Ondas Holdings studies a decline in revenues in comparison with final 12 months By Investing.com

Ondas Holdings Inc. (ONDS) reported a difficult begin to the primary quarter of 2024 however stays optimistic about its future progress prospects, in response to CEO Eric Brock and CFO Yishay Curelaru in the course of the firm’s earnings name. Regardless of a decline in revenues to $625,000 from $2.6 million in the identical interval final 12 months, the corporate highlighted strategic partnerships and technological developments in its FullMAX and Optimus Programs. Working losses and adjusted EBITDA improved year-over-year, and the corporate maintained a money place of $14.6 million as of March 31, 2024. American Robotics, a subsidiary of Ondas, showcased progress in autonomous drone operations and anticipates income progress within the latter half of 2024.

Key Takeaways

• Q1 2024 income fell to $625,000 from $2.6 million in Q1 2023.
• Gross revenue was adverse, however working bills decreased.
• Working loss improved by 28%, and adjusted EBITDA loss narrowed by 24% year-over-year.
• Money and money equivalents stood at $14.6 million, with extra financing of $8.6 million.
• Landmark offers and partnerships have been achieved, together with an upgraded PTC (NASDAQ:) information radio contract and a primary business order for the iron-drone platform.
• American Robotics superior in autonomous drone operations and expects elevated demand in protection and business sectors.
• The corporate is contemplating a possible spin-off of its drone enterprise and anticipates important demand for its Optimus and Raider platforms in 2025.

Firm Outlook

• Ondas Networks made progress with the 900 megahertz improve, attaining integration objectives.
• Ondas Autonomous Programs enhanced operational and monetary flexibility.
• The Optimus System is predicted to generate increased income resulting from buyer engagement and fleet adoption.
• Important demand for each Optimus and Raider platforms is anticipated in 2025.

Bearish Highlights

• Q1 2024 marked a disappointing begin with diminished income.
• Gross revenue was adverse resulting from challenges resembling prolonged timelines with railroads and interruptions from the Gaza battle.

Bullish Highlights

• Strategic partnerships, resembling with HHLA Sky, intention to drive world adoption of Optimus Programs.
• The corporate secured a landmark deal to supply an upgraded PTC information radio for a key Northeast Hall passenger railroad.
• American Robotics accomplished a proof-of-value program and fashioned partnerships to reinforce operations.

Misses

• The corporate didn’t present particular income combine forecasts or disclose the typical promoting value of their counter-drones.
• No particular particulars or timelines got for the potential spin-off of the drone trade enterprise.

Q&A Highlights

• Discussions with buyers a couple of potential spin-off of the drone enterprise are ongoing.
• The corporate plans to provide the Raider system in Israel, with a view to broaden manufacturing globally.
• Optimus and Raider platforms are anticipated to see important demand, significantly from the homeland safety and protection sectors.

As Ondas Holdings Inc. navigates via a difficult quarter, the corporate is waiting for the second half of 2024 with a concentrate on technological adoption and strategic partnerships to drive progress. The corporate’s dedication to equitizing excellent convertible notes and securing preliminary orders for his or her 900 megahertz merchandise underlines their technique to enhance monetary stability and market place. With the drone trade’s fast progress, Ondas’s emphasis on autonomous programs and counter-drone applied sciences positions it to capitalize on rising alternatives throughout the sector.

InvestingPro Insights

Ondas Holdings Inc. (ONDS) has skilled important inventory value volatility and a considerable decline over the previous three months, with analysts not anticipating profitability this 12 months. Regardless of these challenges, the corporate’s management stays targeted on long-term progress and technological developments.

InvestingPro Information metrics reveal a market capitalization of $54.03 million, indicating the corporate’s comparatively small dimension out there. The income progress for the final twelve months as of This fall 2023 stands at a formidable 638.14%, which is a shiny spot amidst the corporate’s monetary scenario. Nevertheless, the working revenue margin for a similar interval is deeply adverse at -243.63%, highlighting the corporate’s wrestle to handle its bills in relation to its income.

An InvestingPro Tip price noting is that whereas Ondas is rapidly burning via money, analysts are anticipating gross sales progress within the present 12 months, which can supply some optimism for potential buyers wanting on the firm’s future prospects. The corporate’s short-term obligations additionally exceed its liquid property, which could possibly be a degree of concern for its monetary well being within the rapid future.

For readers thinking about a deeper evaluation, there are an extra 9 InvestingPro Ideas obtainable at https://www.investing.com/professional/ONDS. The following pointers can present additional insights into Ondas Holdings Inc.’s monetary well being and market efficiency. To entry these helpful insights, use coupon code PRONEWS24 to get an extra 10% off a yearly or biyearly Professional and Professional+ subscription.

Full transcript – Ondas (ONDS) Q1 2024:

Operator: Welcome to the Ondas Holdings Inc. First Quarter 2024 Convention Name. All individuals will probably be in listen-only mode. [Operator Instructions] Earlier than we start, the Firm want to remind you that this name might include forward-looking statements. Whereas these forward-looking statements mirror Ondas’ greatest present judgment, they’re topic to dangers and uncertainties that would trigger precise outcomes to vary materially from these implied by these forward-looking statements. These danger elements are mentioned in Ondas’ periodic SEC filings and within the earnings press launch issued right now, that are each obtainable on the Firm’s web site. Ondas undertakes no obligation to revise or replace any forward-looking statements to mirror future occasions or circumstances, besides as required by legislation. Throughout this name, Ondas will confer with sure non-GAAP monetary measures. These non-GAAP measures usually are not ready in accordance with Typically Accepted Accounting Rules. A reconciliation of the non-GAAP monetary measures to essentially the most instantly comparable GAAP measures is proven in our press launch issued earlier right now, which is obtainable on the Investor Relations part of our web site. This non-GAAP data is offered as a complement to, not as an alternative to as superior to, measures of monetary efficiency ready in accordance with GAAP. Nevertheless, administration believes these non-GAAP measures present buyers with helpful data on the underlying developments of our enterprise. Please word this occasion is being recorded. I’d now like to show the presentation over to Eric Brock, Chairman and CEO. Please go forward.

Eric Brock: Thanks, operator, and good morning. I wish to get began by welcoming everybody to our quarterly convention name. We admire the time you are spending with us and in your curiosity in our firm. I am joyful to be joined right now by key members of our management crew, together with our CFO, Yishay Curelaru, Man Simpson, the President and Chief Working Officer of Ondas Networks, Meir Kliner, President of Ondas Autonomous Programs, and the Founder and CEO of our Airobotics subsidiary; and Tim Tenne, CEO of American Robotics. Now let’s flip to the agenda. We are going to begin the decision with some transient feedback highlighting current enterprise developments at each Ondas Networks and Ondas Autonomous Programs enterprise models. I’ll then hand the decision to Yishay for a monetary overview of our first quarter 2024 outcomes. We are going to then present a enterprise replace for Ondas Networks and our OAS enterprise models the place I’ll ask Man, Meir and Tim to supply a commentary round present enterprise exercise. Then we’ll wrap the decision and open the ground for investor questions. I count on right now’s name to be on the shorter facet given we’ve got shared an in depth replace on our final investor name simply six weeks in the past once we delivered our annual outcomes for 2023. That investor name coated fairly a little bit of exercise from Q1. Even so, we’ve got been productive within the final six weeks and as we’ll talk about, we’ve got superior our key enterprise priorities at each Ondas Networks and OAS enterprise models. Earlier than we dig into that, I wish to begin by acknowledging the disappointing begin to 2024 from a income perspective. As we talked about on our name on April 1st, we count on a very good 12 months from a progress perspective. Nevertheless, our income will probably be closely weighted to the second half of 2024 given headwinds we face to begin the 12 months particularly the prolonged timelines with the Class I railroads to deploy our expertise in upgrading the legacy 900 megahertz community, in addition to the interruptions with our OAS enterprise unit associated to the Gaza battle. Recall with the Gaza battle, the manufacturing of Optimus Programs was negatively impacted, which created a bottleneck in advancing advertising exercise. Nonetheless, we’re optimistic concerning the adoption cycle forward for our three expertise platforms, which embrace in fact Ondas Networks FullMAX dot16 compliant software-defined community platform, in addition to OAS’ Optimus System in iron-drone radar. The worth of our dot16 expertise was additional confirmed with the order we introduced right now to supply an upgraded 220 megahertz PTC information radio for a key Northeast Hall passenger railroad. The client specs for this upgraded PTC information radio required compatibility with the IEEE 802.16 wi-fi customary, which in fact supplies the client the pliability to interact a wi-fi community improve roadmap throughout that Northeast Hall. It is a landmark deal and we’re very excited to open the passenger rail market and broaden our serviceable addressable market or SAM to that very giant 220 megahertz community. We’re additionally enthusiastic about final week’s replace the place we highlighted the primary business order for our iron-drone platform. Iron-Drone Raider is a house run product with what we believed our marketing-leading efficiency specs. We’ve labored intently with our buyer in protection companions so as to add much more functionality to the Raider and we sit up for sharing these particulars on the Raider specs and expertise enhancements at a later time. We count on to obtain extra orders for the Iron-Drone platform within the present months as we put together for quantity manufacturing and expanded advertising to different protection & safety clients globally. These new orders for Ondas Networks and our OAS enterprise unit display the market management and the precious innovation we’re bringing to guard and safe provision of crucial providers and operation of crucial infrastructure property. At Ondas Networks, all indicators proceed to assist a significant progress alternative beginning with the 900 megahertz community the place exercise continues to advance. On the 900 megahertz program, we’ve got made extra progress on the programs integration effort we described on our final name. Man will present extra particulars, however I’m joyful to share upfront that we’ve got now accomplished the combination and backwards compatibility on the legacy 900 megahertz community with two railroads together with a Class I railroad in Chicago and with a smaller group rail system within the Southwest. Our progress was validated when our distribution accomplice acquired an order in early Could for a system-wide deployment on behalf of that dedicated railroad There’s nonetheless extra work in Chicago which is said to demonstrating the ultimate migration to the brand new 900 megahertz frequency band and that migration is being deliberate now. As we moved into 2024, we’re seeing broadening alternatives at OAS. With geopolitical advanced rising as evidenced by the tensions within the Ukraine, Center East and Taiwan, the necessity to shield and safe crucial infrastructure property and providers is a big focus from governments, protection and Homeland Safety officers, in addition to for operators of crucial expertise in industrial property. These tailwind are sturdy and strengthening and profit our Optimus and Iron-Drone platforms. Along with our milestone order for Iron-Drone we proceed to advance the client advertising exercise on our Optimus system. Our advertising efforts within the US and Europe including to a sturdy pipeline of engaging buyer actions whereas our efforts within the Center East continues to carry out properly. Meir and Tim will share extra particulars in a while the decision. And as Meir and Tim will talk about, the Optimus System stock availability is enhancing. It will allow extra buyer exercise right here within the US and internationally and permits us to interact a rising and maturing buyer pipeline. I wish to spotlight the partnership we signed final week with HHLA Sky, a drone providers unit of HHLA, the most important terminal operator on the Port of Hamburg in Germany, which is Europe’s third largest seaport. This is a vital relationship to the Ondas Autonomous Programs enterprise unit with HHLA Sky, we’re bringing a capability to drive free adoption of Optimus Programs and construct scalable aerial safety and information intelligence packages the worldwide terminal operators the place our buyer pipeline is rising. I’d add that we imagine HHLA Sky may even present entry throughout authorities and industrial markets in a big German drone market. So to wrap up the introduction, the weak first half income belies the worth we’re constructing with clients throughout our expertise platforms. The order for the 220 megahertz PTC information radio is a large sign of broad adoption of dot16 throughout world rail markets and the strategic worth of our FullMax connectivity platform. Additional, the commercialization of the Iron-Drone Raider transitions that platform to income era and solidifies our OAS enterprise unit as an essential participant in a quick rising marketplace for Autonomous Programs offering safety and intelligence to crucial markets resembling protection, safety, public security and demanding infrastructure operations in a world that is requiring increasingly of this experience. I’ll now hear the decision to Yishay to supply the detailed Q1 monetary replace. Yishay?

Yishay Curelaru: Thanks, Eric. As I get began, I wish to remind our buyers that the figures we’re about to debate embody the inclusion of Airobotics monetary efficient from January twenty third 2023, following our profitable acquisition. This strategic transfer has considerably augmented our operational effectiveness and income streams, elevated our market presence and enhancing our shareholder worth. Additional, regardless of the added scale from the addition of Airobotics, as you will note working anticipated each money and non-cash OpEx are down quarter-over-quarter reflecting an excessive concentrate on OpEx effectivity. That can proceed. Turning to the Q1 ‘24 outcomes. We had a sluggish begin to the 12 months. Within the first quarter of ’24, revenues decreased to $625,000 in comparison with $2.6 million in Q1 ’23. The lower in revenues was primarily a results of prolonged timelines at Ondas Networks associated to the 900 megahertz actions with the Class I railroad and provide chain disruption linked to the Gaza Struggle at our Alvarez enterprise unit. For Ondas Community, revenues will fluctuate on quarter-to-quarter given the uncertainty round timing of buyer exercise in entrance of the focused business rollout within the 900 megahertz community. And growth packages underway with Siemens and MxV rail. Equally, revenues at OAS are anticipated to range from quarter-to-quarter and to normalize into extra predictable sample as we develop our buyer base and extra of these clients enter flick packages and recurring service agreements in the USA and internationally. Gross revenue decreased to adverse $400,000 for Q1, 24 as in comparison with $1 million for Q1 ‘23. Gross margin was adverse for Q1 ‘24 as in comparison with 39.6% for Q1 ‘23. The disappointing gross margin efficiency is primarily resulting from sub-scale operations given the low income recorded within the quarter relative to recurring price of providers offered, in addition to product growth prices overrun on sometimes low margin growth initiatives. Gross margin might be volatility on quarter-to-quarter foundation resulting from low income stage and shifts in quarter combine between merchandise, growth, and providers income. Please word that we’re concentrating on increased gross margins at Ondas Community on new growth packages such because the PTC information radio introduced right now. Working bills decreased to %8.7 million for Q1 ’24 as in comparison with $13.7 million in Q1 ‘23. The sharp drop in working bills was primarily resulting from controls on money exercise and decreased R&D exercise each in Networks and OAS. This lower in working bills emphasizes the continuing profit from the restructuring of our Ondas Autonomous System enterprise unit in reference to the combination of American Robotics and Airobotics after the Airobotics acquisition closed in January 23. The corporate narrowed working loss to $9.1 million for Q1 ‘24 as in comparison with $12.6 million for Q1 ’23. Though income decreased, our working loss improved 28% year-over-year and was largely pushed by sturdy expense management and decrease non-cash expenses. Adjusted EBITDA loss narrowed 24% year-over-year to $7.7 million for Q1 ‘24 as in comparison with $10.2 million for Q1 ’23. Now let’s flip to the money stream assertion. We had money and money equivalents of $14.6 million as of most thirty first ’24, as in comparison with $14.2 million as of March thirty first 2023. Q1 money offered by financing included extra gross financing totaling $8.6 million. Money utilized in operations throughout Q1 ‘24 decreased by $5.3 million resulting from primarily the restructuring of our Ondas Autonomous System enterprise unit. We count on money utilization to enhance considerably s we transfer ahead into 2024. Improved money efficiencies come from working bills leveraged at each corporations as we focus spending on driving buyer adoption and progress in revenues and gross earnings. As famous, we ended Q1 with $14.6 million in money. In February, we introduced an $8.6 million capital elevate via the gross sales of Ondas Holdings widespread inventory and Ondas Networks most well-liked inventory in a financing led by Charles & Potomac Capital. As of most thirty first 2024, we had $27.4 million in convertible notes excellent. I wish to spotlight that the convertible notes have maturities in April 2025 and July 2025, which implies we’ve got a while to handle the amortization and create circumstances to equitize the notes beneath extra favorable situation. It’s our goal to equitize these notes as quickly as we will by utilizing shares to retire the notes both through month-to-month amortization or to see these notes convert totally to fairness previous to maturity. I’ll now hand over the decision again to Eric.

Eric Brock: Thanks, Yishay. Now we’ll transition to a overview of our enterprise models and ask Man Simpson and Meir Kliner to share updates on current exercise within the discipline with clients and trade companions. We may even ask Tim Tenne to share feedback relating to American Robotics and drill down a bit into the outlook for OAS in the USA. As I hand the decision to Man, I wish to reiterate that I’ve confidence in our capacity to develop an essential enterprise at Ondas Networks as we deploy wi-fi expertise that’s critically helpful for the rail clients and the big industrial distributors in rising MC-IoT expertise ecosystem. We imagine business deployments on 900 megahertz will start quickly definitely this 12 months and that the chance in 900 megahertz, in addition to with the opposite personal networks for the Class I rails along with world rail markets stays substantial. Man, please proceed.

Man Simpson: Thanks, Eric. I am joyful to be right here this morning and to share an Ondas Networks replace for our buyers. As acknowledged earlier within the name, we offered a really detailed standing replace on the 900 megahertz improve exercise not too long ago. And so my feedback right now will concentrate on our incremental progress and outlook. I’m joyful to share that we’ve got achieved the programs integration objectives for our Airlink ATCS merchandise and demonstrated backwards compatibility within the stay legacy 900 megahertz community of a Class I railroad in Chicago. Our subsequent step with this railroad is to advance the migration of the put in Airlink programs to the brand new 900 megahertz frequency band and what we imagine we’ve got the correct plan to just do that. This effort is at present being deliberate with the client and we count on to finish this migration effort within the second quarter. As well as, we’ve got accomplished a second programs integration with a commuter railroad within the Southwest. Our distribution accomplice has already acquired an order on behalf of this buyer signaling their confidence in our capacity to improve the legacy 900 megahertz community. And let me spotlight, that is the primary system-wide business order within the 900 megahertz community. It is a important milestone validating the progress we’re making with this essential community. Moreover, we’re beginning the now well-proven programs integration course of with the Midwest commuter railroad. As we really helpful, they’ve bought tools to ascertain a number of labs by which they’ll consider Airlink merchandise and dot16 expertise for numerous functions. The opposite Class I rails proceed to carefully monitor our progress. Success in Chicago is predicted to result in additional engagement with Class I rails on planning and timelines for their very own 900 megahertz networks. We, together with the rail clients and Siemens have realized rather a lot via these preliminary integration actions and we imagine we’ve got created scalable processes that may be deployed in different areas throughout all railroad operations. We wish to take a second and spotlight some current public statements by the AAR (NYSE:) relating to plans for the 900 megahertz community and a few key takeaways. On Could 2nd, the AAR submitted a remark letter to the FCC in response to regulatory filings associated to a 900 megahertz spectrum licenses. On this remark letter, the AAR made some sturdy statements associated to the worth of the brand new 900 megahertz spectrum and the networks for prepare operations. Additionally the AAR acknowledged that the 900 megahertz frequency band was crucial, extremely helpful and that the 900 megahertz community was a key element of the trade’s next-generation community plans. Moreover, they signaled the crucial position that dot16 wi-fi expertise will play within the 900 megahertz build-out, whereas additionally referencing the opposite personal license spectrum bands. I remind our buyers that the railroads at present function 4 Mission Important personal networks throughout the 160, 220, 450 and 900 megahertz frequency bands. We imagine the AAR’s reference to future modern applied sciences and – throughout the total suite of spectrum bands, highlights the chance for Ondas and its dot16 platforms to assist community upgrades throughout the entire legacy networks operated by the railroads. We are going to proceed to work exhausting to comprehend this large market alternative and assist the AAR’s necessities. Let’s flip now to the key announcement we made right now relating to the 220 megahertz PTC information radio. Ondas Networks has entered into an settlement with our distribution accomplice to supply an upgraded on locomotive radio for a key Northeast hall passenger railroad. This radio will probably be backwards suitable with the legacy 220 megahertz community and hosts optimistic prepare management, a crucial security utility. Importantly, this new radio will exchange a discontinued legacy radio and is designed for adoption throughout the Northeast hall, the place a monitor is shared by different passenger transit and even freight railroad operators. The brand new 220 information radio will supply an improve cross to dot16, which was a particular requirement of the rail buyer. I wish to know that this mission has already began and we’re on monitor to ship manufacturing radios within the first quarter of 2025. One last word on the 220 megahertz program. This win represents a brand new rail market, passenger and transit, a brand new personal community 220 megahertz and a brand new utility, optimistic prepare management. In brief, it expands our service addressable market or SAM within the rail sector. As well as, our work with the AAR and particularly with MxV Rail continues the purpose to broaden it engagement relating to new networks and functions. For instance, work with the Class I railroads on advancing the commercialization of our base station controller to supply dynamic frequency useful resource administration and on new use instances for 900 megahertz. Together with CTC over ITCM to supply the required redundancy for the 220 megahertz PTC security community. Now I’ll hand the decision again to Eric. Eric?

Eric Brock: Thanks, Man. I’ll now ask Meir Kliner to take the ground and replace us on progress at Ondas Autonomous Programs and supply perception into current developments at OAS and the outlook from right here. Meir?

Meir Kliner: Thanks, Eric. Within the first quarter, we introduced the formation of Ondas Autonomous Holding Inc, OAH. This newly fashioned one holding firm is meant to reinforce our operational and monetary flexibility as we scale our one enterprise worldwide. OAH will leverage our market-leading autonomous drone platforms, the Optimus System and the Iron-Drone Raider, by driving targeted and scalable working fashions focused in the direction of offering complete space of safety and information options for particular trade verticals. After all, these preliminary vertical markets the place we’re demonstrating scalable go to market success together with public security and emergency response, crucial infrastructure, development mission administration and datacenters. Our buyer pipeline has expanded considerably in current months. As our investments in our providers group in each US and Europe, which embrace partnerships like we introduced final week with HHLA Sky and C-Astral Aerospace start to mature. Our capacity to satisfy this rising demand visibility has improved with Optimus System manufacturing now catching up after the dislocation from the Gaza Struggle. On manufacturing, we count on to obtain supply of the 15 programs at present being produced by Q3 2024. We’re planning to broaden manufacturing behind these programs. Throughout Q1, Airobotics secured an expanded providers settlement to assist the rising fleet of our Optimus Programs within the UAE and Israel. Moreover, Airobotics continued its enlargement within the United Arab Emirates, the place a neighborhood governmental entity is deploying the world’s first drone community infrastructure for public security and different public providers. This initiative is predicted to proceed aiming to attain a fleet of greater than 20 programs by the top of 2025. As we proceed to assist this community enlargement, we see a rising potential for expanded business use instances within the UAE and we hope to have extra to say on this later this 12 months. Within the counter-drone area, we’ve got efficiently accomplished the pressing works to tailor the Iron-Drone Raider system for sure army necessities. This achievement is clear in our current announcement of preliminary buy order for main protection firm. We imagine the system specs for the raider are best-in-class and even disruptive as in comparison with different programs out there. The unimaginable effort and accomplishments by our crew positions Ondas very properly in a fast-growing market. Whereas Tim Tenne will present an replace on US enterprise exercise, I wish to spotlight our enterprise growth actions in Europe, the place we’ve got established a advertising effort that features the formation of recent partnerships that assist leverage the native market experience of those three raiders. We imagine the market potential in Europe is important the place we will deliver our huge expertise and credibility in defending and monitoring crucial property to key clients in transportation, development, and lots of different crucial operations. I wish to end my ready remarks by highlighting that we’re working Airobotics and American robotics in a full synergy successfully bringing to the desk the core benefits of OAH. Collectively, we’re leveraging world-class expertise with confirmed worth and reliability, which we’re combining with scalable options concentrating on at focus vertical markets and use instances. I’ll now hand the decision over to Tim Tenne, CEO of American Robotics to supply an replace on the enterprise achievements we’re making at American Robotics.

Tim Tenne: Thanks, Meir. Through the first quarter, we efficiently accomplished a proof-of-value program with the Mass Division of Transportation Aeronautical division, which included flawless demonstrations of the Optimus System and our newly positioned Kestrel Detect-and-avoid resolution on the Massachusetts Maritime Academy. These demonstrations showcased our capacity to function the Optimus System constantly with distant operations past visible line of sights. This demonstration is continuous to drive a maturing pipeline throughout the protection, federal date and business segments, which positions us properly for profitable gross sales and deployments. We’ve additionally expanded our ecosystem round discipline operations and expertise infrastructure, through new partnerships at American Robotics. For instance, we secured a partnership with Senhive, a number one supplier of reasonably priced passive detection system for drones, often known as a counter unmanned plane system in addition to extra functionality for monitoring, collaborating in non-cooperative air site visitors Moreover, we’ve got partnered with ResilienX, a frontrunner and information high quality assurance and real-time aviation security administration programs for extremely automated and autonomous programs. Collectively, these partnerships will help Ondas in elevating autonomous drone operations via superior integration of airspace security and administration programs. American Robotics engaged within the Inexperienced UAS program to certify compliance with the very best ranges of cyber safety and provide chain necessities of the US Nationwide Protection Authorization Act. The Inexperienced UAS program is run by the Affiliation for Uncrewed Automobile Programs Worldwide in partnership with the US Division of Protection and lots of state governments with the aim of enhancing the nation’s UAS expertise base. American Robotics expects to finish the Inexperienced UAS qualification throughout quarter three. We count on to be accomplished on the construct out of our new demonstration, coaching and operations middle to be launched at our Baltimore County Maryland headquarters in June. We sit up for sharing extra detailed data with everybody quickly. We’re seeing an elevated demand for the deployment of the Optimus System with potential clients in each authorities and business segments. Lastly, American Robotics is advancing its go to market plans and US protection and safety markets with each Optimus and Iron-Drone. We anticipate new alternatives that can come into impact in the course of the second half of 2024 and I sit up for preserving our buyers knowledgeable on these actions. I’ll now hand the decision again to Eric.

Eric Brock: Let’s wrap a name now and summarize the outlook and supply context for the place we’re. We’ll proceed to carry off and offering a proper outlook for 2024. We wish to be conservative given we nonetheless must safe that preliminary 900 megahertz order. We do imagine order and income visibility will enhance within the second half. We proceed to work exhausting within the current AAR public remark suggests the railroads are intending to construct out the $900 megahertz community and it additionally means that they’ll have some urgency. For OAS, buyer engagement, conversations and negotiations and orders, in addition to discipline trials proceed to construct and the provision of Optimus Programs will assist assist a restoration in income progress. The varied distribution partnerships we’ve got secured, such because the HHLA Sky announcement final week are additionally anticipated so as to add to our income within the second half. Lastly, Iron-Drone will probably be accretive to the income outlook, now that has been formally launched and accepted by a vital reference buyer. So the outlook stays optimistic for Ondas. I perceive could also be pissed off with our uneven efficiency from a monetary and operational standpoint. We share your frustrations, particularly giving our perception that we’ve got created extraordinarily helpful expertise platforms in very giant excessive progress end-markets. We’re persevering with to work exhausting to ship this to you. We’re engaged on enterprise plans and funding methods, which embrace capital methods at our OAH enterprise unit, which we imagine will speed up the execution of its marketing strategy. My confidence stays excessive. We’re doing wonderful issues for our clients and companions and it’s our job to guarantee that we, which means our buyers and our crew will probably be rewarded. It is not simple for positive, however we stay 100% dedicated and we’ll work exhausting to ship for you. With that mentioned, let’s examine if there are any questions. Operator?

Operator: [Operator Instructions] The primary query comes from Tim Horan with Oppenheimer. Please go forward.

Tim Horan: Hello guys. Hello Eric. It is nice that the rails sort of reaffirm to the FCC assembly the sort of deadline to clear the spectrum. Are you able to simply give us a bit bit extra coloration on how a lot you assume they should spend to satisfy the intent in that letter? And only a tough replace once you consider income begin coming in?

Eric Brock: Okay. So, by way of sizing, we nonetheless take a look at the TAM as what we have shared with you typically up to now. I do – I’d level to particular numbers that the AAR used of their remark letter. I feel that is a pleasant quantity that they’ve used by way of dimension. Nevertheless, I feel it does confer with legacy tools. So, it is not essentially apples-to-apples. After which, by way of timing, as we have been discussing within the final couple of calls, we’re very lively throughout the board with the AAR and particularly in Chicago and that exercise is being watched very carefully. We do imagine that that we’ll have success there and that can result in business orders and additional engagement with different railroads on their plans for upgrading the legacy networks?

Tim Horan: So, is there any change in – it has been just a few years I feel because you upgraded the TAM. Is there any change in your pricing technique or scope of the work in any respect? And do you assume you may I suppose, you have got a greatest guess on when the revenues may begin coming in at this level. It looks as if it’s a number of the agency orders now that revenues are in all probability extra like subsequent 12 months? [Indiscernible]

Eric Brock: Yeah, so, I do not wish to make any commitments by way of timelines, as a result of we do want the visibility. I do would refer once more and Man coated this within the AAR assertion that they are anticipating to satisfy the deadlines to maneuver up the legacy community. And as a reminder, these are September 2025. As well as, there’s a build-out requirement. The railroads have to point out substantial protection to the FCC and that deadline is April 2026. So the preliminary deadlines lower than 18 months away and April 2026 is about two years. And really lower than two years. So we’re going to get busy. And I suppose, that’s all I can inform you, Tim. I do wish to maintain off on placing stakes within the floor on the income facet till we get orders. I’ll add if orders come, that we’ve got constructed a little bit of stock. So we might be responsive. However there you go.

Tim Horan: Nice. And may you then, perhaps simply replace us in your liquidity scenario, do you assume it’s essential elevate extra capital at this level A? And B, are you able to simply remind us what your totally diluted shares excellent are actually on a totally diluted foundation?

Eric Brock: Oh gee, I haven’t got that in entrance of me on the share account. I’ll must get again to you.

Tim Horan: Okay.

Eric Brock: However on the liquidity facet, we do count on to boost capital. And I’ve mentioned that on the final name six weeks in the past and we pointed particularly to some exercise with OAH. So I would like to only depart it at that.

Tim Horan: Okay. So do you assume this money burn price is sort of good for an additional quarter or two or will there be any modifications to the money burn?

Eric Brock: Yeah, I feel you may see our money OpEx at these ranges after which on the income facet, we’ll drive or I would say perhaps these ranges are perhaps barely decrease after which we glance into the second half the place gross revenue era is selecting up with income and we want to have that drive the money utilization down.

Tim Horan: Thanks.

Operator: Our subsequent query comes from Glenn Mattson with Ladenburg Thalmann. Please go forward.

Glenn Mattson: Hey guys. Thanks for taking the questions. Yeah, simply are you able to give us a way on the OAH facet about there’s been, I suppose, a bit little bit of push-out based mostly on a number of the disruptions you talked about. Simply are you able to give us a way of the scope of what do you’re feeling – do you see for that unit versus the place you have been say originally coming into the 12 months?

Eric Brock: Yeah, so, I count on our drone companies to be up year-over-year on income. The rationale for the work in first half weak spot is simply clearly the struggle which was disruptive. And we’ve shared that with you. At OAH, there’s pent-up demand and I wish to be particular or cautious concerning the specifics on a number of the pipelines, however clearly there’s and naturally that is for aggressive causes. However we’re seeing fairly a little bit of that exercise in public security, the Dubai Police and the UAE Governmental Entity proceed to be very lively and we’re having nice success increasing the fleet there and we expect that continues. They’ve publicly restated once more their intent to construct a citywide infrastructure. And we do see business exercise or business alternatives within the UAE as properly. That exercise in Dubai is resulting in extra engagement with world safety and legislation enforcement teams. So we’re very inspired by that. $we’ve got highlighted a number of the demand we’re seeing from ports supreme and particularly a facet ports we speak about terminal operators, the place we’re sort of constructing particular packages round safety within the aerial intelligence or inspection and the HHLA Sky relationship that we established this quarter is an effective instance of us within the route we’re heading there. Definitely, the departments of transportation and different authorities companies are engaged. So we see fairly a little bit of alternative and I’d additionally add that we’ve got a brand new income producing platform within the Iron-Drone Raider. We did announce that order final week. We expect extra orders. In order that’s going to assist assist income progress this 12 months.

Glenn Mattson: Okay. On Iron-Drone, once you – because the pipeline begins to construct or no matter, is it extra for – are you saying for extra army functions or is it generally like extra safety and public security kind of issues and what do you assume once you’re once you’re competing in opposition to different drone platforms or no matter on that kind of utility, the place do you assume you stand there? What do you see when there’s like a bake off versus you or any person else finished this?

Eric Brock: Yeah, so the preliminary demand right here is clearly going to be for army use instances and that is the place our first orders will come. And we see – we imagine with this buyer that we’ve got substantial progress alternative. Now, I would additionally say we’re seeing fairly a little bit of curiosity from different governments, homeland safety teams and protection teams, as properly. In order that’s the place you are going to see us play. And we really feel particularly for the county us platforms that intercept hostile drones that the specs that we’re bringing to the desk and the reliability that we’re demonstrating that we’ve got a best-in-class product. So, the marketplace for counter-drone programs is massive and rising very quickly. So we expect we’re properly positioned there to construct a really good enterprise. And that’s going to be beginning proper now after lots of effort.

Glenn Mattson: Nice. And perhaps a identical query on the Optimus simply once you’re competing for ports and that sort of stuff, is it – are you the sort of go to resolution that folks simply must convert to turn into a drone operators customers kind factor? Or is there’s there oftentimes there’s two or three opponents going for that enterprise and also you’re having to compete on both options or value or something like that?

Eric Brock: So it is – so, I suppose I will share with you the way I take a look at it’s, the answer we provide from a reliability and performance standpoint, is admittedly unmatched. We will present safety, intelligence. We will do it 24 hours a day, seven days per week. And that is an extremely helpful resolution. We do see fairly a little bit of exercise in these markets utilizing drones, however most of them are piloted single function. They do not have the persistency. And once more, the intelligence, the vary of options that we will deliver from an analytics standpoint. So, as you see, as spending develop with the worth of the drone being realized and included into the workflows, I feel that what we’re doing is extraordinarily aggressive. And I feel that we’re going to be serving to drive progress in these markets. So I like our place.

Glenn Mattson: Okay nice. Thanks for the colour guys.

Eric Brock: Thanks, Glenn.

Operator: Our subsequent query comes from Carter Mansbach with Forte Capital Group. Please go forward.

Carter Mansbach: Good morning, guys. So, I suppose, congratulations on the $2.8 billion commuter. Is there any method that we will know the title of the corporate that you simply signal this contract with and if not, why?

Eric Brock: What I will say is that, there – let me let me provide you with some background on the request for proposal that got here from a pair totally different locations within the Northeast hall together with Amtrak. And people are publicly disclosed RFPs. As a result of the customized engagement we have had is coming with our accomplice Siemens. So this order that for us comes from Siemens. Siemens could be very lively with all of the northeast hall clients. So, I do not wish to say particularly, Carter. However it’s a it is a radio for a key northeast hall buyer and we imagine that the northeast hall rails which incorporates MBTA, New Jersey Transit, Lengthy Island rail, MTA and Amtrak, in addition to sure straight rail operators like CSX (NASDAQ:). They would be the goal for this radio. And it is essential to additionally perceive that this radio is being developed as a result of the legacy radio is finish of life and has been discontinued.

Carter Mansbach: Okay. That is useful. So, with AAR dialog has been floated about, you guys talked about it, Tim talked about it. So the quantity in that optical or that piece was $69 million. So what piece of that motion could possibly be instructed on this?

Eric Brock: Although I can not discuss particularly about these numbers, as a result of these are AAR numbers and so they calculate themselves, what I’ll say is that, within the new A band, as they name the brand new 900 megahertz frequency, that we’re so far as we all know, the one radio that is licensed. The one system, wi-fi system that’s licensed by the FCC to function.

Carter Mansbach: Okay. All proper. Final query relating to this spin-off of the drone trade enterprise. Can we get any kind of really feel as to what the timeframe is, or since you mentioned it within the final name, I do not perceive that, I feel that buyers don’t perceive how logistically that is going to occur. Are you able to give us any coloration as to how it should occur? And when you are going to be discussing it additional? Thanks.

Eric Brock: I can not – I can not provide you with specifics on that. What I did say – reiterate is that the conversations with buyers are lively. So and I will say, there’s a wide range of situations that would play out right now and sooner or later which contain funding and doubtlessly spinning the corporate off right into a separate entity.

Carter Mansbach: Okay. Thanks. Respect it.

Eric Brock: After all.

Operator: Our subsequent query comes from Mike Latimore with Northland Capital. Please go forward.

Aditya Iyer: Hello, that is Aditya on behalf of Mike Latimore. May you give us some coloration on what sort of income combine between Autonomous Programs and Networks may we count on for this 12 months?

Eric Brock: Nicely, I’d say the outlook for the 12 months is our Autonomous Programs enterprise unit will probably have increased income than Ondas Networks, however I do not wish to forecast the combo.

Aditya Iyer: Bought it. And in addition may you give some coloration on what’s the common promoting value in your counter-drones?

Eric Brock: We’re not disclosing that in the meanwhile for aggressive causes.

Aditya Iyer: Alright. Thanks.

Eric Brock: I’ll inform you that we imagine it should – that is very helpful product. It is at value factors which can be very aggressive. And I feel decrease than different programs that we see on the market. And that we will ship it at a really engaging margin.

Aditya Iyer: Bought it. Thanks.

Eric Brock: Certain. Thanks.

Operator: Our subsequent query comes from Matthew Galinko with Maxim Group. Please go forward.

Matthew Galinko: Hey, good morning. Thanks for taking my questions. I am questioning how a lot customized integration work you count on to be required because the Raiders offered to different army and protection functions.

Eric Brock: A great query, Matt. I do not assume we essentially have lots of work on the system itself, proper? So the UAE and the docking station. Nevertheless, once we go to different markets, there could also be totally different detect applied sciences and once we discuss concerning the detect we’re sometimes speaking about raider programs or radar programs, I am sorry. So, if we’ve got a unique radar system, we have to combine into that radar system which is a fairly simple course of and never essentially very pricey.

Matthew Galinko: Bought it. Okay. After which, I suppose a comply with as much as that’s, simply given a number of the provide chain hiccups you have seen on the Optimus facet, do you count on or how do you navigate any limitations or ongoing limitations with regards to scaling up the raider enterprise?

Eric Brock: Yeah, good query. So the present plans are to provide the Raider in Israel. And as we entry clients globally, we’re more likely to produce in different areas, as properly. I will inform you that the complexity with the Raider system is dramatically lower than what we see with the Optimus system. That is not construct supplies in a construct standpoint. So, we expect we have got this present – the orders that we’re monitoring now, we expect we will produce and we’ve recognized the plan to do this. However once more, I do assume I will say this for each Optimus and Raider. We may have plans to construct in different components of the world. And we’ll add extra specifics to that once we’re prepared to take action.

Matthew Galinko: Nice. And I suppose a last query on that thread in simply searching to 2025, I do know you are not giving a 2024 outlook. However relative to the way you see demand on the Autonomous facet growing on each Optimus and Raider facet, do you to count on that raider may have pull-through in ‘25 that that outpaces Optimus or is it going to be a extra gradual uptake?

Eric Brock: Nice query. So I imagine 2025 for each platforms goes to be important. I feel that I’d say Optimus will nonetheless be bigger from a income standpoint the place we’ll see income pushed is thru present clients and fleet adoption, however as we’re shifting this 12 months via 2024, you possibly can see quite a few very important clients interact, which is able to begin to flip into fleets in 2025, as properly. So, there’s lots of pent-up demand for what we’re doing right here with Optimus. Similar time identical factor with Raider. The Raider will broaden what the prevailing buyer is our sturdy perception. However we expect we’re going to have the ability to interact different homeland safety and protection teams. And also you add all up given the income fashions, I feel Optimus will in all probability nonetheless be a bigger than higher however they’re each sort of develop considerably.

Matthew Galinko: Nice. Thanks.

Operator: [Operator Instructions] This concludes our query any solutions session. I want to flip the convention again over to Eric Brock for any closing remarks.

Eric Brock: Okay. Thanks, operator. I am simply going to shut a name by merely thanking you once more for attending. We’ve lots of work forward and we’ll get proper again at it. And we sit up for preserving you knowledgeable on our progress. I hope you have got a fantastic day.

Operator: The convention is now concluded. Thanks in your attending right now’s presentation. You might now disconnect.

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