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Proxy Statement Pursuant to Section 14(a) of
the Securities
Exchange Act of 1934 (Amendment No.)
Filed by the Registrant
☒
Filed by a Party other than the Registrant
☐
Check the appropriate box:
☐
Preliminary Proxy Statement
☐
Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
☒
Definitive Proxy Statement
☐
Definitive Additional Materials
☐
Soliciting Material Pursuant to 240.14a-12
ACTELIS NETWORKS, INC.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other
than the Registrant)
Payment of Filing Fee (Check the appropriate box):
☒
No fee required.
☐
Fee paid previously with preliminary materials.
☐
Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a6(i)(1) and 011
ACTELIS NETWORKS, INC.
NOTICE OF ANNUAL MEETING
AND
PROXY STATEMENT
Meeting to be held on July 30, 2024, at 10:00
a.m. (
Eastern Standard Time
)
The Meeting to be held virtually at the following
link: www.virtualshareholdermeeting.com/ASNS2024.
ACTELIS NETWORKS, INC.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON JULY 30, 2024
An annual meeting of
stockholders (the Annual Meeting) of Actelis Networks, Inc. (Actelis, the Company,
we, us, or our) will be held virtually on July 30, 2024, at 10:00 a.m. (Eastern Standard
Time), virtually at the following link: www.virtualshareholdermeeting.com/ASNS2024, to consider the following proposals:
1.
To elect one Class II director to serve on our board of directors for a term of three years or until our 2027 Annual Meeting of Stockholders, for which Joseph Moscovitz is the nominee (Proposal No. 1);
2.
To ratify the appointment of Kesselman Kesselman, Certified Public Accountants (Isr.), a member firm of PricewaterhouseCoopers International Limited, as the Companys independent registered public accounting firm for the fiscal year ending December 31, 2024 (Proposal No. 2);
3.
To authorize for purposes of complying with
NASDAQ listing rule 5635(D) the ability to issue shares of the Companys common stock upon the exercise of our Common Stock
warrants issued pursuant to the terms of a private placement financing transaction set forth in the Securities Purchase
Agreement, dated December 17, 2023 (the Purchase Agreement) (Proposal No. 3)
4.
To approve the adjournment of the Annual Meeting to a later date or time,
if necessary, to permit further solicitation and vote of proxies if, based upon the tabulated vote at the time of the Annual Meeting,
there are not sufficient votes to approve Proposal No. 1, Proposal No. 2 and/or Proposal No. 3 (Proposal No. 4); and
5.
To transact such other business as may be properly brought before the Annual Meeting and any adjournments thereof.
BECAUSE OF THE SIGNIFICANCE OF THESE PROPOSALS
TO THE COMPANY AND ITS STOCKHOLDERS, IT IS VITAL THAT EVERY STOCKHOLDER VOTES AT THE ANNUAL MEETING IN PERSON OR BY PROXY.
These proposals are fully
set forth in the accompanying Proxy Statement, which you are urged to read thoroughly. For the reasons set forth in the Proxy Statement,
your board of directors recommends a vote FOR Proposal Nos. 1, 2, 3 and 4. The Company intends to mail the Proxy Statement
and Proxy Card enclosed with this notice on or about June 25, 2024 to all stockholders entitled to vote at the Annual Meeting. Only stockholders
of record at the close of business on June 13, 2024 (the Record Date) will be entitled to attend and vote at the meeting.
A list of all stockholders entitled to vote at the Annual Meeting will be available at the principal office of the Company during usual
business hours, for examination by any stockholder for any purpose germane to the Annual Meeting for 10 days prior to the date thereof.
Stockholders are cordially invited to attend the Annual Meeting. However, whether or not you plan to attend the meeting in person, your
shares should be represented and voted. After reading the enclosed Proxy Statement, please sign, date, and return promptly the enclosed
Proxy in the accompanying postpaid envelope we have provided for your convenience to ensure that your shares will be represented. If you
do attend the meeting and wish to vote your shares personally, you may revoke your Proxy.
By Order of the Board of Directors
/s/ Tuvia Barlev
Tuvia Barlev
Chairman of the Board of Directors
June 25, 2024
WHETHER OR NOT YOU PLAN ON ATTENDING THE MEETING
IN PERSON, PLEASE VOTE AS PROMPTLY AS POSSIBLE TO ENSURE THAT YOUR VOTE IS COUNTED.
Important Notice Regarding the Availability
of Proxy Materials for the Annual Meeting of Stockholders to be held on July 30, 2024. The Proxy Statement is available at www.proxyvote.com.
Actelis Networks, Inc.
4039 Clipper Court
Fremont, CA 94538
(510) 545-1045
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
July 30, 2024
This Proxy Statement is furnished
in connection with the solicitation of proxies by the board of directors of the Company to be voted at the Annual Meeting of stockholders,
which will be held on July 30, 2024, at 10:00 a.m. (Eastern Standard Time), virtually at the following link: www.virtualshareholdermeeting.com/ASNS2024,
and at any postponements or adjournments thereof. The proxy materials will be mailed to stockholders on or about June 25, 2024.
REVOCABILITY OF PROXY AND SOLICITATION
Any stockholder executing
a proxy that is solicited hereby has the power to revoke it prior to the voting of the proxy. Revocation may be made by attending the
Annual Meeting and voting the shares of stock in person, or by delivering to the Secretary of the Company at the principal office of the
Company prior to the Annual Meeting a written notice of revocation or a later-dated, properly executed proxy. Solicitation of proxies
may be made by directors, officers and other employees of the Company by personal interview, telephone, facsimile transmittal or electronic
communications. No additional compensation will be paid for any such services. This solicitation of proxies is being made by the Company
which will bear all costs associated with the mailing of this proxy statement and the solicitation of proxies.
1
RECORD DATE
Stockholders of record at
the close of business on June 13, 2024, the Record Date, will be entitled to receive notice of, attend and vote at the meeting.
Why am I receiving these materials?
The Company has delivered
printed versions of these materials to you by mail, in connection with the Companys solicitation of proxies for use at the Annual
Meeting. These materials describe the proposals on which the Company would like you to vote and also give you information on these proposals
so that you can make an informed decision.
What is included in these materials?
These materials include:
●
this Proxy Statement for the Annual Meeting;
●
the Proxy Card or voting instruction form for the Annual Meeting; and
●
the Companys Annual Report on Form 10-K for the year ended December 31, 2023.
What is the Proxy Card?
The Proxy Card enables you
to appoint Tuvia Barlev, our Chief Executive Officer, and Yoav Efron, our Chief Financial Officer and Deputy Executive Officer, as your
representative at the Annual Meeting. By completing and returning a Proxy Card, you are authorizing each of Mr. Barlev and Mr. Efron,
to vote your shares at the Annual Meeting in accordance with your instructions on the Proxy Card. This way, your shares will be voted
whether or not you attend the Annual Meeting.
What is the purpose of the Annual Meeting?
At our Annual Meeting, stockholders
will act upon the matters outlined in the Notice of Annual Meeting on the cover page of this Proxy Statement, including (i) the election
of one Class II director to serve on the Companys board of directors for a term of three years until our 2027 Annual Meeting of
Stockholders for which Joseph Moscovitz is the nominee (Proposal No. 1); (ii) the ratification of the appointment of Kesselman Kesselman,
Certified Public Accountants (Isr.), a member firm of PricewaterhouseCoopers International Limited (PwC), as the Companys
independent registered public accounting firm for the fiscal year ending December 31, 2024 (Proposal No. 2);(iii) the approval
of the ability to issue up to (A) 1,271,187 shares of our Common Stock upon the exercise of our Common Stock purchase warrants issued
to an institutional Purchaser in a private transaction that closed on December 20, 2023 (the Common Warrants), and (B) 88,983
shares of our Common Stock upon the exercise of a Common Stock purchase warrant issued to designees of H.C. Wainwright Co., LLC
(the Placement Agent) as partial compensation for services in connection with the referenced transaction (the Placement
Agent Warrant, and together with the Common Warrants, the Warrants) that may be equal to or exceed 20% of our Common
Stock outstanding before such offering (Proposal No. 3); and (iv) the approval of the adjournment of the Annual Meeting to a later date
or time, if necessary, to permit further solicitation and vote of proxies if, based upon the tabulated vote at the time of the Annual
Meeting, there are not sufficient votes to approve Proposal No. 1, Proposal No. 2 and/or Proposal No. 3 (Proposal No. 4).
2
What constitutes a quorum?
The presence at the meeting,
in person or by proxy, of the holders of one third of the number of shares of common stock issued and outstanding on the Record Date will
constitute a quorum permitting the meeting to conduct its business. As of the Record Date, there were 5,008,992 shares of the Companys
common stock issued and outstanding, each share entitled to one vote at the meeting. Thus, the presence of the holders of 1,669,648 shares
of common stock will be required to establish a quorum. Abstentions, withhold votes and broker non-votes are counted as shares present
and entitled to vote for purposes of determining a quorum.
What is the difference between a stockholder
of record and a beneficial owner of shares held in street name?
Most of our stockholders hold
their shares in an account at a brokerage firm, bank or other nominee holder, rather than holding share certificates in their own name.
As summarized below, there are some distinctions between shares held of record and those owned beneficially in street name.
Stockholder of Record
If on the Record Date, your
shares were registered directly in your name with our transfer agent, Vstock Transfer, LLC, you are considered a stockholder of record
with respect to those shares, and the Notice of Annual Meeting and Proxy Statement was sent directly to you by the Company. As the stockholder
of record, you have the right to direct the voting of your shares by returning the Proxy Card to us. Whether or not you plan to attend
the Annual Meeting, please complete, date, sign and return a Proxy Card to ensure that your vote is counted.
Beneficial Owner of Shares Held in Street Name
(non-Israeli brokerage firm, bank, broker-dealer, or other nominee holders)
If on the Record Date, your
shares were held in an account at a brokerage firm, bank, broker-dealer, or other nominee holder, then you are considered the beneficial
owner of shares held in street name, and the Notice of Annual Meeting and Proxy Statement was forwarded to you by that organization.
The organization holding your account is considered the stockholder of record for purposes of voting at the Annual Meeting. As the beneficial
owner, you have the right to direct that organization on how to vote the shares held in your account. However, since you are not the stockholder
of record, you may not vote these shares in person at the Annual Meeting unless you receive a valid proxy from the organization.
How do I vote?
Your vote is very important
to us. Whether or not you plan to attend the Annual Meeting, please vote by proxy in accordance with the instructions on your proxy card
or voting instruction form (from your broker or other intermediary). There are three convenient ways of submitting your vote:
●
By Telephone or Internet
All record holders can vote by touchtone telephone from the United States using the toll free telephone number on the proxy card, or over the Internet, using the procedures and instructions described on the proxy card. Street name holders may vote by telephone or Internet if their bank, broker or other intermediary makes those methods available, in which case the bank, broker or other intermediary will enclose the instructions with the proxy materials. The telephone and Internet voting procedures are designed to authenticate stockholders identities, to allow stockholders to vote their shares, and to confirm that their instructions have been recorded properly.
●
In Person
All record holders may vote in person at the Annual Meeting. Street name holders may vote in person at the Annual Meeting if their bank, broker or other intermediary has furnished a legal proxy. If you are a street name holder and would like to vote your shares by proxy, you will need to ask your bank, broker or other intermediary to furnish you with an intermediary issued proxy. You will need to bring the intermediary issued proxy with you to the Annual Meeting and hand it in with a signed ballot that will be provided to you at the Annual Meeting. You will not be able to vote your shares without an intermediary issued proxy. Note that a broker letter that identifies you as a stockholder is not the same as an intermediary issued proxy.
●
By Mail
You may vote by completing, signing, dating and returning your proxy card or voting instruction form in the pre-addressed, postage-paid envelope provided.
3
The board of directors has
appointed Tuvia Barlev, our Chief Executive Officer, and Yoav Efron, our Chief Financial Officer and Deputy Chief Executive Officer, to
serve as the proxies for the Annual Meeting.
If you complete and sign the
proxy card but do not provide instructions for one or more of the proposals, then the designated proxies will or will not vote your shares
as to those proposals, as described under What happens if I do not give specific voting instructions? below. We do not anticipate
that any other matters will come before the Annual Meeting, but if any other matters properly come before the meeting, then the designated
proxies will vote your shares in accordance with applicable law and their judgment.
If you hold your shares in
street name, and complete the voting instruction form provided by your broker or other intermediary except with respect
to one or more of the proposals, then, depending on the proposal(s), your broker may be unable to vote your shares with respect to those
proposal(s). See What is a broker non-vote? above.
Even if you currently plan
to attend the Annual Meeting, we recommend that you vote by telephone or Internet or return your proxy card or voting instructions as
described above so that your votes will be counted if you later decide not to attend the Annual Meeting or are unable to attend.
How are votes counted?
Votes will be counted by the
inspector of election appointed for the Annual Meeting, who will separately count, for the election of directors, For, Withhold
and broker non-votes and, with respect to the other proposals, votes For and Against, abstentions and broker
non-votes.
What is a broker non-vote?
If your shares are held in
street name, you must instruct the organization who holds your shares how to vote your shares. If you sign your proxy card but do not
provide instructions on how your broker should vote on routine proposals, your broker will vote your shares as recommended
by the board of directors. If a stockholder does not give timely customer direction to its broker or nominee with respect to a non-routine
matter, the shares represented thereby (broker non-votes) cannot be voted by the broker or nominee, but will be counted
in determining whether there is a quorum. Of the proposals described in this Proxy Statement, Proposal Nos. 1, 3 and, 4 are considered
non-routine matters. Proposal No. 2 is considered a routine matter.
What is an abstention?
An abstention is a stockholders
affirmative choice to decline to vote on a proposal. Under Delaware law, abstentions are counted as shares present and entitled to vote
at the Annual Meeting.
4
What happens if I do not give specific voting
instructions?
Stockholders of Record.
If you are a stockholder of record and you sign and return a proxy card without giving specific voting instructions, then the proxy
holders will vote your shares in the manner recommended by the board of directors on all matters presented in this Proxy Statement and
as the proxy holders may determine in their discretion with respect to any other matters properly presented for a vote at the Annual Meeting.
Beneficial Owners of Shares
Held in Street Name.
If you are a beneficial owner of shares held in street name and do not provide the organization that holds your
shares with specific voting instructions, under the rules of various national and regional securities exchanges, the organization that
holds your shares may generally vote on routine matters, but cannot vote on non-routine matters.
What is the required vote for each proposal?
Proposal No. 1
:
The affirmative vote of a plurality of the votes cast at the Annual Meeting is required for the election of directors. Plurality
means that the nominees who receive the largest number of votes cast for are elected as directors. As a result, any shares
not voted for a particular nominee (whether as a result of stockholder abstention or a broker non-vote) will not be counted
in such nominees favor and will have no effect on the outcome of the election. The proxies cannot be voted for a greater number
of persons than one.
Proposal No. 2
:
The affirmative vote of a majority of the votes cast on the matter is required for the approval of Proposal No. 2. Stockholder ratification
of the selection of PwC, as the Companys independent registered public accounting firm for the fiscal year ending December 31,
2024 is not required by our Bylaws or other applicable legal requirement; however, our board is submitting the selection PwC, to stockholders
for ratification as a matter of good corporate practice. In the event that the stockholders do not approve the selection of PwC, the audit
committee will reconsider the appointment of the independent registered accounting firm. Even if the selection is ratified, the audit
committee in its discretion may direct the appointment of a different independent registered accounting firm at any time during the year
if the audit committee believes that such a change would be in the best interests of the Company and its stockholders. Abstentions are
considered votes present and entitled to vote on this proposal, and thus, will have the same effect as a vote against the
proposal. Because this proposal is considered a routine matter under applicable stock exchange rules, we do not expect to
receive any broker non-votes on this proposal.
Proposal No. 3
:
The affirmative vote of a majority of the votes cast on the matter is required for the approval of Proposal No. 3. Any abstention from
voting or broker non-vote with respect to such matter will not count as a vote for or against the amendment and will not affect the outcome
of the proposal.
Proposal No. 4
:
The affirmative vote of a majority of the votes cast on the matter is required for the approval of Proposal No. 4. Any abstention from
voting or broker non-vote with respect to such matter will not count as a vote for or against the amendment and will not affect the outcome
of the proposal.
5
What are the boards recommendations?
The boards recommendation
is set forth together with the description of each item in this Proxy Statement. In summary, the board recommends a vote:
●
FOR the approval of Proposal No. 1;
●
FOR the approval of Proposal No. 2;
●
FOR the approval of Proposal No. 3;
●
FOR the approval of Proposal No 4;
With respect to any other
matter that properly comes before the meeting, the proxy holder will vote as recommended by the board of directors or, if no recommendation
is given, in his own discretion.
Dissenters Right of Appraisal
Holders of shares of our common
stock do not have appraisal rights under Delaware law or under the governing documents of the Company in connection with this solicitation.
How are proxy materials delivered to households?
With respect to eligible stockholders
who share a single address, we may send only one Notice or other Annual Meeting materials to that address unless we receive instructions
to the contrary from any stockholder at that address. This practice, known as householding, is designed to reduce our printing
and postage costs. However, if a stockholder of record residing at such address wishes to receive a separate notice or proxy statement
in the future, he or she may contact Actelis Networks, Inc., 4039 Clipper Court, Fremont, CA 94538, Attention: Corporate Secretary or
by calling us at +1 (510) 545-1045. Eligible stockholders of record receiving multiple copies of our Notice or other Annual Meeting materials
can request householding by contacting us in the same manner. Stockholders who own shares through a bank, broker or other intermediary
can request householding by contacting the intermediary.
We hereby undertake to deliver
promptly, upon written or oral request, a copy of Notice or other Annual Meeting materials to a stockholder at a shared address to which
a single copy of the document was delivered. Requests should be directed to the Corporate Secretary at the address or phone number set
forth above.
A copy of our bylaws may be
obtained by accessing our public filings on the SECs website at www.sec.gov. You may also contact our Secretary at our principal
executive offices for a copy of the relevant bylaw provisions regarding the requirements for making stockholder proposals and nominating
director candidates.
6
ACTIONS TO BE TAKEN AT THE MEETING
PROPOSAL NO. 1
ELECTION OF DIRECTORS
The members of our board of
directors are classified into three classes with staggered three-year terms, as follows:
●
Class I, comprised of one director, Gideon Marks (with his term expiring at our 2026 annual meeting of stockholders);
●
Class II, comprised of one director, Joseph Moscovitz (with his term expiring at our 2027 Annual Meeting and who is the nominee for re-election); and
●
Class III, comprised of two directors, Dr. Israel Niv and Tuvia Barlev (with their terms expiring at our 2025 annual meeting of stockholders).
To preserve the classified
board structure, a director elected by the board of directors to fill a vacancy holds office until the next election of the class for
which such director has been chosen, and until that directors successor has been elected and qualified or until his or her earlier
death, resignation, retirement or removal.
Biographical and certain other
information concerning the Companys nominees for election to the board of directors and additional directors is set forth below.
Except as indicated below, none of our directors is a director in any other reporting companies. We are not aware of any proceedings to
which any of our directors, or any associate of any such director is a party adverse to us or any of our subsidiaries or has a material
interest adverse to us or any of our subsidiaries.
The following sets forth certain
information with respect to each of our directors who are up for election or re-election at the Annual Meeting (Class II directors) and
each additional director currently serving on our board of directors:
Name
Age
Class
Position(s)
Tuvia Barlev
62
Class III
Chief Executive Officer and Chairman
Dr. Israel Niv*
70
Class III
Director
Joseph Moscovitz*
69
Class II
Director
Gideon Marks*
69
Class I
Director
*
Independent, as that term is defined by the rules of the Nasdaq Stock Market.
Biography of Class II Director Nominee Subject
to Re-election at the Annual Meeting
Joseph Moscovitz Director
Mr. Moscovitz began serving on our board of directors
following our IPO in May 2022. In November 2022, we engaged Mr. Moscovitz as a short term business development consultant to the Company.
Mr. Moscovitz served as the Chief Strategy Officer at Telit Communications Plc from January 2019 through December 2021. Prior to that,
Mr. Moscovitz served as Chief Executive Officer of Telit Automotive Solutions from December 2016 through December 2018 and President of
Products and Solutions at Telit Plc from January 2011 through November 2016. Mr. Moscovitz was previously employed as Chief Executive
Officer of Cell Data Ltd. and as Chief Executive Officer by Microkim Ltd. Mr. Moscovitz received his Bachelor of Science in Electrical
Engineering from Technion-Israel Institute of Technology.
Biographies of Other Directors
Tuvia Barlev Chief Executive Officer,
Chairman of the Board, and Secretary
Mr. Barlev has served as our
Chief Executive Officer and Secretary since January 2013 and as the Chairman of the board since 2010. Previously, Mr. Barlev founded our
company in 1998 and served as the Chief Executive Officer until January 2010. Mr. Barlev is a seasoned serial entrepreneur with more than
25 years of experience in high-technology leadership in military, telecommunications, e-commerce, Big Data and clean energy. Prior to
joining Actelis, he was head of the RD organization at Teledata (acquired by ADC in 1998), a global supplier of advanced digital
loop carrier (DLC) equipment from 1996 to 1998. Previously, Mr. Barlev served as a senior research officer with the Israeli government,
and he was also founder, Chairman/Acting CEO at companies including Superfish Inc., a leading provider of visual search technology, from
2007 to 2015; Leyden Energy, a leading supplier of breakthrough battery technology from 2010 to 2012; Adyounet Inc., provider of advanced
direct marketing services over the Web from 2006 to 2009; and SafePeak LTD., provider of hot data acceleration platform for Big Data across
the cloud from 2011 to 2012. Mr. Barlev holds BSC and MSEE degrees from Tel Aviv University, both Summa Cum Laude.
7
Dr. Israel Niv Director
Dr. Niv has served as a board
member in our company since 2015. Dr. Niv also serves on the boards of directors of Palo Alto University, Dealsum, and Attolight AG, and
is an advisor to the Silicom Ventures Investment Group. Dr. Niv previously served as Chairman of Femtronix Inc. and as General Manager
of Opal Inc. (formerly traded on Nasdaq). Dr. Niv also founded Optonics, and served as CEO of DGC. Dr. Niv received a BSc in chemistry
and a PhD in chemical physics from Ben-Gurion University of the Negev (Israel). Dr. Niv completed his postdoctoral work at the University
of Southern California as a Weizmann Postdoctoral Fellow.
Gideon Marks Director
Mr. Marks is a seasoned professional
with over 35 years of experience in leading technology companies, specializing in financial, business, and corporate development roles.
Mr. Marks has served as an advisory board member of Deepdub, Inc., a company specializing in dubbing and voice over localization, since
July 2023, and as the co-founder of DogLog, an app that connects all aspects of a dogs life in one app, since January 2018. In addition,
Mr. Marks has served as a mentor for the Google for Startups Accelerator since January 2018. Mr. Marks previous experience includes
taking three companies public on Nasdaq as their Chief Financial Officer (Lannet Data Communications Ltd., Radcom Ltd. (Nasdaq: RDCM),
and Silicom Ltd. (Nasdaq: SILC)), and successfully leading four others to acquisitions as their Chief Financial Officer (Radnet Inc.,
RealTime Image, Ltd., Adamind Ltd., and Net Optics, Inc.). Mr. Marks holds a B.A. in Economics and an MBA Finance from Tel Aviv University
in Israel.
Board Diversity Matrix
The table below provides certain
information regarding the diversity of our board of directors as of the date of this annual report.
Board Diversity Matrix (As of June 13, 2024)
Total Number of Directors
4
Female
Male
Non-
Binary
Did Not
Disclose
Gender
Part I: Gender Identity
Directors
#
4
#
#
Part II: Demographic Background
African American or Black
#
#
#
#
Alaskan Native or Native American
#
#
#
#
Asian
#
#
#
#
Hispanic or Latinx
#
#
#
#
Native Hawaiian or Pacific Islander
#
#
#
#
White
#
4
#
#
Two or More Races or Ethnicities
#
#
#
#
LGBTQ+
#
Did Not Disclose Demographic Background
#
Family Relationships
There are no family relationships
among any of our current or former directors or executive officers.
Arrangements between Officers and Directors
To our knowledge, there is
no arrangement or understanding between any of our officers and any other person, including directors, pursuant to which the officer was
selected to serve as an officer.
Involvement in Certain Legal Proceedings
We are not aware of any of
our directors or officers being involved in any legal proceedings in the past ten years relating to any matters in bankruptcy, insolvency,
criminal proceedings (other than traffic and other minor offenses), or being subject to any of the items set forth under Item 401(f) of
Regulation S-K.
8
Board Meetings
The board met on 9 occasions
during the fiscal year ended December 31, 2023. Each of the members of the board attended at least 80% of the meetings held by the board
during the fiscal year ended December 31, 2023. None of our directors attended our 2023 annual meeting of stockholders.
Although we do not have a
formal policy regarding attendance by members of our board of directors at annual meetings of stockholders, we strongly encourage our
directors to attend.
Committees of the Board
Audit Committee
Our audit committee is comprised
of Dr. Israel Niv, Joseph Moscovitz, and Gideon Marks, with Gideon Marks serving as Chairperson. The audit committee is responsible for
retaining and overseeing our independent registered public accounting firm, approving the services performed by our independent registered
public accounting firm and reviewing our annual financial statements, accounting policies and our system of internal controls. The audit
committee acts under a written charter, which more specifically sets forth its responsibilities and duties, as well as requirements for
the audit committees composition and meetings. The audit committee charter is available on our website
www.actelis.com
.
The board of directors has
determined that each member of the audit committee is independent, as that term is defined by applicable SEC rules. In addition,
the board of directors has determined that each member of the audit committee is independent, as that term is defined by
the rules of the Nasdaq Stock Market.
The board of directors has
determined that Gideon Marks is an audit committee financial expert serving on its audit committee as the SEC has defined
that term in Item 407 of Regulation S-K.
The audit committee met on
four occasions during the fiscal year ended December 31, 2023. Each of the members of the audit committee attended at least 80% of the
meetings held by the audit committee during the fiscal year ended December 31, 2023.
Compensation Committee
Our compensation committee
consists of Dr. Israel Niv, Joseph Moscovitz, and Gideon Marks, with Dr. Israel Niv serving as Chairperson.
The compensation committees
roles and responsibilities include making recommendations to the board of directors regarding the compensation for our executives, the
role and performance of our executive officers, and appropriate compensation levels for our CEO, which are determined without the CEO
present, and other executives. Our compensation committee also administers our 2015 Equity Incentive Plan. The compensation committee
acts under a written charter, which more specifically sets forth its responsibilities and duties, as well as requirements for the compensation
committees composition and meetings. The compensation committee charter is available on our website
www.actelis.com
.
Our compensation committee
is responsible for the executive compensation programs for our executive officers and reports to our board of directors on its discussions,
decisions and other actions. Our compensation committee reviews and approves corporate goals and objectives relating to the compensation
of our Chief Executive Officer, evaluates the performance of our Chief Executive Officer in light of those goals and objectives and determines
and approves the compensation of our Chief Executive Officer based on such evaluation. The Chief Executive Officer may not participate
in, or be present during, any deliberations or determinations of the compensation committee regarding his compensation or individual performance
objectives. Our compensation committee has the sole authority to determine our Chief Executive Officers compensation. In addition,
our compensation committee, in consultation with our Chief Executive Officer, reviews and approves all compensation for other officers,
including the directors. Our Chief Executive Officer and Chief Financial Officer also make compensation recommendations for our other
executive officers and initially propose the performance objectives to the compensation committee.
9
The compensation committee
is authorized to retain the services of one or more executive compensation and benefits consultants or other outside experts or advisors
as it sees fit, in connection with the establishment of our compensation programs and related policies.
Our board of directors has
determined that all three members of the compensation committee are independent, as that term is defined by the rules of
the Nasdaq Stock Market.
The compensation committee
met on three occasions during the fiscal year ended December 31, 2023. Each of the members of the compensation committee attended at least
80% of the meetings held by the compensation committee during the fiscal year ended December 31, 2023.
Nominations and Corporate Governance Committee
The members of the nominations
and corporate governance committee are Dr. Israel Niv, Joseph Moscovitz, and Gideon Marks, with Joseph Moscovitz serving as Chairperson.
The nominations and corporate governance committee acts under a written charter, which more specifically sets forth its responsibilities
and duties, as well as requirements for the nominations and corporate governance committees composition and meetings. The nominations
and corporate governance committee charter is available on our website
www.actelis.com
.
The nominations and corporate
governance committee develops, recommends and oversees implementation of corporate governance principles for us and considers recommendations
for director nominees. The nominations and corporate governance committee also considers stockholder recommendations for director nominees
that are properly received in accordance with applicable rules and regulations of the SEC. Our stockholders that wish to nominate a director
for election to the board of directors should follow the procedures set forth in our bylaws. See When are Stockholder Proposals
Due for the 2025 Annual Meeting?
The nominations and corporate
governance committee will consider persons identified by its members, management, stockholders, investment bankers and others. The guidelines
for selecting nominees, which are specified in the nominating committee charter, generally provide that a candidate for nomination:
●
should be accomplished in his or her field and have a reputation, both personal and professional, that is consistent with our image and reputation;
●
should have relevant experience and expertise and would be able to provide insights and practical wisdom based upon that experience and expertise; and
●
should be of high moral and ethical character and would be willing to apply sound, objective and independent business judgment, and to assume broad fiduciary responsibility.
The nominations and corporate
governance committee will consider a number of qualifications relating to management and leadership experience, background and integrity
and professionalism in evaluating a persons candidacy for membership on the board of directors. The nominations and corporate governance
committee may require certain skills or attributes, such as financial or accounting experience, to meet specific board needs that arise
from time to time and will also consider the overall experience and makeup of its members to obtain a broad and diverse mix of board of
directors members. The nominations and corporate governance committee will not distinguish between nominees recommended by stockholders
and those recommended by other persons.
10
Our board of directors has
determined that all three members of the nominations and corporate governance committee are independent as that term is
defined by the rules of the Nasdaq Stock Market.
The nominations and corporate
governance committee met on one occasion during the fiscal year ended December 31, 2023. Each of the members of the nominations and corporate
governance committee attended the meeting held by the nominations and corporate governance committee during the fiscal year ended December
31, 2023.
Stockholder Communications with the Board of
Directors
Historically, we have not
provided a formal process related to stockholder communications with the board. Nevertheless, every effort has been made to ensure that
the views of stockholders are heard by the board or individual directors, as applicable, and that appropriate responses are provided to
stockholders in a timely manner. Stockholders or other interested parties may communicate with any director by writing to them at Actelis
Networks, Inc., 4039 Clipper Court, Fremont, CA 94538, Attention: Corporate Secretary.
Code of Business Conduct and Ethics
We have a Code of Business
Conduct and Ethics that applies to all our employees. The text of the Code of Business Conduct and Ethics is publicly available on our
website at
www.actelis.com
. Information contained on, or that can be accessed through, our website does not constitute a part of
this report and is not incorporated by reference herein. Disclosure regarding any amendments to, or waivers from, provisions of the code
of business conduct and ethics that apply to our directors, principal executive and financial officers will be posted on the Investors-
Governance section of our website at
www.actelis.com
or will be included in a Current Report on Form 8-K, which we will
file within four business days following the date of the amendment or waiver.
Board Role in Risk Oversight
Risk is inherent with every
business, and how well a business manages risk can ultimately determine its success. We face a number of risks, including economic risks,
financial risks, legal and regulatory risks and others, such as the impact of competition. Management is responsible for the day-to-day
management of the risks that we face, while our board, as a whole and through its committees, has responsibility for the oversight of
risk management. In its risk oversight role, our board is responsible for satisfying itself that the risk management processes designed
and implemented by management are adequate and functioning as designed. Our board assesses major risks facing our Company and options
for their mitigation in order to promote our stockholders interests in the long-term health of our Company and our overall success
and financial strength. A fundamental part of risk management is not only understanding the risks a company faces and what steps management
is taking to manage those risks, but also understanding what level of risk is appropriate for us. The involvement of our full board in
the risk oversight process allows our board to assess managements appetite for risk and also determine what constitutes an appropriate
level of risk for our Company. Our board regularly includes agenda items at its meetings relating to its risk oversight role and meets
with various members of management on a range of topics, including corporate governance and regulatory obligations, operations and significant
transactions, risk management, insurance, pending and threatened litigation and significant commercial disputes.
While our board is ultimately
responsible for risk oversight, various committees of our board oversee risk management in their respective areas and regularly report
on their activities to our entire board. In particular, the audit committee has the primary responsibility for the oversight of financial
risks facing our Company. The audit committees charter provides that it will discuss our major financial risk exposures and the
steps we have taken to monitor and control such exposures. Our board has also delegated primary responsibility for the oversight of all
executive compensation and our employee benefit programs to the compensation committee. The compensation committee strives to create incentives
that encourage a level of risk-taking behavior consistent with our business strategy.
11
We believe the division of
risk management responsibilities described above is an effective approach for addressing the risks facing our Company and that our boards
leadership structure provides appropriate checks and balances against undue risk taking.
Anti-hedging Policy
Our insider trading policy
prohibits directors, officers and other employees or contractors from engaging in short sales, transactions in put or call options, hedging
transactions or other inherently speculative transactions with respect to our stock at any time.
Director Compensation
The following table sets forth
compensation information for our non-employee directors for the year ended December 31, 2023.
Name
Fees
earned
or
paid in
cash ($)
Option
awards
($)
Total
($)
Dr. Israel Niv
19,000
-
19,000
Joseph Moscovitz
10,000
-
10,000
Dr. Naama Halevi-Davidov
19,000
-
19,000
Noemi Schmayer
19,000
-
19,000
Our board adopted a non-employee director compensation
policy pursuant to which each of our directors who is not an employee or consultant of our company will be eligible to receive an annual
cash retainer of $10,000 for his or her service on our board of directors and an annual cash retainer of $2,000 for his or her service
on a committee of our board of directors, with the chairperson of each committee receiving an additional $3,000 annually. Additionally,
following the IPO, as compensation for serving on the board, Dr. Naama Halevi-Davidov, Israel Niv, Noemi Schmayer and Joseph Moscovitz
were each granted 2,500 RSUs, of which shall fully vest over 36 months, subject to each members continued service on the board.
Furthermore, in connection with the IPO, on March 22, 2023, compensation committee of the board approved, and thereafter, on May 2, 2023,
the entire board approved and ratified the annual issuance of RSUs worth $100,000 at their time of their grant to each of our members
of the board, Dr. Naama Halevi-Davidov, Israel Niv, Noemi Schmayer and Joseph Moscovitz (the Annual RSU Grants). The Annual
RSU Grants shall fully vest over 36 months, subject to each members continued service on the board, as compensation for serving
on the board. Each Annual RSU Grant will be subject to their availability under the Plan. The members of the board did not receive any
new grants of options during 2023.
RECOMMENDATION OF THE BOARD FOR PROPOSAL NO.
1:
THE BOARD RECOMMENDS A VOTE FOR THE ELECTION
OF THE NOMINEE NAMED ABOVE UNTIL THE TERM OF SUCH DIRECTOR EXPIRES IN ACCORDANCE WITH HIS CLASS, AND PROXIES SOLICITED BY THE BOARD WILL
BE VOTED IN FAVOR THEREOF UNLESS A STOCKHOLDER HAS INDICATED OTHERWISE ON THE PROXY.
12
PROPOSAL NO. 2
RATIFICATION OF THE APPOINTMENT OF PWC AS INDEPENDENT
PUBLIC ACCOUNTANT FOR THE FISCAL YEAR ENDING DECEMBER 31, 2024
The audit committee has appointed
PwC, independent public accountant, to audit our financial statements for the fiscal year ending December 31, 2024. The board proposes
that the stockholders ratify this appointment. We expect that representatives of PwC will be either present or available via phone at
the Annual Meeting, will be able to make a statement if they so desire, and will be available to respond to appropriate questions.
The following table sets forth
the fees billed by PwC for each of our last two fiscal years for the categories of services indicated.
Fee category
2023
2022
Audit Fees
$
255,938
$
270,000
Audit related fees
$
39,463
$
7,000
Tax fees
$
15,571
$
-
All other fees
$
-
$
-
Total fees
$
310,972
$
277,000
Audit Fees
PwC billed us audit fees in
the aggregate amount of $255,938 and $270,000 for the years ended December 31, 2023 and 2022, respectively. These fees relate to the audit
of our annual financial statements and the review of our interim quarterly financial statements.
Audit-Related Fees
PwC billed us audit-related
fees in the aggregate amount of $39,463 and $7,000 for the year ended December 31, 2023 and 2022, respectively.
Tax Fees
PwC billed us tax fees in
the aggregate amount of $15,571 and $0 for the year ended December 31, 2023 and 2022, respectively. These fees relate to professional
services rendered for tax compliance, tax advice and tax planning.
All Other Fees
PwC did not bill us for any
other fees for the year ended December 31, 2023 and 2022.
Pre-Approval Policies and Procedures
In accordance with the Sarbanes-Oxley
Act of 2002, as amended, our audit committee charter requires the audit committee to pre-approve all audit and permitted non-audit services
provided by our independent registered public accounting firm, including the review and approval in advance of our independent registered
public accounting firms annual engagement letter and the proposed fees contained therein. The audit committee has the ability to
delegate the authority to pre-approve non-audit services to one or more designated members of the audit committee. If such authority is
delegated, such delegated members of the audit committee must report to the full audit committee at the next audit committee meeting all
items pre-approved by such delegated members. In the fiscal years ended December 31, 2023 and December 31, 2022 all of the services performed
by our independent registered public accounting firm were pre-approved by the audit committee.
RECOMMENDATION OF THE BOARD FOR PROPOSAL NO.
2:
THE BOARD RECOMMENDS A VOTE FOR THE RATIFICATION
OF THE APPOINTMENT OF PwC AS INDEPENDENT PUBLIC ACCOUNTANT FOR THE FISCAL YEAR ENDING DECEMBER 31, 2024.
13
PROPOSAL NO. 3
A
PROPOSAL TO
APPROVE THE ABILITY TO ISSUE UP TO 1,360,170 SHARES OF COMMON STOCK UPON THE EXERCISE OF
WARRANTS.
Background
The Private Placement
On December
17, 2023, we entered into a securities purchase agreement (the Purchase Agreement) with
an accredited investor (the Investor),
pursuant to which the Company agreed to
issue and sell to the Investor in a private placement (the Private Placement) (i) 301,000 unregistered shares (the Shares)
of common stock of the Company, $0.0001 par value (the Common Stock), (ii) 970,187 pre-funded warrants (the Pre-Funded
Warrants) to purchase up to 970,187 unregistered shares of Common Stock and (iii) warrants to purchase up to 1,271,187 unregistered
shares of Common Stock (Common Warrants) for a purchase price of $1.18 per share of Common Stock and related Common Warrant
or $1.1799 per Pre-Funded Warrant and related Common Warrant, for a total aggregate gross proceeds of approximately $1.5 million. As of
the date hereof, the Pre-Funded Warrants were exercised in full.
The
Private Placement closed on December 20, 2023, and on that date, we also
issued the Placement Agent Warrant to designees of H.C.Wainwright
Co., LLC, as partial compensation for services rendered in connection with the Private Placement. The shares of Common Stock issuable
upon exercise of the Purchase Warrants and Placement Agent Warrant are referred to as the Warrant Shares.
We are
seeking stockholder approval for the ability to issue up to (i) 1,271,187 shares of our Common
Stock upon the exercise of the Common Warrants and (ii)88,983shares of our Common Stock upon the exercise of the Placement
Agent Warrants, that were issued in and in connection with the Private Placement as contemplated by Nasdaq Listing Rules, that
may be equal to or exceed 20% of our Common Stock outstanding before such offering.
The Common Warrants
The Common
Warrants have an exercise price of $1.18 per share, are exercisable commencing on the effective date of stockholder approval of the issuance
of the shares issuable upon exercise of the Common Warrants and expire five and one-half years following the issuance. Under the terms
of the Common Warrants, the Investor may not exercise the warrants to the extent such exercise would cause the Investor, together with
its affiliates and attribution parties, to beneficially own a number of shares of common stock which would exceed 4.99% (or, at such Investors
option upon issuance, 9.99%), of the Companys then outstanding Common Stock following such exercise, excluding for purposes of
such determination shares of Common Stock issuable upon exercise of such warrants which have not been exercised.
The Placement Agent Warrants
The Common
Warrants have an exercise price of $1.475 per share, are exercisable commencing on the effective date of stockholder approval of the issuance
of the shares issuable upon exercise of the Common Warrants and expire five and one-half years following the closing. Under the terms
of the Common Warrants, the Investor may not exercise the warrants to the extent such exercise would cause the Investor, together with
its affiliates and attribution parties, to beneficially own a number of shares of common stock which would exceed 4.99% (or, at such Investors
option upon issuance, 9.99%), of the Companys then outstanding Common Stock following such exercise, excluding for purposes of
such determination shares of Common Stock issuable upon exercise of such warrants which have not been exercised.
14
The Purchase Agreement
The
Purchase Agreement contains representations, warranties, indemnification and other provisions customary for transactions of this
nature. The Purchase Agreement also provides that, subject to certain exceptions, until 60 days after the effective date of the
registration statement to be filed in connection with private placement, neither the Company nor any of its subsidiaries will issue, enter
into any agreement to issue or announce the issuance or proposed issuance of any shares of Common Stock or Common Stock equivalents
or file a registration statement other than one in connection with the Offering. The Purchase Agreement also provides that, subject
to certain exceptions, for a period of six months following the effective date of the registration statement to be filed in
connection with Offering, the Company will be prohibited from effecting or entering into an agreement to effect any issuance by the
Company or any of its subsidiaries of Common Stock or Common Stock equivalents (or a combination of units thereof) involving a
variable rate transaction, which generally includes any transaction in which the Company (i) issues or sells any debt or equity
securities that are convertible into, exchangeable or exercisable for, or include the right to receive additional shares of common
stock either (A) at a conversion price or exchange rate that is based upon and/or varies with the trading prices of or quotations
for the shares of common stock at any time after the initial issuance of such securities, or (B) with a conversion, exercise or
exchange price that is subject to being reset at some future date after the initial issuance of such debt or equity security or upon
the occurrence of specified or contingent events directly or indirectly related to the business of the Company or the market for the
common stock or (ii) enters into any agreement, whereby the Company may issue securities at a future determined price. The Company
also agreed to seek approval from its shareholders within 90 days following the closing date of the Offering for the issuance of the
shares issuable upon exercise of the Common Warrants.
Effect of the Issuance of the Warrants
The potential issuance of
the Warrants and would result in an increase in the number of shares of common stock outstanding, and our stockholders would incur
dilution of their percentage ownership to the extent that the holders thereof exercise their warrants.
Reasons for Nasdaq Stockholder Approval
Nasdaq Listing Rule 5635(d) 20%
Threshold
Our Common Stock is listed on The Nasdaq Capital Market (Nasdaq)
and trades under the ticker symbol ASNS. Nasdaq Listing Rule 5635(d) requires stockholder approval of transactions other
than public offerings of greater than 20% of the outstanding common stock or voting power of the issuer prior to the offering. The issuance
of the Common Warrants and Placement Agent Warrant under the Purchase Agreement, respectively, implicated Nasdaq Listing Rule 5635(d),
which requires shareholder approval prior to the issuance of securities in connection with a transaction other than a public offering,
involving the sale, issuance or potential issuance by the Company of common stock (or securities convertible into or exercisable for common
stock) at a price less than the lower of: (i) the Nasdaq Official Closing Price (as reflected on Nasdaq.com) immediately preceding the
signing of the binding agreement for the transaction; or (ii) the average Nasdaq Official Closing Price of the common stock (as reflected
on Nasdaq.com) for the five trading days immediately preceding the signing of the binding agreement for the transaction, which alone or
together with sales by officers, directors or substantial shareholders of the company, equals 20% or more of the common stock or 20% or
more of the voting power outstanding before the issuance.
In order to comply with Nasdaq
Listing Rule 5635(d), the Common Warrants and the Placement Agent Warrant are not exercisable until Shareholder Approval is obtained.
Potential Consequences if this
Proposal is Not Approved
The Board is not seeking the approval of our stockholders to authorize
our entry into or consummation of the transactions contemplated by the Purchase Agreement, as the Private Placement has already been completed
and the Warrants have already been issued. We are only asking for approval to allow the issuance of the shares underlying the Warrants upon exercise thereof.
15
The failure of our stockholders
to approve this proposal will mean that: (i) we cannot permit the exercise of the Warrants and (ii) may incur substantial additional costs
and expenses.
The Common Warrants and Placement
Agent Warrant have initial exercise prices of $1.18 and $1.475 per share, respectively. Accordingly, we would realize an aggregate of
up to approximately $1.6 million in gross proceeds if all the Warrants were exercised based on such value. If the Warrants cannot be exercised,
we will not receive any such proceeds, which could adversely impact our ability to fund our operations.
In addition, in
connection with the Private Placement and the issuance of Warrants, we agreed to seek stockholder approval every 90 days until our
stockholders approve the issuance of the shares underlying the Warrants. We are required to seek such approval until such time as
none of the Warrants are outstanding which could result in us seeking such approval every 90 days for five and a half years. The
costs and expenses associated with seeking such approval could materially adversely impact our ability to fund our operations and
advance the clinical trials, regulatory approvals for, and commercialization of our products and product candidates.
Potential Adverse Effects of the Approval of this Proposal
If this proposal is
approved, existing stockholders will suffer dilution in their ownership interests in the future upon the issuance of shares of
Common Stock upon exercise of the Warrants. Assuming the full exercise of the Warrants, an aggregate of 1,360,170 additional shares
of Common Stock will be outstanding, and the ownership interest of our existing stockholders would be correspondingly reduced. In
addition, the sale into the public market of these shares also could materially and adversely affect the market price of our Common
Stock.
Further Information
The terms of the Purchase
Agreement are only briefly summarized above. For further information, please refer to the forms of the Purchase Agreement and Warrants,
which were filed with the SEC as exhibits to our Current Report on Form 8-K, filed with the SEC on December 20, 2023 and are incorporated
herein by reference. The discussion herein is qualified in its entirety by reference to the filed documents.
RECOMMENDATION OF THE BOARD FOR PROPOSAL NO.
3:
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR
A PROPOSAL TO APPROVE THE ABILITY TO ISSUE UP TO (A) 1,271,187 SHARES OF OUR COMMON STOCK UPON THE
EXERCISE OF OUR COMMON STOCK PURCHASE WARRANTS ISSUED TO AN INSTITUTIONAL PURCHASER IN A PRIVATE TRANSACTION THAT CLOSED ON DECEMBER
20, 2023, AND (B) 88,983 SHARES OF OUR COMMON STOCK UPON THE EXERCISE OF A COMMON STOCK PURCHASE WARRANT ISSUED TO DESIGNEES OF H.C.
WAINWRIGHT CO., LLC AS PARTIAL COMPENSATION FOR SERVICES IN CONNECTION WITH THE REFERENCED TRANSACTION, FOR PURPOSES OF COMPLYING
WITH NASDAQ LISTING RULE 5635(D).
16
PROPOSAL NO. 4
APPROVAL
OF THE ADJOURNMENT
The Company is asking
stockholders to approve, if necessary, adjournment of the Annual Meeting to solicit additional proxies in favor of the Director Appointment,
the Auditor Appointment, and/or the Nasdaq listing rule 5635(d) share issuance authorization. Any adjournment of the Annual Meeting for
the purpose of soliciting additional proxies will allow stockholders who have already sent in their proxies to revoke them at any time
prior to the time that the proxies are used.
Vote Required
The affirmative vote of a majority of the voting power present or represented
by proxy is required to approve the Adjournment proposal. Abstentions represent the voting power present under the Companys amended
and restated bylaws, and accordingly will have the same effect as a vote AGAINST the outcome of this Proposal No. 4.
RECOMMENDATION OF THE BOARD FOR PROPOSAL NO.
4:
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR
the ADJOURNMENT.
17
SECURITY OWNERSHIP
OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth
certain information regarding beneficial ownership of shares of our common stock as of June 11, 2024 by (i) each person known to beneficially
own more than 5% of our outstanding common stock, (ii) each of our directors, (iii) each of our executive officers, and (iv) all of our
directors and executive officers as a group. Except as otherwise indicated, the persons named in the table below have sole voting and
investment power with respect to all shares beneficially owned, subject to community property laws, where applicable.
Name of Beneficial Owner
(1)
Shares of
Common
Stock
Beneficially
Owned
Percentage
(2)
Tuvia Barlev
178,829
(3)
3.6
%
Yoav Efron
14,410
(4)
*
Eyal Aharon
603
(5)
*
Brett Harrison
1,667
(6)
*
Michal Winkler-Solomon
5,383
(7)
*
Hemi Kabir
284
(8)
*
Israel Niv
68,472
(9)
1.4
%
Elad Domanovitz
4,134
(10)
*
Joseph Moscovitz
1,666
(11)
*
Yaron Altit
-
-
Gideon Marks
-
-
All executive officers and directors as a group (11 persons)
275,448
5.5
%
5% Stockholders
Armistice Capital Master Fund, Ltd.
(12)
272,000
(13)
5.40
%(13)
*
Less than 1%
(1)
Unless otherwise noted, the business address of the following entities or individuals is 4039 Clipper Court, Fremont, CA 94538.
(2)
The calculation in this column is based upon 5,008,992 shares of common stock outstanding on June 11, 2024. Beneficial ownership is determined in accordance with the rules of the SEC and generally includes voting or investment power with respect to the subject securities. Shares of common stock that are currently exercisable or exercisable within 60 days of June 11, 2024 are deemed to be beneficially owned by the person holding such securities for the purpose of computing the percentage beneficial ownership of such person, but are not treated as outstanding for the purpose of computing the percentage beneficial ownership of any other person.
(3)
Consists of (i) 161,539 shares of common stock held by Mr. Barlev and (ii) 8,325 shares of common stock issuable upon the vesting of RSUs issued to Mr. Barlev, and 8,965 shares of common stock purchased under a 10-b5 plan.
(4)
Consists of (i) 323 shares of common stock held by Mr. Efron; (ii) 12,421 shares of common stock issuable upon the exercise of options and (iii) 1,666 RSUs.
(5)
Includes 603 shares of common stock issuable upon the exercise of options.
(6)
Includes 1,667 of RSUs.
(7)
Includes (i) 4,116 shares of common stock issuable upon the exercise of options and (ii) 1,267 RSUs.
(8)
Includes 284 shares of common stock issuable upon the exercise of options.
(9)
Consists of (i) 45,856 shares of common stock held by The Niv Family Trust, for which the Reporting Person and his spouse serve as trustees; (ii) 13,939 shares of common stock held by Sharon Hava Niv 2015 Family Trust for which Mr. Niv and his spouse serve as trustee; (iii) 7,011 shares of common stock issuable upon the exercise of options; and (iv) 1,666 RSUs.
(10)
Includes 4,134 shares of common stock issuable upon the exercise of options.
(11)
Includes 1,666 shares of common stock issuable upon the exercise of options.
(12)
The securities are directly held by Armistice Capital Master Fund Ltd., a Cayman Islands exempted company, and may be deemed to be indirectly beneficially owned by: (i) Armistice Capital, LLC (Armistice Capital), as the investment manager of the Investor; and (ii) Steven Boyd, as the Managing Member of Armistice Capital. Armistice Capital and Steven Boyd disclaim beneficial ownership of the securities except to the extent of their respective pecuniary interests therein. The business address of the Master Fund is c/o Armistice Capital, LLC, 510 Madison Ave, 7th Floor, New York, NY 10022.
(13)
Represents 272,000 shares
of common stock. Does not include (i) 1,271,187 shares of common stock issuable upon the exercise of warrants issued in December
2023 and (ii) 1,999,340 shares of common stock issuable upon the exercise of warrants issued in June 2024. All of these warrants are
subject to a beneficial ownership limitation of 4.99%, which such limitation restrict the Master Fund from exercising that portion
of the warrants that would result in the Master Fund and its affiliates owning, after exercise, a number of shares of common stock
in excess of the beneficial ownership limitation.
18
EXECUTIVE COMPENSATION AND OTHER INFORMATION
The following table sets forth
certain information about our executive officers:
Name
Age
Position
Tuvia Barlev
62
Chief Executive Officer and Chairman
Yoav Efron
55
Chief Financial Officer and Deputy Chief Executive Officer
Yaron Altit
54
Executive Vice President, International Sales
Tuvia Barlev Chief Executive Officer
and Chairman
Mr. Barlevs biography
is listed under Proposal No. 1Election of Directors.
Yoav Efron Chief Financial Officer
and Deputy Chief Executive Officer
Mr. Efron has served as our
Chief Financial Officer since January 2018, and as our Deputy Chief Executive Officer since May 2024. Mr. Efron is responsible for all
financial aspects of our business and for strategy, as well as Information Technology and Human Resources. Prior to joining Actelis, Mr.
Efron was the CFO of TriPlay Inc. and eMusic Inc., a B2C cloud media services company, from 2012 to 2017. From 2010 to 2014, Mr. Efron
was an entrepreneur in energy efficiency, and from 1998 through 2010 worked at Avaya Inc., a Fortune 500 telecommunications company in
various executive financial roles including Finance Director. Mr. Efron earned his bachelors degree in economics and management
from the Hebrew University of Jerusalem.
Yaron Altit Executive Vice President,
International Sales
Mr. Altit has served as our
Vice President of International Sales since June 2017. Prior to joining us, Mr. Altit was self-employed from 2013 to 2017. Mr. Altit brings
more than 25 years of experience to his position as Actelis Executive Vice President International Sales business unit, including
vast experience in sales management positions in the Telecom, Datacom, and control plane industries. In his role, Mr. Altit is responsible
for all EMEA APAC regions customer-facing functions, including sales, customer support, pre-sale engineering, business development
and regional marketing. Mr. Altit held executive positions in several telecommunication companies, including management of Sales, Customer
Support and Business Development at Schema, where he was the General Manager of EMEA Business unit. Previously, Mr. Altit held top sales
management positions at Mindspeed Technologies. Mr. Altit was responsible for European and International sales at T-Soft (now Cramer Systems,
an Amdocs OSS division). Mr. Altit studied towards a B.A. in Economics and Accounting at the Ramat Gan College.
Summary Compensation Table
The following sets forth the
compensation paid by us to our named executive officers, during the years ended December 31, 2023 and December 31, 2022.
Name and Principal Position
Year
Salary
($)
Bonus
($)
Stock
Awards
($)
Option
Awards
($)
All Other
Compensation
($)
Total
($)
Tuvia Barlev
2023
298,000
163,000
-
-
13,834
475,885
Chief Executive Officer and Chairman
2022
250,000
125,000
500,000
-
11,603
886,603
Yoav Efron
2023
183,727
36,500
-
-
16,337
236,564
Chief Financial Officer and Deputy Chief
Executive Officer
2022
172,614
85,000
100,000
-
26,934
384,548
Yaron Altit
2023
132,381
62,790
11,760
-
21,584
228,515
Executive Vice President, International Sales
2022
121,850
82,865
3,840
-
20,885
229,440
19
All Other Compensation Table
The
All Other Compensation amounts set forth in the Summary Compensation Table above consist of the following:
Name
Year
Automobile-
Related
Expenses
($)
Managers
Insurance*
($)
Education
Fund*
($)
Other social benefits**
($)
Total
($)
Tuvia Barlev
2023
-
-
-
13,834
13,834
2022
-
-
-
11,603
11,603
Yoav Efron
2023
-
-
3,094
13,243
16,337
2022
-
-
4,887
22,047
26,934
Yaron Altit
2023
-
-
5,038
16,546
21,584
2022
-
-
6,570
14,315
20,885
*
Managers insurance and education funds are customary benefits provided to employees based in Israel. Managers insurance is a combination of severance savings (in accordance with Israeli law), defined contribution tax-qualified pension savings and disability insurance premiums. An education fund is a savings fund of pre-tax contributions to be used after a specified period of time for educational or other permitted purposes.
**
Other social benefits for 2023 and 2022 for all named individuals includes tax payments in respect of social benefits.
Agreements with Named Executive Officers
We have entered into written
employment agreements with our executive officers. All of these agreements contain customary provisions regarding noncompetition, confidentiality
of information and assignment of inventions. However, the enforceability of the noncompetition provisions may be limited under applicable
law.
Chief Executive Officer
Employment Agreement with Mr. Tuvia Barlev
On February 15, 2015, we entered
into an at-will employment agreement with Mr. Tuvia Barlev, which remains in effect as of the date of this Annual Report.
In May 2022, the Company approved
an increase to Mr. Barlevs salary, effective upon completion of the IPO, to $300,000 with performance bonuses of an additional
$260,000. In addition, Mr. Barlev received a bonus of $125,000 following the IPO and is entitled annually to receive $500,000 of RSUs
under the Companys 2015 Plan. For the fiscal year of 2023, Mr. Barlev was not granted these RSUs.
In May 2023, the Company approved
an increase to Mr. Barlevs salary to $330,000, effective as of April 1,2023. In addition, Mr. Barlev was granted an additional
27,500 RSUs, and a $163,801 bonus for 2022. However, Mr. Barlev decided not to apply his approved salary increase. In addition, in September
2023 the board indefinitely delayed the grant of 27,500 RSUs to Mr. Barlev.
Mr. Barlevs employment
agreement provides that that he will be entitled to severance if we terminate his employment without Cause (as defined in
the employment agreement), if he terminates his employment for Good Reason (as defined in the employment agreement), or
following his death or permanent disability. In any event in which Mr. Barlev is entitled to severance pursuant to these provisions, we
shall continue to pay Mr. Barlev his then-in-effect base salary and provide benefit continuation at our expense for a period of nine months
from the date of termination of employment. Any severance payable to Mr. Barlev shall be payable in equal instalments in the same manner
and in our regular payroll cycle as other salaried executive employees are paid.
20
Consultant Agreement with Barlev Enterprises
Inc.
In February 2015, we entered
into a consulting agreement with Barlev Enterprises Inc., a company owned by Mr. Tuvia Barlev, our Chief Executive Officer, and his wife,
Nurit Barlev (the Barlev Consulting Agreement). Pursuant to the Barlev Consulting Agreement, Barlev Enterprises Inc. provides
services to us as an independent contractor and receives a monthly retainer of $2,083 for these services. The Barlev Consulting Agreement
contains provisions regarding noncompetition, non-solicitation, confidentiality of information and assignment of inventions. The enforceability
of the noncompetition covenants is subject to certain limitations. The Barlev Consulting Agreement will continue to be in full force and
effect unless otherwise terminated in accordance with its terms. The Barlev Consulting Agreement may be terminated by either party, with
or without cause, at any time upon six (6) months advance written notice to the other party. This agreement was terminated following the
IPO.
Promissory Note with Tuvia Barlev
On February 20, 2015, we made
a loan to our Chief Executive Officer, Mr. Tulia Barlev, in the principal amount of $106,290, which loan was evidenced by a secured, nonnegotiable
promissory note (the Barlev Note). In April 2022, we entered into a Securities Purchase and Loan Repayment Agreement with
Mr. Barlev, pursuant to which Mr. Barlev sold to the Company 27,699 shares for a purchase price equal to $4.55 per share for an aggregate
purchase consideration of $126,023 (the Purchase Consideration). In lieu of paying Mr. Barlev the Purchase Consideration
for the shares in cash, the Purchase Consideration was used to repay in full the outstanding loan amount and accrued interest owed to
the Company by Mr. Barlev, and the Barlev Note was terminated.
Chief Financial Officer
Employment Agreements with Mr. Yoav Efron
In December 2017, we entered
into an at will employment agreement with our Chief Financial Officer, Mr. Yoav Efron, and he entered into another, separate, at will
employment agreement with our subsidiary. Both of these agreements remain in effect as of the date of this Annual Report.
In May 2022, the Company approved
an increase to Mr. Efrons salary, effective upon completion of the IPO, to $187,000 through both employment agreements with performance
bonuses of an additional $50,000. In addition, Mr. Efron received a one-time $85,000 bonus upon completion of the IPO and is entitled
annually to receive $100,000 of RSUs. For the fiscal year of 2023, Mr. Efron was not granted these RSUs.
In May 2023, the Company approved
an increase to Mr. Efrons salary to $205,000, effective as of April 1, 2023. In addition, Mr. Efron was granted an additional 5,500
RSUs, and a $36,500 bonus for 2022. However, Mr. Efron decided not to apply his approved salary increase. In addition, in September 2023
the board indefinitely delayed the above mentioned grant of 5,500 RSUs to Mr. Efron.
Mr. Efrons employment
agreements provide that that he will be entitled to severance if we terminate his employment without Cause (as defined in
the employment agreements), if he terminates his employment for Good Reason (as defined in the employment agreements), we
shall continue to pay Mr. Efron his then-in-effect base salary and provide benefit continuation at our expense for a period of nine months
from the date of termination of employment following an acquisition of Actelis. Any severance payable to Mr. Efron shall be payable in
equal instalments in the same manner and in our regular payroll cycle as other salaried executive employees are paid.
Effective
May 9, 2024, Mr. Efron, has been promoted to Deputy Chief Executive Officer, in addition to his current position as Chief Financial Officer.
Executive Vice President, International Sales
Employment Agreement, as amended, with Mr. Yaron Altit
On June 19, 2017, we entered
into an at-will employment agreement with Mr. Yaron Altit, which remains in effect as of the date of this Annual Report. On April 2023,
the Company approved an increase to Mr. Altits salary, effective March 1, 2023, to a monthly salary of NIS42,000. Additionally,
Mr. Altit will receive 4,000 RSU pending board approval.
21
Mr. Altits employment
agreement may be terminated by either party by providing written notice to the other party at least 90 days in advance. Should Mr. Altit
resign without giving prior notice, the Company may withhold any owed amounts, including salary, equivalent to the salary he would have
been entitled to receive had he been employed during the notice period.
The Company may terminate
Mr. Altits employment agreement without the need for prior notice, if such termination is for good cause, as defined
in the employment agreement.
Outstanding Equity Awards at Fiscal Year-End
The following table provides
information regarding options held by each of our named executive officers that were outstanding as of December 31, 2023.
Option Awards
Stock Awards
Name and Principal Position
Number of
Securities
Underlying
Unexercised
Options
Exercisable
Number of
Securities
Underlying
Unexercised
Options
Unexercisable
Option
Exercise
Price
Option
Expiration
Date
Equity
incentive
plan awards:
Number of
Unearned
Shares that Have
Not Vested
Equity
incentive
plan awards:
Market Value of
Unearned
Shares, That Have
Not Vested
Tuvia Barlev
Chief Executive Officer and Chairman
-
-
$
-
-
4,167
(1)
$
4,667
Yoav Efron
Chief Financial Officer
10,700
(2)
-
$
1.058
02/08/2028
-
-
1,630
544
(3)
$
13.616
05/27/2031
-
-
-
-
$
-
-
834
(4)
$
934
Yaron Altit Executive Vice President, International Sales
5,255
(5)
-
$
1.058
06/08/2027
-
-
5,445
(6)
-
$
1.058
05/08/2028
-
-
-
-
$
-
-
533
(7)
$
597
-
-
$
-
-
4,000
(8)
$
4,480
(1)
The RSUs vests annually in three equal tranches, with the first tranche vesting on May 17, 2023, the second tranche vested on May 17, 2024, and the last tranche vesting on May 17, 2025.
(2)
This option grant was vested in full on December 7, 2021.
(3)
25% of these options vested on May 27, 2022, with the remaining 75% vesting monthly thereafter.
(4)
The RSUs vests annually in three equal tranches, with the first tranche vesting on May 17, 2023, the second tranche vested on May 17, 2024, and the last tranche vesting on May 17, 2025
(5)
This option grant was vested in full on June 12, 2021.
(6)
This option grant was vested in full on February 1, 2022.
(7)
The RSUs vests annually in three equal tranches, with the first tranche vesting on September 29, 2023, the second tranche vested on September 29, 2024, and the last tranche vesting on September 29, 2025.
(8)
The RSUs vests annually in three equal tranches, with the first tranche vested on June 14, 2024, the second tranche vesting on June 14, 2025, and the last tranche vesting on June 14, 2026.
22
REPORT OF THE AUDIT COMMITTEE
The audit committee has reviewed
and discussed the audited financial statements for the fiscal year ended December 31, 2023 with management of the Company. The audit committee
has discussed with the independent registered public accounting firm the matters required to be discussed by the applicable requirements
of the Public Company Accounting Oversight Board (the PCAOB), and the SEC. The audit committee has also received the written
disclosures and the letter from the independent registered public accounting firm required by applicable requirements of the PCAOB regarding
the independent accountants communications with the audit committee concerning independence and has discussed with the independent
registered public accounting firm the accounting firms independence. Based on these reviews and discussions, the audit committee
has recommended to the board that the audited financial statements be included in our Form 10-K for the year ended December 31, 2023.
Gideon Marks
Dr. Israel Niv
Joseph Moscovitz
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS,
AND DIRECTOR INDEPENDENCE
Other than the compensation
agreements and other arrangements described under Executive Compensation and the transactions described below, since January
1, 2023, we did not participate in any transaction, and we are not currently participating in any proposed transaction, or series of transactions,
in which the amount involved exceeded the lesser of $120,000 or one percent of the average of our total assets at year-end for the last
two completed fiscal years, and in which, to our knowledge, any of our directors, officers, five percent beneficial security holders,
or any member of the immediate family of the foregoing persons had, or will have, a direct or indirect material interest.
Services Agreement with Ram Vromen
On December 27, 2021, we entered
into a service agreement with Dr. Ram Vromen, our former director (the Vromen Services Agreement). Under the terms of the
Vromen Services Agreement, Dr. Vromen provides services to us as an independent contractor. The services include advising us and aiding
in fundraising, assisting with presentations and providing follow-up, negotiating deals, legal assistance. We agreed to pay the outstanding
amount for unpaid services rendered by Dr. Vromen during the period between February 15, 2015, and ending on December 31, 2019, of $197,500
plus VAT (the Outstanding Fees). Pursuant to the Vromen Services Agreement, Dr. Vromen will also be entitled to additional
fees in the amount of $150,000, plus VAT as follows: Dr. Vromen will receive (1) $100,000 upon the earlier to occur of (i) the closing
of a financing round by us of at least $2.0 million and (ii) achievement of at least $3.0 million in EBITDA as reported by us, which fee
was paid to Dr. Vromen in January 2022 following the closing of our private placement, and (2) $50,000 upon the earlier to occur of (i)
the closing of a financing round by us of at least $4.0 million and (ii) achievement of at least $3.0 million in EBITDA as reported by
us. In the event that we reach the second of the milestones set forth above and Dr. Vromen is entitled to receive such additional fees,
then we will pay to Dr. Vromen all of the Outstanding Fees, together with the payment of such additional fees, provided that we may pay
any and all of the Outstanding Fees in several installments over a period not to exceed twenty-four (24) months from achievement of the
applicable milestone.
23
Employment Agreements
We have entered into written
employment agreements with each of our executive officers. These agreements generally provide for notice periods of varying duration for
termination of the agreement by us or by the relevant executive officer, during which time the executive officer will continue to receive
base salary and benefits. We have also entered into customary non-competition, confidentiality of information and ownership of inventions
arrangements with our executive officers. However, the enforceability of the noncompetition provisions may be limited under applicable
law.
Options
Since our inception we have
granted options to purchase our common stock to our officers and directors. Such option agreements may contain acceleration provisions
upon certain merger, acquisition, or change of control transactions.
Restricted Stock Grants
Since our inception we have
granted restricted share awards under our 2015 Equity Incentive Plan to
Directors, officers, consultants
and employees
The restricted shares shall vest over a three-year period.
Indemnification Agreements and Directors
and Officers Liability Insurance
We have entered into indemnification
agreements with each of our directors and executive officers. These agreements, among other things, require us to indemnify these individuals
and, in certain cases, affiliates of such individuals, to the fullest extent permitted by Delaware law against liabilities that may arise
by reason of their service to us or at our direction, and to advance expenses incurred as a result of any proceedings against them as
to which they could be indemnified. We also maintain an insurance policy that insures our directors and officers against certain liabilities,
including liabilities arising under applicable securities laws.
Director Independence
See Nominees for Director
above for a discussion regarding the independence of the members of our board of directors.
24
STOCKHOLDER PROPOSALS TO BE PRESENTED AT THE
NEXT ANNUAL MEETING
To be considered for inclusion
in the proxy statement relating to our 2025 Annual Meeting of Stockholders, we must receive stockholder proposals (other than for director
nominations) no later than 120 days prior to the date that is one year from this years mailing date. To be considered for presentation
at the 2025 Annual Meeting, although not included in the proxy statement, proposals (including director nominations that are not requested
to be included in our proxy statement) must be received no earlier than the close of business on the 150th day nor later than the close
of business on the 120th day prior to the first anniversary of the date of the preceding years Annual Meeting as first specified
in the notice of meeting (without regard to any postponements or adjournments of such meeting after the notice was first given). The notice
must include information concerning the nominee or proposal, as the case may be, and information concerning the proposing or nominating
stockholders ownership of and agreements related to our stock. If the 2025 Annual Meeting is held more than 30 days before or after
the first anniversary of the date of the 2024 Annual Meeting, the stockholder must submit notice of any such nomination and of any such
proposal that is not made pursuant to Rule 14a-8 by the later of the 90th day prior to the 2025 Annual Meeting or the 10th day following
the date on which public announcement of the date of such meeting is first made. Proposals that are not received in a timely manner will
not be voted on at the 2025 Annual Meeting. If a proposal is received on time, the proxies that management solicits for the meeting may
still exercise discretionary voting authority on the proposal under circumstances consistent with the proxy rules of the SEC.
Proposals should be addressed to:
Actelis Networks, Inc.
4039 Clipper Court
Fremont, CA 94538
(510) 545-1045
You may propose director candidates
for consideration by the Boards Corporate Governance and Nominating Committee. Any such recommendations should include the nominees
name and qualifications for Board membership, information regarding the candidate as would be required to be included in a proxy statement
filed pursuant to SEC regulations, and a written indication by the recommended candidate of her or his willingness to serve, and should
be directed to the Corporate Secretary at our principal executive offices within the time period described above for proposals other than
matters brought under SEC Rule 14a-8.
ANNUAL REPORT
Our Annual Report on Form
10-K for the year ended December 31, 2023 is being delivered with this proxy statement. Any person who was a beneficial owner of our ordinary
shares on the Record Date may request a copy of our Annual Report, and it will be furnished without charge upon receipt of a written request
identifying the person so requesting an Annual Report as a stockholder of Actelis at such date. Requests should be directed in writing
to Actelis Networks, Inc., 4039 Clipper Court, Fremont, CA 94538, Attention: Corporate Secretary or by calling us at +1 (510) 545-1045,
Attention: Corporate Secretary. Our Annual Report, as well as other company reports, are also available on the SECs website (www.sec.gov).
STOCKHOLDERS SHARING THE SAME LAST NAME AND
ADDRESS
The SEC has adopted
rules that permit companies and intermediaries such as brokers to satisfy delivery requirements for proxy statements with respect to
two or more stockholders sharing the same address by delivering a single proxy statement addressed to those stockholders. This
process, which is commonly referred to as householding, potentially provides extra convenience for stockholders and
cost savings for companies. We and some brokers household proxy materials, delivering a single proxy statement to multiple
stockholders sharing an address unless contrary instructions have been received from the affected stockholders. Once you have
received notice from your broker or us that they are or we will be householding materials to your address, householding will
continue until you are notified otherwise or until you revoke your consent. If, at any time, you no longer wish to participate in
householding and would prefer to receive a separate proxy statement, or if you currently receive multiple proxy statements and would
prefer to participate in householding, please notify your broker if your shares are held in a brokerage account or us if you hold
registered shares. You can notify us by sending a written request to 4039 Clipper Court, Fremont, California 94538, Attention:
Tuvia Barlev, Chief Executive Officer.
OTHER MATTERS
We have no knowledge of any
other matters that may come before the Annual Meeting and does not intend to present any other matters. However, if any other matters
shall properly come before the meeting or any adjournment, the persons soliciting proxies will have the discretion to vote as they see
fit unless directed otherwise.
If you do not plan to attend
the Annual Meeting, in order that your shares may be represented and in order to assure the required quorum, please sign, date and return
your proxy promptly. In the event you are able to attend the Annual Meeting, at your request, we will cancel your previously submitted
proxy.
25
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