Technology Select Sector

Russell 2000

The Cash Burner

Comparable Companies - ONDS

The report covers the period up to 2026-01-12. Insider activity consisted of 25 discretionary sales totaling $12,149,123.62, with no reported purchases. Short interest increased significantly, rising from 2.3% of float in July 2025 to 21.5% of float by December 2025. Institutional ownership data shows Hood River Capital Management LLC and Vanguard Group Inc. as top holders, both increasing their positions in the quarter ending 2025-09-30. Activist filings include a Schedule 13D/A from Charles & Potomac Capital, LLC, indicating a planned disposition of shares due to a nomination for U.S. Ambassador.

CHAIRMAN, CEO AND PRESIDENT

DIRECTOR

CFO, SECRETARY AND TREASURER

The filing states that due to the nomination of Joseph V. Popolo for U.S. Ambassador to the Kingdom of the Netherlands, the Reporting Persons are required to dispose of all Shares beneficially owned by them as soon as practicable but no later than 90 days after Senate confirmation.

The securities were not acquired and are not held for the purpose of or with the effect of changing or influencing the control of the issuer.

The securities were acquired and are held in the ordinary course of business and were not acquired and are not held for the purpose of or with the effect of changing or influencing the control of the issuer.

Eric Ashley Brock

Neil J. Laird

Richard M. Cohen

Randall P. Seidl

Jaspreet Sood

Ron Stern

Eric Ashley Brock's tenure as Chairman and CEO of Ondas Holdings Inc. is marked by significant capital allocation activities, including a notable exchange of subsidiary shares for common stock valued at $9.31 million, approved under specific regulatory exemptions. His direct stock sales in late 2025 reduced his holdings, indicating potential portfolio management or liquidity needs. While the provided data does not detail his performance at prior companies, his current role involves navigating the company's financial strategy, which has seen substantial stock issuances to fund operations and acquisitions, as evidenced by the capital allocation analysis showing significant reliance on external funding.

Exchange of subsidiary shares for Common Stock

Chairman and CEO

Neil J. Laird, as CFO of Ondas Holdings Inc., has been involved in financial operations since June 2025. His prior engagement included an interim CFO services agreement valued at $0.15 million. His capital allocation activities at Ondas, as reflected in the provided data, include RSU vest/sale transactions that reduced his direct holdings. The company's overall capital strategy, which he oversees, has been characterized by significant stock issuances and operational cash burn, with a substantial reliance on external funding. His background includes over 30 years of financial leadership, suggesting a seasoned approach to managing the company's financial complexities.

Services agreement for interim CFO services

Chief Financial Officer

Richard M. Cohen, serving as Lead Independent Director and Chair of the Audit Committee at Ondas Holdings Inc., has a background that includes a Managing Partner role at Cohen & Company and a previous position as Managing Director at Bear Stearns. His capital allocation activities at Ondas, as indicated by the data, include RSU vest/sale transactions that adjusted his direct shareholdings. His oversight role, particularly within the Audit Committee, is crucial given the company's reliance on external funding and its operational cash burn. His experience in investment and finance provides a foundation for his governance responsibilities.

Lead Independent Director

Randall P. Seidl, a Director at Ondas Holdings Inc. and Chair of the Compensation Committee, brings experience as CEO of a private consulting firm and prior executive roles in technology companies. His capital allocation activities at Ondas, as reflected in the provided data, include RSU vest/sale transactions that adjusted his direct shareholdings. His involvement in the Compensation Committee is significant in the context of the company's executive compensation structure and its reliance on stock-based incentives. His technical background in Electrical Engineering from Stanford University complements his strategic oversight role.

Director

Jaspreet Sood, a Director at Ondas Holdings Inc. and Chair of the Nominating and Governance Committee, has a background as a Partner at a venture capital firm focused on deep tech, complemented by an MBA from Harvard Business School and a Computer Science degree from IIT. Her capital allocation activities at Ondas, as indicated by the data, include RSU vest/sale transactions that adjusted her direct shareholdings. Her expertise in venture capital and technology is valuable for her governance role, particularly in areas of strategic direction and board composition, especially within a company that has a history of significant stock issuances to fund its operations.

Ron Stern, a Director at Ondas Holdings Inc., brings extensive experience in distressed debt and special situations investing as the Managing Member of Stern Capital. His background, including a degree from the Wharton School, suggests a strong financial acumen. While the provided data does not detail specific capital allocation events for him at Ondas, his expertise is relevant to the company's financial strategy, which has involved significant stock issuances and operational cash burn. His role on the board likely involves providing critical financial oversight and strategic guidance.

AeroVironment is a technology company focused on designing, developing, manufacturing, and supporting intelligent, multi-domain robotic systems and related services for government agencies and businesses, primarily supplying uncrewed aircraft and ground robot systems to the U.S. DoD and international allies.

Provides uncrewed aerial, ground, and seaborne systems, loitering munitions, and related services.

Offers high-altitude pseudo-satellite systems and other advanced technology solutions.

Kratos is a technology, products, systems, and software company addressing the defense, national security, and commercial markets, focused on rapidly developing and fielding affordable, mission-critical solutions.

Provides C5ISR, cyber, training, and IT solutions for defense and national security customers.

Develops and manufactures unmanned aerial, ground, and seaborne systems and components.

Viasat is a global communications technologies and services provider, focused on making connectivity accessible, available, and secure through its satellite fleet, ground infrastructure, and user terminals for aviation, maritime, enterprise, and government users.

Provides satellite broadband services, in-flight connectivity, and fixed broadband services.

Offers communications gateways, situational awareness, command and control products, and cybersecurity solutions.

Textron is a multi-industrial company that leverages its global network of aircraft, defense, industrial, and finance businesses to provide innovative products and services worldwide.

Manufactures and sells business jets, turboprops, and military trainer aircraft.

Designs, manufactures, and supports helicopters and tiltrotor aircraft.

Provides unmanned systems, specialty aircraft, and other defense and industrial solutions.

Includes products such as fuel systems, tools, and industrial components.

Corporate headquarters are located in Boston, Massachusetts. Ondas Networks has offices and facilities in Sunnyvale, California. American Robotics has offices and facilities in Sparks, Maryland. Airobotics has offices and facilities in Petah Tikva, Israel.

The management team at Ondas Holdings is executing a high-risk, dilutive strategy to pivot the company into a defense-focused hypergrowth platform. Financially, the company is in a 'cash burn' phase, with negative ROIC of -150.4% and operating margins of -176.1% (TTM), funded entirely by massive equity raises that have increased the share count by 67.5% CAGR over two years. While the strategic pivot to defense markets has driven a 208% TTM revenue increase to $24.7M, the capital allocation has been destructive, and the balance sheet strength is a recent artifact of dilution, not operational performance. Incentive alignment is weak, with standard compensation structures and consistent insider selling. The CEO's background is in finance rather than operational scaling, and the board lacks deep expertise in the defense/autonomous systems sector. Consequently, while the team has successfully raised capital to fund the vision, their track record of creating shareholder value and their alignment with that goal remain questionable.

The company operates in a highly regulated business environment. As a manufacturer of commercial Unmanned Aircraft Systems (UAS), the company is subject to various government regulations, restrictions, and requirements. As a manufacturer of consumer products, it is subject to significant government regulations under the Consumer Products Safety Act and similar statutes in international markets. Failure to comply with these regulations could result in sanctions that negatively impact the business. The company also faces risks related to the handling of explosive and flammable materials, which could lead to fires or explosions disrupting manufacturing processes and causing workplace injuries or fatalities.

The company reported having 113 full-time employees.

The company's products have inherent safety risks, including risks of battery fires due to lithium-ion cells, potential for electrocution during repair, and defects or failures due to issues in design, materials, or manufacture. These risks could lead to product liability claims, safety recalls, and adverse publicity. The company is also subject to data privacy regulations such as the California Consumer Privacy Act (CCPA) and the General Data Protection Regulation (GDPR), and faces risks related to unauthorized access or disclosure of personal information, which could harm its reputation and business.

The company is in a high-investment phase characterized by extreme cash burn and dilution, with TTM operating margin at -176.1% despite a 208.4% increase in trailing revenue to $24.7 million.

The Capital Allocation Appendix notes that the negative ROIC reflects a company in investment mode. The P14 Innovation Dossier details that R&D is focused on expanding capabilities (DAA, payloads), but the returns are not yet visible. The M&A strategy is intended to accelerate value creation, but the -1.5x effectiveness score suggests the acquired assets are currently dilutive to returns.

Joseph V. Popolo

3% Series B-1/B-2 Senior Convertible Notes

EV/Sales

Yishay Curelaru

Chief Executive Officer and President of the Company.

Eric A. Brock

Neil Laird

Ondas Holdings Inc. is a leading provider of private wireless, drone, and automated data solutions. The company operates through two primary subsidiaries: Ondas Networks, which provides secure wireless connectivity solutions for mission-critical Industrial Internet of Things (MC-IoT) applications, and Ondas Autonomous Systems (OAS), which develops and integrates fully autonomous drone platforms for aerial data capture and security. OAS wholly-owns Airobotics Ltd. and American Robotics, Inc. The company's solutions are designed to serve and protect critical infrastructure and operations in markets including rail, energy, mining, public safety, and government.

Provides wireless connectivity solutions enabling mission-critical Industrial Internet applications and services (MC-IoT). The wireless networking products are applicable to a wide range of MC-IoT applications, which are most often located at the very edge of large industrial networks. These applications require secure, real-time connectivity with the ability to process large amounts of data at the edge of large industrial networks.

Develops and integrates drone-based solutions focusing on high-performance critical applications for government and Tier-1 commercial enterprises. OAS provides specialized real-time aerial data capturing and aerial protection solutions in complex environments such as urban areas, sensitive and critical facilities, and field area operations. The segment offers a wide suite of supplementary services including AI data analytics, IT implementation, safety planning, certification, training, and maintenance.

Held WACC (15.0%) and Terminal Multiple (15.0x) constant. Solved for the required Year 5 Operating Margin to justify the current Enterprise Value of $4.44B.

Balance Sheet - Supplemental

Balance Sheet

Cash Flow Statement - Supplemental

Cash Flow Statement

Income Statement - Supplemental

Income Statement

Ratios

Valuation

Historical Ratios & Multiples - ONDS

The defense industry is currently in a Golden Age for technology providers, with the DoD shifting toward faster, commercially-driven procurement cycles for autonomous systems. While supply chain disruptions remain a headwind, demand for counter-UAS and unmanned platforms is surging globally, creating a powerful tailwind for companies with battle-tested technologies.

Ondas is at a critical juncture following its $855M capital raise and a series of strategic acquisitions, making the next 12 months a decisive 'show-me' period for the integration of its defense platform.

Achievement of positive EBITDA for operating businesses in the second half of 2026. This is the primary milestone management has set to prove the viability of the scaled defense platform. Reaching this would validate the operating leverage inherent in the business model and address the primary bear concern regarding cash burn.

Integration of the $225M Sentrycs acquisition and realization of cross-selling synergies. Successful integration of Sentrycs' Cyber Over RF technology with the Iron Drone platform would create a differentiated counter-UAS solution, potentially leading to larger contract wins and validating the M&A strategy.

Execution failure in the buy-and-build strategy leading to integration friction and cost overruns. The rapid acquisition of multiple companies (Sentrycs, Apeiro, etc.) creates significant organizational complexity. Failure to integrate these units could lead to a failure to reach the $110M 2026 revenue target and accelerated cash burn.

Further dilutive equity raises to fund operations if EBITDA positivity is delayed. With a TTM operating margin of -176.1%, the company remains dependent on external financing. If revenue growth slows or margins do not improve as guided, the company may be forced to raise capital at depressed valuations.

Liquidation value analysis is not relevant for the company's archetype ('Early-Stage_Hypergrowth') and was not performed.

Cash & Equivalents

Accounts Receivable

Inventory

Short-Term Inv.

Other Current Assets

Net PP&E

Intangibles

Long-Term Inv.

Other Non-Current

Accounts Payable

Current Debt

Deferred Revenue

Tax Liabilities

Other Current Liabilities

Non-Current Debt

Other Non-Current Liabilities

Ondas filed prospectus for resale of 1.67M shares from Sentry CS acquisition.

Ondas Networks extends maturity dates of convertible notes to January 15, 2026.

Brigadier General Patrick Huston appointed COO while retaining General Counsel role.

Ondas executed exchange agreements for OAS convertible notes.

Ondas initiated with a Buy at Stifel

Ron Stern resigned as a director of Ondas Holdings Inc., effective December 12, 2025.

Ondas price target raised to $12 from $10 at Needham

Ondas Wins Strategic Government Tender To Develop And Deploy Autonomous Border-Protection System With Thousands Of Drones

Jane Street Group, LLC and affiliates filed Schedule 13G reporting passive ownership in Ondas Holdings Inc.

Ondas Holdings announced a $35 million strategic investment in Performance Drone Works (PDW).

Ondas Holdings Inc. completed the acquisition of Sentry CS Ltd for $225 million.

The Goldman Sachs Group reported 5.9% beneficial ownership in Ondas Holdings.

Ondas Holdings reported record Q3 2025 results with strategic acquisitions driving growth.

Unavailable

Ondas Holdings announced acquisition of controlling interest in 4M Defense to expand into smart demining.

Safe Pro Group received a $14 million strategic investment led by Ondas Holdings.

Ondas completed acquisition of 51% stake in Smart Precision Optics.

Ondas Places Initial Order For Wasp Attritable Drones From Rift Dynamics For Distribution To U. S. Defense Markets

Exhibit 99.1

ONDAS HOLDINGS ADDS GENERAL PATRICK HUSTON TO ADVISORY BOARD

Ondas' Apeiro Launches Ndaa-Compliant Made-In-The-Usa Combat-Proven Fiber-Optic Spools For Drones And Ground Robotics

Ondas priced $200 million public offering of common stock at $5.00 per share.

Ondas completes acquisition of Apeiro Motion Ltd. for $12M cash.

Ondas Holdings launched Ondas Capital to deploy $150 million in defense and security technologies.

Ondas Holdings appoints Mark Green as Head of Global Corporate Development and M&A.

James Acuna joined Ondas Autonomous Systems Advisory Board.

Safe Pro Group announced an $8.0 million private placement with strategic investments from Ondas Holdings and Unusual Machines.

Ondas Holdings entered agreement to acquire robotics company Apeiro Motion for $12 million.

Ondas announced proposed public offering of common stock.

Ondas achieved record Q2 2025 revenue of $6.3M, a 6-fold YoY increase, driven by global demand for autonomous drone systems.

Ondas made strategic investment in Rift Dynamics for attritable drone systems.

ONDAS HOLDINGS MAKES STRATEGIC INVESTMENT IN RIFT DYNAMICS-ADVANCES PRESENCE IN EUROPE AND GAINS EXCLUSIVE DISTRIBUTION OF LOW-COST ATTRITABLE DRONE SYSTEMS FOR U.S. DEFENSE MARKET

Ondas retired all outstanding convertible notes, strengthening its balance sheet.

Ondas announces Investor Day and reports preliminary Q2 2025 revenue of $6M (6x YoY growth).

Ondas extended maturity dates of multiple notes to December 31, 2025.

Ondas Holdings entered a strategic partnership with Detroit Manufacturing Systems (DMS) for U.S.-based drone manufacturing.

Ondas formed a strategic partnership with Mistral Inc. to accelerate defense sector adoption of autonomous drones.

Ondas to host Investor Day on July 9, 2025 focusing on autonomous systems business.

Ondas announced proposed public offering of common stock and pre-funded warrants.

Ondas secured a $14.3 million order for Optimus drone systems from a major defense customer.

Charles & Potomac Capital filed Amendment No. 5 to Schedule 13D reporting reduced ownership.

Ondas settled December 31, 2024 Additional Notes.

Ondas reported Q1 2025 revenue of $4.2M, a 12-fold YoY increase, driven by OAS growth and reaffirmed $25M 2025 revenue target.

Ondas settled Exchange Notes, reducing debt to $21.1 million.

2025 Annual Meeting scheduled for May 12, 2025 with April 10 record date.

Ondas Networks extends maturity of $1.5M Secured Note to July 23, 2025.

Ondas partnered with Volatus Aerospace for border surveillance using Optimus System.

Ondas Networks completed $2.93 million January 2025 securities offering.

Ron Stern appointed to Ondas Board of Directors.

Amendment to Schedule 13D/A reporting warrant assignment by Charles & Potomac Capital.

Ondas Holdings regains full compliance with Nasdaq minimum bid price requirement.

One Of The World'S Largest Semiconductor Manufacturers Renews Its Contract With Ondas' Airobotics For Drone Aerial Security And Data Services

Ondas Holdings Inc. issued $11.5 million in 3% Series B-2 Senior Convertible Notes on December 17, 2024.

Siemens Mobility and Ondas Networks partner to upgrade Metra's 900MHz rail network.

Nasdaq grants Ondas 180-day extension to regain minimum bid price compliance.

UNITED STATES

Ondas Autonomous Systems received $3.5 million investment from private group.

Ondas Holdings presented its autonomous drone platforms for defense and security markets at its 2024 Investor Day.

Ondas received an $8 million purchase order for Iron Drone Raider systems from a major military customer.

Ondas Holdings Inc. (ONDS) PT Lowered to $1.50 at Maxim Group

Ondas Holdings reported Q2 2024 results, securing initial Iron Drone Raider orders and a US Coast Guard contract amid revenue declines.

Ondas Holdings' American Robotics Secures Key Contract With United States Coast Guard For Maritime Emissions Monitoring To Support Epa Clean Ports Initiatives

Ondas Holdings reported Q1 2024 results with delayed revenue growth due to rail deployment delays and supply chain disruptions.

Ondas Holdings reported record 2023 revenues of $15.7 million, a 638% increase over 2022, driven by commercial adoption of its Optimus System and Ondas Networks products.

Charles & Potomac Capital filed Amendment No. 2 to Schedule 13D reporting additional investments.

Ondas established Ondas Autonomous Holdings (OAH) subsidiary.

Ondas initiated voluntary delisting from Tel Aviv Stock Exchange (TASE).

Ondas regained compliance with Nasdaq minimum bid price requirement.

Ondas Holdings reported Q3 2023 financial results with $10.7 million year-to-date revenue.

Ondas stockholders approved amendment to increase 2021 Stock Incentive Plan shares.

Ondas appointed Timothy Tenne as CEO of American Robotics.

CFO Yishay Curelaru temporarily stepped down due to military draft.

Charles & Potomac Capital, LLC and Joseph V. Popolo filed a Schedule 13D reporting beneficial ownership in Ondas Holdings Inc.

ONDAS HOLDINGS' AIROBOTICS AWARDED APPROXIMATELY $540,000 GRANT FROM THE ISRAEL INNOVATION AUTHORITY TO FURTHER ADVANCE ITS AI-BASED COUNTER-DRONE SYSTEM

Ondas Networks completed $15 million private placement.

Ondas Holdings reported record Q2 2023 revenues of $5.5 million, driven by over 800% growth across its Networks and Autonomous Systems units.

Ondas issued $11.5 million in 3% Series B-2 Senior Convertible Notes.

Ondas Holdings reported Q1 2023 financial results with revenue growth and key industry standard adoption.

Ondas Holdings reported Q4 and full-year 2022 results and reaffirmed 2023 financial outlook.

Airobotics (Ondas subsidiary) acquired Iron Drone assets and launched counter-UAS system.

Ondas reported preliminary 2022 results and formed Ondas Autonomous Systems unit.

BlackRock, Inc. reported reduced ownership below 5% in Ondas Holdings.

Airobotics (Ondas subsidiary) secured $3.5 million order and joint venture with SkyGo in Abu Dhabi.

Ondas Holdings completed the acquisition of Airobotics Ltd. on January 23, 2023.

Ondas received shareholder approval for Airobotics acquisition.

Ondas Holdings reported Q3 2022 results with new rail orders and Airobotics acquisition progress.

Ondas amended equity distribution agreement, reducing offering size to $40 million.

Description of Airobotics' autonomous drone systems business and technology platform.

Ondas entered definitive agreement to acquire Airobotics Ltd.

Ondas Holdings reported Q1 2022 financial results with increased operating losses.

Ondas price target raised to $10 from $9 at Lake Street

Ondas initiated with a Buy at H.C. Wainwright

Ondas is a hyper-growth defense platform that has successfully pivoted to the counter-UAS market, but the current valuation of 179.6x EV/Sales ignores extreme shareholder dilution and deeply negative unit economics. While the $840M pro-forma cash provides runway, the company destroys $1.50 for every $1 invested, and insiders have sold $12.1M in stock with zero purchases, suggesting the market euphoria is disconnected from fundamental value.

Executive Summary

Ondas is transforming into a scaled defense platform through an aggressive buy-and-build strategy, recently validated by a 580% YoY revenue surge in Q3 2025. However, this growth is being funded by extreme shareholder dilution, with the share count growing at a 67.5% CAGR over the last two years. While the $840M pro-forma cash balance provides a significant runway, the current market price of $13.47 reflects a speculative premium that ignores a deeply negative ROIC of -150.4% and consistent insider liquidation.<ul><li>Driver: Strategic pivot to high-demand defense and counter-UAS markets.</li><li>Catalyst: Achievement of EBITDA positivity for operating businesses in the second half of 2026.</li><li>Protection: Fortress balance sheet with $416.3M in net cash following massive 2025 equity raises.</li></ul>Our variant perception is that the market is excessively discounting the stock's fundamental risks due to a fixation on near-term revenue growth and the massive cash war chest, failing to recognize that the underlying unit economics are currently destructive and that the current cash balance was achieved through massive shareholder dilution rather than operational success. While the market celebrates the $110M 2026 revenue target, it ignores the fact that the company destroys $1.50 of capital for every $1 invested, and that insiders have sold $12.1M in stock over the last 12 months with zero open-market purchases.This is a high-risk, venture-style investment in a disruptive technology, where the bet is on the company achieving market leadership and future profitability at scale, justifying the current cash burn. However, at current levels, the bet is priced for a winner-take-all outcome that ignores a historical guidance hit rate of only 28% and a deeply dilutive capital allocation strategy.

Core Investment Rationale

Ondas Holdings operates as a provider of private wireless, drone, and automated data solutions through two primary segments: Ondas Networks and Ondas Autonomous Systems (OAS). Ondas Networks provides the FullMAX software-defined radio (SDR) platform, which enables secure, industrial-grade connectivity for mission-critical applications in rail and energy markets. OAS, which includes the acquisitions of Airobotics and American Robotics, develops fully autonomous drone platforms like the Optimus System and Iron Drone Raider for aerial security and data capture. The company is currently executing a buy-and-build strategy to consolidate the fragmented autonomous systems market. This strategy is centered on Ondas Capital, a program designed to deploy $150M into battle-tested technologies from Ukraine and allied nations to scale them for U.S. production. Revenue is generated through a mix of direct product sales, Software-as-a-Service (SaaS) subscriptions, and non-recurring engineering (NRE) development projects.The company's strategic moat is anchored by its intangible assets and regulatory approvals. Key products include the FullMAX SDR platform, which has been selected by the Association of American Railroads (AAR) as the standard for next-generation rail communications. In the autonomous segment, the Optimus System holds a first-of-its-kind FAA Type Certification for Beyond-Visual-Line-of-Sight (BVLOS) operations without a human operator on-site, providing a significant regulatory barrier to entry. Other core assets include the Iron Drone Raider, an autonomous counter-UAS system, and a portfolio of 36 issued U.S. and international patents that protect its proprietary landing, payload, and communication technologies.Ondas operates in a competitive but rational landscape dominated by Tier 1 defense primes such as AeroVironment (AVAV) and Kratos Defense (KTOS). While these competitors have significantly larger revenue bases (exceeding $1.1B), Ondas is attempting to disrupt the market with its integrated system of systems approach. The competitive environment is currently characterized by high demand and rational pricing, with peers reporting gross margin expansion despite aggressive growth. Ondas currently maintains a gross margin premium of 33.6% compared to the peer median of 24.7%, although this is offset by its significantly smaller scale and higher operating losses.The most important historical story for Ondas is its rapid pivot from a struggling rail-focused connectivity provider to a high-growth defense technology platform. In FY 2024, the company faced a 54.2% revenue decline to $7.2M due to delays in railroad 900 MHz network deployments. This crisis forced a strategic shift toward the defense and counter-UAS sectors, which was validated in late 2024 by a $14.4M military order for Iron Drone and Optimus systems. This pivot culminated in a massive $855M equity raise in 2025, transforming the company's balance sheet and enabling an aggressive acquisition spree, including the $225M purchase of Sentrycs. However, this journey has been defined by extreme shareholder dilution, with the share count exploding at a 67.5% CAGR over the last two years to fund the operational build-out.

Business & Situation

<ul><li>Bull Case: Ondas is a first-mover in the autonomous drone market with unique FAA BVLOS certifications and a $110M revenue target for 2026. The company has a $840M pro-forma cash balance to fund its buy-and-build strategy in a defense sector experiencing a golden age of capital allocation.</li><li>Bear Case: The company is a massive dilution machine with a 67.5% share count CAGR and an ROIC of -150.4%, indicating it destroys capital at a rapid rate. Insiders have sold $12.1M in stock with zero purchases, and the current valuation of 179.6x EV/Sales is nearly 22x higher than the peer median.</li></ul>The consensus view is that Ondas is a high-growth winner in the disruptive defense technology space, with its recent $855M capital raise providing the necessary firepower to dominate the counter-UAS market. Investors are focused on the 580% YoY revenue growth in Q3 2025 and the potential for the company to become a mini-prime contractor for autonomous systems. This narrative is supported by recent Buy ratings from Stifel and Needham, which highlight the massive TAM and the company's strategic pivot as key drivers for a re-rating.The defense industry is currently in a Golden Age for technology providers, with the DoD shifting toward faster, commercially-driven procurement cycles for autonomous systems. While supply chain disruptions remain a headwind, demand for counter-UAS and unmanned platforms is surging globally, creating a powerful tailwind for companies with battle-tested technologies.Our differentiated view is that the market is fixated on current revenue growth and the massive cash balance while underestimating the long-term value destruction of the current buy-and-build strategy. While revenue surged 208% YoY to $24.7M, the share count grew at a 67.5% CAGR, and the company's ROIC of -150.4% indicates that the cost of capturing this market leadership is currently exceeding the value of the assets being acquired. Furthermore, the market ignores the 28% historical revenue hit rate, which suggests that the $110M 2026 target carries significant execution risk that is not reflected in the 179.6x EV/Sales multiple.The debate between the bull case of a winner-take-all defense platform and the bear case of a dilution machine is resolved by the valuation. At 179.6x EV/Sales, the market has already priced in a flawless execution of the 2026 target and a rapid move to 50% gross margins. However, with insiders liquidating $12.1M in stock and a historical guidance hit rate of only 28%, the risk of execution failure is too high to justify the current price. We recommend a Sell with a fair value target of $1.84.Our analytical edge is a focus on underlying unit economics and capital allocation efficiency, which reveals that the company's growth is being bought at an unsustainable cost. While the market focuses on the $110M 2026 revenue target, our analysis of the -1.5x M&A effectiveness score suggests that the current acquisition spree is dilutive to long-term shareholder value.

Core Thesis

CEO Eric Brock has served since 2019, bringing a background in investment banking and M&A advisory from Sutter Securities. While he has successfully navigated the company through a strategic pivot and massive capital raises, he lacks a verifiable track record of operationally scaling a technology company to a successful IPO or exit.Weak. Management has overseen an ROIC of -150.4% and an incremental ROIC of -8.3%, indicating consistent capital destruction. The company has raised $540.8M in stock issuance over the period covered while generating zero returns for shareholders via buybacks or dividends, and recent M&A has an effectiveness score of -1.5x.Credibility is mixed; while management has been candid about railroad delays, the historical guidance hit rate for revenue is only 28%, and the recent $12.1M in insider sales contradicts the high-conviction narrative presented in earnings calls.<ul><li>Board Independence: 80% (4 of 5 directors)</li><li>Chairman/CEO Roles: Combined</li><li>Chairman Tenure: 6 Years</li><li>Insider Ownership: 1.6%</li><li>Shareholder Rights: Majority vote for Charter Amendments, No Poison Pill</li></ul>Net Negative. While management successfully raised $855M to save the company from a working capital deficit, the 67.5% annual dilution and $12.1M in insider sales suggest a lack of alignment with long-term shareholders. The capital allocation skill is rated as weak, given the consistent destruction of capital and dilutive acquisition strategy.

Leadership & Governance

The valuation floor is set at $1.60, representing the Net Cash per Share. This serves as the ultimate backstop in a 'broken growth' scenario where the operating business fails to reach scale and the company is valued solely on its remaining cash balance.The Base Case assumes the company achieves its $36M 2025 revenue target but experiences a deceleration to 50% growth by Year 4 as competitive pressures from AVAV and KTOS intensify. Operating margins improve gradually but remain negative until Year 5, resulting in a fair value of $1.07.The Bull Case assumes successful integration of all acquisitions, achieving the 50% gross margin target by mid-2026 and securing a major DoD program of record. Blue-Sky Potential: $1.85.The Bear Case is defined by a scenario of execution failure, such as failing to reach scale or achieve profitability, leading to continued cash burn and dilutive financing. The final Bear Case value is therefore determined directly by the Bear Case DCF scenario value of $0.00.

Valuation Context

<ul><li>Achievement of positive EBITDA for operating businesses in the second half of 2026. This is the primary milestone management has set to prove the viability of the scaled defense platform. Reaching this would validate the operating leverage inherent in the business model and address the primary bear concern regarding cash burn.</li><li>Integration of the $225M Sentrycs acquisition and realization of cross-selling synergies. Successful integration of Sentrycs' Cyber Over RF technology with the Iron Drone platform would create a differentiated counter-UAS solution, potentially leading to larger contract wins and validating the M&A strategy.</li></ul>Ondas is at a critical juncture following its $855M capital raise and a series of strategic acquisitions, making the next 12 months a decisive 'show-me' period for the integration of its defense platform.

Catalyst Path & Context

<ul><li>Execution failure in the buy-and-build strategy leading to integration friction and cost overruns. The rapid acquisition of multiple companies (Sentrycs, Apeiro, etc.) creates significant organizational complexity. Failure to integrate these units could lead to a failure to reach the $110M 2026 revenue target and accelerated cash burn. The company's current M&A effectiveness score is -1.5x, and operating expenses surged to $18.1M in Q3 2025 as the infrastructure was built out.</li><li>Further dilutive equity raises to fund operations if EBITDA positivity is delayed. With a TTM operating margin of -176.1%, the company remains dependent on external financing. If revenue growth slows or margins do not improve as guided, the company may be forced to raise capital at depressed valuations. The share count has already grown at a 67.5% CAGR, and the company has a history of using stock as currency for both operations and acquisitions.</li></ul>

Method	Implied Value	Weight	Weighted Value
DCF	$1.00	47%	$0.47
Comps	$2.58	53%	$1.38
Total Weighted			$1.84

ONDS

Company Overview

Price History