Ondas (ONDS) risk factors, FY2025 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. 02We may not successfully manage our growthNew
3. 03If 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
4. 04We 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 operations60% rewritten
5. 05We depend on governmental customers and funding, and our business could be adversely affected by changes in government spending, budget priorities, or procurement policiesNew
6. 06The 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
7. 07Our growth depends in part on the success of our strategic collaborations with key customers, as well as on our ability to establish and expand a broad ecosystem of relationships with leading global industrial vendors61% rewritten
8. 08If 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
9. 09Project 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
10. 10We do not control certain aspects of the manufacturing process44% rewritten
11. 11Material 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
12. 12Certain 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
13. 13Our 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
14. 14Our marketing efforts depend significantly on our ability to receive positive references from our existing customers25% rewritten
15. 15Negative 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 Company62% rewritten
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 operations40% rewritten
24. 24Cyberattacks through security vulnerabilities could lead to disruption of business, reduced revenue, increased costs, liability claims, or harm to our reputation or competitive position43% rewritten
25. 25The development and use of artificial intelligence technologies presents risks that may affect our business, operations, and competitive positionNew
26. 26If 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
27. 27Our past acquisitions, as well as any acquisitions we may complete in the future, may be unsuccessful or result in other risks or developments that adversely affect our financial condition and resultsNew
28. 28If the Company is required to write down goodwill and other intangible assets, the Company’s financial condition and results could be negatively affected59% rewritten
29. 29War, terrorism, and other acts of violence may affect the markets in which we operate, our clients and our product and service delivery
30. 30We may not be able to secure adequate insurance policies, or secure insurance policies at reasonable prices
31. 31The Company will be affected by operational risks and may not be adequately insured for certain risks
32. 32Litigation may adversely affect our business, financial condition, and results of operations
33. 33Our cash could be adversely affected if the financial institutions in which we hold our cash fail
34. 34Unstable market and economic conditions may have serious adverse consequences on our business, financial condition and stock priceNew

Risks Related to Regulatory Requirements

1. 35We 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. 36The regulation of small UAS for commercial use in the U.S. is undergoing substantial change and the ultimate treatment is uncertain21% rewritten
3. 37Substantially 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 U.S
4. 38As 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. 39Our international operations are subject to various operational and financial risks that could adversely affect our businessNew
6. 40With 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. 41We may become subject to increasing global trade laws and regulations33% rewritten
8. 42Changes in U.S. trade policy, including the imposition of new tariffs or other import restrictions, could increase our costs, disrupt our supply chain, and adversely affect our business, financial condition, and results of operationsNew

Risks Related to our Intellectual Property

1. 43Our ability to protect our intellectual property and proprietary technology is uncertain
2. 44Our business may suffer if it is alleged or found that our products infringe the intellectual property rights of others
3. 45If we are unable to protect the confidentiality of our proprietary information, the value of our technology and products could be adversely affected
4. 46We 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. 47Intellectual property rights do not necessarily address all potential threats to our competitive advantage

Risks Related to our Financial Results

1. 48We will need to generate significant sales to achieve profitable operations
2. 49Our 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. 50If business growth falls short of expectations, we may need to obtain additional capital to fund our growth, operations, and obligations
4. 51Our revenue is not predictable and recognition of a significant portion of it will be deferred into future periods
5. 52We are exposed to currency exchange rate fluctuations because a proportion of our assets, liabilities and earnings are denominated in foreign currenciesNew

Risks Related to our Common Stock

1. 53Our stock price has been and may continue to be volatile, and the value of an investment in our common stock may declineNew
2. 54We may issue more shares to raise additional capital, which may result in substantial dilution26% rewritten
3. 55Our 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
4. 56If securities or industry analysts do not publish research or publish inaccurate or unfavorable research about our business, our stock price and trading volume could decline35% rewritten
5. 57We do not intend to pay dividends for the foreseeable future
6. 58If our shares become subject to the penny stock rules, it would become more difficult to trade our shares
7. 59Certain 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