Foresight Autonomous Holdings Ltd., an innovator in automotive
vision systems (Nasdaq and TASE: FRSX), today reported financial
results for the third quarter ended September 30, 2019. Foresight
ended the third quarter of 2019 with $13.1 million in cash, cash
equivalents and short-term deposits, GAAP net loss of $11.07
million and non-GAAP net loss for the same period of $9.46
million.
“The third quarter was highlighted by our significant progress
in penetrating the autonomous vehicle markets in Asia and the
United States,” commented Haim Siboni, CEO of Foresight. “Our
compelling technological demonstrations in Japan and the United
States both led to prototype purchases from Tier One suppliers and
we expect our demonstrations in France and Germany to lead to
additional cooperation and prototype purchases. Additionally, we
expect that our recently announced partnership with Guide Infrared
will significantly expand our footprint in greater China. Going
forward, we will continue to pursue our successful strategy of
increasing our customer base through technological
demonstrations.”
Corporate Highlights Q3:
- Announced Sale of QuadSight™ Prototype to Leading Tier One
Japanese Automotive Supplier: Following the completion of a
successful technological demonstration in Japan, Foresight
announced the sale of a prototype of its QuadSight™ quad-camera
vision system targeted for the semi-autonomous and autonomous
vehicle market. The system was ordered by a leading Tier One
Japanese automotive supplier. Following evaluation, customer
satisfaction may lead to additional system orders for mass
production. Revenue from the prototype system sale is expected to
total tens of thousands of dollars.
- Signed Agreement with Leading Chinese Infrared Camera
Manufacturer: In September, Foresight signed a strategic
cooperation agreement with Wuhan Guide Infrared Co. Ltd., a $2.7
billion Chinese corporation. Guide Infrared develops, manufactures
and markets infrared thermal imaging systems through its
subsidiary, Global Sensor Technology. The agreement provides for
cooperation in the integration of Guide Infrared’s solutions with
Foresight’s QuadSight vision system, in addition to marketing and
distribution throughout greater China.
- Eye-Net Mobile Completed Successful Large-Scale Trial:
In August, Eye-Net Mobile Ltd., a wholly owned subsidiary of
Foresight, successfully completed a large-scale trial of its
Eye-Net cellular-based accident prevention solution. The trial met
all predefined criteria for success, demonstrating the
technological proof of concept of the Eye-Net solution on a large
scale. More than 8,500 users participated in the six-day trial in
Israel and abroad.
- Conducted Successful U.S. Technological Demonstrations:
Foresight completed a series of technological demonstrations of its
QuadSight vision system in the Silicon Valley area and in Detroit
in July. The demonstration led to the sale of an additional
QuadSight prototype to the American subsidiary of a global Tier One
automotive supplier. Revenue from the prototype system sale is
expected to total tens of thousands of dollars.
- Eye-Net Mobile Performed Controlled-Environment Trial:
Eye-Net Mobile successfully completed a controlled-environment
trial of its cellular-based accident prevention solution. The trial
was conducted for a leading global vehicle manufacturer and was
conducted in a designated test track. The trial met all predefined
objectives in all scenarios, and the two parties discussed
potential integration of the Eye-Net solution in the vehicle
manufacturer’s connected car platform.
Third Quarter 2019 Financial
Results
- Research and development (R&D) expenses, net for the three
months ended September 30, 2019 were $2,547,000, compared to
$2,217,000 in the three months ended September 30, 2018. During the
third quarter of 2019, we continued accelerated subcontracted
services.
- General and administrative (G&A) expenses for the three
months ended September 30, 2019 were $893,000, compared to $872,000
in the three months ended September 30, 2018.
- GAAP net loss for the three months ended September 30, 2019 was
$3,931,000, or $0.03 loss per ordinary share, compared to GAAP net
loss of $3,758,000, or $0.03 loss per ordinary share, in the three
months ended September 30, 2018. The change is attributed mainly to
the acceleration of research and development goals.
- Non-GAAP net loss for the three months ended September 30, 2019
was $3,439,000, or $0.02 loss per ordinary share, compared to a
non-GAAP net loss of $3,759,000, or $0.03 loss per ordinary share,
in the three months ended September 30, 2018. A reconciliation
between GAAP net loss and non-GAAP net loss is provided following
the financial statements that are part of this release. Non-GAAP
results exclude the effect of stock-based compensation expenses and
revaluation of derivative warrant liability.
Nine months 2019 Financial
Results
- R&D expenses, net for the nine months ended September 30,
2019 were $7,007,000, compared to $6,478,000 in the nine months
ended September 30, 2018. The increase is attributed mainly to
accelerated subcontracted services.
- G&A expenses for the nine months ended September 30, 2019
were $2,666,000, compared to $2,813,000 in the nine months ended
September 30, 2018. The decrease is attributed primarily to
stock-based compensation expenses.
- GAAP net loss for the nine months ended September 30, 2019 was
$11,069,000, or $(0.07) per ordinary share, compared to a GAAP net
loss of $5,243,000, or ($0.04) per ordinary share, in the nine
months ended September 30, 2018. The increase is attributed mainly
to revaluation of other investments in the amount of $5,328,000 and
to revaluation of derivative warrant liability in the amount of
$1,993,000, both recorded under financing income, net in the nine
months ended September 30, 2018.
- Non-GAAP net loss for the nine months ended September 30, 2019
was $9,457,000, or $(0.06) per ordinary share, compared to a
non-GAAP net loss of $10,944,000, or $(0.09) per ordinary share, in
the nine months ended September 30, 2018. A reconciliation between
GAAP net loss and non-GAAP net loss is provided following the
financial statements that are part of this release. Non-GAAP
results exclude the effect of stock-based compensation expenses,
revaluation of other investments and revaluation of derivative
warrant liability.
Balance Sheet Highlights
- Cash, cash equivalents and short-term deposits totaled $13.1
million as of September 30, 2019, compared to $19.3 million on
September 30, 2018.
- Investments in Rail Vision totaled $7.4 million as of September
30, 2019, compared to $13.1 million as of September 30, 2018. The
decrease is attributed primarily to gains from revaluation of other
investments (Rail Vision warrants) recorded in the nine months
ended September 30, 2018, the expiration of Rail Vision warrants
during the nine months ended September 30, 2019, and by equity in
net loss of Rail Vision’s results.
- GAAP shareholders’ equity totaled $20.3 million as of September
30, 2019, compared to $23.6 million as of December 31, 2018.
- Non-GAAP shareholders’ equity totaled $20.6 million as of
September 30, 2019, compared to $23.3 million as of December 31,
2018. A reconciliation between GAAP shareholders’ equity results
and non-GAAP shareholders’ equity results is provided following the
financial statements that are part of this release. Non-GAAP
results exclude revaluation of other investments and derivative
warrant liability.
Use of Non-GAAP Financial Results
In addition to disclosing financial results calculated in
accordance with United States generally accepted accounting
principles (GAAP), this earnings release contains non-GAAP
financial measures of net loss for the periods presented that
exclude 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 sensors systems for the
automotive industry. Through the company’s wholly owned
subsidiaries, Foresight 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 sensor is a four-camera system based on 3D video analysis,
advanced algorithms for image processing, and sensor fusion.
Eye-Net Mobile’s cellular-based application is a V2X
(vehicle-to-everything) accident prevention solution based on
real-time spatial analysis of clients’ movement.
The company’s systems are designed to improve driving safety by
enabling highly accurate and reliable threat detection while
ensuring the lowest rates of false alerts. Foresight is targeting
the semi-autonomous and autonomous vehicle markets and 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 it expects demonstrations in France and Germany to lead to
additional cooperation and prototype purchases, that its
partnership with Guide Infrared will significantly expand its
footprint in greater China, continuing to pursue its strategy of
increasing customer base through technological demonstrations, that
customer satisfaction may lead to additional system orders for mass
production, revenue from prototype system sales, cooperation with
Wuhan Guide Infrared Co. Ltd., and potential integration of the
Eye-Net solution in a vehicle manufacturer’s connected car
platform. 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 20, 2019, and in any
subsequent filings with the SEC. The following factors, among
others, could cause actual results to differ materially from those
described in the forward-looking statements: Foresight’s burn rate,
its ability to generate revenue, and its ability to continue as a
going concern. Based on the projected cash flows and our cash
balances as of September 30, 2019, Foresight’s management is of the
opinion that without further fund raising it will not have enough
resources to enable it to continue advancing its activities for a
period of at least 12 months. As a result, there is substantial
doubt about Foresight’s ability to continue as a going concern.
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 is not
responsible for the contents of third-party websites.
FORESIGHT AUTONOMOUS
HOLDINGS LTD. INTERIM CONDENSED CONSOLIDATED BALANCE SHEETS
U.S. dollars in thousands
As of September 30,
2019
As of September 30,
2018
As of December 31,
2018
ASSETS
Current assets:
Cash and cash equivalents
$
5,070
$
11,172
$
3,158
Short term deposits
8,068
8,109
12,506
Marketable equity securities
36
24
23
Other investments
-
5,574
345
Other receivables
773
526
471
Total current assets
13,947
25,405
16,503
Non-current assets:
ROU asset
1,340
-
-
Investment in affiliate company
7,400
7,559
7,568
Fixed assets, net
668
827
787
9,408
8,386
8,355
Total assets
$
23,355
$
33,791
$
24,858
LIABILITIES AND
SHAREHOLDERS’ EQUITY
Current liabilities:
Trade payables
$
675
$
223
$
344
Operating lease liability
413
-
-
Other accounts payables
892
928
947
Derivative warrant liability
-
2
-
Total current liabilities
1,980
1,153
1,291
Non-current liabilities:
Operating lease liability
1,068
-
-
Derivative warrant liability
-
76
-
-
Total liabilities
3,048
1,229
1,291
Shareholders’ equity:
Common stock of NIS 0 par value;
-
-
-
Additional paid-in capital
65,330
57,102
57,521
Accumulated deficit
(45,023
)
(24,540
)
(33,954
)
Total stockholders’ equity
20,307
32,562
23,567
Total liabilities and stockholders’
equity
$
23,355
$
33,791
$
24,858
FORESIGHT AUTONOMOUS
HOLDINGS LTD. INTERIM CONDENSED CONSOLIDATED STATEMENTS OF
COMPREHENSIVE LOSS U.S. dollars in thousands
Nine months ended September
30,
Three months ended September
30,
2019
2018
2019
2018
Research and development expenses, net
(7,007)
(6,478)
(2,547)
(2,217)
Marketing and sales
(1,616)
(775)
(519)
(234)
General and administrative expenses
(2,666)
(2,813)
(893)
(872)
Operating loss
(11,289)
(10,066)
(3,959)
(3,323)
Equity in net loss of an affiliated
company
(168)
(2,112)
(184)
(1,035)
Financing income, net
388
6,935
212
600
Net loss
(11,069)
(5,243)
(3,931)
(3,758)
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,
2019
2018
2019
2018
Net cash used in operating
activities
Loss for the Period
(11,069)
(5,243)
(3,931)
(3,758)
Adjustments to reconcile profit (loss) to
net cash used in operating activities:
2,259
(2,962)
827
143
Net cash used in operating
activities
(8,810)
(8,205)
(3,104)
(3,615)
Cash Flows from Investing
Activities
Changes in short term deposits
4,438
4,060
4,212
3,053
Proceeds from other investments
21
-
-
-
Investment in affiliate company
-
(4,479)
-
(1,990)
Purchase of fixed assets
(73)
(708)
(34)
(282)
Net cash provided by (used in)
investing activities
4,386
(1,127)
4,178
785
Cash flows from Financing
Activities:
Issuance of ordinary shares and warrants,
net of issuance expenses
6,521
11,208
-
5,403
Exercise of warrants and options, net of
issuance expenses
-
159
-
-
Net cash provided by financing
activities
6,521
11,367
-
5,403
Effect of exchange rate changes on cash
and cash equivalents
(185)
(499)
(51)
116
Increase in cash and cash
equivalents
1,912
1,536
1,023
2,689
Cash and cash equivalents at the
beginning of the period
3,158
9,636
4,047
8,483
Cash and cash equivalents at the end of
the period
5,070
11,172
5,070
11,172
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:
Nine months
ended September 30,
Three months
ended September 30,
2019
2018
2019
2018
Share-based payment
1,286
1,620
450
440
Depreciation
193
170
65
80
Revaluation of derivative warrant
liability
1
(1,993)
(42)
(441)
Equity in loss of an affiliated
company
168
2,112
184
1,035
Revaluation of securities
(13)
(2)
(5)
20
Revaluation of other investments
324
(5,328)
-
-
Exchange rate changes on cash and cash
equivalents
185
499
51
(116)
Changes in assets and liabilities:
increase in other receivables
(302)
(44)
(264)
(186)
Increase (decrease) in Trade payables
331
(107)
368
(83)
Change in operating lease liability
105
-
30
Increase (decrease) in other accounts
payable
(19)
111
(10)
(606)
Adjustments to reconcile profit (loss)
to net cash used in operating activities
2,259
(2,962)
827
143
SUPPLEMENTAL
RECONCILIATION OF GAAP TO NON-GAAP SHAREHOLDERS' EQUITY U.S.
dollars in thousands
As of September 30,
2019
As of September 30,
2018
As of December 31,
2018
GAAP Shareholders' equity
20,307
32,562
23,567
Revaluation of other investments
324
(5,328)
(316)
Derivative warrant liability
-
78
--
Non-GAAP Shareholders' equity
20,631
27,312
23,252
FORESIGHT AUTONOMOUS
HOLDINGS LTD. SUPPLEMENTAL RECONCILIATION OF GAAP TO NON-GAAP
RESULTS U.S. dollars in thousands
Nine months ended September
30
Three months ended September
30,
2019
2018
2019
2018
GAAP operating loss
(11,289)
(10,066)
(3,959)
(3,323)
Stock-based compensation in research and
development
442
491
158
142
Stock-based compensation in sales and
marketing
152
143
54
47
Stock-based compensation in general and
administrative
692
986
238
251
Non-GAAP operating loss
(10,003)
(8,446)
(3,509)
(2,883)
GAAP Financing income (expenses),
net
388
6,935
212
600
Revaluation of other investments
324
(5,328)
-
-
Revaluation of derivative warrant
liability expenses (income)
1
(1,993)
42
(441)
Non-GAAP Financing income (expenses),
net
713
(386)
254
159
GAAP net profit (loss)
(11,069)
(5,243)
(3,931)
(3,758)
Stock-based compensation expenses
1,286
1,620
450
440
Revaluation of other investments
324
(5,328)
-
-
Revaluation of derivative warrant
liability
1
(1,993)
42
(441)
Non-GAAP net loss
(9,457)
(10,944)
(3,439)
(3,759)
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Investor Relations Contact: Miri Segal-Scharia CEO MS-IR
LLC msegal@ms-ir.com 917-607-8654
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