Ondas Holdings Inc.

Good day. Welcome to the OAS Virtual Investor Day. All participants will be in listen-only mode. At the end of today's presentation, there will be an opportunity to answer some of your questions. To ask a question by phone, please click the link or dial the numbers that appear on screen. Please make sure to dial in with questions only at the end of today's presentation. Once connected, please press star then 1 on your telephone keypad. To withdraw your question, please press star then two. Please note this event is being recorded. I would now like to turn the conference over to Eric Brock, Chairman and CEO of OnDust Holdings. Please go ahead, sir.

Well, thank you, operator. I want to start by welcoming everyone to the OnDust Autonomous Systems or OAS Investor Day. This presentation will be a deep dive into our OAS business and we will get right to it. We start like always by highlighting our standard legal disclaimer. We will be making forward-looking statements during the course of our presentation today. Of course, those forward-looking statements are based upon our assumptions about the future, and there can be no assurances that those assumptions or financial results will not differ materially from these expectations. We also share non-GAAP financial metrics such as EBITDA, ADAS uses non-GAAP financial metrics to highlight operational performance and believes this financial data is helpful for our investors. Of course, additional details are available in our SEC filings. Let's now turn to the agenda. I will once again thank you for attending our Investor Day today. This presentation, again, will be a deep dive into our business. We'll be sharing a comprehensive business and financial plan that reflects both the opportunities ahead and the strong conviction we have in Andas' leadership position in the markets we target. We will start this afternoon with an introduction and corporate overview to set the context. From there, we're going to cover our core technologies and solutions platforms, followed by an in-depth review of our go-to-market strategy and execution framework. We'll then review our financial strategy and model and provide insight into our financial targets for both the near and long term. Throughout the presentation today, we will be emphasizing how we're deploying growth capital with a disciplined and scalable operating and financial model. At the end, we'll close with a strategic roadmap for value creation and leave time for Q&A so we can hear directly from you, our shareholders. We appreciate your time and interest and are excited to share what we believe is a compelling story with significant upside potential for our investors. Before we dive in, I'd like to briefly introduce the leadership team that's with me here today. Many of you are already familiar with this group, so I'll be brief. Before I do, I want to emphasize that we are extremely busy at Ondas, which, of course, is a good thing. Our team is spread in different locations for the call, so we decided to deliver this presentation via the audio-only format. With that said, I'm joined by Neil Laird, the CFO of Ondas Holdings, as well as Oshri Legassi, the co-CEO of Otis Autonomous Systems. From Air Robotics, we have Mayor Kleiner, the founder and CEO of Air Robotics, Natan Rotberg, our Senior Vice President of Product and Marketing, as well as Tim Tanney, the CEO of American Robotics, who's here to update us on the activity with AR and our expansion plans in the United States. Lastly, I want to introduce Roni Kannelbaum, our Vice President of Corporate Development at OAS. Rony joined us earlier in the year, and you will hear from her towards the end of the call, where she will provide details on our strategic growth initiatives. This team brings decades of proven execution and expertise across defense, security, and aerospace sectors, as well as with commercial and financial operations. We have organized the company and our leadership team to execute a high-growth plan across geographies and market verticals, and of course, you're going to hear from each of us throughout the presentation today. Let's begin with a snapshot of OAS and how we're positioned in the market. We operate with headquarters in Baltimore, Maryland, in Petit Tikva, Israel, to support global sales and customer engagement. We also have commercial locations in Dubai and Singapore to support localized customer engagements in those markets. Across the company, we have 117 employees and have invested over $165 million to build what we believe are amongst the most advanced autonomous drone platforms in the market, serving military, homeland security, public safety, and critical infrastructure customers. Our flagship platforms include the Iron Drone Raider, a counter-UAS system designed to secure critical locations and population centers from the growing threat of intruder drones, and the Optimus system, which delivers autonomous aerial security, inspection, and emergency response. These are proven scalable platforms with active deployments. Our growing operational footprint includes deployments for military and homeland security forces true drone as first responder or DFR use cases in urban environments, and data as a service infrastructure protection as we show here. We have a growing list of global reference customers and operational momentum. And as you are learning, we are positioned to lead what we believe will be a decade-long investment cycle in delivering new AI-enabled defense and security technologies to extremely large and critical end markets. At the core of everything we do at Andes Autonomous Systems is a simple but powerful mission to protect and secure critical assets, infrastructure, and most importantly, people. Our platforms are designed to deliver aerial intelligence, security, and data on demand, at scale, and with military-grade reliability. This is about more than just impressive technology. It's about enabling safe operations in some of the world's most complex and high-risk environments. Our customers include defense ministries, public safety agencies, critical infrastructure operators, and industrial enterprises, all of whom require real-time intelligence and protection capabilities that are autonomous, precise, and persistent. With our dual-use platforms, we're not only supporting military operations, we're also enabling a safer, more secure future for civilian populations, governments, and private industry across the globe. And as you'll see throughout this presentation, the mission is now being realized in the field every single day. The last 12 months have been truly transformational for ONDOS, driven by success at OAS. We are successfully making the shift from a technology development company to a growth stage operator, and our systems have been validated in real-world deployments, delivered results, and proven value for customers. Our technology platforms, Iron Drone and Optimus, are no longer development systems. They are combat-ready, field-tested, and operational today. And just as importantly, the market is ready. Procurement cycles are accelerating, budgets are expanding, and the demand for scalable autonomous systems has never been higher. From a financial perspective, we've strengthened the balance sheet significantly. We've de-risked the balance sheet, reduced debt, and built a strong cash runway. This sets us up to deploy growth capital with confidence. Our financial model now supports scalability, and that allows us to build an institutional investor base to support what we believe will be a leading and extremely valuable defense and security company. Let's take a look at our current financial position, which I believe is one of the strongest indicators of our transformation into a high-growth operator. Here we are presenting consolidated financial both OAS and on-desk networks. As we expect to report $6 million in revenue for Q2 2025 when we report earnings in August. This represents a more than six-fold increase from last year's second quarter and was driven primarily by expanding customer adoption in order fulfillment at OAS. Our backlog has grown significantly from approximately $10 million at the end of 2024 to an estimated $22.8 million today. after removing the expected revenue to be recognized in Q2. For the full year, we are maintaining our guidance of $25 million in total revenue with at least 20 million coming from the OAS business. We believe this guidance remains conservative given the strength of our backlog, pipeline visibility, and recent momentum. On the balance sheet, we've also made tremendous progress. We've reduced our outstanding convertible notes at the holding company from over $46 million at the end of 2024 to just $5.4 million as of June 30th. Most importantly, we now have a strong liquidity position with over $67 million in cash as of the end of Q2. In short, we are now well capitalized with the resources and flexibility to execute our growth plan in the second half of 2025 and beyond. At the heart of Andas Autonomous Systems is a multi-platform portfolio built for autonomy, mission readiness, and reliability. Our two core systems, the Iron Drone Raider and the Optimus system, are both fully autonomous, military-grade aerial platforms designed to support 24-7 deployment in complex and high-risk environments. This is drone infrastructure. You are well familiar with these systems, and we will do a proper technology review and update a bit later. Here, I will simply emphasize that these are not just drones. They are full-stack, end-to-end autonomous systems that include embedded AI, integrated software, command and control infrastructure, and seamless operational workflows. And again, both platforms are field-tested, scalable, and operational today, and backed by reference customers in some of the world's most demanding environments. Now, I want to zoom out and look at the key investment highlights that define our opportunity at OAS. First, We have a portfolio of dual-use mission-critical platforms that are already deployed with military and public safety customers worldwide. Second, we've demonstrated clear commercial traction through multiple programs with prominent customers. Those programs are expanding, and new programs are being captured in the United States, Europe, the Middle East, and now Asia. Thirdly, Iron Drone Raider is emerging as a potential category-defining solution in the counter-drone space. We see surging demand for effective counter drone tools that are both non-lethal with low collateral effect and reusable, which serves the lower costs. Clearly, Iron Drone stands out in addressing these requirements. Fourth, we are building scalable go-to-market infrastructure in the United States and Europe, both internally and through key partnerships that enhance our reach and operating leverage. In addition, we have launched a strategic M&A program to accelerate growth. We're targeting high-quality, synergistic businesses that will deepen our technology portfolio and expand our market presence, and you're going to learn a lot more about our M&A program today. Lastly, we feel we are doing this from a position of strength, with solid financial foundation, an experienced team, and a vision that is aligned with massive macro and policy tailwinds, supporting a strong demand environment for OAS. We are moving forward at OAS with a clear focus on scalability. Everything we've built from our technology to our go-to-market strategy to our financial model is being designed to support high growth operations at global scale. The schematic you see here represents our framework. You'll see this several times throughout this presentation because we're executing across four integrated layers. It starts with markets and customers. We're focused on high value sectors like defense, homeless security, public safety, and critical infrastructure. These are large and growing markets with urgent needs. Technology capabilities. Our Optimus and Iron Drone platforms are modular, upgradable, and built with embedded AI to meet mission-specific requirements. We will expand on this. Our success at OnDesk will boil down to our operating platform and execution across critical operating functions, including sales, marketing, supply chain, field services, regulatory compliance, and more. We're building this platform in region, and we'll have localized efforts in major markets, including the United States, Europe, and the Middle East, to deliver at the speed and reliability our customers expect. Our financial platform. We have a strong balance sheet and will deploy a disciplined investment plan to accelerate growth, drive operating leverage for profitability, with a focus on building long-term value. Ultimately, success in our sector will be determined not by technology alone, but by who can deploy and support these systems at scale. And that capability around scale is exactly what we're building at ONDOS. Now let's talk about the macro environment and highlight why this investment climate is one of the most supportive we've seen in decades for a company like ONDOS. Around the world, governments are facing new security threats and making major strategic shifts in how they allocate defense budgets across allied nations. In short, NATO is lined up to massively grow its defense and security posture. Just recently, non-US NATO members have committed to increasing defense and related infrastructure spending to 5% of GDP by 2035. To put that in perspective, that means over the next 10 years, annual defense spending across ex-US NATO countries will grow by our estimates from about $440 billion today to over $1.2 trillion. That's more than $700 billion in new annual defense outlays and more than 2.5 times current levels of spend. This is a seismic shift and a huge tailwind on us in our industry. These dollars are not just going to traditional weapons systems. Nations are fast-tracking investment in AI-enabled autonomy airspace security, and counter drone protections. Our platforms, Optimus and Iron Drone, are aligned precisely for these requirements. We believe this trend will drive significant growth for ONDOS, not just over the next year or two, but likely for the decade ahead. On the domestic front, the White House and DOD are taking bold action to ensure that the United States drone sector can retain global leadership in drone and autonomy technologies. In June, the Trump administration issued two executive orders that mark a step change in federal drone policy. These EOs provide critical regulatory clarity and will enable scaled drone adoption in both military and civilian sectors. We emphasize some key highlights here. FAA BB Loss Rulemaking Part 108 regulations, for example, are finally moving forward. We believe this is critically important to reducing hurdles for nationwide autonomous drone operations. Section 2209 will give critical infrastructure operators virtually exclusive airspace over critical infrastructure, allowing commercial DSPs like American Robotics to fly where others cannot. And of course, federal investment in counter-drone infrastructure is surging, and Iron Drone Raider is directly aligned with these priorities. And then there's the big, beautiful bill, which was signed into law just last week, and is allocating over $21 billion across programs that directly support Andes' business. That includes over $4.2 billion for drones and counter drone capabilities, nearly $1.7 billion for autonomy and ISR, and $2.9 billion for border security. This is the strongest policy tailwind we've ever had and is sure to accelerate demand for secure, American-made, NDA-compliant platforms like ours. In short, the skies are opening and we are ready to capitalize on these tailwinds. Let's now dive into the technology, and we'll go back one more just as an intro. Starting with what we call the full-stack physical AI, which enables the intelligence, autonomy, and reliability of our platforms. In a moment, I'm going to ask Eitan Rotberg, our head of product management and marketing, to help cover these important topics. But first, a few things. We are not simply building drones. We are engineering and deploying vertically integrated mission-ready systems. Our physical AI full-stack spans every layer. Edge devices and onboard compute for real-time mission execution. Multi-sensor fusion whereby EOIR, RF, and micro radar sensors are integrated. With embedded AI models at the edge, all supporting autonomous decision making. There's Insightful, our analytics portal which turns raw data collected with payload sensors into actionable intelligence. So what does a full stack physical AI look like in practice? We'll turn the slide. First, it starts with a world-class engineering team. We have experts across robotics, aerospace, AI, autonomy, and systems integration. Then we combine that talent with differentiated core capabilities. Of course, we are talking about full autonomy at scale. Our platforms don't require human pilots for navigation. Edge AI and real-time decision-making. Our systems can classify threats, make navigation decisions, and adapt in real-time and often under high pressure at high speeds. Autonomous infrastructure. We have docking stations and command and control, or C2 software, which allow for persistent, always-on operations. Whether we're securing an oil refinery, protecting a military base or border, or responding to a drone incursion in a dense urban zone, our systems are built for mission-critical performance and rapid deployment. That's what physical AI enables, and it's at the heart of everything we're doing at OAS. I'm going to hand the call to Eitan, who will dig a bit more deeply into our technology and capabilities. You're also going to hear from Tim Tenney and Meir Kleiner before coming back to me. Eitan, the floor is yours.

Thank you, Eric. What I would like to do now is to show how all of these come together in the real world, what we call physical AI deployment. These are not only theoretical systems. Iron Drone and Optimus are in the field today, executing real missions under real operational demands. Iron Run Raider is deployed for 24-7 counter-drone protection, tracking and intercepting hostile drone autonomously with minimal collateral risk. While Optimus is delivering on-demand ISR in both civilian and defense environments with field-proven reliability and full mission automation. Together, these platforms provide persistence, airspace awareness, rapid incident response, and seamless data delivery, exactly what modern security and defense operators need. We take intelligence and precision of AI and embed it with physical systems that protect people, infrastructure, and national interests. That is what physical AI deployed looks like, and that's what UNDOS is delivering. On this slide, we visualize the architecture of full-stack physical AI, which is the embodiment of deep technology powering both Optimus and Iron Drone Raider at the edge. Physical AI is the complex integration and commercialization of high integrated software and hardware into intelligent systems that can navigate autonomously, collect and provide mission and critical intelligence. The hardware and the software stacks spans from edge devices to onboard computers to decision intelligence and mission execution. This includes the sensors, EO and IR cameras, micro radars and communications models, that feeds data into our onboard AI processors, enabling real-time multi-sensor fusion. The data is then processed through our decision intelligence layer. This is where machine learning models classify threats, analyze mission data, and generate autonomous flight decisions in real time. The system includes mission execution layer, which includes autonomous flight control, ISR collection, interception protocols, and flight path optimization. The entire system is connected to our cloud-enabled local insightful intelligence portal, where data is aggregated, visualized, and turned into operational intelligence for the end users. This architecture is not just powerful, it's modular, secure, scalable. It allows us to rapidly deploy into new use case, upgrade platforms in the field, and deliver seamless experience from edge to command centers. Now, Let's look at how the stack is deployed in our field-proven drone systems. Physical AI stack is reflected in end-to-end platforms, and we have designed both Optimus and IronDrone as modular, rocked, and mission-ready platforms. These are not drones that just fly once a day or require operators to be on standby. These are autonomous infrastructure assets built for 24-7 ISR and counter-drone operations. Of course, both platforms are built to meet the most demanding operational requirements of military, online security, and public safety customers and are fully NDA compliant, which is increasingly important in government procurement. Further, these platforms are intelligent, adaptable, and fully autonomous, and because we have expertise across the stack, we can scale and iterate faster and deliver more value to customers over time. This slide shows what the performance of our systems looks like in the real world, deployed in mission-critical environments. On the left, you can see the Iron Drone radar performing a live interception, autonomously identifying and neutralizing a hostile drone with zero human piloting. On the right, we share the Optimus DFR network, whereby drone infrastructure deployed through major urban cities for public safety missions. The KPIs show the value and performance of this critical use case. As we show on the bottom, on the bottom right, we have now logged over eight years of autonomous flight operations across range of environments, including dense urban zones, sensitive infrastructure sites, and desert installations. These deployments are no trials. They're not POCs. They are active, real-world security and intelligence operations, and they are driving recurring business from our customers. The result is clear. Autonomy isn't coming. It's here. And UNDAS is leading the way by delivering operational performance, reliability, and scale that in today's defense and public safety missions demand. Let's now take a closer look at the software stack that powers our autonomous platforms. Our systems build on a tightly integrated suite of applications that manage the entire mission lifecycle, from autonomous flight to data processing and inside delivery. First, we have Insightful, our secure cloud and on-prem data portal. This is where raw sensor data is ingested, organized, visualized, and shared. This includes orthophotos, 3D models, point clouds, and real-time video, all processed automatically. Then there is the Primus, our command and control software. The software manages autonomous flight operations, docking, payload handling, scheduling, and remote intervention when needed. Powering our autonomy layer is the AeroDrone DeepStream, our proprietary AI engine that enables object detection classification and past planning, even in GPS-denied or RF-limited environments. We will highlight DeepStream in more detail in a moment. Together, these systems make our drone infrastructure intelligent, mission-adaptive, and highly scalable. Whether you're securing a base, inspecting a power plant, or intercepting an intruder drone, the entire workflow is automated, secure, and built for compliance in high-security environments. This is the Insightful platform, our central hub for drone-collected data. It's more than just a repository. Insightful is a fully-featured geospatial intelligence platform that enables users to make sense of complex drone data in real time Operators can view live video, feeds from the UEV camera, or explore historical missions from secured video archive. The system supports 3D modeling, orthophotos, point clouds, and annotations with ability to extract detailed measurements directly from the interface. Built-in tools allow teams to collaborate, tag, comment, and export insights to our systems. For enterprise and government customers, this portal become a mission command interface, allowing multiple users to view assets and act on the drone intelligence from any locations. Insightful is fully secure, scalable, and ready to support recurring SaaS revenue as we grow our installed base of Optimus and Arrow Drone Radar systems. As we continue discussing our software architecture, let's take a closer look at the Primus the core command and control interface that powers autonomous operations across the Optimus drone fleet. Primus is engineered as a C4 ISR enabling platform, providing users the tools of command and control, communicate and coordinate autonomous aerial missions in real time. With integrated video feeds, mission planning, camera control and fleet oversight, operators can manage multiple assets seamlessly through a single pane of glass. Accessible on both desktop and mobile tablets, Primus supports flexible operations across centralized command centers and forward deployed on field teams. Built with security at its core, Primus is a VPN-enabled and deployable on private air gap networks, ensuring operational resilience in limited or classified environments. Behind mission execution, Primus supports advanced video management, incident response, coordination, and situational awareness overlays. making it a true tactical interface for multi-mission environments. In short, Primus is more than an autonomy-enabled drone controller. It's a modular, scalable C4ISR interface designed to evolve alongside our platforms and meet the complex need of defense, home security, and critical infrastructure operators. Now, let's come back to the AI engine that gives Iron Drone Raider its edge, the Iron Drone Deep Stream. This is our proprietary computer vision-based flight control and threat classification engine, which enables the Iron Drone to detect, identify, track, and engage with hostile drones in real time, and everything is fully autonomous. The system includes high-frequency flight control algorithms for ultra-responsive maneuvering, AI object detection and tracking, trained on large data sets of aerial threats, multi-modal sensor fusion, including EO and IR cameras and micro-radar, embedded capabilities to operate in GPS denied in high jamming environments where traditional systems usually fail. What makes IronDrone DeepStream special is that it's not just guiding the drone, it's making tactical decision in real time under limited airspace conditions. This is a core differentiator that positions IronDrone Radar as a leading counter drone platform, capable of defending high value targets with unmatched reliability and low collateral risk. Sticking with the Iron Drone, we will take a closer look at the system and its capabilities. Iron Drone is purpose-built to intercept and neutralize hostile drones in real time, autonomously, safely, and persistently. Unlike traditional COES system, they rely on jamming or kinetic destruction, Iron Drone uses low collateral net capture, which can be supported by parachutes. This is especially important in dense and sensitive environment like military bases, airports, and other urban centers. It's also modular and upgradable, enabling configuration of alternative mission types, including kinetic payloads, loitering missions, and extended range intersections. Simply, this is not just a drone. It's an integrated aerial defense system, and it's being adopted by leading defense and homeland security organizations globally these days. The system is designed for 24-7 deployment with zero human piloting. It detects, tracks, and locks onto intruding drones, launches autonomously, intercepts the target, and then capture it mid-air. Now, let's take a look at the full radar architecture. The system starts with a fully automated drone pad, a docking station designed to house and recharge up to three interceptor drones. in a ready-to-launch configuration. The docking system is built for speed and scale. Once a threat is detected, IronDrone will autonomously launch, track, and engage with no manual intervention. Each interceptor is equipped with an AI-powered onboard computer for autonomous flight, a high-speed camera and sensor suit, a net launcher for safe interception, and parachute recovery system. That's going to be added and returned and intercepted drone to the ground, further minimizing the collateral damage. What makes this system so powerful is that when the drone is chasing one threat, it's multi-layered, persistent aerial security system. It reduces cost per interception through drone reusability, speeds up threat response, and provides around-the-clock protection with zero human burdens. We will now show a brief video of the algorithm in action for the benefit of those who maybe didn't see this thing in the past.