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What changed in ACTELIS NETWORKS INC's 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of ACTELIS NETWORKS INC's 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+430 added−330 removedSource: 10-K (2026-03-18) vs 10-K (2025-03-24)

Top changes in ACTELIS NETWORKS INC's 2025 10-K

430 paragraphs added · 330 removed · 244 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

104 edited+115 added−41 removed78 unchanged
Biggest changeWe believe our products offer a unique solution on the market in terms of value, by providing the following: ● High performance hybrid-fiber communication system ● Speeds from 10Mbps to 10Gbps ● Reach of up to 100Km (speed declines over long distances in copper) ● Robust connectivity allowing Gigabit-grade service SLAs in various harsh environments over copper, coax or fiber Rapid installation in hours vs. weeks or months if new infrastructure is needed ● Cyber-protection on several levels, including Triple Shield Protection: ● Multi-line data scrambling and coding (copper) 10 ● 256-bit system-wide encryption ● System level protection (encryption and other protections) of management software, operating system and traffic flow Military — grade, DoD certified FIPS cyber protection ● Dense, feature-full design to replace multiple alternative elements in the market, and allow for installation that is compact, lower cost and power saving: ● Advanced switching functions supporting complex network topologies ● Support for both advanced, digital IoT devices as well as existing analog devices with serial interfaces — to save the need to replace these devices while allowing them to join the digital network ● Power feeding for cameras and other IoT devices with the data cable ● Ability to install our IoT building blocks in remote locations with no power.
Biggest changeWe believe our products offer a unique solution on the market in terms of value, by providing the following: ● High performance hybrid-fiber communication system: ● Speeds from 10Mbps to 10Gbps; ● Reach of up to 100Km (speed declines over long distances in copper); ● Robust connectivity allowing Gigabit-grade service SLAs in various harsh environments over copper, coax or fiber; and ● Rapid installation in hours vs. weeks or months if new infrastructure is needed. ● Cyber-protection on several levels, including Triple Shield Protection: ● Multi-line data scrambling and coding (copper); ● 256-bit system-wide encryption; and ● System level protection (encryption and other protections) of management software, operating system and traffic flow.
Its objective is to continuously monitor IoT devices for cyber-risks, network behaviors, trends and overall health, to detect cyber attacks and operational anomalies, to document such performance tracking and provide compliance reports, and to automatically-correct the vulnerabilities, anomalies and attacks that it identifies.
Its objective is to continuously monitor IoT devices for cyber-risks, network behaviors, trends and overall health, to detect cyber attacks and operational anomalies, to document such performance tracking and provide compliance reports, and to automatically-correct the vulnerabilities, anomalies and attacks that it identifies.
Our products are already capable of delivering sensitive information for many critical IoT applications, and we are investing more in making this a strong differentiator, and to have our products recognized as the most cyber-safe IoT building blocks in the growing secure IoT communication market.
Our products are already capable of delivering sensitive information for many critical applications, and we are investing more in making this a strong differentiator, and to have our products recognized as the most cyber-safe IoT building blocks in the growing secure IoT communication market.
While we continue to consult with counsel on the advisability to seek patent protection of some of our algorithms, we rely heavily on trade secrets to protect our intellectual property around our technology.
While we continue to consult with counsel on the advisability to seek patent protection of some of our algorithms, we rely heavily on trade secrets to protect our intellectual property around our technology.
Power can be provided from the communication line ● Ability to provide precise synchronization over the communication lines to base stations ● Routing functions ● Support for spectrally-friendly reach extenders up to 100Km with minimal impact on other communication lines ● Automated software tools for installation and management (including automated line calibration and configuration recognition during installation to avoid manual work, advanced management systems that allow remote troubleshooting of any line connected to the system to save on operation and management time) We believe that the combination of these advantages provides our customers with a highly cost-effective solution to quickly obtain IoT connectivity anywhere in their network.
Power can be provided from the communication line; ● Ability to provide precise synchronization over the communication lines to base stations; ● Routing functions; and ● Support for spectrally-friendly reach extenders up to 100Km with minimal impact on other communication lines. ● Automated software tools for installation and management (including automated line calibration and configuration recognition during installation to avoid manual work, advanced management systems that allow remote troubleshooting of any line connected to the system to save on operation and management time) 15 We believe that the combination of these advantages provides our customers with a highly cost-effective solution to quickly obtain IoT connectivity anywhere in their network.
In addition to these main benefits, we have focused our efforts and implemented technologies in our products in order to achieve the following: ● Transmission in the copper lines to take into account signals in neighboring lines to minimize crosstalk interference and be “Spectrally Friendly”; 9 ● Multi-line spatial coding scrambling of data in a way that enhances connection immunity to interference, and makes tapping into the data very difficult; ● Integration of remote powering and data on the same copper pairs; ● Minimizing transmission delay to support delay-sensitive applications; and ● Ability to safely, and accurately transmit clock signals for cellular base station synchronization (not available yet for 5G).
In addition to these main benefits, we have focused our efforts and implemented technologies in our products in order to achieve the following: ● Transmission in the copper lines to take into account signals in neighboring lines to minimize crosstalk interference and be “Spectrally Friendly”; ● Multi-line spatial coding scrambling of data in a way that enhances connection immunity to interference, and makes tapping into the data very difficult; ● Integration of remote powering and data on the same copper pairs; ● Minimizing transmission delay to support delay-sensitive applications; and ● Ability to safely, and accurately transmit clock signals for cellular base station synchronization (not available yet for 5G).
Our solutions aim to solve these challenges by instantly enhancing performance of such existing copper and coax infrastructure to fiber-grade performance, through the use of advanced signal processing a unique, patented network architecture, without the need to run new fiber to hard-to-reach locations; thus, effectively accelerating deployment of many IoT projects, as we estimate, sometimes from many months to only days.
Our solutions aim to solve these challenges by instantly enhancing performance of such existing copper and coax infrastructure to fiber-grade performance, through the use of advanced signal processing and unique, patented network architecture, without the need to run new fiber to hard-to-reach locations; thus, effectively accelerating deployment of many IoT projects, as we estimate, sometimes from many months to only days.
We believe that our solutions can provide connectivity over either fiber, copper or coax with speeds of up to multi-Gigabit communication, while supporting Fiber-grade reliability and quality. A primary focus of ours is to provide our customers with a cyber-secure network solution. We currently offer Triple-Shield protection of data delivered with coding, scrambling and encryption of the network traffic.
We believe that our solutions can provide connectivity over either fiber or copper with speeds of up to multi-Gigabit communication, while supporting Fiber-grade reliability and quality. A primary focus of ours is to provide our customers with a cyber-secure network solution. We currently offer Triple-Shield protection of data delivered with coding, scrambling and encryption of the network traffic.
Our U.S.-based employees are employed through a Professional Employer Organization, providing employee benefits and services. 17 We believe our culture and principles enable us to attract, retain, motivate and develop our workforce as well as drive employee engagement. We believe an engaged workforce leads to a more innovative and productive company that serves its customers better.
Our U.S.-based employees are employed through a Professional Employer Organization, providing employee benefits and services. We believe our culture and principles enable us to attract, retain, motivate and develop our workforce as well as drive employee engagement. We believe an engaged workforce leads to a more innovative and productive company that serves its customers better.
Our patent protected hybrid-fiber networking solutions deliver excellent communication over fiber to locations that may be easy to reach with new fiber. However, for locations that are difficult, or too costly to reach with fiber, we can upgrade existing copper or coax lines to deliver cyber-hardened, high-speed connectivity without needing to replace the existing infrastructure with new fiber.
Our patent protected hybrid fiber networking solutions deliver excellent communication over fiber to locations that may be easy to reach with new fiber. However, for locations that are difficult, or too costly to reach with fiber, we can upgrade existing copper lines to deliver cyber-hardened, high-speed connectivity without needing to replace the existing copper infrastructure with new fiber.
Regardless of outcome, litigation can have an adverse impact on us because of defense and settlement costs, diversion of management resources and other factors. Government Regulation Our products are required to be certified for safety and local standards in each country that we sell in as needed.
Regardless of outcome, litigation can have an adverse impact on us because of defense and settlement costs, diversion of management resources and other factors. 22 Government Regulation Our products are required to be certified for safety and local standards in each country that we sell in as needed.
We aim at having our products installed and help accelerate deployment of wire-area IoT projects and applications everywhere. For example, in one of the projects where our solutions are deployed, we found that 70% of locations are easy-to-reach with new fiber optic installation.
We aim at having our products installed and help accelerate deployment of wire-area IoT projects and applications everywhere. 2 For example, in one of the projects where our solutions are deployed, we found that 70% of locations are easy-to-reach with new fiber optic installation.
This product family can be installed either indoors or outdoors, including under extreme weather conditions. ● MetaShield. is a cyber-security, cyber-aware networking solution, an AI-powered, asset intelligence and threat management that comes as part of the network.
This product family can be installed either indoors or outdoors, including under extreme weather conditions. 12 ● MetaShield. is a cyber-security, cyber-aware networking solution, an AI-powered, asset intelligence and threat management that comes as part of the network.
For example, control centers of highways could use such aggregators to communicate with hundreds of EADs installed in cabinets along highways in order to securely connect IoT devices (e.g. security cameras) to the highway network. 8 ● XR239 Series.
For example, control centers of highways could use such aggregators to communicate with hundreds of EADs installed in cabinets along highways in order to securely connect IoT devices (e.g. security cameras) to the highway network. ● XR239 Series.
Our customers benefit from rapidly and cost-effectively enabling their critical IoT functions such as traffic cameras and smart signaling, security cameras, smart parking meters and ticketing, rail signaling and control, electrical substation management and protection, military operations, and many more.
Our customers benefit from rapidly and cost-effectively enabling their critical functions such as traffic cameras and smart signaling, security cameras, smart parking meters and ticketing, rail signaling and control, electrical substation management and protection, military operations, and many more.
Rapid Deployment and Lower Cost of Critical Connectivity for IoT We aim to become the global leading provider of cyber-secure, cost-effective and quick-to-deploy hybrid networking for all wide-area IoT applications.
Rapid Deployment and Lower Cost of Critical Connectivity We aim to become the global leading provider of cyber-secure, cost-effective and quick-to-deploy hybrid networking for all wide-area applications.
Connecting power lines to millions of IoT locations can be costly and very time consuming as well (similar to data connectivity, for the same reason-need for civil works).
Connecting power lines to millions of locations can be costly and very time consuming as well (similar to data connectivity, for the same reason — need for civil works).
Our network management software is also cyber-hardened and helps protect the system. Our systems have been selected for deployment in sensitive applications with U.S. DoD and other governments and military organizations, airports, utility companies, oil and gas companies, smart cities, rail and traffic applications globally.
Our network management software is also cyber-hardened and helps protect the system. Our systems have been selected for deployment in sensitive applications with U.S. DoW and other governments and military organizations, airports, utility companies, oil and gas companies, smart cities, rail and traffic applications globally.
Since our inception, our business was focused on serving telecommunication service providers (Telecom), also known as Telcos, for enterprises and residential customers. Our products and solutions have been deployed with more than 100 telecommunication service providers worldwide, in enterprise, residential and mobile base station connectivity applications.
Since our inception, our business has been focused on serving telecommunication service providers (Telecom), also known as Telcos, for enterprises and residential customers. Our products and solutions have been deployed with more than 100 telecommunication service providers worldwide, in enterprise, residential and mobile base station connectivity applications.
We believe our strong brand name of high-quality communication solutions, as well as the credibility we gain with esteemed customers such as the U.S. DoD, enhances our ability to provide our products and services.
We believe our strong brand name of high-quality communication solutions, as well as the credibility we gain with esteemed customers such as the U.S. DoW, enhances our ability to provide our products and services.
The contents of the websites referred to above are not incorporated into this filing. 19
The contents of the websites referred to above are not incorporated into this filing.
This software, designed as an intelligence layer integrated into Actelis’ networking devices, leverages the network’s power and proximity to IoT devices to monitor and protect physical assets such as cameras, sensors, and other devices at the edge, enabling corrective actions before issues propagate throughout the network.
This includes a software based platform designed as an intelligence layer integrated into Actelis’ networking devices, leverages the network’s power and proximity to IoT devices to monitor and protect physical assets such as cameras, sensors, and other devices at the edge, enabling corrective actions before issues propagate throughout the network.
We have also received the JITC (Joint Interoperability Test Command) certification of meeting certain cybersecurity standards required by the DoD.
We have also received the JITC (Joint Interoperability Test Command) certification of meeting certain cybersecurity standards required by the DoW.
We derive a majority of our revenues from our existing and new IoT (including federal and DoD) customers. For the years ended December 31, 2024 and December 31, 2023, our IoT customers in the aggregate accounted for approximately 72% and 73% of our revenues, respectively. We derive a significant portion of our revenues from a limited number of our customers.
We derive a majority of our revenues from our existing and new IoT (including federal and DoW) customers. For the years ended December 31, 2025 and December 31, 2024, our IoT customers in the aggregate accounted for approximately 73% and 72% of our revenues, respectively. We derive a significant portion of our revenues from a limited number of our customers.
We have funded our operations to date through equity and debt financing and we had cash on hand (including short term bank deposits and restricted cash equivalents) of $2.3 million and long-term restricted cash and cash equivalents and restricted bank deposits of $0.2 million as of December 31, 2024.
We have funded our operations to date through equity and debt financing and we had cash on hand (including short term bank deposits and restricted cash equivalents) of $4.4 million and long-term restricted cash and cash equivalents and restricted bank deposits of $0.2 million as of December 31, 2025.
Product Specifications Our products use advanced signal processing implemented at the system level, with an approach that treats multiple copper lines as one multi-line channel, which we believe to achieve the following benefits: ● Speeds ranging from 10MB to 10GBPS; distances up to 100Km (speeds a lower for longer distances) infrastructure Supporting any hybrid combination of new Fiber infrastructure and existing copper and coax infrastructure, supporting data security an encryption protocols, certified for FIPS by US DoD labs; supporting outdoor hardened environmental requirements dense and compact to save space and allow for flexible location setting. ● Automatic calibration tools and automated management SW enable hassle-free installation withing hours vs. weeks over existing wiring. ● Improve communication reliability even if copper lines are of poor quality, so that network operators can, in most cases, guarantee their customers what we believe are Service Level Availabilities (SLAs) and uptime similar to that of fiber optic infrastructure regardless of the media used, and uptime that allows our customers to support mission-critical applications.
This includes consulting, telephone troubleshooting and remote support, training, product repairs, and software updates. 13 Product Specifications Our products use advanced signal processing implemented at the system level, with an approach that treats multiple copper lines as one multi-line channel, which we believe to achieve the following benefits: ● Speeds ranging from 10Mbps to 10Gbps ; distances up to 100Km (speeds a lower for longer distances) infrastructure Supporting any hybrid combination of new Fiber infrastructure and existing copper and coax infrastructure, supporting data security an encryption protocols, certified for FIPS by US DoW labs; supporting outdoor hardened environmental requirements dense and compact to save space and allow for flexible location setting. ● Automatic calibration tools and automated management software enable hassle-free installation withing hours vs. weeks over existing wiring. ● Improve communication reliability even if copper lines are of poor quality, so that network operators can, in most cases, guarantee their customers what we believe are Service Level Availabilities (SLAs) and uptime similar to that of fiber optic infrastructure regardless of the media used, and uptime that allows our customers to support mission-critical applications.
In accordance with Nasdaq Listing Rule 5815(d)(4)(B), we will remain subject to a panel monitor for equity compliance through August 27, 2025.
In accordance with Nasdaq Listing Rule 5815(d)(4)(B), we remained subject to a panel monitor for equity compliance through August 27, 2025.
Since our inception, our business was focused on serving telecommunication service providers, also known as Telcos, to provide connectivity for enterprises and residential customers. Our products and solutions have been deployed with more than 100 telecommunication service providers worldwide, in enterprise, residential and mobile base station connectivity applications.
Since our inception, our business was focused on serving telecommunication service providers, also known as Telcos, to provide connectivity for enterprises and residential customers. Our products and solutions have been deployed with hundreds of telecommunication service providers worldwide, in enterprise, residential and mobile base station connectivity applications.
We intend to expand this strategy by investing in sales and marketing presence to extend the length these contracts and add many others. Expansion into Cybersecurity, Recurring Revenue Model Cybersecurity is essential for IoT infrastructure. Such security must be addressed at the data traffic, switching, and network management level.
We intend to expand this strategy by investing in sales and marketing presence to extend the length these contracts and add many others. Expansion in Cybersecurity, Recurring Revenue Model, Cyber monitoring services Cybersecurity is essential for networking infrastructure. Such security must be addressed at the data traffic, switching, and network management level.
We are subject to the informational requirements of the Exchange Act and file or furnish reports, proxy statements, and other information with the SEC.
Securities and Exchange Commission (the “SEC”). We are subject to the informational requirements of the Exchange Act and file or furnish reports, proxy statements, and other information with the SEC.
We believe that such hybrid fiber networking solutions have distinct advantages in most real-life installations, while providing significant budget savings and accelerating deployment of modern IoT networks. Based on our experience, most IoT projects have challenging, hard to reach with fiber locations which may significantly increase such projects’ timeline and budgets.
We believe that such hybrid fiber copper networking solution has distinct advantages in most real-life installations, while providing significant budget savings and accelerating deployment of modern IoT networks. Based on our experience, most IoT projects have challenging, hard to reach with fiber locations which may explode such projects’ timeline and budgets.
See “Item 1.A - Risk Factors — New competitors may enter the marketplace and begin to compete with the Company.” Manufacturing, Procurement and Logistics We take advantage of the combination of our inhouse skills and those of the third parties we partner with to execute our operational tasks which are planning and manufacturing finished goods inventory, planning and procuring raw materials and delivering products to our customers based on promised delivery schedules. 14 Our raw material consists of electronic chipsets, FPGA components, modems, and other electronic and mechanical components.
See “Item 1.A - Risk Factors — New competitors may enter the marketplace and begin to compete with the Company.” 19 Manufacturing, Procurement and Logistics We take advantage of the combination of our inhouse skills and those of the third parties we partner with to execute our operational tasks which are planning and manufacturing finished goods inventory, planning and procuring raw materials and delivering products to our customers based on promised delivery schedules.
These elements include switches, typically enhanced with signal processing SW, concentrators, reach extenders, data encryption elements, power sources and a smart networking software that allows for remote management and monitoring down to the single element and line performance, configuration management making complex network topologies easy to deploy, analyze, debug and remote SW download to help with remote handling of large and small networks.
These elements include switches, typically enhanced with signal processing software, concentrators, reach extenders, data encryption elements, power sources and a smart networking software that allows for remote management and monitoring down to the single element and line performance, configuration management making complex network topologies easy to deploy, analyze, debug and remote software download to help with remote handling of large and small networks, on any wired infrastructure – be it Fiber, Copper or Coax.
For the years ended December 31, 2024 and December 31, 2023, our top ten customers in the aggregate accounted for approximately 74% and 66% of our revenues. 2 We have incurred significant losses and negative cash flows from operations and as of December 31, 2024, we had an accumulated deficit of $44.0 million.
For the years ended December 31, 2025 and December 31, 2024, our top ten customers in the aggregate accounted for approximately 62% and 74% of our revenues. We have incurred significant losses and negative cash flows from operations and as of December 31, 2025, we had an accumulated deficit of $52 million.
In recent years, as we have further developed our technology and introduced additional products, we turned our focus on serving the wide-area IoT, federal and DoD markets, as well as multi-dwelling units (“MDUs”), and introduced, in 2024, our cyber-aware networking solutions for IoT markets as well.
In recent years, as we have further developed our technology and introduced additional products, we turned our focus on serving the wide-area IoT, federal and U.S. Department of War (“DoW”) markets, as well as multi-dwelling units, and introduced, in 2024, our cyber-aware networking solutions for IoT markets as well.
As such we compete with a number of companies in the markets we serve. Our key competitors include Moxa Technologies, FlexDSL Telecommunications AG, EtherWAN Systems, Inc. and Belden Inc.
As such we compete with a number of companies in the markets we serve. In ITS, our key competitors include Moxa Technologies, FlexDSL Telecommunications AG, EtherWAN Systems, Inc. and Belden Inc. In the MDU markets, our competition includes companies such as InCoax, Positron and ReadyLinks.
We continue to invest in sales and marketing resources to fuel our growth. Our technology is both powerful and compact and is built as a relatively small set of feature-rich network elements, that serve as building block in many IoT verticals.
We continue to invest in sales and marketing resources to fuel our growth. Our technology is both powerful and compact and is built as a relatively small set of feature-rich network elements, that serve as building block in the verticals we serve, namely Federal and Military, Intelligent Transportation, and MDUs.
EMS may also manage other software keys and elements (for example, for encryption or other cyber-safety functions), for which customers may pay separately for the licenses. We also offer support and maintenance services together with the sales of our product. This includes consulting, telephone troubleshooting and remote support, training, product repairs, and software updates.
EMS may also manage other software keys and elements (for example, for encryption or other cyber-safety functions), for which customers may pay separately for the licenses. We also offer support and maintenance services together with the sales of our product.
Our products are utilized within networks deployed by cities such as the City of Los Angeles, the District of Columbia the City of Seattle, the City of Munich, Germany, as well as notable entities such as Highways England, the Federal Aviation Administration, the U.S. military, including the Air Force, Navy and National Guard, as well as Stanford University.
Our solutions are utilized within networks deployed by cities such as the City of Los Angeles, the District of Columbia, Montgomery County, MD, the City of Seattle, the Cities of Munich, Frankfurt, Cologne and others in Germany, as well as notable entities such as Highways England, the Federal Aviation Administration, the Autostrada in Italy, the U.S. military, including the Air Force, Navy and National Guard, as well as Stanford University.
In this effort, we take advantage of existing strong relationships with business partners in the United States, Canada, Europe, Latin America, and Asia Pacific and also seek to recruit new business partners that can help us expand our coverage.
We seek to cover the geographic territories in which we sell, in combination with the target verticals described above. In this effort, we take advantage of existing strong relationships with business partners in the United States, Canada, Europe, Latin America, and Asia Pacific and also seek to recruit new business partners that can help us expand our coverage.
Some of our products are manufactured to our specifications under an OEM arrangement. The company uses state-of-the-art logistics services from the best providers worldwide and also has in-house expertise in executing such required processes. We believe that we can add and/or replace our contract manufacturer if necessary.
The company uses state-of-the-art logistics services from the best providers worldwide and also has in-house expertise in executing such required processes. We believe that we can add and/or replace our contract manufacturer if necessary.
Our products work over all types of wireline media on the global data network, whether owned or operated by telecom service providers or a private network operated by enterprises or government organizations as well as MDU buildings. Our products are structured as building blocks for most IoT applications and are feature-rich.
Our products work over all types of wireline media on the global data network, whether owned or operated by telecom service providers or a private network operated by enterprises or government organizations as well as MDU buildings. Our products are structured as building blocks especially for Intelligent Transportation Systems (ITS), including roads, rail and airport applications that are feature-rich.
Intellectual Property We rely on a combination of trade secrets, patent, trademark and copyright laws in the United States, as well as intellectual property licenses and other contractual rights (including confidentiality procedures, contractual provisions, and non-disclosure and assignment-of-intellectual property agreements with our employees, independent contractors, consultants and companies with which we conduct business) to establish and protect our A.I. technology, intellectual property and proprietary rights, trade secrets, databases, and our brand. 18 We have registered Actelis Networks as a service trademark in the United States, and we are the registered holder of the domain name Actelis.com that includes “Actelis Networks, Inc.”.
Intellectual Property We rely on a combination of trade secrets, patent, trademark and copyright laws in the United States, as well as intellectual property licenses and other contractual rights (including confidentiality procedures, contractual provisions, and non-disclosure and assignment-of-intellectual property agreements with our employees, independent contractors, consultants and companies with which we conduct business) to establish and protect our A.I. technology, intellectual property and proprietary rights, trade secrets, databases, and our brand.
For example, we achieved UL laboratories compliance with FIPS 140-2 cybersecurity standard required by the United States Department of Defense (the “DoD”) and the Joint Interoperability Test Command (JITC) labs approval of the Company’s products for cybersecurity and interoperability, putting the products in the DoD Approved Products List (APL).
For example, we maintain UL laboratories compliance with FIPS 140-3 cybersecurity standard required by the DoW and the Joint Interoperability Test Command (JITC) labs approval of the Company’s products for cybersecurity and interoperability, putting the products in the DoW Approved Products List (APL).
Additionally, our customers can purchase software support service which allow them to receive some additional features or free upgrades.
Additionally, our customers can purchase software support service which allow them to receive some additional features or free upgrades. Such support service is sold as a separate contract.
Item 1. Business Company Overview Actelis Networks, Inc. (“we,” “the Company”, “Actelis”, “us”, “our”) is a market leader in cyber-hardened, rapid-deployment networking solutions for wide-area IoT applications including federal, state and local government, intelligent traffic systems (“ITS”), military, utility, rail, telecom (notably in multi-dwelling units) and campus applications.
Item 1. Business Company Overview Actelis Networks, Inc. (“Actelis,” “we,” “us,” “our,” “the Company,” “our company”) is a market leader in cyber-hardened, rapid-deployment networking solutions for wide-area applications including federal and military, state and local government, intelligent traffic systems (“ITS”), and additional IoT environments such as utility and rail.
Our unique portfolio of hybrid fiber, environmentally hardened aggregation switches, high density Ethernet devices, advanced management software and AI-based cyber-security offering, unlocks the hidden value of essential networks and the devices they connect, delivering a safe and cyber-aware connectivity for rapid, cost-effective deployment.
Our unique portfolio of hybrid fiber, cyber 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.
In order to correct the issues with providing high speed communications over copper wiring, we developed technologies utilizing a multi-line approach, encoding, scrambling and processing the signals at system level (rather than at the single lines level), and finally also offering data encryption, to combat interference, electromagnetic noise, and issues with copper line quality and data security.
Such wires are also relatively easy to tap into physically, and the information is also radiated outside of the cable and may be exposed to security threats. 14 In order to correct the issues with providing high speed communications over copper wiring, we developed technologies utilizing a multi-line approach, encoding, scrambling and processing the signals at system level (rather than at the single lines level), and finally also offering data encryption, to combat interference, electromagnetic noise, and issues with copper line quality and data security.
A second product line, the GL900, extends Gigabit connectivity from fiber installations outside buildings (“homes passed” by fiber) into individual offices and apartments within MDUs and MTUs, without the need for landlord investment in re-wiring buildings with fiber. MDU/MTU market in the US alone is estimated by the company to include more than 18M buildings.
A second product line, the GL900, extends Gigabit connectivity from fiber installations outside buildings (“homes passed” by fiber) into individual offices and apartments within MDUs, without the need for landlord investment in re-wiring buildings with fiber.
Part of the latter is the Broadband Equity Access and Deployment Program (the “BEAD”). The BEAD Program provides $42.45 billion to expand high-speed Internet access by funding planning, infrastructure deployment and adoption programs. All 50 states, the District of Columbia, and the five territories participating in the Broadband Equity, Access, and Deployment (BEAD) program have approved Internet for All plans.
Part of the latter is the Broadband Equity Access and Deployment Program (the “BEAD”). The BEAD Program provides $42.45 billion to expand high-speed Internet access by funding planning, infrastructure deployment and adoption programs.
A fourth product group, MetaShield, that was introduced in 2024, is a cyber-security, cyber-aware networking solution, an AI-powered, asset intelligence and threat management that comes as part of our networking solutions.
Our products are also built for future integration with enhanced security services we may introduce in the future. A fourth product group, MetaShield, that was introduced in 2024, is a cyber-security, cyber-aware networking solution, an AI-powered, asset intelligence and threat management that comes as part of our networking solutions.
Environmental We are not aware of any environmental laws that have been enacted, nor are we aware of any such laws being contemplated for the future, that impact issues specific to our business.
We still believe this strategy will provide for accelerated growth and maximize investor returns. Environmental We are not aware of any environmental laws that have been enacted, nor are we aware of any such laws being contemplated for the future, that impact issues specific to our business.
We also have 16 registered patents in the United States; 3 registered patents in Europe, 1 registered patent in Mexico, 1 registered patent in Indonesia, one pending application in the United States and one pending application in Europe, all of which in the general area of high-speed carrier class Ethernet service and transport over bonded VDSL2, G.SHDSL as well as Fiber covering various aspects of our technology.
Out of 6 patents we were granted in Europe, 3 are registered and current while the remaining 3 expired, 1 registered patent in Indonesia, one pending application in Brazil, all of which in the general area of high-speed carrier class Ethernet service and transport over bonded VDSL2, G.SHDSL as well as Fiber G.fast and G.hn protocols covering various aspects of our technology.
Such support service is sold as a separate contract. 13 We offer service contracts at different levels (Silver, Gold, Platinum), which may include different levels of support (remotely or in the field), hardware repairs, spare parts, help with network design, and SW/HW upgrades.
We offer service contracts at different levels (Silver, Gold, Platinum), which may include different levels of support (remotely or in the field), hardware repairs, spare parts, help with network design, and SW/HW upgrades. Such service contracts are sold separately from the sale of hardware products and may be sold combined with our EMS software licenses.
In addition, our solutions can also provide power over existing copper and coax lines to remotely power up network elements and IoT components connected to them (like cameras, small cell and Wi-Fi base stations sensors etc.).
This unique hybrid network approach is making IoT projects often significantly more affordable, fast to deploy and predictable to plan and budget. 1 In addition, our solutions can also provide power over existing copper and coax lines to remotely power up network elements and components connected to them (like cameras, small cell and Wi-Fi base stations sensors etc.).
Human Capital Resources As of December 31, 2024, we had approximately 49 employees and contractors, of which 38 were full-time employees, including 18 in sales and marketing, 22 in research development, engineering, and operations and 9 in general and administration. We have approximately 35 employees and contractors in Israel, 9 in the U.S., 3 in Europe and 2 in Asia.
Human Capital Resources As of December 31, 2025, we had approximately 51 employees and contractors, of which 39 were full-time employees, including 13 in sales and marketing, 20 in research development, engineering, and operations and 6 in general and administration. We have approximately 34 employees and contractors in Israel, 15 in the U.S., ,1 in Europe and 1 in Asia.
The result for the network owner is a hybrid network that optimizes the use of both new Fiber (where available) as well as upgraded, fiber-grade copper and coax that is now modernized, digitized and cyber-hardened. This unique hybrid network approach is making IoT projects often significantly more affordable, fast to deploy and predictable to plan and budget.
The result for the network owner is a hybrid network that optimizes the use of both new Fiber (where available) as well as upgraded, fiber-grade copper and coax that is now modernized, digitized and cyber-hardened.
All of these advantages constitute an entry barrier, which we believe may make it more difficult for a competitor to reach a similar status. 11 We believe that over the past years, we have built a reputation for providing, according to our customers, reliable, high-quality communication solutions with better copper and hybrid fiber performance than other alternatives on the market.
We believe that over the past years, we have built a reputation for providing, according to our customers, reliable, high-quality communication solutions with better copper and hybrid fiber performance than other alternatives on the market.
However, new fiber wireline infrastructure is costly to deploy, involves lengthy civil works to install, and, based on our internal calculations, often accounts for more than 50% of total cost of ownership (ToC) and time to deploy wide-area IoT projects. 1 Providing new fiber connectivity to hard-to-reach locations is especially costly and time-consuming, often requiring permits for boring, trenching, and right-of-way, sometimes done over many miles.
However, new fiber wireline infrastructure is costly to deploy, involves lengthy civil works to install, and, based on our internal calculations, often accounts for more than 50% of total cost of ownership and time to deploy wide-area IoT projects.
We continue to work on the remaining components mentioned above relative to edge computing. 16 United States’ Bipartisan Infrastructure Law In November 2021, Former President Biden signed the Bipartisan Infrastructure Law to invest approximately $1.2 trillion to significantly upgrade the United States’ infrastructure.
United States’ Bipartisan Infrastructure Law In November 2021, Former President Biden signed the Bipartisan Infrastructure Law to invest approximately $1.2 trillion to significantly upgrade the United States’ infrastructure.
We believe there is an urgent need to connect tens of millions of locations with a fast and secure connection. A huge challenge for IoT projects is that implementing connectivity between different IoT points in a network can consume the majority of a project’s cost and time to implement, including unpredictable and unanticipated challenges that arise in each individual project.
A huge challenge for ITS projects is that implementing connectivity between different points in a network can consume the majority of a project’s cost and time to implement, including unpredictable and unanticipated challenges that arise in each individual project. 4 We believe that the number of IoT applications requiring our fast, smart, and secure connectivity is immense and provides us with a great market opportunity to grow our business.
As of the date of this filing, we are in compliance with the Minimum Shareholders’ Equity Requirement. 6 In addition, on May 20, 2024, Nasdaq notified us that we were not in compliance with the minimum bid price requirements set forth in Nasdaq Listing Rule 5550(a)(2), which requires our common stock to maintain a minimum bid price of $1.00 per share.
On May 12, 2025, Nasdaq notified us (the “Notification Letter”) that we were not in compliance with Nasdaq Listing Rule 5550(a)(2), which requires our Common Stock to maintain a minimum bid price of $1.00 per share (the “Bid Price Rule”).
The types of applications in this vertical that require communication include road cameras, lane management systems, and road signs. Rail Rail systems include customers who own and operate traditional inter-city rail lines as well as light rails. Some applications requiring communication in this vertical are central train control systems, rail signals, safety cameras and alert sensors, and rail station communication.
We currently have projects in more than 100 cities, mostly in North America and Europe. Rail Rail systems include customers who own and operate traditional inter-city rail lines as well as light rails. Some applications requiring communication in this vertical are central train control systems, rail signals, safety cameras and alert sensors, and rail station communication.
Pursuant to the inducement letter, the holder agreed to exercise for cash its warrants to purchase an aggregate of 999,670 shares of our common stock at an exercise price of $2.00 per share, in consideration of our agreement to issue new common stock purchase warrants (the “July 2024 Warrants”), as descried below, to purchase up to an aggregate of 1,999,340 shares of our common stock (the “July 2024 Warrant Shares”), at an exercise price of $1.75 per share.
Pursuant to the Inducement Letter, the Holder agreed to exercise for cash the Existing Warrants to purchase an aggregate of 427,020 shares of the Company’s common stock at a reduced exercise price of $3.70 per share in consideration of the Company’s agreement to issue new common stock purchase warrants (the “New Warrants”), as descried below, to purchase up to an aggregate of 640,530 shares of the Company’s common stock (the “New Warrant Shares”) at an exercise price of $3.70 per share.
Attempts to deliver high-speed would encounter many problems, including signal attenuation, cross-talk interference from other lines in the Bundle and from any external electrical sources, variable quality and signal interruptions, and variable latency. Such wires are also relatively easy to tap into physically, and the information is also radiated outside of the cable and may be exposed to security threats.
Attempts to deliver high-speed would encounter many problems, including signal attenuation, cross-talk interference from other lines in the Bundle and from any external electrical sources, variable quality and signal interruptions, and variable latency.
Growth through Mergers and Acquisitions We continue to evaluate potential growth through mergers and acquisitions opportunities in situations where we believe that a transaction will fill business gaps or add key business operations without requiring us to wait years for marketing and sales cycles to materialize.
We believe that this significant increase in infrastructure spending by the United States Government will likely result in investments in our communication infrastructure solutions, as these spending initiatives are aimed at our targeted verticals. 21 Growth through Mergers and Acquisitions We continue to evaluate potential growth through mergers and acquisitions opportunities in situations where we believe that a transaction will fill business gaps or add key business operations without requiring us to wait years for marketing and sales cycles to materialize.
From smart transportation systems (smart cameras, smart lights and signals, Vehicle to Everything, or V2X communication) and smart security (cameras and radars), to smart parking, smart rail, power station monitoring, and industrial and warehouse automation, we believe that we are uniquely positioned to address all of these applications in a versatile and flexible manner.
From smart transportation systems (smart cameras, smart lights and signals, Vehicle to Everything, or V2X communication) and smart security (cameras and radars), to smart parking, smart rail, as well as airport and air traffic control infrastructure, also manifested by the $12.5 billion budget granted to the FAA in 2025, we believe that we are uniquely positioned to address all of these applications in a versatile and flexible manner.
These non-exclusive third-party distributors are used to selling our products, and we believe that they appreciate the reliability of our products and the quality of service and support that we provide.
These non-exclusive third-party distributors are used to selling our products, and we believe that they appreciate the reliability of our products and the quality of service and support that we provide. All of these advantages constitute an entry barrier, which we believe may make it more difficult for a competitor to reach a similar status.
EADs (Ethernet Access Devices) are a series of products which are cost efficient, compact and hardened Ethernet switches for long-distance hybrid-fiber networks, located near the IoT devices connected to the network.
In MDU, our Gigaline 900 and 9000 Series allow us to address from small, dozen unit to large, hundreds-to-thousands unit buildings. ● MetaLight ML500/600/700/Series. EADs (Ethernet Access Devices) are a series of products which are cost efficient, compact and hardened Ethernet switches for long-distance hybrid-fiber networks, located near the IoT devices connected to the network.
It is a cloud-base Software-as-a-service solution, that can be a stand-alone solution that works on any network, or, integrated with our networking solutions. We aim to continue developing our technology to include more system-wide security and further hybridity across all types of infrastructure.
It is a cloud-base Software-as-a-service solution, that can be a stand-alone solution that works on any network, or, integrated with our networking solutions.
Nasdaq Listing Compliance On August 25, 2023, we received a notification letter from the Listing Qualifications Staff (the “Staff”) of the Nasdaq Stock Market LLC (“Nasdaq”) indicating that we are not in compliance with Nasdaq Listing Rule 5550(b)(1) due to our failure to maintain a minimum of $2,500,000 in shareholders’ equity (the “Minimum Shareholders’ Equity Requirement”) or any alternatives to such requirement.
The July 2025 Placement Agent Warrants and the shares of Common Stock issuable upon exercise thereof, will be issued in reliance on the exemption from registration provided by Section 4(a)(2) of the Securities Act as transactions not involving a public offering and in reliance on similar exemptions under applicable state laws. 5 Nasdaq Listing Compliance On August 25, 2023, we received a notification letter from the Listing Qualifications Staff (the “Staff”) of Nasdaq indicating that we are not in compliance with Nasdaq Listing Rule 5550(b)(1) due to our failure to maintain a minimum of $2,500,000 in shareholders’ equity (the “Minimum Shareholders’ Equity Requirement”) or any alternatives to such requirement.
The types of applications within this vertical that require communication are sub-station monitoring, oil and gas pipeline and refineries, electric and water flow monitoring, and perimeter security.
The types of applications within this vertical that require communication are sub-station monitoring, oil and gas pipeline and refineries, electric and water flow monitoring, and perimeter security. We have projects within this vertical in North America and Europe. MDU and Telco MDU include apartment buildings and condominiums, as well as hospitality properties such as hotels and resorts.
These devices deliver a much broader selection of solutions for large and small networks, at higher speeds, and better security, in support of hybrid-fiber networks that contain more fiber, and covering IoT, MDU and MTU markets. ● MetaLight ML500/600/700/Series.
Advanced, software managed, temperature and cyber-hardened, layer 2 and layer 3, hybrid-fiber-copper-COAX switching devices, at multi-gigabit speeds of up to 10Gbps. These devices deliver a much broader selection of solutions for large and small networks, at higher speeds, and better security, in support of hybrid-fiber networks that contain more fiber, and covering ITS and MDU markets.
We also secure components as have been designated to be the close to end of life by their manufacturers to ensure adequate quantities of future product shipments. Our products are assembled by various contract manufacturers, located in Israel and in Taiwan who possess the expertise of assembly and quality control required for electronic manufacturing in a turn-key fashion.
Our products are assembled by various contract manufacturers, located in Israel and in Taiwan who possess the expertise of assembly and quality control required for electronic manufacturing in a turn-key fashion. Some of our products are manufactured to our specifications under an OEM arrangement.
In December 2024, we launched our all-new MetaShield SaaS product as a cyber-security solution that comes from the network itself, and is currently being introduced to our existing and new customers.
Later that year, we launched our MetaShield SaaS product as a cyber-security solution that comes from the network itself, and has since then been introduced to our existing and new customers. Our products all include cyber safety features that we are constantly developing. They currently include network traffic encryption and coding.
We have projects within this vertical in North America and Europe. 12 Smart City We believe the goal of nearly any city worldwide is to become smarter and better serve its residents and visitors. Smart city customers include such municipalities.
Smart City We believe the goal of nearly any city worldwide is to become smarter and better serve its residents and visitors. Smart city customers include such municipalities. The types of applications in this vertical requiring communication include security cameras, parking management, energy and water management, waste management, digital signs, and provision of Wi-Fi connectivity.
Most of those components are procured by our contract manufacturers and we assist them as needed in specific cases. For example, since the breakout of COVID-19, as the world is experiencing shortages of electronic components, we have assisted our manufacturers in acquiring components that are harder to find.
For example, since the breakout of COVID-19, as the world is experiencing shortages of electronic components, we have assisted our manufacturers in acquiring components that are harder to find. We also secure components as have been designated to be the close to end of life by their manufacturers to ensure adequate quantities of future product shipments.
The resulting combination of our existing products and services, new key personnel, and strategic partnerships through M&A could provide new offerings to our existing market.
The resulting combination of our existing products and services, new key personnel, and strategic partnerships through M&A could provide new offerings to our existing market. If we target businesses in the same sector or location, we hope to combine resources to reduce costs, eliminate duplicate facilities or departments and increase revenue.
We operate a vertical-based marketing plan where we dedicate tailored solutions and individual resources to each specific vertical. Our verticals include Intelligent Traffic Systems (ITS), rail, smart city, Telecom, utilities, federal and military. ITS ITS include customers who manage road systems such as departments of traffic on either the municipality, county, state, or national level.
We operate a vertical-based marketing plan where we dedicate tailored solutions and individual resources to each specific vertical. Our verticals include Intelligent Traffic Systems (ITS), rail, smart city, Telecom, utilities, federal and military. 16 Federal and Military Our current and future federal and military federal aviation authorities, US military, Air Force and Navy bases, and other government and military facilities.
Recently, Actelis Networks has secured significant orders and launched groundbreaking solutions like MetaShield, an AI-based cybersecurity solution, driving SaaS growth and edge infrastructure resilience.
Recently, Actelis Networks has secured significant orders and launched groundbreaking solutions like MetaShield, an AI-based cybersecurity solution, driving SaaS growth and edge infrastructure resilience. To date, we have been most successful in selling to customers in the intelligent transportation systems, rail, federal and military, airports, and MDU markets, primarily in the US, Canada, Europe, and Japan.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeWe are susceptible to problems, and have encountered problems in the past, in connection with procurement, decreasing quality, reliability, and protectability. ● Demand for our products and solutions may not grow or may decline. ● Our gross margins may not increase or may deteriorate. ● Changes in the price and availability of our raw materials and shipping could be detrimental to our profitability. ● Expanding our operations and marketing efforts to meet expected growth may impact profitability if actual growth is less than expected. ● If our internal Company cyber-security measures are breached or fail and unauthorized access is obtained to our IT environment, we may incur significant losses of data, which we may not be able to recover and may experience a delay in our ability to conduct our day-to-day business. ● We provide cyber security features as part of our products that may not completely prevent information security breaches, and our products are installed in live customer environments and may be compromised by cyber-attacks and damage customer assets. ● We depend on key information systems and third-party service providers. ● We depend on our management team and other key employees, and the loss of one or more of these employees or an inability to attract and retain highly skilled employees could adversely affect our business. ● We may face the effects of increased competition and rapid technological changes. ● Our results of operations are likely to fluctuate from quarter to quarter and year to year, which could adversely affect the trading price of our common stock. ● The loss of one or more of our significant customers, or any other reduction in the amount of revenue we derive from any such customer, would adversely affect our business, financial condition, results of operations and growth prospects. ● Our business, operating results and growth rates may be adversely affected by current or future unfavorable economic and market conditions and adverse developments with respect to financial institutions and associated liquidity risk.
Biggest changeWe are susceptible to problems, and have encountered problems in the past, in connection with procurement, decreasing quality, reliability, and protectability. ● Demand for our products and solutions may not grow or may decline. ● Our gross margins may not increase or may deteriorate. ● Changes in the price and availability of our raw materials and shipping could be detrimental to our profitability. ● Expanding our operations and marketing efforts to meet expected growth may impact profitability if actual growth is less than expected. ● If our internal Company cyber-security measures are breached or fail and unauthorized access is obtained to our IT environment, we may incur significant losses of data, which we may not be able to recover and may experience a delay in our ability to conduct our day-to-day business. ● We provide cyber security features as part of our products that may not completely prevent information security breaches, and our products are installed in live customer environments and may be compromised by cyber-attacks and damage customer assets. ● We depend on key information systems and third-party service providers. ● We depend on our management team and other key employees, and the loss of one or more of these employees or an inability to attract and retain highly skilled employees could adversely affect our business. ● We may face the effects of increased competition and rapid technological changes. ● Our results of operations are likely to fluctuate from quarter to quarter and year to year, which could adversely affect the trading price of our common stock. ● The loss of one or more of our significant customers, or any other reduction in the amount of revenue we derive from any such customer, would adversely affect our business, financial condition, results of operations and growth prospects. ● Our business, operating results and growth rates may be adversely affected by current or future unfavorable economic and market conditions and adverse developments with respect to financial institutions and associated liquidity risk. 25 Risks Related to Protecting Our Technology and Intellectual Property ● Claims by others that we infringe their intellectual property could force us to incur significant costs or revise the way we conduct our business. ● Our patents and proprietary technology may be challenged or disputed. ● Any failure to protect our intellectual property rights could impair our ability to protect our proprietary technology and our brand. ● The lives of our patents may not be sufficient to effectively protect our products and business.
If any of the risks actually occur, our business, results of operations, financial condition and prospects could be harmed. In that event, the trading price of our common stock could decline, and you could lose part or all of your investment.
If any of the risks actually occur, our business, results of operations, financial condition and prospects could be harmed. In that event, the trading price of our common stock could decline, and you could lose part or all of your investment.
Our amended and restated certificate of incorporation, or the Charter, authorizes us to issue up to 42,803,774 shares consisting of 30,000,000 shares of common stock with a par value of US$0.0001 per share, 2,803,774 shares of non-voting common stock with a par value of US$0.0001 per share and 10,000,000 shares of preferred stock with a par value of US$0.0001 per share.
Our amended and restated certificate of incorporation, or the Charter, authorizes us to issue up to 42,803,774 shares consisting of 30,000,000 shares of common stock with a par value of $0.0001 per share, 2,803,774 shares of non-voting common stock with a par value of $0.0001 per share and 10,000,000 shares of preferred stock with a par value of $0.0001 per share.
Our ability to publicly or privately sell equity securities and the liquidity of our shares of common stock could be adversely affected if we are delisted from the Nasdaq Capital Market. ● Our financial condition raises substantial doubt as to our ability to continue as a going concern. ● Unfavorable global economic or political conditions could adversely affect our business, financial condition or results of operations. ● Prolonged inflation rates could negatively impact our revenues and profitability if increases in the prices of our products or a decrease in customer spending results in lower sales. ● We may need to raise additional capital to meet our business requirements in the future, and such capital raising may be costly or difficult to obtain and could dilute our stockholders’ ownership interests. ● Our indebtedness could adversely affect our ability to raise additional capital to fund operations, limit our ability to react to changes in the economy or our industry and prevent us from meeting our financial obligations. ● To support our business growth, in the past years we increased our focus on serving certain IoT verticals, while continuing to serve our existing Telco customers.
Our ability to publicly or privately sell equity securities and the liquidity of our shares of common stock could be adversely affected if we are delisted from the Nasdaq Capital Market. ● Our financial condition raises substantial doubt as to our ability to continue as a going concern. ● Unfavorable global economic or political conditions could adversely affect our business, financial condition or results of operations. ● Prolonged inflation rates could negatively impact our revenues and profitability if increases in the prices of our products or a decrease in customer spending results in lower sales. ● We may need to raise additional capital to meet our business requirements in the future, and such capital raising may be costly or difficult to obtain and could dilute our stockholders’ ownership interests. 24 ● Our indebtedness could adversely affect our ability to raise additional capital to fund operations, limit our ability to react to changes in the economy or our industry and prevent us from meeting our financial obligations. ● To support our business growth, in the past years we increased our focus on serving certain IoT verticals, while continuing to serve our existing Telco customers.
Any such claims or lawsuit could: ● be time-consuming and expensive to defend, whether meritorious or not; ● require us to stop providing products or services that use the technology that infringes the other party’s intellectual property; ● divert the attention of our technical and managerial resources; ● require us to enter into royalty or licensing agreements with third-parties, which may not be available on terms that we deem acceptable; ● prevent us from operating all or a portion of our business or force us to redesign our products, services or technology, which could be difficult and expensive and may make the performance or value of our product or service offerings less attractive; ● subject us to significant liability for damages or result in significant settlement payments; or ● require us to indemnify our customers.
Any such claims or lawsuit could: ● be time-consuming and expensive to defend, whether meritorious or not; ● require us to stop providing products or services that use the technology that infringes the other party’s intellectual property; 38 ● divert the attention of our technical and managerial resources; ● require us to enter into royalty or licensing agreements with third-parties, which may not be available on terms that we deem acceptable; ● prevent us from operating all or a portion of our business or force us to redesign our products, services or technology, which could be difficult and expensive and may make the performance or value of our product or service offerings less attractive; ● subject us to significant liability for damages or result in significant settlement payments; or ● require us to indemnify our customers.
Our Charter and Bylaws, include provisions that: ● permit the board of directors to establish the number of directors and fill any vacancies and newly-created directorships; 44 ● classify our board of directors is classified into three classes of directors with staggered three-year terms and stockholders will only be able to remove directors from office for cause; and ● provide that the board of directors is expressly authorized to make, alter, or repeal our Bylaws.
Our Charter and Bylaws, include provisions that: ● permit the board of directors to establish the number of directors and fill any vacancies and newly-created directorships; ● classify our board of directors is classified into three classes of directors with staggered three-year terms and stockholders will only be able to remove directors from office for cause; and ● provide that the board of directors is expressly authorized to make, alter, or repeal our Bylaws.
As a result, it is unclear if, and to what extent, our research and development employees may be able to claim compensation with respect to our future revenues. Such claims, if successfully asserted, could adversely affect our results of operations and profitability. We may be adversely affected by fluctuations in the currency exchange rate of the Israeli Shekel.
As a result, it is unclear if, and to what extent, our research and development employees may be able to claim compensation with respect to our future revenues. Such claims, if successfully asserted, could adversely affect our results of operations and profitability. 43 We may be adversely affected by fluctuations in the currency exchange rate of the Israeli Shekel.
Additionally, moving forward we anticipate having a limited number of shares in our public float, and as a result, there could be extreme fluctuations in the price of our common stock. Our issuance of additional capital stock in connection with financings, acquisitions, investments, our 2015 Equity Incentive Plan, or otherwise will dilute all other stockholders.
Additionally, moving forward we anticipate having a limited number of shares in our public float, and as a result, there could be extreme fluctuations in the price of our common stock. 47 Our issuance of additional capital stock in connection with financings, acquisitions, investments, our 2015 Equity Incentive Plan, or otherwise will dilute all other stockholders.
Our senior management team may not successfully or efficiently manage our transition to a public company that is subject to significant regulatory oversight and reporting obligations. 39 We are an “emerging growth company,” and our compliance with the reduced reporting and disclosure requirements applicable to “emerging growth companies” may make our common stock less attractive to investors.
Our senior management team may not successfully or efficiently manage our transition to a public company that is subject to significant regulatory oversight and reporting obligations. We are an “emerging growth company,” and our compliance with the reduced reporting and disclosure requirements applicable to “emerging growth companies” may make our common stock less attractive to investors.
Undetected material weaknesses in our internal controls over financial reporting could lead to restatements of our financial statements and require us to incur the expense of remediation. 41 Our disclosure controls and procedures may not prevent or detect all errors or acts of fraud. We are subject to certain reporting requirements of the Exchange Act.
Undetected material weaknesses in our internal controls over financial reporting could lead to restatements of our financial statements and require us to incur the expense of remediation. Our disclosure controls and procedures may not prevent or detect all errors or acts of fraud. We are subject to certain reporting requirements of the Exchange Act.
There can be no assurance that we will achieve positive cash flow in the near future or at all. 23 Our financial condition raises substantial doubt as to our ability to continue as a going concern. Our consolidated financial statements have been prepared assuming that we will continue to operate as a going concern.
There can be no assurance that we will achieve positive cash flow in the near future or at all. Our financial condition raises substantial doubt as to our ability to continue as a going concern Our consolidated financial statements have been prepared assuming that we will continue to operate as a going concern.
The loss of services of our senior management team, particularly our Chief Executive Officer, could significantly delay or prevent the achievement of our development and strategic objectives, which could adversely affect our business, financial condition and results of operations. We may face the effects of increased competition and rapid technological changes.
The loss of services of our senior management team, particularly our Chief Executive Officer, could significantly delay or prevent the achievement of our development and strategic objectives, which could adversely affect our business, financial condition and results of operations. 33 We may face the effects of increased competition and rapid technological changes.
In the event of a delisting, we would attempt to take actions to restore our compliance with Nasdaq’s listing requirements, but we can provide no assurance that any such action taken by us would allow our shares of common stock to become listed again, stabilize the market price or improve the liquidity of our securities, prevent our shares of common stock from dropping below the Nasdaq minimum bid price requirement or prevent future non-compliance with Nasdaq’s listing requirements. 24 Unfavorable global economic or political conditions could adversely affect our business, financial condition or results of operations.
In the event of a delisting, we would attempt to take actions to restore our compliance with Nasdaq’s listing requirements, but we can provide no assurance that any such action taken by us would allow our shares of common stock to become listed again, stabilize the market price or improve the liquidity of our securities, prevent our shares of common stock from dropping below the Nasdaq minimum bid price requirement or prevent future non-compliance with Nasdaq’s listing requirements. 29 Unfavorable global economic or political conditions could adversely affect our business, financial condition or results of operations.
Refer to “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” for additional information on supply constraints related to the COVID-19 pandemic. Demand for our products and solutions may not grow or may decline.
Refer to “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” for additional information on supply constraints related to the COVID-19 pandemic. 31 Demand for our products and solutions may not grow or may decline.
If we do not have sufficient patent life to protect our products, our business and results of operations will be adversely affected. We may not be able to adequately defend against piracy of intellectual property in foreign jurisdictions.
If we do not have sufficient patent life to protect our products, our business and results of operations will be adversely affected. 40 We may not be able to adequately defend against piracy of intellectual property in foreign jurisdictions.
Further, our contractual arrangements may not effectively prevent disclosure of our confidential information or provide an adequate remedy in the event of unauthorized disclosure of our confidential information, and we may be unable to detect the unauthorized use of, or take appropriate steps to enforce, our intellectual property rights. 34 We make business decisions about when to seek patent protection for a particular technology and when to rely upon trade secret protection, and the approach we select may ultimately prove to be inadequate.
Further, our contractual arrangements may not effectively prevent disclosure of our confidential information or provide an adequate remedy in the event of unauthorized disclosure of our confidential information, and we may be unable to detect the unauthorized use of, or take appropriate steps to enforce, our intellectual property rights. 39 We make business decisions about when to seek patent protection for a particular technology and when to rely upon trade secret protection, and the approach we select may ultimately prove to be inadequate.
Our wholly owned subsidiary, Actelis Israel, which manages our research and development efforts, has been financed in part through royalty-bearing grants in an aggregate amount of approximately $14 million (plus accrued interest), received from the Israeli Innovation Authority (formerly known as the Office of the Chief Scientist of the Israeli Ministry of Economy), or the IIA, as of December 31, 2024.
Our wholly owned subsidiary, Actelis Israel, which manages our research and development efforts, has been financed in part through royalty-bearing grants in an aggregate amount of approximately $14 million (plus accrued interest), received from the Israeli Innovation Authority (formerly known as the Office of the Chief Scientist of the Israeli Ministry of Economy), or the IIA, as of December 31, 2025.
You should carefully consider all of the risks described more fully in the section titled “Risk Factors” in this Annual Report on page 23, before deciding to invest in our common stock. If any of these risks actually occurs, our business, financial condition and results of operations would likely be materially adversely affected.
You should carefully consider all of the risks described more fully in the section titled “Risk Factors” in this Annual Report on page 24 , before deciding to invest in our common stock. If any of these risks actually occurs, our business, financial condition and results of operations would likely be materially adversely affected.
We are continuing to monitor the situation in Ukraine, the Middle East and globally, and assessing its potential impact on our business. 31 In addition, increases in inflation raise our costs for commodities, labor, materials and services and other costs required to grow and operate our business, and failure to secure these on reasonable terms may adversely impact our financial condition.
We are continuing to monitor the situation in Ukraine, the Middle East and globally, and assessing its potential impact on our business. 36 In addition, increases in inflation raise our costs for commodities, labor, materials and services and other costs required to grow and operate our business, and failure to secure these on reasonable terms may adversely impact our financial condition.
This change in our strategy may make it more difficult to evaluate our business growth and future prospects, and may increase the risk that we will not be successful in our plans. ● We may have ineffective sales and marketing efforts. 20 ● We outsource our product manufacturing and are dependent on our key manufacturers, and on our component and OEM suppliers.
This change in our strategy may make it more difficult to evaluate our business growth and future prospects, and may increase the risk that we will not be successful in our plans. ● We may be ineffective in our sales and marketing efforts. ● We outsource our product manufacturing and are dependent on our key manufacturers, and on our component and OEM suppliers.
Factors that may cause fluctuations in our quarterly financial results include: ● our ability to attract new customers and increase revenue from our existing customers; ● the loss of existing customers; ● customer satisfaction with our products, solutions, platform capabilities and customer support; ● mergers and acquisitions or other factors resulting in the consolidation of our customer base; 29 ● mix of our revenue; ● our ability to gain new partners and retain existing partners; ● fluctuations in share-based compensation expense; ● decisions by potential customers to purchase competing offerings or develop in-house technologies and solutions as alternatives to our offerings; ● changes in the spending patterns of our customers; ● the amount and timing of operating expenses related to the maintenance and expansion of our business and operations, including investments in research and development, sales and marketing, and general and administrative resources; ● network outages; ● developments or disputes concerning our intellectual property or proprietary rights, our products and services, or third-party intellectual property or proprietary rights; ● negative publicity about our company, our offerings or our partners, including as a result of actual or perceived breaches of, or failures relating to, privacy, data protection or data security; ● the timing of expenses related to the development or acquisition of technologies or businesses and potential future charges for impairment of goodwill from acquired companies; ● general economic, industry, and market conditions; ● the impact of pandemics, such as the COVID-19 pandemic, or any other, epidemic, outbreak of infectious disease or other global health crises on our business, the businesses of our customers and partners and general economic conditions; ● the impact of political uncertainty or unrest; ● changes in our pricing policies or those of our competitors; ● fluctuations in the growth rate of the markets that our offerings address; ● seasonality in the underlying businesses of our customers, including budgeting cycles, purchasing practices and usage patterns; ● the business strengths or weakness of our customers; ● our ability to collect timely on invoices or receivables; ● the cost and potential outcomes of future litigation or other disputes; ● future accounting pronouncements or changes in our accounting policies; ● our overall effective tax rate, including impacts caused by any reorganization in our corporate tax structure and any new legislation or regulatory developments; ● our ability to successfully expand our business in the United States and internationally; ● fluctuations in foreign currency exchange rates; and 30 ● the timing and success of new products and solutions introduced by us or our competitors, or any other change in the competitive dynamics of our industry, including consolidation among competitors, customers or partners.
Factors that may cause fluctuations in our quarterly financial results include: ● our ability to attract new customers and increase revenue from our existing customers; ● the loss of existing customers; ● customer satisfaction with our products, solutions, platform capabilities and customer support; ● mergers and acquisitions or other factors resulting in the consolidation of our customer base; ● mix of our revenue; ● our ability to gain new partners and retain existing partners; ● fluctuations in share-based compensation expense; ● decisions by potential customers to purchase competing offerings or develop in-house technologies and solutions as alternatives to our offerings; ● changes in the spending patterns of our customers; 34 ● the amount and timing of operating expenses related to the maintenance and expansion of our business and operations, including investments in research and development, sales and marketing, and general and administrative resources; ● network outages; ● developments or disputes concerning our intellectual property or proprietary rights, our products and services, or third-party intellectual property or proprietary rights; ● negative publicity about our company, our offerings or our partners, including as a result of actual or perceived breaches of, or failures relating to, privacy, data protection or data security; ● the timing of expenses related to the development or acquisition of technologies or businesses and potential future charges for impairment of goodwill from acquired companies; ● general economic, industry, and market conditions; ● the impact of pandemics, such as the COVID-19 pandemic, or any other, epidemic, outbreak of infectious disease or other global health crises on our business, the businesses of our customers and partners and general economic conditions; ● the impact of political uncertainty or unrest; ● changes in our pricing policies or those of our competitors; ● fluctuations in the growth rate of the markets that our offerings address; ● seasonality in the underlying businesses of our customers, including budgeting cycles, purchasing practices and usage patterns; ● the business strengths or weakness of our customers; ● our ability to collect timely on invoices or receivables; ● the cost and potential outcomes of future litigation or other disputes; ● future accounting pronouncements or changes in our accounting policies; ● our overall effective tax rate, including impacts caused by any reorganization in our corporate tax structure and any new legislation or regulatory developments; ● our ability to successfully expand our business in the United States and internationally; ● fluctuations in foreign currency exchange rates; and ● the timing and success of new products and solutions introduced by us or our competitors, or any other change in the competitive dynamics of our industry, including consolidation among competitors, customers or partners. 35 The impact of one or more of the foregoing or other factors may cause our results of operations to vary significantly.
If a court were to find the exclusive forum provision of our Charter inapplicable or unenforceable with respect to one or more of the specified types of actions or proceedings, we may incur additional costs associated with resolving such matters in other jurisdictions, which could materially and adversely affect our business, financial condition and results of operations and result in a diversion of the time and resources of our management and board of directors.
If a court were to find the exclusive forum provision of our Charter inapplicable or unenforceable with respect to one or more of the specified types of actions or proceedings, we may incur additional costs associated with resolving such matters in other jurisdictions, which could materially and adversely affect our business, financial condition and results of operations and result in a diversion of the time and resources of our management and board of directors. 50 ITEM 1B.
Risks Related to Managing Our Business Operations in Israel Conditions in the Middle East and in Israel, where our research and development facilities are located, may harm our operations. Our office where we conduct our research and development, operations, sales outside the Americas, and administration activities, is located in Israel. Many of our employees are residents of Israel.
Risks Related to Managing Our Business Operations in Israel Geo-Political conditions in the Middle East and in Israel, where our research and development facilities are located, may harm our operations. Our office where we conduct our research and development, operations, sales outside the Americas, and administration activities, is located in Israel. Many of our employees are residents of Israel.
We may not have sufficient resources to enforce our intellectual property rights or to defend our patents against challenges from others. Any failure to protect our intellectual property rights could impair our ability to protect our proprietary technology and our brand. Our success and ability to compete depend largely upon our intellectual property.
We do not have sufficient resources to enforce our intellectual property rights or to defend our patents against challenges from others. Any failure to protect our intellectual property rights could impair our ability to protect our proprietary technology and our brand. Our success and ability to compete depend largely upon our intellectual property.
As a result, our shareholders could lose confidence in our financial and other public reporting, which would harm our business and the trading price of our commons stock. 22 RISK FACTORS Investing in our common stock involves a high degree of risk.
As a result, our shareholders could lose confidence in our financial and other public reporting, which would harm our business and the trading price of our commons stock. 26 RISK FACTORS Investing in our common stock involves a high degree of risk.
Risks Related to Managing Our Business Operations in Israel ● Conditions in the Middle East and in Israel, where our research and development facilities are located, may harm our operations. 21 ● Actelis Israel received Israeli government grants for certain of our research and development activities, the terms of which require us to pay royalties and satisfy specified conditions in order to manufacture products and transfer technologies outside of Israel.
Risks Related to Managing Our Business Operations in Israel ● Geo-Political conditions in the Middle East and in Israel, where our research and development facilities are located, may harm our operations. ● Actelis Israel received Israeli government grants for certain of our research and development activities, the terms of which require us to pay royalties and satisfy specified conditions in order to manufacture products and transfer technologies outside of Israel.
Any losses or damages incurred by us could have a material adverse effect on our business. Any armed conflicts or political instability in the region would likely negatively affect business conditions and could harm our results of operations. To-date, we have received Israeli government war related support funding of approximately $100,000. Finally, political conditions within Israel may affect our operations.
Any losses or damages incurred by us could have a material adverse effect on our business. Any armed conflicts or political instability in the region would likely negatively affect business conditions and could harm our results of operations. To-date, we have received Israeli government war related support funding of approximately $100,000.
Further financial statements may include an explanatory paragraph with respect to our ability to continue as a going concern. There can be no assurance that we will succeed in generating sufficient revenues from our product sales to continue our operations as a going concern.
Further financial statements includes an explanatory paragraph with respect to our ability to continue as a going concern. There can be no assurance that we will succeed in generating sufficient revenues from our product sales to continue our operations as a going concern.
Inflation rates, particularly in the United States, have increased in 2022 through 2024 at levels not seen in years in many countries where our customers reside.
Inflation rates, particularly in the United States, have increased in 2022 through 2025 at levels not seen in years in many countries where our customers reside.
These attacks resulted in extensive deaths, injuries and kidnapping of civilians and soldiers. Following the attack, Israel’s security cabinet declared war against Hamas and a military campaign against these terrorist organizations commenced in parallel to their continued rocket and terror attacks. On January 19, 2025, a temporary ceasefire went into effect, the result of which is uncertain.
These attacks resulted in extensive deaths, injuries and kidnapping of civilians and soldiers. Following the attack, Israel’s security cabinet declared war against Hamas and a military campaign against these terrorist organizations commenced in parallel to their continued rocket and terror attacks. On January 19, 2025, a temporary ceasefire went into effect.
If we cannot achieve and sustain profitability, our business, financial condition, and operating results will be adversely affected. We have incurred net losses in recent years, and we may not achieve or maintain profitability in the future. We experienced a net loss of $4.4 million and $6.3 million in the years ended December 31, 2024 and 2023, respectively.
If we cannot achieve and sustain profitability, our business, financial condition, and operating results will be adversely affected. We have incurred net losses in recent years, and we may not achieve or maintain profitability in the future. We experienced a net loss of $8.3 million and $4.4 million in the years ended December 31, 2025 and 2024, respectively.
The market price of our common stock may fluctuate significantly in response to numerous factors, many of which are beyond our control, including: ● overall performance of the equity markets and/or publicly listed technology companies; ● actual or anticipated fluctuations in our net revenues or other operating metrics; ● changes in the financial projections we provide to the public or our failure to meet these projections; ● failure of securities analysts to initiate or maintain coverage of us, changes in financial estimates by any securities analysts who follow our company, or our failure to meet the estimates or the expectations of investors; ● the economy as a whole and market conditions in our industry; ● political and economic stability in Israel; ● exchange rate fluctuations between U.S. dollars and Israeli New Shekel; ● rumors and market speculation involving us or other companies in our industry; ● announcements by us or our competitors of significant innovations, acquisitions, strategic partnerships, joint ventures, or capital commitments; ● new laws or regulations or new interpretations of existing laws or regulations applicable to our business; 43 ● lawsuits threatened or filed against us; ● recruitment or departure of key personnel; ● other events or factors, including those resulting from war, incidents of terrorism, or responses to these events; and ● the expiration of contractual lock-up or market standoff agreements.
The market price of our common stock may fluctuate significantly in response to numerous factors, many of which are beyond our control, including: ● overall performance of the equity markets and/or publicly listed technology companies; ● actual or anticipated fluctuations in our net revenues or other operating metrics; ● changes in the financial projections we provide to the public or our failure to meet these projections; ● the exercise of currently outstanding warrants in large numbers, which may cause downward pressure on our stock price; ● failure of securities analysts to initiate or maintain coverage of us, changes in financial estimates by any securities analysts who follow our company, or our failure to meet the estimates or the expectations of investors; 48 ● the economy as a whole and market conditions in our industry; ● political and economic stability in Israel; ● exchange rate fluctuations between U.S. dollars and Israeli New Shekel; ● rumors and market speculation involving us or other companies in our industry; ● announcements by us or our competitors of significant innovations, acquisitions, strategic partnerships, joint ventures, or capital commitments; ● new laws or regulations or new interpretations of existing laws or regulations applicable to our business; ● lawsuits threatened or filed against us; ● recruitment or departure of key personnel; ● other events or factors, including those resulting from war, incidents of terrorism, or responses to these events; and ● the expiration of contractual lock-up or market standoff agreements.
Military service call ups that result in absences of personnel from us for an extended period of time may materially and adversely affect our business, prospects, financial condition and results of operations. As of the date of this Annual Report, we currently have 38 full-time employees, with 33 employees located in Israel and 5 employee located outside of Israel.
Military service call ups that result in absences of personnel from us for an extended period of time may materially and adversely affect our business, prospects, financial condition and results of operations. As of the date of this annual report, we currently have 39 full-time employees, with 33 employees located in Israel and 6 employees located outside of Israel.
We currently derive a significant portion of our revenue from a limited number of our customers. For the years ended December 31, 2024 and December 31, 2023, our top ten customers in the aggregate accounted for approximately 74% and 66% of our revenues.
We currently derive a significant portion of our revenue from a limited number of our customers. For the years ended December 31, 2025 and December 31, 2024, our top ten customers in the aggregate accounted for approximately 62% and 74% of our revenues.
We have incurred significant losses and negative cash flows from operations and incurred losses of $ 4.4 million and $6.3 million for the years ended December 31, 2024 and 2023, respectively. During the years ended December 31, 2024 and 2023, we had negative cash flows from operations of $6.5 million and $6.6 million, respectively.
We have incurred significant losses and negative cash flows from operations and incurred losses of $8.3 million and $4.4 million for the years ended December 31, 2025 and 2024, respectively. During the years ended December 31, 2025 and 2024, we had negative cash flows from operations of $7.7 million and $6.5 million, respectively.
On August 25, 2023, we received a notification letter from the Listing Qualifications Staff (the “Staff”) of the Nasdaq Stock Market LLC (“Nasdaq”) indicating that we are not in compliance with Nasdaq Listing Rule 5550(b)(1) due to our failure to maintain a minimum of $2,500,000 in shareholders’ equity (the “Minimum Shareholders’ Equity Requirement”) or any alternatives to such requirement.
On August 25, 2023, we received a notification letter from the Listing Qualifications Staff (the “Staff”) of the Nasdaq Stock Market LLC (“Nasdaq”) indicating that we are not in compliance with Nasdaq Listing Rule 5550(b)(1) due to our failure to comply with the Minimum Shareholders’ Equity Requirement or any alternatives to such requirement.
For the years ended December 31, 2024 and December 31, 2023, our Telco customers in the aggregate increased by 1% from approximately 27% of our revenues in the year ended December 31, 2023, to 28% in the year ended December 31, 2024.
For the years ended December 31, 2025 and December 31, 2024, our Telco customers in the aggregate decreased by 1% from approximately 28% of our revenues in the year ended December 31, 2024, to 27% in the year ended December 31, 2025.
As a result, we had an accumulated deficit of $44 million as of December 31, 2024. We cannot predict when or whether we will reach or maintain profitability.
As a result, we had an accumulated deficit of $52 million as of December 31, 2025. We cannot predict when or whether we will reach or maintain profitability.
The strengthening of the shekel against the dollar and the euro could erode our profitability. 38 Unanticipated changes in our effective tax rate and additional tax liabilities, including those resulting from our international operations or the implementation of new tax rules, could harm our future results. We are subject to income taxes in the United States and Israel.
Unanticipated changes in our effective tax rate and additional tax liabilities, including those resulting from our international operations or the implementation of new tax rules, could harm our future results. We are subject to income taxes in the United States and Israel.
The success of our activities may be affected by general economic and market conditions, like interest rates, currency exchange rate fluctuations, availability of credit, inflation rates, economic uncertainty, changes in laws, and United States and international political circumstances.
The success of our activities may be affected by general economic and market conditions, like interest rates, currency exchange rate fluctuations, availability of credit, inflation rates, economic uncertainty, changes in laws, and United States and international political circumstances. Unexpected volatility or illiquidity could impair profitability or result in losses.
Cyber-attacks become more sophisticated and evolve quickly, and these features may fail to protect our customers as intended and fail at preventing information security breaches. We plan to offer new cyber security products and features which we will either develop internally, obtain from partnerships with third-parties, or through acquisitions in the future.
We plan to offer new cyber security products and features which we will either develop internally, obtain from partnerships with third-parties, or through acquisitions in the future. These planned new cyber-security products and features may fail to protect our customers as intended and not prevent information security breaches.
Our shares of common stock could be delisted from the Nasdaq Capital Market if we fail to regain compliance with the Nasdaq’s stockholders’ equity continued listing standards. Our ability to publicly or privately sell equity securities and the liquidity of our shares of common stock could be adversely affected if we are delisted from the Nasdaq Capital Market.
Our ability to publicly or privately sell equity securities and the liquidity of our shares of common stock could be adversely affected if we are delisted from the Nasdaq Capital Market.
In addition, on May 20, 2024, Nasdaq notified us that we were not in compliance with the minimum bid price requirements set forth in Nasdaq Listing Rule 5550(a)(2), which requires our common stock to maintain a minimum bid price of $1.00 per share.
On May 12, 2025, Nasdaq notified us (the “Notification Letter”) that we were not in compliance with Nasdaq Listing Rule 5550(a)(2), which requires our Common Stock to maintain a minimum bid price of $1.00 per share (the “Bid Price Rule”).
Most of our officers and directors are residents of Israel. Since the establishment of the State of Israel in 1948, a number of armed conflicts have taken place between Israel and its neighboring countries, and between Israel and the Hamas (an Islamist militia and political group in the Gaza Strip) and Hezbollah (an Islamist militia and political group in Lebanon).
Since the establishment of the State of Israel in 1948, a number of armed conflicts have taken place between Israel and its neighboring countries, and between Israel and the Hamas (an Islamist terror and political group in the Gaza Strip), Hezbollah (an Islamist terror and political group in Lebanon), and Iran, including its accomplices.
As of December 31, 2024, our accumulated deficit was $ 44 million. We have funded our operations to date through equity and debt financing and have cash on hand (including short term bank deposits and restricted cash equivalents) of $2.3 million and long-term restricted cash and cash equivalents and restricted bank deposits of $0.2 million as of December 31, 2024.
As of December 31, 2025, our accumulated deficit was $52 million. We have funded our operations to date through equity and debt financing and have cash on hand (including short term bank deposits and restricted cash equivalents) of $4.4 million and long-term restricted bank deposits of $30 thousand and long term deposit of $91 thousand as of December 31, 2025.
Furthermore, the IIA may impose certain conditions on any arrangement under which it permits us to transfer technology or development outside of Israel. 37 The transfer or license of IIA-supported technology or know-how outside of Israel and the transfer of manufacturing of IIA-supported products, technology or know-how outside of Israel may involve the payment of significant amounts, depending upon the value of the transferred or licensed technology or know-how, our research and development expenses, the amount of IIA support, the time of completion of the IIA-supported research project and other factors.
The transfer or license of IIA-supported technology or know-how outside of Israel and the transfer of manufacturing of IIA-supported products, technology or know-how outside of Israel may involve the payment of significant amounts, depending upon the value of the transferred or licensed technology or know-how, our research and development expenses, the amount of IIA support, the time of completion of the IIA-supported research project and other factors.
If funds are not available to us, we may be required to delay, reduce the scope of, or eliminate research or development plans for, or commercialization efforts with respect to our products. This may raise substantial doubts about our ability to continue as a going concern.
If funds are not available to us, we may be required to delay, reduce the scope of, or eliminate research or development plans for, or commercialization efforts with respect to our products.
Moreover, as of that date, approxi mately 99,298 shares of our common stock are available for future grants under our stock incentive plan and for future purchase under our employee stock purchase plan. In addition, as of such date, up to $1.3 million of shares of common stock are issuable pursuant to our ATM Program with HCW.
Moreover, as of that date, approximately 6,750 shares of our common stock are available for future grants under our stock incentive plan and for future purchase under our employee stock purchase plan. In addition, as of such date, none shares of common stock are issuable pursuant to our ATM Program with HCW.
Once we are no longer an “emerging growth company,” or a “smaller reporting company”, our auditors will be required to issue an attestation report on the effectiveness of our internal controls on an annual basis.
Testing and maintaining internal controls may divert our management’s attention from other matters that are important to our business. Once we are no longer an “emerging growth company,” or a “smaller reporting company”, our auditors will be required to issue an attestation report on the effectiveness of our internal controls on an annual basis.
Any disruption or failure of these systems or services could cause substantial errors, processing inefficiencies, security breaches, inability to use the systems or process transactions, loss of customers or other business disruptions, all of which could negatively affect our business and financial performance. 28 We depend on our management team and other key employees, and the loss of one or more of these employees or an inability to attract and retain highly skilled employees could adversely affect our business.
Any disruption or failure of these systems or services could cause substantial errors, processing inefficiencies, security breaches, inability to use the systems or process transactions, loss of customers or other business disruptions, all of which could negatively affect our business and financial performance.
Although as of December 31, 2024, the material weaknesses in our internal control over financial reporting had been remediated, there can be no assurance that we will not suffer from other material weaknesses or significant deficiencies in the future.
Although as of December 31, 2025, the company reported that it has effective internal controls over financial reporting, there can be no assurance that we will not suffer from material weaknesses or significant deficiencies in the future.
Additionally, Yemeni rebel group, the Houthis, launched series of attacks on global shipping routes in the Red Sea, causing disruptions of supply chain. Such clashes may escalate in the future into a greater regional conflict.
Additionally, Yemeni rebel group, the Houthis, launched series of attacks on global shipping routes in the Red Sea, causing disruptions of supply chain. Such clashes may escalate in the future into a greater regional conflict. In March 2026, hostilities resumed along Israel’s northern border with Lebanon, when Hezbollah resumed its attacks as part of a broader regional escalation.
Our manufacturing process has been disrupted in the past, and may be disrupted in the future, by various factors, including but not limited to shipping delays, bottlenecks resulting from raw materials specific shortages, quality problems or a decrease in quality, manpower shortages by the manufacturers or political unease that would trigger the closure of a facility or financial insolvency. 26 Furthermore, a supplier may discontinue production of a particular part for any number of reasons, which may require us to purchase a large inventory of such discontinued parts in order to ensure that a continuous supply of such parts remains available to our customers.
Our manufacturing process has been disrupted in the past, and may be disrupted in the future, by various factors, including but not limited to shipping delays, bottlenecks resulting from raw materials specific shortages, quality problems or a decrease in quality, manpower shortages by the manufacturers or political unease that would trigger the closure of a facility or financial insolvency.
A material weakness is a deficiency or combination of deficiencies in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of a company’s annual and interim financial statements will not be detected or prevented on a timely basis.
A material weakness is a deficiency or combination of deficiencies in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of a company’s annual and interim financial statements will not be detected or prevented on a timely basis. 45 The rules governing the standards that must be met for our management to assess our internal control over financial reporting are complex and require significant documentation, testing, and possible remediation.
If actual growth is less than expected, it would negatively impact our ability to become profitable, which would require we raise additional capital if required, which may not be available on favorable terms, or at all, which would impact our ability to carry on operations. 27 If our internal company cyber-security measures are breached or fail and unauthorized access is obtained to our IT environment, we may incur significant losses of data, which we may not be able to recover and may experience a delay in our ability to conduct our day-to-day business.
If our internal company cyber-security measures are breached or fail and unauthorized access is obtained to our IT environment, we may incur significant losses of data, which we may not be able to recover and may experience a delay in our ability to conduct our day-to-day business.
As of December 31, 2024, we have 8,513,181 outstanding shares of common stock and no outstanding shares of preferred stock . In addition, as of such date, approximately 98,932 shares of common stock are issuable upon the exercise of outstanding stock options and the vesting of restricted stock units.
As of December 31, 2025, we had 8,058,392 outstanding shares of common stock and no outstanding shares of preferred stock. In addition, as of such date, approximately 3,853 shares of common stock were issuable upon the exercise of outstanding stock options and 173,473 shares vesting of restricted stock units.
Risks Related to Protecting Our Technology and Intellectual Property ● Claims by others that we infringe their intellectual property could force us to incur significant costs or revise the way we conduct our business. ● Our patents and proprietary technology may be challenged or disputed. ● Any failure to protect our intellectual property rights could impair our ability to protect our proprietary technology and our brand. ● The lives of our patents may not be sufficient to effectively protect our products and business.
Risks Related to Protecting Our Technology and Intellectual Property Claims by others that we infringe their intellectual property could force us to incur significant costs or revise the way we conduct our business. Our competitors protect their proprietary rights by means of patents, trade secrets, copyrights, trademarks and other intellectual property.
If such claims are successful, our business and results of operations could be harmed, and even if the claims do not result in litigation or are resolved in our favor, these claims, and the time and resources necessary to resolve them, could divert the resources of our management and harm our business, results of operations, and financial condition.
If such claims are successful, our business and results of operations could be harmed, and even if the claims do not result in litigation or are resolved in our favor, these claims, and the time and resources necessary to resolve them, could divert the resources of our management and harm our business, results of operations, and financial condition. 44 The individuals who now constitute our senior management team have limited experience managing a publicly-traded company and limited experience complying with the increasingly complex laws pertaining to public companies.
Our competitors protect their proprietary rights by means of patents, trade secrets, copyrights, trademarks and other intellectual property. We have not conducted an independent review of patents and other intellectual property issued to third parties, who may have patents or patent applications relating to our proprietary technology.
We have not conducted an independent review of patents and other intellectual property issued to third parties, who may have patents or patent applications relating to our proprietary technology. We may receive letters from third parties alleging, or inquiring about, possible infringement, misappropriation, or violation of their intellectual property rights.
As part of our business strategy, we may acquire or make investments in complementary companies, products, or technologies and issue equity securities to pay for any such acquisition or investment.
As part of our business strategy, we may acquire or make investments in complementary companies, products, or technologies and issue equity securities to pay for any such acquisition or investment. Any such issuances of additional capital stock may cause stockholders to experience significant dilution of their ownership interests and the per-share value of our common stock to decline.
For these reasons, we cannot guarantee that the safeguards taken by us and the safeguards we will take in the future will completely prevent information security incidents or damages that may result from them as detailed above.
For these reasons, we cannot guarantee that the safeguards taken by us and the safeguards we will take in the future will completely prevent information security incidents or damages that may result from them as detailed above. 32 We provide cyber security features as part of our products that may not completely prevent information security breaches, and our products are installed in live customer environments and may be compromised by cyber-attacks and damage customer assets.
In accordance with Nasdaq Listing Rule 5815(d)(4)(B), we will remain subject to a panel monitor for equity compliance through August 27, 2025. As of the date of this filing, we believe that we are in compliance with the Minimum Shareholders’ Equity Requirement.
In accordance with Nasdaq Listing Rule 5815(d)(4)(B), we remained subject to a panel monitor for equity compliance through August 27, 2025.
Inferior internal controls could also cause investors to lose confidence in our reported financial information, which could have a negative effect on the trading price of our stock.
Inferior internal controls could also cause investors to lose confidence in our reported financial information, which could have a negative effect on the trading price of our stock. 46 We are required to disclose changes made in our internal controls and procedures on a quarterly basis and our management is required to assess the effectiveness of these controls annually.
Provisions in our charter documents and under Delaware law could make an acquisition of our company more difficult, limit attempts by our stockholders to replace or remove our current board of directors and limit the market price of our common stock.
If one or more of these analysts cease coverage of our company or fail to publish reports on us regularly, demand for our common stock could decrease, which might cause our stock price and trading volume to decline. 49 Provisions in our charter documents and under Delaware law could make an acquisition of our company more difficult, limit attempts by our stockholders to replace or remove our current board of directors and limit the market price of our common stock.
Accordingly, we have regained compliance with Nasdaq Listing Rule 5550(a)(2) and Nasdaq considers the prior bid price deficiency matter now closed. We have in the past, and may in the future, be unable to comply with certain of the listing standards that we are required to meet to maintain the listing of our ordinary shares on Nasdaq.
We have in the past, and may in the future, be unable to comply with certain of the listing standards that we are required to meet to maintain the listing of our shares of common stock on Nasdaq.
Unexpected volatility or illiquidity could impair profitability or result in losses. 32 We may be adversely affected by the political and economic situation in the U.S., Europe and a number of countries in Asia. The U.S. communications market is directly affected by economic developments in the U.S. economy.
We may be adversely affected by the political and economic situation in the U.S., Europe and a number of countries in Asia. The U.S. communications market is directly affected by economic developments in the U.S. economy. The European and Asian communications market is similarly reliant on political and economic stability in those regions.
To support our business growth, in the past years we increased our focus on serving certain IoT verticals, while continuing to serve our existing Telco customers. This change in our strategy may make it more difficult to evaluate our business growth and future prospects, and may increase the risk that we will not be successful in our plans.
This change in our strategy may make it more difficult to evaluate our business growth and future prospects, and may increase the risk that we will not be successful in our plans. Since our inception, our business was focused on serving Telcos for enterprises and residential customers.
Our business could be adversely impacted by changes in laws, regulations and tariffs related to government contracts. Federal or state government bodies or agencies have in the past adopted, and may in the future adopt, laws or regulations affecting the use of the Internet as a commercial medium.
Federal or state government bodies or agencies have in the past adopted, and may in the future adopt, laws or regulations affecting the use of the Internet as a commercial medium. Legislators, regulators, or government bodies or agencies may also make legal or regulatory changes or interpret or apply existing laws or regulations that relate to government contracts.
We are further required to comply with the requirements of the Israeli Encouragement of Industrial Research, Development and Technological Innovation Law, 5744-1984 (formerly known as the Law for Encouragement of Research and Development in the Industry, 1984), as amended, and related regulations, or the Research Law, with respect to those past grants.
We are committed to pay royalties at a rate of 3% on revenues up to the total amount of grants received, linked to the U.S. dollar and bearing interest at an annual rate of LIBOR applicable to U.S. dollar deposits. 42 We are further required to comply with the requirements of the Israeli Encouragement of Industrial Research, Development and Technological Innovation Law, 5744-1984 (formerly known as the Law for Encouragement of Research and Development in the Industry, 1984), as amended, and related regulations, or the Research Law, with respect to those past grants.
You should not rely on an investment in our common stock to provide dividend income. We do not plan to declare or pay any dividends on our capital stock in the foreseeable future. Instead, we intend to retain any earnings to finance the operation and expansion of our business.
We do not plan to declare or pay any dividends on our capital stock in the foreseeable future. Instead, we intend to retain any earnings to finance the operation and expansion of our business. Any credit agreements, which we may enter into with institutional lenders, may restrict our ability to pay dividends.
In recent years there has been an increase in the frequency and severity of cyber incidents (including cybercrime). This trend is expected to continue in the future and even worsen, despite all the defense mechanisms employed against it.
This trend is expected to continue in the future and even worsen, despite all the defense mechanisms employed against it.
Moreover, the scope of protection during the period of the patent term extension does not extend to the full scope of the claim, but instead only to the scope of the product as approved. Laws governing analogous patent term extensions in foreign jurisdictions vary widely, as do laws governing the ability to obtain multiple patents from a single patent family.
Laws governing analogous patent term extensions in foreign jurisdictions vary widely, as do laws governing the ability to obtain multiple patents from a single patent family.
Our patents issued as of March 20, 2025 will expire on dates ranging from September 25, 2025 to October 31, 2038, subject to any patent extensions that may be available for such patents.
Our patents issued as of March 20, 2025 will expire on dates ranging up to October 31, 2038, subject to any patent extensions that may be available for such patents. More specifically, the following patents will expire over the next three years:, US7606315, US7613235, EP1943827, EP3459181, GB2556826, MX279453, US7587042, IDP0030744.
The European and Asian communications market is similarly reliant on political and economic stability in those regions. Changing trends in these markets may lead to a decrease in investments and a delay in projects, which could harm our business. To reduce our sensitivity to market changes, we operate in a large number of different vertical markets and territories.
Changing trends in these markets may lead to a decrease in investments and a delay in projects, which could harm our business. To reduce our sensitivity to market changes, we operate in a large number of different vertical markets and territories. 37 Our business could be adversely impacted by changes in laws, regulations and tariffs related to government contracts.
In recent years, as we have further developed our technology and rolled out additional products, we turned our focus on serving the IoT markets. Our operations are focused on our fast-growing IoT business, while maintaining our commitment to our existing Telco customers. A portion of our revenue continues to be derived from our existing Telco customers.
Our operations are focused on our fast-growing IoT business, while maintaining our commitment to our existing Telco customers. A portion of our revenue continues to be derived from our existing Telco customers.
Such ESG matters may also impact our third-party contract manufacturers and other third parties on which we rely, which may augment or cause additional impacts on our business, financial condition, or results of operations. 33 Risks Related to Protecting Our Technology and Intellectual Property Claims by others that we infringe their intellectual property could force us to incur significant costs or revise the way we conduct our business.
Such ESG matters may also impact our third-party contract manufacturers and other third parties on which we rely, which may augment or cause additional impacts on our business, financial condition, or results of operations.
More specifically, the following patents will expire over the next three years:, US7606315, US7613235, EP1943827, EP3459181, GB2556826, MX279453, US7587042, IDP0030744. 35 In addition, although upon issuance in the United States a patent’s life can be increased based on certain delays caused by the USPTO, this increase can be reduced or eliminated based on certain delays caused by the patent applicant during patent prosecution.
In addition, although upon issuance in the United States a patent’s life can be increased based on certain delays caused by the USPTO, this increase can be reduced or eliminated based on certain delays caused by the patent applicant during patent prosecution. A patent term extension based on regulatory delay may be available in the United States.
Any such issuances of additional capital stock may cause stockholders to experience significant dilution of their ownership interests and the per-share value of our common stock to decline. 42 We do not intend to pay dividends on our common stock and, consequently, the ability of common stockholders to achieve a return on investment will depend on appreciation, if any, in the price of our common stock.
We do not intend to pay dividends on our common stock and, consequently, the ability of common stockholders to achieve a return on investment will depend on appreciation, if any, in the price of our common stock. You should not rely on an investment in our common stock to provide dividend income.
These claims and any resulting lawsuit, if successful, could subject us to significant liability for damages or interruption or cessation of our operations.
Any party asserting that we infringe, misappropriate, or violate proprietary rights may force us to defend ourselves, and potentially our customers, against the alleged claim. These claims and any resulting lawsuit, if successful, could subject us to significant liability for damages or interruption or cessation of our operations.
In addition, we may incur substantial costs in pursuing future capital financing, including investment banking fees, legal fees, accounting fees, securities law compliance fees, printing and distribution expenses and other costs.
In addition, we may incur substantial costs in pursuing future capital financing, including investment banking fees, legal fees, accounting fees, securities law compliance fees, printing and distribution expenses and other costs. We may also be required to recognize non-cash expenses in connection with certain securities we issue, such as convertible notes and warrants, which may adversely impact our financial condition.

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Item 2. Properties

Properties — owned and leased real estate

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Biggest changeWe intend to reduce our real estate footprint as much as possible by moving to a smaller space in Petach-Tikva, Israel in order to reduce costs. We believe our facilities are sufficient to meet our current needs and that suitable space will be available as and when needed. We do not own any real property.
Biggest changeWe believe our facilities are sufficient to meet our current needs and that suitable space will be available as and when needed. We do not own any real property.
ITEM 2. PROPERTIES. We lease our facility in California, which consists of approximately 3,000 square feet of office, lab and warehouse space. Our lease expires in October 2025.
ITEM 2. PROPERTIES. We had leased a facility in Fremont, California, which consisted of approximately 3,000 square feet of office, lab and warehouse space through October 2025.
Removed
We also lease an office and lab facility in Petach-Tikva, Israel consisting of approximately 13,500 square feet serving our R&D personnel, operations and administration as well as our EMEA and APAC sales team. Our lease expires in December 2025.
Added
We vacated the Fremont facility on November 6, 2025 and moved our business location to a Regus/HQ.com hosted facility in Sunnyvale, and established a service agreement with a Loveland, CO based company to host our inventory, testing lab and provide services as needed for customer success.
Added
Our occupation of the Sunnyvale facility runs on a monthly basis, with an initial one-year commitment which runs through October 2026. Our inventory hosting services in Loveland will run on a continuous basis until terminated.
Added
The lease in Petach Tikva, Israel terminated December 31, 2025 and we signed a new amendment with the same landlord in the same building for a different suite and warehouse approximately 50% smaller for through December 2027. This downsizing effort was done in an effort to refit our lease to conform to our current needs and for cost savings purposes.

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Biggest changeITEM 4. MINE SAFETY DISCLOSURES 46 PART II ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES 47 ITEM 6. [RESERVED] 47 ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 48 ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 56 ITEM 8.
Biggest changeITEM 4. MINE SAFETY DISCLOSURES 51 PART II ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES 52 ITEM 6. [RESERVED] 52 ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 53 ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 63 ITEM 8.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeStockholders As of March 21, 2025, we had 8,513,181 outstanding shares of common stock outstanding, including treasury shares, no outstanding shares of preferred stock, and approximately 51 holders of record of our outstanding shares of common stock.
Biggest changeStockholders As of March 15, 2026, we had 26,725,763 outstanding shares of common stock outstanding, including treasury shares, no outstanding shares of preferred stock, and approximately 49 holders of record of our outstanding shares of common stock.
Unregistered Sales of Equity Securities We have previously disclosed all sales of securities without registration under the Securities Act of 1933, as amended (the “Securities Act”). Repurchases of Equity Securities by the Issuer and Affiliated Purchasers During the year ended December 2024, the Company did not make any repurchases of its shares of common stock.
Unregistered Sales of Equity Securities We have previously disclosed all sales of securities without registration under the Securities Act of 1933, as amended (the “Securities Act”). Repurchases of Equity Securities by the Issuer and Affiliated Purchasers During the year ended December 2025, the Company did not make any repurchases of its shares of common stock.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeOther Income Our Other Income for the year ended December 31, 2024, amounted to approximately $160,000, compared to none for the year ended December 31, 2023. The increase is driven by a government grant from the State of Israel associated with the Iron Swords war, received during the second quarter of 2024.
Biggest changeThe income in 2024 is related to government grant from the State of Israel associated with the Iron Swords war. 55 Operating Loss Our operating loss for the year ended December 31, 2025, was $7.2 million, compared to an operating loss of $3.8 million for the year ended December 31, 2024.
Our solutions aim to solve these challenges by instantly enhancing performance of such existing copper and coax infrastructure to fiber-grade performance, through the use of advanced signal processing a unique, patented network architecture, without the need to run new fiber to hard-to-reach locations; thus, effectively accelerating deployment of many IoT projects, as we estimate, sometimes from many months to only days.
Our solutions aim to solve these challenges by instantly enhancing performance of such existing copper and coax infrastructure to fiber-grade performance, through the use of advanced signal processing and unique, patented network architecture, without the need to run new fiber to hard-to-reach locations; thus, effectively accelerating deployment of many IoT projects, as we estimate, sometimes from many months to only days.
We believe that our solutions can provide connectivity over either fiber, copper or coax with speeds of up to multi-Gigabit communication, while supporting Fiber-grade reliability and quality. A primary focus of ours is to provide our customers with a cyber-secure network solution. We currently offer Triple-Shield protection of data delivered with coding, scrambling and encryption of the network traffic.
We believe that our solutions can provide connectivity over either fiber or copper with speeds of up to multi-Gigabit communication, while supporting Fiber-grade reliability and quality. A primary focus of ours is to provide our customers with a cyber-secure network solution. We currently offer Triple-Shield protection of data delivered with coding, scrambling and encryption of the network traffic.
Our patent protected hybrid-fiber networking solutions deliver excellent communication over fiber to locations that may be easy to reach with new fiber. However, for locations that are difficult, or too costly to reach with fiber, we can upgrade existing copper or coax lines to deliver cyber-hardened, high-speed connectivity without needing to replace the existing infrastructure with new fiber.
Our patent protected hybrid fiber networking solutions deliver excellent communication over fiber to locations that may be easy to reach with new fiber. However, for locations that are difficult, or too costly to reach with fiber, we can upgrade existing copper lines to deliver cyber-hardened, high-speed connectivity without needing to replace the existing copper infrastructure with new fiber.
Adjusted results should be considered only in conjunction with results reported according to GAAP. The non-GAAP financial measures are presented for supplemental informational purposes only. They should not be considered a substitute for financial information presented in accordance with GAAP, and may be different from similarly-titled non-GAAP measures used by other companies.
Adjusted results should be considered only in conjunction with results reported according to GAAP. 56 The non-GAAP financial measures are presented for supplemental informational purposes only. They should not be considered a substitute for financial information presented in accordance with GAAP, and may be different from similarly-titled non-GAAP measures used by other companies.
The Company also offers its customers product support services which include telephone support, remote diagnostics and access to on-site technical support personnel. The Company’s customers are comprised of end-users, resellers, system integrators and distributors.
The Company also offers its customers product support services which include telephone support, remote diagnostics and access to on-site technical support personnel. 62 The Company’s customers are comprised of end-users, resellers, system integrators and distributors.
As such, the establishment of SSP of our hardware, management software, maintenance and other services, and directly impact the amount of revenues recognized, and therefore also impacts the overall timing of revenue recognition. We review and analyze the SSP ranges we have from time to time but no more than annually, which have not changed in 2024.
As such, the establishment of SSP of our hardware, management software, maintenance and other services, and directly impact the amount of revenues recognized, and therefore also impacts the overall timing of revenue recognition. We review and analyze the SSP ranges we have from time to time but no more than annually, which have not changed in 2025.
As a result of many factors, including those factors set forth in “Part I, Item 1A - Risk Factors” section of this Annual Report on Form 10-K, our actual results could differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis.
As a result of many factors, including those factors set forth in “Part I, Item 1A - Risk Factors” section of this Annual Report on Form 10-K, our actual results could differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis. Overview Actelis Networks, Inc.
Accounting standards updates not yet adopted Please see Note 2 (dd) to our consolidated financial statements included elsewhere in this prospectus for information.
Accounting standards updates not yet adopted Please see Note 2 (ee) to our consolidated financial statements included elsewhere in this prospectus for information.
In September 2024, we entered into the ATM Agreement with HCW pursuant to which we may offer and sell, at our option, up to $3.4 million of our shares of common stock through an at-the-market equity program under which HCW agreed to act as sales agent.
In September 2024, we entered into the ATM Agreement with HCW pursuant to which we may offer and sell, at our option, up to $16.7 million of our shares of common stock through an at-the-market equity program under which HCW agreed to act as sales agent.
We derive a majority of our revenues from our existing and new IoT (including federal and DoD) customers. For the years ended December 31, 2024 and December 31, 2023, our IoT customers in the aggregate accounted for approximately 72% and 73% of our revenues, respectively. We derive a significant portion of our revenues from a limited number of our customers.
We derive a majority of our revenues from our existing and new IoT (including federal and DoW) customers. For the years ended December 31, 2025 and December 31, 2024, our IoT customers in the aggregate accounted for approximately 73% and 72% of our revenues, respectively. We derive a significant portion of our revenues from a limited number of our customers.
Our operations are focused on our fast-growing IoT, federal and DoD markets, while maintaining our commitment to our existing Telco customers, and particularly MDUs. In 2024, we introduced new product offering, some of which could serve both the IoT markets and our Telco customers.
Our operations are focused on our fast-growing federal and DoW markets, Intelligent Transportation and MDUs while maintaining our commitment to our existing Telco customers. In 2024, we introduced new product offering, some of which could serve both the IoT markets and our Telco customers.
We believe that such hybrid fiber networking solutions have distinct advantages in most real-life installations, while providing significant budget savings and accelerating deployment of modern IoT networks. Based on our experience, most IoT projects have challenging, hard to reach with fiber locations which may significantly increase such projects’ timeline and budgets.
We believe that such hybrid fiber copper networking solution has distinct advantages in most real-life installations, while providing significant budget savings and accelerating deployment of modern IoT networks. Based on our experience, most IoT projects have challenging, hard to reach with fiber locations which may explode such projects’ timeline and budgets.
For the year ended December 31 (U.S. dollars in thousands) 2024 2023 Revenues $ 7,760 $ 5,606 Non-GAAP Adjusted EBITDA (3,481 ) (6,066 ) As a percentage of revenues (44.86 )% (108.20 )% Liquidity and Capital Resources Since our inception, we have financed our operations primarily through the sale of equity securities, debt financing, convertible loans and royalty-bearing grants that we received from the Israel Innovation Authority.
For the year ended December 31 (U.S. dollars in thousands) 2025 2024 Revenues $ 3,671 $ 7,760 Non-GAAP Adjusted EBITDA (6,856 ) (3,481 ) As a percentage of revenues (186.73 )% (44.86 )% Liquidity and Capital Resources Since our inception, we have financed our operations primarily through the sale of equity securities, debt financing, convertible loans and royalty-bearing grants that we received from the Israel Innovation Authority.
In recent years, as we have further developed our technology and introduced additional products, we turned our focus on serving the wide-area IoT, federal and DoD markets, as well as MDUs, and introduced, in 2024, our cyber-aware networking solutions for IoT markets as well.
In recent years, as we have further developed our technology and introduced additional products, we turned our focus on serving the wide-area IoT, federal and DoW markets, as well as multi-dwelling units, and introduced, in 2024, our cyber-aware networking solutions for IoT markets as well.
Services relating to repair or replacement of hardware beyond the standard warranty period are offered under renewable, fee-based contracts and include telephone support, remote diagnostics and access to on-site technical support personnel. The Company also offers its customers other management software.
Services relating to repair or replacement of hardware beyond the standard warranty period are offered under renewable, fee-based contracts and include telephone support, remote diagnostics and access to on-site technical support personnel. The Company also offers its customers other management software. The Company sells its other non-embedded software either as perpetual or as term-based licenses.
See notes 2 to the condensed consolidated financial statements 54 Critical Accounting Policies and Estimates Management’s discussion and analysis of our financial condition and results of operations is based on the audited consolidated financial statements which are included elsewhere in this report.
Critical Accounting Policies and Estimates Management’s discussion and analysis of our financial condition and results of operations is based on the audited consolidated financial statements which are included elsewhere in this report.
Net cash provided by investing activities was $197,000 for the year ended December 31, 2024, compared to cash provided by investing activities of $3.8 million for the year ended December 31, 2023. The increase from the corresponding period was mainly due to the reduction in short-term bank deposits.
Net cash used by investing activities was $8,000 for the year ended December 31, 2025, compared to cash provided by investing activities of $197,000 for the year ended December 31, 2024. The decrease from the corresponding period was mainly due to the reduction in short-term bank deposits.
As of the date of this report, we have sold 2,472,850 of our shares of common stock for total gross proceeds of approximately $3.4 million under the ATM program.
As of the date of this report, we have sold 4,646,045 of our shares of common stock for total gross proceeds of approximately $4.7 million under the ATM program.
We may refinance newly issued invoices at any time up to the Credit Line limit and subject to the terms of the Credit Line. As of December 31, 2024, we used $0.8 million of the Credit Line, and the current balance outstanding is approximately $529,000. Results of Operations The table below provides our results of operations for the periods indicated.
We may refinance newly issued invoices at any time up to the Credit Line limit and subject to the terms of the Credit Line. As of December 31, 2025 the current balance outstanding is approximately $479,234. 54 Results of Operations The table below provides our results of operations for the periods indicated.
We have incurred significant losses and negative cash flows from operations and net loss was $4.4 million and $6.3 million for the years ended December 31, 2024, and December 31, 2023, respectively.
We have incurred significant losses and negative cash flows from operations and net loss was $8.3 million and $4.4 million for the years ended December 31, 2025, and December 31, 2024, respectively. During the years ended December 31, 2025, and December 31, 2024, we had negative cash flows from operations of $8.1 million and $6.5 million, respectively.
The Credit Line has been extended under February 1, 2026. The Credit Line balance drawn is examined every month and adjusted up to every three months, and the repayment of the Credit Line will be made up to every three months subject to the expiration of the financing period for the invoices that were financed.
The Credit Line balance drawn is examined every month, adjusted up to every three months, and the repayment of the Credit Line is made up to every three months subject to the expiration of the financing period for the invoices that were financed.
Our unique portfolio of hybrid fiber, environmentally hardened aggregation switches, high density Ethernet devices, advanced management software and AI-based cyber-security offering, unlocks the hidden value of essential networks and the devices they connect, delivering a safe and cyber-aware connectivity for rapid, cost-effective deployment.
Our unique portfolio of hybrid fiber, 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.
Year ended December 31 2024 2023 (dollars in thousands) Revenues 7,760 5,606 Cost of revenues 3,490 3,706 Gross profit 4,270 1,900 Research and development expenses 2,383 2,702 Sales and marketing, net 2,639 3,030 General and administrative 3,169 3,531 Other Income, net (163 ) - Operating loss (3,758 ) (7,363 ) Interest expenses (618 ) (766 ) Other financial income (expense), net 2 1,843 Net Comprehensive Loss for the year (4,374 ) (6,286 ) Year Ended December 31, 2024, Compared to Year Ended December 31, 2023 Revenues Our revenues for the year ended December 31, 2024 amounted to $7.8 million, compared to $5.6 million for the year ended December 31, 2023.
Year ended December 31 2025 2024 (dollars in thousands) Revenues 3,671 7,760 Cost of revenues 2,453 3,490 Gross profit 1,218 4,270 Research and development expenses 2,638 2,383 Sales and marketing, net 2,866 2,639 General and administrative 2,899 3,169 Other Income, net - (163 ) Operating loss (7,185 ) (3,758 ) Interest expenses (251 ) (618 ) Other financial income (expense), net (825 ) 2 Net Comprehensive Loss for the year (8,261 ) (4,374 ) Year Ended December 31, 2025, Compared to Year Ended December 31, 2024 Revenues Our revenues for the year ended December 31, 2025 amounted to $3.7 million, compared to $7.8 million for the year ended December 31, 2024.
The Company sells its other non-embedded software either as perpetual or as term-based licenses. 55 The Company provides, to certain customers, software updates that it chooses to develop, which the Company refers to as unspecified software updates, and enhancements related to the Company’s management software through support service contracts.
The Company provides, to certain customers, software updates that it chooses to develop, which the Company refers to as unspecified software updates, and enhancements related to the Company’s management software through support service contracts.
Cash used in operating activities (including the effect of exchange rate changes on cash and cash equivalents and restricted cash) amounted to $6.5 million for the year ended December 31, 2024, compared to $6.3 million for the year ended December 31, 2023. The decrease in cash used in operating activities was mainly due to cost reduction measures taken.
Cash used in operating activities (including the effect of exchange rate changes on cash and cash equivalents and restricted cash) amounted to $7.7 million for the year ended December 31, 2025, compared to $6.5 million for the year ended December 31, 2024. The increase from the corresponding period was mainly due to lower sales.
We have funded our operations to date through equity and debt financing and have cash on hand (including short term bank deposits and restricted cash equivalents) of $2.3 million and long-term restricted cash and cash equivalents and restricted bank deposits of $0.2 million as of December 31, 2024.
As of December 31, 2025, our accumulated deficit was $52 million. We have funded our operations to date through equity and debt financing and have cash on hand (including short term bank deposits and restricted cash equivalents) of $4.4 million and long-term restricted bank deposits of $30 thousand and long term deposit of $91 thousand as of December 31, 2025.
In addition, our solutions can also provide power over existing copper and coax lines to remotely power up network elements and IoT components connected to them (like cameras, small cell and Wi-Fi base stations sensors etc.).
This unique hybrid network approach is making IoT projects often significantly more affordable, fast to deploy and predictable to plan and budget. 53 In addition, our solutions can also provide power over existing copper and coax lines to remotely power up network elements and IoT components connected to them (like cameras, small cell and Wi-Fi base stations sensors etc.).
However, new fiber wireline infrastructure is costly to deploy, involves lengthy civil works to install, and, based on our internal calculations, often accounts for more than 50% of total cost of ownership (ToC) and time to deploy wide-area IoT projects. 48 Providing new fiber connectivity to hard-to-reach locations is especially costly and time-consuming, often requiring permits for boring, trenching, and right-of-way, sometimes done over many miles.
However, new fiber wireline infrastructure is costly to deploy, involves lengthy civil works to install, and, based on our internal calculations, often accounts for more than 50% of total cost of ownership (ToC) and time to deploy wide-area IoT projects.
Non-GAAP Financial Measures (U.S. dollars in thousands) Year Ended December 31, 2024 Year Ended December 31, 2023 Revenues $ 7,760 $ 5,606 GAAP net loss (4,374 ) (6,286 ) Interest Expense 618 766 Other financial (expense) income, net (2 ) (1,843 ) Tax Expense 103 78 Fixed asset depreciation expense 26 27 Stock based compensation 337 377 Research and development, capitalization - 444 Other one-time costs and expenses/(income) (189 ) 371 Non-GAAP Adjusted EBITDA (3,481 ) (6,066 ) GAAP net loss margin (56.37 )% (112.14 )% Adjusted EBITDA margin (44.86 )% (108.20 )% 51 Use of Non-GAAP Financial Information Non-GAAP Adjusted EBITDA, Adjusted EBITDA margin are Non-GAAP financial measures.
Non-GAAP Financial Measures (U.S. dollars in thousands) Year Ended December 31, 2025 Year Ended December 31, 2024 Revenues $ 3,671 $ 7,760 GAAP net loss (8,261 ) (4,374 ) Interest Expense 251 618 Other financial expense (income), net 825 (2 ) Tax Expense - 103 Fixed asset depreciation expense 20 26 Stock based compensation 309 337 Other one-time costs and expenses/(income) - (189 ) Non-GAAP Adjusted EBITDA (6,856 ) (3,481 ) GAAP net loss margin (225 )% (56.37 )% Adjusted EBITDA margin (186.73 )% (44.86 )% Use of Non-GAAP Financial Information Non-GAAP Adjusted EBITDA, Adjusted EBITDA margin are Non-GAAP financial measures.
The result for the network owner is a hybrid network that optimizes the use of both new Fiber (where available) as well as upgraded, fiber-grade copper and coax that is now modernized, digitized and cyber-hardened. This unique hybrid network approach is making IoT projects often significantly more affordable, fast to deploy and predictable to plan and budget.
The result for the network owner is a hybrid network that optimizes the use of both new Fiber (where available) as well as upgraded, fiber-grade copper and coax that is now modernized, digitized and cyber-hardened.
Cash Flows The table below, for the periods indicated, provides selected cash flow information: (U.S. dollars in thousands) Year Ended December 31, 2024 Year Ended December 31, 2023 Net cash used in operating activities (including the effect of exchange rate changes on cash and cash equivalents and restricted cash) $ (6,538 ) $ (6,346 ) Net cash provided by investing activities 197 3,821 Net cash provided by financing activities 3,093 3,761 Net change in cash $ (3,248 ) $ 1,236 As of December 31, 2024, we had cash, cash equivalents, and restricted cash of $2.3 million compared to $5.5 million of cash, cash equivalents and restricted cash as of December 31, 2023.
If we are unable to raise additional funds when desired, our business, financial condition and results of operations could be adversely affected. 60 Cash Flows The table below, for the periods indicated, provides selected cash flow information: (U.S. dollars in thousands) Year Ended December 31, 2025 Year Ended December 31, 2024 Net cash used in operating activities (including the effect of exchange rate changes on cash and cash equivalents and restricted cash) $ (7,694 ) $ (6,538 ) Net cash (used in)/ provided by investing activities (8 ) 197 Net cash provided by financing activities 9,797 3,093 Net change in cash $ 2,095 $ (3,248 ) As of December 31, 2025, we had cash, cash equivalents, and restricted cash of $4.4 million compared to $2.3 million of cash, cash equivalents and restricted cash as of December 31, 2024.
General and Administrative Expenses Our general and administrative expenses for the year ended December 31, 2024, amounted to $3.2 million compared to $3.5 million for the year ended December 31, 2023. The decrease was mainly due to cost reduction measures taken.
General and Administrative Expenses Our general and administrative expenses for the year ended December 31, 2025, amounted to $2.9 million compared to $3.2 million for the year ended December 31, 2024.
Management believes the following addresses the most critical accounting policies and estimates, which are those that are most important to the portrayal of our financial condition and results of operations and require management’s most difficult, subjective and complex judgments.
Management believes the following addresses the most critical accounting policies and estimates, which are those that are most important to the portrayal of our financial condition and results of operations and require management’s most difficult, subjective and complex judgments. 61 Critical judgement and estimates Critical judgement and estimates have been used primarily in estimating revenues and estimate of future usage of existing inventory to determine the net value of our inventory (see notes in financial statements).
Pursuant to the inducement letter, the holder agreed to exercise for cash its warrants to purchase an aggregate of 999,670 shares of our common stock at an exercise price of $2.00 per share, in consideration of our agreement to issue new common stock purchase warrants (the “July 2024 Warrants”), as descried below, to purchase up to an aggregate of 1,999,340 shares of our common stock (the “July 2024 Warrant Shares”), at an exercise price of $1.75 per share.
Pursuant to the Inducement Letter, the Holder agreed to exercise for cash the Existing Warrants to purchase an aggregate of 427,020 shares of the Company’s common stock at a reduced exercise price of $3.70 per share in consideration of the Company’s agreement to issue the New Warrants, as descried below, to purchase up to an aggregate of 640,530 New Warrant Shares at an exercise price of $3.70 per share.
Overview We are 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 (notably in multi-dwelling units) and campus applications.
(“Actelis,” “we,” “us,” “our,” “the Company,” “our company”) is a market leader in cyber-hardened, rapid-deployment networking solutions for wide-area IoT applications including federal, state and local government, intelligent traffic systems (“ITS”), military, utility, rail, telecom and campus applications.
Net cash provided by financing activities was $3.1 million for the year ended December 31, 2024, compared to $3.8 million for the year ended December 31, 2023. The decrease is related to the repayment of long-term loan, offset by funds raised from an investor warrant exercise.
Net cash provided by financing activities was $9.8 million for the year ended December 31, 2025, compared to $3.1 million for the year ended December 31, 2024.
The decrease is primarily attributable to cost reduction measures taken. Sales and Marketing Expenses Our sales and marketing expenses for the year ended December 31, 2024, amounted to $2.6 million compared to $3.0 for the year ended December 31, 2023. The decrease was mainly due to cost reduction measures taken.
Sales and Marketing Expenses Our sales and marketing expenses for the year ended December 31, 2025, amounted to $2.9 million compared to $2.6 million for the year ended December 31, 2024. The increase was primarily attributable to engaging consultants to expand market reach in primarily the government sector.
Financial Expenses (income), Net Our financial expenses, net for the year ended December 31, 2024, was approximately $620,000 of interest expense compared to $1.1 million (including approximately $800,000 in interest expenses) for the year ended December 31, 2023 The increase is mainly due to financial income in the prior year from bank deposits, increase due to warrant valuation and exchange rate differences not repeated in current period.
Financial Expenses (income), Net Our financial expenses, net for the year ended December 31, 2025, was approximately $1.08 million of interest expense, compared to $620,000 for the year ended December 31, 2024 The increase is mainly due to expenditure of $750,000 related to the Commitment Fee under the Common Stock Purchase Agreement payable in common shares issuance.
For the years ended December 31, 2024 and December 31, 2023, our top ten customers in the aggregate accounted for approximately 74% and 66% of our revenues. In December 2020, we entered into the Migdalor Loan, for a loan of up to approximately $6.0 million.
For the years ended December 31, 2025 and December 31, 2024, our top ten customers in the aggregate accounted for approximately 62% and 74% of our revenues. In February 2024, we entered into the Credit Line. The Credit Line is secured by customer invoices and incurs interest at a Federal SOFR rate plus 5.5%.
In connection with the July 2024 Warrant Inducement, we issued to certain designees of the Placement Agent warrants (the “July 2024 Placement Agent Warrants”) to purchase up to 69,977 shares of common stock (representing 7.0% of the Existing Warrants being exercised), which have the same terms as the July 2024 Warrants, except that the Placement Agent Warrants have an exercise price equal to $2.50 per share (125% of the exercise price of the June 2024 Warrants).
The Company has also agreed to issue to the financial advisors or their designees the Inducement Placement Agent Warrants to purchase up to 29,891 shares of common stock (representing 7.0% of the Existing Warrants being exercised), which will have the same terms as the New Warrants having a term of five years of Stockholder Approval (as defined below) except the Inducement Placement Agent Warrants will have an exercise price equal to $4.625 per share (125% of the exercise price of the Existing Warrants).
Net Loss Our net loss for the year ended December 31, 2024 was $4.4 million, compared to a net loss of $6.3 million for the year ended December 31, 2023.
Net Loss Our net loss for the year ended December 31, 2025 was $8.3 million, compared to a net loss of $4.4 million for the year ended December 31, 2024. This increase was primarily attributable to lower sales while operating expenditure remained consistent, as well as due to a one-time financial commitment expenditure of $750,000.
Cost of Revenues Our cost of revenues for the year ended December 31, 2024, amounted to $3.5 million compared to $3.7 million for the year ended December 31, 2023.
Cost of Revenues Our cost of revenues for the year ended December 31, 2025, amounted to $2.5 million compared to $3.5 million for the year ended December 31, 2024. The decrease from the corresponding period was primarily attributable to a decrease in sales which led to a decline in variable costs and fixed cost remaining constant.
Connecting such hard-to-reach locations may cause significant delays and budget overruns in IoT projects.
Providing new fiber connectivity to hard-to-reach locations is especially costly and time-consuming, often requiring permits for boring, trenching, and right-of-way, sometimes done over many miles. Connecting such hard-to-reach locations may cause significant delays and budget overruns in IoT projects.
We also provide secure, encrypted access to our network management software, and are working to further enhance system-level and device-level software protection. Our IoT cyber-security software solution implements AI to monitor, identify vulnerabilities and threats, offers or implements automatically AI generated plans addressing such exposures and constant reporting of all such activities, for the sake of documentation and compliance.
We also provide secure, encrypted access to our network management software, and are working to further enhance system-level and device-level software protection. We are also working to introduce additional capabilities for network-wide cyber protection software as an additional SW and license-based services.
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Additionally, through our “Cyber Aware Networking” initiative, we provide an AI-based cyber monitoring and protection software-based system for all edge devices, enhancing network security and resilience and operational continuity.
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The Credit Line was extended until February 1, 2026. As of the date hereof, the Company has not further extended the credit facility; however, it may do so in the future.
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This solution comes with the network itself, and uses the network traffic to become cyber-aware of the risks imminent to the IoT devices that are connected to that network.
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The decrease was primarily attributable to software and services renewal last year for 2 years which will be up for renewal in 2027, as well as a large deal to the City of Washington D.C. last year, while 2025’s revenues are more backend loaded.
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The same is correct in multi-dwelling unit buildings where the wiring from the roof (in case of a wireless based connectivity) or from the basement in case of a wired connectivity to the building. In such cases we utilize existing in-building wiring, preventing the need for brand-new ones and enables multi-gigabit connectivity to each apartment or suite.
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Research and Development Expenses Our research and development expenses for the year ended December 31, 2025, amounted to $2.6 million compared to $2.4 million for the year ended December 31, 2024. The increase is due to the strengthening of the Israeli shekel against the U.S. dollar which led to an increase in expenditure by approximately $151,000.
Removed
In February 2024, we performed a partial early repayment of Migdalor Loan in the amount of 2.0 million NIS (approximately $550,000). During April and May 2024, we made an additional partial early repayment of Migdalor loan in the amount of NIS 10.9 million (approximately $2.9 million).
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The decrease was mainly due to cost reduction measures taken, while these benefits were offset by higher costs driven by the strengthening of the Israeli shekel against the U.S. dollar. Other Income We had no other Income for the year ended December 31, 2025, compared to $163,000 for the year ended December 31, 2024.
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In May 2024, we signed an amendment to the agreement with Migdalor, pursuant to which the remaining $470,000 of the one-time interest payment which was originally due in January 2024 to Migdalor, will be paid in 12 equal monthly payments bearing 9.6% interest from February 2024 until February 2025.
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The increase was mainly due to the decline in sales, while operating expenditure remained consistent and increased operating expenses by $0.3 million driven by the strengthening of the Israeli shekel against the U.S. dollar by approximately 7%.
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In addition, we are obligated to issue Migdalor warrants to acquire common stock of the Company for up to $150,000, based on a share price as of February 8, 2024. 49 As of the date of this report, we have fully repaid the loan principal, and we have an interest outstanding balance of $111,000.
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In addition, the Israeli shekel strengthened by an average of 7% against the U.S. dollar, leading to higher operating expenses and contributing to increase in net loss.
Removed
In February 2024, we entered into the Credit Line, which increased our operating liquidity while not increasing our total debt, as we will perform an early repayment of our existing debt using our restricted cash in a similar amount. The Credit Line is secured by customer invoices and incurs interest at a Federal SOFR rate plus 5.5%.
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July 2025 Private Placement On June 30, 2025, we entered into the July 2025 Purchase Agreement with certain accredited Investors, pursuant to which we agreed to issue and sell to the Investors in the July 2025 Private Placement (a) 162,602 shares of Common Stock, (b) Series A-3 Warrants to purchase up to 162,602 shares of Common Stock, and (c) Series A-4 Warrants to purchase up to 325,204 shares of Common Stock, for a purchase price of $6.15 per share and related July 2025 Common Warrants, for a total aggregate gross proceeds of approximately $1 million.
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The increase was primarily attributable to increase of sales in North America region, it is primarily attributable to an increase of 134% of revenues generated from North America and a decrease of 42% and 61% of revenues generated from Europe, the Middle East and Africa respectively compared to last year.
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The July 2025 Private Placement closed on July 2, 2025. The Series A-3 Warrants have an exercise price of $6.15 per share, are exercisable commencing on the July 2025 Shareholder Approval Date and expire five years following the July 2025 Shareholder Approval Date.
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The decrease from the corresponding period was primarily attributable to the change in regional mix of revenue of an increase in North America revenues, which are more profitable, and a decrease in Europe, Middle East and Africa revenues which are less profitable as well as indirect costs not increasing significantly with revenues growing. 50 Research and Development Expenses Our research and development expenses for the year ended December 31, 2024, amounted to $2.4 million compared to $2.7 million for the year ended December 31, 2023.
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On November 7, 2025, the July 2025 Shareholder Approval was obtained in a special meeting of our shareholders, resulting in the July 2025 Shareholder Approval Date being such date.
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Operating Loss Our operating loss for the year ended December 31, 2024, was $3.8 million, compared to an operating loss of $7.4 million for the year ended December 31, 2023. The decrease was mainly due to the increase in revenues, improved gross margin due to regional revenue mix, and cost reduction measures taken, reducing operating expenses.
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The Series A-4 Warrants have an exercise price of $6.15 per share, are exercisable commencing on the July 2025 Shareholder Approval Date and expire eighteen months following the July 2025 Shareholder Approval Date. HCW acted as the Placement Agent for the issuance and sale of the Securities.
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This decrease was primarily due to the increase in revenues, improved gross margin due to regional revenue mix, and cost reduction measures taken, reducing operating expenses, partially offset by financial income in the prior year not repeating itself.
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The Company has agreed to pay an aggregate cash fee equal to 7.0% of the gross proceeds received by the Company from the Offering and $35,000 for accountable expenses to the placement agent.
Removed
On June 5, 2024, we entered into an inducement agreement with a certain holder of certain of our existing warrants to purchase up to an aggregate of 999,670 shares of our common stock originally issued on May 8, 2023, with a five and one-half year term, at an exercise price of $2.75 per share (the “May 2023 Warrants”). 52 Pursuant to the inducement agreement, the holder agreed to exercise for cash its May 2023 Warrants to purchase an aggregate of 999,670 shares of our common stock at an exercise price of $2.75 per share, in consideration of our agreement to issue new common stock purchase warrants (the “June 2024 Warrants”), as described below, to purchase up to an aggregate of 1,999,340 shares of our common stock, at an exercise price of $2.00 per share.
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The Company also agreed to issue to the Placement Agent, or its designees, July 2025 Placement Agent Warrants to purchase up to 7.0% of the aggregate number of the shares of Common Stock sold to the Investors (or warrants to purchase up to 11,382 shares of Common Stock) at an exercise price per share of $7.688 which will be exercisable commencing on the July 2025 Shareholder Approval Date and a have term of five years after the July 2025 Shareholder Approval Date. 57 September 2025 Warrant Inducement On September 2, 2025, we entered into the Inducement Letter with a Holder of certain of the Company’s Existing Warrants to purchase an aggregate of 427,020 shares of the Company’s common stock, consisting of (i) 127,119 warrants issued on December 20, 2023 with an expiration date of June 20, 2029 at an exercise price of $11.8 per share (ii) 99,967 warrants issued on June 6, 2024 with an expiration date of December 6, 2029 at an exercise price of $20.00 per share and (iii) 199,934 warrants issued on July 2, 2024 with an expiration date of July 2, 2026 at an exercise price of $17.50 per share.
Removed
H.C. Wainwright & Co., LLC (the “Placement Agent”) acted as our exclusive placement agent in connection with the June 2024 Warrant Inducement.
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The Company received aggregate gross proceeds of approximately $1.6 million from the exercise of the Existing Warrants by the Holder, before deducting financial advisory fees and other offering expenses payable by the Company. Rodman & Renshaw LLC and HCW acted as financial advisors to the Company in connection with the transactions contemplated by the Inducement Letter.
Removed
In connection with the June 2024 Warrant Inducement, we issued to certain designees of the Placement Agent warrants (the “June 2024 Placement Agent Warrants”) to purchase up to 69,977 shares of common stock (representing 7.0% of the Existing Warrants being exercised), which have the same terms as the June 2024 Warrants, except that the Placement Agent Warrants have an exercise price equal to $3.4375 per share (125% of the exercise price of the May 2023 Warrants).
Added
Pursuant to an engagement letter with HCW, the Company has agreed to pay the financial advisors a cash fee equal to 7.0% of the aggregate gross proceeds received from the Holder’s exercise of the Existing Warrants, as well as a management fee equal to 1.0% of the gross proceeds from the exercise of the Existing Warrants and $25,000 paid for non-accountable expenses.
Removed
The June 2024 Warrants were immediately exercisable from the date of issuance, until five and one-half year anniversary of such date for 999,670 of the June 2024 Warrants, and until twenty four months anniversary of such date for the remaining 999,670 of the June 2024 Warrants.
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The New Warrants have an exercise price equal to $3.70 per share. The New Warrants will be exercisable from the effective date (the “Warrant Stockholder Approval Date”) of shareholder approval (“Stockholder Approval”), until (i) the five-year anniversary of such date for 340,629 of the New Warrants and (ii) the twenty-four-month anniversary of such date for 299,901 of the New Warrants.
Removed
The Placement Agent Warrants are immediately exercisable from the date of issuance, until the five and one-half year anniversary of such date. The closing of the June 2024 Warrant Inducement occurred on June 6, 2024.
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The exercise price and number of New Warrant Shares issuable upon exercise of the New Warrants is subject to appropriate adjustment in the event of stock dividends, stock splits, subsequent rights offerings, pro rata distributions, reorganizations, or similar events affecting the Company’s common stock and the exercise price.
Removed
On June 30, 2024, we entered into an inducement letter with a holder of our June 2024 Warrants, to purchase up to an aggregate of 999,670 shares of the June 2024 Warrants, originally issued on June 6, 2024, with a twenty-four month term, at an exercise price of $2.00 per share.
Added
On November 7, 2025, the Warrant Stockholder Approval was obtained in a special meeting of our shareholder, resulting in the Warrant Stockholder Approval Date being such date. The closing of the transactions contemplated pursuant to the Inducement Letter occurred on September 3, 2025.
Removed
We engaged the Placement Agent to act as our exclusive placement agent in connection with the July 2024 Warrant Inducement.

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