Ondas : Fourth Quarter 2023 Earnings Conference Call

Fourth Quarter & Full Year 2024

Earnings Release

NASDAQ: ONDS | April 1, 2024 Copyright 2024. All rights reserved.

Disclaimer

This presentation may contain "forward-looking statements" as that term is defined under the Private Securities Litigation Reform Act of 1995 (PSLRA), which statements may be identified by words such as "expects," "projects," "will," "may," "anticipates," "believes," "should," "intends," "estimates," and other words of similar meaning. Ondas Holdings Inc. ("Ondas" or the "Company") cautions readers that forward-looking statements are predictions based on its current expectations about future events. These forward-looking statements are not guarantees of future performance and are subject to risks, uncertainties and assumptions that are difficult to predict. The Company's actual results, performance, or achievements could differ materially from those expressed or implied by the forward-looking statements as a result of a number of factors, including, the risks discussed under the heading "Risk Factors" in the Company's most recent Annual Report on Form 10-K filed with the U.S. Securities and Exchange Commission ("SEC"), in the Company's Quarterly Reports on Form 10-Q filed with the SEC, and in the Company's other filings with the SEC. The Company undertakes no obligation to publicly update or revise any forward- looking statements, whether as a result of new information, future events or otherwise that occur after that date, except as required by law.

Leadership Team

Eric is an entrepreneur with over 25 years of management and investing experience.

ERIC BROCK

CHAIRMAN & CEO

YISHAY CURELARU

CFO

Yishay is an experienced financial executive with over 10 years experience with entrepreneurial growth companies.

TIM TENNE

CEO

Tim brings over 30 years of experience in military and commercial aerospace operations, regulatory, and leadership.

Agenda

Ondas on track to accelerate momentum in 2024

• • Introduction

• • Financial Review & Outlook

• • Business Update

  • • Ondas Networks

  • • Ondas Autonomous Systems (OAS)

• • Closing Remarks

• • Q&A

Introduction

Strengthening our business platform

• • Joe Popolo, CEO of Charles & Potomac Capital LLC joins Ondas Holdings Board of Directors

  • • Largest single investor in the company

  • • Experienced corporate executive; long history as operator and investor driving significant business growth and shareholder value creation

  • • Incentives directly aligned with shareholders

• • Charles & Potomac led recently announced $8.6 million funding

  • • In addition to leading $15 million funding at Ondas Networks in Q3 2023

• • Established Ondas Autonomous Holdings Inc. (OAH)

  • • Owns 100% of drone businesses (American Robotics & Airobotics)

  • • Provides additional operational and financial flexibility supporting growth plan

Overview

2023 was a breakout year for Ondas

• • Platform adoption drove significant revenue growth

  • • Generated $15.7 million in revenue (more than 7-fold growth YoY)

    • • Ondas Networks generated $6.7 million of revenue

    • • OAS generated $9.0 million of revenue

• • Ondas Networks growth driven by FCC 900 MHz mandate

  • • Field activity with Class I rails advanced; ATCS and network integration advancing

  • • Pipeline is growing with 900 MHz migration deadlines nearing

  • • New Class I networks; new opportunities in passenger and transit emerging

• • OAS installing world's first autonomous drone fleets in cities

  • • Groundbreaking Urban Drone Infrastructure fleet expansion begins in Dubai

  • • Received FAA Type Certificate for our Optimus UAV; validates system quality and supports increased customer engagement

  • • Built US leadership and launched expansion; MassDOT and others pending

• • Iron Drone Raider responding to urgent military and security needs

Financial Review

Q4 2023

SELECT P&L DATA

Revenues, net

Cost of goods sold

Gross profit

Total operating expenses

Operating loss

SUPPLEMENTAL INFO:

Depreciation expense

Amortization of Intangible Assets

Stock-based compensation

Impairment of long-term equity investment

Impairment of right of use asset and leasehold improvements

Impairment of goodwill

Three Months Ended December 31,2023

2022

$

4,961,285

$ 478,912

3,233,661 210,083

1,727,624 268,829

14,373,559

34,785,186

$

(12,645,935)

$

(34,516,357)

$

196,209 1,043,501

$

169,263

843,795 1,490,701

411,048 1,500,000 2,511,305

- -

Total

$

5,662,063

-

$

19,419,600 21,923,359

KEY FINANCIAL INSIGHTS:

• • P&L reflects early stage of initial platform adoption for Ondas Networks and OAS

• • Strong year-over-year growth driven by record product shipments at Ondas Networks and OAS

• • Gross margin lower on product mix; expected to remain variable

• • OPEX improvement driven by strong expense controls and lower non-cash charges

• • Sharp decline in recurring cash operating expenses due to strong cost controls and operating leverage across the businesses

  Adjusted EBITDA(1)

  $

  (6,983,872)

  $

  (12,592,998)

• • Adjusted EBITDA loss sharply lower; narrowed 45% year-over-year

Financial Review

KEY FINANCIAL INSIGHTS:

FY 2023

SELECT P&L DATA

Revenues, net

Cost of goods sold

Gross profit

Total operating expenses

Operating loss

SUPPLEMENTAL INFO:

Depreciation expense

Amortization of Intangible Assets

Stock-based compensation

Impairment of long-term equity investment

Impairment of right of use asset and leasehold improvements

Impairment of goodwill

Total

Adjusted EBITDA(1)

Twelve Months Ended December 31,2023

2022

$

15,691,430

$ 2,125,817

9,310,256 1,016,654

6,381,174 1,109,163

46,110,474 70,538,685

$

(39,729,300)

$

(69,429,522)

$

844,833 4,147,092 1,047,398 1,500,000 2,511,305

$

449,458 3,570,090 5,857,435

- -

- 19,419,600

$

10,050,628

$ 29,296,583

$

(29,678,672)

$

(40,132,939)

• • Generated 7-fold revenue growth

• • Growth driven by record revenue at both business units

  • • Ondas Networks growth driven by product revenues/shipments

  • • OAS growth driven by Optimus fleet adoption

• • Gross profit strengthened in 2023

• • OPEX improvement driven by expense controls and lower non-cash charges

• • Recurring cash operating expenses reduced as R&D spending declined and sales & marketing increased with OPEX shifting to focus on driving platform adoption and revenue growth

• • Adjusted EBITDA loss sharply lower; narrowed 25% year-over-year

Financial Review

FY 2023

SELECT CASH FLOW DATA

Twelve Months Ended December 31,

Net cash used in operating activities

Net cash provided by (used in) investing activities Net cash provided by financing activities Decrease in cash

Cash, cash equivalents and restricted cash, beginning of period

Cash, cash equivalents and restricted cash, end of period

15,022,000 $ 29,775,096

$

KEY FINANCIAL INSIGHTS:

• • Cash balance of $15.0 million

• • Operating cash burn includes working capital investment of $3.9 million

• • Cash provided by financing includes:

  • • $24 million net proceeds raised during the third quarter at Ondas Holdings (convertible notes) and Ondas Networks (preferred stock)

  • • Cash repayment of indebtedness of $5.5 million

Balance Sheet

FY 2023

KEY FINANCIAL INSIGHTS:

SELECT BALANCE SHEET DATAASSETS

Cash and restricted cash

Total assets

LIABILITIES AND STOCKHOLDERS' DEFICIT Other debt

Convertible notes, current Convertible notes, long-term Total Debt

Total liabilities

Redeemable noncontrolling interests

Total stockholders' equity

Total liabilities and stockholders' equity

• • New investment at Ondas Holdings and Ondas Networks

• • Convertible notes amortize monthly through maturity via equity issuance or cash payments; unless amortization is deferred

• • Convertible notes mature in April 2025 and July 2025

• • Pro forma cash balance as of December 31, 2023 equal to $23.4 million, adjusted for $8.6 million financing secured in February 2024 (net of fees)

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