UNITED STATES

 SECURITIES AND EXCHANGE COMMISSION

 Washington, D.C. 20549

 FORM 10-K

 ANNUAL REPORT PURSUANT TO SECTION
13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 For the fiscal year ended December 31, 2024

 or

 TRANSITION REPORT PURSUANT TO SECTION
13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 For the transition period from ________ to ___________

 Commission File Number: 001-39761

 (Exact name of registrant as specified in its charter)

 Nevada

 47-2615102

 (State or other jurisdiction of

incorporation or organization)

 (I.R.S. Employer

Identification No.)

 One Marina Park Drive, Suite 1410, Boston,
 MA 02210

 (Address of principal executive offices) (Zip Code)

 (888) 657-2377

 (Registrant's telephone number, including
area code)

 Securities registered pursuant to Section 12(b)
of the Act:

 Title of each class

 Trading Symbol(s)

 Name of each exchange on which registered

 Common Stock, par value $0.0001

 ONDS

 The Nasdaq Stock Market LLC

 Securities registered pursuant to Section 12(g)
of the Act: None

 Indicate by check mark if the registrant is a
well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes No

 Indicate by check mark if the registrant is not
required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes No

(1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements
for the past 90 days. Yes No

has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405
of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes
 No

is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company.
See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company"
and "emerging growth company" in Rule 12b-2 of the Exchange Act.

 Large accelerated filer

 Accelerated filer

 Non-accelerated filer

 Smaller reporting company

 Emerging growth company

 If an emerging growth company, indicate by check
mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting
standards provided pursuant to Section 13(a) of the Exchange Act.

has filed a report on and attestation to its management's assessment of the effectiveness of its internal control over financial
reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or
issued its audit report.

 If securities are registered pursuant to Section
12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction
of an error to previously issued financial statements.

 Indicate by check mark whether any of those error
corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant's
executive officers during the relevant recovery period pursuant to §240.10D-1(b).

is a shell company (as defined in Rule 12b-2 of the Act). Yes No

 The aggregate market value of the common stock held by non-affiliates
of the registrant as of June 28, 2024 (the last business day of the registrant's most recently completed second fiscal quarter)
was approximately $ 34.6 million. For purposes of this computation, all officers, directors, and 10% beneficial owners of the registrant
are deemed to be affiliates. Such determination should not be deemed to be an admission that such officers, directors, or 10% beneficial
owners are, in fact, affiliates of the registrant.

 The number of shares outstanding of the issuer's common stock
as of March 11, 2025 was 105,730,826.

 CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

 From time to time we make
statements concerning our expectations, beliefs, plans, objectives, goals, strategies, future events or performance and underlying assumptions
and other statements that are not historical facts. These statements are "forward-looking statements" within the meaning of
the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those expressed or implied by these statements.
Forward-looking statements may appear throughout this report, including without limitation, the following sections: Item 1 "Business,"
Item 1A "Risk Factors," and Item 7. "Management's Discussion and Analysis of Financial Condition and Results of
Operations." "Forward-looking statements generally can be identified by words such as "anticipates," "believes,"
"estimates," "expects," "intends," "plans," "predicts," "projects,"
"will be," "will continue," "will likely result," and similar expressions. These forward-looking statements
are based on current expectations and assumptions that are subject to risks and uncertainties, which could cause our actual results to
differ materially from those reflected in the forward-looking statements. Factors that could cause or contribute to such differences include
those discussed in this Annual Report on Form 10-K, and in particular, the risks discussed under the caption "Risk Factors"
in Item 1A and those discussed in other documents we file with the Securities and Exchange Commission ("SEC"). We undertake
no obligation to revise or publicly release the results of any revision to these forward-looking statements, except as required by law.
Given these risks and uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements.

 We caution you that assumptions,
beliefs, expectations, intentions, and projections about future events may and often do vary materially from actual results. Therefore,
we cannot assure you that actual results will not differ materially from those expressed or implied by our forward-looking statements.
A summary of some of the factors that could cause actual results to differ from those expressed or implied by our forward-looking statements,
including forward-looking statements contained in this Annual Report on Form 10-K, is provided below under "Risk Factor Summary."
These factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements that are included
in this Annual Report on Form 10-K and our other filings with the SEC. Should one or more of these risks or uncertainties materialize,
or should any of our assumptions prove incorrect, our actual results may vary in material respects from those projected in these forward-looking
statements. Factors or events that could cause our actual results to differ may emerge from time to time, and it is not possible for us
to predict all of them. Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions,
joint ventures, investments, or other strategic transactions we may make. You should not place undue reliance on our forward-looking statements.

 Each forward-looking statement
speaks only as of the date of the particular statement, and we undertake no obligation to update or revise any forward-looking statements
whether as a result of new information, future developments or otherwise, except as required by law.

 i

 Risk Factor Summary

 Our
business is subject to a number of risks and uncertainties, including those highlighted in the section titled "Item 1A. Risk Factors"
in this Annual Report on Form 10-K. Some of these principal risks include the following:

 Risks Related to Our Business and Industry

 We have incurred significant operating losses since inception and cannot assure you that we will ever achieve or sustain profitability.

 The Company operates in evolving markets, which makes it difficult to evaluate the Company's business and future prospects.

 Failure to manage our planned growth could place a significant strain on our resources.

 If 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.

 Material 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.

 Our marketing efforts depend significantly on our ability to receive positive references from our existing customers.

 Our 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.

 We 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.

 If our products do not interoperate with our customers' other systems, the purchase or deployment of our products and services may be delayed or cancelled.

 Cyberattacks through security vulnerabilities could lead to disruption of business, reduced revenue, increased costs, liability claims, or harm to our reputation or competitive position.

 ii

 If the Company is required to write down goodwill and other intangible assets, the Company's financial condition and results could be negatively affected.

 War, terrorism, and other acts of violence may affect the markets in which we operate, our clients and our product and service delivery.

 We may not be able to secure adequate insurance policies, or secure insurance policies at reasonable prices.

 Litigation may adversely affect our business, financial condition, and results of operations.

 Our products have inherent safety risks, as they often operate in hazardous industrial environments and are relied on by our customers to operate in a safe manner. If the reliability of our products fails to meet expected levels during commercial operation, this could result property damage, injury, death, financial harm to the business, and/or brand harm to the business.

 Risks Related to Regulatory Requirements

 We 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.

 Failure to obtain necessary regulatory approvals from the Federal Aviation Administration ("FAA") or other governmental agencies, or limitations put on the use of small UAS in response to public privacy and other concerns, may prevent us from expanding the sales of our drone solutions to industrial and government customers in the United States.

 Substantially all our current products depend on the availability and are subject to the use of licensed radio frequencies regulated by the Federal Communications Committee ("FCC") in the United States.

 As 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.

 Risks Related to our Intellectual Property

 Our ability to protect our intellectual property and proprietary technology is uncertain.

 Our business may suffer if it is alleged or found that our products infringe the intellectual property rights of others.

 Intellectual property rights do not necessarily address all potential threats to our competitive advantage.

 Risks Related to our Financial Results

 We will need to generate significant sales to achieve profitable operations.

 Our 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.

 iii

 If our internal controls over financial reporting or our disclosure controls and procedures are not effective, we may not be able to accurately report our financial results, prevent fraud or file our periodic reports in a timely manner, which may cause investors to lose confidence in our reported financial information and may lead to a decline in our stock price.

 Following the completion of the acquisition of Airobotics, our exposure to fluctuations in foreign currency exchange rates has increased.

 Risks Related to our Common Stock

 Concentration of ownership of our common stock among our existing executive officers, directors and principal stockholders may prevent new investors from influencing significant corporate decisions.

 We may issue more shares to raise additional capital, which may result in substantial dilution.

 Risks Related to the Notes

 We may not have the ability to pay interest on certain (i) 3% Series B-1 Convertible Notes (the "Exchange Notes") and (ii) 3% Series B-2 Senior Convertible Notes (the "Additional Notes," together with the Exchange Notes, the "Notes") or to redeem the Notes.

 Provisions in the Notes may deter or prevent a business combination that may be favorable to you.

 Future 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.

 Our financing arrangements contain, and we expect that other future loan agreements and financing arrangements will contain, customary covenants that may limit our liquidity and corporate activities, which could limit our operational flexibility and have an adverse effect on our financial condition and results of operations.

 Provisions in the Notes may deter or prevent a business combination that may be favorable to you.

 Future 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.

 Our financing arrangements contain, and we expect that other future loan agreements and financing arrangements will contain, customary covenants that may limit our liquidity and corporate activities, which could limit our operational flexibility and have an adverse effect on our financial condition and results of operations.

 iv

 Item 1. Business.

 This business description
should be read in conjunction with our audited Consolidated Financial Statements and accompanying notes thereto appearing elsewhere in
this Annual Report on Form 10-K for the year ended December 31, 2024 (the "Form 10-K"), which are incorporated herein
by this reference.

 The use of the words "we,"
"our," the "Company" and "Ondas Holdings" in this Form 10-K refer to Ondas Holdings Inc. and its subsidiaries.

 Corporate Overview

 Ondas Holdings Inc. is a leading
provider of private wireless, drone, and automated data solutions through its subsidiaries Ondas Networks Inc., a Texas corporation ("Ondas
Networks"), Ondas Autonomous Systems Inc., a Nevada corporation ("OAS"), which wholly-owns Airobotics, Ltd., an Israeli
company ("Airobotics"), and American Robotics, Inc., a Delaware corporation ("American Robotics").

connectivity solutions. OAS provides drone and automated data solutions through its subsidiaries Airobotics and American Robotics. Ondas
Networks and OAS together provide users in rail, energy, mining, public safety and critical infrastructure and government markets with
improved connectivity, data collection capabilities, and data collection and information processing capabilities. We operate Ondas Networks
and OAS as separate business segments, and the following is a discussion of each segment. See Note 1, Note 2, and Note 12 of the accompanying
Consolidated Financial Statements for further information regarding our segments.

connectivity solutions enabling mission-critical Industrial Internet applications and services. We refer to these applications as the
Mission-Critical Internet of Things ("MC-IoT"). Our wireless networking products are applicable to a wide range of MC-IoT
applications, which are most often located at the very edge of large industrial networks. These applications require secure, real-time
connectivity with the ability to process large amounts of data at the edge of large industrial networks. Such applications are required
in all of the major critical infrastructure markets, including rail, electric grids, drone operations, oil and gas, and public safety,
homeland security and government, where secure, reliable and fast operational decisions are required in order to improve efficiency and
ensure a high degree of safety and security. Our MC-IoT intellectual property has been adopted by the Institute of Electrical and Electronics
Engineers ("IEEE"), the leading worldwide standards body in data networking protocols, and forms the core of the IEEE 802.16
standard. Because standards-based communications solutions are preferred by our mission-critical customers and ecosystem partners, we
continue to take a leadership position in IEEE as it relates to wireless networking for industrial markets.

 We design, develop, manufacture,
sell and support FullMAX, our patented, Software Defined Radio ("SDR") platform for secure, private, wide-area broadband networks.
Our customers install FullMAX systems in order to upgrade and expand their legacy wide-area network infrastructure. By upgrading their
legacy systems, customers benefit from significant increases in data throughput which enables new applications. We have targeted the North
American freight rail operators for the initial adoption of our FullMAX platform. These rail operators currently operate legacy communications
systems utilizing dated narrowband wireless technologies for voice and data communications. These legacy wireless networks have limited
data capacity and are unable to support the adoption of new, intelligent train control and management systems. The freight rail operators
through the Association of American Railroads ("AAR"), its advisory subsidiary MxV Rail, as well as the American Railway Engineering
and Maintenance Association ("AREMA"), have adopted the IEEE 802.16 standard for future private wireless networks.

 Our software-based FullMAX
platform is an important and timely upgrade solution for privately-owned and operated wireless wide-area networks, leveraging Internet
Protocol-based communications to provide security, more reliability and significant data throughput for our mission-critical infrastructure
customers. We believe industrial and critical infrastructure markets throughout the globe have reached an inflection point where legacy
serial and analog based protocols no longer meet industry needs. In addition to offering enhanced data throughput, FullMAX is an intelligent
networking platform enabling the adoption of sophisticated operating systems and equipment supporting next-generation MC-IoT applications
over wide field areas. These new MC-IoT applications and related equipment require more processing power at the edge of large industrial
networks and the efficient utilization of network capacity and scarce bandwidth.

 OAS

 Our OAS business unit develops
and integrates drone-based solutions focusing on high-performance critical applications for government and Tier-1 commercial enterprises.
Ondas is marketing comprehensive drone-based solutions to address the needs of governmental and commercial customers based on its commercially
available platforms: the Optimus System, a fully autonomous drone platform capable of continuous and multipurpose aerial data capturing
and analytics, and the Iron Drone Raider, a fully autonomous interceptor drone designed to neutralize small hostile drones.

 Our unique, fully autonomous
platforms enable cutting-edge aerial capabilities and are designed to serve and protect critical infrastructure and operations. Our business
focuses on end-user entities in defense, homeland security, public safety, smart city, airport authorities, and other governmental entities
together with commercial operators of critical industrial and technology facilities such as oil & gas, seaports, mining, and heavy
construction as well as for data centers and semiconductor fabs. For these industries, OAS provides specialized real-time aerial data
capturing and aerial protection solutions in the most complex environments such as urban areas, sensitive and critical facilities and
field area operations, and high-priority projects. In addition, we offer a wide suite of supplementary, enabling services for successful
implementation such as AI data analytics, data automation, IT implementation, safety planning, certification, training, and maintenance,
handling all the complex aspects of such high-performance drone operations.

 Our portfolio companies, American
Robotics and Airobotics, form a unique, powerful, and synergistic combination covering all the aspects required for successful Aerospace
business together with data technologies and services for digital transformation industries. Our companies are specialized in addressing
all the challenges arising along these types of product lifecycles including research and development, manufacturing, certification, and
ongoing support.

 OAS and its portfolio companies
have already gained a track record of industry-leading regulatory successes including the securing of the first-of-its-kind Type Certification
(TC) from the FAA for the Optimus 1-EX UAV on September 25, 2023, becoming the first autonomous security data capture UAV to achieve this
distinction. TC, recognized as the highest echelon of Airworthiness Certification, streamline operational approvals for broad flight operations
over people and infrastructure. The certification verifies the compliance of the system's design with the required FAA airworthiness
and noise standards, ensuring safe operation within the US National Airspace System (NAS) thereby significantly broadening the range of
operational scenarios and scaling up of operations for automated UAS. Achieving FAA Type Certification will enable drone operations beyond-visual-line-of-sight
(BVLOS) without a human operator on-site. With a strong footprint in the US market and worldwide, we believe that OAS is well-positioned
with proven technology, a unique offering, and strong capabilities to strategically transform critical operations with our cutting-edge
drone tech and capabilities.

 Industry Partnerships

 Ondas Networks continues to
develop partnerships in the rail space to develop and market wireless communications products and services based on Ondas Networks'
technology. Our partnership with Siemens Mobility ("Siemens") is geared to market our FullMAX-based networking technology
and services and to jointly develop certain wireless communications products for the North American Rail Industry based on Siemens'
Advanced Train Control System ("ATCS") protocol and our FullMAX MC-IoT platform. We are working with other industry partners
to commercialize our platform technologies for specific use cases and to drive broad industry adoption of dot16 applications.

 Our Strategy

 Our goal is to be a global
leader in providing turnkey data solutions for industrial, public safety and government markets by offering i) secure wireless connectivity
solutions enabling high-bandwidth, mission-critical Industrial Internet applications and services through Ondas Networks and ii) aerial
security and data collection and analysis via automated drone platforms through OAS.

 The key elements of our growth
strategy include the following:

 Deliver
multiple North American Class I Railroad network opportunities through our FullMAX platform. Our marketing and business
development efforts combined with our industry partnerships are focused on providing solutions that address the specific needs of the
North American railroad industry. We expect large-scale commercial adoption of our network technology by the North American operators
as they upgrade legacy communications infrastructure in the 900 MHz as well as other spectrums. In addition, we are working with industry
partners to develop and commercialize the Next Generation Head of Train / End of Train ("NGHE") devices that will solve critical
safety issues in train operations.

 Expand
fleet deployments of our Optimus System in the US by marketing solutions to the government and commercial markets, focusing on
critical infrastructure and public safety applications first, to overcome the drone industry's regulatory and operational barriers
and extend our first-mover advantage. We have developed a strong customer pipeline with planned commercial deployments of our
Optimus System for government and commercial markets for public safety, smart city, and inspection and monitoring of critical
assets, industrial facilities, and construction projects. We plan to leverage our unique industry positioning, owning the first drone
system approved by the FAA for automated remote operation BVLOS without a human operator or visual observer on-site, and other qualitative
advantages of our organization and talent. We will focus on supporting fleet deployments with existing customers while expanding our
pipeline of new customer relationships that can be converted to fleet deployments.

 Expand
fleet deployments of our Optimus System worldwide by leveraging new distribution partners - new international markets with partners
we have announced worldwide. In addition, we plan to secure additional customers and distribution partners for our Optimus System
and Iron Drone Raider, while supporting and expanding our fleet deployments in the UAE with existing customers, expanding our
new customer pipeline, and pursuing new joint ventures.

 Expand
our offering to the defense sector in the US and worldwide marketing based on our Iron Drone Raider platform and Optimus System.
 We plan to secure a Green UAS List designation from a program administered by the Association for Uncrewed Vehicle Systems ("AUVSI")
in order to certify the Optimus System as compliant with the highest levels of cybersecurity and supply chain requirements as
outlined in the National Defense Authorization Act (NDAA). We believe inclusion on the Green List will further demonstrate the maturity
and quality of our system and help accelerate acceptance from U.S. governmental entities for use in defense, homeland security, public
safety, and municipal markets requiring the highest levels of security and reliability. Upon successful completion of the program, we
believe our Optimus drone will be the only Green UAS certified drone that has also received an FAA Type Certificate. We believe the Green
List provides an opportunity to transition from the Green UAS cleared list to the Blue UAS cleared list and be eligible for purchase
by the U.S. Department of Defense.

 Expand
our industrial wireless and autonomous drone solutions via additional partnerships, joint ventures, or acquisitions. In
addition to internal investment and development, we will continue to actively pursue external opportunities to enhance our product offerings
and solutions for our critical infrastructure customers via joint ventures, partnerships, and acquisitions. We intend to focus on companies
with complementary technologies or product offerings or synergistic distribution strategies.

 Our Business Model

 We sell our FullMAX MC-IoT
wireless products and services globally through a direct sales force and value-added sales partners to industrial and critical infrastructure
providers including major rail operators, with growth opportunities in other markets such as commercial and industrial drone operators,
electric and gas utilities, water and wastewater utilities, oil and gas producers and pipeline operators, and for other critical infrastructure
applications in areas such as public safety, homeland security and defense, and transportation. We continue to develop our value-added
reseller relationships for the development of new types of wireless connectivity for the North American Rail market as well as selected
global markets in both Europe and Asia.

 In executing our go-to-market
strategy, we intend to monetize our software-based intellectual property and grow revenue and cash flow with embedded FullMAX software
sales, Software-as-a-Service ("SaaS") arrangements, IP royalties based on Ondas Networks software and through additional services
provided to customers and ecosystem partners. Customers deploy our connectivity and Fog-computing platform in private networks that are
designed for lifetimes of 10 – 15 years or even longer. Our FullMAX platform is software-defined and offers customers flexibility
to expand capacity and evolve network utilization. Similarly, our ecosystem partners often integrate our FullMAX software and wireless
capability into their own long-lived equipment and systems which their customers purchase and deploy. As such, we believe our software
solutions provide ongoing revenue opportunities related to both connectivity value and edge computing capability. Customers and ecosystem
partners will require ongoing FullMAX system and security enhancements and for us to design additional features which create opportunities
for additional, recurring revenue and profit streams. Our monetization strategies include:

 Systems sales: Our
FullMAX deployments are typically large, mission-critical wide-area networks deployed and privately operated by our industrial and government
customers. These end-to-end system deployments involve sales consisting of both base stations and edge radio end points with embedded
FullMAX software and network management software and tools.

 Software and hardware maintenance
agreements: Our customers contract with us for extended software and hardware maintenance which provide them with critical ongoing
support for their installed network. These contracts provide revenue to us in the year following an initial installation. Software maintenance
licenses entitle the customer to ongoing software and security upgrades as well as enabling the provision of additional system features.
Similarly, hardware maintenance programs provide customers with extended equipment warranty terms for an installed network.

 These arrangements allow our
customers to continue to maintain a modern, flexible and upgradeable network over a long period of time. These agreements may extend for
multiple years given the long average life of the installed and growing network.

 Licensing / Royalties:
In certain system deployments, our ecosystem partners may choose to embed FullMAX software into their own hardware and software platforms
providing us with an ongoing per device multi-year revenue stream. Licensing is an effective way for an ecosystem partner to jumpstart
customer activity. Alternatively, a partner may choose to develop software based on our intellectual property generating royalty revenue.

 Other Services: We
provide ancillary services directly related to the sale of our wireless communications products which include wireless network design,
systems engineering, radio frequency planning, software configuration, product training, installation, and onsite support. Furthermore,
we also provide engineering and product development services to ecosystem partners who are interested in integrating their intelligent
equipment with our FullMAX SDR platform and need our expertise to do so.

 OAS

 OAS markets aerial solutions
based on its Optimus System and Iron Drone Raider platforms via direct sales to enterprises and government customers. Additionally,
OAS utilizes channel marketing strategies, building a network of partners and agents to distribute our solutions. We focus on identifying
and qualifying large, sophisticated customers with active drone programs who have the ability and intent to expand those programs and
eventually deploy fleets of automated drones across their portfolio of assets. Our unique value proposition is based on our core strategic
capability to provide holistic solutions, being a trusted one-stop-shop for major entities, and de-risking innovative complex drone implementation
processes.

 After initial customer qualification,
contracting and the receipt of a purchase order, we ship and install our platforms and solutions on the customer premises. Via American
Robotics and Airobotics staff, we are planning our customers deployments providing complete support for all stages of implementation.
Our field service personnel remain on location for a short period of time to ensure the programmed automated drone operations are meeting
customer and regulatory requirements and implemented successfully on-prem, on-time and on-budget.

 We offer our solutions in
several business models designated to allow the required flexibility and benefits for our customers and creating recurring revenues and
organic growth within our accounts:

 Direct
Sales & Service - Our Optimus System and Iron Drone Raider platforms can be purchased and be owned and operated
by our end users or resellers via partnerships or joint ventures with third party drone services providers. These types of agreements
typically include arrangements for ongoing services including training and maintenance. System purchases can be preferred by certain
public safety and homeland security customers directly or via distribution through value-added resellers and partners.

 Drone
Infrastructure and Data-as-a-Service (DaaS) – This model is the typical agreement we have with our customers. Our Optimus System
based solutions can be provided under a DaaS agreement where we bundle hardware, software, operations, and maintenance into one annual
subscription fee. We install the Optimus Systems as a fixed aerial infrastructure on premises or areas serving one or multiple customers
on a flexible consumption business model allowing end users to procure aerial and data services over the drone network in the area. This
model is applicable in two major scenarios:

 o
 Owner/Operator
Model – For example, an agreement with a construction site owner/operator as the central user of the services with additional
aerial data services to subcontractors and tenants of the construction site. The site owner/operator will use the drone infrastructure
for progress remote monitoring and planed-vs-built applications, and in addition will allow more services to the site's tenants
and sub-contractors such as monitoring and inspection and data collection use cases. In many instances, multiple customers will subscribe
for each unique service.

 o
 Joint-Venture
Model - For example, when entering an urban industrial area and deploying the drone infrastructure in partnership with an established
local governmental or commercial entity and providing data service to the entity and to third party customers in the region creating
recurring revenue by increasing the amount and type of service provided over to drone network.

 Our Products and Services

 Ondas Networks has developed
a next-generation radio platform specifically to meet the evolving data needs of large industrial and government customers and markets.
These markets are differentiated from consumer markets in that the customers assets are dispersed over very wide and remote geographies
with specific challenges to installation, maintenance, and upgrades. These challenges led us to design a new type of software-based radio
platform capable of supporting a long useful life to the network hardware. Our software defined radio ("SDR") architecture
allows us to customize almost any aspect of the air interface protocol, the key components of which are patented and have been incorporated
into new IEEE wireless standards. The ability to constantly improve customer networks and hosted software applications with flexible,
over-the-air software upgrade helps create customer loyalty.

 Our FullMAX SDR platform is
designed to enable highly secure and reliable industrial-grade connectivity for truly mission-critical applications. An end-to-end FullMAX
network consists of connected wireless base stations, fixed and mobile edge radios and supporting technology all enabled by critical software
developed and owned by Ondas Networks. The Fog-computing capability integrated in our end-to-end FullMAX SDR platform, primarily through
docker container technology, is valued by our customers and ecosystem partners as they seek to leverage the value of MC-IoT applications
for improved safety, efficiency, and profitability. Our IEEE 802.16s compliant equipment is designed to optimize the performance of unused
or underutilized VHF / UHF low frequencies licensed radio spectrum and narrower channels. We do this through various patented software
algorithms including via "spectrum harvesting" techniques which aggregate narrowband channels to create increased broadband
network capacity. Our channel aggregation algorithms include the ability to aggregate hard to utilize, non-contiguous narrowband channels
and are a hallmark feature of a FullMAX broadband system.

 OAS

 We provide our customers with
turnkey data and security aerial solutions designed to meet their unique requirements in complex environments. Our solutions combine our
platforms the Optimus System and Iron Drone Raider together with a wide suite of supplementary services to insure successful
deployment and integration of the solution on-prem.

 The Optimus System

 The Optimus System
is a fully autonomous drone platform capable of continuous and multipurpose drone operations for various applications. As one of the world's
first "drone-in-a-box" solutions, the Optimus System is marketed as an "Aerial Drone Infrastructure", designed
for aerial data collection and analysis in security, surveillance, and supervision applications across governmental and commercial markets.
The Optimus System provides a cutting-edge solution for public safety, security, industrial Smart City initiatives, and other critical
operations. The platform enables routine, high-resolution, on-demand aerial response alongside automated aerial mapping, surveying, and
inspection capabilities—essential in the digital transformation and Gov-Tech sectors, including Public Services, Oil & Gas,
Infrastructure, Heavy Construction, Rail, Ports, and more.

 The Optimus System,
in combination with the Kestrel system, enhances autonomous operations with advanced Detect and Avoid (DAA) capabilities, airspace
safety and surveillance, and Counter-Unmanned Aircraft Systems (C-UAS) solutions. The integration of Kestrel enables the Optimus
System to operate Beyond Visual Line of Sight (BVLOS), as demonstrated through an FAA-approved BVLOS waiver. This critical capability
allows for autonomous, long-range operations across multiple mission sets, expanding the system's deployment potential in complex
airspace environments.

 The Optimus System
consists of (i) Optimus, a highly automated, AI-powered drone with advanced imaging payloads, (ii) the Airbase, a ruggedized,
weatherproof base station enabling housing, battery swapping, battery charging, payload swapping, data processing, and cloud transfer,
and (iii) Insightful, a secure web portal and API that enables remote interaction with the system, data, and analytics from anywhere
in the world. These subsystems are interconnected through a suite of supporting technologies. The Airbase features internal robotic
mechanisms that facilitate automated battery and payload swaps. This allows for 24/7 operations, as the Optimus drone can be immediately
redeployed after returning to the dock for a battery swap. Similarly, the autonomous swapping of sensors and payloads without human intervention
allows the Optimus System to support multiple applications and use cases from a single deployment.

 We design, develop, and manufacture
the Optimus System, providing high-fidelity, ultra-high-resolution aerial security and data collection to enterprise and government
customers. Our turnkey aerial intelligence solution enables continuous asset digitization, real-time monitoring, and data-driven decision-making
for mission-critical operations. Designed from the ground up as an end-to-end autonomous solution, the Optimus System operates
seamlessly in real-world environments. Leveraging advancements in robotics automation, machine vision, edge computing, and AI, deployed
Optimus units form an interconnected drone infrastructure, enabling autonomous, unattended security and data collection with unmatched
reliability and operational efficiency.

 The Iron Drone Raider System

 In March 2023, Airobotics
acquired the assets of Iron Drone Ltd, an Israeli counter-drone company, and fully integrated its team and technology into the Company.

 We offer The Iron Drone Raider
system, which is a state-of-the-art counter-drone solution designed to counter small drones as they are a growing threat in many defense,
homeland security, and public safety aspects. As a cutting-edge technology, it is specifically marketed to military, government, and enterprise
customers, offering robust defense and security for critical infrastructure, valuable assets, and human lives.

 The Iron Drone Raider
is comprised of a docking station and intercepting drones and can be integrated into any mobile drone detection system. The heart of the
Raider lies in its level of autonomy, allowing it to fly without GPS, day, or night, and safely neutralize small suspicious drones
with minimal collateral damage, lowering them to the ground with a designated parachute. The system uses AI technologies and onboard cameras
and computers to enable it to detect and intercept unauthorized or hostile drones effectively, capable of addressing multiple hostile
drone targets simultaneously. It can seamlessly integrate with various existing drone detection systems, making it adaptable and versatile
for different operational contexts.

 During 2024 we upgraded the Iron Drone Raider system to address
the needs of the Israel and global defense industries market and end users, which included enhancements of the on-board sensor capabilities
for intelligent navigation in complex GNSS-denied areas, which support the most advanced requirements and the efforts of protecting military
and civil operations against the threat of small kamikaze and surveillance hostile drones.

 OAS Services

 OAS provides specialized real-time
aerial data capturing and analytics together with aerial protection services based on its systems. In addition, we offer a wide suite
of supplementary enabling services for successful implementation and customization such as AI data analytics, data automation, IT implementation,
safety planning, certification, training, and maintenance, handling all the complex aspects of such high-performance drone operations.
This unique combination makes our enterprise a one-stop-shop of visionary drone installations.

 Certification and Aviation
Regulatory Services. American Robotics and Airobotics have industry leading regulatory successes which include having the first drone
system approved by the FAA for automated operation BVLOS without a human operator or visual observer on-site. American Robotics'
FAA approvals were enabled by integrating a suite of proprietary technologies, including Detect-and-Avoid ("DAA") and other
proprietary intelligent safety systems into its autonomous drone platform, which we plan to integrate into the Optimus System.
Our regulatory team has been working closely with Civil Aviation Authorities worldwide since 2016 to explore new and innovative approaches
for approving complex automated BVLOS flights over people. Our regulatory strategy has consistently proven successful, leading to numerous
pioneering regulatory accomplishments worldwide, cementing our position as a leader in the global drone industry. Our team of experts
actively participates in rule-making advisory committees, drone associations, and maintains direct communication with regulators in each
country we operate in. We are committed to staying ahead of the curve in terms of drone regulations and compliance. Working with us allows
customers to certify and coordinate complicated drone operations with regulators worldwide.

 Training, Maintenance and
Remote Operations. American Robotics and Airobotics have gained substantial experience in drone operations worldwide. This includes
training, maintenance and remote operations services. Our operational teams are highly qualified in all of the drone operation roles,
including drone piloting, training, and maintenance. As an aerospace developer, manufacturer, and operator our operational capabilities
enable our customers to overcome many operational challenges and reach operational readiness fast.

 Implementation and customization.
 American Robotics and Airobotics have gained substantial experience in implementation and customization of our solutions to our customers.
We offer support and engineering services to our customers in order to successfully integrate our aerial platforms with the highest levels
of both automation and data security, quickly and efficiently.

 The Market for Our Products and Services

 We have targeted the North
American rail operators for the initial adoption of our FullMAX platform. These rail operators currently operate legacy communications
systems utilizing serial-based narrowband wireless technologies for voice and data communications. These legacy wireless networks have
limited data capacity and are unable to support the adoption of new, intelligent train control and management systems. In addition to
data capacity challenges, rail operators need to reliably cover the vast and often remotely located rail track and related infrastructure
which extends nationwide. The rail operators require a next-generation, robust system with significantly increased data throughput capacity
and flexibility to adopt new applications. We believe a transition to integrated Fog-computing wireless communications systems will enable
the rail operators to drive more intelligence to the edge of their operating environments enabling real time automation and better operator
control of many critical operating systems related to train control, crossing safety, train and track integrity and drone operations.
Network upgrades will support enhanced safety, improved efficiency, and increased profitability of train operations.

 The North American Rail Network
is vast in scale, consisting of 140,000 miles of track, 25,000 locomotives, and 1.6 million railcars. Within this large footprint there
are 200,000 highway crossings, with at least 65,000 of the crossings equipped with electronic systems today, a number which is expected
to increase in the coming years. Applications that improve grade crossing safety are enabled by our FullMax platform. The Class I railroads
currently operate four separate private wireless networks in support of train operations. Those networks are deployed using spectrum in
the 160 MHz, 220 MHz, 450 MHz and 900 MHz bands. We believe a significant portion of the communications infrastructure has been in operation
for more than 20 years and now requires a technological upgrade to support new applications and increased capacity requirements. Our FullMAX
MC-IoT platform offers an excellent migration path for these applications. The Class I Railroads value the ability of our frequency agnostic
SDR architecture to enable a substantial data capacity increase utilizing the railroad's existing wireless infrastructure and dedicated
FCC licensed radio frequencies, as well as the flexibility to adapt to and take advantage of future changes in spectrum availability,
as well as future business and operational requirements. Based upon management estimates, we believe the addressable market for the four
private North American Railroad networks is approximately $1.3 billion.

 OAS

 The total addressable market
("TAM") of OAS is measured at over $100 billion in size according to management estimates and independent third-party research.
The TAM comprises the potential value of Ondas' Optimus System in the global defense and civil UAV market and in the drone services
market and the addressable market of the Iron-Drone Raider system in the Counter-Unmanned Aircraft Systems (C-UAS) markets.

 Ondas competes in the large
drone markets which was valued by a study by Grand View Research at $83.7 billion in 2025 and forecasted to grow further at a compound
annual growth rate of 14% reaching $160.6 billion by 2030. In addition, Ondas provides drone services including drone data and data analytics
based on multiple various sensors, in addition to maintenance, repair and operational service. According to Fortune Business Insights,
drone market services is valued at $32.1 billion in 2025 and projected to grow to $213.9 billion by 2032. In the US, the FAA anticipates
that the growth rate in the commercial drone sector will remain high over the next few years. This is primarily driven by the regulatory
clarity that Part 107 rules continues to provide to industry. This is further supported by the Operations Over People final rule, published
on December 28, 2020, which is the latest incremental step towards further integration of small drones into the national airspace. Ondas
has secured a key position within this market, holding the first FAA Airworthiness Type Certificate, allowing it to apply to fly its drones
in complex populated environments.

 In addition to the Optimus
System and its related drone services, Ondas also competes in the C-UAS market providing the Iron-Drone Raider system for counter drone
kinetic interception. The growing C-UAS technology market has been valued at $3.1 billion in a recent study published by Grand View Research
in 2025 and is forecasted to grow at a compound annual growth rate of 27.2% to $10.6 billion by 2030. We believe these studies underestimate
the potential market size, because they don't fully consider the potential effect of security vulnerabilities on the value of the
activities the C-UAS equipment protects and enables, in sensitive locations such as major sporting events, and the protection of industrial
assets such as in the energy and utility sectors. Notably, although the North American C-UAS marketplace is the largest by revenue, twelve
other regions of the world are also active in C-UAS. High-profile events in other countries involving UAS such as the war in Ukraine and
Israel. Recent research and reports from 2024 onwards highlight a significant increase in unauthorized drone activities near airports,
raising concerns about aviation safety and security. According to the US Federal Aviation Administration (FAA) over 100 reports of drone
sightings were received, near airports each month. Between November 2014 and December 2024, there were 18,891 reported drone sightings,
averaging nearly 155 per month. In the first four months of 2024 alone, the FAA recorded 326 drone-related incidents near aircraft and
airports, underscoring the escalating security risks.

 Customer Activity

 The majority of Ondas Networks
customer activity has been with railroad operators and partners, including Siemens, in North America. North American railroad operators
run multiple, frequency-specific networks for different applications. Our FullMAX platform has the flexibility to operate in all these
frequency bands and will allow these customers the opportunity to better utilize their existing radio spectrum, avoid expensive additional
spectrum purchases, and add more high-value, data-intensive applications to their operations. Our initial focus with these rail customers
has been for train control applications and related safety systems in the 900 MHz frequency band where the FCC has recently awarded our
railroad customers new radio spectrum.

 We have worked
extensively with MxV Rail, a subsidiary of the AAR, to validate the performance of our dot16 platform. In March 2023, the
Association of American Railroads ("AAR") formally announced that IEEE 802.16 standard would be the wireless platform
for the greenfield 900 MHz network. In April 2023, the American Railway Engineering and Maintenance-of-Way Association (AREMA) voted
to require the use of 802.16 in the 900 MHz greenfield band; The AAR also confirmed they have agreed with the Federal Communications
Committee to retire the legacy 900 MHz band by September 2025 and that the wireless network in the new 900 MHz band would be
substantially built by April 2026.

 We are currently engaged in
field installation activities with multiple railroads. We expect a 900 MHz network upgrade cycle across all Class I railroad systems over
the next few years in order to comply with FCC license requirements and meet business needs related to safety and profitability. We are
also engaged in supplying rail operators in the important Northeast Corridor with key communications equipment upgrades.

 We have also engaged the AAR
and the WCC on the technical roadmap for the legacy 160 MHz wireless network used by the railroads in North America. We believe the 160
MHz network will be the next major wireless network the railroads upgrade utilizing IEEE 802.16t technology.

 As of December 31, 2024, Ondas
Networks was active with six of the Class 1 Rails in North America and with one of the largest railroads in the world, Indian Railways,
for a multi-year delivery program of locomotive radios for on-board telemetry applications.

 OAS

 Our Optimus System
and Iron Drone Raider continue to gain strong traction across enterprise, industrial, and government markets. The platform has
been extensively tested internally and externally, with customers validating its reliability, safety, and performance in real-world deployments.

 In the United Arab Emirates,
Airobotics expanded its collaboration with a local governmental entity in Dubai, deploying additional Optimus Systems as part of the world's
first drone network infrastructure for public safety and municipal services. A renewed and expanded services agreement ensures continued
operational support and maintenance, allowing the fleet to conduct thousands of autonomous flights each month in densely populated areas.

 In Israel, Airobotics received
a purchase order from one of the world's largest semiconductor manufacturers to extend the deployment of our Optimus System
for aerial security and data services at a critical semiconductor fabrication facility. The system, in continuous operation since 2016,
remains one of the few fully automated aerial data capture solutions functioning within a high-security industrial environment while seamlessly
complying with national airspace regulations.

 The Iron Drone Raider
counter-UAS platform saw increased demand, securing an initial purchase order in May 2024 from a major Israeli defense company for the
first Raider systems. The first deployment phase is underway, with follow-on orders expected in the second and third quarters,
as the system undergoes operational validation in defense environments.

 In July 2024, we received
an initial purchase order from a major government military customer for the Iron Drone Raider, supporting border security and protection
of critical assets from hostile drones. This was followed by an expansion order in August, which included enhanced system features and
long-term operational support. As a structured, multi-stage deal, additional orders are expected based on performance in combat conditions.
In September 2024, Airobotics secured a $5.4 million purchase order for the Optimus System from a major government military customer,
with deployments planned for military bases and border security applications under extreme environmental conditions. This order further
demonstrates the system's versatility in high-security defense and infrastructure monitoring operations.

 In Europe, we expanded our
market reach through strategic reseller partnerships with HHLA Sky and C-Astral Aerospace, enabling us to offer drone services for terminal
operations and critical infrastructure in Germany, Slovenia, and other European markets. With multiple demonstrations planned for defense
and critical infrastructure clients, we anticipate securing new customer orders in 2025.

 American Robotics continued
its expansion in the U.S. market, securing a contract with the U.S. Coast Guard for maritime emissions monitoring in support of EPA Clean
Port initiatives at the Ports of Los Angeles and Long Beach. This marks our first operational contract with a federal agency, opening
doors for expanded drone services in maritime security and environmental monitoring.

 In the third quarter, Airobotics
secured $9 million in purchase orders from a major government military customer for Iron Drone Raider system deployments, upgrades,
and full-scale operational rollouts to protect national borders, military units, and high-security facilities.

 Airobotics was also
awarded a $1 million grant from the Israeli Innovation Authority (IIA) in November to accelerate development and enhance the Iron
Drone Raider with advanced autonomous counter-drone capabilities. In addition to completing the U.S. Coast Guard contract
discussed above, American Robotics expanded its market presence by securing key demonstrations with a technology infrastructure
provider in Texas. These engagements highlight the Optimus System 's ability to perform fully autonomous
beyond-visual-line-of-sight (BVLOS) missions for infrastructure and security monitoring.

 As we closed 2024, Airobotics
secured another purchase order for the Iron Drone Raider from a major defense company, reinforcing our strong position in the counter-drone
security market.

 With record-breaking purchase
orders, an expanding global footprint, and continued market momentum, the demand for our Optimus System and Iron Drone Raider
continues to accelerate. As awareness and adoption of autonomous drone solutions grow, we anticipate further expansion in our customer
pipeline across the U.S., Middle East, and Europe, strengthening our leadership in autonomous aerial security and infrastructure monitoring.

 Manufacturing, Availability and Dependence
upon Suppliers

 Ondas Networks and OAS utilize
outsourced manufacturing partners in the building of product to fulfill customer orders. Utilizing contract manufacturers allows us to
focus on designing, developing and selling our products. Furthermore, outsourced manufacturing allows us to leverage the economies of
scale and expertise of specialized outsourced manufacturers, reduce manufacturing and supply chain risk and distribution costs.

 Ondas Networks designs the
printed circuit boards and enclosures for our radios. The physical manufacturing of FullMAX circuit boards is outsourced to best-in-class
industrial contract manufacturers. The contract manufacturer is responsible for sourcing the majority of components, assembling the components
onto the printed circuit boards and then delivering the final boards to us. Once at our facility, the boards are tested, then placed into
enclosures and programmed with the appropriate software. The radios are then configured according to the requirement of the network and
run through system level tests before being packaged and shipped to the customer. Ondas Networks maintains multiple contract manufacturers,
both domestically and internationally, to ensure competitive pricing and to reduce the risk from a single manufacturer.

 OAS designs the Optimus System
and the Iron Drone and specifies all components including the raw materials, sub-assemblies, intermediate assemblies, sub-components,
parts and the quantities of each needed to manufacture the end product. These assemblies incorporate a combination of custom-developed
components and COTS components. The building of an Optimus System and the Iron Drone is outsourced to best-in-class contract
manufacturers for fabrication and assembly. We utilize different contract manufacturers for the Optimus drone, the Iron Drone,
and Airbase. Once complete, the contract manufacturers deliver the finished products to our facility where software is loaded,
and system-level quality assurance is performed before being packaged and shipped to the customer location for installation. OAS works
with a select group of contract manufacturers and has access to a large number of other comparable contract manufacturers.

 Research & Development

 Our ability to develop state-of-the-art
and cost-effective solutions relative to our competitors can only be achieved through our continued research and development efforts.

 Ondas Networks research and
development activities are headed by Menashe Shahar, our Chief Technology Officer, based in our Sunnyvale, California headquarters. Mr.
Shahar is a co-founder of Ondas Networks and has over 30 years of telecommunications system development experience, including the design
and implementation of broadband wireless data systems for top tier system integrators and service providers including WorldCom, Nortel
and ADC. Mr. Shahar has been awarded multiple patents in the data communications industry and has been an active participant in major
wireless standardization activities including IEEE 802.16. In addition to internal research and development efforts, we also engage third
party consultants to assist us in our research and development activities. Mr. Shahar and his team are currently focused on expanding
the applications of our FullMAX technology in all spectrum bands used by rail operators in North America.

 OAS research and development
activities are headed by Meir Kliner, President of OAS and CEO and Founder of Airobotics who is based in Petah Tikva, Israel. Mr. Kliner
has led the development of the Optimus System since 2014 and has expertise that represents a synthesis of years of managerial experience
combined with command of drone product design. Mr. Kliner's background includes key roles in developing diverse aerial systems,
ranging from recreational to military applications and has founded several businesses, including Light and Strong, a premier manufacturer
of composites for aerial platforms in the drone industry. Mr. Kliner is supported by a development team based in Petah Tikva,
Israel.

 Our research and development
team works closely with our customer support team and incorporates feedback from our customers into our product development plans to improve
our products and address emerging market requirements.

 Our research and development expenses were approximately $12.5 million
and approximately $17.1 million for the years ended December 31, 2024 and 2023, respectively.

 Intellectual Property

 We rely primarily on patent,
trademark and trade secret laws to protect our proprietary technologies and intellectual property. As of this filing, the Ondas Networks
segment held a total of eight issued patents in the U.S., six international issued patents, seven pending patent applications in the U.S.,
and five international pending patent applications. The Ondas Networks segment's patents expire between 2029 and 2044, subject to
any patent extensions that may be available for such patents. Our intellectual property centers around creating and maintaining robust,
private, highly secure, broadband industrial wireless networks using our FullMAX radio technology for our mission critical customers'
networks. We view the Ondas Networks segment's patents as a key strategic advantage as the markets for industrial wireless connectivity
grows and as these industries move to standardized solutions and will enable us to earn licensing fees and/or royalties for the use of
our patents.

 The OAS segment relies primarily
on patent, trademark and trade secret laws to protect our proprietary technologies and intellectual property. As of this filing, the OAS
segment held a total of six issued patents in the U.S., 22 international issued patents, and four international pending patent application.
The OAS segment's patents expire between 2034 and 2048, subject to any patent extensions that may be available for such patents.
The OAS segment's intellectual property incorporates internally developed software and hardware design incorporating machine and
computer vision and was developed with artificial intelligence and machine learning techniques. This intellectual property is critical
to the development of end-to-end systems which reliably enable the automated operation of drones in real-world environments.

 We have a policy of requiring
our officers, employees, contractors and other service providers and parties with which we do business to enter into confidentiality,
non-disclosure ("NDAs") and assignment of invention agreements before disclosure of any of our confidential or proprietary
information.

 Seasonality

 We do not believe that the
industry in which Ondas Networks and OAS competes is subject to seasonal sales fluctuation.

 Dependence on a Small Number of Customers

 Because we have only recently
invested in our customer service and support organization, a small number of customers have accounted for a substantial amount of our
revenue. During the year ended December 31, 2024, three customers accounted for approximately $3,763,000, $1,902,000, and $745,000 of
our revenue or approximately 52%, 26%, and 10%, respectively. During the year ended December 31, 2023, three customers accounted for approximately
$6,703,000, $5,127,000, and $3,395,000 of our revenue or approximately 43%, 33%, and 22%, respectively.

 Competition

 We compete with alternatives
to wireless technology, public cellular data networks and private wireless networking products from other manufacturers. We believe that
each of these competing solutions has core weaknesses when compared to FullMAX, as described below.

 Public cellular data networks:

 Public networks are more vulnerable to cyber security attacks from anywhere in the world including denial of service attacks; private networks can operate independent of the public internet.

 Public networks are more susceptible to prolonged outages during man-made and natural disasters (e.g. 9/11, Hurricane Sandy, etc.), exactly when utilities and mission critical entities require the greatest reliability.

 Public networks are typically designed for population coverage rather than the geographic areas required by critical infrastructure providers, which often include remote locations.

 Public networks are by definition oversubscribed, shared networks without the necessary prioritization service to support mission critical applications.

 Public networks typically use shared infrastructure including tower sites and long-haul fiber connections resulting in vulnerabilities at many points.

 Public networks are designed to support high capacity downloading and streaming applications with limited upload bandwidth available. Industrial networks typically require the reverse traffic flow, often uploading data from a large number of remote locations.

 Other private wireless products:

 Unlicensed Point to Multipoint Wireless (e.g., Wi-Fi) — This equipment is very inexpensive to purchase but is subject to interference, has many security vulnerabilities, uses a contention-based protocol and transmits only over short range. Deploying Wi-Fi over wide areas is cost prohibitive.

 Private Licensed Narrowband Wireless Radios — These networks can provide good coverage and range but are typically too slow and lack sufficient bandwidth to support new applications and the increased number of data connections required.

 Alternate technologies:

 Satellite Technologies — These technologies provide good coverage, but throughput is limited, and latency is too high to support mission-critical applications for our customers. These technologies can be very costly as compared to our products and systems.

 Low-Power Wide Area Networks (LP-WANs) — LP-WAN solutions such as LoRa and NB-IoT are architected with lower power, the purpose of which is to make these typically sensor-based networks lower-cost solutions. The low powered equipment means these systems have lower throughput and higher latency and are not reliable for mission-critical applications that require both monitoring and control functions.

 OAS

 We compete with other drone
OEMs providing a variety of solutions for inspection, security, asset tracking and other applications. We compete on many dimensions with
system performance being differentiated by the level of autonomous operation, ease of use, reliability, safety, and government regulations.
Further, leading automated data solution providers must provide diverse payload capabilities for data collection, along with robust, advanced
analytics programs that are specific for each industry served.

 Governmental Regulations

 Our operations are subject
to various federal, state and local laws and regulations including: (i) authorization from the FCC and other global communications regulators
for operation in various licensed frequency bands; (ii) FAA and other global Civil Aviation Authority regulations and
approvals unique to the operation of commercial or industrial drones; (iii) customers' licenses from the FCC; (iv) licensing, permitting
and inspection requirements applicable to contractors, electricians and engineers; (v) regulations relating to worker safety and environmental
protection; (vi) permitting and inspection requirements applicable to construction projects; (vii) wage and hour regulations; (viii) regulations
relating to transportation of equipment and materials, including licensing and permitting requirements; (ix) building and electrical codes;
and (x) special bidding, procurement and other requirements on government projects.

 We believe we have the licenses
materially required to conduct our operations, and we are in substantial compliance with applicable regulatory requirements. The operation
of our manufactured products by our customers (network providers and service providers) in the U.S. or in foreign jurisdictions in a manner
not in compliance with local law could result in fines, business disruption, or harm to our reputation. The changes to regulatory
and technological requirements may also alter our product offerings, impacting our market share and business. Failure to comply with applicable
regulations could result in substantial fines or revocation of our operating licenses or could give rise to termination or cancellation
rights under our contracts or disqualify us from future bidding opportunities.

 Israel's defense export
policy regulates the sale of a number of our systems and products. Current Israeli policy encourages exports to approved customers of
defense systems and products such as ours, as long as the export is consistent with Israeli government policy. Subject to certain exemptions,
a license is required to initiate marketing activities. We also must receive a specific export license for defense related hardware, software
and technology exported from Israel. Israeli law also regulates export of "dual use" items (items that are typically sold
in the commercial market but that also may be used in the defense market).

 Environmental Regulation

 Our operations are subject
to extensive, and frequently changing, federal, state and local environmental laws and substantial related regulation by government agencies,
including the Environmental Protection Agency. Among other matters, these regulatory authorities impose requirements that regulate the
operation, handling, transportation and disposal of hazardous materials; protect the health and safety of workers; and require us to obtain
and maintain licenses and permits in connection with our operations. This extensive regulatory framework imposes significant compliance
burdens and risks on us. Notwithstanding these burdens, we believe that we are in material compliance with all federal, state and local
environmental laws and regulations governing our operations.

 There has been no material
adverse effect to our Consolidated Financial Statements nor competitive positions as a result of these environmental regulations.

 Employees

 As of March 12, 2025, we have 124 employees, including 113 full-time employees, of which 27 full-time employees
and two part-time employees are in the Ondas Networks segment and 86 full-time employees and nine part-time employees are in the OAS segment.
In addition, we have consulting agreements with 12 consultants for manufacturing, supply chain, documentation, engineering, regulatory,
IT, and business development support. Additionally, from time to time, we may hire temporary employees. We also utilize contractors to
manufacture components, for certain research and development and for system deployment functions. None of our employees are covered by
a collective bargaining agreement and we are unaware of any union organizing efforts. We consider our relationship with our employees
to be good.

 Corporate Information

 Ondas Holdings Inc. was originally
incorporated in Nevada on December 22, 2014, under the name Zev Ventures Incorporated. On September 28, 2018, we acquired Ondas Networks
Inc., a Delaware corporation, changed our name to Ondas Holdings Inc., and discontinued the prior business of Zev Ventures Incorporated.
On August 5, 2021, Ondas Holdings Inc. acquired American Robotics, Inc., a Delaware corporation. On January 23, 2023, Ondas Holdings Inc.
acquired Airobotics Ltd., an Israeli corporation. See Note 5 – Goodwill and Business Acquisitions of the accompanying Consolidated
Financial Statements for further information regarding the Airobotics Ltd. acquisition.

 On February 14, 2023, the
Company formed Ondas Autonomous Systems, a new business unit to manage the combined drone operations of American Robotics and Airobotics.
On December 6, 2023, the Company formed Ondas Autonomous Holdings Inc., a Nevada corporation, as an intermediate holding company which
now wholly-owns American Robotics and Airobotics. On August 8, 2024, the Company filed a certificate of amendment with the Secretary of
State of the State of Nevada, amending Ondas Autonomous Holdings Inc.'s name to Ondas Autonomous Systems Inc ("OAS").

 On August 7, 2024, the Company formed Ondas Networks Texas Inc., a
Texas corporation and wholly owned subsidiary of the Company ("Texas Networks"). Pursuant to a certain Agreement and Plan
of Merger, dated August 19, 2024, Ondas Networks Inc., a Delaware corporation, merged with and into Texas Networks (the "Merger")
with Texas Networks being the surviving entity resulting from the Merger and shall continuing to exist and being governed by the laws
of the State of Texas under the corporate name "Ondas Networks Inc." ("Ondas Networks").

 As a result of the above,
Ondas Networks, OAS, American Robotics and Airobotics became our subsidiaries.

 Ondas Holdings' corporate
headquarters are located in Boston, Massachusetts. Ondas Networks has offices and facilities in Sunnyvale, California, American Robotics'
offices and facilities are located in Sparks, Maryland, and Airobotics' offices and facilities are located in Petah Tikva, Israel.

 Available Information

 Our Internet website is www.ondas.com. Our
Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and amendments to reports filed or furnished
pursuant to Sections 13(a) and 15(d) of the Securities and Exchange Act of 1934, as amended (the "Exchange Act") are available,
free of charge, under the Investors tab of our website as soon as reasonably practicable after we electronically file such material with,
or furnish it to, the SEC. Additionally, the SEC maintains a website located at www.sec.gov that contains the information we
file or furnish electronically with the SEC.

 Item 1A. Risk Factors

 Investing
in our common stock involves a high degree of risk. Before you invest in our common stock, you should carefully consider the following
risks, as well as general economic and business risks, and all of the other information contained in this Form 10-K. Any of the following
risks could harm our business, operating results and financial condition and cause the trading price of our common stock to decline, which
would cause you to lose all or part of your investment. When determining whether to invest, you should also refer to the other information
contained in this Form 10-K including our financial statements and the related notes thereto.

 Risks Related to Our
Business and Industry

 We have incurred
significant operating losses since inception and cannot assure you that we will ever achieve or sustain profitability.

 Since
our inception, we have incurred significant net losses. As of December 31, 2024 and December 31, 2023, we had an accumulated
deficit of approximately $236 million and $198 million, respectively. To date, we have financed our operations primarily through
sales of our equity securities and debt financing.

 We
expect our operating expenses to increase significantly as we pursue our growth strategy, including expending substantial resources for
research, development and marketing. The extent of our future operating losses and the timing of profitability are highly uncertain, and
we expect to continue incurring significant expenses and operating losses over the next several years. Any additional operating losses
may have an adverse effect on our stockholders' equity and the price of our common stock, and we cannot assure you that we will
ever be able to achieve profitability.

 Even
if we achieve profitability, we may not be able to sustain or increase such profitability. Additionally, our costs may increase in future
periods and we may expend substantial financial and other resources on, among things, sales and marketing, the hiring of additional officers,
employees, contractors and other service providers, and general administration, which may include a significant increase in legal and
accounting expenses related to public company compliance, continued compliance and various regulations applicable to our business or arising
from the growth and maturity of our company. Our failure to become and remain profitable would depress the value of our company and could
impair our ability to raise capital, expand our business, maintain our development efforts, obtain regulatory approvals, diversify our
product and service offerings or continue our operations, and may cause the price of our common stock to decline.

 The 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.

 Ondas
Networks is currently developing technology compatible with the proposed wireless broadband standard known as IEEE 802.16t, which is an
evolution of the EEE 802.16s wireless broadband standard published in October 2017. We believe we are currently the only manufacturer
of IEEE 802.16s compliant wireless solutions and are likely to be the only manufacturer of IEEE 802.16t compliant wireless solutions when
that standard is formally ratified. The benefits of the standard to buyers of our equipment are greater when there exists a large, deep
market in terms of the number of customers. A large market benefits from the scale provided such that many vendors can compete on service,
price and quality of solution driving improved value for customers. If a large end market does not develop and customers do not see the
related benefits from the standard, we may not be able to grow our business.

 Our 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.

 In
order to grow our business, we depend on partnerships with market leading technology and industrial companies such as Siemens Mobility,
who are also customers of Ondas Networks, in order to accelerate the adoption of our wireless technology. If we are unsuccessful in maintaining
our partnership and customer relationships with third parties, including Siemens Mobility, or if our partnerships do not provide us the
anticipated benefits, our ability to compete in the marketplace or to grow our revenue could be impaired and our operating results may
suffer. In addition, adoption of our FullMAX wireless platform, Optimus System, and Iron Drone Raider requires us to establish
additional ecosystem relationships with leading global industrial vendors and customers. Even if we are successful in executing these
partnerships and integrating with additional ecosystem vendors, we cannot assure you that these partnerships and relationships will result
in increased adoption of our technology or increased revenue.

 If 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.

 We
cannot accurately predict the future growth rates or sizes of the markets for our products and services. Demand for our products and services
may not increase, or may decrease, either generally or in specific markets, for particular types of products and services or during particular
time periods. We believe the market for commercial UAS is nascent and the expansion of the market for our products and services in particular,
depends on a number of factors, including the following:

 customer
satisfaction with these types of systems as solutions;

 the
cost, performance and reliability of our products and products offered by our competitors;

 customer
perceptions regarding the effectiveness and value of these types of systems;

 obtaining
timely regulatory approvals for new customer deployments; and

 marketing
efforts and publicity regarding these types of systems and services.

 Even
if commercial UAS gain wide market acceptance, our products and services may not adequately address market requirements and may not continue
to gain market acceptance. If these types of systems generally, or our products and services specifically, do not gain wide market acceptance,
then we may not be able to achieve our anticipated level of growth and our revenue and results of operations would decline.

 Negative 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.

 The Company believes the commercial
UAS industry is highly dependent upon customer perception regarding the safety, efficacy, and quality of the commercial UAS system deployed.
Customer perception of these products can be significantly influenced by scientific research or findings, regulatory investigations, litigation,
media attention, and other publicity. There can be no assurance that future scientific research, findings, regulatory proceedings, litigation,
media attention, or other research findings or publicity will be favorable to the UAS market. Future research reports, findings, regulatory
proceedings, litigation, media attention or other publicity that are perceived as less favorable than, or that question, earlier research
reports, findings or publicity 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. The dependence upon customer perceptions means that adverse scientific
research reports, findings, regulatory proceedings, litigation, media attention or other publicity, whether or not accurate or with merit,
could have a material adverse effect on the Company, the demand for the Company's products, and the business, results of operations,
financial condition and cash flows of the Company.

 Failure to manage
our planned growth could place a significant strain on our resources.

 Our
ability to successfully implement our business plan requires an effective plan for managing our future growth. We plan to increase the
scope of our operations. Current and future expansion efforts will be expensive and may significantly strain our managerial and other
resources and ability to manage working capital. To manage future growth effectively, we must manage expanded operations, integrate new
personnel and maintain and enhance our financial and accounting systems and controls. If we do not manage growth properly, it could harm
our business, financial condition or results of operations and make it difficult for us to satisfy our debt obligations.

 We
may be unsuccessful in achieving our organic growth strategies, which could limit our revenue growth or financial performance. Our ability
to generate organic growth will be affected by our ability to, among other things:

 attract
new customers;

 increase
the number of products purchased from customers;

 maintain
profitable gross margins in the sale and maintenance of our products;

 increase
the number of projects performed for existing customers;

 achieve
the estimated revenue we announced from new customer contracts;

 hire
and retain qualified employees;

 expand
the range of our products and services we offer to customers to address their evolving network needs;

 expand
geographically, including internationally; and

 address
the challenges presented by difficult and unpredictable global and regional economic or market conditions that may affect us or our customers.

 Many
of the factors affecting our ability to generate organic growth may be beyond our control, and we cannot be certain that our strategies
for achieving internal growth will be attempted, realized or successful.

 If 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.

 We
believe that our success is dependent on our ability to continue identifying and anticipating the needs of our customers, to retain our
existing customers and to add new customers. For example, our business plan is designed to penetrate large, critical infrastructure end
markets with our wireless and UAS driven data solutions and have expanded our dedicated sales resources and field personnel to broaden
our marketing and field support efforts into new industries and sectors. As a result, we have significantly increased customer engagement
in the transportation, security and UAS end markets with Ondas Networks and in the industrial, public safety and government markets with
OAS. We expect that our qualified customer pipeline will increase in other additional strategic end markets. However, as we become larger
through organic growth, the growth rates for customer engagement, project volume and average spend per customer may slow, even if we continue
to add customers on an absolute basis. In addition, the costs associated with customer retention may be substantially lower than costs
associated with the acquisition of new customers. Therefore, our failure to retain existing customers, even if such losses are offset
by an increase in revenue resulting from the acquisition of new customers, could have an adverse effect on our business, financial condition
or results of operations.

 Additionally,
while a key part of our business strategy is to add customers in our existing geographic markets, we expect to expand our operations into
new geographic markets. In doing so, we may incur losses or otherwise fail to enter new markets successfully. Our expansion into new markets
may place us in unfamiliar and competitive environments and involve various risks, including the need to invest significant resources
and the possibility that returns on such investments will not be achieved for several years or at all.

 The Company faces uncertainty and adverse
changes in the economy.

 Adverse changes in the economy
could negatively impact the Company's business. Future economic distress may result in a decrease in demand for the Company's
products, which could have a material adverse impact on the Company's operating results and financial condition. Uncertainty and
adverse changes in the economy could also increase costs associated with developing and publishing products, increase the cost and decrease
the availability of sources of financing, and increase the Company's exposure to material losses from bad debts, any of which could
have a material adverse impact on the financial condition and operating results of the Company.

 We 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.

 Because
we have only recently invested in our customer service and support organization, a small number of customers have accounted for a substantial
amount of our revenue. During the year ended December 31, 2024, three customers accounted for approximately $3,763,000, $1,902,000, and
$745,000 of our revenue or approximately 52%, 26%, and 10%, respectively. During the year ended December 31, 2023, three customers accounted
approximately $6,703,000, $5,127,000, and $3,395,000 of our revenue or approximately 43%, 33%, and 22%, respectively. The loss of the
2024 customers or a decrease in the business conducted with such customers could have a material adverse impact on our business, financial
condition or results of operations.

 Project 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.

 Many
projects involve challenging engineering, construction or installation phases that may occur over extended time periods. We may encounter
difficulties as a result of delays or changes in designs, engineering information or materials provided by our customer or a third party,
delays or difficulties in equipment and material delivery, schedule changes, delays from our customer's failure to timely obtain
permits or meet other regulatory requirements including the securing of necessary FCC certifications or FAA approvals, weather-related
delays and other factors, many of which are beyond our control, that impact our ability to complete the project in accordance with the
original delivery schedule. In addition, we contract with third-party subcontractors to assist us with the completion of contracts. Any
delay or failure by suppliers or by subcontractors in the completion of their portion of the project may be beyond our control and may
result in delays in the overall progress of the project or may cause us to incur additional costs, or both. Delays and additional costs
may be substantial, and, in some cases, we may be required to compensate the customer for such delays. Delays may also disrupt the final
completion of our contracts as well as the corresponding recognition of revenues and expenses therefrom. In certain circumstances, we
guarantee project completion by a scheduled acceptance date or achievement of certain acceptance and performance testing levels; failure
to meet any of our guarantees, schedules or performance requirements could also result in additional costs or penalties to us, including
obligations to pay liquidated damages, and such amounts could exceed expected project profit. In extreme cases, the above-mentioned factors
could cause project cancellations, and we may be unable to replace such projects with similar projects or at all. Such delays or cancellations
may impact our reputation, brand or relationships with customers, adversely affecting our ability to secure new contracts.

 We do not control
certain aspects of the manufacturing process.

 Our
reliance on a small number of third party contractors to complete manufacturing, certain research and development and deployment functions
reduces our control over the manufacturing process, exposing us to risks, including reduced control over quality assurance, product costs
and product supply including delays in transportation and delivery. Any manufacturing disruption by our usual contractors could impair
our ability to fulfill orders. We may be unable to manage our relationships with our usual contractors effectively as they may experience
delays, disruptions, capacity constraints or quality control problems in their manufacturing operations, customer concerns about the contractor
or our failure to extend existing task orders or issue new task orders, or otherwise fail to meet our future requirements for timely delivery.
Similarly, to the extent that our usual contractors procure materials on our behalf, we may not benefit from any warranties received by
our usual contractors from the suppliers or otherwise have recourse against the original supplier of the materials or even the manufacturer.
In such circumstances, if the original supplier were to provide us or our usual contractors with faulty materials, we might not be able
to recover the costs of such materials or be compensated for any damages that arise as a result of the inclusion of the faulty components
in our products.

 If
any of our contractors fail to deliver on a timely basis the agreed-upon supplies and/or perform the agreed-upon services, then our ability
to fulfill our obligations may be jeopardized. In addition, the absence of qualified contractors with whom we have a satisfactory relationship
could adversely affect the quality of our service and our ability to perform under some of our contracts. One or more of our usual contractors
may suffer an interruption in its business, or experience delays, disruptions or quality control problems in its manufacturing operations,
or seek to terminate its relationship with us, or we may choose to change or add additional contractors for other reasons. Additionally,
we do not have long-term supply agreements with our usual contractors. As a result, we may be unable to renew or extend our agreement
on terms favorable to us, if at all. Although the manufacturing services required to manufacture and assemble our products may be readily
available from a number of established manufacturers, it may be risky, time consuming and costly to qualify and implement new manufacturer
relationships.

 Any
of these risks could have a material adverse effect on our business, financial condition and results of operations.

 Material 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.

 Because
of the nature of most of our contracts, we commit resources to projects prior to receiving payments from our customers in amounts sufficient
to cover expenditures as they are incurred. In certain cases, these expenditures include paying our contractors and purchasing parts.
If a customer defaults in making its payments on a project or projects to which we have devoted significant resources, it could have a
material adverse effect on our business, financial condition or results of operations.

 Certain 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.

 Certain
of our project sites can place our officers, employees, contractors and other service providers and others, including third
parties, in difficult or dangerous environments, and may involve difficult and hard to reach terrain, high elevation, or locations near
large or complex equipment, moving vehicles, high voltage or other safety hazards or dangerous processes. Safety is a primary focus of
our business and maintaining a good reputation for safety is critical to our business. Many of our customers require that we meet certain
safety criteria to be eligible to bid on contracts. We maintain programs with the primary purpose of implementing effective health, safety
and environmental procedures throughout our company. Maintaining such programs involves variable costs which may increase as governmental,
regulatory and industry safety standards evolve, and any increase in such costs may materially affect our business, financial condition
or results of operations. Further, if we fail to implement appropriate safety procedures or if our procedures fail, our officers,
employees, contractors and other service providers, including third parties, may suffer injuries. Failure to comply with such procedures,
client contracts or applicable regulations, or the occurrence of such injuries, could subject us to material losses and liability and
may adversely impact our ability to obtain projects in the future or to hire and retain talented officers, employees, contractors,
and other services providers, therefore materially adversely affecting our business, financial condition or results of operations.

 Our 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.

 Many
of our customers are conservative in their decision-making process. Sales cycles for new customers can vary from one to three years depending
on the complexity of the customer's network, whether the customer is subject to state regulations, and annual budget cycles. During
this lengthy sales cycle, our potential customers may cancel or change their product plans. Customers may also discontinue products incorporating
our devices at any time or they may choose to replace our products with lower cost semiconductors. In addition, we are working with leading
customers in our target markets to define our future products. If customers cancel, reduce or delay product orders from us, or choose
not to release products that incorporate our devices after we have spent substantial time and resources developing products or assisting
customers with their product design, our revenue levels may be less than anticipated and our business, results of operations and financial
condition may be materially adversely affected.

 Our marketing efforts
depend significantly on our ability to receive positive references from our existing customers.

 Our
marketing efforts depend significantly on our ability to call on our current and past customers to provide positive references to new,
potential customers. A material portion of our current pipeline activity is concentrated in the transportation and aviation sectors as
well as in the United Arab Emirates (UAE). Given our limited number of customers, the loss or dissatisfaction of any customer could substantially
harm our brand and reputation, inhibit the market acceptance of our products and services, and impair our ability to attract new customers
and maintain existing customers. Further, as we expand into new vertical and geographic end markets, references from existing customers
could be similarly important. Any of these consequences could have a material adverse effect on our business, financial condition and
results of operations.

 If our products
contain defects or otherwise fail to perform as expected, we could be liable for damages and incur unanticipated warranty claims, recall
and other related expenses, our reputation could be damaged, we could lose market share and, as a result, our financial condition or
results of operations could suffer.

 Our
products rely on complex avionics, sensors, user-friendly interfaces and tightly integrated, electromechanical designs to accomplish their
missions. Our products may contain defects or experience failures due to any number of issues in design, materials, manufacture, deployment
and/or use. If any of our products contain a defect, compatibility or interoperability issue or other error, we may have to devote significant
time and resources to find and correct the issue. Such efforts could divert the attention of our management team and other relevant personnel
from other important tasks. A product recall or a significant number of product returns could (i) be expensive; (ii) damage our reputation
and relationships with utilities and other third-party vendors; (iii) result in the loss of business to competitors; and (iv) result in
litigation against us. Costs associated with field replacement labor, hardware replacement, re-integration with third-party products,
handling charges, correcting defects, errors and bugs, or other issues could be significant and could materially harm our financial results.

 As
a manufacturer of UAV products, and with aircraft and aviation sector companies under increased scrutiny, claims could be brought against
us if use or misuse of one of our UAV products causes, or merely appears to have caused, personal injury or death. In addition, defects
in our products may lead to other potential life, health and property risks. Any claims against us, regardless of their merit, could severely
harm our financial condition, strain our management and other resources.

 The
existence of any defects, errors, or failures in our products or the misuse of our products could also lead to product liability claims
or lawsuits against us. A defect, error or failure in one of our products could result in injury, death or property damage and significantly
damage our reputation and support for our products in general. We anticipate this risk will grow as our products begin to be used in U.S.
domestic airspace and urban areas.

 Although
we maintain insurance policies, we cannot provide assurance that this insurance will be adequate to protect us from all material judgments
and expenses related to potential future claims or that these levels of insurance will be available in the future at economical prices
or at all. A successful product liability claim could result in substantial cost to us. Even if we are fully insured as it relates to
a claim, the claim could nevertheless diminish our brand and divert management's attention and resources, which could have a negative
impact on our business, financial condition and results of operations.

 We generally warrant our manufactured products, including hardware
and software, for a period of one year from the date of receipt of the product by the customer. After the first year, the customer can
pay for extended hardware warranty and software maintenance and upgrades on an annual basis in advance. Estimated future product warranty
claims are based on the expected number of field failures over the warranty commitment period, the term of the product warranty period,
and the costs for repair, replacement and other associated costs. Our warranty obligations are affected by product failure rates, claims
levels, material usage and product re-integration and handling costs. While costs that we have incurred historically under our warranty
obligations have not been material, the costs associated with such warranties, including any warranty related legal proceedings, are variable
and could have a material adverse effect on our business, financial condition or results of operations.

 Because
our products are relatively new and we do not yet have the benefit of long-term experience observing products' performance in the
field, our estimates of a product's lifespan and incidence of claims may be inaccurate. Should actual product failure rates, claims
levels, material usage, product re-integration and handling costs, defects, errors, bugs or other issues differ from the original estimates,
we could end up incurring materially higher warranty or recall expenses than we anticipate.

 Our Optimus System
 makes use of lithium-ion battery cells, which, if not appropriately managed and controlled, have occasionally been observed to catch
fire or vent smoke and flames. If such events occur with our products, we could face liability associated with our warranty, for damage
or injury, adverse publicity and a potential safety recall, any of which would adversely affect our business, prospects, financial condition
and operating results.

 The
battery packs in our Optimus drone use lithium-ion cells, which have been used for years in laptop computers and cell phones. On
occasion, if not appropriately managed and controlled, lithium-ion cells can rapidly release the energy they contain by venting smoke
and flames in a manner that can ignite nearby materials. Highly publicized incidents of laptop computers and cell phones bursting into
flames have focused consumer attention on the safety of these cells. These events also have raised questions about the suitability of
these lithium-ion cells for automotive applications. There can be no assurance that a field failure of our battery packs will not occur,
which would damage the vehicle or lead to personal injury or death and may subject us to lawsuits. Furthermore, there is some risk of
electrocution if individuals who attempt to repair battery packs on our vehicles do not follow applicable maintenance and repair protocols.
Any such damage or injury would likely lead to adverse publicity and potentially a safety recall. Any such adverse publicity could adversely
affect our business, prospects, financial condition and operating results.

 Due 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.

 The
development and manufacture of certain of our products involves the handling of a variety of explosive and flammable materials as well
as high power equipment. From time to time, these activities may result in incidents that could cause us to temporarily shut down or otherwise
disrupt some manufacturing processes, causing production delays and resulting in liability for workplace injuries and/or fatalities. We
have safety and loss prevention programs that require detailed reviews of process changes and new operations, along with routine safety
audits of operations involving explosive materials, to mitigate such incidents, as well as a variety of insurance policies, however our
insurance coverage may be inadequate to cover all claims and losses related to such incidents. We may experience such incidents in the
future, which could result in production delays or otherwise have a material adverse effect on our business and financial condition.

 Our 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.

 The current generation of our FullMAX, Optimus System and Iron
Drone Raider technology platforms have only been developed in the last several years and will continue to evolve. Deploying and
operating our technology is complex and, until recently, had been done primarily by a small number of customers. As the size, complexity
and scope of our deployments grow we have been able to test product performance at a greater scale and in a variety of new geographic
settings and environmental conditions. As the number, size and complexity of our deployments grow and we deploy our technology platforms
for new applications in new critical infrastructure industries, we may encounter unforeseen operational, technical and other challenges,
some of which could cause significant delays, trigger contractual penalties, result in unanticipated expenses, and/or damage to our reputation,
each of which could materially and adversely affect our business, financial condition and results of operations.

 If we fail to respond
to evolving technological changes, our products and services could become obsolete or less competitive.

 We
operate in highly competitive industries characterized by new and rapidly evolving technologies, standards, regulations, customer requirements,
as well as frequent product introductions and revisions. Accordingly, our operating results depend upon our ability to develop and introduce
new products and services, our ability to reduce production costs of our existing products. The process of developing new technologies
and products is complex, and if we are unable to develop enhancements to, and new features for, our existing products and services or
acceptable new products and services that keep pace with technological developments or industry standards, our products may become obsolete,
less marketable and less competitive and our business, financial condition or results of operations could be significantly harmed.

 We depend on our
ability to develop new products and to enhance and sustain the quality of existing products.

 Our
growth and future success will depend, in part, on our ability to continue to design and manufacture new competitive products and to enhance
and sustain the quality and marketability of our existing products. As such, we have made, and expect to continue to make, substantial
investments in technology development. In the future, we may not have the necessary capital, or access to capital on acceptable terms,
to fund necessary levels of research and development. Even with adequate capital resources, we may nonetheless experience unforeseen problems
in the development or performance of our technologies or products. In addition, we may not meet our product development schedules and,
even if we do, we may not develop new products fast enough to provide sufficient differentiation from our competitors' products,
which may be more successful.

 We 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.

 Our future growth depends on penetrating new markets, adapting existing
products to new applications and new environments, and introducing new products and services that achieve market acceptance. We plan to
incur substantial research and development costs as part of our efforts to design, develop and commercialize new products and services
and enhance existing products. For example, we will incur research and development costs to improve the functionality of our acoustic
DAA solution configuration in certain environments, in addition to integrating new payloads to broaden the functionality of our Optimus
System and Iron Drone Raider. Further, our research and development programs may not produce successful results, and our
new products and services may not achieve market acceptance, create additional revenue or become profitable, which could materially harm
our business, prospects, financial results and liquidity.

 If our products
do not interoperate with our customers' other systems, the purchase or deployment of our products and services may be delayed or
cancelled.

 Our
products are designed to interface with our customers' other systems, each of which may have different specifications and utilize
multiple protocol standards and products from other vendors. Our products will be required to interoperate with many or all of these products
as well as future products in order to meet our customers' requirements. If we find errors in the existing software or defects in
the hardware used in our customers' systems, we may need to modify our products or services to fix or overcome these errors so that
our products will interoperate with the existing software and hardware, which could be costly and negatively affect our business, financial
condition, and results of operations. In addition, if our products and services do not interoperate with our customers' systems,
customers may seek to hold us liable, demand for our products could be adversely affected or orders for our products could be delayed
or cancelled. This could hurt our operating results, damage our reputation or brand, and seriously harm our prospects, business, financial
condition or results of operations.

 The Company operates in a competitive market.

 The
Company faces competition and new competitors will continue to emerge throughout the world. Services offered by the Company's competitors
may take a larger share of customer spending than anticipated, which could cause revenue generated from the Company's products and
services to fall below expectations. It is expected that competition in these markets will intensify. If competitors of the Company develop
and market more successful products or services, offer competitive products or services at lower price points, or if the Company does
not produce consistently high-quality and well-received products and services, revenues, margins, and profitability of the Company will
decline.

 The Company's ability
to compete effectively will depend on, among other things, the Company's pricing of services and equipment, quality of customer
service and field support, development of new and enhanced products and services in response to customer demands and changing technology,
reach and quality of sales and distribution channels and capital resources. Competition could lead to a reduction in the rate at which
the Company adds new customers, a decrease in the size of the Company's market share and a decline in its customers.

 We 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.

 We depend, in part, on the performance of Eric Brock, our Chief Executive
Officer and President, Neil Laird, our Interim Chief Financial Officer, Treasurer and Secretary, Markus Nottelmann, Chief Executive Officer
of Ondas Networks, Menashe Shahar, the Chief Technology Officer of Ondas Networks, Oshri Lugassi the Co-Chief Executive Officer of OAS,
Meir Kliner the President of OAS and Yishay Curelaru the Chief Financial Officer of Airobotics to operate and grow our business. The loss
of any of Messrs. Brock, Laird, Nottelmann, Shahar, Lugassi, Kliner or Curelaru could negatively impact our ability to execute our business
strategies. Although we have entered into employment agreements with Messrs. Brock, Nottelmann, Shahar, Lugassi, Kliner and Curelaru,
we may be unable to retain them or replace any of them if we lose their services for any reason.

 Our
future success will also depend on our ability to attract, retain and motivate highly skilled management, product development, operations,
sales, technical and other personnel in the United States and abroad. Even in today's economic climate, competition for these types
of personnel is intense, particularly in Silicon Valley. Given the lengthy sales cycles with utilities and deployment periods of our networking
platform and solutions, the loss of key personnel at any time could adversely affect our business, financial condition or results of operations.

 Cyberattacks through
security vulnerabilities could lead to disruption of business, reduced revenue, increased costs, liability claims, or harm to our reputation
or competitive position.

 Security
vulnerabilities may arise from our hardware, software, employees, contractors or policies we have deployed, which may result in external
parties gaining access to our networks, datacenters, cloud datacenters, corporate computers, manufacturing systems, and or access to accounts
we have at our suppliers, vendors, and customers. They may gain access to our data or our users' or customers' data or attack
the networks causing denial of service or attempt to hold our data or systems in ransom. The vulnerability could be caused by inadequate
account security practices such as failure to timely remove employee access when terminated. To mitigate these security issues, we have
implemented measures throughout our organization, including firewalls, backups, encryption, employee information technology policies and
user account policies. However, there can be no assurance these measures will be sufficient to avoid cyberattacks. If any of these types
of security breaches were to occur and we were unable to protect sensitive data, our relationships with our business partners and customers
could be materially damaged, our reputation could be materially harmed, and we could be exposed to a risk of litigation and possible significant
liability.

 Further,
if we fail to adequately maintain our infrastructure, we may have outages and data loss. Excessive outages may affect our ability to timely
and efficiently deliver products to customers or develop new products and solutions. Such disruptions and data loss may adversely impact
our ability to fulfill orders, patent our intellectual property or protect our source code, and interrupt other processes. Delayed sales
or lost customers resulting from these disruptions could adversely affect our financial results, stock price and reputation.

 Unauthorized
use or disclosure of, or access to, any personal information maintained by us or on our behalf, whether through breach of our systems,
breach of the systems of our suppliers or vendors by an unauthorized party, or through employee or contractor error, theft or misuse,
or otherwise, could harm our business. If any such unauthorized use or disclosure of, or access to, such personal information was to occur,
our operations could be seriously disrupted, and we could be subject to demands, claims and litigation by private parties, and investigations,
related actions, and penalties by regulatory authorities. In addition, we could incur significant costs in notifying affected persons
and entities and otherwise complying with the multitude of foreign, federal, state and local laws and regulations relating to the unauthorized
access to, or use or disclosure of, personal information. Finally, any perceived or actual unauthorized access to, or use or disclosure
of, such information could harm our reputation, substantially impair our ability to attract and retain customers and have an adverse impact
on our business, financial condition and results of operations.

 We do not control
certain aspects of the manufacturing process.

 Our
reliance on a small number of manufacturers reduces our control over the manufacturing process, exposing us to risks, including reduced
control over quality assurance, product costs and product supply including delays in transportation and delivery. Any manufacturing disruption
by our usual manufacturers could impair our ability to fulfill orders. We may be unable to manage our relationships with our usual manufacturers
effectively as they may experience delays, disruptions, capacity constraints or quality control problems in their manufacturing operations
or otherwise fail to meet our future requirements for timely delivery. Similarly, to the extent that our usual manufacturers procure materials
on our behalf, we may not benefit from any warranties received by our usual manufacturers from the suppliers or otherwise have recourse
against the original supplier of the materials or even the manufacturer. In such circumstances, if the original supplier were to provide
us or our usual manufacturers with faulty materials, we might not be able to recover the costs of such materials or be compensated for
any damages that arise as a result of the inclusion of the faulty components in our products.

 One
or more of our usual manufacturers may suffer an interruption in its business, or experience delays, disruptions or quality control problems
in its manufacturing operations, or seek to terminate its relationship with us, or we may choose to change or add additional manufacturers
for other reasons. Additionally, we do not have long-term supply agreements with our usual manufacturers. As a result, we may be unable
to renew or extend our agreement on terms favorable to us, if at all. Although the manufacturing services required to manufacture and
assemble our products may be readily available from a number of established manufacturers, it may be risky, time consuming and costly
to qualify and implement new manufacturer relationships.

 Any
of these risks could have a material adverse effect on our business, financial condition and results of operations.

 If 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.

 In
order to produce our Optimus System and Iron Drone Raider and related safety systems, we obtain certain hardware
components, as well as subsystems and systems from a limited group of suppliers, some of which are sole source suppliers. We do not
have long-term agreements with any of these suppliers that obligate them to continue to sell components, subsystems, systems or
products to us. Our reliance on these suppliers involves significant risks and uncertainties, including whether our suppliers will
provide an adequate supply of required components, subsystems, or systems of sufficient quality, will increase prices for the
components, subsystems or systems and will perform their obligations on a timely basis.

 In
addition, certain raw materials and components used in the manufacturing of our products and in our development programs, are periodically
subject to supply shortages, and our business is subject to the risk of price increases and periodic delays in delivery. Particularly,
the market for electronic components is experiencing increased demand and a global shortage of semiconductors, creating substantial uncertainty
regarding our suppliers' continued production of key components for our products. If any additional shortages occur and we are unable
to obtain components from third party suppliers in the quantities and of the quality that we require, on a timely basis and at acceptable
prices, then we may not be able to timely complete development programs or deliver our products on a timely or cost effective basis to
our customers, which could cause customers to terminate their contracts with us, increase our costs and seriously harm our business, results
of operations and financial condition. Moreover, if any of our suppliers become financially unstable, or otherwise unable or unwilling
to provide us with raw materials or components, then we may have to find new suppliers. It may take several months to locate alternative
suppliers, if required, or to redesign our products to accommodate components from different suppliers. We may experience significant
delays in manufacturing and shipping our products to customers and incur additional development, manufacturing and other costs to establish
alternative sources of supply if we lose any of these sources or are required to redesign our products.

 We currently do
not have long-term supply contracts with guaranteed pricing which exposes us to fluctuations in component, materials and equipment prices.
Substantial increases in these prices would increase our operating costs and could adversely affect our business, prospects, financial
condition and operating results.

 Because we currently do not have long-term supply contracts with guaranteed
pricing, we are subject to fluctuations in the prices of the raw materials, parts and components and equipment we use in the production
of our Optimus System and Iron Drone Raider. Substantial increases in the prices for such raw materials, components and
equipment would increase our operating costs and could reduce our margins if we cannot recoup the increased costs through increased prices.
Any attempts to increase prices of our automated data solutions in response to increased costs could be viewed negatively by our customers
and could adversely affect our business, prospects, financial condition and operating results.

 We may pursue additional strategic transactions
in the future, which could be difficult to implement, disrupt our business or change our business profile significantly.

 We intend to consider additional
potential strategic transactions, which could involve acquisitions of businesses or assets, joint ventures or investments in businesses,
products or technologies that expand, complement or otherwise relate to our current or future business. We may also consider, from time
to time, opportunities to engage in joint ventures or other business collaborations with third parties to address particular market segments.
Should our relationships fail to materialize into significant agreements, or should we fail to work efficiently with these companies,
we may lose sales and marketing opportunities and our business, results of operations and financial condition could be adversely affected.

 These activities, if successful,
create risks such as, among others: (i) the need to integrate and manage the businesses and products acquired with our own business and
products; (ii) additional demands on our resources, systems, procedures and controls; (iii) disruption of our ongoing business; (iv) potential
unknown or unquantifiable liabilities associated with the target company; and (v) diversion of management's attention from other
business concerns. Moreover, these transactions could involve: (a) substantial investment of funds or financings by issuance of debt or
equity securities; (b) substantial investment with respect to technology transfers and operational integration; and (c) the acquisition
or disposition of product lines or businesses. Also, such activities could result in one-time charges and expenses and have the potential
to either dilute the interests of our existing shareholders or result in the issuance of, or assumption of debt. Such acquisitions, investments,
joint ventures or other business collaborations may involve significant commitments of financial and other resources. Any such activities
may not be successful in generating revenue, income or other returns, and any resources we committed to such activities will not be available
to us for other purposes. Moreover, if we are unable to access the capital markets on acceptable terms or at all, we may not be able to
consummate acquisitions, or may have to do so on the basis of a less than optimal capital structure. Our inability to take advantage of
growth opportunities or address risks associated with acquisitions or investments in businesses may negatively affect our operating results.

 Additionally, any impairment
of goodwill or other intangible assets acquired in an acquisition or in an investment, or charges to earnings associated with any acquisition
or investment activity, may materially reduce our earnings. Future acquisitions or joint ventures may not result in their anticipated
benefits, and we may not be able to properly integrate acquired products, technologies or businesses with our existing products and operations
or successfully combine personnel and cultures. Failure to do so could deprive us of the intended benefits of those acquisitions.

 If the Company
is required to write down goodwill and other intangible assets, the Company's financial condition and results could be negatively
affected.

 Goodwill impairment arises
when there is deterioration in the capabilities of acquired assets to generate cash flows, and the fair value of the goodwill dips below
its book value. The Company is required to review its goodwill for impairment at least annually. Events that may trigger goodwill impairment
include deterioration in economic conditions, increased competition, loss of key personnel, and regulatory action. Should any of these
occur, an impairment of goodwill could have a negative effect on the assets of the Company.

 In December 2024, the Company bypassed the qualitative analysis and
proceeded directly to a quantitative analysis. The Company engaged a third-party service provider to carry out a valuation of the OAS
reporting unit. Using a discounted cash flow model and market approach model with updated forecasts for revenue and cash flows, it was
determined that the fair value of the reporting unit was higher than the carrying value as of December 31, 2024, and no further impairment
to goodwill was necessary as of December 31, 2024. See Note 5 – Goodwill and Business Acquisition of the accompanying Consolidated
Financial Statements for further information regarding the impairment of goodwill.

 War, terrorism,
and other acts of violence may affect the markets in which we operate, our clients and our product and service delivery.

 Our business may be adversely
affected by regional or global instability, disruption or destruction, regardless of cause, including war, terrorism, riot, civil
insurrection or social unrest. For example, the war in Israel and the significant military action against Ukraine launched by Russia may
affect the markets in which we operate. Such events may cause clients to delay their decisions on spending for the products and services
provided by us and give rise to sudden significant changes in regional and global economic conditions and cycles. These events pose risks
which could materially adversely affect our financial results.

 Since Airobotics is located in Israel, the Company has considered various
ongoing risks relating to the military operation and related matters. All of the Company's workforce in Israel returned to work
and inventory production restraints have eased. The Company is closely monitoring how the military operation and related activities could
adversely affect its anticipated milestones and its Israel-based activities to support future operations, including the Company's
ability to import materials that are required to construct the Optimus System and the Iron Drone Raider and to ship them
outside of Israel. To date, we have not had material disruptions to our ability to produce, manage and deliver products and services to
customers as our U.S. teams have supported our ongoing operations in Israel and the Middle East; however, a prolonged war or an escalation
of the current conditions in Israel could materially adversely affect our business, financial condition, and results of operations. Due
to the ongoing and evolving nature of these events, the extent of the adverse effect on our business operations is still unknown.

 We may not be able
to secure adequate insurance policies, or secure insurance policies at reasonable prices.

 We maintain general liability
insurance, aviation flight testing insurance, aircraft liability coverage, directors and officers insurance, and other insurance policies
and we believe our level of coverage is customary in the industry and adequate to protect against claims. However, there can be no assurance
that it will be sufficient to cover potential claims or that present levels of coverage will be available in the future at a reasonable
cost. Further, we expect our insurance needs and costs to increase as we grow our commercial operations and expand into new markets and
it is uncertain if such insurance will be available on commercially reasonable terms.

 The Company will be affected by operational
risks and may not be adequately insured for certain risks.

 The Company will be affected
by a number of operational risks and the Company may not be adequately insured for certain risks, including: labor disputes; catastrophic
accidents; fires; blockades or other acts of social activism; changes in the regulatory environment; impact of non-compliance with laws
and regulations; natural phenomena, such as inclement weather conditions, floods, earthquakes and ground movements. There is no assurance
that the foregoing risks and hazards will not result in damage to, or destruction of, the Company's technologies, personal injury
or death, environmental damage, adverse impacts on the Company's operation, costs, monetary losses, potential legal liability and
adverse governmental action, any of which could have an adverse impact on the Company's future cash flows, earnings and financial
condition. Furthermore, the unmanned aerial systems industry lacks a formative insurance market. As a result, the Company may be subject
to or affected by liability or sustain loss for certain risks and hazards against which the Company cannot insure or which the Company
may elect not to insure because of the cost. This lack of insurance coverage could have an adverse impact on the Company's future
cash flows, earnings, results of operations and financial condition.

 Litigation may
adversely affect our business, financial condition, and results of operations.

 From
time to time in the normal course of our business operations, we may become subject to litigation that may result in liability material
to our financial condition as a whole or may negatively affect our operating results if changes to our business operations are required.
The cost to defend such litigation may be significant and may require a significant diversion of our resources, and there is no guarantee
that we will be able to successfully defend against any such litigation regardless of particular merits. There also may be adverse publicity
associated with litigation that could negatively affect customer perception of our business, regardless of whether the allegations are
valid or whether we are ultimately found liable. Insurance may not be available on favorable terms, at all, or in sufficient amounts to
cover any liabilities with respect to these or other matters. A judgment or other liability in excess of our insurance coverage for any
claims could adversely affect our business, financial condition and the results of our operations.

 Our cash could
be adversely affected if the financial institutions in which we hold our cash fail.

 The
Company maintains domestic cash deposits in Federal Deposit Insurance Corporation ("FDIC") insured banks. The domestic bank
deposit balances may exceed the FDIC insurance limits. Also, in the foreign markets we serve, we also maintain cash deposits in foreign
banks, some of which are not insured or partially insured by the FDIC or other similar agency. These balances could be impacted if one
or more of the financial institutions in which we deposit monies fails or is subject to other adverse conditions in the financial or credit
markets.

 Risks Related to Regulatory
Requirements

 We 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.

 Our
products and services and our utility customers are subject to federal, state, local and foreign laws and regulations. Laws and regulations
applicable to us and our products govern, among other things, the manner in which our products communicate, and the environmental impact
and electrical reliability of our products. Additionally, our critical infrastructure customers are often regulated by national, state
and/or local bodies, including public utility commissions, the Department of Energy, the Federal Energy Regulatory Commission, the FAA,
the FCC, Federal Rail Association, Israeli Defense Export Controls Agency of the Ministry of Defense and other bodies. Prospective customers
may be required to gain approval from any or all of these organizations prior to implementing our products and services, including specific
permissions related to the cost recovery of these systems. Regulatory agencies may impose special requirements for implementation and
operation of our products, which may result in unforeseen delays. We may incur material costs or liabilities in complying with government
regulations applicable to us or our utility customers. In addition, potentially significant expenditures could be required in order to
comply with evolving regulations and requirements that may be adopted or imposed on us or our utility customers in the future. Such costs
could make our products less economical and could impact our utility customers' willingness to adopt our products, which could materially
and adversely affect our revenue, results of operations and financial condition.

 Furthermore,
changes in the underlying regulatory conditions that affect critical infrastructure industries could have a potentially adverse effect
on our customers' interest or ability to implement our technologies. Many regulatory jurisdictions have implemented rules that provide
financial incentives for the implementation of energy efficiency and demand response technologies, often by providing rebates or through
the restructuring of utility rates. If these programs were to cease, or if they were restructured in a manner inconsistent with the capabilities
enabled by our products and services, our business, financial condition and results of operations could be significantly harmed.

 Failure to obtain necessary regulatory approvals
from the FAA or other governmental agencies, or limitations put on the use of small UAS in response to public privacy and other concerns,
may prevent us from expanding the sales of our drone solutions to industrial and government customers in the United States.

 The regulation of small UAS for commercial use
in the United States is undergoing substantial change and the ultimate treatment is uncertain.

 On February 14, 2012, the FAA Modernization and Reform Act of
2012 was enacted, establishing various deadlines for the FAA to allow expanded use of small UAS for both public and commercial applications.
On June 21, 2016, the FAA released its final rules regarding the routine use of certain small UAS (under 55 pounds) in the U.S. National
Airspace System pursuant to the act (the "Part 107 Rules"). The Part 107 Rules, which became effective in August 2016, provided
safety regulations for small UAS conducting non-recreational operations and contain various limitations and restrictions for such operations,
including a requirement that operators keep UAS within visual-line-of-sight and prohibiting flights over unprotected people on the ground
who are not directly participating in the operation of the UAS. On December 28, 2020, the FAA announced final rules requiring remote identification
of drones and allowing operators of small drones to fly over people and at night under certain conditions. On June 8, 2021, the FAA announced
the formation of an Aviation Rulemaking Committee ("ARC") to develop new rules to further define regulations for the operations
of UAS Beyond Visual Line-of-Site ("BVLOS"). The timing of additional rulemaking is uncertain as is the outcome of the still
developing regulatory environment related to the operation of small UAS. Additionally, recent focus on reducing the size of the federal
workforce could negatively impact the availability of resources within the FAA which could delay our progress towards certification.

 We
cannot assure you that any final rules enacted in furtherance of the FAA's announced proposals will result in the expanded use of
our drones and drone solutions by commercial and industrial entities. In addition, there exists public concern regarding the privacy
and other implications of U.S. commercial use of small UAS. This concern has included calls to develop explicit written policies and procedures
establishing usage limitations. We cannot assure you that the response from regulatory agencies, customers and privacy advocates to these
concerns will not delay or restrict the adoption of small UAS by the commercial use markets.

 Substantially
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.

 Substantially
all of our current wireless networking products are designed to communicate wirelessly via licensed radio frequencies and therefore depend
on the availability of adequate radio spectrum in order to operate. It is possible that the FCC or the U.S. Congress could adopt additional
regulations or policies which are or may change or modify current regulations or policies so that they are, harmful to our business
or incompatible with our current or future product offerings, as well as products currently installed in the field. Additional regulations
or policies or changes or modifications to current regulations or policies may require modification or replacement of our products, including
products currently installed in the field, at significant, or even prohibitive, cost to us, and may require changes or modifications to,
or termination of, ongoing or planned projects. Any of these developments could materially and adversely impact our business, financial
condition or results of operations.

 As 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.

 As
a manufacturer of consumer products, we are subject to significant government regulations, restrictions and requirements, including, in
the United States, those issued under the Consumer Products Safety Act, as well as those issued under product safety and consumer protection
statutes in our international markets. Failure to comply with any applicable product safety or consumer protection regulation could result
in sanctions that could have a negative impact on our business, financial condition and results of operations.

 Governments
and regulatory agencies in the markets where we manufacture and sell products may enact additional regulations relating to product safety
and consumer protection in the future and may also increase the penalties for failure to comply with product safety and consumer protection
regulations. In addition, one or more of our customers might require changes in our products, such as the non-use of certain materials,
in the future. Complying with any such additional regulations or requirements could impose increased costs on our business. Similarly,
increased penalties for non-compliance could subject us to greater expenses in the event any of our products were found to not comply
with such regulations. Such increased costs or penalties could harm our business.

 Our business is
subject to federal, state and international laws regarding data protection, privacy, and information security, as well as confidentiality
obligations under various agreements, and our actual or perceived failure to comply with such obligations could damage our reputation,
expose us to litigation risk and adversely affect our business and operating results.

 In connection with our business, we receive, collect, process and retain
certain personal and confidential customer information. As a result, we are subject to increasingly rigorous federal, state and international
laws regarding privacy and data protection. Personal privacy, data protection and information security are significant issues in the United
States and the other jurisdictions where we offer our products and services. The regulatory framework for privacy and security issues
worldwide is rapidly evolving and is likely to remain uncertain for the foreseeable future. Our handling of data is subject to a variety
of laws and regulations, including regulation by various government agencies, including the United States Federal Trade Commission ("FTC")
and various state, local and foreign bodies and agencies. We also execute confidentiality and data protection agreements with various
parties under which we are required to protect their confidential information.

 The United States federal and various state and foreign governments
have adopted or proposed limitations on the collection, distribution, use and storage of personal information of individuals, including
end-customers and employees. In the United States, the FTC and many state attorney generals are applying federal and state consumer protection
laws to the online collection, use and dissemination of data. Additionally, many foreign countries and governmental bodies, and other
jurisdictions in which we operate or conduct our business, have laws and regulations concerning the processing of personal information
obtained from their residents or by businesses operating within or processing personal information that falls within their jurisdiction.
These laws and regulations often are more restrictive than those in the United States in certain areas, whereas U.S. laws may impose requirements
not included in their international counterparts. Such laws and regulations may, for example, require companies to implement new privacy
and security policies and practices, permit individuals to access, correct and delete personal information stored or maintained by such
companies, inform individuals of security breaches that affect their personal information, and, in some cases, obtain individuals'
consent to use personal information for certain purposes.

 We
also expect that there will continue to be new proposed laws, regulations and industry standards concerning privacy, data protection and
information security in the United States, the European Union and other jurisdictions, and we cannot yet determine the impact of such
future laws, regulations and standards may have on our business. For example, the California Consumer Privacy Act, which became effective
in 2020, provides new data privacy rights for consumers and new operational requirements for companies. Additionally, we expect that existing
laws, regulations and standards may be interpreted differently in the future. There remains significant uncertainty surrounding the regulatory
framework for the future of personal data transfers from the European Union to the United States with regulations such as the recently
adopted General Data Protection Regulation ("GDPR"), which imposes more stringent European Union data protection requirements,
provides an enforcement authority, and imposes large penalties for noncompliance. Future laws, regulations, standards and other obligations,
including the adoption of the GDPR, as well as changes in the interpretation of existing laws, regulations, standards and other obligations
could impair our ability to collect, use or disclose information relating to individuals, which could decrease demand for our products,
require us to restrict our business operations, increase our costs and impair our ability to maintain and grow our customer base and increase
our revenue.

 Although
we are working to comply with those federal, state and foreign laws and regulations, industry standards, contractual obligations and other
legal obligations that apply to us, such laws, regulations, standards and obligations are evolving and may be modified, interpreted and
applied in an inconsistent manner from one jurisdiction to another, and may conflict with one another, other requirements or legal obligations,
our practices or the features of our products. As such, we cannot assure ongoing compliance with all such laws or regulations, industry
standards, contractual obligations and other legal obligations, and our efforts to do so may cause us to incur significant costs or require
changes to our business practices, which could adversely affect our business and operating results. Any failure or perceived failure by
us to comply with federal, state or foreign laws or regulations, industry standards, contractual obligations or other legal obligations,
or any actual or suspected security incident, whether or not resulting in unauthorized access to, or acquisition, release or transfer
of personal information or other data, may result in governmental enforcement actions and prosecutions, private litigation, fines and
penalties or adverse publicity and could cause our customers to lose trust in us, which could have an adverse effect on our reputation
and business. Any inability to adequately address privacy and security concerns, even if unfounded, or comply with applicable laws, regulations,
policies, industry standards, contractual obligations or other legal obligations could result in additional cost and liability to us,
damage our reputation, inhibit sales, and adversely affect our business and operating results.

 We 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.

 In addition to the United States, Airobotics operates in Israel,
Singapore and the United Arab Emirates. The international scope of Airobotics' business requires us to comply with a wide range
of national and local laws and regulations, which may in certain cases diverge from or even conflict with each other. Restrictions imposed
on us by the Israel government, as a result of strategic ties and treaties with foreign countries, limit our activities and access to
certain countries, in a manner that may restrict and even prevent in certain situations our operations in certain countries and affect
its results.

 With
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.

 In
countries where we operate, legislators and regulatory authorities may introduce new interpretations of existing laws and regulations
or introduce new legislation or regulations concerning our business. Changes in government regulation of or successful challenges to the
business model used by us in certain markets may require us to change our existing business models and operations. Any additional regulatory
scrutiny or changes in legal requirements may impose significant compliance costs and make it uneconomical for us to continue to operate
in all of the current markets or to expand in accordance with our strategy, particularly if regulations or their interpretations vary
greatly or conflict between different operating countries. This may negatively impact our revenue and profitability by preventing our
business from reaching sufficient scale in particular markets or having to change our business model or incur additional costs, which
would adversely impact business. Our inability, or perceived inability, to comply with existing or new compliance obligations, could lead
to regulatory scrutiny, which could result in administrative or enforcement action, such as fines, penalties, and/or enforceable undertakings
and adversely affect our business.

 We may become subject to increasing global
trade laws and regulations.

 We
may become subject to increasing global trade laws and regulations, including economic sanctions, export controls, and import laws. Failure
to comply with global trade laws and regulations can result in penalties and reputational harm. Our international sales efforts expose
us to increased risk under these laws and regulations, and increasing and evolving global trade laws could impact our business.

 In addition, the global economy has recently seen a rise in tariffs
and threats of tariffs. While tariffs have not had a material impact on our business, financial condition or results of operations to
date, new tariffs could increase the costs of raw materials and other goods, both for us and our suppliers, which could impact our business,
particularly as we begin to scale our manufacturing operations.

 Risks Related to our
Intellectual Property

 Our ability to
protect our intellectual property and proprietary technology is uncertain.

 We
rely primarily on patent, trademark and trade secret laws, as well as confidentiality and non-disclosure agreements, to protect our proprietary
technologies and intellectual property. As of this filing, the Ondas Networks segment held a total of eight issued patents in the U.S.,
six issued international patents, seven patent pending applications in the U.S., and five international pending patent application. The
Ondas Networks segment patents expire between 2029 and 2041, subject to any patent extensions that may be available for such patents.
As of this filing, the OAS segment held a total of six issued patents in the U.S., 22 issued international patents, and four international
pending patent applications. The OAS segment patents expire between 2034 and 2048, subject to any patent extensions that may be available
for such patents. Our intellectual property incorporates internally developed software and hardware design incorporating machine and computer
vision and was developed with artificial intelligence and machine learning techniques. This intellectual property is critical to the development
of end-to-end systems which reliably enable the automated operation of drones in real-world environments.

 We
have applied for patent protection relating to certain existing and proposed products and processes. Currently, several of our issued
U.S. patents as well as various pending U.S. and foreign patent applications relate to our FullMAX systems, Optimus System, and
Iron Drone Raider and are therefore important to the functionality of our products. If we fail to timely file a patent application
in any jurisdiction, we may be precluded from doing so at a later date. Furthermore, we cannot assure you that any of our patent applications
will be approved in a timely manner or at all. The rights granted to us under our patents, and the rights we are seeking to have granted
in our pending patent applications, may not be meaningful or provide us with any commercial advantage. In addition, those rights could
be opposed, contested or circumvented by our competitors, or be declared invalid or unenforceable in judicial or administrative proceedings.
The failure of our patents to adequately protect our technology might make it easier or cheaper for our competitors to offer the same
or similar products or technologies. Even if we are successful in receiving patent protection for certain products and processes, our
competitors may be able to design around our patents or develop products that provide outcomes which are comparable or superior to ours
without infringing on our intellectual property rights. Due to differences between foreign and U.S. patent laws, our patented intellectual
property rights may not receive the same degree of protection in foreign countries as they would in the United States. Even if patents
are granted outside the U.S., effective enforcement in those countries may not be available without significant cost and time expense
or at all.

 We
rely on our trademarks and trade names to distinguish our products from the products of our competitors. Third parties may challenge our
use of the trademarks. In the event that our trademarks are successfully challenged, we could be forced to rebrand our products, which
could result in loss of brand recognition, and could require us to devote additional resources to marketing new brands. Further, we cannot
assure you that competitors will not infringe upon our trademarks, or that we will have adequate resources to enforce our trademarks.

 We
also rely on trade secrets, know-how and technology, which are not protectable by patents, to maintain our competitive position. We try
to protect this information by entering into confidentiality agreements and intellectual property assignment agreements with our officers,
employees, contractors and other service providers regarding our intellectual property and proprietary technology. In the event
of unauthorized use or disclosure or other breaches of those agreements, we may not be provided with meaningful protection for our trade
secrets or other proprietary information. In addition, our trade secrets may otherwise become known or be independently discovered by
competitors. To the extent that our commercial partners, collaborators, officers, employees, contractors and other service providers use
intellectual property owned by others in their work for us, disputes may arise as to the rights in the related or resulting know-how and
inventions. If any of our trade secrets, know-how or other technologies not protected by a patent were to be disclosed to or independently
developed by a competitor, our business, financial condition and results of operations could be materially adversely affected.

 If
a competitor infringes upon one of our patents, trademarks or other intellectual property rights, enforcing those patents, trademarks
and other rights may be costly, difficult and time consuming. Patent law relating to the scope of claims in the industry in which we operate
is subject to rapid change and constant evolution and, consequently, patent positions in our industry can be uncertain. Even if successful,
litigation to defend our patents and trademarks against challenges or to enforce our intellectual property rights could be expensive and
time consuming and could divert management's attention from managing our business. Moreover, we may not have sufficient resources
or desire to defend our patents or trademarks against challenges or to enforce our intellectual property rights. Litigation also puts
our patents at risk of being invalidated or interpreted narrowly and our patent applications at risk of not issuing. Additionally, we
may provoke third parties to assert claims against us. We may not prevail in any lawsuits that we initiate, and the damages or other remedies
awarded, if any, may not be commercially valuable. The occurrence of any of these events may harm our business, financial condition and
operating results.

 Our business may
suffer if it is alleged or found that our products infringe the intellectual property rights of others.

 Our
industries are characterized by the existence of a large number of patents and by litigation based on allegations of infringement or other
violations of intellectual property rights. Moreover, in recent years, individuals and groups have purchased patents and other intellectual
property assets for the purpose of making claims of infringement in order to extract settlements from companies like ours. To date we
have received no claims with respect to our infringement of intellectual property or patents but, in the future, third parties may claim
that we are infringing upon their patents or other intellectual property rights. In addition, we may be or may become contractually obligated
to indemnify our utility customers or other third parties that use or resell our products in the event our products are alleged to infringe
a third-party's intellectual property rights. Responding to such claims, regardless of their merit, can be time consuming, costly
to defend in litigation, divert management's attention and resources, damage our reputation and brand, and cause us to incur significant
expenses. Even if we are indemnified against such costs, the indemnifying party may be unable to uphold its contractual obligations. Further,
claims of intellectual property infringement might require us to redesign affected products, delay affected product offerings, enter into
costly settlement or license agreements or pay costly damage awards or face a temporary or permanent injunction prohibiting us from marketing,
selling or distributing the affected products. If we cannot or do not license the alleged infringed technology on reasonable terms or
at all, or substitute similar technology from another source, our revenue and earnings could be adversely impacted. Additionally, our
utility customers may not purchase our products if they are concerned that our products infringe third-party intellectual property rights.
This could reduce the market opportunity for the sale of our products and services. The occurrence of any of these events may have a material
adverse effect on our business, financial condition and results of operations.

 If we are unable
to protect the confidentiality of our proprietary information, the value of our technology and products could be adversely affected.

 In
addition to patented technology, we rely on our unpatented technology, trade secrets and know-how. We generally seek to protect this information
by confidentiality, non-disclosure and assignment of invention agreements with our officers, employees, contractors and other service
providers and with parties with which we do business. These agreements may be breached, which breach may result in the misappropriation
of such information, and we may not have adequate remedies for any such breach. We cannot be certain that the steps we have taken will
prevent unauthorized use or reverse engineering of our technology.

 Moreover,
our trade secrets may be disclosed to or otherwise become known or be independently developed by competitors. To the extent that our officers,
employees, contractors, other service providers, or other third parties with whom we do business use intellectual property owned by others
in their work for us, disputes may arise as to the rights in related or resulting know-how and inventions. If, for any of the above reasons,
our intellectual property is disclosed or misappropriated, it would harm our ability to protect our rights and have a material adverse
effect on our business, financial condition, and results of operations.

 We 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.

 We
use open-source software in connection with our products and services. From time to time, companies that incorporate open-source software
into their products have faced claims challenging the ownership of open-source software and/or compliance with open source license terms.
Therefore, we could be subject to suits by parties claiming ownership of what we believe to be open-source software or noncompliance with
open-source licensing terms. Some open-source software licenses require users who distribute open-source software as part of their software
to publicly disclose all or part of the source code to such software and/or make available any derivative works of the open-source code
on unfavorable terms or at no cost. While we monitor the use of open source software in our products and services and try to ensure that
none is used in a manner that would require us to disclose the source code to the related product or that would otherwise breach the terms
of an open source agreement, such use could inadvertently occur and we may be required to release our proprietary source code, pay damages
for breach of contract, re-engineer our products, discontinue the sale of our products in the event re-engineering cannot be accomplished
on a timely basis or take other remedial action that may divert resources away from our development efforts, any of which could adversely
affect our business, operating results and financial condition.

 Intellectual property
rights do not necessarily address all potential threats to our competitive advantage.

 The
degree of future protection afforded by our intellectual property rights is uncertain because intellectual property rights have limitations,
and may not adequately protect our business, or permit us to maintain our competitive advantage. The following examples are illustrative:

 others
may be able to make devices that are the same as or similar to our remote radios but that are not covered by the claims of the patents
that we own;

 we
or any collaborators might not have been the first to make the inventions covered by the issued patents or pending patent applications
that we own;

 we
might not have been the first to file patent applications covering certain of our inventions;

 others
may independently develop similar or alternative technologies or duplicate any of our technologies without infringing our intellectual
property rights;

 it
is possible that our pending patent applications will not lead to issued patents;

 issued
patents that we own may not provide us with any competitive advantages, or may be held invalid or unenforceable as a result of legal
challenges;

 our competitors might conduct research and development activities in the U.S. and other countries that provide a safe harbor from patent infringement claims for certain research and development activities, as well as in countries where we do not have patent rights, and then use the information learned from such activities to develop competitive products for sale in our major commercial markets; and

 we may not develop additional proprietary technologies that are patentable.

 Risks Related to our Financial Results

 We will need to
generate significant sales to achieve profitable operations.

 We
intend to increase our operating expenses substantially in connection with the planned expansion of our business, establishment of our
sales and marketing infrastructure, our ongoing research and development activities, and the commensurate development of our management
and administrative functions, but there is no guarantee that we will succeed in these endeavors. We will need to generate significant
sales to achieve profitability, and we might not be able to do so. Even if we do generate significant sales, we might not be able to achieve,
sustain or increase profitability on a quarterly or annual basis in the future. If our sales grow more slowly than we expect, or if our
operating expenses exceed our expectations, our business, financial condition and results of operations may be adversely affected.

 Our 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.

 We
do not know whether or when we will be able to develop efficient, low-cost manufacturing capabilities and processes that will enable us
to manufacture (or contract for the manufacture of) these products in commercial quantities while meeting the volume, speed, quality,
price, engineering, design and production standards required to successfully market our products. Our failure to develop such manufacturing
processes and capabilities in locations that can efficiently service our markets could have a material adverse effect on our business,
financial condition, results of operations and prospects. Our future profitability is, in part, dependent upon achieving increased savings
from volume purchases of raw materials and component parts, achieving acceptable manufacturing yield and capitalizing on machinery efficiencies.
We expect our suppliers to experience a sharp increase in demand for their products. As a result, we may not have reliable access to supplies
that we require or be able to purchase such materials or components at cost effective prices. There is no assurance that we will ever
be in a position to realize any material, labor and machinery cost reductions associated with higher purchasing power and higher production
levels. Failure to achieve these cost reductions could adversely impact our business and financial results.

 If business growth
falls short of expectations, we may need to obtain additional capital to fund our growth, operations, and obligations.

 We
may require additional capital to fund our growth, operations, and obligations if our growth plan falls short or takes more time than
we anticipate. As our business has grown, we have managed periods of tight liquidity by accessing capital from our stockholders and their
affiliates. Our capital requirements will depend on several factors, including:

 our
ability to enter into new agreements with customers or to extend the terms of our existing agreements with customers, and the terms of
such agreements;

 the
success of our sales efforts;

 our
working capital requirements related to the costs of inventory and accounts receivable;

 costs
of recruiting and retaining qualified personnel;

 expenditures
and investments to implement our business strategy; and

 the
identification and successful completion of acquisitions.

 We
may seek additional funds through equity or debt offerings and/or borrowings under additional notes payable, lines of credit or other
sources. We do not know whether additional financing will be available on commercially acceptable terms or at all, when needed. For example,
increases in interest rates could negatively impact the costs of seeking additional funds through debt offerings and/or borrowings. If
adequate funds are not available or are not available on commercially acceptable terms, our ability to fund our operations, support the
growth of our business or otherwise respond to competitive pressures could be significantly delayed or limited, which could materially
adversely affect our business, financial condition or results of operations.

 Our revenue is
not predictable and recognition of a significant portion of it will be deferred into future periods.

 Once
a customer decides to move forward with a large-scale deployment of our products and services, the timing of and our ability to recognize
related revenue will depend on several factors, some of which may not be under our control. These factors include shipment schedules
that may be delayed or subject to modification, the rate at which our utility customers choose to deploy our products in their network,
customer acceptance of all or any part of our products and services, our contractual commitments to provide new or enhanced functionality
at some point in the future, other contractual provisions such as liquidated damages, our suppliers' ability to provide an adequate
supply of components, the requirement to obtain regulatory approval, and our ability to deliver quality products according to expected
schedules. In light of these factors, the application of complex revenue recognition rules to our products and services has required
us to defer, and in the future will likely continue to require us to defer, a significant amount of revenue until undetermined future
periods. It may be difficult to predict the amount of revenue that we will recognize in any given period and amounts recognized may fluctuate
significantly from one period to the next.

 Our exposure to
fluctuations in foreign currency exchange rates has increased.

 Airobotics
conducts a significant portion of its operations outside of the United States, which also operate in their respective local currencies,
the most significant of which are currently the Israeli New Shekel, the Singapore Dollar and the Emirati Dirham. Therefore, our international
operations accounts for a significant portion of our overall operations than they previously did and our exposure to fluctuations in foreign
currency exchange rates has increase. Because our financial statements continue to be presented in U.S. dollars, the local currencies
of Airobotics will be translated into U.S. dollars at the applicable exchange rates for inclusion in our Consolidated Financial Statements,
thereby increasing the foreign exchange translation risk.

 If our internal
controls over financial reporting or our disclosure controls and procedures are not effective, we may not be able to accurately report
our financial results, prevent fraud or file our periodic reports in a timely manner, which may cause investors to lose confidence in
our reported financial information and may lead to a decline in our stock price.

 As
a public company, we are required to maintain internal control over financial reporting and disclosure controls and procedures. Section
404 of the Sarbanes-Oxley Act of 2002 (the "Sarbanes-Oxley Act") requires that we evaluate and determine the effectiveness
of our internal control over financial reporting and provide a management report on the internal control over financial reporting. Our
testing, or the subsequent testing by our independent public accounting firm, may reveal deficiencies in our internal control over financial
reporting that are deemed to be material weaknesses. If we are not able to comply with the requirements of Section 404 in a timely manner,
or if we or our accounting firm identify deficiencies in our internal control over financial reporting that are deemed to be material
weaknesses, the market price of our stock would likely decline and we could be subject to lawsuits, sanctions or investigations by regulatory
authorities, including SEC enforcement actions, and we could be required to restate our financial results, any of which would require
additional financial and management resources.

 If
material weaknesses in our internal control over financial reporting are discovered or occur in the future, our consolidated financial
statements may contain material misstatements and we could be required to restate our financial results, which could materially and adversely
affect our business, results of operations and financial condition, restrict our ability to access the capital markets, require us to
expend significant resources to correct the material weakness, subject us to fines, penalties or judgments, harm our reputation or otherwise
cause a decline in investor confidence.

 We
continue to invest in more robust technology and resources to manage those reporting requirements. Implementing the appropriate changes
to our internal controls may distract our officers and employees, result in substantial costs and require significant time to complete.
Any difficulties or delays in implementing these controls could impact our ability to timely report our financial results. For these reasons,
we may encounter difficulties in the timely and accurate reporting of our financial results, which would impact our ability to provide
our investors with information in a timely manner. As a result, our investors could lose confidence in our reported financial information,
and our stock price could decline.

 In
addition, any such changes do not guarantee that we will be effective in maintaining the adequacy of our internal controls, and any failure
to maintain that adequacy could prevent us from accurately reporting our financial results.

 Risks Related to our
Common Stock

 We 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.

 The
limited trading activity and resulting volatility in the market price of our common stock may prevent you from being able to sell your
shares of our common stock at or above the price you paid for your shares. The trading price of our common stock may be volatile and subject
to wide price fluctuations in response to various factors, including, but not limited to:

 actual or anticipated fluctuations in our financial and operating results;

 adverse results from delays in our product development;

 legal, political, governmental or other regulatory developments, decisions or interpretations;

 publication of research reports or coverage about us or our industry or positive or negative recommendations;

 perceptions about the market acceptance of our products and services, and the recognition of our brand;

 adverse publicity about our products and services, operating or financial results or industry in general;

 overall performance of the equity markets;

 introduction or discontinuation of products or services, or announcements of significant contracts, licenses or acquisitions, by us or our competitors;

 additions or departures of key personnel;

 threatened or actual litigation and government or regulatory investigations;

 sale of shares of our common stock by us or members of our management or our stockholders; and

 general economic conditions, both global and regional.

 Our common stock is listed on Nasdaq under the symbol "ONDS."
 There can be no assurance that trading of our common stock on such market will be sustained. In the event that our common
stock is not listed on Nasdaq, or if we do not sustain such listing, our common stock could be quoted only on the OTC Markets. Under such
circumstances, you may find it significantly more difficult to trade, or to obtain accurate quotations for our common stock and our common
stock may become substantially less attractive to certain purchasers, such as financial institutions, hedge funds, and other similar investors.

 These
and other factors might cause the market price of our common stock to fluctuate unpredictably and substantially, which may negatively
affect the liquidity of our common stock. In addition, in recent years, the stock market has experienced significant price and volume
fluctuations. This volatility has had a significant impact on the market price of securities issued by many companies across many industries,
including our industry. The changes frequently appear to occur without regard to the operating performance of the affected companies.
Accordingly, the price of our common stock could fluctuate based upon factors that have little or nothing to do with our company, and
these fluctuations could materially reduce our stock price.

 Securities
class action litigation has often been instituted against companies following periods of volatility in the overall market and in the market
price of a company's securities. This litigation, if instituted against us, could result in substantial costs, divert our management's
attention and resources, and harm our business, operating results and financial condition.

 Concentration of
ownership of our common stock among our existing executive officers, directors and principal stockholders may prevent new investors from
influencing significant corporate decisions.

 Our
executive officers, directors and current beneficial owners of 5% or more of our common stock and their respective affiliates, in the
aggregate, beneficially own approximately 23.2% of our outstanding common stock as of March 10, 2025, and as of the date of this filing.
As a result, these persons, acting together, would be able to significantly influence all matters requiring stockholder approval, including
the election and removal of directors, any merger, consolidation, sale of all or substantially all of our assets, or other significant
corporate transactions.

 Some
of these persons or entities may have interests different than yours. For example, they may be more interested in selling our company
to an acquirer than other investors, or they may want us to pursue strategies that deviate from the interests of other stockholders.

 We may issue more
shares to raise additional capital, which may result in substantial dilution.

 Our Amended and Restated Articles of Incorporation authorize the issuance
of a maximum of 300,000,000 shares of common stock. Any additional financings effected by us may result in the issuance of additional
securities without stockholder approval and the substantial dilution in the percentage of common stock held by our then existing stockholders.
In order to raise additional capital, we may in the future offer additional shares of our common stock or other securities convertible
into or exchangeable for our common stock at prices that may be higher or lower than the price per share of our common stock at that time.
Also, we have reserved 11,000,000 and 3,333,334 shares of common stock for issuance pursuant to future awards under the Ondas Holdings
Inc. 2021 Stock Incentive Plan, as amended (the "2021 Plan") and 2018 Equity Incentive Plan (the "2018 Plan"),
respectively. As of December 31, 2024, the number of securities remaining available for future issuance under the 2021 Plan and 2018 Plan
is 6,573,078 and 1,207,078 shares of common stock, respectively. The issuance of such additional shares of common stock, or securities
convertible or exchangeable into common stock, may cause the price of our common stock to decline. Additionally, if all or a substantial
portion of these shares are resold into the public markets then the trading price of our common stock may decline.

 Our 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.

 Our
Amended and Restated Articles of Incorporation authorize the issuance of up to 5,000,000 shares of "blank check" preferred
stock, $0.0001 par value per share, with such designation rights and preferences as may be determined from time to time by our Board.
Our Board is empowered, without the need to obtain stockholder approval, to issue shares of preferred stock with dividend, liquidation,
conversion, voting or other rights which could adversely affect the voting power or other rights of the holders of our common stock. In
the event of such issuances, the preferred stock could be used, under certain circumstances, as a method of discouraging, delaying or
preventing a change in control of our company.

 If 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.

 The
trading market for our common stock will depend in part on the research and reports that securities or industry analysts publish about
us or our business, which research and reports are not and would not be subject to our control. We currently do not have and may never
obtain research coverage by securities analysts, and industry analysts that currently cover us may cease to do so. If no securities analysts
commence coverage of our company, or if industry analysts cease coverage of our company, the trading price for our stock could be
materially and adversely impacted. In the event we obtain securities analyst coverage, if one or more of the analysts who cover us
downgrade our stock or publish inaccurate or unfavorable research about our business, our stock price may be materially and adversely
impacted. If one or more of these analysts cease coverage of our company or fail to publish reports on us regularly, demand for our stock
could decrease, which might cause our stock price and trading volume to decline.

 We do not intend
to pay dividends for the foreseeable future.

 We
have never declared or paid cash dividends on our capital stock nor are we under any obligation to declare or pay such cash dividends. We
currently intend to retain any future earnings to fund our operations and the development and growth of our business, and we do not expect
to declare or pay any dividends in the foreseeable future. Our future ability to pay cash dividends on our capital stock may be limited
by any future debt instruments or preferred securities. As a result, you may only receive a return on your investment in our common
stock if the market price of our common stock increases to a price above the price you paid for them and you sell such shares.

 If our shares become
subject to the penny stock rules, it would become more difficult to trade our shares.

 The SEC has adopted rules that regulate broker-dealer practices in
connection with transactions in penny stocks. Penny stocks are generally equity securities with a price of less than $5.00, other than
securities registered on certain national securities exchanges or authorized for quotation on certain automated quotation systems, provided
that current price and volume information with respect to transactions in such securities is provided by the exchange or system. If we
do not retain a listing on Nasdaq and if the price of our common stock is less than $5.00, our common stock will be deemed a penny stock.
The penny stock rules require a broker-dealer, before a transaction in a penny stock not otherwise exempt from those rules, to deliver
a standardized risk disclosure document containing specified information. In addition, the penny stock rules require that before effecting
any transaction in a penny stock not otherwise exempt from those rules, a broker-dealer must make a special written determination that
the penny stock is a suitable investment for the purchaser and receive (i) the purchaser's written acknowledgment of the receipt
of a risk disclosure statement; (ii) a written agreement to transactions involving penny stocks; and (iii) a signed and dated copy of
a written suitability statement. These disclosure requirements may have the effect of reducing the trading activity in the secondary market
for our common stock, and therefore stockholders may have difficulty selling shares.

 Certain 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.

 Certain
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. For
example, Nevada law provides that approval of two-thirds of the stockholders is required to remove a director, which may make it more
difficult for a third-party to gain control of the Company. This concentration of ownership limits the power to exercise control by our
minority stockholders.

 Our bylaws designate
the Eighth Judicial District Court of Clark County of the State of Nevada as the sole and exclusive forum for certain actions, which could
limit a stockholder's ability to bring a claim in a judicial forum that it finds favorable for disputes with the Company and its
directors, officers, or other employees and may discourage lawsuits with respect to such claims.

 Unless
we consent in writing to the selection of an alternative forum, the Eighth Judicial District Court of Clark County of the State of Nevada
(the "Court") shall be the sole and exclusive forum for any stockholder (including a beneficial owner) to bring (i) any derivative
action or proceeding brought on behalf of the Company, (ii) any action asserting a claim of breach of a fiduciary duty owed by any Director,
officer or other employee of the Company to the Company or the Company's stockholders, (iii) any action asserting a claim against
the Company, any director or the Company's officers or employees arising pursuant to any provision of the Nevada Revised Statutes
(the "NRS"), Chapters 78 or 92A of the NRS or our Amended and Restated Articles of Incorporation or our Bylaws, or (iv) any
action asserting a claim against the Company, any director or the Company's officers or employees governed by the internal affairs
doctrine. However, each of these clauses (i) through (iv) will not apply to any claim (x) as to which the Court determines that there
is an indispensable party not subject to the jurisdiction of the Court (and the indispensable party does not consent to the personal jurisdiction
of the Court within ten (10) days following such determination), (y) for which the Court does not have subject matter jurisdiction,
or (z) which is vested in the exclusive jurisdiction of a court or forum other than the Court, including pursuant to Section 27 of the
Exchange Act, which provides for exclusive federal jurisdiction over suits brought to enforce any duty or liability created by the Exchange
Act or the rules and regulations thereunder. Furthermore, Section 22 of the Securities Act of 1933, as amended (the "Securities
Act"), provides for concurrent jurisdiction for federal and state courts over all suits brought to enforce any duty or liability
created by the Securities Act or the rules and regulations thereunder, and as such the exclusive jurisdiction clauses set forth above
would not apply to such suits.

 Risks Related to the Notes

 We may not have
the ability to pay interest on the Notes or to redeem the Notes.

 The
Notes bear interest at a rate of 3% per year and add amortization payments with respect to the principal amount of the Notes and accrued
and unpaid interest are due and payable monthly. If we are unable to satisfy certain equity conditions, we will be required to pay all
amounts due on any installment date in cash. If a change of control occurs, holders of the Notes may require us to repurchase, for cash,
all or a portion of their Notes. Our ability to pay amortization payments and interest on the Notes, to repurchase the Notes, to fund
working capital needs, and fund planned capital expenditures depends on our ability to generate cash flow in the future. To some extent,
this is subject to general economic, financial, competitive, legislative and regulatory factors, and other factors that are beyond our
control. We cannot assure you that we will continue to maintain sufficient cash reserves or that our business will continue to generate
cash flow from operations at a level sufficient to permit us to pay the interest on the Notes or to repurchase or redeem the Notes or
that our cash needs will not increase.

 The
holder of the Notes can defer an installment payment due on any installment date to another installment date and may, on any installment
date accelerate the payment of amounts due on up to four future installment dates. Therefore, we may be required to repay the entire principal
amount and accrued and unpaid interest on the Notes in one lump sum on the maturity date of the Notes. If we are unable to satisfy certain
equity conditions, we will be required to pay all amounts due whether by deferral or acceleration in cash and we may not have sufficient
funds to repay the Notes under such circumstances.

 Our
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.

 If
we are unable to generate sufficient cash flow from our operations in the future to service our indebtedness and meet our other needs,
we may have to refinance all or a portion of the indebtedness, obtain additional financing, reduce expenditures, or sell assets that we
deem necessary to our business. We cannot assure you that any of these measures would be possible or that additional financing could be
obtained on favorable terms, if at all. The inability to obtain additional financing on commercially reasonable terms would have a material
adverse effect on our financial condition and our ability to meet our obligations to you under the Notes.

 Provisions in the
Notes may deter or prevent a business combination that may be favorable to you.

 Under
the terms of the Notes we are prohibited from engaging in certain mergers or acquisitions unless, among other things, the surviving entity
assumes our obligations under the Notes. These and other provisions could prevent or deter a third party from acquiring us, even where
the acquisition could be beneficial to you.

 Future 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.

 The conversion of
some or all of the Notes will dilute the ownership interests of existing shareholders, unless we satisfy any such conversions solely
with cash, and conversions of such Notes into shares of our Common Stock could depress the price of our Common Stock. We cannot predict
if and when these shares of our Common Stock will be resold in the public markets. We cannot predict the number of these shares that might
be resold nor the effect that future sales of our shares of Common Stock would have on the market price of our shares of Common Stock.
Sales of a substantial number of our shares of Common Stock in the public markets, or the perception that such sales could occur, may
result in downward pressure on the price of our Common Stock or cause it to be highly volatile and impair our ability to raise capital
through the sale of additional equity securities.

 Our financing arrangements
contain, and we expect that other future loan agreements and financing arrangements will contain, customary covenants that may limit our
liquidity and corporate activities, which could limit our operational flexibility and have an adverse effect on our financial condition
and results of operations.

 Our
financial arrangements contain, and we expect that other future loan agreements and financing arrangements will contain, customary covenants
and event of default clauses, which may affect operational and financial flexibility. Such restrictions could affect, and in many respects
limit or prohibit, among other things, our ability to pay dividends, incur additional indebtedness, create liens, sell assets, or engage
in mergers or acquisitions. These restrictions could limit our ability to plan for or react to market conditions or meet extraordinary
capital needs or otherwise restrict corporate activities. There can be no assurance that such restrictions will not adversely affect our
ability to finance our future operations or capital needs.

 As
a result of these restrictions, we may need to seek permission from our lenders in order to engage in some corporate actions. Our lenders'
interests may be different from ours and we may not be able to obtain their permission when needed. This may prevent us from taking actions
that we believe are in our best interests, which may adversely impact our revenues, results of operations and financial condition.

 For
more information regarding our obligations under the Notes please see Note 9 – Long-term Notes Payable in the accompanying Notes
to Consolidated Financial Statements.

 Item 1B. Unresolved Staff Comments.

 None.

 Item 1C. Cybersecurity.

 Risk management and strategy

 We
rely on our information technology to operate our business. We have policies and processes designed to protect our information technology
systems, some of which are managed by third parties, and resolve issues in a timely manner in the event of a cybersecurity threat or incident.

 As
part of our broader risk management framework, we have identified the potential cybersecurity risks to our business and implemented structured
controls to mitigate them. Our business applications and hosting services are designed to minimize the impact of cybersecurity incidents,
with designated backup systems in place where necessary.

 To
enhance cybersecurity resilience, we have implemented a structured Information Security Management System (ISMS) certified in accordance
with ISO 27001, providing a comprehensive approach to managing cybersecurity risks and aligning with industry best practices. Our risk
mitigation efforts include a combination of administrative, technical, and operational controls, such as real-time monitoring and detection
activities, anti-malware and endpoint protection solutions, annual employee cybersecurity training, regular security audits, third-party
penetration testing, and a clear communication and reporting structure to facilitate timely responses to security incidents.

 We
have a Cybersecurity Incident Response Plan (CIRP) that defines roles, responsibilities, and reporting mechanisms, as well as a structured
incident response process covering preparation, detection, response, documentation, and post-incident analysis. This plan outlines possible
cybersecurity threats and response measures for incidents such as denial-of-service attacks, malicious code attacks, website defacement,
data corruption, and data leakage. In addition, we maintain a Business Continuity Plan (BCP) in accordance with ISO 27001 to ensure operational
resilience, including detailed continuity procedures, system restoration timeframes, and recovery strategies for various scenarios.

 To
address cybersecurity risks associated with third-party service providers, we have established procedures, policies, and tools for identifying,
assessing, and mitigating potential threats. This process begins with a third-party risk assessment, which is performed and updated as
needed. Our Information Security Guidelines for Suppliers ensure compliance with security standards, while our Access Control Policies
regulate third-party access to sensitive systems, and our Cloud System Information Security Procedures govern data security in cloud environments.
We also engage third-party consultants to assist in designing and enhancing our cybersecurity risk management framework, including penetration
testing and continuous threat monitoring.

 To
date, we have not encountered cybersecurity threats or incidents that have had a material impact on our business.

 Governance

 Our
Board of Directors has specific oversight responsibility for cybersecurity, which also oversees our general risk management. The Board
of Directors reviews and discusses with management our policies, practices and risks related to information security and cybersecurity.

 Our
Chief Financial Officer has primary responsibility for assessing, monitoring, and managing cybersecurity risks. Leaders of our Ondas Networks
and OAS segments, along with the Chief Financial Officer, meet quarterly to assess cybersecurity risks, identify emerging threats, and
evaluate our risk management framework. The Chief Financial Officer provides quarterly updates to the Board of Directors on any cybersecurity-related
risks. Our incident response plan includes notifying the Board of Directors of any material threats or incidents as they arise. Although
these members of our senior management do not have direct cybersecurity expertise obtained through certifications, their experience managing
the Company, which includes consulting and coordinating as necessary with in-house and third-party information technology specialists,
enables them to effectively assess and manage material risks from cybersecurity threats.

 At
OAS, risk management oversight is further managed through our Head of Information Security, who is responsible for overseeing the information
security aspects of our cybersecurity framework. Our Head of Information Security brings extensive expertise to the role, with military
experience in information security, a B.Sc. in Information Systems Engineering, and specialized training in computer and information systems
security/information assurance from the T V S D Academy. Additionally, our Head of Information Security is certified by the
Standards Institution of Israel as a Senior Internal Auditor for ISO 27001. Her areas of expertise include performing risk assessments,
developing business continuity plans, drafting information security policies and procedures, conducting internal audits, leading information
security training, and evaluating information systems

 This
structured approach ensures that our cybersecurity governance remains robust, proactive, and aligned with industry best practices.

 At
Ondas Networks, risk management is further managed through the use of expert third party companies to assist in managing relevant risks.
In particular, the Company outsources its information technology function and monitoring to a third-party provider whereby it benefits
from a professionally managed network monitoring, management, maintenance, detection and response system and a 24/7 security operations
center with both onsite and remote support services. Any cybersecurity incident would be reported to the Company promptly by our third-party
consultant.

 Item 2. Properties.

 On October 4, 2024, we entered
into a short-term operating lease agreement for office space located at One Marina Park Drive, Suite 1410, Boston, MA, which serves as
Ondas Holdings' corporate headquarters. The lease commenced on October 15, 2024, and is effective through April 30, 2025, wherein
rent is $267 per month. On January 10, 2025, we renewed the lease through July 31, 2025, wherein rent is $288 per month for May 1, 2025
through July 31, 2025.

 Our offices and facilities
for Ondas Networks are located at 920 Stewart Drive, Suite 100, Sunnyvale, CA. On August 7, 2023, Ondas Networks entered into a 72-month
operating lease agreement with the owner and landlord of 21,537 square feet of other office space in Sunnyvale, CA (the "2023 Lease").
The lease commenced October 1, 2023, and is effective through September 30, 2029, wherein base rent is $77,533 per month, increasing approximately
3% annually, with a security deposit due in the amount of $269,428. Base rent for the 2023 Lease was abated during the first twelve months
of the term of the lease.

 Our offices and facilities
for American Robotics are located at 936 Ridgebrook Road, Sparks, MD. On January 1, 2025, American Robotics entered into a 48-month operating
lease agreement for office space in Sparks, Maryland through December 31, 2028, wherein base rent is $90,590 per year starting January
1, 2025, with an annual increase of 2% through December 31, 2028.

 On October 8, 2021, American
Robotics entered into an 86-month operating lease for space at 411 Waverley Oaks Road, Suite 114, Waltham, MA, representing approximately
18,000 square feet. The lease commenced on March 1, 2022 and terminates on April 30, 2029, wherein the base rate is $39,375 per month,
increasing 3% annually, with a security deposit in the amount of $104,040. On January 15, 2024, American Robotics entered into an agreement
to sublet their full leased space in Waltham through April 30, 2029, the remaining lease term, for $22,920 per month from May 1, 2024
through April 30, 2025, then $41,250 per month from May 1, 2025 through April 30, 2029.

 Our offices and facilities
for Airobotics are located at 8 Modi'in St, Petah Tikva, Israel, representing approximately 13,240 square feet and an adjacent yard
with an area of approximately 9,690 square feet which Airobotics leases according to three different lease agreements. These agreements
are with respect to different sections of the entire leased area and were in effect through December 31, 2023, February 28, 2024, and
November 30, 2024 wherein the base rate of the entire leased area is approximately $20,500 per month. The expired leases are currently
being leased on a month-to-month basis.

 On November 25, 2024, Airobotics entered into a 24-month lease agreement
with the owner and landlord of office space in Dubai, United Arab Emirates (the "Dubai Office Lease"). The Dubai Office Lease
commenced on December 1, 2024, and is an operating lease through December 2, 2026. Base rent for the full lease term is $272,262, which
was paid in full in December 2024.

 We believe that our offices and facilities are
sufficient for our current needs.

 Item 3. Legal Proceedings.

 From time to time, we may become involved in various lawsuits and legal
proceedings that arise in the ordinary course of business. Litigation is subject to inherent uncertainties and an adverse result in these,
or other matters may arise from time to time that may harm our business. We are not currently involved in any legal proceeding or investigation
by a governmental agency that we believe will have a material adverse effect on our business, financial condition, or operating results.
For information related to our legal proceedings, refer to Note 14 —Commitments and Contingencies of the accompanying Consolidated
Financial Statements.

 Item 4. Mine Safety Disclosures.

 Not applicable.

 Item 5. Market for Registrant's Common
Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

 Market Information

 On December 4, 2020, our common
stock was uplisted from the OOTCQB to the Nasdaq Capital Market ("Nasdaq") under the symbol "ONDS" where it continues
to trade on a very limited basis.

 Stockholders

 As of March 12, 2025, there
were approximately 98 stockholders of record.

 Dividends

 We have never declared nor
paid any cash dividends to stockholders. We do not intend to pay cash dividends on our common stock for the foreseeable future, and currently
intend to retain any future earnings to fund our operations and the development and growth of our business. The declaration of any future
cash dividend, if any, would be at the discretion of our Board (subject to limitations imposed under applicable Nevada law) and would
depend upon our earnings, if any, our capital requirements and financial position, our general economic conditions, and other pertinent
conditions.

 Unregistered Sales of Securities

 None during the year ended
December 31, 2024.

 Purchases of Equity Securities by the Issuer
and Affiliated Purchasers

 None during the quarter ended
December 31, 2024.

 Item 6. [Reserved]

 Item 7. Management's Discussion and Analysis
of Financial Condition and Results of Operations

 General

 You should read the following
discussion and analysis in conjunction with our Consolidated Financial Statements and the notes to those financial statements included
elsewhere in this Annual Report on Form 10-K for the year ended December 31, 2024 (the "Form 10-K"). This discussion
contains forward-looking statements based upon current expectations that involve risks and uncertainties. See "Cautionary Note Regarding
Forward-Looking Statements." Our actual results may differ materially from those contained in or implied by any forward-looking
statements.

 Overview

 Ondas Holdings Inc. ("Ondas
Holdings," the "Company," "we" or "our") is a leading provider of private wireless, drone, and
automated data solutions through its subsidiaries Ondas Networks Inc., a Texas corporation ("Ondas Networks"), Ondas Autonomous
Systems Inc., a Nevada corporation ("OAS"), which wholly-owns Airobotics Ltd., an Israeli company ("Airobotics"),
and American Robotics, Inc., a Delaware corporation ("American Robotics").

connectivity solutions. OAS provides drone and automated data solutions through its subsidiaries Airobotics and American Robotics. Ondas
Networks and OAS together provide users in rail, energy, mining, public safety and critical infrastructure and government markets with
improved connectivity, data collection capabilities, and data collection and information processing capabilities. We operate Ondas Networks
and OAS as separate business segments, and the following is a discussion of each segment. See Note 1, Note 2, and Note 12 of the accompanying
Consolidated Financial Statements for further information regarding our segments.

 Ondas Networks Segment

connectivity solutions enabling mission-critical Industrial Internet applications and services. We refer to these applications as the
Mission-Critical Internet of Things ("MC-IoT"). Our wireless networking products are applicable to a wide range of MC-IoT
applications, which are most often located at the very edge of large industrial networks. These applications require secure, real-time
connectivity with the ability to process large amounts of data at the edge of large industrial networks. Such applications are required
in all of the major critical infrastructure markets, including rail, electric grids, drone operations, oil and gas, and public safety,
homeland security and government, where secure, reliable and fast operational decisions are required in order to improve efficiency and
ensure a high degree of safety and security. Our MC-IoT intellectual property has been adopted by the Institute of Electrical and Electronics
Engineers ("IEEE"), the leading worldwide standards body in data networking protocols, and forms the core of the IEEE 802.16
standard. Because standards-based communications solutions are preferred by our mission-critical customers and ecosystem partners, we
continue to take a leadership position in IEEE as it relates to wireless networking for industrial markets.

 We design, develop, manufacture,
sell and support FullMAX, our patented, Software Defined Radio ("SDR") platform for secure, private, wide-area broadband networks.
Our customers install FullMAX systems in order to upgrade and expand their legacy wide-area network infrastructure. By upgrading their
legacy systems, customers benefit from significant increases in data throughput which enables new applications. We have targeted the North
American freight rail operators for the initial adoption of our FullMAX platform. These rail operators currently operate legacy communications
systems utilizing dated narrowband wireless technologies for voice and data communications. These legacy wireless networks have limited
data capacity and are unable to support the adoption of new, intelligent train control and management systems. The freight rail operators
through the Association of American Railroads ("AAR"), its advisory subsidiary MxV Rail, as well as the American Railway Engineering
and Maintenance Association ("AREMA"), have adopted the IEEE 802.16 standard for future private wireless networks.

 Our software-based FullMAX
platform is an important and timely upgrade solution for privately-owned and operated wireless wide-area networks, leveraging Internet
Protocol-based communications to provide security, more reliability and significant data throughput for our mission-critical infrastructure
customers. We believe industrial and critical infrastructure markets throughout the globe have reached an inflection point where legacy
serial and analog based protocols no longer meet industry needs. In addition to offering enhanced data throughput, FullMAX is an intelligent
networking platform enabling the adoption of sophisticated operating systems and equipment supporting next-generation MC-IoT applications
over wide field areas. These new MC-IoT applications and related equipment require more processing power at the edge of large industrial
networks and the efficient utilization of network capacity and scarce bandwidth.

 Industry Partnerships

 Ondas Networks continues to
develop partnerships in the rail space to develop and market wireless communications products and services based on Ondas Networks'
technology. Our partnership with Siemens Mobility ("Siemens") is geared to market our FullMAX-based networking technology
and services and to jointly develop certain wireless communications products for the North American Rail Industry based on Siemens'
Advanced Train Control System ("ATCS") protocol and our FullMAX MC-IoT platform. We are working with other industry partners
to commercialize our platform technologies for specific use cases and to drive broad industry adoption of dot16 applications.

 OAS Segment

 Our OAS business unit develops
and integrates drone-based solutions focusing on high-performance critical applications for government and Tier-1 commercial enterprises.
Ondas is marketing comprehensive drone-based solutions to address the needs of governmental and commercial customers based on its commercially
available platforms: the Optimus System, a fully autonomous drone platform capable of continuous and multipurpose aerial data capturing
and analytics, and the Iron Drone Raider, a fully autonomous interceptor drone designed to neutralize small hostile drones.

 Our unique, fully autonomous
platforms enable cutting-edge aerial capabilities and are designed to serve and protect critical infrastructure and operations. Our business
focuses on end-user entities in defense, homeland security, public safety, smart city, airport authorities, and other governmental entities
together with commercial operators of critical industrial and technology facilities such as oil & gas, seaports, mining, and heavy
construction as well as for data centers and semiconductor fabs. For these industries, OAS provides specialized real-time aerial data
capturing and aerial protection solutions in the most complex environments such as urban areas, sensitive and critical facilities and
field area operations, and high-priority projects. In addition, we offer a wide suite of supplementary, enabling services for successful
implementation such as AI data analytics, data automation, IT implementation, safety planning, certification, training, and maintenance,
handling all the complex aspects of such high-performance drone operations.

 Our portfolio companies, American
Robotics and Airobotics, form a unique, powerful, and synergistic combination covering all the aspects required for successful Aerospace
business together with data technologies and services for digital transformation industries. Our companies are specialized in addressing
all the challenges arising along these types of product lifecycles including research and development, manufacturing, certification, and
ongoing support.

 OAS and its portfolio companies
have already gained a track record of industry-leading regulatory successes including the securing of the first-of-its-kind Type Certification
(TC) from the FAA for the Optimus 1-EX UAV on September 25, 2023, becoming the first autonomous security data capture UAV to achieve this
distinction. TC, recognized as the highest echelon of Airworthiness Certification, streamline operational approvals for broad flight operations
over people and infrastructure. The certification verifies the compliance of the system's design with the required FAA airworthiness
and noise standards, ensuring safe operation within the US National Airspace System (NAS) thereby significantly broadening the range of
operational scenarios and scaling up of operations for automated UAS. Achieving FAA Type Certification will enable drone operations beyond-visual-line-of-sight
(BVLOS) without a human operator on-site. With a strong footprint in the US market and worldwide, we believe that OAS is well-positioned
with proven technology, a unique offering, and strong capabilities to strategically transform critical operations with our cutting-edge
drone tech and capabilities.

 War in Israel

 On October 7, 2023, the State
of Israel, where Airobotics' main offices and facilities are located, suffered a surprise attack by hostile forces from the Gaza
Strip, which led to the Security Cabinet of the State of Israel declaring a state of war in Israel. This military operation and related
activities are on-going as of the date of this filing.

 The Company is closely monitoring how the military operation and related
activities could adversely affect its anticipated milestones and its Israel-based activities to support future operations, including the
Company's ability to import materials that are required to construct the Optimus System and to ship them outside of Israel.
Although there have been disruptions in our business and operations, the Company has determined that there have not been any materially
adverse effects on its business or operations. The Company does not believe the disruptions in its business and operations will have an
enduring impact on its business and operations, but it continues to monitor the situation, as any future escalation or change could result
in a material adverse effect on the ability of the Company's Israeli office to support the Company's activities. The Company
does not have any specific contingency plans in the event of any such escalation or change.

 Results of Operations

 Year ended December 31, 2024 compared to year
ended December 31, 2023

 Revenues

 2024

 2023

 Increase
 (Decrease)

 Revenue, net

 $
 1,931,519

 $
 6,722,230

 $
 (4,790,711
)

 OAS

 5,261,175

 8,969,200

 (3,708,025
)

 Total

 $

 $

 $
 (8,498,736
)

 Revenue decreased by $8,498,736 to $7,192,694 for the year ended December
31, 2024 from $15,691,430 for the year ended December 31, 2023. Revenues during the year ended December 31, 2024 included $2,796,178 for
products, $2,491,955 for service and subscriptions, and $1,904,561 for development agreements, primarily with Siemens. Revenues during
the same period in 2023 included $12,102,388 for products, $2,126,560 for service and subscriptions, and $1,462,482 for development agreements
primarily with Siemens. The decrease in our revenues was primarily the result of a decrease of approximately $5,221,000 in product sales,
mainly to Siemens, at Ondas Networks, as further orders have been delayed by the railroads, as they work on implementing the 900 MHz band
network; a decrease of approximately $4,085,000 in decreased product sales at OAS, who had multi-drone orders during the year ended December
31, 2023, but no comparable sales until the second half of 2024. These decreases were offset by an increase of approximately
$344,000 in maintenance, service, support, and subscriptions revenue and an increase of approximately $33,000 in development
revenue at OAS due to new orders at Airobotics and American Robotics. Further offset by an increase of approximately $21,000 in service
revenue at Ondas Networks, and an increase of approximately $409,000 in development revenue to Siemens, related to a new development
agreement at Ondas Networks.

 2024

 2023

 Increase
 (Decrease)

 $
 2,290,324

 $
 4,647,931

 $
 (2,357,607
)

 OAS

 4,557,187

 4,662,325

 (105,138
)

 Total

 $
 6,847,511

 $
 9,310,256

 $
 (2,462,745
)

 Cost of goods sold decreased by $2,462,745 to $6,847,511 for the year
ended December 31, 2024 from $9,310,256 for the year ended December 31, 2023. The decrease in cost of goods sold was primarily a result
of decreased revenue for the year ended December 31, 2024, as compared to the year ended December 31, 2023. Cost of goods sold at OAS
did not decrease in the same ratio as revenue because of fixed manufacturing costs.

 Gross profit

 2024

 2023

 Increase
 (Decrease)

 Gross profit

 $
 (358,805
)

 $
 2,074,299

 $
 (2,433,104
)

 OAS

 703,988

 4,306,875

 (3,602,887
)

 Total

 $
 345,183

 $
 6,381,174

 $
 (6,035,991
)

 Our gross profit decreased by $6,035,991 to $345,183 for the year ended
December 31, 2024 compared to $6,381,174 for the year ended December 31, 2023 based on the changes in revenues and cost of goods sold
as discussed above. Gross profit for the years ended December 31, 2024 and 2023 was 5% and 41%, respectively. The decrease in gross margin
of 36% is due to the change in the mix of revenues during the year ended December 31, 2024, which included development projects with lower
gross margins as compared to product revenue with higher gross margins during the year ended December 31, 2023, as well as certain fixed
costs related to OAS delivery.

 Operating Expenses

 2024

 2023

 Increase (Decrease)

 Operating expenses:

 General and administrative

 $
 17,141,882

 $
 21,556,976

 $
 (4,415,094
)

 5,336,204

 5,908,263

 (572,059
)

 12,476,401

 17,145,235

 (4,668,834
)

 Long-term equity investment impairment

 -

 1,500,000

 (1,500,000
)

 Total

 $
 34,954,487

 $
 46,110,474

 $
 (11,155,987
)

 Our principal operating costs
include the following items as a percentage of total operating expenses:

 2024

 2023

 Human resource costs, including benefits

 %

 %

 Travel and entertainment

 %

 %

 Other general and administration costs:

 Professional fees and consulting expenses

 %

 %

 Facilities and other expenses

 %

 %

 Depreciation and amortization

 %

 %

 Long-term asset impairment

 -
 %

 %

 Other research and deployment costs, excluding human resources and travel and entertainment

 %

 %

 Other sales and marketing costs, excluding human resources and travel and entertainment

 %

 %

 Operating expenses for the
year ended December 31, 2024 decreased by $11,155,987, or 24%, as a result of the following items:

 Human resource costs, including benefits

 $
 (1,810,417
)

 Travel and entertainment

 118,277

 Other general and administration costs

 Professional fees and consulting costs

 (1,151,589
)

 Facilities and other expenses

 (35,677
)

 Depreciation and amortization

 (277,712
)

 Long-term asset impairment

 (3,935,139
)

 Other research and deployment costs, excluding human resources and travel and entertainment

 (3,537,604
)

 Other sales and marketing costs, excluding human resources and travel and entertainment

 (526,126
)

 $
 (11,155,987
)

 The decrease in operating
expenses was primarily due to:

 (i)
 A decrease of approximately $1,810,000 in human resource costs, of
which approximately $1,065,000 relates to reduced headcount at OAS and synergies achieved by integrating American Robotics and Airobotics,
and a decrease of approximately $937,000 related to a decreased headcount and bonus expense at Ondas Networks and Ondas Holdings, partially
offset by an increase of approximately $192,000 in stock-based compensation at the Company due to new warrants issued during the year
ended December 31, 2024;

 (ii)

 A decrease of approximately $1,152,000 in professional fees and consulting costs, of which approximately $1,596,000 relates to legal and accounting fee costs, primarily for costs incurred during the year ended December 31, 2023 for a public offering in 2023 that was not consummated, the acquisition of Airobotics, and legal fees surrounding the acquisition of Ardenna, which were partially recovered in the year ended December 31, 2024, partially offset by an increase of approximately $444,000 related to increased use of third-party contractors and consultants;

 (iii)
 A decrease of approximately $3,935,000 in long-term asset impairment related to impairment of our long-term
equity investment of $1,500,000 and impairment of the American Robotics Waltham Lease right-of-use asset and the associated leasehold
improvement and furniture and fixtures of approximately $2,511,000 recognized during the year ended December 31, 2023;

 (iv)
 A decrease of approximately $3,538,000 in other research and development costs, excluding human resources
and travel and entertainment, of which approximately $592,000 relates to settlement of all amounts due to a vendor under previous development
and manufacturing agreements during the year ended December 31, 2024 at American Robotics, approximately $1,368,000 relates to one-time
costs incurred during the year ended December 31, 2023 associated with terminating a development contract at American Robotics, approximately
$274,000 relates to synergies achieved by integrating American Robotics and Airobotics, and approximately $1,304,000 relates to additional
development expenses allocated to cost of goods sold at Ondas Networks; and

 (v)
 A decrease of approximately $526,000 in other sales and marketing costs, excluding human resources and
travel and entertainment, primarily related to a decrease in use of third-party contractors and consultants.

 Operating Loss

 2024

 2023

 Decrease

 Operating loss

 $
 (34,609,304
)

 $
 (39,729,300
)

 $
 5,119,996

 As a result of the foregoing,
our operating loss decreased by $5,119,996, or 13%, to $34,609,304 for the year ended December 31, 2024, compared with $39,729,300 for
the year ended December 31, 2023. Operating loss decreased primarily as a result of a decrease in operating expenses as described above,
partially offset by decreased revenue and gross margin for the year ended December 31, 2024.

 Total Other Income (Expense), net

 2024

 2023

 Decrease

 Total other income (expense), net

 $
 (3,398,453
)

 $
 (5,115,572
)

 $
 1,717,119

 Total other expense, net,
decreased by $1,717,119, to $3,398,453 for the year ended December 31, 2024, compared with $5,115,572 for the year ended December 31,
2023. Total other expense, net decreased primarily as a result of a decrease of approximately $574,000 from the change in fair value of
government grant liability; a decrease in interest expense of approximately $534,000 primarily related to amortization of debt discount
and debt issuance costs; an increase in interest income of approximately $111,000 due to interest earned on cash deposits; a decrease
of approximately $161,000 in other expense primarily related to an impairment of deferred offering costs of approximately $116,000 related
to the termination of the ATM Agreement during the year ended December 31, 2023; and a decrease in foreign exchange loss, net of approximately
$337,000.

 Net Loss

 2024

 2023

 Decrease

 Net Loss

 $
 (38,007,757
)

 $
 (44,844,872
)

 $
 6,837,115

 As a result of the net effects
of the foregoing, net loss decreased by $6,837,115, or 15%, to $38,007,757 for the year ended December 31, 2024, compared with $44,844,872
for the year ended December 31, 2023. Net loss per share of common stock, basic and diluted, was $(0.61) for the year ended December 31,
2024, compared with $(0.88) for the year ended December 31, 2023.

 Summary of (Uses) and Sources of Cash

 2024

 2023

 Net cash used in operating activities

 $
 (33,469,623
)

 $
 (34,019,519
)

 Net cash provided by (used in) investing activities

 (1,731,676
)

 536,273

 Net cash provided by financing activities

 50,178,620

 18,730,150

 Increase (decrease) in cash, cash equivalents, and restricted cash

 14,977,321

 (14,753,096
)

 Cash, cash equivalents, and restricted cash, beginning of period

 15,022,000

 29,775,096

 Cash, cash equivalents, and restricted cash, end of period

 $
 29,999,321

 $
 15,022,000

 The principal use of cash
in operating activities for the year ended December 31, 2024, was to fund the Company's current expenses primarily related to operating
activities necessary to allow us to service and support customers.

 The decrease in cash flows
used in operating activities of $549,896 was primarily due to a decrease in net loss of approximately $6,837,000, of which approximately
$1,409,000 relates to non-cash and credits, including depreciation, amortization of debt discount and issuance costs, amortization of
intangibles assets and right of use asset, stock-based compensation, and change in fair value of government grant liability; approximately
$4,011,000 relates to non-cash impairment of long-term assets; offset by changes in operating assets and liabilities resulting in a cash
outflow of approximately $867,000.

 The increase in cash flows
used in investing activities of $2,267,949, relates to an increase of approximately $1,452,000 in payments made for purchase of equipment,
software intangibles and patent costs, and a decrease of approximately $47,000 from net of proceeds from sale of equipment, combined with
a decrease of approximately $1,049,000 for cash acquired with the Airobotics acquisition in the year ended December 31, 2023, partially
offset by the decrease of approximately $280,000 for cash paid for asset acquisitions in the year ended December 31, 2023.

 The increase in cash provided
by financing activities of $31,448,470 was due to an increase in net proceeds from convertible debt of approximately $27,687,000, increase
in net proceeds from notes payable of approximately $1,422,000, increase in proceeds from exercise of options and warrants of approximately
$18,000, increase in net proceeds of approximately $110,000 from government grants, and approximately $7,304,000 in net proceeds from
the sale of the Company's Common Stock and warrants. Combined with a decrease of approximately $4,355,000 in cash payments on the
2022 Convertible Exchange Notes and a decrease of approximately $1,140,000 in cash payments for Airobotics related debt. This was partially
offset by a decrease in net proceeds of approximately $10,317,000 from the sale of noncontrolling interest in Ondas Networks and an increase
of approximately $271,000 in cash payments on the government grants liability.

 Liquidity and Capital Resources

 We have incurred losses since
inception and have funded our operations primarily through debt and the sale of capital stock. On December 31, 2024, we had an accumulated
deficit of approximately $236,368,000. On December 31, 2024, we had net long-term borrowings outstanding of approximately $18,057,000
net of debt discount and issuance costs of approximately $1,682,000 and short-term borrowings outstanding of approximately $38,747,000,
net of debt discount and issuance costs of approximately $5,825,000. On December 31, 2024, we had cash and restricted cash of approximately
$29,999,000 and a working capital deficit of approximately $3,056,000. We had approximately $33,470,000 of net cash flows used in operations
for the year ended December 31, 2024.

 In 2024, we raised approximately
$36,997,000 of net proceeds from issuance of convertible notes in Ondas Holdings, Ondas Networks, and OAS; approximately $1,422,000 of
net proceeds from issuance of secured notes in Ondas Networks; approximately $7,304,000 of net proceeds from issuing common stock in Ondas
Holdings, warrants in Ondas Holdings, and warrants in OAS; and approximately $4,375,000 in net proceeds from issuing additional redeemable
preference shares in Ondas Networks and warrants in Ondas Holdings.

 In January 2025, we raised
approximately $931,000 in gross proceeds from issuance of convertible notes in Ondas Networks.

 We expect to fund our operations
for the next twelve months from the filing date of this Annual Report on Form 10-K from the cash on hand as of December 31, 2024, proceeds
from the 2025 financing activity discussed above, gross profits generated from revenue growth, potential prepayments from customers for
purchase orders, potential proceeds from warrants issued and outstanding, and additional funds that we may seek through equity or debt
offerings and/or borrowings under additional notes payable, lines of credit or other sources. There is substantial doubt that the funding
plans will be successful and therefore the conditions discussed above have not been alleviated. As a result, there is substantial doubt
about the Company's ability to continue as a going concern for one year from March 12, 2025, the date the Consolidated Financial
Statements were available to be issued.

 Our future capital requirements
will depend upon many factors, including progress with developing, manufacturing and marketing our technologies, the time and costs involved
in preparing, filing, prosecuting, maintaining and enforcing patent claims and other proprietary rights, our ability to establish collaborative
arrangements, marketing activities and competing technological and market developments, including regulatory changes and overall economic
conditions in our target markets. Our ability to generate revenue and achieve profitability requires us to successfully market and secure
purchase orders for our products and services from customers currently identified in our sales pipeline as well as new customers. We also
will be required to efficiently manufacture and deliver equipment on those purchase orders. These activities, including our planned research
and development efforts, will require significant uses of working capital. There can be no assurance that we will generate revenue and
cash as expected in our current business plan. We may seek additional funds through equity or debt offerings and/or borrowings under additional
notes payable, lines of credit or other sources. We do not know whether additional financing will be available on commercially acceptable
terms or at all, when needed. If adequate funds are not available or are not available on commercially acceptable terms, our ability to
fund our operations, support the growth of our business or otherwise respond to competitive pressures could be significantly delayed or
limited, which could materially adversely affect our business, financial conditions, or results of operations.

 In addition, the global economy
has recently seen a rise in tariffs and threats of tariffs. While tariffs have not had a material impact on our business, financial condition
or results of operations to date, new tariffs could increase the costs of raw materials and other goods, both for us and our suppliers,
which could impact our business, particularly as we begin to scale our manufacturing operations.

 Off-Balance Sheet Arrangements

 As of December 31, 2024, we
had no off-balance sheet arrangements.

 Critical Accounting Estimates

 The preparation of financial
statements in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP") requires
management to make estimates and assumptions that affect reported amounts and related disclosures in the financial statements. Management
considers an accounting estimate to be critical if:

 requires
assumptions to be made that were uncertain at the time the estimate was made, and

 changes
in the estimate or different estimates that could have been selected could have a material impact on our results of operations or financial
condition.

 We base our estimates and
judgments on our experience, our current knowledge, our beliefs of what could occur in the future, our observation of trends in the industry,
information provided by our customers and information available from other sources. Actual results may differ from these estimates under
different assumptions or conditions. We have identified the following accounting policies and estimates as those that we believe are most
critical to our financial condition and results of operations and that require management's most subjective and complex judgments
in estimating the effect of inherent uncertainties: share-based compensation expense, income taxes, complex derivative financial instruments
and impairment of long-lived assets including intangible assets acquired in business combinations.

 Stock-Based Compensation
Expense. We calculate stock-based compensation expense for option awards ("Stock-based Award(s)") based on the estimated
grant/issue date fair value using the Black-Scholes-Merton option pricing model ("Black-Scholes Model") and recognize the
expense on a straight-line basis over the vesting period. We account for forfeitures as they occur. The Black-Scholes Model requires the
use of a number of assumptions including volatility of the stock price, the weighted average risk-free interest rate, and the vesting
period in determining the fair value of Stock-based Awards. The expected term is based on the "simplified method." Under this
method, the term is estimated using the weighted average of the service vesting period and contractual term of the option award. As the
Company does not yet have sufficient history of its own volatility, the Company has identified several public entities of similar complexities
and industry and calculates historical volatility based on the volatilities of these companies. Although we believe our assumptions used
to calculate share-based compensation expense are reasonable, these assumptions can involve complex judgments about future events, which
are open to interpretation and inherent uncertainty. In addition, significant changes to our assumptions could significantly impact the
amount of expense recorded in a given period.

 We recognize restricted stock
unit expense over the period of vesting or period that services will be provided. Compensation associated with shares of Common Stock
issued or to be issued to consultants and other non-employees is recognized over the expected service period beginning on the measurement
date, which is generally the time the Company and the service provider enter into a commitment whereby the Company agrees to grant shares
in exchange for the services to be provided.

 Income Taxes. As part
of the process of preparing our Consolidated Financial Statements, we are required to estimate income taxes in each of the jurisdictions
in which we operate. Our provision for income taxes is determined using the asset and liability approach to account for income taxes.
A current liability is recorded for the estimated taxes payable for the current year. Deferred tax assets and liabilities are recorded
for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets
and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using the enacted tax rates in effect
for the year in which the timing differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities
of changes in tax rates or tax laws are recognized in the provision for income taxes in the period that includes the enactment date. Valuation
allowances are established, when necessary, to reduce deferred tax assets to the amount more-likely-than-not to be realized. Changes in
valuation allowances will flow through the statement of operations unless related to deferred tax assets that expire unutilized or are
modified through translation, in which case both the deferred tax asset and related valuation allowance are similarly adjusted. Where
a valuation allowance was established through purchase accounting for acquired deferred tax assets, any future change will be credited
or charged to income tax expense. See Note 13 – Income Taxes in the accompanying Consolidated Financial Statements for discussion
related to Tax Reform.

 The determination of our provision
for income taxes requires significant judgment, the use of estimates, and the interpretation and application of complex tax laws. In the
ordinary course of our business, there are transactions and calculations for which the ultimate tax determination is uncertain. In spite
of our belief that we have appropriate support for all the positions taken on our tax returns, we acknowledge that certain positions may
be successfully challenged by the taxing authorities. We determine the tax benefits more likely than not to be recognized with respect
to uncertain tax positions. Although we believe our recorded tax assets and liabilities are reasonable, tax laws and regulations are subject
to interpretation and inherent uncertainty; therefore, our assessments can involve both a series of complex judgments about future events
and rely on estimates and assumptions. Although we believe these estimates and assumptions are reasonable, the final determination could
be materially different than that which is reflected in our provision for income taxes and recorded tax assets and liabilities.

 Complex Derivative Financial
Instruments. From time to time, we sell common stock, and we issue convertible debt, both with common stock purchase warrants, which
may include terms requiring conversion price or exercise price adjustments based on subsequent issuance of securities at prices lower
than those in the agreements of such securities. In these situations, the instruments may be accounted for as liabilities and recorded
at fair value each reporting period. Due to the complexity of the agreement, we use an outside expert to assist in providing the mark
to market fair valuation of the liabilities over the reporting periods in which the original agreement was in effect. It was determined
that a Binomial Lattice option pricing model using a Monte Carlo simulation would provide the most accuracy given all the potential variables
encompassing a future dilutive event. This model incorporated transaction assumptions such as our stock price, contractual terms, maturity,
risk free rates, as well as estimates about future financings, volatility, and holder behavior. Although we believe our estimates and
assumptions used to calculate the fair valuation liabilities and related expense were reasonable, these assumptions involved complex judgments
about future events, which are open to interpretation and inherent uncertainty. In addition, significant changes to our assumptions could
significantly impact the amount of expense recorded in a given period.

 Impairment of Long-Lived
Assets. Carrying values of property and equipment and finite-lived intangible assets are reviewed for impairment whenever events or
changes in circumstances indicate that their carrying values may not be recoverable. If impairment indicators are present, we determine
whether an impairment loss should be recognized by testing the applicable asset or asset group's carrying value for recoverability.
This assessment requires the exercise of judgment in assessing the future use of and projected value to be derived from the eventual disposal
of the assets to be held and used. Assessments also consider changes in asset utilization, including the temporary idling of capacity
and the expected timing for placing this capacity back into production. If the carrying value of the assets are not recoverable, then
a loss is recorded for the difference between the assets' fair value and respective carrying value. The fair value of the assets
is determined using an "income approach" based upon a forecast of all the expected discounted future net cash flows associated
with the subject assets. Some of the more significant estimates and assumptions include: market size and growth, market share, projected
selling prices, manufacturing cost and discount rate. Our estimates are based upon historical experience, commercial relationships, market
conditions and available external information about future trends.

 Recently Accounting Pronouncements and SEC Rules

 See Note 2 to our Consolidated
Financial Statements included elsewhere in this Form 10-K for recently adopted accounting pronouncements and SEC rules and recently issued
accounting pronouncements not yet adopted as of the date of this report.

 Item 7A. Quantitative and Qualitative
Disclosures about Market Risk.

 We are a smaller reporting company as defined by
Rule 229.10(f)(1) and are not required to provide information under this item.

 Item 8. Financial Statements and
Supplementary Data.

 Financial statements begin on page F-1 following
this Report.

 Index to Financial Statements

 Page

 Report of Independent Registered Public Accounting Firms [PCAOB No. 89 ]

 Consolidated Balance Sheets as of December 31, 2024 and 2023

 Consolidated Statements of Operations for the Years Ended December 31, 2024 and 2023

 Consolidated Statements of Changes in Stockholders' Equity for the Years Ended December 31, 2024 and 2023

 Consolidated Statements of Cash Flows for the Years Ended December 31, 2024 and 2023

 Notes to the Consolidated Financial Statements

 F- 1

 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING
FIRM

 To the Board of Directors and

Stockholders of Ondas Holdings Inc.

 Opinion on the Financial Statements

 We have audited the accompanying consolidated balance sheets of Ondas
Holdings, Inc. (the Company) as of December 31, 2024 and 2023, and the related statements of operations, stockholders' equity, and
cash flows for each of the years in the two-year period ended December 31, 2024, and the related notes (collectively referred to as the
financial statements). In our opinion, the financial statements present fairly, in all material respects, the financial position of the
Company as of December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the years in the two-year period
ended December 31, 2024, in conformity with accounting principles generally accepted in the United States of America.

 Going Concern

 The accompanying financial statements have been prepared assuming that
the Company will continue as a going concern. As discussed in Note 1 to the consolidated financial statements, the Company has experienced
recurring losses from operations, negative cash flows from operations and a working capital deficit as of December 31, 2024. The consolidated
financial statements do not include any adjustments that might result from the outcome of this uncertainty.

 Basis for Opinion

 These financial statements are the responsibility
of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our
audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are
required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and
regulations of the Securities and Exchange Commission and the PCAOB.

 We conducted our audits in accordance with the
standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged
to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding
of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company's
internal control over financial reporting. Accordingly, we express no such opinion.

 Our audits included performing procedures to assess
the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond
to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.
Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating
the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

 Critical Audit Matters

 The critical audit matters communicated below
are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to
the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our
especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion
on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions
on the critical audit matters or on the accounts or disclosures to which they relate.

 F- 2

 Excess and obsolete inventory reserve

 As discussed in Note 2 to the consolidated financial
statements, management analyzes inventory for slow-moving and excess inventories on a recurring basis. Management establishes reserve
for excess and obsolete inventories based on historical and projected sales volumes and anticipated selling prices. Inventory that is
in excess of current and projected use is reduced by an allowance to a level that approximates its estimate of future demand. Inventory
that is in excess of current and projected use is reduced by an allowance to a level that approximates its estimate of future demand.
As of December 31, 2024, the Company has inventories of $9.8 million, net of excess quantities and obsolescence reserves.

 We identified the Ondas Networks reserve for excess quantities and
obsolete inventory as a critical audit matter because of the significant estimates and assumptions management makes to quantify the reserve.
Subjective auditor judgment was required in evaluating whether historical sales experience is indicative of future product demand, as
future product demand is based on the outcome of uncertain future events.

 How the Critical Audit Matter Was Addressed
in the Audit

 We performed the following audit procedures, among others, to test
management's estimate of inventory:

 –

 We evaluated the reasonableness of the Company's excess and obsolete
reserve policy, considering historical experience and the underlying assumptions and judgements used in the calculation.

 –

 Tested the accuracy and completeness of the underlying data used in
the reserve calculations.

 –

 Recomputed the mathematical accuracy of the Company's reserve
calculations.

 –

 Tested the significant assumptions and the underlying inputs used by
the Company in its analysis including historical sales trends, expectations regarding future demand, product life cycles and other relevant
factors.

 /s/ Rosenberg Rich Baker Berman, P.A.

 We have served as the Company's auditor since 2018.

 Somerset, New Jersey

 F- 3

 CONSOLIDATED BALANCE SHEETS

 2024

 2023

 ASSETS

 Current Assets:

 Cash

 $
 29,958,106

 $
 14,979,436

 Restricted cash

 41,215

 42,564

 Accounts receivable, net

 5,223,182

 3,429,974

 Inventory, net

 9,821,692

 2,186,646

 Other current assets

 2,476,356

 2,967,619

 Total current assets

 47,520,551

 23,606,239

 Property and equipment, net

 2,586,691

 4,175,958

 Other Assets:

 Goodwill, net of accumulated impairment charges

 Intangible assets, net

 27,178,057

 31,329,182

 Deposits and other assets

 663,073

 599,517

 Operating lease right of use assets

 3,921,995

 4,701,865

 Total other assets

 59,515,046

 64,382,485

 Total assets

 $
 109,622,288

 $
 92,164,682

 LIABILITIES, TEMPORARY EQUITY, AND STOCKHOLDERS' EQUITY

 Current Liabilities:

 Accounts payable

 $
 5,659,643

 $
 5,177,022

 Operating lease liabilities

 1,121,565

 685,099

 Accrued expenses and other current liabilities

 4,719,214

 3,587,877

 Notes payable, net of unamortized debt discount and issuance costs of $ 226,785 and $ 0, respectively, related party

 1,273,215

 -

 Convertible note payable, net of unamortized debt discount and issuance cost of $ 362,237 and $ 0, respectively, related party

 5,137,763

 -

 Convertible note payable, net of debt discount and issuance cost of $ 5,236,362 and $ 1,968,411, respectively

 31,947,445

 25,692,505

 Deferred revenue

 329,025

 276,944

 Government grant liability

 388,752

 520,657

 Total current liabilities

 50,576,622

 35,940,104

 Long-Term Liabilities:

 Notes payable

 300,000

 300,000

 Convertible notes payable, net of current, net of unamortized debt discount and issuance cost of $ 1,681,784 and $ 391,718, respectively

 15,568,216

 2,812,156

 Accrued interest

 20,041

 26,844

 Government grant liability net of current

 2,168,430

 2,229,047

 Operating lease liabilities, net of current

 4,961,967

 5,800,710

 Other liabilities

 82,500

 -

 Total long-term liabilities

 23,101,154

 11,168,757

 Total liabilities

 73,677,776

 47,108,861

 Commitments and Contingencies (Note 14)

 Temporary Equity

 Redeemable noncontrolling interest

 19,361,205

 11,920,694

 Stockholders' Equity

 Preferred stock – par value $ 0.0001; 5,000,000 shares authorized
at December 31, 2024 and December 31, 2023, respectively, and none issued or outstanding at December 31, 2024 and December 31, 2023, respectively

 -

 -

 Preferred stock, Series A – par value $ 0.0001; 5,000,000 shares
authorized at December 31, 2024 and December 31, 2023, respectively, and none issued or outstanding at December 31, 2024 and December
31, 2023, respectively

 -

 -

 Common stock – par value $ 0.0001; 300,000,000 shares authorized
at December 31, 2024 and 2023; 93,173,191 and 61,940,878 issued and outstanding, at December 31, 2024 and December 31, 2023, respectively

 9,317

 6,194

 Additional paid in capital

 252,941,813

 231,488,999

 Accumulated deficit

 ( 236,367,823
)

 ( 198,360,066
)

 Total stockholders' equity

 16,583,307

 33,135,127

 Total liabilities and stockholders' equity

 $
 109,622,288

 $
 92,164,682

 The accompanying footnotes
are an integral part of these Consolidated Financial Statements.

 F- 4

 CONSOLIDATED STATEMENTS OF OPERATIONS

 Years Ended

 2024

 2023

 Revenues, net

 $

 $

 6,847,511

 9,310,256

 Gross profit

 345,183

 6,381,174

 Operating expenses:

 General and administration

 17,141,882

 21,556,976

 5,336,204

 5,908,263

 12,476,401

 17,145,235

 Long-term equity investment impairment

 -

 1,500,000

 Total operating expenses

 34,954,487

 46,110,474

 Operating loss

 ( 34,609,304
)

 ( 39,729,300
)

 Other income (expense), net

 Other income (expense), net

 ( 19,890
)

 ( 180,904
)

 Change in fair value of government grant liability

 94,962

 ( 478,721
)

 Interest income

 234,930

 123,874

 Interest expense

 ( 3,620,258
)

 ( 4,154,759
)

 Foreign exchange loss, net

 ( 88,197
)

 ( 425,062
)

 Total other income (expense), net

 ( 3,398,453
)

 ( 5,115,572
)

 Loss before income taxes

)

)

 Provision for income taxes

 -

 -

 Net loss

 $
)

 $
)

 Less preferred dividends attributable to noncontrolling interest

 1,504,138

 512,207

 Less deemed dividends attributable to accretion of redemption value

 2,907,567

 1,001,538

 Net loss attributable to common stockholders

 ( 42,419,462
)

 ( 46,358,617
)

 Net loss per share - basic and diluted

 $
 ( 0.61
)

 $
 ( 0.88
)

 Weighted average number of common shares outstanding, basic and diluted

 69,917,062

 52,740,215

 The accompanying footnotes are an integral part
of these Consolidated Financial Statements.

 F- 5

 CONSOLIDATED STATEMENTS OF STOCKHOLDERS'
EQUITY

 Redeemable
 Noncontrolling Interest

 Common Stock

 Additional
 Paid in

 Accumulated

 Total
 Stockholders'

 Shares

 Shares

 Capital

 Deficit

 Equity

 Balance, January 1, 2023

 -

 $
 -

 44,108,661

 $
 4,411

 $
 211,733,690

 $
 ( 153,515,194
)

 $
 58,222,907

 Sale of redeemable preferred stock in Ondas Networks, net of issuance costs

 429,123

 10,406,949

 -

 -

 ( 307,665
)

 -

 ( 307,665
)

 Issuance of warrants in connection with the sale of redeemable preferred stock in Ondas Networks

 -

 -

 -

 -

 4,593,051

 -

 4,593,051

 Preferred dividends attributable to redeemable noncontrolling interest

 -

 512,207

 -

 -

 ( 512,207
)

 -

 ( 512,207
)

 Accretion of redeemable preferred stock in Ondas Networks

 -

 1,001,538

 -

 -

 ( 1,001,538
)

 -

 ( 1,001,538
)

 Issuance of shares in connection with acquisition of Airobotics, Ltd.

 -

 -

 2,844,291

 5,261,654

 -

 5,261,938

 Issuance of shares in connection with acquisition of the assets of Iron Drone, Ltd.

 -

 -

 46,129

 85,795

 -

 85,800

 Assumption of vested stock options in connection with acquisition of Airobotics, Ltd.

 -

 -

 -

 -

 700,690

 -

 700,690

 Issuance of shares for payment on convertible debt

 -

 -

 14,028,022

 1,403

 9,847,884

 -

 9,849,287

 Issuance of shares upon exercise of options

 -

 -

 89,042

 40,329

 -

 40,338

 Delivery of shares for vesting of restricted stock units

 -

 -

 824,733

 ( 82
)

 -

 -

 -

 -

 -

 -

 1,047,398

 -

 1,047,398

 Net Loss

 -

 -

 -

 -

 -

)

)

 Balance, December 31, 2023

 429,123

 $
 11,920,694

 61,940,878

 $
 6,194

 $
 231,488,999

 $
 ( 198,360,066
)

 $
 33,135,127

 Sale of redeemable preferred stock in Ondas Networks, net of issuance costs

 108,925

 3,028,806

 -

 -

 ( 124,965
)

 -

 ( 124,965
)

 Issuance of warrants in connection with the sale of redeemable preferred stock in Ondas Networks

 -

 -

 -

 -

 1,471,194

 -

 1,471,194

 Preferred dividends attributable to redeemable noncontrolling interest

 -

 1,504,138

 -

 -

 ( 1,504,138
)

 -

 ( 1,504,138
)

 Accretion of redeemable preferred stock in Ondas Networks

 -

 2,907,567

 -

 -

 ( 2,907,567
)

 -

 ( 2,907,567
)

 Sale of common stock and warrants, net of issuance costs

 -

 -

 8,949,405

 6,348,702

 -

 6,349,597

 Issuance of warrants in Ondas Autonomous Systems, in connection with sale of common stock

 -

 -

 -

 -

 954,737

 -

 954,737

 Issuance of warrants in Ondas Networks, in connection with note payable

 -

 -

 -

 -

 556,554

 -

 556,554

 Issuance of warrants in Ondas Networks, in connection with convertible note payable

 -

 -

 -

 -

 767,661

 -

 767,661

 Settlement of development agreement

 -

 -

 320,026

 342,396

 -

 342,428

 Issuance of shares for payment on convertible debt

 -

 -

 21,284,556

 2,129

 14,225,332

 -

 14,227,461

 Issuance of shares upon exercise of options and warrants

 -

 -

 123,860

 57,778

 -

 57,790

 Delivery of shares for vesting of restricted stock units

 -

 -

 554,466

 ( 55
)

 -

 -

 -

 -

 -

 -

 1,265,185

 -

 1,265,185

 Net Loss

 -

 -

 -

 -

 -

)

)

 Balance, December 31, 2024

 538,048

 $
 19,361,205

 93,173,191

 $
 9,317

 $
 252,941,813

 $
 ( 236,367,823
)

 $
 16,583,307

 The accompanying footnotes
are an integral part of these Consolidated Financial Statements.

 F- 6

 CONSOLIDATED STATEMENTS OF CASH FLOWS

 Years Ended

 2024

 2023

 CASH FLOWS FROM OPERATING ACTIVITIES

 Net loss

 $

)

 $

)

 Adjustments to reconcile net loss to net cash flows used in operating activities:

 Depreciation

 602,304

 844,833

 Amortization of debt discount and issuance cost

 2,527,102

 3,139,779

 Amortization of intangible assets

 4,220,436

 4,147,092

 Amortization of right of use asset

 841,895

 1,060,398

 Provision for obsolete inventory

 120,790

 -

 Credit losses

 992,571

 1,050,000

 Retirement of assets

 1,578

 52,595

 Loss on intellectual property

 27,670

 12,223

 Gain on termination of operating lease

 ( 12,256

)

 -

 Impairment of long-term equity investment

 -

 1,500,000

 Impairment of right of use asset and leasehold improvements

 -

 1,383,537

 Impairment of property and equipment

 -

 1,127,768

 Change in fair value of government grant liability

 ( 214,891

)

 427,208

 1,265,185

 1,047,398

 Changes in operating assets and liabilities:

 Cash paid for right of use asset

 ( 272,262

)

 -

 Accounts receivable

 ( 2,890,779

)

 ( 4,263,453

)

 Inventory

 ( 5,466,297

)

 1,481,078

 Other current assets

 491,263

 ( 415,217

)

 Deposits and other assets

 ( 63,556

)

 ( 318,460

)

 Accounts payable

 1,155,590

 1,241,951

 Accrued expenses and other current liabilities

 1,151,994

 ( 494,029

)

 Deferred revenue

 157,081

 ( 1,387,099

)

 Operating lease liability

 ( 179,784

)

 ( 812,249

)

 Other liabilities

 82,500

 -

 Net cash flows used in operating activities

 ( 33,469,623

)

 ( 34,019,519

)

 CASH FLOWS FROM INVESTING ACTIVITIES

 Patent costs

 ( 36,540

)

 ( 70,081

)

 Purchase of equipment

 ( 1,636,395

)

 ( 211,035

)

 Proceeds from sale of equipment

 1,700

 48,768

 Purchase of software intangible

 ( 60,441

)

 -

 Cash paid for Iron Drone asset acquisition

 -

 ( 135,000

)

 Cash acquired on the acquisition of Airobotics Ltd.

 -

 1,049,454

 Cash paid for Field of View LLC asset acquisition

 -

 ( 145,833

)

 Net cash flows provided by (used in) investing activities

 ( 1,731,676

)

 536,273

 CASH FLOWS FROM FINANCING ACTIVITIES

 Proceeds from exercise of stock options and warrants

 57,790

 40,338

 Proceeds from convertible notes payable, net of issuance costs, related party

 5,436,897

 -

 Proceeds from convertible notes payable, net of issuance costs

 31,560,009

 9,309,513

 Proceeds from notes payable, net of issuance costs, related party

 1,422,186

 -

 Proceeds from government grant

 299,838

 189,752

 Proceeds from sale of common stock and warrants, net of issuance costs

 7,304,334

 -

 Proceeds from sale of redeemable preferred stock in Ondas Networks, net of issuance costs

 4,375,035

 14,692,335

 Payments on convertible notes payable

 -

 ( 4,354,911

)

 Payments on government grant liability

 ( 277,469

)

 ( 6,576

)

 Payments on loan payable

 -

 ( 1,140,301

)

 Net cash flows provided by financing activities

 50,178,620

 18,730,150

 Increase (decrease) in cash, cash equivalents, and restricted cash

 14,977,321

 ( 14,753,096

)

 Cash, cash equivalents, and restricted cash beginning of period

 15,022,000

 29,775,096

 Cash, cash equivalents, and restricted cash end of period

 $

 29,999,321

 $

 15,022,000

 SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:

 Cash paid for interest

 $

 21,803

 $

 176,542

 Cash paid for income taxes

 $

 -

 $

 -

 SUPPLEMENTAL SCHEDULE OF NON-CASH FINANCING ACTIVITIES:

 Preferred dividends attributable to redeemable noncontrolling interest

 $

 1,504,138

 $

 512,207

 Accretion of redeemable preferred stock in Ondas Networks

 $

 2,907,567

 $

 1,001,538

 Common stock, vested stock options, and warrants in relation to the acquisition of Airobotics, Ltd.

 $

 -

 $

 5,962,628

 Common stock in relation to acquisition of the assets of Iron Drone, Ltd.

 $

 -

 $

 85,000

 Debt exchanged for common stock

 $

 14,227,461

 $

 9,849,287

 Warrants in relation to sale of redeemable preferred stock in Ondas Networks

 $

 1,471,194

 $

 4,593,051

 Warrants in relation to sale of common stock

 $

 2,198,559

 $

 -

 Warrants in Ondas Autonomous Systems, in relation to sale of common stock

 $

 954,737

 $

 -

 Warrants in Ondas Networks, in relation to notes payable and convertible notes payable

 $

 1,324,215

 $

 -

 Non-cash consideration for settlement of development agreement payable

 $

 342,428

 $

 -

 Transfer of equipment into inventory

 $

 2,289,539

 $

 -

 Operating leases right-of-use assets obtained in exchange of lease liabilities

 $

 -

 $

 3,875,700

 The accompanying footnotes are an integral part
of these Consolidated Financial Statements.

 F- 7

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 NOTE 1 – DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION

 The Company

 Ondas Holdings Inc. ("Ondas Holdings", "Ondas",
the "Company," "we," or "our") was originally incorporated in Nevada on December 22, 2014, under the
name of Zev Ventures Incorporated. On September 28, 2018, we acquired Ondas Networks Inc., a Delaware corporation ("Delaware Networks"),
and changed our name to Ondas Holdings Inc. On August 5, 2021, we acquired American Robotics, Inc. ("American Robotics" or
"AR"), a Delaware corporation. On January 23, 2023, we acquired Airobotics, Ltd. ("Airobotics"), an Israeli-based
developer of autonomous drone systems. See Note 5 – Goodwill and Business Acquisition. On December 6, 2023, the Company formed Ondas
Autonomous Holdings Inc. ("OAH"), a Nevada corporation, as an intermediate holding company which now wholly-owns American
Robotics and Airobotics. On August 8, 2024, the Company filed a certificate of amendment with the Secretary of State of the State of Nevada,
amending Ondas Autonomous Holdings Inc.'s name to Ondas Autonomous Systems Inc. ("OAS"). On August 7, 2024, the Company
formed Ondas Networks Texas Inc., a Texas corporation and wholly owned subsidiary of the Company ("Texas Networks"). Pursuant
to a certain Agreement and Plan of Merger, dated August 19, 2024, Delaware Networks merged with and into Texas Networks (the "Merger")
with Texas Networks being the surviving entity resulting from the Merger and shall continuing to exist and being governed by the laws
of the State of Texas under the corporate name "Ondas Networks Inc." ("Ondas Networks").

 As a result, Ondas Networks,
OAS, American Robotics and Airobotics became our subsidiaries. Ondas' corporate headquarters are located in Boston, Massachusetts.
Ondas Networks has offices and facilities in Sunnyvale, California, American Robotics' offices and facilities are located in Sparks,
Maryland, and Airobotics' offices and facilities are located in Petah Tikva, Israel.

 Business Activity

 Ondas is a leading provider
of private wireless, drone, and automated data solutions through its subsidiaries Ondas Networks, OAS, Airobotics, and American Robotics.
Ondas Networks provides wireless connectivity solutions. OAS provides drone and automated data solutions through its subsidiaries Airobotics
and American Robotics. Ondas Networks and OAS together provide users in rail, energy, mining, public safety and critical infrastructure
and government markets with improved connectivity, data collection capabilities, and data collection and information processing capabilities.
We operate Ondas Networks and OAS as separate business segments, and the following is a discussion of each segment.

connectivity solutions enabling mission-critical Industrial Internet applications and services. We refer to these applications as the
Mission-Critical Internet of Things ("MC-IoT"). Our wireless networking products are applicable to a wide range of MC-IoT
applications, which are most often located at the very edge of large industrial networks. These applications require secure, real-time
connectivity with the ability to process large amounts of data at the edge of large industrial networks. Such applications are required
in all of the major critical infrastructure markets, including rail, electric grids, drones, oil and gas, and public safety, homeland
security and government, where secure, reliable and fast operational decisions are required in order to improve efficiency and ensure
a high degree of safety and security.

 F- 8

 We design, develop, manufacture,
sell and support FullMAX, our patented, Software Defined Radio ("SDR") platform for secure, licensed, private, wide-area broadband
networks. Our customers install FullMAX systems in order to upgrade and expand their legacy wide-area network infrastructure. We have
targeted the North American freight rail operators for the initial adoption of our FullMAX platform. These rail operators currently operate
legacy communications systems utilizing serial-based narrowband wireless technologies for voice and data communications. These legacy
wireless networks have limited data capacity and are unable to support the adoption of new, intelligent train control and management systems.
Our MC-IoT intellectual property has been adopted by the Institute of Electrical and Electronics Engineers ("IEEE"), the leading
worldwide standards body in data networking protocols, and forms the core of the IEEE 802.16 standard. Because standards-based communications
solutions are preferred by our mission-critical customers and ecosystem partners, we continue to take a leadership position in IEEE as
it relates to wireless networking for industrial markets. As such, management believes this standards-based approach supports the adoption
of our technology across a burgeoning ecosystem of global partners and end markets.

 Our software-based FullMAX
platform is an important and timely upgrade solution for privately-owned and operated wireless wide-area networks, leveraging Internet
Protocol-based communications to provide more reliability and data capacity for our mission-critical infrastructure customers. We believe
industrial and critical infrastructure markets throughout the globe have reached an inflection point where legacy serial and analog based
protocols and network transport systems no longer meet industry needs. In addition to offering enhanced data throughput, FullMAX is an
intelligent networking platform enabling the adoption of sophisticated operating systems and equipment supporting next-generation MC-IoT
applications over wide field areas. These new MC-IoT applications and related equipment require more processing power at the edge of large
industrial networks and the efficient utilization of network capacity and scarce bandwidth resources which can be supported by the "Fog-computing"
capability integrated in our end-to-end network platform. Fog-computing utilizes management software to enable edge compute processing
and data and application prioritization in the field enabling our customers more reliable, real-time operating control of these new, intelligent
MC-IoT equipment and applications at the edge.

 Ondas Autonomous Systems (OAS)

 Our OAS business unit develops
and integrates drone-based solutions focusing on high-performance critical applications for government and Tier-1 commercial enterprises.
Ondas is marketing comprehensive drone-based solutions to address the needs of governmental and commercial customers based on its commercially
available platforms: the Optimus System, a fully autonomous drone platform capable of continuous and multipurpose aerial data capturing
and analytics, and the Iron Drone Raider, a fully autonomous interceptor drone designed to neutralize small hostile drones. Airobotics
acquired the assets of Iron Drone on March 6, 2023.

 Our unique, fully autonomous
platforms enable cutting-edge aerial capabilities and are designed to serve and protect critical infrastructure and operations. Our business
focuses on end-user entities in defense, homeland security, public safety, smart city, airport authorities, and other governmental entities
together with commercial operators of critical industrial and technology facilities such as oil & gas, seaports, mining, and heavy
construction as well as for data centers and semiconductor fabs. For these industries, OAS provides specialized real-time aerial data
capturing and aerial protection solutions in the most complex environments such as urban areas, sensitive and critical facilities and
field area operations, and high-priority projects. In addition, we offer a wide suite of supplementary, enabling services for successful
implementation such as AI data analytics, data automation, IT implementation, safety planning, certification, training, and maintenance,
handling all the complex aspects of such high-performance drone operations.

 Our portfolio companies, American
Robotics and Airobotics, form a unique, powerful, and synergistic combination covering all the aspects required for successful Aerospace
business together with data technologies and services for digital transformation industries. Our companies specialize in addressing all
the challenges arising along these types of product lifecycles including research and development, manufacturing, certification, and ongoing
support.

 OAS and its portfolio companies
have already gained a track record of industry-leading regulatory successes including the securing of the first-of-its-kind Type Certification
(TC) from the FAA for the Optimus 1-EX UAV on September 25, 2023, becoming the first autonomous security data capture UAV to achieve this
distinction. TC, recognized as the highest echelon of Airworthiness Certification, streamline operational approvals for broad flight operations
over people and infrastructure. The certification verifies the compliance of the system's design with the required FAA airworthiness
and noise standards, ensuring safe operation within the US National Airspace System (NAS) thereby significantly broadening the range of
operational scenarios and scaling up of operations for automated UAS. Achieving FAA Type Certification will enable drone operations beyond-visual-line-of-sight
(BVLOS) without a human operator on-site. With a strong footprint in the US market and worldwide, we believe that OAS is well-positioned
with proven technology, a unique offering, and strong capabilities to strategically transform critical operations with our cutting-edge
drone tech and capabilities.

 F- 9

 Liquidity

 We have incurred losses since
inception and have funded our operations primarily through debt and the sale of capital stock. On December 31, 2024, we had an accumulated
deficit of approximately $ 236,368,000. On December 31, 2024, we had net long-term borrowings outstanding of approximately $ 18,057,000
net of debt discount and issuance costs of approximately $ 1,682,000 and short-term borrowings outstanding of approximately $ 38,747,000,
net of debt discount and issuance costs of approximately $ 5,825,000. On December 31, 2024, we had cash and restricted cash of approximately
$ 29,999,000 and a working capital deficit of approximately $ 3,056,000. We had approximately $ 33,470,000 of net cash flows used in operations
for the year ended December 31, 2024.

 In 2024, we raised approximately
$ 36,997,000 of net proceeds from issuance of convertible notes in Ondas Holdings, Ondas Networks, and OAS; approximately $ 1,422,000 of
net proceeds from issuance of secured notes in Ondas Networks; approximately $ 7,304,000 of net proceeds from issuing common stock in Ondas
Holdings, warrants in Ondas Holdings, and warrants in OAS; and approximately $ 4,375,000 in net proceeds from issuing additional redeemable
preference shares in Ondas Networks and warrants in Ondas Holdings.

 In January 2025, we raised
approximately $ 931,000 in gross proceeds from issuance of convertible notes in Ondas Networks.

 We expect to fund our operations
for the next twelve months from the filing date of this Annual Report on Form 10-K from the cash on hand as of December 31, 2024, proceeds
from the 2025 financing activity discussed above, gross profits generated from revenue growth, potential prepayments from customers for
purchase orders, potential proceeds from warrants issued and outstanding, and additional funds that we may seek through equity or debt
offerings and/or borrowings under additional notes payable, lines of credit or other sources. There is substantial doubt that the funding
plans will be successful and therefore the conditions discussed above have not been alleviated. As a result, there is substantial doubt
about the Company's ability to continue as a going concern for one year from March 12, 2025, the date the Consolidated Financial
Statements were available to be issued.

 Our future capital requirements
will depend upon many factors, including progress with developing, manufacturing and marketing our technologies, the time and costs involved
in preparing, filing, prosecuting, maintaining and enforcing patent claims and other proprietary rights, our ability to establish collaborative
arrangements, marketing activities and competing technological and market developments, including regulatory changes and overall economic
conditions in our target markets. Our ability to generate revenue and achieve profitability requires us to successfully market and secure
purchase orders for our products and services from customers currently identified in our sales pipeline as well as new customers. We also
will be required to efficiently manufacture and deliver equipment on those purchase orders. These activities, including our planned research
and development efforts, will require significant uses of working capital. There can be no assurance that we will generate revenue and
cash as expected in our current business plan. We may seek additional funds through equity or debt offerings and/or borrowings under additional
notes payable, lines of credit or other sources. We do not know whether additional financing will be available on commercially acceptable
terms or at all, when needed. If adequate funds are not available or are not available on commercially acceptable terms, our ability to
fund our operations, support the growth of our business or otherwise respond to competitive pressures could be significantly delayed or
limited, which could materially adversely affect our business, financial conditions, or results of operations.

 F- 10

 NOTE 2 – SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES

 Basis of Presentation

 The Consolidated Financial
Statements include the accounts of the Company and our subsidiaries, Ondas Networks, OAS, American Robotics, and Airobotics. All inter-company
accounts and transactions between these entities have been eliminated in these Consolidated Financial Statements. The functional currency
of the Company and all of our subsidiaries is the U.S. dollar.

 Business Combinations

 We utilize the purchase method
of accounting for business combinations. This method requires, among other things, that results of operations of acquired companies are
included in Ondas' results of operations beginning on the respective acquisition dates and that assets acquired, and liabilities
assumed are recognized at fair value as of the acquisition date. Any excess of the fair value of consideration transferred over the fair
value of the net assets acquired is recognized as goodwill. Contingent consideration liabilities are recognized at the estimated fair
value on the acquisition date; these are recorded in either other accruals within current liabilities (for expected payments in less than
a year) or other non-current liabilities (for expected payments in greater than a year), both on our consolidated balance sheets. Subsequent
changes to the fair value of contingent consideration liabilities are recognized in other income (expense) in the Consolidated Statements
of Operations. Contingent consideration payments made soon after the acquisition date are classified as investing activities in the consolidated
statements of cash flows. Contingent consideration payments not made soon after the acquisition date that are related to the acquisition
date fair value are reported as financing activities in the consolidated statements of cash flows, and amounts paid in excess of the original
acquisition date fair value are reported as operating activities in the consolidated statements of cash flows. The fair value of assets
acquired, and liabilities assumed in certain cases, may be subject to revision based on the final determination of fair value during a
period of time not to exceed 12 months from the acquisition date. Legal costs, due diligence costs, business valuation costs and all other
business acquisition costs are expensed when incurred.

 Goodwill and Intangible Assets

 Goodwill represents the excess
of the purchase price over the fair values of the underlying net assets of an acquired business. The Company tests goodwill for impairment
on an annual basis during the fourth quarter of its fiscal year, or immediately if conditions indicate that such impairment could exist.
The Company evaluates qualitative factors to determine if it is more likely than not that the fair value of a reporting unit is less than
its carrying value and whether it is necessary to perform goodwill impairment process.

 Intangible assets represent
patents, licenses, software and allocation of purchase price to identifiable intangible assets of an acquired business. The Company estimates
the fair value of its reporting units using the fair market value measurement requirement. Intangible assets are evaluated for impairment
when events or changes in business circumstances indicate that the carrying amount of the assets may not be fully recoverable.

 We amortize our intangible
assets with a finite life on a straight-line basis, over 3 years for software; 10 years for patents; 3 - 10 years for developed technology,
 10 years for licenses, trademarks, marketing-related assets and the FAA waiver; 5 years for customer relationships; and 1 year for non-compete
agreements.

 Segment Information

 Operating segments are defined
as components of an entity for which discrete financial information is available and is regularly reviewed by the Chief Operating Decision
Maker ("CODM") in making decisions regarding resource allocation and performance assessment. The Company's CODM is its
Chief Executive Officer. The Company determined it has two reportable segments: Ondas Networks and OAS as the CODM reviews financial information
for these two businesses separately. The Company has no inter-segment sales.

 Use of Estimates

 The process of preparing financial
statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets
and liabilities and disclosure of assets and liabilities at the date of the financial statements. Such management estimates include those
relating to allocation of consideration for business combinations to identifiable tangible and intangible assets, revenue recognition,
inventory write-downs to reflect net realizable value, fair values of financial instruments and goodwill, assumptions used in the valuation
of stock-based awards and valuation allowances against deferred tax assets. Actual results could differ from those estimates.

 F- 11

 Cash, Cash Equivalents, and Restricted Cash

 The Company considers all
highly liquid instruments purchased with an original maturity of three months or less to be cash equivalents. As of December 31, 2024
and 2023, we had no cash equivalents. Restricted cash includes cash that is not readily available for use in the Company's operating
activities. Restricted cash is attributable to minimum cash reserve requirements for Airobotics' credit cards. The Company periodically
monitors its positions with, and the credit quality of the financial institutions with which it invests. Periodically, throughout the
year, and as of December 31, 2024, the Company has maintained balances in excess of federally insured limits. As of December 31, 2024,
the Company was approximately $ 28,873,000 in excess of federally insured limits.

 Accounts Receivable

 Accounts receivable are stated
at a gross invoice amount less an allowance for credit losses as well as net of any discounts or other forms of variable consideration.
We estimate allowance for credit losses by evaluating specific accounts where information indicates our customers may have an inability
to meet financial obligations, such as customer payment history, credit worthiness and receivable amounts outstanding for an extended
period beyond contractual terms. We use assumptions and judgment, based on the best available facts and circumstances, to record an allowance
to reduce the receivable to the amount expected to be collected. These allowances are evaluated and adjusted as additional information
is received. We had no allowance for credit losses as of December 31, 2024 and 2023. During the years ended December 31, 2024 and 2023, we recognized $ 992,571 and $ 1,050,000 of expense related to credit
losses, respectively.

 Inventory

 Inventories, which consist
solely of raw materials, work in process and finished goods, are stated at the lower of cost (first-in, first-out) or net realizable value,
net of reserves for obsolete inventory. We continually analyze our slow-moving and excess inventories. Based on historical and projected
sales volumes and anticipated selling prices, we established reserves. Inventory that is in excess of current and projected use is reduced
by an allowance to a level that approximates its estimate of future demand. Products that are determined to be obsolete are written down
to net realizable value. On December 31, 2024 and 2023, such reserves were $ 221,044 and $ 100,254, respectively.

 Inventory consists of the
following:

 2024

 2023

 Raw Material

 $
 4,354,121

 $
 1,499,727

 Work in Process

 306,016

 782,770

 Finished Goods

 5,382,599

 4,403

 Less Inventory Reserves

 ( 221,044
)

 ( 100,254
)

 Total Inventory, Net

 $
 9,821,692

 $
 2,186,646

 As of December 31, 2024, the Company reclassed
$ 2,289,539 of docking stations and drones, net into inventory, as OAS has shifted their focus from service revenue, selling a data subscription
service to its customers based on the information collected by their autonomous systems, to product revenue, primarily selling their Optimus
System and Iron Drone Raider.

 Property and Equipment

 All additions, including improvements
to existing facilities, are recorded at cost. Maintenance and repairs are charged to expense as incurred. Depreciation of property and
equipment is principally recorded using the straight-line method over the estimated useful lives of the assets. The estimated useful lives
typically are (i) 3 to 7 years for computer equipment, (ii) 5 years for vehicles and docking stations and drones, (iii) 7 - 17 years for
furniture and fixtures, (iv) 5 to 7 years for development equipment, and (v) 3 years for machinery and equipment. Leasehold improvements
are amortized on a straight-line basis over the shorter of the lease term or the estimated useful life of the asset. Upon the disposal
of property, the asset and related accumulated depreciation accounts are relieved of the amounts recorded therein for such items, and
any resulting gain or loss is recorded in operating expenses in the year of disposition.

 F- 12

 Impairment of Long-Lived Assets

 Long-lived assets are evaluated whenever events
or changes in circumstances indicate that the carrying amount may not be recoverable or the useful life has changed. Such indicators include
significant technological changes, adverse changes in market conditions and/or poor operating results. The carrying value of a long-lived
asset group is considered impaired when the projected undiscounted future cash flows are less than its carrying value. The amount of impairment
loss recognized is the difference between the estimated fair value and the carrying value of the asset or asset group. Fair market value
is determined primarily using the projected future cash flows discounted at a rate commensurate with the risk involved. The impairment
of long-lived assets was $ 27,670 and $ 2,523,528 for the years ended December 31, 2024 and 2023, respectively. For additional information
on the asset impairment charges, see Note – 2 Summary of Significant Account Policies, Leases, Note 4 – Property and
Equipment, and Note 6 – Intangibles Assets.

 Research and Development

 Costs for research and development
are expensed as incurred except for research and development equipment with alternative future use. Research and development expenses
consist primarily of salaries, salary-related expenses and costs of contractors and materials.

 Fair Value of Financial Instruments

 Our financial assets and liabilities
measured at fair value on a recurring basis consist primarily of receivables, accounts payable, accrued expenses and short- and long-term
debt. The carrying amount of receivables, accounts payable and accrued expenses approximate our fair value because of the short-term maturity
of such instruments. Our financial assets measured at fair value on a nonrecurring basis include right of use assets, goodwill and intangibles,
which are adjusted to fair value whenever events or changes in circumstances indicate that the carrying amount may not be recoverable
or the useful life has changed. Our estimate of the fair value of right of use assets, goodwill and intangibles are based on expected
future cash flows and actual results may differ from those estimates.

 We have categorized our assets
and liabilities that are valued at fair value on a recurring basis into a three-level fair value hierarchy in accordance with U.S. GAAP.
Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the
principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement
date. The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets and liabilities (Level
1) and lowest priority to unobservable inputs (Level 3).

 Assets and liabilities recorded
in the balance sheets at fair value are categorized based on a hierarchy of inputs, as follows:

 Level 1 --

 Unadjusted quoted prices in active markets for identical assets or liabilities.

 Level 2 --

 Quoted prices for similar assets or liabilities in active markets or inputs that are observable for the asset or liability, either directly or indirectly through market corroboration, for substantially the full term of the financial instrument.

 Level 3 --

 Unobservable inputs for the asset or liability.

 The Company had no Level 3
assets that were required to be valued at fair value as of December 31, 2024. The Company had Level 3 assets that are required to be valued
at fair value as of December 31, 2023, see Note – 2 Summary of Significant Account Policies, Leases, and Note 4 – Property
and Equipment.

 F- 13

 The Company had Level 3 liabilities
that are required to be valued at fair value as of December 31, 2024 and 2023. The fair value of the government grant liability is determined
as the sum of 3 % royalty payments on forecasted future sales, discounted using the effective interest method. As of December 31, 2024,
the Company made the following assumptions: (i) royalty payments will be made on future sales through 2027, and (ii) the effective interest
rate is a range of 17 - 19 %. The following table provides a reconciliation of the beginning and ending balances for the Level 3 government
grant liability measured at fair value using significant unobservable inputs:

 Government
 Grant
 Liability

 Balance as of January 24, 2023

 $
 1,783,403

 Repayment on liability

 ( 6,576
)

 Government grant liability assumed from Iron Drone asset purchase

 307,122

 Fair value adjustment to government grant liability assumed from Iron Drone asset purchase

 48,795

 Government grant proceeds received, adjusted to fair value

 128,803

 Net loss on change in fair value of liability

 488,157

 Balance as of December 31, 2023

 $
 2,749,704

 Repayment on liability

 ( 277,469
)

 Government grant proceeds received, adjusted to fair value

 179,909

 Net gain on change in fair value of liability

 ( 94,962
)

 Balance as of December 31, 2024

 2,557,182

 Deferred Offering Costs

 The Company capitalizes certain
legal, professional accounting and other third-party fees that are directly associated with in-process equity financing as deferred offering
costs until such financing is consummated. After consummation of equity financing, these costs are recorded in stockholders' equity
as a reduction of additional paid-in capital generated as a result of the offering. Should the planned equity financing be abandoned,
the deferred offering costs are expensed immediately as a charge to other income (expense) in the Consolidated Statements of Operations.

 Government Grants

 The government grant liability
was assumed through the acquisition of Airobotics and asset purchase of Iron Drone. Airobotics and Iron Drone received government grants
from the Israel Innovation Authority (formerly: the Office of the Chief Scientist in Israel, "the IIA"), and the grant funds
are repayable to the extent that future economic benefits are expected from the research project that will result in royalty-bearing sales.
A liability for grants received is first measured at fair value using a discount rate that reflects a market rate of interest. The difference
between the amount of the grant received and the fair value of the liability is accounted for as a government grant and recognized as
a reduction of research and development expenses.

 At each reporting date, the
Company evaluates whether there is reasonable assurance that the liability recognized, in whole or in part, will not be repaid (since
the Company will not be required to pay royalties) based on the best estimate of future sales and using the original effective interest
method, which is 17 - 19 %, and if so, the appropriate amount of the liability is derecognized through other income (expense). Amounts paid
as royalties are treated as a reduction of the liability. Royalty payments are due every nine months. There is no maturity date. The liability
exists until it is paid in full through royalty payments or the Company reports to the IIA there will be no further sales.

 F- 14

 Redeemable Noncontrolling Interests

 In 2023 and 2024, Ondas Networks
Inc. entered into multiple agreements with a third party for the sale of redeemable preferred stock in Ondas Networks (see Note 11 –
Redeemable Noncontrolling Interest). The preferred stock accrues dividends at the rate per annum of eight percent ( 8 %) of the original
issue price and can be redeemed at the request of the Holder at any time after the fifth anniversary as follows:

 (i)
 In
respect of the 2023 investments, for the greater of two times the initial investment plus accrued dividends or the amount that would
be due if the Preferred Stock was converted into Common Stock.

 (ii)
 In
respect of the 2024 investment, for the greater of one times the initial investment plus accrued dividends or the amount that would be
due if the Preferred Stock was converted into Common Stock.

 The applicable accounting
guidance requires an equity instrument that is redeemable for cash or other assets to be classified outside of permanent equity if it
is redeemable (a) at a fixed or determinable price on a fixed or determinable date, (b) at the option of the holder, or (c) upon the occurrence
of an event that is not solely within the control of the issuer. As a result, the Company recorded the noncontrolling interest as redeemable
noncontrolling interest and classified it in temporary equity within its consolidated balance sheet initially at its acquisition-date
estimated redemption value or fair value. In addition, the Company has elected to accrete the redeemable noncontrolling interest to the
full redemption value as of the earliest redemption date by accruing dividends at 8 % per annum and accreting the redemption value to two
and one times the initial investment, respectively, using the effective interest rate method.

 Income Taxes

 Income taxes are accounted
for under the asset and liability method. Deferred tax assets and liabilities are recognized for the estimated future tax consequences
attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax
basis. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which
the related temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change
in tax rates is recognized when the rate change is enacted. Valuation allowances are recorded to reduce deferred tax assets to the amount
that will more likely than not be realized. In accordance with U.S. GAAP, we recognize the effect of uncertain income tax positions only
if the positions are more likely than not of being sustained in an audit, based on the technical merits of the position. Recognized uncertain
income tax positions are measured at the largest amount that is greater than 50 % likely of being realized. Changes in recognition or measurement
are reflected in the period in which those changes in judgment occur. We recognize both interest and penalties related to uncertain tax
positions as part of the income tax provision.

 Stock-based Compensation

 We calculate stock-based compensation
expense for option awards ("Stock-based Award(s)") based on the estimated grant/issue date fair value using the Black-Scholes-Merton
option pricing model ("Black-Scholes Model") and recognize the expense on a straight-line basis over the vesting period. We
account for forfeitures as they occur. The Black-Scholes Model requires the use of a number of assumptions including volatility of the
stock price, the weighted average risk-free interest rate, and the vesting period in determining the fair value of Stock-based Awards.
The expected term is based on the "simplified method", due to the Company's limited option exercise history. Under this
method, the term is estimated using the weighted average of the service vesting period and contractual term of the option award. As the
Company does not yet have sufficient history of its own volatility, the Company has identified several public entities of similar size,
complexities and industry and calculates historical volatility based on the volatilities of these companies. Although we believe our assumptions
used to calculate stock-based compensation expense are reasonable, these assumptions can involve complex judgments about future events,
which are open to interpretation and inherent uncertainty. In addition, significant changes to our assumptions could significantly impact
the amount of expense recorded in a given period.

 We recognize restricted stock
unit expense over the period of vesting or period that services will be provided. Compensation associated with shares of the Company's
common stock, par value $ 0.0001 (the "Common Stock"), issued or to be issued to consultants and other non-employees is recognized
over the expected service period beginning on the measurement date, which is generally the time the Company and the service provider enter
into a commitment whereby the Company agrees to grant shares in exchange for the services to be provided.

 F- 15

 Shipping and Handling

 We expense all shipping and
handling costs as incurred. These costs are included in Cost of goods sold on the accompanying Consolidated Statements of Operations.

 Advertising and Promotional Expenses

 We expense advertising and
promotional costs as incurred. We recognized expense of $ 76,008 and $ 182,070 for the years ended December 31, 2024, and 2023, respectively.
These costs are included in Sales and marketing on the accompanying Consolidated Statements of Operations.

 Post-Retirement Benefits

 We have one 401(k) Savings
Plan for US employees that qualifies as a deferred salary arrangement under Section 401(k) of the Internal Revenue Code. Under this 401(k)
Plan, matching contributions are based upon the amount of the employees' contributions subject to certain limitations. We recognized
expense of $ 256,910 and $ 328,357 for the years ended December 31, 2024, and 2023, respectively.

 Airobotics' post-employment
benefits are usually funded by deposits with insurance companies and are classified as defined deposit plans or defined benefit plans.
Airobotics' has defined deposit plans, in accordance with Section 14 of Severance Compensation Israeli Law, 1963, according to which
Airobotics regularly makes its payments without having a legal or implied obligation to make additional payments even if the fund has
not accumulated sufficient amounts to pay all employee benefits, in the current period and in previous periods. Deposits to a defined
benefit plan for severance pay or benefits, are recognized as an expense when deposited with the plan in parallel with receiving work
services from the employee. All of Airobotics' employees in Israel are subject to Section 14 of Severance Compensation Israeli Law.
We recognized expense of $ 823,870 for the year ended December 31, 2024 and $ 624,758 for the period of January 24, 2023 through December
31, 2023 related to these post-employment benefits.

 Revenue Recognition

 We derive our revenue from
product sales, services, and development arrangements. We determine revenue recognition in accordance with ASC 606, Revenue from Contracts
with Customers through the following steps: (1) identification of the contract with a customer; (2) identification of the performance
obligations in the contract; (3) determination of the transaction price; (4) allocation of the transaction price to the performance obligations
in the contract (where revenue is allocated on a relative standalone selling price basis by maximizing the use of observable inputs to
determine the standalone selling price for each performance obligation); and (5) recognition of revenue when, or as, we satisfy a performance
obligation. The Company only applies the five-step model to contracts when it is probable that the entity will collect the consideration
it is entitled to in exchange for the products or services it transfers to the customer.

 Ondas has two business segments
that generate revenue: Ondas Networks and OAS. Ondas Networks is engaged in the development, marketing, and sale of wireless radio systems
for secure, wide area mission-critical, business-to-business networks. Ondas Networks generates revenue primarily from the sale of our
FullMAX System and the delivery of related services, along with non-recurring engineering ("NRE") development projects with
certain customers. OAS generates revenue through the sales of their Optimus System, the Iron Drone Raider, and separately
priced support, maintenance and ancillary services directly related to the sale of the Optimus System and the Iron Drone Raider.

 Product Sales Revenue

 Product revenue is generally
recognized when the customer obtains control of our product, which occurs at a point in time, and may be upon shipment or upon delivery
based on the contractual shipping terms of a contract, or upon installation when the combined performance obligation is not distinct within
the context of the contract.

 Ondas Networks' software
and hardware, and OAS' Optimus System and Iron Drone Raider, are sold with a limited one-year basic warranty included
in the price. The limited one-year basic warranty is an assurance-type warranty, is not a separate performance obligation, and thus no
transaction price is allocated to it. The nature of tasks under the limited one-year basic warranty only provides for remedying defective
product(s) covered by the warranty.

 F- 16

 Service and Subscription Revenue

 Service revenue is comprised
of separately priced support and maintenance sales, as well as ancillary services, directly related to product sales, including product
training, installation, and onsite support. Ancillary service revenues are recognized at the point in time when those services have been
provided to the customer and the performance obligation has been satisfied. The Company allocates the transaction price to the service
based on the stand-alone selling prices of these performance obligations which are stated in our contracts.

 OAS also generates service
revenue by selling a data subscription service to its customers based on the information collected by their autonomous systems. The customer
pays for a monthly, annual, or multi-annual subscription service to remotely access the data collected by their autonomous systems. Data
subscription service revenue is recognized on straight line basis over the length of the customer subscription agreement. If a subscription
payment is received prior to installation and operation of their autonomous systems, it is held in deferred revenue and recognized after
operation commences over the length of the subscription service.

 Development Revenue

 Development revenue is comprised
primarily of non-recurring engineering service contracts to develop software and hardware applications for various customers. For Ondas
Networks, in 2024 and 2023, a significant portion of this revenue is generated from one parent customer whereby Ondas Networks is to develop
such applications to interoperate within the customers infrastructure. For these contracts, Ondas Networks and the customers work cooperatively,
whereby the customers' involvement is to provide technical specifications for the product design, as well as to review and approve
the project progress at various markers based on predetermined milestones. The products developed are not able to be sold to any other
customer and are based in part upon existing Ondas Networks and customer technology. Development revenue is typically recognized over
time using a percentage of completion input method, whereby revenues are recorded on the basis of the Company's estimates of satisfaction
of the performance obligation based on the ratio of actual costs incurred to total estimated costs. The input method is utilized because
management considers it to be the best available measure of progress as the performance obligations are completed.

 Revenue and cost estimates
are regularly monitored and revised based on changes in circumstances. Impacts from changes in estimates of revenue and cost of revenue
are recognized on a cumulative catch-up basis, which recognizes in the current period the cumulative effect of the changes on current
and prior periods base in the performance completed to date.

 Payment Terms

 Ondas Networks' payment
terms are Net 30 days from the date of the invoices for product and services related revenue. OAS's payment terms vary and range
from Net 30 days to Net 60 days from the date of the invoices for product and services related revenue. Payment terms for the majority
of development related revenue carry milestone-related payment obligations which span the contract life. For milestone-based development
contracts, the customer reviews the completed milestone and once approved, makes payment pursuant to the applicable contract.

 Contracts with Multiple Performance Obligations

 Our contracts may contain
more than one of the products and services listed above, each of which is separately accounted for as a distinct performance obligation.
We account for multiple agreements with a single customer as a single contract if the contractual terms and/or substance of those agreements
indicate that they may be so closely related that they are, in effect, parts of a single contract. We allocate the total transaction price
to each distinct performance obligation in a multiple performance obligations arrangement on a relative standalone selling price basis.
The standalone selling price reflects the price we would charge for a specific product or service if it were sold separately in similar
circumstances and to similar customers. If the standalone selling price is not observable through past transactions, we estimate the standalone
selling price considering available information such as market conditions and internally approved pricing guidelines related to the performance
obligations. If a contract contains a single performance obligation, no allocation is required.

 F- 17

 Contract Modification

 Contracts that are modified
to account for changes in contract specifications and requirements are assessed to determine if the modification either creates new or
changes the existing enforceable rights and obligations. Generally, contract modifications are for products or services that are not distinct
from the existing contract due to the inability to use, consume or sell the products or services on their own to generate economic benefits
and are accounted for as if they were part of that existing contract. The effect of a contract modification on the transaction price and
measure of progress for the performance obligation to which it relates, is recognized as an adjustment to revenue (either as an increase
in or a reduction of revenue) on a cumulative catch-up basis. For the years ended December 31, 2024 and 2023, there were no modifications
to contract specifications.

 Disaggregation of Revenue

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

 2024

 2023

 Type of Revenue

 Product revenue

 $
 2,796,178

 $
 12,102,388

 Service and subscription revenue

 2,491,955

 2,126,560

 Development revenue

 1,904,561

 1,462,482

 Total revenue

 $

 $

 2024

 2023

 Timing of Revenue

 Revenue recognized point in time

 $
 4,496,056

 $
 14,071,906

 Revenue recognized over time

 2,696,638

 1,619,524

 Total revenue

 $

 $

 2024

 2023

 Country of Revenue, based on location services were provided or product was shipped to:

 United States

 $
 1,827,114

 $
 5,717,832

 United Arab Emirates

 753,165

 8,521,393

 United Kingdom

 311,214

 995,357

 Israel

 4,283,637

 429,107

 India

 17,564

 27,741

 Total revenue

 $

 $

 F- 18

 Contract Assets and Liabilities

 We recognize a receivable
or contract asset when we perform a service or transfer a good in advance of receiving consideration. A receivable is recorded when our
right to consideration is unconditional and only the passage of time is required before payment of that consideration is due. A contract
asset is recorded when we have recognized revenue over time in accordance with meeting our performance obligation but are unable to invoice
the customer yet based on the contractual invoicing terms. The contract asset is reclassified to a receivable when the right to consideration
becomes unconditional. The table below details the activity in our contract assets during the years ended December 31, 2024 and 2023.
Contract assets are included in Other current assets on the Consolidated Balance Sheet.

 2024

 2023

 Balance at beginning of period

 $
 819,107

 $
 -

 Contract assets recognized

 322,888

 928,995

 Reclassification to Accounts receivable, net

 ( 936,084
)

 ( 109,888
)

 Balance at end of period

 $
 205,911

 $
 819,107

 We recognize a contract liability
(deferred revenue) when we receive consideration from a customer, or if we have the unconditional right to consideration (i.e., a receivable),
prior to satisfying the performance obligation. A contract liability is our obligation to transfer goods or services to a customer for
which we have received consideration, or an amount of consideration is due from the customer. The table below details the activity in
our contract liabilities during the years ended December 31, 2024 and 2023.

 2024

 2023

 Balance, beginning of year

 $

 276,944

 $

 61,508

 Additions

 1,596,155

 2,438,655

 Transfer to revenue

 ( 1,439,074

)

 ( 2,223,219

)

 Transfer to general and administrative expense

 ( 105,000

)

 -

 Balance, end of year

 $

 329,025

 $

 276,944

 Revenue recognized during
the year ended December 31, 2024 that was included in the contract liability opening balance was $ 171,944.

 Warranty Reserve

 For our software and hardware
products, we provide a limited one-year assurance-type warranty and for our development service, we provide no warranties. The assurance-type
warranty covers defects in material and workmanship only. If a software or hardware component is determined to be defective after being
tested by the Company within the one-year, the Company will repair, replace or refund the price of the covered hardware and/or software
to the customer (not including any shipping, handling, delivery or installation charges). We estimate, based upon a review of historical
warranty claim experience, the costs that may be incurred under our warranties and record a liability in the amount of such estimate at
the time a product is sold. Factors that affect our warranty liability include the number of units sold, historical and anticipated rates
of warranty claims, and cost per claim. We periodically assess the adequacy of our recorded warranty liability and adjust the accrual
as claims data and historical experience warrants. The Company has assessed the costs of fulfilling its existing assurance-type warranties
and has determined that the estimated outstanding warranty obligation as of December 31, 2024 and 2023 are immaterial to the Company's
financial statements.

 F- 19

 Leases

 Under Topic 842, operating
lease expense is generally recognized evenly over the term of the lease. During the year ended December 31, 2024, the Company's
operating leases consisted of office spaces in Sunnyvale, CA, Marlborough, MA (the "American Robotics Lease"), Waltham, MA
(the "Waltham Lease"), and Petah Tikva, Israel (the "Airobotics Leases").

 On January 22, 2021, we entered
into a 24-month lease (effective April 1, 2021) with the owner and landlord (the "2021 Gibraltar Lease"), wherein the base
rate was $ 45,000 per month, with a security deposit in the amount of $ 90,000. On April 1, 2023, the Company amended the 2021 Gibraltar
Lease to extend the lease through September 30, 2023, wherein the base rate was $ 65,676 per month. On November 6, 2023, the Company amended
the 2021 Gibraltar Lease, as amended to further extend the lease through June 30, 2024, wherein the base rate was $ 68,959 per month. As
of July 1, 2024, the lease was terminated.

 On August 7, 2023, Ondas Networks
entered into a 72-month lease agreement with the owner and landlord of office space in Sunnyvale, CA (the "Oakmead Lease").
The Oakmead Lease commenced on October 1, 2023, and is an operating lease through September 30, 2029. Base rent is $ 77,533 per month,
increasing approximately 3 % annually, with a security deposit due in the amount of $ 269,428. Base rent was abated during the first twelve
months of the term of the lease.

 On August 5, 2021, the Company
acquired American Robotics and the American Robotics Lease, located in Marlborough, Massachusetts, wherein the base rate was $ 15,469 per
month, with an annual increase of 3 % through January 2024, with a security deposit of $ 24,166. On August 19, 2021, American Robotics amended
the American Robotics Lease to reduce their space to approximately 10,450 square feet. The amendment reduced their annual base rent to
$ 8,802 per month, with an annual increase of 3 % through January 31, 2024. On November 10, 2023, American Robotics amended the American
Robotics Lease, as amended to extend the existing lease term from January 31, 2024 to January 31, 2026 and to relinquish a portion of
the leased outdoor space. The annual base rent was $ 14,586 per month starting February 1, 2024, with an annual increase of 3.5 % through
January 2026. Effective September 30, 2024, the lease was terminated. The Company wrote off the remaining operating lease liability and
right of use asset and recognized a gain on lease termination of $ 12,256, which is included in other income (expense), net in the Consolidated
Statements of Operations for the year ended December 31, 2024.

 On October 8, 2021, American
Robotics entered into an 86-month operating lease for space in Waltham, Massachusetts. The Waltham Lease commenced on March 1, 2022, and
is scheduled to terminate on April 30, 2029, wherein the base rate is $ 39,375 per month, increasing 3 % annually, with a security deposit
due in the amount of $ 104,040.

 On January 15, 2024, American
Robotics entered into an agreement to sublet their full leased space, leasehold improvements, and remaining furniture and fixtures in
Waltham, Massachusetts through April 30, 2029, the remaining lease term, for $ 22,920 per month from May 1, 2024 through April 30, 2025,
then $ 41,250 per month from May 1, 2025 through April 30, 2029. The sublease is an operating lease. This event indicated that the carrying
amount of the right of use asset, leasehold improvements, and remaining furniture and fixtures in Waltham, Massachusetts (the "Asset
Group") may not be recoverable. The Asset Group was tested for recoverability using the undiscounted cash flows from the sublease
and the Company found the Asset Group to be impaired. The Company determined the Level 3 fair value of the Asset Group using the sum of
future cash flows from the sublease, discounted to the present value using an assumed discount rate of 10.5 %. Based on this valuation,
the Company recorded an impairment charge of $ 1,383,536 related to the right of use asset associated with this Asset Group, which is included
in General and administrative expenses in the Company's Consolidated Statements of Operations for the year ended December 31, 2023.

 On January 23, 2023, the Company
acquired Airobotics and the Airobotics Leases, which includes office space in Petah Tikva, Israel leased according to three different
lease agreements. These agreements are with respect to different sections of the entire leased area and were in effect through December
31, 2023, February 28, 2024, and November 30, 2024 wherein the base rate of the entire leased area was approximately $ 20,500 per month.
The expired leases are being accounted for on a month-to-month basis.

 On November 25, 2024, Airobotics
entered into a 24-month lease agreement with the owner and landlord of office space in Dubai, United Arab Emirates (the "Dubai Office
Lease"). The Dubai Office Lease commenced on December 1, 2024, and is an operating lease through December 2, 2026. Base rent for
the full lease term is $ 272,262, which was paid in full in December 2024.

 F- 20

 We determine if an arrangement
is a lease, or contains a lease, at the inception of the arrangement. If we determine the arrangement is a lease, or contains a lease,
at lease inception, we then determine whether the lease is an operating lease or finance lease. Operating and finance leases result in
recording a right-of-use ("ROU") asset and lease liability on our consolidated balance sheets. ROU assets represent our right
to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease.
Operating lease ROU assets and liabilities are recognized at the commencement date based on the present value of lease payments over the
lease term. For purposes of calculating operating lease ROU assets and operating lease liabilities, we use the non-cancellable lease term
plus options to extend that we are reasonably certain to take. Lease expense for operating lease payments is recognized on a straight-line
basis over the lease term. Our leases generally do not provide an implicit rate. As such, we use our incremental borrowing rate based
on the information available at commencement date in determining the present value of lease payments. This rate is generally consistent
with the interest rate we pay on borrowings under our credit facilities, as this rate approximates our collateralized borrowing capabilities
over a similar term of the lease payments. We have elected not to recognize ROU assets and lease liabilities that arise from short-term
(12 months or less) leases for any class of underlying assets. We have elected not to separate lease and non-lease components for any
class of underlying asset.

 Lease Costs

 Years ended December 31,

 2024

 2023

 Components of total lease costs:

 Operating lease expense

 $
 1,016,734

 $
 1,231,198

 Common area maintenance expense

 551,660

 277,865

 Short-term lease costs (1)

 827,969

 813,797

 Total lease costs

 $
 2,396,363

 $
 2,322,860

 (1)
 Represents
short-term leases with an initial term of 12 months or less, which are immaterial.

 Lease Positions as of December 31, 2024 and
2023

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

 2024

 2023

 Assets:

 Operating lease assets

 $
 3,921,995

 $
 4,701,865

 Total lease assets

 $
 3,921,995

 $
 4,701,865

 Liabilities:

 Operating lease liabilities, current

 $
 1,121,565

 $
 685,099

 Operating lease liabilities, net of current

 4,961,967

 5,800,710

 Total lease liabilities

 $
 6,083,532

 $
 6,485,809

 Other Leases Information

 Years ended December 31,

 2024

 2023

 Operating cash flows for operating leases

 $
 1,046,541

 $
 1,038,556

 Weighted average remaining lease term (in years)- operating lease

 4.50

 4.73

 Weighted average discount rate – operating lease

 9.20
 %

 9.99
 %

 F- 21

 Undiscounted Leases Cash Flows

 Future lease payments included
in the measurement of lease liabilities on the consolidated balance sheet on December 31, 2024, as follows:

 Years ending December 31,

 2025

 $
 1,626,102

 2026

 1,641,584

 2027

 1,568,688

 2028

 1,616,022

 2029

 999,204

 Total future minimum lease payments

 $
 7,451,600

 Lease imputed interest

 ( 1,368,068
)

 Total

 $
 6,083,532

 Net Loss Per Common Share

 Basic net loss per share is
computed by dividing net loss available to common stockholders (the numerator) by the weighted average number of shares of Common Stock
outstanding for each period (the denominator). Income available to common stockholders shall be computed by deducting the dividends accumulated
for the period on cumulative preferred stock (whether or not earned) from net income.

 The computation of diluted
net loss per share is similar to the computation of basic net loss per share except that the numerator may have to adjust for any dividends
and income or loss associated with potentially dilutive securities that are assumed to have resulted in the issuance of shares of common
stock, and the denominator may have to adjust to include the number of additional shares of common stock that would have been outstanding
if the dilutive potential shares of common stock had been issued during the period to reflect the potential dilution that could occur
from shares of common stock issuable through stock options, warrants, restricted stock units, or convertible preferred stock. For purposes
of determining diluted earnings per common share, the treasury stock method is used for stock options, warrants, and restricted stock
units, and the if-converted method is used for convertible preferred stock as prescribed in ASC Topic 260. Because of the net loss for
the years ended December 31, 2024 and 2023, the impact of including this in our computation of diluted net loss per share was anti-dilutive.

 The following potentially
dilutive securities for the years ended December 31, 2024 and 2023 have been excluded from the computation of diluted net loss per share
because the effect of their inclusion would have been anti-dilutive.

 2024

 2023

 Warrants to purchase common stock

 26,490,110

 12,566,092

 Options to purchase common stock

 4,289,359

 4,854,507

 Potential shares issuable under 2022 Convertible Exchange Notes

 19,356,876

 62,084,776

 Potential shares issuable under 2023 Additional Notes

 30,011,617

 29,125,732

 Potential shares issuable under 2024 Additional Notes

 119,544,155

 -

 Restricted stock units

 252,417

 554,466

 Total potentially dilutive securities

 199,944,534

 109,185,573

 F- 22

 Concentrations of Credit Risk

 Financial instruments that
potentially subject us to concentrations of credit risk consist of cash and accounts receivable. Cash is deposited with a limited number
of financial institutions. The balances held at any one financial institution may be in excess of Federal Deposit Insurance Corporation
(FDIC) insurance limits. As of December 31, 2024, the Company was approximately $ 28,873,000 in excess of federally insured limits.

 Credit is extended to customers
based on an evaluation of their financial condition and other factors. We generally do not require collateral or other security to support
accounts receivable. We perform ongoing credit evaluations of our customers and maintain an allowance for credit losses.

 Concentration of Customers

 Because we have only recently
invested in our customer service and support organization, a small number of customers have accounted for a substantial amount of our
revenue. Revenue from significant customers, those representing 10% or more of total revenue, was composed of three customers accounting
for 52 %, 26 % and 10 % of the Company's revenue for the year ended December 31, 2024, respectively. Three customers accounted for
 43 %, 33 % and 22 % of the Company's revenue for the year ended December 31, 2023, respectively.

 Accounts receivable from significant customers, those representing
10% or more of the total accounts receivable, were composed of two customers accounting for 78 % and 10 % of the Company's accounts
receivable balance as of December 31, 2024, respectively. Three customers accounted for 61 %, 22 % and 12 % of the Company's accounts
receivable balance as of December 31, 2023, respectively.

 Recently Adopted Accounting Pronouncements

 As of January 1, 2024, the
Company adopted the following Accounting Standards Updates (ASU), and the adoption had no impact on our accompanying Consolidated Financial
Statements:

 On September 30, 2022, the
FASB issued ASU No. 2022-03, which (1) clarifies existing guidance when measuring the fair value of an equity security subject to contractual
restrictions that prohibit the sale of an equity security and (2) introduces new disclosure requirements for equity securities subject
to contractual sale restrictions. The ASU clarifies that a contractual restriction on the sale of an equity security is not considered
part of the unit of account of the equity security. Instead, the contractual sale restriction is a characteristic of the reporting entity.
Accordingly, an entity should not consider the contractual sale restriction when measuring the equity security's fair value. Additionally,
the ASU clarifies that an entity cannot, as a separate unit of account, recognize and measure a contractual sale restriction. For public
business entities, the amendments in this Update are effective for fiscal years beginning after December 15, 2023, and interim periods
within those fiscal years. The adoption of the pronouncement as of January 1, 2024 did not have a material impact on our accompanying
Consolidated Financial Statements.

 In November 2023, the FASB
issued ASU No. 2023-07, "Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures", which amends and
enhances the disclosure requirements for reportable segments. All disclosure requirements under this standard will also be required for
public entities with a single reportable segment. The new standard will be effective for the Company for fiscal years beginning after
December 15, 2023, including interim periods within fiscal years beginning after December 15, 2024. The adoption of the pronouncement
as of January 1, 2024 resulted in additional disclosures in the accompanying Consolidated Financial Statements, see Note 12 – Segment
Information.

 F- 23

 Recently Issued Accounting Pronouncements Not Yet Adopted

 In October 2023, the FASB
issued ASU No. 2023-06, which incorporates 14 of the 27 disclosures referred to by the SEC in their SEC Release No. 33-10532, Disclosure
Update and Simplification, issued on August 17, 2018. The amendments in this ASU modify the disclosure or presentation requirements of
a variety of Topics in the Codification and apply to all reporting entities within the scope of the affected Topics unless otherwise indicated.
The amendments in this ASU should be applied prospectively. For public business entities, the effective date for each amendment will be
the date on which the SEC's removal of that related disclosure from Regulation S-X or Regulation S-K becomes effective, with early
adoption prohibited. The Company has evaluated the effects of the adoption of ASU No. 2022-03, and it is not expected to have an impact
on the Company's Consolidated Financial Statements.

 In December 2023, the FASB
issued ASU No. 2023-08, "Accounting for and Disclosure of Crypto Assets", which amends and enhances the disclosure requirements
for crypto assets. The new requirements will be effective for public business entities for fiscal periods beginning after December 15,
2024. The Company has evaluated the effects of the adoption of ASU No. 2022-08, and it is not expected to have an impact on the Company's
Consolidated Financial Statements.

 In December 2023, the FASB
issued ASU No. 2023-09, "Improvements to Income Tax Disclosures", which requires companies to provide disaggregated information
about a reporting entity's effective tax rate reconciliation as well as information on income taxes paid. The new requirements will
be effective for public business entities for fiscal periods beginning after December 15, 2024. The Company is currently assessing the
impact of adopting this standard on the Company's Consolidated Financial Statements.

 In November 2024, the FASB
issued ASU No. 2024-03, "Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic
220-40)". The amendments in ASU No. 2024-03 require disclosure, in the notes to financial statements, of specified information about
certain costs and expenses. The amendments require that at each interim and annual reporting period an entity: 1. Disclose the amounts
of (a) purchases of inventory, (b) employee compensation, (c) depreciation, (d) intangible asset amortization, and (e) depreciation, depletion,
and amortization recognized as part of oil and gas-producing activities (DD&A) (or other amounts of depletion expense) included in
each relevant expense caption. A relevant expense caption is an expense caption presented on the face of the income statement within continuing
operations that contains any of the expense categories listed in (a)–(e). 2. Include certain amounts that are already required to
be disclosed under U.S. GAAP in the same disclosure as the other disaggregation requirements. 3. Disclose a qualitative description of
the amounts remaining in relevant expense captions that are not separately disaggregated quantitatively. 4. Disclose the total amount
of selling expenses and, in annual reporting periods, an entity's definition of selling expenses. For all public business entities,
the amendments in ASU No. 2024-03 are effective for annual reporting periods beginning after December 15, 2026, and interim reporting
periods beginning after December 15, 2027. Early adoption is permitted. The Company is currently assessing the impact of adopting this
standard on the Company's Consolidated Financial Statements.

 In November 2024, the FASB
issued ASU No. 2024-04, "Debt with Conversion and Other Options (Subtopic 470-20): Induced Conversions of Convertible Debt Instruments".
The amendments in ASU No. 2024-04 clarify the requirements for determining whether certain settlements of convertible debt instruments
should be accounted for as an induced conversion, applicable only to conversions that include the issuance of all equity securities issuable
pursuant to the conversion privileges provided in the terms of the debt at issuance, and make additional clarifications to assist stakeholders
in applying the guidance. For all entities, the amendments in this Update are effective for annual reporting periods beginning after December
15, 2025, and interim reporting periods within those annual reporting periods. Early adoption is permitted for all entities that have
adopted the amendments in ASU 2020-06. The Company is currently assessing the impact of adopting this standard on the Company's
Consolidated Financial Statements.

 Reclassification

 Certain amounts reported in
the prior year financial statements have been reclassified to conform to the current year presentation.

 F- 24

 NOTE 3 – OTHER CURRENT ASSETS

 Other current assets consist
of the following:

 2024

 2023

 Prepaid insurance

 $
 871,856

 $
 1,035,071

 Advance to vendors

 1,001,818

 442,727

 Contract asset

 205,911

 819,107

 VAT input credit

 52,375

 232,048

 Receivables from employees

 -

 40,117

 Other prepaid expenses and current assets

 344,396

 398,549

 Total other current assets

 $
 2,476,356

 $
 2,967,619

 NOTE 4 – PROPERTY AND EQUIPMENT

 Property and equipment consist
of the following:

 2024

 2023

 Vehicles

 $
 149,916

 $
 149,916

 Computer equipment

 464,661

 363,141

 Furniture and fixtures

 336,682

 332,804

 Leasehold improvements

 3,612,176

 2,534,014

 Development equipment

 456,686

 294,288

 Drones and base stations

 1,012,946

 3,928,958

 Machinery and Equipment

 67,821

 60,321

 Construction in progress

 -

 395,340

 6,100,888

 8,058,782

 Less: accumulated depreciation

 ( 3,514,197
)

 ( 3,882,824
)

 Total property and equipment

 $
 2,586,691

 $
 4,175,958

 Depreciation expense for the
years ended December 31, 2024 and 2023 was $ 602,304 and $ 844,833, respectively. For the years ended December 31, 2024 and 2023, the Company
recognized a loss on disposal of Computer equipment of $ 1,578 and $ 52,595, respectively. Loss on disposal of assets is included in Other
income (expense), net in the Company's Consolidated Statements of Operations for the years ended December 31, 2024 and 2023. As
of December 31, 2024, there was $ 600,339 of net property and equipment located in Israel.

 In 2024, the Company reclassed
$ 2,289,539 of docking stations and drones, net into inventory, as OAS has shifted their focus from service revenue, selling a data subscription
service to its customers based on the information collected by their autonomous systems, to product revenue, primarily selling their Optimus
System and Iron Drone Raider.

 In December 2023, the Company
identified a change in circumstances in connection with the American Robotics sublease effective January 15, 2024, see Note – 2
Summary of Significant Account Policies, Leases, which indicated that the carrying amount of the right of use assets, leasehold
improvements, and remaining furniture and fixtures in Waltham, Massachusetts (the "Asset Group") may not be recoverable. As
a result, the Company recorded an impairment charge of $ 1,127,769 related to the leasehold improvements and furniture and fixtures associated
with the Asset Group, which is included in General and administrative expenses in the Company's Consolidated Statements of Operations
for the year ended December 31, 2023. There was no indication of impairment for the year ended December 31, 2024.

 F- 25

 NOTE 5 – GOODWILL AND BUSINESS ACQUISITION

 We account for acquisitions
in accordance with FASB ASC 805, "Business Combinations" ("ASC 805"), and goodwill in accordance with ASC 350,
"Intangibles — Goodwill and Other" ("ASC 350"). The excess of the purchase price over the estimated fair
value of net assets acquired in a business combination is recorded as goodwill.

 Airobotics Transaction

 On
January 23, 2023, the Company, completed the acquisition of Airobotics, pursuant to the Agreement of Merger, dated as of August 4, 2022
(the "Original Airobotics Agreement"), and that certain Amendment to Agreement of Merger, dated November 13, 2022 (the "Airobotics
Amendment," and together with the Original Airobotics Agreement, the "Airobotics Agreement"), by and among the Company,
Talos Sub Ltd., an Israeli company and a wholly owned subsidiary of the Company ("Merger Sub"), and Airobotics.
In accordance with the terms of the Airobotics Agreement, Merger Sub merged with and into Airobotics (the "Merger"), with
Airobotics continuing as the surviving company of the Merger and as a wholly owned subsidiary of the Company.

 At
the effective time of the Merger (the "Effective Time"), each ordinary share of Airobotics, par value NIS 0.01 per share (the
"Airobotics Ordinary Shares"), issued and outstanding (other than shares owned by Airobotics or its subsidiaries (dormant
or otherwise) or by the Company or Merger Sub) was converted into, and exchanged for 0.16806 (the "Exchange Ratio") fully
paid and nonassessable shares of Common Stock of the Company, without interest and subject to applicable tax withholdings ("Merger
Consideration"). All fractional shares of the Company Common Stock that would have otherwise been issued to a holder of Airobotics
Ordinary Shares as part of the Merger Consideration were rounded up to the nearest whole share based on the total number of shares of
the Company's Common Stock issued to such holder of Airobotics Ordinary Shares. Holders of Airobotics Ordinary Shares received approximately
 2.8 million shares as consideration (excluding approximately 1.7 million shares underlying equity awards to be outstanding following the
Merger).

 As
provided in the Airobotics Agreement, each outstanding option, warrant or other right, whether vested or unvested, to purchase Airobotics
Ordinary Shares (each, an "Airobotics Stock Option," and collectively, the "Airobotics Stock Options") issued
pursuant to the Airobotics Ltd. 2015 Israeli Share Option Plan and 2020 Incentive Equity Plan (the "Airobotics Plans"), was
assumed by Ondas and converted as of the Effective Time into an option, warrant or right, as applicable, to purchase shares of Company
Common Stock. Subject to the terms of the relevant Airobotics Stock Option, each Airobotics Stock Option is deemed to constitute an option,
warrant, or other right, as applicable, to purchase, on substantially the same terms and conditions as were applicable under such Airobotics
Stock Option, a number of shares of Company Common Stock equal to the number of shares of Company Common Stock (rounded up to the nearest
whole share) that the holder of such Airobotics Stock Option would have been entitled to receive pursuant to the Merger had such holder
exercised such option, warrant, or right to purchase full Airobotics Ordinary Shares immediately prior to the Effective Time at a price
per share of Company Common Stock (rounded down to the nearest whole cent) equal to (i) the former per share exercise price for Airobotics
Ordinary Shares otherwise purchasable pursuant to such Airobotics Stock Option, divided by (ii) the Exchange Ratio.

 As a result of the Merger,
the Company was dual listed on The Nasdaq Stock Market ("Nasdaq") and the Tel Aviv Stock Exchange ("TASE"). The
first trading day of the Company's shares on TASE was January 26, 2023. On February 8, 2024, the Company took steps to voluntarily
delist the Company's common stock from trading on TASE. The Company's Common Stock continues to be listed for trading on Nasdaq,
and all of the shares traded on the TASE were transferred to Nasdaq where they can continue to be traded. See the Current Report on Form
8-K filed with the SEC on February 8, 2024 for further details.

 F- 26

 The following table summarizes
the consideration paid for Airobotics and the preliminary allocation of the purchase consideration to the estimated fair value of the
assets acquired and liabilities assumed at the acquisition date.

 Purchase price consideration

 Common Stock – 2,844,291 Shares

 $
 5,261,938

 Vested Stock Options – 773,244 Shares

 700,690

 Warrants – 586,440 Warrants to purchase shares

 -

 Total purchase price consideration

 $
 5,962,628

 Estimated fair value of assets acquired:

 Cash and cash equivalents and restricted cash

 $
 1,049,454

 Accounts receivable

 112,245

 Inventory

 1,494,707

 Other current assets

 835,664

 Property and equipment

 3,015,602

 Right of use asset

 339,104

 Intangible assets

 5,977,926

 Other long-term assets

 62,851

 Total estimated fair value of assets acquired

 12,887,553

 Estimated fair value of liabilities assumed:

 Accounts payable

 969,242

 Customer Prepayments

 1,602,535

 Government grant liability

 1,783,403

 Other loans

 1,140,301

 Other payables

 1,156,057

 Lease liabilities

 385,450

 Loan from related party

 2,032,875

 Total estimated fair value of liabilities assumed

 9,069,863

 Net Assets Acquired

 $
 3,817,690

 Goodwill

 $
 2,144,938

 The exercise price of the
warrants included in the purchase price consideration far exceeded the Company's stock price at the date of acquisition, thus the
value of warrants was deemed de minimis.

 The intangible assets acquired
include the developed technology, marketing-related assets, and customer relationships (see Note 6 – Intangible Assets). The final
purchase price allocation has changed from the preliminary allocation because of changes in the valuation of property and equipment and
intangibles. During the year ended December 31, 2023, measurement period adjustments were made of (1) $ 68,483 to reduce the estimated
fair value of property and equipment and increase goodwill, respectively, and (2) $ 80,000 to reduce the valuation of the customer relationships
intangible asset and increase goodwill, respectively.

 Goodwill represents the assembled
workforce, acquired capabilities, and future economic benefits resulting from the acquisition. No portion of the goodwill is deductible
for tax purposes.

 Our results for the year ended
December 31, 2023 include results from Airobotics between January 24, 2023 and December 31, 2023. The following unaudited pro forma information
presents the Company's results of operations as if the acquisition of Airobotics had occurred on January 1, 2023. The pro forma
results do not purport to represent what the Company's results of operations actually would have been if the transactions had occurred
on January 1, 2023 or what the Company's operating results will be in future periods.

 F- 27

 (Unaudited)
 Year Ended

 2023

 Revenue, net

 $
 15,723,466

 Net loss

 $
 ( 45,272,685
)

 Net Loss Per Share – basic and diluted

 $
 ( 0.86
)

 Goodwill Impairment

 The Company has recognized
goodwill as part of the American Robotics acquisition in 2021 and Airobotics acquisition in 2023. The changes in the carrying amount of
goodwill for the years ended December 31, 2024 and 2023, are as follows:

 Ondas
 Autonomous
 Systems

 Balance as of January 1, 2023

 $
 25,606,983

 Goodwill acquired

 2,144,938

 Balance as of December 31, 2023 and 2024

 $

 Goodwill is tested for impairment
in the fourth quarter after the annual forecasting process. In December 2024 and 2023, the Company bypassed the qualitative analysis and
proceeded directly to a quantitative analysis. The Company engaged a third-party service provider to carry out a valuation of the OAS
reporting unit. Using a discounted cash flow model and market approach model with updated forecasts for revenue and cash flows, it was
determined that the fair value of the OAS reporting unit was higher than the carrying value as of December 31, 2024 and 2023.

 NOTE 6 – INTANGIBLE ASSETS

 The components of intangible
assets, all of which are finite lived, were as follows:

 December 31, 2024

 December 31, 2023

 Gross
 Carrying

 Accumulated
 Amortization

 Net
 Carrying

 Gross
 Carrying

 Accumulated
 Amortization

 Net
 Carrying

 Useful
 Life

 Patents

 $
 165,106

 $
 ( 58,808
)

 106,298

 $
 117,810

 $
 ( 43,153
)

 $
 74,657

 Patents in process

 103,813

 -

 103,813

 142,239

 -

 142,239

 N/A

 Licenses

 241,909

 ( 114,048
)

 127,861

 241,909

 ( 89,859
)

 152,050

 Software

 271,852

 ( 208,699
)

 63,153

 211,411

 ( 167,412
)

 43,999

 Trademarks

 3,230,000

 ( 1,099,226
)

 2,130,774

 3,230,000

 ( 776,235
)

 2,453,765

 FAA waiver

 5,930,000

 ( 2,018,084
)

 3,911,916

 5,930,000

 ( 1,425,101
)

 4,504,899

 Developed technology

 27,977,331

 ( 8,564,502
)

 19,412,829

 27,977,331

 ( 5,632,170
)

 22,345,161

 3 - 10

 Non-compete agreements

 840,000

 ( 840,000
)

 -

 840,000

 ( 840,000
)

 -

 Marketing-related assets

 890,000

 ( 171,540
)

 718,460

 890,000

 ( 82,540
)

 807,460

 Customer relationships

 1,010,000

 ( 407,047
)

 602,953

 1,010,000

 ( 205,048
)

 804,952

 $
 40,660,011

 $
 ( 13,481,954
)

 27,178,057

 $
 40,590,700

 $
 ( 9,261,518
)

 $
 31,329,182

 Amortization expense for the
year ended December 31, 2024 and 2023 was $ 4,220,436 and $ 4,147,092, respectively.

 F- 28

 We recognized losses on intellectual
property of $ 27,670 and $ 12,223 due to expiration of patent applications for the years ended December 31, 2024 and 2023, respectively.

 On August 31, 2022, the Company
entered into the asset purchase agreement with Field of View LLC, a North Dakota limited liability company. The total purchase consideration
consisted of $ 250,000 of cash payable in monthly installments over twelve months, and $ 75,520 shares of the Company's common stock,
representing 16,000 shares ("FOV Consideration Shares"). The asset purchase agreement restricts the holder from transferring
the FOV Consideration Shares for 180 days from the closing date, subject to certain exceptions. The Company acquired computer and research
and development equipment amounting to $ 18,506 and intangibles for developed technology for $ 307,014. As of December 31, 2023, the cash
was paid and equity was issued in full.

 On October 19, 2022, Airobotics
entered into an Asset Purchase Agreement, as amended, to acquire all of the intellectual property, technical systems, and operations of
Iron Drone Ltd. ("Iron Drone"), an Israeli-based company specializing in the development of autonomous counter-drone systems
(the "Iron Drone Transaction"). The consideration for the Iron Drone Transaction was (i) $135,000 in cash, (ii) 46,129 shares
of the Company's Common Stock, (iii) warrants exercisable for 26,553 shares of the Company's Common Stock with an exercise
price of $11.95, which shall be exercisable if, during the 48 month period following the closing, the average price per share of the Company's
Common Stock exceeds $52.38 for a period of at least 90 consecutive trading days, (iv) a right to acquire 35,377 shares of the Company's
Common Stock if during the 48 month period after the closing, the average price per share of the Company's Common Stock exceeds
$18.25 for a period of at least 90 consecutive trading days, and (v) a right to acquire 70,753 shares of the Company's Common Stock
if during the 48 month period after the closing, the average price per share of Company's Common Stock exceeds $20.27 for a period
of at least 90 consecutive trading days. On March 6, 2023, the Company completed the Iron Drone Transaction. The Company acquired intangibles
for developed technology for $576,717. As of December 31, 2023, the cash was paid and equity was issued in full.

 Expected amortization expense
for the next five years for the intangible costs currently being amortized is as follows:

 Year Ending December 31,

 Expected
 Amortization

 2025

 $
 4,174,292

 2026

 4,090,564

 2027

 4,075,443

 2028

 3,792,280

 2029

 3,756,854

 Thereafter

 7,288,624

 Total

 $
 27,178,057

 NOTE 7 – LONG-TERM EQUITY INVESTMENT

 On October 5, 2021, Ondas
Holdings irrevocably subscribed and agreed to purchase 3,141,098 shares of Series A-1 Preferred Stock of Dynam. AI, Inc. ("Dynam"),
a tech-enabled services provider for critical or complex artificial intelligence and machine learning projects, par value $ 0.00001 for
the aggregate price of $ 500,000 representing subscription price of $ 0.15918 per share by way of a non-brokered private placement for approximately
 11 % ownership in Dynam.

 On July 15, 2022, Ondas Holdings
irrevocably subscribed and agreed to purchase 3,357,958 shares of Series Seed Preferred Stock of Dynam for the aggregate price of $ 1,000,000
representing a subscription price of $ 0.2978 per share by way of a non-brokered private placement for approximately 8 % ownership in Dynam.
This brought Ondas Holdings investment in Dynam to 6,499,056 shares or approximately 19 % ownership.

 F- 29

 As of December 31, 2023, Dynam
had ceased operations, and the Company recognized an impairment charge of $ 1,500,000, which is included in Operating expenses on the Consolidated
Statements of Operations for the year ended December 31, 2023. As of December 31, 2024 and 2023 the long-term equity investment had a
carrying value of $ 0.

 NOTE 8 – ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES

 Accrued expenses and other
current liabilities consist of the following:

 2024

 2023

 Accrued payroll and other benefits

 $
 1,907,175

 $
 2,423,709

 D&O insurance financing payable

 326,716

 -

 Accrued professional fees

 191,152

 315,863

 VAT payable

 385,279

 -

 Accrued interest

 1,673,627

 652,631

 Other accrued expenses and payables

 235,265

 195,674

 Total accrued expenses and other current liabilities

 $
 4,719,214

 $
 3,587,877

 NOTE 9 – NOTES PAYABLE

 2017 Convertible Promissory Note

 On September 14, 2017, the
Company and an individual entered into a convertible promissory note with unilateral conversion preferences by the individual (the "2017
Convertible Promissory Note"). On July 11, 2018, the Company's Board approved certain changes to the 2017 Convertible Promissory
Note wherein the conversion feature was changed from unilateral to mutual between the individual and the Company. The note matures
on September 14, 2027.

 The Company may at any time
on or after a qualified public offering convert any unpaid repayment at the IPO conversion price. The conversion price is the lesser of
the (i) price per share of Common Stock sold in the Qualified Public Offering, discounted by 20 %, and (ii) the price per share of Common
Stock based on a pre-money Company valuation of $ 50 million on a Fully Diluted Basis.

 As of December 31, 2024 and
2023, the total outstanding balance of the 2017 Convertible Promissory Note was $ 300,000. The maturity date of the 2017 Convertible Promissory
Note is based on the payment of 0.6 % of quarterly gross revenue until 1.5 times the amount of the Note is paid. Accrued interest as of
December 31, 2024 and 2023 was $ 20,041 and $ 26,844, respectively. Interest expense for both years ended December 31, 2024 and 2023 was
$ 15,000.

 F- 30

 2022 Convertible Promissory Notes

 On
October 28, 2022, the Company entered into a securities purchase agreement (the "Purchase Agreement") with certain investors
pursuant to which we issued convertible notes ("2022 Convertible Promissory Notes") in the principal amount of $ 34.5 million,
with a debt discount of $ 4.5 million and issuance costs of $ 2.3 million. The net amount of proceeds to us from the 2022 Convertible Promissory
Notes after deducting the placement agent's fees and issuance costs were approximately $ 27,703,000. The Company intends to use the
net proceeds of the 2022 Convertible Promissory Notes for general corporate purposes, including funding capital, expenditures, or the
expansion of its business and providing working capital.

 On
January 20, 2023, the Company entered into an Amendment No. 1 to the Purchase Agreement ("Amended SPA"). The Amended SPA amends
the notes as described below and was accounted for as a modification of the Purchase Agreement,

 Pursuant
to the terms of the Amended SPA, on January 20, 2023, the Company exchanged the 2022 Convertible Promissory Notes, on a dollar-for-dollar
basis, into 3 % Senior Convertible Notes Due 2024 (the "2022 Convertible Exchange Notes").

 The
2022 Convertible Exchange Notes are identical in all material respects to the 2022 Convertible Promissory Notes, except that they (i)
are issued pursuant to the Base Indenture (as defined below) and the First Supplemental Indenture (as defined below); (ii) have a maturity
date of October 28, 2024; (iii) allow for the Acceleration of Installment Amounts (as defined in the 2022 Convertible Exchange Notes)
not to exceed eight (8) times the Installment Amount (as defined in the 2022 Convertible Exchange Notes) with respect to the Installment
Date (as defined in the 2022 Convertible Exchange Notes) related to the Current Acceleration (as defined in the 2022 Convertible Exchange
Notes); and (iv) modify the Acceleration Conversion Price (as defined in the 2022 Convertible Exchange Notes).

 The
2022 Convertible Exchange Notes were issued pursuant to the first supplemental indenture (the "First Supplemental Indenture"),
dated as of January 20, 2023, between the Company and Wilmington Savings Fund Society, FSB, as trustee (the "Trustee"). The
First Supplemental Indenture supplements the indenture entered into by and between the Company and the Trustee, dated as of January 20,
2023 (the "Base Indenture" and, together with the First Supplemental Indenture, the "Initial Indenture"). The
Initial Indenture has been qualified under the Trust Indenture Act of 1939, and the terms of the 2022 Convertible Exchange Notes include
those set forth in the Initial Indenture and those made part of the Initial Indenture by reference to the Trust Indenture Act.

 On July 21, 2023, the Company
entered into an agreement and waiver with the holder of the 2022 Convertible Exchange Notes (the "Agreement and Waiver," together
with the Purchase Agreement and Amended SPA, the "SPA") that included (i) extending the Maturity Date to from October 28,
2024 to April 28, 2025; (ii) waive the last sentence of Section 8(e) of the Notes (such that last sentence of Section 8(e) of the Notes
shall have no further force and effect) (the "Acceleration Waiver"); (iii) reduce the Conversion Price of the 2022 Convertible
Exchange Notes to the lower of (A) the Conversion Price then in effect and (B) the greater of (x) the Floor Price (as defined in the Notes)
then in effect and (y) 125 % of the lowest volume weighted average price ("VWAP") of the Common Stock during the five (5) consecutive
Trading Day period ending and including the Trading Day immediately prior to the effective date; provided, that, in addition, during the
period commencing on the effective date through and including September 30, 2023, the conversion price of the Notes, solely with respect
to voluntary conversions of such aggregate Conversion Amount of the Notes not in excess of such aggregate Current Installment Amounts
of such applicable period (or otherwise eligible to be converted in one or more Accelerations during such applicable period), shall be
further lowered to the Installment Conversion Price (as defined in the Existing Note) in effect for the Installment Date (as defined in
the Existing Note) of the Existing Note of July 3, 2023; (iv) to extend the Additional Closing Expiration Date to April 28, 2026; and
(v) increase the aggregate principal amount of Notes issuable in one or more Additional Closings to $ 46,000,000. This agreement was
accounted for as a modification.

 F- 31

 The
2022 Convertible Exchange Notes bear interest at the rate of 3 % per annum. The 2022 Convertible Exchange Notes are payable in monthly
installments beginning on November 1, 2022, through the maturity date of April 28, 2025 (each such date, an "Installment Date").
On each Installment Date, we will make monthly payments by converting the applicable "Installment Amount" (as defined below)
into shares of our Common Stock (an "Installment Conversion"), subject to satisfaction of certain equity conditions, including
a minimum $ 1.50 share price, $ 500,000 minimum daily volume, and maintaining continued Nasdaq listing requirements among other conditions.
If these conditions are not met, installments can be requested in cash. For the years ended December 31, 2024 and 2023, we issued 21,284,556
and 14,028,022 common shares as a result of Installment Conversion, respectively. At each Installment Date the note holder may defer some
or all of the amount due until the subsequent Installment Date. In between Installment Dates, the note holder also has the option to accelerate
certain portions of principal due. At each Installment Date the price used to exchange outstanding notes into Common Stock is based on
the lower of (A) 92 % of the lowest VWAP of the respective previous five trading days; and (B) the Floor Price ($ 0.32 as of December 31,
2024). The maximum conversion price is $ 1.50 per share.

 The
"Installment Amount" will equal:

 (i)
 for
all Installment Dates other than the maturity date, the lesser of (x) the Holder Pro Rata Amount of $ 1,437,500 and (y) the principal
amount then outstanding under the Note; and

 (ii)
 on
the maturity date, the principal amount then outstanding under the Note.

 Each
month, the note holders may accelerate a portion of the note due up to eight times the minimum Installment Amount of $ 1,437,500.

 2023 Additional Notes

 On July 24, 2023, pursuant
to the terms of the Purchase Agreement, as amended, an Investor elected to purchase 3 % Series B-2 Senior Convertible Notes in the aggregate
original principal amount of $ 11.5 million (the "2023 Additional Notes"), which 2023 Additional Notes are convertible into
shares of Common Stock under certain conditions more fully described in the 2022 Convertible Exchange Notes discussed above. The 2023
Additional Notes have an original issue discount of approximately thirteen percent ( 13 %) resulting in gross proceeds to the Company of
$ 10.0 million. The Company currently intends to use the net proceeds for general corporate purposes, which includes funding capital expenditures
and working capital. The 2023 Additional Notes have a maturity date of July 25, 2025. The 2023 Additional Notes were issued pursuant to
the second supplemental indenture, dated as of July 25, 2023, between the Company and the Trustee (the "Second Supplemental Indenture,"
and together with the Base Indenture, the "Second Indenture"). The Second Supplemental Indenture supplements the Base Indenture.
The Second Indenture has been qualified under the Trust Indenture Act of 1939, and the terms of the Additional Notes include those set
forth in the Second Indenture and those made part of the Indenture by reference to the Trust Indenture Act.

 The 2023 Additional Notes
bear interest at the rate of 3 % per annum. The 2023 Additional Notes are payable in monthly installments beginning on August 1, 2023 through
the maturity date of July 24, 2025 (each such date, an "2023 Installment Date"). On each 2023 Installment Date, we will make
monthly payments by converting the applicable 2023 Installment Amount (as defined above under the 2022 Convertible Exchange Notes) into
shares of our Common Stock (a "2023 Installment Conversion"), subject to satisfaction of certain equity conditions, including
a minimum $ 1.50 share price, $ 500,000 minimum daily volume, and maintaining continued Nasdaq listing requirements among other conditions.
If these conditions are not met, installments can be requested in cash. For the years ended December 31, 2024 and 2023, we made no cash
payments and issued no common shares as a result of the note holder deferring all 2023 Installment Conversions. At each 2023 Installment
Date the note holder may defer some or all of the amount due until the subsequent 2023 Installment Date. In between 2023 Installment Dates,
the note holder also has the option to accelerate certain portions of principal due. At each 2023 Installment Date the price used to exchange
outstanding notes into Common Stock is based on the greater of (x) the Floor Price ($ 0.40 as of December 31, 2024) and (y) 92 % of the
lowest VWAP of the prospective five trading days. The maximum conversion price is $ 1.45 per share.

 F- 32

 2024 Additional Notes

 On December 3, 17, and 31,
2024, pursuant to the terms of the Purchase Agreement, as amended, an Investor elected to purchase 3 % Series B-2 Senior Convertible Notes
in the aggregate original principal amount of $ 4.1 million, $ 11.5 million, and $ 18.9 million, respectively, (the "2024 Additional
Notes," together with the 2022 Convertible Exchange Notes and 2023 Additional Notes, the "Notes"), which 2024 Additional
Notes are convertible into shares of Common Stock under certain conditions more fully described in the 2022 Convertible Exchange Notes
discussed above. The 2024 Additional Notes have an original issue discount of approximately thirteen percent ( 13 %) resulting in net proceeds
to the Company of $ 30.1 million. The Company currently intends to use the net proceeds for general corporate purposes and will be primarily
allocated to supporting the growth of our drone business at OAS. The 2024 Additional Notes have a maturity date of December 3, 17, and
31, 2026, respectively. The 2024 Additional Notes were issued pursuant to an indenture entered into by and between the Company and the
Trustee, dated as of December 3, 2024 (the "2024 Base Indenture"). The 2024 Base Indenture was supplemented by three supplemental
indentures (the "2024 Indentures", dated as of December 3, 17 and 31, 2024, between the Company and the Trustee. The 2024
Indentures have been qualified under the Trust Indenture Act of 1939, and the terms of the 2024 Additional Notes include those set forth
in the 2024 Indentures and those made part of the 2024 Indentures by reference to the Trust Indenture Act.

 The 2024 Additional Notes
bear interest at the rate of 3 % per annum. The 2024 Additional Notes are payable in monthly installments beginning on January 1, 2025,
through the maturity date of December 3, 17, and 31, 2026, respectively, (each such date, an "2024 Installment Date"). On
each 2024 Installment Date, we will make monthly payments by converting the applicable 2024 Installment Amount (as defined above under
the 2022 Convertible Exchange Notes) into shares of our Common Stock (an "2024 Installment Conversion"), subject to satisfaction
of certain equity conditions, including a minimum $ 1.50 share price, $ 500,000 minimum daily volume, and maintaining continued Nasdaq listing
requirements among other conditions. If these conditions are not met, installments can be requested in cash. For the year ended December
31, 2024, we made no cash payments and issued no common shares as a result of 2024 Installment Conversion. At each 2024 Installment Date
the note holder may defer some or all of the amount due until the subsequent 2024 Installment Date. In between 2024 Installment Dates,
the note holder also has the option to accelerate certain portions of principal due. At each 2024 Installment Date the price used to exchange
outstanding notes into Common Stock is based on the greater of (x) the Floor Price ($ 0.17, $ 0.20, and $ 0.50, respectively, as of December
31, 2024) and (y) 92 % of the lowest VWAP of the prospective five trading days. The maximum conversion price is $ 0.80, $ 0.88, and $ 1.60
per share, respectively.

 As
of December 31, 2024, the total outstanding principal on the 2022 Convertible Exchange Notes, 2023 Additional Notes, and 2024 Additional
Notes was $ 51,164,790, net of unamortized debt discount of $ 4,746,547 and unamortized issuance costs of $ 1,801,013. As of December 31,
2023, the total outstanding principal on the 2022 Convertible Exchange Notes and 2023 Additional Notes was $ 28,504,661, net of debt discount
of $ 1,570,739 and issuance costs of $ 789,390. Accrued interest as of December 31, 2024 and 2023 was $ 1,558,615 and $ 652,631, respectively,
and is included in Accrued expenses and other current liabilities on the Consolidated Balance Sheets.

 For
the year ended December 31, 2024, we recognized interest expense of $ 933,445, amortization expense of $ 1,324,173 related to the debt discount,
and amortization expense of $ 656,858 related to the issuance costs for the 2022 Convertible Exchange Notes, 2023 Additional Notes, and
2024 Additional Notes. For the year ended December 31, 2023, we recognized interest expense of $ 1,027,480, amortization expense of $ 2,070,390
related to the debt discount, and amortization expense of $ 1,069,388 related to the issuance costs for the 2022 Convertible Exchange Notes
and 2023 Additional Notes. The remaining unamortized debt discount and issuance costs will be amortized via the effective interest method
under ASC 835. Interest expense and amortization expense of the debt discount and issuance costs are included in Interest expense on the
Consolidated Statements of Operations.

 F- 33

 Ondas Networks Convertible Notes

 On
July 8, 2024 and July 23, 2024, Charles & Potomac Capital, LLC, ("C&P"), an entity affiliated with Joseph Popolo,
a director of the Company, elected to purchase Convertible Notes in the aggregate original principal amount of $ 700,000 and $ 800,000,
respectively, (the "July Networks Convertible Notes"). The July Networks Convertible Notes are convertible into shares of
Networks Common Stock (as defined below) or Preferred Stock under certain conditions. The Company currently intends to use the net proceeds
for general corporate purposes, which includes funding capital expenditures and working capital. The July Networks Convertible Notes bear
interest at the rate of 6 % per annum and have a maturity date of July 8, 2025 and July 23, 2025, respectively.

 On
November 13, 2024, multiple investors elected to purchase Convertible Notes in the aggregate original principal amount of $ 2,069,017,
(the "November Networks Convertible Notes"), of which $ 1,000,000 was purchased by C&P. The November Networks Convertible
Notes are convertible into shares of Networks Common Stock (as defined below) or Preferred Stock under certain conditions. The Company
currently intends to use the net proceeds for general corporate purposes, which includes funding capital expenditures and working capital.
The November Networks Convertible Notes bear interest at the rate of 10 % per annum and have a maturity date of September 30, 2025.

 In
the event Ondas Networks consummates the next round of equity financing prior to the maturity date, the principal balance and unpaid accrued
interest on the July and November Networks Convertible Notes will be convertible at the option of the Investor into conversion shares
upon closing of the next round of equity financing.

 Along with the November Networks
Convertible Notes, Networks issued the investors warrants to purchase $ 2,069,017 in shares of preferred stock of Networks, $ 0.00001 par
value per share, at an exercise price of $ 20.65 per share. The number of warrants exercisable under the Security Agreement is calculated
by $ 2,069,017 divided by the Conversion Price, which is the amount equal to the price per share of Networks' most senior series
of Preferred Stock issued to investors in Networks' next equity financing date, or if none, then $ 41.3104. The warrants are exercisable
commencing November 13, 2024 through November 13, 2029. The Company engaged a third-party service provider to carry out an appraisal of
the warrants, who ran a Black-Scholes Model to determine the fair value of the warrants as of November 13, 2024, which was $ 1,220,498.
The initial valuation was assigned to the November Networks Convertible Notes and the warrants based on their relative fair values, resulting
in a relative fair value of $ 767,660 for the warrants, which was recorded as debt discount.

 As
of December 31, 2024, the total outstanding principal on the July and November Networks Convertible Notes was $ 3,569,017, net of unamortized
debt discount of $ 650,843 and unamortized issuance costs of $ 44,549. Accrued interest as of December 31, 2024 was $ 40,932 and is included
in Accrued expenses and other current liabilities on the Consolidated Balance Sheets. For the year ended December 31, 2024, we recognized
interest expense of $ 40,932 and amortization expense of $ 116,817 related to debt discount and $ 14,694 related to the issuance costs. The
remaining unamortized debt discount and issuance costs will be amortized straight line over the term of the loan, as there was no material
difference when compared to amortization via the effective interest method under ASC 835. Interest expense and amortization expense related
to issuance costs are included in Interest expense on the Consolidated Statements of Operations.

 OAS Convertible Notes

 In
October and December 2024, multiple investors elected to purchase Convertible Notes in the aggregate original principal amount of $ 5,200,000,
(the "OAS Convertible Notes"), of which $ 2,000,000 was purchased by C&P and $ 1,000,000 was purchased by Privet Ventures
LLC, an entity affiliated with Eric Brock, Chairman and Chief Executive Officer of the Company and OAS. The OAS Convertible Notes are
convertible into shares of OAS Common Stock, par value per share $ 0.0001, or Preferred Stock under certain conditions. The Company currently
intends to use the net proceeds for general corporate purposes, which includes funding capital expenditures and working capital. The OAS
Convertible Notes bear interest at the rate of 5 % per annum and have a maturity date of September 30, 2025.

 F- 34

 In
the event OAS consummates the next round of equity financing prior to the maturity date, the principal balance and unpaid accrued interest
on the OAS Convertible Notes will be automatically converted into conversion shares upon closing of the next round of equity financing.

 As
of December 31, 2024, the total outstanding principal on the OAS Convertible Notes was $ 5,200,000, net of unamortized issuance costs of
$ 37,430. Accrued interest as of December 31, 2024 was $ 36,973 and is included in Accrued expenses and other current liabilities on the
Consolidated Balance Sheets. For the year ended December 31, 2024, we recognized interest expense of $ 36,973 and amortization expense
of $ 6,977 related to the issuance costs. The remaining unamortized issuance costs will be amortized straight line over the term of the
loan, as there was no material difference when compared to amortization via the effective interest method under ASC 835. Interest expense
and amortization expense related to issuance costs are included in Interest expense on the Consolidated Statements of Operations.

 Ondas Networks Secured Note

 On September 3, 2024, Networks
entered into a Security Note Agreement (the "Security Agreement") with C&P, in which, Networks may draw, and C&P shall
loan Networks, up to $ 1,500,000 (the "Networks Secured Loan"). Pursuant to the Security Agreement, Networks issued C&P
a secured note in the amount of $ 1,500,000, which amount may be increased or decreased by the mutual written agreement of the parties
thereto (the "Networks Secured Note"). The Networks Secured Note (i) bears interest at a rate of 8 % per annum, (ii) has a
maturity date of February 28, 2025, and (iii) is secured by all assets of Networks. On February 28, 2025, Networks and C&P entered
into an agreement to extend the maturity date to July 23, 2025. As of December 31, 2024, Networks has drawn a total of $ 1,500,000 on the
Networks Secured Note.

 On September 3, 2024 and October
7, 2024, pursuant to the Security Agreement, Networks issued C&P warrants to purchase $ 1,000,000 and $ 500,000, respectively, in shares
of preferred stock of Networks, $ 0.00001 par value per share, at an exercise price of $ 20.65 per share. The number of warrants exercisable
under the Security Agreement is calculated by $ 1,500,000 divided by the Conversion Price, which is the amount equal to the price per share
of Networks' most senior series of Preferred Stock issued to investors in Networks' next equity financing date, or if none,
then $ 41.3104. The warrants are exercisable commencing September 3, 2024 through September 3, 2029 and October 7, 2024 through October
7, 2029, respectively. The Company engaged a third-party service provider to carry out an appraisal of the warrants, who ran a Black-Scholes
Model to determine the fair value of the warrants as of September 3, 2024 and October 7, 2024, which was $ 589,924 and $ 884,875, respectively.
The initial valuation was assigned to the Networks Secured Note and the warrants based on their relative fair values, resulting in a total
relative fair value of $ 556,554 for the warrants, which was recorded as debt discount.

 As
of December 31, 2024, the total outstanding principal on the Networks Secured Note was $ 1,500,000, net of unamortized debt discount of
$ 201,135 and unamortized issuance costs of $ 25,649. Accrued interest as of December 31, 2024 was $ 37,107 and is included in Accrued expenses
and other current liabilities on the Consolidated Balance Sheets. For the year ended December 31, 2024, we recognized interest expense
of $ 37,107 and amortization expense of $ 355,419 related to the debt discount and $ 52,164 related to the issuance costs. The remaining
unamortized debt discount and issuance costs will be amortized straight line over the term of the loan, as there was no material difference
when compared to amortization via the effective interest method under ASC 835. Interest expense and amortization expense related to issuance
costs are included in Interest expense on the Consolidated Statements of Operations.

 Government Grant Liability

 Airobotics has received grants
from the Israel Innovation Authority ("IIA") to finance its research and development programs in Israel, through which Airobotics
received IIA participation payments in the aggregate amount of $ 3.7 million through December 31, 2024. All of these are royalty-bearing
grants. In return, Airobotics is committed to pay IIA royalties at a rate of 3 % of future sales of the developed products, up to 100 %
of the amounts of grants received plus interest at LIBOR. Through December 31, 2024, approximately $ 737,000 in royalties have been paid
to the IIA. The Company made royalty payments of $ 277,469 and $ 6,576 during the years ended December 31, 2024 and 2023, respectively.

 The Company's royalty
liability to the IIA as of December 31, 2024 and 2023, including grants received by Airobotics and the associated LIBOR interest on all
such grants, was $ 2,557,182 and $ 2,749,704, respectively. The (increase) and decrease in fair value of the government grant liability,
including LIBOR interest expense accrued, was $94,962 for the year ended December 31, 2024 and ($478,721) for the period of January 24,
2023 - December 31, 2023, which is included in Other income (expense), net on the Consolidated Statements of Operations.

 Maturities on Long-Term Liabilities

 Principal maturities on long-term notes
payable and convertible notes payable on the consolidated balance sheet as of December 31, 2024, are as follows:

 Notes payable

 Convertible

 notes

 payable

 2026

 $

 -

 $

 17,250,000

 2027

 300,000

 -

 Total

 $

 300,000

 $

 17,250,000

 F- 35

 NOTE 10 – STOCKHOLDERS' EQUITY

 Common Stock

 As of December 31, 2024 and
2023, the Company had 300,000,000 shares of Common Stock authorized for issuance, of which 93,173,191 and 61,940,878 shares of our Common
Stock were issued and outstanding, respectively.

 Preferred Stock

 As of December 31, 2024 and
2023, the Company had 10,000,000 shares of preferred stock, par value $ 0.0001, authorized, of which 5,000,000 shares are designated as
Series A Convertible Preferred Stock ("Series A Preferred") and 5,000,000 shares are non-designated ("blank check,"
together with the Series A Preferred, the "Preferred Shares") shares. As of December 31, 2024 and 2023, the Company had no
preferred stock outstanding.

 Form S-3

 On January 29, 2021, the Company
filed a shelf Registration Statement on Form S-3 for up to $ 150,000,000 with the SEC (the "Prior Form S-3") for shares of
its Common Stock; shares of its preferred stock, which the Company may issue in one or more series or classes; debt securities, which
the company may issue in one or more series; warrants to purchase its Common Stock, preferred stock or debt securities; and units. The
Prior Form S-3 was declared effective by the SEC on February 5, 2021. In accordance with SEC rules, the Prior Form S-3 expired on
February 5, 2024, the three-year anniversary of the date on which it was declared effective.

 On February 2, 2024, the Company
initially filed with the SEC a new shelf Registration Statement on Form S-3 for up to $ 175,000,000, which represents $ 150,000,000 under
the Prior Form S-3 and an additional $ 25,000,000 (the "New Form S-3"), for shares of its Common Stock; shares of its preferred
stock, which the Company may issue in one or more series or classes; debt securities, which the company may issue in one or more series;
warrants to purchase its Common Stock, preferred stock or debt securities; and units. The New Form S-3 was declared effective by the SEC
on February 15, 2024.

 Stock Issued for Convertible Debt

 The Company issued 21,284,556
shares of its Common Stock during the year ended December 31, 2024 to the lenders in lieu of cash payments for $ 27,461 of interest and
$ 14,200,000 of outstanding principal on the 2022 Convertible Exchange Notes (See Note 9 – Notes Payable for further details).

 The Company issued 14,028,022
shares of its Common Stock during the year ended December 31, 2023 to the lenders in lieu of cash payments for $ 268,987 of outstanding
interest and $ 9,580,300 of outstanding principal on the 2022 Convertible Exchange Notes (See Note 9 – Notes Payable for further
details).

 Sale of Common Stock in Ondas Holdings and Warrants to Purchase
Common Stock of OAS

 On February 26, 2024, the
Company entered into a Securities Purchase Agreement (the "Ondas Agreement") with certain purchasers named therein (the "Ondas
Purchasers") for the purchase and sale of (i) an aggregate of 3,616,071 shares (the "Holdings Shares") of Common Stock
and (ii) warrants to purchase an aggregate of 3,616,071 shares of OAS' common stock $ 0.0001 par value per share, at an exercise
price of 80 % of the lowest price of Common Shares of OAS issued in a subsequent financing of at least $ 10,000,000 to the Company, and
exercisable commencing ninety days following the date of issuance through the fifth anniversary of the date of issuance (the "OAS
Warrants," and together with the Holdings Shares, the "Ondas Offering Securities"), for gross proceeds of $ 4,050,000
(the "Ondas Offering"). The purchase price paid by the Ondas Purchasers for the Holdings Shares was $ 1.12 per share.

 The Company engaged a third-party service provider to carry out an
appraisal of the OAS Warrants, who ran a Monte Carlo simulation to determine the fair value of the OAS Warrants as of February 26, 2024,
which is $ 1,561,532. The initial valuation was assigned to the Holdings Shares and the OAS Warrants based on their relative fair values,
with the initial valuation of the Holdings Shares being $ 3,095,263 and OAS Warrants being $ 954,737. As of December 31, 2024, there were
 3,616,071 OAS Warrants outstanding, with a weighted average remaining contractual life of 4.16 years.

 F- 36

 Sale of Common Stock and Warrants in Ondas
Holdings

 On August 28, 2024, the Company
entered into a Securities Purchase Agreement, (the "Purchase Agreement") with an institutional investor (the "Investor"),
pursuant to which the Company agreed to issue and sell, in a registered direct offering by the Company directly to the Investor an aggregate
of 5,333,334 shares of Common Stock (the "Holdings Shares"), together with Series A warrants ("Series A Warrants")
to purchase up to 5,333,334 shares of Common Stock and Series B warrants ("Series B Warrants," and together with the Series
A Warrants, the "Warrants") to purchase up to 5,333,334 shares of Common Stock. The Series A Warrants have an exercise price
of $ 0.8073 per share and are exercisable at any time from February 28, 2025 through March 1, 2027. The Series B Warrants have an exercise
price of $ 0.8073 per share and are exercisable at any time from February 28, 2025 through February 28, 2030.

 Each share of Common Stock
and accompanying Series A Warrant and Series B Warrant were sold together at a combined offering price of $ 0.75, for gross proceeds of
$ 4,000,000 before deducting the placement agent's fees and related offering expenses, which totaled $ 555,060. The offering closed
on August 30, 2024.

 The Company used the Black-Scholes-Merton
option model (the "Black-Scholes Model") to determine the fair value of warrants to purchase Common Stock of the Company,
which is $ 4,881,775. See the table below for the assumptions used in the Black-Scholes Model. The initial valuation was assigned to the
Holdings Shares and the Warrants based on their relative fair values, with the initial valuation of the Holdings Shares being $ 1,801,442
and Warrants being $ 2,198,559.

 Warrants to Purchase Preferred Stock of Networks

 On September 3, 2024 and October
7, 2024, in connection with the Networks Secured Note, pursuant to the Agreement, Networks issued C&P warrants to purchase $ 1,000,000
and $ 500,000, respectively, in shares of preferred stock of Networks, $ 0.00001 par value per share, at an exercise price of $ 20.65 per
share. The number of warrants exercisable under the Agreement is calculated by $ 1,500,000 divided by the Conversion Price, which is the
amount equal to the price per share of Networks' most senior series of Preferred Stock issued to investors in Networks' next
equity financing date, or if none, then $ 41.3104. The warrants are exercisable commencing September 3, 2024 through September 3, 2029
and October 7, 2024 through October 7, 2029, respectively. The Company engaged a third-party service provider to carry out an appraisal
of the warrants, who ran a Black-Scholes Model to determine the fair value of the warrants as of September 3, 2024 and October 7, 2024,
which was $ 589,924 and $ 294,950, respectively. The initial valuation was assigned to the Networks Secured Note and the warrants based on
their relative fair values, resulting in a total relative fair value of $ 556,554 for the warrants, which was recorded as debt discount.
(See Note 9 – Notes Payable for further details).

 On November 13, 2024, in connection
with the November Networks Convertible Notes, Networks issued the investors warrants to purchase $ 2,069,017 in shares of preferred stock
of Networks, $ 0.00001 par value per share, at an exercise price of $ 20.65 per share. The number of warrants exercisable under the Security
Agreement is calculated by $ 2,069,017 divided by the Conversion Price, which is the amount equal to the price per share of Networks'
most senior series of Preferred Stock issued to investors in Networks' next equity financing date, or if none, then $ 41.3104. The
warrants are exercisable commencing November 13, 2024 through November 13, 2029. The Company engaged a third-party service provider to
carry out an appraisal of the warrants, who ran a Black-Scholes Model to determine the fair value of the warrants as of November 13, 2024,
which was $ 1,220,498. The initial valuation was assigned to the November Networks Convertible Notes and the warrants based on their relative
fair values, resulting in a relative fair value of $ 767,660 for the warrants, which was recorded as debt discount. (See Note 9 –
Notes Payable for further details).

 As of December 31, 2024, there were 86,392 warrants for shares of preferred
stock in Networks outstanding based on a Conversion Price of $ 41.3104, with a weighted average exercise price of $ 20.65 and a weighted
average remaining contractual life of 4.82 years.

 Warrants to Purchase Common Stock of Networks

 On June 3, 2024, the Company issued warrants to purchase 15,391 shares
of Networks Common Stock, at an exercise price of $ 2.75 per share, with a fair value of $ 303,052, in consideration of consulting services
for the Company. The warrants vest over a one-year period. The Company engaged a third-party service provider to carry out a valuation
of Ondas Networks' Common Stock to determine its fair value as of May 31, 2024 and has recorded stock-based compensation of $ 201,529
in General and administrative expense on the Consolidated Statements of Operations for the year ended December 31, 2024 based on the valuation.
As of December 31, 2024, there were 15,391 warrants for shares of common stock in Networks outstanding, with a weighted average exercise
price of $ 2.75 and a weighted average remaining contractual life of 4.42 years. As of December 31, 2024, total unrecognized compensation
expense related to the non-vested Warrants was $ 101,523 which is expected to be recognized over a weighted-average period of approximately
 0.5 years.

 F- 37

 Warrants to Purchase Common Stock of the Company

 We use the Black-Scholes-Merton
option model (the "Black-Scholes Model") to determine the fair value of warrants to purchase Common Stock of the Company.
The Black-Scholes Model is an acceptable model in accordance with U.S GAAP. The Black-Scholes Model requires the use of a number of assumptions
including volatility of the stock price, the weighted average risk-free interest rate, and the weighted average term of the warrant.

 The risk-free interest rate
assumption is based upon observed interest rates on zero coupon U.S. Treasury bonds whose maturity period is appropriate for the term
of the warrants. Estimated volatility is a measure of the amount by which our stock price is expected to fluctuate each year during the
expected life of the award. Our estimated volatility is an average of the historical volatility of peer entities whose stock prices were
publicly available over a period equal to the expected life of the awards. We used the historical volatility of peer entities due to the
lack of sufficient historical data of our stock price.

 On February 26, 2024, the
Company issued warrants to purchase 3,015,000 shares of the Company's Common Stock, at an exercise price of $ 1.26 per share, and
with a relative fair value of $ 1,471,194, in connection with the sale of redeemable preferred stock in Ondas Networks. See Note 11 –
Redeemable Noncontrolling Interest.

 On June 3, 2024, the Company
issued warrants to purchase 662,723 shares of the Company's Common Stock, at an exercise price of $ 0.72 per share, and with a fair
value of $ 193,250, in consideration of consulting services for the Company. The warrants vest over a one-year period.

 On June 21, 2024, the Company issued warrants to
purchase 90,910 shares of the Company's Common Stock, including warrants for 45,455 shares issued to Neil Laird, Interim Chief Financial
Officer of the Company, at an exercise price of $ 4.47 per share, and with a fair value of $ 31,156, in consideration of consulting services
for the Company. The warrants vest over a one-year period.

 The assumptions used in the
Black-Scholes Model are set forth in the table below.

 Ondas Holdings

 2024

 2023

 Stock price

 $

 0.72 - 1.40

 $

 1.14 - 2.00

 Risk-free interest rate

 3.71 - 4.62 %

 4.09 - 4.70 %

 Volatility

 56.15 - 82.03 %

 50.64 - 55.34 %

 Expected life in years

 2.00 - 5.00

 0.12 - 5.00

 Dividend yield

 0.00 %

 0.00 %

 A summary of our Warrants
activity and related information follows:

 Shares
 Under
 Warrant

 Weighted
 Average
 Exercise
 Price

 Weighted
 Average
 Remaining
 Contractual
 Life

 Balance as of January 1, 2024

 12,566,092

 $
 2.22

 4.71

 Granted

 14,435,301

 0.90

 Exercised

 ( 46,993
)

 0.03

 Cancelled

 ( 464,290
)

 9.32

 Balance as of December 31, 2024

 26,490,110

 $
 1.70

 3.84

 Vested and Exercisable as of December 31, 2024

 15,555,975

 $
 1.78

 3.95

 Total stock-based compensation
expense for warrants for the year ended December 31, 2024 was $ 144,089 and is recorded in General and administrative expense on the Consolidated
Statements of Operations. There was no stock-based compensation expense for warrants for the year ended December 31, 2023.

 As of December 31, 2024, total
unrecognized compensation expense related to non-vested Warrants was $ 80,317 which is expected to be recognized over a weighted-average
period of approximately 0.5 years.

 F- 38

 Stock Options to Purchase Common Stock

 The Company awards stock options
to certain employees, directors, and consultants, which represent the right to purchase common shares on the date of exercise at a stated
exercise price. Stock options granted to employees generally vest over a two to four-year period and are contingent on ongoing employment.
Compensation expenses related to these awards is recognized straight-line over the applicable vesting period. Stock options granted to
consultants are subject to the attainment of pre-established performance conditions. The actual number of shares subject to the award
is determined at the end of the performance period and may range from zero to 100 % of the target shares granted depending upon the terms
of the award. Compensation expenses related to these awards is recognized when the performance conditions are satisfied.

 On April 8, 2024, the Compensation
Committee granted an aggregate of 804,500 stock options to purchase shares of the Company's Common Stock to certain employees, with
an exercise price of $ 1.07 and a term of 10 years. The stock options vest over a four-year period and are contingent on ongoing employment.
They are included in compensation expenses.

 The assumptions used in the
Black-Scholes Model are set forth in the table below.

 2024

 2023

 Stock price

 $
 1.00

 $
 1.24 – $ 2.06

 Risk-free interest rate

 4.43 %

 3.61 – 4.82 %

 Volatility

 58.58 %

 49.83 – 58.92 %

 Expected life in years

 6.25

 0.12 – 6.25

 Dividend yield

 0.00 %

 0.00 %

 A summary of our Option activity
and related information follows:

 Number of Shares Under Option

 Weighted Average Exercise Price

 Weighted
 Average
 Remaining
 Contractual
 Life

 Balance as of January 1, 2024

 4,854,507

 $
 4.59

 7.34

 Granted

 804,500

 $
 1.07

 Exercised

 ( 76,867
)

 $
 0.77

 Forfeited

 ( 260,297
)

 $
 1.75

 Canceled

 ( 1,032,484
)

 $
 6.56

 Balance as of December 31, 2024

 4,289,359

 $
 3.70

 7.59

 Vested and Exercisable as of December 31, 2024

 2,424,514

 $
 4.88

 6.91

 As of December 31, 2024, total
unrecognized compensation expense related to non-vested Options was $ 1,343,152 which is expected to be recognized over a weighted-average
period of 2.35 years.

 Total stock-based compensation
expense for stock options for the years ended December 31, 2024 and 2023 is as follows:

 2024

 2023

 General and administrative

 $
 272,159

 $
 343,371

 239,489

 523,798

 140,991

 223,513

 73,433

 50,341

 Total stock-based expense related to options

 $
 726,072

 $
 1,141,023

 F- 39

 Restricted Stock Units

 The Company awards Restricted
Stock Units ("RSUs") to certain employees and directors, which represent a right to receive common stock for each RSU that
vests. Compensation expenses related to these awards is recognized straight-line over the applicable vesting period.

 On November 18, 2024, the
Compensation Committee approved the grant of 252,417 RSUs to directors. The RSUs vest in four successive equal quarterly installments
with the first vesting date commencing on the first day of the next calendar quarter.

 A summary of our RSUs activity
and related information follows:

 RSUs

 Weighted Average Grant Date Fair Value

 Weighted
 Average
 Vesting Period (Years)

 Unvested balance at January 1, 2024

 554,466

 $
 1.14

 0.66

 Granted

 252,417

 $
 0.68

 Vested

 ( 554,466
)

 1.14

 Unvested balance at December 31, 2024

 252,417

 $
 0.68

 0.75

 As of December 31, 2024 the
unrecognized compensation expense for RSUs was $ 147,342.

 In 2023, three employees with
RSUs separated from the Company. As part of their separation agreements, the employees were granted accelerated vesting on some of their
restricted stock unit awards, which was accounted for as a modification of their awards. The result of the modification was a reversal
of approximately $ 1,184,000 of previously recognized stock-based compensation expense during the year ended December 31, 2023. Total stock-based
compensation expense for RSUs for the years ended December 31, 2024 and 2023 is as follows:

 2024

 2023

 General and administrative

 $
 179,216

 $
 ( 152,814
)

 13,564

 90,899

 ( 31,710
)

 Total stock-based expense related to RSUs

 $
 193,495

 $
 ( 93,625
)

 Equity Incentive Plan

 In 2018, our stockholders
adopted the 2018 Equity Incentive Plan (the "2018 Plan") pursuant to which 3,333,334 shares of our Common Stock has been reserved
for issuance to employees, including officers, directors and consultants. The 2018 Plan shall be administered by the Board, provided however,
that the Board may delegate such administration to the compensation committee of the Board of the Company (the "Compensation Committee").
Subject to the provisions of the 2018 Plan, the Board and/or the Compensation Committee shall have authority to grant, in its discretion,
incentive stock options, or non-statutory options, stock awards or restricted stock purchase offers ("Equity Awards"). As
of December 31, 2024, the balance available to be issued under the 2018 Plan was 1,207,078.

 In 2021, our stockholders
adopted the Ondas Holdings Inc. 2021 Stock Incentive Plan (the "2021 Plan"). The purpose of the 2021 Plan is to enable the
Company to attract, retain, reward, and motivate eligible individuals by providing them with an opportunity to acquire or increase a proprietary
interest in the Company and to incentivize them to expend maximum efforts for the growth and success of the Company, so as to strengthen
the mutuality of the interests between the eligible individuals and the shareholders of the Company. The 2021 Plan provides for the issuance
of awards including stock options, stock appreciation rights, restricted stock, restricted stock units, and performance awards. On October
31, 2023, stockholders of the Company approved an amendment to the 2021 Plan to increase the number of shares of the Company's Common
Stock authorized for issuance under the 2021 Plan from 6,000,000 to 8,000,000 shares. On November 18, 2024, stockholders of the Company
approved an amendment to the 2021 Plan to increase the number of shares of the Company's Common Stock authorized for issuance under
the 2021 Plan from 8,000,000 to 11,000,000 shares. As of December 31, 2024, the balance available to be issued under the 2021 Plan was
 6,573,078.

 F- 40

 NOTE 11 – REDEEMABLE NONCONTROLLING
INTEREST

 Networks Series A-1 Preferred Stock

 On July 9, 2023, Ondas Networks
entered into a Preferred Stock Purchase Agreement with an initial purchaser named therein (the "Initial Purchaser") to purchase
preferred stock of Ondas Networks, $ 0.00001 par value per share (the "Networks Preferred Stock") and the issuance of warrants
to purchase 10,200,000 shares of Ondas Holdings (the "Original Networks Agreement").

 The Preferred Stock accrues
dividends at the rate per annum of eight percent ( 8 %) of the original issue price, of $ 34.955 per share (the "2023 Original Issue
Price"). Such dividends are payable in cash or additional shares of Networks Preferred Stock, with such valuation based on the 2023
Original Issue Price. Each share of Networks Preferred Stock is convertible, at the option of the holder thereof, at any time and from
time to time, and without the payment of additional consideration by the holder thereof, into such number of fully paid and non-assessable
shares of Networks Common Stock (as defined below) as is determined by dividing the 2023 Original Issue Price by the conversion price
in effect at the time of conversion, which initially is set at $ 34.955. In lieu of any fractional shares to which the holder would otherwise
be entitled, the number of shares of Networks Common Stock to be issued upon conversion of the Networks Preferred Stock shall be rounded
to the nearest whole share. The Networks Preferred Stock can be redeemed at the request of the holder at any time after the fifth anniversary
for the greater of two times the initial investment plus accrued dividends or the amount that would be due if the Networks Preferred Stock
was converted into Networks Common Stock as described above.

 On July 21, 2023, Ondas
Networks entered into a certain Amendment to Preferred Stock Purchase Agreement (the "Networks Amendment," together with the
Original Networks Agreement, the "2023 Networks Agreement"). Pursuant to the Networks Amendment, in exchange for an initial
sale of shares of Networks Preferred Stock, the Initial Purchaser acquired the following (the "Initial Networks Closing"),
for gross proceeds to Ondas Networks of $ 11,508,517: (i) 329,238 shares of Networks Preferred Stock, at a purchase price of $ 34.955 per
share (the "Per Share Price"), convertible into shares of Common Stock of Ondas Networks, $ 0.00001 par value per share (the
"Networks Common Stock") and (ii) warrants to purchase 7,825,792 shares of the Company Common Stock, at an exercise price
of $ 0.89 per share, exercisable commencing ninety days following the date of issuance through the fifth anniversary of the date of issuance
(the "Initial Warrants"). Also, pursuant to the Networks Amendment, the Initial Purchaser agreed to purchase, and Ondas Networks
agreed to sell and issue to the Initial Purchaser, an additional 99,885 shares of Networks Preferred Stock, at the Per Share Price (the
"Second Initial Purchaser Closing") and warrants to purchase 2,374,208 shares of Company Common Stock, at an exercise price
of $ 0.89 per share, exercisable commencing ninety days following the date of issuance through the fifth anniversary of the date of issuance
(the "Second Initial Purchaser Warrants"), within thirty days of the Initial Networks Closing.

 Ondas Networks will use the
proceeds from the sale of the Networks Preferred Stock for working capital and other general corporate purposes, including fees related
to the transactions contemplated by the 2023 Networks Agreement. No portion of the proceeds will be distributed to the Company.

 Also on July 21, 2023, Ondas
Networks completed the Initial Networks Closing. In connection with the Initial Networks Closing, the Company issued the Initial Warrants.
Also, in connection with the Initial Closing, the parties entered into an indemnification agreement, investors' rights agreement,
right of first refusal agreement, and voting agreement. Forms of each of these agreements are attached to Exhibit 10.1 to Form 8-K filed
on July 28, 2023.

 On August 11, 2023, Ondas
Networks completed the Second Initial Purchaser Closing. In connection with the Second Initial Purchaser Closing, the Company issued Second
Initial Purchaser Warrants. Following the Second Initial Purchaser Closing, the Initial Purchaser has invested an aggregate of $ 15.0 million
and owns a minority interest of approximately 28 % of Ondas Networks.

 The Company assessed the Networks
Preferred Stock in accordance with ASC 480 and determined that it should be recorded as temporary equity and not as a liability. The initial
valuation was assigned to the Networks Preferred Stock and the Initial Warrants and Second Initial Purchaser Warrants on relative fair
values, with the initial valuation of the noncontrolling interest being $ 10,406,949 and warrants being $ 4,593,051. It is being accreted
using the effective interest rate method over the five-year period to achieve the redemption value of $ 30,000,000 plus accrued dividends.

 F- 41

 Networks Series A-2 Preferred Stock

 On February 26, 2024, Ondas
Networks entered into a second Preferred Stock Purchase Agreement (the "Networks Agreement") for an investment of $ 4.50 million
in Ondas Networks (the "Networks Offering"). The Networks Agreement was entered into with the Networks Purchasers for the
sale of shares of preferred stock for a purchase of $ 4.50 million. The Networks Offering was consummated on February 26, 2024.

 Pursuant to the Networks Agreement,
the Networks Purchasers acquired the following in the Networks Offering for gross proceeds to Ondas Networks of $ 4.5 million: (i) 108,925
shares of preferred stock of Networks Series A-2 Preferred Stock, at a purchase price of $ 41.3104 per share (the "Per Share Price"),
convertible into shares of Common Stock, $ 0.00001 par value per share of Networks Common Stock and (ii) warrants to purchase 3,015,000
shares of the Company's Common Stock, at an exercise price of $ 1.26 per share, exercisable commencing ninety days following the
date of issuance through the fifth anniversary of the date of issuance (the "Holdings Warrants," and together with the Networks
Series A-2 Preferred Stock, the "Networks Offering Securities").

 The Networks Series A-2 Preferred
Stock accrues dividends at the rate per annum of eight percent ( 8 %) of the original issue price, of $ 41.3104 per share (the "Original
Issue Price"). Dividends shall be payable only when, as, and if declared by the board of directors of Ondas Networks and Ondas Networks
shall be under no obligation to pay such dividends. Such dividends are payable in cash or additional shares of Networks Series A-2 Preferred
Stock, with such valuation based on the Original Issue Price. Each share of Networks Series A-2 Preferred Stock is convertible, at the
option of the holder thereof, at any time and from time to time, and without the payment of additional consideration by the holder thereof,
into such number of fully paid and non-assessable shares of Networks Common Stock as is determined by dividing the Original Issue Price
by the conversion price in effect at the time of conversion, which initially is set at $ 41.3104. In lieu of any fractional shares to which
the holder would otherwise be entitled, the number of shares of Networks Common Stock to be issued upon conversion of the Networks Series
A-2 Preferred Stock shall be rounded to the nearest whole share. The Networks Series A-2 Preferred Stock can be redeemed as the request
of the Holder at any time after the fifth anniversary for the greater of the initial investment plus accrued dividends or the amount that
would be due if the Networks Series A-2 Preferred Stock was converted into Networks Common Stock as described above.

 Pursuant to the Networks Agreement,
the Company entered into a registration rights agreement with the purchasers to register the resale of the Company's Common Stock
underlying the Holdings Warrants pursuant to a registration statement to be filed no later 180 days following the closing of the Networks
Offering. Also, pursuant to the Networks Agreement, the Networks Purchasers became parties to those certain investors' rights agreement,
right of first refusal agreement, and voting agreement, dated July 21, 2023.

 Ondas Networks used the proceeds
from the sale of the Networks Offering Securities to immediately redeem an amount of shares of Networks Common Stock at the Per Share
Price held by the Company that was equivalent to the amount of proceeds raised in the sale of the Networks Offering Securities.

 The issuance of the Networks
Offering Securities was exempt from registration requirements of the Securities Act pursuant to Section 4(2) of such Securities Act and
Regulation D promulgated thereunder based upon the representations of each of the Networks Purchasers that it was an "accredited
investor" (as defined under Rule 501 of Regulation D) and that it was purchasing such securities without a present view toward a
distribution of the securities. In addition, there was no general advertisement conducted in connection with the sale of the Networks
Offering Securities. See the Current Report on Form 8-K filed with the SEC on February 26, 2024 for further details.

 The Company assessed the Networks
Series A-2 Preferred Stock in accordance with ASC 480 and determined that it should be recorded as temporary equity and not as a liability.
The initial valuation was assigned to the Networks Series A-2 Preferred Stock and the Warrants based on relative fair values, with the
initial valuation of the noncontrolling interest being $ 3,028,806 and warrants being $ 1,471,194. It is being accreted using the effective
interest rate method over the five-year period to achieve the redemption value of $ 4,500,000 plus accrued dividends.

 The Company recorded accrued
dividends of $ 1,504,138 and accretion of $ 2,907,567 for the year ended December 31, 2024 for the Networks Series A-1 and A-2 Preferred
Stock. The Company recorded accrued dividends of $ 512,207 and accretion of $ 1,001,538 for the year ended December 31, 2023 for the Networks
Series A-1 Preferred Stock.

 F- 42

 NOTE 12 – SEGMENT INFORMATION

 Operating segments are defined as components of an entity for which
discrete financial information is available and is regularly reviewed by the Chief Operating Decision Maker ("CODM") in making
decisions regarding resource allocation and performance assessment. The Company's CODM is its Chief Executive Officer. Segment operating
loss and segment loss before provision for income taxes are the measure of profit and loss used by the CODM to assess performance and
to decide how to allocate resources for each of the Company's reportable segments. Segment operating loss and segment loss before
provision for income taxes are used to monitor actual results versus planned and prior period results for each segment based on their
respective profitability objectives and business models. Segment operating loss and segment loss before provision for income taxes are
also used to allocate human and capital resources among the reportable segments. The Company determined it has two reportable segments,
Ondas Networks and OAS, as the CODM reviews financial information for these two businesses separately. The Company has no inter-segment
sales. The following table presents segment information for years ended December 31,:

 2024

 2023

 Ondas

Networks

 OAS

 Total

 Ondas

Networks

 OAS

 Total

 Product revenue

 $

 25,682

 $

 2,770,496

 $

 2,796,178

 $

 5,246,948

 $

 6,855,440

 $

 12,102,388

 Service revenue

 34,276

 2,457,679

 2,491,955

 12,800

 2,113,760

 2,126,560

 Development revenue

 1,871,561

 33,000

 1,904,561

 1,462,482

 -

 1,462,482

 Revenue, net

 1,931,519

 5,261,175

 6,722,230

 8,969,200

 2,290,324

 4,557,187

 6,847,511

 4,647,931

 4,662,325

 9,310,256

 Gross profit (loss)

 ( 358,805

)

 703,988

 345,183

 2,074,299

 4,306,875

 6,381,174

 Operating expenses:

 General and administration

 5,261,026

 10,360,623

 15,621,649

 4,374,703

 13,960,077

 18,334,780

 2,208,960

 3,101,275

 5,310,235

 3,174,435

 2,668,759

 5,843,194

 5,881,712

 6,594,689

 12,476,401

 7,131,564

 9,942,371

 17,073,935

 Segment operating loss

 ( 13,710,503

)

 ( 19,352,599

)

 ( 33,063,102

)

 ( 12,606,403

)

 ( 22,264,332

)

 ( 34,870,735

)

 Interest income

 75,045

 -

 75,045

 114,526

 -

 114,526

 Interest expense

 ( 632,132

)

 ( 676,704

)

 ( 1,308,836

)

 ( 15,000

)

 ( 427,412

)

 ( 442,412

)

 Other segment items

 ( 29,962

)

 16,837

 ( 13,125

)

 ( 12,184

)

 ( 955,968

)

 ( 968,152

)

 Segment loss before provision for income taxes

 $

 ( 14,297,552

)

 $

 ( 20,012,466

)

 $

 ( 34,310,018

)

 $

 ( 12,519,061

)

 $

 ( 23,647,712

)

 $

 ( 36,166,773

)

 Corporate operating expenses

 -

 -

 ( 1,546,202

)

 -

 -

 ( 4,858,565

)

 Corporate other expense

 -

 -

 -

 -

 -

 ( 116,535

)

 Elimination of intercompany interest

 -

 -

 605,687

 -

 -

 470,486

 Corporate interest income

 -

 -

 159,885

 -

 -

 9,348

 Corporate interest expense

 -

 -

 ( 2,917,109

)

 -

 -

 ( 4,182,833

)

 Loss before income taxes

 -

 -

 $

)

 -

 -

 $

)

 Additional segment information is set forth below
as of and for the year ending December 31,

 2024

 2023

 Ondas
 Networks

 OAS

 Total

 Ondas
 Networks

 OAS

 Total

 Total assets

 $
 24,297,317

 $
 85,324,971

 $
 109,622,288

 $
 19,272,162

 $
 72,892,520

 $
 92,164,682

 Goodwill

 $
 -

 $

 $

 $
 -

 $

 $

 Depreciation and amortization

 $
 212,031

 $
 4,610,709

 $
 4,822,740

 $
 142,866

 $
 4,849,059

 $
 4,991,925

 $
 599,520

 $
 665,665

 $
 1,265,185

 $
 1,111,256

 $
 ( 63,858
)

 $
 1,047,398

 Capital expenditures

 $
 1,042,699

 $
 593,696

 $
 1,636,395

 $
 79,208

 $
 131,827

 $
 211,035

 F- 43

 NOTE 13 – INCOME TAXES

 The provision (benefit) from
income taxes was as follows:

 2024

 2023

 Current

 U.S. Federal

 $
 -

 $
 -

 State and local

 -

 -

 $
 -

 $
 -

 Deferred

 U.S. Federal

 $
 -

 $
 -

 State and local

 -

 -

 $
 -

 $
 -

 Total

 U.S. Federal

 $
 -

 $
 -

 State and local

 -

 -

 $
 -

 $
 -

 The tax effects of temporary
differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities are as follows:

 2024

 2023

 Deferred Tax Assets:

 Tax benefit of net operating loss carry-forward

 $
 69,411,243

 $
 62,608,641

 Accrued liabilities

 569,552

 336,802

 378,633

 223,047

 Depreciation

 400,385

 183,361

 Amortization

 4,443

 -

 Inventory reserve

 63,881

 29,962

 Investment impairment

 433,498

 448,289

 Operating lease liabilities

 1,744,674

 1,910,688

 R&D capitalization

 8,960,583

 8,793,631

 R&D credit

 751,488

 751,488

 Other

 1,427,808

 1,446,535

 Total deferred tax assets

 84,146,188

 76,732,444

 Deferred Tax Liabilities:

 Intangibles

 ( 5,603,344
)

 ( 6,450,630
)

 Deferred rent

 ( 1,047,460
)

 ( 1,379,646
)

 Total deferred tax liabilities

 ( 6,650,804
)

 ( 7,830,276
)

 Total net deferred tax assets

 77,495,384

 68,902,168

 Valuation allowance for deferred tax assets

 ( 77,495,384
)

 ( 68,902,168
)

 Deferred tax assets, net of valuation allowance

 $
 -

 $
 -

 The change in the Company's valuation allowance
is as follows:

 2024

 2023

 Beginning of the year

 $
 68,902,168

 $
 29,218,958

 Change in valuation account

 8,593,216

 39,683,210

 End of the year

 $
 77,495,384

 $
 68,902,168

 F- 44

 A reconciliation of the provision
for income taxes with the amounts computed by applying the Federal income tax rate to income from operations before the provision for
income taxes is as follows:

 2024

 2023

 U.S. federal statutory rate

 ( 21.0
)%

 ( 21.0
)%

 Federal true ups

 ( 0.82
)%

 0.88
 %

 State taxes, net of federal benefit

 ( 1.29
)%

 ( 4.86
)%

 Change in valuation allowance

 23.45
 %

 24.24
 %

 Stock compensation

 0.25
 %

 0.94
 %

 Acquisition costs

 -

 %

 0.09
 %

 Foreign rate differential

 ( 0.66
)%

 ( 0.35
)%

 Nondeductible expenses

 0.07
 %

 0.06
 %

 Effective income tax rate

 -

 %

 -

 %

 In assessing the realization
of deferred tax assets, including the net operating loss carryforwards (NOLs), the Company assesses the available positive and negative
evidence to estimate if sufficient future taxable income will be generated to utilize its existing deferred tax assets. The ultimate realization
of deferred tax assets is dependent upon the generation of future taxable income during the period when those temporary differences become
deductible. Based on its assessment, the Company has provided a full valuation allowance against its net deferred tax assets as their
future utilization remains uncertain at this time.

 Effective with the issuance
of redeemable preferred stock on July 21, 2023, Ondas Networks will not be a member of the Company consolidated US tax filing.

 As of December 31, 2024 and 2023, the Company and Ondas Networks, respectively,
had Federal NOLs of approximately $ 1 million and $ 15 million generated in 2007 to 2017 which will begin to expire in 2027 through 2037.
Additionally, as of December 31, 2024 and December 31, 2023, the Company and Ondas Networks, respectively, had Federal NOLs of $ 73 million
and $ 59 million, and of $ 61 million and $ 51 million, generated in 2018 through 2024 that have no expiration. As of December 31, 2024 and
2023, the Company and Ondas Networks, respectively, had State NOLs available to offset future taxable income of $ 49 million and $ 93 million,
and of $ 43 million and $ 92 million expiring from 2038 through 2044. As of December 31, 2024 and 2023, the Company and Ondas Networks,
respectively, had approximately $ 0 and $ 752,000, and $ 0 and $ 752,000, of Federal research and development credits available to offset
future tax liability expiring from 2038 through 2040. As of December 31, 2024 and December 31, 2023, the Company had approximately $ 134
million and $ 127 of Israeli NOL's. The Company's Federal income tax returns for the 2021 to 2023 tax years remain open to
examination by the IRS. Upon utilization of Federal NOLs in the future, the IRS may examine records from the year the loss occurred, even
if outside the three-year statute of limitations. The Company's State tax returns also remain open to examination. The Company's
Israeli income tax returns for the 2020 to 2023 tax years remain open to examination.

 In accordance with Section
382 of the Internal Revenue code, the usage of the Company's Federal Carryforwards could be limited in the event of a change in
ownership. As of December 31, 2021, the Company completed an analysis and determined that there were multiple ownership changes. Provided
sufficient taxable income is generated the annual base limitation plus increased limitation calculated pursuant to IRS Notice 2003-65
will allow the Company to utilize all existing losses within the carryover periods.

 The Company applies the FASB's
provisions for uncertain tax positions. The Company utilizes the two-step process to determine the amount of recognized tax benefit. For
tax positions meeting the more-likely-than-not threshold, the amount recognized in the Consolidated Financial Statements is the largest
benefit that has a greater than 50 % likelihood of being realized upon ultimate settlement with the relevant tax authority. The Company
recognizes interest and penalties associated with uncertain tax positions as a component of income tax expense.

 As of December 31, 2024, management
does not believe the Company has any material uncertain tax positions that would require it to measure and reflect the potential lack
of sustainability of a position on audit in its financial statements. The Company will continue to evaluate its uncertain tax positions
in future periods to determine if measurement and recognition in its financial statements is necessary. The Company does not believe there
will be any material changes in its unrecognized tax positions over the next year.

 F- 45

 NOTE 14 – COMMITMENTS AND CONTINGENCIES

 Legal Proceedings

 We may be involved in legal
proceedings, claims and assessments arising in the ordinary course of business. Such matters are subject to many uncertainties, and outcomes
are not predictable with assurance. There are no such loss contingencies that are included in the financial statements as of December
31, 2024.

 On October 27, 2023, the Company
reached a settlement agreement for legal proceedings related to Ardenna in which the Company is entitled to receive $ 600,000 in reimbursements
for legal fees related to the proceedings. For the year ending December 31, 2024, the Company received $ 550,000 from the settlement agreement,
which is recorded in General and administrative expense on the Consolidated Statements of Operations.

 On
June 6, 2024, Airobotics filed a Notice of Non-Payment with the Abu Dhabi Civil Courts in connection with a customer's lack of payment
relating to a purchase order and breach of a settlement agreement in relation to such purchase order. A performance order was filed on
July 11, 2024, and rejected on July 17, 2024 by the Abu Dhabi Civil Courts. On July 30, 2024, Airobotics appealed the rejection of the
performance order. On August 28, 2024, the Abu Dhabi Civil Court of Appeals accepted the appeal and appointed an expert to review the
case. On October 9, 2024, the Abu Dhabi Civil Court of Appeals ruled in favor of Airobotics for the full amount of the initial purchase
order less amounts paid to date by the customer (without taking into consideration the terms of the settlement agreement breached by the
customer), which resulted in a total award of $ 2,138,945 plus interest and expenses. Airobotics will continue to pursue the collection
of such award. However, the Company cannot guarantee a successful outcome in collecting any of the funds owed to Airobotics.

 NOTE 15 – RELATED PARTY TRANSACTIONS

 As of December 31, 2024 and
2023, the Company owed $ 12,500 and $ 22,500 to independent directors, respectively, related to accrued compensation, which is included
in Accrued expenses and other current liabilities on the Consolidated Balance Sheets.

 Networks Convertible Notes (See Note 9 –
Notes Payable)

 On
July 8, 2024, July 23, 2024, and November 13, 2024 C&P elected to purchase Convertible Notes in Networks in the aggregate original
principal amount of $ 700,000, $ 800,000, and $ 1,000,000, respectively, (the "C&P Networks Convertible Notes"). Joseph Popolo,
a director of the Company, is the sole control person of C&P.

 Along with the November 13,
2024 Networks Convertible Notes, Networks issued C&P warrants to purchase $ 1,000,000 in shares of preferred stock of Networks, $ 0.00001
par value per share, at an exercise price of $ 20.65 per share (the "C&P Warrants). The number of C&P warrants exercisable
under the Security Agreement is calculated by $ 1,000,000 divided by the Conversion Price, which is the amount equal to the price per share
of Networks' most senior series of Preferred Stock issued to investors in Networks' next equity financing date, or if none,
then $ 41.3104. The warrants are exercisable commencing November 13, 2024 through November 13, 2029. The C&P Warrants have a relative
fair value of $ 371,031, which was recorded as debt discount.

 As
of December 31, 2024, the total outstanding principal on the C&P Networks Convertible Notes was $ 2,500,000, net of unamortized debt
discount of $ 314,570 and unamortized issuance costs of $ 26,102. Accrued interest as of December 31, 2024 was $ 54,356 and is included in
Accrued expenses and other current liabilities on the Consolidated Balance Sheets. For the year ended December 31, 2024, we recognized
interest expense of $ 54,356 and amortization expense of $ 56,461 related to debt discount and $ 11,383 related to the issuance costs. Interest
expense and amortization expense related to issuance costs are included in Interest expense on the Consolidated Statements of Operations.
No principal or interest has been paid since the C&P Networks Convertible Notes were issued.

 OAS Convertible Notes (See Note 9 – Notes
Payable)

 In October and December 2024,
C&P elected to purchase Convertible Notes in OAS in the aggregate original principal amount of $ 2,000,000 (the "C&P OAS
Convertible Notes"). Joseph Popolo, a director of the Company, is the sole control person of C&P. As of December 31, 2024, the
total outstanding principal on the C&P OAS Convertible Notes was $ 2,000,000, net of unamortized issuance costs of $ 14,376. Accrued
interest as of December 31, 2024 was $ 12,808 and is included in Accrued expenses and other current liabilities on the Consolidated Balance
Sheets. For the year ended December 31, 2024, we recognized interest expense of $ 12,808 and amortization expense of $ 2,703 related to
the issuance costs. Interest expense and amortization expense related to issuance costs are included in Interest expense on the Consolidated
Statements of Operations. No principal or interest has been paid since the C&P OAS Convertible Notes were issued.

 On October 10, 2024, Privet
Ventures LLC, an entity affiliated with Eric Brock, Chairman and Chief Executive Officer of the Company and OAS, elected to purchase a
Convertible Note in OAS in the original principal amount of $ 1,000,000 (the "Privet OAS Convertible Note"). As of December
31, 2024, the total outstanding principal on the Privet OAS Convertible Note was $ 1,000,000, net of unamortized issuance costs of $ 7,188.
Accrued interest as of December 31, 2024 was $ 11,233 and is included in Accrued expenses and other current liabilities on the Consolidated
Balance Sheets. For the year ended December 31, 2024, we recognized interest expense of $ 11,233 and amortization expense of $ 1,352 related
to the issuance costs. Interest expense and amortization expense related to issuance costs are included in Interest expense on the Consolidated
Statements of Operations. No principal or interest has been paid since the Privet OAS Convertible Note was issued.

 F- 46

 Networks Secured Note (See Note 9 – Notes
Payable)

 On September 3, 2024, Networks
entered into a Security Note Agreement (the "Security Agreement") with C&P, in which Networks may draw, and C&P shall
loan Networks, up to $ 1,500,000. Pursuant to the Security Agreement, Networks issued C&P a secured note in the amount of $ 1,500,000,
which amount may be increased or decreased by the mutual written agreement of the parties thereto (the "Networks Secured Note").
As of December 31, 2024, Networks has drawn a total of $ 1,500,000 on the Networks Secured Note.

 On September 3, 2024 and October
7, 2024, pursuant to the Security Agreement, Networks issued C&P warrants to purchase $ 1,000,000 and $ 500,000, respectively, in shares
of preferred stock of Networks, $ 0.00001 par value per share, at an exercise price of $ 20.65 per share. The number of warrants exercisable
under the Security Agreement is calculated by $ 1,500,000 divided by the Conversion Price, which is the amount equal to the price per share
of Networks' most senior series of Preferred Stock issued to investors in Networks' next equity financing date, or if none,
then $ 41.3104. The warrants are exercisable commencing September 3, 2024 through September 3, 2029 and October 7, 2024 through October
7, 2029, respectively. The C&P Warrants have a total relative fair value of $ 556,554, which was recorded as debt discount. Joseph
Popolo, a director of the Company, is the sole control person of C&P.

 As of December 31, 2024, the
total outstanding principal on the Networks Secured Note was $ 1,500,000, net of unamortized debt discount of $ 201,135 and unamortized
issuance costs of $ 25,649. Accrued interest as of December 31, 2024 was $ 37,107 and is included in Accrued expenses and other current
liabilities on the Consolidated Balance Sheets. For the year ended December 31, 2024, we recognized interest expense of $ 37,107 and amortization
expense of $ 355,419 related to the debt discount and $ 52,164 related to the issuance costs. No principal or interest has been paid since
the Networks Secured Note was issued.

 Sale of Common Stock in Ondas Holdings and
Warrants to Purchase Common Stock of OAS (See Note 10 – Stockholders' Equity)

 On February 26, 2024, the
Company completed a direct registered offering with certain purchasers with respect to the sale of (i) an aggregate of 3,616,071 shares
Common Stock of the Company and (ii) warrants to purchase an aggregate of 3,616,071 shares of OAS's common stock $ 0.0001 par value
per share, at an exercise price of $ 1.29 for gross proceeds of $ 4,050,000 (the "2024 Direct Registered Offering"). See Note
10 – Stockholders' Equity, Sale of Common Stock in Ondas Holdings and Warrants to Purchase Common Stock of OAS, for further
details. In connection with the 2024 Direct Registered Offering, C&P paid $ 2,000,000 for 1,785,714 shares of Common Stock of the Company
and warrants to purchase 1,785,714 shares of OAS common stock. Joseph Popolo, a director of the Company, is the sole control person of
C&P.

 Warrants to Purchase Common Stock of the Company
(See Note 10 – Stockholders' Equity)

 On June 21, 2024, the Company
issued warrants to purchase 45,455 shares of the Company's Common Stock, at an exercise price of $ 0.66 per share, and with a fair
value of $ 31,156, to Neil Laird, Interim Chief Financial Officer of the Company, in consideration of his consulting services for the Company.
The warrants vest over a one-year period and are issued pursuant to the 2018 Plan.

 Networks Series A-1 Preferred Stock (See Note 11 – Redeemable
Noncontrolling Interest)

 On July 21, 2023 and August
11, 2023, Ondas Networks completed the first and second tranche of a private placement with Stage 1 Growth Fund LLC (Series WAVE, Class
A) (the "SPV"), respectively. See Note 11 – Redeemable Noncontrolling Interest, Networks Series A-1 Preferred Stock,
for further details.

 C&P is the proxy for the
members of the SPV, and the manager of the SPV must act in accordance with C&P's direction with respect to exercise and voting
of the issuer's securities and derivative securities held by the SPV. Joseph Popolo, a director of the Company, is the sole control
person of C&P.

 Networks Series A-2 Preferred Stock (See Note 11 – Redeemable
Noncontrolling Interest)

 On February 26, 2024, Ondas
Networks completed a private placement with certain purchasers with respect to the sale of (i) 108,925 shares of preferred stock of Ondas
Networks, $ 0.00001 par value per share ("Networks Preferred Stock"), at a purchase price of $ 41.3104 per share convertible
into shares of Networks Common Stock and (ii) warrants to purchase 3,015,000 shares of Common Stock of the Company, at an exercise price
of $ 1.26 per share for gross proceeds to Ondas Networks of $ 4,500,000 (the "2024 Private Placement"). See Note 11 –
Redeemable Noncontrolling Interest, Networks Series A-2 Preferred Stock, for further details. In connection with the 2024 Private Placement,
C&P paid $ 250,000 for 6,051 shares of Networks Preferred Stock and warrants to purchase 167,500 shares of Common Stock of the Company.
Joseph Popolo, a director of the Company, is the sole control person of C&P.

 F- 47

 NOTE 16 – SUBSEQUENT EVENTS

 Management has evaluated subsequent
events as of March 12, 2025, the date the Consolidated Financial Statements were available to be issued according to the requirements
of ASC Topic 855.

 Subsequent to December 31,
2024, the Company issued 11,397,029 shares as a result of Installment Conversions on the 2024 Additional Notes.

 American Robotics Lease Agreement

 On January 1, 2025, American
Robotics entered into a 48-month operating lease agreement for office space in Sparks, Maryland through December 31, 2028, wherein base
rent is $ 90,590 per year starting January 1, 2025, with an annual increase of 2 % through December 31, 2028.

 Appointment of Ron Stern as Director

 On January 6, 2025, the Board
of Directors of the Company appointed Ron Stern as a director of the Company, effective January 7, 2025.

 On January 6, 2025, the Company
entered into that certain Directorship Agreement, by and between the Company and Mr. Stern (the "Stern Agreement"). Pursuant
to the Stern Agreement, Mr. Stern will be compensated a fixed cash retainer of $ 15,000 plus VAT, if applicable, per month during the period
he will serve as a director. In addition, once the Company consummates the next Qualified Event and subject to certain conditions (as
described in the Stern Agreement), the Company intends to appoint Mr. Stern as Vice Chairman of the Board and as a special strategic advisor
of the Company. Mr. Stern will also be compensated with (i) a fixed cash retainer of $ 24,000 plus VAT, if applicable, per month during
the period he will serve as the Vice Chairman of the Board; (ii) a $ 500,000 cash bonus plus VAT, if applicable, upon and subject to the
consummation of a Qualified Event; (iii) a $ 250,000 bonus plus VAT, if applicable, for each additional Acquisition Transaction (as defined
in the Stern Agreement) in which he took an active role; (iv) a one-time signing bonus of $ 100,000 plus VAT, if applicable, at the time
of the Stern Agreement; and (v) a grant of options on January 7, 2025 to purchase 2,876,944 shares of common stock of the Company pursuant
to the 2021 Stock Incentive Plan with an exercise price of $ 2.69. See Current Report on Form 8-K dated January 13, 2025 for further information.

 Ondas Networks Secured Note – Maturity
Date Extended

 On February 28, 2025, Networks and C&P entered
into an agreement to extend the maturity date to July 23, 2025.

 Networks January 2025 Convertible Notes

 On January 15, 2025, Networks
entered into a Securities Purchase Agreement (the "January Networks SPA"), for an aggregate investment of approximately $ 2,931,000
in Networks. The January Networks SPA was entered into by and among Networks, the Company, and a private investor group, for the sale
of convertible promissory notes in the aggregate amount of approximately $ 2,931,000 (the "Networks January 2025 Convertible Notes"),
of which $ 2,000,000 is from the Company. The Networks January 2025 Convertible Notes will (i) bear an interest rate of 10 % per annum,
(ii) have a maturity date of September 30, 2025, (iii) be secured by all assets of Networks, provided however such secured obligation
shall be subordinate to that certain secured note, dated September 3, 2024, by and between Networks and C&P, and (iv) at the option
of C&P be convertible into equity securities of Networks upon the closing (a) a Corporate Transaction (as defined in the Note) or
(b) a subsequent offering of securities of Networks. Pursuant to the January Networks SPA, Networks issued the Company and the private
investor group warrants to purchase 70,947 shares of senior preferred stock, $ 0.00001 par value per share, at an exercise price of $ 20.65
per share and exercisable commencing on January 15, 2025 through January 15, 2030. See Current Report on Form 8-K dated January 16, 2025
for further information.

 F- 48

 Item 9. Changes in and Disagreements With Accountants on Accounting
and Financial Disclosures.

 None.

 Item 9A. Controls and Procedures

 Disclosure Controls and Procedures

 The Company's management,
with the participation of the Company's Chief Executive Officer and Chief Financial Officer, have evaluated the effectiveness of
the Company's disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act
of 1934, as amended (the "Exchange Act")) as of December 31, 2024. Based on that evaluation, the Company's Chief Executive
Officer and the Company's Chief Financial Officer have concluded that as of the period ended December 31, 2024 the Company's
disclosure controls and procedures were effective.

 Management's Annual Report on Internal
Control Over Financial Reporting

 Our senior management is responsible
for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting is defined
in Rules 13a-15(f) and 15d-15(f) promulgated under the Exchange Act as a process designed by, or under the supervision of, our principal
executive officer and principal financial officer, or persons performing similar functions, and effected by our Board, senior management
and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial
statements for external purposes in accordance with U.S. GAAP.

 Because of its inherent limitations,
internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness
to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of
compliance with the policies or procedures may deteriorate. We continue to review our internal control over financial reporting and may
from time to time make changes aimed at enhancing their effectiveness and to ensure that our systems evolve with our business.

 Under the supervision and
with the participation of management, including the Chief Executive Officer and Chief Financial Officer, we conducted an evaluation of
the effectiveness of our internal control over financial reporting based on the framework in "Internal Control — Integrated
Framework (2013)" issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Based on the results of
this evaluation, our senior management has concluded that the Company's internal controls over financial reporting were effective
for the period ended December 31, 2024.

 Changes in Internal Control Over Financial
Reporting

 There were no changes in our
internal control over financial reporting identified in management's evaluation pursuant to Rules 13a-15(d) or 15d-15(d) of the
Exchange Act during the quarter ended December 31, 2024 that materially affected, or are reasonably likely to materially affect, our internal
control over financial reporting.

 Limitations on Effectiveness of Controls and
Procedures

 In designing and evaluating
the disclosure controls and procedures and internal control over financial reporting, management recognizes that any controls and procedures,
no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition,
the design of disclosure controls and procedures and internal control over financial reporting must reflect the fact that there are resource
constraints, and that management is required to apply judgment in evaluating the benefits of possible controls and procedures relative
to their costs.

 Item 9B. Other Information.

 None.

 Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent
Inspections.

 Not applicable.

 Item 10. Directors, Executive Officers, and Corporate Governance.

 Directors and Executive Officers

 The following table sets forth
information on our executive officers and directors as of the filing of this Report. The terms of service for each of our directors expires
at our next annual meeting of shareholders or until their successors are duly elected and qualified.

 Name

 Age

 Position

 Eric A. Brock

 Chairman, Chief Executive Officer and President

 Neil J. Laird

 Interim Chief Financial Officer, Treasurer and Secretary

 Richard M. Cohen

 Joseph Popolo

 Randall P. Seidl

 Jaspreet Sood

 Ron Stern

 Family Relationships

 There are no family relationships
between our executive officers and members of our Board.

 Business Experience of Directors and Executive
Officers

 Information About Our Executive Officers

 Eric A. Brock - Chairman of the Board, Chief Executive Officer,
and President

 Mr. Brock has been the
Chairman of the Board and Chief Executive Officer since 2018 and our President since June 9, 2023. Mr. Brock also serves as Chairman
of the Board of Ondas Networks Inc. since September 28, 2018, Chairman of the Board and President of Ondas Autonomous Systems Inc.
("OAS"), since December 7, 2023, Chairman of the Board of American Robotics, Inc. since August 5, 2021, Secretary
of American Robotics, Inc. since November 9, 2023, and Chairman of the Board of Airobotics Ltd. since January 23, 2023. Mr. Brock
served as Chief Executive Officer of American Robotics, Inc. from June 9, 2023 to October 11, 2023 and as Chief Executive Officer
of Ondas Networks Inc. from September 28, 2018 to January 20, 2025. Mr. Brock is an entrepreneur with over 20 years of global
banking and investing experience. He served as a founding Partner and Portfolio Manager with Clough Capital Partners, a Boston-based investment
firm, from 2000 to 2017. Prior to Clough, Mr. Brock was an investment banker at Bear, Stearns & Co. and an accountant at
Ernst & Young, LLP. Mr. Brock holds an MBA from the University of Chicago and a BS from Boston College. Our
Board believes that Mr. Brock's experience in the public markets makes him well qualified to serve on our Board.

 Neil Laird – Interim Chief Financial Officer, Treasurer and
Secretary

 Mr. Laird has served as our
Interim Chief Financial Officer, Treasurer and Secretary since June 21, 2024. Mr. Laird also serves as Interim Chief Financial Officer,
Treasurer and Secretary of Ondas Networks Inc. since June 25, 2024 and Treasurer of American Robotics, Inc. since September 24, 2024.
Mr. Laird is an experienced financial executive who works with companies to provide accounting and finance related services. From September
2021 to July 2024, Mr. Laird served as fractional chief financial officer of NovAccess Global Inc. ("NovAccess"), a publicly
traded company. Since May 2021, Mr. Laird has been an employee of AM Consulting. Since 2017, Mr. Laird has worked with several technology
and other companies as a consultant. From June 2011 until November 2016, Mr. Laird served as the chief financial officer of Mobileum Inc.,
a private company providing roaming and other solutions to the telecommunications industry. Prior to that, Mr. Laird was chief financial
officer of SumTotal Systems, Inc., a provider of enterprise learning management systems, and before that, chief financial officer of ADAC
Laboratories, a provider of nuclear medicine and PET systems. Both SumTotal Systems and ADAC Laboratories were publicly traded companies.
Mr. Laird has an MA from the University of Cambridge and is qualified as a UK chartered accountant.

 Non-Management Directors

 Richard M. Cohen - Director

 Mr. Cohen was appointed
as one of our directors on September 28, 2018. Previously, he had served as a member of the Board of Ondas Networks Inc. from April 2016
to September 2018. He has been the President of Richard M Cohen Consultants since 1995, a company providing financial consulting services
to both public and private companies. He has served as a director of Great Elm Capital Corp. (NASDAQ: GECC) since March 2022, Direct Digital
Holdings, Inc. (NASDAQ: DRCT) since November 2021, and Smart For Life, Inc. (NASDAQ: SMFL) from February 2022 to October 2022. From March 2012
to July 2015, he was the Founder and Managing Partner of Chord Advisors, a firm providing outsourced CFO services to both public
and private companies. From May 2012 to August 2013, he was the Interim CEO and member of the Board of Directors of CorMedix
Inc. (NYSE: CRMD). From July 2008 to August 2012, Mr. Cohen was a member of the Audit Committee of Rodman and Renshaw,
an investment banking firm. From July 2001 to August 2012, he was a partner with Novation Capital until its sale to a private
equity firm. Mr. Cohen holds a BS with honors from the University of Pennsylvania (Wharton), an MBA from Stanford University and
a CPA (inactive) from New York State. He is considered an expert to Chair the Audit Committee of a publicly traded company. We believe
that Mr. Cohen's educational background and financial experience supporting publicly traded companies including as a CEO and
Board member of a public traded company on the New York Stock Exchange makes him well qualified to serve on our Board.

 Joseph Popolo – Director

 Mr. Popolo was appointed as
one of our directors on March 27, 2024. Mr. Popolo serves as the CEO of Charles & Potomac Capital, LLC, a private investment firm
he founded in 2014 to focus on investments in technology, healthcare, media, energy, and real estate. From 1997 to 2019, Mr. Popolo helped
transform the Freeman Company ("Freeman") into the world's leading live event and brand experience company. As its President
for eight years and CEO for 11 years, he and his team transformed Freeman and tripled it in size to $3 billion in revenue, expanding Freeman
into new services and geographic markets, while leading 7,500 employees in 25 cities on four continents. Responsible for over $1.5 billion
in M&A activity over his career, in 2019, Mr. Popolo led the team that marketed and sold Freeman's Encore Event Technology subsidiary
to Blackstone, creating the world's largest-venue-based audio-visual company. Currently, Mr. Popolo is Chairman of the board of
Pinnacle Live, LLC and a board member of Ondas Networks, and sits on the advisory boards of the Jordan Edmiston Group Inc., Samesurf Inc.,
and Advisory Research Inc. Mr. Popolo graduated from Boston College with a BS in Finance and from the University of Chicago Booth School
of Business with an MBA in Finance and Economics, subsequently receiving a Dean's Award of Distinction from the Booth School of
Business in 1997. Mr. Popolo graduated from Boston College with a BS in Finance and from the University of Chicago Booth School of Business
with an MBA in Finance and Economics, subsequently receiving a Dean's Award of Distinction from the Booth School of Business in
1997. Mr. Popolo is active with other charitable and philanthropic organizations. We believe Mr. Popolo's experience in senior leadership
positions at companies and his board experience makes him well-qualified to serve on our board of directors.

 Randall P. Seidl - Director

 Mr. Seidl was appointed
as one of our directors on November 16, 2020. Mr. Seidl has served as Chief Executive Officer and a director of Rainwater Technologies
(NASDAQ: RAIN) since January 2, 2025. In 2020, Mr. Seidl founded and continues to serve as Chairman of Sales Community, a sales social
network with a mission to add value to technology sales professionals. In 2016, he founded and continues to serve as Chairman of Top Talent
Recruiting, a boutique contingency-based recruiting business. In 2013, he founded and continues to serve as Chairman of Revenue Acceleration
to help tech companies accelerate revenue growth. From 2009 to 2013, Mr. Seidl served as Sr. Vice President/General Manager of Hewlett
Packard's Americas and U.S. Enterprise Group. From 2006 to 2009, he served as Sr. Vice President/General Manager of Sun Microsystems'
North America business and as Vice President/General Manager for Financial Services. From 2004 to 2006, he served as Vice President/General
Manager of East Region at StorageTek. From 2003 to 2004, he served as Chief Executive Officer and director at Permabit, from 2000 to 2003
was co-founder and Executive Vice President of GiantLoop, and from 1996 to 1999 was Chairman and Chief Executive Officer of Workgroup
Solutions. He began his career at EMC Corporation, employee #33, holding various domestic and international positions including Vice President
of Open Systems Sales for North America from 1985 to 1996. Since 2015, Mr. Seidl has served as director of Data Dynamics, a leader
in enterprise data management, and since 2016 a director of ISG, the leader in claim and litigation support services for insurance and
legal communities. He previously served as director of Datawatch Corporation (2015-2018, Nasdaq: DWCH, acquired by Altair). He continues
to serve on the advisory boards and consults with ZoomInfo, AuctusIQ, TitanX, Sandler, and others. Mr. Seidl is a graduate of Boston
College's Carroll School of Management. Mr. Seidl serves as a Trustee Associated on Boston College's Board of Trustees
and the Board of Trustees of St. Sebastian's School. He is also a member of CEO (Chief Executives Organization) and YPO (Young Presidents'
Organization) and is active with other charities. We believe Mr. Seidl's experience in senior leadership positions at private/public
technology companies and his private/public board experience makes him well-qualified to serve on our board of directors.

 Jaspreet (Jas) Sood – Director

 Ms. Sood was appointed as
one of our directors on January 19, 2021. Ms. Sood is a seasoned executive who has strategic expertise in the areas of sales, product
management, P&L management, operational transformation and go to market strategies. Since August 2021, Ms. Sood serves as Senior
Vice President of Sales — US Enterprise for Palo Alto Networks (NYSE: PANW). Prior to joining Palo Alto Networks,
Ms. Sood held a variety of executive level positions with Hewlett Packard Enterprise (NYSE: HPE) and its predecessor companies in
the areas of business operations, strategy, product management, and finance. Ms. Sood was employed by Hewlett Packard Enterprise and its
predecessor companies for twenty-five years. Ms. Sood holds an MBA with an emphasis in Technology Management from Pepperdine University
and a bachelor's degree in Economics from the University of California, Irvine. In 2018, 2019, 2020, and 2021, she was honored as
a "CRN Power 100 Woman of the Channel" and sales executive of the year in 2023. Ms. Sood is routinely featured as a guest
speaker at various technology industry events. We believe Ms. Sood's business experience makes her well qualified to serve on our
Board.

 Ron Stern

 Mr. Stern was appointed as
one of our directors and a director of Airobotics Ltd., an indirect subsidiary of the Company, on January 6, 2025. Mr. Stern has
served as a General Partner and as the head of Portfolio Management of OurCrowd since April 2017 with responsibility
for OurCrowd's global portfolio of over 250 active companies, including over 100 board and board observer nominations and led or
participated in over 400 financing rounds for start-up and growth companies. Mr. Stern has over twenty years' experience working in Growth
Equity and Venture Capital investing, predominantly with Israeli related companies. During his tenure at OurCrowd, Mr. Stern was appointed
to the board of director of Airobotics Ltd. in November 2019 and later became Chairman of Airobotics Ltd in January 2021. In this capacity
Mr. Stern led the initial public offering of Airobotics Ltd. on the Tel Aviv Stock Exchange, ultimately leading to the sale of Airobotics
Ltd. to Ondas in January 2023. From February 2015 to April 2017, Mr. Stern served as Chief Financial Officer of Adgorithms, an Israel
based AI marketing company, which Mr. Stern helped take public on the London Stock Exchange, raising over $40 million to the company
and its shareholders. From March 2013 to December 2014, Mr. Stern served as a Senior International Advisor to a leading U.S. family office.
From January 2010 to December 2014, Mr. Stern served as a scout and advisor to a number of leading U.S. venture capital firms, and advised
and managed large capital environmental projects for municipalities and government entities in Israel. From September 2002 to December
2009, Mr. Stern was a partner with Shamrock Holdings where he built the Israeli investing team and facilitated four initial public offerings
of Shamrock's portfolio companies. Mr. Stern currently serves as Chairman of Blue Green Water Technology. Mr. Stern graduated from The
Hebrew University of Jerusalem with a degree in Economics and from Columbia Business School with an MBA in Finance and Entrepreneurship.
We believe Mr. Stern's experience in senior leadership positions at companies and his board experience makes him well-qualified
to serve on our board of directors.

 Other Directorships

 Other than as indicated within
this section under the caption titled Business Experience of Directors and Executive Officers, none of our directors hold or have
been nominated to hold a directorship in any company with a class of securities registered pursuant to Section 12 of the Securities Exchange
Act of 1934, as amended, (the "Exchange Act") or subject to the requirements of Section 15(d) of the Securities Act of 1933,
as amended, or any company registered as an investment company under the Investment Company Act of 1940.

 Committees of the Board

 Audit Committee

 The audit committee of the
Board (the "Audit Committee") reviews our internal accounting procedures and consults with and reviews the services provided
by our independent registered public accountants. Our Audit Committee consists of three directors, Messrs. Cohen and Seidl and Ms. Sood,
and our Board has determined that each of them is independent within the meaning of the listing requirements of The Nasdaq Stock Market
("Nasdaq") and the independence requirements contemplated by Rule 10A-3 under the Exchange Act. Mr. Cohen is the chairman
of the Audit Committee, and our Board has determined that Mr. Cohen is an "audit committee financial expert" as defined by
SEC rules and regulations implementing Section 407 of the Sarbanes-Oxley Act. Our Board has determined that the composition of our Audit
Committee meets the criteria for independence under, and the functioning of our Audit Committee complies with, the applicable requirements
of the Sarbanes-Oxley Act, Nasdaq listing requirements and SEC rules and regulations. We intend to continue to evaluate the requirements
applicable to us and to comply with the future requirements to the extent that they become applicable to our Audit Committee. The principal
duties and responsibilities of our Audit Committee include:

 overseeing
the accounting and financial reporting processes of the Company, internal systems of control of the Company and audits of the Company's
Consolidated Financial Statements;

 overseeing
the Company's relationship with its independent auditors, including appointing or changing the Company's auditors and ensuring
their independence;

 providing
oversight regarding significant financial matters, including the Company's tax planning, treasury policies, dividends and share
issuance and repurchases;

 overseeing
the Code of Conduct (as defined below); and

 reviewing
and approving all transactions with related persons for potential conflict of interest situations on an ongoing basis.

 Compensation Committee

 The compensation committee
of the Board (the "Compensation Committee") reviews and determines the compensation of all our executive officers. Our Compensation
Committee consists of three directors, Messrs. Cohen and Seidl and Ms. Sood, each of whom is a non-employee member of our Board as defined
in Rule 16b-3 under the Exchange Act and independent within the meaning of the listing requirements of Nasdaq. Mr. Seidl is the chairman
of the Compensation Committee. Our Board has determined that the composition of our Compensation Committee satisfies the applicable independence
requirements under, and the functioning of our Compensation Committee complies with the applicable listing requirements of Nasdaq and
SEC rules and regulations. We intend to continue to evaluate and intend to comply with all future requirements applicable to our Compensation
Committee. The principal duties and responsibilities of our Compensation Committee include:

 establishing,
overseeing and administering the Company's employee compensation policies and programs;

 reviewing
and approving compensation and incentive programs and awards for the Company's CEO, all other executive officers of the Company
and the non-employee members of the Company's Board; and

 administering
the Company's equity compensation plans.

 Nominating and Corporate Governance Committee

 The se
 (the "N&CG Committee") consists of three independent
directors, Messrs. Cohen and Seidl, and Ms. Sood. Mr. Cohen is the chairman of the N&CG Committee. Our Board has determined that the
composition of our N&CG Committee satisfies the applicable independence requirements under, and the functioning of our N&CG Committee
complies with the applicable listing requirements of Nasdaq and SEC rules and regulations. We will continue to evaluate and will comply
with all future requirements applicable to our N&CG Committee. The N&CG Committee's responsibilities include:

 assisting
the Board in identifying individuals qualified to become Board members, consistent with criteria approved by the Board;

 recommending
for the Board's approval the slate of nominees to be proposed by the Board to stockholders for election to the Board;

 developing,
updating and recommending to the Board the governance principles applicable to the Company;

 overseeing
the evaluation of the Board and management;

 recommending
to the Board the directors who will serve on each committee of the Board; and

 addressing
any related matters required by the federal securities laws.

 Code of Business Conduct and Ethics and Committee Charters

 We have adopted a Code of
Business Conduct and Ethics (the "Code of Conduct"), applicable to all of our employees, executive officers and directors.
The Audit Committee is responsible for overseeing the Code of Conduct and our Board must approve any waivers of the Code of Conduct for
employees, executive officers and directors. All of our directors, executive officers and employees are required to certify in writing
their understanding of and intent to comply with the Code of Conduct.

 Our Board adopted charters
for the Audit Committee, Compensation Committee, and N&CG Committee of the Board describing the authority and responsibilities delegated
to each committee.

 We post on our website www.ondas.com
the charters of each of our board committees and our Code of Conduct, and all disclosures that are required by law concerning any amendments
or waivers thereto applicable to our principal executive officer, principal financial officer, principal accounting officer or controller,
or persons performing similar functions; and any other corporate governance materials contemplated by the Nasdaq listing requirements
and SEC regulations. These documents are also available in print, without charge, to any stockholder requesting a copy in writing from
our Secretary at our executive offices set forth in this Report.

 Insider Trading Policy

 We have adopted an
 Insider Trading Policy that governs the purchase, sale, and/or other disposition of our securities and is applicable to our directors,
officers, employees, and other covered persons. We believe our Insider Trading Policy is reasonably designed to promote compliance with
insider trading laws, rules, and regulations, and listing standards applicable to the Company. A copy of our insider trading policy is
filed as Exhibit 19.1 to this Annual Report on Form 10-K.

 Delinquent Section 16(a) Reports

 Section 16(a) of the Exchange
Act requires directors, officers and greater than 10 percent beneficial owners of our common shares to file reports concerning their ownership
of, and transactions in, such common shares.

 Based solely on our review
of these reports filed by the Company's officers, directors and shareholders, and written representations from our executive officers
and directors that they filed such reports, we believe that our officers, directors, and shareholders complied with all filing requirements
under Section 16(a) of the Exchange Act on a timely basis during fiscal year 2024, except Mr. Curelaru untimely filed a Form 4 to report
the delivery of stock options.

 Item 11. Executive Compensation.

 Summary Compensation Table

 The following table provides
the compensation earned by our principal executive officer and other executive officers whose total compensation exceeded $100,000 for
the fiscal years ended December 31, 2024 and 2023.

 Name and Principal Position

 Year

 Salary

 ($)

 Bonus

 ($)

 Stock

 Awards
 ($)

 Option

 Awards
 ($)

 Non-Equity

 Incentive
 Plan
 Compensation
 ($)

 Nonqualified

 Deferred
 Compensation
 Earnings
 ($)

 All
 Other
 Compensation
 ($)

 Total

 ($)

 Eric
 A. Brock (1)

 2024

 $
 200,000

 $
 -

 $
 -

 $
 -

 $
 -

 $
 -

 $
 19,288

 $
 219,288

 (CEO)

 2023

 $
 200,000

 $
 -

 $
 -

 $
 -

 $
 -

 $
 -

 $
 22,318

 $
 222,318

 Neil
 Laird (2)
 (Interim CFO, Treasurer and Secretary)

 2024

 $
 -

 $
 -

 $
 15,578
 (3)

 $
 -

 $
 -

 $
 -

 $
 253,333

 $
 268,911

 Yishay
 Curelaru (4)
 (Former CFO, Treasurer and Secretary)

 2024

 $
 117,604

 $
 60,819

 $
 -

 $
 58,300

 $
 -

 $
 -

 $
 84,151

 $
 320,874

 2023

 $
 171,181

 $
 55,025

 $
 -

 $
 288,750

 $
 -

 $
 -

 $
 72,113

 $
 587,069

 (1)
 Mr.
Brock's All Other Compensation for 2024 and 2023 includes health insurance premiums paid on Mr. Brock's behalf.

 (2)
 Mr.
Laird was appointed as Interim Chief Financial Officer, Treasurer and Secretary of the Company on June 21, 2024, pursuant to the
Services Agreement (as defined below) with AM Consulting. All Other Compensation for 2024 includes consulting fees incurred for Mr. Laird's
services from June 21, 2024 through December 31, 2024.

 (3)
 Pursuant to the Services Agreement, Mr. Laird was issued warrants
to purchase shares of Common Sock pursuant to the 2018 Plan. The warrants vest in four equal quarterly installments with the first vesting
date commencing on September 21, 2024.

 (4)
 Mr.
Curelaru served as Chief Financial Officer, Treasurer and Secretary of the Company from September 19, 2023 to June 21, 2024. All Other
Compensation for 2024 includes post-employment benefits paid on Mr. Curelaru's behalf totaling $54,564 and other fringe benefits
totaling $29,587. All Other Compensation for 2023 includes post-employment benefits paid on Mr. Curelaru's behalf totaling $42,727
and other fringe benefits totaling $29,386.

 Policies and Practices Related to the Grant of Certain Equity
Awards.

 We do not grant equity awards
in anticipation of the release of material nonpublic information, and we do not time the release of material nonpublic information
based on equity award grant dates or for the purpose of affecting the value of executive compensation. While we do not have a formal policy
with respect to the timing of awards of stock options, stock appreciation rights, or similar option-like instruments to our NEOs, historically,
including during fiscal 2024, our Compensation Committee has not granted such awards. In certain circumstances, including the hiring or
promotion of an officer, the Compensation Committee may approve grants to be effective at other times.

 Outstanding Equity Awards at Fiscal Year End

 The following table provides
the outstanding equity awards for our principal executive officer and other executive officers as of the year ended December 31, 2024
and 2023.

 Option Awards

 Stock Awards

 Name and

 Principal

 Position

 Grant Date

 underlying
 unexercised
 options
 (#)
 exercisable

 underlying
 unexercised
 options
 (#)
 unexercisable

 Equity
 incentive plan
 awards:
 underlying
 unexercised
 unearned
 options
 (#)

 Option
 exercise
 price
 ($)

 Option
 expiration
 date

 shares or

 units of stock

 that have not

 vested
 (#)

 Market value

 of shares or

 units of stock

 that have not

 vested
 (#)

 Eric A. Brock (1)

 -

 -

 -

 -

 -

 -

 -

 -

 (CEO)

 Neil Laird

 06/21/2024

 -

 -

 -

 -

 -

 22,727
 (2)

 $
 7,789

 (Interim CFO, Treasurer and Secretary)

 Yishay Curelaru

 09/13/2021

 17,614

 -

 -

 $
 0.44

 09/13/2031

 -

 -

 (Former CFO, Treasurer and Secretary)

 09/13/2021

 20,958

 4,837
 (3)

 -

 $
 22.00

 09/13/2031

 09/13/2021

 41,917

 9,674
 (4)

 -

 $
 11.00

 09/13/2031

 03/16/2023

 164,062

 -

 210,938
 (5)

 $
 1.46

 03/16/2033

 04/08/2024

 -

 -

 100,000
 (6)

 $
 1.07

 04/08/2034

 (1)
 As
of December 31, 2024, Mr. Brock had no outstanding equity awards.

 (2)
 The
warrants vest in four equal quarterly installments with the first vesting date commencing on September 21, 2024.

 (3)
 The
stock option vests in sixteen equal quarterly installments with the first vesting date commencing on December 13, 2021.

 (4)
 The
stock option vests in sixteen equal quarterly installments with the first vesting date commencing on December 13, 2021.

 (5)
 The
stock option vests (i) 25% on March 16, 2024 and (ii) the remaining 75% in thirty-six equal monthly installments thereafter.

 (6)
 The
stock option vests (i) 25% on April 8, 2024 and (ii) the remaining 75% in thirty-six equal monthly installments thereafter.

 Employment Agreements with Executive Officers

 Eric Brock

 Eric Brock serves as our Chief
Executive Officer pursuant to an employment agreement entered into on September 28, 2018 (the "Brock Agreement"). The Brock
Agreement provides for a continuous term and may be terminated by either party at any time. Pursuant to the Brock agreement, Mr. Brock
will receive an initial salary of $200,000 per annum, subject to annual review by our Board. Mr. Brock is eligible to participate in benefit
plans generally available to our employees. During 2020, in response to COVID-19 employee furloughs, Mr. Brock accepted a pay reduction
of 90% for the period from March 21 to May 19, 2020 and a 35% pay reduction from May 20 to December 15, 2020. Mr. Brock's salary
was returned to 100% effective December 16, 2020.

 As part of the terms of the
Brock Agreement, Mr. Brock entered into an Employment, Non-Competition, Confidential Information and Intellectual Property Assignment
Agreement (the "Supplemental Agreement"). As part of the Supplemental Agreement, Mr. Brock agreed (i) not to engage in Competitive
Business (as defined in the Supplemental Agreement) during his term of employment with us and for a period of 12 months following termination;
(ii) not to disclose Confidential Information (as defined in the Supplemental Agreement), subject to certain customary carve-outs; and
(iii) to assign to the Company any Intellectual Property (as defined in the Supplemental Agreement) developed using the Company's
resources or related to the Company's business within the scope of and during the period of employment.

 Mr. Brock is entitled to severance
compensation from the Company if his employment is terminated (i) without cause or (ii) due to "constructive termination"
or (iii) due to disability, with these causes of termination being defined in the Brock Agreement. The severance compensation would consist
of (i) accrued and vested benefits, and (ii) continued payment of the executive base salary and benefits as follows: (i) for a period
of six (6) months following Mr. Brock's separation.

 Neil Laird

 Neil Laird serves as our Interim Chief Financial
Officer, Treasurer and Secretary pursuant to an services agreement with AM Consulting entered into on June 21, 2024 ("Services Agreement").
Pursuant to the Services Agreement which AM Consulting agreed to provide the Company consulting services as set forth in a statement of
work ("Statement of Work"). Pursuant to the Statement of Work, AM Consulting shall provide staff resources to perform chief
financial officer services for (i) $40,000 per month and (ii) warrants to purchase 90,910 shares of Common Stock, at an exercise price
of $0.66, pursuant to the 2018 Plan, including a warrant to purchase 45,455 shares of Common Stock to Mr. Laird.

 Yishay Curelaru

 Yishay Curelaru served as
our Chief Financial Officer, Treasurer and Secretary from September 18, 2023 to June 21, 2024 pursuant to an employment agreement entered
into on November 28, 2017 by and between Mr. Curelaru and Airobotics, as amended on February 15, 2023 and September 27, 2023 (the "Curelaru
Agreement"). The Curelaru Agreement provides for a continuous term and may be terminated by either party at any time. Pursuant to
the Curelaru Agreement, Mr. Curelaru will receive an initial salary of NIS 720,000 (approximately $188,981 USD) per annum and a limit
on the education fund of Mr. Curelaru's gross salary amount, subject to annual review by our Board. Mr. Curelaru is eligible to
participate in benefit plans generally available to our employees.

 Mr. Curelaru is entitled to
severance compensation from the Company if his employment is terminated (i) without cause or (ii) due to "constructive termination"
or (iii) due to disability, with these causes of termination being defined in the Curelaru Agreement. The severance compensation would
consist of continued payment of the executive base salary and benefits as follows: (i) for a period of six (6) months following Mr. Curelaru's
separation. If Mr. Curelaru is eligible to receive disability payments pursuant to a disability insurance policy paid for by Airobotics,
Mr. Curelaru shall assign such benefits to Airobotics for all periods as to which Mr. Curelaru is receiving payment under Curelaru Agreement.

 Director Compensation

 On January 25, 2021, the Compensation
Committee (the "Compensation Committee") of the Board approved the Director Compensation Policy (the "Policy").
The Policy is applicable to all directors that are not employees or compensated consultants of the Company. Pursuant to the Policy, the
cash compensation to non-employee directors will be the following: (i) quarterly board retainer — $2,500; (ii) additional Board
Chair retainer — $2,000; (iii) additional Audit Committee Chair retainer — $2,000; (iv) additional Compensation Committee
Chair retainer — $2,000; and (v) additional N&CG Committee Chair retainer — $1,000. Also, pursuant to the Policy, the
annual equity award to non-employee directors will be restricted stock units representing $60,000. Also, pursuant to the Policy, non-employee
directors will be reimbursed for reasonable out-of-pocket business expenses incurred in connection with business related to the Board.

 Name

 Fees
 Earned
 or
 Paid in
 Cash
 ($)

 Stock
 awards
 ($) (1)

 Option
 awards
 ($) (1)

 Non-equity
 incentive
 plan
 compensation
 ($)

 Nonqualified
 deferred
 compensation
 earnings
 ($)

 All other
 compensation
 ($)

 Total
 ($)

 Richard M. Cohen

 22,000

 84,139

 -

 -

 -

 -

 106,139

 Randall P. Seidl

 18,000

 84,139

 -

 -

 -

 -

 102,139

 Jaspreet Sood

 10,000

 84,139

 -

 -

 -

 -

 94,139

 (1)

 The amounts reflected in this column represent the aggregate grant date fair value of the awards made during each respective year, as computed in accordance with FASB ASC Topic 718. For additional information related to the measurement of stock-based compensation awards, see Note 10 of the accompanying Consolidated Financial Statements.

 Item 12. Security Ownership of Certain Beneficial Owners and
Management and Related Stockholder Matters.

 Beneficial Security Ownership Table

 As of March 10, 2025, the
following table sets forth certain information with respect to the beneficial ownership of our Common Stock by (i) each stockholder known
by us to be the beneficial owner of more than five percent (5%) of our Common Stock, (ii) by each of our current executive officers and
directors as identified herein, and (iii) all of our directors and executive officers as a group. Each person has sole voting and investment
power with respect to the shares of common stock, except as otherwise indicated. Beneficial ownership is determined in accordance with
the rules of the SEC and generally includes voting or investment power with respect to securities. Shares of common stock, options, restricted
stock units, and common stock purchase warrants ("Warrants") that are currently exercisable or convertible into shares of
our common stock within sixty (60) days of the date of this document, are deemed to be outstanding and to be beneficially owned by the
person holding such securities for the purpose of computing the percentage ownership of the person, but are not treated as outstanding
for the purpose of computing the percentage ownership of any other person. Unless otherwise noted, the address for all officers and directors
listed below is One Marina Park Drive, Suite 1410, Boston, MA 02210.

 Name

 Amount and

Nature of

Beneficial

Ownership (1)

 Percent of

Class

 Directors and Executive Officers

 Eric A. Brock (Chairman of the Board and Chief Executive Officer) (2)

 1,936,255

 1.8

 %

 Neil Laird (Interim Chief Financial Officer, Treas. and Sec.) (3)

 39,510

 *

 Richard M. Cohen (Director) (4)

 228,139

 *

 Joseph Popolo (Director) (5)

 7,699,531

 7.1

 %

 Randall P. Seidl (Director) (6)

 196,513

 *

 Jaspreet Sood (Director) (7)

 179,172

 *

 Ron Stern (Director) (8)

 239,757

 All Executive Officers & Directors as a Group (6 persons) (9)

 10,518,877

 9.9

 %

 5% or Greater Stockholders

 Armistice Capital, LLC (10)

 15,416,668

 13.2

 %

 Charles & Potomac Capital, LLC (11)

 6,315,286

 5.8

 %

 *
 Represents
beneficial ownership of less than 1%.

 (1)
 Unless
otherwise noted, we believe that all shares are beneficially owned and that all persons named in the table have sole voting and investment
power with respect to all shares of common stock owned by them. Applicable percentage of ownership is based on 105,736,326
shares of common stock currently outstanding, as adjusted for each stockholder.

 (2)
 Mr.
Brock exercises sole voting and dispositive power over the 1,936,255 shares of common stock.

 (3)
 Mr.
Laird exercises sole voting and dispositive power over 250 shares of common stock, 22,727 shares of common stock issuable upon the exercise
of warrants, 11,364 shares of common stock issuable upon the vesting and exercise of warrants. Mr. Laird's spouse owns 769 shares of
common stock and 4,400 shares on common stock are held in Mr. Laird's spouse's IRA. Mr. Laird disclaims beneficial ownership of the shares
held by his spouse and in his spouse's IRA.

 (4)
 Mr.
Cohen exercises sole voting and dispositive power over 165,069 shares of common stock, 30,000 shares of common stock issuable upon exercise
of an option, 21,035 shares of common stock issuable upon the vesting of RSUs, and 21,035 shares of common stock underlying RSUs
that have vested and are pending delivery.

 (5)
 Mr.
Popolo exercises sole voting and dispositive power over 1,384,245 shares of Common Stock and shared voting and dispositive power over
3,283,244 shares of Common Stock and 3,032,042 shares of Common Stock issuable upon exercise of a warrant.

 (6)
 Mr.
Seidl exercises sole voting and dispositive power over 154,443 shares of common stock, 21,035 shares of common stock issuable upon
the vesting of RSUs, and 21,035 shares of common stock underlying RSUs that have vested and are pending delivery.

 (7)

 Ms. Sood exercises sole voting and dispositive power over 137,102 shares of common stock, 21,035 shares of common stock issuable upon the vesting of RSUs, and 21,035 shares of common stock underlying RSUs that have vested and are pending delivery.

 (8)

 Mr. Stern exercises sole voting and dispositive power over 239,757 shares of common stock issuable upon the vesting and exercise of an option.

 (9)

 Includes 30,000 shares of common stock issuable upon exercise of options, 3,054,769 shares of common stock issuable upon the exercise of warrants, 11,364 shares of common stock issuable upon the vesting and exercise of warrants, 63,105 shares of common stock issuable upon vesting of RSUs, and 63,105 shares of common stock underlying RSUs that have vested and are pending delivery.

 (10)

 Based on the Schedule 13G filed on November 14, 2024, the address for Armistice Capital, LLC ("Armistice") is 510 Madison Avenue, 7th Floor New York, New York 10022. Steven Boyd is the managing member of Armistice exercises sole voting and dispositive power over the 4,750,000 shares of common stock and 10,666,668 shares of common stock issuable upon exercise of warrants.

 (11)

 Based on Amendment No. 4 to Schedule 13D filed on January 3, 2025 and the Form 4 filed by Mr. Popolo on June 10, 2024, the address for C&P is Commonwealth Hall at Old Parkland, 3899 Maple Avenue, Suite 100, Dallas, Texas 75219. CFO Fund is the Managing Member of C&P. Joseph Popolo is the chief executive officer of C&P and the sole control person of CFO Fund. Mr. Popolo exercises shared voting and dispositive power over the 3,283,244 shares of common stock and 3,032,042 shares of common stock issuable upon exercise of warrants.

 Equity Compensation
Plan Information

 The following table summarizes
the equity compensation plans under which our securities may be issued as of December 31, 2024.

 Plan Category

 to be issued
 upon
 exercise of
 outstanding
 options,
 warrants
 and rights

 Weighted-
 average
 exercise
 price of
 outstanding
 options,
 warrants
 and rights

 remaining
 available
 for future
 issuance
 under equity
 compensation
 plans

 Equity compensation plans approved by security holders:

 2018 Incentive Stock Plan (1)

 345,581

 $
 0.59

 1,207,078

 2021 Incentive Stock Plan (2)

 3,572,851

 $
 1.62

 6,573,078

 Equity compensation plans not approved by security holders

 -

 -

 -

 (1)

 The Ondas Holdings Inc. 2018 Incentive Stock Plan (the "2018 Plan"), was approved by stockholders in September 2018. The number of securities to be issued upon exercise of outstanding options, warrants and rights consist of 254,671 shares underlying outstanding options and 90,910 shares underlying outstanding warrants granted pursuant to the 2018 Incentive Stock Plan.

 (2)

 The Ondas Holdigns Inc. 2021 Incentive Stock Plan, as amended (the "2021 Plan"), was approved by stockholders in November 2021. Stockholders of the Company approved an amendment to the 2021 Plan to increase the number of shares of the Company's Common Stock authorized for issuance under the 2021 Plan from 6,000,000 to 8,000,000 shares on October 31, 2023 and from 8,000,000 to 11,000,000 shares on November 18, 2024. The number of securities to be issued upon exercise of outstanding options, warrants and rights consist of 3,320,434 shares underlying outstanding options and 252,417 shares underlying outstanding restricted stock units granted pursuant to the 2021 Incentive Stock Plan.

 Item 13. Certain Relationships and Related Transactions and Director
Independence.

 Related Party Transactions Policy

 Under its written charter,
the Audit Committee is responsible for reviewing and approving any transaction between our company and a related party (as defined in
Item 404 of Regulation S-K). Our management is responsible for bringing any such transaction to the attention of the Audit Committee.
In approving or rejecting any such transaction, the Audit Committee considers the relevant facts and circumstances, including the material
terms of the transaction, risks, benefits, costs, availability of other comparable services or products and, if applicable, the impact
on a director's independence.

 Related Party Transactions

 Under its written charter,
the Audit Committee is responsible for reviewing and approving or ratifying any transaction between our company and a related person (as
defined in Item 404 of Regulation S-K) that is required to be disclosed under the rules and regulations of the SEC. Our management is
responsible for bringing any such transaction to the attention of the Audit Committee. In approving or rejecting any such transaction,
the Audit Committee considers the relevant facts and circumstances, including the material terms of the transaction, risks, benefits,
costs, availability of other comparable services or products and, if applicable, the impact on a director's independence.

 We have been a party to the
following transactions since January 1, 2023, in which the amount exceeded or will exceed $120,000 and in which any current director,
executive officer, holder of more than 5% of our capital stock, or any member of the immediate family of the foregoing, had or will have
a material interest.

 July 2023 Offering

 On July 21, 2023, Ondas Networks
completed the first tranche of a private placement with Stage 1 Growth Fund LLC (Series WAVE, Class A) (the "SPV"), with respect
to the sale of (i) 329,238 shares of Networks Preferred Stock, at a purchase price of $34.955 per share, convertible into shares of Networks
Common Stock and (ii) warrants to purchase 7,825,792 shares of the Company Common Stock, at an exercise price of $0.89 per share for gross
proceeds to Ondas Networks of $11,508,517 (the "2023 Private Placement").

 On August 14, 2023, Ondas
Networks completed the second tranche of the 2023 Private Placement with SPV, with respect to the sale of an additional (i) 99,885 shares
of Networks Preferred Stock, at a purchase price of $34.955 per share, convertible into shares of Networks Common Stock and (ii) warrants
to purchase 2,374,208 shares of the Company Common Stock, at an exercise price of $0.89 per share for gross proceeds to Ondas Networks
of an additional $3,491,483. Charles & Potomac Capital, LLC ("C&P") is the proxy for the members of the SPV, and the
manager of the SPV must act in accordance with C&P's direction with respect to exercise and voting of the issuer's securities
and derivative securities held by the SPV. Joseph Popolo, a director of the Company, is the sole control person of C&P.

 February 2024 Offerings

 On February 26, 2024, Ondas
Networks completed a private placement with certain purchasers with respect to the sale of (i) 108,925 shares of preferred stock of Networks
Preferred Stock, at a purchase price of $41.3104 per share convertible into shares of Networks Common Stock and (ii) warrants to purchase
3,015,000 shares of the Company's Common Stock, at an exercise price of $1.26 per share for gross proceeds to Ondas Networks of
$4,500,000 (the "2024 Private Placement"). In connection with the 2024 Private Placement, C&P paid $250,000 for 6,051
shares of Networks Preferred Stock and warrants to purchase 167, 5000 shares of the Company's Common Stock. Joseph Popolo, a director
of the Company, is the sole control person of C&P.

 Also on February 26, 2024,
we completed a direct registered offering with certain purchasers with respect to the sale of (i) an aggregate of 3,616,071 shares the
Company's Common Stock and (ii) warrants to purchase an aggregate of 3,616,071 shares of OAH's common stock $0.0001 par value
per share, at an exercise price of $1.29 for gross proceeds of $4,050,000 (the "2024 Direct Registered Offering"). In connection
with the 2024 Direct Registered Offering, C&P paid $2,000,000 for 1,785,714 shares of the Company's Common Stock and warrants
to purchase 1,785,714 shares of OAH common stock. Joseph Popolo, a director of the Company, is the sole control person of C&P.

 Networks July 2024 Convertible Notes

 On July 8, 2024 and July 23, 2024,
C&P elected to purchase Convertible Notes in the aggregate original principal amount of $700,000 and $800,000, respectively, (the
"Networks July 2024 Convertible Notes"). The Networks July 2024 Convertible Notes are convertible into shares of Networks
Common Stock or Networks Preferred Stock under certain conditions. The Company currently intends to use the net proceeds for general corporate
purposes, which includes funding capital expenditures and working capital. The Networks July 2024 Convertible Notes bear interest at the
rate of 6% per annum and have a maturity date of July 8, 2025 and July 23, 2025, respectively. In the event Ondas Networks consummates
the next round of equity financing prior to the maturity date, the principal balance and unpaid accrued interest on the Networks July
2024 Convertible Notes will be convertible at the option of C&P into conversion shares upon closing of the next round of equity financing.
Joseph Popolo, a director of the Company, is the sole control person of C&P. As of March 10, 2025, there was $1,557,945 outstanding
under the Networks July 2024 Convertible Notes, including $57,945 of interest outstanding, and no principal or interest has been paid
since the Networks July 2024 Convertible Notes were issued.

 Ondas Networks Secured Notes

 On September 3, 2024, Ondas Networks
entered into that certain Security Note Agreement (the "Networks Security Agreement"), by and among Ondas Networks, as borrower,
and C&P as lender, pursuant to which, Ondas Networks may draw, and C&P shall loan Networks, up to One Million Five Hundred Thousand
Dollars ($1,500,000) (the "Secured Loan"). Pursuant to the Networks Security Agreement, Ondas Networks issued C&P a secured
note in the amount of One Million Five Hundred Thousand Dollars ($1,500,000), which amount may be increased or decreased by the mutual
written agreement of the parties thereto (the "Secured Note"). The Secured Note (i) bears interest at a rate of 8% per annum,
(ii) has a maturity date of February 28, 2025, and (iii) is secured by all assets of Ondas Networks. Pursuant to the Networks Security
Agreement, Ondas Networks issued C&P warrants to purchase shares of Networks Preferred Stock. Joseph Popolo, a director of the Company,
is the sole control person of C&P. On February 28, 2025, Ondas Networks and C&P entered into that certain Letter Agreement, pursuant
to which the maturity date of the Secured Note was amended from February 28, 2025 to July 23, 2025. As of March 10, 2025, there was $1,559,792
outstanding under the Secured Loan, including $59,792 of interest outstanding, and no principal or interest has been paid since the Secured
Loan was issued.

 Ondas Autonomous Systems Convertible Notes

 On October 10, 2024, OAS entered
into that certain Securities Purchase Agreement (the "OAS Agreement"), for an aggregate investment of $3.5 million in OAS
(the "Offering"). The OAS Agreement was entered into by and among OAS and a private investor group, including (i) Privet Ventures
LLC, an entity affiliated with Eric Brock, Chairman and Chief Executive Officer of the Company and OAS, and (ii) Charles & Potomac
Capital, LLC, an entity affiliated with Joseph Popolo, a Board Member of the Company, for the sale of convertible promissory notes in
the aggregate amount of $3.5 million (the "OAS Notes"). The OAS Notes will (i) bear an interest rate of 5% per annum, (ii)
have a maturity date of September 30, 2025, and (iii) be convertible into securities of OAS under certain conditions. As of March 10,
2025, there was $3,568,356 outstanding under the OAS Notes, including $68,356 of interest outstanding, and no principal or interest has
been paid since the OAS Notes was issued.

 Networks November 2024 Convertible Notes

 On November 13, 2024, Ondas Networks
entered into a Securities Purchase Agreement (the "November Networks SPA"), for an aggregate investment of approximately $2,070,000
in Ondas Networks. The November Networks SPA was entered into by and among Ondas Networks and a private investor group, including C&P
(the "Networks Lead Investor"), for the sale of secured convertible promissory notes in the aggregate amount of $2,070,000 million
(the "Networks November 2024 Convertible Notes"). The Networks November 2024 Convertible Notes will (i) bear an interest rate
of 10% per annum, (ii) have a maturity date of September 30, 2025, (iii) be secured by all assets of Networks, provided however such secured
obligation shall be subordinate to the Secured Loan, and (iv) at the option of C&P be convertible into equity securities of Networks
upon the closing (a) a Corporate Transaction (as defined in the Networks November 2024 Convertible Notes) or (b) a subsequent offering
of securities of Ondas Networks. Pursuant to the November Networks SPA, Ondas Networks issued the private investor group warrants to purchase
50,082 shares of senior preferred stock, $0.00001 par value per share, at an exercise price of $20.65 per share and exercisable commencing
on November 13, 2024 through November 13, 2029. As of March 10, 2025, there was $2,135,906 outstanding under the Networks November 2024
Convertible Notes, including $66,889 of interest outstanding, and no principal or interest has been paid since the Networks November 2024
Convertible Notes were issued.

 Networks January 2025 Convertible Notes

 On January 15, 2025, Networks
entered into a Securities Purchase Agreement (the "January Networks SPA"), for an aggregate investment of approximately $2,931,000
in Networks. The January Networks SPA was entered into by and among Networks, the Company, and a private investor group, for the sale
of convertible promissory notes in the aggregate amount of approximately $2,931,000 (the "Networks January 2025 Convertible Notes"),
of which $2,000,000 is from the Company. The Networks January 2025 Convertible Notes will (i) bear an interest rate of 10% per annum,
(ii) have a maturity date of September 30, 2025, (iii) be secured by all assets of Networks, provided however such secured obligation
shall be subordinate to the Secured Loan, and (iv) at the option of C&P be convertible into equity securities of Networks upon the
closing (a) a Corporate Transaction (as defined in the Note) or (b) a subsequent offering of securities of Networks. Pursuant to the January
Networks SPA, Networks issued the Company and the private investor group warrants to purchase 70,947 shares of senior preferred stock,
$0.00001 par value per share, at an exercise price of $20.65 per share and exercisable commencing on January 15, 2025 through January
15, 2030. As of March 10, 2025, there was $2,975,952 outstanding under the Networks November 2024 Convertible Notes, including $44,969
of interest outstanding, and no principal or interest has been paid since the Networks November 2024 Convertible Notes were issued.

 Director Independence

 A majority of our Board is
independent under the rules of Nasdaq. Our Board has undertaken a review of the independence of our directors and considered whether any
director has a material relationship with us that could compromise his ability to exercise independent judgment in carrying out his responsibilities.
As a result of this review, our Board has determined that Messrs. Cohen, Popolo and Seidl and Ms. Sood are "independent directors"
as defined under the rules of Nasdaq.

 Item 14. Principal Accountant Fees and Services.

 Rosenberg Rich Baker Berman,
P.A. ("RRBB") has served as the Company's independent registered public accounting firm since June 28, 2018.

 Aggregate fees billed to the
Company for the years ended December 31, 2024 and 2023 by RRBB were as follows:

 For the years ended

 2024

 2023

 Audit Fees

 $
 315,000

 $
 252,500

 Tax Fees

 30,925

 38,877

 All Other Fees

 48,755

 39,000

 $
 394,680

 $
 330,377

 Audit fees consist of fees
associated with the annual audit, including the reviews of our quarterly reports. Tax fees include the preparation of our tax returns.
All other fees consist of fees associated with services provided related to all other filings with the SEC as well as consents.

 On September 28, 2018, the
Audit Committee of our Board adopted a policy and related procedures requiring its pre-approval of all audit and non-audit services to
be rendered by its independent registered public accounting firm. These policies and procedures are intended to ensure that the provision
of such services do not impair the independent registered public accounting firm's independence. These services may include audit
services, audit-related services, tax services and other services. All services provided by RRBB during the years ended December 31, 2024
and 2023 were approved by the Audit Committee.

 Item 15. Exhibits and Financial Statement
Schedules.

 Exhibit No.

 Name of Document

 2.1

 Agreement and Plan of Merger, dated as of May 17, 2021, by and among Ondas Holdings Inc., Drone Merger Sub I Inc., Drone Merger Sub II Inc., American Robotics, Inc., and the Company Stockholder's Representative (incorporated herein by reference to Exhibit 2.1 to the Company's Current Report on Form 8-K filed on May 17, 2021 (File No. 001-39761)).

 2.2

 Agreement of Merger, dated August 4, 2022 (incorporated by reference to Exhibit 2.1 to the Company's Current Report on Form 8-K filed with the Securities and Exchange Commission on August 8, 2022 (File No. 001-39761)).

 2.3

 Amendment to Agreement of Merger, dated November 13, 2022 (incorporated by reference to Exhibit 2.1 to the Company's Current Report on Form 8-K filed with the Securities and Exchange Commission on November 14, 2022 (File No. 001-39761)).

 3.1

 Amended and Restated Articles of Incorporation of the Registrant, dated September 28, 2018 (incorporated herein by reference to Exhibit 3.1 to the Company's Current Report on Form 8-K filed on October 4, 2018 (File No. 333-205271)).

 3.2

 Amended and Restated Bylaws of the Registrant, dated September 28, 2018 (incorporated herein by reference to Exhibit No. 3.2 to the Company's Current Report on Form 8-K filed on October 4, 2018 (File No. 333-205271)).

 3.3

 Certificate of Designation (incorporated by reference to Exhibit 3.1 to the Company's Current Report on Form 8-K filed on August 17, 2020 (File No. 000-56004)).

 3.4

 Certificate of Change (incorporated herein by reference to Exhibit 3.1 to the Company's Current Report on Form 8-K filed on November 13, 2020 (File No. 000-56004)).

 3.5

 Certificate of Amendment, filed on October 31, 2023 (incorporated herein by reference to Exhibit 3.1 to the Company's Current Report on Form 8-K filed on October 31, 2023 (File No. 001-39761)).

 4.1

 Form of Common Stock Certificate (incorporated herein by reference to Exhibit No. 4.1 to the Company's Registration Statement on Form S-3 filed on January 29, 2021 (File No. 333-252571)).

 4.2

 Form of Warrant (incorporated by reference to Exhibit 4.3 to the Company's Current Report on Form 8-K filed on October 1, 2019 (File No. 000-56004)).

 4.3

 Form of Warrant Agreement (incorporated by reference to Exhibit 10.2 to the Company's Current Report on Form 8-K filed on May 7, 2020 (File No. 000-56004)).

 4.4

 Form of Warrant (included as Exhibit E to Exhibit 2.1 and incorporated by reference to Exhibit 2.1 to the Company's Current Report on Form 8-K filed on May 17, 2021 (File No. 001-39761)).

 4.5

 Form of Warrant (incorporated herein by reference to Exhibit 10.3 to the Company's Current Report on Form 8-K, filed by the Company with the SEC on July 10, 2023).

 4.6

 Form of Warrant (incorporated by reference to Exhibit 4.1 to the Company's Current Report on Form 8-K filed with the Securities and Exchange Commission on August 16, 2023).

 4.7

 Form of Warrant (incorporated by reference to Exhibit 10.2 to the Company's Current Report on Form 8-K filed with the Securities and Exchange Commission on February 26, 2024).

 4.8

 Form of Warrant (incorporated by reference to Exhibit 10.5 to the Company's Current Report on Form 8-K filed with the Securities and Exchange Commission on February 26, 2024).

 4.9

 Base Indenture, dated January 20, 2023, between Ondas Holdings Inc. and Wilmington Savings Fund Society, FSB (incorporated by reference to Exhibit 4.3 to the Company's Current Report on Form 8-K filed with the Securities and Exchange Commission on January 23, 2023 (File No. 001-39761)).

 4.10

 Supplemental Indenture, dated January 20, 2023, between Ondas Holdings Inc. and Wilmington Savings Fund Society, FSB (incorporated by reference to Exhibit 4.4 to the Company's Current Report on Form 8-K filed with the Securities and Exchange Commission on January 23, 2023 (File No. 001-39761)).

 4.11

 Second Supplemental Indenture, dated July 25, 2023, between Ondas Holdings Inc. and Wilmington Savings Fund Society, FSB (incorporated herein by reference to Exhibit 4.3 to the Company's Current Report on Form 8-K, filed by the Company with the Securities and Exchange Commission on July 28, 2023.

 4.12

 Form of 3% Series B-1 Senior Convertible Note (incorporated herein by reference to Exhibit 4.1 to the Company's Current Report on Form 8-K, filed by the Company with the Securities and Exchange Commission on January 23, 2023).

 4.13

 Form of 3% Series B-2 Senior Convertible Note (see Exhibit A to the Second Supplemental Indenture filed as Exhibit 4.3 to the Current Report on Form 8-K filed on with the Securities and Exchange Commission on July 28, 2023).

 4.14

 Form of Warrant of Ondas Networks Inc. (incorporated herein by reference to Exhibit 4.1 to the Company's Current Report on Form 8-K, filed by the Company with the SEC on November 15, 2024).

 4.15

 Base Indenture, dated December 3, 2024, between Ondas Holdings Inc. and Wilmington Savings Fund Society, FSB (incorporated herein by reference to Exhibit 4.2 to the Company's Current Report on Form 8-K, filed by the Company with the SEC on December 3, 2024).

 4.16

 First Supplemental Indenture, dated December 3, 2024, between Ondas Holdings Inc. and Wilmington Savings Fund Society, FSB (incorporated herein by reference to Exhibit 4.3 to the Company's Current Report on Form 8-K, filed by the Company with the SEC on December 3, 2024).

 4.17

 Second Supplemental Indenture, dated December 17, 2024, between Ondas Holdings Inc. and Wilmington Savings Fund Society, FSB (incorporated herein by reference to Exhibit 4.3 to the Company's Current Report on Form 8-K, filed by the Company with the SEC on December 17, 2024).

 4.18

 Third Supplemental Indenture, dated December 31, 2024, between Ondas Holdings Inc. and Wilmington Savings Fund Society, FSB (incorporated herein by reference to Exhibit 4.3 to the Company's Current Report on Form 8-K, filed by the Company with the SEC on December 31, 2024).

 4.19

 Description of Registrant's Securities (incorporated by reference to Exhibit 4.5 to the Company's Annual Report on Form 10-K for the year ended December 31, 2021 (File No. 000-56004)).

 10.1#

 Amended and Restated Employment Agreement, dated June 3, 2020, between Ondas Holdings Inc. and Eric Brock. (incorporated by reference to Exhibit 10.2 to the Company's Current Report on Form 8-K filed on June 3, 2020 (File No. 000-56004)).

 10.2#

 Employment Agreement, between Airobotics and Yishay Curelaru, dated November 28, 2017 (incorporated by reference to Exhibit 10.5 to the Company's Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on November 14, 2023).

 10.3#

 Amendment to Employment Agreement, between Airobotics and Yishay Curelaru, dated February 15, 2023 (incorporated by reference to Exhibit 10.6 to the Company's Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on November 14, 2023).

 10.4#

 Amendment to Employment Agreement, dated September 27, 2023 (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed with the Securities and Exchange Commission on September 29, 2023).

 10.5#

 2018 Equity Incentive Plan (incorporated herein by reference to Exhibit 10.7 to the Company's Current Report on Form 8-K filed on October 4, 2018 (File No. 333-205271)).

 10.6#

 Form of Stock Option Agreement (incorporated by reference to Exhibit 10.3 to the Company's Current Report on Form 8-K filed on May 7, 2020 (File No. 000-56004)).

 10.7#

 Form of Restricted Stock Unit Agreement. (incorporated by reference to Exhibit 10.4 to the Company's Current Report on Form 8-K filed on June 3, 2020 (File No. 000-56004)).

 10.8

 Form of Nonstatutory Stock Option Agreement.# (incorporated by reference to Exhibit 10.6 to the Company's Current Report on Form 8-K filed on June 3, 2020 (File No. 000-56004)).

 10.9

 Form of Securities Purchase Agreement (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed on August 17, 2020 (File No. 000-56004)).

 10.10

 Form of Securities Purchase Agreement (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed on September 1, 2020 (File No. 000-56004)).

 10.11

 Ondas Holdings Inc. 2021 Director Compensation Policy (incorporated herein by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed with the SEC on January 29, 2021)).

 10.12#

 Ondas Holdings Inc. 2021 Stock Incentive Plan (incorporated herein by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed on November 5, 2021 (File No. 001-39761)).

 10.13#

 Ondas Holdings, Inc. 2021 Incentive Stock Israeli Appendix (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed with the Securities and Exchange Commission on January 13, 2023 (File No. 001-39761)).

 10.14#

 Airobotics Ltd. 2015 Israeli Share Option Plan (incorporated by reference to Exhibit 10.1 to the Company's Registration Statement on Form S-8 filed with the Securities and Exchange Commission on January 25, 2023 (File No. 001-269418)).

 10.15#

 Amendment to the Ondas Holdings Inc. 2021 Incentive Stock Plan incorporated herein by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed on October 31, 2023 (File No. 001-39761)).

 10.16#

 Amendment to the Ondas Holdings Inc. 2021 Incentive Stock Plan (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed with the Securities and Exchange Commission on November 18, 2024).

 10.17#

 2020 Incentive Equity Plan (incorporated by reference to Exhibit 10.2 to the Company's Registration Statement on Form S-8 filed with the Securities and Exchange Commission on January 25, 2023 (File No. 001-269418)).

 10.18

 Form of Securities Purchase Agreement, dated October 26, 2022, between Ondas Holdings Inc. and the Investors (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed with the Securities and Exchange Commission on October 26, 2022 (File No. 001-39761)).

 10.19

 Form of Amendment No. 1 to Securities Purchase Agreement, dated January 20, 2023, between Ondas Holdings Inc. and the Investors (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed with the Securities and Exchange Commission on January 23, 2023 (File No. 001-39761)).

 10.20

 Form of Agreement and Waiver, dated as of July 21, 2023, by and between Ondas Holdings Inc. and the investor signatory thereto (incorporated herein by reference to Exhibit 10.5 to the Company's Current Report on Form 8-K, filed by the Company with the SEC on July 24, 2023).

 10.21

 Form of Agreement and Waiver, dated as of February 23, 2024, by and between Ondas Holdings Inc. and the investor signatory thereto (incorporated by reference to Exhibit 10.6 to the Company's Current Report on Form 8-K filed with the Securities and Exchange Commission on February 26, 2024).

 10.22

 Placement Agent Agreement, dated October 26, 2022, between Ondas Holdings Inc. and Oppenheimer & Co. Inc. (incorporated by reference to Exhibit 10.2 to the Company's Current Report on Form 8-K filed with the Securities and Exchange Commission on October 26, 2022 (File No. 001-39761)).

 10.23

 Preferred Stock Purchase Agreement, dated July 9, 2023, between Ondas Networks Inc. and the Initial Purchaser (incorporated herein by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K, filed by the Company with the SEC on July 10, 2023).

 10.24

 Amendment to Preferred Stock Purchase Agreement, dated July 21, 2023, between Ondas Networks Inc. and Initial Purchaser (incorporated herein by reference to Exhibit 10.2 to the Company's Current Report on Form 8-K, filed by the Company with the SEC on July 24, 2023).

 10.25

 Form of Preferred Stock Purchase Agreement, dated February 26, 2024, between Ondas Networks Inc. and the Purchasers (incorporated by reference to Exhibit 10.3 to the Company's Current Report on Form 8-K filed with the Securities and Exchange Commission on February 26, 2024).

 10.26

 Registration Rights Agreement, dated July 21, 2023, between the Company and Initial Purchaser (incorporated by reference to Exhibit 10.3 to the Company's Current Report on Form 8-K filed with the Securities and Exchange Commission on July 24, 2023).

 10.27

 Registration Rights Agreement, dated August 11, 2023, between the Company and Initial Purchaser (incorporated by reference to Exhibit 10.3 to the Company's Current Report on Form 8-K filed with the Securities and Exchange Commission on August 16, 2023).

 10.28

 Form of Registration Rights Agreement (incorporated by reference to Exhibit 10.4 to the Company's Current Report on Form 8-K filed with the Securities and Exchange Commission on February 26, 2024).

 10.29

 Form of Securities Purchase Agreement, dated February 26, 2024, between Ondas Holdings Inc., the Purchasers and solely with respect to Section 4.9 of this ONDS Agreement, Ondas Autonomous Holdings, Inc. (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed with the Securities and Exchange Commission on February 26, 2024).

 10.30

 Services Agreement, dated June 21, 2024, by and between the Company and AM Consulting (including the Statement of Work). (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed with the Securities and Exchange Commission on June 21, 2024).

 10.31

 Form of Securities Purchase Agreement, dated as of August 28, 2024, by and among Ondas Holdings Inc. and the purchaser party thereto (incorporated by reference to Exhibit 10.2 to the Company's Current Report on Form 8-K filed with the Securities and Exchange Commission on August 30, 2024).

 10.32

 Secured Note Agreement, dated September 3, 2024, by and between Ondas Networks Inc. and Charles & Potomac Capital, LLC (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed with the Securities and Exchange Commission on September 3, 2024).

 10.33

 Security Agreement, dated September 3, 2024, by and among Ondas Networks Inc. and Charles & Potomac Capital, LLC (incorporated by reference to Exhibit 10.2 to the Company's Current Report on Form 8-K filed with the Securities and Exchange Commission on September 3, 2024).

 10.34

 Patent Security Agreement, dated September 3, 2024, by and between Ondas Networks Inc. and Charles & Potomac Capital, LLC (incorporated by reference to Exhibit 10.3 to the Company's Current Report on Form 8-K filed with the Securities and Exchange Commission on September 3, 2024).

 10.35

 Form of Securities Purchase Agreement (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed with the Securities and Exchange Commission on November 15, 2024).

 10.36

 Form of Convertible Promissory Note (see Exhibit A to the Securities Purchase Agreement filed as Exhibit 10.1 to the Company's Current Report on Form 8-K filed with the Securities and Exchange Commission on November 15, 2024).

 10.37

 Directorship Agreement, by and between Ondas Holdings Inc. and Ron Stern, dated January 6, 2025 (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed with the Securities and Exchange Commission on January 13, 2025).

 10.38

 Form of Securities Purchase Agreement (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed with the Securities and Exchange Commission on January 16, 2025).

 10.39

 Form of Convertible Promissory Note (see Exhibit A to the Securities Purchase Agreement filed to Exhibit 10.1 to the Company's Current Report on Form 8-K filed with the Securities and Exchange Commission on January 16, 2025).

 10.40

 Letter Agreement, dated February 28, 2025, by and between Ondas Networks Inc. and Charles & Potomac Capital, LLC (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed with the Securities and Exchange Commission on February 28, 2025).

 19.1

 Insider Trading Policy*

 Subsidiaries of the Registrant*.

 23.1

 Consent of Rosenberg Rich Baker Berman, P.A.*

 31.1

 Certification of Chief Executive Officer of Periodic Report pursuant to Rule 13a-14a and Rule 15d-14(a) dated March 12, 2025*

 31.2

 Certification of Chief Financial Officer of Periodic Report pursuant to Rule 13a-14a and Rule 15d-14(a) dated March 12, 2025*

 32.1

 Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350 dated March 12, 2025**

 32.2

 Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350 dated March 12, 2025**

 97.1

 Ondas Holdings Inc. Clawback Policy (incorporated by reference to Exhibit 97.1 to the Company's Annual Report on Form 10-K filed with the Securities and Exchange Commission on April 1, 2024).

 101.INS

 101.SCH

 101.CAL

 101.DEF

 101.LAB

 101.PRE

 *

 Filed herewith.

 **

 This certification is being furnished and shall not be deemed "filed" with the SEC for purposes of Section 18 of the Exchange Act, or otherwise subject to the liability of that section, and shall not be deemed to be incorporated by reference into any filing under the Securities Act or the Exchange Act, except to the extent that the Registrant specifically incorporates it by reference.

 #

 Management contract or compensatory plan or arrangement.

 Item 16. Form 10-K Summary.

 None.

 SIGNATURES

 Pursuant to the requirements
of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Company has duly caused this Report to be signed on its behalf by
the undersigned, thereunto duly authorized.

 DATE: March 12, 2025

 By:

 /s/ Eric A. Brock

 Eric A. Brock

 Chief Executive Officer

 (Principal Executive Officer)

 By:

 /s/ Neil J. Laird

 Neil J. Laird

 Interim Chief Financial Officer

 (Principal Financial Officer

 Principal Accounting Officer)

 Pursuant to the requirements
of the Securities Exchange Act of 1934, this Report has been signed below by the following persons on behalf of the Registrant and in
the capacities and on the dates indicated.

 Signature

 Title

 Date

 /s/ Eric A. Brock

 Chairman and Chief Executive Officer

 Eric A. Brock

 /s/ Neil J. Laird

 Interim Chief Financial Officer,

 Neil J. Laird

 Principal Financial and Accounting Officer

 /s/ Richard M. Cohen

 Richard M. Cohen

 /s/ Joseph Popolo

 Joseph Popolo

 /s/ Randall P. Seidl

 Randall P. Seidl

 /s/ Jaspreet Sood

 Jaspreet Sood

 /s/ Ron Stern

 Ron Stern

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