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Foresight Announces Second Quarter 2018 Financial Results

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Foresight Autonomous Holdings Ltd., an innovator in automotive vision
systems (Nasdaq and TASE: FRSX), today reported financial results for
the second quarter of 2018. Foresight ended the second quarter of 2018
with $19.6 million in cash and short-term deposits, GAAP net loss of
$1.49 million for the six months ended June 30, 2018, and non-GAAP net
loss for the same period of $7.2 million.

"During the second quarter, we announced the first sales of our
QuadSight™ prototype. The prototypes were ordered by a truck division of
a large European vehicle manufacturer and by a leading global Chinese
electric vehicle manufacturer, as both companies indicated their
interest in the significant advances in obstacle detection offered by
the QuadSight™ system," commented Haim Siboni, CEO of Foresight. "These
prototype sales will enable us to collect customer feedback and modify
the system to better meet customer needs in the future. We are confident
that these sales, along with the progress in commercializing our
Eyes-On™ system, offer a clear path to increased revenues and an
enhanced product offering in the future."

"Foresight also completed multiple successful capital raises during the
second quarter, demonstrating the support of leading Israeli
institutional investors in our company's long-term potential. These
capital raises strengthened our balance sheet and placed us in a strong
position for future growth. We expect that our existing cash and cash
equivalents will be sufficient to fund our current operations until the
first quarter of 2020," concluded Mr. Siboni.

Second Quarter 2018 Financial Results

  • Research and development (R&D) expenses for the three months ended
    June 30, 2018 were $2,187,000 compared to $778,000 in the three months
    ended June 30, 2017. The increase is attributed mainly to accelerated
    employee recruitment and is comprised primarily of payroll and related
    expenses, stock-based compensation expenses and subcontracted services
    expenses.
  • General and administrative (G&A) expenses for the three months ended
    June 30, 2018 were $887,000 compared to $1,666,000 in the three months
    ended June 30, 2017. The decrease is attributed primarily to a
    decrease in stock-based compensation expenses. Also, during the three
    months ended June 30, 2017 Foresight incurred additional expenses
    related to professional services regarding the company's listing on
    Nasdaq.
  • GAAP net loss for the three months ended June 30, 2018 was $4,083,000,
    or $(0.04) per ordinary share, compared to a GAAP net loss of
    $21,447,000, or $(0.33) per ordinary share, in the three months ended
    June 30, 2017. The decrease is attributed mainly to the revaluation of
    derivative warrant liability.
  • Non-GAAP net loss for the three months ended June 30, 2018 was
    $3,637,000 or $(0.03) per ordinary share, compared to a non-GAAP net
    loss of $1,125,000, or $(0.01) per ordinary share, in the three months
    ended June 30, 2017. A reconciliation between GAAP net loss and
    non-GAAP net loss is provided in the financial statements that are
    part of this release. Non-GAAP results exclude the effect of
    stock-based compensation expenses and derivative warrant liability.

Balance Sheet Highlights

  • Cash and short-term deposits totaled $19.6 million as of June 30,
    2018, compared to $18.3 million on June 30, 2017.
  • Investments in Rail Vision Ltd. totaled $12.2 million (including
    investment in an affiliate company totaling $3.8 million and other
    investments totaling $8.4 million) as of June 30, 2018 compared to
    $0.9 million on June 30, 2017. The increase is attributed primarily to
    warrants exercise and to revaluation of outstanding warrants (which
    are presented in current assets) of $8.4 million.
  • GAAP shareholders' equity totaled $30.5 million as of June 30, 2018,
    compared to $24.8 million as of December 31, 2017. The increase is
    attributed mainly to the capital raise completed by the company during
    the period.
  • Non-GAAP shareholders' equity totaled $25.7 million as of June 30,
    2018, compared to $22.9 million as of December 31, 2017.
       
As of
June 30,
As of

December 31,

(thousands of U.S. dollars) 2018   2017 2017
GAAP Results
Shareholders' equity $ 30,477 $ 2,619 $ 24,817
Non-GAAP Results
Shareholders' equity $ 25,668 $ 18,926 $ 22,921
 

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 revaluation of
other investments and derivative warrant liability.

Recent Corporate Highlights:

  • Announced First Sales of QuadSight Prototype: Foresight
    announced sales of its QuadSight™ vision system to a truck division of
    a large European vehicle manufacturer and a leading global Chinese
    electric vehicle manufacturer. The breakthrough vision system for
    semi-autonomous and autonomous vehicles offers near-100% obstacle
    detection with near-zero false alerts in all weather and lighting
    conditions. Revenue from each QuadSight™ prototype system sale is
    expected to total tens of thousands of dollars.
  • Completed Successful Capital Raises at a Total Amount of $12.4
    Million from Leading Israeli Institutional Investors Through Private
    Placements:
    Foresight announced that it closed several private
    placement agreements with multiple leading Israeli institutional
    investors. During the second quarter Foresight raised $5.5 million
    from Harel Insurance, resulting in Harel Insurance holding an
    aggregate of approximately 8.15% of Foresight's issued shares. During
    the third quarter Foresight completed an additional raise of $6.9
    million from multiple institutional investors, including Meitav Dash
    Group and Psagot Investment House, as well as from other
    non-institutional investors. Meitav Dash Group invested approximately
    $4.1 million, while Psagot Investment House invested approximately
    $1.4 million.
  • Signed Memorandum of Understanding for First Potential Sales of
    Eyes-On
    System: Foresight signed a non-binding memorandum
    of understanding with a direct importer of several leading vehicle
    manufacturers to Israel. Once a binding agreement is signed, Foresight
    and the importer will carry out a pilot program in which a beta
    version of the Eyes-On™ system will be integrated into multiple models
    from the importer's fleet. According to preliminary estimates by the
    importer, the importer's purchasing potential is approximately 21,000
    systems over a three-year period from the signing of a binding
    agreement.
  • Increased Stake in Rail Vision to Become Largest Shareholder:
    By exercising $2.24 million of warrants, to take effect in the third
    quarter, Foresight increased its ownership stake in Rail Vision Ltd.
    to approximately 35% of issued and outstanding shares and 34% on a
    fully-diluted basis. Foresight is now the largest shareholder of Rail
    Vision Ltd.

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, the revaluation of other investments and revaluation of
derivative warrant liability, and non-GAAP financial measures of
shareholders' equity that excludes the effect of derivative warrant
liability and the revaluation of other investments. 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 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.

About Foresight

Foresight Autonomous Holdings Ltd. (Nasdaq and TASE: FRSX), founded in
2015, is a technology company engaged in the design, development and
commercialization of stereo/quad-camera vision systems and V2X cellular
based solutions for the automotive industry. Foresight's vision systems
are based on 3D video analysis, advanced algorithms for image processing
and sensor fusion. The company, through its wholly owned subsidiary
Foresight Automotive Ltd., 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
improve driving safety by enabling highly accurate and reliable threat
detection while ensuring the lowest rates of false alerts. The company's
systems are targeting the Advanced Driver Assistance Systems (ADAS),
semi-autonomous and autonomous vehicle markets. The company predicts
that its systems will revolutionize automotive safety 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,
Foresight is using forward-looking statements in this press release when
it discusses that prototype sales, along with progress in
commercialization of its Eyes-On™ system, offers a clear path to
increased revenues and an enhanced product offering in the future, when
it discusses its strong position for future growth, the amount of
revenue from sales of its QuadSight™ system, that Foresight and an
importer will carry out a pilot program in which a beta version of the
Eyes-On™ system will be integrated into multiple models from the
importer's fleet, and the importer's purchasing potential. 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 annual report on Form 20-F filed with the Securities and
Exchange Commission ("SEC") on March 27, 2018, 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.

 

FORESIGHT AUTONOMOUS HOLDINGS LTD.

INTERIM CONDENSED CONSOLIDATED BALANCE SHEETS

U.S. dollars in thousands

           

As of
June 30,
2018

As of
June 30,
2017

 

As of
December 31,
2017

ASSETS

 
Current assets:
Cash and cash equivalents $ 8,483 $ 14,282 $ 9,636
Short Term Deposits 11,162 4,019 12,169
Marketable equity securities 44 24 22
Other Investments 8,417 - 2,361
Other receivables   340  

280

  482
Total current assets 28,446 18,605 24,670
 
Non-current assets:
Investment in affiliate company 3,761 865 1,404
Other investments - 66 1,672
Fixed assets, net   629   132   289
4,390 1,063 3,365
 
Total assets $ 32,836   19,668 $ 28,035
 

LIABILITIES AND SHAREHOLDERS' EQUITY

 
Current liabilities:
Trade payables $ 306 104 $ 330
Other accounts payables 1,534 638 817
Derivative warrant liability   238   -   -
Total current liabilities 2,078 742 1,147
 
Derivative warrant liability   281   16,307   2,071
 
Total liabilities   2,359   17,049   3,218
 
Shareholders' equity:
 
Common shares of NIS 0 par value; - - -
Additional paid-in capital 50,409 32,876 44,114
Receipts on account of shares 850 - -
Accumulated deficit   (20,782)   (30,257)   (19,297)
Total stockholders' equity   30,477   2,619   24,817
 
Total liabilities and stockholders' equity $ 32,836   19,668 $ 28,035
 
 

SUPPLEMENTAL RECONCILIATION OF GAAP TO
NON-GAAP SHAREHOLDERS' EQUITY

U.S. dollars in thousands

           
As of
June 30,
2018
As of
June 30,
2017

As of
December
31, 2017

GAAP Shareholders' equity 30,477 2,619 24,817
Revaluation of other investments (5,328 ) - (3,967)
Derivative warrant liability 519 16,307 2,071
Non-GAAP Shareholders' equity 25,668 18,926 22,921
 

FORESIGHT AUTONOMOUS HOLDINGS LTD.

INTERIM CONDENSED CONSOLIDATED STATEMENTS
OF COMPREHENSIVE LOSS

U.S. dollars in thousands

       
Six months ended
June 30,
Three months ended
June 30,
2018   2017 2018   2017
Research and development expenses (4,262) (1,275) (2,187) (778)
 
Marketing and sales (540) (513) (234) (392)
 
General and administrative expenses (1,941) (2,337) (887) (1,666)
 
Operating loss (6,743) (4,125) (3,308) (2,836)
 
Equity in net loss of an affiliated company (1,077) (383) (459) (215)
 
Financing income (expenses), net 6,335 (22,394) (316) (18,396)
 
Net (loss) profit (1,485) (26,902) (4,083) (21,447)
 
 

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,
2018   2017 2018   2017
 

Net cash used in operating activities

Profit (Loss) for the Period (1,485) (26,902) (4,083) (21,447)
 

Adjustments to reconcile profit (loss) to net cash
used in
operating activities:

(3,635)

24,541

1,554

19,819

 
Net cash used in operating activities (5,120) (2,361) (2,529) (1,628)
 
 

Cash Flows from Investing Activities

Changes in short term deposits 1,007 (3,629) 350 (2,903)
Investment in affiliate company (2,489) - (249) -
Purchase of fixed assets (430) (80) (149) (48)
 
Net cash used in investing activities (1,912) (3,709) (48) (2,951)
 
 

Cash flows from Financing Activities:

Issuance of ordinary shares and warrants, net of
issuance
expenses

5,485

10,745

5,485

4,652

Exercise of warrants and options, net of issuance
expenses

159

5,593

-

5,457

Receipts on account of shares 850 - 850 -
 
Net cash provided by financing activities 6,494 16,338 6,335 10,109
 
 

Effect of exchange rate changes on cash and
cash
equivalents

(615) 650 (456) 516
       

Increase (decrease) in cash and cash
equivalents

(1,153) 10,918 3,302 6,082

Cash and cash equivalents at the beginning of
the
period

9,636

3,364

5,181

8,200

       

Cash and cash equivalents at the end of the
period

8,483

14,282

8,483

14,282

 
 

FORESIGHT AUTONOMOUS HOLDINGS LTD.

INTERIM CONDENSED CONSOLIDATED STATEMENTS
OF CASH FLOW

U.S. dollars in thousands

       

Adjustments to reconcile profit (loss) to
net cash

used in operating activities:

Six months

ended
June 30,

Three months

ended
June 30,

2018   2017 2018   2017
Share-based payment 1,180 1,640 573 1,406
Depreciation 90 15 49 12
Revaluation of derivative warrant liability (1,552) 23,050 (127) 18,916
Equity in loss of an affiliated company 1,077 383 459 215
Revaluation of securities (22) (6) 8 (5)
Revaluation of other investments (5,328) - - -
exchange rate changes on cash and cash equivalents 615 (650) 456 (516)
 
Changes in assets and liabilities:
Decrease (increase) in other receivables 142 (176) 149 225
Increase (decrease) in Trade payables (24) - 10 (242)
Increase (decrease) in other accounts payable 187 285 (23) (192)
       

Adjustments to reconcile profit (loss) to net cash
used
in operating activities

(3,635)

(24,541)

1,554

19,819

 
 

FORESIGHT AUTONOMOUS HOLDINGS LTD.

SUPPLEMENTAL RECONCILIATION OF GAAP TO
NON-GAAP RESULTS

U.S. dollars in thousands

       

 

Six months ended
June 30
Three months ended
June 30,
2018   2017 2018   2017
GAAP operating loss (6,743) (4,125) (3,308) (2,836)

Stock-based compensation in research and
development

349

183

166

183

Stock-based compensation in sales and marketing 96 261 48 261

Stock-based compensation in general and
administrative

735

1,196

359

962

Non-GAAP operating loss (5,563) (2,485) (2,735) (1,430)
 
GAAP Financing income (expenses), net

6,335

(22,394)

(316)

(18,396)

Revaluation of other investments (5,328) - - -
Revaluation of derivative warrant liability (1,552) 23,050 (127) 18,916
Non-GAAP Financing income (expenses), net

(545)

656

(443)

520

 
GAAP net profit (loss) (1,485) (26,902) (4,083) (21,447)
Stock-based compensation expenses 1,180 1,640 573 1,406
Revaluation of other investments (5,328) - - -
Revaluation of derivative warrant liability (1,552) 23,050 (127) 18,916
Non-GAAP net loss (7,185) (2,212) (3,637) (1,125)

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