Ondas Holdings Inc

Previous wording

Ondas Holdings Inc. (“Ondas Holdings,” “Ondas,” the “Company,” “we” or “our”) is a leading provider of private wireless, drone, and automated data solutions through its subsidiaries Ondas Networks Inc., a Delaware corporation (“Ondas Networks”) and Ondas Autonomous Systems Inc., a Nevada corporation (“OAS”), which wholly-owns Airobotics, Ltd., an Israeli company (“Airobotics”), and American Robotics, Inc., a Delaware corporation (“American Robotics” or “AR”). On August 8, 2024, the Company filed a certificate of amendment with the Secretary of State of the State of Nevada, amending Ondas Autonomous Holdings Inc.’s name to Ondas Autonomous Systems Inc.

Current wording

Ondas Holdings Inc. (“Ondas Holdings,” “Ondas,” the “Company,” “we” or “our”) is a leading provider of private wireless, drone, and automated data solutions through its subsidiaries Ondas Networks Inc., a Texas corporation (“Ondas Networks”) and Ondas Autonomous Systems Inc., a Nevada corporation (“OAS”), which wholly-owns Airobotics, Ltd., an Israeli company (“Airobotics”), and American Robotics, Inc., a Delaware corporation (“American Robotics” or “AR”). On August 8, 2024, the Company filed a certificate of amendment with the Secretary of State of the State of Nevada, amending Ondas Autonomous Holdings Inc.’s name to Ondas Autonomous Systems Inc.

Previous wording

Ondas and Siemens developed a new locomotive radio to support European Railroads. We secured an initial volume order from Siemens for the Class I Rail 900 MHz Network consisting of both ATCS compatible products along with Ondas’ catalog products. We received government authorization to sell ATCS radios in Canada and Siemens and launched our joint effort for the European market at Innotrans in Berlin. Siemens and Ondas demonstrated our over the air compatibility to systems used by passenger rails in the Northeast Corridor of the US.

Current wording

Ondas and Siemens developed a new locomotive radio to support European Railroads. We secured an initial volume order from Siemens for the Class I Rail 900 MHz Network consisting of both ATCS compatible products along with Ondas’ catalog products. We received government authorization to sell ATCS radios in Canada and, along with Siemens, launched our joint effort for the European market at Innotrans in Berlin. Siemens and Ondas demonstrated our over the air compatibility to systems used by passenger rails in the Northeast Corridor of the US.

Previous wording

OAS and its portfolio companies have already gained a track record of industry-leading regulatory successes including the securing of the first-of-its-kind Type Certification (TC) from the FAA for the Optimus 1-EX UAV on September 25, 2023, becoming the first autonomous security data capture UAV to achieve this distinction. TC, recognized as the highest echelon of Airworthiness Certification, streamline operational approvals for broad flight operations over people and infrastructure. The certification verifies the compliance of the system’s design with the required FAA airworthiness and noise standards, ensuring safe operation within the US National Airspace System (NAS) thereby significantly broadening the range of operational scenarios and scaling up of operations for automated UAS. Achieving FAA Type Certification will enable drone operations beyond-visual-line-of-sight (BVLOS) without a human operator on-site. With a strong footprint in the US market and worldwide, we believe that OAS is well-positioned with proven technology, a unique offering, and strong capabilities to strategically transform critical operations with our cutting-edge drone tech and capabilities.

Current wording

OAS and its portfolio companies have already gained a track record of industry-leading regulatory successes including the securing of the first-of-its-kind Type Certification (“TC”) from the Federal Aviation Administration (“FAA”) for the Optimus 1-EX UAV on September 25, 2023, becoming the first autonomous security data capture UAV to achieve this distinction. TC, recognized as the highest echelon of Airworthiness Certification, streamline operational approvals for broad flight operations over people and infrastructure. The certification verifies the compliance of the system’s design with the required FAA airworthiness and noise standards, ensuring safe operation within the US National Airspace System (NAS) thereby significantly broadening the range of operational scenarios and scaling up of operations for automated UAS. Achieving FAA Type Certification will enable drone operations beyond-visual-line-of-sight (BVLOS) without a human operator on-site. With a strong footprint in the US market and worldwide, we believe that OAS is well-positioned with proven technology, a unique offering, and strong capabilities to strategically transform critical operations with our cutting-edge drone tech and capabilities.

Previous wording

Our revenues decreased by $4,511,113 to $957,851 for the three months ended June 30, 2024, compared to $5,468,964 for the three months ended June 30, 2023. Revenues during the three months ended June 30, 2024, included $22,484 for products, $298,553 for maintenance, service, support, and subscriptions, and $636,814 for development agreements, mainly with Siemens. Revenues during the three months ended June 30, 2023, included $4,344,056 for products, $975,468 for maintenance, service, support, and subscriptions, and $149,440 for development agreements, mainly with Siemens. The decrease in our revenues were primarily the result of approximately $2,975,000 in decreased product sales and approximately $675,000 in decreased maintenance, service, support, and subscription revenue at OAS, who had a multi-drone order in the three months ended June 30, 2023, but no comparable sales in the three months ended June 30, 2024, and a decrease of approximately $1,346,000 in product sales to Siemens at Ondas Networks, as further orders have been delayed. These decreases were offset by an increase of approximately $485,000 in development revenue to Siemens during the three months ended June 30, 2024, related to a new development agreement at Ondas Networks.

Current wording

Our revenues decreased by $1,184,398 to $1,480,792 for the three months ended September 30, 2024, compared to $2,665,190 for the three months ended September 30, 2023. Revenues during the three months ended September 30, 2024, included $150,668 for products, $887,747 for maintenance, service, support, and subscriptions, and $442,377 for development agreements, mainly with Siemens. Revenues during the three months ended September 30, 2023, included $2,180,472 for products, $234,236 for maintenance, service, support, and subscriptions, and $250,482 for development agreements, mainly with Siemens. The decrease in our revenues were primarily the result of approximately $2,178,000 in decreased product sales to Siemens at Ondas Networks, as further orders have been delayed by the railroads, as they work on implementing the 900 MHz band network, partially offset by an increase of approximately $192,000 in development revenue to Siemens during the three months ended September 30, 2024, related to a new development agreement at Ondas Networks. At OAS, product sales increased by approximately $150,000, and revenue for maintenance, service, support, and subscriptions increased by approximately $651,000, as we started to fulfill the new purchase orders received during the three months ended September 30, 2024.

Previous wording

Our cost of goods sold was $2,168,737 for the six months ended June 30, 2024, compared to $3,966,283 for the six months ended June 30, 2023. The decrease in cost of goods sold was primarily a result of decreased revenue for the six months ended June 30, 2024, as compared to the six months ended June 30, 2023, offset by fixed manufacturing costs at OAS, resulting in negative gross profit for the six months ended June 30, 2024, as further discussed below.

Current wording

Our cost of goods sold decreased by $677,080 to $1,433,232 for the three months ended September 30, 2024, compared to $2,110,312 for the three months ended September 30, 2023. The decrease in cost of goods sold was primarily a result of decreased revenue for the three months ended September 30, 2024, as compared to the three months ended September 30, 2023, partially offset by an increase in fixed manufacturing costs at OAS.

Previous wording

Our gross profit decreased by $3,262,671 for the three months ended June 30, 2024, compared to the three months ended June 30, 2023. Gross margin for the three months ended June 30, 2024 and 2023 was (20%) and 56%, respectively. The decrease in gross margin of 76% is primarily related to the decrease in revenue combined with fixed manufacturing costs at OAS.

Current wording

Our gross profit decreased by $507,318 for the three months ended September 30, 2024, compared to the three months ended September 30, 2023. Gross margin for the three months ended September 30, 2024 and 2023 was 3% and 21%, respectively. The decrease in gross margin of 18% is due to the change in the mix of revenues in the third quarter of 2024, which included development projects with lower gross margins as compared to product revenue with higher gross margins in the third quarter of 2023, as well as an increase in certain fixed costs related to OAS service delivery.

Previous wording

As a result of the foregoing, our operating loss decreased by $3,718,559, or 18%, to $17,430,785 for the six months ended June 30, 2024, compared with $21,149,344 for the six months ended June 30, 2023. Operating loss decreased primarily as a result of the decrease in operating expenses described above, offset by decreased revenue and gross margin, for the six months ended June 30, 2024.

Current wording

As a result of the foregoing, our operating loss increased by $2,726,694 or 46%, to $8,660,715 for the three months ended September 30, 2024, compared with $5,934,021 for the three months ended September 30, 2023. Operating loss increased primarily as a result of the increase in operating expenses described above, combined with decreased revenue and gross margin for the three months ended September 30, 2024.

Previous wording

As a result of the net effects of the foregoing, net loss decreased by $688,350, or 8%, to $8,269,736 for the three months ended June 30, 2024, compared with $8,958,086 for the three months ended June 30, 2023. Net loss per share of common stock, par value $0.0001 per share (“Common Stock”), basic and diluted, was $(0.14) for the three months ended June 30, 2024, compared with $(0.18) for the three months ended June 30, 2023.

Current wording

As a result of the net effects of the foregoing, net loss increased by $2,233,807, or 31%, to $9,526,268 for the three months ended September 30, 2024, compared with $7,292,461 for the three months ended September 30, 2023. Net loss per share of common stock, par value $0.0001 per share (“Common Stock”), basic and diluted, was $(0.15) for the three months ended September 30, 2024 and 2023.

Previous wording

Our revenues decreased by $6,482,095 to $1,582,860 for the six months ended June 30, 2024, compared to $8,064,955 for the six months ended June 30, 2023. Revenues during the six months ended June 30, 2024, included $24,758 for products, $608,140 for maintenance, service, support, and subscriptions, and $949,962 for development agreements, mainly with Siemens. Revenues during the six months ended June 30, 2023, included $6,699,837 for products, $1,055,406 for maintenance, service, support, and subscriptions, and $309,712 for development agreements with Siemens. The decrease in our revenues were primarily the result of approximately $4,374,000 in decreased product sales and approximately $430,000 in decreased maintenance, service, support, and subscription revenue at OAS, who had multi-drone orders during the six months ended June 30, 2023, but no comparable sales in the six months ended June 30, 2024, and a decrease of approximately $2,300,000 in product sales, mainly to Siemens, at Ondas Networks, as further orders have been delayed. These decreases were offset by an increase of approximately $622,000 in development revenue to Siemens during the six months ended June 30, 2024, related to a new development agreement at Ondas Networks.

Current wording

Our revenues decreased by $7,666,493 to $3,063,652 for the nine months ended September 30, 2024, compared to $10,730,145 for the nine months ended September 30, 2023. Revenues during the nine months ended September 30, 2024, included $175,426 for products, $1,495,887 for maintenance, service, support, and subscriptions, and $1,392,339 for development agreements, mainly with Siemens. Revenues during the nine months ended September 30, 2023, included $8,880,309 for products, $1,289,642 for maintenance, service, support, and subscriptions, and $560,194 for development agreements, mainly with Siemens. The decrease in our revenues were primarily the result of approximately $4,224,000 in decreased product sales at Airobotics, who had multi-drone orders during the nine months ended September 30, 2023, but no comparable sales in the nine months ended September 30, 2024, and a decrease of approximately $4,481,000 in product sales, mainly to Siemens, at Ondas Networks, as further orders have been delayed by the railroads, as they work on implementing the 900 MHz band network. These decreases were partially offset by an increase of approximately $204,000 in maintenance, service, support, and subscriptions at OAS as a result of new orders at Airobotics, and an increase of approximately $815,000 in development revenue to Siemens, related to a new development agreement at Ondas Networks.

Previous wording

Our cost of goods sold was $1,148,746 for the three months ended June 30, 2024, compared to $2,397,188 for the three months ended June 30, 2023. The decrease in cost of goods sold was primarily a result of decreased revenue for the three months ended June 30, 2024, as compared to the three months ended June 30, 2023, offset by fixed manufacturing costs at OAS, resulting in negative gross profit for the three months ended June 30, 2024, as further discussed below.

Current wording

Our cost of goods sold decreased by $2,474,626 to $3,601,969 for the nine months ended September 30, 2024, compared to $6,076,595 for the nine months ended September 30, 2023. The decrease in cost of goods sold was primarily a result of decreased revenue for the nine months ended September 30, 2024, as compared to the nine months ended September 30, 2023, partially offset by fixed manufacturing costs at OAS, resulting in negative gross profit for the nine months ended September 30, 2024, as further discussed below.

Previous wording

Operating expenses decreased by $3,455,746, or 30%, as a result of the following items:

Current wording

Operating expenses decreased by $6,183,732, or 19%, as a result of the following items:

Previous wording

The decrease in operating expenses was primarily due to: (i) a decrease of approximately $3,767,000 in human resource costs, of which approximately $2,226,000 relates to stock-based compensation primarily due to reduced headcount at Ondas Networks and American Robotics and the resulting forfeiture of stock options and RSUs, approximately $596,000 relates to the decreased head count at Ondas Networks, and approximately $945,000 relates to the decreased head count at OAS and synergies achieved by integrating American Robotics and Airobotics; (ii) a decrease of approximately $1,003,000 in professional fees and consulting costs, of which approximately $765,000 relates to legal and accounting fee costs incurred during the six months ended June 30, 2023 for the sale ofSeries A-1 Preferred Stockin Ondas Networks and approximately $238,000 relates to synergies achieved by integrating American Robotics and Airobotics; (iii) a decrease of approximately $3,362,000 in other research and development costs, excluding human resources and travel and entertainment, of which approximately $592,000 relates to settlement of all amounts due to a vendor under previous development and manufacturing agreements during the six months ended June 30, 2024 at American Robotics, approximately $1,368,000 relates to one-time costs incurred during the six months ended June 30, 2023 associated with terminating a development contract at American Robotics, approximately $782,000 relates to synergies achieved by integrating American Robotics and Airobotics, and approximately $620,000 relates to additional development expenses allocated to cost of goods sold at Ondas Networks; (iv) a decrease of approximately $486,000 in other sales and marketing costs, excluding human resources and travel and entertainment related to a decrease in use of third party contractors and consultants; (v) offset by a net increase of approximately $325,000 in all other operating expenses primarily related to increased rent expense.

Current wording

The decrease in operating expenses was primarily due to: (i) a decrease of approximately $1,214,000 in human resource costs, of which approximately $1,474,000 relates to the decreased head count at OAS and synergies achieved by integrating American Robotics and Airobotics, and approximately $409,000 relates to decreased headcount at the Company, partially offset by an increase of approximately $337,000 at Ondas Networks due to increased average headcount from hires in the latter part of 2023, and an increase of approximately $332,000 in stock-based compensation primarily due to new warrants issued during the nine months ended September 30, 2024; (ii) a decrease of approximately $1,370,000 in professional fees and consulting costs, of which approximately $1,787,000 relates to legal and accounting fee costs, primarily for costs incurred during the nine months ended September 30, 2023 for a public offering in 2023 that was not consummated, the acquisition of Airobotics, and legal fees surrounding the acquisition of Ardenna, which were partially recovered in the fourth quarter of 2023, partially offset by an increase of approximately $417,000 related to increased use of third-party contractors and consultants; (iii) a decrease of approximately $3,624,000 in other research and development costs, excluding human resources and travel and entertainment, of which approximately $592,000 relates to settlement of all amounts due to a vendor under previous development and manufacturing agreements during the nine months ended September 30, 2024 at American Robotics, approximately $1,368,000 relates to one-time costs incurred during the nine months ended September 30, 2023 associated with terminating a development contract at American Robotics, approximately $549,000 relates to synergies achieved by integrating American Robotics and Airobotics, and approximately $1,115,000 relates to additional development expenses allocated to cost of goods sold at Ondas Networks; (iv) a decrease of approximately $361,000 in other sales and marketing costs, excluding human resources and travel and entertainment related to a decrease in use of third-party contractors and consultants; (v) partially offset by a net increase of approximately $474,000 in other operating expense primarily related to increased rent expense and other facility costs.

Previous wording

As a result of the foregoing, our operating loss decreased by $193,075 or 2%, to $8,303,590 for the three months ended June 30, 2024, compared with $8,496,665 for the three months ended June 30, 2023. Operating loss decreased primarily as a result of the decrease in operating expenses described above, offset by decreased revenue and gross margin for the three months ended June 30, 2024.

Current wording

As a result of the foregoing, our operating loss decreased by $991,865, or 4%, to $26,091,500 for the nine months ended September 30, 2024, compared with $27,083,365 for the nine months ended September 30, 2023. Operating loss decreased primarily as a result of the decrease in operating expenses described above, partially offset by decreased revenue and gross margin, for the nine months ended September 30, 2024.

Previous wording

Other expense, net decreased by $1,549,258, to $715,035 for the six months ended June 30, 2024, compared with the other expense, net of $2,264,293 for the six months ended June 30, 2023. Other expense, net decreased primarily as a result of an increase in other income of approximately $467,000 from the change in fair value of government grant liability; an increase in interest income of approximately $178,000 due to interest earned on cash deposits; a decrease in interest expense, including amortization of debt discount and debt issuance costs, of approximately $818,000 for the 3% Senior Convertible Notes Due 2025 (the “2022 Convertible Exchange Notes”) and the 3% Series B-2 Senior Convertible Notes (the “2023 Additional Notes”); and an increase in foreign exchange gain, net of approximately $78,000.

Current wording

Total other expense, net decreased by $2,042,145, to $1,580,588 for the nine months ended September 30, 2024, compared with $3,622,733 for the nine months ended September 30, 2023. Total other expense, net decreased primarily as a result of an increase in other income of approximately $676,000 from the change in fair value of government grant liability; a decrease in interest expense of approximately $840,000 primarily related to amortization of debt discount and debt issuance costs; an increase in interest income of approximately $299,000 due to interest earned on cash deposits; a decrease of approximately $132,000 in other expense primarily related to an impairment of deferred offering costs of approximately $116,000 related to the termination of the ATM Agreement during the nine months ended September 30, 2023; and an increase in foreign exchange gain, net of approximately $95,000.

Previous wording

As a result of the net effects of the foregoing, net loss decreased by $5,267,817, or 22%, to $18,145,820 for the six months ended June 30, 2024, compared with $23,413,637 for the six months ended June 30, 2023. Net loss per share of Common Stock, basic and diluted, was $(0.31) for the six months ended June 30, 2024, compared with $(0.47) for the six months ended June 30, 2023.

Current wording

As a result of the net effects of the foregoing, net loss decreased by $3,034,010, or 10%, to $27,672,088 for the nine months ended September 30, 2024, compared with $30,706,098 for the nine months ended September 30, 2023. Net loss per share of Common Stock, basic and diluted, was $(0.46) for the nine months ended September 30, 2024, compared with $(0.62) for the nine months ended September 30, 2023.

Previous wording

The principal use of cash in operating activities for the six months ended June 30, 2024, was to fund the Company’s current expenses primarily related to operating activities necessary to allow us to service and support customers. The decrease in cash flows used in operating activities of $5,590,055 was primarily due to the decrease in net loss of approximately $5,268,000, of which approximately $3,822,000 related to non-cash and credits, including depreciation, amortization of debt discount and issuance costs, amortization of intangibles assets and right of use asset, stock-based compensation, and change in fair value of government grant liability, combined with changes in operating assets and liabilities resulting in a cash inflow of approximately $4,144,000.

Current wording

The principal use of cash in operating activities for the nine months ended September 30, 2024, was to fund the Company’s current expenses primarily related to operating activities necessary to allow us to service and support customers. The decrease in cash flows used in operating activities of $2,748,095 was primarily due to the decrease in net loss of approximately $3,034,000, of which approximately $1,348,000 related to non-cash and credits, including depreciation, amortization of debt discount and issuance costs, amortization of intangibles assets and right of use asset, stock-based compensation, and change in fair value of government grant liability, combined with changes in operating assets and liabilities resulting in a cash inflow of approximately $1,062,000.

Previous wording

The decrease in cash flows provided by investing activities of $3,010,357, relates to an increase of approximately $2,200,000 in payments made for purchase of equipment, software intangibles and patent costs, combined with decrease of approximately $1,049,000 for cash acquired with the Airobotics acquisition in the six months end June 30, 2023, offset by the decrease of approximately $239,000 for cash paid for asset acquisitions in the six months end June 30, 2023.

Current wording

The decrease in cash flows provided by investing activities of $2,304,302, relates to an increase of approximately $1,536,000 in payments made for purchase of equipment, net of proceeds from disposals, software intangibles and patent costs, combined with decrease of approximately $1,049,000 for cash acquired with the Airobotics acquisition in the nine months end September 30, 2023, partially offset by the decrease of approximately $281,000 for cash paid for asset acquisitions in the nine months end September 30, 2023.

Previous wording

The cash flows provided by financing activities increased by approximately $14,044,000 primarily due to proceeds received from the sale of common stock in the Company and options exercised of approximately of $3,867,000 and the sale of preferred stock in Ondas Networks of approximately $4,375,000; the increase of approximately $300,000 in cash proceeds received from government grants; combined with the decrease in cash payments of approximately $5,502,000 on the 2022 Convertible Exchange Notes, government grant liability, and Airobotics related debt. For a summary of our outstanding Long-Term Notes Payable, see Note 8 in the accompanying Notes to unaudited Condensed Consolidated Financial Statements.

Current wording

The decrease in cash flows provided by financing activities of $3,829,302 primarily relates to a decrease in net proceeds received from the sale of preferred stock in Ondas Networks of approximately $10,317,000; a decrease of approximately $3,472,000 in net proceeds from convertible notes, net of issuance costs, net of cash repayments. This decrease in cash flows provided by financing activities is offset by an increase in proceeds received from the sale of common stock in the Company and options exercised of approximately of $7,325,000; an increase of approximately $2,518,000 in proceeds from notes payable, net of issuance costs, net of cash repayments; and an increase of approximately $117,000 in cash proceeds received from government grants, net of payments. For a summary of our outstanding Notes Payable, see Note 8 in the accompanying Notes to unaudited Condensed Consolidated Financial Statements.

Previous wording

We have incurred losses since inception and have funded our operations primarily through debt and the sale of capital stock. As of June 30, 2024, we had an accumulated deficit of approximately $216,506,000. As of June 30, 2024, we had net long-term borrowings outstanding of approximately $2,502,000 net of debt discount and issuance costs of approximately $110,000 and short-term borrowings outstanding of approximately $29,427,000, net of debt discount and issuance costs of approximately $4,975,000. As of June 30, 2024, we had cash and restricted cash of approximately $4,975,000 and a working capital deficit of approximately $22,801,000.

Current wording

We have incurred losses since inception and have funded our operations primarily through debt and the sale of capital stock. As of September 30, 2024, we had an accumulated deficit of approximately $226,032,000. As of September 30, 2024, we had net long-term borrowings outstanding of approximately $2,217,000 net of debt discount and issuance costs of $0 and short-term borrowings outstanding of approximately $30,751,000, net of debt discount and issuance cost of approximately $1,537,000 and a working capital deficit of approximately $22,341,000.

Previous wording

In 2023, we raised approximately $14,692,000 of net proceeds from the sale redeemable preferences shares in Ondas Networks and warrants in Ondas Holdings to third parties, and approximately $9,310,000 from a second convertible debt agreement. In February 2024, we raised gross proceeds of approximately $4,500,000 from issuing additional redeemable preference shares in Ondas Networks and warrants in Ondas Holdings to third parties, and approximately $4,050,000 from issuing common stock of Ondas Holdings and warrants in OAS.

Current wording

In 2023, we raised approximately $14,692,000 of net proceeds from the sale of redeemable preferences shares in Ondas Networks and warrants in Ondas Holdings to third parties, and approximately $9,310,000 from a second convertible debt agreement. In the first nine months of 2024, we raised net proceeds of approximately $4,375,000 from the sale of additional redeemable preferred shares in Ondas Networks and warrants in Ondas Holdings to third parties, approximately $7,327,000 in net proceeds from issuing Common Stock of Ondas Holdings and warrants in OAS, approximately $2,860,000 in net proceeds from issuance of a secured note and convertible note in Ondas Networks, and approximately $300,000 in government grant loans issued to Airobotics. On November 9, 2024, we entered into an agreement with Klear Inc., which provides for financing of accounts receivable, and we have financed approximately $500,000 so far at Ondas Networks.

Previous wording

We expect to fund our operations for the next twelve months from the filing date of this Report from the cash on hand as of June 30, 2024, proceeds from the 2024 financing activities discussed above, gross profits generated from revenue growth, potential prepayments from customers for purchase orders, potential proceeds from warrants issued and outstanding, and additional funds that we may seek through equity or debt offerings and/or borrowings under additional notes payable, lines of credit or other sources. There is substantial doubt that the funding plans will be successful and therefore the conditions discussed above have not been alleviated. As a result, there is substantial doubt about the Company’s ability to continue as a going concern for one year from August 14, 2024, the date the unaudited Condensed Consolidated Financial Statements were available to be issued.

Current wording

We expect to fund our operations for the next twelve months from the filing date of this Quarterly Report on Form 10-Q from the cash on hand as of September 30, 2024, proceeds from the 2024 financing activities discussed above, gross profits generated from revenue growth, potential prepayments from customers for purchase orders, potential proceeds from warrants issued and outstanding, and additional funds that we may seek through equity or debt offerings and/or borrowings under additional notes payable, lines of credit or other sources. There is substantial doubt that the funding plans will be successful and therefore the conditions discussed above have not been alleviated. As a result, there is substantial doubt about the Company’s ability to continue as a going concern for one year from November 12, 2024, the date the unaudited Condensed Consolidated Financial Statements were issued.