| GENERAL |
NOTE 1 –
GENERAL:
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a. |
Actelis Networks, Inc. (hereafter -the Company) was established
in 1998, under the laws of the state of Delaware. The Company has a wholly-owned subsidiary in Israel, Actelis Networks Israel Ltd. (hereafter
– the Subsidiary). The Company is engaged in the design, development, manufacturing, and marketing of cyber hardened, hybrid fiber,
copper networking solutions for IoT and Telecommunication companies. The Company’s customers include providers of telecommunication
services and enterprises as well as resellers of the Company’s products. On May 12, 2022, the Company accepted a notification of
effectiveness from the SEC, and on May 17 completed its IPO. See note 2 below for further details. |
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b. |
In December 2019, a novel coronavirus disease, or COVID-19,
was first reported and on March 11, 2020, the World Health Organization characterized COVID-19 as a pandemic. The widespread health
crisis is adversely affecting the broader economies, financial markets and overall demand environment for many of the Company’s
products. |
The
Company’s operations and the operations of the Company’s suppliers, channel partners and customers were disrupted to varying
degrees by a range of external factors related to the COVID-19 pandemic, some of which are not within the Company’s control.
The
duration and extent of any future epidemic or pandemic and its potential effect on the Company depends on future developments that cannot
be accurately predicted at this time.
| | c. | The Company has incurred significant losses, negative working capital and negative cash flows
from operations and incurred losses of $4,355 and $10,982 for the nine months ended September 30, 2023, and the year ended December 31,
2022, respectively. During the nine months ended September 30, 2023, and the year ended December 31, 2022, the Company had negative cash
flows from operations of $5,194 and $7,768, respectively. As of September 30, 2023, the Company’s accumulated deficit was $37,757.
The Company has funded its operations to date through equity and debt financing and has cash on hand (including short term deposits and
restricted bank deposits) of $1,386 and long-term deposits, restricted bank deposits and restricted cash of $4,457 as of September 30,
2023. The Company monitors its cash flow projections on a current basis and takes active measures to obtain the funding it requires to
continue its operations, as well as adjustments to its cost structure that were done year to date. However, these cash flow projections
are subject to various uncertainties concerning their fulfilment such as the ability to increase revenues by attracting and expanding
its customer base or reducing cost structure. If the Company is not successful in generating sufficient cash flow or completing additional
financing including debt refinancing which shall release restricted cash, then it will need to execute additional cost reduction actions
that were planned. The Company’s transition to profitable operations is dependent on generating a level of revenue adequate to
support its cost structure. The Company expects to fund operations using cash on hand, through operational cash flows and raising additional
proceeds. There are no assurances, however, that the Company will be able to generate the revenue necessary to support its cost structure
or that it will be successful in obtaining the level of financing necessary for its operations. Management has evaluated the significance
of these conditions and has determined that the Company does not have sufficient resources to meet its operating obligations for at least
one year from the issuance date of these condensed consolidated financial statements. These factors and the risk inherent in the Company's
operations raise a substantial doubt as to the Company's ability to continue as a going concern. These condensed consolidated financial
statements have been prepared assuming that the Company will continue as a going concern and do not include any adjustments that might
result from the outcome of this uncertainty. |
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