Ondas Inc.

NOTE 1 – DESCRIPTION OF BUSINESS

Ondas, Inc. (together with its subsidiaries, the “Company,” “Ondas,” “we,” “us,” or “our”) is a defense, security, and critical infrastructure technology company organized around two business units: Ondas Autonomous Systems Inc. (“OAS”) and Ondas Capital Inc. (“Ondas Capital”). Through these business units, we develop and commercialize autonomous systems and strategic investment and partnership initiatives that support the scaling and adoption of mission-critical solutions for governments and industrial customers.

OAS focuses on autonomous and unmanned aerial and ground systems and integrated mission solutions for defense, homeland security, public safety, and other critical infrastructure and industrial end markets. Through its product company subsidiaries, OAS develops, commercializes and delivers integrated capabilities across Counter-Unmanned Aerial System (“CUAS”), aerial Intelligence, Surveillance, and Reconnaissance (“ISR”), and Unmanned Ground Vehicle (“UGV”) applications. Ondas Capital supports our growth strategy through strategic investments, partnerships, and capital formation initiatives intended to accelerate technology development, expand market access, and enhance long-term value creation across the Ondas platform.

The Company manages these business units as distinct operating platforms aligned to complementary end markets and customer requirements. The Company’s approach is designed to combine advanced autonomy, secure communications, and integrated operating capabilities to help customers improve situational awareness, operational resilience, and safety and security outcomes in complex, regulated, and often contested environments.

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements present the Company’s historical financial position, results of operations, changes in stockholders’ equity and cash flows in accordance with accounting principles generally accepted in the United States of America (“GAAP”).

The condensed consolidated financial statements have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission (“SEC”) and accounting principles generally accepted in the United States (“U.S. GAAP”) for interim reporting. As such, certain notes or other information that are normally required by U.S. GAAP have been omitted if they substantially duplicate the disclosures contained in the Company’s annual audited consolidated financial statements. Accordingly, the condensed consolidated financial statements should be read in conjunction with the Company’s audited financial statements and related notes as of and for the fiscal year ended December 31, 2025, which are included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025, as filed with the SEC on March 30, 2026 (the “2025 Annual Report”). The condensed consolidated financial statements are unaudited; however, in the opinion of management, they include all normal and recurring adjustments necessary for a fair presentation of the Company’s condensed consolidated financial statements for the periods presented. Results of operations reported for interim periods are not necessarily indicative of results for the entire year.

Principles of Consolidation

The accompanying condensed consolidated financial statements include the accounts of the Company and its consolidated subsidiaries. All intercompany balances and transactions have been eliminated in consolidation.

The Company evaluates whether entities in which it holds an ownership or contractual interest should be consolidated. This evaluation requires significant judgment, including determining whether an entity is a variable interest entity (“VIE”) and, if so, whether the Company is the primary beneficiary. In determining whether the Company is the primary beneficiary of a VIE, the Company applies a qualitative approach that determines whether the Company has both (1) the power to direct the economically significant activities of the entity and (2) the obligation to absorb losses of, or the right to receive benefits from, the entity that could potentially be significant to that entity. The Company continuously reassesses whether the Company is the primary beneficiary of a VIE as changes to existing interest, relationships or future transactions may result in consolidation or deconsolidation of the VIE.

Acquisitions

Assets acquired, liabilities assumed, and noncontrolling interests in a business combination are measured at fair value at the acquisition date. Any excess of the consideration transferred over the estimated fair value of net assets acquired is recorded as goodwill.

The Company accounts for asset acquisitions related to transactions that do not meet the definition of a business. In an asset acquisition, the cost of the transaction, including transaction costs and contingent consideration that is probable and reasonably estimable at the acquisition date, is allocated to the identifiable assets acquired and liabilities assumed on a relative fair value basis. No goodwill is recognized in an asset acquisition. Any excess of the transaction cost over the estimated fair value of net assets acquired is recognized in earnings.

Goodwill and Intangible Assets

Goodwill and other intangible assets result from the Company’s acquisition of existing businesses. In accordance with accounting standards related to business combinations, goodwill is not amortized; however, certain finite-lived identifiable intangible assets, primarily customer relationships and acquired technology, are amortized over their estimated useful lives. Intangible assets with indefinite lives are not amortized. The Company reviews identified intangible assets and goodwill for impairment whenever events or changes in circumstances indicate that the related carrying amounts may not be recoverable. The Company also tests intangible assets with indefinite lives and goodwill for impairment at least annually.

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, asset acquisitions, deconsolidation’s and retained interests, revenue recognition, inventory write-downs to reflect net realizable value, fair values of financial instruments and goodwill, assumptions used in the valuation of contingent consideration liabilities, stock-based awards, derivative warrant liabilities, and valuation allowances against deferred tax assets. Actual results could differ from those estimates.

Cash and Cash Equivalents, and Restricted Cash

The Company considers all highly liquid instruments purchased with an original maturity of three months or less to be cash equivalents. Restricted cash includes cash that is not readily available for use in the Company’s operating activities. At December 31, 2025, $37.6 million of our restricted cash balance relates to funds held in escrow in connection with the acquisition of Sentrycs. The restrictions on the $37.6 million funds held in escrow were released during thesix months ended June 30, 2026. The remaining restricted cash balance at June 30, 2026 and December 31, 2025 is attributable to (i) minimum cash reserves required to be maintained to cover bank guarantees issued for new customer orders and operating leases, and (ii) minimum cash reserve requirements for credit cards.

Debt Investments

The Company accounts for its investments in debt securities, including fixed-income securities and certificates of deposit, as available-for-sale. Available-for-sale debt securities are recorded at fair value on the consolidated balance sheets, with unrealized gains and losses, net of tax, recorded in accumulated other comprehensive income (loss).

The amortized cost of available-for-sale securities includes the purchase price, adjusted for the amortization of premiums and accretion of discounts, which are recognized in interest income using the effective interest method. Interest income earned on investments, including certificates of deposit, is recorded in interest and dividend income in the condensed consolidated statements of operations. Certificates of deposit included in available-for-sale investments are classified based on their contractual maturities and are recorded at fair value, with changes in fair value reflected in accumulated other comprehensive income (loss).

The Company evaluates available-for-sale debt securities, including certificates of deposit, for expected credit losses at each reporting date and records an allowance for credit losses when a decline in fair value below amortized cost is attributable to credit factors. Unrealized losses that are not credit related are recorded in accumulated other comprehensive income (loss). Upon the sale or maturity of an available-for-sale security, realized gains or losses are recognized in earnings and amounts previously recorded in accumulated other comprehensive income (loss) are reclassified into earnings.

Equity Investments

The Company’s investments in equity securities with readily determinable fair values are measured at fair value, with changes in fair value recognized in earnings. Equity securities without readily determinable fair values are recorded at cost, less impairment, and adjusted for observable price changes in orderly transactions for identical or similar equity securities of the same issuer, with such adjustments recognized in earnings. Equity investments over which the Company has significant influence, generally presumed when the Company owns 20% or more of the investee’s voting interests, are accounted for using the equity method of accounting, unless the fair value option is elected. Dividends received from equity securities are recognized in earnings when declared.

Inventory

Inventories, which consist 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 excess and 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.

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 cash flows discounted at a rate commensurate with the risk involved. There wasno impairment of long-lived assets for thethree and six months ended June 30, 2026 and 2025, respectively.

Noncontrolling Interests

Noncontrolling interests represent the minority shareholders’ proportionate share of the Company’s majority-owned subsidiaries. The portion of net income (loss) attributable to noncontrolling interests is presented as net loss attributable to noncontrolling interests in the condensed consolidated statements of operations, and the portion of other comprehensive income (loss) of these noncontrolling interests is presented in the condensed consolidated statements of stockholders’ equity.

Derivative Warrant Liabilities

The Company classifies as equity any warrants that (i) require physical settlement or net-share settlement or (ii) provide the Company with a choice of net-cash settlement or settlement in its own shares (physical settlement or net-share settlement). The Company classifies as assets or liabilities any warrants that (i) require net-cash settlement (including a requirement to net cash settle the contract if an event occurs and if that event is outside the Company’s control), (ii) gives the counterparty a choice of net-cash settlement or settlement in shares (physical settlement or net-share settlement) or (iii) that contain reset provisions that do not qualify for the scope exception. The Company assesses classification of its common stock warrants and other freestanding warrant instruments at each reporting date to determine whether a change in classification between assets and liabilities is required.

Warrants that are determined to require equity classification are measured at fair value upon issuance and are not subsequently remeasured unless they are required to be reclassified. Warrants that are determined to require asset or liability classification are measured at fair value upon issuance and are subsequently remeasured to fair value at each balance sheet date with any change in fair value recognized in the condensed consolidated statements of operations.

Other Income (Expense)

The components of other income (expense), net were as follows:

Fair Value of Financial Instruments

Our financial assets measured at fair value on a recurring basis consist primarily of cash equivalents, such as money market funds, investments, including publicly traded equity securities, warrants (including warrants exercisable for publicly traded stock), instruments for which the Company has elected to apply the fair value option, and available-for-sale debt securities. Our financial liabilities measured at fair value on a recurring basis consist primarily of government grant liabilities and warrant liabilities.

Government grant liabilities represent obligations under government-funded arrangements and are measured at fair value using valuation techniques that incorporate significant unobservable inputs. Warrant liabilities arise from warrants issued by the Company that do not meet the criteria for equity classification and are therefore accounted for as liabilities and measured at fair value on a recurring basis, with changes in fair value recognized in earnings.

The carrying amounts of receivables, accounts payable, and accrued expenses approximate fair value due to the short-term maturity of such instruments.

Income Taxes

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. 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.

Stock-based Compensation

The Company measures stock-based compensation expense for stock option awards (“Stock-based Awards”) based on the estimated grant-date fair value using the Black-Scholes-Merton option pricing model and recognizes the related compensation expense on a straight-line basis over the requisite service period. The Company accounts for forfeitures as they occur.

The Black-Scholes-Merton option pricing model requires the use of subjective assumptions, including expected stock price volatility, expected term, risk-free interest rate, and dividend yield. The expected term is estimated using the simplified method due to the Company's limited history of option exercises. Under this method, the expected term is determined based on the weighted average of the vesting period and the contractual term of the award. Historically, the Company primarily relied on the historical volatility of comparable public companies due to insufficient Company-specific trading history. As additional trading history has become available, the Company has incorporated the historical volatility of its own common stock into the expected volatility assumption through a blended methodology. Management will continue to reassess the relative weighting of Company-specific and peer-group volatility as the Company’s trading history matures.

The Company recognizes restricted stock unit expense over the period of vesting or the period that services will be provided. For awards with graded vesting schedules that contain only service-based vesting conditions, the Company has elected the straight-line attribution method. The Company periodically evaluates cumulative compensation cost recognized and records any required catch-up adjustment to ensure that cumulative compensation expense recognized is not less than the grant-date fair value of the vested portion of the award. This assessment may result in accelerated recognition of compensation expense in certain periods.

Compensation associated with shares of the Company’s common stock, par value $0.0001 (the “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.

Net Income (Loss) Per Common Share

Basic net income (loss) per share is computed by dividing net income (loss) available to common stockholders (the numerator) by the weighted average number of shares of Common Stock outstanding for each period (the denominator).

Basic net income (loss) per share is computed using the two-class method, which is an earnings allocation method that determines income (loss) per share for common stock and participating securities. The participating securities consist of warrants to purchase common stock issued in the October 2025 Offering and the January 2026 Offering. Undistributed earnings are allocated between common stock and participating securities as if all earnings had been distributed during the period. In periods of loss, no allocation is made to the participating securities.

Diluted net income (loss) per share is calculated using the more dilutive of the two-class method or the treasury stock and if-converted methods, as applicable. Potential dilutive shares include stock options, warrants, restricted stock units, contingently issuable shares, and convertible preferred stock. Because the Company reported a net loss for the six months ended June 30, 2025, the effect of potentially dilutive securities would have been anti-dilutive; therefore, diluted net loss per share equals basic net loss per share for that period.

The reconciliation of basic to diluted shares is as follows (in thousands except share and per share data):

The following potentially dilutive securities for thethree and six months ended June 30, 2026 and 2025, have been excluded from the computation of diluted net income (loss) per share because the effect of their inclusion would have been anti-dilutive.

Concentration of Customers

A significant portion of our revenues are concentrated with a small number of customers. Revenues from each customer that were 10% or greater of total revenues were as follows:

A significant portion of our accounts receivable are concentrated with a small number of customers. Accounts receivable from each customer that were 10% or greater of total accounts receivable were as follows:

Recently Adopted Accounting Pronouncements

In September 2025, the Financial Accounting Standards Board (FASB) issued ASU 2025-06, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software. ASU 2025-06 updates the accounting for internal-use software by replacing the previous project-stage model with a principles-based recognition threshold, under which an entity capitalizes qualifying internal-use software costs when management authorizes and commits to fund a project and it is probable the project will be completed and the software will be used for its intended purpose. The amendments also bring website development costs into Subtopic 350-40 and require enhanced disclosures, including presentation of capitalized internal-use software within the scope of ASC 360-10.

The amendments are effective for annual reporting periods beginning after December 15, 2027, including interim periods within those annual periods, with early adoption permitted as of the beginning of an annual reporting period. Ondas elected to early adopt ASU 2025-06 on a prospective basis effective January 1, 2026. Under the prospective method, the Company applies the new capitalization model only to costs incurred on or after January 1, 2026, for new or significantly modified internal-use software projects, while amounts capitalized prior to adoption continue to be amortized under the Company’s historical accounting policies. Prior-period financial statements and opening retained earnings were not adjusted for the adoption of this standard.

The early, prospective adoption of ASU 2025-06 did not have a material impact on the Company’s consolidated financial position, results of operations, or cash flows as of and for the period ended June 30, 2026. However, the guidance is expected to affect the timing and amount of internal-use software costs capitalized and amortized in future periods, as well as related disclosures.

Reclassification

During the second quarter of 2026, the Company completed its functional classification assessment of amortization of acquired developed technology. Amortization attributable to developed technology used in research and development activities is presented in research and development expense. Accordingly, the Company reclassified $3.1 million of developed technology amortization recognized during the three months ended March 31, 2026 from general and administrative expense to research and development expense in the year to date results for the period ended June 30, 2026.

During the three and six months ended June 30, 2026, the Company updated the presentation of certain non-operating income and expense items by presenting such amounts within a single line item, "Other income (expense), net," in the condensed consolidated statements of operations. Additional disaggregated information regarding the components of other income (expense), net is presented in Note 2. Prior-period amounts have been conformed to the current-period presentation.

NOTE 3 – REVENUE

The following table presents our disaggregated revenues by type, timing and geographical region.

Contract Assets and Liabilities

The Company recognizes 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 we have recognized revenue over time in accordance with meeting our performance obligation but are unable to invoice the customer yet based on the contractual invoicing terms. The contract asset is reclassified to a receivable when the right to consideration becomes unconditional. Contract assets are included in other current assets on the condensed consolidated balance sheets. The table below details the activity in our contract assets during thesix months ended June 30, 2026 and the year ended December 31, 2025.

The Company recognizes a contract liability (deferred revenue) when we receive consideration from a customer, or if we have the unconditional right to consideration (i.e., a receivable), prior to 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 thesix months ended June 30, 2026 and the year ended December 31, 2025.

Revenue recognized during the six months ended June 30, 2026 and 2025 that was included in the contract liability opening balance was$6.9 million and $19 thousand, respectively. As of June 30, 2026 and December 31, 2025,$2.9 million and $0.5 million of the contract liability balance represents long-term deferred revenue and is included in other liabilities on the consolidated balance sheets, respectively.

NOTE 4 – OTHER CURRENT ASSETS

Other current assets consist of the following:

NOTE 5 – GOODWILL AND ACQUISITIONS

The following table summarizes the change in the Company’s goodwill:

The Company completed the acquisitions detailed below to expand product offerings, add critical technology, and enter new markets. Control was obtained through the purchase of the issued and outstanding share capital pursuant to the respective share purchase agreement. Equity consideration issued in connection with the acquisitions was measured at fair value based on the quoted market price on the respective acquisition dates. All identifiable intangible assets acquired other than goodwill are finite lived.

Acquisition-related costs incurred in connection with the 2026 acquisitions were $4.4 million and$10.2 millionfor the three and six months ended June 30, 2026, respectively, and were expensed as incurred. These costs are included in general and administrative expense in the condensed consolidated statements of operations. The accounts receivable acquired across the Company’s 2026 acquisitions were not material, either individually or in the aggregate. Accordingly, the Company has not separately disclosed the gross contractual amounts receivable or the best estimate of contractual cash flows not expected to be collected. The unaudited pro forma financial information reflected below includes adjustments that are directly attributable to the acquisitions and factually supportable, including incremental amortization of acquired intangible assets and incremental depreciation related to fair value adjustments of property and equipment.

The Company valued identifiable intangible assets acquired in its business combinations, and assets acquired that are consolidated as variable interest entities (i.e., Indo Earth Ltd.), using valuation approaches applied consistently across all acquisitions completed during the period. For material acquisitions, the Company primarily used income-based valuation techniques to estimate fair value based on the present value of expected future economic benefits, including the multi-period excess earnings method for developed technology and the relief-from-royalty method for trade names. These valuations incorporate managements financial forecasts, estimated useful lives, contributory asset charges, royalty rates, tax rates, and discount rates. For acquisitions determined to be immaterial, the Company may use market-based benchmarking approaches, including observable transaction multiples, comparable royalty rate benchmarks, and other market-corroborated data, to estimate the fair value of acquired intangible assets. The Company engaged third-party valuation specialists, as appropriate, to assist in the identification and valuation of intangible assets acquired.

2026 Acquisitions

Rotron Aerospace Ltd.

On March 16, 2026, the Company completed the acquisition of Rotron Aerospace Ltd. (“Rotron”), pursuant to the Share Purchase Agreement (the “Rotron Acquisition Agree ment”), by and among the Company, Gilo Holdings Ltd., a private limited company existing under the laws of England and Wales (“Gilo”) and indirect owner of Rotron, and the shareholders of Gilo. Pursuant to the Rotron Acquisition Agreement, the Company acquired 100% of the issued and outstanding share capital of Rotron. The purchase consideration includes cash consideration of $6.7 million and the issuance of 3,334,753 shares of the Company’s common stock with a fair value of $35.1 million.

Pursuant to the Rotron Acquisition Agreement, the Company agreed to contingent consideration in the form of an earn-out payable over four post-acquisition periods, generally corresponding to calendar years 2026 through 2029. The earn-out is based on the achievement of specified program win milestones and revenue targets during each earn-out period. For each period, the earn-out consists of (i) a program win component calculated as a percentage of the total contract value of qualifying customer program wins awarded during the period, subject to defined eligibility criteria and an aggregate cap of £25.0 million, and (ii) a revenue component based on revenues earned in excess of defined target thresholds, which is uncapped. The revenue-based earn-out is payable only to the extent it exceeds the program win earn-out for the same period, and failure to achieve an earn-out in any period does not preclude payments in subsequent periods. The earn-out arrangement is accounted for as contingent consideration and measured at fair value, with changes in fair value recognized in earnings until settlement.

In addition, the Rotron Acquisition Agreement provides for a separate contingent payment to the former shareholders based on the amount of preacquisition research and development credit ultimately received by the Company. The contingent consideration was recorded at its fair value of $0.8 million.

The following table summarizes the consideration paid for Rotron and the preliminary allocation of the purchase consideration to the estimated fair value of the assets acquired and liabilities assumed at the acquisition date.

The intangible assets acquired include $25.0 million allocated to developed technology, with a useful life offive years, and $3.7 million allocated to trademarks, with a useful life offive years. The acquired intangible assets have a weighted-average amortization period offive years. 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. During the three and six months ended June 30, 2026, the Company recorded measurement period adjustments primarily related to an increase in contingent consideration of $0.8 million, a decrease in deferred tax liabilities of $1.3 million, and increases in certain accruals. The measurement period adjustments resulted in a net decrease to goodwill of $0.6 million. 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 developed technology, tradename, as well as goodwill, (3) deferred tax balances and (4) other changes to assets and liabilities.

Rotron generated revenue of $3.5 million and a net loss of $1.4 million for thethree months ended June 30, 2026, and revenue of $3.8 million and net loss of $1.4 million for thesix months ended June 30, 2026, in each case from the acquisition date, which are included in the Company's condensed consolidated statements of operations.

Bird Aerosystems Ltd.

On March 11, 2026, the Company completed the acquisition of Bird Aerosystems Ltd., a company organized under the laws of the State of Israel (“Bird”) pursuant to the Share Purchase Agreement (the “Bird Purchase Agreement”), entered into by and among the Company, Bird, Bird’s shareholders, and a general partnership organized under the laws of the State of Israel, solely in its capacity as the representative, agent and attorney-in-fact of the indemnifying parties. The Company acquired 100% of the issued and outstanding share capital of Bird for an aggregate purchase price of $127.9 million consisting of $23.5 million in cash consideration and 10,291,207 shares of the Company’s common stock with a fair value of $104.5 million.

The following table summarizes the consideration paid for Bird and the preliminary allocation of the purchase consideration to the estimated fair value of the assets acquired and liabilities assumed at the acquisition date.

The intangible assets acquired include $34.6 million allocated to customer relationships with a useful life ofeight years, $21.1 million allocated to developed technology with a useful life ofeight years, and $2.7 million allocated to trademarks with a useful life ofseven years. The acquired intangible assets have a weighted-average amortization period ofeight years. 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. During the three and six months ended June 30, 2026, the Company recorded measurement period adjustments primarily related to a decrease in deferred tax liabilities of $12.8 million and an increase in certain accruals of $0.7 million. The measurement period adjustments resulted in a net decrease to goodwill of $12.1 million. 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 customer relationships, developed technology, and trademarks, as well as goodwill, (3) deferred tax balances, and (4) other changes to assets and liabilities.

Bird generated revenue of $5.9 million and net loss of $6.7 million for the three months ended June 30, 2026, and revenue of $16.5 million and net loss of $4.7 million for thesix months ended June 30, 2026, in each case from the acquisition date, which are included in the Company's condensed consolidated statements of operations.

Indo-Earth Moving Ltd.

On March 17, 2026, the Company completed the acquisition of Indo Earth Moving Ltd. (“Indo”) pursuant to a Share Purchase Agreement with Indo’s shareholders and their representative (the “Indo Agreement”). Pursuant to the Indo Agreement, at closing the Company transferred cash consideration of $5.7 million and 2,441,506 shares of Common Stock with a fair value of $27.5 million, for total consideration of $33.5 million (together, the “Indo Base Consideration”), in exchange for all outstanding equity interests in Indo. The Company also agreed to issue 3,051,882 shares of Common Stock upon the achievement of specified technical and regulatory milestones (the “Indo Milestone Payment”) and agreed to make additional earn-out payments of up to $140.0 million, payable in cash or shares of the Company's Common stock at the Company's election, based on the achievement of defined post-closing revenue, bookings and profitability targets (the “Indo Earn-Out Payments”).

Although the transaction was structured as a legal acquisition, (i) Indo did not meet the GAAP definition of a business under ASC 805, (ii) Indo qualified as a variable interest entity (“VIE”) as its pre-Acquisition equity capitalization was not sufficient to finance its activities without additional subordinated financial support, and (iii) the Company was the primary beneficiary of Indo. As such, Indo was consolidated in the Company’s condensed consolidated financial statements beginning on the date the Company obtained a controlling financial interest and recognized a loss on the acquisition measured as the difference between the fair value of the consideration paid and the net amount of Indo’s identifiable assets measured in accordance with ASC 805.

The Indo Milestone Payment and Indo Earn-Out Payments represent liability-classified contingent consideration and were measured at fair value at the date the Company obtained a controlling financial interest. The fair value of the Indo Milestone Payment and Indo Earn-Out Payments at the date the Company obtained a controlling financial interest totaled $25.4 million and $58.8 million, respectively. The fair value of the Indo customer relationship acquired totaled $92.5 million and has an estimated useful life often years. Amortization of the Indo Customer Relationship is presented in sales and marketing expense on a straight-line basis.

Under the terms of the Indo Agreement, the Company may be entitled to recover all or a portion of the Indo Base Consideration transferred if certain conditions are not satisfied within a defined period following the acquisition date. As of June 30, 2026, the Company has concluded that the refundability provisions represent a contingent feature of the purchase consideration. Accordingly, the refundable amounts continue to be evaluated at each reporting date based on the facts and circumstances then existing, including the likelihood that the relevant conditions will be met. The Company has not recorded any refund receivable as of June 30, 2026, as management has determined that realization of any refund is not probable.

The excess purchase consideration over the estimated fair value of the net assets acquired resulted in a loss on the acquisition of the variable interest of $46.2 million, which is presented in other income (expense) in the condensed consolidated statements of operations.

World View

On April 1, 2026, the Company completed the acquisition of World View Enterprises Inc., a Delaware corporation ("World View") pursuant to the Agreement and Plan of Merger dated March 23, 2026 (the “World View Agreement”), by and among the Company, Wassaic Merger Sub Inc., a Delaware corporation and a wholly owned subsidiary of the Company (“Wassaic Merger Sub”), World View and Fortis Advisors LLC, a Delaware limited liability company, in its capacity as the representative. Pursuant to the World View Agreement, Wassaic Merger Sub merged with and into World View, with World View surviving the merger as a wholly owned subsidiary of the Company and the Company obtaining 100% of the voting equity interests in World View. The aggregate purchase consideration was $145.3 million, consisting of 12,774,802 shares of the Company’s common stock with a fair value of $112.5 million, $10.0 million related to effective settlement of a pre-acquisition note receivable described below, and $22.8 million of cash consideration.

Prior to the acquisition, the Company purchased a $10.0 million convertible promissory note issued by World View. The promissory note was entered into in contemplation of the acquisition and was accounted for at fair value prior to closing. The promissory note was effectively settled upon the Company obtaining control of World View and its fair value upon closing was included in the aggregate consideration transferred.

The acquisition of World View expands the Company's capabilities in advanced aerial intelligence, surveillance, and reconnaissance solutions and enhances the Company's position in the defense, security, and critical, infrastructure markets.

The following table summarizes the consideration paid for World View and the preliminary allocation of the purchase consideration to the estimated fair value of the assets acquired and liabilities assumed at the acquisition date.

The intangible assets acquired include $68.3 million allocated to developed technology with a useful life ofeight years, and $3.7 million allocated to trade name with a useful life ofeight years. The acquired intangible assets have a weighted-average amortization period ofeight years. 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. All goodwill was assigned to the Company’s OAS reportable segment. 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 valuation of intangible assets such as developed technology and trade name, as well as goodwill, (2) changes to acquired deferred tax assets and liabilities, including the impact of Section 382 ownership change analysis, and (3) other changes to assets and liabilities.

Concurrently with the closing of the acquisition, the Company granted restricted stock awards to certain continuing employees of World View ("World View Awards"). The World View Awards had an aggregate grant date fair value of $12.0 million. The World View Awards were granted outside the Company's existing equity incentive plan as inducement awards in connection with the acquisition and are subject to terms and conditions of the applicable award agreements. The World View Awards vest over a twelve month period subject to recipient's continued employment through the applicable vesting dates. The Company accounted for these awards separately from the business combination as stock-based compensation.

World View generated revenue of $2.0 million and net loss of $20.9 million since the acquisition date that is recognized in the condensed consolidated statements of operations for thethree and six months ended June 30, 2026.

Mistral

On April 24, 2026, the Company completed the acquisition of Mistral, Inc., a Delaware corporation ("Mistral"), pursuant to the Agreement and Plan of Merger dated March 8, 2026 (the “Mistral Agreement”), by and among the Company, Project Cyclone, a Delaware corporation and a wholly owned subsidiary of the Company (“Merger Sub”), Mistral and Mistral’s sole shareholder. Pursuant to the Mistral Agreement, Merger Sub merged with and into Mistral, with Mistral surviving the merger as a wholly owned subsidiary of the Company and the Company obtaining 100% of the voting equity interests in Mistral. The aggregate purchase consideration was $177.6 million, consisting of 2,612,891 shares of the Company’s common stock with a fair value of $27.6 million and $150.0 million of deferred consideration.

The deferred consideration represented a fixed monetary obligation that was payable through the issuance of a variable number of shares of the Company’s common stock. An initial installment was issued at the closing, with the deferred consideration payable in six remaining equal installments over the 20 business days period following the acquisition date. During thethree months ended June 30, 2026, the Company recognized a gain of $7.4 million resulting from changes in the fair value of the deferred consideration liability through settlement. The obligation was settled through issuance of an aggregate of 18,070,922 shares of the Company's common stock.

The Company acquired Mistral to strengthen its position in the U.S. defense market by gaining access to established government contracting channels and expanding its capabilities in defense and homeland security programs. The acquisition also enables the Company to accelerate the deployment of its autonomous systems and enhance its ability to participate directly in large-scale U.S. government contracts.

The following table summarizes the consideration paid for Mistral and the preliminary allocation of the purchase consideration to the estimated fair value of the assets acquired and liabilities assumed at the acquisition date.

The intangible assets acquired include $86.3 million allocated to program relationships with a useful life offive years, $11.3 million allocated to customer relationships with a useful life ofnine years, and $6.2 million allocated to trademarks with a useful life ofseven years. The acquired intangible assets have a weighted-average amortization period of six years. 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. All goodwill was assigned to the Company’s OAS reportable segment. 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 valuation of intangible assets such as program relationships, customer relationships, and trademarks, as well as goodwill, (2) deferred tax balance, and (3) other changes to assets and liabilities.

Mistral generated revenue of $7.5 million and net income of $12.4 million since the acquisition date that is recognized in the condensed consolidated statements of operations for thethree and six months ended June 30, 2026.

Omnisys

On May 21, 2026, the Company completed the acquisition of Omnisys Ltd., a company organized under the laws of the State of Israel ("Omnisys") pursuant to the Share Purchase Agreement dated May 16, 2026 (the “Omnisys Agreement”), by and among the Company, Omnisys, Omnisys' shareholders, and Mr. Ofer Yarden, solely in such person’s capacity as the representative, agent and attorney-in-fact of the indemnifying parties. Pursuant to the Omnisys Agreement, the Company acquired 100% of the issued and outstanding share capital of Omnisys for an aggregate purchase consideration of $209.2 million consisting of 3,098,291 shares of the Company’s common stock with a fair value of $28.4 million, $170.0 million of deferred consideration and contingent earn-out consideration with a fair value of $13.2 million.

The deferred consideration consisted of a fixed monetary obligation of $170.0 million, of which $2.4 million was payable in cash and $167.6 million was payable through the issuance of a variable number of shares of the Company’s common stock. An initial installment was issued at the closing, with the deferred consideration payable in six remaining equal installments over 24 trading days following the acquisition date. During the three months ended June 30, 2026, the Company recognized a loss of $1.2 million resulting from changes in the fair value of the deferred consideration liability through settlement. The obligation was settled through issuance of an aggregate of 20,056,441 shares of the Company's common stock.

The contingent earn-out arrangement provides for additional consideration of up to $60.0 million, payable to the former shareholders of Omnisys in either cash or the Company’s common stock, at the Company’s election. The earn-out is contingent upon achievement of specified cumulative new customer order targets during the period beginning on the acquisition date and ending on the third anniversary of the acquisition date. No earn-out payment is due unless the specified minimum performance threshold is achieved. If cumulative new customer orders exceed the specified minimum performance threshold, the earn-out increases on a linear basis, up to a maximum payment of $60.0 million upon achievement of the maximum specified target amount. The contingent consideration is classified as a liability and measured at fair value at each reporting date, with changes in fair value recognized in earnings until the contingency is resolved. There were no changes to the fair value of the contingent consideration through June 30, 2026.

The Company acquired Omnisys to strengthen its autonomous defense systems portfolio by adding battle-proven battlefield orchestration software that complements its existing autonomous platforms and expands opportunities to deliver integrated software-enabled defense solutions to global customers.

The following table summarizes the consideration paid for Omnisys and the preliminary allocation of the purchase consideration to the estimated fair value of the assets acquired and liabilities assumed at the acquisition date.

The intangible assets acquired include $85.1 million allocated to developed technology with a useful life ofeight years, $23.3 million allocated to customer relationships with a useful life offive years, and $2.2 million allocated to trademarks with a useful life ofsix years. The acquired intangible assets have a weighted-average amortization period of seven years. 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. 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 valuation contingent consideration, (2) changes in valuation of intangible assets such as customer relationships, developed technology, and trademarks, as well as goodwill, (3) deferred tax balances, and (4) other changes to assets and liabilities.

Omnisys generated revenue of $13.2 million and net income of $2.1 million since the acquisition date that is recognized in the condensed consolidated statements of operations for thethree and six months ended June 30, 2026.

Other 2026 acquisitions

During the six months ended June 30, 2026, the Company completed other acquisitions that were individually immaterial, with an aggregate purchase price of approximately $4.8 million in equity consideration. The acquisitions were accounted for as business combinations, and the consideration transferred has been allocated on a preliminary basis to the assets acquired and liabilities assumed. The identifiable intangible assets recognized include approximately $1.3 million of developed technology with a useful life often years and $0.5 million of customer relationships with a useful life offive years. The Company also recognized goodwill of approximately $3.9 million, which represents the assembled workforce, acquired capabilities, and future economic benefits expected to arise from the acquisitions. No portion of the goodwill is deductible for tax purposes. The preliminary purchase price allocations are subject to change during the measurement period as additional information becomes available regarding the fair value of the assets acquired and liabilities assumed. Detailed disclosures required for individually material business combinations have not been presented, as the acquisitions were not material individually or in the aggregate.

Supplemental Pro Forma Results of Operations

The following unaudited supplemental pro forma information presents the Company’s results of operations as if the acquisition of Rotron, Bird, World View, Mistral and Omnisys had occurred on January 1, 2025. The unaudited 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, 2025 or what the Company’s operating results will be in future periods. There were no material nonrecurring pro forma adjustments directly attributable to the business combinations included in the reported unaudited pro forma revenue and earnings.

2025 Acquisitions

As of June 30, 2026, the accounting for the Company’s 2025 acquisitions remains preliminary, as certain fair value measurements associated with the assets acquired and liabilities assumed have not yet been finalized. During the three and six months ended June 30, 2026, measurement period adjustments totaled $9.1 million and related to decreases in deferred tax liabilities recorded. These adjustments were applied retrospectively to the acquisition-date amounts and resulted in a corresponding decrease in goodwill. The Company is continuing to evaluate information obtained about facts and circumstances that existed as of the respective acquisition dates, including, but not limited to, the valuation of identifiable intangible assets, tangible assets, assumed liabilities, deferred taxes, and other acquisition-related items.

Apeiro Motion Ltd.

On August 31, 2025, the Company completed the acquisition of Apeiro Motion Ltd. (Apeiro), pursuant to the Share Purchase Agreement (the “Apeiro Acquisition Agreement”), by and among the Company, Apeiro, and the Apeiro shareholders. Pursuant to the Apeiro Acquisition Agreement, the Company acquired 100% of the issued and outstanding share capital of Apeiro.

The following table summarizes the consideration paid for Apeiro and the preliminary allocation of the purchase consideration to the estimated fair value of the assets acquired and liabilities assumed at the acquisition date.

The intangible assets acquired include $4.0 million allocated to developed technology with an estimated useful life ofeight years. 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. All of the goodwill was assigned to the OAS reporting unit. During the six months ended June 30, 2026, the Company recorded measurement period adjustments related to certain accruals, which resulted in a net increase to goodwill of $61 thousand. 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, including goodwill, and (3) other changes to assets and liabilities.

Smart Precision Optics S.P.O Ltd.

On October 3, 2025, the Company completed the acquisition of Smart Precision Optics S.P.O ltd. (“SPO”)., a company organized under the laws of the State of Israel, pursuant to (i) the SPO Share Purchase Agreement, dated August 20, 2025, by and among the Company, SPO, Shamir Investment Entrepreneurship ACS LTD., an agricultural cooperative society organized under the laws of the State of Israel (“Shamir”) and (ii) the Side Letter, dated August 20, 2025, by and among the Company, SPO and Shamir (the “Side Letter”) (collectively the “SPO Acquisition Agreement”). In accordance with the terms of the SPO Acquisition Agreement, the Company acquired (i)51% of the issued and outstanding share capital of SPO for an aggregate purchase amount of approximately $6.0 million and (ii)51% of the outstanding capital notes of SPO for an aggregate purchase amount of approximately $0.30 plus the Contingent Consideration, as defined below. The Company allocated the aggregate purchase amount to the purchase consideration and capital notes based on their relative fair value, resulting in $2.8 million in purchase consideration and $3.2 million in capital notes acquired by the Company, which have been eliminated in consolidation.

Additionally, if SPO obtains or receives Qualified Grants (as defined in the SPO Acquisition Agreement) between October 3, 2025 and December 31, 2026, the Company shall be required to make payment to Shamir in an amount equal to 10% of the amount of any such Qualified Grants received by SPO, up to an aggregate amount of approximately $11.9 million of Qualified Grants received (“Contingent Consideration”) (i.e. the maximum Contingent Consideration paid by the Company to Shamir shall be approximately $1.2 million). The Contingent Consideration shall be paid in cash, provided however, that the Company may choose, in its sole discretion, to pay the Contingent Consideration in shares of the Company’s Common Stock.

Subject to the terms of the SPO Acquisition Agreement, Shamir had the right (the “First Put Option”) to cause the Company to purchase all (but not less than all) of the remaining issued and outstanding share capital of SPO held by Shamir, which acquisition shall have been accompanied with sale for no additional consideration of any and all capital notes of SPO then held by Shamir (such shares and capital notes, jointly, the “Put Shares”), at a purchase price of approximately $220.69 per share. The First Put Option expired unexercised on June 30, 2026.

Subject to the terms of the SPO Acquisition Agreement, as the First Put Option expired unexercised, Shamir has the right to appoint a third-party evaluator to determine SPO’s valuation and after receiving such valuation, Shamir may offer to the Company to purchase the Put Shares at such evaluated price (the “Second Put Option” together with the First Put Option, the “SPO Options”). If the Company declines, the Company may make a counter-offer to purchase the Put Shares. If Shamir rejects the Company’s counter-offer, Shamir can initiate a “Forced Sale” process to sell 100% of SPO to a third party during a limited period of nine months. Alternatively, if no Forced Sale occurs, Shamir can request an updated evaluation for SPO and either sell to the Company pursuant to Company’s offer, or buy all of the Company’s securities in SPO at the updated valuation. Shamir may exercise the foregoing during the period commencing on the second anniversary of the closing of the SPO Acquisition and ending June 30, 2029. The consideration payable by the Company to Shamir upon the consummation of either the First Put Option or the Second Put Option shall be paid in cash, provided however, that the Company may choose, in its sole discretion, to pay Shamir in Common Stock.

Additionally, subject to the terms of the SPO Acquisition Agreement, in the event that the Second Put Option is exhausted without being exercised, the Company shall have the right (the “Call Option”) to require Shamir to sell all (and not less than all) of the remaining issued and outstanding share capital of SPO held by Shamir in consideration for the amount reflecting SPO’s valuation on a cash free-debt free basis of approximately $59.5 million, which acquisition shall be accompanied with sale for no additional consideration of any and all capital notes of SPO then held by Shamir, payable in cash. The Company may exercise the Call Option during the period commencing on the end of the Second Put Option Period and ending 18 months later.

The following table summarizes the consideration paid for SPO and the preliminary allocation of the purchase consideration to the estimated fair value of the assets acquired, liabilities assumed and noncontrolling interest retained by SPO shareholders at the acquisition date.

The noncontrolling interest was measured at fair value at the acquisition date. The fair value was estimated based on the implied equity value of SPO, using the purchase consideratinoon paid for the Company’s 51% ownership as an observable input. The implied equity value was extrapolated to a 100% basis, and the 49% noncontrolling interest ownership percentage was applied to determine the fair value of the noncontrolling interest. The noncontrolling interest, inclusive of the embedded First Put Option, is reflected within redeemable noncontrolling interest in the consolidated balance sheets.

The intangible assets acquired include $3.2 million allocated to customer relationships with an estimated useful life offive years. Goodwill represents the assembled workforce, acquired capabilities, and future economic benefits resulting from the acquisition. No portion of the goodwill is deductible for tax purp oses. There wereno measurement period adjustments with respect to thethree and six months ended June 30, 2026. 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 customer relationships, as well as goodwill, and (3) other changes to assets and liabilities.

Insight Intelligent Sensors Ltd.

On October 27, 2025, the Company completed the acquisition of Insight Intelligent Sensors Ltd. (“Insight”), pursuant to the Share Purchase Agreement (the “Insight Acquisition Agreement”), by and among the Company, Insight, and the Insight shareholders. Pursuant to the Insight Acquisition Agreement, the Company acquired 51% of the issued and outstanding share capital of Insight, representing a controlling interest.

The following table summarizes the consideration paid for Insight and the preliminary allocation of the purchase consideration to the estimated fair value of the assets acquired, liabilities assumed and noncontrolling interest retained by Insight shareholders at the acquisition date.

The noncontrolling interest was measured at fair value at the acquisition date. The fair value was estimated based on the implied equity value of Insight, using the purchase consideration paid for the Company’s 51% ownership interest as an observable input. The implied equity value was extrapolated to a 100% basis, and the 49% noncontrolling interest ownership percentage was applied to determine the fair value of the noncontrolling interest.

The intangible assets acquired include $2.4 million allocated to developed technology with an estimated useful life often years. 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. All of the goodwill was assigned to the OAS reporting unit. During thethree and six months ended June 30, 2026, the Company recorded measurement period adjustments related to deferred tax liabilities, which resulted in a net decrease to goodwill of $79 thousand. 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 developed technology, as well as goodwill, and (3) other changes to assets and liabilities.

4M Defense Ltd.,

On October 29, 2025, the Company completed the acquisition of a controlling interest in 4M Defense Ltd. (“4M”), a company registered in the State of Israel, pursuant to the Share Purchase Agreement, dated October 24, 2025 (the “4M Acquisition Agreement”), by and among the Company, 4M, Chirokka Holding Ltd., a company registered in the State of Israel (“HoldCo”), and the 4M shareholders. HoldCo held 100% of the share capital of 4M. In accordance with the terms of the 4M Acquisition Agreement, the Company acquired 70% of the issued and outstanding share capital of HoldCo (“HoldCo Shares”).

In connection with the acquisition of 4M in October 2025, the 4M shareholders retained a noncontrolling equity interest. The 4M shareholders have the right to cause the Company to purchase all (but not less than all) of the remaining issued and outstanding share capital of 4M at an aggregate purchase price equal to 30% of 90% of 4M’s EBITDA during the 12-month period ending on the first day of the calendar quarter during which such calculation is made. The 4M shareholders may exercise the redemption right during the period from January 1, 2026 through December 31, 2027. As of December 31, 2025, the carrying value of redeemable noncontrolling interest was $3.0 million.

On March 16, 2026, the Company and 4M shareholders entered into the 4M Supplement, whereby the Company acquired the remaining 30% of the issued and outstanding share capital of 4M, for a purchase price of(i) $3.7 million, paid with 352,968 shares of Common Stock, and (ii) an additional amount of up to $1.4 million in shares of common stock in contingent earn-out payments, subject to certain milestones as set forth in the 4M Supplement. Upon closing, the redemption feature associated with the noncontrolling interest was eliminated and the redeemable noncontrolling interest balance of $2.6 million was reclassified to additional paid-in capital.

The following table summarizes the consideration paid for 4M and the preliminary allocation of the purchase consideration to the estimated fair value of the assets acquired, liabilities assumed and noncontrolling interest retained by 4M shareholders at the acquisition date.

The noncontrolling interest was measured at fair value at the acquisition date. The fair value was estimated based on the implied equity value of 4M, using the purchase consideration paid for the Company’s 70% ownership interest as an observable input. The implied equity value was derived by extrapolating the purchase consideration to a 100% basis and applying the 30% noncontrolling interest ownership percentage.

The intangible assets acquired include $0.9 million allocated to developed technology with an estimated useful life often years, $1.4 million allocated to customer relationships with an estimated useful life offive years, and $0.1 million allocated to backlog with an estimated useful life ofthree years. 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. All of the goodwill was assigned to the OAS reporting unit. During thesix months ended June 30, 2026, the Company recorded measurement period adjustments related to deferred tax liabilities, which resulted in a net decrease to goodwill of $16 thousand. 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 developed technology, as well as goodwill, and (3) other changes to assets and liabilities.

Sentry CS Ltd.

On November 17, 2025, the Company completed the acquisition of Sentry CS Ltd., (“Sentrycs”) pursuant to the Share Purchase Agreement (the “Sentrycs Acquisition Agreement”), entered into by and among the Company, Sentrycs, a company organized under the laws of the State of Israel, Sentrycs’s shareholders, (the “Sentrycs Major Shareholders”), and Sagitta Holdco SARL, a private limited liability company organized under the laws of the Grand Duchy of Luxembourg. The Company acquired 100% of the issued and outstanding share capital of Sentrycs for an aggregate purchase price of $224.6 million consisting of $134.1 million in cash and shares of the Company’s common stock valued at $90.6 million. This aggregate purchase price reflects the working capital adjustments made at closing pursuant to the Sentrycs Acquisition Agreement.

The Sentrycs Acquisition Agreement detailed that the purchase price consideration of $224.6 million would be paid over four payment dates, with the first payment made upon closing at November 17, 2025. The Company paid $149.6 million on November 17, 2025, consisting of $120.2 million in cash and 4,096,700 shares of Common Stock valued at $29.4 million. The remaining three payments would be made 30-days, 45-days and 120-days after closing. These three payments would total $25.0 million each and consist of $4.6 million in cash and shares of Common Stock valued at $20.4 million. At December 31, 2025, the Company recorded a liability for these payments in the amount of $75.0 million classified as Accrued Purchase Consideration on the Company’s Consolidated Balance Sheets. The Company issued 1,671,899 and 1,622,607 shares of Common Stock on January 8, 2026 and January 22, 2026, respectively, related to the second and third payments.

The Company also paid $37.5 million into an escrow account which we own (the “Ondas Escrow Amount”). On second, third and fourth payment dates, $10.0 million will be returned to the Company, and $2.5 million will be transferred from the Ondas Escrow Amount to the Indemnity Escrow Account. Under the Indemnity Escrow terms and agreement, the funds will be held until the one-year anniversary of the Sentrycs Acquisition Agreement, during which time the Company may make indemnification claims. Any balance remaining after 1 year will be released to the sellers.

Amounts transferred to the Indemnity Escrow Account serve as security for the sellers’ indemnification obligations. Under the Indemnity Escrow Agreement, these funds will be held until the one-year anniversary of the Sentrycs Acquisition Agreement. During this period, the Company may assert indemnification claims in accordance with the agreement. Any balance remaining in the Indemnity Escrow Account after the one-year period, net of any amounts reserved for outstanding claims, will be released to the sellers. The Ondas Escrow Amount is included in Restricted cash on the Company’s Consolidated Balance Sheets, as the scheduled releases to the Company are considered short-term in nature. Amounts transferred to the Indemnity Escrow Account are recognized as part of the purchase consideration.

The following table summarizes the consideration paid for Sentrycs and the preliminary allocation of the purchase consideration to the estimated fair value of the assets acquired and liabilities assumed at the acquisition date.

The intangible assets acquired include $66.0 million allocated to developed technology with an estimated useful life often years, $3.7 million allocated to trademarks with an estimated useful life ofseven years, and $2.7 million allocated to customer relationships with an estimated useful life offive years. 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. All of the goodwill was assigned to the OAS reporting unit. During thesix months ended June 30, 2026, the Company recorded measurement period adjustments related to deferred tax liabilities, which resulted in a net decrease to goodwill of $1.9 million. 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 developed technology, as well as goodwill, (3) deferred tax balances and (4) other changes to assets and liabilities.

Robo-Team Holdings Ltd.

On December 17, 2025, the Company completed the acquisition of Robo-Team Holdings Ltd. (“Robo-Team”), pursuant to the Share Purchase Agreement, dated November 23, 2025 (the “Robo-Team Acquisition Agreement”), by and among the Company, Robo-Team, and the Robo-Team shareholders. Pursuant to the Robo-Team Acquisition Agreement, the Company acquired 100% of the issued and outstanding share capital of Robo-Team.

The following table summarizes the consideration paid for Robo-Team and the preliminary allocation of the purchase consideration to the estimated fair value of the assets acquired and liabilities assumed at the acquisition date.

The intangible assets acquired include $12.7 million allocated to developed technology with an estimated useful life often years, $14.6 million allocated to customer relationships with an estimated useful life offive years, and $3.5 million allocated to non-compete agreements with an estimated useful life offour years. 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. All of the goodwill was assigned to the OAS reporting unit. During thesix months ended June 30, 2026, the Company recorded measurement period adjustments related to deferred tax liabilities, which resulted in a net decrease to goodwill of $7.2 million. 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 developed technology, as well as goodwill, and (3) other changes to assets and liabilities.

Goodwill Impairment

The Company reviews goodwill for impairment annually as of December 31 and on an interim basis whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. For the six months ended June 30, 2026, the Company performed an assessment of whether any such indicators were present and concluded that there were no triggering events or changes in circumstances that would indicate a potential impairment of goodwill. Accordingly, no interim impairment test was performed as of June 30, 2026.

As previously disclosed, the Company performed a qualitative assessment as of December 31, 2025 and concluded there were no indications of impairment with respect to the goodwill recorded at that date.

NOTE 6 – INTANGIBLE ASSETS

The components of intangible assets, all of which are finite-lived, were as follows:

Amortization expense for the three months ended June 30, 2026 and 2025 was $18.7 million and $1.1 million, respectively. Amortization expense for thesix months ended June 30, 2026 and 2025 was $24.3 million and $2.1 million, respectively. Other intangible assets represent patents, licenses, software, backlog and other marketing-related assets.

The weighted-average amortization periods for definite-lived intangible assets acquired during the six months ended June 30, 2026 are 7.5 years for customer relationships,7.7 years for developed technology,6.7 years for tradenames, and 3.0 years for other intangible assets. The weighted-average amortization period for definite-lived intangible assets acquired in aggregate duringthe six months ended June 30, 2026 is 7.5 years.

In June 2026, the Company entered into an agreement with Palantir Technologies Inc. to deploy enterprise software, artificial intelligence tools and perform related implementation services. The arrangement is intended to support data integration, operational efficiency, supply chain visibility, and other corporate initiatives. The agreement has an initial term expiring in February 2027 and includes options for future renewal periods. The Company accounts for the arrangement as a hosted software service contract and recognizes the related costs as services are received.

NOTE 7 – LONG-TERM EQUITY INVESTMENTS

These long-term equity investments consist of equity investments in private companies through common and preferred stock. The Company accounts for these equity securities under the measurement alternative because they do not have a readily determinable fair value and do not qualify for the equity method of accounting. Accordingly, the investments are carried at cost, less impairment, adjusted for observable price changes in orderly transactions for identical or similar investments of the same issuer. The Company does not have significant influence over any of the long-term equity investees. Amounts are classified as a long-term equity investment on our condensed consolidated balance sheets. Dividends or other distributions, if and when declared by the investee, are recognized by the Company as investment income upon receipt with adjustments recognized in other (expense) income, net in the condensed consolidated statements of operations.

On August 12, 2025, the Company purchased a non-controlling interest in Rift Dynamics AS (“Rift”), a Norway-based defense technology company specializing in affordable, mass-producible combat drone systems for the aggregate price of $0.6 million.

On November 20, 2025, the Company purchased Series B-3 Preferred Stock in Performance Drone Works (“PDW”), a veteran-led defense-technology engineer and manufacturer of advanced robotics for mission-critical national security missions, for the aggregate price of $35.0 million. The Series B-3 Preferred Stock is convertible into PDW common stock at the option of the holder and ranks senior to PDW’s common stock with respect to liquidation and dividend rights. The investment is subject to customary transfer restrictions and provides the Company with certain investor rights, including information rights and the right to appoint a non-voting observer to PDW’s board of directors, subject to specified conditions.

On February 27, 2026, the Company purchased Series B-1 Preferred Stock in Firestorm Labs, Inc (“Firestorm”), a defense technology company that develops expeditionary manufacturing platforms enabling the on-demand, point-of-need production of mission-critical systems and components for military and defense applications, for the aggregate price of $5.0 million.

On June 17, 2026, the Company purchased Series Seed Preferred Stock in FPF Defense, Inc. (“FPF Defense”), a defense technology company that develops low-cost, high-volume counter-drone interceptors for U.S. and allied defense for the aggregate price of $5.0 million.

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 transactions involving the investee securities, and other publicly available data. If the investment is impaired, the Company writes it down to its estimated fair value. No impairment charges were recognized for thethree and six months ended June 30, 2026 or 2025.

NOTE 8 – LEASES

The Company has operating leases for office space, warehouses, and certain equipment, primarily automobiles. Many leases include one or more options to renew, some of which include options to extend the leases for up to 10 years. In certain of the Company’s lease agreements, the rental payments are adjusted periodically to reflect inflation and/or changes in other indexes.

Right-of-use assets are recorded in other assets; the current portion of lease liabilities for our operating leases is recorded in accrued expenses and other current liabilities, and thelong-term portion of our operating lease liabilities is recorded inother long-term liabilities on the condensed consolidated balance sheets as follows:

NOTE 9 – ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES

Accrued expenses and other current liabilities consist of the following:

NOTE 10 – NOTES PAYABLE AND CONVERTIBLE NOTES PAYABLE

Ondas Inc. 2022 Convertible Exchange Notes, 2023 Additional Notes, and 2024 Additional Notes

In 2022, 2023 and 2024, the Company entered into securities purchase agreements with certain investors, pursuant to which we issued convertible notes. Refer to the Company’s annual financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2025, filed with the SEC on March 30, 2026 for a full description. As of December 31, 2025, the convertible notes were repaid in full.

For the three months ended June 30, 2025, we recognized interest expense of $0.2 million and amortization expense of $0.9 million related to the debt discount and issuance costs for convertible notes. For thesix months ended June 30, 2025, we recognized interest expense of $0.5 million and amortization expense of $3.6 million related to the debt discount and issuance costs for convertible notes. Interest expense and amortization expense related to debt discount and issuance costs are included in interest expense in the condensed consolidated statements of operations.

SPO Convertible Capital Notes

In connection with the acquisition of SPO in October 2025, the Company assumed outstanding convertible capital notes issued by SPO (the “SPO Convertible Capital Notes”). Immediately prior to the acquisition, the SPO Convertible Capital Notes were held entirely by the existing shareholders of SPO. Upon acquisition,51% of the outstanding SPO Convertible Capital Notes, corresponding to the Company’s ownership interest, were considered intercompany balances and therefore eliminated in consolidation. The remaining 49% of the SPO Convertible Capital Notes, held by noncontrolling interest holders, remain outstanding and are reflected in the Company’s condensed consolidated balance sheets.

Concurrent with the acquisition, the SPO Convertible Capital Notes were amended to include the following terms: (i) any repayment of the SPO Convertible Capital Notes is subject to prior written consent of the Company, as the majority shareholder of SPO, (ii) the Company, as the majority shareholder of SPO, has the right, at its sole discretion, to require conversion of any or all SPO Convertible Capital Notes into common shares of SPO after a minimum holding period of five years from the original issuance date of the SPO Convertible Capital Notes, but no earlier than January 1, 2027, at a conversion price reflecting the fair market value of SPO’s common shares as determined by SPO’s board of directors at the relevant time and (iii) each holder of the SPO Convertible Capital Notes may assign all or a portion of its SPO Convertible Capital Notes solely to a transferee of SPO common shares on a pro rata basis, in proportion to the number of shares transferred.

The SPO Convertible Capital Notes do not bear interest and do not have a stated maturity date. The SPO Convertible Capital Notes were accounted for as part of the business combination in accordance with ASC 805 and were initially measured at fair value as of the acquisition date. Because the SPO Convertible Capital Notes are non-interest-bearing and their settlement is contingent upon the timing of future conversion or repayment, the Company recorded the noncontrolling interest portion of the SPO Convertible Capital Notes at a discount to face value.

Subsequent to initial recognition, the outstanding portion of the SPO Convertible Capital Notes is accounted for as a liability and measured at amortized cost. The Company accretes the discount to the SPO Convertible Capital Notes’ face value using the effective interest method, with the resulting accretion recognized as interest expense in the condensed consolidated statements of operations.

As of June 30, 2026 and December 31, 2025, the total outstanding balance of the SPO Convertible Capital Notes subject to repayment or conversion by noncontrolling interest holders was $4.7 million and $3.5 million, respectively. For thethree and six months ended June 30, 2026, the Company recognized $0.5 million and $0.8 million, respectively, of accretion which is included in interest expense in the condensed consolidated statements of operations.

OAS Convertible Notes

In October and December 2024, multiple investors (collectively, the “Holders”) elected to purchase convertible notes in the aggregate original principal amount of $5.2 million, (the “OAS Convertible Notes”), of which $2.0 million was purchased by C&P and $1.0 million was purchased by Privet Ventures LLC, an entity affiliated with Eric Brock, Chairman and Chief Executive Officer of the Company and OAS. The OAS Convertible Notes are convertible into shares of OAS common stock, par value per share $0.0001 (the “OAS Common Stock”), or preferred stock under certain conditions. The Company used the net proceeds for general corporate purposes, which includes funding capital expenditures and working capital. The OAS Convertible Notes bear interest at the rate of 5% per annum. On September 29, 2025, the Company amended the OAS Convertible Notes to extend the maturity date from September 30, 2025, to January 1, 2026. The amendment was accounted for as a debt modification under ASC 470-50.

On December 17, 2025, the Company and OAS entered into agreements with the Holders of the OAS Convertible Notes to convert the principal and accrued interest outstanding as of November 30, 2025 into OAS Common Stock under the original conversion terms of the OAS Convertible Notes, at a conversion price of $0.7189, which was equal to the quotient resulting from dividing (x) the Valuation Cap of $65.0 million by (y) the fully diluted shares outstanding as of November 30, 2025 (the “OAS Exchange”).

At each Holder’s election, the Holder could elect to defer the conversion to January 5, 2026 as the Company and the Holder may agree. Seven of the eleven Holders that elected to participate in the Exchange elected to defer their closing to January 5, 2026 (the “January Converters”). For the year ended December 31, 2025, OAS converted $3.3 million and $0.2 million of principal and accrued interest, respectively, into OAS Common Stock for four of the eleven Holders including C&P (the “December Converters”). Immediately following the conversion, the OAS Common Stock was exchanged for Common Stock. OAS made cash payments of $33 thousand to the December Converters representing accrued interest on the OAS Convertible Notes from December 1 to December 16, 2025.

As of December 31, 2025, the total outstanding principal on the OAS Convertible Notes was $1.9 million. As of December 31, 2025, accrued interest was $0.1 million, which is included in accrued expenses and other current liabilities on the condensed consolidated balance sheets.

On January 5, 2026, OAS converted the remaining $1.9 million and $0.1 million of principal and accrued interest, respectively, into common shares of OAS for the January Converters, which were immediately exchanged for Ondas Inc. Common Stock.

For the three months ended June 30, 2025, we recognized interest expense of $64 thousand and amortization expense of $12 thousand related to the issuance costs, which are included in interest expense in the condensed consolidated statements of operations. For thesix months ended June 30, 2025, we recognized interest expense of $0.1 million and amortization expense of $25 thousand related to the issuance costs.

NOTE 11 – STOCKHOLDERS’ EQUITY AND STOCK-BASED COMPENSATION

Stockholders’ Equity

As of June 30, 2026 and December 31, 2025, the Company had 1,200,000,000 shares of Common Stock authorized for issuance, ofwhich 529,838,610 and 380,763,481 shares of our Common Stock were issued and outstanding, respectively.

As of June 30, 2026 and December 31, 2025, 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,” together with the Series A Preferred, the “Preferred Shares”) shares. As of June 30, 2026 and December 31, 2025, the Company had no preferred stock outstanding.

Stock Issued for Convertible Debt

During the three months ended June 30, 2025, the Company issued 33,584,247 shares of its Common Stock to the lenders in lieu of cash payments for $1.9 million of outstanding interest and $22.6 million of outstanding principal on the 2022 Convertible Exchange Notes, 2023 Additional Notes, and 2024 Additional Notes. During thesix months ended June 30, 2025, the Company issued 66,906,644 shares of its Common Stock to the lenders in lieu of cash payments for $1.9 million of outstanding interest and $45.2 million of outstanding principal on the 2022 Convertible Exchange Notes, 2023 Additional Notes, and 2024 Additional Notes.

Sale of Common Stock and Capital Raises

January 2026 Offering

On January 12, 2026, the Company closed on an offering (the “January 2026 Offering”) for the sale of (i)19,000,000 shares of Common Stock (the “2026 Shares”), (ii) pre-funded warrants to purchase up to 41,790,274 shares of Common Stock (the “2026 Pre-Funded Warrants”), and (iii) common warrants to purchase up to 121,580,548 shares of Common Stock (the “2026 Common Warrants”).

The January 2026 Offering price for (i) each 2026 Share and accompanying 2026 Common Warrant was $16.45 and (ii) each 2026 Pre-Funded Warrant and accompanying 2026 Common Warrant was $16.45 (with all but a nominal exercise price of $0.0001 per share prepaid as of the issuance date). The 2026 Pre-Funded Warrants were immediately exercisable and will expire seven years from the date of issuance. As of June 30, 2026, the 2026 Pre-Funded Warrants have been fully exercised. The 2026 Common Warrants have an exercise price of $28.00 per share, were immediately exercisable and will expire seven years from the date of issuance.

The 2026 Common Warrants may be cash settled, at the option of the holders, upon a change of control event. Because share settlement of the 2026 Common Warrants is not within the Company’s control, the 2026 Common Warrants were initially classified as a liability with a fair value of $1,194.0 million, and the Company recognized a loss of $234.9 million. Refer to Note 12 for further discussion of the warrant liability.

The net proceeds to the Company from the January 2026 Offering was $959.1 million, after deducting underwriting discounts and commissions and estimated offering expenses payable by the Company and excluding any proceeds that may be received from the exercise of the 2026 Common Warrants. The Company has used a portion of the proceeds, and intends to use the remaining proceeds, from the January 2026 Offering for corporate development and strategic growth, including acquisitions, joint ventures and investments.

The table below details the net proceeds of the January 2026 Offering.

Noncontrolling Interests

Noncontrolling Interest in OAS

On September 11, 2025, certain OAS warrant holders exercised their warrants for 669,643 shares of OAS Common Stock for exercise proceeds of $1.2 million, of which $0.3 million was attributed to noncontrolling interest in OAS, representing an ownership interest of approximately 0.77% in OAS. The Company retained a controlling interest of approximately 99.23% in OAS. The transaction was accounted for as an equity transaction in accordance with ASC 810-10-45-23, with no gain or loss recognized in the consolidated statements of operations for year ended December 31, 2025.

On December 17, 2025, in conjunction with the OAS Exchange,44,643 shares of OAS Common Stock were exchanged for Common Stock, reducing the noncontrolling interest in OAS to 0.71%. For thethree and six months ended June 30, 2026, the Company attributed $35 thousand and $78 thousand of OAS’ net loss to the remaining noncontrolling interest in OAS, respectively. As of June 30, 2026 and December 31, 2025, the carrying value of the noncontrolling interest in OAS was $0.1 and $0.2 million, respectively.

Noncontrolling Interest in Insight

On October 27, 2025, the Company completed the acquisition of a controlling interest of 51% in Insight and recognized a noncontrolling interest for the remaining 49%. For thethree months ended June 30, 2026, the Company attributed $0.2 million of Insight’s net loss and $0.3 million of foreign currency translation gains to the noncontrolling interest in Insight. For thesix months ended June 30, 2026, the Company attributed $0.3 million of Insight’s net loss and $0.3 million of foreign currency translation gains to the noncontrolling interest in Insight. As of both June 30, 2026 and December 31, 2025, the carrying value of the noncontrolling interest in Insight was $3.8 million.

Noncontrolling Interest in SPO

In connection with the acquisition of SPO, Shamir retained a noncontrolling equity interest. Shamir has the right (the “First Put Option”) to cause the Company to purchase all (but not less than all) of the remaining issued and outstanding share capital of SPO held by Shamir at a purchase price of approximately $220.69 per share, including all capital notes of SPO then held by Shamir for no additional consideration. Shamir may exercise the First Put Option during the period commencing on October 15, 2025, and ending June 30, 2026. As of June 30, 2026, the First Put Option has expired.

As of December 31, 2025, the carrying value and redemption value of Shamir’s noncontrolling equity interest was $2.3 million. During thethree months ended June 30, 2026, the Company attributed $1.3 million of SPO’s net loss and $86 thousand of foreign currency translation gains to the carrying value of Shamir’s noncontrolling interest. During thesix months ended June 30, 2026, the Company attributed $2.4 million of SPO’s net loss and $87 thousand of foreign currency translation gains to the carrying value of Shamir’s noncontrolling interest. During thesix months ended June 30, 2026, the noncontrolling interest was redeemable. Therefore the Company recorded accretion of $0.3 million and $1.6 million during thethree and six months ended June 30, 2026, respectively, to increase the carrying amount of the noncontrolling interest to its redemption value. Upon expiration of the First Put Option, the Company reclassified the redeemable noncontrolling interest balance of $1.6 million to noncontrolling interest as of June 30, 2026.

Warrants to Purchase Common Stock of the Company

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. The Black-Scholes Model is an acceptable model in accordance with U.S GAAP. The Black-Scholes Model requires the use of a number of assumptions including volatility of the stock price, the risk-free interest rate, and the 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.

A summary of our Warrants activity and related information is as follows:

Stock-Based Compensation

Equity Incentive Plans

In 2018, the Company’s stockholders adopted the 2018 Equity Incentive Plan, which has been subsequently amended (the “2018 Plan”), pursuant to which 3,333,334 shares of our Common Stock have 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 of the Board of the Company (the “Compensation Committee”). Subject to the provisions of the 2018 Plan, the Board and/or the Compensation 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”). As of June 30, 2026, the balance available to be issued under the 2018 Plan was 347,412 shares.

In 2021, the Company’s stockholders adopted the Ondas Inc. 2021 Stock Incentive Plan, which has been subsequently amended (the “2021 Plan”), pursuant to which 81,000,000 shares of our Common Stock have been reserved for issuance to employees, including officers, directors and consultants. The purpose of the 2021 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 stockholders of the Company. The 2021 Plan provides for the issuance of awards including stock options, stock appreciation rights, restricted stock, restricted stock units, and performance awards. As of June 30, 2026, the balance available to be issued under the 2021 Plan was 11,226,808 shares.

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 expense 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 expense related to these awards is recognized when the performance conditions are satisfied.

The assumptions used in the Black-Scholes Model are set forth in the table below.

A summary of our option activity and related information is as follows:

As of June 30, 2026, total unrecognized compensation expense related to non-vested options was $101.7 million which is expected to be recognized over a weighted-average period of 2.55 years. The weighted-average grant date fair value per option was $7.09 for options granted during thesix months ended June 30, 2026.

Total stock-based compensation expense for stock options for thethree and six months ended June 30, 2026 and 2025 is as follows:

Restricted Stock Units

The Company awards Restricted Stock Units (“RSUs”) to certain employees and directors, which represent a right to receive common stock for each RSU that vests. RSUs generally vest over a one to four-year period and are contingent on ongoing employment or service as directors. Compensation expense related to these awards is recognized straight-line over the applicable vesting period.

A summary of our RSUs activity and related information is as follows:

As of June 30, 2026, there were 33,431 restricted stock units that were vested but not yet released due to administrative timing. As of June 30, 2026, the unrecognized compensation expense for RSUs was $302.2 million, which is expected to be recognized over a weighted-average period of 2.32 years.

Total stock-based compensation expense for RSUs for thethree and six months ended June 30, 2026 and 2025 is as follows:

NOTE 12 – FAIR VALUE MEASUREMENTS

Accounting standards define fair value based on an exit price model, establish a framework for measuring fair value for assets and liabilities required to be carried at fair value and provide for certain disclosures related to the valuation methods used within the valuation hierarchy as established within the accounting standards. This hierarchy prioritizes the inputs into three broad levels 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.

A summary of financial assets and liabilities that are measured at fair value on a recurring basis is as follows:

Short-term investments

The Company classifies its investments in fixed-income securities and certificates of deposit as available-for-sale. Available-for-sale securities are carried at fair value, with unrealized gains and losses, net of tax, recorded in accumulated other comprehensive income (loss). The amortized cost of available-for-sale securities includes the purchase price adjusted for the amortization of premiums and accretion of discounts, which are recognized in interest income using the effective interest method.

The Company holds marketable equity securities consisting of publicly traded common stock measured at fair value of $30.4 million as of June 30, 2026. For the three and six months ended June 30, 2026, we recognized net unrealized gains of $11.7 million and $9.7 million, respectively, on these marketable equity securities, which are included in other income (expense) in the condensed consolidated statements of operations. For thethree and six months ended June 30, 2026, the Company recognized net realized gains of $2.9 million, on these marketable equity securities, which are included in other income (expense) in the condensed consolidated statements of operations.

The Company’s short-term investments are measured at fair value on a recurring basis. There were no transfers between Levels 1 and 2 during the period. Fair value measurements classified as Level 2 primarily include U.S. government agency securities, corporate fixed income securities, and certificates of deposit. These instruments are valued using pricing models and matrix pricing techniques that rely on observable market inputs, including quoted prices for similar instruments, benchmark yield curves, interest rate spreads, and dealer quotations. The valuation models do not rely on significant unobservable inputs.

The Company classifies its warrants within Level 3 in the fair value hierarchy because it uses unobservable inputs related to volatility to determine fair value. There were no transfers between Level 1 and Level 3 during the period ended June 30, 2026.

The following table summarizes the Company’s Level 3 investments in marketable equity securities:

The Company’s investment in warrants exercisable for publicly traded stock allow us to purchase up to 500,000 shares of publicly traded common stock at an exercise price of $6.00 per share. The warrants are exercisable in whole or in part until August 20, 2028 and are required to be measured at fair value as long as the warrants remain outstanding. The fair value of the Company’s investment in warrants in a publicly traded company was determined using a Black-Scholes Model. During thethree and six months ended June 30, 2026, net unrealized gains totaled $0.3 million and $0.1 million, respectively, and are included in other income (expense), net. For thesix months ended June 30, 2026, the key assumptions used in the Black-Scholes Model are as follows:

The following table provides a reconciliation of the beginning and ending balances for the Level 3 warrant assets measured at fair value using significant unobservable inputs.

Convertible promissory note

On February 27, 2026, the Company purchased a $10.0 million convertible promissory note issued by World View. The convertible promissory note is measured under the fair value option and classified within Level 3 of the fair value hierarchy due to the use of unobservable inputs, including projected cash flows and market-based credit assumptions. The Company elected the fair value option for this instrument upon acquisition.

The convertible promissory note was effectively settled during the six months ended June 30, 2026 upon the Company obtaining control of World View. The note's fair value as of the acquisition date was included in the aggregate consideration transferred. Refer to Note 5 - World View for additional information. Changes in fair value were immaterial and were recognized in other income (expense), net.

Equity investment in affiliate

The Company’s equity investment in Ondas Networks is classified as Level 3 within the fair value hierarchy due to the use of significant unobservable inputs. The fair value of the investment was estimated using a combination of income-based and market-based valuation approaches, requiring significant judgment by management.

The income-based approach primarily applied a discounted cash flow (“DCF”) method using management-prepared financial projections, a terminal value based on a long-term growth rate, and a discount rate that reflects the risks associated with Ondas Networks’ expected future cash flows and early-stage operating profile. A probability-weighted expected return method (“PWERM”) was also used to allocate value across potential future liquidity scenarios, including assumed sale or liquidation outcomes and continued operations, based on management’s assessment of the probability and timing of each scenario and the contractual rights of the equity holders. A market approach utilizing guideline public company data was used to corroborate the income-based valuation conclusions.

Significant unobservable inputs include projected revenue growth, operating margins, discount rates, long-term growth rates, assumed probabilities and timing of liquidity events, and market-based valuation multiples. Changes in these assumptions, particularly revenue forecasts, discount rates, or liquidity assumptions, could materially impact the estimated fair value of the investment.

For the three and six months ended June 30, 2026, we recognized a loss of $2.5 million for the change in fair value of the equity investment in affiliate, which is included in other income (expense) in the condensed consolidated statements of operations.

Note receivable from affiliate

The Company holds a note receivable from Ondas Networks, which is measured at fair value and classified as Level 3 within the fair value hierarchy. The fair value of the note receivable was estimated using a discounted cash flow approach, applying a discount rate that reflects the credit risk of Ondas Networks and the illiquid nature of the instrument. Changes in the discount rate could materially affect the estimated fair value of the note receivable. For the three and six months ended June 30, 2026, we recognized a gain of $0.3 million on the change in fair value of the note receivable, which is included in other income (expense) in the condensed consolidated statements of operations.

Government Grants

The Company had Level 3 liabilities that are required to be valued at fair value as of June 30, 2026 and December 31, 2025. The fair value of the government grant liability is determined as the sum of 3% royalty payments on forecasted future sales of the products developed using the grant funds, discounted using a discounted cash flow model. As of June 30, 2026 and December 31, 2025, the Company made the following assumptions: (i) royalty payments will be made on certain forecasted future sales through 2029, and (ii) using a discount rate of 19%.

The following table provides a reconciliation of the beginning and ending balances for the Level 3 government grant liabilities measured at fair value using significant unobservable inputs.

Warrant Liability

The fair value of the warrants was determined using Level 3 inputs in a Black-Scholes Model. Inherent in the valuation were assumptions related to the expected stock-price volatility, expected term, risk-free interest rate, and dividend yield. 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 warrant term. 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. The expected term was assumed to be equivalent to the warrants’ remaining contractual term. The risk-free interest rate was estimated using the yield on actively traded non-inflation-indexed U.S. treasury securities with contract maturities equal to the expected term. The dividend yield was based on the historical rate, which the Company anticipates remaining at zero.

The assumptions used to estimate the fair value of warrants during the period were as follows:

The following table provides a reconciliation of the beginning and ending balances for the Level 3 warrant liabilities measured at fair value using significant unobservable inputs. There was no warrant liability activity during thethree and six months ended June 30, 2025.

In connection with the January 2026 Offering, the Company issued liability classified warrants that were measured at fair value on the issuance date (the January 2026 Warrant Liability). The initial fair value of the January 2026 Warrant Liability was $1.2 billion. The January 2026 Warrant Liability exceeded the net proceeds received from the January 2026 Offering was $959.1 million. As a result, the Company recognized a loss upon issuance equal to the excess of the initial fair value of the January 2026 Warrant Liability over the net proceeds, totaling $234.9 million. The warrant liabilities are subsequently remeasured to fair value at each reporting date, with changes in fair value recognized in earnings in the period of change. For thethree months ended June 30, 2026, the Company recognized a $15.3 million gain on the change in fair value. For thesix months ended June 30, 2026, the Company recognized a net gain of $404.8 million, consisting of the $234.9 million loss recognized upon issuance and the $639.7 million gain on change in fair value subsequent issuance. These amounts are recorded in other income (expense), net in the condensed consolidated statements of operations.

Significant increases or decreases in expected volatility or expected term would result in a higher or lower fair value measurement, respectively.

Contingent Consideration

The Company’s contingent consideration liabilities consist of earn-out and milestone payment arrangements related to business combinations. Earn-out payments are contingent upon the achievement of specified revenue, program win, and financial performance targets over defined post-acquisition periods. Milestone payments are contingent upon the achievement of specified operational, technical, regulatory, or program-related events within defined timeframes. These liabilities are classified as Level 3 within the fair value hierarchy due to the use of significant unobservable inputs in their valuation. Contingent consideration liabilities are presented as accrued purchase and contingent consideration on the condensed consolidated balance sheets.

The fair value of the contingent consideration liabilities is estimated primarily using either scenario-based valuation methods or Monte Carlo simulation models, depending on the terms and structure of the contingent consideration liability. These valuation methods may incorporate multiple future performance and milestone achievement scenarios, each probability-weighted based on management’s assessment of potential outcomes and discounted to present value using risk-adjusted discount rates. In the case of simulation analysis, the Monte-Carlo Simulation method may incorporate forecasts of such future performance targets, applicable volatility around such estimates, and risk-adjusted discount rates.

The significant unobservable inputs used in the valuation of the contingent consideration liabilities include projected revenue, probability of achieving performance and milestone targets, discount rates, volatility assumptions, and the expected timing of payments. These assumptions reflect management’s judgment regarding expected future operating performance, program execution, achievement of specified milestones, market conditions, and the time value of money. Significant increases or decreases in the probability of achieving the underlying earn-out targets or milestone events, or in projected revenue levels, would result in a corresponding increase or decrease in the fair value of the contingent consideration liabilities. Increases in the discount rate would result in a decrease in the estimated fair value of the contingent consideration liabilities.

The following table reconciles the beginning and ending balances of the Company’s Level 3 contingent consideration liabilities:

During the three and six months ended June 30, 2026, the Company recognized changes in fair value of $0.2 million and $0.3 million through stock-based compensation in operating expenses, respectively.

Non-recurring fair value measurements

In connection with the business combinations completed during the six months ended June 30, 2026 and the year ended December 31, 2025, the Company recognized identifiable intangible assets, including developed technology, customer relationships, trade names, and non-compete agreements. These intangible assets were measured at fair value on a non-recurring basis as of their respective acquisition dates in accordance with ASC 805. These measurements are not subsequently remeasured and the assets are amortized over their estimated useful lives.

The fair value of the acquired intangible assets was determined using valuation techniques consistent with the income approach, including discounted cash flow models such as the multi-period excess earnings method for developed technology and customer relationships, the relief-from-royalty method for trade names, and the with-and-without method for non-compete agreements.

These fair value measurements are classified within Level 3 of the fair value hierarchy due to the use of significant unobservable inputs, including projected future revenues, operating margins, customer attrition rates, royalty rates, and discount rates, which reflect management’s assumptions regarding the expected economic benefits derived from the acquired assets. The fair value measurements were determined as of the respective acquisition dates and represent non-recurring measurements.

NOTE 13 – SEGMENT INFORMATION

During the six months ended June 30, 2026, the Company deconsolidated Ondas Networks, which was previously included in the Company’s consolidated financial statements. As a result of the deconsolidation, Ondas Networks is no longer a reportable segment, and the Company evaluated its segment reporting structure for the current period in accordance with ASC 280, Segment Reporting. Following the deconsolidation, the Company operates inone operating and reportable segment, which is focused on developing and providing advanced defense, security, and communications technologies for critical infrastructure and government customers. The prior period has been recast to conform to the current period presentation.

The Company’s Chief Executive Officer serves as the chief operating decision maker (“CODM”) and is responsible for assessing operating performance and allocating resources. The Company’s organizational structure is based primarily on functional lines, with department heads and shared service functions reporting either directly to the CODM or to direct reports of the CODM. The CODM reviews financial information on a consolidated basis and uses net income (loss)before provision for income taxesas the primary measure of operating performance and for purposes of making operating decisions. Accordingly, the Company has determined that it has a single operating segment.

In assessing performance, the CODM reviews significant operating expense categories reflected in net income (loss), including research and development, sales and marketing, and general and administrative expenses, each of which is separately disclosed in the condensed consolidated statements of operations. In addition, the CODM reviews certain significant expense items that impact operating results, including stock-based compensation, as well as other significant charges or credits that may occur during the period and are discussed elsewhere in the notes to the condensed consolidated financial statements.

The measure of segment assets is reported on the condensed consolidated balance sheets as total consolidated assets. The accounting policies of the Company’s operating segment are the same as those described in the Company’s annual financial statements included within our Annual Report on Form 10-K for the year ended December 31, 2025.

The following table presents segment information for thethree and six months ended June 30, 2026 and 2025:

The above table includes depreciation expense of $0.9 million and $0.2 million for thethree months ended June 30, 2026 and 2025, respectively, and amortization expense of intangible and right-of-use assets of $18.6 million and $1.4 million for thethree months ended June 30, 2026 and 2025, respectively. The above table includes depreciation expense of $1.6 million and $0.4 million for thesix months ended June 30, 2026 and 2025, respectively, and amortization expense of intangible and right-of-use assets of $24.6 million and $2.7 million for thesix months ended June 30, 2026 and 2025, respectively.

NOTE 14 – INCOME TAXES

In general, the Company uses an estimated annual effective tax rate, which is based on expected annual income and statutory tax rates in the various jurisdictions in which the Company operates, to determine its quarterly provision for income taxes. However, to the extent that application of the estimated annual effective tax rate is not representative of the quarterly portion of actual tax expense expected to be recorded for the year in a jurisdiction, the Company determines the provision for income taxes based on actual year-to-date income (loss) which it has done for the quarter ended June 30, 2026. Certain significant or unusual items, if applicable, are separately recognized in the quarter in which they occur and can be a source of variability on the effective tax rates from quarter to quarter. The Company’s effective tax rate may change from period-to-period based on recurring and non-recurring factors including the geographical mix of earnings, enacted tax legislation, and state and local income taxes.

The effective income tax rate was 24.5% and 0.0% for thethree months ended June 30, 2026 and 2025, respectively. The effective income tax rate was (11.9)% and 0.0% for the six months ended June 30, 2026 and 2025, respectively. The effective income tax rate for the three and six months ended June 30, 2026 were impacted by the geographical mix of earnings, as well as movement in the federal, state and foreign valuation allowances.

During the three months ended June 30, 2026, the Company recognized an income tax benefit of approximately $29.0 million related to current-year tax losses. The benefit was recognized because the associated deferred tax assets are expected to be realized through the reversal of existing deferred tax liabilities. Approximately $17.8 million of thebenefit was recognized because management concluded that it is more likely than not that deferred tax assets will be realized through the future reversal of deferred tax liabilities arising primarily from acquisition accounting adjustments associated with recent business combinations. The acquisition accounting for these business combinations remains provisional and is subject to refinement during the measurement period. Accordingly, the deferred tax liabilities and the related tax benefit recognized may be adjusted in future periods as additional information becomes available.

NOTE 15 – COMMITMENTS AND CONTINGENCIES

The Company 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 areno such loss contingencies that are included in the financial statements as of June 30, 2026.

NOTE 16 – RELATED PARTY TRANSACTIONS

As of June 30, 2026 and December 31, 2025, the Company owed $81 thousand to independent directors related to accrued compensation and $0.7 million to independent directors related to taxes collected on RSU shares delivered, respectively, which is included in accrued expenses and other current liabilities on the condensed consolidated balance sheets.

Investment in Ondas Networks

At December 31, 2025, Ondas Networks was a separate business unit that was consolidated in the December 31, 2025 financial statements. Ondas Networks provides mission-critical private wireless connectivity solutions for Industrial Internet of Things (IOT) applications, enabling secure, reliable, wide-area communications and edge data transport in demanding critical infrastructure environments.

On January 16, 2026, Ondas Networks completed a Series B preferred stock financing (the “2026 Networks Offering”) for aggregate gross proceeds of approximately $8.4 million, which included approximately $6.0 million from the Company and $2.0 million from other investors. In connection with the 2026 Networks Offering, Ondas Networks issued shares of Series B-1 and B-2 Preferred Stock. The Series B Preferred Stock accrues dividends at a rate of 8% per annum of the original issue price. Dividends are payable only when, as, and if declared by the board of directors of Ondas Networks and may be paid in cash or additional shares of Ondas Networks preferred stock. Each share of Series B Preferred Stock is convertible at the option of the holder at any time into shares of Ondas Networks common stock at an initial conversion price equal to the original issue price, subject to standard adjustments. The Series B Preferred Stock is redeemable upon the occurrence of specified events, including at the option of the holder after a stated period, at amounts intended to provide a return of capital plus accrued dividends.

During the quarter ended March 31, 2026, the Company determined that it no longer held a controlling financial interest in Ondas Networks, a VIE, as a result of the 2026 Networks Offering. This determination resulted from the 2026 Networks Offering, pursuant to which minority preferred shareholders exercised warrants and acquired additional voting interests in Ondas Networks (refer to Note 18). As a result of these additional issuances, the Company’s ownership and voting interests were diluted such that it no longer possessed the unilateral power to direct the activities that most significantly impact Ondas Networks’ economic performance. Accordingly, the Company was not considered the primary beneficiary and deconsolidated Ondas Networks effective January 16, 2026. Subsequent to deconsolidation, the assets, liabilities, and results of operations of Ondas Networks are no longer included in the Company’s consolidated financial statements.

Upon deconsolidation, the Company derecognized all assets and liabilities of Ondas Networks, including the related noncontrolling interest, and measured the retained ownership interest at fair value. The Company recognized a gain on deconsolidation of $51.5 million, which is included in other income (expense), net in the condensed consolidated statements of operations for thesix months ended June 30, 2026. The most significant carrying amounts of the assets and liabilities that were deconsolidated were inventory of $3.6 million, deposits and other assets of $2.3 million, convertible notes payable of $5.0 million, accrued expenses and other liabilities, current and long-term, of $2.7 million, and notes payable to the Company of $10.4 million.

Following the deconsolidation, the Company retains an approximately 47.5% ownership interest in Ondas Networks and has the ability to exercise significant influence over Ondas Networks’ operating and financial policies. The retained equity interest is presented as Investment in unconsolidated affiliate within noncurrent assets and the retained note receivable is presented as Other assets on the condensed consolidated balance sheets. The Company elected the fair value option for its retained equity investment in and note receivable from Ondas Networks for operational ease associated with subsequent measurement. As a result, the retained interests are carried at fair value, with changes in fair value recognized in earnings each reporting period and included in other income (expense) in the condensed consolidated statements of operations.

For the three and six months ended June 30, 2026, we recognized a loss of $2.5 million for the change in fair value of the equity investment in affiliate, which is included in other income (expense) in the condensed consolidated statements of operations.

Networks Note

On January 16, 2026, upon the deconsolidation of Ondas Networks, the Company recorded a note receivable from Ondas Networks (the “Networks Note”). The Networks Note is presented within other assets on the condensed consolidated balance sheets and is separate from the Company’s equity-method investment in Ondas Networks. The Networks Note represents a contractual debt instrument and is accounted for as a financial asset in accordance with U.S. GAAP. The face value of the Networks Note is $10 million, and bears interest at 8% and matures in December 2027. As of January 16, 2026, the fair value of the Networks Note was $8.8 million.

As of June 30, 2026, the fair value of the Networks Note was $9.1 million. For the three and six months ended June 30, 2026, we recognized a gain of $0.3 million on the change in fair value of the note receivable, which is included in other income (expense) in the condensed consolidated statements of operations. No principal or interest has been paid since the Networks Note was issued.

Ondas Networks Convertible Notes

On July 8, 2024, July 23, 2024, and November 13, 2024 C&P elected to purchase Convertible Notes in Ondas Networks in the aggregate original principal amount of $0.7 million, $0.8 million, and $1.0 million, respectively, (the “C&P Networks Convertible Notes”). Joseph Popolo, a former director of the Company, was the sole control person of C&P.

Along with the November 13, 2024 Networks Convertible Notes, Ondas Networks issued warrants to purchase $1.0 million in shares of Ondas Networks Preferred Stock at an exercise price of $20.65 per share (the “Networks Warrants”). The number of Networks Warrants exercisable under the Security Agreement is calculated by $1.0 million divided by the Conversion Price, which is the amount equal to the price per share of Ondas Networks’ most senior series of Preferred Stock issued to investors in Ondas Networks’ next equity financing date, or if none, then $41.3104. The Networks Warrants are exercisable commencing November 13, 2024 through November 13, 2029 and have a relative fair value of $0.4 million, which was recorded as debt discount.

As of December 31, 2025, the total outstanding principal on the C&P Networks Convertible Notes was $2.5 million. Accrued interest as of December 31, 2025, was $0.2 million and is included in accrued expenses and other current liabilities on the condensed consolidated balance sheets. For thethree months ended June 30, 2025, we recognized interest expense of $47 thousand and amortization expense of $0.1 million related to debt discount and issuance costs. For thesix months ended June 30, 2025, we recognized interest expense of $0.1 million and amortization expense of $0.2 million related to debt discount and issuance costs. Interest expense and amortization expense related to debt discount and issuance costs are included in interest expense in the condensed consolidated statements of operations.

On January 16, 2026, Ondas Networks consummated an additional equity financing round. Pursuant to the Securities Purchase Agreement, the C&P Warrants and the principal balance and accrued interest on the C&P Networks Convertible Notes were converted into shares of Ondas Networks Preferred Stock.

OAS Convertible Notes

On October 10, 2024, Privet Ventures LLC, an entity affiliated with Eric Brock, Chairman and Chief Executive Officer of the Company and OAS, elected to purchase a convertible note in OAS in the original principal amount of $1.0 million (the “Privet OAS Convertible Note”). As of December 31, 2025, the total outstanding principal on the Privet OAS Convertible Note was $1.0 million, net of unamortized issuance costs of $7 thousand. Accrued interest as of December 31, 2025 was $61 thousand, which is included in accrued expenses and other current liabilities on the condensed consolidated balance sheets. For the three months ended June 30, 2025, we recognized interest expense of $12 thousand and amortization expense of $2 thousand related to the issuance costs. For thesix months ended June 30, 2025, we recognized interest expense of $25 thousand and amortization expense of $5 thousand related to issuance costs. Interest expense and amortization expense related to issuance costs are included in interest expense in the condensed consolidated statements of operations.

On January 5, 2026, in connection with the OAS Exchange, Privet Ventures LLC converted $1.0 million in principal and $61 thousand of accrued interest on the Privet OAS Convertible Note into OAS Common Stock under the original conversion terms of the OAS Convertible Notes, which was immediately exchanged for 1,153,625 shares of Common Stock, repaying the Privet OAS Convertible Note in full.

Ondas Networks Secured Note

On September 3, 2024, Ondas Networks entered into the C&P Security Agreement, in which Ondas Networks may draw, and C&P shall loan Ondas Networks, up to $1.5 million. Pursuant to the C&P Security Agreement, Ondas Networks issued C&P the Ondas Networks Secured Note.

On September 3, 2024 and October 7, 2024, pursuant to the C&P Security Agreement, Ondas Networks issued C&P warrants to purchase $1.0 million and $0.5 million, respectively, in shares of Ondas Networks Preferred Stock at an exercise price of $20.65 per share (the “C&P Warrants”). The number of warrants exercisable under the C&P Security Agreement is calculated by $1.5 million divided by the Conversion Price, which is the amount equal to the price per share of the most senior series of Ondas Networks Preferred Stock issued to investors in Ondas Networks’ next equity financing date, or if none, then $41.3104. The C&P Warrants are exercisable commencing September 3, 2024 through September 3, 2029 and October 7, 2024 through October 7, 2029, respectively. The C&P Warrants have a total relative fair value of $0.6 million, which was recorded as debt discount. Joseph Popolo, a former director of the Company, was the sole control person of C&P.

As of December 31, 2025, the total outstanding principal on the Ondas Networks Secured Note was $1.5 million. Accrued interest as of December 31, 2025 was $0.2 million, which is included in accrued expenses and other current liabilities on the condensed consolidated balance sheets. For the three months ended June 30, 2025, we recognized interest expense of $30 thousand. For thesix months ended June 30, 2025, we recognized interest expense of $59 thousand and amortization expense of $0.2 million related to the debt discount and issuance costs. Interest expense and amortization expense related to the debt discount and issuance costs are included in interest expense in the condensed consolidated statements of operations. No principal or interest was paid on the Ondas Networks Secured Note through December 31, 2025.

Effective January 16, 2026, the Company determined that it no longer held a controlling financial interest in Ondas Networks and no longer includes the assets, liabilities, and results of operations of Ondas Networks in the condensed consolidated financial statements subsequent to that date.

NOTE 17 - INVESTMENT IN VARIABLE INTEREST ENTITIES

Consolidated Variable Interest Entities

Our consolidated financial statements include the financial results of variable interest entities (“VIE”) in which we are the primary beneficiary. The following are our interests in significant consolidated variable interest entities.

Indo-Earth Moving Ltd.

Beginning in March 2026, the Company consolidated the results of Indo-Earth Moving Ltd. (“Indo”), of which it has acquired 100% equity interests in March 2026, as it was determined that the Company is the primary beneficiary of Indo because the Company has the power to direct the activities that most significantly impact the entity's economic performance and has the obligation to absorb losses that may be significant to Indo. The Company is the sole equity owner and provides 100% of the financial support to Indo post-acquisition. Indo was considered a VIE due to the Company’s rights to recover all or a portion of the Indo Base Consideration such that the Company’s investment in Indo is not fully at risk until the refundability option lapses.

The following represents the carrying amounts of Indo’s assets and liabilities as of June 30, 2026:

Unconsolidated Variable Interest Entities

The following are our interests in significant unconsolidated variable interest entities.

Ondas Networks

Upon the deconsolidation of Ondas Networks in January 2026, Ondas Networks was deemed a VIE. The Company does not consolidate Ondas Networks due to the fact that the power to direct the activities that most significantly impact the VIE’s economic performance is shared with the other investors. The Company provides financial support to Ondas Networks in the form of equity and debt financing which may exceed support provided by other investors. During the period from the deconsolidation date through March 31, 2026, the Company provided no additional financing to Ondas Networks. The Company’s maximum exposure to loss from its involvement with Ondas Networks is limited to the carrying values of its equity and debt investments.

NOTE 18 – SUBSEQUENT EVENTS

High Point UAS, LLC

On July 2, 2026, the Company completed the acquisition of 100% of the outstanding membership interests of High Point UAS, LLC, ("High Point") the parent of DZYNE Technologies, LLC, (“DZYNE”), a U.S.-based defense technology company specializing in long-endurance autonomous aircraft, counter-UAS systems and autonomous effects.

The aggregate purchase price consisted of (i) $204.1 million in cash, including $12.0 million deposited into an escrow account to secure certain seller indemnification and payment obligations, (ii)39,999,998 shares of the Company's common stock issued at closing, and (iii) an additional 44,999,998 shares of the Company's common stock to be issued on January 4, 2027. The purchase price remains subject to customary post-closing adjustments.

The following table summarizes the consideration and its preliminary allocation to the estimated fair value of the assets acquired and liabilities assumed at the acquisition date.

The intangible assets acquired include $168.3 million allocated to developed technology and $144.8 million allocated to customer relationships. The Company has not completed its determination of the useful lives to be assigned to each class of acquired intangible assets. The useful lives and the weighted-average amortization period of the acquired intangible assets disclosures will be presented in our Quarterly Report on Form 10-Q for the period ending September 30, 2026. Goodwill represents the assembled workforce, acquired capabilities, and future economic benefits resulting from the acquisition. The determination of the tax basis of the assets acquired and liabilities assumed as well as the amount of goodwill that will be deductible for tax purposes is in process and incomplete. The completion of this may result in the recognition of deferred taxes, with a corresponding adjustment to goodwill.

The acquisition was completed subsequent to June 30, 2026, accordingly, no amounts related to High Point are reflected in the Company’s condensed consolidated balance sheet or in its results of operations for the periods presented. The initial accounting for the acquisition is incomplete at the issuance date of these condensed consolidated financial statements. The amounts presented represent the Company's preliminary estimates based on information available as of that date. 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 inventories and property, plant, and equipment, (2) changes in valuation of intangible assets such as developed technology, customer relationships, as well as corresponding changes to goodwill, (3) deferred tax balances, (4) other changes to assets and liabilities including working capital adjustments, and (5) considerations transferred.

The Company expects to incur total acquisition-related costs of approximately $6.9 million, consisting primarily of legal, advisory, valuation, and other professional fees. Of this amount, approximately $1.6 million was incurred during thethree and six months ended June 30, 2026, and is recognized within general and administrative expense in the consolidated statements of operations. The remainder is expected to be recognized in the third quarter of 2026.

As of the issuance date of these financial statements the historical results of operations of High Point for the three and six months ended June 30, 2026 and 2025, prepared on a basis conforming to the Company's accounting policies, are not available. Accordingly, the supplemental pro forma revenue and earnings information has not been presented and will be presented in our Quarterly Report on Form 10-Q for the period ending September 30, 2026.

Cyberhawk Holdings Limited

On August 10, 2026 the Company completed the acquisition of Cyberhawk Holdings Limited (“Cyberhawk”), pursuant to the Share Purchase Agreement (the “Cyberhawk Agreement”), dated June 17, 2026, by and among the Company, and Cyberhawk shareholders listed on Schedule 1 thereto (the “Cyberhawk Sellers”).

Pursuant to the Cyberhawk Agreement, the Company agreed to acquire 100% of the issued and outstanding share capital of Cyberhawk for (i) $118.2 million in cash and (ii)581,732 shares of the Company's common stock issued to the High Point Sellers. The shares are subject to restriction on transfer for a period of one year following the acquisition date. Additionally, on August 10, 2026, the Company entered into a Registration of Rights and Lock-Up Agreement whereby the seller may not sell, in the aggregate, any shares of common stock issued to the seller pursuant to the agreement on any trading market in any single trading day to the extent the sales would exceed the seller's pro rata portion of 10% of the average daily trading volume of the common stock with respect to such trading day.

The purchase price remains subject to customary post-closing adjustments.

The initial accounting for the Cyberhawk acquisition is incomplete as of the issuance of the condensed consolidated financial statements. Therefore, the Company is unable to provide other disclosures required by ASC 805 regarding this acquisition.