Actelis Networks Announces New $1.5 Million Credit Line

Rhea-AI Summary

Actelis Networks, Inc. (ASNS) has closed a new credit line facility with an Israeli bank, securing up to $1.5 million to increase operating cash without increasing total debt. The credit line will be secured by customer invoices, incur interest at a Federal SOFR rate plus 5.5%, and is available until the end of 2024. The company plans to perform a partial early repayment of its existing debt facility using the new credit line, leaving the total debt amount at a similar level.

Insights

Financial Analyst

The establishment of a new credit line facility for Actelis Networks, Inc. is a strategic financial maneuver that can have several implications for the company's liquidity and debt management. By securing a $1.5 million credit line that is backed by customer invoices, Actelis is enhancing its operating cash, which is a crucial factor for sustaining day-to-day operations and investing in growth opportunities. The decision to use restricted cash to perform an early repayment of existing debt is a prudent approach to manage the company's leverage and maintain a healthy balance sheet.

It is essential to note that the interest rate for this credit line is pegged to the Federal SOFR rate plus an additional 5.5%. This rate is somewhat higher than traditional bank loans, indicating a potential risk assessment by the lender. Investors should monitor the SOFR rate trends as fluctuations will directly impact the interest expenses of Actelis. The fact that the credit line is available until the end of 2024, with a possible extension, provides short-term financial flexibility but also introduces the need for careful financial planning beyond this period.

Market Research Analyst

Actelis Networks' focus on cyber-hardened, rapid deployment networking solutions for IoT applications positions it within a high-growth industry. The IoT market is expected to expand significantly and companies with strong financial backing are more likely to capitalize on this growth. The new credit line could therefore be seen as a strategic move to ensure that Actelis has the necessary capital to seize market opportunities without diluting shareholder equity. However, the reliance on debt financing over equity does carry risks, such as increased interest expenses and potential cash flow constraints if revenue from invoiced customers is delayed or insufficient to cover the debt obligations.

Investors often view the management of working capital and cash flow as indicators of a company's operational efficiency. Actelis' ability to negotiate a credit facility that does not increase total debt but improves cash flow is likely to be perceived positively. However, the effectiveness of this strategy will ultimately be judged by the company's ability to deploy the additional operating cash towards profitable ventures that enhance shareholder value.

FREMONT, Calif., Feb. 07, 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 a new credit line facility. The accounts receivable credit line from an Israeli bank of up to $1.5 million increases the Company’s operating cash while not increasing the Company’s total debt, as the Company will perform an early repayment of its existing debt using its restricted cash in a similar amount.

The new credit line will be secured by customer invoices and will incur interest at a Federal SOFR rate plus 5.5% and is available until the end of 2024, with possible extension. At the same time, Actelis plans to perform a partial early repayment of its existing debt facility at an amount equal to the amount of funding from the new credit line, therefore leaving the total debt amount at a similar level.

Yoav Efron, Chief Financial Officer of Actelis stated, “We are pleased to announce this new credit line agreement as it increases operating cash while we continue to pursue our business plan, and it does not increase our total debt since we will partially repay our existing loan using our restricted cash.”

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-copper, environmentally hardened aggregation switches, high density Ethernet devices, advanced management software and cyber-protection capabilities, unlocks the hidden value of essential networks, delivering safer connectivity for rapid, cost-effective deployment. For more information, please visit www.actelis.com.

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 completion of the private placement, satisfaction of the closing conditions and use of proceeds therefrom and obtaining shareholder approval. 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 to 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 is the ticker symbol for Actelis Networks, Inc.?

The ticker symbol for Actelis Networks, Inc. is ASNS.

What is the purpose of the new credit line facility?

The purpose of the new credit line facility is to increase the company's operating cash without increasing its total debt.

Who is the Chief Financial Officer of Actelis Networks, Inc.?

Yoav Efron is the Chief Financial Officer of Actelis Networks, Inc.

What is the interest rate for the new credit line?

The new credit line will incur interest at a Federal SOFR rate plus 5.5%.

How long is the new credit line available?

The new credit line is available until the end of 2024, with a possible extension.