and beyond-line-of-sight accident-prevention solutions.

Foresights vision solutions include modules of automatic calibration and dense three-dimensional (3D) point cloud that can be applied to different markets such as automotive, defense, autonomous vehicles and heavy industrial equipment. Eye-Net Mobiles cellular-based solution suite provides real-time pre-collision alerts to enhance road safety and situational awareness for all road users in the urban mobility environment by incorporating cutting-edge AI technology and advanced analytics.

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

Contact Details

Investor Relations Contact:

Miri Segal-Scharia, CEO, MS-IR LLC

+1 917-607-8654

msegal@ms-ir.com

Company Website

https://www.foresightauto.com/

View source version on newsdirect.com: https://newsdirect.com/news/foresight-announces-second-quarter-2023-financial-results-639014568

Foresight Autonomous Holdings Ltd.

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COMTEX_438928385/2655/2023-08-23T16:04:49