DEF: Ondas Holdings Seeks Stockholder Approval for Increased Share Authorization and Incentive Plan Amendment

Ondas Holdings is holding its 2025 Annual Meeting of Stockholders to vote on key proposals, including increasing the number of authorized shares of common stock and amending the 2021 Stock Incentive Plan.

Summary

• Ondas Holdings Inc. is soliciting proxies for its 2025 Annual Meeting of Stockholders to be held on May 12, 2025.
• The meeting will address the election of six directors, ratification of the company's independent auditor (Rosenberg Rich Baker Berman, P.A.), an advisory vote on executive compensation (Say on Pay), an amendment to the company's Amended and Restated Articles of Incorporation to increase the number of authorized shares of common stock from 300,000,000 to 400,000,000, and an amendment to the 2021 Stock Incentive Plan to increase the number of shares authorized for issuance.
• The Board of Directors recommends voting FOR all proposals.
• As of April 10, 2025, there were 127,724,799 shares of Common Stock issued and outstanding and entitled to vote at the Annual Meeting.

Sentiment

Score: 7

Explanation: The document is primarily procedural, outlining proposals for stockholder vote. The tone is neutral, with a focus on providing information. The potential for future growth and flexibility is positive, but the risk of dilution tempers the overall sentiment.

Positives

• Increasing the authorized shares of common stock provides flexibility for future corporate needs, including equity incentives, capital raising, and acquisitions.
• The board believes that the additional shares would provide the company with needed flexibility to issue shares in the future without potential expense or delay incident to obtaining stockholder approval for a particular issuance, unless applicable law, rule or regulation requires stockholder approval for such issuance.
• Amending the 2021 Stock Incentive Plan will allow the Company to achieve important business objectives in ways that are consistent with stockholder interests.

Negatives

• Increasing the number of authorized shares could dilute existing stockholders' ownership and voting rights.
• Future sales of substantial amounts of our Common Stock, or the perception that these sales might occur, could adversely affect the prevailing market price of our Common Stock or limit our ability to raise additional capital.
• The availability of additional authorized shares for issuance may have the effect of discouraging a merger, tender offer, proxy contest or other attempt to obtain control.

Risks

• Failure to obtain stockholder approval for the proposed amendments could limit the company's flexibility in pursuing future strategic opportunities.
• Future issuances of common stock could dilute earnings per share and stockholders' equity.
• There is a risk that the additional authorized shares could be used to discourage potential takeover attempts.

Future Outlook

The company aims to provide sufficient shares for corporate purposes, including equity incentive plans, raising capital, acquisitions, and strategic relationships.

Management Comments

• The Board of Directors recommends that you vote FOR the election of all the director nominees; FOR the ratification of the selection of Rosenberg Rich Baker Berman, P.A. as the Company's independent certified public accountants for the fiscal year ending December 31, 2025; FOR the advisory approval of the Company's executive compensation; FOR the approval of an amendment to the Company's Amended and Restated Articles of Incorporation, as amended, to increase the number of authorized shares of common stock; and FOR the approval of an amendment to the Ondas Holdings Inc. 2021 Stock Incentive Plan, as amended (the 2021 Plan), to increase the number of shares of Common Stock authorized for issuance under the 2021 Plan.

Industry Context

The proposals reflect common corporate governance practices aimed at providing companies with the flexibility to manage their capital structure and incentivize employees.

Comparison to Industry Standards

• Increasing authorized shares is a standard practice among publicly traded companies to facilitate future financing and strategic initiatives.
• Equity incentive plans are widely used to attract and retain talent, aligning employee interests with those of shareholders.
• Companies like Qualcomm, Intel, and Texas Instruments regularly seek shareholder approval for similar increases in authorized shares to support their long-term growth strategies.

Related Party Transactions

• 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&Ps direction with respect to exercise and voting of the issuers securities and derivative securities held by the SPV.
• Joseph Popolo, a director of the Company, is the sole control person of C&P.
• 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 Companys 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 Companys 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 Companys Common Stock and (ii) warrants to purchase an aggregate of 3,616,071 shares of OAHs 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 Companys 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.
• 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).
• Joseph Popolo, a director of the Company, is the sole control person of C&P.
• 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).
• Joseph Popolo, a director of the Company, is the sole control person of C&P.
• 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).
• 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).
• 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.

Stakeholder Impact

• Approval of the proposals could impact shareholders through potential dilution and changes in voting rights.
• Employees may benefit from the increased flexibility in equity compensation.
• The company's ability to raise capital and pursue strategic opportunities could affect its long-term prospects and impact all stakeholders.

Next Steps

• Stockholders need to review the proxy statement and cast their votes before the deadlines.
• The company will hold the Annual Meeting on May 12, 2025, to vote on the proposals.
• The company will implement the approved amendments to the Charter and Incentive Plan.

Key Dates

Keywords

proxy statement, annual meeting, stockholders, authorized shares, incentive plan, directors, auditor, executive compensation, corporate governance, Ondas Holdings