ASNS Actelis Networks Inc

  

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): May 14, 2024

 

Actelis Networks, Inc.

(Exact name of registrant as specified in its charter)

 

Delaware		001-41375		52-2160309
(State or other jurisdiction of incorporation)		(Commission File Number)		(I.R.S. Employer 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 Financial Condition.

 

On May 14, 2024, Actelis Networks, Inc. issued a press release which included its results of operations for the fiscal first quarter ended March 31, 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 May 14, 2024
104		Cover Page Interactive Data File (embedded within the Inline XBRL document).

 

 

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: May 14, 2024	By:	/s/ Tuvia Barlev
	Name:	Tuvia Barlev
	Title:	Chief Executive Officer

 

 

 

 

 

 

Exhibit 99.1

 

 

Actelis Networks Reports Fiscal First Quarter 2024

 

FREMONT, Calif., May 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 first quarter ended March 31, 2024.

 

First Quarter 2024 Financial Highlights:

 

●

Strategic shift to IoT sales continues: Revenue at $0.73 million for the first quarter ended March 31, 2024 compared to $1.85 million in the year ago period, driven by delay in customer order delivery to the second quarter of 2024.

●

Fixed costs maintained in anticipation of next quarters’ growth: Gross Margin at 30% for the first quarter ended March 31, 2024, compared to 37% for the three months ended March 31, 2023, driven by lower revenue offset by indirect costs that are down 20%.

●

Operating expense improvement driving net loss near parity: Operating expenses declined 20% to $2.09 million for the first quarter ended March 31, 2024 compared to $2.55 million in the year ago period, driving net Loss to remain nearly the same at $2.0 million in the 3 months ended March 31, 2024 compared to $1.9 million in the year ago period.

●

Non-GAAP adjusted EBITDA loss was $1.8 million for the first quarter ended March 31, 2024, compared to $1.6 million in the prior year period.

 

Recent Company Highlights:

 

●

Major order win of $2.3 million for immediate delivery from Washington D.C.’s Department of Transportation to modernize the city infrastructure as part of its smart city upgrades.

●

Successful implementation of hybrid-fiber, cyber-hardened solution in the city of Bakersfield, CA

●

The Company continued to pursue a partnership in the cyber-aware-networking space to secure the surrounding devices to the Actelis network.

●

The Company’s expense reduction program continues through first and second quarters of 2024, in advance of economic softness. Actual spending is in line with plan at 20% lower operating expenses in the first quarter of 2024 compared to the year ago period. Additional expense reductions have been executed during the last few months, continuing the positive trend.

●

Multiple telecom carrier and IoT customer trials scheduled for the coming months for the new GigaLine 800 and GigaLine 900 Multi Dwelling Unit (MDU) solutions, exploring additional verticals where these can be deployed in IoT networking.

●

Yoav Efron the Company’s Chief Financial Officer has been promoted to Deputy CEO and CFO, on top of his duties as CFO which he will continue to assume, denoting his significant involvement and impact on the strategic and operational progress the Company is making.

●

The war in Israel has not affected the Company’s operations, we are keeping a close look as the situation evolves and preparing for any necessary adjustments.

 

 

“Actelis continues to drive momentum in customer acquisitions, partnerships in technology and sales distribution and expansion. I am pleased with our progress with cyber-aware networking as we combine our own expertise with those of 3^rd party technology partners. Our solutions continue to win customers domestically and internationally, some already disclosed and others moving through our pipeline, and our partner network has expanded adding new names we just recently announced such as Carahsoft and Netceed to name a few,” said Tuvia Barlev, Chairman and CEO of Actelis. Despite macroeconomic headwinds, cyber-secure IoT connectivity of everything is essential in all our verticals for any data-oriented solution.”

 

“We will continue to invest in developing our target markets and look for cost saving measures operationally as we enter our third year as a publicly traded company. We are continuing our investment in the opportunities in IoT and cyber aware networking strengthened by our FIPS compliance and continue to serve residential and enterprise telecom customers with our new MDU solution,” Barlev added. “Overall, we are excited by our growth opportunity and future prospects as we continue to execute on our strategy.”

 

Fiscal First Quarter 2024 Financial Results:

 

Revenues for the three months ended March 31, 2024, amounted to $0.73 million, compared to $1.85 million for the three months ended March 31, 2023. The decrease from the corresponding period was primarily attributable to a decrease of $236,000 of revenues generated from North America, a decrease of $636,000 of revenues generated from Europe the Middle East and Africa as a major project phase completed in the three months ended March 31, 2023, and a decrease of $250,000 of revenues generated from Asia Pacific.

  

Cost of revenues for the three months ended March 31, 2024, amounted to $0.51 million compared to $1.16 million for the three months ended March 31, 2023. The decrease from the corresponding period was mainly due to the decrease in revenues, partially offset by the higher effect of indirect costs as a higher percent of the lower revenues.

 

Gross profit for the three months ended March 31, 2024, amounted to $220,000 or 30% of revenue, compared to $688,000, or 37% of revenue for the three months ended March 31, 2023. The decrease from the corresponding period was mainly due to a favorable product mix and higher effect of indirect costs as a higher percent of the lower revenues.

 

Research and development expenses for the three months ended March 31, 2024, amounted to $0.65 million compared to $0.76 million for the three months ended March 31, 2023. The decrease is mainly due to a decrease in payroll expenses.

 

Sales and marketing expenses for the three months ended March 31, 2024, amounted to $0.63 million compared to $0.93 million for the three months ended March 31, 2023. The decrease was mainly due to a decrease in commission expenses as a result of the decrease in revenues primarily driven by the project phase completion in Europe, and a decrease in payroll associated with the Company’s cost reduction measures.

  

General and administrative expenses for the three months ended March 31, 2024, amounted to $0.82 million compared to $0.87 million for the three months ended March 31, 2023.

 

Operating loss for the three months ended March 31, 2024, was $1.87 million, compared to an operating income of $1.86 million for the three months ended March 31, 2023.

 

Other Financial expenses, net and interest expenses for the three months ended March 31, 2024, were $0.12 million (including $0.2 million interest expenses) compared to $0.03 million (including $0.2 million interest expenses) for the three months ended March 31, 2023. The increase is mainly due to a decrease in income from exchange rate differences.

 

Net loss for the three months ended March 31, 2024, was $2.0 million, compared to net loss of $1.9 million for the three months ended March 31, 2023.

 

 

Adjusted EBITDA loss, a non-GAAP measurement of operating performance (reconciled below to Net Loss), for the three months ended March 31, 2024, was $1.8 million, compared to $1.6 million in the comparable year-ago period. This was primarily a result of a decrease in revenues.

 

The Company reported a balance sheet with $10.5 million of total assets compared to $11.2 million as of December 31, 2023, $12.0 million of total liabilities compared to $10.8 million as of December 31, 2023, $0.2 million of Mezzanine equity compared to $0.2 million as of December 31, 2023, and $1.7 million of capital deficiency compared to shareholders equity of $0.2 million as of December 31, 2023.

 

About Actelis 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.

 

Use of Non-GAAP Financial Information

 

Non-GAAP Adjusted EBITDA, and backlog of open orders are Non-GAAP financial measures. In addition to reporting financial results in accordance with GAAP, we provide Non-GAAP operating results adjusted for certain items, including: financial expenses, which are interest, financial instrument fair value adjustments, exchange rate differences of assets and liabilities, stock based compensation expenses, depreciation and amortization expense, tax expense, and impact of development expenses ahead of product launch. We adjust for the items listed above and show Non-GAAP financial measures in all periods presented, unless the impact is clearly immaterial to our financial statements. When we calculate the tax effect of the adjustments, we include all current and deferred income tax expense commensurate with the adjusted measure of pre-tax profitability.

 

Cautionary Statement Concerning Forward-Looking Statements

This press release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 and other 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. Forward-looking statements are not historical facts, and are based upon management’s current expectations, beliefs and projections, many of which, by their nature, are inherently uncertain. Such expectations, beliefs and projections are expressed in good faith. However, there can be no assurance that management’s expectations, beliefs and projections will be achieved, and actual results may differ materially from what is expressed in or indicated by the forward-looking statements. Forward-looking statements are subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in the forward-looking statements. More detailed information about the Company and the risk factors that may affect the realization of forward-looking statements is set forth in the Company’s filings with the Securities and Exchange Commission (SEC), including the Company’s Annual Report on Form 10-K and its Quarterly Reports on Form 10-Q. Investors and security holders are urged to read these documents free of charge on the SEC’s web site at http://www.sec.gov.

 

Forward-looking statements speak only as of the date the statements are made. The Company assumes no obligation to update forward-looking statements to reflect actual results, subsequent events or circumstances, changes in assumptions or changes in other factors affecting forward-looking information 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-looking statements. 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. Actelis is not responsible for the contents of third-party websites.

 

Investor Relations Contact:

Kirin Smith
PCG Advisory
ksmith@pcgadvisory.com

 

-Financial Tables to Follow-

 

 

ACTELIS NETWORKS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(UNAUDITED)

(U. S. dollars in thousands except for share and per share amounts)

 

		March 31, 2024				December 31, 2023
Assets
CURRENT ASSETS:
Cash and cash equivalents			1,211				620
Restricted cash equivalents			1,392				1,565
Short term deposits			197				197
Trade receivables, net of allowance for credit losses of  $168 as of March 31, 2024, and December 31, 2023.			533				664
Inventories			2,608				2,526
Prepaid expenses and other current assets, net of allowance for doubtful debts of $181 and $144 as of March 31, 2024, and December 31, 2023, respectively			249				340
TOTAL CURRENT ASSETS			6,190				5,912
NON-CURRENT ASSETS:
Property and equipment, net			58				61
Prepaid expenses			592				592
Restricted cash and cash equivalents			2,542				3,330
Restricted bank deposits			90				94
Severance pay fund			238				238
Operating lease right of use assets			728				918
Long term deposits			78				78
TOTAL NON-CURRENT ASSETS			4,326				5,311
TOTAL ASSETS			10,516				11,223

 

 

ACTELIS NETWORKS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS (continued)

UNAUDITED

(U. S. dollars in thousands except for share and per share amounts)

 

		March 31, 2024				December 31, 2023
Liabilities, Mezzanine Equity and shareholders’ equity (capital deficiency)
CURRENT LIABILITIES:
Short term loan			574				-
Current maturities of long-term loans			1,088				1,335
Trade payables			2,258				1,769
Deferred revenues			305				389
Employee and employee-related obligations			855				737
Advances from reseller			1,143				-
Accrued royalties			1,087				1,062
Operating lease liabilities			465				498
Other accrued liabilities			1,115				1,122
TOTAL CURRENT LIABILITIES			8,890				6,912
NON-CURRENT LIABILITIES:
Long-term loan, net of current maturities			2,521				3,154
Deferred revenues			68				71
Operating lease liabilities			254				405
Accrued severance			269				270
Other long-term liabilities			23				23
TOTAL NON-CURRENT LIABILITIES			3,135				3,923
TOTAL LIABILITIES			12,025				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 March 31, 2024 and December 31, 2023.			-				-
WARRANTS TO PLACEMENT AGENT (Note 7d)			159				159
SHAREHOLDERS’ EQUITY (CAPITAL DEFICIENCY):
Common stock, $0.0001 par value: 30,000,000 shares authorized; 3,010,244 and 3,007,745 shares issued and outstanding as of March 31, 2024, and December 31, 2023, respectively.			1				1
Non-voting common stock, $0.0001 par value: 2,803,774 shares authorized as of March 31, 2024, and December 31, 2023, None issued and outstanding as of March 31, 2024, and December 31, 2023.			-				-
Additional paid-in capital			40,005				39,916
Accumulated deficit			(41,674	)			(39,688	)
TOTAL SHAREHOLDERS’ EQUITY (CAPITAL DEFICIENCY)			(1,668	)			229
TOTAL LIABILITIES, MEZZANINE EQUITY AND SHAREHOLDERS’ EQUITY (CAPITAL DEFICIENCY)			10,516				11,223

 

The accompanying notes are an integral part of these condensed consolidated financial statements (Unaudited).

 

 

ACTELIS NETWORKS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(UNAUDITED)

(U. S. dollars in thousands except for share and per share amounts)

 

		Three months ended March 31,
		2024				2023
REVENUES			726				1,848
COST OF REVENUES			506				1,160
GROSS PROFIT			220				688
OPERATING EXPENSES:
Research and development expenses			647				757
Sales and marketing expenses, net			627				929
General and administrative expenses			817				865
TOTAL OPERATING EXPENSES			2,091				2,551
OPERATING LOSS			(1,871	)			(1,863	)
Interest expenses			(207	)			(180	)
Other Financial income, net			92				148
NET COMPREHENSIVE LOSS FOR THE PERIOD			(1,986	)			(1,895	)
Net loss per share attributable to common shareholders – basic and diluted		$	(0.50	)		$	(1.09	)
Weighted average number of common stocks used in computing net loss per share – basic and diluted			3,978,828				1,734,160

 

The accompanying notes are an integral part of these condensed consolidated financial statements (Unaudited).

 

 

ACTELIS NETWORKS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

 

		Three months ended March 31,
		2024				2023
		U.S. dollars in thousands
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss for the period			(1,986	)			(1,895	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation			4				7
Inventory write-downs			-				7
Exchange rate differences			(70	)			(130	)
Share-based compensation			89				95
Interest expenses			(61	)			-
Financial income from long term bank deposit			(1	)			(51	)
Changes in operating assets and liabilities:
Trade receivables			131				561
Net change in operating lease assets and liabilities			6				16
Inventories			(83	)			(102	)
Prepaid expenses and other current assets			91				265
Trade payables			490				(381	)
Deferred revenues			(87	)			(35	)
Advances from reseller			1,143				-
Other current liabilities			131				(46	)
Other long-term liabilities			-				(16	)
Net cash used in operating activities			(203	)			(1,705	)
CASH FLOWS FROM INVESTING ACTIVITIES:
Short term deposits			-				812
Short term Restricted bank deposits			-				(329	)
Long term Restricted bank deposits			-				(811	)
Long term deposits			-				(3	)
Purchase of property and equipment			(1	)			(3	)
Net cash used in investing activities			(1	)			(334	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Repurchase of common stock			-				(50	)
Proceeds from credit lines with bank			574				-
Early repayment of long-term loan			(545	)
Repayment of long-term loan			(193	)			(192	)
Net cash used in financing activities			(164	)			(242	)
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS AND RESTRICTED CASH			(2	)			(5	)
DECREASE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH			(370	)			(2,281	)
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			5,145				1,998

 

The accompanying notes are an integral part of these condensed consolidated financial statements (Unaudited).

 

 

ACTELIS NETWORKS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)

(UNAUDITED)

 

		March 31, 2024				December 31, 2023
		U.S. dollars in thousands
RECONCILIATION OF CASH, CASH EQUIVALENTS AND RESTRICTED CASH:
Cash and cash equivalents			1,211				808
Restricted cash equivalents, current			1,392				-
Restricted cash and cash equivalents, non-current			2,542				1,190
Total cash, cash equivalents and restricted cash			5,145				1,998

 

		Three months ended March 31,
		2024				2023
		U.S. dollars in thousands
SUPPLEMENTARY DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid for interest			273				116

 

The accompanying notes are an integral part of these condensed consolidated financial statements (Unaudited).

 

Non-GAAP Financial Measures

 

(U.S. dollars in thousands)		Three months Ended March 31, 2024				Three months Ended March 31, 2023
Revenues		$	726			$	1,848
GAAP net loss			(1,986	)			(1,895	)
Interest Expense		$	207			$	180
Other financial (income) expenses, net			(92	)			(148	)
Tax Expense			17				21
Fixed asset depreciation expense			4				7
Stock based compensation			89				95
Research and development, capitalization			-				146
Other one time costs and expenses			(26	)			-
Non-GAAP Adjusted EBITDA			(1,787	)		$	(1,594	)
GAAP net loss margin			(246.27	)%			(102.54	)%
Adjusted EBITDA margin			(90.00	)%			(84.12	)%

 

 

8

v3.24.1.1.u2

Cover	May 14, 2024
Cover [Abstract]
Document Type	8-K
Amendment Flag	false
Document Period End Date	May 14, 2024
Entity File Number	001-41375
Entity Registrant Name	Actelis Networks, Inc.
Entity Central Index Key	0001141284
Entity Tax Identification Number	52-2160309
Entity Incorporation, State or Country Code	DE
Entity Address, Address Line One	4039 Clipper Court
Entity Address, City or Town	Fremont
Entity Address, State or Province	CA
Entity Address, Postal Zip Code	94538
City Area Code	(510)
Local Phone Number	545-1045
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Title of 12(b) Security	Common Stock, $0.0001 par value per share
Trading Symbol	ASNS
Security Exchange Name	NASDAQ
Entity Emerging Growth Company	true
Elected Not To Use the Extended Transition Period	false

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