Ondas(US:ONDS)2024-11-12 13:10Revenue Performance - Revenue for the three months ended September 30, 2024, decreased by $1,184,398 to $1,480,792 compared to $2,665,190 for the same period in 2023, primarily due to a $2,178,000 decrease in product sales to Siemens[267]. - Ondas Networks generated $445,288 in revenue for the three months ended September 30, 2024, down from $2,430,954 in the same period in 2023, reflecting a significant decline in product sales[268]. - OAS revenue increased by $801,268 to $1,035,504 for the three months ended September 30, 2024, compared to $234,236 for the same period in 2023, indicating strong growth in drone-based solutions[268]. - Revenue decreased by $7,666,493 to $3,063,652 for the nine months ended September 30, 2024, compared to $10,730,145 for the same period in 2023[283]. - Revenue from maintenance, service, support, and subscriptions increased by approximately $651,000 during the three months ended September 30, 2024[269]. Operating Loss and Expenses - Operating loss for the three months ended September 30, 2024, was $8,660,715, an increase of $2,726,694 compared to the operating loss of $5,934,021 for the same period in 2023[267]. - Operating expenses increased by $2,219,376, or 34%, to $8,708,275 for the three months ended September 30, 2024, compared to $6,488,899 for the same period in 2023[273]. - Operating loss increased by $2,726,694, or 46%, to $8,660,715 for the three months ended September 30, 2024, compared to $5,934,021 for the same period in 2023[278]. - Operating expenses decreased by $6,183,732, or 19%, with total operating expenses amounting to $25,553,183 for the nine months ended September 30, 2024[286]. Net Loss - Net loss for the three months ended September 30, 2024, was $9,526,268, compared to a net loss of $7,292,461 for the same period in 2023, reflecting increased operational expenses[267]. - Net loss increased by $2,233,807, or 31%, to $9,526,268 for the three months ended September 30, 2024, compared to $7,292,461 for the same period in 2023[280]. - Net loss decreased by $3,034,010, or 10%, to $27,672,088 for the nine months ended September 30, 2024, with a net loss per share of $(0.46) compared to $(0.62) in 2023[294]. Gross Profit and Margin - Gross profit for the nine months ended September 30, 2024, was $(538,317), a decrease of $5,191,867 compared to $4,653,550 for the same period in 2023[281]. - Gross margin decreased from 21% in 2023 to 3% in 2024, reflecting a change in revenue mix and increased fixed costs[272]. - Gross profit decreased by $5,191,867 for the nine months ended September 30, 2024, with a gross margin of (18%) compared to 43% in the same period of 2023, reflecting a 61% decrease due to a shift in revenue mix[285]. Cash Flow and Financial Position - Net cash flows used in operating activities were $(25,360,649) for the nine months ended September 30, 2024, a decrease of $2,748,095 compared to the previous year[295]. - Cash, cash equivalents, and restricted cash decreased to $2,873,286 as of September 30, 2024, down from $21,011,891 at the end of the previous year[295]. - As of September 30, 2024, the company had an accumulated deficit of approximately $226,032,000 and a working capital deficit of approximately $22,341,000[300]. - The company raised approximately $4,375,000 from the sale of additional redeemable preferred shares and $7,327,000 from issuing common stock in the first nine months of 2024[301]. Future Outlook and Concerns - There is substantial doubt about the company's ability to continue as a going concern for one year from November 12, 2024, due to uncertainties in funding plans[302]. - Future capital requirements will depend on various factors, including technology development, manufacturing, marketing, and overall economic conditions in target markets[303]. Operational Challenges - Approximately 17% of the workforce in Israel was called to active duty due to the ongoing military operation, temporarily reducing operational capacity[265]. Management and Compliance - Management's financial condition analysis is based on unaudited Condensed Consolidated Financial Statements prepared in accordance with U.S. GAAP[305]. - No material changes to significant accounting policies were noted since the filing of the 2023 Form 10-K[306]. - Forward-looking statements are based on current expectations and assumptions, subject to risks and uncertainties that could materially affect actual results[307]. - The Company is classified as a smaller reporting company and is not required to provide market risk disclosures[308]. - Disclosure controls and procedures were evaluated as effective as of September 30, 2024[308]. - No changes in internal control over financial reporting were identified that materially affected the reporting during the quarter ended September 30, 2024[309]. - Management acknowledges that controls can only provide reasonable assurance of achieving desired objectives due to resource constraints[310]. - Legal proceedings information can be found in Note 11 of the Quarterly Report on Form 10-Q[312].