| 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, networking solutions for IoT
and Telecommunication governmental agencies and companies. The Company’s customers
include governmental agencies, providers of telecommunication services, 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, 2022, completed its IPO. The Company’s
Common Stock is listed on the NASDAQ. |
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b. |
The Company has incurred significant losses and negative cash flows from operations. Net loss was $1,986 and $1,895 for the three months ended March 31, 2024, and March 31, 2023, respectively. During the three months ended March 31, 2024, and March 31, 2023, the Company had negative cash flows from operations of $203 and $1,705, respectively. As of March 31, 2024, the Company’s accumulated deficit was $41,674. The Company has funded its operations to date through equity and debt financing and has cash on hand (including short term deposit and restricted cash equivalents) of $2,800 and long-term restricted cash and cash equivalents and restricted bank deposits of $2,632 as of March 31, 2024. 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. 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 a new cost reduction plan in addition to previous cost reduction plans that were executed so far. 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 consolidated financial statements. These conditions raise substantial doubt as to the Company’s ability to continue as a going concern. These 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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C. |
On
October 7th, 2023, an attack by the Hamas terrorist organization was inflicted on the
State of Israel which started a war between Israel and the Hamas as well as military conflicts
on other fronts. As of the date of the issuance of these consolidated financial statements,
the Company has not identified any material effect on its operations as a result of those
events. The Company continues to monitor its ongoing activities and will make adjustments
in its business if needed, including updating any estimates or judgments impacting its financial
statements as appropriate, while supporting the safety and well-being of its employees. It
is currently not possible to predict the effects of such conflicts and its impact on the
Company’s business, operations or financial conditions. |
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D. |
On
August 25, 2023, the Company received a notification letter from the Nasdaq Staff indicating
that we are not in compliance with Nasdaq Listing Rule 5550(b)(1) due to our failure to meet
the Minimum Shareholders’ Equity Requirement or any alternatives to such requirement.
In order to maintain our listing on the Nasdaq Capital Market, we submitted a plan of compliance
addressing how we intended to regain compliance. We had until February 21, 2024 to evidence
compliance with the Minimum Shareholders’ Equity Requirement. As of the date of this
Quarterly Report, we have not provided such evidence. |
On
March 27, 2024, the Company received a delist determination letter (the “Delist Letter”) from the Staff
advising the Company that the Staff had determined to delist the Company’s securities from Nasdaq due to its non-compliance
with the Equity Rule unless the Company timely requests a hearing before the Nasdaq Hearings Panel (the “Panel”). The
Company has since timely requested a hearing, which request served to stay any further action by Nasdaq at least pending the hearing
before the Panel and the expiration of any extension the Panel may grant following the hearing.
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