Foresight(FRSX) - 2022 Q4 - Annual Report

Overview Foresight's 2022 full-year revenue surged 358% to $550,000, driven by POC projects, alongside widening GAAP losses and a strategic commercialization push Full Year 2022 Key Financial Metrics | Metric | FY 2022 | FY 2021 | Change | | :--- | :--- | :--- | :--- | | Revenues | $550,000 | $120,000 | +358% | | GAAP Operating Loss | ($17.5 million) | ($15.9 million) | +10% | | GAAP Net Loss | ($21.7 million) | ($15.0 million) | +44% | | Cash, cash equivalent, restricted cash and short-term deposits | $26.5 million | $45.7 million | -42% | - The company's strategic focus in 2022 was on achieving commercialization with early adopters, resulting in three commercial agreements with industry leaders[1] - A key achievement was the commercial agreement with SUNWAY-AI, which validates the company's long-term strategy of building partnerships in key geographies like China, Japan, Europe, and North America[4] Fourth Quarter Corporate Highlights Q4 2022 highlights include a $51 million potential agreement with SUNWAY-AI and Eye-Net Mobile's successful Japan roadshow, generating strong OEM interest - Signed a joint development and supply agreement with SUNWAY-AI Technology Co., Ltd., which could yield up to $51 million in revenue over four years. SUNWAY-AI will commercialize the ADAS systems in mainland China, Hong Kong, Taiwan, and Macao[3] - Wholly-owned subsidiary Eye-Net Mobile completed a successful technological roadshow in Japan, demonstrating its solution to 20 automotive-related companies, including five leading Japanese OEMs, which generated significant interest[3] - Hosted a virtual investor webinar in December to showcase progress in developing and distributing new automotive technologies and to provide updates on relationships with customers like Hitachi Astemo Americas and SUNWAY-AI[3] Financial Results The company's financial performance in Q4 and full-year 2022 reflects significant revenue growth from POC projects, offset by increased operating expenses and net losses Fourth Quarter 2022 Financial Results Q4 2022 revenues grew 23.8% to $99,000 from POC projects, while GAAP net loss remained stable at $3.8 million due to higher expenses Q4 2022 vs. Q4 2021 Financials (in thousands) | Metric | Q4 2022 | Q4 2021 | Change | | :--- | :--- | :--- | :--- | | Revenues | $99 | $80 | +23.8% | | R&D Expenses, net | $3,035 | $2,647 | +14.7% | | G&A Expenses | $1,087 | $987 | +10.1% | | GAAP Net Loss | ($3,820) | ($3,726) | +2.5% | | Non-GAAP Net Loss | ($3,377) | ($3,304) | +2.2% | | GAAP EPS | ($0.012) | ($0.012) | 0% | - Q4 revenue was primarily generated from the successful completion of a POC project with a leading American EV manufacturer ($70,000) and a POC project with a leading global tractor manufacturer ($15,000)[6] Full Year 2022 Financial Results Full-year 2022 revenues surged 358% to $550,000 from POC projects, but GAAP net loss widened to $21.7 million due to increased expenses and finance costs Full Year 2022 vs. 2021 Financials (in thousands) | Metric | FY 2022 | FY 2021 | Change | | :--- | :--- | :--- | :--- | | Revenues | $550 | $120 | +358% | | R&D Expenses, net | $11,534 | $10,170 | +13.4% | | Sales & Marketing Exp. | $2,230 | $1,848 | +20.7% | | GAAP Net Loss | ($21,676) | ($15,036) | +44.2% | | Non-GAAP Net Loss | ($19,850) | ($12,572) | +57.9% | | GAAP EPS | ($0.067) | ($0.047) | +42.6% | - Full-year revenue was generated from projects with Elbit Systems ($220k), Hitachi Astemo ($150k), ZF North America ($90k), an American EV manufacturer ($70k), and a global tractor manufacturer ($15k)[8] - Net finance expenses for 2022 were $4.2 million, a significant shift from a net finance income of $0.9 million in 2021. This was mainly driven by a $2.2 million revaluation of the company's investment in Rail Vision Ltd. and $2.2 million in exchange rate differences[11] Balance Sheet Highlights As of December 31, 2022, Foresight's liquidity and equity decreased, with cash and deposits at $26.5 million and total equity at $28.8 million Balance Sheet Comparison (as of Dec 31, in thousands) | Metric | 2022 | 2021 | | :--- | :--- | :--- | | Cash, restricted cash, and short-term deposits | $26,491 | $45,701 | | Total Assets | $32,893 | $53,481 | | Total Liabilities | $4,110 | $4,848 | | Total Equity | $28,783 | $48,633 | Consolidated Financial Statements The consolidated financial statements provide detailed insights into the company's balance sheet, comprehensive loss, and cash flow for 2022 Consolidated Balance Sheets As of December 31, 2022, total assets were $32.9 million and total equity $28.8 million, reflecting a reduction from 2021 due to cash utilization Consolidated Balance Sheets (U.S. dollars in thousands) | | As of Dec 31, 2022 | As of Dec 31, 2021 | | :--- | :--- | :--- | | ASSETS | | | | Total current assets | $27,335 | $46,373 | | Total non-current assets | $5,558 | $7,108 | | Total assets | $32,893 | $53,481 | | LIABILITIES AND SHAREHOLDERS' EQUITY | | | | Total current liabilities | $2,634 | $2,705 | | Total non-current liabilities | $1,476 | $2,143 | | Total liabilities | $4,110 | $4,848 | | Total equity | $28,783 | $48,633 | | Total liabilities and shareholders' equity | $32,893 | $53,481 | Consolidated Statements of Comprehensive Loss For FY2022, the company reported a net loss of $21.7 million on $550,000 revenue, with Q4 2022 showing a $3.8 million net loss on $99,000 revenue Consolidated Statements of Comprehensive Loss (U.S. dollars in thousands) | | Year ended Dec 31, 2022 | Year ended Dec 31, 2021 | Three months ended Dec 31, 2022 | Three months ended Dec 31, 2021 | | :--- | :--- | :--- | :--- | :--- | | Revenues | 550 | 120 | 99 | 80 | | Gross profit | 298 | 53 | 55 | 48 | | Operating loss | (17,455) | (15,945) | (4,538) | (4,116) | | Net loss | (21,676) | (15,036) | (3,820) | (3,726) | Consolidated Statements of Cash Flow In FY2022, net cash used in operations was $17.1 million, offset by $9.0 million from investing, resulting in a $8.9 million decrease in cash to $19.3 million Consolidated Statements of Cash Flow Highlights (U.S. dollars in thousands) | | Year ended Dec 31, 2022 | Year ended Dec 31, 2021 | | :--- | :--- | :--- | | Net cash used in operating activities | (17,057) | (12,125) | | Net cash provided by (used in) investing activities | 8,983 | (12,582) | | Net cash provided by financing activities | - | 14,160 | | Decrease in cash and cash equivalents and Restricted cash | (8,913) | (10,584) | | Cash and cash equivalents and Restricted cash at end of period | 19,275 | 28,188 | Reconciliation of GAAP to Non-GAAP Results The reconciliation adjusts GAAP net loss by excluding non-cash share-based compensation, resulting in a FY2022 non-GAAP net loss of $19.9 million GAAP to Non-GAAP Reconciliation (U.S. dollars in thousands) | | Year ended Dec 31, 2022 | Year ended Dec 31, 2021 | Three months ended Dec 31, 2022 | Three months ended Dec 31, 2021 | | :--- | :--- | :--- | :--- | :--- | | GAAP net loss | (21,676) | (15,036) | (3,820) | (3,726) | | Share-based compensation expenses | 1,826 | 2,464 | 443 | 422 | | Non-GAAP net loss | (19,850) | (12,572) | (3,377) | (3,304) | - Management believes non-GAAP financial information is useful for investors to understand and assess the company's ongoing operations, as it excludes non-cash expenses like stock-based compensation[9]