ACTELIS NETWORKS INC

ACTELIS NETWORKS INC: Facing Nasdaq Delisting – A Critical Update for Investors

Actelis Networks is confronting a critical challenge that could significantly impact its future and your investment. This is not a routine update; the company has received a formal delisting notice from Nasdaq, signaling serious implications.

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1. Event Description: The Immediate Challenge - Nasdaq Delisting Notice

Actelis Networks recently received a formal delisting determination notice from Nasdaq. This means Nasdaq intends to remove Actelis's shares from trading on the Nasdaq Capital Market.

However, Actelis is challenging this decision. The company plans to formally request a hearing before an independent Nasdaq Hearings Panel. This request is crucial because it temporarily stays (pauses) the delisting action, allowing Actelis's shares to continue trading on Nasdaq while the appeal process unfolds.

2. Event Date/Timeline: Key Dates and Deadlines

• February 4, 2026: Actelis received the formal delisting notice.
• February 11, 2026 (estimated): Actelis must submit its request for a hearing by this approximate deadline (within seven calendar days of the notice). Missing this deadline would result in immediate delisting.
• November 18, 2025: Actelis conducted a 1-for-10 reverse stock split.
• Within 30-45 days of request (estimated): Nasdaq typically schedules the hearing before the Nasdaq Hearings Panel within this timeframe.

3. Event Description (Continued): Why This Happened - The "Dollar Rule" and Reverse Split Penalty

Nasdaq requires listed companies to maintain a minimum bid price of $1.00 per share. Actelis's stock failed to meet this requirement for 30 consecutive business days.

Crucially, Nasdaq denied Actelis the standard 180-day grace period typically granted to companies whose stock falls below the $1.00 threshold. This denial stems from Nasdaq Listing Rule 5810(c)(3)(A)(iv). This rule specifies that if a company implements a reverse stock split and its stock price then falls back below $1.00 within one year, Nasdaq can immediately issue a delisting determination without a compliance period.

Actelis conducted a 1-for-10 reverse stock split on November 18, 2025, consolidating ten old shares into one new, more valuable share. Unfortunately, the stock price subsequently dropped below $1.00 again, triggering this immediate delisting determination.

4. Impact Assessment: Why This Matters - Significant Impact on Company and Investors

A Nasdaq delisting is a major blow, carrying severe implications for both the company and its investors:

• Reduced Trading Liquidity and Accessibility: If delisted, Actelis's shares would likely trade on less regulated Over-The-Counter (OTC) markets, such as the OTCQB or Pink Sheets. These markets typically have fewer buyers and sellers, making it much harder to buy or sell shares quickly and at a fair price. Some brokerage firms may also impose restrictions or higher fees for trading OTC stocks.
• Loss of Credibility and Investor Confidence: Removal from a major exchange like Nasdaq signals significant financial distress and can severely damage the company's reputation. This often leads to a further decline in investor confidence and stock price.
• Significant Financial Repercussions: The company faces substantial financial challenges. Accessing capital becomes significantly harder and more expensive for delisted companies, impacting Actelis's ability to fund operations, invest in growth, or attract new institutional investors. It could also affect their ability to secure loans or meet existing debt covenants. Investors should anticipate a high likelihood of further depreciation in share value and potential for further dilution if the company needs to raise capital.
• Increased Volatility and Risk: OTC markets are generally less transparent, with less stringent reporting requirements. This can lead to higher price volatility and increased risk for investors.

5. Impact Assessment (Continued): Who Is Affected?

The potential delisting affects several key groups:

• Investors: As an investor, you face direct impacts from the potential loss of liquidity, increased trading difficulty, and likely further depreciation in share value.
• Actelis Networks: The company confronts an existential challenge to its public listing, its ability to attract funding, and its overall market standing.
• Employees, Customers, and Partners: While not immediately affecting day-to-day operations, the financial distress signaled by a delisting can eventually impact the company's ability to retain talent, invest in products, or fulfill long-term commitments.

6. Event Description (Continued): What Happens Next - The Hearing and Potential Outcomes

Here's what investors can expect next:

• The Hearing: At the hearing, Actelis must present a compelling plan to the Nasdaq Hearings Panel. This plan needs to demonstrate how the company intends to regain and sustain compliance with all Nasdaq listing requirements, primarily the $1.00 minimum bid price.
• Potential Strategies: Such a plan might include:
  • Operational Improvements: Announcing new contracts, significant product developments, or strategic partnerships designed to boost revenue and profitability.
  • Financial Restructuring: Implementing cost-cutting measures, asset sales, or a new capital raise (though raising capital for a delisted company is challenging).
  • Another Reverse Stock Split: While Actelis recently completed one, if granted an extension, the company might consider another, though investors often view this negatively.
• Possible Outcomes:
  • Extension Granted: The panel could grant Actelis an extension, providing a specific timeframe (e.g., up to 180 days) to meet compliance requirements.
  • Delisting Upheld: The panel could uphold the delisting determination, in which case Actelis's shares would be removed from Nasdaq shortly after the decision.
• If Delisted: Should the delisting be upheld, Actelis's stock would begin trading on an OTC market, subject to different rules and significantly reduced visibility.

7. Key Takeaways for Investors

For investors, this situation presents several critical considerations:

• High Risk, High Volatility: Expect significant price fluctuations as the market reacts to this news and subsequent updates. This remains a highly speculative situation.
• Evaluate Your Position: Carefully assess your comfort level with the increased risk, potential lack of liquidity, and the possibility of your investment moving to a less transparent market.
• Monitor Closely: Pay extremely close attention to all future announcements from Actelis, especially regarding the hearing date, their proposed compliance plan, and the Nasdaq panel's final decision.
• Understand OTC Trading: Research the implications of trading on Over-The-Counter (OTC) markets, including potential broker limitations, wider bid-ask spreads, and reduced access to real-time information.
• Potential for Further Dilution: If Actelis needs to raise capital to fund operations or meet compliance, it could involve issuing new shares, potentially diluting the value of existing holdings.

This situation is far more critical than typical operational news. It directly threatens Actelis's ability to trade on a major exchange and signals deep financial challenges.