Financial Highlights:
- Total revenue increased 5% year-over-year to
$6.3 million for the nine-months endedSeptember 30, 2022 . - Delivery of Sales to IoT- customers grew 45% year-over-year for the nine-months ended
September 30, 2022 . - Backlog of customer open orders of
$3.9 million (of which 84% are for IoT customers) as ofSeptember 30, 2022 . - Gross Margin at 48.3% for the nine-months ended
September 30, 2022 compared to 50% in the prior year period, due to ongoing inflationary and supply-chain pressures. - Significant purchase price variance incurred (
$164,000 ) during Q3 2022 for premium purchases of components that are in interim shortage, in part enabling Q4-2022 and Q1-2023 deliveries. - Non-GAAP adjusted EBITDA at
($2.6) million for the nine-months endedSeptember 30, 2022 compared to($0.7) million in the prior year period as the company continues to invest in sales and marketing, and is operating as a public company post its completed IPO inMay 2022 .
Operational Updates:
- Actelis strengthened its marketing team with the hiring of
Sean Renn , Global Vice President ofMarketing & Communications . Sean spent the last 14 years leading the marketing efforts for parking and transit giantFlowbird (formerly Parkeon) in local government and public transportation. - Actelis has significantly increased digital marketing activities and industry trade shows exhibiting in 14 conferences during Q3 focused on ITS/ITE, Federal/military, and telecommunications including major conferences such as
ITS World Congress inLos Angeles and ISE Expo 2022 inDenver . - Actelis strengthened its America’s sales team by hiring
Michael Mercier , Director of Sales of Intelligent Traffic Systems (ITS). Michael possesses over 15 years of experience in selling to Federal and Local Governments which is where he is focused now. - Actelis is working to expand channel and distribution coverage in many countries and verticals in various countries in
Asia such asSingapore ,Vietnam ,Malaysia andIndia , as well as in the US andEurope . In October we announced our new partnership with Norseman, a US based Federal and Military system integrator who now has our product and services portfolio included in the SEWP acquisition contract by all federal and military agencies. Kevin Foster has joined theActelis Advisory Board , bringing with him more than 30 years of experience in Technology, Architecture and Innovation in networking technologies and standards development following his career inBritish Telecom and former chairman and president of theBroadband Forum .
Management Commentary:
“Actelis is moving fast to increase its market presence and impact in many markets and verticals. Since the beginning of 2022, we nearly doubled our Americas Sales and Marketing Team, launched aggressive digital and tangible marketing plans, and added multiple channel partners and resellers. New, powerful products have been launched, with faster speeds and better cyber protection capabilities, and much progress has been made on closing the gap in component shortages and backlog delivery catch up and cleared nearly 60% of the backlog from the beginning of the year,” said
Barlev added: “Through our engagement with existing and new partners and customers, I’m pleased with the strong interest we’re gaining. We are excited by the prospects for our Company resulting from
Fiscal Third Quarter and First Nine Months of 2022 Financial Results:
Revenues for the three months ended
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Gross profit amounted to
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Research and development expenses for the three months ended
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Sales and marketing expenses for the three months ended
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General and administrative expenses for the three months ended
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Net loss for the three months ended
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Adjusted EBITDA loss, a non-GAAP measurement of operating performance (reconciled below to Net Loss), for the three months ended
Non-GAAP adjusted EBITDA loss was
The Company reported a balance sheet with
Conference Call
Actelis management will hold a conference call today,
Company CEO
International dial-in (toll): +1(646) 307-1963
Conference ID: 6957723
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 Investor Relations at 949-574-3860.
The conference call will also 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
US Toll-free replay number: (800) 770-2030
International replay number (toll): +1(609) 800-9909
Conference ID: 6957723
About
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 Statements
This 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
Investor Relations Contact:
Gateway Investor Relations
+1 949-574-3860
ASNS@gatewayir.com
-Financial Tables to Follow-
CONDENSED CONSOLIDATED BALANCE SHEETS UNAUDITED | ||||||||
2022 | 2021 | |||||||
U. S. dollars in thousands (except for share and per share amounts) | ||||||||
Assets | ||||||||
CURRENT ASSETS: | ||||||||
Cash and cash equivalents | 10,206 | 693 | ||||||
Short term bank deposit | 68 | - | ||||||
Restricted cash | 650 | - | ||||||
Trade receivables, net of allowance for doubtful debts of | 2,110 | 2,147 | ||||||
Inventories | 1,062 | 897 | ||||||
Prepaid expenses and other current assets | 649 | 398 | ||||||
TOTAL CURRENT ASSETS | 14,745 | 4,135 | ||||||
NON-CURRENT ASSETS: | ||||||||
Property and equipment, net | 108 | 103 | ||||||
Prepaid expenses | 245 | - | ||||||
Restricted cash | 89 | 102 | ||||||
Severance pay fund | 239 | 266 | ||||||
Operating lease right of use assets | 818 | - | ||||||
Long term deposits | 81 | 78 | ||||||
TOTAL NON-CURRENT ASSETS | 1,580 | 549 | ||||||
TOTAL ASSETS | 16,325 | 4,684 | ||||||
CONDENSED CONSOLIDATED BALANCE SHEETS (continued) UNAUDITED | ||||||||
2022 | 2021 | |||||||
(except for share and per share amounts) | ||||||||
Liabilities and redeemable convertible preferred stock and shareholders’ equity (capital deficiency) | ||||||||
CURRENT LIABILITIES: | ||||||||
Current maturities of long-term loans | 777 | 758 | ||||||
Warrants | 27 | 177 | ||||||
Trade payables | 853 | 1,920 | ||||||
Deferred revenues | 625 | 673 | ||||||
Employee and employee-related obligations | 695 | 703 | ||||||
Accrued royalties | 1,006 | 818 | ||||||
Operating lease liabilities | 480 | - | ||||||
Other accrued liabilities | 1,128 | 902 | ||||||
TOTAL CURRENT LIABILITIES | 5,591 | 5,951 | ||||||
NON-CURRENT LIABILITIES: | ||||||||
Long-term loan, net of current maturities | 4,374 | 5,473 | ||||||
Deferred revenues | 193 | - | ||||||
Warrants | - | 1,972 | ||||||
Convertible loan | - | 4,905 | ||||||
Operating lease liabilities | 276 | - | ||||||
Accrued severance | 276 | 315 | ||||||
Other long-term liabilities | 52 | 79 | ||||||
TOTAL NON-CURRENT LIABILITIES | 5,171 | 12,744 | ||||||
TOTAL LIABILITIES | 10,762 | 18,695 | ||||||
COMMITMENTS AND CONTINGENCIES (Note 8) | ||||||||
REDEEMABLE CONVERTIBLE PREFERRED STOCK: | ||||||||
CONVERTIBLE PREFERRED STOCK | ||||||||
SERIES A | ||||||||
0 and 4,986,039 shares issued and outstanding as of | ||||||||
SERIES B | ||||||||
0 and 2,745,004 shares issued and outstanding as of | - | 5,585 | ||||||
TOTAL REDEEMABLE CONVERTIBLE PREFERRED STOCK | - | 5,585 | ||||||
SHAREHOLDERS’ EQUITY (CAPITAL DEFICIENCY): | ||||||||
Common stock, | 1 | * | ||||||
Non-voting common stock, | - | * | ||||||
Additional paid-in capital | 36,482 | 2,824 | ||||||
Accumulated deficit | (30,920 | ) | (22,420 | ) | ||||
TOTAL SHAREHOLDERS’ EQUITY (CAPITAL DEFICIENCY) | 5,563 | (19,596 | ) | |||||
TOTAL LIABILITIES AND REDEEMABLE CONVERTIBLE PREFERRED STOCK AND SHAREHOLDERS’ EQUITY (CAPITAL DEFICIENCY) | 16,325 | 4,684 |
* Represents an amount less than
The accompanying notes are an integral part of these condensed consolidated financial statements (Unaudited).
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (UNAUDITED) | ||||||||||||||||
Three months ended | Nine months ended | |||||||||||||||
2022 | 2021 | 2022 | 2021 | |||||||||||||
REVENUES | 1,348 | 1,422 | 6,297 | 5,995 | ||||||||||||
COST OF REVENUES | 813 | 896 | 3,258 | 3,002 | ||||||||||||
GROSS PROFIT | 535 | 526 | 3,039 | 2,993 | ||||||||||||
OPERATING EXPENSES: | ||||||||||||||||
Research and development expenses, net | 723 | 552 | 2,049 | 1,818 | ||||||||||||
Sales and marketing expenses, net | 790 | 627 | 2,357 | 1,576 | ||||||||||||
General and administrative expenses, net | 1,028 | 255 | 2,730 | 906 | ||||||||||||
TOTAL OPERATING EXPENSES | 2,541 | 1,434 | 7,136 | 4,300 | ||||||||||||
OPERATING LOSS | (2,006 | ) | (908 | ) | (4,097 | ) | (1,307 | ) | ||||||||
Financial expenses, net | (201 | ) | (279 | ) | (4,403 | ) | (592 | ) | ||||||||
NET COMPREHENSIVE LOSS FOR THE PERIOD | (2,207 | ) | (1,187 | ) | (8,500 | ) | (1,899 | ) | ||||||||
Net loss per share attributable to common shareholders – basic and diluted | $ | (0.13 | ) | $ | (0.58 | ) | $ | (0.88 | ) | $ | (0.93 | ) | ||||
Weighted average number of common stock used in computing net loss per share – basic and diluted | 17,317,532 | 2,049,433 | 9,687,205 | 2,048,241 |
The accompanying notes are an integral part of these condensed consolidated financial statements (Unaudited).
Non-GAAP Financial Measures
(U.S. dollars in thousands) | Three months Ended 2022 | Three months Ended 2021 | Nine months Ended 2022 | Nine months Ended 2021 | ||||||||||||||||||||||||||||
Revenues | $ | 1,348 | $ | 1,422 | $ | 6,297 | $ | 5,995 | ||||||||||||||||||||||||
GAAP net loss | (2,207 | ) | (1,187 | ) | (8,500 | ) | (1,899 | ) | ||||||||||||||||||||||||
Interest Expense | 201 | 279 | 4,403 | 592 | ||||||||||||||||||||||||||||
Tax Expense | 28 | 6 | 102 | 69 | ||||||||||||||||||||||||||||
Fixed asset depreciation expense | 9 | 7 | 29 | 31 | ||||||||||||||||||||||||||||
Stock based compensation | 13 | 8 | 41 | 28 | ||||||||||||||||||||||||||||
Research and development, capitalization | 143 | 119 | 423 | 472 | ||||||||||||||||||||||||||||
Other one-time costs and expenses | 115 | - | 916 | - | ||||||||||||||||||||||||||||
Non-GAAP Adjusted EBITDA | (1,698 | ) | (768 | ) | (2,586 | ) | (707 | ) | ||||||||||||||||||||||||
GAAP net loss margin | (163.72 | )% | (83.47 | )% | (134.98 | )% | (31.67 | )% | ||||||||||||||||||||||||
Adjusted EBITDA margin | (125.96 | )% | (54.01 | )% | (41.07 | )% | (11.79 | )% |
( | For the three months ended | For the nine months ended | ||||||||||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | |||||||||||||||||||||||||||||
Revenues | $ | 1,348 | $ | 1,422 | $ | 6,297 | $ | 5,995 | ||||||||||||||||||||||||
Backlog of open Orders(1) | $ | 3,917 | $ | 5,153 | $ | 3,917 | $ | 5,153 | ||||||||||||||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) | |||||||||
Nine months ended | |||||||||
2022 | 2021 | ||||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | |||||||||
Net loss for the period | (8,500 | ) | (1,899 | ) | |||||
Adjustments to reconcile net loss to net cash used in operating activities: | |||||||||
Depreciation | 29 | 29 | |||||||
Changes in fair value related to warrants to lenders | 1,068 | - | |||||||
Inventories write-downs | 106 | 55 | |||||||
Exchange rate differences | (798 | ) | 15 | ||||||
Share-based compensation | 41 | 28 | |||||||
Changes in fair value related to convertible loan | 1,648 | - | |||||||
Changes in fair value related to convertible note | 1,753 | - | |||||||
Changes in operating assets and liabilities: | |||||||||
Trade receivables | 37 | (30 | ) | ||||||
Net change in operating lease assets and liabilities | (62 | ) | - | ||||||
Inventories | (271 | ) | (30 | ) | |||||
Prepaid expenses and other current assets | (251 | ) | (6 | ) | |||||
Long term prepaid expenses | (245 | ) | - | ||||||
Trade payables | (1,067 | ) | (845 | ) | |||||
Deferred revenues | 145 | 713 | |||||||
Other current liabilities | 180 | 258 | |||||||
Other long-term liabilities | 185 | 179 | |||||||
Other accrued liabilities | 226 | 55 | |||||||
Net cash used in operating activities | (5,776 | ) | (1,478 | ) | |||||
CASH FLOWS FROM INVESTING ACTIVITIES: | |||||||||
Short term bank deposit | (68 | ) | - | ||||||
Purchase of property and equipment | (34 | ) | (6 | ) | |||||
Net cash used in investing activities | (102 | ) | (6 | ) | |||||
CASH FLOWS FROM FINANCING ACTIVITIES: | |||||||||
Proceeds from exercise of options | * | * | |||||||
Proceeds from long-term debt, net of issuance costs | - | 2,070 | |||||||
Proceeds from initial public offering and private placement | 18,712 | - | |||||||
Underwriting discounts and commissions and other offering costs | (2,175 | ) | - | ||||||
Repayment of long-term loan | (509 | ) | (192 | ) | |||||
Net cash provided by financing activities | 16,028 | 1,878 | |||||||
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS AND RESTRICTED CASH | 46 | (2 | ) | ||||||
INCREASE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH | 10,150 | 394 | |||||||
BALANCE OF CASH, CASH EQUIVALENTS AND RESTRICTED CASH AT BEGINNING OF THE PERIOD | 795 | 671 | |||||||
BALANCE OF CASH, CASH EQUIVALENTS AND RESTRICTED CASH AT END OF THE PERIOD | 10,945 | 1,065 | |||||||
* Represents an amount less than | |||||||||
Source:
2022 GlobeNewswire, Inc., source