Ondas Holdings Inc. (NASDAQ:ONDS), a manufacturer of radio and TV broadcasting and communications equipment, has entered into a material definitive agreement, issuing $4.1 million in 3% Series B-2 Senior Convertible Notes, as disclosed in a recent SEC filing. The notes, due December 3, 2026, have an original issue discount, resulting in net proceeds of approximately $3.6 million to the company.
According to InvestingPro data, this financing comes as the company faces liquidity challenges, with a current ratio of 0.43 and short-term obligations exceeding liquid assets.
The Boston-based company, incorporated in Nevada, announced on Tuesday that the newly issued convertible notes are part of a series that also includes previously issued notes in 2022 and 2023. These notes are convertible into shares of Ondas Holdings' common stock under specific conditions detailed in the notes.
The proceeds from the issuance are intended for general corporate purposes, with a focus on supporting the growth of the company's drone business, Ondas Autonomous Systems.
The 2024 Additional Notes were issued under an indenture with Wilmington Savings Fund Society, FSB, as trustee, effective December 3, 2024. The terms of the notes include those set forth in the indenture and those made part of the indenture by reference to the Trust Indenture Act of 1939.
The offering and sale of the 2024 Additional Notes were made pursuant to the company's shelf registration statement, which became effective in February 2024. The sale was facilitated by Oppenheimer & Co. Inc., which acted as the sole placement agent for the transaction.
Legal opinions regarding the issuance and sale of the 2024 Additional Notes and the issuance of common stock upon conversion were provided and attached as exhibits to the SEC filing.
Ondas Holdings' actions reflect its ongoing efforts to finance its strategic initiatives and expand its business operations. The information for this article is based on the company's SEC filing.
In other recent news, Ondas Holdings Inc. reported a challenging Q3 2024, with revenues falling to approximately $1.5 million from $2.7 million in Q3 2023, and operating expenses leading to an operating loss of $8.7 million.
Despite these setbacks, the company secured $14.4 million in orders for its military technology platforms and received a strategic order from Siemens (ETR:SIEGn) for Chicago's Metra rail system.
The company also announced an amendment to its 2021 Stock Incentive Plan, increasing the number of shares available for issuance from 8 million to 11 million. Furthermore, Ondas has been granted a 180-day extension from Nasdaq to meet the minimum bid price requirement.
The company expects substantial revenue growth in Q4 2024 and into 2025, backed by a maturing customer pipeline and increased military and rail market engagement. These are the latest developments in the company's operations.
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