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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Actelis Networks Inc | NASDAQ:ASNS | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
-0.0379 | -6.95% | 0.5073 | 0.4602 | 0.5325 | 0.545 | 0.3598 | 0.5258 | 942,474 | 00:56:05 |
Second Quarter and First Half 2023 Financial Highlights:
Recent Company Highlights:
Management Commentary:
“As we close out the first half of the year, Actelis continues to experience strong momentum in growing our pipeline of IoT customers and channels to further accelerate growth,” said Tuvia Barlev, Chairman and CEO of Actelis. “We launched the Gigaline fiber optic series and we are about to launch additional hybrid fiber-copper-coax enabled products that would complete the picture for our customers in any of the environments we serve including multi-dwelling units and including FIPS enabled, cyber-hardened, encrypted products. We also introduced our newest roadmap concept of cyber-aware-networking recently and we are working both organically as well as inorganically to achieve it. Our telco business has continued to decline but is being offset by our focus on serving our IoT verticals well and the growth opportunity there is exciting. As we approach a clear inflection point as the growth in IoT fully offsets our telco business we are investing in global sales and marketing to ensure we deliver strong performance in the coming quarters.”
"While we continue to reach new customers, we have carefully implemented cost savings measures as internal projects are coming to completion and freeing up resources. As a result, we are re-focusing our investment in IoT opportunities and cyber-aware-networking while keeping the cash burn-rate as low as needed,” Barlev added. “Our newly raised funding of $3.5M in gross proceeds, alongside the expense reduction efforts bolsters our balance sheet as we continue to make solid progress. We are also focused on improving our working capital as the supply chain availability is improving, as well as with regards to releasing restricted cash we own against our debt.”
“We have not been affected by the recent political climate in Israel and we enjoy a foreign exchange advantage for expenses related to our Israel office,” Barlev added.
Fiscal Second Quarter and First Half 2023 Financial Results:
Revenues for the for the three months ended June 30, 2023, amounted to $1.9 million, compared to $3.1 million for the three months ended June 30, 2022. The decrease from the corresponding period was primarily attributable to a decrease of $1.3 million of revenues generated from North America and Asia Pacific, offset by an increase of $0.1 million in revenues generated from Europe, the Middle East and Africa.
Revenues for the six months ended June 30, 2023, amounted to $3.74 million, compared to $4.95 million for the six months ended June 30, 2022. The decrease from the corresponding period was primarily attributable to a decrease of $1.3 million in revenues generated from North America and Europe, the Middle East and Africa, offset by an increase of $0.1 million in revenues generated from Asia Pacific.
Cost of revenues for the three months ended June 30, 2023, amounted to $1.3 million compared to $1.2 million for the three months ended June 30, 2022. The increase from the corresponding period was primarily attributable to change in product mix.
Cost of revenues for the six months ended June 30, 2023, amounted to $2.4 million compared to $2.45 million for the six months ended June 30, 2022.
Gross profit for the three months ended June 30, 2023, amounted to $0.6 million or 33% of revenue, compared to $1.9 million, or 62% of revenue for the three months ended June 30, 2022. The decrease from the corresponding period was mainly due to change in product mix.
Gross profit for the six months ended June 30, 2023, amounted to $1.3 million or 35% of revenue, compared to $2.5 million, or 50% of revenue for the six months ended June 30, 2022. The decrease from the corresponding period was mainly due to change in product mix.
Research and development expenses for the three months ended June 30, 2023, amounted to $0.7 million compared to $0.7 million for the three months ended June 30, 2022.
Research and development expenses for the six months ended June 30, 2023, amounted to $1.4 million compared to $1.3 million for the six months ended June 30, 2022. The increase was mainly due to an increase in payroll expenses for research and development personnel in the amount of $25,000, and an increase in professional services related to research and development in the amount of $51,000.
Sales and marketing expenses for the three months ended June 30, 2023, amounted to $0.7 million compared to $0.8 for the three months ended June 30, 2022. The decrease was mainly due to a decrease in commission expenses.
Sales and marketing expenses for the six months ended June 30, 2023, amounted to $1.6 million compared to $1.6 for the six months ended June 30, 2022, with sales and marketing investments made in 2023, offsetting lower sales commission expenses.
General and administrative expenses for the three months ended June 30, 2023, amounted to $0.97 million compared to $1.07 million for the three months ended June 30, 2022. The decrease is driven by cost reduction measures.
General and administrative expenses for the six months ended June 30, 2023, amounted to $1.8 million compared to $1.7 million for the six months ended June 30, 2022. This increase was mainly due to payroll, insurance expenses and professional services expenses, in connection with our IPO completed in May 2022 and those costs associated with being a public company.
Operating loss for the three months ended June 30, 2023, was $1.7 million, compared to an operating loss of $0.7 million for the three months ended June 30, 2022. The increase was mainly due to the decrease in revenues and gross margin.
Operating loss for the six months ended June 30, 2023, was $3.6 million, compared to an operating loss of $2.1 million for the six months ended June 30, 2022. The increase was mainly due to the decrease in revenues and gross margin.
Other Financial income, net and interest expenses for the three months ended June 30, 2023, were $0.1 million (including $0.2 million interest expenses) compared to financial expense of $1.0 million (including $0.2 million interest expenses) for the three months ended June 30, 2022. During the three months ended June 30, 2023, the Company recorded financial income in connection with a decrease in fair value of warrants in the amount of $0.4 million, compared to an increase in fair value of various financial instruments prior to the IPO completed in May 2022, such as a convertible loan, note and warrants in the amount of $1.4 million, for the three months ended June 30, 2022. In addition, the Company recorded income in the amount of $0.1 from exchange rate differences during the three months ended June 30, 2023, compared to $0.5 million, during the three months ended June 30, 2022.
Other Financial income, net and interest expenses for the six months ended June 30, 2023, were $0.1 million (including $0.35 million interest expenses) compared to financial expense of $4.2 million (including $0.4 million interest expenses) for the six months ended June 30, 2022. During the six months ended June 30, 2023, the Company recorded financial income in connection with a decrease in fair value of warrants in the amount of $0.4 million, compared to an increase in fair value of various financial instruments prior to the IPO completed in May 2022, such as a convertible loan, note and warrants in the amount of $4.5 million. In addition, the Company recorded income in the amount of $0.25 million from exchange rate differences, compared to $0.65 during the three months ended June 30, 2022.
Net loss for the three months ended June 30, 2023, was $1.6 million, compared to net loss of $1.7 million for the three months ended June 30, 2022.
Net loss for the six months ended June 30, 2023, was $3.5 million, compared to net loss of $6.3 million for the six months ended June 30, 2022. This decrease was primarily due to the decrease in revenues and gross margin offset by a decrease in financial expenses, resulting from the conversion of the financial instruments the Company had such as a convertible loan, note and warrants from the IPO completed in May 2022.
Adjusted EBITDA income (loss), a non-GAAP measurement of operating performance (reconciled below to Net Loss), for the three months ended June 30, 2023, was $(1.26) million, compared to $0.1 million in the comparable year-ago period. This was primarily a result of product mix change which resulted in a decreased gross profit and a decrease in other one-time costs and expenses.
Adjusted EBITDA loss, a non-GAAP measurement of operating performance (reconciled below to Net Loss), for the six months ended June 30, 2023, was $(2.85) million, compared to $(0.9) million in the comparable year-ago period. This was primarily attributed to product mix changes, as well as expenses associated with being a public company and a decrease in other one-time costs and expenses.
The Company reported a balance sheet with $13.6 million of total assets compared to $14.8 million as of December 31, 2022, $12.3 million of total liabilities compared to $11.6 million as of December 31, 2022, and $1.3 million of shareholders’ equity compared to shareholders equity of $3.3 million as of December 31, 2022.
About Actelis Networks, Inc.
Actelis Networks, Inc. (NASDAQ: ASNS) is a market leader in cyber-hardened, rapid-deployment 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 StatementsThis 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. For a more detailed description of the risks and uncertainties affecting the Company, reference is made to the Company’s reports filed from time to time with the SEC, including, but not limited to, the risks detailed in the Company’s final prospectus (Registration No. 333-264321), filed with the SEC on May 16, 2022. 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.
-Financial Tables to Follow-
ACTELIS NETWORKS, INC.CONDENSED CONSOLIDATED BALANCE SHEETS(UNAUDITED)(U. S. dollars in thousands except for share and per share amounts)
June 30,2023 | December 31, 2022 | ||||||
Assets | |||||||
CURRENT ASSETS: | |||||||
Cash and cash equivalents | 2,573 | 3,943 | |||||
Short term deposits | 809 | 1,622 | |||||
Restricted bank deposits | 454 | 451 | |||||
Trade receivables, net of allowance for credit losses of $125 as of June 30, 2023, and December 31, 2022. | 1,759 | 3,034 | |||||
Inventories | 1,808 | 1,179 | |||||
Prepaid expenses and other current assets | 470 | 678 | |||||
TOTAL CURRENT ASSETS | 7,873 | 10,907 | |||||
NON-CURRENT ASSETS: | |||||||
Property and equipment, net | 70 | 80 | |||||
Prepaid expenses | 492 | 492 | |||||
Restricted cash | 2,214 | 336 | |||||
Restricted bank deposits | 2,213 | 2,027 | |||||
Severance pay fund | 231 | 239 | |||||
Operating lease right of use assets | 464 | 726 | |||||
Long term deposits | 17 | 12 | |||||
TOTAL NON-CURRENT ASSETS | 5,701 | 3,912 | |||||
TOTAL ASSETS | 13,574 | 14,819 | |||||
ACTELIS NETWORKS, INC.CONDENSED CONSOLIDATED BALANCE SHEETS (continued)UNAUDITED(U. S. dollars in thousands except for share and per share amounts)
June 30,2023 | December 31, 2022 | ||||||
Liabilities and redeemable convertible preferred stock, warrants to placement agent and shareholders’ equity | |||||||
CURRENT LIABILITIES: | |||||||
Current maturities of long-term loans | 1,223 | 553 | |||||
Warrants | 8 | 8 | |||||
Trade payables | 1,918 | 1,781 | |||||
Deferred revenues | 493 | 484 | |||||
Employee and employee-related obligations | 772 | 793 | |||||
Accrued royalties | 996 | 900 | |||||
Current maturities of operating lease liabilities | 303 | 445 | |||||
Other accrued liabilities | 1,003 | 1,238 | |||||
TOTAL CURRENT LIABILITIES | 6,716 | 6,202 | |||||
NON-CURRENT LIABILITIES: | |||||||
Long-term loan, net of current maturities | 3,456 | 4,625 | |||||
Warrants | 1,576 | - | |||||
Deferred revenues | - | 164 | |||||
Operating lease liabilities | 141 | 237 | |||||
Accrued severance | 264 | 278 | |||||
Other long-term liabilities | 32 | 48 | |||||
TOTAL NON-CURRENT LIABILITIES | 5,469 | 5,352 | |||||
TOTAL LIABILITIES | 12,185 | 11,554 | |||||
COMMITMENTS AND CONTINGENCIES (Note 10) | |||||||
REDEEMABLE CONVERTIBLE PREFERRED STOCK: | |||||||
Redeemable convertible preferred stock - $0.0001 par value, 10,000,000 authorized as of June 30, 2023, December 31, 2022. None issued and outstanding as of June 30, 2023, December 31, 2022. | - | - | |||||
WARRANTS TO PLACEMENT AGENT (Note 11(e)) | 104 | - | |||||
SHAREHOLDERS' EQUITY (**): | |||||||
Common stock, $0.0001 par value: 3,000,000 shares authorized as of June 30, 2023, and December 31, 2022, respectively; 1,930,718 and 1,737,986 shares issued and outstanding as of June 30,2023 and December 31, 2022, respectively | 1 | 1 | |||||
Non-voting common stock, $0.0001 par value: 2,803,774 shares authorized as of June 30, 2023, and December 31, 2022, respectively; None issued and outstanding as of June 30, 2023, and December 31, 2022, respectively. | - | - | |||||
Additional paid-in capital | 38,174 | 36,666 | |||||
Accumulated deficit | (36,890 | ) | (33,402 | ) | |||
TOTAL SHAREHOLDERS’ EQUITY | 1,285 | 3,265 | |||||
TOTAL LIABILITIES AND REDEEMABLE CONVERTIBLE PREFERRED STOCK, WARRANTS TO PLACEMENT AGENT AND SHAREHOLDERS’ EQUITY | 13,574 | 14,819 | |||||
(**) Adjusted to reflect reverse stock split, see note 3(f).
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 June 30, | Six months ended June 30, | ||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||
REVENUES | 1,896 | 3,081 | 3,744 | 4,949 | |||||||||||
COST OF REVENUES | 1,264 | 1,159 | 2,424 | 2,445 | |||||||||||
GROSS PROFIT | 632 | 1,922 | 1,320 | 2,504 | |||||||||||
OPERATING EXPENSES: | |||||||||||||||
Research and development expenses, net | 669 | 676 | 1,426 | 1,326 | |||||||||||
Sales and marketing expenses, net | 712 | 837 | 1,641 | 1,567 | |||||||||||
General and administrative expenses, net | 969 | 1,067 | 1,834 | 1,702 | |||||||||||
TOTAL OPERATING EXPENSES | 2,350 | 2,580 | 4,901 | 4,595 | |||||||||||
OPERATING LOSS | (1,718 | ) | (658 | ) | (3,581 | ) | (2,091 | ) | |||||||
Interest expense | (171 | ) | (204 | ) | (351 | ) | (424 | ) | |||||||
Other Financial income (expenses), net | 296 | (792 | ) | 444 | (3,778 | ) | |||||||||
NET COMPREHENSIVE LOSS FOR THE PERIOD | (1,593 | ) | (1,654 | ) | (3,488 | ) | (6,293 | ) | |||||||
Net loss per share attributable to common shareholders – basic and diluted (*) | $ | (0.68 | ) | $ | (1.74 | ) | $ | (1.72 | ) | $ | (10.9 | ) | |||
Weighted average number of common stock used in computing net loss per share – basic and diluted (*) | 2,333,381 | 952,223 | 2,033,747 | 578,726 | |||||||||||
(*) Adjusted to reflect reverse stock split, see note 3(f).
The accompanying notes are an integral part of these condensed consolidated financial statements (Unaudited).
Non-GAAP adjusted EBITDA
(U.S. dollars in thousands) | Three monthsEndedJune 30,2023 | Three monthsEndedJune 30,2022 | Six monthsEndedJune 30,2023 | Six monthsEndedJune 30,2022 | |||||||||||||||||||||||
Revenues | $ | 1,896 | $ | 3,081 | $ | 3,744 | $ | 4,949 | |||||||||||||||||||
GAAP net loss | (1,593 | ) | (1,654 | ) | (3,488 | ) | (6,293 | ) | |||||||||||||||||||
Interest Expense | 171 | 204 | 351 | 424 | |||||||||||||||||||||||
Other Financial expenses (income), net | (296 | ) | 792 | (444 | ) | 3,778 | |||||||||||||||||||||
Tax Expense | 19 | 62 | 40 | 74 | |||||||||||||||||||||||
Fixed asset depreciation expense | 6 | 10 | 13 | 20 | |||||||||||||||||||||||
Stock based compensation | 97 | 14 | 192 | 28 | |||||||||||||||||||||||
Research and development, capitalization | 112 | 138 | 258 | 280 | |||||||||||||||||||||||
Other one-time costs and expenses | 223 | 513 | 223 | 801 | |||||||||||||||||||||||
Non-GAAP Adjusted EBITDA | (1,261 | ) | 79 | (2,855 | ) | (888 | ) | ||||||||||||||||||||
GAAP net loss margin | (84.02 | )% | (53.67 | )% | (93.16 | )% | (127.2 | )% | |||||||||||||||||||
Adjusted EBITDA margin | (66.51 | )% | 2.6 | % | (76.25 | )% | (17.94 | )% |
For the three months endedJune 30 | For the six months endedJune 30 | |||||||||||||||
(U.S. dollars in thousands) | 2023 | 2022 | 2023 | 2022 | ||||||||||||
Revenues | $ | 1,896 | $ | 3,081 | $ | 3,744 | $ | 4,949 | ||||||||
Non-GAAP Adjusted EBITDA | (1,261 | ) | 79 | (2,855 | ) | (888 | ) | |||||||||
As a percentage of revenues | (66.51 | )% | 2.6 | % | (76.25 | )% | (17.94 | )% | ||||||||
ACTELIS NETWORKS, INC.CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS(UNAUDITED)
Six months endedJune 30, | |||||||
2023 | 2022 | ||||||
U.S. dollars in thousands | |||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | |||||||
Net loss for the period | (3,488 | ) | (6,293 | ) | |||
Adjustments to reconcile net loss to net cash used in operating activities: | |||||||
Depreciation | 13 | 20 | |||||
Changes in fair value related to warrants to lenders and investors | (396 | ) | 1,115 | ||||
Warrant issuance costs | 223 | - | |||||
Inventories write-downs | 97 | 80 | |||||
Exchange rate differences | (226 | ) | (739 | ) | |||
Share-based compensation | 192 | 28 | |||||
Changes in fair value related to convertible loan | - | 1,648 | |||||
Changes in fair value related to convertible note | - | 1,753 | |||||
Financial income from long term bank deposit | (64 | ) | (4 | ) | |||
Changes in operating assets and liabilities: | |||||||
Trade receivables | 1,275 | (962 | ) | ||||
Net change in operating lease assets and liabilities | 24 | (82 | ) | ||||
Inventories | (726 | ) | (91 | ) | |||
Prepaid expenses and other current assets | 208 | (735 | ) | ||||
Trade payables | 137 | (261 | ) | ||||
Deferred revenues | (155 | ) | 227 | ||||
Other current liabilities | (36 | ) | 378 | ||||
Other long-term liabilities | (17 | ) | 136 | ||||
Net cash used in operating activities | (2,939 | ) | (3,782 | ) | |||
CASH FLOWS FROM INVESTING ACTIVITIES: | |||||||
Short term deposits | 810 | (71 | ) | ||||
Long term Restricted bank deposits | (125 | ) | - | ||||
Long term deposits | (5 | ) | - | ||||
Purchase of property and equipment | (3 | ) | (16 | ) | |||
Net cash provided by (used in) investing activities | 677 | (87 | ) | ||||
CASH FLOWS FROM FINANCING ACTIVITIES: | |||||||
Proceeds from exercise of options | 10 | * | |||||
Proceeds from common stocks, pre-funded warrants and warrants (see Note 11d) | 3,500 | - | |||||
Proceeds from initial public offering and private placement | - | 18,712 | |||||
Underwriting discounts and commissions and other offering costs | (291 | ) | (2,175 | ) | |||
Repurchase of common stock | (50 | ) | - | ||||
Repayment of long-term loan | (389 | ) | (316 | ) | |||
Net cash provided by financing activities | 2,780 | 16,221 | |||||
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS AND RESTRICTED CASH | (10 | ) | (739 | ) | |||
INCREASE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH | 508 | 12,352 | |||||
BALANCE OF CASH, CASH EQUIVALENTS AND RESTRICTED CASH AT BEGINNING OF THE PERIOD | 4,279 | 795 | |||||
BALANCE OF CASH, CASH EQUIVALENTS AND RESTRICTED CASH AT END OF THE PERIOD | 4,787 | 13,147 | |||||
* Represents an amount less than $1 thousands.
The accompanying notes are an integral part of these condensed consolidated financial statements (Unaudited).
Investor Relations Contact: Kirin Smith PCG Advisory Ksmith@pcgadvisory.com
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