Foresight Announces Third Quarter 2022 Financial Results

Foresight Autonomous Holdings Ltd., an innovator in automotive vision systems (Nasdaq and TASE: FRSX) (“Foresight” or the “Company”), today reported financial results for the third quarter of 2022. Foresight ended the first nine months of 2022 with revenues of $451,000 and with $30.3 million in cash, cash equivalents, restricted cash and short-term deposits.

The Company reported a U.S. Generally Accepted Accounting Principles (“GAAP”) net loss of $5.7 million and a non-GAAP net loss of $5.3 million for the third quarter of 2022, compared to a GAAP net loss of $3.8 million and a non-GAAP net loss of $3.4 million for the third quarter of 2021, reflecting an increase of 50% and 56%, respectively.

Third Quarter and Recent Corporate Highlights:

• Foresight Signs Commercial Agreement With SUNWAY-AI for up to $51M: The agreement with SUNWAY-AI Technology Co., Ltd. (“SUNWAY”), a global Chinese manufacturer of components for autonomous and unmanned intelligent vehicles, is a joint program for the development and supply of obstacle detection systems and cloud gateway for driverless airport vehicles, as well as for advanced driver assistance systems (ADAS) for airport ground support vehicles using Foresight’s QuadSight® technology.

• Eye-Net Signs Commercial Agreement with MaaS and Payment Application Pango: In September 2022, Eye-Net Mobile Ltd. ("Eye-Net") signed a five-year commercial cooperation agreement with Pango Pay & Go Ltd. (“Pango”), a developer of the leading mobility-as-a-service (MaaS) parking, vehicle, road services and payment application to potentially protect the lives of three million road users in Israel. Pango will also serve as Eye-Net’s distributor in Israel.

• Foresight Collaborates with Leading American EV Manufacturer to Enhance Existing ADAS Systems: In September 2022, Foresight signed a paid joint proof of concept (POC) project with a leading American manufacturer of electric vehicles (EVs). The POC project will consist of the technological evaluation and testing of predefined scenarios, through which Foresight intends to demonstrate its ability to create 3D stereo perception with software only.

• Foresight Enters MOU with Research Institute in Shandong Province, China: In July 2022, Foresight signed a memorandum of understanding (MOU) with Shandong Industry Research Information and Artificial Intelligence Integration Research Institute Co., Ltd (“Shandong Research Institute”), a professional research institute wholly owned by Shandong Industrial Technology Research Institute, and Beidou Jingzong Technology, a company mainly engaged in the research of high-precision seamless positioning, real-time accurate regeneration of scene targets, and control of scene target position. According to the MOU, the parties will develop an obstacle detection system and all-weather, high-precision positioning for unmanned vehicles based on multi-sensor fusion.

“We believe that the global market continues to validate the strength and innovation of Foresight’s technology offering,” stated Haim Siboni, Foresight’s chief executive officer. “We recently announced the signing of a commercial agreement with SUNWAY in China, which may yield up to $51 million in revenue over a four-year period. This is the most significant accomplishment to date following a consistent pattern of key business developments.”

“Building off of our strategy of establishing joint agreements with leading Tier One manufacturers in multiple global regions, we announced a joint POC project during the third quarter of 2022 with a leading American manufacturer of electric vehicles. We also expanded our presence in the Chinese market through the signing of an MOU with a research institute in Shandong Province. Together with Shandong Research Institute, Foresight will develop an obstacle detection and high-precision positioning system for unmanned vehicles. Following these developments, Foresight will be in a strong position to grow and expand its efforts in some of the world’s most important manufacturing markets.”

“The third quarter of 2022 also saw an important breakthrough for Foresight’s wholly owned subsidiary, Eye-Net. In September 2022, Eye-Net announced the signing of a five-year commercial cooperation agreement with Pango, the developer of Israel’s leading mobility-as-a-service (MaaS) parking, vehicle, road services and payment application. This agreement will see the two companies integrate Eye-Net Protect products into Pango’s app as a software development kit, potentially protecting Pango’s 3 million users by alerting both drivers and other road users about potential oncoming collisions. This cooperation could potentially protect the lives of millions of road users, changing the paradigm of road safety in Israel and demonstrating the potential value of this solution for other regions throughout the world.”

Third Quarter 2022 Financial Results

• Revenues for the three months ended September 30, 2022, amounted to $203,000, compared to $40,000 for the three months ended September 30, 2021. The revenues were generated primarily from a successful completion of the second milestone of the POC project with a leading Tier One supplier in the amount of $65,000, and from the successful completion of the second milestone of a POC project with a leading Tier One supplier in the amount of $120,000.

• Research and development (R&D) expenses, net for the three months ended September 30, 2022, were $3,001,000, compared to $2,428,000 for the three months ended September 30, 2021. The increase is mainly attributed to an increase in payroll and related expenses in the amount of $377,000. R&D expenses in the third quarter of 2022 were offset by the participation from the European Horizon 2020 program in the amount of $75,000.

• Sales and marketing (S&M) expenses for the three months ended September 30, 2022 were $530,000, compared to $333,000 for the three months ended September 30, 2021. The increase is mainly attributed to an increase in payroll and related expenses in the amount of $130,000 and an increase in exhibitions, conventions, and travel expenses in the amount of $27,000.

• General and administrative (G&A) expenses for the three months ended September 30, 2022, were $877,000, compared to $975,000 for the three months ended September 30, 2021. The decrease is mainly attributed to a decrease in stock-based compensation awarded to employees, directors, and consultants in the amount of $77,000.

• Finance expenses, net for the three months ended September 30, 2022, were $1,420,000, compared to finance expenses, net of $54,000 for the three months ended September 30, 2021. Finance expenses, net for the three months ended September 30, 2022, consisted of the revaluation of the Company’s investment in Rail Vision Ltd. to its fair value in the amount of $686,000 and by exchange rate differences in the amount of $956,000, offset by interest income and other income in the amount of $222,000.

• GAAP net loss for the three months ended September 30, 2022, was $5,716,000, or $0.02 per ordinary share, compared to a GAAP net loss of $3,785,000, or $0.01 per ordinary share, for the three months ended September 30, 2021.

• Non-GAAP net loss for the three months ended September 30, 2022, was $5,283,000, or $0.02 per ordinary share, compared to a non-GAAP net loss of $3,406,000, or $0.01 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.

Balance Sheet Highlights

• Cash, restricted cash, and short-term deposits totaled $30.3 million as of September 30, 2022, compared to $45.7 million as of December 31, 2021.

• GAAP shareholders’ equity totaled $32.2 million as of September 30, 2022, compared to $48.6 million as of December 31, 2021. The decrease is mainly attributed to the net loss for the period.

• The Company maintains an at-the-market facility pursuant to the sales agreement it executed in January 22, 2021. The Company has not utilized any sales under such facility since the second quarter of 2021.

Use of Non-GAAP Financial Results

In addition to disclosing financial results calculated in accordance with (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 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 sensor systems for the automotive industry. Through the Company’s 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” cellular-based applications.

Foresight’s 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 Mobile’s 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.

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 its collaborations with strategic partners, the potential revenue to be derived from its strategic partnerships, that it is in a strong position to grow and expand its efforts in some of the world’s most important manufacturing markets, its strategy of establishing joint agreements with leading manufacturers, the development of its products and solutions, its ability to grow and expand its efforts in different manufacturing markets, the integration of its solutions into the Pango app and the potential benefits to be derived from such integration, the potential of its products to protect the lives of road users, its ability to create, the ability of our solutions to improve driving safety by enabling highly accurate and reliable threat detection. 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 31, 2022, 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

FORESIGHT AUTONOMOUS HOLDINGS LTD.

INTERIM CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

U.S. dollars in thousands

FORESIGHT AUTONOMOUS HOLDINGS LTD.

INTERIM CONDENSED CONSOLIDATED BALANCE SHEETS

U.S. dollars in thousands

As of

September 30, 2022

As of

September 30, 2021

As of

December 31, 2021

ASSETS

Current assets:

Cash and cash equivalents

$

12,435

$

32,268

$

$

28,073

Restricted cash

101

60

115

Short-term deposits

17,742

16,724

17,513

Marketable equity securities

3

17

12

Other current receivables

1,000

675

660

Total current assets

31,281

49,744

46,373

Non-current assets:

Operating lease right of use asset

2,278

1,867

2,594

Investment in equity securities

-

4,011

4,011

Marketable equity securities

1,536

-

-

Fixed assets, net

625

426

503

4,439

6,304

7,108

Total assets

$

35,720

$

56,048

$

$

53,481

LIABILITIES AND SHAREHOLDERS’ EQUITY

Current liabilities:

Trade payables

$

228

$

278

$

$

253

Operating lease liability

537

430

587

Other accounts payables

1,230

1,904

1,865

Total current liabilities

1,995

2,612

2,705

Non-current liabilities:

Operating lease liability

1,565

1,499

2,143

Total liabilities

3,560

4,111

4,848

Shareholders’ equity:

Common stock of no par value;

-

-

-

Additional paid-in capital

129,417

127,834

128,209

Accumulated deficit

(97,660)

(76,078

)

(79,804)

Total Foresight Autonomous Holdings Ltd. shareholders’ equity

31,757

51,756

48,405

Non-controlling interest

403

181

228

Total equity

32,160

51,937

48,633

Total liabilities and shareholders’ equity

$

35,720

$

56,048

$

$

53,481

Nine months ended

September 30,

Three months ended

September 30,

2022

2021

2022

2021

Revenues

451

40

203

40

Cost of revenues

(208)

(35)

(91)

(35)

Gross Profit

243

5

112

5

Research and development expenses, net

(8,499)

(7,523)

(3,001)

(2,428)

Sales and marketing

(1,759)

(1,318)

(530)

(333)

General and administrative

(2,902)

(2,993)

(877)

(975)

Operating loss

(12,917)

(11,829)

(4,296)

(3,731)

Finance income (expenses), net

(4,939)

519

(1,420)

(54)

Net loss

(17,856)

(11,310)

(5,716)

(3,785)

FORESIGHT AUTONOMOUS HOLDINGS LTD.

INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW

U.S. dollars in thousands

Nine months ended

September 30,

Three months ended

September 30,

2022

2021

2022

2021

Net cash used in operating activities

Loss for the Period

(17,856)

(11,310)

(5,716)

(3,785)

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

4,753

2,335

720

573

Net cash used in operating activities

(13,103)

(8,975)

(4,996)

(3,212)

Cash Flows from Investing Activities

Changes in short-term deposits

(230)

(11,558)

(7,238)

11,738

Investment in marketable securities

(1,001)

-

-

-

Purchase of fixed assets

(282)

(118)

(33)

(56)

Net cash provided by (used in) investing activities

(1,513)

(11,676)

(7,271)

11,682

Cash flows from Financing Activities:

Issuance of ordinary shares and warrants, net of issuance expenses

-

13,508

-

-

Proceeds from exercise of warrants

-

595

-

-

Proceeds from exercise of options

-

57

-

-

Net cash provided by financing activities

-

14,160

-

-

Effect of exchange rate changes on cash and cash equivalents

(1,036)

47

(323)

(25)

Increase (decrease) in cash, cash equivalents and restricted cash

(15,652)

(6,444)

(12,590)

8,445

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

28,188

38,772

25,126

23,883

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

12,536

32,328

12,536

32,328

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:

Nine months

ended

September 30,

Three months

ended

September 30,

2022

2021

2022

2021

Share-based payment

1,383

2,042

433

379

Depreciation

161

119

55

38

Revaluation of securities

3,485

25

689

(6)

exchange rate changes on cash and cash equivalents

1,036

(47)

323

25

Changes in assets and liabilities:

Increase in other receivables

(340)

(274)

(427)

(151)

Increase (decrease) in trade payables

(25)

(113)

(23)

58

Changes in operating lease liability

(312)

(107)

(20)

15

Increase (decrease) in other accounts payable

(635)

690

(310)

215

Adjustments to reconcile loss to net cash used in operating activities

4,753

2,335

720

573

Supplemental cash flow information

Nine months ended

September 30,

Three months ended

September 30,

2022

2021

2022

2021

Operating leases

Cash payments for operating leases

$ 408

$ 334

$ 138

$ 115

Non-cash activity

New operating lease assets obtained in exchange for operating lease liabilities

-

$ 1,010

-

$ 38

FORESIGHT AUTONOMOUS HOLDINGS LTD.1

SUPPLEMENTAL RECONCILIATION OF GAAP TO NON-GAAP RESULTS

U.S. dollars in thousands

Nine months ended

September 30

Three months ended

September 30,

2022

2021

2022

2021

GAAP operating loss

(12,917)

(11,829)

(4,296)

(3,731)

Share-based Payment in cost of revenues

17

-

9

-

Share-based Payment in research and development

696

917

234

242

Share-based Payment in sales and marketing

163

145

34

(85)

Share-based Payment in general and administrative

507

980

156

222

Non-GAAP operating loss

(11,534)

(9,787)

(3,863)

(3,352)

GAAP net loss

(17,856)

(11,310)

(5,716)

(3,785)

Share-based Payment expenses

1,383

2,042

433

379

Non-GAAP net loss

(16,473)

(9,268)

(5,283)

(3,406)

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 Company’s 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.

Foresight’s 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 Mobile’s 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.

Investor Relations Contact:

Miri Segal-Scharia, CEO, MS-IR LLC

+1 917-607-8654

msegal@ms-ir.com

https://www.foresightauto.com/