Ondas Inc. Quarterly report [Sections 13 or 15(d)]

Quarterly report [Sections 13 or 15(d)]

Fair Value Measurements (Tables)

Fair Value Measurements (Tables)

3 Months Ended

Mar. 31, 2026

Schedule of Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis

A summary of financial assets and liabilities that are measured at fair value on a recurring basis were as follows:

	March 31, 2026 Fair Value Measurements
(dollars in thousands)	Level 1		Level 2		Level 3		Total
Assets
Cash equivalents (money market funds)	$	960,188	$	-	$	-	$	960,188
Short-term investments						-
Publicly traded stock		20,295		-		-		20,295
U.S. Treasury securities		64,960		-		-		64,960
Fixed income (corporate fixed income and bonds, agency securities)		-		111,660		-		111,660
Certificates of deposit		-		249,937		-		249,937
Warrants in publicly traded companies		-		-		990		990
Total short-term investments		85,255		361,597		990		447,842
Convertible promissory note		-		-		10,000		10,000
Equity investment in affiliate		-		-		29,289		29,289
Note receivable from affiliate		-		-		8,835		8,835
Total assets	$	1,045,443	$	361,597	$	49,114	$	1,456,154
Liabilities
Government grants	$	-	$	-	$	3,456	$	3,456
Warrant liabilities		-		-		1,058,990		1,058,990
Contingent consideration		-		-		128,102		128,102
Total liabilities	$	-	$	-	$	1,190,548	$	1,190,548

	December 31, 2025 Fair Value Measurements
(dollars in thousands)	Level 1		Level 2		Level 3		Total
Liabilities
Government grants	$	-	$	-	$	3,657	$	3,657
Total liabilities	$	-	$	-	$	3,657	$	3,657

Schedule of Investment Unrealized Gains and Losses to Reflect Fair Value

Certificates of deposit are classified as available-for-sale investments and are recorded at amortized cost, adjusted for unrealized gains and losses to reflect fair value at each reporting date.

	As of March 31, 2026
(dollars in thousands)	Amortized cost basis		Gross unrealized gains		Gross unrealized losses			Fair Value
U.S. Treasury securities	$	64,970	$	-	$	(10	)	$	64,960
Fixed income (corporate fixed income and bonds, agency securities)		111,970		25		(335	)		111,660
Certificates of deposit		250,000		-		(63	)		249,937
Total	$	426,940	$	25	$	(408	)	$	426,557

Schedule of Investment Marketable Equity Securities

The following table summarizes the Company’s Level 3 investments in marketable equity securities:

	As of March 31, 2026
(dollars in thousands)	Fair Value Hierarchy		Cost Basis		Accumulated Net Unrealized Gains		Fair Value
Warrants exercisable for publicly traded stock		Level 3	$	706	$	284	$	990
Total			$	706	$	284	$	990

Schedule of Key Assumptions of Black-Scholes Model

For the three months ended March 31, 2026, the key assumptions used in the Black-Scholes Model are as follows:

	As of March 31, 2026
Stock price	$	3.81
Risk-free interest rate		3.8	%
Expected volatility		107.7	%
Remaining contractual life in years		2.39
Dividend yield		0	%

The assumptions used to estimate the fair value of warrants during the period were as follows:

	Range			Weighted average
Risk-free interest rate		4	%		4	%
Expected volatility		79-84	%		82	%
Expected life (in years)		6.5-6.8			6.7
Dividend yield		0	%		0-	%

Schedule of Warrant Asset Measured at Fair value

The following table provides a reconciliation of the beginning and ending balances for the Level 3 warrant assets measured at fair value using significant unobservable inputs.

(dollars in thousands)	Warrants
Balance as of January 1, 2026	$	1,123
Warrants purchased, adjusted to fair value		-
Net unrealized gain (loss) on change in fair value		(133	)
Balance as of March 31, 2026	$	990

The following table provides a reconciliation of the beginning and ending balances for the Level 3 warrant liabilities measured at fair value using significant unobservable inputs.

(dollars in thousands)	Warrant liability
Balance as of January 1, 2026	$	489,434
Fair value of warrant liability issued during the period		1,194,019
Change in fair value of warrant liability		(624,463	)
Balance as of March 31, 2026	$	1,058,990

The following table reconciles the beginning and ending balances of the Company’s Level 3 contingent consideration liabilities:

(dollars in thousands)	Contingent Consideration
Balance as of January 1, 2026	$	-
Earn-out liabilities acquired at fair value		102,682
Milestone liabilities acquired at fair value		25,420
Changes in fair value recognized in earnings		-
Payments		-
Balance as of March 31, 2026	$	128,102

Schedule of Liability Measured at Fair Value of Unobservable Inputs

The following table provides a reconciliation of the beginning and ending balances for the Level 3 government grant liabilities measured at fair value using significant unobservable inputs.

(dollars in thousands)	Government Grant Liability
Balance as of January 1, 2026	$	3,657
Government grant liability acquired in Bird Aerosystems Ltd. acquisition		58
Payments made		(373	)
Effect of foreign currency translation		10
Net loss on change in fair value of liability		104
Balance as of March 31, 2026	$	3,456

- Definition

Tabular disclosure of the fair value measurement of assets using significant unobservable inputs (Level 3), a reconciliation of the beginning and ending balances, separately presenting changes during the period attributable to the following: (1) total gains or losses for the period (realized and unrealized), segregating those gains or losses included in earnings (or changes in net assets) and gains or losses recognized in other comprehensive income (loss), and a description of where those gains or losses included in earnings (or changes in net assets) are reported in the statement of income (or activities); (2) purchases, sales, issues, and settlements (each type disclosed separately); and (3) transfers in and transfers out of Level 3 (for example, transfers due to changes in the observability of significant inputs), by class of asset.

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