Ondas Holdings Inc. Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)

9 Months Ended

Sep. 30, 2019

Inventory consists of the following:

	September 30, 2019		December 31, 2018
Raw Material	$	376,417	$	307,947
Finished Goods		46,792		39,998
TOTAL INVENTORY	$	423,209	$	347,945

Schedule of changes in fair value associated with level 3 liabilities

The following table provides a summary of changes in fair value associated with the Level 3 liabilities for the nine months ended September 30, 2019 and for the year ended December 31, 2018:

	Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
	Nine Months Ended September 30, 2019		Year ended December 31, 2018

Balance, beginning of period	$	-	$	(166,093	)
Issuances of derivative liability		-		-
Reclassification to additional paid in capital		-		1,141,995
Change in fair value of derivative liability		-		(975,902	)
Balance, end of period	$	-	$	-

Schedule of disaggregation of revenue

The following tables present our disaggregated revenues by Type of Revenue and Timing of Revenue:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2019		2018		2019		2018
Type of Revenue
Product revenue	$	61,182	$	23,323	$	212,905	$	29,913
Service revenue		26,950		11,853		100,459		46,699
Other revenue		-		-		219		6,568
Total revenue	$	88,132	$	35,176	$	313,583	$	83,180

	Three Months Ended September 30,				Nine Months Ended September 30,
	2019		2018		2019		2018
Timing of Revenue
Revenue recognized point in time	$	79,166	$	28,310	$	281,333	$	44,356
Revenue recognized over time		8,966		6,866		32,250		38,824
Total revenue	$	88,132	$	35,176	$	313,583	$	83,180

Schedule of deferred warranty activity

The table below details the activity in our contract liabilities during the nine months ended September 30, 2019, and the year ended December 31, 2018, and is included in other current liabilities in the Company’s unaudited condensed consolidated balance sheet.

	Nine Months Ended September 30, 2019			Year Ended December 31, 2018
Balance at beginning of period	$	20,631		$	30,690
Additions		20,826			32,106
Transfer to revenue		(32,250	)		(42,166	)
Balance at end of period	$	9,207		$	20,631

Schedule of lease costs

We used the incremental borrowing rate on December 31, 2018 for all leases that commenced prior to that date.

Lease Costs

	Three Months Ended September 30, 2019		Nine Months Ended September 30, 2019
Components of total lease costs:
Operating lease expense	$	148,922	$	445,148
Short-term lease costs ⁽¹⁾		11,122		38,626
Total lease costs	$	160,044	$	483,774

⁽¹⁾	Represents short-term leases which are immaterial.

Schedule of ROU lease assets and lease liabilities

ROU lease assets and lease liabilities for our operating leases were recorded in the unaudited condensed consolidated balance sheet as follows:

	As of September 30, 2019
Assets:
Operating lease assets, current	$	337,000
Operating lease assets, net of current		369,275
Total lease assets	$	706,275

Liabilities:
Operating lease liabilities, current	$	589,158
Operating lease liabilities, net of current		432,860
Total lease liabilities	$	1,022,018

Schedule of lease terms and discount rate

Lease Terms and Discount Rate

Weighted average remaining lease term (in years) – operating lease			2.3
Weighted average discount rate – operating lease			14	%

Schedule of cash paid for amounts included in the measurement of lease liabilities

Nine Months Ended
September 30,

2019

Cash paid for amounts included in the measurement of lease liabilities:

Operating cash flows for operating leases

340,044

Schedule of future minimum lease payments

Future lease payments included in the measurement of lease liabilities on the unaudited condensed consolidated balance sheet as of September 30, 2019, for the following five years and thereafter are as follows:

Years ending December 31,
2019 (3 months)	$	155,075
2020		645,248
2021		173,545
2022		116,392
2023		67,895
Total future minimum lease payments		1,158,155
Lease imputed interest		(136,137	)
Total	$	1,022,018

Schedule of net loss per share

The following potentially dilutive securities for the nine months ended September 30, 2019 and 2018 have been excluded from the computation of diluted net loss per share because the effect of their inclusion would have been anti-dilutive.

	Nine months ended
	September 30, 2019		September 30, 2018
Warrants		5,466,057		-
Convertible debt		-		140,678
TOTAL		5,466,057		140,678

Schedule of concentration of customers

The table below sets forth the Company’s customers that accounted for greater than 10% of its revenues for the three- and nine-month periods ended September 30, 2019 and 2018, respectively:

	Three Months Ended September 30,						Nine Months Ended September 30,
Customer	2019			2018			2019			2018
A		-			16	%		44	%		48	%
B		-			55	%		18	%		33	%
C		85	%		-			36	%		-
D		-			27	%		-			12	%