Document And Entity Information
Document And Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Mar. 10, 2023 | Jun. 30, 2022 | |
Document Information Line Items | |||
Entity Registrant Name | ONDAS HOLDINGS INC. | ||
Trading Symbol | ONDS | ||
Document Type | 10-K | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Common Stock, Shares Outstanding | 49,062,030 | ||
Entity Public Float | $ 187,729,280 | ||
Amendment Flag | false | ||
Entity Central Index Key | 0001646188 | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Well-known Seasoned Issuer | No | ||
Document Period End Date | Dec. 31, 2022 | ||
Document Fiscal Year Focus | 2022 | ||
Document Fiscal Period Focus | FY | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
ICFR Auditor Attestation Flag | false | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
Entity File Number | 000-56004 | ||
Entity Incorporation, State or Country Code | NV | ||
Entity Tax Identification Number | 47-2615102 | ||
Entity Address, Address Line One | 411 Waverley Oaks Road | ||
Entity Address, Address Line Two | Suite 114, | ||
Entity Address, City or Town | Waltham | ||
Entity Address, State or Province | MA | ||
Entity Address, Postal Zip Code | 02452 | ||
City Area Code | (888) | ||
Local Phone Number | 350-9994 | ||
Title of 12(b) Security | Common Stock par value $0.0001 | ||
Security Exchange Name | NASDAQ | ||
Entity Interactive Data Current | Yes | ||
Auditor Firm ID | 89 | ||
Auditor Name | Rosenberg Rich Baker Berman, P.A | ||
Auditor Location | Somerset, New Jersey |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Current Assets: | ||
Cash | $ 29,775,096 | $ 40,815,123 |
Accounts receivable, net | 104,276 | 1,213,195 |
Inventory, net | 2,173,017 | 1,178,345 |
Note receivable | 2,000,000 | |
Other current assets | 1,749,613 | 1,449,610 |
Total current assets | 35,802,002 | 44,656,273 |
Property and equipment, net | 3,099,887 | 1,031,999 |
Other Assets: | ||
Goodwill | 25,606,983 | 45,026,583 |
Intangible assets, net | 28,787,171 | 25,169,489 |
Long-term equity investment | 1,500,000 | 500,000 |
Lease deposits | 218,206 | 218,206 |
Operating lease right of use assets | 2,930,996 | 836,025 |
Total other assets | 59,043,356 | 71,750,303 |
Total assets | 97,945,245 | 117,438,575 |
Current Liabilities: | ||
Accounts payable | 2,965,829 | 2,411,085 |
Operating lease liabilities | 580,593 | 550,525 |
Accrued expenses and other current liabilities | 3,092,364 | 1,149,907 |
Convertible note payable, net of debt discount and issuance cost of $3,251,865 and $0, respectively | 14,901,244 | |
Deferred revenue | 61,508 | 512,397 |
Total current liabilities | 21,601,538 | 4,623,914 |
Long-Term Liabilities: | ||
Notes payable | 300,000 | 300,000 |
Convertible notes payable, net of current | 15,146,891 | |
Accrued interest | 217,594 | 40,152 |
Operating lease liabilities, net of current | 2,456,315 | 241,677 |
Total long-term liabilities | 18,120,800 | 581,829 |
Total liabilities | 39,722,338 | 5,205,743 |
Commitments and Contingencies (Note 14) | ||
Stockholders’ Equity | ||
Preferred stock - par value $0.0001; 5,000,000 shares authorized at December 31, 2022 and December 31, 2021, respectively, and none issued or outstanding at December 31, 2022 and December 31, 2021, respectively | ||
Preferred stock, Series A - par value $0.0001; 5,000,000 shares authorized at December 31, 2022 and December 31, 2021, respectively, and none issued or outstanding at December 31, 2022 and December 31, 2021, respectively | ||
Common stock - par value $0.0001; 116,666,667 shares authorized; 44,108,661 and 40,990,604 issued and outstanding, respectively December 31, 2022 and December 31, 2021, respectively | 4,411 | 4,099 |
Additional paid in capital | 211,733,690 | 192,502,122 |
Accumulated deficit | (153,515,194) | (80,273,389) |
Total stockholders’ equity | 58,222,907 | 112,232,832 |
Total liabilities and stockholders’ equity | $ 97,945,245 | $ 117,438,575 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parentheticals) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Convertible note payable, net of debt discount and issuance cost (in Dollars) | $ 3,251,865 | $ 0 |
Preferred stock, par value (in Dollars per share) | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized | 5,000,000 | 5,000,000 |
Preferred stock, shares issued | ||
Preferred stock, shares outstanding | ||
Common stock par value (in Dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 116,666,667 | 116,666,667 |
Common stock, shares issued | 44,108,661 | 40,990,604 |
Common stock, shares outstanding | 44,108,661 | 40,990,604 |
Series A Preferred Stock | ||
Preferred stock, par value (in Dollars per share) | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized | 5,000,000 | 5,000,000 |
Preferred stock, shares issued | ||
Preferred stock, shares outstanding |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Income Statement [Abstract] | ||
Revenues, net | $ 2,125,817 | $ 2,906,771 |
Cost of goods sold | 1,016,654 | 1,810,942 |
Gross profit | 1,109,163 | 1,095,829 |
Operating expenses: | ||
General and administration | 23,618,823 | 11,781,503 |
Sales and marketing | 3,456,257 | 1,487,394 |
Research and development | 24,044,005 | 5,800,549 |
Goodwill impairment | 19,419,600 | |
Total operating expenses | 70,538,685 | 19,069,446 |
Operating loss | (69,429,522) | (17,973,617) |
Other income (expense), net | ||
Other income (expense), net | (76,127) | 591,900 |
Interest income | 25,542 | 11,578 |
Interest expense | (3,761,698) | (575,685) |
Total other income (expense), net | (3,812,283) | 27,793 |
Loss before benefit from income taxes | (73,241,805) | (17,945,824) |
Benefit from income taxes | 2,921,982 | |
Net loss | $ (73,241,805) | $ (15,023,842) |
Net loss per share - basic and diluted (in Dollars per share) | $ (1.73) | $ (0.44) |
Weighted average number of common shares outstanding, basic and diluted (in Shares) | 42,242,525 | 34,180,897 |
Consolidated Statements of Op_2
Consolidated Statements of Operations (Parentheticals) - $ / shares | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Income Statement [Abstract] | ||
Basic and diluted | $ (1.73) | $ (0.44) |
Basic and diluted | 42,242,525 | 34,180,897 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders’ Equity - USD ($) | Common Stock | Additional Paid in Capital | Accumulated Deficit | Total |
Balance at Dec. 31, 2020 | $ 2,654 | $ 80,330,488 | $ (65,249,547) | $ 15,083,595 |
Balance (in Shares) at Dec. 31, 2020 | 26,540,769 | |||
Stock-based compensation | 3,253,590 | 3,253,590 | ||
Issuance of shares from 2021 Public Offering, net of costs | $ 736 | 47,522,833 | 47,523,569 | |
Issuance of shares from 2021 Public Offering, net of costs (in Shares) | 7,360,000 | |||
Issuance of shares in connection with acquisition of American Robotics, Inc. | $ 675 | 52,514,123 | 52,514,798 | |
Issuance of shares in connection with acquisition of American Robotics, Inc. (in Shares) | 6,749,974 | |||
Issuance of warrants in connection with acquisition of American Robotics, Inc. | 6,904,543 | 6,904,543 | ||
Issuance of vested stock options in connection with acquisition of American Robotics, Inc. | 380,330 | 380,330 | ||
Restricted stock units issued | $ 15 | (15) | ||
Restricted stock units issued (in Shares) | 152,410 | |||
Shares issued in exercise of options | $ 5 | 99,993 | 99,998 | |
Shares issued in exercise of options (in Shares) | 47,846 | |||
Shares issued in exercise of warrants | $ 14 | 1,361,134 | 1,361,148 | |
Shares issued in exercise of warrants (in Shares) | 139,605 | |||
Forgiveness of accrued officer’s salary | 135,103 | 135,103 | ||
Net loss | (15,023,842) | (15,023,842) | ||
Balance at Dec. 31, 2021 | $ 4,099 | 192,502,122 | (80,273,389) | 112,232,832 |
Balance (in Shares) at Dec. 31, 2021 | 40,990,604 | |||
Stock-based compensation | 5,857,435 | 5,857,435 | ||
Issuance of shares in connection with acquisition of Ardenna, Inc. | $ 78 | 5,943,522 | 5,943,600 | |
Issuance of shares in connection with acquisition of Ardenna, Inc. (in Shares) | 780,000 | |||
Issuance of shares per ATM agreement (net of offering costs) | $ 86 | 6,090,330 | 6,090,416 | |
Issuance of shares per ATM agreement (net of offering costs) (in Shares) | 864,674 | |||
Issuance of shares in connection with acquisition of asset from Field of View LLC | $ 2 | 75,518 | 75,520 | |
Issuance of shares in connection with acquisition of asset from Field of View LLC (in Shares) | 16,000 | |||
Issuance of shares for payment on convertible debt | $ 42 | 1,199,958 | 1,200,000 | |
Issuance of shares for payment on convertible debt (in Shares) | 415,161 | |||
Delivery of shares for restricted stock units | $ 101 | (101) | ||
Delivery of shares for restricted stock units (in Shares) | 1,011,165 | |||
Shares issued in exercise of options | $ 3 | 64,906 | 64,909 | |
Shares issued in exercise of options (in Shares) | 31,057 | |||
Net loss | (73,241,805) | (73,241,805) | ||
Balance at Dec. 31, 2022 | $ 4,411 | $ 211,733,690 | $ (153,515,194) | $ 58,222,907 |
Balance (in Shares) at Dec. 31, 2022 | 44,108,661 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
CASH FLOWS FROM OPERATING ACTIVITES | ||
Net loss | $ (73,241,805) | $ (15,023,842) |
Adjustments to reconcile net loss to net cash flows used in operating activities: | ||
Depreciation | 449,458 | 116,231 |
Amortization of debt discount and issuance cost | 3,545,843 | 120,712 |
Provision for obsolete inventory | 100,254 | |
PPP Loan forgiveness | (666,091) | |
Amortization of intangible assets | 3,570,090 | 1,396,364 |
Deferred income taxes, release of valuation allowance | (2,921,982) | |
Amortization of right of use asset | 833,940 | 302,931 |
Retirement of assets | 382,060 | |
Impairment of goodwill | 19,419,600 | |
Loss on Intellectual Property | 12,343 | 97,789 |
Stock-based compensation | 5,857,435 | 3,253,590 |
Changes in operating assets and liabilities: | ||
Accounts receivable | 1,108,919 | (1,153,315) |
Inventory | (994,672) | (126,494) |
Other current assets | (300,003) | (696,280) |
Accounts payable | 554,744 | (86,658) |
Deferred revenue | (450,889) | 314,370 |
Operating lease liability | (684,205) | (336,432) |
Accrued expenses and other current liabilities | 1,974,066 | (1,586,563) |
Net cash flows used in operating activities | (37,963,076) | (16,895,416) |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Patent costs | (49,501) | (104,112) |
Purchase of equipment | (2,880,900) | (923,718) |
Cash paid for Ardenna Inc. asset acquisition | (900,000) | |
Purchase of American Robotics, Inc., net of cash acquired | (6,517,338) | |
Investment in Dynam A.I. | (1,000,000) | (500,000) |
Cash paid for Field of View LLC asset acquisition | (104,167) | |
Security deposit | (165,463) | |
Cash disbursement on note receivable | (2,000,000) | (2,000,000) |
Net cash flows used in investing activities | (6,934,568) | (10,210,631) |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Proceeds from sale of common stock, net of costs | 47,523,569 | |
Proceeds from exercise of stock options and warrants | 64,909 | 1,461,146 |
Proceeds from convertible notes payable, net of issuance costs | 27,702,292 | |
Payments on loan payable | (7,124,278) | |
Proceeds from sale of shares under ATM agreement | 6,090,416 | |
Net cash flows provided by financing activities | 33,857,617 | 41,860,437 |
Increase (Decrease) in cash and cash equivalents | (11,040,027) | 14,754,390 |
Cash and cash equivalents, beginning of period | 40,815,123 | 26,060,733 |
Cash and cash equivalents, end of period | 29,775,096 | 40,815,123 |
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION: | ||
Cash paid for interest | 14,187 | 1,042,737 |
Cash paid for income taxes | ||
SUPPLEMENTAL SCHEDULE OF NON-CASH FINANCING ACTIVITIES: | ||
Forgiveness of accrued officer’s salary | 135,103 | |
Debt exchanged for common stock | 1,200,000 | |
Common stock, warrants and forgiveness of note receivable in relation to acquisition of American Robotics | 61,811,179 | |
Non-cash consideration for purchase of intangible assets | 6,019,120 | |
Operating leases right-of-use assets obtained in exchange of lease liabilities | $ 2,928,911 | $ 937,245 |
Description of Business and Bas
Description of Business and Basis of Presentation | 12 Months Ended |
Dec. 31, 2022 | |
Description of Business and Basis of Presentation [Abstract] | |
DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION | NOTE 1 – DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION The Company Ondas Holdings Inc. (“Ondas Holdings”, “Ondas”, the “Company,” “we,” or “our”) was originally incorporated in Nevada on December 22, 2014, under the name of Zev Ventures Incorporated. On September 28, 2018, we acquired Ondas Networks Inc., a Delaware corporation (“Ondas Networks”), and changed our name to Ondas Holdings Inc. On August 5, 2021, we acquired American Robotics, Inc. (“American Robotics” or “AR”), a Delaware corporation. On January 23, 2023, we acquired Airobotics, Ltd. (“Airobotics”), an Israeli-based developer of autonomous drone systems. See Note 16 – Subsequent Events. As a result of these acquisitions, Ondas Networks, American Robotics and Airobotics became our wholly owned subsidiaries. These three wholly owned subsidiaries are now Ondas’ primary focus. Ondas’ corporate headquarters are located in Waltham, Massachusetts. Ondas Networks has offices and facilities in Sunnyvale, California, American Robotics’ offices and facilities are located in Waltham, Massachusetts and Marlborough, Massachusetts, and Airobotics’ offices and facilities are located in Petah Tikva, Israel. Ondas has a fourth wholly owned subsidiary, FS Partners (Cayman) Limited, a Cayman Islands limited liability company (“FS Partners”), and one majority owned subsidiary, Full Spectrum Holding Limited, a Cayman Islands limited liability company (“FS Holding”). FS Partners and FS Holding were both formed for the purpose of operating in China. As of December 31, 2019, we revised our business strategy, and discontinued all operations in China. Both FS Partners and FS Holding had no operations for the years ended December 31, 2022 and 2021, and these entities have been dissolved as of January 4, 2023. Business Activity Ondas is a leading provider of private wireless, drone, and automated data solutions through its wholly owned subsidiaries Ondas Networks and American Robotics and Airobotics. On February 14, 2023, the Company announced the formation of Ondas Autonomous Systems, a new business unit to manage the combined drone operations of wholly owned subsidiaries American Robotics and Airobotics. Ondas Networks and Ondas Autonomous Systems together provide users in rail, energy, mining, agriculture, public safety and critical infrastructure and government markets with improved connectivity, data collection capabilities, and data collection and information processing capabilities. We operate Ondas Networks and Ondas Autonomous Systems as separate business segments. Ondas Networks Ondas Networks provides wireless connectivity solutions enabling mission-critical Industrial Internet applications and services. We refer to these applications as the Mission-Critical Internet of Things (“MC-IoT”). Our wireless networking products are applicable to a wide range of MC-IoT applications, which are most often located at the very edge of large industrial networks. These applications require secure, real-time connectivity with the ability to process large amounts of data at the edge of large industrial networks. Such applications are required in all of the major critical infrastructure markets, including rail, electric grids, drones, oil and gas, and public safety, homeland security and government, where secure, reliable and fast operational decisions are required in order to improve efficiency and ensure a high degree of safety and security. We design, develop, manufacture, sell and support FullMAX, our patented, Software Defined Radio (“SDR”) platform for secure, licensed, private, wide-area broadband networks. Our customers install FullMAX systems in order to upgrade and expand their legacy wide-area network infrastructure. Our MC-IoT intellectual property has been adopted by the Institute of Electrical and Electronics Engineers (“IEEE”), the leading worldwide standards body in data networking protocols, and forms the core of the IEEE 802.16s standard. Because standards-based communications solutions are preferred by our mission-critical customers and ecosystem partners, we have taken a leadership position in IEEE as it relates to wireless networking for industrial markets. As such, management believes this standards-based approach supports the adoption of our technology across a burgeoning ecosystem of global partners and end markets. Our software-based FullMAX platform is an important and timely upgrade solution for privately-owned and operated wireless wide-area networks, leveraging Internet Protocol-based communications to provide more reliability and data capacity for our mission-critical infrastructure customers. We believe industrial and critical infrastructure markets throughout the globe have reached an inflection point where legacy serial and analog based protocols and network transport systems no longer meet industry needs. In addition to offering enhanced data throughput, FullMAX is an intelligent networking platform enabling the adoption of sophisticated operating systems and equipment supporting next-generation MC-IoT applications over wide field areas. These new MC-IoT applications and related equipment require more processing power at the edge of large industrial networks and the efficient utilization of network capacity and scarce bandwidth resources which can be supported by the “Fog-computing” capability integrated in our end-to-end network platform. Fog-computing utilizes management software to enable edge compute processing and data and application prioritization in the field enabling our customers more reliable, real-time operating control of these new, intelligent MC-IoT equipment and applications at the edge. Ondas Autonomous Systems Our Ondas Autonomous Systems business unit designs, develops, and markets commercial drone solutions via the Optimus System™ and Scout System™ (the “Autonomous Drone Platforms”). The Autonomous Drone Platforms are highly automated, AI-powered drone systems capable of continuous, remote operation and are marketed as “drone-in-a-box” turnkey data solution services. They are deployed for critical industrial and government applications where data and information collection and processing are required. These use cases include public safety, security and smart city deployments where routine, high-resolution automated emergency response, mapping, surveying, and inspection services are highly valued, in addition to industrial markets such as oil & gas, rail and ports which emphasize security and inspection solutions. The Autonomous Drone Platforms are typically provided to customers under a Data-as-a-Service (DaaS) business model, while some customers will choose to purchase and own and operate an Optimus Systems™. American Robotics and Airobotics have industry leading regulatory successes which include having the first drone system approved by the Federal Aviation Administration (“FAA”) for automated operation beyond-visual-line-of-sight (BVLOS) without a human operator on-site. In addition to the Autonomous Drone Platforms, Ondas Autonomous Systems offers a counter-drone system called the Raider™. The Raider™ was developed by Iron Drone and is deployed by government and enterprise customers to provide security and protect critical infrastructure, assets and people from the threat of hostile drones. Airobotics acquired the assets of Iron Drone on March 6, 2023. Autonomous Drone Platforms We design, develop and manufacture autonomous drone systems, providing high-fidelity, ultra-high-resolution aerial data to enterprise and government customers. We currently prioritize the marketing of our Optimus System™ which provides customers with a turnkey data and information solution and the ability to continuously digitize, analyze, and monitor their assets and field operations in real-time or near real-time. We believe the market opportunity for our Scout System™ remains significant. As we drive market adoption with the Optimus platform, we anticipate re-introducing the Scout platform including newly enhanced versions to help segment the market for different use cases and price points. The Optimus System™ has been designed from the ground up as an end-to-end product capable of continuous unattended operations in the real world. Powered by innovations in robotics automation, machine vision, edge computing, and AI, the Optimus System™ provides efficiencies as a drone solution for commercial use. Once installed in the field at customer locations, a fleet of connected Optimus Systems™, which are often deployed as networked drone infrastructure, which we refer to as Urban Drone Infrastructure, remains indefinitely in an area of operation, automatically collecting and seamlessly delivering data and information regularly and reliably. We market the Optimus System™ under a DaaS business model, whereby our drone platform aggregates customer data and provides the data analytics meeting customer requirements in return for an annual subscription fee. Some customers purchase Optimus Systems™ to own and operate themselves. We also engage distributors to assist in the sales and marketing of our Optimus System™ in geographic markets where its more cost effective to identify and service potential customers by engaging local third parties. These distribution agreements can include joint ventures, where Ondas Autonomous Systems will provide technical expertise to support the joint venture partner in the provision of aerial data services to customers. The Optimus System™ consists of (i) Optimus™, a highly automated, AI-powered drone with advanced imaging payloads (ii) the Airbase™, a ruggedized weatherproof base station for housing, battery swapping, battery charging, payload swapping, data processing, and cloud transfer, and (iii) Insightful™, a secure web portal and API which enables remote interaction with the system, data, and resulting analytics anywhere in the world. These major subsystems are connected via a host of supporting technologies. Airbase™ has internal robotic systems that enable the automated swapping of batteries and payloads. Automated battery swapping allows for 24/7 operation of the Optimus as the Optimus drone can immediately be redeployed after returning to the dock for a battery swap. Similarly, the ability to autonomously swap sensors and advanced payloads without human intervention allows for the Optimus System™ to provide multiple applications and use cases from a single location. American Robotics and Airobotics have industry leading regulatory successes which include having the first drone system approved by the FAA for automated operation BVLOS without a human operator or visual observer on-site. American Robotics’ FAA approvals were enabled by integrating a suite of proprietary technologies, including Detect-and-Avoid (“DAA”) and other proprietary intelligent safety systems into its autonomous drone platform, which we plan to integrate into the Optimus System™. Airobotics is in the advanced stages of receiving approval for Type Certification (“TC”) from the FAA for the Optimus UAV. TC approval will enable expanded operation for the Optimus System™ in the United States including flight operations in populated areas. The Raider The Raider™ is a counter-drone system, which was designed and developed by Iron Drone, that we are marketing to government and enterprise customers who can utilize the system for security and the protection of critical infrastructure, assets and people from the threat of hostile drones. A typical Raider™ deployment location would include sensitive locations such as borders, stadiums or schools, or near critical assets such as power plants and military bases, and for high profile locations such as amusement parks or where public events are held. The Raider™ is designed to detect, track and intercept unauthorized, or hostile unmanned aircraft and is most often sold with three small UAVs that are housed in a docking station. The Raider UAV has live video capability and a payload containing a net that can be deployed to intercept a hostile drone. Upon detection of an unauthorized drone, one or more Raider™ UAVs can be autonomously deployed at high speeds to track the unauthorized aircraft. If the unauthorized aircraft is deemed hostile, the Raider™ UAV can deploy the netting to physically intercept the aircraft. A parachute integrated with the netting allows the intercepted drone to safely fall to the ground for collection by our customer. Liquidity We have incurred losses since inception and have funded our operations primarily through debt and the sale of capital stock. On December 31, 2022, we had stockholders’ equity of approximately $58,223,000. On December 31, 2022, we had net long-term borrowings outstanding of approximately $15,147,000 and short-term borrowings outstanding of approximately $14,901,000, net of debt discount and issuance costs of approximately $3,252,000. On December 31, 2022, we had cash of approximately $29,775,000 and working capital of approximately $14,200,000. In June 2021, the Company completed a registered public offering of its common stock, generating net proceeds of approximately $47,524,000. In October 2022, the Company entered into a convertible debt agreement, which provided cash proceeds of approximately $27,660,000. Also in 2022, the Company raised approximately $6,090,000 through the ATM Offering. We believe the funds raised in 2021 and 2022, the remaining fund availability under the ATM Offering and 2022 Convertible Promissory Notes, in addition to growth in revenue expected as the Company executes its business plan, will fund its operations for at least the next twelve months from the issuance date of the accompanying financial statements. Our future capital requirements will depend upon many factors, including progress with developing, manufacturing and marketing our technologies, the time and costs involved in preparing, filing, prosecuting, maintaining and enforcing patent claims and other proprietary rights, our ability to establish collaborative arrangements, marketing activities and competing technological and market developments, including regulatory changes and overall economic conditions in our target markets. Our ability to generate revenue and achieve profitability requires us to successfully market and secure purchase orders for our products and services from customers currently identified in our sales pipeline as well as new customers. We also will be required to efficiently manufacture and deliver equipment on those purchase orders. These activities, including our planned research and development efforts, will require significant uses of working capital. There can be no assurance that we will generate revenue and cash as expected in our current business plan. We may seek additional funds through equity or debt offerings and/or borrowings under additional notes payable, lines of credit or other sources. We do not know whether additional financing will be available on commercially acceptable terms or at all, when needed. If adequate funds are not available or are not available on commercially acceptable terms, our ability to fund our operations, support the growth of our business or otherwise respond to competitive pressures could be significantly delayed or limited, which could materially adversely affect our business, financial conditions, or results of operations. COVID-19 In December 2019, a novel strain of coronavirus (“COVID-19”) was identified and has resulted in increased travel restrictions, business disruptions and emergency quarantine measures across the world including the United States. The Company’s business, financial condition and results of operations were impacted from the COVID-19 pandemic for the years ended December 31, 2022 and 2021 as follows: ● sales and marketing efforts were disrupted as our business development team was unable to travel to visit customers and customers were unable to receive visitors for on-location meetings; ● field activity for testing and deploying our wireless systems was delayed due to the inability for our field service team to install and test equipment for our customers; ● supply chain disruptions led to component shortages and inefficiencies in and delays in producing and delivering equipment for certain purchase orders; and ● delays in fulfilling purchase orders reduced our cash flow from operations. The Company expects its business, financial condition and results of operations will be impacted from the COVID-19 pandemic during 2023, primarily due to supply chain disruptions due to pandemic-related plant and port shutdowns, transportation delays, government actions and other factors, which may be beyond our control. The global shortage of certain components such as semiconductor chips, strains on production or extraction of raw materials, cost inflation, and labor and equipment shortages, could escalate in future quarters. Labor shortages have led and may continue to lead to difficult conditions for hiring and retention of employees, and increased labor costs. Further, the COVID-19 pandemic is ongoing and remains an unknown risk for the foreseeable future. The extent to which the coronavirus may impact our business will depend on future developments, which are highly uncertain and cannot be predicted, including new information which may emerge concerning the severity of the coronavirus. As a result, the Company is unable to reasonably estimate the full extent of the impact from the COVID-19 pandemic on its future business, financial condition and results of operations. In addition, if the Company were to experience any new impact to its operations or incur additional unanticipated costs and expenses as a result of the COVID-19 pandemic, such operational delays and unanticipated costs and expenses there could be a further adverse impact on the Company’s business, financial condition and results of operations during the year ended December 31, 2023. Inflation Reduction Act of 2022 and Tax Cuts and Jobs Act of 2017 On August 16, 2022, the Inflation Reduction Act of 2022 (“IRA”) was signed into law. The IRA includes a 15% Corporate Alternative Minimum Tax (“Corporate AMT”) for tax years beginning after December 31, 2022. We do not expect the Corporate AMT to have a material impact on our consolidated financial statements. Additionally, the IRA imposes a 1% excise tax on net repurchases of stock by certain publicly traded corporations. The excise tax is imposed on the value of the net stock repurchased or treated as repurchased. The new law will apply to stock repurchases occurring after December 31, 2022. Under the Tax Cuts and Jobs Act of 2017, we are required to capitalize R&D expenses for tax purposes and amortize over five years for domestic based expenses and fifteen years for foreign expenses. Given our tax net operating loss carryforward position we do not expect this change to have a material impact on our financial statements. |
Summary of Significant Account
Summary of Significant Account Policies | 12 Months Ended |
Dec. 31, 2022 | |
Summary of Significant Account Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNT POLICIES | NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNT POLICIES Basis of Presentation The consolidated financial statements include the accounts of the Company and our wholly owned subsidiaries, Ondas Networks, American Robotics, and FS Partners, and our majority owned subsidiary, FS Holding. All inter-company accounts and transactions between these entities have been eliminated in these consolidated financial statements. Business Combinations We utilize the purchase method of accounting for business combinations. This method requires, among other things, that results of operations of acquired companies are included in Ondas’ results of operations beginning on the respective acquisition dates and that assets acquired, and liabilities assumed are recognized at fair value as of the acquisition date. Any excess of the fair value of consideration transferred over the fair values of the net assets acquired is recognized as goodwill. Contingent consideration liabilities are recognized at the estimated fair value on the acquisition date; these are recorded in either other accruals within current liabilities (for expected payments in less than a year) or other non-current liabilities (for expected payments in greater than a year), both on our consolidated balance sheets. Subsequent changes to the fair value of contingent consideration liabilities are recognized in other income (expense) in the Consolidated Statements of Operations. Contingent consideration payments made soon after the acquisition date are classified as investing activities in the consolidated statements of cash flows. Contingent consideration payments not made soon after the acquisition date that are related to the acquisition date fair value are reported as financing activities in the consolidated statements of cash flows, and amounts paid in excess of the original acquisition date fair value are reported as operating activities in the consolidated statements of cash flows. The fair value of assets acquired, and liabilities assumed in certain cases, may be subject to revision based on the final determination of fair value during a period of time not to exceed 12 months from the acquisition date. Legal costs, due diligence costs, business valuation costs and all other business acquisition costs are expensed when incurred. Goodwill and Intangible Assets Goodwill represents the excess of the purchase price over the fair values of the underlying net assets of an acquired business. The Company tests goodwill for impairment on an annual basis during the fourth quarter of its fiscal year, or immediately if conditions indicate that such impairment could exist. The Company evaluates qualitative factors to determine if it is more likely than not that the fair value of a reporting unit is less than its carrying value and whether it is necessary to perform goodwill impairment process. The impairment of Goodwill was $19,419,600 and $0 for the years ended December 31, 2022 and 2021, respectively, see Note 5 – Goodwill and Business Acquisition, for further details. Intangible assets represent patents, licenses, and allocation of purchase price to identifiable intangible assets of an acquired business. The Company estimates the fair value of its reporting units using the fair market value measurement requirement. Intangible assets are evaluated for impairment when events or changes in business circumstances indicate that the carrying amount of the assets may not be fully recoverable. We amortize our intangible assets with a finite life on a straight-line basis, over 10 years for patents; 10 years for developed technology, 10 years for licenses, trademarks, and the FAA waiver; 5 years for customer relationships; and 1 year for non-compete agreements. Segment Information Operating segments are defined as components of an entity for which discrete financial information is available and is regularly reviewed by the Chief Operating Decision Maker (“CODM”) in making decisions regarding resource allocation and performance assessment. The Company’s CODM is its Chief Executive Officer. The Company determined it has two reportable segments: Ondas Networks and Ondas Autonomous Systems as the CODM reviews financial information for these two businesses separately. The Company has no inter-segment sales. Use of Estimates The process of preparing financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of assets and liabilities at the date of the financial statements. Such management estimates include those relating to allocation of consideration for business combinations to identifiable tangible and intangible assets, revenue recognition, inventory write-downs to reflect net realizable value, assumptions used in the valuation of stock-based awards and valuation allowances against deferred tax assets. Actual results could differ from those estimates. Cash and Cash Equivalents The Company considers all highly liquid instruments purchased with an original maturity of three months or less to be cash equivalents. On December 31, 2022 and 2021, we had no cash equivalents. The Company periodically monitors its positions with, and the credit quality of the financial institutions with which it invests. Periodically, throughout the year, and as of December 31, 2022, the Company has maintained balances in excess of federally insured limits. As of December 31, 2022, the Company was approximately $29,268,000 in excess of federally insured limits. Accounts Receivable Accounts receivable are stated at a gross invoice amount less an allowance for credit losses. We estimate allowance for credit losses by evaluating specific accounts where information indicates our customers may have an inability to meet financial obligations, such as customer payment history, credit worthiness and receivable amounts outstanding for an extended period beyond contractual terms. We use assumptions and judgment, based on the best available facts and circumstances, to record an allowance to reduce the receivable to the amount expected to be collected. These allowances are evaluated and adjusted as additional information is received. We had no allowance for credit losses as of December 31, 2022 and 2021. Inventory Inventories, which consist solely of raw materials, work in process and finished goods, are stated at the lower of cost (first-in, first-out) or net realizable value, net of reserves for obsolete inventory. We continually analyze our slow-moving and excess inventories. Based on historical and projected sales volumes and anticipated selling prices, we established reserves. Inventory that is in excess of current and projected use is reduced by an allowance to a level that approximates its estimate of future demand. Products that are determined to be obsolete are written down to net realizable value. On December 31, 2022 and 2021, such reserves were $100,254. Inventory consists of the following: December 31, December 31, Raw Material $ 2,041,776 $ 1,153,254 Work in Process 89,080 65,192 Finished Goods 142,415 60,153 Less Inventory Reserves (100,254 ) (100,254 ) Total Inventory, Net $ 2,173,017 $ 1,178,345 Property and Equipment All additions, including improvements to existing facilities, are recorded at cost. Maintenance and repairs are charged to expense as incurred. Depreciation of property and equipment is principally recorded using the straight-line method over the estimated useful lives of the assets. The estimated useful lives typically are (i) three to seven years for computer equipment and software, (ii) five years for vehicles and base stations, (iii) five to seven years for furniture and fixtures, and (iv) two years for drones. Leasehold improvements are amortized on a straight-line basis over the shorter of the lease term or the estimated useful life of the asset. Upon the disposal of property, the asset and related accumulated depreciation accounts are relieved of the amounts recorded therein for such items, and any resulting gain or loss is recorded in operating expenses in the year of disposition. Software Costs incurred internally in researching and developing a software product are charged to expense until technological feasibility has been established for the product. Once technological feasibility is established, all software costs are capitalized until the product is available for general release to customers. Judgment is required in determining when technological feasibility of a product is established. We have determined that technological feasibility for our software products is reached after all high-risk development issues have been resolved through coding and testing. Generally, this occurs shortly before the products are released to production. The amortization of these costs is included in cost of revenue over the estimated life of the products. As of December 31, 2022 and 2021, the Company had no internally developed software. Impairment of Long-Lived Assets Long-lived assets are evaluated whenever events or changes in circumstances indicate that the carrying amount may not be recoverable or the useful life has changed. Such indicators include significant technological changes, adverse changes in market conditions and/or poor operating results. The carrying value of a long-lived asset group is considered impaired when the projected undiscounted future cash flows are less than its carrying value. The amount of impairment loss recognized is the difference between the estimated fair value and the carrying value of the asset or asset group. Fair market value is determined primarily using the projected future undiscounted cash flows. Research and Development Costs for research and development are expensed as incurred. Research and development expenses consist primarily of salaries, salary related expenses and costs of contractors and materials. Fair Value of Financial Instruments Our financial instruments consist primarily of receivables, accounts payable, accrued expenses and short- and long-term debt. The carrying amount of receivables, accounts payable and accrued expenses approximates our fair value because of the short-term maturity of such instruments. We have categorized our assets and liabilities that are valued at fair value on a recurring basis into a three-level fair value hierarchy in accordance with U.S. GAAP. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets and liabilities (Level 1) and lowest priority to unobservable inputs (Level 3). Assets and liabilities recorded in the balance sheets at fair value are categorized based on a hierarchy of inputs, as follows: Level 1 -- Unadjusted quoted prices in active markets for identical assets or liabilities. Level 2 -- Quoted prices for similar assets or liabilities in active markets or inputs that are observable for the asset or liability, either directly or indirectly through market corroboration, for substantially the full term of the financial instrument. Level 3 -- Unobservable inputs for the asset or liability. The Company had no financial instruments that are required to be valued at fair value as of December 31, 2022 and 2021. Deferred Offering Costs The Company capitalizes within other assets, certain legal, accounting and other third-party fees that are directly related to the Company’s in-process equity financings. After consummation of the equity financing, these costs are recorded as a reduction of the proceeds received as a result of the offering. Should a planned equity financing be abandoned, terminated or significantly delayed, the deferred offering costs are immediately written off to operating expenses. Deferred Financing Costs The Company capitalizes certain legal, professional accounting and other third-party fees that are directly associated with the issuance of notes payable, elsewhere referred to as issuance costs. These issuance costs are amortized on a straight-line basis over the term of the related note payable, which approximates the amortization we would have recorded under the effective interest method Income Taxes The Company files a consolidated tax return for federal purposes. Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which the related temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized when the rate change is enacted. Valuation allowances are recorded to reduce deferred tax assets to the amount that will more likely than not be realized. In accordance with GAAP, we recognize the effect of uncertain income tax positions only if the positions are more likely than not of being sustained in an audit, based on the technical merits of the position. Recognized uncertain income tax positions are measured at the largest amount that is greater than 50% likely of being realized. Changes in recognition or measurement are reflected in the period in which those changes in judgment occur. We recognize both interest and penalties related to uncertain tax positions as part of the income tax provision. Share-Based Compensation We calculate share-based compensation expense for option awards (“Share-based Award(s)”) based on the estimated grant/issue date fair value using the Black-Scholes-Merton option pricing model (“Black-Scholes Model”) and recognize the expense on a straight-line basis over the vesting period. We account for forfeitures as they occur. The Black-Scholes Model requires the use of a number of assumptions including volatility of the stock price, the weighted average risk-free interest rate, and the vesting period in determining the fair value of Share-based Awards. The expected term is based on the “simplified method”, due to the Company’s limited option exercise history. Under this method, the term is estimated using the weighted average of the service vesting period and contractual term of the option award. As the Company does not yet have sufficient history of its own volatility, the Company has identified several public entities of similar size, complexities and industry and calculates historical volatility based on the volatilities of these companies. Although we believe our assumptions used to calculate share-based compensation expense are reasonable, these assumptions can involve complex judgments about future events, which are open to interpretation and inherent uncertainty. In addition, significant changes to our assumptions could significantly impact the amount of expense recorded in a given period. We recognize restricted stock unit expense over the period of vesting or period that services will be provided. Compensation associated with shares of Common Stock issued or to be issued to consultants and other non-employees is recognized over the expected service period beginning on the measurement date, which is generally the time the Company and the service provider enter into a commitment whereby the Company agrees to grant shares in exchange for the services to be provided. Shipping and Handling We expense all shipping and handling costs as incurred. These costs are included in Cost of goods sold on the accompanying Consolidated Statements of Operations. Advertising and Promotional Expenses We expense advertising and promotional costs as incurred. We recognized expense of $80,934 and $28,142 for the years ended December 31, 2022, and 2021, respectively. These costs are included in Sales and marketing on the accompanying Consolidated Statements of Operations. Post-Retirement Benefits: We have one 401(k) Savings Plan that qualifies as a deferred salary arrangement under Section 401(k) of the Internal Revenue Code. Under this 401(k) Plan, matching contributions are based upon the amount of the employees’ contributions subject to certain limitations. We recognized expense of $351,837 and $84,303 for the years ended December 31, 2022, and 2021, respectively. Revenue Recognition Ondas has two business segments that generate revenue: Ondas Networks and Ondas Autonomous Systems. Ondas Networks generates revenue from product sales, services, and development projects. American Robotics, as part of the Ondas Autonomous Systems segment, generates revenue through data subscription services. Ondas Networks is engaged in the development, marketing, and sale of wireless radio systems for secure, wide area mission-critical, business-to-business networks. Ondas Networks generates revenue primarily from the sale of our FullMAX System and the delivery of related services, along with non-recurring engineering (“NRE”) development projects with certain customers. American Robotics generates revenue by selling a data subscription service to its customers based on the information collected by their autonomous systems. The customer pays for a monthly, annual, or multi-annual subscription service to remotely access the data collected by their autonomous systems. Revenue for development projects is typically recognized over time using a percentage of completion input method, whereby revenues are recorded on the basis of the Company’s estimates of satisfaction of the performance obligation based on the ratio of actual costs incurred to total estimated costs. The input method is utilized because management considers it to be the best available measure of progress as the performance obligations are completed. Revenue and cost estimates are regularly monitored and revised based on changes in circumstances. Impacts from changes in estimates of revenue and cost of revenue are recognized on a cumulative catch-up basis, which recognizes in the current period the cumulative effect of the changes on current and prior periods base in the performance completed to date. Subscription revenue is recognized on straight line basis over the length of the customer subscription agreement. If a subscription payment is received prior to installation and operation of their autonomous systems, it is held in deferred revenue and recognized after operation commences over the length of the subscription service. Collaboration Arrangements within the Scope of ASC 808, Collaborative Arrangements The Company’s development revenue includes contracts where the Company and the customer work cooperatively to develop software and hardware applications. The Company analyzes these contracts to assess whether such arrangements involve joint operating activities performed by parties that are both active participants in the activities and exposed to significant risks and rewards dependent on the commercial success of such activities and are therefore within the scope of ASC Topic 808, Collaborative Arrangements (“ASC 808”). This assessment is performed throughout the life of the arrangement based on changes in the responsibilities of all parties in the arrangement. For collaboration arrangements that are deemed to be within the scope of ASC 808, the Company first determines which elements of the collaboration are deemed to be within the scope of ASC 808 and those that are more reflective of a vendor-customer relationship and therefore within the scope of ASC 606, Revenue from Contracts with Customers (“ASC 606”). The Company’s policy is generally to recognize amounts received from collaborators in connection with joint operating activities that are within the scope of ASC 808 as a reduction in research and development expense. As of December 31, 2022 and 2021, the Company has not identified any contracts with its customers that meet the criteria of ASC 808. Arrangements within the Scope of ASC 606, Revenue from Contracts with Customers Under ASC 606, the Company recognizes revenue when the customer obtains control of promised products or services, in an amount that reflects the consideration which is expected to be received in exchange for those products or services. The Company recognizes revenue following the five-step model prescribed under ASC 606: (i) identify contract(s) with a customer; (ii) identify the performance obligation(s) in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligation(s) in the contract; and (v) recognize revenue when (or as) the Company satisfies a performance obligation. The Company only applies the five-step model to contracts when it is probable that the entity will collect the consideration it is entitled to in exchange for the products or services it transfers to the customer. At contract inception, once the contract is determined to be within the scope of ASC 606, the Company assesses the products or services promised within each contract and determines those that are performance obligations and assesses whether each promised product or service is distinct. The Company then recognizes as revenue the amount of the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied. To the extent the transaction price includes variable consideration, we estimate the amount of variable consideration that should be included in the transaction price utilizing the expected value method. Variable consideration is included in the transaction price if, in our judgment, it is probable that a significant future reversal of cumulative revenue under the contract will not occur. Estimates of variable consideration and determination of whether to include estimated amounts in the transaction price are based largely on an assessment of our anticipated performance and all information (historical, current, and forecasted) that is reasonably available. Sales and other taxes collected on behalf of third parties are excluded from revenue. For the years ended December 31, 2022 and 2021, none of our contracts with customers included variable consideration. Contracts that are modified to account for changes in contract specifications and requirements are assessed to determine if the modification either creates new or changes the existing enforceable rights and obligations. Generally, contract modifications are for products or services that are not distinct from the existing contract due to the inability to use, consume or sell the products or services on their own to generate economic benefits and are accounted for as if they were part of that existing contract. The effect of a contract modification on the transaction price and measure of progress for the performance obligation to which it relates, is recognized as an adjustment to revenue (either as an increase in or a reduction of revenue) on a cumulative catch-up basis. For the years ended December 31, 2022 and 2021, there were no modifications to contract specifications. Product revenue is comprised of sales of the Ondas Networks’ software defined base station and remote radios, its network management and monitoring system, and accessories. Ondas Networks’ software and hardware is sold with a limited one-year basic warranty included in the price. The limited one-year basic warranty is an assurance-type warranty, is not a separate performance obligation, and thus no transaction price is allocated to it. The nature of tasks under the limited one-year basic warranty only provides for remedying defective product(s) covered by the warranty. Product revenue is generally recognized when the customer obtains control of our product, which occurs at a point in time, and may be upon shipment or upon delivery based on the contractual shipping terms of a contract, or upon installation when the combined performance obligation is not distinct within the context of the contract. Service revenue is comprised of separately priced extended warranty sales, network support and maintenance, remote monitoring, as well as ancillary services directly related to the sale of the Ondas Networks’ wireless communications products including wireless network design, systems engineering, radio frequency planning, software configuration, product training, installation, and onsite support. The extended warranty Ondas Networks sells provides a level of assurance beyond the coverage for defects that existed at the time of a sale or against certain types of covered damage. The extended warranty includes 1) factory hardware repair or replacement of the base station and remote radios, at our election, 2) software upgrades, bug fixes and new features of the radio software and network management systems (“NMS”), 3) deployment and network architecture support, and 4) technical support by phone and email. Ancillary service revenues are recognized at the point in time when those services have been provided to the customer and the performance obligation has been satisfied. The Company allocates the transaction price to the service and extended warranty based on the stand-alone selling prices of these performance obligations, which are stated in our contracts. Revenue for the extended warranty is recognized overtime. Development revenue is comprised primarily of non-recurring engineering service contracts to develop software and hardware applications for various customers. For Ondas Networks, in 2022, a significant portion of this revenue is generated from one parent customer whereby Ondas Networks is to develop such applications to interoperate within the customers infrastructure. For these contracts, Ondas Networks and the customers work cooperatively, whereby the customers’ involvement is to provide technical specifications for the product design, as well as, to review and approve the project progress at various markers based on predetermined milestones. The products developed are not able to be sold to any other customer and are based in part upon existing Ondas Networks and customer technology. Development revenue is either recognized at the point in time when those services have been provided to the customer and the performance obligation has been satisfied recognized, or as services are provided over the life of the contract as Ondas Networks has an enforceable right to payment for services completed to date and there is no alternative use of the product, depending on the contract. If the customer contract contains a single performance obligation, the entire transaction price is allocated to the single performance obligation. We enter into certain contracts within our service revenues that have multiple performance obligations, one or more of which may be delivered subsequent to the delivery of other performance obligations. We allocate the transaction price based on the estimated relative standalone selling prices of the promised products or services underlying each performance obligation. We determine standalone selling prices based on the price at which the performance obligation is sold separately. If the standalone selling price is not observable through past transactions, we estimate the standalone selling price considering available information such as market conditions and internally approved pricing guidelines related to the performance obligations. Revenue is then allocated to the performance obligations using the relative selling prices of each of the performance obligations in the contract. Ondas Networks’ payment terms vary and range from Net 15 to Net 30 days from the date of the invoices for product and services related revenue. Ondas Networks’ payment terms for the majority of their development related revenue carry milestone related payment obligations which span the contract life. For milestone-based contracts, the customer reviews the completed milestone and once approved, makes payment pursuant to the applicable contract. American Robotics generates revenue by selling a data subscription service to its customers based on the information collected by their autonomous systems. The customer pays for a monthly, annual, or multi-annual subscription service to remotely access the data collected by their autonomous systems. American Robotics’ payment terms vary and range from Net 30 to Net 60 days from the date of the invoices for product and services related revenue . Disaggregation of Revenue The following tables present our disaggregated revenues by Type of Revenue and Timing of Revenue. Years Ended 2022 2021 Type of Revenue Product revenue $ 872,660 $ 405,570 Service and subscription revenue 319,140 96,933 Development revenue 934,017 2,401,474 Other revenue - 2,794 Total revenue $ 2,125,817 $ 2,906,771 Of the service and subscription revenue above, $194,140 and $66,617 represents American Robotics subscription revenue for the years ended December 31, 2022 and 2021, respectively. Years Ended 2022 2021 Timing of Revenue Revenue recognized point in time $ 872,660 $ 438,413 Revenue recognized over time 1,253,157 2,468,358 Total revenue $ 2,125,817 $ 2,906,771 Of the revenue recognized over time above, $194,140 and $66,617 represents American Robotics subscription revenue for the years ended December 31, 2022 and 2021, respectively. Contract Assets and Liabilities We recognize a receivable or contract asset when we perform a service or transfer a good in advance of receiving consideration. A receivable is recorded when our right to consideration is unconditional and only the passage of time is required before payment of that consideration is due. A contract asset is recorded when our right to consideration in exchange for goods or services that we have transferred or provided to a customer is conditional on something other than the passage of time. We did not have any contract assets recorded on December 31, 2022 and 2021. We recognize a contract liability when we receive consideration, or if we have the unconditional right to receive consideration, in advance of satisfying the performance obligation. A contract liability is our obligation to transfer goods or services to a customer for which we have received consideration, or an amount of consideration is due from the customer. The table below details the activity in our contract liabilities during the years ended December 31, 2022 and 2021, and the balance at the end of each year is reported as deferred revenue in the Company’s consolidated balance sheet. Years Ended 2022 2021 Balance, beginning of year $ 512,397 $ 165,035 Additions 527,268 2,238,137 Transfer to revenue (978,157 ) (1,890,775 ) Balance, end of year $ 61,508 $ 512,397 Warranty Reserve For our software and hardware products, we provide a limited one-year assurance-type warranty and for our development service, we provide no warranties. The assurance-type warranty covers defects in material and workmanship only. If a software or hardware component is determined to be defective after being tested by the Company within the one-year, the Company will repair, replace or refund the price of the covered hardware and/or software to the customer (not including any shipping, handling, delivery or installation charges). We estimate, based upon a review of historical warranty claim experience, the costs that may be incurred under our warranties and record a liability in the amount of such estimate at the time a product is sold. Factors that affect our warranty liability include the number of units sold, historical and anticipated rates of warranty claims, and cost per claim. We periodically assess the adequacy of our recorded warranty liability and adjust the accrual as claims data and historical experience warrants. The Company has assessed the costs of fulfilling its existing assurance-type warranties and has determined that the estimated outstanding warranty obligations on December 31, 2022 and 2021 are immaterial to the Company’s financial statements. Leases Under Topic 842, operating lease expense is generally recognized evenly over the term of the lease. During the year ended December 31, 2022, the Company’s operating leases consisted of office space in Sunnyvale, CA (the “Gibraltar Lease”), Marlborough, MA (the “American Robotics Lease”), and Waltham, MA (the “Waltham Lease”). For the year end |
Other Current Assets
Other Current Assets | 12 Months Ended |
Dec. 31, 2022 | |
Other Current Assets [Abstract] | |
OTHER CURRENT ASSETS | NOTE 3 – OTHER CURRENT ASSETS Other current assets consist of the following: Years Ended 2022 2021 Prepaid insurance $ 782,538 $ 1,026,212 Other prepaid expenses 957,388 423,398 Other receivables 9,687 - Total other current assets $ 1,749,613 $ 1,449,610 |
Property and Equipment
Property and Equipment | 12 Months Ended |
Dec. 31, 2022 | |
Property and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT | NOTE 4 – PROPERTY AND EQUIPMENT Property and equipment consist of the following: Years Ended 2022 2021 Vehicles $ 149,916 $ 149,916 Computer equipment 348,408 183,869 Furniture and fixtures 461,352 141,053 Software 161,284 88,284 Leasehold improvements 2,093,812 37,401 Development equipment 342,142 56,275 Base stations - 117,850 Drones - 54,969 Construction in progress 330,541 627,044 3,887,455 1,456,661 Less: accumulated depreciation (787,568 ) (424,662 ) Total property and equipment $ 3,099,887 $ 1,031,999 Depreciation expense for the years ended December 31, 2022 and 2021 was $449,458 and $116,231, respectively. For the years ended December 31, 2022 and 2021, due to obsolescence, Base station and Drone assets with a net-book value totaling $382,060 and $0, respectively, were written off. |
Goodwill and Business Acquisiti
Goodwill and Business Acquisition | 12 Months Ended |
Dec. 31, 2022 | |
Goodwill and Business Acquisition [Abstract] | |
GOODWILL AND BUSINESS ACQUISITION | NOTE 5 – GOODWILL AND BUSINESS ACQUISITION We account for acquisitions in accordance with FASB ASC 805, “Business Combinations” (“ASC 805”), and goodwill in accordance with ASC 350, “Intangibles — Goodwill and Other” (“ASC 350”). The excess of the purchase price over the estimated fair value of net assets acquired in a business combination is recorded as goodwill. American Robotics On May 17, 2021, the Company entered into an Agreement and Plan of Merger (the “Agreement”) with Drone Merger Sub I Inc., a Delaware corporation and a direct wholly owned subsidiary of the Company (“Merger Sub I”), Drone Merger Sub II Inc., a Delaware corporation and a direct wholly owned subsidiary of the Company (“Merger Sub II”), American Robotics, and Reese Mozer, solely in his capacity as the representative of American Robotics’ Stockholders (as defined in the Agreement). On August 5, 2021 (the “Closing Date”), the Company’s stockholders approved the issuance of shares of the Company’s common stock, including shares of common stock underlying Warrants (as defined below), in connection with the acquisition of American Robotics. On the Closing Date, American Robotics merged with and into Merger Sub I (“Merger I”), with American Robotics continuing as the surviving entity, and American Robotics then subsequently and immediately merged with and into Merger Sub II (“Merger II” and, together with Merger I, the “Mergers”), with Merger Sub II continuing as the surviving entity and as a direct wholly owned subsidiary of the Company. Simultaneously with Merger II, Merger Sub II was renamed American Robotics, Inc. Pursuant to the Agreement, American Robotics stockholders and certain service providers received (i) cash consideration in an amount equal to $7,500,000, less certain indebtedness, transaction expenses and other expense amounts as described in the Agreement; (ii) 6,750,000 shares of the Company’s common stock (inclusive of 26 fractional shares paid in cash as set forth in the Agreement); (iii) warrants exercisable for 1,875,000 shares of the Company’s common stock (the “Warrants”) (inclusive of 24 fractional shares paid in cash and the equivalent of Warrants for 309,320 shares representing the value of options exercisable for 211,038 shares issued under the Company’s incentive stock plan and reducing the aggregate amount of Warrants as set forth in the Agreement); and (iv) the cash release from the PPP Loan Escrow Amount (as defined in the Agreement). Each of the Warrants entitle the holder to purchase a number of shares of the Company’s common stock at an exercise price of $7.89. Each of the Warrants shall be exercisable in three equal annual instalments commencing on the one-year anniversary of the Closing Date and shall have a term of ten years. 59,544 of the stock options were issued fully vested to employees who did not exercise their American Robotics options prior to the Closing Date and had no ongoing service requirements and therefore they were included in the purchase consideration. The remaining 151,494 stock options issued vest over four years and are contingent on ongoing employment by the employee and are recorded as compensation expense over the service period. During the year ended December 31, 2021, the Company incurred approximately $1,644,000 in transaction costs for professional fees and expenses, which are included in General and administration operating expenses on the Consolidated Statements of Operations. Also, on the Closing Date, the Company entered into employment agreements and issued 1,375,000 restricted stock units (“RSUs”) under the Company’s incentive stock plan to key members of American Robotics’ management. These RSUs vest in equal installments on the next three anniversaries of the Closing Date and vesting is contingent on the individuals remaining employed by the Company. These RSUs are not included in purchase consideration and are expensed ratably over the service period. They were valued at the closing market price on the Closing Date. The compensation expense recognized for the years ended December 31, 2022 and 2021, in respect of these restricted stock units, was $3,554,748 and $1,452,385, respectively. As of December 31, 2022 and 2021 the unrecognized compensation expense was $5,690,367 and $9,245,115, respectively. The following table summarizes the consideration paid for American Robotics and the final allocation of the purchase consideration to the estimated fair value of the assets acquired and liabilities assumed at the acquisition date. Consideration: Fair value of total consideration transferred $ 69,311,577 Fair value of assets acquired: Cash $ 920,011 Other current assets 148,043 Property and equipment 61,430 Intangible assets 26,180,000 Right of use asset 463,252 Other long-term assets 87,217 Total assets acquired 27,859,953 Fair value of liabilities assumed: Accounts payable 129,541 Deferred revenue 32,992 Accrued payroll and rent 42,617 Lease liabilities 447,827 Deferred tax liability 2,921,982 Total liabilities assumed 3,574,959 Total net assets acquired 24,284,994 Goodwill 45,026,583 Total $ 69,311,577 The intangible assets acquired include the trademarks, FAA waiver, developed technology, non-compete agreements, and customer relationships (see note 6). The deferred tax liability represents the tax effected timing differences relating to the acquired intangible assets to the extent they are not offset by acquired deferred tax assets. The goodwill represents the assembled workforce, acquired capabilities, and future economic benefits resulting from the acquisition. No portion of the goodwill is deductible for tax purposes. Our results for the year ended December 31, 2022 and 2021 include results from American Robotics between August 6, 2021 and December 31, 2022. The following unaudited pro forma information presents the Company’s results of operations as if the acquisition of American Robotics had occurred on January 1, 2021. The pro forma results do not purport to represent what the Company’s results of operations actually would have been if the transactions had occurred on January 1, 2021 or what the Company’s operating results will be in future periods. (Unaudited) 2021 Revenue, net $ 2,967,591 Net loss $ (23,974,346 ) Basic Earnings Per Share $ (0.56 ) Diluted Earnings Per Share $ (0.56 ) We acquired American Robotics in order to broaden the industrial data solutions Ondas is able to provide to customers. The drone is the ultimate data gathering device at the edge of field area operations and American Robotics’ Scout System is a world class drone platform. We believe that combining the technical and industry expertise of Ondas Networks and American Robotics will be highly valued by our customers. Airobotics Ltd On January 23, 2023, the Company acquired Airobotics, Ltd. See Note 16 - Subsequent Events for further information regarding the Airobotics acquisition. Promissory Note During the year ended December 31, 2022, the Company made a loan to Airobotics in the aggregate amount of $2,000,000 million. The note carries interest at a rate of 6% per annum. The principal and any accrued and unpaid interest were due on February 15, 2023. On February 15, 2023, the note was extended until March 31, 2023. As of and for the year ended December 31, 2022, the Company recorded $25,542 of interest receivable and interest income related to the note in the Consolidated Balance Sheets and Consolidated Statements of Operations, respectively. Goodwill Impairment The Company has goodwill acquired as part of the American Robotics acquisition in 2021. The changes in the carrying amount of goodwill for the years ended December 31, 2022 and 2021, are as follows: American Robotics Balance as of January 1, 2021 $ - Goodwill acquired during the year 45,026,583 Balance as of December 31, 2021 45,026,583 Impairment loss (19,419,600 ) Balance as of December 31, 2022 $ 25,606,983 Goodwill is tested for impairment in the fourth quarter after the annual forecasting process. The Company initially carried out a qualitative analysis and determined that because of changes in market conditions as well as a slower increase in revenue than previously forecast, it was more likely than not that goodwill was impaired. The Company engaged a third-party service provider to carry out a valuation of the American Robotics entity. Using a discounted cash flow analysis and revised forecasts for revenue and cash flows that are lower than the previous valuation, it was determined that the fair value of the entity was lower than the carrying value as of December 31, 2022, and an impairment of $19,419,600 was recognized in operating expenses in the Consolidated Statements of Operations for the year ending December 31, 2022. |
Intangible Assets
Intangible Assets | 12 Months Ended |
Dec. 31, 2022 | |
Intangible Assets Disclosure [Abstract] | |
INTANGIBLE ASSETS | NOTE 6 – INTANGIBLE ASSETS The components of intangible assets, all of which are finite lived, were as follows: December 31, 2022 December 31, 2021 Gross Accumulated Net Gross Accumulated Net Carrying Amount Useful Patents $ 82,431 $ (27,331 ) $ 55,100 $ 75,266 $ (13,077 ) $ 62,189 10 Patents in process 119,760 - 119,760 89,767 - 89,767 N/A Licenses 241,909 (65,665 ) 176,244 241,909 (41,472 ) 200,437 10 Trademarks 3,230,000 (453,242 ) 2,776,758 3,230,000 (130,242 ) 3,099,758 10 FAA waiver 5,930,000 (832,113 ) 5,097,887 5,930,000 (239,113 ) 5,690,887 10 Developed technology 23,270,614 (2,752,353 ) 20,518,261 16,120,000 (650,000 ) 15,470,000 10 Non-compete agreements 840,000 (840,000 ) - 840,000 (338,710 ) 501,290 1 Customer relationships 60,000 (16,839 ) 43,161 60,000 (4,839 ) 55,161 5 $ 33,774,714 $ (4,987,543 ) $ 28,787,171 $ 26,586,942 $ (1,417,453 ) $ 25,169,489 Amortization expense for years ended December 31, 2022 and 2021 was $3,570,091 and $1,396,364, respectively. We recognized losses on intellectual property of $12,343 and $97,789 due to expiration of patent applications for the years ended December 31, 2022 and 2021, respectively. On March 20, 2022, the Company entered into a Purchase Agreement to acquire the assets of Ardenna, Inc., a leading provider of image processing and machine learning software solutions for rail infrastructure monitoring and inspections. The consideration for the acquisition was $900,000 in cash and 780,000 shares of the Company’s common stock (the “Ardenna Consideration Shares”). In connection of the acquisition, the parties entered into a Registration Rights and Lock-Up Agreement, which required the Company to file a resale registration statement covering the resale of the Ardenna Consideration Shares no later than ninety (90) days after the closing date and restricted the holder from transferring the Ardenna Consideration Shares for 180 days from the closing date, subject to certain exceptions. On April 5, 2022, the Company completed the acquisition. As a result of this transaction, the Company recognized developed technology in the amount of $6,843,600. The Company filed the registration statement Form S-3 on July 1, 2022, and it was declared effective on July 15, 2022. On August 31, 2022, the Company entered into the asset purchase agreement with Field of View LLC, a North Dakota limited liability company. The total purchase consideration consisted of $250,000 of cash payable in monthly instalments over twelve months, and $75,520 shares of the Company’s common stock, representing 16,000 shares (“FOV Consideration Shares”). The asset purchase agreement restricts the holder from transferring the FOV Consideration Shares for 180 days from the closing date, subject to certain exceptions. The Company acquired computer and research and development equipment amounting to $18,506 and intangibles for developed technology for $307,014. As of December 31, 2022, the equity was issued in full and cash paid amounted to $104,167 the balance payable of $145,333 being accounted for as accrued purchase consideration included in accrued expenses and other current liabilities payable over twelve months Estimated amortization expense for the next five years for the intangible costs currently being amortized is as follows: Year Ending December 31, Estimated 2023 $ 3,287,497 2024 $ 3,287,497 2025 $ 3,287,497 2026 $ 3,282,658 2027 $ 3,275,497 Thereafter $ 12,366,528 Total $ 28,787,171 |
Long-Term Equity Investment
Long-Term Equity Investment | 12 Months Ended |
Dec. 31, 2022 | |
Other Current Assets [Abstract] | |
LONG-TERM EQUITY INVESTMENT | NOTE 7 – LONG-TERM EQUITY INVESTMENT On October 5, 2021, Ondas Holdings irrevocably subscribed and agreed to purchase 3,141,098 shares of Series A-1 Preferred Stock of Dynam.AI, Inc. (“Dynam”), a tech-enabled services provider for critical or complex artificial intelligence and machine learning projects, par value $0.00001 for the aggregate price of $500,000 representing subscription price of $0.15918 per share by way of a non-brokered private placement for approximately 11% ownership in Dynam. In addition to the equity investment, Ondas Holdings’ wholly owned subsidiary, American Robotics, Inc., entered into a development, services and marketing agreement with Dynam.AI on October 1, 2021. The agreement allows American Robotics to expand and enhance its IP library and analytics capabilities with artificial intelligence using physics-based algorithms and allows Dynam to further the development of Vizlab™, Dynam’s proprietary AI/ML platform, an advanced developer toolkit for data scientists. On July 15, 2022, Ondas Holdings irrevocably subscribed and agreed to purchase 3,357,958 shares of Series Seed Preferred Stock of Dynam for the aggregate price of $1,000,000 representing a subscription price of $0.2978 per share by way of a non-brokered private placement for approximately 8% ownership in Dynam. This brings Ondas Holdings investment in Dynam to 6,499,056 shares or approximately 19% ownership. This long-term equity investment consists of an equity investment in a private company through preferred shares, which are not considered in-substance common stock, that is accounted for at cost, with adjustments for observable changes in prices or impairments, and is classified as long-term equity investment on our consolidated balance sheets with adjustments recognized in other (expense) income, net on our consolidated statements of operations. The Company has determined that the equity investment does not have a readily determinable fair value and elected the measurement alternative. Therefore, the equity investment’s carrying amount will be adjusted to fair value at the time of the next observable price change for the identical or similar investment of the same issuer or when an impairment is recognized. Each reporting period, the Company performs a qualitative assessment to evaluate whether the investment is impaired. The assessment includes a review of recent operating results and trends, recent sales/acquisitions of the investee securities, and other publicly available data. If the investment is impaired, the Company writes it down to its estimated fair value. As of December 31, 2022 and 2021 the long-term equity investment had a carrying value of $1,500,000 and $500,000, respectively. Our CEO Eric Brock is a director of Dynam. An officer and a director of the Company have invested an aggregate of $35,000 in Dynam as of December 31, 2022. |
Accrued Expenses and Other Curr
Accrued Expenses and Other Current Liabilities | 12 Months Ended |
Dec. 31, 2022 | |
Accrued Expenses and Other Current Liabilities [Abstract] | |
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | NOTE 8 – ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES Accrued expenses and other current liabilities consist of the following: Years Ended 2022 2021 Accrued payroll and other benefits $ 390,698 $ 269,725 D&O insurance financing payable 516,619 719,313 Accrued professional fees 792,367 117,008 Accrued purchase consideration 145,833 - Other accrued expenses and payables 1,246,847 43,861 Total accrued expenses and other current liabilities $ 3,092,364 $ 1,149,907 |
Secured Promissory Notes
Secured Promissory Notes | 12 Months Ended |
Dec. 31, 2022 | |
Investments, Debt and Equity Securities [Abstract] | |
SECURED PROMISSORY NOTES | NOTE 9 – SECURED PROMISSORY NOTES Steward Capital Holdings LP On March 9, 2018, we entered into a loan and security agreement (the “Agreement”) with Steward Capital Holdings LP (the “Steward Capital”) wherein Steward Capital made available to us a loan in the aggregate principal amount of up to $10,000,000 (the “Loan”). On March 9, 2018, the Company and Steward Capital, pursuant to the Agreement, entered into a Secured Term Promissory Note for $5,000,000, having a maturity date of September 9, 2019 (“Tranche A”). The Note bore interest at a per annum rate equal to the greater of (a) 11.25% or (b) 11.25% plus the Prime Rate, less 3.25%. The Agreement also included payments of $25,000 in loan commitment fees and $100,000 (1%) of the funding in loan facility charges. The loan commitment fees and $50,000 in loan facility charges associated with Tranche A were recorded as debt discount and amortized over the life of the Loan. There was also an end of term charge of $250,000. The end of term charge was being recorded as accreted costs over the term of the Loan. The Note was secured by substantially all of the assets of the Company. On October 9, 2018, the Company and Steward Capital, pursuant to the Agreement, entered into a second Secured Term Promissory Note for $5,000,000 having a maturity date of April 9, 2020 (the “Second Note”) to complete the Agreement for $10,000,000. The Second Note bore interest at a per annum rate equal to the greater of (a) 11.25% or (b) 11.25% plus the Prime Rate, less 3.25%. Pursuant to the terms of the Agreement, the Company was required to pay a $50,000 loan facility charge. On June 18, 2019, the Company and Steward Capital entered into a letter of agreement to amend the Agreement (the “First Amendment”) to (i) extend and amend the maturity date, as defined in Section 1.1 of the Agreement, to read in its entirety “means September 9, 2020” (the “Maturity Date”); (ii) waive the repayment requirement to Steward Capital under Section 2.3 of the Agreement, in connection with the then proposed public offering of the Company as described in the Company’s Registration Statement on Form S-1, as amended, originally filed on April 12, 2019, and (iii) waive the restriction by Steward Capital on the prepayment of Indebtedness under Section 7.4 of the Agreement. In connection with the waivers, extension and amendment, the Company agreed to pay to Steward Capital, upon the earlier of (a) the completion of the public offering as set forth in Section 2.3 of the Agreement and (b) ten (10) days following the Company’s receipt of Steward’s written demand therefor, a fee equal to three percent (3%) of the current outstanding principal balance of the Loan (as defined in the Agreement), neither of which have occurred at the time of this filing. The Company concluded that the modifications created by the First Amendment resulted in a troubled debt restructuring under Accounting Standard Codification—Debt (Topic 470) as it was determined that a concession was granted by Steward Capital. However, as the future payments to be made subsequent to the modification were greater than the carrying value at the time of the modification, no gain or loss was required to be recognized on the troubled debt restructuring. As the difference between the effective interest rate method and the straight-line method was deemed immaterial, the Company continued to amortize the deferred loan costs using the straight-line method over the remaining term of the Loan. On October 28, 2019, the Company and Steward Capital entered into a letter of agreement to amend the Agreement, as amended (the “Second Amendment”) wherein the parties agreed to (i) extend and amend the due date for all accrued and unpaid interest starting September 2, 2019 to the Maturity Date and (ii) extend and amend the due date for the 3% fee payable to Steward Capital in connection with the First Amendment and waiver dated June 2019 to be payable on the Maturity Date. In connection with the extensions and amendments, the Company issued Steward Capital 120,000 shares of the Company’s common stock valued at $300,000 on December 15, 2019. The value was recorded as debt discount and amortized over the life of the Loan. The Company concluded that the modifications created by the Second Amendment resulted in a troubled debt restructuring under Accounting Standard Codification—Debt (Topic 470) as it was determined that a concession was granted by Steward Capital. However, as the future payments to be made subsequent to the modification were greater than the carrying value at the time of the modification, no gain or loss was required to be recognized on the troubled debt restructuring. As the difference between the effective interest rate method and the straight-line method was deemed immaterial, the Company continued to amortize the deferred loan costs using the straight-line method over the remaining term of the Loan. The Agreement also contained covenants which included certain restrictions with respect to subsequent indebtedness, liens, loans and investments, asset sales and share repurchases and other restricted payments, subject to certain exceptions. The Agreement also contained financial reporting obligations. An event of default under the Agreement included, but was not limited to, breach of covenants, insolvency, and occurrence of any default under any agreement or obligation of the Company. In addition, the Agreement contained a customary material adverse effect clause which stated that in the event of a material adverse effect, an event of default would occur, and the lender had the option to accelerate and demand payment of all or any part of the loan. A material adverse effect was defined in the Agreement as a material change in our business, operations, properties, assets or financial condition or a material impairment of its ability to perform all obligations under its Agreement. On September 4, 2020, the Company and Steward Capital entered into the Second Amendment to the Loan and Security Agreement (the “Second Amendment”) to (i) extend the Maturity Date to September 9, 2021 (the “Extended Maturity Date”) and agree to convert all accrued interest into the note, resulting in a new principal balance of $11,254,236, (ii) make all accrued and unpaid interest from September 9, 2020 through the date of maturity due on the Extended Maturity Date, (iii) on or before October 1, 2020, Company were to issue 40,000 shares of Company’s stock to Steward valued at $9.75 per share, or total of $390,000 (issued on September 30, 2020) and (iv) make the fee of 3% of the outstanding principal balance of the loan, or $300,000 (as defined in the First Amendment) due at the updated maturity date of September 9, 2021. The Company concluded that the modifications created by the Second Amendment resulted in a troubled debt restructuring under Accounting Standard Codification—Debt (Topic 470) as it was determined that a concession was granted by Steward Capital. However, as the future payments to be made subsequent to the modification were greater than the carrying value at the time of the modification, no gain or loss was required to be recognized on the troubled debt restructuring. On April 14, 2021, the Company requested Steward Capital’s waiver of Section 7 (Covenants of Borrower), in connection with the acquisition of American Robotics, Inc (“American Robotics”). In connection with the waiver, the Company agreed to, upon consummation of the proposed acquisition, pay Steward Capital an additional $280,000, and upon the consummation of the proposed acquisition, Steward and the Company would amend the Agreement to modify the defined term “collateral” to include the intellectual property of American Robotics; however, the Company made a final payment to Steward Capital before closing of the acquisition. On December 9, 2020, the Company made a $5,000,000 payment to Steward Capital, applying $4,679,958 to principal and $320,042 to accrued interest. On December 31, 2020, the principal balance was $7,003,568, net of debt discount of $120,711 and accreted cost of $550,000. On June 25, 2021, the Company made a final payment of $7,044,750 to Steward Capital, applying $6,574,278 to principal, $404,729 in interest and other fees, and $65,743 in early payment penalties. The agreement was terminated on July 1, 2021. Interest expense for the years ended December 31, 2022 and 2021 was $0 and $426,448, respectively. |
Long-Term Notes Payable
Long-Term Notes Payable | 12 Months Ended |
Dec. 31, 2022 | |
Debt Disclosure [Abstract] | |
LONG-TERM NOTES PAYABLE | NOTE 10 – LONG-TERM NOTES PAYABLE 2017 Convertible Promissory Note On September 14, 2017, the Company and an individual entered into a convertible promissory note with unilateral conversion preferences by the individual (the “2017 Convertible Promissory Note”). On July 11, 2018, the Company’s Board approved certain changes to the 2017 Convertible Promissory Note wherein the conversion feature was changed from unilateral to mutual between the individual and the Company. The Company may at any time on or after a qualified public offering convert any unpaid repayment at the IPO conversion price. The conversion price is the lesser of the (i) price per share of Common Stock sold in the Qualified Public Offering, discounted by 20%, and (ii) the price per share of Common Stock based on a pre-money Company valuation of $50 million on a Fully Diluted Basis. On both December 31, 2022 and 2021, the total outstanding balance of the 2017 Convertible Promissory Note was $300,000. The maturity date of the 2017 Convertible Promissory Note is based on the payment of 0.6% of quarterly gross revenue until 1.5 times the amount of the Note is paid. Accrued interest on December 31, 2022 and 2021 was $40,965 and $40,152, respectively. Interest expense for both years ended December 31, 2022 and 2021 was $15,000. 2022 Convertible Promissory Notes On October 28, 2022, the Company entered into a securities purchase agreement (the “Purchase Agreement”) with certain investors pursuant to which we issued convertible notes (“2022 Convertible Promissory Notes”) in the principal amount of $34.5 million, with a debt discount of $4.5 million and issuance costs of $2.3 million. The net amount of proceeds to us from the 2022 Convertible Promissory Notes after deducting the placement agent’s fees and transaction expenses (issuance costs) were approximately $27,703,000. The Company intends to use the net proceeds of the 2022 Convertible Promissory Notes for general corporate purposes, including funding capital, expenditures, or the expansion of its business and providing working capital. As of December 31, 2022, the total outstanding principal on the 2022 Convertible Promissory Notes was $30,048,135, net of debt discount and issuance costs of $3,251,865. For the year ended December 31, 2022, we recognized interest expense of $176,629 and amortization expense of $2,358,871 and $1,186,972 related to the debt discount and issuance costs, respectively. The remaining unamortized debt discount of $2,141,129 and issuance costs of $1,110,736 will be amortized via the straight-line method through the maturity date. This method is materially consistent with the interest method under ASC 835. Interest expense and amortization expense of the debt discount and issuance costs are included in Interest expense on the Consolidated Statements of Operations. The 2022 Convertible Promissory Notes bears interest at the rate of 3% per annum. The 2022 Convertible Promissory Notes are payable in monthly installments beginning on November 1, 2022 through the maturity date of February 28, 2023 (each such date, an “Installment Date”). On each Installment Date, we will make monthly payments by converting the applicable “Installment Amount” (as defined below) into shares of our common stock (an “Installment Conversion”), subject to satisfaction of certain equity conditions, including a minimum $1.50 share price, $500,000 minimum daily volume, and maintaining continued Nasdaq listing requirements among other conditions. If these conditions are not met, installments can be requested in cash. In 2022, we issued 415,161 common shares as a result of Installment Conversion. At each Installment Date the note holder may defer some or all of the amount due until the subsequent Installment Date. In between Installment Dates, the note holder also has the option to accelerate certain portions of principal due. At each Installment Date the price used to exchange outstanding notes into common stock is based on an 8% discount to the lowest volume weighted average price (“VWAP”) of the respective previous five trading days. The maximum conversion price is $4.25 per share. The “Installment Amount” will equal: (i) for all Installment Dates other than the maturity date, the lesser of (x) the Holder Pro Rata Amount of $1,437,500 and (y) the principal amount then outstanding under the Note; and (ii) on the maturity date, the principal amount then outstanding under the Note. Each month, the note holders may accelerate a portion of the note due up to five times the minimum Installment Amount of $1,437,500. The 2022 Convertible Promissory Notes were issued with a maturity date of February 28, 2023. See Exchange Note in Note 16 - Subsequent Events for a description of an amendment to the 2022 Convertible Promissory Notes executed in January 2023, which includes an extension of the maturity date to October 28, 2024. A full summary of the 2022 Convertible Promissory Notes, including a full text of the related agreements, are available on the Form 8-K dated October 28, 2022. Paycheck Protection Program Loan On May 4, 2020, the Company applied for a loan pursuant to the Paycheck Protection Program under the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”), as administered by the U.S. Small Business Administration (the “SBA”). The loan, in the principal amount of $666,091 (the “PPP Loan”), was disbursed by Wells Fargo Bank, National Association (“Lender”) on May 6, 2020, pursuant to a Paycheck Protection Program Promissory Note and Agreement (the “Note and Agreement”). The program was later amended by the Paycheck Protection Flexibility Act of 2020 whereby debtors were granted a minimum maturity date of the five-year anniversary of the funding date and a deferral of ten months from the end of the covered period. The PPP Loan bore interest at a fixed rate of 1.00% per annum. Monthly principal and interest payments, less the amount of any potential forgiveness (discussed below), were to commence after the sixteen-month anniversary of the funding date. The Company did not provide any collateral or guarantees for the PPP Loan, nor did the Company pay any facility charge to obtain the PPP Loan. The Note and Agreement provided for customary events of default, including those relating to failure to make payment, bankruptcy, breaches of representations and material adverse effects. The Company could prepay the principal of the PPP Loan at any time without incurring any prepayment charges. All or a portion of the PPP Loan could be forgiven by the SBA upon application to the Lender by the Company within 10 months after the last day of the covered period. The Lender would have 90 days to review borrower’s forgiveness application and the SBA had an additional 60 days to review the Lender’s decision as to whether the borrower’s loan could be forgiven. Under the CARES Act, loan forgiveness was available for the sum of documented payroll costs, covered rent payments, and covered utilities, and certain covered mortgage interest payments during the twenty-four-week period beginning on the date of the first disbursement of the PPP Loan. For purposes of the CARES Act, payroll costs excluded compensation of an individual employee earning more than $100,000, prorated annually. Not more than 40% of the forgiven amount could be for non-payroll costs. Forgiveness was reduced if full-time headcount declines, or if salaries and wages for employees with salaries of $100,000 or less annually were reduced by more than 25%. On May 4, 2021, the Company submitted an application to the lender with supporting detail requesting forgiveness of the loan. On May 26, 2021, the Company received full forgiveness for both the principal and accrued interest, which is included in other income on the Company’s accompanying consolidated statements of operations. |
Stockholders_ Equity
Stockholders’ Equity | 12 Months Ended |
Dec. 31, 2022 | |
Stockholders' Equity Note [Abstract] | |
STOCKHOLDERS' EQUITY | NOTE 11 – STOCKHOLDERS’ EQUITY Common Stock As of December 31, 2022 and 2021, the Company had 116,666,667 shares of common stock, par value $0.0001 (the “Common Stock”), authorized for issuance, of which 44,108,661 and 40,990,604 shares of our Common Stock were issued and outstanding, respectively. Preferred Stock As of December 31, 2022 and 2021, the Company had 10,000,000 shares of preferred stock, par value $0.0001, authorized, of which 5,000,000 shares are designated as Series A Convertible Preferred Stock (“Series A Preferred”) and 5,000,000 shares are non-designated (“blank check”) shares. As of December 31, 2022 and 2021, the Company had no The Company evaluated its Series A Preferred to determine if those instruments or embedded components of those instruments qualify as derivatives to be accounted for separately. The Preferred Shares include an embedded contingent automatic conversion option which is bifurcated from the Preferred Shares and recorded separately as a derivative liability, creating a discount to the Preferred Shares. The fair value of the embedded derivative is recorded as a liability and marked-to-market each balance sheet date, with the change in fair value recorded as other income (expense) in the Company’s accompanying consolidated statement of operations. The discount arising from the identification of the embedded conversion feature will not be accreted or amortized as the Series A Preferred has been classified in equity. Form S-3 On January 29, 2021, the Company filed a shelf Registration Statement on Form S-3 for up to $150,000,000 with the SEC (the “Form S-3”) for shares of its Common Stock; shares of its preferred stock, which the Company may issue in one or more series or classes; debt securities, which the company may issue in one or more series; warrants to purchase its Common Stock, preferred stock or debt securities; and units. The Form S-3 was declared effective by the SEC on February 5, 2021. In connection with the 2022 Convertible Promissory Notes, on October 26, 2022, the Company filed a Registration Statement on Form S-3MEF to register an additional $11,696,000 aggregate maximum amount of the Company’s securities. This registration statement became effective upon filing. 2021 Public Offering On June 8, 2021, the Company entered into an underwriting agreement (the “2021 Underwriting Agreement”) with Oppenheimer & Co. Inc., acting as the representative for the underwriters identified therein (the “Underwriters”), relating to the Company’s public offering (the “2021 Public Offering”) of 6,400,000 shares (the “2021 Firm Shares”) of the Company’s Common Stock. Pursuant to the 2021 Underwriting Agreement, the Company also granted the Underwriters a 30-day option to purchase up to an additional 960,000 shares of Common Stock (the “2021 Option Shares,” and together with the 2021 Firm Shares, the “2021 Shares”) to cover over-allotments. The Underwriters agreed to purchase the 2021 Firm Shares from the Company with the option to purchase the 2021 Option Shares at a price of $6.51 per share. The 2021 Shares were offered, issued, and sold pursuant to the Form S-3 and accompanying prospectus filed with the SEC under the Securities Act. On June 11, 2021, pursuant to the 2021 Public Offering, the Company issued 7,360,000 shares of Common Stock (2021 Firm Shares and 2021 Option Shares) at a public price of $7.00 for net proceeds to the Company of $47,523,569 after deducting the underwriting discount and offering fees and expenses payable by the Company. The Underwriting Agreement included customary representations, warranties, and agreements by the Company, customary conditions to closing, indemnification obligations of the Company and the Underwriters, including for liabilities under the Securities Act, other obligations of the parties and termination provisions. The representations, warranties and covenants contained in the 2021 Underwriting Agreement were made only for purposes of such agreement and as of specific dates, were solely for the benefit of the parties to the agreement and were subject to limitations agreed upon by the contracting parties. The table below details the net proceeds of the 2021 Public Offering. Gross Proceeds: Initial Closing $ 44,800,000 Over-allotment Closing 6,720,000 51,520,000 Offering Costs: Underwriting discounts and commissions (3,806,400 ) Other offering costs (190,031 ) Net Proceeds $ 47,523,569 The Company will use the net proceeds of the 2021 Public Offering for working capital and general corporate purposes, which includes further technology development, increased spending on marketing and advertising and capital expenditures necessary to grow the Ondas Holdings business. ATM Offering On March 22, 2022, the Company, entered into an Equity Distribution Agreement (the “ATM Agreement”) with Oppenheimer. (the “Sales Agent”). Pursuant to the terms of the ATM Agreement, the Company could offer and sell (the “ATM Offering”) from time to time through the Sales Agent, as the Company’s sales agent, up to $50 million of shares Common Stock, (the “ATM Shares”). Sales of the ATM Shares, if any, may be made in sales deemed to be “at the market offerings” as defined in Rule 415 promulgated under the Securities Act. The Sales Agent is not required to sell any specific number or dollar amount of ATM Shares but will act as a sales agent using commercially reasonable efforts consistent with its normal trading and sales practices and applicable state and federal laws, rules, and regulations and the rules of the Nasdaq Stock Market, on mutually agreed terms between the Sales Agent and the Company. The Sales Agent will receive from the Company a commission of 3.0% of the gross proceeds from the sales of ATM Shares by the Sales Agent pursuant to the terms of the Agreement. Net proceeds from the sale of the ATM Shares will be used for general corporate purposes. On October 26, 2022, Ondas entered into Amendment No. 1 to the Equity Distribution Agreement, dated March 22, 2022 (“Amendment No. 1”), the Sales Agent. Amendment No. 1 provides for the reduction of the aggregate offering price from up to $50 million to up to $40 million of shares of Common Stock. The offering of ATM Shares pursuant to the ATM Agreement will terminate upon the earliest of (i) the sale of all ATM Shares subject to the ATM Agreement, and (ii) the termination of the ATM Agreement pursuant to its terms. The ATM Shares are issued pursuant to the Form S-3 and the prospectus supplement thereto dated March 22, 2022. During 2022, the Company sold (1) 852,679 ATM Shares through the Sales Agent at an average price of $7.29 with the net proceeds of $6.03 million; (2) 11,995 ATM Shares through the Sales Agent at an average price of $5.62 with the net proceeds of $65 thousand. In connection with the sale of these ATM Shares, the compensation paid by the Company to the Sales Agent was $227,116. Stock Issued for Convertible Debt On December 1, 2022 and November 1, 2022, the Company issued 212,450 and 202,711 shares of its common stock, respectively, to the lenders in lieu of cash payments for the outstanding interest and principal on the 2022 Convertible Promissory Notes (See NOTE 10 for further details). Warrants to Purchase Common Stock We use the Black-Scholes-Merton option model (the “Black-Scholes Model”) to determine the fair value of warrants to purchase Common Stock of the Company (“Warrants”). The Black-Scholes Model is an acceptable model in accordance with the GAAP. The Black-Scholes Model requires the use of a number of assumptions including volatility of the stock price, the weighted average risk-free interest rate, and the weighted average term of the Warrant. The risk-free interest rate assumption is based upon observed interest rates on zero coupon U.S. Treasury bonds whose maturity period is appropriate for the term of the Warrants. Estimated volatility is a measure of the amount by which our stock price is expected to fluctuate each year during the expected life of the award. Our estimated volatility is an average of the historical volatility of peer entities whose stock prices were publicly available over a period equal to the expected life of the awards. We used the historical volatility of peer entities due to the lack of sufficient historical data of our stock price. As of December 31, 2022, we had Warrants outstanding to purchase an aggregate of 1,901,802 shares of Common Stock with a weighted-average contractual remaining life of approximately 7.47 years, and exercise prices ranging from $0.03 to $7.89 per share, resulting in a weighted average exercise price of $7.63 per share. Warrants Granted During 2021 As of December 31, 2021, we had Warrants outstanding to purchase an aggregate of 3,305,854 shares of Common Stock with a weighted-average contractual remaining life of approximately 5.24 years, and exercise prices ranging from $0.03 to $9.75 per share, resulting in a weighted average exercise price of $8.53 per share. On August 8, 2021 the Company issued warrants to purchase an aggregate of 1,565,656 shares of Common Stock with an exercise price of $7.89 per share as consideration in the acquisition of American Robotics. These warrants vest in three equal installments on the next three anniversaries of their issuance. The assumptions used in the Black-Scholes Model are set forth in the table below. 2021 Stock price $ 7.78 Risk-free interest rate 1.23 % Volatility 46.91 % Expected life in years 10 Dividend yield 0.00 % No warrant holders exercised their rights during the year ended December 31, 2022. During the year ended December 31, 2021, certain warrant holders exercised their right to purchase an aggregate of 139,605 shares of the Company’s Common Stock at an exercise price of $9.75 totaling $13,689,507, all of which was received by the Company as of December 31, 2021. A summary of our Warrants activity and related information follows: Weighted Weighted Average Number of Average Remaining Shares Under Exercise Contractual Warrant Price Life Balance on January 1, 2021 1,879,803 $ 9.16 2.20 Issued 1,565,656 $ 7.89 4.50 Exercised (139,605 ) $ 9.75 Balance on December 31, 2021 3,305,854 $ 8.53 5.20 Expired (1,404,052 ) $ 9.75 Balance on December 31, 2022 1,901,802 $ 7.63 7.47 Equity Incentive Plan In 2018, our stockholders adopted the 2018 Equity Incentive Plan (the “2018 Plan”) pursuant to which 3,333,334 shares of our Common Stock has been reserved for issuance to employees, including officers, directors and consultants. The 2018 Plan shall be administered by the Board, provided however, that the Board may delegate such administration to the compensation committee (the “Committee”). Subject to the provisions of the 2018 Plan, the Board and/or the Committee shall have authority to grant, in its discretion, incentive stock options, or non-statutory options, stock awards or restricted stock purchase offers (“Equity Awards”). At the 2021 Annual Meeting of Stockholders of the Company held on November 5, 2021, stockholders of the Company approved, among other matters, the Ondas Holdings Inc. 2021 Stock Incentive Plan (the “Plan”). The Compensation Committee of the Board of Directors of the Company adopted the Plan on September 30, 2021, subject to stockholder approval. The purpose of the Plan is to enable the Company to attract, retain, reward, and motivate eligible individuals by providing them with an opportunity to acquire or increase a proprietary interest in the Company and to incentivize them to expend maximum efforts for the growth and success of the Company, so as to strengthen the mutuality of the interests between the eligible individuals and the shareholders of the Company. The Plan provides for the issuance of awards including stock options, stock appreciation rights, restricted stock, restricted stock units, and performance awards. The Plan provides for a reserve of 6,000,000 shares of the Company’s common stock. Stock Options to Purchase Common Stock The Company awards stock options to certain employees, directors, and consultants, which represent the right to purchase common shares on the date of exercise at a stated exercise price. Stock options granted to employees generally vest over a two to four-year period and are contingent on ongoing employment. Compensation expenses related to these awards is recognized straight-line over the applicable vesting period. Stock options granted to consultants are subject to the attainment of pre-established performance conditions. The actual number of shares subject to the award is determined at the end of the performance period and may range from zero to 100% of the target shares granted depending upon the terms of the award. Compensation expenses related to these awards is recognized when the performance conditions are satisfied. On August 5, 2021, the Company issued 211,038 Stock Options to employees of American Robotics in connection with the merger. Of these Stock Options 50,543 were issued as fully vested with no further service obligations and were included in the purchase consideration. The remaining 151,495 vest over a four-year period and are contingent on ongoing employment. They are included in compensation expense. As of December 31, 2022, we had Stock Options outstanding to purchase an aggregate of 2,412,286 shares of Common Stock with a weighted-average contractual remaining life of approximately 7.58 years, and exercise prices ranging from $3.51 to $6.79 per share, resulting in a weighted average exercise price of $5.77 per share. As of December 31, 2021, we had Stock Options outstanding to purchase an aggregate of 687,448 shares of Common Stock with a weighted-average contractual remaining life of approximately 8.20 years, and exercise prices ranging from $1.37 to $12.92 per share, resulting in a weighted average exercise price of $6.79 per share. The assumptions used in the Black-Scholes Model are set forth in the table below. 2022 2021 Stock price $3.81 - $6.55 $7.50 - $12.92 Risk-free interest rate 1.82 - 3.95% 0.35 - 0.87% Volatility 46.42 - 48.96% 45.53 - 53.99% Expected life in years 5.80 - 6.30 3.00 - 5.89 Dividend yield 0.00% 0.00% A summary of our Option activity and related information follows: Number of Shares Under Option Weighted Average Exercise Price Weighted Balance on January 1, 2021 568,006 $ 7.39 9.40 Granted 336,038 $ 4.91 Exercised (47,846 ) $ 2.09 Canceled (168,750 ) $ 6.39 Balance on December 31, 2021 687,448 $ 6.79 8.20 Granted 2,094,000 $ 5.17 Exercised (31,057 ) $ 2.09 Forfeited (168,105 ) $ 2.77 Canceled (170,000 ) $ 6.43 Balance on December 31, 2022 2,412,286 $ 5.77 7.58 Vested and Exercisable at December 31, 2022 635,288 $ 7.88 5.78 As of December 31, 2022, total unrecognized compensation expense related to non-vested Options was $2,631,636 which is expected to be recognized over a weighted-average period of 2.21 years. Total stock-based compensation expense for stock options for the years ended December 31, 2022 and 2021 is as follows: Years Ended 2022 2021 General and administrative $ 536,269 $ 306,055 Sales and marketing 509,789 - Research and development 720,554 - Total stock-based expense related to options $ 1,766,612 $ 306,055 Restricted Stock Units The Company awards Restricted Stock Units (“RSUs”) to certain employees, directors, which represent a right to receive common stock for each RSU that vests. RSUs granted to employees generally vest in two to four successive equal annual installments with the first vesting date commencing on the first anniversary of the award date and are contingent on continuing employment. RSUs granted to directors generally vest in four to eight successive equal quarterly installments with the first vesting date commencing on the first day of the next calendar quarter, provided that such director is a director of the Company on the applicable vesting dates. Compensation expenses related to these awards is recognized straight-line over the applicable vesting period. As of December 31, 2022 and 2021 the unrecognized compensation expense for RSUs was $6,125,626 and $9,734,567, respectively. A summary of our RSUs activity and related information follows: RSUs Weighted Average Grant Date Fair Value Weighted Unvested balance at January 1, 2021 625,000 $ 2.80 1.25 Granted 1,458,172 $ 7.98 Vested (526,250 ) $ 3.75 Cancelled (125,000 ) $ 2.80 Unvested balance at December 31, 2021 1,431,922 $ 12.12 2.5 Granted 190,860 $ 2.52 Vested (512,755 ) $ 8.06 Unvested balance at December 31, 2022 1,110,027 $ 6.89 1.52 As of December 31, 2022, there were 1,590 RSUs that vested, but were not yet issued as common stock. Total stock-based compensation expense for RSUs for the years ended December 31, 2022 and 2021 is as follows: Years Ended 2022 2021 General and administrative $ 3,259,648 $ 2,947,585 Sales and marketing 24,632 - Research and development 806,543 - Total stock-based expense related to RSUs $ 4,090,823 $ 2,947,585 |
Segment Information
Segment Information | 12 Months Ended |
Dec. 31, 2022 | |
Segment Reporting [Abstract] | |
SEGMENT INFORMATION | NOTE 12 – SEGMENT INFORMATION Operating segments are defined as components of an entity for which discrete financial information is available and is regularly reviewed by the Chief Operating Decision Maker (“CODM”) in making decisions regarding resource allocation and performance assessment. The Company’s CODM is its Chief Executive Officer. The Company determined it has two reportable segments: Ondas Networks and Ondas Autonomous Systems, which only includes the results of American Robotics for the year ended December 31, 2022 and 2021, as the CODM reviews financial information for these two businesses separately The Company has no inter-segment sales. The following table presents segment information for years ended December 31, 2022 and 2021: Year Ended Year Ended December 31, 2022 December 31, 2021 Ondas Ondas Total Ondas Ondas Total Revenue, net $ 1,931,677 $ 194,140 $ 2,125,817 $ 2,840,154 $ 66,617 $ 2,906,771 Depreciation and amortization 1,915,557 5,649,834 7,565,391 126,728 1,385,866 1,512,594 Interest income 12,771 12,771 25,542 10,399 1,179 11,578 Interest expense 1,294,863 1,279,863 2,574,726 574,889 796 575,685 Stock based compensation 1,188,217 4,669,218 5,857,435 1,642,507 1,611,083 3,253,590 Goodwill impairment - 19,419,600 19,419,600 - - - Benefit from income taxes - - - - 2,921,982 2,921,982 Net loss (14,361,407 ) (58,880,398 ) (73,241,805 ) (7,888,588 ) (7,135,254 ) (15,023,842 ) Goodwill - 25,606,983 25,606,983 - 45,026,583 45,026,583 Capital expenditure 97,853 2,783,047 2,880,900 123,854 799,864 923,718 Total assets 34,227,117 63,718,129 97,945,245 45,226,925 72,211,650 117,438,575 |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | NOTE 13 – INCOME TAXES The provision (benefit) from income taxes was as follows: December 31, 2022 2021 Current U.S. Federal $ — $ — State and local — — $ — $ — Deferred U.S. Federal $ — $ (2,360,923 ) State and local — (561,059 ) $ — $ (2,921,982 ) Total U.S. Federal $ — $ (2,360,923 ) State and local — (561,059 ) $ — $ (2,921,982 ) The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities are as follows: December 31, 2022 2021 Deferred Tax Assets: Tax benefit of net operating loss carry-forward $ 27,478,875 $ 17,577,952 Accrued liabilities 96,363 69,525 Stock based compensation 949,089 1,630,004 Depreciation 91,639 — Inventory Reserve 27,321 — Operating Lease Liabilities 827,607 159,558 R&D Capitalization 5,683,784 — R&D Credit 751,488 1,046,841 Total deferred tax assets 35,906,166 20,483,880 Deferred Tax Liabilities: Depreciation — (12,706 ) Amortization (3,078 ) (5,331 ) Intangibles (5,885,385 ) (5,743,441 ) Deferred Rent (798,745 ) (193,482 ) Total deferred tax liabilities (6,687,208 ) (5,954,960 ) Total net deferred tax assets 29,218,958 14,528,920 Valuation allowance for deferred tax assets (29,218,958 ) (14,528,920 ) Deferred tax assets, net of valuation allowance $ - $ - The change in the Company’s valuation allowance is as follows: Years Ended 2022 2021 Beginning of the year $ 14,528,920 $ 16,655,023 Change in valuation account 14,690,038 (2,126,103 ) End of the year $ 29,218,958 $ 14,528,920 A reconciliation of the provision for income taxes with the amounts computed by applying the Federal income tax rate to income from operations before the provision for income taxes is as follows: Years Ended 2022 2021 U.S. federal statutory rate (21.0 )% (21.0 )% Federal True Ups 0.40 % 0.5 % State taxes, net of federal benefit (7.61 )% 14.01 % Change in valuation allowance 20.06 % (11.85 )% Goodwill Impairment 5.57 % — % Stock Compensation 2.02 % — % Nondeductible Expenses 0.56 % 2.01 % R&D Credit — % 0.05 % Effective income tax rate — % (16.28 )% In assessing the realization of deferred tax assets, including the net operating loss carryforwards (NOLs), the Company assesses the available positive and negative evidence to estimate if sufficient future taxable income will be generated to utilize its existing deferred tax assets. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the period when those temporary differences become deductible. Based on its assessment, the Company has provided a full valuation allowance against its net deferred tax assets as their future utilization remains uncertain at this time. The December 31, 2022 change in valuation allowance is mainly related to the acquisition of ARI. As of December 31, 2022 and 2021, the Company had approximately $102 million and $79 million, respectively, of Federal NOLs available to offset future taxable income. The Federal NOLs of $15 million generated in 2007 through 2017 will begin to expire in 2027 through 2037. The Federal NOLs of $87 million generated in 2018 through 2022 have no expiration. As of December 31, 2022 and 2021, the Company had approximately $105 million and $70 million, respectively, of State NOLs available to offset future taxable income expiring from 2028 through 2042. As of December 31, 2022 and 2021, the Company had approximately $752,000 and $1,047,000, respectively of Federal research and development credits available to offset future tax liability expiring from 2038 through 2040. The Company’s Federal income tax returns for the 2019 to 2021 tax years remain open to examination by the IRS. Upon utilization of Federal NOLs in the future, the IRS may examine records from the year the loss occurred, even if outside the three-year statute of limitations. The Company’s State tax returns also remain open to examination. In accordance with Section 382 of the Internal Revenue code, the usage of the Company’s Federal Carryforwards could be limited in the event of a change in ownership. As of December 31, 2021, the Company completed an analysis and determined that there were multiple ownership changes. Provided sufficient taxable income is generated the annual base limitation plus increased limitation calculated pursuant to IRS Notice 2003-65 will allow the Company to utilize all existing losses within the carryover periods. The Company applies the FASB’s provisions for uncertain tax positions. The Company utilizes the two-step process to determine the amount of recognized tax benefit. For tax positions meeting the more-likely-than-not threshold, the amount recognized in the consolidated financial statements is the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement with the relevant tax authority. The Company recognizes interest and penalties associated with uncertain tax positions as a component of income tax expense. As of December 31, 2022, management does not believe the Company has any material uncertain tax positions that would require it to measure and reflect the potential lack of sustainability of a position on audit in its financial statements. The Company will continue to evaluate its uncertain tax positions in future periods to determine if measurement and recognition in its financial statements is necessary. The Company does not believe there will be any material changes in its unrecognized tax positions over the next year. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE 14 – COMMITMENTS AND CONTINGENCIES Legal Proceedings We may be involved in legal proceedings, claims and assessments arising in the ordinary course of business. Such matters are subject to many uncertainties, and outcomes are not predictable with assurance. There are no such loss contingencies that are included in the financial statements as of December 31, 2022. Operating Leases On October 30, 2018, Ondas Networks entered into a Sublease with Texas Instruments Sunnyvale Incorporated, regarding the sublease of approximately 21,982 square feet of rentable space at 165 Gibraltar Court, Sunnyvale, CA 94089 (the “Gibraltar Sublease”), constituting the entire first floor of the premises (except the lobby and two stairwells), as defined under that certain Lease dated April 12, 2004, as amended by the First Lease Amendment dated March 15, 2005, a Second Amendment to Lease dated November 30, 2005, and a Third Amendment to Lease dated November 30, 2010 between Gibraltar Sunnyvale Holdings LLC and Texas Instruments Sunnyvale Incorporated. The Sublease began on November 1, 2018 and ended on February 28, 2021 at a base monthly rent of $28,577. A security deposit of $28,577 was paid upon execution of the Sublease and refunded during the year ended December 31, 2021. Rent expense for the years ended December 31, 2022 and 2021 was $0 and $80,627, respectively. The lease for our offices and facilities for Ondas Networks at 165 Gibraltar Court, Sunnyvale, CA expired on February 28, 2021 and was verbally extended to March 31, 2021 under the same terms. On January 22, 2021, we entered into a 24-month lease (effective April 1, 2021) with Google LLC, the owner and landlord, wherein the base rate is $45,000 per month and including a security deposit in the amount of $90,000. Rent expense for the years ended December 31, 2022 and 2021 was $540,000 and $405,000, respectively. On August 5, 2021, the Company acquired American Robotics and their Lease (American Robotics Lease), wherein the base rate is $15,469 per month, with an annual increase of 3% through January 2024, with a security deposit of $24,166. On August 19, 2021, American Robotics amended their lease to reduce their space. The amendment reduced their annual base rent to $8,802 per month, with an annual increase of 3% through January 2024. Rent expense for the years ended December 31, 2022 and 2021 was $109,155 and $45,050, respectively. On October 8, 2021, American Robotics entered into an 86-month operating lease for space in Waltham, MA. Lease is scheduled to commence on March 1, 2022 and terminate on April 30, 2029, wherein the base rate is $39,375 per month, increasing 3% annually, with a security deposit due in the amount of $104,040. In conjunction with this new lease, American Robotics is leasing a short-term temporary space at $8,500 per month, until their primary space is available, which is targeted for May 1, 2022. Rent expense for the year ended December 31, 2022 was $502,298. |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
Sep. 30, 2022 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | NOTE 15 – RELATED PARTY TRANSACTIONS On March 14, 2020, Mr. Brock waived accrued payroll amounts in the amount of $141,667. Between January 1 and December 15, 2020 we accrued $131,494 for salary owed during 2020 to Mr. Brock. On January 29, 2021, Mr. Brock was paid $64,344 of the accrued amount and the remaining $67,150 was paid on April 15, 2021. On March 14, 2020, Stewart Kantor, President of Ondas Networks, waived accrued payroll amounts in the amount of $8,334. As of December 31, 2020, Ondas Networks accrued an additional $2,850 for salary owed during 2020 to Mr. Kantor, which was paid on April 15, 2021. Between June 2 and December 31, 2020, we accrued $115,385 for salary owed to Thomas V. Bushey, then President of the Company. On January 19, 2021, Mr. Bushey waived the accrued payroll amounts in the amount of $115,385. Pursuant to the terms of a Separation Agreement and General Release (the “Separation Agreement”) dated January 19, 2021 (the “Effective Date”), between Mr. Bushey and the Company, Mr. Bushey agreed to waive his entitlement to accrued salary in the amount of $125,256 and accrued vacation in the amount of $9,846 as of the Effective Date. At the time of Mr. Bushey’s resignation as President in January 2021, Mr. Bushey had the right to receive 500,000 RSU Shares (375,000 vested as of December 31, 2020 and 125,000 of which the Compensation Committee accelerated vesting), which will be issued on June 3, 2022 pursuant to Mr. Bushey’s deferral election. The remaining 500,000 RSU Shares were canceled. As part of the Separation Agreement, Mr. Bushey and the Company entered into a Consulting Agreement dated January 19, 2021 (the “Consulting Agreement”). Pursuant to the Consulting Agreement, Mr. Bushey provided services to the Company at the direction of the Company’s Chief Executive Officer. The Consulting Agreement terminated on July 19, 2021. Mr. Bushey was paid $7,500 per month for these services. The Company has a long-term equity investment in Dynam with a carrying value of $1,500,000 and $500,000 as December 31, 2022 and 2021, respectively. See Note 7 – Long-Term Equity Investment. In addition to the equity investment, the Company paid Dynam for services of $2,026,400 and $275,200 during the years ended December 31, 2022 and 2021, respectively. As of December 31, 2022 and 2021, amounts owed to Dynam were $0 and $151,893, respectively, which are included in Accounts payable on the Consolidated Balance Sheets. As of December 31, 2022, the Company owed $359,159 to independent directors, which is included in Accrued expenses and other current liabilities on the Consolidated Balance Sheets. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2022 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 16 – SUBSEQUENT EVENTS Management has evaluated subsequent events as of March 14, 2023, the date the consolidated financial statements were available to be issued according to the requirements of ASC Topic 855. Exchange Note On January 20, 2023, the Company entered into an Amendment No. 1 to Securities Purchase Agreement (“Amended SPA”) to that certain Purchase Agreement. The Amended SPA amends the notes attached as exhibits to the Purchase Agreement. Pursuant to the terms of the Purchase Agreement, on January 20, 2023, the Company exchanged the 2022 Convertible Promissory Notes, on a dollar-for-dollar basis, into 3% Senior Convertible Notes Due 2024 (the “2022 Convertible Exchange Notes”). The 2022 Convertible Exchange Notes are identical in all material respects to the 2022 Convertible Promissory Notes, except that they (i) are issued pursuant to the Base Indenture (as defined below) and the First Supplemental Indenture (as defined below); (ii) have a maturity date of October 28, 2024; (iii) allow for the Acceleration of Installment Amounts not to exceed eight (8) times the Installment Amount with respect to the Installment Date related to the Current Acceleration; and (iv) modify the Acceleration Conversion Price. Capitalized terms used but not otherwise defined herein have the respective meanings set forth in the 2022 Convertible Exchange Notes attached as an exhibit to this report. The 2022 Convertible Exchange Notes were issued pursuant to the first supplemental indenture (the “First Supplemental Indenture”), dated as of January 20, 2023, between the Company and Wilmington Savings Fund Society, FSB, as trustee (the “Trustee”). The First Supplemental Indenture supplements the indenture entered into by and between the Company and the Trustee, dated as of January 20, 2023 (the “Base Indenture” and, together with the First Supplemental Indenture, the “Indenture”). The Indenture has been qualified under the Trust Indenture Act of 1939, and the terms of the 2022 Convertible Exchange Notes include those set forth in the Indenture and those made part of the Indenture by reference to the Trust Indenture Act. Subsequent to December 31, 2022, the Company issued approximately 2,105,000 shares as a result of Installment Conversion. Airobotics Transaction On January 23, 2023, the Company, completed the acquisition of Airobotics, pursuant to the Agreement of Merger, dated as of August 4, 2022 (the “ Original Airobotics Agreement Amendment Agreement an Israeli company and a wholly owned subsidiary of the Company Merger Sub Merger At the effective time of the Merger (the “ Effective Time Airobotics Ordinary Shares owned by Airobotics or its subsidiaries (dormant or otherwise) or by the Company or Merger Sub Exchange Ratio without interest and subject to applicable tax withholdings (“Merger Consideration”) All fractional shares of the Company common stock that would have otherwise been issued to a holder of Airobotics Ordinary Shares as part of the Merger Consideration were rounded up to the nearest whole share based on the total number of shares of the Company’s common stock issued to such holder of Airobotics Ordinary Shares. Holders of Airobotics Ordinary Shares received approximately 2.8 million shares as consideration (excluding approximately 1.7 million shares underlying equity awards to be outstanding following the Merger). As provided in the Airobotics Agreement, each outstanding option, warrant or other right, whether vested or unvested, to purchase Airobotics Ordinary Shares (each, an “ Airobotics Stock Option Airobotics Stock Options Airobotics Plans As a result of the Merger, the Company will be dual listed on The Nasdaq Stock Market and the Tel Aviv Stock Exchange (“ TASE The following table summarizes the preliminary allocation of the purchase price based on the estimated fair value of the acquired assets and assumed liabilities as of January 23, 2023 (in thousands, except share amounts): Purchase price consideration Parent loan $ 2,000 Common Stock – 2,844,291 Shares 5,262 Vested Stock Options – 605,349 Shares 925 Warrants – 586,440 Shares - Total purchase price consideration $ 8,187 Estimated fair value of assets: Cash and cash equivalents and restricted cash $ 1,050 Accounts receivable 112 Inventory 1,495 Other current assets 836 Property, plant and equipment 2,624 Right of use asset 340 Intangible assets 3,565 Other long-term assets 63 10,085 Estimated fair value of liabilities assumed: Accounts payable 969 Customer Prepayments 1,603 Government grant liability 1,783 Other payables 1,156 Lease liabilities 385 Loan from related party 3,131 9,027 Net Assets Acquired $ 1,058 Goodwill $ 7,129 The final purchase price allocation will be determined when the Company has completed the detailed valuations and necessary calculations. The final allocation could differ materially from the preliminary allocation. The final allocation may include (1) changes in fair values of property, plant and equipment, (2) changes in valuation of intangible assets such as trade names, customer relationships, and technology, as well as goodwill and (3) other changes to assets and liabilities. The table below estimates the financial results of the Company had both the American Robotics and Airobotics acquisitions occurred on January 1, 2021. All numbers except loss per shares are in thousands. (Unaudited) 2022 2021 Revenue, net $ 2,874 $ 7,214 Net loss $ (87,092 ) $ (43,663 ) Basic Earnings Per Share $ (1.93 ) $ (1.02 ) Diluted Earnings Per Share $ (1.93 ) $ (1.02 ) Iron Drone Asset Acquisition As previously disclosed, on October 19, 2022, Airobotics entered into an Asset Purchase Agreement, as amended, to acquire all of the intellectual property, technical systems, and operations of Iron Drone Ltd. (“Iron Drone”), an Israeli-based company specializing in the development of autonomous counter-drone systems (the “Iron Drone Transaction”). The consideration for the Iron Drone Transaction was (i) $135,000 in cash, (ii) 46,129 shares of the Company’s common stock, (iii) warrants exercisable for 26,553 shares of the Company’s commons stock with an exercise price of $11.95, which shall be exercisable if, during the 48 month period following the closing, the average price per share of the Company’s common stock exceeds $52.38 for a period of at least 90 consecutive trading days, (iv) a right to acquire 35,377 shares of the Company’s common stock if during the 48 month period after the closing, the average price per share of the Company’s common stock exceeds $18.25 for a period of at least 90 consecutive trading days, and (v) a right to acquire 70,753 shares of the Company’s common stock if during the 48 month period after the closing, the average price per share of Company’s common stock exceeds $20.27 for a period of at least 90 consecutive trading days. On March 6, 2023, the Company completed the Iron Drone Transaction. Ondas Autonomous Systems On February 14, 2023, the Company announced the formation of Ondas Autonomous Systems, a new business unit to manage the combined drone operations of wholly owned subsidiaries American Robotics and Airobotics. As part of the integration of American Robotics and Airobotics to form Ondas Autonomous Systems and focus on a single product platform, the Company undertook certain restructuring actions: ● A reduction in workforce of 45 full time employees at American Robotics was implemented that results in a one-time restructuring charge of approximately $264,000 that will be recognized in the quarter ending March 31, 2023. ● A contract entered into on August 29, 2022, with a third party for development, that committed the Company to 24 monthly payments, of which the first twelve months were non-cancellable, was renegotiated. The original contract had a minimum commitment of $4,995,833 of which $3,633,332 was outstanding as of December 31, 2022. The company ended all development efforts and agreed to a termination fee of $1,589,585 payable over nine months from March 15, 2023. The full cost of the termination fee will be recorded in the quarter ending March 31, 2023. Silicon Valley Bank Failure On March 10, 2023, Silicon Valley Bank failed and was taken into receivership by the FDIC. Federal Deposit Insurance Corporation (FDIC). The Company held $361,813 in excess of federally insured limits with Silicon Valley Bank as of March 10, 2023. However, on March 12, 2023, the federal government announced they will back all customer deposits at Silicon Valley Bank. |
Accounting Policies, by Policy
Accounting Policies, by Policy (Policies) | 12 Months Ended |
Dec. 31, 2022 | |
Summary of Significant Account Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The consolidated financial statements include the accounts of the Company and our wholly owned subsidiaries, Ondas Networks, American Robotics, and FS Partners, and our majority owned subsidiary, FS Holding. All inter-company accounts and transactions between these entities have been eliminated in these consolidated financial statements. |
Business Combinations | Business Combinations We utilize the purchase method of accounting for business combinations. This method requires, among other things, that results of operations of acquired companies are included in Ondas’ results of operations beginning on the respective acquisition dates and that assets acquired, and liabilities assumed are recognized at fair value as of the acquisition date. Any excess of the fair value of consideration transferred over the fair values of the net assets acquired is recognized as goodwill. Contingent consideration liabilities are recognized at the estimated fair value on the acquisition date; these are recorded in either other accruals within current liabilities (for expected payments in less than a year) or other non-current liabilities (for expected payments in greater than a year), both on our consolidated balance sheets. Subsequent changes to the fair value of contingent consideration liabilities are recognized in other income (expense) in the Consolidated Statements of Operations. Contingent consideration payments made soon after the acquisition date are classified as investing activities in the consolidated statements of cash flows. Contingent consideration payments not made soon after the acquisition date that are related to the acquisition date fair value are reported as financing activities in the consolidated statements of cash flows, and amounts paid in excess of the original acquisition date fair value are reported as operating activities in the consolidated statements of cash flows. The fair value of assets acquired, and liabilities assumed in certain cases, may be subject to revision based on the final determination of fair value during a period of time not to exceed 12 months from the acquisition date. Legal costs, due diligence costs, business valuation costs and all other business acquisition costs are expensed when incurred. |
Goodwill and Intangible Assets | Goodwill and Intangible Assets Goodwill represents the excess of the purchase price over the fair values of the underlying net assets of an acquired business. The Company tests goodwill for impairment on an annual basis during the fourth quarter of its fiscal year, or immediately if conditions indicate that such impairment could exist. The Company evaluates qualitative factors to determine if it is more likely than not that the fair value of a reporting unit is less than its carrying value and whether it is necessary to perform goodwill impairment process. The impairment of Goodwill was $19,419,600 and $0 for the years ended December 31, 2022 and 2021, respectively, see Note 5 – Goodwill and Business Acquisition, for further details. Intangible assets represent patents, licenses, and allocation of purchase price to identifiable intangible assets of an acquired business. The Company estimates the fair value of its reporting units using the fair market value measurement requirement. Intangible assets are evaluated for impairment when events or changes in business circumstances indicate that the carrying amount of the assets may not be fully recoverable. We amortize our intangible assets with a finite life on a straight-line basis, over 10 years for patents; 10 years for developed technology, 10 years for licenses, trademarks, and the FAA waiver; 5 years for customer relationships; and 1 year for non-compete agreements. |
Segment Information | Segment Information Operating segments are defined as components of an entity for which discrete financial information is available and is regularly reviewed by the Chief Operating Decision Maker (“CODM”) in making decisions regarding resource allocation and performance assessment. The Company’s CODM is its Chief Executive Officer. The Company determined it has two reportable segments: Ondas Networks and Ondas Autonomous Systems as the CODM reviews financial information for these two businesses separately. The Company has no inter-segment sales. |
Use of Estimates | Use of Estimates The process of preparing financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of assets and liabilities at the date of the financial statements. Such management estimates include those relating to allocation of consideration for business combinations to identifiable tangible and intangible assets, revenue recognition, inventory write-downs to reflect net realizable value, assumptions used in the valuation of stock-based awards and valuation allowances against deferred tax assets. Actual results could differ from those estimates. |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all highly liquid instruments purchased with an original maturity of three months or less to be cash equivalents. On December 31, 2022 and 2021, we had no cash equivalents. The Company periodically monitors its positions with, and the credit quality of the financial institutions with which it invests. Periodically, throughout the year, and as of December 31, 2022, the Company has maintained balances in excess of federally insured limits. As of December 31, 2022, the Company was approximately $29,268,000 in excess of federally insured limits. |
Accounts Receivable | Accounts Receivable Accounts receivable are stated at a gross invoice amount less an allowance for credit losses. We estimate allowance for credit losses by evaluating specific accounts where information indicates our customers may have an inability to meet financial obligations, such as customer payment history, credit worthiness and receivable amounts outstanding for an extended period beyond contractual terms. We use assumptions and judgment, based on the best available facts and circumstances, to record an allowance to reduce the receivable to the amount expected to be collected. These allowances are evaluated and adjusted as additional information is received. We had no allowance for credit losses as of December 31, 2022 and 2021. |
Inventory | Inventory Inventories, which consist solely of raw materials, work in process and finished goods, are stated at the lower of cost (first-in, first-out) or net realizable value, net of reserves for obsolete inventory. We continually analyze our slow-moving and excess inventories. Based on historical and projected sales volumes and anticipated selling prices, we established reserves. Inventory that is in excess of current and projected use is reduced by an allowance to a level that approximates its estimate of future demand. Products that are determined to be obsolete are written down to net realizable value. On December 31, 2022 and 2021, such reserves were $100,254. Inventory consists of the following: December 31, December 31, Raw Material $ 2,041,776 $ 1,153,254 Work in Process 89,080 65,192 Finished Goods 142,415 60,153 Less Inventory Reserves (100,254 ) (100,254 ) Total Inventory, Net $ 2,173,017 $ 1,178,345 |
Property and Equipment | Property and Equipment All additions, including improvements to existing facilities, are recorded at cost. Maintenance and repairs are charged to expense as incurred. Depreciation of property and equipment is principally recorded using the straight-line method over the estimated useful lives of the assets. The estimated useful lives typically are (i) three to seven years for computer equipment and software, (ii) five years for vehicles and base stations, (iii) five to seven years for furniture and fixtures, and (iv) two years for drones. Leasehold improvements are amortized on a straight-line basis over the shorter of the lease term or the estimated useful life of the asset. Upon the disposal of property, the asset and related accumulated depreciation accounts are relieved of the amounts recorded therein for such items, and any resulting gain or loss is recorded in operating expenses in the year of disposition. |
Software | Software Costs incurred internally in researching and developing a software product are charged to expense until technological feasibility has been established for the product. Once technological feasibility is established, all software costs are capitalized until the product is available for general release to customers. Judgment is required in determining when technological feasibility of a product is established. We have determined that technological feasibility for our software products is reached after all high-risk development issues have been resolved through coding and testing. Generally, this occurs shortly before the products are released to production. The amortization of these costs is included in cost of revenue over the estimated life of the products. As of December 31, 2022 and 2021, the Company had no internally developed software. |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets Long-lived assets are evaluated whenever events or changes in circumstances indicate that the carrying amount may not be recoverable or the useful life has changed. Such indicators include significant technological changes, adverse changes in market conditions and/or poor operating results. The carrying value of a long-lived asset group is considered impaired when the projected undiscounted future cash flows are less than its carrying value. The amount of impairment loss recognized is the difference between the estimated fair value and the carrying value of the asset or asset group. Fair market value is determined primarily using the projected future undiscounted cash flows. |
Research and Development | Research and Development Costs for research and development are expensed as incurred. Research and development expenses consist primarily of salaries, salary related expenses and costs of contractors and materials. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments Our financial instruments consist primarily of receivables, accounts payable, accrued expenses and short- and long-term debt. The carrying amount of receivables, accounts payable and accrued expenses approximates our fair value because of the short-term maturity of such instruments. We have categorized our assets and liabilities that are valued at fair value on a recurring basis into a three-level fair value hierarchy in accordance with U.S. GAAP. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets and liabilities (Level 1) and lowest priority to unobservable inputs (Level 3). Assets and liabilities recorded in the balance sheets at fair value are categorized based on a hierarchy of inputs, as follows: Level 1 -- Unadjusted quoted prices in active markets for identical assets or liabilities. Level 2 -- Quoted prices for similar assets or liabilities in active markets or inputs that are observable for the asset or liability, either directly or indirectly through market corroboration, for substantially the full term of the financial instrument. Level 3 -- Unobservable inputs for the asset or liability. The Company had no financial instruments that are required to be valued at fair value as of December 31, 2022 and 2021. |
Deferred Offering Costs | Deferred Offering Costs The Company capitalizes within other assets, certain legal, accounting and other third-party fees that are directly related to the Company’s in-process equity financings. After consummation of the equity financing, these costs are recorded as a reduction of the proceeds received as a result of the offering. Should a planned equity financing be abandoned, terminated or significantly delayed, the deferred offering costs are immediately written off to operating expenses. Deferred Financing Costs The Company capitalizes certain legal, professional accounting and other third-party fees that are directly associated with the issuance of notes payable, elsewhere referred to as issuance costs. These issuance costs are amortized on a straight-line basis over the term of the related note payable, which approximates the amortization we would have recorded under the effective interest method |
Income Taxes | Income Taxes The Company files a consolidated tax return for federal purposes. Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which the related temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized when the rate change is enacted. Valuation allowances are recorded to reduce deferred tax assets to the amount that will more likely than not be realized. In accordance with GAAP, we recognize the effect of uncertain income tax positions only if the positions are more likely than not of being sustained in an audit, based on the technical merits of the position. Recognized uncertain income tax positions are measured at the largest amount that is greater than 50% likely of being realized. Changes in recognition or measurement are reflected in the period in which those changes in judgment occur. We recognize both interest and penalties related to uncertain tax positions as part of the income tax provision. |
Share-Based Compensation | Share-Based Compensation We calculate share-based compensation expense for option awards (“Share-based Award(s)”) based on the estimated grant/issue date fair value using the Black-Scholes-Merton option pricing model (“Black-Scholes Model”) and recognize the expense on a straight-line basis over the vesting period. We account for forfeitures as they occur. The Black-Scholes Model requires the use of a number of assumptions including volatility of the stock price, the weighted average risk-free interest rate, and the vesting period in determining the fair value of Share-based Awards. The expected term is based on the “simplified method”, due to the Company’s limited option exercise history. Under this method, the term is estimated using the weighted average of the service vesting period and contractual term of the option award. As the Company does not yet have sufficient history of its own volatility, the Company has identified several public entities of similar size, complexities and industry and calculates historical volatility based on the volatilities of these companies. Although we believe our assumptions used to calculate share-based compensation expense are reasonable, these assumptions can involve complex judgments about future events, which are open to interpretation and inherent uncertainty. In addition, significant changes to our assumptions could significantly impact the amount of expense recorded in a given period. We recognize restricted stock unit expense over the period of vesting or period that services will be provided. Compensation associated with shares of Common Stock issued or to be issued to consultants and other non-employees is recognized over the expected service period beginning on the measurement date, which is generally the time the Company and the service provider enter into a commitment whereby the Company agrees to grant shares in exchange for the services to be provided. |
Shipping and Handling | Shipping and Handling We expense all shipping and handling costs as incurred. These costs are included in Cost of goods sold on the accompanying Consolidated Statements of Operations. |
Advertising and Promotional Expenses | Advertising and Promotional Expenses We expense advertising and promotional costs as incurred. We recognized expense of $80,934 and $28,142 for the years ended December 31, 2022, and 2021, respectively. These costs are included in Sales and marketing on the accompanying Consolidated Statements of Operations. |
Post-Retirement Benefits | Post-Retirement Benefits: We have one 401(k) Savings Plan that qualifies as a deferred salary arrangement under Section 401(k) of the Internal Revenue Code. Under this 401(k) Plan, matching contributions are based upon the amount of the employees’ contributions subject to certain limitations. We recognized expense of $351,837 and $84,303 for the years ended December 31, 2022, and 2021, respectively. |
Revenue Recognition | Revenue Recognition Ondas has two business segments that generate revenue: Ondas Networks and Ondas Autonomous Systems. Ondas Networks generates revenue from product sales, services, and development projects. American Robotics, as part of the Ondas Autonomous Systems segment, generates revenue through data subscription services. Ondas Networks is engaged in the development, marketing, and sale of wireless radio systems for secure, wide area mission-critical, business-to-business networks. Ondas Networks generates revenue primarily from the sale of our FullMAX System and the delivery of related services, along with non-recurring engineering (“NRE”) development projects with certain customers. American Robotics generates revenue by selling a data subscription service to its customers based on the information collected by their autonomous systems. The customer pays for a monthly, annual, or multi-annual subscription service to remotely access the data collected by their autonomous systems. Revenue for development projects is typically recognized over time using a percentage of completion input method, whereby revenues are recorded on the basis of the Company’s estimates of satisfaction of the performance obligation based on the ratio of actual costs incurred to total estimated costs. The input method is utilized because management considers it to be the best available measure of progress as the performance obligations are completed. Revenue and cost estimates are regularly monitored and revised based on changes in circumstances. Impacts from changes in estimates of revenue and cost of revenue are recognized on a cumulative catch-up basis, which recognizes in the current period the cumulative effect of the changes on current and prior periods base in the performance completed to date. Subscription revenue is recognized on straight line basis over the length of the customer subscription agreement. If a subscription payment is received prior to installation and operation of their autonomous systems, it is held in deferred revenue and recognized after operation commences over the length of the subscription service. Collaboration Arrangements within the Scope of ASC 808, Collaborative Arrangements The Company’s development revenue includes contracts where the Company and the customer work cooperatively to develop software and hardware applications. The Company analyzes these contracts to assess whether such arrangements involve joint operating activities performed by parties that are both active participants in the activities and exposed to significant risks and rewards dependent on the commercial success of such activities and are therefore within the scope of ASC Topic 808, Collaborative Arrangements (“ASC 808”). This assessment is performed throughout the life of the arrangement based on changes in the responsibilities of all parties in the arrangement. For collaboration arrangements that are deemed to be within the scope of ASC 808, the Company first determines which elements of the collaboration are deemed to be within the scope of ASC 808 and those that are more reflective of a vendor-customer relationship and therefore within the scope of ASC 606, Revenue from Contracts with Customers (“ASC 606”). The Company’s policy is generally to recognize amounts received from collaborators in connection with joint operating activities that are within the scope of ASC 808 as a reduction in research and development expense. As of December 31, 2022 and 2021, the Company has not identified any contracts with its customers that meet the criteria of ASC 808. Arrangements within the Scope of ASC 606, Revenue from Contracts with Customers Under ASC 606, the Company recognizes revenue when the customer obtains control of promised products or services, in an amount that reflects the consideration which is expected to be received in exchange for those products or services. The Company recognizes revenue following the five-step model prescribed under ASC 606: (i) identify contract(s) with a customer; (ii) identify the performance obligation(s) in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligation(s) in the contract; and (v) recognize revenue when (or as) the Company satisfies a performance obligation. The Company only applies the five-step model to contracts when it is probable that the entity will collect the consideration it is entitled to in exchange for the products or services it transfers to the customer. At contract inception, once the contract is determined to be within the scope of ASC 606, the Company assesses the products or services promised within each contract and determines those that are performance obligations and assesses whether each promised product or service is distinct. The Company then recognizes as revenue the amount of the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied. To the extent the transaction price includes variable consideration, we estimate the amount of variable consideration that should be included in the transaction price utilizing the expected value method. Variable consideration is included in the transaction price if, in our judgment, it is probable that a significant future reversal of cumulative revenue under the contract will not occur. Estimates of variable consideration and determination of whether to include estimated amounts in the transaction price are based largely on an assessment of our anticipated performance and all information (historical, current, and forecasted) that is reasonably available. Sales and other taxes collected on behalf of third parties are excluded from revenue. For the years ended December 31, 2022 and 2021, none of our contracts with customers included variable consideration. Contracts that are modified to account for changes in contract specifications and requirements are assessed to determine if the modification either creates new or changes the existing enforceable rights and obligations. Generally, contract modifications are for products or services that are not distinct from the existing contract due to the inability to use, consume or sell the products or services on their own to generate economic benefits and are accounted for as if they were part of that existing contract. The effect of a contract modification on the transaction price and measure of progress for the performance obligation to which it relates, is recognized as an adjustment to revenue (either as an increase in or a reduction of revenue) on a cumulative catch-up basis. For the years ended December 31, 2022 and 2021, there were no modifications to contract specifications. Product revenue is comprised of sales of the Ondas Networks’ software defined base station and remote radios, its network management and monitoring system, and accessories. Ondas Networks’ software and hardware is sold with a limited one-year basic warranty included in the price. The limited one-year basic warranty is an assurance-type warranty, is not a separate performance obligation, and thus no transaction price is allocated to it. The nature of tasks under the limited one-year basic warranty only provides for remedying defective product(s) covered by the warranty. Product revenue is generally recognized when the customer obtains control of our product, which occurs at a point in time, and may be upon shipment or upon delivery based on the contractual shipping terms of a contract, or upon installation when the combined performance obligation is not distinct within the context of the contract. Service revenue is comprised of separately priced extended warranty sales, network support and maintenance, remote monitoring, as well as ancillary services directly related to the sale of the Ondas Networks’ wireless communications products including wireless network design, systems engineering, radio frequency planning, software configuration, product training, installation, and onsite support. The extended warranty Ondas Networks sells provides a level of assurance beyond the coverage for defects that existed at the time of a sale or against certain types of covered damage. The extended warranty includes 1) factory hardware repair or replacement of the base station and remote radios, at our election, 2) software upgrades, bug fixes and new features of the radio software and network management systems (“NMS”), 3) deployment and network architecture support, and 4) technical support by phone and email. Ancillary service revenues are recognized at the point in time when those services have been provided to the customer and the performance obligation has been satisfied. The Company allocates the transaction price to the service and extended warranty based on the stand-alone selling prices of these performance obligations, which are stated in our contracts. Revenue for the extended warranty is recognized overtime. Development revenue is comprised primarily of non-recurring engineering service contracts to develop software and hardware applications for various customers. For Ondas Networks, in 2022, a significant portion of this revenue is generated from one parent customer whereby Ondas Networks is to develop such applications to interoperate within the customers infrastructure. For these contracts, Ondas Networks and the customers work cooperatively, whereby the customers’ involvement is to provide technical specifications for the product design, as well as, to review and approve the project progress at various markers based on predetermined milestones. The products developed are not able to be sold to any other customer and are based in part upon existing Ondas Networks and customer technology. Development revenue is either recognized at the point in time when those services have been provided to the customer and the performance obligation has been satisfied recognized, or as services are provided over the life of the contract as Ondas Networks has an enforceable right to payment for services completed to date and there is no alternative use of the product, depending on the contract. If the customer contract contains a single performance obligation, the entire transaction price is allocated to the single performance obligation. We enter into certain contracts within our service revenues that have multiple performance obligations, one or more of which may be delivered subsequent to the delivery of other performance obligations. We allocate the transaction price based on the estimated relative standalone selling prices of the promised products or services underlying each performance obligation. We determine standalone selling prices based on the price at which the performance obligation is sold separately. If the standalone selling price is not observable through past transactions, we estimate the standalone selling price considering available information such as market conditions and internally approved pricing guidelines related to the performance obligations. Revenue is then allocated to the performance obligations using the relative selling prices of each of the performance obligations in the contract. Ondas Networks’ payment terms vary and range from Net 15 to Net 30 days from the date of the invoices for product and services related revenue. Ondas Networks’ payment terms for the majority of their development related revenue carry milestone related payment obligations which span the contract life. For milestone-based contracts, the customer reviews the completed milestone and once approved, makes payment pursuant to the applicable contract. American Robotics generates revenue by selling a data subscription service to its customers based on the information collected by their autonomous systems. The customer pays for a monthly, annual, or multi-annual subscription service to remotely access the data collected by their autonomous systems. American Robotics’ payment terms vary and range from Net 30 to Net 60 days from the date of the invoices for product and services related revenue . Disaggregation of Revenue The following tables present our disaggregated revenues by Type of Revenue and Timing of Revenue. Years Ended 2022 2021 Type of Revenue Product revenue $ 872,660 $ 405,570 Service and subscription revenue 319,140 96,933 Development revenue 934,017 2,401,474 Other revenue - 2,794 Total revenue $ 2,125,817 $ 2,906,771 Of the service and subscription revenue above, $194,140 and $66,617 represents American Robotics subscription revenue for the years ended December 31, 2022 and 2021, respectively. Years Ended 2022 2021 Timing of Revenue Revenue recognized point in time $ 872,660 $ 438,413 Revenue recognized over time 1,253,157 2,468,358 Total revenue $ 2,125,817 $ 2,906,771 Of the revenue recognized over time above, $194,140 and $66,617 represents American Robotics subscription revenue for the years ended December 31, 2022 and 2021, respectively. Contract Assets and Liabilities We recognize a receivable or contract asset when we perform a service or transfer a good in advance of receiving consideration. A receivable is recorded when our right to consideration is unconditional and only the passage of time is required before payment of that consideration is due. A contract asset is recorded when our right to consideration in exchange for goods or services that we have transferred or provided to a customer is conditional on something other than the passage of time. We did not have any contract assets recorded on December 31, 2022 and 2021. We recognize a contract liability when we receive consideration, or if we have the unconditional right to receive consideration, in advance of satisfying the performance obligation. A contract liability is our obligation to transfer goods or services to a customer for which we have received consideration, or an amount of consideration is due from the customer. The table below details the activity in our contract liabilities during the years ended December 31, 2022 and 2021, and the balance at the end of each year is reported as deferred revenue in the Company’s consolidated balance sheet. Years Ended 2022 2021 Balance, beginning of year $ 512,397 $ 165,035 Additions 527,268 2,238,137 Transfer to revenue (978,157 ) (1,890,775 ) Balance, end of year $ 61,508 $ 512,397 Warranty Reserve For our software and hardware products, we provide a limited one-year assurance-type warranty and for our development service, we provide no warranties. The assurance-type warranty covers defects in material and workmanship only. If a software or hardware component is determined to be defective after being tested by the Company within the one-year, the Company will repair, replace or refund the price of the covered hardware and/or software to the customer (not including any shipping, handling, delivery or installation charges). We estimate, based upon a review of historical warranty claim experience, the costs that may be incurred under our warranties and record a liability in the amount of such estimate at the time a product is sold. Factors that affect our warranty liability include the number of units sold, historical and anticipated rates of warranty claims, and cost per claim. We periodically assess the adequacy of our recorded warranty liability and adjust the accrual as claims data and historical experience warrants. The Company has assessed the costs of fulfilling its existing assurance-type warranties and has determined that the estimated outstanding warranty obligations on December 31, 2022 and 2021 are immaterial to the Company’s financial statements. |
Leases | Leases Under Topic 842, operating lease expense is generally recognized evenly over the term of the lease. During the year ended December 31, 2022, the Company’s operating leases consisted of office space in Sunnyvale, CA (the “Gibraltar Lease”), Marlborough, MA (the “American Robotics Lease”), and Waltham, MA (the “Waltham Lease”). For the year ended December 31, 2021, the Company’s operating leases consisted of office space in Sunnyvale, CA (the “Gibraltar Lease”) and Marlborough, MA (the “American Robotics Lease”). On January 22, 2021, we entered into a 24-month lease (effective April 1, 2021) with the owner and landlord (the “2021 Gibraltar Lease”), wherein the base rate is $45,000 per month, with a security deposit in the amount of $90,000. On August 5, 2021, the Company acquired American Robotics and the American Robotics Lease, wherein the base rate is $15,469 per month, with an annual increase of 3% through January 2024, with a security deposit of $24,166. On August 19, 2021, American Robotics amended their lease to reduce their space to approximately 10,450 square feet. The amendment reduced their annual base rent to $8,802 per month, with an annual increase of 3% through January 2024. On October 8, 2021, American Robotics entered into an 86-month operating lease for space in Waltham, MA. The Waltham Lease commenced on March 1, 2022 and is scheduled to terminate on April 30, 2029, wherein the base rate is $39,375 per month, increasing 3% annually, with a security deposit in the amount of $104,040. These facilities also serve as Ondas corporate headquarters. We determine if an arrangement is a lease, or contains a lease, at the inception of the arrangement. If we determine the arrangement is a lease, or contains a lease, at lease inception, we then determine whether the lease is an operating lease or finance lease. Operating and finance leases result in recording a right-of-use (“ROU”) asset and lease liability on our consolidated balance sheets. ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at the commencement date based on the present value of lease payments over the lease term. For purposes of calculating operating lease ROU assets and operating lease liabilities, we use the non-cancellable lease term plus options to extend that we are reasonably certain to take. Lease expense for operating lease payments is recognized on a straight-line basis over the lease term. Our leases generally do not provide an implicit rate. As such, we use our incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. This rate is generally consistent with the interest rate we pay on borrowings under our credit facilities, as this rate approximates our collateralized borrowing capabilities over a similar term of the lease payments. We have elected not to recognize ROU assets and lease liabilities that arise from short-term (12 months or less) leases for any class of underlying assets. We have elected not to separate lease and non-lease components for any class of underlying asset. Lease Costs Years ended 2022 2021 Components of total lease costs: Operating lease expense $ 1,151,453 $ 522,012 Common area maintenance expense 103,691 42,738 Short-term lease costs (1) 48,870 45,498 Total lease costs $ 1,304,014 $ 610,248 (1) Represents short-term leases with an initial term of 12 months or less, which are immaterial. Lease Positions as of December 31, 2022 and 2021 ROU lease assets and lease liabilities for our operating leases were recorded in the consolidated balance sheet as follows: December 31, 2022 2021 Assets: Operating lease assets $ 2,930,996 $ 836,025 Total lease assets $ 2,930,996 $ 836,025 Liabilities: Operating lease liabilities, current $ 580,593 $ 550,525 Operating lease liabilities, net of current 2,456,315 241,677 Total lease liabilities $ 3,036,908 $ 792,202 Other Leases Information Years ended 2022 2021 Operating cash flows for operating leases $ 878,627 $ 525,938 Weighted average remaining lease term (in years)- operating lease 5.86 1.48 Weighted average discount rate – operating lease 5.78 % 10.93 % Undiscounted Leases Cash Flows Future lease payments included in the measurement of lease liabilities on the consolidated balance sheet on December 31, 2022, as follows: Years ending December 31, 2023 $ 730,592 2024 508,208 2025 513,900 2026 529,320 2027 545,250 Thereafter 752,490 Total future minimum lease payments $ 3,579,760 Lease imputed interest (542,852 ) Total $ 3,036,908 |
Net Loss Per Common Share | Net Loss Per Common Share Basic net loss per share is computed by dividing net loss by the weighted average shares of common stock outstanding for each period. Diluted net loss per share is the same as basic net loss per share since the Company has net losses for each period presented. The following potentially dilutive securities for the years ended December 31, 2022 and 2021 have been excluded from the computation of diluted net loss per share because the effect of their inclusion would have been anti-dilutive. Years Ended 2022 2021 Warrants to purchase common stock 1,901,802 3,305,854 Options to purchase common stock 2,412,286 687,448 Potential shares issuable under 2022 Convertible Promissory Notes 24,177,835 - Restricted stock units 1,111,617 1,958,172 Total potentially dilutive securities 29,603,540 5,951,474 |
Concentrations of Credit Risk | Concentrations of Credit Risk Financial instruments that potentially subject us to concentrations of credit risk consist of cash and accounts receivable. Cash is deposited with a limited number of financial institutions. The balances held at any one financial institution may be in excess of Federal Deposit Insurance Corporation (FDIC) insurance limits. As of December 31, 2022, the Company was approximately $29,268,291 in excess of federally insured limits. Credit is extended to customers based on an evaluation of their financial condition and other factors. We generally do not require collateral or other security to support accounts receivable. We perform ongoing credit evaluations of our customers and maintains an allowance for credit losses. |
Concentration of Customers | Concentration of Customers Because we have only recently invested in our customer service and support organization, a small number of customers have accounted for a substantial amount of our revenue. Revenue from significant customers, those representing 10% or more of total revenue, was composed of one customer accounting for 89% of the Company’s revenue for the year ended December 31, 2022. Two customers accounted for 55% and 41% of the Company’s revenue for the year ended December 31, 2021, respectively. Accounts receivable from significant customers, those representing 10% or more of the total accounts receivable, were composed of two customers accounting for 67% and 33%, respectively, of the Company’s accounts receivable balance as of December 31, 2022. Two customers accounted for 54% and 36% of the Company’s accounts receivable balance as of December 31, 2021, respectively. |
Recently Adopted Accounting Pronouncements | Recently Adopted Accounting Pronouncements In May 2021, the Financial Accounting Standards Board (“FASB”) issued accounting standards update (“ASU”) 2021-04—Earnings Per Share (Topic 260), Debt— Modifications and Extinguishments (Subtopic 470-50), Compensation—Stock Compensation (Topic 718), and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Issuer’s Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options, to clarify and reduce diversity in an issuer’s accounting for modifications or exchanges of freestanding equity-classified written call options (for example, warrants) that remain equity classified after modification or exchange. The amendments in this ASU are effective for public and nonpublic entities for fiscal years beginning after December 15, 2021, and interim periods with fiscal years beginning after December 15, 2021. Early adoption was permitted, including adoption in an interim period. The adoption of this pronouncement during the year ended December 31, 2022 had no impact on our accompanying consolidated financial statements. In August 2020, the FASB issued ASU No. 2020-06, Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity (“ASU 2020-06”), which simplifies an issuer’s accounting for convertible instruments by reducing the number of accounting models that require separate accounting for embedded conversion features. ASU 2020-06 also simplifies the settlement assessment that entities are required to perform to determine whether a contract qualifies for equity classification and makes targeted improvements to the disclosures for convertible instruments and earnings-per-share (EPS) guidance. This update will be effective for the Company’s fiscal years beginning after December 15, 2023, and interim periods within those fiscal years. Early adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020, and interim periods within those fiscal years. Entities can elect to adopt the new guidance through either a modified retrospective method of transition or a fully retrospective method of transition. The Company has elected to adopt the standard early using the modified retrospective method of transition with effect from January 1, 2022. At the time of adoption this did not have a material impact on the consolidated financial statements. However, ASU 2020-06 precluded the Company from having to record a derivative liability for convertible notes entered into during the year ended December 31, 2022. In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes, which removes certain exceptions for recognizing deferred taxes for investments, performing intra-period tax allocation and calculating income taxes in interim periods. ASU 2019-12 is applicable to all entities subject to income taxes. ASU 2019-12 provides guidance to minimize complexity in certain areas by introducing a policy election to not allocate consolidated income taxes when a member of a consolidated tax return is not subject to income tax and guides whether to relate a step-up tax basis to a business combination or separate transaction. ASU 2019-12 changes the current guidance of making an intraperiod allocation, determining when a tax liability is recognized after a foreign entity investor transition to or from equity method of accounting, accounting for tax law changes and year-to-date losses in interim periods, and determining how to apply income tax guidance to franchise taxes. The amendments from ASU 2019-12 are effective for all public business entities for fiscal years beginning after December 15, 2020 and include interim periods. The guidance is effective for all other entities for fiscal years beginning after December 15, 2021 and for interim periods beginning after December 15, 2022. Early adoption was permitted. The adoption of this pronouncement during the year ended December 31, 2021 had no impact on our accompanying consolidated financial statements. |
Recently Issued Accounting Pronouncements Not Yet Adopted | Recently Issued Accounting Pronouncements Not Yet Adopted On June 30, 2022, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2022-03, which (1) clarifies existing guidance when measuring the fair value of an equity security subject to contractual restrictions that prohibit the sale of an equity security and (2) introduces new disclosure requirements for equity securities subject to contractual sale restrictions. The ASU clarifies that a contractual restriction on the sale of an equity security is not considered part of the unit of account of the equity security. Instead, the contractual sale restriction is a characteristic of the reporting entity. Accordingly, an entity should not consider the contractual sale restriction when measuring the equity security’s fair value. Additionally, the ASU clarifies that an entity cannot, as a separate unit of account, recognize and measure a contractual sale restriction. For public business entities, the amendments in this Update are effective for fiscal years beginning after December 15, 2023, and interim periods within those fiscal years. The Company has evaluated the effects of the adoption of ASU No. 2022-03, and it will have no impact on its consolidated financial statements. In March 2022, FASB issued Accounting Standards Update (ASU) No. 2022-02, Financial Instruments—Credit Losses: Troubled Debt Restructurings and Vintage Disclosures, as an amendment to ASU No. 2016-13 Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. Regarding Troubled Debt Restructurings by Creditors, this amendment eliminates the accounting guidance for TDRs by creditors in Subtopic 310-40, Receivables—Troubled Debt Restructurings by Creditors, while enhancing disclosure requirements for certain loan refinancings and restructurings by creditors when a borrower is experiencing financial difficulty. Regarding Vintage Disclosures—Gross Writeoffs, this amendment requires that an entity disclose current-period gross writeoffs by year of origination for financing receivables and net investments in leases within the scope of Subtopic 326-20, Financial Instruments—Credit Losses—Measured at Amortized Cost. For entities that have not yet adopted the amendments in Update 2016-13, ASU No. 2022-02 is effective for fiscal years beginning after December 15, 2022. The Company has evaluated the effects of the adoption of ASU No. 2022-02, and it will have no impact on its consolidated financial statements. On September 29, 2022, FASB issued Accounting Standards Update (ASU) No. 2022-04, Liabilities—Supplier Finance Programs (Subtopic 405-50): Disclosure of Supplier Finance Program Obligations, which enhances the transparency about the use of supplier finance programs for investors and other allocators of capital. Under the new ASU, a company that uses a supplier finance program in connection with the purchase of goods or services will be required to disclose sufficient information about the program to allow a user of financial statements to understand the program’s nature, activity during the period, changes from period to period, and potential magnitude. ASU No. 2022-04 is effective for fiscal years, including interim periods within those fiscal years, beginning after December 15, 2022, except for the roll forward of the supplier finance program obligations, which is effective for fiscal years beginning after December 15, 2023. Early adoption is permitted. The Company is currently evaluating the effects of the adoption of ASU No. 2022-03 on its consolidated financial statements. In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers, which requires contract assets and contract liabilities (i.e., deferred revenue) acquired in a business combination to be recognized and measured by the acquirer on the acquisition date in accordance with ASC 606, Revenue from Contracts with Customers, as if it had originated the contracts. The new guidance creates an exception to the general recognition and measurement principles of ASC 805, Business Combinations. The new guidance should be applied prospectively and is effective for all public business entities for fiscal years beginning after December 15, 2022 and include interim periods. The guidance is effective for all other entities for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. Early adoption is permitted. The Company has evaluated the effects of the adoption of ASU No. 2021-08, and it will have no impact on its consolidated financial statements. In June 2016, FASB issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which replaces the incurred loss methodology with an expected loss methodology that is referred to as the current expected credit loss (“CECL”) methodology. The CECL model utilizes a lifetime expected credit loss measurement objective for the recognition of credit losses for loans and other receivables at the time the financial asset is originated or acquired. The expected credit losses are adjusted each period for changes in expected lifetime credit losses. This model replaces the multiple existing impairment models previously used under U.S. generally accepted accounting principles, which generally require that a loss be incurred before it is recognized. The new standard also applies to financial assets arising from revenue transactions such as contract assets and accounts receivables. For public business entities that meet the definition of an SEC filer, excluding entities eligible to be SRCs as defined by the SEC, ASU No. 2016-13 is effective for fiscal years beginning after December 15, 2019. All other entities, ASU No. 2016-13 is effective for fiscal years beginning after December 15, 2022. The Company has evaluated the effects of the adoption of ASU No. 2016-13, and it did not have a material impact on its consolidated financial statements. |
Reclassification | Reclassification Certain amounts reported in the prior year financial statements have been reclassified to conform to the current year presentation. |
Summary of Significant Accoun_2
Summary of Significant Account Policies (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Summary of Significant Account Policies [Abstract] | |
Schedule of inventory | December 31, December 31, Raw Material $ 2,041,776 $ 1,153,254 Work in Process 89,080 65,192 Finished Goods 142,415 60,153 Less Inventory Reserves (100,254 ) (100,254 ) Total Inventory, Net $ 2,173,017 $ 1,178,345 |
Schedule of disaggregated revenues | Years Ended 2022 2021 Type of Revenue Product revenue $ 872,660 $ 405,570 Service and subscription revenue 319,140 96,933 Development revenue 934,017 2,401,474 Other revenue - 2,794 Total revenue $ 2,125,817 $ 2,906,771 Years Ended 2022 2021 Timing of Revenue Revenue recognized point in time $ 872,660 $ 438,413 Revenue recognized over time 1,253,157 2,468,358 Total revenue $ 2,125,817 $ 2,906,771 |
Schedule of contract liabilities | Years Ended 2022 2021 Balance, beginning of year $ 512,397 $ 165,035 Additions 527,268 2,238,137 Transfer to revenue (978,157 ) (1,890,775 ) Balance, end of year $ 61,508 $ 512,397 |
Schedule of lease costs | Years ended 2022 2021 Components of total lease costs: Operating lease expense $ 1,151,453 $ 522,012 Common area maintenance expense 103,691 42,738 Short-term lease costs (1) 48,870 45,498 Total lease costs $ 1,304,014 $ 610,248 (1) Represents short-term leases with an initial term of 12 months or less, which are immaterial. |
Schedule of ROU lease assets and lease liabilities | December 31, 2022 2021 Assets: Operating lease assets $ 2,930,996 $ 836,025 Total lease assets $ 2,930,996 $ 836,025 Liabilities: Operating lease liabilities, current $ 580,593 $ 550,525 Operating lease liabilities, net of current 2,456,315 241,677 Total lease liabilities $ 3,036,908 $ 792,202 |
Schedule of other Information | Years ended 2022 2021 Operating cash flows for operating leases $ 878,627 $ 525,938 Weighted average remaining lease term (in years)- operating lease 5.86 1.48 Weighted average discount rate – operating lease 5.78 % 10.93 % |
Schedule of future lease payments | Years ending December 31, 2023 $ 730,592 2024 508,208 2025 513,900 2026 529,320 2027 545,250 Thereafter 752,490 Total future minimum lease payments $ 3,579,760 Lease imputed interest (542,852 ) Total $ 3,036,908 |
Schedule of diluted net loss per share | Years Ended 2022 2021 Warrants to purchase common stock 1,901,802 3,305,854 Options to purchase common stock 2,412,286 687,448 Potential shares issuable under 2022 Convertible Promissory Notes 24,177,835 - Restricted stock units 1,111,617 1,958,172 Total potentially dilutive securities 29,603,540 5,951,474 |
Other Current Assets (Tables)
Other Current Assets (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Other Current Assets [Abstract] | |
Schedule of other current assets | Years Ended 2022 2021 Prepaid insurance $ 782,538 $ 1,026,212 Other prepaid expenses 957,388 423,398 Other receivables 9,687 - Total other current assets $ 1,749,613 $ 1,449,610 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Property and Equipment [Abstract] | |
Schedule of property and equipment | Years Ended 2022 2021 Vehicles $ 149,916 $ 149,916 Computer equipment 348,408 183,869 Furniture and fixtures 461,352 141,053 Software 161,284 88,284 Leasehold improvements 2,093,812 37,401 Development equipment 342,142 56,275 Base stations - 117,850 Drones - 54,969 Construction in progress 330,541 627,044 3,887,455 1,456,661 Less: accumulated depreciation (787,568 ) (424,662 ) Total property and equipment $ 3,099,887 $ 1,031,999 |
Goodwill and Business Acquisi_2
Goodwill and Business Acquisition (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Goodwill and Business Acquisition [Abstract] | |
Schedule of consideration | Fair value of total consideration transferred $ 69,311,577 Fair value of assets acquired: Cash $ 920,011 Other current assets 148,043 Property and equipment 61,430 Intangible assets 26,180,000 Right of use asset 463,252 Other long-term assets 87,217 Total assets acquired 27,859,953 Fair value of liabilities assumed: Accounts payable 129,541 Deferred revenue 32,992 Accrued payroll and rent 42,617 Lease liabilities 447,827 Deferred tax liability 2,921,982 Total liabilities assumed 3,574,959 Total net assets acquired 24,284,994 Goodwill 45,026,583 Total $ 69,311,577 |
Schedule of operating results | (Unaudited) 2021 Revenue, net $ 2,967,591 Net loss $ (23,974,346 ) Basic Earnings Per Share $ (0.56 ) Diluted Earnings Per Share $ (0.56 ) |
Schedule of carrying amount of goodwill | American Robotics Balance as of January 1, 2021 $ - Goodwill acquired during the year 45,026,583 Balance as of December 31, 2021 45,026,583 Impairment loss (19,419,600 ) Balance as of December 31, 2022 $ 25,606,983 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Intangible Assets Disclosure [Abstract] | |
Schedule of finite-lived intangible assets | December 31, 2022 December 31, 2021 Gross Accumulated Net Gross Accumulated Net Carrying Amount Useful Patents $ 82,431 $ (27,331 ) $ 55,100 $ 75,266 $ (13,077 ) $ 62,189 10 Patents in process 119,760 - 119,760 89,767 - 89,767 N/A Licenses 241,909 (65,665 ) 176,244 241,909 (41,472 ) 200,437 10 Trademarks 3,230,000 (453,242 ) 2,776,758 3,230,000 (130,242 ) 3,099,758 10 FAA waiver 5,930,000 (832,113 ) 5,097,887 5,930,000 (239,113 ) 5,690,887 10 Developed technology 23,270,614 (2,752,353 ) 20,518,261 16,120,000 (650,000 ) 15,470,000 10 Non-compete agreements 840,000 (840,000 ) - 840,000 (338,710 ) 501,290 1 Customer relationships 60,000 (16,839 ) 43,161 60,000 (4,839 ) 55,161 5 $ 33,774,714 $ (4,987,543 ) $ 28,787,171 $ 26,586,942 $ (1,417,453 ) $ 25,169,489 |
Schedule of estimated amortization expense | Year Ending December 31, Estimated 2023 $ 3,287,497 2024 $ 3,287,497 2025 $ 3,287,497 2026 $ 3,282,658 2027 $ 3,275,497 Thereafter $ 12,366,528 Total $ 28,787,171 |
Accrued Expenses and Other Cu_2
Accrued Expenses and Other Current Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Accrued Expenses and Other Current Liabilities [Abstract] | |
Schedule of accrued expenses and other current liabilities | Years Ended 2022 2021 Accrued payroll and other benefits $ 390,698 $ 269,725 D&O insurance financing payable 516,619 719,313 Accrued professional fees 792,367 117,008 Accrued purchase consideration 145,833 - Other accrued expenses and payables 1,246,847 43,861 Total accrued expenses and other current liabilities $ 3,092,364 $ 1,149,907 |
Stockholders_ Equity (Tables)
Stockholders’ Equity (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Stockholders' Equity Note [Abstract] | |
Schedule of net proceeds of the offering | Gross Proceeds: Initial Closing $ 44,800,000 Over-allotment Closing 6,720,000 51,520,000 Offering Costs: Underwriting discounts and commissions (3,806,400 ) Other offering costs (190,031 ) Net Proceeds $ 47,523,569 |
Schedule of assumptions used in the black-scholes model | 2021 Stock price $ 7.78 Risk-free interest rate 1.23 % Volatility 46.91 % Expected life in years 10 Dividend yield 0.00 % 2022 2021 Stock price $3.81 - $6.55 $7.50 - $12.92 Risk-free interest rate 1.82 - 3.95% 0.35 - 0.87% Volatility 46.42 - 48.96% 45.53 - 53.99% Expected life in years 5.80 - 6.30 3.00 - 5.89 Dividend yield 0.00% 0.00% |
Schedule of warrants activity | Weighted Weighted Average Number of Average Remaining Shares Under Exercise Contractual Warrant Price Life Balance on January 1, 2021 1,879,803 $ 9.16 2.20 Issued 1,565,656 $ 7.89 4.50 Exercised (139,605 ) $ 9.75 Balance on December 31, 2021 3,305,854 $ 8.53 5.20 Expired (1,404,052 ) $ 9.75 Balance on December 31, 2022 1,901,802 $ 7.63 7.47 |
Schedule of stock option activity | Number of Shares Under Option Weighted Average Exercise Price Weighted Balance on January 1, 2021 568,006 $ 7.39 9.40 Granted 336,038 $ 4.91 Exercised (47,846 ) $ 2.09 Canceled (168,750 ) $ 6.39 Balance on December 31, 2021 687,448 $ 6.79 8.20 Granted 2,094,000 $ 5.17 Exercised (31,057 ) $ 2.09 Forfeited (168,105 ) $ 2.77 Canceled (170,000 ) $ 6.43 Balance on December 31, 2022 2,412,286 $ 5.77 7.58 Vested and Exercisable at December 31, 2022 635,288 $ 7.88 5.78 |
Schedule of Share based compensation expense for stock options | Years Ended 2022 2021 General and administrative $ 536,269 $ 306,055 Sales and marketing 509,789 - Research and development 720,554 - Total stock-based expense related to options $ 1,766,612 $ 306,055 |
Schedule of restricted stock unit activity | RSUs Weighted Average Grant Date Fair Value Weighted Unvested balance at January 1, 2021 625,000 $ 2.80 1.25 Granted 1,458,172 $ 7.98 Vested (526,250 ) $ 3.75 Cancelled (125,000 ) $ 2.80 Unvested balance at December 31, 2021 1,431,922 $ 12.12 2.5 Granted 190,860 $ 2.52 Vested (512,755 ) $ 8.06 Unvested balance at December 31, 2022 1,110,027 $ 6.89 1.52 |
Schedule of stock based compensation RSUs | Years Ended 2022 2021 General and administrative $ 3,259,648 $ 2,947,585 Sales and marketing 24,632 - Research and development 806,543 - Total stock-based expense related to RSUs $ 4,090,823 $ 2,947,585 |
Segment Information (Tables)
Segment Information (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Segment Reporting [Abstract] | |
Schedule of segment information | Year Ended Year Ended December 31, 2022 December 31, 2021 Ondas Ondas Total Ondas Ondas Total Revenue, net $ 1,931,677 $ 194,140 $ 2,125,817 $ 2,840,154 $ 66,617 $ 2,906,771 Depreciation and amortization 1,915,557 5,649,834 7,565,391 126,728 1,385,866 1,512,594 Interest income 12,771 12,771 25,542 10,399 1,179 11,578 Interest expense 1,294,863 1,279,863 2,574,726 574,889 796 575,685 Stock based compensation 1,188,217 4,669,218 5,857,435 1,642,507 1,611,083 3,253,590 Goodwill impairment - 19,419,600 19,419,600 - - - Benefit from income taxes - - - - 2,921,982 2,921,982 Net loss (14,361,407 ) (58,880,398 ) (73,241,805 ) (7,888,588 ) (7,135,254 ) (15,023,842 ) Goodwill - 25,606,983 25,606,983 - 45,026,583 45,026,583 Capital expenditure 97,853 2,783,047 2,880,900 123,854 799,864 923,718 Total assets 34,227,117 63,718,129 97,945,245 45,226,925 72,211,650 117,438,575 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Schedule of provision for (benefit from) income taxes | December 31, 2022 2021 Current U.S. Federal $ — $ — State and local — — $ — $ — Deferred U.S. Federal $ — $ (2,360,923 ) State and local — (561,059 ) $ — $ (2,921,982 ) Total U.S. Federal $ — $ (2,360,923 ) State and local — (561,059 ) $ — $ (2,921,982 ) |
Schedule of deferred tax assets and liabilities | December 31, 2022 2021 Deferred Tax Assets: Tax benefit of net operating loss carry-forward $ 27,478,875 $ 17,577,952 Accrued liabilities 96,363 69,525 Stock based compensation 949,089 1,630,004 Depreciation 91,639 — Inventory Reserve 27,321 — Operating Lease Liabilities 827,607 159,558 R&D Capitalization 5,683,784 — R&D Credit 751,488 1,046,841 Total deferred tax assets 35,906,166 20,483,880 Deferred Tax Liabilities: Depreciation — (12,706 ) Amortization (3,078 ) (5,331 ) Intangibles (5,885,385 ) (5,743,441 ) Deferred Rent (798,745 ) (193,482 ) Total deferred tax liabilities (6,687,208 ) (5,954,960 ) Total net deferred tax assets 29,218,958 14,528,920 Valuation allowance for deferred tax assets (29,218,958 ) (14,528,920 ) Deferred tax assets, net of valuation allowance $ - $ - |
Schedule of valuation allowance | Years Ended 2022 2021 Beginning of the year $ 14,528,920 $ 16,655,023 Change in valuation account 14,690,038 (2,126,103 ) End of the year $ 29,218,958 $ 14,528,920 |
Schedule of provision for income taxes with the amounts | Years Ended 2022 2021 U.S. federal statutory rate (21.0 )% (21.0 )% Federal True Ups 0.40 % 0.5 % State taxes, net of federal benefit (7.61 )% 14.01 % Change in valuation allowance 20.06 % (11.85 )% Goodwill Impairment 5.57 % — % Stock Compensation 2.02 % — % Nondeductible Expenses 0.56 % 2.01 % R&D Credit — % 0.05 % Effective income tax rate — % (16.28 )% |
Subsequent Events (Tables)
Subsequent Events (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Subsequent Events [Abstract] | |
Schedule of estimated fair value of the acquired assets and assumed liabilities | Purchase price consideration Parent loan $ 2,000 Common Stock – 2,844,291 Shares 5,262 Vested Stock Options – 605,349 Shares 925 Warrants – 586,440 Shares - Total purchase price consideration $ 8,187 Estimated fair value of assets: Cash and cash equivalents and restricted cash $ 1,050 Accounts receivable 112 Inventory 1,495 Other current assets 836 Property, plant and equipment 2,624 Right of use asset 340 Intangible assets 3,565 Other long-term assets 63 10,085 Estimated fair value of liabilities assumed: Accounts payable 969 Customer Prepayments 1,603 Government grant liability 1,783 Other payables 1,156 Lease liabilities 385 Loan from related party 3,131 9,027 Net Assets Acquired $ 1,058 Goodwill $ 7,129 |
Schedule of loss per shares | (Unaudited) 2022 2021 Revenue, net $ 2,874 $ 7,214 Net loss $ (87,092 ) $ (43,663 ) Basic Earnings Per Share $ (1.93 ) $ (1.02 ) Diluted Earnings Per Share $ (1.93 ) $ (1.02 ) |
Description of Business and B_2
Description of Business and Basis of Presentation (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Oct. 28, 2022 | Aug. 16, 2022 | |
Description of Business and Basis of Presentation [Abstract] | |||
Stockholders’ equity | $ 58,223,000 | ||
Net long term borrowings | 15,147,000 | ||
Net short term borrowings | 14,901,000 | ||
Net debt discount | 3,252,000 | ||
Cash | 29,775,000 | ||
Working capital | 14,200,000 | ||
Generating net proceeds | 47,524,000 | ||
Convertible debt | $ 27,660,000 | ||
Offering cost | $ 6,090,000 | ||
Corporate alternative minimum tax | 15% | ||
Excise tax percentage | 1% |
Summary of Significant Accoun_3
Summary of Significant Account Policies (Details) - USD ($) | 1 Months Ended | 12 Months Ended | ||||
Oct. 08, 2021 | Aug. 05, 2021 | Jan. 22, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | Jun. 11, 2021 | |
Summary of Significant Account Policies (Details) [Line Items] | ||||||
Impairment of Goodwill | $ 19,419,600 | $ 0 | ||||
Federally insured limits | 29,268,000 | |||||
Reserves | 100,254 | 100,254 | ||||
Proceeds amount | 35,841 | 390,032 | ||||
offering costs | 45,283 | 0 | ||||
Deferred offering costs outstanding | $ 145,293 | 0 | $ 47,523,569 | |||
Recognized uncertain income tax percentage | 50% | |||||
Recognized expense | $ 80,934 | 28,142 | ||||
Revenue amount | $ 194,140 | $ 66,617 | ||||
Base rate per month | $ 45,000 | |||||
Security deposit amount | $ 90,000 | |||||
Lease, description | The Waltham Lease commenced on March 1, 2022 and is scheduled to terminate on April 30, 2029, wherein the base rate is $39,375 per month, increasing 3% annually, with a security deposit in the amount of $104,040. These facilities also serve as Ondas corporate headquarters. | On August 5, 2021, the Company acquired American Robotics and the American Robotics Lease, wherein the base rate is $15,469 per month, with an annual increase of 3% through January 2024, with a security deposit of $24,166. On August 19, 2021, American Robotics amended their lease to reduce their space to approximately 10,450 square feet. The amendment reduced their annual base rent to $8,802 per month, with an annual increase of 3% through January 2024. | ||||
Revenues, percentage | 89% | 41% | ||||
Accounts receivable percentage | 33% | 36% | ||||
Revenue [Member] | ||||||
Summary of Significant Account Policies (Details) [Line Items] | ||||||
Revenue amount | $ 194,140 | $ 66,617 | ||||
Revenues, percentage | 10% | 55% | ||||
Customers [Member] | ||||||
Summary of Significant Account Policies (Details) [Line Items] | ||||||
Accounts receivable percentage | 67% | 54% | ||||
Accounts Receivable [Member] | Customers [Member] | ||||||
Summary of Significant Account Policies (Details) [Line Items] | ||||||
Accounts receivable percentage | 10% | |||||
Patents [Member] | ||||||
Summary of Significant Account Policies (Details) [Line Items] | ||||||
Intangible assets with a finite life | 10 years | |||||
Developed Technology [Member] | ||||||
Summary of Significant Account Policies (Details) [Line Items] | ||||||
Intangible assets with a finite life | 10 years | |||||
Licenses [Member] | ||||||
Summary of Significant Account Policies (Details) [Line Items] | ||||||
Intangible assets with a finite life | 10 years | |||||
Customer Relationships [Member] | ||||||
Summary of Significant Account Policies (Details) [Line Items] | ||||||
Intangible assets with a finite life | 5 years | |||||
Non-Compete Agreements [Member] | ||||||
Summary of Significant Account Policies (Details) [Line Items] | ||||||
Intangible assets with a finite life | 1 year | |||||
Concentrations of Credit Risk [Member] | ||||||
Summary of Significant Account Policies (Details) [Line Items] | ||||||
Federally insured limits | $ 29,268,291 | |||||
Post-Retirement Benefits [Member] | ||||||
Summary of Significant Account Policies (Details) [Line Items] | ||||||
Recognized expense | $ 351,837 | $ 84,303 | ||||
Computer Equipment and Software [Member] | Minimum [Member] | ||||||
Summary of Significant Account Policies (Details) [Line Items] | ||||||
Estimated useful lives | 3 years | |||||
Computer Equipment and Software [Member] | Maximum [Member] | ||||||
Summary of Significant Account Policies (Details) [Line Items] | ||||||
Estimated useful lives | 7 years | |||||
Vehicles and Base Stations [Member] | ||||||
Summary of Significant Account Policies (Details) [Line Items] | ||||||
Estimated useful lives | 5 years | |||||
Furniture and Fixtures [Member] | Minimum [Member] | ||||||
Summary of Significant Account Policies (Details) [Line Items] | ||||||
Estimated useful lives | 5 years | |||||
Furniture and Fixtures [Member] | Maximum [Member] | ||||||
Summary of Significant Account Policies (Details) [Line Items] | ||||||
Estimated useful lives | 7 years | |||||
Drones [Member] | ||||||
Summary of Significant Account Policies (Details) [Line Items] | ||||||
Estimated useful lives | 2 years |
Summary of Significant Accoun_4
Summary of Significant Account Policies (Details) - Schedule of inventory - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Schedule of inventory [Abstract] | ||
Raw Material | $ 2,041,776 | $ 1,153,254 |
Work in Process | 89,080 | 65,192 |
Finished Goods | 142,415 | 60,153 |
Less Inventory Reserves | (100,254) | (100,254) |
Total Inventory, Net | $ 2,173,017 | $ 1,178,345 |
Summary of Significant Accoun_5
Summary of Significant Account Policies (Details) - Schedule of disaggregated revenues - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Schedule of disaggregated revenues [Abstract] | ||
Type of Revenue | $ 2,125,817 | $ 2,906,771 |
Timing of Revenue | 2,125,817 | 2,906,771 |
Product revenue [Member] | ||
Schedule of disaggregated revenues [Abstract] | ||
Type of Revenue | 872,660 | 405,570 |
Service and subscription revenue [Member] | ||
Schedule of disaggregated revenues [Abstract] | ||
Type of Revenue | 319,140 | 96,933 |
Development revenue [Member] | ||
Schedule of disaggregated revenues [Abstract] | ||
Type of Revenue | 934,017 | 2,401,474 |
Other revenue [Member] | ||
Schedule of disaggregated revenues [Abstract] | ||
Type of Revenue | 2,794 | |
Revenue recognized point in time [Member] | ||
Schedule of disaggregated revenues [Abstract] | ||
Timing of Revenue | 872,660 | 438,413 |
Revenue recognized over time [Member] | ||
Schedule of disaggregated revenues [Abstract] | ||
Timing of Revenue | $ 1,253,157 | $ 2,468,358 |
Summary of Significant Accoun_6
Summary of Significant Account Policies (Details) - Schedule of contract liabilities - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Schedule of contract liabilities [Abstract] | ||
Balance, beginning of year | $ 512,397 | $ 165,035 |
Additions | 527,268 | 2,238,137 |
Transfer to revenue | (978,157) | (1,890,775) |
Balance, end of year | $ 61,508 | $ 512,397 |
Summary of Significant Accoun_7
Summary of Significant Account Policies (Details) - Schedule of lease costs - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | ||
Components of total lease costs: | |||
Operating lease expense | $ 1,151,453 | $ 522,012 | |
Common area maintenance expense | 103,691 | 42,738 | |
Short-term lease costs | [1] | 48,870 | 45,498 |
Total lease costs | $ 1,304,014 | $ 610,248 | |
[1] Represents short-term leases with an initial term of 12 months or less, which are immaterial. |
Summary of Significant Accoun_8
Summary of Significant Account Policies (Details) - Schedule of ROU lease assets and lease liabilities - Operating Leases [Member] - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Assets: | ||
Operating lease assets | $ 2,930,996 | $ 836,025 |
Total lease assets | 2,930,996 | 836,025 |
Liabilities: | ||
Operating lease liabilities, current | 580,593 | 550,525 |
Operating lease liabilities, net of current | 2,456,315 | 241,677 |
Total lease liabilities | $ 3,036,908 | $ 792,202 |
Summary of Significant Accoun_9
Summary of Significant Account Policies (Details) - Schedule of other Information - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Schedule of other Information [Abstract] | ||
Operating cash flows for operating leases | $ 878,627 | $ 525,938 |
Weighted average remaining lease term (in years)- operating lease | 5 years 10 months 9 days | 1 year 5 months 23 days |
Weighted average discount rate – operating lease | 5.78% | 10.93% |
Summary of Significant Accou_10
Summary of Significant Account Policies (Details) - Schedule of future lease payments | 12 Months Ended |
Dec. 31, 2022 USD ($) | |
Schedule of future lease payments [Abstract] | |
2023 | $ 730,592 |
2024 | 508,208 |
2025 | 513,900 |
2026 | 529,320 |
2027 | 545,250 |
Thereafter | 752,490 |
Total future minimum lease payments | 3,579,760 |
Lease imputed interest | (542,852) |
Total | $ 3,036,908 |
Summary of Significant Accou_11
Summary of Significant Account Policies (Details) - Schedule of diluted net loss per share - shares | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Schedule of diluted net loss per share [Abstract] | ||
Total potentially dilutive securities | 29,603,540 | 5,951,474 |
Warrants to purchase common stock [Member] | ||
Schedule of diluted net loss per share [Abstract] | ||
Total potentially dilutive securities | 1,901,802 | 3,305,854 |
Options to purchase common stock [Member] | ||
Schedule of diluted net loss per share [Abstract] | ||
Total potentially dilutive securities | 2,412,286 | 687,448 |
Potential shares issuable under 2022 Convertible Promissory Notes [Member] | ||
Schedule of diluted net loss per share [Abstract] | ||
Total potentially dilutive securities | 24,177,835 | |
Restricted stock units [Member] | ||
Schedule of diluted net loss per share [Abstract] | ||
Total potentially dilutive securities | 1,111,617 | 1,958,172 |
Other Current Assets (Details)
Other Current Assets (Details) - Schedule of other current assets - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Schedule of Other Current Assets [Abstract] | ||
Prepaid insurance | $ 782,538 | $ 1,026,212 |
Other prepaid expenses | 957,388 | 423,398 |
Other receivables | 9,687 | |
Total other current assets | $ 1,749,613 | $ 1,449,610 |
Property and Equipment (Details
Property and Equipment (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Property and Equipment [Abstract] | ||
Depreciation expense | $ 449,458 | $ 116,231 |
Depreciated written off | $ 382,060 | $ 0 |
Property and Equipment (Detai_2
Property and Equipment (Details) - Schedule of property and equipment - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Property, Plant and Equipment [Line Items] | ||
Property and equipment gross | $ 3,887,455 | $ 1,456,661 |
Less: accumulated depreciation | (787,568) | (424,662) |
Total property and equipment | 3,099,887 | 1,031,999 |
Vehicles [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment gross | 149,916 | 149,916 |
Computer equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment gross | 348,408 | 183,869 |
Furniture and fixtures [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment gross | 461,352 | 141,053 |
Software [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment gross | 161,284 | 88,284 |
Leasehold Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment gross | 2,093,812 | 37,401 |
Development equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment gross | 342,142 | 56,275 |
Base stations [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment gross | 117,850 | |
Drones [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment gross | 54,969 | |
Construction in progress [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment gross | $ 330,541 | $ 627,044 |
Goodwill and Business Acquisi_3
Goodwill and Business Acquisition (Details) - USD ($) | 1 Months Ended | 12 Months Ended | |
Oct. 26, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | |
Goodwill and Business Acquisition (Details) [Line Items] | |||
Professional fees and expenses | $ 1,644,000 | ||
Unrecognized compensation expense | $ 5,690,367 | $ 9,245,115 | |
Aggregate amount | $ 11,696,000 | 2,000,000 | |
Interest receivable | 25,542 | ||
Impairment amount | $ 19,419,600 | ||
Incentive Stock Plan [Member] | |||
Goodwill and Business Acquisition (Details) [Line Items] | |||
Restricted stock units (in Shares) | 1,375,000 | ||
Restricted Stock Units (RSUs) [Member] | |||
Goodwill and Business Acquisition (Details) [Line Items] | |||
Restricted stock units (in Shares) | 3,554,748 | 1,452,385 | |
Unrecognized compensation expense | $ 6,125,626 | $ 9,734,567 | |
Business Combination [Member] | |||
Goodwill and Business Acquisition (Details) [Line Items] | |||
Business acquisitions, description | Pursuant to the Agreement, American Robotics stockholders and certain service providers received (i) cash consideration in an amount equal to $7,500,000, less certain indebtedness, transaction expenses and other expense amounts as described in the Agreement; (ii) 6,750,000 shares of the Company’s common stock (inclusive of 26 fractional shares paid in cash as set forth in the Agreement); (iii) warrants exercisable for 1,875,000 shares of the Company’s common stock (the “Warrants”) (inclusive of 24 fractional shares paid in cash and the equivalent of Warrants for 309,320 shares representing the value of options exercisable for 211,038 shares issued under the Company’s incentive stock plan and reducing the aggregate amount of Warrants as set forth in the Agreement); and (iv) the cash release from the PPP Loan Escrow Amount (as defined in the Agreement). Each of the Warrants entitle the holder to purchase a number of shares of the Company’s common stock at an exercise price of $7.89. Each of the Warrants shall be exercisable in three equal annual instalments commencing on the one-year anniversary of the Closing Date and shall have a term of ten years. 59,544 of the stock options were issued fully vested to employees who did not exercise their American Robotics options prior to the Closing Date and had no ongoing service requirements and therefore they were included in the purchase consideration. The remaining 151,494 stock options issued vest over four years and are contingent on ongoing employment by the employee and are recorded as compensation expense over the service period. | ||
Promissory Note [Member] | |||
Goodwill and Business Acquisition (Details) [Line Items] | |||
Interest rate | 6% |
Goodwill and Business Acquisi_4
Goodwill and Business Acquisition (Details) - Schedule of consideration | Dec. 31, 2022 USD ($) |
Schedule of consideration [Abstract] | |
Fair value of total consideration transferred | $ 69,311,577 |
Fair value of assets acquired: | |
Cash | 920,011 |
Other current assets | 148,043 |
Property and equipment | 61,430 |
Intangible assets | 26,180,000 |
Right of use asset | 463,252 |
Other long-term assets | 87,217 |
Total assets acquired | 27,859,953 |
Fair value of liabilities assumed: | |
Accounts payable | 129,541 |
Deferred revenue | 32,992 |
Accrued payroll and rent | 42,617 |
Lease liabilities | 447,827 |
Deferred tax liability | 2,921,982 |
Total liabilities assumed | 3,574,959 |
Total net assets acquired | 24,284,994 |
Goodwill | 45,026,583 |
Total | $ 69,311,577 |
Goodwill and Business Acquisi_5
Goodwill and Business Acquisition (Details) - Schedule of operating results | 12 Months Ended |
Dec. 31, 2021 USD ($) $ / shares | |
Schedule of Operating Results [Abstract] | |
Revenue, net | $ | $ 2,967,591 |
Net loss | $ | $ (23,974,346) |
Basic Earnings Per Share | $ / shares | $ (0.56) |
Diluted Earnings Per Share | $ / shares | $ (0.56) |
Goodwill and Business Acquisi_6
Goodwill and Business Acquisition (Details) - Schedule of carrying amount of goodwill - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Schedule of Carrying Amount of Goodwill [Abstract] | ||
Balance at Begining | $ 45,026,583 | |
Balance at Ending | 25,606,983 | 45,026,583 |
Goodwill acquired during the year | 45,026,583 | |
Impairment loss | $ (19,419,600) | $ 0 |
Intangible Assets (Details)
Intangible Assets (Details) - USD ($) | 1 Months Ended | 12 Months Ended | |||
Aug. 31, 2022 | Mar. 20, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | Apr. 05, 2022 | |
Intangible Assets (Details) [Line Items] | |||||
Amortization expense | $ 3,570,091 | $ 1,396,364 | |||
Recognized losses | 12,343 | $ 97,789 | |||
Cash | $ 900,000 | ||||
Common stock shares (in Shares) | 780,000 | ||||
Transaction amount | $ 6,843,600 | ||||
Purchase consideration | $ 250,000 | ||||
Cash payable in monthly instalments | 75,520 | ||||
Research and development amounts | 18,506 | ||||
Intangibles for developed technology | $ 307,014 | ||||
Cash paid | 104,167 | ||||
Accrued expenses and other current liabilities payable | $ 145,333 | ||||
Intangible asset term | 5 years | ||||
Common Stock [Member] | |||||
Intangible Assets (Details) [Line Items] | |||||
Shares issued (in Shares) | 16,000 |
Intangible Assets (Details) - S
Intangible Assets (Details) - Schedule of finite-lived intangible assets - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 33,774,714 | $ 26,586,942 |
Accumulated Amortization | (4,987,543) | (1,417,453) |
Net Carrying Amount | 28,787,171 | 25,169,489 |
Patents [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 82,431 | 75,266 |
Accumulated Amortization | (27,331) | (13,077) |
Net Carrying Amount | $ 55,100 | 62,189 |
Useful Life | 10 years | |
Patents in Process [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 119,760 | 89,767 |
Accumulated Amortization | ||
Net Carrying Amount | $ 119,760 | 89,767 |
Useful Life | ||
Licenses [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 241,909 | 241,909 |
Accumulated Amortization | (65,665) | (41,472) |
Net Carrying Amount | $ 176,244 | 200,437 |
Useful Life | 10 years | |
Trademarks [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 3,230,000 | 3,230,000 |
Accumulated Amortization | (453,242) | (130,242) |
Net Carrying Amount | $ 2,776,758 | 3,099,758 |
Useful Life | 10 years | |
FAA waiver [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 5,930,000 | 5,930,000 |
Accumulated Amortization | (832,113) | (239,113) |
Net Carrying Amount | $ 5,097,887 | 5,690,887 |
Useful Life | 10 years | |
Developed Technology [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 23,270,614 | 16,120,000 |
Accumulated Amortization | (2,752,353) | (650,000) |
Net Carrying Amount | $ 20,518,261 | 15,470,000 |
Useful Life | 10 years | |
Non-Compete Agreements [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 840,000 | 840,000 |
Accumulated Amortization | (840,000) | (338,710) |
Net Carrying Amount | 501,290 | |
Useful Life | 1 year | |
Customer Relationships [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 60,000 | 60,000 |
Accumulated Amortization | (16,839) | (4,839) |
Net Carrying Amount | $ 43,161 | $ 55,161 |
Useful Life | 5 years |
Intangible Assets (Details) -_2
Intangible Assets (Details) - Schedule of estimated amortization expense - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Schedule of Estimated Amortization Expense [Abstract] | ||
2023 | $ 3,287,497 | |
2024 | 3,287,497 | |
2025 | 3,287,497 | |
2026 | 3,282,658 | |
2027 | 3,275,497 | |
Thereafter | 12,366,528 | |
Total | $ 28,787,171 | $ 25,169,489 |
Long-Term Equity Investment (De
Long-Term Equity Investment (Details) - USD ($) | 12 Months Ended | |||
Oct. 05, 2021 | Dec. 31, 2022 | Jul. 15, 2022 | Dec. 31, 2021 | |
Long-Term Equity Investment (Details) [Line Items] | ||||
Purchase shares (in Shares) | 3,141,098 | |||
Par value (in Dollars per share) | $ 0.00001 | $ 6.51 | ||
Aggregate amount | $ 500,000 | |||
Subscription per share (in Dollars per share) | $ 0.15918 | |||
Ownership percentage | 11% | |||
subscribed preferred stock (in Shares) | 3,357,958 | |||
Aggregate price | $ 1,000,000 | |||
Subscription price per share (in Dollars per share) | $ 0.2978 | |||
Investment shares (in Shares) | 6,499,056 | |||
Long-term equity investment | $ 1,500,000 | $ 500,000 | ||
Invested amount | $ 35,000 | |||
Ondas Holdings Investment [Member] | ||||
Long-Term Equity Investment (Details) [Line Items] | ||||
Ownership percentage | 19% | |||
Private Placement [Member] | Ondas Holdings Investment [Member] | ||||
Long-Term Equity Investment (Details) [Line Items] | ||||
Ownership percentage | 8% |
Accrued Expenses and Other Cu_3
Accrued Expenses and Other Current Liabilities (Details) - Schedule of accrued expenses and other current liabilities - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Schedule of accrued expenses and other current liabilities [Abstract] | ||
Accrued payroll and other benefits | $ 390,698 | $ 269,725 |
D&O insurance financing payable | 516,619 | 719,313 |
Accrued professional fees | 792,367 | 117,008 |
Accrued purchase consideration | 145,833 | |
Other accrued expenses and payables | 1,246,847 | 43,861 |
Total accrued expenses and other current liabilities | $ 3,092,364 | $ 1,149,907 |
Secured Promissory Notes (Detai
Secured Promissory Notes (Details) - USD ($) | 1 Months Ended | 12 Months Ended | ||||||||||
Dec. 31, 2020 | Dec. 09, 2020 | Oct. 09, 2018 | Mar. 09, 2018 | Jun. 25, 2021 | Sep. 04, 2020 | Oct. 28, 2019 | Jun. 18, 2019 | Dec. 31, 2022 | Dec. 31, 2021 | Apr. 14, 2021 | Dec. 15, 2019 | |
Secured Promissory Notes (Details) [Line Items] | ||||||||||||
Aggregate principal amount | $ 7,003,568 | |||||||||||
Debt interest rate, description | The Note bore interest at a per annum rate equal to the greater of (a) 11.25% or (b) 11.25% plus the Prime Rate, less 3.25%. | |||||||||||
Debt discount | 120,711 | |||||||||||
Agreement description | the Company and Steward Capital entered into a letter of agreement to amend the Agreement (the “First Amendment”) to (i) extend and amend the maturity date, as defined in Section 1.1 of the Agreement, to read in its entirety “means September 9, 2020” (the “Maturity Date”); (ii) waive the repayment requirement to Steward Capital under Section 2.3 of the Agreement, in connection with the then proposed public offering of the Company as described in the Company’s Registration Statement on Form S-1, as amended, originally filed on April 12, 2019, and (iii) waive the restriction by Steward Capital on the prepayment of Indebtedness under Section 7.4 of the Agreement. | |||||||||||
Outstanding principal, percentage | 3% | |||||||||||
Common stock share issued (in Shares) | 44,108,661 | 40,990,604 | ||||||||||
Common stock share value | $ 4,411 | $ 4,099 | ||||||||||
Additional capital | $ 280,000 | |||||||||||
Accreted costs | $ 550,000 | |||||||||||
Final payment | $ 7,044,750 | |||||||||||
Steward capital | 6,574,278 | |||||||||||
Principal amount | 404,729 | 30,048,135 | ||||||||||
Interest other fees | $ 65,743 | |||||||||||
Interest expenses | 0 | $ 426,448 | ||||||||||
Steward Capital Holdings LP [Member] | ||||||||||||
Secured Promissory Notes (Details) [Line Items] | ||||||||||||
Amendment, description | the Company and Steward Capital entered into a letter of agreement to amend the Agreement, as amended (the “Second Amendment”) wherein the parties agreed to (i) extend and amend the due date for all accrued and unpaid interest starting September 2, 2019 to the Maturity Date and (ii) extend and amend the due date for the 3% fee payable to Steward Capital in connection with the First Amendment and waiver dated June 2019 to be payable on the Maturity Date. | |||||||||||
Common stock share issued (in Shares) | 120,000 | |||||||||||
Common stock share value | $ 300,000 | |||||||||||
Steward Capital Holdings LP [Member] | Secured Term Promissory Note [Member] | Loan and Security Agreement [Member] | ||||||||||||
Secured Promissory Notes (Details) [Line Items] | ||||||||||||
Aggregate principal amount | $ 10,000,000 | |||||||||||
Secured term promissory note | $ 5,000,000 | |||||||||||
Payment of loan commitment fees | 25,000 | |||||||||||
Funding in loan facility charges | $ 100,000 | |||||||||||
Percentage of loan facility | 1% | |||||||||||
Debt discount | $ 50,000 | |||||||||||
Debt principal and interest outstanding amount | $ 250,000 | |||||||||||
Debts instrument description | the Company and Steward Capital, pursuant to the Agreement, entered into a second Secured Term Promissory Note for $5,000,000 having a maturity date of April 9, 2020 (the “Second Note”) to complete the Agreement for $10,000,000. | |||||||||||
Line of credit interest rate description | The Second Note bore interest at a per annum rate equal to the greater of (a) 11.25% or (b) 11.25% plus the Prime Rate, less 3.25%. | |||||||||||
Funding in loan facility charges | $ 50,000 | |||||||||||
Steward Capital Holdings LP [Member] | Loan and Security Agreement [Member] | ||||||||||||
Secured Promissory Notes (Details) [Line Items] | ||||||||||||
Amendment, description | the Company and Steward Capital entered into the Second Amendment to the Loan and Security Agreement (the “Second Amendment”) to (i) extend the Maturity Date to September 9, 2021 (the “Extended Maturity Date”) and agree to convert all accrued interest into the note, resulting in a new principal balance of $11,254,236, (ii) make all accrued and unpaid interest from September 9, 2020 through the date of maturity due on the Extended Maturity Date, (iii) on or before October 1, 2020, Company were to issue 40,000 shares of Company’s stock to Steward valued at $9.75 per share, or total of $390,000 (issued on September 30, 2020) and (iv) make the fee of 3% of the outstanding principal balance of the loan, or $300,000 (as defined in the First Amendment) due at the updated maturity date of September 9, 2021. | |||||||||||
Steward Capital [Member] | ||||||||||||
Secured Promissory Notes (Details) [Line Items] | ||||||||||||
Paid amount | $ 5,000,000 | |||||||||||
Principal value | 4,679,958 | |||||||||||
Accrued interest | $ 320,042 |
Long-Term Notes Payable (Detail
Long-Term Notes Payable (Details) - USD ($) | 1 Months Ended | 12 Months Ended | ||
Jun. 25, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | May 04, 2020 | |
Long-Term Notes Payable (Details) [Line Items] | ||||
Percentage of conversion price | 3% | |||
Long term investment cost | $ 50,000,000 | |||
Interest expense | 1,186,972 | |||
Principal amount | $ 404,729 | 30,048,135 | ||
Debt issuance costs | 3,545,843 | $ 120,712 | ||
Interest expense | 3,761,698 | 575,685 | ||
Unamortized debt discount | 2,141,129 | |||
Issuance cost | $ 3,570,091 | $ 1,396,364 | ||
Share price (in Dollars per share) | $ 1.5 | $ 7.78 | ||
Debt amount | $ 500,000 | |||
Common stock shares (in Shares) | 415,161 | |||
Discount percentage | 8% | |||
Debt conversion price (in Dollars per share) | $ 4.25 | |||
Minimum installment amount | $ 1,437,500 | |||
Common Stock [Member] | ||||
Long-Term Notes Payable (Details) [Line Items] | ||||
Percentage of conversion price | 20% | |||
Paycheck Protection Program Loan [Member] | ||||
Long-Term Notes Payable (Details) [Line Items] | ||||
Principal amount | $ 666,091 | |||
Interest rate per annum | 1% | |||
Description of paycheck protection program loan | For purposes of the CARES Act, payroll costs excluded compensation of an individual employee earning more than $100,000, prorated annually. Not more than 40% of the forgiven amount could be for non-payroll costs. Forgiveness was reduced if full-time headcount declines, or if salaries and wages for employees with salaries of $100,000 or less annually were reduced by more than 25%. | |||
Convertible Promissory Notes [Member] | ||||
Long-Term Notes Payable (Details) [Line Items] | ||||
Convertible promissory note | $ 300,000 | |||
Description of payment of quarterly gross revenue | The maturity date of the 2017 Convertible Promissory Note is based on the payment of 0.6% of quarterly gross revenue until 1.5 times the amount of the Note is paid. | |||
Accrued interest | $ 40,965 | $ 40,152 | ||
Interest expense | 15,000 | $ 15,000 | ||
Principal amount | 34,500,000 | |||
Amortization expense | 4,500,000 | |||
Debt issuance costs | 2,300,000 | |||
Transaction expenses | 27,703,000 | |||
Issuance cost | 1,110,736 | |||
Convertible Debt [Member] | ||||
Long-Term Notes Payable (Details) [Line Items] | ||||
Principal amount | 1,437,500 | |||
Amortization expense | 2,358,871 | |||
Debt issuance costs | 3,251,865 | |||
Interest expense | $ 176,629 |
Stockholders_ Equity (Details)
Stockholders’ Equity (Details) - USD ($) | 1 Months Ended | 12 Months Ended | ||||||||||||
Aug. 08, 2021 | Aug. 05, 2021 | Jun. 11, 2021 | Jun. 08, 2021 | Oct. 26, 2022 | Mar. 22, 2022 | Jan. 29, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 01, 2022 | Nov. 01, 2022 | Mar. 18, 2022 | Oct. 05, 2021 | Dec. 31, 2018 | |
Stockholders’ Equity (Details) [Line Items] | ||||||||||||||
Common stock, authorized | 116,666,667 | 116,666,667 | ||||||||||||
Common stock par value (in Dollars per share) | $ 0.0001 | $ 0.0001 | ||||||||||||
Common stock, shares issued | 44,108,661 | 40,990,604 | ||||||||||||
Common stock, shares outstanding | 44,108,661 | 40,990,604 | ||||||||||||
Preferred stock, shares (in Dollars per share) | $ 10,000,000 | $ 10,000,000 | ||||||||||||
Preferred stock, par value (in Dollars per share) | $ 0.0001 | $ 0.0001 | ||||||||||||
Preferred stock, authorized | 5,000,000 | 5,000,000 | ||||||||||||
Certificate of designation series A preferred stock | 5,000,000 | 5,000,000 | ||||||||||||
Preferred stock, shares outstanding | ||||||||||||||
Description of transaction | On January 29, 2021, the Company filed a shelf Registration Statement on Form S-3 for up to $150,000,000 with the SEC (the “Form S-3”) for shares of its Common Stock; shares of its preferred stock, which the Company may issue in one or more series or classes; debt securities, which the company may issue in one or more series; warrants to purchase its Common Stock, preferred stock or debt securities; and units. The Form S-3 was declared effective by the SEC on February 5, 2021. | |||||||||||||
Aggregate amount (in Dollars) | $ 11,696,000 | $ 2,000,000 | ||||||||||||
Public offering, description | On June 11, 2021, pursuant to the 2021 Public Offering, the Company issued 7,360,000 shares of Common Stock (2021 Firm Shares and 2021 Option Shares) at a public price of $7.00 for net proceeds to the Company of $47,523,569 after deducting the underwriting discount and offering fees and expenses payable by the Company. | On June 8, 2021, the Company entered into an underwriting agreement (the “2021 Underwriting Agreement”) with Oppenheimer & Co. Inc., acting as the representative for the underwriters identified therein (the “Underwriters”), relating to the Company’s public offering (the “2021 Public Offering”) of 6,400,000 shares (the “2021 Firm Shares”) of the Company’s Common Stock. Pursuant to the 2021 Underwriting Agreement, the Company also granted the Underwriters a 30-day option to purchase up to an additional 960,000 shares of Common Stock (the “2021 Option Shares,” and together with the 2021 Firm Shares, the “2021 Shares”) to cover over-allotments. The Underwriters agreed to purchase the 2021 Firm Shares from the Company with the option to purchase the 2021 Option Shares at a price of $6.51 per share. The 2021 Shares were offered, issued, and sold pursuant to the Form S-3 and accompanying prospectus filed with the SEC under the Securities Act. | ||||||||||||
Option shares at price per share (in Dollars per share) | $ 6.51 | $ 0.00001 | ||||||||||||
Common stock, shares issued | 7,360,000 | |||||||||||||
Net proceeds (in Dollars) | $ 7 | $ 6,030,000 | ||||||||||||
Deducting the underwriting discount (in Dollars) | $ 47,523,569 | $ 145,293 | $ 0 | |||||||||||
Sales amount (in Dollars) | $ 50,000,000 | |||||||||||||
Percentage of gross proceeds | 3% | |||||||||||||
ATM shares | 11,995 | |||||||||||||
Sales average price (in Dollars per share) | $ 7.29 | |||||||||||||
Stock (in Dollars) | $ 212,450 | $ 202,711 | ||||||||||||
Warrants outstanding to purchase an aggregate | 1,901,802 | |||||||||||||
Options term | 7 years 5 months 19 days | |||||||||||||
Warrants exercise price (in Dollars per share) | $ 8.53 | |||||||||||||
Warrants issued | 1,565,656 | |||||||||||||
Exercise price per share (in Dollars per share) | $ 7.89 | |||||||||||||
Warrant fair value (in Dollars per share) | $ 13,689,507 | |||||||||||||
Stock options to purchase common stock description | The actual number of shares subject to the award is determined at the end of the performance period and may range from zero to 100% of the target shares granted depending upon the terms of the award. | |||||||||||||
Stock options to purchase common stock, description | On August 5, 2021, the Company issued 211,038 Stock Options to employees of American Robotics in connection with the merger. Of these Stock Options 50,543 were issued as fully vested with no further service obligations and were included in the purchase consideration. The remaining 151,495 vest over a four-year period and are contingent on ongoing employment. They are included in compensation expense. | As of December 31, 2022, we had Stock Options outstanding to purchase an aggregate of 2,412,286 shares of Common Stock with a weighted-average contractual remaining life of approximately 7.58 years, and exercise prices ranging from $3.51 to $6.79 per share, resulting in a weighted average exercise price of $5.77 per share. | As of December 31, 2021, we had Stock Options outstanding to purchase an aggregate of 687,448 shares of Common Stock with a weighted-average contractual remaining life of approximately 8.20 years, and exercise prices ranging from $1.37 to $12.92 per share, resulting in a weighted average exercise price of $6.79 per share. | |||||||||||
Compensation expense related to non-vested options (in Dollars) | $ 2,631,636 | |||||||||||||
Weighted-average period | 2 years 2 months 15 days | |||||||||||||
Unrecognized compensation expense (in Dollars) | $ 5,690,367 | $ 9,245,115 | ||||||||||||
Compensation committee grants | 1,590 | |||||||||||||
Equity Incentive Plan [Member] | ||||||||||||||
Stockholders’ Equity (Details) [Line Items] | ||||||||||||||
Common stock reserved for issuance | 3,333,334 | |||||||||||||
Warrant [Member] | ||||||||||||||
Stockholders’ Equity (Details) [Line Items] | ||||||||||||||
Warrants exercise price (in Dollars per share) | $ 9.75 | |||||||||||||
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | 139,605 | |||||||||||||
Maximum [Member] | ||||||||||||||
Stockholders’ Equity (Details) [Line Items] | ||||||||||||||
Aggregate offering price (in Dollars) | 50,000,000 | |||||||||||||
Warrants exercise price (in Dollars per share) | $ 9.75 | |||||||||||||
Minimum [Member] | ||||||||||||||
Stockholders’ Equity (Details) [Line Items] | ||||||||||||||
Aggregate offering price (in Dollars) | $ 40,000,000 | |||||||||||||
Warrants exercise price (in Dollars per share) | $ 0.03 | |||||||||||||
Securities Purchase Agreement [Member] | Warrant [Member] | ||||||||||||||
Stockholders’ Equity (Details) [Line Items] | ||||||||||||||
Warrants exercise price (in Dollars per share) | $ 7.63 | |||||||||||||
Warrants issued | 3,305,854 | |||||||||||||
Weighted-average contractual remaining life | 5 years 2 months 26 days | |||||||||||||
Securities Purchase Agreement [Member] | Maximum [Member] | Warrant [Member] | ||||||||||||||
Stockholders’ Equity (Details) [Line Items] | ||||||||||||||
Warrants exercise price (in Dollars per share) | 7.89 | |||||||||||||
Securities Purchase Agreement [Member] | Minimum [Member] | Warrant [Member] | ||||||||||||||
Stockholders’ Equity (Details) [Line Items] | ||||||||||||||
Warrants exercise price (in Dollars per share) | $ 0.03 | |||||||||||||
ATM Agreement pursuant [Member] | ||||||||||||||
Stockholders’ Equity (Details) [Line Items] | ||||||||||||||
Net proceeds (in Dollars) | $ 65,000 | |||||||||||||
ATM shares | 852,679 | |||||||||||||
Weighted average exercise price (in Dollars per share) | $ 5.62 | |||||||||||||
Compensation paid by agent (in Dollars) | $ 227,116 | |||||||||||||
Equity Incentive Plan [Member] | ||||||||||||||
Stockholders’ Equity (Details) [Line Items] | ||||||||||||||
Common stock reserved for issuance | 6,000,000 | |||||||||||||
RSU [Member] | ||||||||||||||
Stockholders’ Equity (Details) [Line Items] | ||||||||||||||
Unrecognized compensation expense (in Dollars) | $ 6,125,626 | $ 9,734,567 |
Stockholders_ Equity (Details)
Stockholders’ Equity (Details) - Schedule of net proceeds of the offering | 12 Months Ended |
Dec. 31, 2021 USD ($) | |
Gross Proceeds: | |
Initial Closing | $ 44,800,000 |
Over-allotment Closing | 6,720,000 |
Total proceeds | 51,520,000 |
Offering Costs: | |
Underwriting discounts and commissions | (3,806,400) |
Other offering costs | (190,031) |
Net Proceeds | $ 47,523,569 |
Stockholders_ Equity (Details_2
Stockholders’ Equity (Details) - Schedule of assumptions used in the black-scholes model - $ / shares | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Stockholders’ Equity (Details) - Schedule of assumptions used in the black-scholes model [Line Items] | ||
Stock price (in Dollars per share) | $ 1.5 | $ 7.78 |
Risk-free interest rate | 1.23% | |
Volatility | 46.91% | |
Expected life in years | 10 years | |
Dividend yield | 0% | |
Minimum [Member] | ||
Stockholders’ Equity (Details) - Schedule of assumptions used in the black-scholes model [Line Items] | ||
Stock price (in Dollars per share) | $ 3.81 | $ 7.5 |
Risk-free interest rate | 1.82% | 0.35% |
Volatility | 46.42% | 45.53% |
Expected life in years | 5 years 9 months 18 days | 3 years |
Dividend yield | 0% | 0% |
Maximum [Member] | ||
Stockholders’ Equity (Details) - Schedule of assumptions used in the black-scholes model [Line Items] | ||
Stock price (in Dollars per share) | $ 6.55 | $ 12.92 |
Risk-free interest rate | 3.95% | 0.87% |
Volatility | 48.96% | 53.99% |
Expected life in years | 6 years 3 months 18 days | 5 years 10 months 20 days |
Dividend yield | 0% | 0% |
Stockholders_ Equity (Details_3
Stockholders’ Equity (Details) - Schedule of warrants activity - Warrants [Member] - $ / shares | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Stockholders’ Equity (Details) - Schedule of warrants activity [Line Items] | ||
Number of Shares Under Warrant, beginning balance | 3,305,854 | 1,879,803 |
Weighted Average Exercise Price, beginning balance | $ 8.53 | $ 9.16 |
Weighted Average Remaining Contractual Life, beginning balance | 2 years 2 months 12 days | |
Number of Shares Under Warrant, Issued | 1,565,656 | |
Weighted Average Exercise Price, Issued | $ 7.89 | |
Weighted Average Remaining Contractual Life, Issued | 4 years 6 months | |
Number of Shares Under Warrant, Exercised | (139,605) | |
Weighted Average Exercise Price, Exercised | $ 9.75 | |
Number of Shares Under Warrant, ending balance | 1,901,802 | 3,305,854 |
Weighted Average Exercise Price, ending balance | $ 7.63 | $ 8.53 |
Weighted Average Remaining Contractual Life, ending balance | 7 years 5 months 19 days | 5 years 2 months 12 days |
Number of Shares Under Warrant, Expired | (1,404,052) | |
Weighted Average Exercise Price, Expired | $ 9.75 |
Stockholders_ Equity (Details_4
Stockholders’ Equity (Details) - Schedule of stock option activity - $ / shares | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Schedule Of Stock Option Activity Abstract | ||
Number of Shares Under Option, beginning | 687,448 | 568,006 |
Weighted Average Exercise Price, beginning | $ 6.79 | $ 7.39 |
Weighted Average Remaining Contractual Life, beginning | 9 years 4 months 24 days | |
Number of Shares Under Option, Granted | 2,094,000 | 336,038 |
Weighted Average Exercise Price, Granted | $ 5.17 | $ 4.91 |
Number of Shares Under Option, Exercised | (31,057) | (47,846) |
Weighted Average Exercise Price, Exercised | $ 2.09 | $ 2.09 |
Number of Shares Under Option, Forfeited | (168,105) | |
Weighted Average Exercise Price, Forfeited | $ 2.77 | |
Number of Shares Under Option, Canceled | (170,000) | (168,750) |
Weighted Average Exercise Price, Canceled | $ 6.43 | $ 6.39 |
Number of Shares Under Option, ending | 2,412,286 | 687,448 |
Weighted Average Exercise Price, ending | $ 5.77 | $ 6.79 |
Weighted Average Remaining Contractual Life, ending | 7 years 6 months 29 days | 8 years 2 months 12 days |
Number of Shares Under Option, Vested and Exercisable | 635,288 | |
Weighted Average Exercise Price, Vested and Exercisable | $ 7.88 | |
Weighted Average Remaining Contractual Life, Vested and Exercisable | 5 years 9 months 10 days |
Stockholders_ Equity (Details_5
Stockholders’ Equity (Details) - Schedule of Share based compensation expense for stock options - Employee Stock [Member] - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Stockholders’ Equity (Details) - Schedule of Share based compensation expense for stock options [Line Items] | ||
General and administrative | $ 536,269 | $ 306,055 |
Sales and marketing | 509,789 | |
Research and development | 720,554 | |
Total stock-based expense related to options | $ 1,766,612 | $ 306,055 |
Stockholders_ Equity (Details_6
Stockholders’ Equity (Details) - Schedule of restricted stock unit activity - Restricted Stock Units (RSUs) [Member] - $ / shares | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Stockholders’ Equity (Details) - Schedule of restricted stock unit activity [Line Items] | ||
Shares, Unvested balance, beginning | 1,431,922 | 625,000 |
Weighted Average Grant Date Fair Value, Unvested balance, beginning | $ 12.12 | $ 2.8 |
Weighted Average Vesting Period (Years), beginning | 2 years 6 months | 1 year 3 months |
Shares, Granted | 190,860 | 1,458,172 |
Weighted Average Grant Date Fair Value, Granted | $ 2.52 | $ 7.98 |
Shares, Vested | (512,755) | (526,250) |
Weighted Average Grant Date Fair Value, Vested | $ 8.06 | $ 3.75 |
Cancelled | (125,000) | |
Cancelled | $ 2.8 | |
Shares, Unvested balance, ending | 1,110,027 | 1,431,922 |
Weighted Average Grant Date Fair Value, Unvested balance, ending | $ 6.89 | $ 12.12 |
Weighted Average Vesting Period (Years), ending | 1 year 6 months 7 days | 2 years 6 months |
Stockholders_ Equity (Details_7
Stockholders’ Equity (Details) - Schedule of stock based compensation RSUs - Restricted Stock [Member] - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Stockholders’ Equity (Details) - Schedule of stock based compensation RSUs [Line Items] | ||
General and administrative | $ 3,259,648 | $ 2,947,585 |
Sales and marketing | 24,632 | |
Research and development | 806,543 | |
Total stock-based expense related to RSUs | $ 4,090,823 | $ 2,947,585 |
Segment Information (Details)
Segment Information (Details) | 12 Months Ended |
Dec. 31, 2022 | |
Segment Reporting [Abstract] | |
Number of reportable segments | 2 |
Segment Information (Details) -
Segment Information (Details) - Schedule of segment information - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Segment Reporting Information [Line Items] | ||
Revenue, net | $ 2,125,817 | $ 2,906,771 |
Depreciation and amortization | 7,565,391 | 1,512,594 |
Interest income | 25,542 | 11,578 |
Interest expense | 2,574,726 | 575,685 |
Stock based compensation | 5,857,435 | 3,253,590 |
Goodwill impairment | 19,419,600 | |
Benefit from income taxes | 2,921,982 | |
Net loss | (73,241,805) | (15,023,842) |
Goodwill | 25,606,983 | 45,026,583 |
Capital expenditure | 2,880,900 | 923,718 |
Total assets | 97,945,245 | 117,438,575 |
Ondas Networks [Member] | ||
Segment Reporting Information [Line Items] | ||
Revenue, net | 1,931,677 | 2,840,154 |
Depreciation and amortization | 1,915,557 | 126,728 |
Interest income | 12,771 | 10,399 |
Interest expense | 1,294,863 | 574,889 |
Stock based compensation | 1,188,217 | 1,642,507 |
Goodwill impairment | ||
Benefit from income taxes | ||
Net loss | (14,361,407) | (7,888,588) |
Goodwill | ||
Capital expenditure | 97,853 | 123,854 |
Total assets | 34,227,117 | 45,226,925 |
Ondas Autonomous Systems [Member] | ||
Segment Reporting Information [Line Items] | ||
Revenue, net | 194,140 | 66,617 |
Depreciation and amortization | 5,649,834 | 1,385,866 |
Interest income | 12,771 | 1,179 |
Interest expense | 1,279,863 | 796 |
Stock based compensation | 4,669,218 | 1,611,083 |
Goodwill impairment | 19,419,600 | |
Benefit from income taxes | 2,921,982 | |
Net loss | (58,880,398) | (7,135,254) |
Goodwill | 25,606,983 | 45,026,583 |
Capital expenditure | 2,783,047 | 799,864 |
Total assets | $ 63,718,129 | $ 72,211,650 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Income Taxes (Details) [Line Items] | ||
Amount of federal and state NOLs | $ 102,000,000 | $ 79,000,000 |
Expiration, description | The Federal NOLs of $15 million generated in 2007 through 2017 will begin to expire in 2027 through 2037. The Federal NOLs of $87 million generated in 2018 through 2022 have no expiration. | |
Federal research and development credits | $ 752,000 | 1,047,000 |
Income tax expense benefit, percentage | 50% | |
State NOLs [Member] | ||
Income Taxes (Details) [Line Items] | ||
Amount of federal and state NOLs | $ 105,000,000 | $ 70,000,000 |
Income Taxes (Details) - Schedu
Income Taxes (Details) - Schedule of provision for (benefit from) income taxes - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Current | ||
U.S. Federal | ||
State and local | ||
Total | ||
Deferred | ||
U.S. Federal | (2,360,923) | |
State and local | (561,059) | |
Total | (2,921,982) | |
Total | ||
U.S. Federal | (2,360,923) | |
State and local | (561,059) | |
Total | $ (2,921,982) |
Income Taxes (Details) - Sche_2
Income Taxes (Details) - Schedule of deferred tax assets and liabilities - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Deferred Tax Assets: | ||
Tax benefit of net operating loss carry-forward | $ 27,478,875 | $ 17,577,952 |
Accrued liabilities | 96,363 | 69,525 |
Stock based compensation | 949,089 | 1,630,004 |
Depreciation | 91,639 | |
Inventory Reserve | 27,321 | |
Operating Lease Liabilities | 827,607 | 159,558 |
R&D Capitalization | 5,683,784 | |
R&D Credit | 751,488 | 1,046,841 |
Total deferred tax assets | 35,906,166 | 20,483,880 |
Deferred Tax Liabilities: | ||
Depreciation | (12,706) | |
Amortization | (3,078) | (5,331) |
Intangibles | (5,885,385) | (5,743,441) |
Deferred Rent | (798,745) | (193,482) |
Total deferred tax liabilities | (6,687,208) | (5,954,960) |
Total net deferred tax assets | 29,218,958 | 14,528,920 |
Valuation allowance for deferred tax assets | (29,218,958) | (14,528,920) |
Deferred tax assets, net of valuation allowance |
Income Taxes (Details) - Sche_3
Income Taxes (Details) - Schedule of valuation allowance - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Schedule Of Valuation Allowance [Abstract] | ||
Beginning of the year | $ 14,528,920 | $ 16,655,023 |
Change in valuation account | 14,690,038 | (2,126,103) |
End of the year | $ 29,218,958 | $ 14,528,920 |
Income Taxes (Details) - Sche_4
Income Taxes (Details) - Schedule of provision for income taxes with the amounts | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Schedule Of Provision For Income Taxes With The Amounts [Abstract] | ||
U.S. federal statutory rate | (21.00%) | (21.00%) |
Federal True Ups | 0.40% | 0.50% |
State taxes, net of federal benefit | (7.61%) | 14.01% |
Change in valuation allowance | 20.06% | (11.85%) |
Goodwill Impairment | 5.57% | |
Stock Compensation | 2.02% | |
Nondeductible Expenses | 0.56% | 2.01% |
R&D Credit | 0.05% | |
Effective income tax rate | (16.28%) |
Commitments and Contingencies (
Commitments and Contingencies (Details) | 12 Months Ended | ||||
Oct. 08, 2021 | Aug. 05, 2021 | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | Oct. 30, 2018 m² | |
Commitments and Contingencies (Details) [Line Items] | |||||
Sublease description | The Sublease began on November 1, 2018 and ended on February 28, 2021 at a base monthly rent of $28,577. | ||||
Monthly rent | $ 28,577 | ||||
Security deposits | 28,577 | ||||
Rent expense | $ 540,000 | $ 405,000 | |||
Description of Operation Leases | The lease for our offices and facilities for Ondas Networks at 165 Gibraltar Court, Sunnyvale, CA expired on February 28, 2021 and was verbally extended to March 31, 2021 under the same terms. On January 22, 2021, we entered into a 24-month lease (effective April 1, 2021) with Google LLC, the owner and landlord, wherein the base rate is $45,000 per month and including a security deposit in the amount of $90,000. | ||||
Description Of operation leases, one | On August 5, 2021, the Company acquired American Robotics and their Lease (American Robotics Lease), wherein the base rate is $15,469 per month, with an annual increase of 3% through January 2024, with a security deposit of $24,166. On August 19, 2021, American Robotics amended their lease to reduce their space. The amendment reduced their annual base rent to $8,802 per month, with an annual increase of 3% through January 2024. Rent expense for the years ended December 31, 2022 and 2021 was $109,155 and $45,050, respectively. | ||||
Description Of operation leases, two | On October 8, 2021, American Robotics entered into an 86-month operating lease for space in Waltham, MA. Lease is scheduled to commence on March 1, 2022 and terminate on April 30, 2029, wherein the base rate is $39,375 per month, increasing 3% annually, with a security deposit due in the amount of $104,040. In conjunction with this new lease, American Robotics is leasing a short-term temporary space at $8,500 per month, until their primary space is available, which is targeted for May 1, 2022. Rent expense for the year ended December 31, 2022 was $502,298. | ||||
Gibraltar Sublease [Member] | |||||
Commitments and Contingencies (Details) [Line Items] | |||||
Area of square feet (in Square Meters) | m² | 21,982 | ||||
Rent expense | $ 0 | $ 80,627 |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) | 1 Months Ended | 12 Months Ended | |||||
Mar. 14, 2020 | Jan. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2022 | Dec. 31, 2021 | Jul. 19, 2021 | Jan. 19, 2021 | |
Related Party Transactions (Details) [Line Items] | |||||||
Description of related party transaction | On March 14, 2020, Mr. Brock waived accrued payroll amounts in the amount of $141,667. Between January 1 and December 15, 2020 we accrued $131,494 for salary owed during 2020 to Mr. Brock. On January 29, 2021, Mr. Brock was paid $64,344 of the accrued amount and the remaining $67,150 was paid on April 15, 2021. | ||||||
Accrued salary | $ 2,850 | ||||||
Compensation shares (in Shares) | 125,000 | ||||||
RSU shares canceled (in Shares) | 500,000 | ||||||
Carrying value | $ 1,500,000 | $ 500,000 | |||||
Equity investment | 2,026,400 | 275,200 | |||||
Accounts payables | 0 | $ 151,893 | |||||
Accrued expenses | $ 359,159 | ||||||
Thomas V. Bushey [Member] | |||||||
Related Party Transactions (Details) [Line Items] | |||||||
Accrued salary | $ 115,385 | ||||||
Mr. Bushey [Member] | |||||||
Related Party Transactions (Details) [Line Items] | |||||||
Accrued salary | $ 125,256 | ||||||
Accrued balance | 115,385 | ||||||
Accrued vacation | $ 9,846 | ||||||
Share units issued (in Shares) | 375,000 | ||||||
Consulting agreement paid amount | $ 7,500 | ||||||
Mr. Bushey [Member] | RSU [Member] | |||||||
Related Party Transactions (Details) [Line Items] | |||||||
Share units issued (in Shares) | 500,000 | ||||||
Stewart Kantor [Member] | |||||||
Related Party Transactions (Details) [Line Items] | |||||||
Accrued salary | $ 8,334 |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) | 1 Months Ended | 12 Months Ended | ||
Mar. 10, 2023 | Feb. 14, 2023 | Jan. 23, 2023 | Dec. 31, 2022 | |
Subsequent Events (Details) [Line Items] | ||||
Aggregate original principal amount | $ 2,105,000 | |||
Consideration, description | At the effective time of the Merger (the “Effective Time”), each ordinary share of Airobotics, par value NIS 0.01 per share (the “Airobotics Ordinary Shares”), issued and outstanding (other than shares owned by Airobotics or its subsidiaries (dormant or otherwise) or by the Company or Merger Sub) was converted into, and exchanged for 0.16806 (the “Exchange Ratio”) fully paid and nonassessable shares of common stock of the Company common stock, without interest and subject to applicable tax withholdings (“Merger Consideration”). All fractional shares of the Company common stock that would have otherwise been issued to a holder of Airobotics Ordinary Shares as part of the Merger Consideration were rounded up to the nearest whole share based on the total number of shares of the Company’s common stock issued to such holder of Airobotics Ordinary Shares. Holders of Airobotics Ordinary Shares received approximately 2.8 million shares as consideration (excluding approximately 1.7 million shares underlying equity awards to be outstanding following the Merger). | |||
Asset purchase agreement, description | As previously disclosed, on October 19, 2022, Airobotics entered into an Asset Purchase Agreement, as amended, to acquire all of the intellectual property, technical systems, and operations of Iron Drone Ltd. (“Iron Drone”), an Israeli-based company specializing in the development of autonomous counter-drone systems (the “Iron Drone Transaction”). The consideration for the Iron Drone Transaction was (i) $135,000 in cash, (ii) 46,129 shares of the Company’s common stock, (iii) warrants exercisable for 26,553 shares of the Company’s commons stock with an exercise price of $11.95, which shall be exercisable if, during the 48 month period following the closing, the average price per share of the Company’s common stock exceeds $52.38 for a period of at least 90 consecutive trading days, (iv) a right to acquire 35,377 shares of the Company’s common stock if during the 48 month period after the closing, the average price per share of the Company’s common stock exceeds $18.25 for a period of at least 90 consecutive trading days, and (v) a right to acquire 70,753 shares of the Company’s common stock if during the 48 month period after the closing, the average price per share of Company’s common stock exceeds $20.27 for a period of at least 90 consecutive trading days. On March 6, 2023, the Company completed the Iron Drone Transaction | |||
Credit losses | $ 361,813 | |||
Subsequent Event [Member] | ||||
Subsequent Events (Details) [Line Items] | ||||
Percentage of direct offering price | 3% | |||
Contract development, description | the Company announced the formation of Ondas Autonomous Systems, a new business unit to manage the combined drone operations of wholly owned subsidiaries American Robotics and Airobotics.As part of the integration of American Robotics and Airobotics to form Ondas Autonomous Systems and focus on a single product platform, the Company undertook certain restructuring actions: ●A reduction in workforce of 45 full time employees at American Robotics was implemented that results in a one-time restructuring charge of approximately $264,000 that will be recognized in the quarter ending March 31, 2023. ●A contract entered into on August 29, 2022, with a third party for development, that committed the Company to 24 monthly payments, of which the first twelve months were non-cancellable, was renegotiated. The original contract had a minimum commitment of $4,995,833 of which $3,633,332 was outstanding as of December 31, 2022. The company ended all development efforts and agreed to a termination fee of $1,589,585 payable over nine months from March 15, 2023. The full cost of the termination fee will be recorded in the quarter ending March 31, 2023. |
Subsequent Events (Details) - S
Subsequent Events (Details) - Schedule of estimated fair value of the acquired assets and assumed liabilities - Subsequent Event [Member] $ in Thousands | 1 Months Ended |
Jan. 23, 2023 USD ($) | |
Purchase price consideration | |
Parent loan | $ 2,000 |
Common Stock – 2,844,291 Shares | 5,262 |
Vested Stock Options – 605,349 Shares | 925 |
Warrants – 586,440 Shares | |
Total purchase price consideration | 8,187 |
Estimated fair value of assets: | |
Cash and cash equivalents and restricted cash | 1,050 |
Accounts receivable | 112 |
Inventory | 1,495 |
Other current assets | 836 |
Property, plant and equipment | 2,624 |
Right of use asset | 340 |
Intangible assets | 3,565 |
Other long-term assets | 63 |
Total assets | 10,085 |
Estimated fair value of liabilities assumed: | |
Accounts payable | 969 |
Customer Prepayments | 1,603 |
Government grant liability | 1,783 |
Other payables | 1,156 |
Lease liabilities | 385 |
Loan from related party | 3,131 |
Total liabilities | 9,027 |
Net Assets Acquired | 1,058 |
Goodwill | $ 7,129 |
Subsequent Events (Details) -_2
Subsequent Events (Details) - Schedule of estimated fair value of the acquired assets and assumed liabilities (Parentheticals) - Subsequent Event [Member] | 1 Months Ended |
Jan. 23, 2023 shares | |
Subsequent Events (Details) - Schedule of estimated fair value of the acquired assets and assumed liabilities (Parentheticals) [Line Items] | |
Common Stock, Shares | 2,844,291 |
Vested Stock Options, Shares | 605,349 |
Warrants, Shares | 586,440 |
Subsequent Events (Details) -_3
Subsequent Events (Details) - Schedule of loss per shares - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Schedule of Loss Per Shares [Abstract] | ||
Revenue, net | $ 2,874 | $ 7,214 |
Net loss | $ (87,092) | $ (43,663) |
Basic Earnings Per Share | $ (1.93) | $ (1.02) |
Diluted Earnings Per Share | $ (1.93) | $ (1.02) |