NOTE 11 – STOCKHOLDERS’ EQUITY AND STOCK-BASED COMPENSATION

Stockholders’ Equity

As of March 31, 2026 and December 31, 2025, the Company had 800,000,000 shares of Common Stock authorized for issuance, of which 469,062,109 and 380,763,481 shares of our Common Stock were issued and outstanding, respectively.

As of March 31, 2026 and December 31, 2025, the Company had 10,000,000 shares of preferred stock, par value $0.0001, authorized, of which 5,000,000 shares are designated as Series A Convertible Preferred Stock (“Series A Preferred”) and 5,000,000 shares are non-designated (“blank check,” together with the Series A Preferred, the “Preferred Shares”) shares. As of March 31, 2026 and December 31, 2025, the Company had no preferred stock outstanding.

Stock Issued for Convertible Debt

The Company issued 33,322,397 shares of its Common Stock during the three months ended March 31, 2025 to the lenders in lieu of cash payments for $42 thousand of interest and $22.6 million of outstanding principal on the 2024 Additional Notes.

Sale of Common Stock and Capital Raises

January 2026 Offering

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

The January 2026 Offering price for (i) each 2026 Share and accompanying 2026 Common Warrant was $16.45 and (ii) each 2026 Pre-Funded Warrant and accompanying 2026 Common Warrant was $16.45 (with all but a nominal exercise price of $0.0001 per share prepaid as of the issuance date). The 2026 Pre-Funded Warrants were immediately exercisable and will expire seven years from the date of issuance. As of March 31, 2026, the 2026 Pre-Funded Warrants have been fully exercised. The 2026 Common Warrants have an exercise price of $28.00 per share, were immediately exercisable and will expire seven years from the date of issuance.

The 2026 Common Warrants may be cash settled, at the option of the holders, upon a change of control event. Because share settlement of the 2026 Common Warrants is not within the Company’s control, the 2026 Common Warrants were initially classified as a liability with a fair value of $1,194 million, and the Company recognized a loss of $234.9 million. Refer to Note 13 for further discussion of the warrant liability.

The net proceeds to the Company from the January 2026 Offering was $959.1 million, after deducting underwriting discounts and commissions and estimated offering expenses payable by the Company and excluding any proceeds that may be received from the exercise of the 2026 Common Warrants.

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

(dollars in thousands)

Noncontrolling Interest in OAS

On September 11, 2025, certain OAS warrant holders exercised their warrants for 669,643 shares of OAS Common Stock for exercise proceeds of $1.2 million, of which $334 thousand was attributed to noncontrolling interest in OAS, representing an ownership interest of approximately 0.77% in OAS. The Company retained a controlling interest of approximately 99.23% in OAS. The transaction was accounted for as an equity transaction in accordance with ASC 810-10-45-23, with no gain or loss recognized in the consolidated statements of operations for year ended December 31, 2025.

On December 17, 2025, in conjunction with the OAS Exchange, 44,643 shares of OAS Common Stock were exchanged for Common Stock, reducing the noncontrolling interest in OAS to 0.71%. For the three months ended March 31, 2026, the Company attributed $42 thousand of OAS’ net loss to the remaining noncontrolling interest in OAS. As of March 31, 2026 and December 31, 2025, the carrying value of the noncontrolling interest in OAS was $154 thousand and $196 thousand, respectively.

Noncontrolling Interest in Insight

On October 27, 2025, the Company completed the acquisition of a controlling interest of 51% in Insight and recognized a noncontrolling interest for the remaining 49%. For the three months ended March 31, 2026, the Company attributed $111 thousand of Insight’s net loss and $1 thousand of foreign currency translation losses to the noncontrolling interest in Insight. As of March 31, 2026 and December 31, 2025, the carrying value of the noncontrolling interest in Insight was $3.7 million and $3.8 million, respectively.

Stock-Based Compensation

Warrants to Purchase Common Stock of the Company

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

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

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

Total stock-based compensation expense for warrants for the three months ended March 31, 2026 and 2025 was $0 thousand and $40 thousand, respectively, and is recorded in general and administrative expense on the condensed consolidated statements of operations.

Equity Incentive Plans

In 2018, the Company’s stockholders adopted the 2018 Equity Incentive Plan, which has been subsequently amended (the “2018 Plan”), pursuant to which 3,333,334 shares of our Common Stock has been reserved for issuance to employees, including officers, directors and consultants. The 2018 Plan shall be administered by the Board, provided however, that the Board may delegate such administration to the compensation committee of the Board of the Company (the “Compensation Committee”). Subject to the provisions of the 2018 Plan, the Board and/or the Compensation Committee shall have authority to grant, in its discretion, incentive stock options, or non-statutory options, stock awards or restricted stock purchase offers (“Equity Awards”). As of March 31, 2026, the balance available to be issued under the 2018 Plan was 95,050 shares.

In 2021, the Company’s stockholders adopted the Ondas Inc. 2021 Stock Incentive Plan, which has been subsequently amended (the “2021 Plan”), pursuant to which 61,000,000 shares of our Common Stock has been reserved for issuance to employees, including officers, directors and consultants. The purpose of the 2021 Plan is to enable the Company to attract, retain, reward, and motivate eligible individuals by providing them with an opportunity to acquire or increase a proprietary interest in the Company and to incentivize them to expend maximum efforts for the growth and success of the Company, so as to strengthen the mutuality of the interests between the eligible individuals and the stockholders of the Company. The 2021 Plan provides for the issuance of awards including stock options, stock appreciation rights, restricted stock, restricted stock units, and performance awards. As of March 31, 2026, the balance available to be issued under the 2021 Plan was 1,986,679 shares.

Stock Options to Purchase Common Stock

The Company awards stock options to certain employees, directors, and consultants, which represent the right to purchase common shares on the date of exercise at a stated exercise price. Stock options granted to employees generally vest over a two to four-year period and are contingent on ongoing employment. Compensation 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.

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

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

As of March 31, 2026, total unrecognized compensation expense related to non-vested options was $82.9 million which is expected to be recognized over a weighted-average period of 2.67 years. The weighted-average grant date fair value per option was $7.02 for options granted during the three months ended March 31, 2026.

Total stock-based compensation expense for stock options for the three months ended March 31, 2026 and 2025 is as follows:

Restricted Stock Units  

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

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

As of March 31, 2026, there were 186,251 restricted stock units that were vested but not yet released due to administrative timing. As of March 31, 2026, the unrecognized compensation expense for RSUs was $210.6 million, which is expected to be recognized over a weighted-average period of 2.83 years.

Total stock-based compensation expense for RSUs for the three months ended March 31, 2026 and 2025 is as follows: