Actelis Networks, Inc. (NASDAQ: ASNS) (“Actelis”
or the “Company”), a market leader in cyber-hardened,
rapid-deployment networking solutions for wide-area IoT networks,
reported financial results for the fiscal first quarter ended March
31, 2022.
Fiscal First Quarter 2022 Financial
Summary:
- Revenues increased 21% to $1.9
million from $1.5 million in the same year-ago period.
- Customer backlog of open order value
increased 121% year-over-year to $4.2 million.
- Net loss for the three months ended
March 31, 2022 totaled $4.6 million, compared to a net loss of $0.7
million in the comparable year-ago period.
- Adjusted EBITDA loss, a non-GAAP
measurement of operating performance reconciled below to Net Loss,
totaled $957,000, compared to adjusted EBITDA loss of $385,000 in
the comparable year-ago period. The higher adjusted EBITDA loss was
primarily due to lower gross profit and an increase in operating
expenses.
- Total proforma Stockholders equity
at $7.6 million vs. as reported Capital Deficiency of ($24.2)
million, when illustrating the impact of the May, 2022 completed
IPO on the balance sheet as of March 31, 2022. A detailed
explanation of the pro forma balance sheet can be found in our Form
10-Q, filed today June 22, 2022 with the Securities and Exchange
Commission (the “SEC”).
Operational Highlights during Fiscal First Quarter
2022:
- Delivered an initial order as part
of a Three-year contract from a leading global partner specializing
in airport operations management systems. This contract is aiming
at modernizing and digitizing operations in hundreds of airports
worldwide.
- Selected for deployment and
delivered an initial order for an energy company, providing power
to the capital city of a major European country. The mission of
this project is to modernize, digitize and enhance the customer’s
power network and streamline customer’s operations.
Post First Quarter 2022 Highlights
- Hired two sales leaders for the
North America region to focus on current and future government and
commercial sales and business development. The new sales leaders
will report to the Company’s Chief Revenue Officer Jan
Ruderman.
- Completed a successful IPO in May
2022, raising net proceeds of approximately $15.4 million before
additionally paid offering expenses of approximately $1.0 million
amounting to proceeds available to the Company of $14.4
million.
Management Commentary:
“I am pleased with the progress we are making in being selected
by more and more strategic IoT customers, as part of our continuous
success in increasing the number of customers selecting us as their
long-term networking partner in various IoT verticals globally.
These new wins add to our current deployment with hundreds of
customers such as energy companies, rail and road systems, cities
and campuses, militaries and governments. We believe that they will
provide a continuously growing revenue source for the company for
years to come.
I’m also happy to see that our new sales leaders are off to a
good start in their respective verticals. And, last but not least,
we are very excited about our successful IPO in May, which was
achieved despite difficult financial market conditions. Now, we can
invest in more sales and marketing resources to expedite our growth
in 2022 and beyond,” says Tuvia Barlev, CEO of the Company.
Fiscal First Quarter 2022 Financial
Results:
Revenues for the three months ended March 31,
2022 amounted to $1.9 million, compared to $1.5 million for the
three months ended March 31, 2021. The increase was primarily
attributable to $763,000 of revenues generated from Europe, the
Middle East and Africa, offset by a decrease of $451,000 in
revenues generated from North America.
Backlog of customer open orders, a non-GAAP
measurement, as of March 31, 2022 increased 121% to $4.2 million
from $1.9 million as of March 31, 2021.
Cost of revenues for the three months ended
March 31, 2022, amounted to $1.3 million compared to $0.8 million
for the three months ended March 31, 2021. The increase was mainly
due to the increase in revenues, as well as a change in the product
mix and an increase in the cost of components and manufacturing
driven by supply shortages and shipment costs.
Research and Development expenses for the three
months ended March 31, 2022 amounted to $0.6 million compared to
$0.6 for the three months ended March 31, 2021.
Sales and marketing expenses for the three
months ended March 31, 2022 amounted to $0.7 million compared to
$0.4 for the three months ended March 31, 2021. The increase in
comparison with the corresponding period was mainly associated with
increased investments in sales and marketing, specifically in
payroll in the amount of $131,000, mainly due to hiring of sales
and marketing employees, increase in commission expenses in the
amount of $72,000 due to the higher revenues and other professional
services in the amount of $74,000.
General and administrative expenses for the
three months ended March 31, 2022 amounted to $0.6 million compared
to $0.3 million for the three months ended March 31, 2021. The
increase was mainly due to professional services attributed to the
work towards the IPO completed in May 2022.
Operating loss for the three months ended March
31, 2022, was $1.4 million, compared to an operating loss of $0.6
million for the three months ended March 31, 2021. The increase was
mainly due to the decrease in gross profit of $146,000 and an
increase in operating expenses of $662,000.
Financial expenses, Net were $3.2 Million
Dollars for the three months ended March 31, 2022, compared to $0.1
Million Dollars for the three months ended March 31, 2021. The
increase is driven primarily by the increase in fair value of our
financial instruments such as warrants and convertible loan and
note.
Net loss for the three months ended March 31,
2022 was $4.6 million, compared to net loss of $0.7 million for the
three months ended March 31, 2021. The increase was primarily due
to the increase in financial expenses of $3.1 million, resulted
primarily from the increases in fair value of various financial
instruments, as well as an decrease in gross profit in the amount
of $146,000 and an increase in operating expenses of $662,000.
Adjusted EBITDA loss, a non-GAAP measurement of
operating performance (reconciled below to Net Loss), was $0.96
million, compared to $0.39 million in the comparable year-ago
period. The higher adjusted EBITDA loss was driven primarily by
lower gross profit and an increase in operating expenses.
The Company reported pro forma balance sheet
reflecting its balance sheet as of March 31, 2022 and applied the
necessary adjustments to illustrate the impact of net proceeds from
the IPO less IPO expenses and of the issuance of common stock. On a
pro forma basis as adjusted, Actelis had $18.3 million of cash,
$19.8 million of total assets, and total shareholders’ equity of
$7.6 million, compared to Capital Deficiency of ($24.2) million as
reported. A detailed explanation of the pro forma balance sheet can
be found in our Form 10-Q, filed today June 22, 2022 with the
Securities and Exchange Commission (the “SEC”).
Please refer to our Form 10-Q filed today June 22, 2022 with the
Securities and Exchange Commission (the “SEC”) for the full
financial report and information.
Conference Call
Actelis management will hold a conference call today, June 22,
2022, at 4:30 p.m. Eastern time (1:30 p.m. Pacific time) to discuss
these results.
Company CEO Tuvia Barlev and CFO Efron will host the call.
U.S. dial-in: (844) 830-1956International dial-in: +1 (213)
320-2553Conference ID: 9356273
Please call the conference telephone number 10 minutes prior to
the start time. An operator will register your name and
organization. If you have any difficulty connecting with the
conference call, please contact Gateway Group at 949-574-3860.
The conference call will be broadcast live and available for
replay here and via the Investor Relations section of Actelis
Network’s website.
A telephonic replay of the conference call will be available
after 7:30 p.m. Eastern time on the same day through June 29,
2022.
Toll-free replay number: (855) 859-2056International replay
number: +1(404) 537-3406Replay ID: 9356273
About Actelis Networks,
Inc.
Actelis Networks 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.
Investor Relations Contact:Matt Glover and Ralf
EsperGateway Investor Relations+1
949-574-3860ASNS@gatewayir.com
-Financial Tables to Follow-
ACTELIS NETWORKS, INC. |
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS |
(UNAUDITED) |
|
|
|
|
|
|
|
|
|
|
|
For the Three months endedMarch 31, |
|
|
|
2022 |
|
|
2021 |
|
|
|
U.S. dollars in thousands(except share andper share
amounts) |
|
|
|
|
|
|
|
|
REVENUES |
|
|
1,868 |
|
|
|
1,546 |
|
COST OF REVENUES |
|
|
1,286 |
|
|
|
818 |
|
GROSS PROFIT |
|
|
582 |
|
|
|
728 |
|
|
|
|
|
|
|
|
|
|
OPERATING EXPENSES: |
|
|
|
|
|
|
|
|
Research and development expenses, net |
|
|
650 |
|
|
|
620 |
|
Sales and marketing expenses, net |
|
|
730 |
|
|
|
411 |
|
General and administrative expenses, net |
|
|
635 |
|
|
|
322 |
|
TOTAL OPERATING EXPENSES |
|
|
2,015 |
|
|
|
1,353 |
|
|
|
|
|
|
|
|
|
|
OPERATING LOSS |
|
|
(1,433 |
) |
|
|
(625 |
) |
Financial expenses, net |
|
|
(3,206 |
) |
|
|
(54 |
) |
NET COMPREHENSIVE LOSS FOR THE PERIOD |
|
|
(4,639 |
) |
|
|
(679 |
) |
|
|
|
|
|
|
|
|
|
Net loss per share attributable to common shareholders – basic and
diluted |
|
$ |
(2.26 |
) |
|
$ |
(0.33 |
) |
Weighted average number of
common stock used in computing net loss per share – basic and
diluted |
|
|
2,052,134 |
|
|
|
2,047,641 |
|
|
|
|
|
|
|
|
|
|
The accompanying notes are an integral part of the
condensed consolidated financial statements
(Unaudited). |
ACTELIS NETWORKS, INC. |
CONDENSED CONSOLIDATED BALANCE SHEETS |
UNAUDITED |
|
|
|
|
|
|
|
|
|
|
|
March 31, |
|
|
December 31, |
|
|
|
2022 |
|
|
2021 |
|
|
|
U. S. dollars in thousands(except for share andper share
amounts) |
|
Assets |
|
|
|
|
|
|
CURRENT ASSETS: |
|
|
|
|
|
|
Cash and cash equivalents |
|
|
344 |
|
|
|
693 |
|
Short term bank deposit |
|
|
262 |
|
|
|
- |
|
Restricted cash |
|
|
486 |
|
|
|
- |
|
Trade receivables, net of allowance for doubtful debts of $61 as of
March 31, 2022, and December 31, 2021 |
|
|
1,334 |
|
|
|
2,147 |
|
Inventories |
|
|
931 |
|
|
|
897 |
|
Prepaid expenses and other current assets |
|
|
559 |
|
|
|
398 |
|
TOTAL CURRENT ASSETS |
|
|
3,916 |
|
|
|
4,135 |
|
|
|
|
|
|
|
|
|
|
NON-CURRENT ASSETS: |
|
|
|
|
|
|
|
|
Property and equipment, net |
|
|
108 |
|
|
|
103 |
|
Restricted cash |
|
|
99 |
|
|
|
102 |
|
Severance pay fund |
|
|
261 |
|
|
|
266 |
|
Operating lease right of use assets |
|
|
868 |
|
|
|
- |
|
Long term deposits |
|
|
76 |
|
|
|
78 |
|
TOTAL NON-CURRENT ASSETS |
|
|
1,412 |
|
|
|
549 |
|
|
|
|
|
|
|
|
|
|
TOTAL ASSETS |
|
|
5,328 |
|
|
|
4,684 |
|
ACTELIS NETWORKS, INC. |
CONDENSED CONSOLIDATED BALANCE SHEETS |
UNAUDITED |
|
|
|
|
|
|
|
|
|
|
|
March 31, |
|
|
December 31, |
|
|
|
2022 |
|
|
2021 |
|
|
|
|
U.S. dollars in thousands(except for share andper share
amounts) |
|
Liabilities and redeemable convertible preferred stock net
of capital deficiency |
|
|
|
|
|
|
|
|
CURRENT
LIABILITIES: |
|
|
|
|
|
|
|
|
Current maturities of long-term loans |
|
|
826 |
|
|
|
758 |
|
Warrants |
|
|
177 |
|
|
|
177 |
|
Trade payables |
|
|
1545 |
|
|
|
1920 |
|
Deferred revenues |
|
|
612 |
|
|
|
673 |
|
Employee and employee-related obligations |
|
|
704 |
|
|
|
703 |
|
Accrued royalties |
|
|
877 |
|
|
|
818 |
|
Convertible loan |
|
|
5871 |
|
|
|
- |
|
Operating lease liabilities |
|
|
575 |
|
|
|
- |
|
Other accrued liabilities |
|
|
1007 |
|
|
|
902 |
|
TOTAL CURRENT LIABILITIES |
|
|
12,194 |
|
|
|
5,951 |
|
NON-CURRENT LIABILITIES: |
|
|
|
|
|
|
|
|
Long-term loan, net of current maturities |
|
|
5161 |
|
|
|
5473 |
|
Warrants |
|
|
3030 |
|
|
|
1972 |
|
Convertible Note |
|
|
2923 |
|
|
|
- |
|
Convertible loan |
|
|
- |
|
|
|
4905 |
|
Operating lease liabilities |
|
|
283 |
|
|
|
- |
|
Accrued severance |
|
|
308 |
|
|
|
315 |
|
Other long-term liabilities |
|
|
65 |
|
|
|
79 |
|
TOTAL NON-CURRENT LIABILITIES |
|
|
11,770 |
|
|
|
12,744 |
|
TOTAL LIABILITIES |
|
|
23,964 |
|
|
|
18,695 |
|
COMMITMENTS AND CONTINGENCIES (Note 8) |
|
|
|
|
|
|
|
|
REDEEMABLE CONVERTIBLE PREFERRED STOCK: |
|
|
|
|
|
|
|
CONVERTIBLE SERIES A PREFERRED STOCK, |
|
|
|
|
|
|
|
|
$0.0001 par value, 4,986,039 shares authorized as of March 31,
2022, and December 31, 2021; 4,986,039 shares issued and
outstanding as of March 31, 2022, and December 31, 2021; aggregate
liquidation preference of $5,189 and $4,804 as of March 31, 2022
and December 31, 2021. |
|
|
2,858 |
|
|
|
2,858 |
|
CONVERTIBLE SERIES B PREFERRED STOCK, |
|
|
|
|
|
|
|
|
$0.0001 par value, 3,002,652 shares authorized as of March 31,
2022, and December 31, 2021; 2,745,004 shares issued and
outstanding as of March 31, 2022, and December 31, 2021; aggregate
liquidation preference of $4,353 and $4,031 as of March 31, 2022
and December 31, 2021, respectively. |
|
|
2,727 |
|
|
|
2,727 |
|
TOTAL REDEEMABLE CONVERTIBLE PREFERRED STOCK |
|
|
5,585 |
|
|
|
5,585 |
|
CAPITAL DEFICIENCY: |
|
|
|
|
|
|
|
|
Common stock, $0.0001 par value: 11,009,315 shares authorized as of
March 31, 2022, and December 31, 2021, respectively; 2,065,864 and
2,047,641 shares issued and outstanding as of March 31, 2022, and
December 31, 2021, respectively |
|
|
* |
|
|
|
* |
|
Non-voting common stock, $0.0001 par value: 2,803,774 shares
authorized as of March 31, 2022, and December 31, 2021,
respectively; 1,783,773 shares issued and outstanding as of March
31, 2022, and December 31, 2021, respectively. |
|
|
* |
|
|
|
* |
|
Additional paid-in
capital |
|
|
2,838 |
|
|
|
2,824 |
|
Accumulated deficit |
|
|
(27,059 |
) |
|
|
(22,420 |
) |
TOTAL CAPITAL
DEFICIENCY |
|
|
(24,221 |
) |
|
|
(19,596 |
|
TOTAL LIABILITIES AND REDEEMABLE CONVERTIBLE PREFERRED
STOCK NET OF CAPITAL DEFICIENCY |
|
|
5,328 |
|
|
|
4,684 |
|
|
|
|
|
|
|
|
|
|
* Represents an amount less than $1 thousands. |
ACTELIS NETWORKS, INC. |
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS |
(UNAUDITED) |
|
|
|
|
|
|
|
|
|
|
|
Three months ended |
|
March 31, |
|
|
|
2022 |
|
|
2021 |
|
|
|
U.S. dollars in thousands |
|
CASH FLOWS FROM OPERATING ACTIVITIES: |
|
|
|
|
|
|
Net loss for the period |
|
|
(4,639 |
) |
|
|
(679 |
) |
Adjustments to reconcile net loss to net cash used in operating
activities: |
|
|
|
|
|
|
|
|
Depreciation |
|
|
10 |
|
|
|
12 |
|
Changes in fair value related to warrants to lenders |
|
|
1,058 |
|
|
|
- |
|
Inventories write-downs |
|
|
43 |
|
|
|
9 |
|
Exchange rate differences |
|
|
(197 |
) |
|
|
(130 |
) |
Share-based compensation |
|
|
14 |
|
|
|
10 |
|
Changes in fair value related to convertible loan |
|
|
966 |
|
|
|
- |
|
Changes in fair value related to convertible note |
|
|
1,075 |
|
|
|
- |
|
Changes in operating assets and liabilities: |
|
|
|
|
|
|
|
|
Trade receivables |
|
|
813 |
|
|
|
435 |
|
Net change in operating lease assets and liabilities |
|
|
(10 |
) |
|
|
- |
|
Inventories |
|
|
(77 |
) |
|
|
75 |
|
Prepaid expenses and other current assets |
|
|
(161 |
) |
|
|
(68 |
) |
Other non-current asset |
|
|
- |
|
|
|
10 |
|
Trade payables |
|
|
(375 |
) |
|
|
(239 |
) |
Deferred revenues |
|
|
(61 |
) |
|
|
(249 |
) |
Other current liabilities |
|
|
142 |
|
|
|
82 |
|
Other long-term liabilities |
|
|
(13 |
) |
|
|
40 |
|
Other accrued liabilities |
|
|
105 |
|
|
|
(111 |
) |
Net cash used in operating activities |
|
|
(1,307 |
) |
|
|
(803 |
) |
CASH FLOWS FROM
INVESTING ACTIVITIES: |
|
|
|
|
|
|
|
|
Short term bank deposit |
|
|
(262 |
) |
|
|
- |
|
Purchase of property and equipment |
|
|
(15 |
) |
|
|
(2 |
) |
Net cash used in investing
activities |
|
|
(277 |
) |
|
|
(2 |
) |
CASH FLOWS FROM
FINANCING ACTIVITIES: |
|
|
|
|
|
|
|
|
Proceeds from exercise of options |
|
|
* |
|
|
|
* |
|
Proceeds from convertible note |
|
|
1,847 |
|
|
|
- |
|
Proceeds from long-term debt, net of issuance costs |
|
|
- |
|
|
|
2,090 |
|
Repayment of long-term loan |
|
|
(129 |
) |
|
|
(96 |
) |
Net cash provided by financing
activities |
|
|
1,718 |
|
|
|
1,994 |
|
|
|
|
|
|
|
|
|
|
EFFECT OF EXCHANGE
RATE CHANGES ON CASH AND CASH EQUIVALENTS |
|
|
(197 |
) |
|
|
(130 |
) |
INCREASE IN CASH, CASH
EQUIVALENTS AND RESTRICTED CASH |
|
|
134 |
|
|
|
1,189 |
|
|
|
|
|
|
|
|
|
|
BALANCE OF CASH, CASH
EQUIVALENTS AND RESTRICTED CASH AT BEGINNING OF YEAR |
|
|
795 |
|
|
|
671 |
|
|
|
|
|
|
|
|
|
|
BALANCE OF CASH, CASH
EQUIVALENTS AND RESTRICTED CASH AT END OF THE PERIOD |
|
|
929 |
|
|
|
1,860 |
|
|
|
|
|
|
|
|
|
|
* Represents an amount less than $1 thousands. |
|
|
|
|
|
|
|
|
|
The accompanying notes are an integral part of the
condensed consolidated financial statements
(Unaudited). |
Non GAAP adjusted EBITDA |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(U.S. dollars in thousands) |
|
Three months |
|
|
Three months |
|
Ended |
Ended |
|
March 31, |
March 31, |
|
2022 |
2021 |
|
Revenues |
|
$ |
1,868 |
|
|
$ |
1,546 |
|
GAAP net loss |
|
|
(4,639 |
) |
|
|
(679 |
) |
Interest Expense |
|
$ |
3,206 |
|
|
$ |
54 |
|
Tax Expense |
|
|
12 |
|
|
|
37 |
|
Fixed asset depreciation expense |
|
|
10 |
|
|
|
12 |
|
Stock based compensation |
|
|
14 |
|
|
|
10 |
|
Research and development, capitalization |
|
|
142 |
|
|
|
181 |
|
Net change in operating lease assets and liabilities |
|
|
10 |
|
|
|
— |
|
Other one time costs and expenses |
|
|
288 |
|
|
|
— |
|
Non-GAAP Adjusted EBITDA |
|
|
(957 |
) |
|
$ |
(385 |
) |
GAAP net loss margin |
|
|
(248.35 |
)% |
|
|
(43.92 |
)% |
Adjusted EBITDA margin |
|
|
(51.23 |
)% |
|
|
(24.90 |
)% |
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