Ondas (ONDS) risk factors, 2025 10-K

Risks Related to Our Business and Industry

1. 01We have incurred significant operating losses since inception and cannot assure you that we will ever achieve or sustain profitability
2. 02The adoption of the IEEE 802.16t wireless broadband standard, an evolution of the IEEE 802.16s standard published in 2017, by customers in our target critical infrastructure sectors is uncertain
3. 03Our growth depends in part on the success of our strategic partnerships with third parties such as Siemens Mobility, who are also customers, as well as on our ability to establish a broad range of additional ecosystem partner and customer relationships with leading global industrial vendors
4. 04If the commercial UAS markets do not experience significant growth, if we cannot expand our customer base or if our products and services do not achieve broad acceptance, then we may not be able to achieve our anticipated level of growth
5. 05Negative customer perception regarding the commercial UAS industry or the Company’s automated data solutions could have a material adverse effect on the demand for the Company’s products and the business, results of operations, financial condition and cash flows of the Company
6. 06Failure to manage our planned growth could place a significant strain on our resources
7. 07If we fail to retain our existing customers or do not acquire new customers in a cost-effective manner, our revenue may decrease and our business, financial condition or results of operations may be harmed
8. 08The Company faces uncertainty and adverse changes in the economy
9. 09We have significant dependence on a small number of customers, and the loss of such customers or a decrease in business conducted with such customers could materially harm our business, financial condition or results of operations
10. 10Project performance delays or difficulties, including those caused by third parties, or certain contractual obligations may result in additional costs to us, reductions in revenues or the payment of liquidated damages
11. 11We do not control certain aspects of the manufacturing process
12. 12Material delays or defaults in customer payments could leave us unable to cover expenditures related to such customer’s projects, including the payment of our subcontractors
13. 13Certain of our officers, employees, contractors and other service providers may work on projects that are inherently dangerous, and a failure to maintain a safe worksite could result in significant losses
14. 14Our products are subject to a lengthy sales cycle and our customers may cancel or change their product plans after we have expended substantial time and resources in the design of their products
15. 15Our marketing efforts depend significantly on our ability to receive positive references from our existing customers
16. 16Due to the volatile and flammable nature of certain components of our products and equipment, fires or explosions may disrupt our business or cause significant injuries, which could adversely affect our financial results
17. 17Our technology, products and services have only been developed in the last several years and we have had only limited opportunities to deploy and assess their performance in the field at full scale
18. 18If we fail to respond to evolving technological changes, our products and services could become obsolete or less competitive
19. 19We depend on our ability to develop new products and to enhance and sustain the quality of existing products
20. 20We expect to incur substantial research and development costs and devote significant resources to identifying and commercializing new products and services, which could significantly reduce our profitability and may never result in revenue to us
21. 21If our products do not interoperate with our customers’ other systems, the purchase or deployment of our products and services may be delayed or cancelled
22. 22The Company operates in a competitive market
23. 23We rely on our management team and need additional personnel to grow our business, and the loss of one or more key officers, employees, contractors and other service providers or our inability to attract and retain qualified personnel could harm our business, financial condition or results of operations
24. 24Cyberattacks through security vulnerabilities could lead to disruption of business, reduced revenue, increased costs, liability claims, or harm to our reputation or competitive position
25. 25If critical components or raw materials used to manufacture our products or used in our development programs become scarce or unavailable, then we may incur delays in manufacturing and delivery of our products and in completing our development programs, which could damage our business
26. 26We may pursue additional strategic transactions in the future, which could be difficult to implement, disrupt our business or change our business profile significantly
27. 27If the Company is required to write down goodwill and other intangible assets, the Company’s financial condition and results could be negatively affected
28. 28War, terrorism, and other acts of violence may affect the markets in which we operate, our clients and our product and service delivery
29. 29We may not be able to secure adequate insurance policies, or secure insurance policies at reasonable prices
30. 30The Company will be affected by operational risks and may not be adequately insured for certain risks
31. 31Litigation may adversely affect our business, financial condition, and results of operations
32. 32Our cash could be adversely affected if the financial institutions in which we hold our cash fail

Risks Related to Regulatory Requirements

1. 33We and our customers operate in a highly regulated business environment and changes in regulation could impose costs on us or make our products less economical
2. 34The regulation of small UAS for commercial use in the United States is undergoing substantial change and the ultimate treatment is uncertain
3. 35Substantially all our current wireless networking products depend on the availability and are subject to the use of licensed radio frequencies regulated by the FCC in the United States
4. 36As a manufacturer of commercial UAS, we are subject to various government regulations, restrictions and requirements, and may be subject to additional regulations in the future, violation of which could subject us to sanctions or otherwise harm, restrict or add costs to our business
5. 37We are subject to numerous legal and regulatory regimes, and we could be harmed by changes to, or the interpretation or the application of, the laws and regulations of each of the jurisdictions in which it operates
6. 38With the geographic expansion of our business, and that of our subsidiaries, into new markets, we have become subject to additional and changing legal, regulatory, tax, licensing, and compliance requirements and industry standards
7. 39We may become subject to increasing global trade laws and regulations

Risks Related to our Intellectual Property

1. 40Our ability to protect our intellectual property and proprietary technology is uncertain
2. 41Our business may suffer if it is alleged or found that our products infringe the intellectual property rights of others
3. 42If we are unable to protect the confidentiality of our proprietary information, the value of our technology and products could be adversely affected
4. 43We use open-source software in our products and services that may subject our products and services to general release or require us to re-engineer our products and services, which may cause harm to our business
5. 44Intellectual property rights do not necessarily address all potential threats to our competitive advantage

Risks Related to our Financial Results

1. 45We will need to generate significant sales to achieve profitable operations
2. 46Our future profitability may be dependent upon achieving cost reductions and projected economies of scale from increasing manufacturing quantities of our products. Failing to achieve such reductions in manufacturing costs and projected economies of scale could materially adversely affect our business
3. 47If business growth falls short of expectations, we may need to obtain additional capital to fund our growth, operations, and obligations
4. 48Our revenue is not predictable and recognition of a significant portion of it will be deferred into future periods
5. 49Our exposure to fluctuations in foreign currency exchange rates has increased

Risks Related to our Common Stock

1. 50We have limited trading activity and as a result, the price of our common stock might fluctuate significantly, and you could lose all or part of your investment
2. 51Concentration of ownership of our common stock among our existing executive officers, directors and principal stockholders may prevent new investors from influencing significant corporate decisions
3. 52We may issue more shares to raise additional capital, which may result in substantial dilution
4. 53Our Board may issue and fix the terms of shares of our preferred stock without stockholder approval, which could adversely affect the voting power of holders of our common stock or any change in control of our Company
5. 54If securities or industry analysts do not publish research or publish inaccurate or unfavorable research about our business, our stock price and trading volume could decline
6. 55We do not intend to pay dividends for the foreseeable future
7. 56If our shares become subject to the penny stock rules, it would become more difficult to trade our shares
8. 57Certain provisions of our Amended and Restated Articles of Incorporation and Bylaws and Nevada law make it more difficult for a third-party to acquire us and make a takeover more difficult to complete, even if such a transaction were in the stockholders’ best interest

Risks Related to the Notes

1. 58We may not have the ability to pay interest on the Notes or to redeem the Notes
2. 59Our failure to make the required payments on the Notes would permit the holders of the Notes to accelerate our obligations under the Notes. Such default may also lead to a default under our agreements governing any of our current and future indebtedness
3. 60Provisions in the Notes may deter or prevent a business combination that may be favorable to you
4. 61Future sales of a significant number of our shares of Common Stock in the public markets, or the perception that such sales could occur, could depress the market price of our shares of Common Stock or cause it to be highly volatile