Foresight soars after Elbit deal
24 June 2019 - globes
Elbit will integrate Foresight's image processing software in its products.
Foresight Automotive Holdings (Nasdaq: FRSX; TASE: FRSX), which develops computer vision systems for preventing traffic accidents, has landed its first deal. The company today reported to Nasdaq that it had signed an agreement with Elbit Land Systems, a subsidiary of Elbit Systems Ltd. (Nasdaq: ESLT; TASE: ESLT), under which Elbit Land Systems will exclusively market Foresight's QuadSight image processing software for use in the defense, semi-military, and homeland security markets. Foresight's share price is up 55% in today's trading, following a 16% rise yesterday on an unusually high turnover.
Elbit Land Systems plans to integrate Foresight's image processing software in its product, and to market it all over the world. The software will be installed in military and security land vehicles, including unmanned vehicles.
Elbit Land Systems tested the system over the past two months, comparing it with other solutions, and eventually decided to purchase and market it. Under the agreement, Foresight will sell the current version of its image processing software to Elbit Land Systems and the latter's customers through a license to use the software at thousands of dollars per license.
Foresight will also provide Elbit Land Systems with support and maintenance services for additional payment. Foresight anticipates more substantial proceeds through future development agreements aimed at adapting the current version of its software to changes needed by Elbit Land Systems and its customers.
Elbit Land Systems will gain the exclusive right to market and sell Foresight's image processing software in Israel for a number of years, in exchange for a undertaking to a minimum number of annual orders during the exclusivity period, including an initial $50,000 order.
Elbit Land Systems will also obtain an exclusive global right to distribute Foresight's image processing software worldwide for an initial period stipulated in the agreement. This does not include a number of customers from the defense industry already involved in Foresight's commercial activity. The exclusivity period, both in Israel and worldwide, can be extended on the basis of sales targets.
Foresight was first listed on the stock exchange in January 2016 after merging with stock exchange shell Asia Development. Investors in its first financing round included Yitzhak Manor's Lubinski group, the importer of Peugeot and Citroen; Itzhak Swary, chairman of Allied, which own Champion Motors, importers of Audi, Seat, Volkswagen, and Skoda; and Guy Meyohas, holder of the Porsche franchise for Israel. Financier Itschak Shrem, Professor Benad Goldwasser, and a UK investment fund also invested in Foresight.
A year ago, Foresight raised NIS 45 million from Psagot Investment House Ltd., Meitav DS Investment House Ltd., and Harel Insurance Investments and Financial Services Ltd. at NIS 2.05 per share. Since that financing round, Foresight's share price has tumbled 70%, sending its market cap down to NIS 110 million.
Siboni said today, "The agreement with Elbit Land Systems validates the business approach that we have adopted over the past year - the sale of prototype systems and an offer to strategic partners to directly experience our unique solution and integrate it in all of their vehicles."