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Foresight Announces First Half 2017 Results

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Foresight Autonomous Holdings Ltd., a leading developer of Advanced
Driver Assistance Systems (TASE: FRSX) (NASDAQ:FRSX)
, today
reported financial results for the six months ended June 30, 2017.
Foresight ended the first half of 2017 with $18.3 million in cash and
short term deposits, with GAAP net loss of $26.9 million and with
non-GAAP net loss of $2.2 million.

Commenting on Foresight's first half 2017 results, Foresight's CEO, Haim
Siboni said: "We are extremely pleased with the company's progress this
period in multiple areas. First, our dual listing on the NASDAQ has been
instrumental for our expansion into the U.S. market. In addition, our
progress with one of the largest vehicle manufacturers in China
demonstrates that our unparalleled technology aligns with our long-term
corporate development strategy to become a leader in the automated
transportation industry. Since then, we signed another pilot agreement
with a leading vehicle manufacturer in China. Finally, these
achievements, along with a strong balance sheet, have built solid
momentum for the remainder of 2017, as we plan to leverage our
competitive technology and expand globally."

Six Months Ended June 30, 2017 Financial Results

  • Research and development (R&D) expenses for the six months ended June
    30, 2017 were $1,275,000, compared to $319,000 in the six months ended
    June 30, 2016. The increase is attributed to acceleration in our R&D
    efforts and employee recruitment, and is comprised primarily of an
    increase in stock-based compensation, and in payroll and related
    expenses.
  • General and administrative (G&A) expenses for the six months ended
    June 30, 2017 were $2,337,000, compared to $1,484,000 in the six
    months ended June 30, 2016. The increase is attributed primarily to
    increases in stock-based compensation, and in payroll and related
    expenses.
  • GAAP net loss for the six months ended June 30, 2017 was $26,902,000,
    or $(0.33) per ordinary share, compared to a GAAP net loss of
    $1,424,000, or $(0.02) per ordinary share, in the six months ended
    June 30, 2016. The increase is attributed mainly to the increases in
    R&D expenses, stock-based compensation, and in the revaluation of
    derivative warrants liability expenses.

    Non-GAAP net loss
    for the six months ended June 30, 2017 was $2,213,000 or $(0.03) per
    ordinary share compared to a non-GAAP net loss of $1,642,000, or
    $(0.03) per ordinary share, in the six months ended June 30, 2016.
    Six months ended
June 30,
  Year ended

December 31,

(thousands of U.S. dollars, except share and per share data)   2017   2016   2016
GAAP Results            
Net loss   (26,902)   (1,424)   (1,913)
Basic and diluted loss per share   (0.33)   (0.02)   (0.03)
Non-GAAP Results  
Net loss   (2,213)   (1,642)   (3,355)
Basic and diluted loss per share   (0.03)   (0.03)   (0.05)

A reconciliation between GAAP operating results and non-GAAP operating
results is provided in the financial statements that are part of this
release. Non-GAAP results exclude stock-based compensation expenses and
revaluation of derivative warrant liability.

Balance Sheet Highlights

Cash and short term deposits totaled $18.3 million as of June 30,
2017, compared to $3.8 million on December 31, 2016. The increase
compared to December 31, 2016 is mainly due to the proceeds received
from private placements that occurred in the first half of 2017,
totaling $11.6 million gross ($10.7 net proceeds), and from warrants
exercised by shareholders equal to $5.6 million, less cash used
during the first half of 2017.
 

GAAP shareholders' equity totaled $2.6 million as of June 30,
2017, compared to $4.7 million as of December 31, 2016. Non-GAAP
shareholders' equity totaled $18.9 million as of June 30, 2017
compared to $4.8 million as of December 31, 2016.

 

   
    As of
June 30,
  As of

December 31,

(thousands of U.S. dollars)   2017   2016   2016
GAAP Results            
Shareholders' equity   2,619   3,799   4,669
Non-GAAP Results  
Shareholders' equity   18,926   5,199   4,800

A reconciliation between GAAP shareholders' equity results and non-GAAP
shareholders' equity results is provided in the financial statements
that are part of this release. Non-GAAP results exclude derivative
warrant liability.

Business Highlights

  • Raised $11.6 million (gross) through private placements:
    Included funding from strategic investors in the Israeli automotive
    industry, and from Israeli major institutional investors. This funding
    was priced below market value, and received high market demand.
  • Achieved successful pilot results after signing an agreement with
    JAC Motors, a leading Chinese car manufacturer for pilot test:

    Completed a pilot test with JAC Motors, one of the largest Chinese car
    manufacturers, in which Foresight's accident prevention system was
    compared with leading competing systems. Foresight's system proved
    superior and demonstrated successful results during the test. The
    parties have agreed to explore several scenarios for potential
    commercial cooperation.
  • Signed second agreement with a leading Chinese car manufacturer for
    pilot test:
    An additional large Chinese car manufacturer will
    finance and provide Foresight with vehicles for a pilot test of
    Foresight's accident prevention system in China.
  • Successfully completed proof of concept of multispectral road
    traffic accident prevention system:
    The new system is designed to
    provide multispectral vision capabilities, by combining four cameras
    operating at varying wavelengths, thereby presenting a comprehensive
    solution for the front of the vehicle, which will detect all obstacles
    under any weather and lighting conditions, including complete
    darkness, smoke, haze, fog, rain and glare.
  • Dual listing – began trading on NASDAQ: Foresight's ADS'
    commenced trading on NASDAQ under the symbol "FRSX". The listing is in
    line with Foresight's strategy to expand its presence in the U.S.
  • Foresight's 32% subsidiary, Rail Vision Ltd., advanced its
    operations on several fronts:
    Rail Vision conducted a successful
    field test of its unique system, designed to prevent on-track
    collisions for Deutsche Bahn, one of the largest train operators in
    the world. Rail Vision also achieved real-time capabilities of
    its railway safety system. Through its unique algorithm, the
    prototype demonstration validated the system's ability to detect and
    classify railway obstacles and alert the driver and control center in
    real time.

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 excludes the effect of stock-based compensation
expenses and revaluation of derivative warrant liability, and non-GAAP
financial measures of shareholders' equity that excludes the effect of
derivative warrant liability. The company's management believes the
non-GAAP financial information provided in this release is useful to
investors' understanding and assessment of the company's on-going
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.

About Foresight

Foresight (NASDAQ and TASE: FRSX), founded in 2015, is a
technology company engaged in the design, development and
commercialization of Advanced Driver Assistance Systems (ADAS) based on
3D video analysis, advanced algorithms for image processing and
artificial intelligence. The company, through its wholly owned
subsidiary, develops advanced systems for accident prevention, which are
designed to provide real-time information about the vehicle's
surroundings while in motion. The systems are designed to alert drivers
to threats that might cause accidents, resulting from traffic
violations, driver fatigue or lack of concentration, etc., and to enable
highly accurate and reliable threat detection while ensuring the lowest
rates of false alerts. The company estimates that its systems will
revolutionize ADAS by providing an automotive grade, cost-effective
platform, and advanced technology.

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, when
Foresight describes exploring several scenarios for potential commercial
cooperation with a Chinese car manufacturer, that it plans to leverage
its competitive technology and expand globally, and that it estimates
that its systems will revolutionize ADAS, it is using forward-looking
statements. Because such statements deal with future events and are
based on Foresight's 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 Foresight's registration
statement on Form 20-F filed with the Securities and Exchange Commission
("SEC") on June 1, 2017, 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.



FORESIGHT AUTONOMOUS HOLDINGS LTD.
INTERIM
CONDENSED CONSOLIDATED BALANCE SHEETS

U.S. dollars in thousands
(Except share data)

 

As of
June 30, 2017

    As of
June 30, 2016
 

As of
December 31, 2016

ASSETS  
 
Current assets:
Cash and cash equivalents $ 14,282 5,042 3,364
Short Term Deposits 4,019 - 390
Marketable equity securities 24 17 -
Other receivables   304   299 104
Total current assets 18,605 5,358 3,858
 
Non-current assets:
Marketable equity securities - 63 18
Investment in affiliate company 865 - 1,248
Other investments 66 - 66
Fixed assets, net   132   12 67
1,063 75 1,399
 
Total assets $ 19,668   5,433   5,257
 
LIABILITIES AND SHAREHOLDERS' EQUITY
 
Current liabilities:
Other accounts payable $ 742   234 457
Total current liabilities 742 234 457
 
Derivative warrant liability   16,307   1,400 131
 
Total liabilities   17,049   1,634 588
 
Shareholders' equity:
 
Common stock of NIS 0 par value; - - -
Additional paid-in capital 32,876 6,672 8,024
Accumulated deficit   (30,257)   (2,873) (3,355)
Total stockholders' equity   2,619   3,799 4,669
 
Total liabilities and stockholders' equity $ 19,668   5,433 5,257



SUPPLEMENTAL RECONCILIATION OF GAAP TO NON-GAAP SHAREHOLDERS' EQUITY
U.S. dollars in thousands

  As of
June 30, 2017
    As of
June 30, 2016
 

 

As of
December 31, 2016

GAAP Shareholders' equity   2,619 3,799 4,669
Derivative warrant liability 16,307 1,400 131
Non-GAAP Shareholders' equity 18,926 5,199 4,800

FORESIGHT AUTONOMOUS HOLDINGS LTD.
INTERIM
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

U.S. dollars in thousands
(Except share data)

  Six months ended
June 30,
  Year ended

December 31,

2017   2016 2016
 
Research and development expenses, net $ (1,275 ) $ (319) $ (904)
 
Marketing and sales (513 ) (105) (224)
 
General and administrative expenses (2,337 ) (1,484) (2,627)
 
Equity in net loss of an affiliated company   (383 )   -   (108)
 
Operating loss (4,508 ) (1,908) (3,863)
 
Revaluation of derivative warrant liability (expenses) income (23,050) 438 1,847
Financing income, net   656     53 103
 
Net loss $ (26,902) $ (1,417)   $ (1,913)
 
Basic and diluted loss per share $ (0.33) $ (0.02) $ (0.03)
 
Weighted average number of shares outstanding used in computing
basic and diluted loss per share - in thousands
  82,100   64,566   67,311

FORESIGHT AUTONOMOUS HOLDINGS LTD.
SUPPLEMENTAL
RECONCILIATION OF GAAP TO NON-GAAP RESULTS

U.S. dollars in thousands

  Six months ended
June 30,
    Year ended

December 31,

2017     2016 2016
 
GAAP operating loss   (4,508)   (1,908) (3,863)
Stock-based compensation in research and development 183 - -
Stock-based compensation in sales and marketing 260 - -
Stock-based compensation in general and administrative 1,196 213 405
Non-GAAP operating loss (2,869) (1,695) (3,458)
 
GAAP Revaluation of derivative warrant liability (expenses) income (23,050) 438 1,847
Revaluation of derivative warrant liability 23,050 (438 ) (1,847)
Non-GAAP Revaluation of derivative warrant liability (expenses)
income
- - -
 
GAAP net loss (26,902) (1,417) (1,913)
Stock-based compensation expenses 1,639 213 405
Revaluation of derivative warrant liability (expenses) income 23,050 (438 ) (1,847)
Non-GAAP net loss (2,213) (1,642) (3,355)
 
GAAP Basic and diluted loss per share (0.33) (0.02) (0.03)
Non-GAAP Basic and diluted loss per share (0.03) (0.03) (0.05)
 
Weighted average number of shares outstanding used in computing
basic and diluted loss per share - in thousands
82,100 64,566 67,311

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