NOTE 11 – STOCKHOLDERS’ EQUITY

Common Stock

As of September 30, 2025 and December 31, 2024, the Company had 400,000,000 and 300,000,000 shares of Common Stock authorized for issuance, respectively, of which 329,515,817 and 93,173,191 shares of our Common Stock were issued and outstanding, respectively.

Preferred Stock

As of September 30, 2025 and December 31, 2024, the Company had 10,000,000 shares of preferred stock, par value $0.0001, authorized, of which 5,000,000 shares are designated as Series A Convertible Preferred Stock (“Series A Preferred”) and 5,000,000 shares are non-designated (“blank check,” together with the Series A Preferred, the “Preferred Shares”) shares. As of September 30, 2025 and December 31, 2024, the Company had no preferred stock outstanding.

Form S-3

On February 2, 2024, the Company initially filed with the Securities and Exchange Commission (the “SEC”) a new shelf Registration Statement on Form S-3 for up to $175,000,000, which represents $150,000,000 under the Prior Form S-3 and an additional $25,000,000 (the “Form S-3”), for shares of its Common Stock; shares of its preferred stock, which the Company may issue in one or more series or classes; debt securities, which the company may issue in one or more series; warrants to purchase its Common Stock, preferred stock or debt securities; and units. The Form S-3 was declared effective by the SEC on February 15, 2024.

On April 18, 2025, the Company initially filed with the SEC a new shelf Registration Statement on Form S-3 for up to $225,000,000 (the “New Form S-3”), for shares of its Common Stock; shares of its preferred stock, which the Company may issue in one or more series or classes; debt securities, which the company may issue in one or more series; warrants to purchase its Common Stock, preferred stock or debt securities; and units. The New Form S-3 was declared effective by the SEC on April 25, 2025.

On September 9, 2025, the Company filed with the SEC an automatic shelf Registration Statement on Form S-3ASR (the “Form S-3ASR”) and was automatically effective upon filing on September 9, 2025, for shares of its Common Stock; shares of its preferred stock, which the Company may issue in one or more series or classes; debt securities, which the company may issue in one or more series; warrants to purchase its Common Stock, preferred stock or debt securities; and units. 

Stock Issued for Convertible Debt

During the nine months ended September 30, 2025, the Company issued 73,857,218 shares of its Common Stock to the lenders in lieu of cash payments for $2,053,628 of interest and $51,164,790 of outstanding principal on the 2022 Convertible Exchange Notes, 2023 Additional Notes, and 2024 Additional Notes (See Note 10 – Notes Payable for further details).

During the nine months ended September 30, 2024, the Company issued 3,708,286 shares of its Common Stock to the lenders in lieu of cash payments for $4,375 of outstanding interest and $2,075,000 of outstanding principal on the 2022 Convertible Exchange Notes (See Note 10 – Notes Payable for further details).

June 2025 Public Offering

On June 9, 2025, the Company entered into an underwriting agreement (the “June 2025 Underwriting Agreement”) with Oppenheimer & Co. Inc., as sole underwriter (the “June Underwriter”), relating to the Company’s underwritten public offering (the “June 2025 Public Offering”) of 22,400,000 shares (the “June 2025 Firm Shares”) of its Common Stock and pre-funded warrants (the “June Pre-Funded Warrants”) to purchase up to 9,600,000 shares of Common Stock (the “June Pre-Funded Warrant Shares”). Pursuant to the June 2025 Underwriting Agreement, the Company also granted the Underwriter a 30-day option (the “June Option”) to purchase an additional 4,800,000 shares of Common Stock (the “June Option Shares,” and together with the June Firm Shares, the “June Shares”).

On June 10, 2025, the June Underwriter exercised the June Option in full. The June Shares and June Pre-Funded Warrants were offered, issued, and sold pursuant to a prospectus supplement and accompanying prospectus that form part of the New Form S-3.

On June 11, 2025, the Company closed the June 2025 Public Offering and issued the June Shares and June Pre-Funded Warrants. The public offering price for each June Share was $1.25 and the public offering price for each June Pre-Funded Warrant was $1.2499. The June Pre-Funded Warrants have an exercise price of $0.0001 per share, are immediately exercisable and will expire three years from the date of issuance. As of September 30, 2025, the June Pre-Funded Warrants have been exercised in full. The net proceeds to the Company were approximately $42,677,000 after deducting underwriting discounts and commissions and offering expenses payable by the Company.

The table below details the net proceeds of the June 2025 Public Offering.

The Company will use the net proceeds of the June 2025 Public Offering for general corporate purposes, including funding capital expenditures and providing working capital.

August 2025 Public Offering

On August 13, 2025, the Company entered into an underwriting agreement (the “August 2025 Underwriting Agreement”) with Oppenheimer & Co. Inc., as representative of the several underwriters (the “August Underwriters”), relating to the Company’s underwritten public offering (the “August 2025 Public Offering”) of 46,160,000 shares (the “August Firm Shares”) of its Common Stock. Pursuant to the August 2025 Underwriting Agreement, the Company also granted the August Underwriters a 30-day option (the “August Option”) to purchase an additional 6,924,000 shares of Common Stock (the “August Option Shares,” and together with the August Firm Shares, the “August Shares”).

On August 14, 2025, the August Underwriters exercised the August Option in full, and the Company closed the August 2025 Public Offering and issued the August Shares. The August Shares were offered, issued, and sold pursuant to a prospectus supplement and accompanying prospectus that form part of the New Form S-3. The public offering price for each August Share was $3.25. The net proceeds to the Company from the August 2025 Public Offering are approximately $162,636,000, after deducting underwriting discounts and commissions and estimated offering expenses payable by the Company.

The table below details the net proceeds of the August 2025 Public Offering.

The Company intends to use the net proceeds of the August 2025 Public Offering for working capital, general corporate purposes and potential strategic transactions, including acquisitions of businesses or assets, joint ventures or investments in businesses, products or technologies.

September 2025 Offering

On September 9, 2025, the Company entered into an underwriting agreement (the “September 2025 Underwriting Agreement”) with Oppenheimer & Co. Inc., as representative of the several underwriters (the “September Underwriters”), relating to the Company’s underwritten offering (the “September 2025 Offering”) of 40,000,000 shares (the “September Firm Shares”) of its Common Stock. Pursuant to the September 2025 Underwriting Agreement, the Company also granted the September Underwriters a 30-day option (the “September Option”) to purchase an additional 6,000,000 shares of Common Stock (the “September Option Shares,” and together with the September Firm Shares, the “September Shares”). On September 9, 2025, the Underwriters exercised the September Option in full.

On September 10, 2025, the Company closed the September 2025 Offering and issued the September Shares. The September Shares were offered, issued, and sold pursuant to a prospectus supplement and accompanying prospectus that form part of the Form S-3ASR. The offering price for each September Share was $5.00. The net proceeds to the Company from the September 2025 Offering are approximately $216,995,000, after deducting underwriting discounts and commissions and estimated offering expenses payable by the Company.

The table below details the net proceeds of the September 2025 Offering.

The Company intends to use the net proceeds of the September 2025 Offering for corporate development and strategic growth, including acquisitions, joint ventures, and investments.

Sale of Common Stock in Ondas Holdings and Warrants to Purchase Common Stock of OAS

On February 26, 2024, the Company entered into a Securities Purchase Agreement (the “Ondas Agreement”) with certain purchasers named therein (the “Ondas Purchasers”) for the purchase and sale of (i) an aggregate of 3,616,071 shares (the “2024 Holdings Shares”) of Common Stock and (ii) warrants to purchase an aggregate of 3,616,071 shares of OAS’ common stock $0.0001 par value per share, at an exercise price of 80% of the lowest price of common stock of OAS issued in a subsequent financing of at least $10,000,000 to OAS, and exercisable commencing ninety days following the date of issuance through the fifth anniversary of the date of issuance (the “OAS Warrants,” and together with the 2024 Holdings Shares, the “Ondas Offering Securities”), for gross proceeds of $4,050,000 (the “2024 Ondas Offering”). The purchase price paid by the Ondas Purchasers for the 2024 Holdings Shares was $1.12 per share.

The Company engaged a third-party service provider to carry out an appraisal of the OAS Warrants, who ran a Monte Carlo simulation to determine the fair value of the OAS Warrants as of February 26, 2024, which is $1,561,532. The initial valuation was assigned to the 2024 Holdings Shares and the OAS Warrants based on their relative fair values, with the initial valuation of the 2024 Holdings Shares being $3,095,263 and OAS Warrants being $954,737. As of September 30, 2025, there were 2,946,428 OAS Warrants outstanding, with a weighted average remaining contractual life of 3.41 years.

Noncontrolling interest in OAS

On September 11, 2025, certain OAS warrant holders exercised their warrants for 669,643 common stock in OAS for exercise proceeds of $1,158,482, representing an ownership interest approximately 0.77% in OAS. The Company retained a controlling interest of approximately 99.23% in OAS. The transaction was accounted for as an equity transaction in accordance with ASC 810-10-45-23, with no gain or loss recognized in the unaudited Condensed Consolidated Statements of Operations. The Company attributed $12,639 of OAS’ Net Loss to the noncontrolling interest in OAS for the three and nine months ended September 30, 2025. As of September 30, 2025, the carrying value of the noncontrolling interest in OAS was $1,145,843.

Sale of Common Stock and Warrants in Ondas Holdings

On August 28, 2024, the Company entered into a Securities Purchase Agreement, (the “August 2024 Purchase Agreement”) with an institutional investor (the “August 2024 Investor”), pursuant to which the Company agreed to issue and sell, in a registered direct offering by the Company directly to the August 2024 Investor an aggregate of 5,333,334 shares of Common Stock (the “August 2024 Holdings Shares”), together with Series A warrants (“Series A Warrants”) to purchase up to 5,333,334 shares of Common Stock and Series B warrants (“Series B Warrants,” and together with the Series A Warrants, the “August 2024 Warrants”) to purchase up to 5,333,334 shares of Common Stock. The Series A Warrants have an exercise price of $0.8073 per share and are exercisable at any time from February 28, 2025 through March 1, 2027. The Series B Warrants have an exercise price of $0.8073 per share and are exercisable at any time from February 28, 2025 through February 28, 2030.

Each share of Common Stock and accompanying Series A Warrant and Series B Warrant were sold together at a combined offering price of $0.75, for gross proceeds of $4,000,000 before deducting the placement agent’s fees and related offering expenses, which totaled $555,060. The offering closed on August 30, 2024.

The Company used the Black-Scholes Model to determine the fair value of warrants to purchase Common Stock of the Company, which is $4,881,775. See the table below for the assumptions used in the Black-Scholes Model. The initial valuation was assigned to the August 2024 Holdings Shares and the August 2024 Warrants based on their relative fair values, with the initial valuation of the August 2024 Holdings Shares being $1,801,442 and August 2024 Warrants being $2,198,559.

Warrants to Purchase Preferred Stock of Networks

On September 3, 2024 and October 7, 2024, in connection with the Networks Secured Note, Networks issued C&P warrants to purchase $1,000,000 and $500,000, respectively, in shares of Networks Preferred Stock, at an exercise price of $20.65 per share. (See Note 10 – Notes Payable for further details).

On November 13, 2024 and January 15, 2025, in connection with the November Networks Convertible Notes and January 2025 Networks Convertible Notes, Networks issued the investors warrants to purchase $2,069,017 and $2,930,983, respectively, in shares of Networks Preferred Stock, at an exercise price of $20.65 per share, of which $2,000,000 is to the Company and has been eliminated in consolidation. (See Note 10 – Notes Payable for further details).

As of September 30, 2025, there were 157,339 warrants for shares of Networks Preferred Stock outstanding based on a Conversion Price of $41.3104, with a weighted average exercise price of $20.65 and a weighted average remaining contractual life of 4.17 years.

Warrants to Purchase Common Stock of Networks

On June 3, 2024, the Company issued warrants to purchase 15,391 shares of Networks Common Stock, at an exercise price of $2.75 per share, with a fair value of $303,052, in consideration of consulting services for the Company. The warrants vest over a one-year period. The Company engaged a third-party service provider to carry out a valuation of Networks Common Stock to determine its fair value as of May 31, 2024. The Company recorded stock-based compensation of $0 and $101,523 in General and administrative expense on the unaudited Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2025, respectively, based on the valuation. The Company recorded stock-based compensation of $65,776 and $150,768 in General and administrative expense on the unaudited Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2024, based on the valuation.

As of September 30, 2025, there were 15,391 fully vested warrants for shares Networks Common Stock outstanding, with a weighted average exercise price of $2.75 and a weighted average remaining contractual life of 3.68 years.

Warrants to Purchase Common Stock of the Company

We use the Black-Scholes Model to determine the fair value of warrants to purchase Common Stock of the Company. The Black-Scholes Model is an acceptable model in accordance with U.S GAAP. The Black-Scholes Model requires the use of a number of assumptions including volatility of the stock price, the weighted average risk-free interest rate, and the weighted average term of the warrant.

The risk-free interest rate assumption is based upon observed interest rates on zero coupon U.S. Treasury bonds whose maturity period is appropriate for the term of the warrants. Estimated volatility is a measure of the amount by which our stock price is expected to fluctuate each year during the expected life of the award. Our estimated volatility is an average of the historical volatility of peer entities whose stock prices were publicly available over a period equal to the expected life of the awards. We used the historical volatility of peer entities due to the lack of sufficient historical data of our stock price.

A summary of our Warrants activity for the nine months ended September 30, 2025 and related information follows:

Total stock-based compensation expense for warrants for the three and nine months ended September 30, 2025 was $0 and $80,317, respectively, and is recorded in General and administrative expense on the unaudited Condensed Consolidated Statements of Operations. Total stock-based compensation expense for warrants for the three and nine months ended September 30, 2024 was $105,934 and $254,699, respectively, and is recorded in General and administrative expense on the unaudited Condensed Consolidated Statements of Operations.

Stock Options to Purchase Common Stock

The Company awards stock options to certain employees, directors, and consultants, which represent the right to purchase Common Stock on the date of exercise at a stated exercise price. Stock options granted to employees generally vest over a two to four-year period and are contingent on ongoing employment. Compensation expenses related to these awards is recognized straight-line over the applicable vesting period. Stock options granted to consultants are subject to the attainment of pre-established performance conditions. The actual number of shares subject to the award is determined at the end of the performance period and may range from zero to 100% of the target shares granted depending upon the terms of the award. Compensation expenses related to these awards is recognized when the performance conditions are satisfied.

On January 7, 2025, the Compensation Committee granted Ron Stern stock options to purchase an aggregate of 2,876,944 shares of Common Stock in connection with his Directorship Agreement. The options have an exercise price of $2.69, a term of 5 years and are contingent on ongoing employment. 1,918,059 options vest upon the earlier of: (a) on a quarterly basis over a two-year period following the grant date, or (b) the expiration of a 30-day period in which the average price per share of the Company in the applicable stock exchange is five dollars (or more) per share (the “Valuation Milestone”). 958,885 options vest upon the Valuation Milestone. The Company engaged a third-party service provider to carry out an appraisal of the options, who ran a Monte Carlo simulation to determine the fair value and the period over which the related expense shall be recognized as of January 7, 2025, which is $4,125,352, to be recognized straight-line through November 25, 2026. As of September 30, 2025, the Valuation Milestone was met, the stock options vested, and the Company recognized the remaining unrecognized compensation expense, which is included in compensation expenses.

Also in January 2025, the Compensation Committee granted an aggregate of 2,213,550 stock options to purchase shares of Common Stock to certain employees, with an exercise price range of $2.37 - $2.24 and a term of 10 years. The stock options vest over a range of two to three-year period and are contingent on ongoing employment. They are included in compensation expenses.

In May 2025, the Compensation Committee granted an aggregate of 8,111,450 stock options to purchase shares of Common Stock to certain employees, with an exercise price range of $0.77 - $0.86 and a term of 10 years. The stock options vest over a three-year period and are contingent on ongoing employment. They are included in compensation expenses.

On June 23, 2025, the Compensation Committee granted 100,000 stock options to purchase shares of Common Stock to a certain employee, with an exercise price of $1.58 and a term of 10 years. The stock options vest over a two-year period and are contingent on ongoing employment. They are included in compensation expenses.

 On July 8, 2025, the Compensation Committee granted an aggregate of 150,000 stock options to purchase shares of Common Stock to certain employees and consultants, with an exercise price of $1.75 and a term of 10 years. The stock options vest over a three-year period and are contingent on ongoing employment. They are included in compensation expenses.

In August, 2025, the Compensation Committee granted an aggregate of 1,510,000 stock options to purchase shares of Common Stock to certain employees and advisors, with an exercise price range of $2.20 - $3.59 and a term of 10 years. The stock options vest over a range of five months to four-years and are contingent on ongoing employment. They are included in compensation expenses.

On September 18, 2025, the Compensation Committee granted 30,000 stock options to purchase shares of Common Stock to a certain employee, with an exercise price of $6.10 and a term of 10 years. The stock options vest over a three-year period and are contingent on ongoing employment. They are included in compensation expenses.

The assumptions used in the Monte Carlo simulation and Black-Scholes Model are set forth in the table below.

A summary of our Option activity for the three and nine months ended September 30, 2025 and related information follows:

As of September 30, 2025, total unrecognized compensation expense related to non-vested stock options was $11,862,687 which is expected to be recognized over a weighted average period of 2.46 years.

Total stock-based compensation expense for stock options for the three and nine months ended September 30, 2025 and 2024 is as follows:

Restricted Stock Units

The Company awards Restricted Stock Units (“RSUs”) to certain employees and directors, which represent a right to receive Common Stock for each RSU that vests. Compensation expenses related to these awards is recognized straight-line over the applicable vesting period.

On January 11, 2025, the Compensation Committee granted an aggregate of 1,415,700 RSUs to certain employees. The RSUs vest in eight to twelve successive equal quarterly installments on March 16th, May 16th, August 16th and November 16th and are contingent on ongoing employment. They are included in compensation expenses.

On February 21, 2025, the Compensation Committee granted 60,606 fully vested RSUs in consideration of consulting services for the Company. They are included in compensation expenses.

On May 12, 2025, the Compensation Committee granted an aggregate of 2,406,800 RSUs to certain employees. The RSUs vest in eight to twelve successive equal quarterly installments on August 16^th, November 16th March 16th, and May 16th and are contingent on ongoing employment. They are included in compensation expenses.

On May 12, 2025, the Compensation Committee granted an aggregate of 235,293 RSUs to directors. The RSUs vest in four successive equal quarterly installments with the first vesting date commencing on the first day of the next calendar quarter. They are included in compensation expenses.

On June 23, 2025, the Compensation Committee granted 100,000 RSUs to a certain employee. The RSUs vest in eight successive equal quarterly installments with the first vesting date commencing on September 23, 2025. They are included in compensation expenses.

On August 4, 2025, the Compensation Committee granted 250,000 RSUs to a certain employee. The RSUs vest in twelve successive equal quarterly installments with the first vesting date commencing on November 4, 2025. They are included in compensation expenses.

On August 11, 2025, the Compensation Committee granted 46,935 RSUs to directors. The RSUs vest in six successive quarterly installments with the first vesting date commencing in the third quarter of 2025. They are included in compensation expenses.

Also on August 11, 2025, the Compensation Committee granted 550,000 RSUs to certain employees. The RSUs vest in twelve successive equal quarterly installments with the first vesting date commencing on November 11, 2025. They are included in compensation expenses.

On September 4, 2025, the Compensation Committee granted 250,000 RSUs to a certain employee. The RSUs vest in twelve successive equal quarterly installments with the first vesting date commencing on December 4, 2025. They are included in compensation expenses.

On September 5, 2025, the Compensation Committee granted 600,000 RSUs to a certain employee. The RSUs vest in eight successive equal quarterly installments with the first vesting date commencing on December 5, 2025. They are included in compensation expenses.

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

As of September 30, 2025, there were 134,429 restricted stock units that were vested but not yet released due to administrative timing. As of September 30, 2025, the unrecognized compensation expense for RSUs was $10,818,997.

Total stock-based compensation expense for RSUs for the three and nine months ended September 30, 2025 and 2024 is as follows:

Equity Incentive Plan

In 2018, our stockholders adopted the 2018 Equity Incentive Plan (the “2018 Plan”) pursuant to which 3,333,334 shares of our Common Stock have been reserved for issuance to employees, including officers, directors and consultants. The 2018 Plan is administered by the Board, provided however, that the Board may delegate such administration to the compensation committee of the Board of the Company (the “Compensation Committee”). Subject to the provisions of the 2018 Plan, the Board and/or the Compensation Committee has the authority to grant, in its discretion, incentive stock options, or non-statutory options, stock awards or restricted stock purchase offers (“Equity Awards”). As of September 30, 2025, the balance available to be issued under the 2018 Plan was 14,216.

In 2021, our stockholders adopted the Ondas Holdings Inc. 2021 Stock Incentive Plan (the “2021 Plan”). The purpose of the 2021 Plan is to enable the Company to attract, retain, reward, and motivate eligible individuals by providing them with an opportunity to acquire or increase a proprietary interest in the Company and to incentivize them to expend maximum efforts for the growth and success of the Company, so as to strengthen the mutuality of the interests between the eligible individuals and the shareholders of the Company. The 2021 Plan provides for the issuance of awards including stock options, stock appreciation rights, restricted stock, restricted stock units, and performance awards. On November 18, 2024, stockholders of the Company approved an amendment to the 2021 Plan to increase the number of shares of the Company’s Common Stock authorized for issuance under the 2021 Plan from 8,000,000 to 11,000,000 shares. On May 12, 2025, stockholders of the Company approved an amendment to the 2021 Plan to increase the number of shares of the Company’s Common Stock authorized for issuance under the 2021 Plan from 11,000,000 to 26,000,000 shares. As of September 30, 2025, the balance available to be issued under the 2021 Plan was 1,971,465.