8-K
ACTELIS NETWORKS INC (ASNS)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of report (Date of earliest event reported): August 14, 2024
Actelis Networks, Inc.
(Exact name of registrant as specified in its charter)
| Delaware | 001-41375 | 52-2160309 |
|---|---|---|
| (State or other jurisdiction<br><br>of incorporation) | (Commission File Number) | (I.R.S. Employer<br><br>Identification Number) |
4039 Clipper Court, Fremont, CA 94538(Address of principal executive offices)
(510) 545-1045
(Registrant’s telephone number, including area code)
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instructions A.2. below):
| ☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
|---|---|
| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| --- | --- |
| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| --- | --- |
| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
| --- | --- |
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
|---|---|---|
| Common Stock, $0.0001 par value per share | ASNS | Nasdaq Capital Market |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☒
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02 Results of Operation and FinancialCondition.
On August 14, 2024, Actelis Networks, Inc. issued a press release which included its results of operations for the fiscal second quarter ended June 30, 2024. The press release is attached hereto as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated by reference herein in its entirety.
The information included in this Item 2.02 of Current Report on Form 8-K, including the attached Exhibit 99.1, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, and shall not be deemed to be incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, whether made before or after the date of this Current Report on Form 8-K, regardless of any general incorporation language in any such filing, except as expressly set forth by specific reference in such filing.
Item 7.01 Regulation
FD Disclosures.
The matters described in Item 2.02 of this Current Report on Form 8-K are incorporated herein by reference.
Item 9.01 Financial Statements and Exhibits.
The following exhibits are filed herewith or incorporated herein by reference:
| Exhibit No. | Description. |
|---|---|
| 99.1 | Press Release, dated August 14, 2024 |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document). |
1
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| ACTELIS NETWORKS, INC. | ||
|---|---|---|
| Dated: August 14, 2024 | By: | /s/ Tuvia Barlev |
| Name: | Tuvia Barlev | |
| Title: | Chief Executive Officer |
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Exhibit 99.1
Actelis Networks Reports Q2 2024 Results: 372% Sequential Revenue Growth,81% Year-Over-Year Increase, and Positive EBITDA
ActelisNetworks achieves very strong Q2 2024 performance with 372% sequential revenue growth, 81% year-over-year revenue increase, and positiveEBITDA, highlighting strong execution and financial discipline.
FREMONT,Calif., August 14, 2024 — Actelis Networks, Inc. (NASDAQ: ASNS) (“Actelis” or the “Company”), a market leader in cyber-hardened, rapid deployment networking solutions for wide area IoT applications, today reported financial results for the fiscal second quarter ended June 30, 2024.
SecondQuarter and First Half 2024 Financial Highlights:
| ● | Major Revenue Growth: Actelis achieved revenue increase to $3.43 million in Q2 2024, reflecting<br> an 81% year-over-year growth compared to $1.9 million in Q2 2023, and 372% sequential growth<br> from $0.73 million in Q1 2024, driven by the accelerated execution of large contracts, including<br> a significant deal with the Washington D.C. Department of Transportation. For the first half<br> of 2024, revenue reached $4.2 million, up from $3.7 million in the same period last year,<br> without a major software and services renewal valued at $1.4 million, won in July and covering<br> 2024-2026. |
|---|---|
| ● | Significant Improvement in Gross Margin: Gross margin soared to $1.9 million, or 57%, in Q2 2024,<br> a substantial improvement from $0.2 million, or 30%, in the prior quarter. This boost was<br> driven by increased revenue and a more profitable geographical mix, with minimal rise in<br> fixed costs. Year-over-year, Q2 2024 gross margin jumped from $0.6 million, or 33%, in Q2<br> 2023, and for the first half of 2024, gross margin improved to $2.2 million, or 52%, from<br> $1.3 million, or 35%, in the same period last year, reflecting enhanced profitability. |
| --- | --- |
| ● | Continued Reduction in Operating Expenses: Operating expenses were successfully reduced by 20%<br>to $1.88 million (by 13% to $2.04 million excluding one-time other income) in Q2 2024, down from $2.35 million in Q2 2023. For the first<br>half of 2024, operating expenses decreased by 20% to $3.97 million (by 16% to $4.1 million excluding one-time other Income) compared to<br>the previous year, demonstrating the effectiveness of the company's ongoing cost reduction initiatives. |
| --- | --- |
| ● | Substantial narrowing of Net Loss and Positive Non-GAAP Adjusted EBITDA: Actelis reported a net<br>loss of $78,000 and a Non-GAAP adjusted EBITDA profit of $11,000 in Q2 2024, marking the first positive quarter since 2022. The net loss<br>for the first half of 2024 was reduced by 44% to $2.06 million, and the EBITDA loss decreased by 38% to $1.78 million, reflecting the<br>company’s improving financial health. |
| --- | --- |
| ● | Strengthened liquidity Position: The company raised nearly $5 million in June 2024, including $2 million<br> signed on June 30 and closed on July 2. As of June 30, 2024, shareholders’ equity stood<br> at $1.06 million, and on a pro forma basis, including this fundraise, shareholders' equity<br> was $3.0 million—above Nasdaq's continued listing requirement of $2.5 million. |
| --- | --- |
“I am extremely proud of our progress in the second quarter of 2024,” said Tuvia Barlev, Chairman and CEO. “Our team's relentless efforts have translated into significant customer successes and the successful execution for key customers. We are delivering on the commitments we made to drive growth and innovation, and the results speak to the impact of our strategic initiatives.”
RecentCompany Highlights:
| ● | Secured<br> and delivered a $2.3 million order from Washington D.C.’s Department of Transportation,<br> contributing to the city’s infrastructure modernization efforts as part of its smart<br> city initiatives. |
|---|---|
| ● | Successfully<br> deployed our hybrid-fiber, cyber-hardened solution in Bakersfield, CA, further demonstrating<br> our technology's ability to enhance urban infrastructure and security. |
| --- | --- |
| ● | Our<br> expense reduction program continues to yield results, with operating expenses in the first<br> half of 2024 reduced by 16% compared to the same period last year, in line with our strategic<br> cost structure optimization plan. |
| --- | --- |
| ● | The<br> newly launched GigaLine 800 and GigaLine 900 Multi-Dwelling Unit (MDU) solutions are generating<br> significant market interest, with a growing list of customer trials underway. |
| --- | --- |
A first order for Gigaline 800 worth $160,000 from a contractor to a major military carrier was received, a major milestone in executing on the new products’ potential.
| ● | Reported<br> multiple customer wins across various markets in the past 90 days, reinforcing our position<br> as a leader in networking solutions. |
|---|---|
| ● | We continue to work on the deal with Quality Industrial Corp and have extended the no-shop period until August 16. |
| --- | --- |
| ● | Despite<br> ongoing tensions and conflicts in the Middle East, Actelis’ operations remain unaffected.<br> We are closely monitoring the situation and are prepared to make necessary adjustments as<br> events unfold. |
| --- | --- |
“Our second quarter performance reflects the tangible progress we’re making in executing our growth strategy, especially in key sectors like intelligent transportation and critical infrastructure,” said Tuvia Barlev, Chairman and CEO of Actelis. “The significant order from Washington D.C.’s Department of Transportation and our successful deployments in cities like Bakersfield demonstrate not only the strength of our technology but also the trust that major urban centers place in Actelis to modernize and secure their infrastructure.”
“As we move forward, our focus is on scaling these successes, expanding our SaaS offerings through strategic partnerships, and continuing to reduce operational costs while maintaining high margins. As we navigate an increasingly complex global environment, our focus remains on executing our business plan with precision and adapting to any challenges that arise,” added Barlev.
FiscalSecond Quarter and First Half 2024 Financial Results:
| ● | Revenues: Q2 2024 revenues were $3.43 million, reflecting an impressive 81% year-over-year increase<br> from $1.90 million in Q2 2023. This also represents a remarkable 372% sequential growth from<br> $0.73 million in Q1 2024. For the first half of 2024, revenues totaled $4.16 million, up<br> from $3.74 million in the same period in 2023. |
|---|---|
| ● | Cost of Revenues: Cost of revenues for Q2 2024 was $1.49 million, slightly higher than $1.26<br> million in Q2 2023. For the first half of 2024, the cost of revenues was $1.99 million, compared<br> to $2.42 million for the first half of 2023. |
| --- | --- |
| ● | Gross Profit: Gross profit for Q2 2024 was $1.94 million, up from $632,000 in Q2 2023. For<br> the first half of 2024, gross profit reached $2.16 million, compared to $1.32 million in<br> the first half of 2023. |
| --- | --- |
2
| ● | Research and Development Expenses: R&D expenses for Q2 2024 were $603,000, down from $669,000<br> in Q2 2023. For the first half of 2024, R&D expenses were $1.25 million, compared to<br> $1.43 million in the same period last year. |
|---|---|
| ● | Sales and Marketing Expenses: Sales and marketing expenses for Q2 2024 were $647,000, compared<br> to $712,000 in Q2 2023. For the first half of 2024, these expenses totaled $1.27 million,<br> down from $1.64 million in the first half of 2023. |
| --- | --- |
| ● | General and Administrative Expenses: G&A expenses were $790,000 in Q2 2024, down from $969,000<br> in Q2 2023. For the first half of 2024, G&A expenses were $1.61 million, compared to<br> $1.83 million for the same period last year. |
| --- | --- |
| ● | Other Income: Other income was $163,000 in Q2 2024 and first half of 2024, driven by a government<br>grant from the state of Israel associated with the Swords of Iron war |
| --- | --- |
| ● | Operating Profit/Loss: Operating profit for Q2 2024 was $66,000, compared to an operating loss<br>of $1.72 million in Q2 2023. For the first half of 2024, the operating loss was reduced to $1.81 million, down from $3.58 million in the<br>first half of 2023. |
| --- | --- |
| ● | Interest Expenses/(income): Interest Expense was $137,000 in Q2 2024, a decrease from an expense<br>of $171,000 in Q2 2023. For the first half of 2024, interest expenses were $344,000, compared to $351,000 in the first half of 2023. |
| --- | --- |
| ● | Other Financial Income/Expenses, Net : Q2 2024 Other Financial income/(expense) was $57,000, compared<br>to an income of $296,000 in Q2 2023. For the first half of 2024, financial income/(expense) were $149,000, compared to $444,000 for the<br>first half of 2023. |
| --- | --- |
| ● | Net Comprehensive Profit/(Loss): Net comprehensive Loss for Q2 2024 was $78,000, a significant<br>turnaround from a net loss of $1.59 million in Q2 2023. For the first half of 2024, the net loss was $2.06 million, compared to a net<br>loss of $3.49 million in the first half of 2023. |
| --- | --- |
| ● | Non-GAAP EBITDA: Non-GAAP EBITDA was $11,000 in Q2-2023, compared to a non-GAAP EBITDA loss of<br> $1.3 million in the year ago period, driven by increased revenue, better gross margin and<br> reduced operating expenses. For the first half of 2024, non-GAAP EBITDA loss was $1.8 million,<br> down 38% from $2.86 million in the year ago period. |
| --- | --- |
AboutActelis Networks, Inc.
Actelis Networks, Inc. (NASDAQ: ASNS) is a market leader in cyber-hardened, rapid-deployment hybrid fiber networking solutions for wide-area IoT applications including federal, state and local government, ITS, military, utility, rail, telecom and campus applications. Actelis’ unique portfolio of hybrid fiber-copper, environmentally hardened aggregation switches, high density Ethernet devices, advanced management software and cyber-protection capabilities, unlocks the hidden value of essential networks, delivering safer connectivity for rapid, cost-effective deployment. For more information, please visit www.actelis.com.
Useof Non-GAAP Financial Information
Non-GAAPAdjusted EBITDA, and backlog of open orders are Non-GAAP financial measures. In addition to reporting financial results in accordancewith GAAP, we provide Non-GAAP operating results adjusted for certain items, including: financial expenses, which are interest, financialinstrument fair value adjustments, exchange rate differences of assets and liabilities, stock based compensation expenses, depreciationand amortization expense, tax expense, and impact of development expenses ahead of product launch. We adjust for the items listed aboveand show Non-GAAP financial measures in all periods presented, unless the impact is clearly immaterial to our financial statements. Whenwe calculate the tax effect of the adjustments, we include all current and deferred income tax expense commensurate with the adjustedmeasure of pre-tax profitability.
3
CautionaryStatement Concerning Forward-Looking Statements
Thispress release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of1995 and other securities laws. Words such as “expects,” “anticipates,” “intends,” “plans,”“believes,” “seeks,” “estimates” and similar expressions or variations of such words are intendedto identify forward-looking statements. Forward-looking statements are not historical facts, and are based upon management’s currentexpectations, beliefs and projections, many of which, by their nature, are inherently uncertain. Such expectations, beliefs and projectionsare expressed in good faith. However, there can be no assurance that management’s expectations, beliefs and projections will beachieved, and actual results may differ materially from what is expressed in or indicated by the forward-looking statements. Forward-lookingstatements are subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressedin the forward-looking statements. More detailed information about the Company and the risk factors that may affect the realization offorward-looking statements is set forth in the Company’s filings with the Securities and Exchange Commission (SEC), including theCompany’s Annual Report on Form 10-K and its Quarterly Reports on Form 10-Q. Investors and security holders are urged to read thesedocuments free of charge on the SEC’s web site at http://www.sec.gov.
Forward-lookingstatements speak only as of the date the statements are made. The Company assumes no obligation to update forward-looking statementsto reflect actual results, subsequent events or circumstances, changes in assumptions or changes in other factors affecting forward-lookinginformation except to the extent required by applicable securities laws. If the Company does update one or more forward-looking statements,no inference should be drawn that the Company will make additional updates with respect thereto or with respect to other forward-lookingstatements. References and links to websites have been provided as a convenience, and the information contained on such websites is notincorporated by reference into this press release. Actelis is not responsible for the contents of third-party websites.
InvestorRelations Contact:
ASNS@actelis.com
-FinancialTables to Follow-
4
ACTELIS NETWORKS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(U. S. dollars in thousands except for share and per share amounts)
| December 31, | |||
|---|---|---|---|
| 2023 | |||
| Assets | |||
| CURRENT ASSETS: | |||
| Cash and cash equivalents | 2,412 | 620 | |
| Restricted cash equivalents | 724 | 1,565 | |
| Short term deposits | - | 197 | |
| Trade receivables, net of allowance for credit losses of 168 as of June 30, 2024, and December 31, 2023. | 690 | 664 | |
| Inventories | 2,158 | 2,526 | |
| Prepaid expenses and other current assets, net of allowance for doubtful debts of 181 and 144 as of June 30, 2024, and December 31, 2023, respectively | 491 | 340 | |
| TOTAL CURRENT ASSETS | 6,475 | 5,912 | |
| NON-CURRENT ASSETS: | |||
| Property and equipment, net | 55 | 61 | |
| Prepaid expenses | 592 | 592 | |
| Restricted cash and cash equivalents | 226 | 3,330 | |
| Restricted bank deposits | 89 | 94 | |
| Severance pay fund | 235 | 238 | |
| Operating lease right of use assets | 608 | 918 | |
| Long term deposits | 77 | 78 | |
| TOTAL NON-CURRENT ASSETS | 1,882 | 5,311 | |
| TOTAL ASSETS | 8,357 | 11,223 |
All values are in US Dollars.
5
ACTELIS NETWORKS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(U. S. dollars in thousands except for share and per share amounts)
| December 31, | |||||
|---|---|---|---|---|---|
| 2023 | |||||
| Liabilities, Mezzanine Equity and shareholders’ equity | |||||
| CURRENT LIABILITIES: | |||||
| Credit line | 1,045 | - | |||
| Current maturities of long-term loans | 103 | 1,335 | |||
| Trade payables | 1,421 | 1,769 | |||
| Deferred revenues | 206 | 389 | |||
| Employee and employee-related obligations | 782 | 737 | |||
| Accrued royalties | 1,119 | 1,062 | |||
| Operating lease liabilities | 443 | 498 | |||
| Other accrued liabilities | 995 | 1,122 | |||
| TOTAL CURRENT LIABILITIES | 6,114 | 6,912 | |||
| NON-CURRENT LIABILITIES: | |||||
| Long-term loan, net of current maturities | 498 | 3,154 | |||
| Deferred revenues | 45 | 71 | |||
| Operating lease liabilities | 151 | 405 | |||
| Accrued severance | 263 | 270 | |||
| Other long-term liabilities | 27 | 23 | |||
| TOTAL NON-CURRENT LIABILITIES | 984 | 3,923 | |||
| TOTAL LIABILITIES | 7,098 | 10,835 | |||
| COMMITMENTS AND CONTINGENCIES (Note 6) | |||||
| MEZZANINE EQUITY | |||||
| Redeemable Convertible Preferred Stock 0.0001 par value, 10,000,000 authorized; None issued and outstanding as of June 30, 2024 and December 31, 2023. | - | ||||
| WARRANTS TO PLACEMENT AGENT (Note 7d) | 201 | 159 | |||
| SHAREHOLDERS’ EQUITY: | |||||
| Common stock, 0.0001 par value: 30,000,000 shares authorized; 5,017,322 and 3,007,745 shares issued and outstanding as of June 30, 2024, and December 31, 2023, respectively. | 1 | 1 | |||
| Non-voting common stock, 0.0001 par value: 2,803,774 shares authorized as of June 30, 2024, and December 31, 2023, None issued and outstanding as of June 30, 2024, and December 31, 2023. | - | ||||
| Additional paid-in capital | 42,687 | 39,916 | |||
| Accumulated deficit | (41,630 | ) | (39,688 | ) | |
| TOTAL SHAREHOLDERS’ EQUITY | 1,058 | 229 | |||
| TOTAL LIABILITIES, MEZZANINE EQUITY AND SHAREHOLDERS’ EQUITY | 8,357 | 11,223 |
All values are in US Dollars.
The accompanyingnotes are an integral part of these condensed consolidated financial statements (Unaudited).
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ACTELIS NETWORKS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
(UNAUDITED)
(U. S. dollars in thousands except for share and per share amounts)
| Six months ended<br> June 30 | Three months ended<br> June 30 | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2024 | 2023 | 2024 | 2023 | |||||||||
| REVENUES | 4,157 | 3,744 | 3,431 | 1,896 | ||||||||
| COST OF REVENUES | 1,994 | 2,424 | 1,488 | 1,264 | ||||||||
| GROSS PROFIT | 2,163 | 1,320 | 1,943 | 632 | ||||||||
| OPERATING EXPENSES: | ||||||||||||
| Research and development expenses | 1,250 | 1,426 | 603 | 669 | ||||||||
| Sales and marketing expenses, net | 1,274 | 1,641 | 647 | 712 | ||||||||
| General and administrative expenses | 1,607 | 1,834 | 790 | 969 | ||||||||
| TOTAL OPERATING EXPENSES | 4,131 | 4,901 | 2,040 | 2,350 | ||||||||
| OPERATING LOSS | (1,968 | ) | (3,581 | ) | (97 | ) | (1,718 | ) | ||||
| Interest expenses | (286 | ) | (351 | ) | (79 | ) | (171 | ) | ||||
| Other Financial income, net | 149 | 444 | 57 | 296 | ||||||||
| Other income | 163 | - | 163 | - | ||||||||
| NET COMPREHENSIVE PROFIT (LOSS) FOR THE PERIOD | (1,942 | ) | (3,488 | ) | 44 | (1,593 | ) | |||||
| Net profit (loss) per share attributable to common shareholders – basic and diluted | $ | (0.50 | ) | (1.72 | ) | 0.01 | (0.68 | ) | ||||
| Weighted average number of common stocks used in computing net profit (loss) per share – basic and diluted | 4,257,674 | 2,033,747 | 4,000,994 | 2,333,381 |
The accompanying notes are an integral partof these condensed consolidated financial statements (Unaudited).
7
ACTELIS NETWORKS, INC.
CONSOLIDATED STATEMENTS OF MEZZANINE EQUITY AND SHAREHOLDERS’ EQUITY
(UNAUDITED)
U.S. dollars in thousands (except number of shares)
| Warrants To<br><br><br> Placement <br><br>Agent | Redeemable<br><br> Convertible<br><br> Preferred Stock | Common<br> Stock | Non-voting<br><br> Common Stock | Additional | Total shareholders’ | |||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Six Months Ended | Amount | Number<br> of shares | Amount | Number<br> of shares | Amount | Number<br> of shares | Amount | paid-in<br> capital | Accumulated<br> deficit | equity (capital deficiency) | ||||||||||||||
| BALANCE AS OF<br> JANUARY 1, 2023 | - | - | - | 1,737,986 | 1 | - | - | 36,666 | (33,402 | ) | 3,265 | |||||||||||||
| Share based compensation | - | - | - | - | - | - | - | 192 | - | 192 | ||||||||||||||
| Repurchase of common stock | - | - | - | (7,920 | ) | * | - | - | (50 | ) | - | (50 | ) | |||||||||||
| Issuance of common stock and<br> pre-funded warrants upon private placement, net of offering costs | 104 | - | - | 190,000 | * | - | - | 1,356 | - | 1,356 | ||||||||||||||
| Exercise of options into common<br> stock | - | - | - | 10,652 | * | - | - | 10 | - | 10 | ||||||||||||||
| Net comprehensive loss for<br> the period | - | - | - | - | - | - | - | - | (3,488 | ) | (3,488 | ) | ||||||||||||
| BALANCE AS OF JUNE 30, 2023 | 104 | - | - | 1,930,718 | 1 | - | - | 38,174 | (36,890 | ) | 1,285 | |||||||||||||
| BALANCE AS OF JANUARY 1, 2024 | 159 | - | - | 3,007,745 | 1 | - | - | 39,916 | (39,688 | ) | 229 | |||||||||||||
| Share based compensation | - | 179 | 179 | |||||||||||||||||||||
| Exercise of options into common stock | 21,225 | * | 32 | 32 | ||||||||||||||||||||
| Vesting of RSUs | 18,495 | * | - | - | ||||||||||||||||||||
| Warrant inducement agreement, net of offering costs (Note 7d) | 42 | - | - | 999,670 | * | 2,560 | 2,560 | |||||||||||||||||
| Exercise of Pre funded warrants into common stock (Note 7b) | 970,187 | * | * | |||||||||||||||||||||
| Net comprehensive loss for the period | - | - | - | (1,942 | ) | (1,942 | ) | |||||||||||||||||
| BALANCE AS OF JUNE 30, 2024 | 201 | - | - | 5,017,322 | 1 | - | - | 42,687 | (41,630 | ) | 1,058 | |||||||||||||
| * | Represents an amount less than $1 thousands. | |||||||||||||||||||||||
| --- | --- |
The accompanyingnotes are an integral part of these condensed consolidated financial statements (Unaudited).
8
ACTELIS NETWORKS, INC.
CONSOLIDATED STATEMENTS OF MEZZANINE EQUITY AND SHAREHOLDERS’ EQUITY (CAPITAL DEFICIENCY)
(UNAUDITED)
U.S. dollars in thousands (except number of shares)
| Warrants To Placement Agent | Redeemable<br> Convertible Preferred Stock | Common<br> Stock | Non-voting<br> <br><br>Common Stock | Additional | Total shareholders’ | |||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Three Months Ended | Amount | Number of shares | Amount | Number of shares | Amount | Number of shares | Amount | paid-in capital | Accumulated deficit | **** | equity (capital deficiency) | **** | ||||||||||
| BALANCE<br> AS OF APRIL 1, 2023 | - | - | - | 1,730,066 | 1 | - | - | 36,711 | (35,297 | ) | 1,415 | |||||||||||
| Share<br> based compensation | - | - | - | - | - | - | - | 97 | - | 97 | ||||||||||||
| Issuance<br> of common stock and pre-funded warrants upon private placement, net of offering costs | 104 | - | - | 190,000 | * | - | - | 1,356 | - | 1,356 | ||||||||||||
| Exercise<br> of options into common stock | - | - | - | 10,652 | * | - | - | 10 | - | 10 | ||||||||||||
| Net<br> comprehensive loss for the period | - | - | - | - | - | - | - | - | (1,593 | ) | (1,593 | ) | ||||||||||
| BALANCE<br> AS OF JUNE 30, 2023 | 104 | - | - | 1,930,718 | 1 | - | - | 38,174 | (36,890 | ) | 1,285 | |||||||||||
| BALANCEAS OF APRIL 1, 2024 | 159 | - | - | 3,010,244 | 1 | - | - | 40,005 | (41,674 | ) | (1,668 | ) | ||||||||||
| Share<br>based compensation | - | - | - | - | - | - | - | 90 | - | 90 | ||||||||||||
| Vesting of RSUs | - | - | - | 15,996 | - | - | - | - | - | - | ||||||||||||
| Exercise of options into common stock | 21,225 | - | 32 | - | 32 | |||||||||||||||||
| Exercise of Pre funded warrants into common stock(Note 7b) | 970,187 | * | * | |||||||||||||||||||
| Warrant inducement agreement, net of offering costs (Note 7d) | 42 | - | - | 999,670 | - | 2,560 | - | 2,560 | ||||||||||||||
| Net comprehensive profit for the period | - | - | - | 44 | 44 | |||||||||||||||||
| BALANCE<br> AS OF JUNE 30, 2024 | 201 | - | - | 5,017,322 | 1 | - | - | 42,687 | (41,630 | ) | 1,058 | |||||||||||
| * | Represents an amount less than $1 thousands. | |||||||||||||||||||||
| --- | --- |
The accompanyingnotes are an integral part of these condensed consolidated financial statements (Unaudited).
9
ACTELIS NETWORKS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
| Six months ended<br> <br>June 30, | ||||||
|---|---|---|---|---|---|---|
| 2024 | 2023 | |||||
| U.S. dollars in thousands | ||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||
| Net loss for the period | (1,942 | ) | (3,488 | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||
| Depreciation | 8 | 13 | ||||
| Inventory write-downs | 25 | 97 | ||||
| Exchange rate differences | (139 | ) | (226 | ) | ||
| Share-based compensation | 179 | 192 | ||||
| Interest expenses | (103 | ) | - | |||
| Financial income from long term bank deposit | 4 | (64 | ) | |||
| Changes in operating assets and liabilities: | ||||||
| Trade receivables | (26 | ) | 1,275 | |||
| Net change in operating lease assets and Liabilities | 1 | 24 | ||||
| Inventories | 342 | (726 | ) | |||
| Prepaid expenses and other current assets | (150 | ) | 208 | |||
| Trade payables | (347 | ) | 137 | |||
| Deferred revenues | (209 | ) | (155 | ) | ||
| Other current liabilities | 14 | (36 | ) | |||
| Other long-term liabilities | - | (17 | ) | |||
| Net cash used in operating activities | (2,343 | ) | (2,939 | ) | ||
| CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||
| Short term deposits | 198 | 810 | ||||
| Short term Restricted bank deposits | - | (125 | ) | |||
| Long term Restricted bank deposits | - | - | ||||
| Long term deposits | - | (5 | ) | |||
| Purchase of property and equipment | (1 | ) | (3 | ) | ||
| Net cash Provided by investing activities | 197 | 677 | ||||
| CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||
| Proceeds from exercise of options | 32 | 10 | ||||
| Repurchase of common stock | - | (50 | ) | |||
| Proceeds from common stocks, pre-funded warrants and warrants | - | 3,500 | ||||
| Proceeds from Warrant inducement agreement | 2,999 | - | ||||
| Underwriting discounts and commissions and other offering costs | (397 | ) | (291 | ) | ||
| Proceeds from credit lines with bank | 1,045 | - | ||||
| Early repayment of long-term loan | (3,483 | ) | - | |||
| Repayment of long-term loan | (193 | ) | (389 | ) | ||
| Net cash Provided by financing activities | 3 | 2,780 | ||||
| EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS AND RESTRICTED CASH | (10 | ) | (10 | ) | ||
| INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH | (2,153 | ) | 508 | |||
| BALANCE OF CASH, CASH EQUIVALENTS AND RESTRICTED CASH AT BEGINNING OF THE PERIOD | 5,515 | 4,279 | ||||
| BALANCE OF CASH, CASH EQUIVALENTS AND RESTRICTED CASH AT END OF THE PERIOD | 3,362 | 4,787 |
The accompanying notes are an integral partof these condensed consolidated financial statements (Unaudited).
10
ACTELIS NETWORKS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)
(UNAUDITED)
| June 30 | ||||
|---|---|---|---|---|
| 2024 | 2023 | |||
| U.S. dollars in thousands | ||||
| RECONCILIATION OF CASH, CASH EQUIVALENTS AND RESTRICTED CASH: | ||||
| Cash and cash equivalents | 2,412 | 2,573 | ||
| Restricted cash equivalents, current | 724 | - | ||
| Restricted cash and cash equivalents, non-current | 226 | 2,214 | ||
| Total cash, cash equivalents and restricted cash | 3,362 | 4,787 | ||
| Six months ended <br> June 30 | ||||
| --- | --- | --- | --- | --- |
| 2024 | 2023 | |||
| SUPPLEMENTARY DISCLOSURE OF CASH FLOW INFORMATION: | ||||
| Cash paid for interest | $ | 326 | $ | 351 |
| SUPPLEMENTARY INFORMATION ON INVESTING AND FINANCING ACTIVITIES NOT INVOLVING CASH FLOWS: | ||||
| Issuance costs of common stock, pre-funded warrants and warrants | - | $ | 104 | |
| Issuance costs of the Warrant inducement agreement | 1,493 | - |
The accompanying notes are an integral part of these condensed consolidatedfinancial statements (Unaudited).
11