NOTE 16 – RELATED PARTY TRANSACTIONS

Investment in Ondas Networks

On January 16, 2026, Ondas Networks completed a Series B preferred stock financing (the “2026 Networks Offering”) for aggregate gross proceeds of approximately $8.4 million, which included approximately $6.0 million from the Company and $2.0 million from other investors. In connection with the 2026 Networks Offering, Ondas Networks issued shares of Series B-1 and B-2 Preferred Stock. The Series B Preferred Stock accrues dividends at a rate of 8% per annum of the original issue price. Dividends are payable only when, as, and if declared by the board of directors of Ondas Networks and may be paid in cash or additional shares of Ondas Networks preferred stock. Each share of Series B Preferred Stock is convertible at the option of the holder at any time into shares of Ondas Networks common stock at an initial conversion price equal to the original issue price, subject to standard adjustments. The Series B Preferred Stock is redeemable upon the occurrence of specified events, including at the option of the holder after a stated period, at amounts intended to provide a return of capital plus accrued dividends.

During the quarter ended March 31, 2026, the Company determined that it no longer held a controlling financial interest in Ondas Networks, a VIE, as a result of the 2026 Networks Offering. This determination resulted from the 2026 Networks Offering, pursuant to which minority preferred shareholders exercised warrants and acquired additional voting interests in Ondas Networks (refer to Note 17). As a result of these additional issuances, the Company’s ownership and voting interests were diluted such that it no longer possessed the unilateral power to direct the activities that most significantly impact Ondas Networks’ economic performance. Accordingly, the Company was not considered the primary beneficiary and deconsolidated Ondas Networks effective January 16, 2026. Subsequent to deconsolidation, the assets, liabilities, and results of operations of Ondas Networks are no longer included in the Company’s consolidated financial statements.

Upon deconsolidation, the Company derecognized all assets and liabilities of Ondas Networks, including the related noncontrolling interest, and measured the retained ownership interest at fair value. The Company recognized a gain on deconsolidation of $48.8 million, which is included in other income (expense), net in the condensed consolidated statements of operations for the nine months ended September 30, 2026. The most significant carrying amounts of the assets and liabilities that were deconsolidated were inventory of $3.6 million, deposits and other assets of $2.3 million, convertible notes payable of $5.0 million, accrued expenses and other liabilities, current and long-term, of $2.7 million, and notes payable to the Company of $10.4 million.

Following the deconsolidation, the Company retains an approximately 47.5% ownership interest in Ondas Networks and has the ability to exercise significant influence over Ondas Networks’ operating and financial policies. The retained equity interest is presented as Investment in unconsolidated affiliate within noncurrent assets and the retained note receivable is presented as Other assets on the condensed consolidated balance sheets. The Company elected the fair value option for its retained equity investment in and note receivable from Ondas Networks for operational ease associated with subsequent measurement. As a result, the retained interests are carried at fair value, with changes in fair value recognized in earnings each reporting period and included in other income (expense), net in the condensed consolidated statements of operations.

For the three and nine months ended September 30, 2026, we recognized a gain of $3.5 million and $1.0 million, respectively, for the change in fair value of the equity investment in affiliate which is included in other income (expense), net in the condensed consolidated statements of operations.

Networks Note

Upon the deconsolidation of Ondas Networks on January 16, 2026, the Company recorded a note receivable from Ondas Networks in the amount of $10.0 million (the “Networks Note”). The Company elected the fair value option for the Networks Note, which had a fair value of $8.8 million on January 16, 2026.

In August 2026, the Company issued an additional note receivable for $6.0 million. The Networks Note collectively has a face amount of $16.0 million, bears interest at 8% per annum and matures in December 2027.

As of September 30, 2026, the fair value of the Networks Note was $14.8 million. For the three and nine months ended September 30, 2026, we recognized a loss of $0.3 million and $30 thousand, respectively, on the change in fair value of the note receivable which is included in other income (expense), net in the condensed consolidated statements of operations. No principal or interest has been paid since the Networks Note was issued.

Settlement of Related-Party Financing Arrangements

During January 2026, certain related-party financing arrangements outstanding at December 31, 2025 were converted or otherwise ceased to be liabilities of the Company and its consolidated subsidiaries.

On January 5, 2026, Privet Ventures LLC, an entity affiliated with Eric Brock, the Company’s Chairman and Chief Executive Officer, converted $1.0 million of principal and $61 thousand of accrued interest outstanding under its OAS convertible note into OAS common stock pursuant to the original conversion terms. Such shares were immediately exchanged for 1,153,625 shares of the Company’s common stock, and the related note was repaid in full.

On January 16, 2026, in connection with the 2026 Networks Offering, $2.5 million of principal and related accrued interest outstanding under Ondas Networks convertible notes held by C&P were converted into shares of Ondas Networks preferred stock. C&P was controlled by Joseph Popolo, a former director of the Company.

At December 31, 2025, Ondas Networks also had $1.5 million of principal outstanding under a secured note payable to C&P. Upon the deconsolidation of Ondas Networks on January 16, 2026, the secured note and related accrued interest ceased to be included in the Company’s condensed consolidated balance sheets.