Ondas Holdings Inc. Form 10-Q Quarterly Report Filed 2021-08-16
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SECURITIES AND EXCHANGE COMMISSION FORM 10-Q Quarterly report pursuant to sections 13 or 15(d) Filing Date: 2021-08-16 | Period of Report: 2021-06-30 SEC Accession No. 0001213900-21-043005 (HTML Version on secdatabase.com) FILER Ondas Holdings Inc. Mailing Address Business Address 61 OLD SOUTH RD., #495 61 OLD SOUTH RD., #495 CIK:1646188| IRS No.: 000000000 | State of Incorp.:NV | Fiscal Year End: 1231 NANTUCKET MA 02554 NANTUCKET MA 02554 Type: 10-Q | Act: 34 | File No.: 001-39761 | Film No.: 211178412 6314187044 SIC: 3663 Radio & tv broadcasting & communications equipment Copyright © 2021 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2021 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from________ to ___________ Commission File Number: 000-56004 ONDAS HOLDINGS INC. (Exact name of registrant as specified in its charter) Nevada 47-2615102 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 61 Old South Road, #495, Nantucket, MA 02554 (Address of principal executive offices) (Zip Code) (888) 350-9994 (Registrant’s telephone number) N/A (Former name, former address and former fiscal year, if changed since last report) Securities registered pursuant to Section 12(b) of the Act: None Name of each exchange on which Title of each class Trading Symbol(s) registered Common Stock par value $0.0001 ONDS The Nasdaq Stock Market LLC Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☑ No ☐ Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☑ No ☐ Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act. Large accelerated filer ☐ Accelerated filer ☐ Non-accelerated filer ☒ Smaller reporting company ☒ Emerging growth company ☒ Copyright © 2021 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐ Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☑ The number of shares outstanding of the issuer’s common stock as of August 13, 2021 was 39,666,886. ONDAS HOLDINGS INC. INDEX TO FORM 10-Q Page PART I - FINANCIAL INFORMATION Item 1. Financial Statements Condensed Consolidated Balance Sheets as of June 30, 2021 (Unaudited) and December 31, 2020 1 Condensed Consolidated Statements of Operations for the Three and Six Months Ended June 30, 2021 2 and 2020 (Unaudited) Condensed Consolidated Statements of Stockholders’ Equity (Deficit) for the Three and Six Months 3 Ended June 30, 2021 and 2020 (Unaudited) Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2021 and 2020 4 (Unaudited) Notes to the Unaudited Condensed Consolidated Financial Statements 5 Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations 26 Item 3. Quantitative and Qualitative Disclosures about Market Risks 37 Item 4. Controls and Procedures 37 PART II - OTHER INFORMATION Item 1. Legal Proceedings 39 Item 1A. Risk Factors 39 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 42 Item 3. Defaults upon Senior Securities 42 Item 4. Mine Safety Disclosures 42 Item 5. Other Information 42 Item 6. Exhibits 42 Copyright © 2021 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document i ONDAS HOLDINGS INC. CONDENSED CONSOLIDATED BALANCE SHEETS December June 30, 31, 2021 2020 (Unaudited) ASSETS Current Assets: Cash and cash equivalents $ 58,550,105 $ 26,060,733 Accounts receivable, net 726,338 47,645 Inventory, net 1,146,718 1,152,105 Note receivable 2,000,000 - Other current assets 1,064,958 629,030 Total current assets 63,488,119 27,889,513 Property and equipment, net 185,241 163,084 Other Assets: Intangible assets, net 292,716 379,530 Lease deposits 118,577 28,577 Operating lease right of use assets 833,852 51,065 Total other assets 1,245,145 459,172 Total assets $ 64,918,505 $ 28,511,769 LIABILITIES AND STOCKHOLDERS’ DEFICIT Current Liabilities: Accounts payable $ 1,871,858 $ 2,368,203 Operating lease liabilities 476,487 56,168 Accrued expenses and other current liabilities 2,073,735 2,832,780 Secured promissory note, net of debt discount of $0 and $120,711, respectively - 7,003,568 Deferred revenue 24,692 165,035 Notes payable - 59,550 Total current liabilities 4,446,772 12,485,304 Long-Term Liabilities: Notes payable 300,000 906,541 Accrued interest 36,972 36,329 Operating lease liabilities, net of current 357,365 - Total long-term liabilities 694,337 942,870 Total liabilities 5,141,109 13,428,174 Commitments and Contingencies Stockholders’ Equity Preferred stock - par value $0.0001; 5,000,000 and 10,000,000 shares authorized; at June 30, 2021 and December 31, 2020, respectively, and none issued or outstanding at June 30, 2021 and - - December 31, 2020, respectively Preferred stock, Series A - par value $0.0001; 5,000,000 shares authorized; none issued or - - outstanding at June 30, 2021 and December 31, 2020, respectively Copyright © 2021 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Common stock - par value $0.0001; 116,666,667 shares authorized; 34,038,707 and 26,540,769 3,404 2,654 issued and outstanding at June 30, 2021 and December 31, 2020, respectively Additional paid in capital 130,983,424 80,330,488 Accumulated deficit (71,209,432) (65,249,547) Total stockholders’ equity 59,777,396 15,083,595 Total liabilities and stockholders’ equity $ 64,918,505 $ 28,511,769 The accompanying footnotes are an integral part of these condensed consolidated financial statements. 1 ONDAS HOLDINGS INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) Three Months Ended Six Months Ended June 30, June 30, 2021 2020 2021 2020 Revenues, net $ 887,432 $ 1,155,374 $ 2,052,196 $ 1,355,572 Cost of goods sold 580,675 540,585 1,136,025 721,677 Gross profit 306,757 614,789 916,171 633,895 Operating expenses: General and administration 2,495,271 2,490,257 4,904,124 3,398,844 Sales and marketing 196,149 132,370 383,521 681,388 Research and development 753,642 757,916 1,648,219 1,650,845 Total operating expenses 3,445,062 3,380,543 6,935,864 5,731,077 Operating loss (3,138,305) (2,765,754) (6,019,693) (5,097,182) Other income (expense) Other income (expense), net 652,957 - 618,781 9,013 Interest income 7,594 66 7,626 158 Interest expense (344,012) (454,853) (566,600) (939,815) Total other income (expense) 316,539 (454,787) 59,807 (930,644) Loss before provision for income taxes (2,821,766) (3,220,541) (5,959,886) (6,027,826) Provision for income taxes - - - - Net loss (2,821,766) (3,220,541) (5,959,886) (6,027,826) Net loss per share - basic and diluted $ (0.10) $ (0.16) $ (0.21) $ (0.30) Weighted average number of common shares outstanding, basic and diluted 28,890,547 19,802,921 28,083,888 19,802,921 The accompanying footnotes are an integral part of these condensed consolidated financial statements. Copyright © 2021 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document 2 ONDAS HOLDINGS INC. CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT) FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2021 AND 2020 (Unaudited) Additional Common Stock Paid in Accumulated Shares Amount Capital Deficit Total Balance, December 31, 2019 19,756,154 $ 1,976 $ 39,339,449 $ (51,771,667) (12,430,242) Stock-based compensation - - 25,599 - 25,599 Forgiveness of accrued officers salary - - 150,002 - 150,002 Net loss - - - (2,807,285) (2,807,285) Balance, March 31, 2020 19,756,154 1,976 39,515,050 (54,578,952) (15,061,926) Stock-based compensation - - 1,881,080 - 1,881,080 Net loss - - - (3,220,541) (3,220,541) Balance, June 30, 2020 19,756,154 $ 1,976 $ 41,396,130 $ (57,799,493) $(16,401,387) Balance, December 31, 2020 26,540,769 $ 2,654 $ 80,330,488 $ (65,249,547) 15,083,595 Stock-based compensation - - 1,348,462 - 1,348,462 Shares issued in exercise of warrants 131,271 13 1,279,879 - 1,279,892 Forgiveness of accrued officers salary - - 135,103 - 135,103 Net loss - - - (3,138,119) (3,138,119) Balance, March 31, 2021 26,672,040 2,667 83,093,932 (68,387,666) 14,708,933 Issuance of shares from 2021 Public Offering, net of 7,360,000 736 47,522,833 - 47,523,569 costs Stock-based compensation - - 301,657 - 301,657 Shares issued in exercise of warrants 6,667 1 65,002 - 65,003 Net loss - - - (2,821,766) (2,821,766) Balance, June 30, 2021 34,038,707 $ 3,404 $130,983,424 $ (71,209,432) $ 59,777,396 The accompanying footnotes are an integral part of these condensed consolidated financial statements.