Ondas Inc

Good day and welcome to the ONDIS Holdings second quarter 2022 earnings and business update conference call. Today, all participants will be in a listen-only mode. Should you need assistance during today's call, please signal for a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one. on your touch-tone phone. To withdraw your question, please press star, then two. Please note that today's event is being recorded. At this time, I would like to turn the conference over to Eric Brock, Chairman and CEO. Please go ahead.

Good morning. It's a pleasure to welcome you to our conference call. I'm happy to be joined today by Stuart Cantor, the founder and president of OnDots Networks, and Reece Moser, American Robotics founder and CEO. I want to note that due to scheduling and international travel conflicts, Derek Ricefield, our president and CFO, is unable to participate in today's call. I will handle the financial review in his place. I want to start the call by emphasizing that business is on track at ONDOS, and the technology-based leadership positions we are staking out in critical infrastructure and services markets continues to strengthen. ONDOS Networks continues to make advances with the Class 1 rails on the 900 MHz network, Our launch activity continues apace, and we are seeing expanded opportunity sets globally in new networks, new products, and new geographic regions. Of course, we believe today's news regarding the Siemens order, which I will touch on in a moment, is a clear signal our growth trajectory is ahead. At American Robotics, we are continuing the field work with our initial franchise customers, maturing the pipeline, and preparing to onboard additional franchise customers. Importantly, as we do this, we are enhancing our capabilities with investments in new payloads and data analyst capabilities, all of which we will provide updates on today. Our success in the field with customers and ecosystem partners is demonstrating that our business plan is creating value and highlights our unique position to deliver our valuable technology platforms and data solutions to the large end markets we are targeting. The strength of our technology platforms, market leadership, and business plan was demonstrated by the two recent significant events we want to highlight at the outset of the call. Obviously, I'm speaking firstly about the Siemens volume order we announced today, and secondly, the aerobatics acquisition, which was announced yesterday. I will make some high-level remarks about the strategic significance of both transactions, and we will be sure to provide details of both during the call. So let's start with the big rail news. We are thrilled to share with you that we have received the first volume order from Siemens for commercial deployment of our Fulmax platform in the 900 megahertz network with Class 1 rail customers. This is an incredibly important milestone for Andas Network and is the culmination of several years of hard work to establish our Fulmax platform in the global rail sector. Secondly, we are similarly excited to share the news that we've entered into a merger agreement to acquire Aerobotics. As you will learn today, Aerobotics brings to Andas an incredibly talented team, along with the Optimus system, a proven world-class automated drone platform, which is highly complimentary to AR's market-leading scout system. They also bring in order pipeline and access to markets that immediately expand AR's product portfolio and market reach. We believe the combination of aerobotics with American robotics is a seminal event in the UAS sector, creating a leading global provider of commercial drone solutions capable of scaling for customers. With these two major strategic achievements, we are able to confirm not only that business is on track at ONDOS, but also that our leadership positions continue to strengthen. I will now share some high-level details on the Siemens 900 MHz order. As I do, I want to start with a well-earned congratulations for the team at ONDOS Networks. It's fair to say that establishing a new mission-critical wireless network architecture like FOMACS, is a once-in-a-generation event in the critical markets we target. As we celebrate this milestone, I want to also share our appreciation to our investors. This has been a multi-year effort and one which we have successfully navigated with your support. This multimillion-dollar order marks the beginning of commercial deployments in the Greenfield 900 MHz network and, in a broader sense, the adoption of our FOMACS .16 systems across the rail sector in North America. This is a major inflection point as we move towards producing material revenue growth and begin our path to profitability. I want to highlight that the Siemens order calls for deliveries to commence in 2022 and includes a mixture of next-generation ATCS base stations and remote edge radios, which we have jointly developed with Siemens. In addition, the order also includes Venus base stations and Mercury and Venus edge remotes, which are catalog products of OnDesk Networks. marketed by Siemens under the Airlink brand name. Stuart will provide further details later regarding the rail rollout, but I want to emphasize here that this is a major step forward and we believe we will begin to build momentum for additional bookings and backlog growth as we move through 2022 and 2023. Let's turn now to another key message up front. We are investing and we have access to capital. It's not lost on me that we are operating in a difficult financial climate. I want to assure you that we are up to the task. Customers need us to deliver, and we will. We believe the rewards for doing so will be substantial. Now is not the time to be timid, and I am extremely confident in our ability to not just lead these MCIOT markets, but to define these solutions. We will invest, and I believe we will have support from customers, strategic partners, and deep-pocketed investors. What we are able to do from a technology standpoint is unique, and we have invested substantial amounts in our wireless network and drone platforms to allow our industrial and government customers to garner significant value in terms of operating efficiency and safety by deploying our technical solutions. As we have demonstrated with the Aerobotics acquisition, our leadership position, balance sheet, and access to capital are providing incredible opportunities for ONDOS to grow and enhance our technology platforms faster and to accelerate timelines. We have a very strong balance sheet. Our equity position is significant, and that equity is backed by multi-patented intellectual property that has incredible strategic value to ONDOS and others. We have $28 million of cash at the end of June, and we have created the flexibility to expand our growth plan through the APM equity facility we announced in the spring. The market volatility and nascent elements of our end markets is creating the opportunity to seize leadership, accelerate our business plan, and deliver on the promise of our hard work for our investors.

So with these opening remarks, I will now outline the agenda.