Actelis Announces Closing of Exercise of Warrants for $3 Million Gross Proceeds

Rhea-AI Summary

Actelis Networks (NASDAQ: ASNS) announced the successful closing of the exercise of warrants, generating approximately $3 million in gross proceeds. The warrants, originally issued in May and September 2023 at an exercise price of $2.75 per share, allowed for the purchase of 999,670 shares of common stock. H.C. Wainwright & Co. acted as the exclusive placement agent. In addition, Actelis issued new unregistered Series A-1 and Series A-2 warrants for 999,670 shares each, with exercise prices of $2.00 per share. These new warrants are immediately exercisable, with the Series A-1 warrants having a term of 5.5 years and Series A-2 warrants having a term of 24 months. The proceeds are intended for general corporate purposes and working capital.

Positive

• Actelis Networks secured $3 million in gross proceeds from warrant exercises.
• New unregistered Series A-1 and Series A-2 warrants issued, providing additional future funding opportunities.
• Series A-1 warrants have a favorable term of 5.5 years.

Negative

• Issuance of new warrants may lead to shareholder dilution.
• Incurring placement agent fees and offering expenses reduces net proceeds.
• Unregistered status of new warrants may limit liquidity and resale options for investors.

Insights

Financial Analyst

The exercise of warrants, resulting in $3 million in gross proceeds, is significant for the company's financial health. The influx of capital provides immediate liquidity which can be used as working capital, potentially enabling the company to accelerate its growth initiatives. However, it's important to note the dilutive effect of issuing new shares. Dilution can impact existing shareholders by reducing their percentage ownership. Additionally, the issuance of new unregistered Series A-1 and A-2 warrants indicates a strategic move to secure future capital, albeit at a lower exercise price of $2.00 per share. This could signal management's expectation of future value appreciation of the stock.

The immediate and long-term implications for investors include understanding the potential dilution and the strategic benefits of secured funds. The decision to use proceeds for general corporate purposes is broad, leaving investors to speculate on specific uses, which might range from R&D investments to market expansion.

Market Research Analyst

This recent financial maneuver by Actelis offers an interesting glimpse into the company's market positioning and strategies. By facilitating the immediate exercise of the warrants, Actelis not only gains liquidity but also demonstrates the confidence of its existing investors in its future prospects. This exercise leverages investors' willingness to reinvest at a premium, signaling positive sentiment around the company's growth potential.

From a market dynamics perspective, this action likely aims to bolster Actelis' balance sheet without taking on additional debt. The new warrants, exercisable at a lower price of $2.00, indicate confidence in the company's ability to drive its stock price higher, which could appeal to long-term investors looking for growth opportunities. However, the private placement of these warrants, coupled with the filing for resale registration, also suggests a cautious approach towards compliance and market stability.

FREMONT, Calif., June 06, 2024 (GLOBE NEWSWIRE) -- Actelis Networks, Inc. (NASDAQ:ASNS) (“Actelis” or the “Company”), a market leader in cyber-hardened, rapid deployment networking solutions for IoT applications, today announced the closing of its previously announced exercise of certain outstanding warrants to purchase up to an aggregate of 999,670 shares of common stock of the Company originally issued in May 2023 and September 2023 having an exercise price of $2.75 per share. The shares of common stock issued upon exercise of the warrants are registered pursuant to an effective registration statement on Form S-1 (No. 333-276425). The gross proceeds to the Company from the exercise of the warrants were approximately $3 million, prior to deducting placement agent fees and estimated offering expenses.

H.C. Wainwright & Co. acted as the exclusive placement agent for the offering.

In consideration for the immediate exercise of the warrants for cash and the payment of additional $0.125 per new unregistered warrant (additional $249,917.50 in the aggregate, which are included in the gross proceeds to the Company), the Company issued new unregistered Series A-1 warrants to purchase up to 999,670 shares of common stock and new unregistered Series A-2 warrants to purchase up to 999,670 shares of common stock. The new warrants have an exercise price of $2.00 per share and are immediately exercisable upon issuance. The Series A-1 warrants have a term of five and one-half years from the issuance date and the Series A-2 warrants have a term of twenty-four months from the issuance date.

The Company intends to use the net proceeds from the offering as working capital for general corporate purposes.

The new warrants described above were offered in a private placement pursuant to an applicable exemption from the registration requirements of the Securities Act of 1933, as amended (the “1933 Act”) and, along with the shares of common stock issuable upon their exercise, have not been registered under the 1933 Act, and may not be offered or sold in the United States absent registration with the Securities and Exchange Commission (“SEC”) or an applicable exemption from such registration requirements. The Company has agreed to file a registration statement with the SEC covering the resale of the shares of common stock issuable upon exercise of the new warrants.

This press release shall not constitute an offer to sell or a solicitation of an offer to buy nor shall there be any sale of these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of any such state or jurisdiction.

About Actelis Networks, Inc.

Actelis Networks, Inc. (NASDAQ: ASNS) is a market leader in cyber-hardened, rapid-deployment networking solutions for wide-area IoT applications including federal, state and local government, ITS, military, utility, rail, telecom and campus applications. Actelis’ unique portfolio of hybrid fiber, environmentally hardened aggregation switches, high density Ethernet devices, advanced management software and cyber-protection capabilities, unlocks the hidden value of essential networks, delivering safer connectivity for rapid, cost-effective deployment. For more information, please visit www.actelis.com.

Forward-Looking Statements

This press release contains certain forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements are identified by the use of the words "could," "believe," "anticipate," "intend," "estimate," "expect," "may," "continue," "predict," "potential," "project" and similar expressions that are intended to identify forward-looking statements, and include statements regarding the use of proceeds therefrom. All forward-looking statements speak only as of the date of this press release. You should not place undue reliance on these forward-looking statements. Although we believe that our plans, objectives, expectations and intentions reflected in or suggested by the forward-looking statements are reasonable, we can give no assurance that these plans, objectives, expectations or intentions will be achieved. Forward-looking statements involve significant risks and uncertainties (some of which are beyond our control), including, but not limited to, market and other conditions, and assumptions that could cause actual results to differ materially from historical experience and present expectations or projections. Actual results could differ materially from those in the forward-looking statements and the trading price for our common stock may fluctuate significantly. Forward-looking statements also are affected by the risk factors described in the Company's filings with the U.S. Securities and Exchange Commission. Except as required by law, we undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise, after the date on which the statements are made or to reflect the occurrence of unanticipated events.

Media Contact:

Sean Renn
Global VP Marketing & Communications
srenn@actelis.com

Investor Relations Contact:

Kirin Smith
PCG Advisory, Inc.
Ksmith@pcgadvisory.com

FAQ

What recent financial event did Actelis Networks (ASNS) announce?

Actelis announced the closing of the exercise of warrants, generating approximately $3 million in gross proceeds.

How many shares were involved in Actelis Networks' recent warrant exercise?

The warrant exercise involved the purchase of 999,670 shares of common stock.

What is the exercise price of the newly issued Series A-1 and A-2 warrants by Actelis Networks (ASNS)?

The new Series A-1 and A-2 warrants have an exercise price of $2.00 per share.

What are the terms of the Series A-1 and Series A-2 warrants issued by Actelis Networks?

The Series A-1 warrants have a term of 5.5 years, while the Series A-2 warrants have a term of 24 months.

What are the intended uses of the proceeds from Actelis Networks' recent warrant exercise?

The proceeds are intended for general corporate purposes and working capital.