Actelis Networks' Losses Widen, Raises Going Concern Doubts Amid Revenue Plunge

Ticker: ASNS · Form: 10-Q · Filed: Aug 14, 2025 · CIK: 1141284

Sentiment: bearish

Topics: Going Concern, Revenue Decline, Net Loss, Cash Flow Negative, Accumulated Deficit, Geopolitical Risk, Networking Solutions

TL;DR

**ASNS is bleeding cash and facing an existential crisis; dump shares before it's too late.**

AI Summary

ACTELIS NETWORKS INC (ASNS) reported a significant decline in revenues and an increased net comprehensive loss for the six months ended June 30, 2025. Revenues plummeted to $1.662 million from $4.157 million in the prior year, a 60% decrease. The net comprehensive loss widened to $3.761 million, up from $2.064 million in the same period of 2024, representing an 82% increase. Operating expenses remained high at $4.141 million, compared to $3.968 million in 2024. The company experienced negative cash flows from operations of $3.218 million for the six months ended June 30, 2025, an increase from $2.343 million in 2024. As of June 30, 2025, the accumulated deficit reached $48 million, and cash and cash equivalents decreased to $393 thousand from $1.967 million at December 31, 2024. The company explicitly stated substantial doubt about its ability to continue as a going concern due to insufficient resources to meet operating obligations for at least one year. Geopolitical risks in Israel, where its subsidiary Actelis Networks Israel Ltd. is located, are also highlighted as a potential impact on business operations.

Why It Matters

Actelis Networks' substantial revenue decline of 60% and an 82% increase in net loss for the first half of 2025 signal deep operational challenges, raising significant red flags for investors. The explicit 'going concern' warning indicates a high risk of insolvency, directly impacting shareholder value and potentially jeopardizing employee jobs. In a competitive networking solutions market, ASNS's inability to generate sufficient cash flow or secure additional financing could lead to a loss of market share and customer trust, especially given its focus on governmental agencies and telecommunication providers. This financial instability could also affect its ability to innovate and compete against larger, more financially robust rivals.

Risk Assessment

Risk Level: high — The company explicitly states 'substantial doubt as to the Company's ability to continue as a going concern' due to insufficient resources to meet operating obligations for at least one year. This is evidenced by a net comprehensive loss of $3.761 million and negative cash flows from operations of $3.218 million for the six months ended June 30, 2025, alongside an accumulated deficit of $48 million.

Analyst Insight

Investors should consider divesting ASNS shares immediately given the explicit 'going concern' warning and severe financial deterioration. The company's inability to generate sufficient cash flow and the significant accumulated deficit suggest a high probability of further dilution or bankruptcy, making it an unsuitable investment.

Financial Highlights

debt To Equity
N/A
revenue
$1.662M
operating Margin
N/A
total Assets
$5.982M
total Debt
$4.730M
net Income
-$3.761M
eps
-$0.43
gross Margin
33.5%
cash Position
$393K
revenue Growth
-60.0%

Key Numbers

Key Players & Entities

FAQ

What were Actelis Networks' revenues for the six months ended June 30, 2025?

Actelis Networks' revenues for the six months ended June 30, 2025, were $1.662 million, a significant decrease from $4.157 million for the same period in 2024.

Did Actelis Networks (ASNS) report a profit or loss for the first half of 2025?

Actelis Networks (ASNS) reported a net comprehensive loss of $3.761 million for the six months ended June 30, 2025, which is an increase from the $2.064 million loss in the prior year.

What is Actelis Networks' (ASNS) cash position as of June 30, 2025?

As of June 30, 2025, Actelis Networks (ASNS) had cash and cash equivalents of $393 thousand, a substantial decrease from $1.967 million at December 31, 2024.

What is the primary risk factor highlighted in Actelis Networks' 10-Q filing?

The primary risk factor highlighted is the 'substantial doubt as to the Company's ability to continue as a going concern' due to insufficient resources to meet operating obligations for at least one year from the issuance date of the financial statements.

How have Actelis Networks' operating expenses changed?

Actelis Networks' total operating expenses for the six months ended June 30, 2025, were $4.141 million, a slight increase from $3.968 million in the same period of 2024.

What is the accumulated deficit for Actelis Networks (ASNS) as of June 30, 2025?

As of June 30, 2025, Actelis Networks (ASNS) had an accumulated deficit of $48 million, indicating a history of significant losses.

How does the geopolitical situation in Israel affect Actelis Networks?

The geopolitical situation in Israel, including conflicts with Hamas, Hezbollah, and Iran, is noted as a factor that could impact Actelis Networks' business, particularly its wholly-owned subsidiary, Actelis Networks Israel Ltd.

What is Actelis Networks' strategy to address its financial challenges?

Actelis Networks expects to fund operations using cash on hand, through operational cash flows, and by raising additional equity and debt funds, as well as improving its gross margin through better revenue mix and generating other efficiencies.

What was the net loss per share for Actelis Networks (ASNS) for the six months ended June 30, 2025?

The net loss per share attributable to common shareholders for Actelis Networks (ASNS) was $0.43 for the six months ended June 30, 2025, compared to $0.51 in the prior year.

What type of company is Actelis Networks (ASNS)?

Actelis Networks, Inc. (ASNS) is engaged in the design, development, manufacturing, and marketing of cyber hardened, hybrid fiber, networking solutions for IoT and Telecommunication governmental agencies and companies.

Risk Factors

Industry Context

Actelis Networks operates in the telecommunications and IoT networking solutions market, providing cyber-hardened hybrid fiber solutions. This sector is characterized by rapid technological advancements, increasing demand for secure and reliable connectivity, and significant competition from established players and emerging technology firms. The company's focus on governmental agencies and telecommunication providers suggests a niche market with potentially long sales cycles and stringent security requirements.

Regulatory Implications

As a publicly traded company on NASDAQ, Actelis Networks is subject to SEC regulations and reporting requirements. The company's disclosure of substantial doubt about its going concern status could attract increased scrutiny from regulators and investors. Furthermore, any geopolitical instability affecting its Israeli subsidiary could have implications for compliance with international trade and data privacy regulations.

What Investors Should Do

  1. Monitor cash burn rate closely: Given the negative operating cash flow of $3.218 million and low cash balance of $393K, investors should track the company's ability to secure additional funding or significantly reduce expenses.
  2. Evaluate the sustainability of revenue: The 60% revenue decline warrants investigation into the causes and the company's strategy to reverse this trend.
  3. Assess the impact of geopolitical risks: Understand how the situation in Israel might affect operations, supply chain, and future revenue streams.
  4. Review management's going concern mitigation plan: Investors should scrutinize the company's strategy to address the substantial doubt about its ability to continue as a going concern.

Key Dates

Glossary

Accumulated deficit
The total cumulative net losses of a company since its inception, minus any cumulative net income. It represents the total losses that have not been offset by profits. (Indicates the company has historically operated at a loss, reaching $48 million as of June 30, 2025.)
Going concern
A business's ability to continue operating for the foreseeable future without the threat of liquidation. A 'substantial doubt' about going concern means there's significant uncertainty about the company's ability to meet its obligations. (The company explicitly states substantial doubt about its ability to continue as a going concern due to insufficient resources.)
Net comprehensive loss
The total loss of a company during a period, including both net income/loss and other comprehensive income/loss items (like unrealized gains/losses on investments). (The company reported a significant increase in net comprehensive loss to $3.761 million for the six months ended June 30, 2025.)
Operating expenses
Costs incurred by a company in its normal business operations, excluding cost of goods sold. This includes R&D, sales and marketing, and general administrative expenses. (Operating expenses remained high at $4.141 million for the six months ended June 30, 2025, despite declining revenues.)
Cash and cash equivalents
The most liquid assets a company has, including cash on hand, bank deposits, and short-term, highly liquid investments that are readily convertible to cash. (The company's cash position significantly decreased to $393 thousand as of June 30, 2025.)

Year-Over-Year Comparison

Compared to the prior year's six-month period, Actelis Networks Inc. has experienced a severe 60% decline in revenue, falling from $4.157 million to $1.662 million. This revenue drop has exacerbated the company's financial distress, leading to an 82% increase in net comprehensive loss to $3.761 million. Operating expenses, however, have remained stubbornly high, increasing slightly to $4.141 million, further widening the operating loss. The company's cash position has also deteriorated significantly, with cash and cash equivalents dropping from $1.967 million at the end of 2024 to $393 thousand by June 30, 2025, intensifying concerns about its ability to continue as a going concern.

Filing Stats: 4,645 words · 19 min read · ~15 pages · Grade level 14.7 · Accepted 2025-08-14 16:45:58

Key Financial Figures

Filing Documents

- FINANCIAL INFORMATION

PART I - FINANCIAL INFORMATION F-1 Item 1. Condensed Consolidated Interim Financial Statements (Unaudited) F-1 Condensed Consolidated Balance Sheets F-3 Unaudited Condensed Consolidated Statements of Comprehensive Loss for the Three and Six Months Ended June 30, 2025 and 2024 F-5 Unaudited Condensed Consolidated Statements of Redeemable Convertible Preferred Stock, Warrants to Placement Agent and Shareholders' Equity F-6 Unaudited Condensed Consolidated Statements of Cash Flows for the Three and Six Months Ended June 30, 2025 and 2024 F-8 Notes to Condensed Consolidated Interim Financial Statements F-10 Item 2. Management's Discussion & Analysis of Financial Condition and Results of Operations 1 Item 3. Quantitative and Qualitative Disclosure About Market Risk 7 Item 4.

Controls and Procedures

Controls and Procedures 7

- OTHER INFORMATION

PART II - OTHER INFORMATION 8 Item 1.

Legal Proceedings

Legal Proceedings 8 Item 1A.

Risk Factors

Risk Factors 8 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 10 Item 3. Defaults Upon Senior Securities 11 Item 4. Mine Safety Disclosures 11 Item 5 Other information 11 Item 6. Exhibits 11

SIGNATURES

SIGNATURES 12 i SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS This Quarterly Report on Form 10-Q includes "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended (the "Securities Act") and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), that are not historical facts and involve risks and uncertainties that could cause actual results to differ materially from those expected and projected. All statements other than statements of historical fact included in this Form 10-Q including, without limitation, statements in this "Management's Discussion and Analysis of Financial Condition and Results of Operations" regarding the Actelis Networks Inc.'s (the "Company", "we") financial position, business strategy and the plans and objectives of management for future operations, are forward-looking statements. Words such as "expect," "believe," "anticipate," "intend," "estimate," "seek" and variations and similar words and expressions are intended to identify such forward-looking statements. Such forward-looking statements relate to future events or future performances, but reflect management's current beliefs, based on information currently available. A number of factors could cause actual events, performances or results to differ materially from the events, performance and results discussed in the forward-looking statements. For information identifying important factors that could cause actual results to differ materially from those anticipated in the forward-looking statements, please refer to Part II, Item 1A of this Quarterly Report on Form 10-Q and the Risk Factors section of our Annual Report on Form 10-K for the year ended December 31, 2024, filed on March 24, 2025, with the U.S. Securities and Exchange Commission (the "SEC"). The Company's securities filings can be accessed on the EDGAR section of the SEC's website at www.sec.gov. In addition, forward-looking statements conta

– FINANCIAL INFORMATION

PART I – FINANCIAL INFORMATION

Financial Statements

Item 1. Financial Statements. ACTELIS NETWORKS, INC. QUARTERLY REPORT FOR THE PERIOD ENDED June 30, 2025 (Unaudited) F-1 ACTELIS NETWORKS, INC. QUARTERLY REPORT FOR THE PERIOD ENDED June 30, 2025 (Unaudited) TABLE OF CONTENTS Page Condensed consolidated financial statements (unaudited) – U.S. dollars in thousands: Condensed consolidated balance sheets F-3 - F-4 Condensed consolidated statements of comprehensive loss F-5 Condensed consolidated statements of mezzanine and Shareholders' equity F-6 – F-7 Condensed consolidated statements of cash flows F-8 - F-9 Notes to condensed consolidated financial statements F-10 - F-20 F-2 ACTELIS NETWORKS, INC. CONDENSED CONSOLIDATED BALANCE SHEETS ( U. S. dollars in thousands except for share and per share amounts) (UNAUDITED) June 30, 2025 December 31, 2024 Assets CURRENT ASSETS: Cash and cash equivalents 393 1,967 Restricted cash equivalents 302 300 Restricted bank deposits 71 - Trade receivables, net of allowance for credit losses of $ 168 as of June 30, 2025, and December 31, 2024. 943 1,616 Inventories 2,519 2,436 Prepaid expenses and other current assets, net of allowance for doubtful debts of $ 181 as of June 30, 2025, and December 31, 2024. 600 584 TOTAL CURRENT ASSETS 4,828 6,903 NON-CURRENT ASSETS: Property and equipment, net 33 38 Prepaid expenses and other 534 492 Restricted bank deposits 30 91 Severance pay fund 223 205 Operating lease right of use assets 241 410 Long-term deposits 93 86 TOTAL NON-CURRENT ASSETS 1,154 1,322 TOTAL ASSETS 5,982 8,225 F-3 ACTELIS NETWORKS, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (continued) (UNAUDITED) (U. S. dollars in thousands) June 30, 2025 December 31, 2024 Liabilities, Mezzanine Equity and shareholders' equity CURRENT LIABILITIES: Credit line 236 774 Short-term loan 305 - Trade payables 1,020 982 Deferred revenues 325 246 Employee and employ

financial statements (Unaudited)

financial statements (Unaudited). F-4 ACTELIS NETWORKS, INC. CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (UNAUDITED) (U. S. dollars in thousands) Six months ended June 30, Three months ended June 30, 2025 2024 2025 2024 REVENUES 1,662 4,157 941 3,431 COST OF REVENUES 1,106 1,994 636 1,488 GROSS PROFIT 556 2,163 305 1,943 OPERATING EXPENSES: Research and development expenses 1,356 1,250 675 603 Sales and marketing expenses 1,366 1,274 700 647 General and administrative expenses 1,419 1,607 703 790 Other income - ( 163 ) - ( 163 ) TOTAL OPERATING EXPENSES 4,141 3,968 2,078 1,877 OPERATING INCOME (LOSS) ( 3,585 ) ( 1,805 ) ( 1,773 ) 66 Interest expense ( 56 ) ( 344 ) ( 22 ) ( 137 ) Other Financial income (expense), net ( 120 ) 85 ( 106 ) ( 7 ) NET COMPREHENSIVE LOSS FOR THE PERIOD ( 3,761 ) ( 2,064 ) ( 1,901 ) ( 78 ) Net loss per share attributable to common shareholders – basic and diluted ( 0.43 ) ( 0.51 ) ( 0.21 ) ( 0.01 ) Weighted average number of common stocks used in computing net loss per share – basic and diluted 8,837,441 4,000,994 9,144,125 4,257,674 The accompanying notes are an integral part of these condensed consolidated

financial statements (Unaudited)

financial statements (Unaudited). F-5 ACTELIS NETWORKS, INC. CONDENSED CONSOLIDATED STATEMENTS OF MEZZANINE EQUITY AND SHAREHOLDERS' EQUITY (UNAUDITED) U.S. dollars in thousands (except number of shares) Redeemable Convertible Preferred Stock Warrants To Placement Agent Common Stock Non-voting Common Stock Additional Total Six months ended Amount Amount Number of shares Amount Number of shares Amount paid-in capital Accumulated deficit shareholders' equity BALANCE AS OF JANUARY 1, 2024 - 159 3,007,745 1 - - 39,916 ( 39,688 ) 229 Share based compensation - - - - - - 179 - 179 Exercise of options into common stock 21,225 * 32 - 32 Vesting of RSUs - - 18,495 * - - (* ) - - Warrant inducement agreement, net of offering costs - 42 999,670 * - - 2,560 - 2,560 Exercise of Pre funded warrants into common stock - - 970,187 * - - - - * Net comprehensive loss for the period - - - - - - - ( 2,064 ) ( 2,064 ) BALANCE AS OF JUNE 30, 2024 - 201 5,017,322 1 - - 42,687 ( 41,752 ) 936 BALANCE AS OF JANUARY 1, 2025 - 228 7,623,159 1 - - 46,818 ( 44,062 ) 2,757 Share based compensation - - - - - - 129 - 129 Vesting of RSUs - - 15,763 * - - (* ) - - Issuance of common stock, net of offering costs - - 1,901,299 * - - 1,877 1,877 Warrants to lender - - - - - - 22 - 22 Net comprehensive loss for the period - - - - - - - ( 3,761 ) ( 3,761 ) BALANCE AS OF June 30, 2025 - 228 9,540,221 1 - - 48,846 ( 47,823 ) 1,024 * Represents an amount less than $1 thousand. The accompanying notes are an integral part of these condensed consolidated

financial statements (Unaudited)

financial statements (Unaudited) F-6 ACTELIS NETWORKS, INC. CONSOLIDATED STATEMENTS OF MEZZANINE EQUITY AND SHAREHOLDERS' EQUITY (CAPITAL DEFICIENCY) (UNAUDITED) U.S. dollars in thousands (except number of shares) Redeemable Convertible Preferred Stock Warrants To Placement Agent Common Stock Non-voting Common Stock Additional Total shareholders' Three Months Ended Amount Number of shares Amount Number of shares Amount paid-in capital Accumulated deficit equity (capital deficiency) BALANCE AS OF APRIL 1, 2024 - 159 3,010,244 1 - - 40,005 ( 41,674 ) ( 1,668 ) Share based compensation - - - - - - 90 - 90 Vesting of RSUs - - 15,996 * - - (* ) - - Exercise of options into common stock - - 21,225 - - - 32 - 32 Exercise of Pre funded warrants into common stock - - 970,187 * - - - - * Warrant inducement agreement, net of offering costs - 42 999,670 - - - 2,560 - 2,560 Net comprehensive loss for the period - - - - - - - ( 78 ) ( 78 ) BALANCE AS OF JUNE 30, 2024 - 201 5,017,322 1 - - 42,687 ( 41,752 ) 936 BALANCE AS OF APRIL 1, 2025 - 228 9,019,758 1 - - 48,499 ( 45,922 ) 2,578 Share based compensation - - - - - - 50 - 50 Vesting of RSUs - - 14,098 * - - (* ) - - Issuance of common stock, net of offering costs - - 506,365 * - - 297 - 297 Net comprehensive loss for the period - - - - - - - ( 1,901 ) ( 1,901 ) BALANCE AS OF June 30, 2025 - 228 9,540,221 1 - - 48,846 ( 47,823 ) 1,024 * Represents an amount less than $1 thousand. The accompanying notes are an integral part of these condensed consolidated financial statements (Unaudited). F-7 ACTELIS NETWORKS, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) Six months ended June 30, 2025 2024 U.S. dollars in thousands CASH FLOWS FROM OPERATING ACTIVITIES: Net loss for the period ( 3,761 ) ( 2,064 ) Adjustmen

financial statements (Unaudited)

financial statements (Unaudited). F-8 ACTELIS NETWORKS, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (continued) (UNAUDITED) June 30 2025 2024 U.S. dollars in thousands RECONCILIATION OF CASH, CASH EQUIVALENTS AND RESTRICTED CASH: Cash and cash equivalents 393 2,412 Restricted cash equivalents, current 302 790 Restricted cash and cash equivalents , non-current - 160 Total cash, cash equivalents and restricted cash 695 3,362 Six months ended June 30, 2025 2024 U.S. dollars in thousands SUPPLEMENTARY DISCLOSURE OF CASH FLOW INFORMATION: Cash paid for interest 190 326 SUPPLEMENTARY INFORMATION ON INVESTING AND FINANCING ACTIVITIES NOT INVOLVING CASH FLOWS: Warrant to lender 22 1,493 Other non-current assets 50 - The accompanying notes are an integral part of these condensed consolidated

financial statements (Unaudited)

financial statements (Unaudited). F-9 ACTELIS NETWORKS, INC. NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS U.S. DOLLARS IN THOUSANDS NOTE 1 – GENERAL: 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. b. The Company has incurred significant losses and negative cash flows from operations. Net loss was $ 3,761 and $ 2,064 for the six months ended June 30, 2025, and June 30, 2024, respectively. During the six months ended June 30, 2025, and June 30, 2024, the Company had negative cash flows from operations of $ 3,218 and $ 2,343 , respectively. As of June 30, 2025, the Company's accumulated deficit was $ 48 million. The Company has funded its operations to date through equity and debt financing and has cash on hand (including restricted cash equivalents) of $ 0.7 million, short term restricted bank deposits of $ 71 thousand, long-term restricted bank deposits of $ 30 thousand and long term deposit of $ 93 thousand as of June 30, 2025. 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 continue to increase revenues and gross

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