UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C.  20549

SCHEDULE 14A INFORMATION

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TRANSACTION PROPOSED — YOUR VOTE IS VERY IMPORTANT

Dear Ondas Stockholders:

The board of directors (the “Board”) of Ondas Holdings Inc., a Nevada corporation (“Ondas,” the “Company,” “we,” “us,” or “our”), has approved an Agreement and Plan of Merger (the “Merger Agreement”) by and among the Company, Drone Merger Sub I Inc., a Delaware corporation and a direct wholly-owned subsidiary of the Company (“Merger Sub I”), Drone Merger Sub II Inc., a Delaware corporation and a direct wholly-owned subsidiary of the Company (“Merger Sub II” and, together with Merger Sub I, the “Merger Subs”), American Robotics, Inc., a Delaware corporation (“American Robotics”), and Reese Mozer, solely in his capacity as the representative of American Robotics’ Stockholders (the “American Robotics Stockholders’ Representative”). Under the terms of the Merger Agreement, Merger Sub I will merge with and into American Robotics (“Merger I”), with American Robotics as the surviving entity, and American Robotics will then subsequently and immediately merge with and into Merger Sub II (“Merger II” and, together with Merger I, the “Mergers”), with Merger Sub II continuing as the surviving entity and as a direct wholly-owned subsidiary of the Company. Pursuant to the terms of the Merger Agreement, simultaneously with Merger II, Merger Sub II shall be renamed American Robotics, Inc. The Mergers are subject to customary closing conditions, including approval by the Company’s stockholders of the issuance of common stock, including common stock underlying the Warrants (as defined below), as consideration in connection with the Mergers. The Mergers and the transactions contemplated by the Merger Agreement are referred to herein as the “Transaction.” The Transaction is expected to close in the third quarter of 2021.

Upon completion of the Transaction, Ondas Holdings Inc.’s common stock will continue to trade on the Nasdaq Stock Market LLC (“Nasdaq”), under the symbol “ONDS.” On June 22, 2021, the closing price per share of the Company’s common stock as reported by Nasdaq was $8.05. You are urged to obtain current market quotations for the shares of the Company.

If the Transaction is completed, the Company will acquire American Robotics in exchange for (a) cash consideration in an amount equal to $7,500,000, less certain transaction expenses and indebtedness of American Robotics as described in the Merger Agreement (the “Cash Consideration”); (b) 6,750,000 validly issued, fully paid and non-assessable shares of the Company’s common stock, less certain shares which may be paid as transaction expenses; (c) warrants, in the form of Exhibit E of the Merger Agreement, exercisable for 1,875,000 shares of the Company’s common stock (each a “Warrant,” and collectively the “Warrants”), as such number may be adjusted pursuant to the terms of the Merger Agreement; and (d) the cash released to the American Robotics’ Stockholders from the PPP Loan Escrow Amount (as defined in the Merger Agreement) (if any) and from the Company Stockholders’ Representative Expense Fund (as defined in the Merger Agreement) (if any). Each Warrant entitles the holder to purchase a number of shares of the Company’s common stock at a price equal to the average of the high and low prices of one share of common stock as reported on Nasdaq on the trading day immediately preceding the closing date of the Transaction. Each Warrant shall be exercisable in three equal annual installments commencing on the one year anniversary of the closing date of the Transaction and shall have a term of ten years.

If American Robotics’ PPP loans are not forgiven by the U.S. Small Business Administration (the “SBA”) prior to the closing of the Transaction, a portion of the Cash Consideration equaling indebtedness owed by American Robotics on either of its PPP loans plus an amount equal to the amount of interest that would have accrued on such PPP loans as of their maturity dates will be held in escrow with American Robotics’ PPP lender. If an escrow account is established to hold the PPP Loan Escrow Amount at the closing, such amount or a portion thereof, as applicable, will be distributed as merger consideration to American Robotics’ Stockholders upon a determination by the SBA that one or both of the PPP loans are forgivable under the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”). As of the date of this proxy statement, one of American Robotics’ two PPP loans outstanding as of the date of signing of the Merger Agreement has been forgiven, representing an aggregate amount of $249,732.60 in principal and interest.

Also on the closing date of the Transaction, the Company expects to enter into employment agreements and issue up to 1,375,000 restricted stock units under the Company’s incentive stock plan to key members of American Robotics’ management.

The Transaction cannot be completed unless holders of Ondas common stock approve the issuance of common stock, including common stock underlying the Warrants, as consideration in connection with the Transaction.

In addition to the stock issuance in connection with the Transaction, the Board asks that you approve a proposal to approve an adjournment of the special meeting, if necessary, to solicit additional proxies in favor of the foregoing proposal.

The Company will hold a special meeting of its stockholders to vote on these matters. Whether or not you plan to attend the special meeting, please take the time to cause your shares to be voted by completing and mailing the enclosed proxy card or submitting your proxy by telephone or through the Internet, using the procedures in the proxy voting instructions included with your proxy card. Even if you return the proxy, you may attend the special meeting and vote your shares in person at the meeting.

YOUR VOTE IS IMPORTANT. The issuance of common stock is a condition to completing the Transaction, and as such, at the special meeting Ondas stockholders must approve the proposal relating to this matter in order for the Transaction to close.

This document describes the Transaction and other matters to be considered in more detail. The Company encourages you to read this entire document carefully, including the Merger Agreement, which is included as Annex A, and the section discussing “Risk Factors” relating to the Transaction beginning on page 8.

Ondas looks forward to seeing you at the special meeting and to the successful completion of the Transaction.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of the matters described in this proxy statement or the Ondas common stock to be issued pursuant to the Transaction, or determined if this proxy statement is accurate or adequate. Any representation to the contrary is a criminal offense.

This proxy statement is dated [●], 2021 and, together with the accompanying proxy card, is first being mailed or otherwise delivered to Ondas stockholders as of the record date for the special meeting on or about [●], 2021. 

THIS PROXY STATEMENT INCORPORATES ADDITIONAL INFORMATION

This document incorporates by reference important business and financial information about Ondas from other documents filed with the Securities and Exchange Commission (the “SEC”) that are not included in or delivered with this proxy statement. This information is available to you without charge upon your written or oral request. For a list of the documents incorporated by reference into this proxy statement, see “Where You Can Find More Information.” You can obtain electronic or hardcopy versions of the documents that are incorporated by reference into this proxy statement, without charge, from the Investor Relations section of Ondas’ website or by requesting them in writing or by telephone, in each case as set forth below:

IF YOU WOULD LIKE TO REQUEST DOCUMENTS, PLEASE DO SO BY [●], 2021 IN ORDER TO RECEIVE THEM BEFORE THE SPECIAL MEETING.

SUBMITTING A PROXY ELECTRONICALLY, BY INTERNET, TELEPHONE, OR BY MAIL

Ondas stockholders of record on [●], 2021 may submit their proxies as follows:

If you are a beneficial owner, please refer to your proxy card or the information forwarded by your bank, broker or other holder of record to see which options are available to you.

[INTENTIONALLY LEFT BLANK]

Ondas Holdings Inc.

NOTICE OF SPECIAL MEETING OF STOCKHOLDERS

To Be Held On [●], 2021

Dear Ondas Stockholder:

Ondas Holdings Inc. is pleased to invite you to attend a special meeting of the stockholders of Ondas which will be held on [●], 2021 at [●] a.m., Eastern time, at [●].

The purpose of the Ondas special meeting is to consider and to vote upon the following proposals:

The Board has approved the Mergers and related transactions, the Merger Agreement and the other agreements relating to the Mergers and related transactions, and determined that the Mergers and related transactions, the Merger Agreement and the other agreements relating to the Mergers and related transactions, are advisable and in the best interests of Ondas and its stockholders and unanimously recommends that Ondas stockholders vote “FOR” the issuance of shares of Ondas common stock, including shares of common stock underlying the Warrants, in connection with the Transaction and “FOR” the adjournment of the special meeting, if necessary, to solicit additional proxies in favor of the Stock Issuance Proposal.

Your vote is very important. The Stock Issuance Proposal is a condition to completing the Transaction, and as such, Ondas stockholders must approve this proposal in order for the Transaction to be completed.

THE BOARD UNANIMOUSLY RECOMMENDS THAT THE ONDAS STOCKHOLDERS APPROVE THE STOCK ISSUANCE PROPOSAL AND ADJOURNMENT PROPOSAL.

The close of business on [●], 2021 has been fixed as the record date for the special meeting (the “Record Date”). Only holders of record of Ondas common stock on the Record Date are entitled to notice of, and to vote at, the special meeting or any adjournments or postponements of the special meeting. A list of holders of common stock entitled to vote at the special meeting will be available for examination by any Ondas stockholder for any purpose germane to the special meeting at Ondas’ principal executive offices at 61 Old South Road, #495, Nantucket, Massachusetts 02554, for ten days before the special meeting, during normal business hours, and at the time and place of the special meeting as required by law.

Ondas directs your attention to the proxy statement accompanying this notice for more detailed information regarding the matters to be acted upon at the special meeting. You are encouraged to read the entire proxy statement carefully, including the Merger Agreement, which is included as Annex A to the proxy statement, and the section titled “Risk Factors” beginning on page 8.

SO THAT YOUR SHARES WILL BE REPRESENTED WHETHER OR NOT YOU ATTEND THE SPECIAL MEETING, PLEASE SUBMIT A PROXY AS SOON AS POSSIBLE BY MAIL, BY TELEPHONE OR THROUGH THE INTERNET. INSTRUCTIONS ON THESE DIFFERENT WAYS TO SUBMIT YOUR PROXY ARE FOUND ON THE ENCLOSED PROXY FORM. YOU MAY REVOKE YOUR PROXY AT ANY TIME BEFORE IT IS VOTED AT THE SPECIAL MEETING. REMEMBER, YOUR VOTE IS IMPORTANT, SO PLEASE ACT TODAY!

TABLE OF CONTENTS

RISK FACTORS

In addition to the other information included and incorporated by reference into this proxy statement, including the matters addressed in “Cautionary Statement Regarding Forward-Looking Statements” below, you should carefully consider the following risk factors before deciding how to vote on the matters presented to stockholders at the special meeting. In addition to the risk factors set forth below, you should read and consider other risk factors specific to Ondas’ business and securities that will also affect the combined company after the Transaction, which are described in Part I, Item 1A of Ondas’ Annual Report on Form 10-K for the year ended December 31, 2020, which was filed with the SEC on March 8, 2021, and all of which are incorporated by reference into this proxy statement. If any of the risks described below or in the periodic reports incorporated by reference into this proxy statement actually occur, the business, financial condition, results of operations, prospects, or stock price of Ondas or the combined company could be materially adversely affected. See “Where You Can Find More Information.”

Risks Related to the Transaction

Completion of the Transaction is subject to the conditions contained in the Merger Agreement and if these conditions are not satisfied, the Transaction will not be completed.

The completion of the Transaction is subject to various closing conditions, including but not limited to (a) the Company obtaining stockholder approval of the Stock Issuance Proposal, and (b) the shares of the common stock to be issued as consideration, including shares of common stock underlying Warrants, in the Transaction being approved for listing on Nasdaq. Also, the Company may need to obtain approval from the United States Department of Transportation as a condition to closing if the Company is not a U.S. citizen under Department of Transportation rules.

Many of the conditions to the closing of the Transaction are not within our control, and we cannot predict with certainty when or if these conditions will be satisfied. The failure to satisfy any of the required conditions could delay the completion of the Transaction or prevent it from occurring. Any delay in completing the Transaction could cause us not to realize some or all of the benefits that we expect to achieve if the Transaction is successfully completed within the expected timeframe. There can be no assurance that the conditions to the closing of the Transaction will be satisfied or that the Transaction will be completed or that if completed we will realize the anticipated benefits.

Failure to complete the Transaction could negatively impact our stock price and our future business and financial results.

If the Transaction is not completed for any reason, our ongoing business may be adversely affected and, without realizing any of the benefits of having completed the Transaction, we could be subject to a number of negative consequences, including, among others: (i) we may experience negative reactions from the financial markets, including negative impacts on our stock price; (ii) we will still be required to pay certain significant costs relating to the Transaction, including legal, accounting, and financial advisor costs; and (iii) matters related to the Transaction (including integration planning) require substantial commitments of our time and resources, which could result in our inability to pursue other opportunities that could be beneficial to us. If the Transaction is not completed or if completion of the Transaction is delayed, any of these risks could occur and may adversely affect our business, financial condition, financial results, and stock price.

The Transaction will involve substantial costs.

We have incurred, and expect to continue to incur, a number of non-recurring costs associated with the Transaction. The substantial majority of the non-recurring expenses will consist of transaction and regulatory costs related to the Transaction. We will also incur transaction fees and costs related to formulating and implementing integration plans, including system consolidation costs and employment-related costs. We continue to assess the magnitude of these costs, and additional unanticipated costs may be incurred from the Transaction and integration. Although we anticipate that the elimination of duplicative costs and the realization of other efficiencies and synergies related to the integration should allow us to offset integration-related costs over time, this net benefit may not be achieved in the near term, or at all.

Risks Related to the Combined Company if the Transaction is Completed

Our business relationships, those of American Robotics or the combined company may be subject to disruption due to uncertainty associated with the Transaction.

Parties with which we or American Robotics do business may experience uncertainty associated with the Transaction, including with respect to current or future business relationships with us, American Robotics or the combined company. Our and American Robotics’ business relationships may be subject to disruption, as customers, distributors, suppliers, vendors, and others may seek to receive confirmation that their existing business relationships with us or American Robotics, as the case may be, will not be adversely impacted as a result of the Transaction or attempt to negotiate changes in existing business relationships or consider entering into business relationships with parties other than us, American Robotics, or the combined company as a result of the Transaction. Any of these other disruptions could have a material adverse effect on our or American Robotics’ business, financial condition, or results of operations or on the business, financial condition or results of operations of the combined company, and could also have an adverse effect on our ability to realize the anticipated benefits of the Transaction.

If we are unable to implement and maintain effective internal control over financial reporting following completion of the Transaction, we may fail to prevent or detect material misstatements in our financial statements, in which case investors may lose confidence in the accuracy and completeness of our financial reports and the market price of our securities may decline.

We and American Robotics currently maintain separate internal control over financial reporting with different financial reporting processes and different process control software. We plan to integrate our internal control over financial reporting with that of American Robotics. We may encounter difficulties and unanticipated issues in combining our respective accounting systems due to the complexity of the financial reporting processes. We may also identify errors or misstatements that could require audit adjustments. If we are unable to implement and maintain effective internal control over financial reporting following completion of the Transaction, we may fail to prevent or detect material misstatements in our financial statements, in which case investors may lose confidence in the accuracy and completeness of our financial reports and the market price of our securities may decline.

American Robotics may have liabilities that are not known, probable or estimable at this time.

After the Transaction, American Robotics will remain subject to certain past, current, and future liabilities. There could be unasserted claims or assessments against or affecting American Robotics, including the failure to comply with applicable laws and regulations. In addition, there may be liabilities of American Robotics that are neither probable nor estimable at this time that may become probable or estimable in the future, including indemnification requests received from customers of American Robotics relating to claims of infringement or misappropriation of third party intellectual property or other proprietary rights, tax liabilities arising in connection with ongoing or future tax audits and liabilities in connection with other past, current and future legal claims and litigation. Any such liabilities, individually or in the aggregate, could have a material adverse effect on our financial results. We may learn additional information about American Robotics that adversely affects us, such as unknown, unasserted, or contingent liabilities and issues relating to compliance with applicable laws or infringement or misappropriation of third party intellectual property or other proprietary rights.

Ondas stockholders will experience dilution as a consequence of the issuance of the common stock in connection with the Transaction.

Ondas stockholders will experience dilution upon the issuance of additional shares of common stock pursuant to the Merger Agreement. Such dilution will, among other things, limit the ability of the current Ondas stockholders to influence management of Ondas, including through the election of directors following the Transaction.

Ondas may experience difficulties integrating American Robotics’ business.

Achieving the anticipated benefits of the Transaction will depend in significant part upon whether Ondas and American Robotics integrate their businesses in an efficient and effective manner. Ondas has been able to conduct only limited planning regarding the integration of the companies following the Transaction and has not yet determined the exact nature of how the businesses and operations of the companies will be combined after the Transaction. The actual integration may result in additional and unforeseen expenses, and the anticipated benefits of the integration plan may not be realized. The companies may not be able to accomplish the integration process smoothly, successfully or on a timely basis. The necessity of coordinating geographically separated organizations, systems of controls, and facilities and addressing possible differences in business backgrounds, corporate cultures and management philosophies may increase the difficulties of integration. The companies operate numerous systems and controls, including those involving management information, purchasing, accounting and finance, sales, billing, employee benefits, payroll and regulatory compliance. The integration of operations following the Transaction will require the dedication of significant management and external resources, which may temporarily distract management’s attention from the day-to-day business of the combined company and be costly. Employee uncertainty and lack of focus during the integration process may also disrupt the business of the combined company. Any inability of management to successfully and timely integrate the operations of the two companies could have a material adverse effect on the business and results of operations of the combined company.

The combined company may not fully realize the anticipated benefits of the Transaction within the timing anticipated or at all.

Ondas and American Robotics entered into the Merger Agreement because each company believes that the Transaction will be beneficial to each of Ondas and American Robotics primarily as a result of the anticipated benefits resulting from the combined company’s operations. The companies may not be able to achieve the anticipated long-term strategic benefits of the Transaction. An inability to realize the full extent of, or any of, the anticipated benefits of the Transaction, as well as any delays that may be encountered in the integration process, which may delay the timing of such benefits, could have an adverse effect on the business and results of operations of the combined company, and may affect the value of Ondas common stock after the completion of the Transaction.

Charges to earnings resulting from the application of the acquisition method of accounting may adversely affect the market value of Ondas common stock following the Transaction.

In accordance with GAAP, Ondas will be considered the acquiror of American Robotics for accounting purposes. Ondas will account for the Transaction using the acquisition method of accounting. There may be charges related to the acquisition that are required to be recorded to Ondas’s earnings that could adversely affect the market value of Ondas common stock following the completion of the Transaction. Under the acquisition method of accounting, Ondas will allocate the total purchase price to the assets acquired, including identifiable intangible assets, and liabilities assumed from American Robotics based on their fair values as of the date of the completion of the Transaction, and record any excess of the purchase price over those fair values as goodwill. For certain tangible and intangible assets, revaluating them to their fair values as of the completion date of the Transaction may result in Ondas incurring additional depreciation and amortization expense that may exceed the combined amounts recorded by Ondas and American Robotics prior to the Transaction. This increased expense will be recorded by Ondas over the useful lives of the underlying assets. In addition, to the extent the value of goodwill or intangible assets were to become impaired after the Transaction, Ondas may be required to incur charges relating to the impairment of those assets.

The combined company’s goodwill or other intangible assets may become impaired, which could result in material non-cash charges to its results of operations.

The combined company will have goodwill and other intangible assets resulting from the Transaction. At least annually, or whenever events or changes in circumstances indicate a potential impairment in the carrying value as defined by GAAP, the combined company will evaluate this goodwill and other intangible assets for impairment based on the fair value of each reporting unit. Estimated fair values could change if there are changes in the combined company’s capital structure, cost of debt, interest rates, capital expenditure levels, operating cash flows, or market capitalization. Impairments of goodwill or other intangible assets could require material non-cash charges to the combined company’s results of operations.

The combined company may be unable to manage its growth effectively.

The combined company’s growth strategy will place significant demands on its financial, operational and management resources. In order to continue its growth, the combined company may need to add administrative and other personnel, and will need to make additional investments in operations and systems. There can be no assurance that the combined company will be able to find and train qualified personnel, or do so on a timely basis, or expand its operations and systems to the extent, and in the time, required.

The combined company may be unable to execute its acquisition growth strategy.

The combined company’s ability to execute its growth strategy depends in part on its ability to identify and acquire desirable acquisition candidates as well as its ability to successfully integrate American Robotics’ operations into its business. The consolidation of Ondas’s operations with the operations of American Robotics will present significant challenges to management, particularly during the initial phases of combining the operations of Ondas and American Robotics.

Additional factors may negatively impact the combined company’s growth strategy. The combined company’s strategy may require spending significant amounts of capital. If the combined company is unable to obtain additional needed financing on acceptable terms, it may need to reduce the scope of its acquisition growth strategy, which could have a material adverse effect on its growth prospects. If any of the aforementioned factors force management to alter the combined company’s growth strategy, the combined company’s growth prospects could be adversely affected.

Our largest stockholders may have the ability to exert substantial influence over actions to be taken or approved by our stockholders.

After the closing of the Transaction, the executive officers and directors and their affiliates of the combined company will beneficially own approximately [●%] of the voting power in the combined company. As a result, these individuals may have the ability to exert substantial influence over actions to be taken or approved by our stockholders, including the election of directors and any transactions involving a change of control.

In the future, our largest stockholders may acquire or dispose of shares of our common stock and thereby increase or decrease their ownership stake in us. Significant fluctuations in the levels of ownership of our largest stockholders could impact the volume of trading, liquidity, and market price of our common stock.

The loss of key personnel could have a material adverse effect on the combined company’s financial condition, results of operations and growth prospects.

The success of the combined company will depend on the continued contributions of key employees and officers. The loss of the services of key employees and officers, whether such loss is through resignation or other causes, or the inability to attract additional qualified personnel, could have a material adverse effect on the combined company’s financial condition, results of operations and growth prospects.

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

This proxy statement, as well as information included in oral statements or other written statements made or to be made by us, contain statements that constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements generally can be identified by words such as “anticipates,” “believes,” “estimates,” “expects,” “intends,” “plans,” “predicts,” “projects,” “will be,” “will continue,” “will likely result,” and similar expressions. Forward-looking statements are neither historical facts nor assurances of future performance. These forward-looking statements are based on current expectations and assumptions that are subject to risks and uncertainties, which could cause our actual results to differ materially from those reflected in the forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed in Ondas’s Annual Report on Form 10-K for the year ended December 31, 2020, which was filed with the SEC on March 8, 2021, and incorporated by reference into this proxy statement, and in particular, the risks discussed under the caption “Risk Factors” included in this proxy statement. We undertake no obligation to revise or publicly release the results of any revision to these forward-looking statements, except as required by law. Given these risks and uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements.

PROPOSAL 1: THE STOCK ISSUANCE PROPOSAL

The following discussion contains important information relating to the Transaction. The Merger Agreement is included as Annex A to this proxy statement. Ondas encourages you to carefully read the Merger Agreement in its entirety because it is the principal legal agreement that governs the Mergers. Capitalized terms used but not defined herein have the meanings ascribed to such terms in the Merger Agreement attached hereto as Annex A.

The Companies

Ondas Holdings Inc.

Ondas Holdings Inc., through its wholly-owned subsidiary, Ondas Networks Inc., provides wireless connectivity solutions enabling mission-critical Industrial Internet applications and services. We refer to these applications as the Mission-Critical Internet of Things (“MC-IoT”). The Company’s wireless networking products are applicable to a wide range of MC-IoT applications, which are most often located at the very edge of large industrial networks. These applications require secure, real time connectivity with the ability to process large amounts of data at the edge of large industrial networks. Such applications are required in all of the major critical infrastructure markets, including rail, electric grids, drones, oil and gas, and public safety and government, where secure, reliable and fast operational decisions are required in order to improve efficiency and ensure a high degree of safety and security. We design, develop, manufacture, sell and support FullMAX, our patented, Software Defined Radio (“SDR”) platform for secure, licensed, private, wide-area broadband networks. Our customers install FullMAX systems in order to upgrade and expand their legacy wide-area network (“WAN”) infrastructure. Our MC-IoT intellectual property has been adopted by the Institute of Electrical and Electronics Engineers (“IEEE”), the leading worldwide standards body in data networking protocols, and forms the core of the IEEE 802.16s standard. Because standards-based communications solutions are preferred by our mission-critical customers and ecosystem partners, Ondas has taken a leadership position in IEEE as it relates to wireless networking for industrial markets. As such, management believes this standards-based approach supports the adoption of the Company’s technology across a burgeoning ecosystem of partners and end markets.

Our FullMAX SDR platform is an important and timely upgrade solution for privately-owned and operated wireless WANs, leveraging Internet Protocol-based communications to provide more reliability and data capacity for our mission-critical infrastructure customers. Critical infrastructure markets throughout the globe have reached an inflection point where legacy serial and analog based protocols and network transport systems no longer meet industry needs. In addition to offering enhanced data throughput, FullMAX is an intelligent networking platform enabling the adoption of sophisticated operating systems and equipment supporting next-generation MC-IoT applications over wide field areas. These new MC-IoT applications and related equipment require more processing power at the edge of large industrial networks and the efficient utilization of network capacity and scarce bandwidth resources which can be supported by the “Fog-computing” capability integrated in our end-to-end network platform. Fog-computing utilizes management software to enable edge compute processing and data and application prioritization in the field enabling our customers more reliable, real-time operating control of these new, intelligent MC-IoT equipment and applications at the edge.

We sell our products and services globally through a direct sales force and value-added sales partners to critical infrastructure providers including major rail operators, commercial and industrial drone operators, electric and gas utilities, water and wastewater utilities, oil and gas producers and pipeline operators, and for other critical infrastructure applications in areas such as homeland security and defense, and transportation. We continue to develop our value-added reseller relationships which today include a major strategic partnership with Siemens Mobility for the development of new types of wireless connectivity for the North American Rail. In addition, Ondas and JVCKenwood, a global supplier of Land Mobile Radio (“LMR”) systems, have jointly responded to a request from the rail industry for the design and delivery of a next generation data and voice platform. We believe our Siemens’ partnership and our joint effort with JVCKenwood are indicative of the potential for additional Tier 1 partnerships in our other vertical markets including securing reseller relationships with major suppliers to the worldwide government and homeland security markets. These partnerships are being driven by the flexibility of our FullMAX software to support legacy industrial protocols (e.g. Push to Talk Voice, Dial-up Serial Data Communications, and Advanced Train Control System – ATCS) while simultaneously operating our state of the art MC-IoT protocols. This dual and multi-mode software capability provides major industrial customers with a seamless migration path to advanced internet-protocol-based networks. Over time, these legacy functions, like Push to Talk Voice and ATCS, are transformed into just several of many new data applications we can support.

American Robotics, Inc.

American Robotics, a privately-owned company, is a leading developer of highly automated commercial drone systems and the first and only company approved by the FAA to operate its drones beyond-visual-line-of-sight (“BVLOS”) without a human operator onsite. American Robotics’ Scout System™ is a highly automated, AI-powered drone system capable of continuous, unattended operation and is marketed as a “drone-in-a-box” turnkey data solution service under a Robot-as-a-Service (“RAAS”) business model. American Robotics was founded by leading roboticists from Carnegie Mellon and Stanford with a shared vision for bringing robotic technology out of the lab and into the real-world to solve global challenges.

The American Robotics team is comprised of expert engineers, entrepreneurs, business leaders, and industry veterans. American Robotics has a high margin, recurring revenue RAAS business model with a deep customer pipeline in industrial and agriculture markets.

American Robotics’ Scout System is the first and only drone system to receive FAA regulatory approval for operations without a human operator onsite. This gives the company an exclusive first-mover advantage to unlock the commercial drone market by overcoming the need for costly visual observers to be on the ground during every drone flight. With humans removed from the field and data processing achieved at the edge, users can achieve a 10X+ reduction in data acquisition costs.

The Scout System™ is the ultimate mobile data gathering application for wide field area operations in industrial, agricultural and governmental settings with the drone residing as a high-value mobile edge device in a Mission Critical IoT (MC-IoT) network deployment. The Scout System consists of:

The Transaction

Structure of the Transaction

Subject to the terms and conditions of the Transaction, Ondas will acquire American Robotics through the Merger Subs. Merger Sub I will merge with and into American Robotics, with American Robotics continuing as the surviving entity, and American Robotics will then subsequently and immediately merge with and into Merger Sub II, with Merger Sub II continuing as the surviving entity and as a direct wholly-owned subsidiary of Ondas. Pursuant to the terms of the Merger Agreement, simultaneously with Merger II, Merger Sub II shall be renamed American Robotics, Inc.

Upon consummation of the Transaction, Ondas’ common stock will continue to trade on Nasdaq under the symbol “ONDS.”

Consideration

Ondas Stockholders. No consideration is being paid to Ondas stockholders in the Transaction. Ondas stockholders will continue to own their existing shares of Ondas common stock after the Transaction.

Holders of Interests in American Robotics. If the Transaction is completed, American Robotics’ stockholders will receive (a) cash consideration in an amount equal to $7,500,000, less certain transaction expenses and indebtedness of American Robotics as described in the Merger Agreement; (b) 6,750,000 validly issued, fully paid and non-assessable shares of the Company’s common stock (less certain shares, if any, which may be paid as transaction expenses); (c) Warrants, in the form of Exhibit E of the Merger Agreement, exercisable for 1,875,000 shares of the Company’s common stock, as such number may be adjusted pursuant to the terms of the Merger Agreement; and (d) the cash released to the American Robotics’ Stockholders from the PPP Loan Escrow Amount (as defined in the Merger Agreement) (if any) and from the Company Stockholders’ Representative Expense Fund (as defined in the Merger Agreement) (if any). Each Warrant entitles the holder to purchase a number of shares of the Company’s common stock at a price equal to the average of the high and low prices of one share of common stock as reported on Nasdaq on the trading day immediately preceding the closing date of the Transaction. Each Warrant shall be exercisable in three equal annual installments commencing on the one year anniversary of the closing date of the Transaction and shall have a term of ten years.

Holders of “in the money” stock options of American Robotics that are vested or that will vest at the closing of the Transaction can elect to either exercise such options for shares in American Robotics or to convert such options into stock options or warrants of Ondas. Holders of “in the money” stock options of American Robotics that are unvested and will not become vested at the closing of the Transaction will be converted into stock options of Ondas. Ondas and American Robotics will work in good faith before the closing to determine the Equity Award Exchange Ratio (as defined in the Merger Agreement) which will determine the number of options or warrants in Ondas that will be issued for such stock options of American Robotics. Additionally, Ondas and American Robotics will also work in good faith before the closing of the Transaction to equitably reduce the number of Ondas Warrants that will be issued as part of the consideration in an amount equal to the value of the Ondas stock options and warrants being issued in exchange for such stock options of American Robotics.

If American Robotics’ PPP loans are not forgiven by the SBA prior to the closing of the Mergers, a portion of the Cash Consideration equaling Indebtedness owed by American Robotics on either of its PPP loans plus an amount equal to the amount of interest that would have accrued on such PPP loans as of their maturity dates will be held in escrow with American Robotics’ PPP lender. If an escrow account is established to hold the PPP Loan Escrow Amount at the closing, such amount or a portion thereof, as applicable, will be distributed as merger consideration to American Robotics’ Stockholders upon a determination by the SBA that one or both of the PPP loans are forgivable under the CARES Act. As of the date of this proxy statement, one of American Robotics’ two PPP loans outstanding as of the date of signing of the Merger Agreement has been forgiven, representing an aggregate amount of $249,732.60 in principal and interest.

Also on the closing date of the Transaction, the Company expects to enter into employment agreements and issue up to 1,375,000 restricted stock units under the Company’s incentive stock plan to key members of American Robotics’ management.

Background of the Transaction

On January 29, 2020, Eric Brock, Chairman and Chief Executive Officer of the Company, was introduced to an American Robotics shareholder and board advisor (the “American Robotics board advisor”). The American Robotics board advisor has no material relationships with the Company. During the telephonic meeting, the American Robotics board advisor shared with Mr. Brock an overview of American Robotics Scout System™ platform and information regarding the prospects for Scout™ to receive FAA approval for highly automated BVLOS operations without a human operator onsite. Mr. Brock shared an overview of Ondas Networks and its FullMAX wireless platform.

From January 29, 2020 to January 15, 2021, the Company’s management team had no further contact with American Robotics.

On February 5, 2020, American Robotics retained HamiltonClark Sustainable Capital, Inc. (“HamiltonClark”) to assist American Robotics as a financial advisor. This engagement paused during 2020 awaiting FAA approvals.

On January 14, 2021, American Robotics received FAA approval to operate the highly-automated Scout System™ and BVLOS for research and development including for industrial applications. On or around that day, Mr. Brock reached out to the American Robotics board advisor and Reese Mozer, Chief Executive Officer of American Robotics, and Vijay Somandepalli, Chief Technology Officer of American Robotics, to discuss the FAA approval process and American Robotics’ business plan. Discussions between the management teams of the Company and American Robotics began on February 4, 2021.

On January 14, 2021, American Robotics re-engaged HamiltonClark as a financial advisor.

On January 26, 2021, Mr. Brock spoke to the American Robotics board advisor via telephone and learned that American Robotics had developed a business expansion plan and was launching a process to engage investors to raise capital or sell the company. Mr. Brock expressed interest in discussing opportunities for strategic cooperation and investment. The American Robotics board advisor noted he would share details of this conversation with Mr. Mozer and his management team.

On February 4, 2021, Mr. Brock held a telephonic meeting with Mr. Mozer to discuss the businesses of American Robotics and Ondas Networks. Mr. Mozer noted that the American Robotics Board of Directors was considering its strategic alternatives and was likely to commence a formal process to secure capital or sell American Robotics. Mr. Mozer noted that the management team preferred a path to remain with American Robotics and execute the growth plan if the company were acquired.

On February 9, 2021, Mr. Brock and Dr. Somandepalli held an introductory telephonic meeting to explore technology and marketing synergies between the two companies.

On February 15, 2021, Mr. Mozer introduced Mr. Brock to representatives of HamiltonClark during a telephonic meeting. The representatives of HamiltonClark explained their role in managing a formal sales process on behalf of the American Robotics Board of Directors. Mr. Brock provided an overview of the Ondas Networks business, and the group held a discussion regarding the business and financial outlook for American Robotics.

On February 16, 2021, the Company and American Robotics entered into a confidentiality agreement.

On February 16, 2021, Mr. Brock, Stewart Kantor, President, Chief Financial Officer, Secretary and Treasurer of the Company, and Mr. Mozer held discussions during a telephonic meeting focused on the initial financial diligence required to understand the respective business opportunities of each company, financing requirements, if any, and the opportunity for strategic cooperation and the related business and financial benefits. On that same day, the companies held a technical telephonic meeting to discuss in detail specific aspects of the Ondas wireless platform and American Robotics Scout System™. Mr. Brock and Mr. Kantor were joined by Guy Simpson, Chief Operating Officer of Ondas Networks, and Martin Paget, Director of Technical Solutions of Ondas Networks. Mr. Mozer and Dr. Somandepalli attended the technical meeting for American Robotics.

On February 17, 2021, Mr. Mozer provided the Company a Confidential Information Memorandum and access to a diligence data room. Mutual due diligence proceeded over the next several weeks on financial, operational, regulatory, accounting, information systems, legal, tax, environmental, labor and other matters.

On February 18, 2021, Ondas held an internal telephonic due diligence meeting attended by Messrs. Brock, Kantor, Simpson, and Paget. The meeting was also attended by Susan Roberts, an aviation and UAS expert, who the Company had engaged as a consultant to assist in managing Ondas’ UAS business efforts and explore opportunities to further grow the Company’s business in UAS and drone markets. Mrs. Roberts shared her independent analysis of American Robotics technical platform, standing with the FAA and the value of the FAA approval for remote automated BVLOS operation of the Scout System™.

On February 19, 2021, Messrs. Brock and Kantor hosted a telephonic meeting to share a business and financial outlook focused on the Company. Mr. Mozer, Dr. Somandepalli and representatives of HamiltonClark attended the meeting.

On February 21, 2021, Messrs. Brock and Mozer and a representative of HamiltonClark held a telephonic meeting to initiate preliminary discussions about the terms of an acquisition of American Robotics by the Company. Both companies discussed valuation concepts, structures and timelines. The representative of HamiltonClark stressed that American Robotics was continuing a process of reviewing strategic opportunities and had received substantial interest from other potential acquirors.

On February 22, 2021, the Company held an internal telephonic due diligence meeting attended by Messrs. Brock, Kantor, Simpson, and Paget. Mrs. Roberts, the Company’s consultant, also attended and presented further analysis of American Robotics’ technical and regulatory position. Also, Mrs. Roberts shared some additional information regarding the competitive environment in the UAS and “drone-in-a-box” markets. The parties discussed valuation approaches and comparable transactions.

On March 4, 2021, Mr. Brock visited American Robotics headquarters in Marlborough, Massachusetts for further in-person diligence, a facility tour and for a flight demonstration for the Scout System™. Mr. Mozer, Dr. Somandepalli and representatives of HamiltonClark were present for this visit. In connection with Mr. Brock’s visit, Mr. Brock was also provided additional technical information regarding the Scout System™ base station and Scout™ drone vehicle and the related software analytics capabilities.

On March 4, 2021, the Company provided American Robotics a preliminary draft term sheet for a proposed acquisition of American Robotics by the Company, which included the following terms: 6,250,000 shares of the Company’s common stock, warrants exercisable for 1,875,000 shares of the Company’s common stock and 1,875,000 restricted stock units to American Robotics’ senior management.

From March 4 to April 14, 2021, the management teams of the Company and American Robotics negotiated the term sheet.

On March 9, 2021, the Company held telephonic meetings with certain American Robotics customers as part of its business diligence, which list was compiled by Messrs. Brock and Mozer. The telephonic meetings were attended by Messrs. Brock, Kantor, Simpson, and Paget.

On March 10, 2021, Mr. Mozer contacted Mr. Brock via telephone to express interest in moving forward with exploring a proposed transaction. Mr. Mozer advised Mr. Brock that American Robotics had attracted serious interest from other suitors, though it preferred a strategic transaction with the Company, subject to finalizing the term sheet with the Company.

On March 10, 2021, Messrs. Brock and Mozer preliminarily discussed in a telephonic meeting the financial terms of a possible acquisition.

On April 7, 2021, Messrs. Brock and Mozer discussed the proposed transaction further in a telephonic meeting and Mr. Mozer requested (i) a $7,500,000 cash payment (“Cash Consideration”) and (ii) a $2.0 million loan upon execution of the term sheet (the “Bridge Note”). The loan was intended to help fund American Robotics hiring and inventory expansion to support growing customer demand.

On April 9, 2021, Messrs. Brock, Kantor, Mozer and Somandepalli, representatives of HamiltonClark, and representatives of Akerman, legal counsel for Ondas, and representatives of Hogan Lovells, legal counsel for American Robotics, held a telephonic meeting to discuss and further negotiate the key aspects of a draft term sheet for the proposed acquisition of American Robotics.

On April 9, 2021, the Company provided American Robotics a revised term sheet, which included the Cash Consideration and Bridge Note.

On April 10, 2021, the Company’s Board of Directors held a telephonic meeting. All directors were present and, at the request of the Board of Directors, representatives of Akerman attended the meeting. Mr. Brock discussed the proposed acquisition of American Robotics by the Company and provided the Board of Directors a summary of American Robotics’ business. Messrs. Brock and Kantor presented the strategic opportunity and financial considerations to the Board of Directors, including a draft term sheet regarding the proposed transaction, which included the Cash Consideration and the terms of the Bridge Loan. Representatives of Akerman reviewed (i) the approvals required in connection with the proposed transaction, including shareholder approval of the Company, (ii) the ability for the Board to engage a financial advisor to render a fairness opinion regarding the fairness of the transaction consideration to the Company from a financial point of view, and (iii) the ability of the Company to acquire representation and warranty insurance for the proposed transaction. The Board of Directors discussed the proposed transaction and the term sheet, which did not include a financing contingency. The Board of Directors also discussed a proposed equity offering of the Company’s securities. Mr. Brock noted that based on discussions with Oppenheimer, the Company’s financial advisor, the plan was to commence an equity offering shortly after the announcement of the proposed acquisition; however, as noted earlier in the meeting the proposed transaction was not contemplated to have a financing contingency. Mr. Kantor advised the Board of Directors that he would not approve the proposed transaction without a financing contingency. Messrs. Brock, Bushey, Cohen, Reisfield, Seidl, Silverman and Ms. Sood authorized Mr. Brock to finalize and execute the term sheet and promissory note with such changes as required in his discretion.

On April 11, 2021, Messrs. Brock and Mozer held a telephonic meeting to further negotiate the key terms of the proposed transaction. The discussion focused on consideration to be offered, structure of the consideration and the timeline for executing the transaction. Mr. Mozer emphasized his prior request for the Bridge Loan.

On April 14, 2021, the Company and American Robotics executed the term sheet, which included a provision for the Bridge Loan, which was made on April 22, 2021. The final term sheet represented no material changes from the draft term sheet approved by the Board on April 10, 2021.

On April 15, 2021, Mr. Brock visited American Robotics headquarters in Marlborough, Massachusetts for further in-person diligence meetings and negotiations. Mr. Mozer, Dr. Somandepalli and a representative of HamiltonClark were present. Thereafter, Ondas and Akerman began coordinating with respect to due diligence, timing and the process of obtaining a representation and warranty insurance policy (the “R&W Insurance Policy”).

Also, on April 15, 2021, American Robotics provided Ondas and Akerman access to the American Robotics data room.

On April 22, 2021, the Company loaned American Robotics $2.0 million pursuant to the Bridge Loan.

From April 20, 2021 to April 23, 2021, at the Board’s request, Messrs. Brock and Kantor spoke with two financial advisors, including National Securities, regarding the engagement of a financial advisor to render a fairness opinion in connection with the proposed transaction. After review by Messrs. Brock and Kantor, a written consent of the Board of Directors was presented to the Company’s Board of Directors to approve the engagement of National Securities Corp. (“National Securities”) to render an opinion as to the fairness to the Company, from a financial point of view, of the consideration to be paid by the Company in connection with the proposed transaction (the “Fairness Opinion”). All members of the Company’s Board of Directors executed the written consent.

On April 23, 2021, the Company executed an engagement letter with National Securities. Pursuant to the engagement letter, National Securities was retained as a financial advisor to the Company’s Board of Directors with respect to rendering the Fairness Opinion.

On April 23, 2021, the Company held a telephonic organizational meeting with representatives of National Securities. Messrs. Brock and Kantor and representatives of Akerman attended the meeting.

On April 27, 2021, Akerman provided Hogan an initial draft of the merger agreement.

Over the following weeks, due diligence and the negotiation of the merger agreement continued.

On May 4, 2021, American Robotics entered into additional confidentiality agreements with Ondas’ advisors for additional due diligence.

On May 4, 2021, representatives of National Securities held a telephonic diligence meeting with Messrs. Brock and Kantor focused on the business and financial outlook of the Company.

On May 5, 2021, Hogan provided Akerman a revised draft of the merger agreement.

On May 5, 2021, representatives of National Securities held a telephonic diligence meeting with Messrs. Mozer and Kantor. The meeting was focused on the business and financial outlook of American Robotics.

On May 6, 2021, representatives of National Securities held a telephonic diligence meeting with Messrs. Brock and Kantor to perform additional diligence on the financial outlook, business synergies and financial terms of the proposed transaction.

On May 6, 2021, Messrs. Brock, Mozer and a representative of HamiltonClark held a telephonic meeting to discuss key considerations in the draft merger agreement, the ongoing financial and legal diligence and timing of the transaction.

On May 10, 2021, Akerman provided Hogan a revised draft merger agreement.

On May 10, 2021, the Company’s Board of Directors held a telephonic meeting. All directors were present, except Mr. Silverman, and, at the request of the Board of Directors, representatives of Akerman attended the meeting. Mr. Brock provided the Board of Directors an update of the negotiations regarding the proposed acquisition of American Robotics. Also, Mr. Brock reviewed with the Board of Directors the expected execution of the merger agreement and public announcement of the transaction, which was scheduled for before market on Monday, May 17, 2021.

On May 11, 2021, the parties agreed to increase the shares of the Company’s common stock to be issued to stockholders of American Robotics in connection with the Transaction from 6,250,000 to 6,750,000 and reduce the number of restricted stock units to American Robotics’ senior management from 1,875,000 to 1,375,000.

On May 13, 2021, Hogan provided Akerman a revised draft of the merger agreement.

On May 14, 2021, Akerman provided Hogan a revised draft of the merger agreement.

 On May 13, 2021, an underwriting telephonic meeting with respect to the R&W Insurance Policy was held with Messrs. Brock and Kantor and representatives of Marsh Specialty Services, ASQ Underwriting Services, Akerman and of Berkeley Research Group.

On May 14, 2021, the Company’s Board of Directors held a telephonic meeting. All directors were present and, at the request of the Board of Directors, representatives of Akerman and National Securities attended the meeting. Also, representatives of Holland & Knight, legal counsel to National Securities, attended the meeting. Representatives of National Securities provided the Board of Directors a presentation regarding its review and analysis regarding the consideration to be paid in connection with the proposed transaction. At the request of the Board of Directors, representatives of National Securities delivered the Fairness Opinion orally. The Board discussed the National Securities presentation and asked questions of the National Securities representatives. The representatives of National Securities and Holland & Knight excused themselves from the remainder of the meeting. Mr. Brock reviewed with the Board of Directors the expected execution of the merger agreement and public announcement of the transaction, which was scheduled for before market on Monday, May 17, 2021. At Mr. Brock’s request, representatives of Akerman reviewed the terms of the merger agreement and outstanding items to be finalized.

On May 14, 2021, National Securities issued the written Fairness Opinion to the Company’s Board of Directors.

On May 15, 2021, Hogan provided Akerman a revised merger agreement.

On May 16, 2021, Akerman and Hogan agreed to the final form of the merger agreement, subject to the approval of their respective clients.

On May 16, 2021, the Company’s Board of Directors held a telephonic meeting. All directors were present and, at the request of the Board of Directors, representatives of Akerman attended the meeting. Mr. Brock provided the Board of Directors an update on the transaction. At the request of Mr. Brock, representatives of Akerman reviewed the changes to the draft merger agreement since the meeting of the Board of Directors on May 14, 2021 and noted that there were no material changes since the Board meeting on May 14, 2021. Also, representatives of Akerman reviewed with the Board of Directors resolutions regarding the transaction. Mr. Kantor advised the Board of Directors again that he would not approve the proposed transaction without a financing contingency. Messrs. Brock, Bushey, Cohen, Reisfield, Seidl, Silverman and Ms. Sood approved the execution of the merger agreement and the related transaction matters as set forth in the resolutions.

On the morning of May 17, 2021, (i) the merger agreement was executed, (ii) the Company issued a press release announcing the merger agreement, (iii) the Company filed a Current Report on Form 8-K with the SEC reporting the entry into the merger agreement and filed as exhibits transaction documents, investor presentations and the press release, (iv) the Company hosted an earnings conference call and audio webcasts, which included an overview of the American Robotics acquisition, and (v) the R&W Insurance Policy was bound.

On May 26, 2021, the Company issued a press release announcing a call and webcast for May 27, 2021 to provide a business update, including information relating to the Company’s acquisition of American Robotics.

Also, on May 26, 2021, the Company filed a Current Report on Form 8-K with the SEC to file (i) the audited financial statements of American Robotics for the years ended December 31, 2020 and December 31, 2019, (ii) the unaudited financial statements of American Robotics for the three months ended March 31, 2021 and March 31, 2020, and (iii) the unaudited pro forma condensed combined financial statements (and related notes) of the Company as of and for the three months ended March 31, 2021 and the year ended December 31, 2020.

On the morning of May 27, 2021, the Company filed a Current Report on Form 8-K to file the investor presentation to be reviewed during the business update call, which was held later that morning.

On June 8, 2021, the Company issued a press release announcing the launch of an underwritten public offering of common stock (“Public Offering”), and later that day issued a press release announcing the pricing of the Public Offering.

On June 11, 2021, the Company issued a press release announcing the closing of the Public Offering and exercise of the over-allotment option. The Company estimates net proceeds from the Public Offering to be approximately $47.4 million, after deducting underwriting discounts and commissions and estimated offering expenses. The Company stated its intent to use the net proceeds of the Public Offering for working capital and general corporate purposes.

Following the closing of the Public Offering, Mr. Kantor advised Mr. Brock and representatives of Akerman that he approved the transaction and would recommend that the Company’s stockholders vote in favor of the proposals to be submitted to the Company’s stockholders in relation to the acquisition of American Robotics.

On June 23, 2021, the Company filed a preliminary proxy statement with the SEC.

Rationale for the Transaction

The Company has identified a number of potential benefits of the Transaction, which it believes will contribute to the success of the combined company, including the following:

Strategic Benefits. As leading innovators in next generation MC-IoT markets, the Company and American Robotics both provide advanced data capabilities to critical infrastructure markets such as transportation, oil & gas, and utilities, as well as solutions for security, agriculture, government, and defense markets. In combining these two platforms, the Company expects users will have access to a fully integrated, end-to-end industrial solution that optimizes the use of edge computing and data-intensive sensor-type technologies. The Company believes that integrating American Robotics’ Scout System™ with its FullMAX wireless technology will provide its customers and ecosystem partners with the capability to better inspect and manage their large field operations and critical infrastructure.

Synergies of Combined Company. The Company expects to realize synergies from more rapid customer adoption and expanded end market penetration for both American Robotics’ Scout System™ and the Company’s FullMAX wireless platform. These synergies provide revenue benefits as well as reduced costs from a more efficient customer marketing and service platform. Market adoption for our industrial technology platforms is enhanced via:

Strong Financial and Operational Foundation.  We believe the Company’s strong balance sheet and access to capital will provide the growth capital required to execute and accelerate the American Robotics expansion plan providing funds to increase the production of Scout Systems™ for customer pipeline demand and to execute a hiring plan to support larger customer activity. A strong capital position is a requirement for providers of mission-critical solutions to the industrial and government end markets we target and is similarly valuable to help the Company and American Robotics expand the number of ecosystem partnerships with Tier 1 industrial vendors such as Siemens.

New Growth Opportunities. The Company believes there is a substantial capital spending and investment cycle ahead in the end markets we target, driven by the adoption of MC-IoT technologies. As we drive market adoption of our FullMAX private wireless network platform and American Robotics Scout System™, we expect to find opportunities for the combined company to further enhance our customer solutions via the development of additional complementary products and technologies and by the expansion of our ecosystem partnering strategy. In addition, we plan to pursue strategic acquisitions of companies offering complementary products and technologies. Such acquisitions will be targeted to further enhance the platform solutions we offer to customers, as well as to provide financial scale and efficiency through consolidation as our end markets grow. We believe these strategies intended to drive new growth opportunities offer the potential to further enhance shareholder value.

Reasons for the Transaction

In reaching its decision to approve the Merger Agreement and unanimously recommend that its stockholders approve the proposals required as conditions to closing the Transaction, the Board consulted with its management and its financial and legal advisors and considered a number of factors, including the following material factors, which the Ondas Board viewed as supporting its determination:

In addition to the factors described above, the Board identified and considered a variety of risks and potentially negative factors concerning the Transaction, including:

As discussed in “Background of the Transaction” above, before the closing of the Public Offering on June 11, 2021, Mr. Kantor advised the Board that he would not approve the Transaction without a financing contingency. After the closing of the Public Offering, Mr. Kantor advised Mr. Brock and representatives of Akerman that he approved the Transaction and recommended that the Company’s stockholders vote in favor of the proposals to be submitted to the Company’s stockholders in relation to the acquisition of American Robotics.

The foregoing discussion of the material factors considered by the Ondas Board is not intended to be exhaustive, but does set forth the principal factors the Board considered.

In light of the number and wide variety of factors considered in connection with its evaluation of the Transaction, the Board did not consider it practicable to, and did not attempt to, quantify, rank or otherwise assign relative weights to the specific factors it considered in reaching its determination. Rather, the Board made its recommendation based on the totality of information presented to, and the investigations conducted by or at its direction. In addition, individual directors may have given different weight to different factors. This explanation of Ondas’s reasons for the Transaction and other information presented in this section is forward-looking in nature and, therefore, should be read in light of the factors discussed under “Risk Factors.”

The Merger Agreement

The disclosure under this section provides a brief summary of the Merger Agreement but may not include all the information important to you. You should read the entire Merger Agreement, which is included as Annex A to this proxy statement. In this section, we have used defined terms from the Merger Agreement for consistency between this summary and the complete agreement. Capitalized terms used in this section but not defined should be used as defined in the Merger Agreement.

The Mergers

Pursuant to the terms and subject to the conditions set forth in Merger Agreement, Merger Sub I will merge with and into American Robotics, with American Robotics continuing as the surviving entity, and American Robotics will then subsequently and immediately merge with and into Merger Sub II, with Merger Sub II continuing as the surviving entity and as a wholly-owned subsidiary of Ondas. Pursuant to the terms of the Merger Agreement, simultaneously with Merger II, Merger Sub II shall be renamed American Robotics, Inc.

Merger Consideration

Pursuant to the terms and conditions of the Merger Agreement, the shares of American Robotics common stock, par value $0.0001 per share issued and outstanding immediately prior to the Merger I Effective Time (including for this purpose all shares of American Robotics common stock issued upon the exercise of any vested American Robotics options and any conversion of the Convertible Notes), other than shares of American Robotics Common Stock cancelled pursuant to Section 2.01(a)(i) of the Merger Agreement and Dissenting Company Shares, will be converted into the right to the aggregate merger consideration comprised of the following components: (a) cash consideration in an amount equal to (i) $7,500,000, less (ii) Company Transaction Expenses incurred by American Robotics in connection with the Mergers and the Merger Agreement, to the extent unpaid prior to the closing date of the of the Mergers, including, among other items, any change of control or retention bonuses payable by American Robotics in connection with the Mergers, less (iii) Indebtedness of American Robotics as of the Merger I Effective Time, less (iv) a $200,000 representative expense fund, which will be transferred to the American Robotics Stockholders’ Representative to pay expenses incurred by him in such capacity and to satisfy certain indemnification obligations of the American Robotics Stockholders as set forth in Section 8.01 of the Merger Agreement, less (v) in the event that any American Robotics Stockholder perfects its exercise of appraisal rights pursuant to Section 262 of the DGCL prior to the Closing Date, an additional $500,000, to be used by the American Robotics Stockholders’ Representative to satisfy certain indemnification obligations of American Robotics under Section 8.01(c) of the Merger Agreement with respect to Dissenting Company Shares, (b) 6,750,000 validly issued, fully paid and non-assessable shares of Ondas common stock, $0.0001 par value per share, less the transaction expense shares, if any, payable to HamiltonClark; (c) Warrants, in the form of Exhibit E of the Merger Agreement, exercisable for 1,875,000 shares of Ondas common stock, $0.0001 par value per share, as such number may be adjusted pursuant to the terms of the Merger Agreement, including to reduce such number by the value of certain options of Ondas being issued in connection with certain American Robotics options, less the transaction expense warrants, if any, payable to HamiltonClark; and (d) a contingent right to receive the cash released to the American Robotics Stockholders from the PPP Loan Escrow Amount (if any) plus the cash released to the American Robotics Stockholders from the American Robotics Stockholders’ Representative Expense Fund (if any). HamiltonClark will receive part of the fee owed to it by American Robotics as shares of Ondas stock and Warrants, which will reduce the number of shares of Ondas and Warrants that the holders of shares of American Robotics are entitled to receive pursuant to the Merger Agreement.

The per share consideration to be paid by Ondas at the closing of the Mergers will be (a) the Cash Consideration divided by the Fully Diluted Share Number; plus (b) the Parent Payment Shares divided by the Fully Diluted Share Number plus (c) the Parent Payment Warrants divided by the Fully Diluted Share Number; plus (d) a contingent right to receive any Contingent Consideration divided by the Fully Diluted Share Number. If fractional shares of Ondas common stock would be issued in connection with the foregoing conversion (including with respect to any shares of Ondas common stock into which Parent Payment Warrants would be exercisable), such fractional shares will be paid out in cash.

Ondas is required to register for resale under the Securities Act of 1933, as amended, the shares issued in connection with the Mergers, including the shares of Ondas common stock underlying the Warrants, on a Form S-1 or S-3 registration statement (as applicable). Ondas is required to use commercially reasonable efforts to cause such registration statement to be declared effective no later than 90 days following the Closing Date, pursuant to the terms of a lock up and registration rights agreement executed by Ondas and the directors and officers of American Robotics at the same time the Merger Agreement was executed, which agreement is in the form attached hereto as Annex B.

Prior to the Merger I Effective Time, American Robotics is required to give notice to each holder of an In-Money Company Option that is either vested or will become vested as a result of the transactions contemplated by the Merger Agreement regarding information related to exercise of his or her vested American Robotics options prior to the Merger I Effective Time. American Robotics shall have the right to cause each such holder who does not so exercise to be subject to a deemed exercise procedure immediately before and on the same date on the Merger I Effective Time or permit conversion of the vested American Robotics options into options to purchase shares of Ondas common stock or warrants to purchase shares of Ondas common stock. Ondas and American Robotics will work in good faith before the Closing to determine the Equity Award Exchange Ratio which will determine the number of options or warrants to purchase shares of Ondas common stock that will be issued for such In-Money Company Options. Additionally, Ondas and American Robotics will also work in good faith before the Closing to equitably reduce the number of Ondas warrants constituting the Parent Warrants that will be issued as part of the consideration in an amount equal to the value of the Ondas stock options and warrants being issued in exchange for such In-Money Company Options. At the Merger I Effective Time, each Out-of-Money Company Option will automatically be terminated and of no further force and effect. Each holder of American Robotics common stock resulting from a vested American Robotics option so exercised will be treated as an American Robotics stockholder for all purposes of the Merger Agreement.

Each promissory note convertible into securities of American Robotics (each a “Convertible Note”) that remains outstanding immediately prior to the Merger I Effective Time will either (i) to the extent permitted by the terms of such Convertible Note, be included in the Funded Debt and repaid on the Closing Date pursuant to the Merger Agreement and the terms of such Convertible Note or (ii) be converted, immediately prior to the Merger I Effective Time, into American Robotics shares at the applicable conversion price specified in such Convertible Note pursuant to and in accordance with the terms thereof. Each holder of American Robotics common stock resulting from a Convertible Note that is so converted will be treated as an American Robotics stockholder for all purposes of the Merger Agreement. American Robotics may choose to (but is not required to) seek amendment of the Convertible Notes prior to the Closing in accordance with the terms and conditions of such Convertible Notes to require automatic conversion of the Convertible Notes as set forth in clause (ii) above.

Representations and Warranties

The representations and warranties described below and included in the Merger Agreement were made by the parties as of specific dates. The assertions embodied in these representations and warranties may be subject to important qualifications and limitations mutually agreed to by the parties, in connection with negotiating the Merger Agreement. The representations and warranties may also be subject to a contractual standard of materiality that may be different from what may be viewed as material to stockholders and may have been used for the purpose of allocating risk among the parties, rather than establishing matters as facts. The Merger Agreement is described in this proxy statement to provide you with information regarding its terms and conditions at the time it was entered into by Ondas and American Robotics.

Representations and Warranties of Ondas, Merger Sub I and Merger Sub II

The Merger Agreement contains representations and warranties of Ondas, Merger Sub I and Merger Sub II that are customary for transactions of the type contemplated by the Merger Agreement, including representations and warranties concerning:

Representations and Warranties of American Robotics

The Merger Agreement also contains representations and warranties of American Robotics that are customary for transactions of the type contemplated by the Merger Agreement, including representations and warranties concerning:

Covenants Regarding Conduct Pending the Mergers

Pending the closing of the Mergers or the earlier termination of the Merger Agreement in accordance with its terms, American Robotics has agreed to, except for matters permitted or contemplated by the Merger Agreement and the other Transaction Agreements, set forth on a schedule, as required by applicable Law (including any applicable COVID-19 Measures) or unless we otherwise agree in writing (which agreement shall not be unreasonably withheld, conditioned or delayed), conduct its business in the ordinary course in substantially the same manner as previously conducted and use its reasonable best efforts to (i) preserve intact its corporate existence and current business organization in all material respects, (ii) preserve in all material respects the goodwill and present business relationships (contractual or otherwise) with customers, suppliers, distributors and others having business dealings with the Company, (iii) keep available the services of its current officers, directors, employees and consultants, (iv) preserve in all material respects its present properties and its tangible and intangible assets, (v) comply in all material respects with all applicable Laws and Material Contracts and (vi) pay all applicable Taxes as such Taxes become due and payable.

Pending the closing of the Mergers, American Robotics has agreed to not do any of the following without our written consent:

Pending the closing of the Mergers or the earlier termination of the Merger Agreement in accordance with its terms, Ondas has agreed to, except for matters permitted or contemplated by the Merger Agreement and the other Transaction Agreements, set forth on a schedule, as required by applicable Law (including any applicable COVID-19 Measures) or unless American Robotics otherwise agrees in writing (which agreement shall not be unreasonably withheld, conditioned or delayed), conduct its business in the ordinary course in substantially the same manner as previously conducted and use commercially reasonable efforts to: (i) preserve intact its corporate existence and current business organization in all material respects, (ii) keep available the services of its current officers, directors and key employees and consultants, (iii) preserve in all material respects the goodwill and present business relationships (contractual or otherwise) with customers, suppliers, distributors and others having business dealings with them, (iv) preserve in all material respects its present properties and its tangible and intangible assets, and (v) comply in all material respects with all applicable Laws and material contracts of Ondas and its Subsidiaries.

Prior to the Closing, Ondas has agreed not to do any of the following without American Robotics’ written consent:

The foregoing however, does not prevent Ondas or any of its subsidiaries from (i) granting any Lien, or taking any other action, as may be required under certain of its existing indebtedness, (ii) undertaking any action authorized prior to the date of the Merger Agreement under any 401(k) matching or similar benefit plan in effect as of the date of the Merger Agreement in the ordinary course of business consistent with past practice; or (iii) canceling or retiring any treasury shares held by Ondas or transferring any or all of such treasury shares to Ondas.

Other Covenants and Agreements

The Merger Agreement contains certain other covenants and agreements by the parties customary for a transaction of the type contemplated by the Merger Agreement, including, but not limited to:

Convertible Notes. No earlier than 30 days after the date of the Merger Agreement, American Robotics must provide notice of the Mergers and other transactions contemplated by the Merger Agreement to all holders of Convertible Notes, subject to review by and consent from Ondas. Such notice must include, if permitted by the terms of the applicable Convertible Notes, a request that such holders elect to require American Robotics to repay such holder’s Convertible Note(s) at the Closing or to convert such holder’s Convertible Notes into shares of Ondas’ common stock immediately prior to the Closing. American Robotics may instead seek to amend the Convertible Notes in accordance with their terms so that they will automatically convert into shares of American Robotics immediately before the closing of the Mergers.

280G. Prior to the Closing and if required to avoid certain adverse tax consequences, American Robotics must use commercially reasonable efforts to obtain waivers from American Robotics’ voting shareholders for any payments and benefits provided by American Robotics to any “disqualified individual” (as such term is defined for purposes of Section 280G of the Code and the Treasury Regulations thereunder) which absent such shareholder waiver would reasonably be expected to be a “parachute payment”. Any documentation prepared in connection with the foregoing must be reviewed and approved by Ondas.

Notices. Each party must notify the other of (i) any event that would be likely to cause the condition to the obligations of the other party to effect the Mergers not to be satisfied, (ii) the failure of such party to comply with any covenant, condition or agreement to be complied with that would reasonably be expected to result in the conditions to the obligations of the other party to effect the Mergers not to be satisfied, or (iii) the occurrence of an event that has resulted in a Material Adverse Effect or Parent Material Adverse Effect.

Access to Information. American Robotics has agreed to give Ondas and its authorized representatives before the Closing reasonable access during normal business hours to the books, records, offices, properties and financial and operating data of American Robotics as Ondas may from time to time reasonably request. Any such access must be conducted in a manner that does not unreasonably interfere with the businesses or operations of American Robotics, and no such access is permitted to the extent such disclosure would result in a waiver of attorney-client privilege or other applicable privilege, or is prohibited by a third-party confidentiality agreement or would violate applicable law. Additionally, Ondas may not contact certain business relations of American Robotics regarding the Transaction without American Robotics’ prior consent.

After the Closing, Ondas has agreed to give the American Robotics Stockholders’ Representative and its authorized representatives reasonable access during normal business hours to the books, records, offices, properties and financial and operating data of American Robotics as the American Robotics Stockholders’ Representative may from time to time reasonably request in connection with any determination of the rights and obligations or liability of American Robotics or its stockholders under the Merger Agreement. Any such access must be conducted in a manner that does not unreasonably interfere with the businesses or operations of Ondas and its subsidiaries, and no such access is permitted to the extent such disclosure would result in a waiver of attorney-client privilege or other applicable privilege, or is prohibited by a third-party confidentiality agreement or would violate applicable law.

Efforts to Consummate. Each party must reasonably cooperate, and use its reasonable best efforts to take all action and do all things necessary under applicable law to consummate the Mergers and the other transactions contemplated by the Merger Agreement as promptly as practicable. Ondas must inform American Robotics within 30 days of the date of the Merger Agreement if the Requisite Regulatory Approval is required and cooperate with American Robotics if any filing is required to be made with the applicable Governmental Authority and use its reasonable best efforts to obtain any Requisite Regulatory Approval from such Governmental Authority with respect to the Mergers and the transactions contemplated by the Merger Agreement. The parties must reasonably cooperate and keep each other reasonably apprised of the status of and matters related to the completion of the transactions contemplated by the Merger Agreement, including obtaining consents from or communications with any Governmental Authority. Except with respect to the Requisite Regulatory Approval, no party is obligated to pay amounts in excess of $10,000 in the aggregate to obtain any consent.

Preparation of SEC Filings. Upon Ondas’ reasonable request, American Robotics must use reasonable best efforts to furnish information regarding American Robotics to Ondas as may be reasonably necessary in connection with the preparation of any filing with the SEC contemplated by the Merger Agreement, including certain audited and unaudited financial statements of American Robotics prepared in conformity with Regulation S-X under the Securities Act of 1933. Ondas must ensure that any required SEC filing complies in all material respects with all applicable requirements of law, and provide American Robotics and its counsel with copies of any correspondence or comments from the SEC or any other government officials with respect to the required SEC filings. Ondas and American Robotics must use commercially reasonable efforts to ensure the information provided for inclusion or incorporation in any required SEC filings does not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading.

Public Announcements. Prior to the Closing, Ondas may not issue a press release or other public announcement regarding American Robotics, the Mergers, Merger Agreement or the transactions contemplated thereby without the prior written consent of American Robotics. If Ondas is required by law to issue a press release or other public announcement, then Ondas may issue such press release or other public announcement without American Robotics’ consent if Ondas provides an advance copy to American Robotics’ so that, to the extent practicable, American Robotics has reasonable time to comment on such release or announcement and Ondas must reasonably consider in good faith any comments from American Robotics. American Robotics may not issue a press release or other public announcement regarding the Mergers, the Merger Agreement or the transactions contemplated thereby without the prior written consent of Ondas, but may issue a press release required by law, court process or obligations to any national securities exchange.

Listing. Ondas must use all reasonable efforts for Ondas to remain listed as a public company on, and for Ondas common stock to be tradable over, Nasdaq. On or prior to the Merger I Effective Time, Ondas must use commercially reasonable efforts to cause the shares to be issued in connection with the Mergers to be listed on Nasdaq at Ondas’ expense.

Tax Returns. Ondas must prepare and file, or cause to be prepared and filed, all tax returns of American Robotics required to be filed after the Closing Date. American Robotics Stockholders’ Representative and Ondas, and their respective affiliates, must reasonably cooperate in filing all tax returns or responding to tax proceedings with respect to American Robotics, including by furnishing prior years’ tax returns and such other information within the relevant party’s possession and promptly forwarding to the other party copies of notices and forms or other communications received from or sent to any Governmental Authority. American Robotics must terminate any tax sharing agreements as of the Closing Date such that there are no further rights or liabilities thereunder.

Books and Records. Ondas and American Robotics’ stockholders must (i) retain the books and records of American Robotics for a period of seven years following the Closing, (ii) make such books and records available to American Robotics Stockholders’ Representative and stockholders of American Robotics as reasonably requested, and (iii) provide other parties to the Merger Agreement reasonable written notice prior to transferring, destroying or discarding any such books and records.

Qualification as a Reorganization. Each party to the Merger Agreement has agreed to use its reasonable best efforts to cause the Mergers to qualify as a reorganization under Section 368(a) of the Code, and will not take any actions which could reasonably be expected to prevent the Mergers from qualifying as a reorganization under Section 368(a) of the Code. If the Mergers do not qualify as a reorganization, the parties to the Merger Agreement agree to treat the Mergers as separate transactions for U.S. federal income tax purposes not subject to the “integration doctrine” pursuant to Rev. Rul. 90-95, 1990-2 C.B. 67.

Employee Matters. For the period beginning on the Closing Date and ending the earlier of (i) the first anniversary of the Closing Date and (ii) the termination of the applicable employee of American Robotics, Ondas must provide employees of American Robotics who remain employed following the closing with base salary and cash bonus or commission opportunity that are in the aggregate substantially similar to those offered by Ondas to its similarly situated personnel and benefit plans that are the same as those offered by Ondas to its similarly situated personnel.

Ondas must use reasonable best efforts to take into account the service of continuing employees for purposes of participation, level of benefits and vesting and accrual of vacation and paid-time-off, as applicable, to the same extent such service was recognized for the same purpose under a similar benefit plan of American Robotics that such continuing employee participated in immediately prior to the Merger I Effective Time. Ondas must use commercially reasonable efforts to waive, or cause to be waived, any pre-existing condition limitations, exclusions, actively-at-work requirements and waiting periods under any group health benefit plan in which continuing employees will be eligible to participate from and after the Closing and in the plan year in which the Closing Date occurs, except to the extent that such items would not have been satisfied or waived under the comparable benefit plan immediately prior to the Closing.

American Robotics Stockholder Approval. American Robotics must use its commercially reasonable best efforts to obtain the written consent of the stockholders holding at least 70% of the outstanding common stock of American Robotics and at least a majority of certain holders of common stock party to a subscription agreement with American Robotics (“Written Consent”) within 48 hours after the execution of the Merger Agreement. Such Written Consent was delivered by American Robotics to Ondas immediately following the signing of this Agreement. Within 10 days after obtaining the Written Consent, American Robotics must prepare and mail a notice to every stockholder of American Robotics that did not sign the Written Consent, advising such stockholders that (i) the board of directors of American Robotics unanimously approved and adopted the Merger Agreement and the transactions contemplated thereby, (ii) the Written Consent approved and adopted the Merger Agreement and the transactions contemplated thereby, and (iii) the dissent and appraisal rights such stockholders may have pursuant to Section 262 of the Delaware General Corporation Law (the “DGCL”). Such notice was not delivered because all of American Robotics’ stockholders executed the Written Consent.

Parent Stockholder Approval. Ondas must file with the SEC a proxy statement and solicit proxies from the holders of Ondas common stock to obtain the requisite approval of the Mergers and the other transactions contemplated by the Merger Agreement, and the other matters to be voted on at the Ondas stockholders’ meeting, as promptly as practicable, but in no event more than fifteen (15) Business Days after the later of (i) date of the Merger Agreement and (ii) Ondas’ receipt of the American Robotics required financial statements, which filing date was mutually extended by Ondas and American Robotics. The proxy statement must seek approval of the issuance of the shares of Ondas common stock and Warrants to be issued in connection with the Merger Agreement. Ondas must keep American Robotics reasonably informed on matters relating to the proxy statement and Ondas’ annual stockholders meeting, including by promptly furnishing any voting or proxy solicitation reports received by Ondas related to such matters. American Robotics must promptly provide to Ondas such information concerning American Robotics as may be reasonably requested by Ondas and necessary for the proxy statement and compliance with the applicable provisions of and rules under the Securities Act of 1933, Exchange Act of 1934, and the DGCL, including certain financial statements of American Robotics.

Financing. Ondas must use reasonable best efforts to consummate an equity financing on arms’ length terms with minimum gross proceeds of $35 million (the “Financing) as promptly as practical after the date of the Merger Agreement, and provide American Robotics with proposed forms of the related documentation for review and comment by American Robotics and its representatives. On June 11, 2021, Ondas closed the Public Offering (as described above in the section titled “Background of the Transaction”).

Parent Stockholder Approval; Recommendation of Parent’s Board of Directors. Ondas’ board of directors must recommend that Ondas’ stockholders adopt and approve the Mergers and the other transactions contemplated by the Merger Agreement, and such recommendation may not be withdrawn or modified in a way adverse to American Robotics. Such recommendation must be included in the proxy statement, and Ondas must use its reasonable best efforts to solicit and obtain the requisite Ondas stockholder approval.

Parent Stockholders’ Meeting. Ondas must use reasonable best efforts to establish a record date, which must also be mutually agreed upon with American Robotics for Ondas’ stockholders meeting. Within 45 days after the proxy statement is “cleared” by the SEC or otherwise filed, Ondas’ stockholders’ meeting shall be held in accordance with applicable law and Ondas’ certificate of incorporation. If a sufficient vote to approve the Merger and the transactions contemplated by the Merger Agreement is not obtained on the date of the stockholders’ meeting, or if quorum is not established, Ondas has the right to two adjournments of the stockholders’ meeting.

No Solicitation; Other Offers. American Robotics agreed not to and to cause its officers, directors, employees, stockholders, representatives, agents, investment bankers and any of their respective affiliates not to, directly or indirectly (a) discuss, pursue, solicit, initiate, knowingly facilitate or encourage or otherwise enter into any discussions, negotiations, agreements or other arrangements regarding or which could lead to, a possible sale or other disposition (whether by merger, reorganization, recapitalization or otherwise) of all or any part of the capital stock or any substantial portion of the assets of American Robotics other than Ondas or its affiliates, (b) enter into any contract with any third party that has submitted, or is seeking to submit, a proposal described in (a), or (c) provide any non-public and confidential information relating to American Robotics to any person other than Ondas or its affiliates, other than information which is traditionally provided in the regular course of the Company’s business operations to third parties.

Paycheck Protection Program Loan. Prior to the Closing, American Robotics must file an application for forgiveness for its Paycheck Protection Program loans (“PPP Loans”) with the U.S. Small Business Administration (“SBA”). If American Robotics does not obtain forgiveness prior to the Closing, at Closing the amount of the PPP Loans will be held in escrow pending determination by the SBA of whether such PPP Loans are eligible for forgiveness under the CARES Act, and released to the stockholders of American Robotics following such forgiveness. As of the date of this proxy statement, one of American Robotics’ two PPP loans outstanding as of the date of signing of the Merger Agreement has been forgiven, representing an aggregate amount of $249,732.60 in principal and interest.

Indemnification of Officers and Directors. From and after the Merger I Effective Time until the sixth (6th) anniversary thereof, Ondas must (i) cause the surviving entity of the Mergers to fulfill and honor in all respects to the fullest extent available under applicable Law the obligations of American Robotics pursuant to any indemnification provisions under American Robotics’ charter documents and any indemnification agreement set forth on the Disclosure Schedule, in each case, as in effect on the date of the Merger Agreement and (ii) cause the organizational documents of Merger Sub I, Merger Sub II, the intermediate surviving entity and the surviving entity of the Mergers to contain the same (or substantially similar) provisions with respect to indemnification and exculpation from liability set forth in American Robotics’ charter documents on the date of the Merger Agreement. Before the closing American Robotics may obtain, at its own expense, a “tail” policy for its directors and officers with a claims period of 6 years.

R&W Insurance. On the date of the Merger Agreement, Ondas must deliver a copy of the binder agreement with respect to the R&W Insurance. Ondas must bear all costs associated with obtaining the R&W Policy, including, as applicable, the premium, broker fee, underwriting fee, due diligence fee, carrier commissions, legal fees for counsel engaged by the underwriter and surplus lines fees. Ondas may not amend or modify the R&W Insurance Policy in a manner that would reasonably be expected to allow the insurer to subrogate against any stockholder of American Robotics or that would otherwise make or bring any action or proceeding against the stockholders of American Robotics.

Representation and Warranty Insurance Policy

In conjunction with the entry in the Merger Agreement, Ondas entered into a binder agreement for the R&W Insurance Policy which was bound by ASQ Underwriting. The R&W Insurance Policy is subject to a limit of liability of $7,000,000 in the aggregate, a retention amount of $700,000 subject to adjustment at the Closing as set forth in the binder, as well as certain exclusions and other terms and conditions set forth therein.

Conditions to Closing

The respective obligations of each of Ondas and American Robotics to effect the Mergers are subject to the satisfaction (or waiver in writing by each such party), at or prior to the Closing, of the following conditions:

The obligations of Ondas to effect the Mergers are subject to the satisfaction (or waiver in writing by Ondas) of certain conditions, including the following:

The obligation of American Robotics to complete the Mergers is subject to the satisfaction (or waiver in writing by American Robotics) of certain conditions, including the following:

Indemnification

Indemnification by the American Robotics Stockholders

Each American Robotics Stockholder shall severally, not jointly, indemnify each Ondas indemnitee from and against, and defend and hold them harmless from, any losses, damages or liabilities, excluding any punitive or exemplary damages, except to the extent payable to third parties in respect of a Third Party Claim (collectively, “Losses”), suffered, sustained or incurred by any such indemnitee arising from, based upon, attributable to:

Survival

Except with respect to the American Robotics stockholders’ indemnification obligations under Section 8.01 of the Merger Agreement and the covenants and agreements to which such indemnification obligations relate to, which shall survive for thirty (30) days after the applicable statute of limitations, the representations, warranties, covenants and agreements in this Agreement and in any certificate delivered hereunder do not survive the Closing except as set forth below.

Notwithstanding the foregoing: (a) Ondas and its Subsidiaries are not precluded from seeking recovery under the R&W Policy; (b) the foregoing does not limit any covenant or agreement of the Parties which by its terms contemplates performance after the Closing until such time that such covenant or agreement is fully performed or no longer operative; (c) Ondas, Merger Sub I and Merger Sub II will be jointly and not severally liable for breach of any covenant or agreement requiring performance by Ondas, Merger Sub I, Merger Sub II or the Surviving Entity after the Closing; and (d) the foregoing does not limit a claim for Fraud.

Limitations of Liability

The obligations of each American Robotics stockholder to indemnify the Ondas indemnitees (i) shall be several, not joint, based on such American Robotics stockholder’s Pro Rata Indemnity Share and (ii) shall not exceed the portion of the Merger Consideration actually received by such American Robotics stockholder; provided that Ondas shall, and shall cause the other Ondas indemnitees, to recover any Losses for which an Ondas indemnitee is entitled to indemnification in respect to any Dissenting Company Shares first from the portion (if any) of the American Robotics Stockholders’ Representative Expense Fund which constitutes the American Robotics Stockholders’ Representative Indemnity Amount (and the liability of the American Robotics stockholders with respect to such Losses recovered against the American Robotics Stockholders’ Representative Indemnity Amount shall be joint and several) before seeking recourse against any individual American Robotics stockholder.

The amount of Losses subject to indemnification by the American Robotics stockholders shall be reduced by any insurance or other proceeds previously received by Ondas and its Subsidiaries with respect to such Losses (net of any deductible or co-payment, actual increase in insurance premiums attributable to such recovery and the reasonable out of pocket costs incurred in connection with such recovery) from any insurance carrier pursuant to any insurance coverage held by or on behalf of Ondas or its Affiliates (including, following the Closing, the Surviving Entity) or any other third party under any other indemnity or contribution agreements, Contracts or otherwise with respect to such Losses.

Termination Rights

The Merger Agreement provides that it may be terminated at any time prior to the Closing:

 Amendments.

Any provision of this Agreement may be amended prior to the Merger I Effective Time if, but only if, such amendment or waiver is in writing and is signed by each party to the Merger Agreement.

The American Robotics Stockholders’ Representative

Reese Mozer has been appointed as the American Robotics Stockholders’ Representative under the Merger Agreement. By virtue of the execution of the written consent, Support or Agreement or the delivery of a duly executed Letter of Transmittal or Post-Closing Letter of Transmittal, by any American Robotics stockholder, the American Robotics Stockholders’ Representative will be irrevocably authorized and empowered to act, after the Closing of the Merger, as a representative, for the benefit of all American Robotics stockholders, as the exclusive agent and attorney-in-fact, in connection with and to facilitate the consummation of the Mergers and the other Transaction Agreements contemplated by the Merger Agreement. This includes the authority and power to:

At the Closing, an aggregate amount of $200,000 will be transferred by or on behalf of the American Robotics stockholders to the American Robotics Stockholders’ Representative, to be used by the American Robotics Stockholders’ Representative to pay expenses incurred by him in such capacity. In the event that any American Robotics stockholder has perfected its exercise of appraisal rights pursuant to Section 262 of the DGCL prior to the Closing Date, an additional $500,000 will be transferred at the Closing by or on behalf of the American Robotics stockholders to the American Robotics Stockholders’ Representative in a segregated account maintained by him to be used by him to pay any Losses for which an Ondas indemnitee is entitled to indemnification with respect to Company Dissenting Shares, provided further that any payments from the American Robotics Stockholders’ Representative Indemnity Amount for anything other than such Losses shall require Ondas’ prior written consent. The American Robotics Stockholders’ Representative is not entitled to any fee, commission or other compensation for the performance of his services under the Merger Agreement, but is entitled to the payment of all of his out-of-pocket expenses incurred as the American Robotics Stockholders’ Representative. In no event will the American Robotics Stockholders’ Representative be required to advance his own funds on behalf of the American Robotics stockholders or otherwise.

If the Mergers and the other transactions are not consummated, American Robotics must reimburse the American Robotics Stockholders’ Representative for all costs and expenses reasonably incurred by him in connection with the Mergers and the other transactions contemplated by the Merger Agreement. Once the American Robotics Stockholders’ Representative determines, in his sole discretion, that he will not incur, or reasonably be expected to incur, any additional expenses in his capacity as the American Robotics Stockholders’ Representative, then he will distribute the remaining unused American Robotics Stockholders’ Representative Expense Fund, if any, to the American Robotics stockholders in accordance with their Pro Rata Percentages; provided that if the American Robotics Stockholders’ Representative Indemnity Amount has been deposited into the American Robotics Stockholders’ Representative Expense Fund, only the unused amount of the American Robotics Stockholders’ Representative Expense Amount, if any, may be so distributed and the unused amount of the American Robotics Stockholders’ Representative Indemnity Amount, if any, shall not be distributed until the final resolution of the claims for appraisal rights which triggered the requirement for the American Robotics Stockholders’ Representative Indemnity Amount. Additionally, if the American Robotics Stockholders’ Representative incurs expenses, in such capacity, in an amount exceeding the American Robotics Stockholders’ Representative Expense Amount, or after the distribution of the American Robotics Stockholders’ Representative Expense Amount, then the American Robotics stockholders are required to, in accordance with their respective Pro Rata Indemnity Share, reimburse the American Robotics Stockholders’ Representative for the difference between the total expenses incurred by him and the amount received by him from the American Robotics Stockholders’ Representative Expense Amount.

Under the Merger Agreement, the American Robotics Stockholders’ Representative will incur no liability of any kind with respect to any action or omission by him in connection with his services pursuant to any Transaction Agreement except in the event of liability directly resulting from the American Robotics Stockholders’ Representative’s willful misconduct.

The American Robotics Stockholders’ Representative is not liable for any action or omission pursuant to the advice of counsel. Each American Robotics stockholder is required to indemnify, on a pro rata basis (based on such American Robotics stockholders’ Pro Rata Indemnity Share), the American Robotics Stockholders’ Representative against all losses and liabilities (including any and all expenses whatsoever reasonably incurred in investigating, preparing or defending against any litigation, commenced or threatened or any claims whatsoever), arising out of or in connection with any claim, investigation, challenge, action or proceeding or in connection with any appeal thereof, relating to the acts or omissions of the American Robotics Stockholders’ Representative under the Merger Agreement or otherwise. The foregoing indemnification does not apply to any action or proceeding which finally adjudicates liability against the American Robotics Stockholders’ Representative under the Merger Agreement for his willful misconduct. In the event of any indemnification upon written notice from the American Robotics Stockholders’ Representative to the American Robotics stockholders as to the existence of a deficiency toward the payment of any such indemnification amount, each American Robotics stockholder must promptly deliver to the American Robotics Stockholders’ Representative full payment of his, her or its ratable share of the amount of such deficiency (based on such American Robotics stockholder’s Pro Rata Indemnity Share).

Under the Merger Agreement, Ondas, Merger Sub I and Merger Sub II have the right to conclusively rely upon all actions taken or omitted to be taken by the American Robotics Stockholders’ Representative pursuant to the Merger Agreement and the Transaction Agreements and the transactions contemplated thereby, all of which actions or omissions shall be legally binding upon all American Robotics stockholders. The grant of authority provided to the American Robotics Stockholders’ Representative (i) is coupled with an interest and is irrevocable and survives the death, incompetency, bankruptcy or liquidation of any of the American Robotics Stockholders and (ii) will survive the closing of the Mergers.

Opinion of Our Financial Advisor

On May 14, 2021, National Securities Corp. (“National Securities” or “NSC”) rendered its oral opinion to the Board, which was subsequently confirmed in writing by delivery of National Securities’ written opinion addressed to the Board dated the same date as to, as of such date, the fairness, from a financial point of view, to the merger consideration (the “Merger Consideration”) to be paid to stockholders of American Robotics pursuant to the Merger Agreement (the “Opinion”). The Opinion was based on the most recent draft of the Merger Agreement, dated May 13, 2021, distributed to National Securities prior to its issuance of the Opinion. 

National Securities’ opinion was directed to the Board (in its capacity as such) and only addressed the fairness, from a financial point of view, to Ondas of the Merger Consideration to be paid pursuant to the Merger Agreement. For purposes of the Opinion, National Securities assumed that (A) “Merger Consideration” includes the Company Transaction Expenses, the proceeds of the Parent Note (which National Securities assumed will be forgiven, but nonetheless, was included in “Merger Consideration” for purposes of the Opinion), the aggregate amount of the Company’s Stockholders’ Representative Expense Fund, the Parent Transaction Expenses Shares, the Parent Transactions Expenses Warrants, the Funded Debt, and the aggregate amount of the PPP Loan Escrow Amount (each as defined in the Merger Agreement)², notwithstanding the definition of “Merger Consideration” in the Merger Agreement, (B) the Convertible Notes (as defined in the Merger Agreement) will be converted in full to shares of common stock, par value $0.0001 per share, of American Robotics (“American Robotics Shares”) on or before the Merger I Effective Time (as defined in the Merger Agreement) and (C) the Fully Diluted Share Number (as defined in the Merger Agreement) used to calculate Per Share Closing Merger Consideration (as defined in the Merger Agreement) and Per Share Contingent Consideration (as defined in the Merger Agreement) will be inclusive of such American Robotics Shares issuable upon such assumed full conversion of the Convertible Notes (as defined in the Merger Agreement). The Opinion did not address any other aspect or implication (financial or otherwise) of the Mergers, the Merger Agreement or any other agreement or understanding entered into in connection with the Mergers or otherwise. The summary of the Opinion in this proxy statement is qualified in its entirety by reference to the full text of the written Opinion, which is included as Annex C to this proxy statement and sets forth the procedures followed, assumptions made, qualifications and limitations on the review undertaken and other matters considered by National Securities in preparing its Opinion. The Opinion does not constitute advice or any recommendation to any holder of Ondas’ or American Robotics’ common stock as to how such holder should act or vote on any matter relating to the Mergers.

In connection with rendering the Opinion, National Securities reviewed:

For purposes of its analysis and opinion, National Securities relied, without assuming responsibility or liability for independent verification, upon the accuracy and completeness of all financial and other information available from public sources and provided to and reviewed by National Securities and all other information provided to National Securities or otherwise discussed with or reviewed by National Securities. National Securities assumed, at the direction and with the consent of the Board, that the financial and other projections prepared by Ondas and American Robotics’ managements, and the assumptions underlying those projections, including the amounts and the timing of all financial and other performance data, were reasonably prepared in accordance with industry practice and represented the best estimates and judgments of the managements of Ondas and of American Robotics as of the date of their preparation. At the direction of the Board, National Securities did not assume any responsibility for and did not express an opinion as to such analyses or forecasts or the assumptions on which they were based. National Securities also assumed that there were not any material changes in the assets, liabilities, financial condition, results of operations, business or prospects of American Robotics since the dates of the last financial statements made available to National Securities. National Securities further relied, with the Board’s consent, upon the assurances of the management of American Robotics that they were not aware of any facts that would have made the information and projections provided by them inaccurate, incomplete or misleading in any material respect.

In connection with rendering its Opinion, National Securities performed financial analyses utilizing several methodologies that National Securities considered appropriate and relevant to the Mergers and that National Securities believed are customary for similar transactions. The preparation of a fairness opinion involves significant judgment as to the most appropriate and relevant methods of financial analysis, data used in establishing fair value and the application of these methods to the particular circumstances and data and, therefore, such an opinion is not readily susceptible to a partial analysis or summary description. Accordingly, notwithstanding the analyses summarized herein, National Securities believes that its analyses must be considered as a whole and that selecting portions of the analyses, without considering all such analyses and factors, or attempting to ascribe relative weights to some or all such analyses and factors, could create an incomplete view of the evaluation process underlying National Securities Opinion.

In arriving at its Opinion, National Securities considered the results of all of its analyses and did not attribute any particular weight to any factor or analysis considered by it. National Securities made its determination on the basis of its experience and professional judgment after considering the results of all of its analyses. National Securities only considered weighting of various analyses to test its assumptions and conclusions, which confirmed its results. No company or precedent transaction used in the analyses as a comparison is directly comparable to Ondas or to American Robotics, or the Mergers. National Securities prepared these analyses for purposes of providing its Opinion to the Board (in its capacity as such) as to the fairness, from a financial point of view, to Ondas of the Merger Consideration to be paid pursuant to the Merger Agreement. These analyses do not purport to be appraisals, nor do they necessarily reflect the prices at which businesses or securities may actually be bought or sold. Analyses based upon forecasts of future results are not necessarily indicative of actual future results, which may be significantly different than suggested by these analyses. Because these analyses are inherently subject to uncertainty, being based upon numerous factors or events beyond the control of the parties or their respective advisors, none of Ondas, National Securities, or any other person assumes responsibility if future results are materially different from those forecasts.

The Merger Consideration was determined through arm’s-length negotiations between American Robotics and Ondas. National Securities did not recommend any specific amount of Merger Consideration to the Board or that any specific amount of consideration constituted the appropriate consideration for the Mergers. National Securities’ Opinion to the Board (in its capacity as such) was one of many factors taken into consideration by the Board in making its determination to approve the Mergers.

National Securities was not asked to undertake, and did not undertake, an independent verification of any information provided to National Securities or reviewed by National Securities, nor was National Securities furnished with any such verification and National Securities did not assume any responsibility or liability for the accuracy or completeness of such information. National Securities did not make an independent evaluation or appraisal of the assets or the liabilities (contingent or otherwise) of American Robotics including those which may arise from the Mergers, nor did National Securities evaluate the solvency of American Robotics under any state or federal laws. National Securities did not undertake an independent analysis of any pending or threatened litigation, possible unasserted claims or other contingent liabilities to which American Robotics is or may be a party or subject to and its Opinion did not make an assumption concerning, and therefore did not consider, the possible assertion of claims, outcomes or damages arising out of any such matters.

National Securities also assumed, with the Board’s consent, that the final executed form of the Merger Agreement would not differ in any material respects from the last draft provided to National Securities, that the consummation of the Mergers would be effected in accordance with the terms and conditions of the Merger Agreement, without waiver, modification or amendment of any material term, condition or agreement, and that, in the course of obtaining the necessary regulatory or third party consents and approval for the Mergers, no delay, limitation, restriction or condition would be imposed that would have an adverse effect on American Robotics or the contemplated benefits of the Mergers. In addition, events occurring after the date of the Opinion could materially affect the assumptions used in rendering the Opinion; however, National Securities does not have any obligation to reaffirm, update or revise its Opinion. National Securities is not a legal, tax or regulatory advisor and National Securities relied upon, without independent verification, the assessments of Ondas and of American Robotics, and their respective legal, tax and regulatory advisors with respect to such matters.

The Opinion was limited to the fairness, from a financial point of view, as of the date of the Opinion, to Ondas of the Merger Consideration to be paid pursuant to the Merger Agreement, and did not an opinion as to the fairness of the Mergers to the holders of any class of securities, creditors or other constituencies of Ondas or as to the underlying decision by Ondas to engage in the Mergers. The Opinion did not address any other aspect or implication of the Mergers, the Merger Agreement, or any agreement or understanding entered into in connection with the Mergers or otherwise. National Securities did not express any opinion as to the fairness of the amount or nature of the compensation to any of Ondas’ officers, directors, or employees, or any class of such persons, relative to the Merger Consideration or otherwise. National Securities assumed that the exercise price of the Parent Warrants will be the trading price of the Parent Common Stock (as defined in the Merger Agreement) on the trading day immediately preceding the closing of the Mergers and, for purposes of the Opinion, that the exercise price of the Parent Warrants was equal to the 10-day volume-weighted average price of the Parent Common Stock as of May 12, 2021, and did not express any opinion as to the prices or trading ranges at which shares of Ondas’ common stock will trade at any time before or after the announcement or consummation of the Mergers. Furthermore, National Securities did not express an opinion regarding the impact of the Mergers on the solvency or viability of Ondas, or the ability of Ondas to pay its obligations when they become due before consummation of the Mergers.

National Securities’ Opinion was necessarily based upon economic, market, monetary, regulatory and other conditions as they existed and could be evaluated, and the information made available to it, on the date of its Opinion. National Securities’ Opinion did not address the relative merits of the transaction as compared to alternative transactions or strategies that may have been available to Ondas.

National Securities’ Opinion was provided to the Board solely in connection with and for the purposes of its evaluation of the Mergers. The Opinion did not address Ondas’ underlying business decision to effect the Mergers and was not a recommendation to the Board or any holder of Ondas’ common stock as to how to vote or act on any matter with respect to the transaction.

Financial Analyses

The following is a summary of the material financial analyses presented by National Securities to the Board on May 14, 2021 in connection with its consideration of the proposed Mergers contemplated by the Merger Agreement. The summary does not contain all of the financial data security holders of Ondas may want or need for purposes of making an independent determination of fair value. Holders of Ondas’ securities are encouraged to consult their own financial and other advisors before making any investment decision in connection with the proposed Mergers. The following summary does not purport to be a complete description of the financial analyses performed by National Securities. The order of the analyses described and the results of these analyses do not represent relative importance or weight given to these analyses by National Securities. The following summary of financial analyses includes information presented in tabular format. The tables must be read together with the full text of each summary to understand the financial analyses discussed.

For purposes of its analyses, National Securities utilized three valuation approaches for both companies. While National Securities utilized these approaches for both Ondas and American Robotics, its analysis of Ondas was solely to perform a comparison to the market price of Ondas common stock to be used as a portion of the consideration in the Mergers. National Securities concluded in its professional judgment that the results of such analyses were sufficiently close to Ondas’ market price that no further valuation analysis of Ondas was required.

The following describes the valuation approaches that National Securities used for American Robotics:

Selected Public Company Analysis

National Securities applied valuation multiples of selected companies with publicly-traded equity securities National Securities deemed relevant to certain financial data for American Robotics. The publicly-traded companies were selected by National Securities in its professional judgment and experience because they were deemed to be similar to American Robotics in one or more respects. For purposes of these analyses, (i) except as otherwise noted, share prices for the selected companies reflect closing prices as of May 12, 2021 and (ii) estimates of future financial performance for the selected companies for the years ending December 31, 2021 and 2022 were based on publicly available research analyst estimates for those companies. In its professional judgment, National Securities did not analyze periods after December 31, 2022, because analyst estimates were not generally available for such periods.

The financial data reviewed included:

Although none of the selected public companies is directly comparable to American Robotics, the companies selected were chosen because they are publicly-traded companies with operations that, for purposes of analysis, may be considered similar in certain respects to American Robotics’ business. The selected companies considered by National Securities were:

Company Name

The mean, strip mean (which excluded the highest and lowest values), and median multiples of the financial data reviewed for the selected companies, based on publicly available research analyst estimates for the years ended December 31, 2021 and December 31, 2022, were:

Following its review of the results of the selected public companies analysis and taking into account several factors, including, among other things, the sizes, geographic presence and revenue mixes of American Robotics and the selected companies, as well as other operational and financial characteristics of American Robotics compared with the selected companies, National Securities applied, based on its professional judgment and experience, multiple ranges of 4.12x to 50.18x to estimates American Robotics’ 2021 revenue based on the American Robotics Projections and 3.70x to 10.32x to estimates of American Robotics’ 2022 revenue based on the American Robotics Projections.

This analysis indicated implied enterprise value reference ranges for American Robotics of approximately $6.8M to $83.1M (based on 2021E revenue) and $37.4M to $104.2M (based on 2022E revenue), as compared to the Merger Consideration of approximately $70.6M as provided in the Merger Agreement.

Selected Precedent Transactions Analysis

National Securities considered the financial terms of certain business combinations and other transactions that National Securities deemed relevant. The precedent transactions were selected because the target companies or assets were deemed by National Securities to be similar to American Robotics in one or more respects. Financial data for the selected transactions were based on public filings, publicly available research analyst estimates and other publicly available information.

The financial data reviewed for the selected transactions included the enterprise value implied by the consideration paid in the selected transaction as a multiple of the target companies’ then latest 12 months’ revenue as of the date of announcement of the transaction.

The observed high, median, low, and average multiples of the financial data reviewed for the selected transactions were 71.21x, 8.71x, 3.57x, and 18.39x, respectively. Taking into account the results of the selected transactions analysis, National Securities applied, based on its professional judgment and experience, a multiple range of 3.57x to 71.21x to American Robotics’ projected 2021 revenue (as provided to National Securities).

The selected transactions analysis indicated an implied enterprise value reference range for American Robotics of approximately $5.9M to $117.9M, as compared to the Merger Consideration of approximately $70.6M as provided in the Merger Agreement.

Discounted Cash Flow Analysis

National Securities performed a discounted cash flow analysis to derive the equity value reference range for American Robotics. The reference range was determined by adding (i) the net present value of the unlevered free cash flows for the fiscal years ending December 31, 2018 through December 31, 2024, based on the American Robotics Projections and (ii) the present value of an estimated terminal value for American Robotics. In addition, National Securities performed an additional discounted cash flow analysis scenario whereby the American Robotics Projections adjusted downward by 50%. National Securities determined to perform this additional adjusted analysis in its professional judgment in order to analyze American Robotics’ discounted cash flows in the event of potential adverse circumstances to American Robotics. National Securities applied a range of terminal value multiples, based on its professional judgment and experience, of 10.0x to 14.0x to estimates of American Robotics’ unlevered free cash flow in both scenarios for the fiscal year ended December 31, 2025 based on the American Robotics Projections and discount rates ranging from 32.2% to 42.2%. National Securities derived the discount rates referenced above, reflecting estimates of weighted average cost of capital for American Robotics, by application of the capital asset pricing model. The discounted cash flow analysis indicated an implied equity value reference range for American Robotics of $168.5M to $413.2M based on the American Robotics Projections and an implied equity value reference range of $82.0M to $203.9M based on the American Robotics Projections as adjusted by National Securities.

Other Matters

Pursuant to the engagement letter between Ondas and National Securities, Ondas agreed to pay National Securities an initial retainer fee of $50,000 upon commencement of its engagement and a fee of $75,000 which was paid upon the rendering of its Opinion to the Board. In addition, should the Board request that National bring down its opinion in connection with the transaction, an additional fee of $25,000 would be due and payable. Ondas has agreed to reimburse certain of National Securities’ expenses and to indemnify National Securities and certain related persons and entities for certain liabilities and other items arising out of or related to its engagement. In the past two years, National Securities has acted (1) in an advisory capacity to, (2) as a placement agent in three private placements for and (3) as an underwriter in one public offering for Ondas.

At the time of issuing the Opinion, the banking team of National Securities was employed by National Securities. As of May 17, 2021, the banking team of National Securities is employed by B. Riley Financial, Inc. (“B. Riley”). B. Riley acted as an underwriter in the Public Offering, which closed on June 11, 2021.

National Securities and its affiliates are engaged in a broad range of securities activities and financial advisory services. National Securities and its affiliates may in the future provide investment banking and other financial advice and services to American Robotics, Ondas and their respective affiliates for which advice and services National Securities and its affiliates would expect to receive compensation. In the ordinary course of business, National Securities and its affiliates may actively trade or hold the securities of Ondas and its affiliates for their own accounts or for the accounts of others, and, accordingly, may at any time hold long or short positions in such securities.

Certain Projected Financial Information

American Robotics and the Company do not as a practice make public projections as to future revenues, earnings or other results. However, in connection with the Board’s consideration of the Transaction and NSC’s financial analysis of American Robotics described under “– Opinion of Financial Advisor,” American Robotics’ management confidentially provided to the Company its non-public, internal financial forecast regarding American Robotics’ anticipated future operations for the years ending December 31, 2021 through December 31, 2025, which the Company subsequently provided to NSC. NSC made certain adjustments to the data it received from the Company, which adjustments were based on NSC’s experience and judgment. The Company has included from American Robotics’ financial forecasts the summary information set forth below to give its stockholders access to certain previously non-public information because such information was considered by the Company’s Board for purposes of evaluating the Transaction and by our financial advisor, NSC, for purposes of rendering its fairness opinion.

The unaudited prospective financial information was not prepared with a view toward public disclosure, nor was it prepared with a view toward complying with the published guidelines of the SEC and the guidelines established by the American Institute of Certified Public Accountants with respect to the preparation and presentation of prospective financial information, but, in the view of the Company’s management, was prepared on a reasonable basis, and presents, as of the date prepared, American Robotics’ expectation of its estimated future financial performance for the periods indicated. Furthermore, the unaudited prospective financial information does not take into account any circumstances or events occurring after the date it was prepared. The prospective financial information was prepared treating American Robotics on a stand-alone basis, without giving effect to the Transaction or any other potential acquisitions. However, this information is not fact and should not be relied upon as being necessarily indicative of future results, and readers of this proxy statement are cautioned not to place undue reliance on the prospective financial information.

The accompanying prospective financial information includes financial measures that were not calculated in accordance with GAAP, namely EBITDA and Adjusted EBITDA (as defined above). EBITDA is a non-GAAP financial measure and should not be considered as an alternative to operating income or net income as measures of operating performance or cash flows or as measures of liquidity. Non-GAAP measures are not necessarily calculated the same way by different companies and should not be considered a substitute for or superior to GAAP results.

American Robotics’ assumptions and estimates underlying the prospective financial information are inherently uncertain and are subject to a wide variety of significant business, economic and competitive risks and uncertainties that could cause actual results to differ materially from those contained in the prospective financial information, including, among others, risks and uncertainties set forth under “Risk Factors” and “Cautionary Statement Regarding Forward-Looking Statements” contained elsewhere in this proxy statement. Accordingly, there can be no assurance that the prospective results are indicative of the future performance of American Robotics, or that actual results will not differ materially from those presented in the prospective financial information. Inclusion of the prospective financial information in this proxy statement should not be regarded as a representation by any person that the results contained in the prospective financial information will be achieved.

The Company and American Robotics have not updated, and do not intend to update or otherwise revise, the prospective financial information to reflect circumstances existing since its preparation, including any changes in general economic or industry conditions, or to reflect the occurrence of subsequent events. None of the Company, American Robotics or any of their respective representatives or advisors makes any representation to any person with regard to the ultimate performance of the Company or American Robotics.

Interests of Ondas Executive Officers and Directors in the Transaction

In considering the recommendation of the Board with respect to the Transaction, stockholders should be aware that executive officers of Ondas and members of the Ondas board of directors may have interests in the Transaction that may be different from, or in addition to, the interests of Ondas stockholders generally. The Board was aware of these interests and considered them, among other matters, in approving the Merger Agreement and in making its recommendations regarding the proposals to be presented at the special meeting. These interests are as follows: directors and officers of Ondas have rights to indemnification and directors’ and officers’ liability insurance that will survive completion of the Transaction.

Accounting Treatment

Ondas will account for the Transaction as an acquisition of American Robotics by Ondas using the acquisition method of accounting in accordance with United States generally accepted accounting principles (“GAAP”). Ondas expects that, upon completion of the Transaction, holders of interests in American Robotics will receive approximately 16.6% of the outstanding common stock and voting power of the combined company, and Ondas stockholders will retain 83.4% of the outstanding common stock and voting power of the combined company. In addition to considering these relative voting powers, Ondas also considered the proposed composition of the combined company’s board of directors and the board committees, and the proposed members of the executive management team of the combined company, in determining the acquirer for accounting purposes. Based on the weighting of these factors, Ondas has concluded that it is the accounting acquirer.

Under the acquisition method of accounting, the assets, including identifiable intangible assets, and liabilities of American Robotics as of the effective time of the Mergers will be recorded at their respective fair values and added to those of Ondas. Any excess of the purchase price for the Mergers over the net fair value of American Robotics’ assets and liabilities will be recorded as goodwill. The results of operations of American Robotics will be combined with the results of operations of Ondas beginning at the closing of the Transaction. The consolidated financial statements of Ondas after closing will not be restated retroactively to reflect the historical financial position or results of operations of American Robotics. Following the Transaction, and subject to the finalization of the purchase price allocation, the earnings of Ondas will reflect the effect of any purchase accounting adjustments, including any increased depreciation and amortization associated with fair value adjustments to the assets acquired and liabilities assumed.

The allocation of the purchase price used in the unaudited pro forma financial statements included in this proxy statement is based upon a preliminary valuation by management. The final estimate of the fair values of the assets and liabilities will be determined with the assistance of a third-party valuation firm. Ondas’ preliminary estimates and assumptions are subject to materially change upon the finalization of internal studies and third-party valuations of assets, including investments, property and equipment, intangible assets including goodwill, and certain liabilities.

Ownership of Ondas after the Transaction

As of [●], 2021, Ondas has [34,032,040] shares of common stock outstanding.

Under the terms of the Merger Agreement, on the closing date of the Transaction, Ondas will issue to American Robotics’ stockholders an aggregate of 6,750,000 shares of common stock . Based on the foregoing, immediately after the closing of the Transaction, [40,782,040] shares of common stock will be issued and outstanding and the shares issued to American Robotics stockholders in the Transaction will represent approximately 16.6% of the outstanding common stock and voting power of the Company. Shares of common stock held by Ondas stockholders immediately before the closing of the Transaction will represent approximately 83.4% of the outstanding common stock and voting power of the Company after the closing of the Transaction. The foregoing are estimates of post-Transaction shares of common stock and to whether any adjustment is made.

Security Ownership of Certain Beneficial Owners and Management before the Transaction

As of [●], 2021, the record date for the special meeting, the following table sets forth certain information with respect to the beneficial ownership of our common stock by (i) each stockholder known by us to be the beneficial owner of more than five percent (5%) of our common stock, (ii) by each of our current directors and executive officers as identified herein, and (iii) all of our directors and executive officers as a group. Each person has sole voting and investment power with respect to the shares of common stock, except as otherwise indicated. Beneficial ownership is determined in accordance with the rules of the SEC and generally includes voting or investment power with respect to securities. Shares of common stock, stock options, restricted stock units (“RSUs”) and common stock purchase warrants that are currently exercisable or convertible into shares of our common stock within sixty (60) days of the date of this document, are deemed to be outstanding and to be beneficially owned by the person holding the options, RSUs, or warrants for the purpose of computing the percentage ownership of the person, but are not treated as outstanding for the purpose of computing the percentage ownership of any other person. Unless otherwise noted, the address for all officers and directors listed below is 61 Old South Road, #495, Nantucket, MA 02554.

Security Ownership of the Company after the Transaction

The following table sets forth information with respect to the beneficial ownership of our common stock after consummating the Transaction by each person expected to serve as an executive officer or director of the combined company, all such executive officers and directors as a group, and each person expected to own more than 5% of our common stock. For this table, we assume 6,750,000 shares of common stock will be issued in connection with the Transaction.

Executive Officers and Board of Directors Before and After the Transaction

The following table sets forth information on our executive officers and directors before and after the Transaction.

Federal Securities Laws Consequences; Stock Transfer Restriction Agreements

All shares of Ondas common stock that holders of interests in American Robotics receive in the Transaction will be issued pursuant to an exemption from the registration requirements under the Securities Act of 1933, as amended, and the rules and regulations thereunder (collectively, the “Securities Act”) and as such will be deemed restricted securities as that term is understood under the Securities Act. Moreover, certain American Robotics equity holders will be subject to a 180-day contractual lock-up to be entered into in connection with consummating the Mergers. Ondas has agreed to file a registration statement on Form S-3 providing for the resale of shares issued in the transaction, including the shares of Ondas common stock underlying the Warrants, which registration statement is required to be effective within 90 days after the Closing Date, subject to SEC comment.

Dissenters’ Rights for Ondas Stockholders

Ondas stockholders have no dissenters’ rights in the Transaction.

MATERIAL FEDERAL INCOME TAX CONSEQUENCES OF THE MERGERS

There will be no U.S. federal income tax consequences to holders of Ondas common stock as a result of the Mergers.

REGULATORY MATTERS

Pursuant to the Merger Agreement, in the event Ondas does not qualify as a Citizen of the U.S. as defined in 49 U.S.C. 40102 (a)(15) (as determined after the Mergers), Ondas will be required to apply for and receive a U.S. Department of Transportation Foreign Civil Aircraft Permit or Special Authorization under Title 14 C.F.R. Part 375 related to American Robotics’ UAS operations.  Ondas believes it currently qualifies and will qualify as of the closing of the Transaction as a Citizen of the U.S. as defined in 49 U.S.C. 40102 (a)(15) and, as a result, Ondas believes the Requisite Regulatory Approval is not required in connection with the Mergers. 

AMERICAN ROBOTICS MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

General

The following discussion and analysis provide information which management believes to be relevant to an assessment and understanding of the results of operations and financial condition of American Robotics for fiscal year 2020 compared to fiscal year 2019 and for the three months ended March 31, 2021 compared to the three months ended March 31, 2020.

Overview

American Robotics is a commercial developer of highly automated drone systems, providing ultra-high resolution aerial data to enterprise customers. Through innovations in robot autonomy, machine vision, edge computing and AI, American Robotics has created the next generation of drone technology: a highly automated robotic data platform capable of continuous, unattended operation. As a result, American Robotics provides enterprise customers with the ability to continuously digitize, monitor and analyze their assets in near real-time.

The American Robotics Scout System™ has been designed from the ground up as an end-to-end product capable of continuous attended operations in the real world. Powered by innovations in robotics automation, machine vision, edge computing, and AI, the Scout system provides unprecedented efficiencies as a drone solution for commercial use. The Scout System™ consists of (1) a highly automated drone with advanced imaging payloads, Scout (2) a ruggedized base station for housing, charging, data processing, and cloud transfer, ScoutBase, and (3) American Robotics’ analytics and user interface software package, ScoutView, as well as a host of supporting technologies that connect these major subsystems. Once installed in the field at customer locations, a fleet of connected, weatherproof Scouts remain indefinitely in an area of operation, automatically collecting data each day, self-charging, and seamlessly delivering data analysis regularly and reliably.

With no human intervention required to operate the Scout System™in the field and the incorporation of power edge computing into the Scout System™, the result is a 10x+ reduction in data acquisition costs for American Robotics’ customers. Unlike traditional drone technology, Scout System™live in the field for many years, performing multiple missions per day without physical human interaction. The result of this automation, as well as the edge computing power that lives within each base station, is the ability to capture data at resolutions, frequencies, and speeds never before feasible. This ability, in turn, allows users to extract actionable information in a manner that is reliable, repeatable, and scalable.

The advanced and high automation incorporated into the Scout drone technology enables the implementation of a Robot-as-a-Service (RaaS) business model wherein American Robotics’ customer are not required to make expensive capital investments in robotics or drone hardware, and instead can obtain the data collected by the Scout drone systems via a subscription service. This enables American Robotics to realize high profitability margins on the drone hardware that the company retains ownership of, and operates on behalf of these customers. Customers are also guaranteed access to the latest hardware and software features as American Robotics develops and rolls these features out.

American Robotics sells its products and services nationally through a direct sales force to large enterprises that operate in the agriculture, industrial and critical infrastructure verticals that include major rail operators, electric and gas utilities, oil and gas producers, large agricultural input manufacturers, large agricultural coops, and for other critical infrastructure applications in areas such as homeland security and defense, and transportation. American Robotics’ business consists of a single segment of services, all of which are sold and provided in the United States.

American Robotics has incurred significant net losses since inception, and expects to continue incurring substantial losses for the next several years as the company continues to develop, manufacture and market their technologies. American Robotics’ operating expenses are comprised of research and development expenses, general and administrative expenses, and sales and marketing expenses.

American Robotics’ future capital requirements will depend upon many factors, including progress with developing, manufacturing and marketing of the company’s technologies, the time and costs involved in preparing, filing, prosecuting, maintaining and enforcing patent claims and other proprietary rights, the company’s ability to establish collaborative arrangements, marketing activities and competing technological and market developments, including regulatory changes and overall economic conditions in target markets.

Regulatory Approvals

During 2019, American Robotics filed several applications for regulatory approvals of the Scout System™. These included applications for Certifications, and waivers from several regulations in Title 14 C.F.R. Part 107 to allow the operational, research and development, and commercial use of American Robotics’ technology.

In January 2020, several American Robotics staff members along with multiple Scout System™ spent three weeks at a partner’s test facility in Southern Nevada to test, document, and demonstrate the capabilities of American Robotics’ technology to observers including those from the FAA. This test campaign culminated in the FAA issuing a Special Airworthiness Certificate, in February 2020, to the Scout System™ that allowed for operation of up to three systems simultaneously by a single pilot located in Boston. The scout drones would be monitored by visual observers while in flight.

In parallel to this effort, the FAA also granted American Robotics a waiver to Title 14 C.F.R. §107.31 that allowed for the use of American Robotics’ unique acoustics-based aircraft detect and avoid sensor in conjunction with the Scout System™ to allow BVLOS UAS flight operations. In this operational modality approved by the FAA, the UAS pilot, who is co-located with the Scout base station is allowed to operate the Scout System™ to a distance of 2 miles which would be beyond the line of sight of the pilot in any direction.

In January 2021, the FAA granted American Robotics the first and currently one of its kind approval to allow operations of the Scout System™ remotely, with no humans present at the operational locations. The approval consists of a unique combination of waivers and exemptions to certain Federal Aviation Regulations governing the operation of UAS in the National Airspace System (NAS). This approval is not only a validation of American Robotics’ technology and regulatory approach to the safe integration of UAS, but also provides the company with a strong and durable first-mover advantage to operate automated drone systems in the commercial markets, which the company believes is a requirement for over 90% of all commercial drone applications. This gives American Robotics a competitive advantage over other players in the commercial drone industry and allows the company to start engaging with large industrial enterprises to establish a beachhead as a trusted service provider to these enterprises.

American Robotics expects an increase in sales as a result of the grant of approval by the FAA, and the subsequent heightened interest from enterprise customers.

Financing Activity

In 2020, American Robotics issued convertible notes and sold common stock to existing investors and a small group of new investors to raise additional capital in the aggregate amount of $2.35 million, of which the convertible notes in the aggregate amount of $850,000 bear interest at 6% per annum. The capital raised will be used to fund American Robotics’ operations including research and development, additional support for regulatory matters, increased sales and marketing efforts, and to support the continued growth and expansion of American Robotics’ business and operations. Unless converted, these notes will automatically mature and be fully payable, including accrued interest, on dates ranging from January 31, 2023 to December 18, 2023.

During the three months ended March 31, 2021, American Robotics issued additional convertible notes in the aggregate amount of $250,000 bearing interest at 6% per annum and which mature on the same terms as described in the preceding paragraph. As of March 31, 2021, the convertible notes payable balance, inclusive of all convertible notes issued in 2021 and previous periods, consisted of principal outstanding of $2,725,000 and accrued interest of $212,999.

COVID-19

In December 2019, a novel strain of coronavirus (“COVID-19”) was identified in Wuhan, China, and has subsequently spread to other regions of the world, and has resulted in increased travel restrictions, business disruptions and emergency quarantine measures across the world including the United States.

American Robotics’ business, financial condition and results of operations were impacted from the COVID-19 pandemic significantly in 2020 and during the three months ended March 31, 2021:

In the first quarter of 2020, American Robotics reduced its business activity to critical operations only, and all employees were asked to work from home until the public health situation improves. Per orders issued by the Commonwealth of Massachusetts, American Robotics’ corporate offices and facilities were closed, except for functions related to the support of remote workers. All sales activities were curtailed, and customer engagements, where possible, were deferred. As most of the customers American Robotics was engaged with in 2020 were in the agriculture vertical, this meant that these customer engagements would be deferred to 2021 because of the seasonality of agriculture.

On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) was enacted. The CARES Act is an approximately $2 trillion emergency economic stimulus package in response to the COVID-19 outbreak, which among other things contains numerous income tax provisions. Some of these tax provisions are expected to be effective retroactively for years ending before the date of enactment. American Robotics applied for, and received, funds under the Economic Injury Disaster Loan and Paycheck Protection Program (PPP) in the amount of $257,029. The application for these funds requires American Robotics to, in good faith, certify that the current economic uncertainty made the loan request necessary to support operations of the company. This certification further requires American Robotics to consider its current business activity and ability to access other sources of liquidity sufficient to support ongoing operations in a manner that is not significantly detrimental to the business.

On December 27, 2020, the Economic Aid to Hard-Hit Small Businesses, Nonprofits, and Venues Act (the “Economic Aid Act”) was enacted which included provisions for a second round of the PPP. In January 2021, American Robotics applied for, and in February 2021 received, funds under the second round of the PPP in the amount of $235,846.37. The application for these funds requires American Robotics to, in good faith, certify that the current economic uncertainty made the loan request necessary to support operations of the company. This certification further requires the company to consider its current business activity and ability to access other sources of liquidity sufficient to support ongoing operations in a manner that is not significantly detrimental to the business. The receipt of these funds, and the forgiveness of the loan related to these funds, is dependent on the company having initially qualified for the loan and qualifying for the forgiveness of such loan based on its future adherence to the forgiveness criteria. American Robotics is in discussion with the lender regarding the forgiveness of this second round PPP loan. However, no determination related to the forgiveness of this loan has been made as of the date of this proxy statement.

During 2020, in response to COVID-19, and the associated restrictions on personnel, management decided to continue the furlough and reduction in hours of certain employees who were expected to be brought back to full employment in April 2020. This continuation of reduced hours and furlough extended through 2020 and into the first quarter of 2021. Management also decided to freeze all plans for additional hiring, and expansion of manufacturing additional Scout systems. Engineering resources were diverted towards increasing manufacturability of American Robotics’ technology, and in support of obtaining regulatory approvals. It was also decided that only one customer engagement, local to Boston, would be executed, and manned by American Robotics staff with appropriate health precautions and in full-compliance of all public health orders. Sales and business development resources were diverted towards expanding American Robotics’ engagement with enterprises in the industrial sector, as it is expected that this vertical would be a revenue and sales driver once the regulatory approvals for American Robotics’ technology materialize. Limited engagements with large electric utilities, oil and gas majors, and chemical industry majors have been highly encouraging, and it is expected that these would turn into revenue-generating engagements as soon as the regulatory approvals sought by American Robotics are granted.

In May 2021, subsequent to the three months ended March 31, 2021, one of American Robotics’ two PPP loans outstanding as of such time had been forgiven, representing an aggregate amount of $249,732.60 in principal and interest.

American Robotics expects its business, financial condition and results of operations will be impacted from the COVID-19 pandemic during 2021, primarily due to the slowdown of customer activity during 2020 and 2021. Further, the COVID-19 pandemic is ongoing and remains an unknown risk for the foreseeable future. The extent to which the coronavirus may impact American Robotics’ business will depend on future developments, which are highly uncertain and cannot be predicted. As a result, the company is unable to reasonably estimate the full extent of the impact from the COVID-19 pandemic on its future business, financial condition and results of operations. In addition, if the company were to experience any new impact to its operations or incur additional unanticipated costs and expenses as a result of the COVID-19 pandemic, such operational delays and unanticipated costs and expenses there could be a further adverse impact on the company’s business, financial condition and results of operations during 2020 and 2021.

Key Components of American Robotics’ Results of Operations and Financial Condition

Revenues

American Robotics’ revenues are derived principally from the sale of services using the American Robotics Scout System™. Due to the ongoing development and commercialization process, as well as the ongoing regulatory approval processes for the Scout System™, the company’s revenues have historically been generated by pilot programs, short-term proof of concept tests, and related services. American Robotics, historically, had limited sales and customer service resources to support higher sales volumes. In 2020 and 2019, the company expanded its sales and business development effort into the industrial verticals which dramatically increased American Robotics’ sales pipeline and the number of customers and projects being targeted. American Robotics expects this increased customer engagement to lead to a larger number of sales opportunities and revenue in 2021 and beyond, following regulatory approvals of American Robotics’ technology.

Cost of Sales

American Robotics’ cost of sales consists primarily of the cost of components included in the American Robotics Scout System™ and other costs associated with the delivery, installation and deployment thereof. American Robotics expects its investment in expanding customer sales and service efforts to lead to increased volume of Scout System™ sales in future periods, which will lead to higher costs of sales. Higher unit sales volume will, in turn, provide scale manufacturing opportunities which could lead to a decline in the cost of sales as a percentage of revenue in future periods.

General and Administration

General and administration expenses primarily include salary and benefit expenses, legal and accounting services, professional services, rent and facilities costs, general liability insurances, and travel expenses. American Robotics expects these expenses to increase as a result of continued growth in headcount and support of its business and operations in 2021 and beyond.

Sales and Marketing

Sales and marketing expenses primarily include salary and benefit expenses, trade shows, marketing programs and promotional material, travel expenses, and the allocation of certain facility costs. American Robotics expects these expenses to increase as a result of continued growth in headcount and support of the company’s business and operations.

Research and Development

Research and development expenses primarily include salary and benefit expenses and costs for contractors engaged in research, design and development activities including intellectual property, travel expenses, and the allocation of certain facility costs. American Robotics expects its research and development costs to increase as the company continues to invest in developing its products in addition to new software and analytics features that may be customer- and industry- dependent.

Other Income (Expense)

Other income (expense) primarily includes interest expense and grant income.

Results of Operations

Three months ended March 31, 2021 compared to three months ended March 31, 2020

Revenues and Gross Profit

The revenue realized and the gross profit for the three months ended March 31, 2021 increased by $50,000 compared to the same period in 2020 as a result of an increase in customer sales activity.

Operating expenses

American Robotics’ principal operating costs include the following items as a percentage of total expense.

Operating expenses increased by $68,124 as a result of the following items:

The increase in operating expense was primarily a result of the higher expense under the Other research and development costs that includes payments to technology partners and vendors of technology used in the company’s products and services.

Operating Loss

Primarily as a result of the foregoing increase in operating expense, American Robotics’ operating loss increased by $18,124, to $723,064 for the three months ended March 31, 2021 compared to $704,940 for the three months ended March 31, 2020.

Other Income (Expense), net

Other income (expense), net increased by $224,498, to $195,264 for the three months ended March 31, 2021, compared with $(29,234) for the three months ended March 31, 2020. During the three months ended March 31, 2021, compared to the same period in 2020, American Robotics recognized additional grant income that is reflected in Other Income (Expense), net.

Net Loss

As a result of the net effects of the foregoing items, net loss decreased by $206,374, to $527,800 for the three months ended March 31, 2021, compared with $734,174 for the three months ended March 31, 2020.

Liquidity and Capital Resources

As of March 31, 2021, American Robotics believes that its cash and cash equivalents together with its accounts receivable would not provide the company sufficient liquidity, as a stand-alone business, to satisfy its obligations for the following 12 months or subsequent periods, but expects to meet its liquidity needs through the consummation of the Transaction or, in the event the Transaction is not consummated, by increasing sales as well as reducing costs as needed, and through alternative strategic or financing transactions. Subject to the consummation of the Transaction, American Robotics’ future capital requirements will depend on many factors, including its rate of revenue growth, the rate of expansion of its workforce, the timing and extent of its expansion into new markets, the timing of introductions of new functionality and enhancements to its solutions, potential acquisitions of complementary businesses and technologies, continuing market acceptance of its solutions, and general economic and market conditions.

American Robotics’ principal sources of liquidity consisted of cash and cash equivalents of $725,483 as of March  31, 2021, as compared to $938,227 as of March  31, 2020, and net cash provided by financing activities of $250,000 during the three months ended March 31, 2021, as compared to $800,000 during the three months ended March  31, 2020. Additional information regarding American Robotics’ sources of liquidity and capital commitments for the period ended March 31, 2021 and the year ended December 31, 2020 is set forth under “—Sources and (Uses) of Cash” and “—Year ended December 31, 2020 compared to year ended December 31, 2019—Sources and (Uses) of Cash,” respectively.

Sources and (Uses) of Cash

The principal use of cash in operating activities for the three months ended March 31, 2021 was to fund American Robotics’ current expenses primarily related to both sales and marketing and research and development activities necessary to allow the company to leverage its FAA approval to service and support customers. The net cash provided by financing activities of $250,000 was due to the issuance of the convertible notes in the three months ended March 31, 2021.

Year ended December 31, 2020 compared to year ended December 31, 2019

Operating expenses

American Robotics’ principal operating costs include the following items as a percentage of total expense.

Operating expenses in 2020 decreased by $1,308,258 compared to 2019 as a result of the following items:

The decrease in operating expense was primarily a result of the lower expense under the Other research and development costs that includes funds spent on prototyping, field testing of systems and subsystems, payments to technology partners and vendors of technology used in the company’s products and services. Additionally, human resource costs were also lower because of extended furloughs, and a freeze in hiring in 2020. Similarly, sales and marketing costs were also lower in 2020 as a result of COVID-19-related restrictions.

Operating Loss

Primarily as a result of the decrease in operating expenses, American Robotics’ operating loss decreased by $1,316,358, to $2,579,470 for the year ended December 31, 2020, compared with $3,895,828 for the year ended December 31, 2019.

Other Income (Expense), net

Other income (expense), net increased by $155,577, to $131,818 for the year ended December 31, 2020, compared with $(23,759) for the year ended December 31, 2020. In 2020, American Robotics recognized additional grant income that is reflected in Other Income (Expense), net.

Net Loss

As a result of the net effects of the foregoing items, net loss decreased by $1,471,935 to $2,447,652 for the year ended December 31, 2020 compared to $3,919,587 for the year ended December 31, 2019.

Sources and (Uses) of Cash

The principal use of cash in operating activities for the year ended December 31, 2020 was to fund American Robotics’ current expenses primarily related to research and development and sales and marketing activities necessary to allow the company to service and support a higher level of business as it expanded into new industry segments. The decrease in cash flow used in operation activities is primarily a result of reduction of personnel, both employees and third-party consulting services, and a reduction in research and development activities. The decrease in net cash provided by financing activities in 2020 compared to 2019 was due to a reduction in the issuance of convertible notes and common stock in 2020 compared to 2019.

Vote Required

The affirmative vote of a majority of the votes cast at the special meeting is required to approve the Stock Issuance Proposal.

THE BOARD UNANIMOUSLY RECOMMENDS THAT YOU VOTE “FOR” THE STOCK ISSUANCE PROPOSAL

PROPOSAL 2: THE ADJOURNMENT PROPOSAL

The Adjournment Proposal allows the Board to submit a proposal to adjourn the special meeting to a later date or dates, if necessary, to permit further solicitation of proxies in the event, based on the tabulated votes, there are not sufficient votes at the time of the special meeting to approve the Stock Issuance Proposal. In no event will Ondas solicit proxies to adjourn the special meeting or consummate the Transaction beyond the date by which it may properly do so under Nevada law. The purpose of the Adjournment Proposal is to provide more time for Ondas to solicit proxies in favor of the Stock Issuance Proposal.

In addition to an adjournment of the special meeting upon approval of an Adjournment Proposal, the Board is empowered under Nevada law to postpone the meeting at any time before the special meeting is called to order. In such event, Ondas will issue a press release and take such other steps as it believes are necessary and practical in the circumstances to inform its stockholders of the postponement.

Consequences if the Adjournment Proposal is not Approved

If the Adjournment Proposal is presented at the special meeting and such proposal is not approved by stockholders, the Board may not be able to adjourn the special meeting to a later date in the event, based on the tabulated votes, there are not sufficient votes at the time of the special meeting to approve the consummation of the Mergers and the proposal relating thereto.

Vote Required

The affirmative vote of a majority of the votes cast at the special meeting by the holders of our common stock is required to approve the Adjournment Proposal.

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE “FOR”
THE ADJOURNMENT PROPOSAL

THE SPECIAL MEETING

The Board is using this proxy statement to solicit proxies from stockholders of Ondas who hold shares of Ondas common stock on the Record Date for use at the Ondas special meeting. Ondas is first mailing this proxy statement and accompanying form of proxy to Ondas stockholders on or about [●], 2021.

Date, Time, and Place

The Ondas special meeting will be held on [●] at [●] Eastern time, at [●].

Purpose of the Ondas Special Meeting

At the Ondas special meeting, Ondas stockholders will be asked to consider and vote upon the following proposals:

Board Recommendations

The Board has approved the Mergers and related transactions, the Merger Agreement and the other agreements relating to the Mergers and related transactions, and determined that the Mergers and related transactions, the Merger Agreement and the other agreements relating to the Mergers and related transactions, are advisable and in the best interests of Ondas and its stockholders. The Board unanimously recommends that Ondas stockholders vote:

Record Date; Shares Entitled to Vote

Ondas has fixed the close of business on [●], 2021 as the record date for determining the Ondas stockholders entitled to receive notice of and to vote at the Ondas special meeting. Only holders of record of Ondas common stock on the Record Date are entitled to receive notice of and vote at the Ondas special meeting, and any adjournment or postponement thereof.

Each share of Ondas common stock is entitled to one vote on each matter brought before the meeting. On the Record Date, there were approximately [34,032,040] shares of common stock issued and outstanding.

Quorum Requirement

Under Nevada law and the Ondas bylaws, a quorum of Ondas stockholders at the special meeting is necessary to transact business at the special meeting of the Ondas stockholders. The presence of holders representing a majority of the shares of stock, issued and outstanding and entitled to vote at the special meeting, in person or represented by proxy, will constitute a quorum for the transaction of business at the Ondas special meeting.

All shares of Ondas common stock represented in person or by proxy at the Ondas special meeting, including abstentions, will be treated as present for purposes of determining the presence or absence of a quorum at the Ondas special meeting.

Abstentions

Any of your shares that are not voted or as to which you abstain are not “votes cast” and will have no effect on the vote for the Stock Issuance Proposal or the Adjournment Proposal.

Broker Non-Votes

Your broker is not permitted to vote on the Stock Issuance Proposal and the Adjournment Proposal unless you provide your broker with voting instructions on such proposal. You should instruct your broker to vote your shares by following the directions your broker provides you. Please review the voting information form used by your broker to see if you can submit your voting instructions by telephone or Internet.

A broker non-vote will have no effect on the Stock Issuance Proposal and the Adjournment Proposal.

Stock Ownership of Ondas Directors and Executive Officers

On the Record Date, directors and executive officers of Ondas and their respective affiliates beneficially owned and were entitled to vote approximately [●] shares of Ondas common stock. These shares represent approximately [●]% of the shares of Ondas common stock outstanding on the Record Date.

Votes Required to Approve Proposals

Approval of the proposals to be considered at the Ondas special meeting requires the vote thresholds described below. You may vote for or against either or both of the proposals submitted at the Ondas special meeting or you may abstain from voting.

Required Vote for Approval of the Stock Issuance Proposal (Proposal 1)

Approval of the Stock Issuance Proposal requires the affirmative vote of a majority of the votes cast at the special meeting. Consequently, an abstention from voting or a broker non-vote will have no effect on the outcome of the vote for Proposal 1.

Required Vote for Adjournment Proposal (Proposal 2)

Approval of the Adjournment Proposal requires the affirmative vote of a majority of the votes cast at the special meeting. An abstention from voting or a broker non-vote will have no effect on the outcome of the vote for Proposal 2.

Approval of the Stock Issuance Proposal by the requisite vote of the Ondas stockholders is required to complete the Transaction.

Submission of Proxies

By Mail

A proxy card is enclosed for your use. To submit your proxy by mail, Ondas asks that you sign and date the accompanying proxy and, if you are a stockholder of record, return it as soon as possible in the enclosed postage-paid envelope or pursuant to the instructions set out in the proxy card. If you are a beneficial owner, please refer to your proxy card or the information provided to you by your bank, broker, custodian or record holder. When the accompanying proxy is returned properly executed, the shares of Ondas common stock represented by it will be voted at the special meeting in accordance with the instructions contained in the proxy.

If proxies are returned properly executed without indication as to how to vote, the Ondas common stock represented by each such proxy will be voted as follows: (1) “FOR” the Stock Issuance Proposal and (2) “FOR” the Adjournment Proposal.

Your vote is important. Accordingly, please sign, date and return the enclosed proxy card whether or not you plan to attend the Ondas special meeting in person.

By Telephone

If you are a stockholder of record, you may also submit your proxy by telephone by dialing the toll-free telephone number on your proxy card and providing the unique control number indicated on the enclosed proxy card. Telephone proxy submission is available 24 hours a day and will be accessible until [●] Eastern time on [●], 2021. Easy-to-follow voice prompts allow you to submit your proxy and confirm that your instructions have been properly recorded. If you are a beneficial owner, please refer to your proxy card or the information provided by your bank, broker, custodian or record holder for information on telephone proxy submission. If you are located outside the United States, Canada and Puerto Rico, see your proxy card or other materials for additional instructions. If you submit your proxy by telephone, you do not need to return your proxy card. If you hold shares through a broker or other custodian, please check the voting form used by that firm to see if it offers telephone proxy submission.

By Internet

If you are a stockholder of record, you may also choose to submit your proxy on the Internet. The website for Internet proxy submission and the unique control number you will be required to provide are on the proxy card. Internet proxy submission is available 24 hours a day and will be accessible until [●] Eastern time on [●], 2021. If you are a beneficial owner, please refer to your proxy card or the information provided by your bank, broker, custodian or record holder for information on Internet proxy submission. As with telephone proxy submission, you will be given the opportunity to confirm that your instructions have been properly recorded. If you submit your proxy on the Internet, you do not need to return your proxy card. If you hold shares through a broker or other custodian, please check the voting form used by that firm to see if it offers Internet proxy submission.

Voting In Person

If you wish to vote in person at the special meeting, a ballot will be provided at the special meeting. However, if your shares are held in the name of your bank, broker, custodian or other record holder, you must obtain a proxy, executed in your favor, from the holder of record to be able to vote at the meeting.

Revocation of Proxies

You have the power to revoke your proxy at any time before your shares are voted at the special meeting. If you grant a proxy in respect of your Ondas shares and then attend the special meeting in person, your attendance at the special meeting or at any adjournment or postponement of the special meeting will not automatically revoke your proxy. Your proxy can be revoked in one of four ways:

If you choose either of the first two methods to revoke your proxy, you must submit your notice of revocation or new proxy to Ondas’s Corporate Secretary so that it is received no later than the beginning of the special meeting or, if the special meeting is adjourned or postponed, before the adjourned or postponed meeting is actually held.

If your shares are held in the name of a broker or nominee, you may change your vote by submitting new voting instructions to your broker or nominee. If you need assistance in changing or revoking your proxy, please contact your broker or nominee.

Solicitation of Proxies

This solicitation is made on behalf of the Board and Ondas will pay the costs of soliciting and obtaining proxies, including the cost of reimbursing banks and brokers for forwarding proxy materials to their principals. Proxies may be solicited, without extra compensation, by Ondas’ officers and employees by mail, telephone, fax, personal interviews or other methods of communication. [Ondas has engaged [●] to assist it in the distribution and solicitation of proxies at a fee of $[●], plus expenses. Ondas will also reimburse brokers and other custodians, nominees and fiduciaries for their expenses in sending these materials to you and getting your voting instructions.]

AUDITORS, TRANSFER AGENT AND REGISTRAR

The independent registered public accounting firm that audits the Company’s financial statements is Rosenberg Rich Baker Berman, P.A., whose offices are located at 265 Davidson Avenue, suite 210, Somerset, New Jersey 08873. Representatives of Rosenberg Rich Baker Berman, P.A. are not expected to be present at the special meeting. As a result, there will be no statements made by Rosenberg Rich Baker Berman, P.A. and no opportunity to ask questions of Rosenberg Rich Baker Berman, P.A.

Also, the independent public accounting firm that audits American Robotics’ financial statements is Turner Stone & Company, L.L.P., whose offices are located at 12700 Park Central Drive, Suite 1400, Dallas, Texas 75251. Representatives of Turner Stone & Company, L.L.P. are not expected to be present at the special meeting. As a result, there will be no statements made by Turner Stone & Company, L.L.P. and no opportunity to ask questions of Turner Stone & Company, L.L.P.

The transfer agent and registrar for the Company’s common stock is Globex Transfer, LLC, whose offices are located at 780 Deltona Blvd., Suite 202, Deltona, Florida 32725.

FUTURE STOCKHOLDER PROPOSALS

We did not hold a 2020 Annual Meeting of Stockholders. We plan to hold a 2021 Annual Meeting of Stockholders by December 31, 2021. As a result, under Rule 14a-8 promulgated under the Exchange Act (“Rule 14a-8”), a stockholder may submit proposals before the Company’s 2021 Annual Meeting of Stockholders if all applicable requirements of Rule 14a-8 are satisfied and such proposals are received by the Company’s Secretary within a reasonable time before the Company prints and mails materials for its 2021 Annual Meeting of Stockholders. If we hold a 2021 Annual Meeting of Stockholders, we anticipate that we will disclose the deadline for stockholders to submit proposals for the 2021 Annual Meeting of Stockholders under Rule 14a-8 on a Current Report on Form 8-K, Quarterly Report on Form 10-Q or Annual Report on Form 10-K once such deadline is known.

Also, pursuant to the Company’s bylaws, for business to be properly brought before an Annual Meeting of Stockholders by a stockholder, the stockholder shall give timely notice in writing to the Secretary of the Company. To be timely, a stockholder’s notice shall be delivered to or mailed and received by the Secretary at the principal executive office of the Company no later than the 90^th day nor earlier than 120 days prior to the first anniversary of the preceding year’s annual meeting; provided, however, that in the event that the date of the annual meeting is advanced by more than 30 days before or delayed by more than 60 days after such anniversary date, notice by the stockholder to be timely must be so delivered not earlier than the close of business on the 120th day prior to such annual meeting and not later than the close of business on the later of the 90th day prior to such annual meeting or the 10th day following the day on which public announcement of the date of such meeting is first made. Notwithstanding anything to the contrary provided herein, for the first annual meeting following the listing on a national securities exchange of common stock of the Company, which we expect will be the 2021 Annual Meeting of Stockholders, a stockholder’s notice shall be timely if delivered to the Secretary at the principal executive offices of the Company not later than the close of business on the later of the 90th day prior to the scheduled date of such annual meeting or the 10th day following the day on which public announcement of the date of such annual meeting is first made or sent by the Company.

WHERE YOU CAN FIND MORE INFORMATION

Ondas files annual, quarterly and periodic reports, proxy statements and other information with the SEC. These SEC filings are available to the public from commercial document retrieval services and at the website maintained by the SEC at http://www.sec.gov.

The SEC allows Ondas to incorporate by reference information into this proxy statement, which means that the companies can disclose important information to you by referring you to other documents filed separately with the SEC. The information incorporated by reference is considered part of this proxy statement, except for any information superseded by information contained directly in this proxy statement or in later filed documents incorporated by reference into this proxy statement.

This document incorporates by reference the documents listed below that Ondas has previously filed with the SEC other than portions of these documents that are furnished under Item 2.02 or Item 7.01 of a Current Report on Form 8–K. These documents contain important business and financial information about Ondas that is not included in or delivered with this proxy statement.

Ondas is also incorporating by reference additional documents that it files with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act between the date of this proxy statement and the date of the special meeting.

Documents incorporated by reference are available without charge from Ondas, as applicable, excluding any exhibits to those documents unless the exhibit is specifically incorporated by reference in this proxy statement. You can obtain documents incorporated by reference into this proxy statement by requesting them in writing or by telephone from the Company at the following address:

If you wish to request documents, the Company must receive your request by [●], 2021 in order to receive them before the special meeting.

Ondas has not authorized anyone to give any information or make any representation about the Transaction that is different from, or in addition to, that contained in this proxy statement or in any of the materials that have been incorporated by reference into this proxy statement. Therefore, if anyone gives you information of this sort, you should not rely on it. If you are in a jurisdiction where offers to exchange or sell, or solicitations of offers to exchange or purchase, the securities offered by this proxy statement or the solicitation of proxies is unlawful, or if you are a person to whom it is unlawful to direct these types of activities, then the offer presented in this proxy statement does not extend to you. The information contained in this proxy statement speaks only as of the date of this proxy statement unless the information specifically indicates that another date applies.

AMERICAN ROBOTICS, INC. PRO FORMA FINANCIAL STATEMENTS

FINANCIAL STATEMENTS OF AMERICAN ROBOTICS, INC.

Audited Financial Statements

Years ended December 31, 2020 and December 31, 2019

Unaudited Financial Statements

Three months ended March 31, 2021 and March 31, 2020

Unaudited Pro Forma Condensed Combined Financial Statements

As of March 31, 2021 and for the three months ended March 31, 2021 and year ended December 31, 2020

AMERICAN ROBOTICS, INC.
Financial Statements
December 31, 2020 and 2019

American Robotics, Inc.

Table of Contents

December 31, 2020 and 2019

Independent Auditors’ Report

The Board of Directors and Stockholders of

American Robotics, Inc.

Marlborough, Massachusetts

We have audited the accompanying financial statements of American Robotics, Inc. (the “Company”), which comprise the balance sheets as of December 31, 2020 and 2019, and the related statements of operations, changes in stockholders’ deficit, and cash flows for the years then ended, and the related notes to the financial statements.

Management’s Responsibility for the Financial Statements

Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.

Auditors’ Responsibility

Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditors’ judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2020 and 2019, and the results of its operations and cash flows for the years then ended in accordance with accounting principles generally accepted in the United States of America.

Emphasis of Matter

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the financial statements, the Company generated a net loss, has net stockholders’ deficit, and used significant cash for operating activities, all of which raise substantial doubt about its ability to continue as a going concern. Management’s plan in regard to these matters are also described in Note 1. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

/s/ Turner Stone & Company L.L.P.

Certified Public Accountants

May 10, 2021

American Robotics, Inc.

Balance Sheets

December 31, 2020 and 2019

The Notes to Financial Statements are an integral part of these statements.

American Robotics, Inc.

Statements of Operations

Years Ended December 31, 2020 and 2019

The Notes to Financial Statements are an integral part of these statements.

American Robotics, Inc.

Statements of Changes in Stockholders’ Deficit

Years Ended December 31, 2020 and 2019

The Notes to Financial Statements are an integral part of these statements.

American Robotics, Inc.

Statements of Cash Flows

Years Ended December 31, 2020 and 2019