Foresight Lands Up to $7 Million Deal with Tier-One Supplier KONEC to Distribute Technology and Products in South Korea

Rhea-AI Summary

Foresight Autonomous Holdings (Nasdaq: FRSX) has signed a commercial cooperation agreement with KONEC, a leading South Korean Tier-One automotive supplier, to distribute advanced 3D perception solutions in South Korea. The deal, initially announced on December 9, 2024, forecasts commercial sales of $1.5 million by 2027, potentially growing to $7 million by 2029.

KONEC will exclusively distribute Foresight's technology in South Korea, targeting original equipment manufacturers and business partners. The agreement follows a successful co-development project with KONEC, sponsored by Hyundai's Foundation. The companies are considering establishing a 50-50 joint venture in South Korea, including a manufacturing facility for advanced solutions.

Positive

• Secured commercial agreement worth up to $7 million by 2029
• Exclusive distribution rights in South Korean market
• Initial orders already placed by KONEC for 2024 targets
• Potential 50-50 joint venture and manufacturing facility in South Korea
• Partnership with established Tier-One supplier serving major customers like Tesla, Hyundai, and Kia

Negative

• Revenue projections are long-term, with significant portion expected only by 2029
• Exclusivity agreement contingent on meeting sales targets

Insights

Financial Analyst

This $7 million deal marks a strategic entry into South Korea's automotive market, representing 24.8% of FRSX's current market cap. The structured revenue ramp-up, starting with $1.5 million by 2027 and scaling to $7 million by 2029, provides clear revenue visibility. The exclusive distribution rights, contingent on meeting sales targets, creates a compelling incentive structure while protecting Foresight's market position.

The potential joint venture and manufacturing facility signals a deeper commitment to the Korean market and could generate additional revenue streams beyond the initial agreement. KONEC's established relationships with major OEMs like Tesla and Hyundai provide significant distribution channels. For a small-cap company like Foresight, securing a Tier-One supplier partnership validates their technology and opens doors to the rapidly growing Asian autonomous vehicle market.

Tech Expert

The integration of Foresight's 3D perception systems across multiple vehicle categories - from passenger cars to heavy machinery - demonstrates the versatility of their technology stack. The successful co-development project with Hyundai's backing validates the technical capabilities. Multi-spectral vision software combined with dense 3D point cloud generation positions Foresight competitively in the autonomous driving sensor market.

The technology's application in geofenced autonomous vehicles and logistics presents immediate commercialization opportunities, as these controlled environments typically have lower regulatory hurdles. KONEC's expertise in eco-friendly vehicle components and lightweight materials complements Foresight's software solutions, potentially creating integrated hardware-software offerings that could accelerate market adoption.

KONEC's customers and partners aim to integrate Foresight's advanced 3D perception solutions into their vehicles and solutions

Ness Ziona, Israel, Dec. 30, 2024 (GLOBE NEWSWIRE) -- Foresight Autonomous Holdings Ltd. (Nasdaq and TASE: FRSX) (“Foresight” or the “Company”), an innovator in 3D perception systems, announced the signing of a commercial cooperation agreement with KONEC Co. Ltd. (“KONEC”), a leading South Korean Tier-One automotive supplier, to bring to market advanced 3D perception solutions to be integrated into the vehicles and machinery of KONEC’s customers and business partners in the Republic of Korea. These solutions are designed for a wide range of sectors, including passenger vehicles, commercial vehicles such as trucks and buses, autonomous logistics vehicles, geofenced autonomous vehicles, as well as agriculture and heavy machinery.

Pursuant to the terms of the agreement, originally announced on December 9, 2024, KONEC forecasts commercial sales of $1.5 million by 2027, with anticipated revenues from various advanced solutions, including supply of products, software license fees, non-recurring engineering services, and development fees, projected to grow up to $7 million by 2029. KONEC has already placed orders to achieve its sales target for 2024 and has exclusivity for 2025.

Furthermore, Foresight's cutting-edge 3D perception solutions will be exclusively distributed in South Korea by KONEC. This distribution agreement covers KONEC's existing customer base, with a focus on original equipment manufacturers, as well as its business partners and potential new clients. The exclusivity commitment is subject to KONEC meeting certain sales targets determined in the agreement.

This agreement follows a successful co-development agreement with KONEC, sponsored by Hyundai’s Foundation of Korea Automotive Parts Industry Promotion, which integrated Foresight’s 3D perception technology into a conceptual autonomous driving vehicle, as reported by the Company on May 29, 2024.

The parties are also contemplating establishing a joint venture in South Korea, equally owned by both parties, in order to facilitate and promote their business cooperation, including establishing a factory for manufacturing of the advanced solutions.

"This strategic agreement with Foresight marks a significant milestone in our commitment to innovation and technological advancement. By integrating Foresight's cutting-edge 3D perception solutions into our partners' solutions, we aim to enhance operational efficiency, improve product quality, and unlock new possibilities in various sectors, from automotive to agriculture and heavy machinery in the Republic of Korea. We're excited about the potential this agreement holds for autonomous driving growth and creating value for all stakeholders involved,” said Mr. Jaeho Moon, Chief Technology Officer of KONEC.

“We are proud to announce this strategic agreement in South Korea, a market known for its focus on technological innovation. This commercial agreement follows our successful co-development collaboration, which has laid a strong foundation for bringing our advanced 3D perception solutions to market. We believe there are substantial revenue opportunities arising from this collaboration and we look forward to playing a key role in South Korea's continued technological leadership”, said Mr. Oren Bar-On, Chief Executive Officer of Foresight Changzhou Automotive Ltd.

About KONEC

KONEC is a leading Tier-One automotive supplier that manufactures automobile parts for eco-friendly vehicles using a high-pressure die-casting process. KONEC has established a batch production system for lightweight metal raw materials, molds, castings, processing, and assembly through cooperation among its group affiliates. Major customers include Tesla, Hyundai Motor, and Kia. In addition to the existing business scope of lightweight metal body, chassis, and body parts, KONEC is venturing into new industries in line with the electrification of mobility and software advancements.

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 “X” (formerly 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 the benefits and advantages of Foresight’s solutions, KONEC’s commercial forecasts and timing thereof, KONEC’s aim to enhance operational efficiency, improve product quality, and unlock new possibilities in various sectors and Foresight’s belief that there are substantial revenue opportunities arising from this collaboration. 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 for the fiscal year ended December 31, 2023 filed with the Securities and Exchange Commission ("SEC") on March 27, 2024, 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 is not responsible for the contents of third-party websites. 

Investor Relations Contact:
Miri Segal-Scharia
CEO
MS-IR LLC
msegal@ms-ir.com
917-607-8654

FAQ

What is the potential value of Foresight's (FRSX) deal with KONEC?

The deal with KONEC is valued at up to $7 million by 2029, with initial commercial sales of $1.5 million projected by 2027.

What are the terms of FRSX's exclusivity agreement with KONEC in South Korea?

KONEC has exclusive distribution rights in South Korea, with exclusivity for 2025 and subsequent years contingent on meeting specific sales targets.

What type of joint venture are Foresight (FRSX) and KONEC planning?

The companies are considering establishing a 50-50 joint venture in South Korea, including plans for a manufacturing facility for advanced solutions.

Which markets will FRSX's 3D perception solutions target through the KONEC partnership?

The solutions will target passenger vehicles, commercial vehicles (trucks and buses), autonomous logistics vehicles, geofenced autonomous vehicles, agriculture, and heavy machinery sectors.

What revenue streams are included in FRSX's agreement with KONEC?

Revenue streams include product supply, software license fees, non-recurring engineering services, and development fees.