Ondas(US:ONDS)2023-05-15 13:07Acquisition and Partnerships - Ondas Holdings acquired Airobotics, an Israeli-based developer of autonomous drone systems, on January 23, 2023[204]. - American Robotics and Airobotics achieved regulatory success with the first drone system approved by the FAA for automated operation beyond-visual-line-of-sight (BVLOS) without a human operator on-site[216]. Business Segments and Products - The Ondas Networks segment provides wireless connectivity solutions for mission-critical Industrial Internet applications, focusing on sectors such as rail, energy, and public safety[205]. - The FullMAX platform is a patented Software Defined Radio (SDR) system that supports secure, licensed, private, wide-area broadband networks, and is based on the IEEE 802.16s standard[206]. - The Optimus System™ is marketed under a Data-as-a-Service (DaaS) model, providing customers with a turnkey data solution and real-time monitoring capabilities[215]. - The Raider™ counter-drone system is designed to protect critical infrastructure from hostile drones and is typically sold with three UAVs for interception[224]. Financial Performance - Revenue for the three months ended March 31, 2023, was $2,595,991, an increase of $2,185,793 compared to $410,198 for the same period in 2022[230]. - Cost of goods sold increased to $1,569,095 for the three months ended March 31, 2023, from $287,932 in the prior year, primarily due to the acquisition of Airobotics[231]. - Gross profit rose to $1,026,896, with a gross margin improvement to 40% from 30% year-over-year, attributed to higher product sales with better margins[232]. - Operating expenses increased by $3,565,976, or 35%, totaling $13,679,575, driven by higher human resource costs and research and development expenses[236]. - Operating loss for the three months ended March 31, 2023, was $12,652,679, an increase of $2,661,346, or 27%, compared to the same period in 2022[237]. - Net loss increased to $14,455,551, or 44%, compared to $10,010,399 in the prior year, with a net loss per share of $(0.30) for Q1 2023[239]. - Cash flows used in operating activities were $(12,738,835), an increase of $5,636,905 from $(7,101,930) in the previous year[240]. - Total cash, cash equivalents, and restricted cash as of March 31, 2023, were approximately $14,157,000, with a working capital deficit of approximately $3,500,000[243]. Future Outlook and Risks - Ondas expects additional orders from a defense contractor for Integrated Coastal Surveillance Systems (ICSS) in 2023, following successful installations in the Caribbean and India[213]. - Ondas anticipates that supply chain disruptions from the COVID-19 pandemic will impact its business in 2023, particularly due to semiconductor shortages and labor costs[226]. - The company expects to fund operations for the next twelve months through cash on hand, gross profits, and potential additional equity or debt offerings[244]. - Future capital requirements will depend on various factors, including technology development, marketing efforts, and the ability to secure purchase orders from customers[245]. - Forward-looking statements are based on current expectations and assumptions, subject to risks and uncertainties[251]. Accounting and Regulatory Matters - The Inflation Reduction Act of 2022 includes a 15% Corporate Alternative Minimum Tax, which is not expected to materially impact Ondas' financial statements[227]. - No significant changes in critical accounting policies since the filing of the 2022 Form 10-K[248]. - Recent accounting pronouncements are not expected to materially impact the condensed consolidated financial statements[249]. - The company is classified as a smaller reporting company and is not required to provide market risk disclosures[252].