| 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 $2,064 and $3,488 for the six months ended June 30, 2024, and June 30, 2023, respectively. During the six months ended June 30, 2024, and June 30, 2023, the Company had negative cash flows from operations of $2,343 and $2,939, respectively. As of June 30, 2024, the Company’s accumulated deficit was $41,752. The Company has funded its operations to date through equity and debt financing and has cash on hand (including restricted cash equivalents) of $3,202 and long-term restricted cash and cash equivalents and restricted bank deposits of $249 as of June 30, 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 7,
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. |
On November 21, 2023 we applied
for an Israeli government grant associated with the Swords of Iron war declared by the State of Israel following the October 7, 2023
attack by Hamas.
The Company was found eligible
and received an amount of $163 which was recognized as other income. The grant is not repayable.
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d. |
On
August 25, 2023, the Company received a notification letter from the Nasdaq Staff indicating
that the company was not in compliance with Nasdaq Listing Rule 5550(b)(1) due to the company’s
failure to meet the Minimum Shareholders’ Equity Requirement or any alternatives to
such requirement. In order to maintain listing on the Nasdaq Capital Market, the company
has submitted a plan of compliance addressing how we intended to regain compliance. The company
had until February 21, 2024 to evidence compliance with the Minimum Shareholders’ Equity
Requirement. |
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 timely requested a hearing before the Panel. Following
the hearing, on June 10, 2024, the Panel granted the Company’s request for continued listing subject to the Company evidencing
compliance with the Minimum Shareholders’ Equity Requirement by August 30, 2024.
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