DESCRIPTION OF CAPITAL STOCK
Except as otherwise
indicated herein or as the context otherwise requires, references to “Ondas Holdings,” “Ondas,” the “Company,”
“we,” “us,” and “our” refer to Ondas Holdings Inc. and our consolidated subsidiaries.
Our authorized capital
stock consists of (i) 116,666,667 shares of common stock, par value $0.0001 per share, after giving effect to the 1-for-3 reverse
stock split of the Company’s authorized and outstanding common stock, effective November 13, 2020 (the “Reverse Stock
Split”), and (ii) 10,000,000 shares of preferred stock, par value $0.0001 per share. The following is a summary of the rights
of our common and preferred stock and some of the provisions of our Amended and Restated Articles of Incorporation and Amended
and Restated Bylaws, and the Nevada Revised Statutes (the “NRS”). Because it is only a summary, it does not contain
all the information that may be important to you. For a complete description you should refer to our Amended and Restated Articles
of Incorporation, as amended, and our Amended and Restated Bylaws, copies of which have been filed as exhibits to our Annual Report
on Form 10-K for the year ended December 31, 2020 and incorporated herein by reference.
The holders of the
Company’s common stock:
|1.||Have ratable rights to dividends from funds legally available if and when declared by the Company’s
Board of Directors (the “Board”).|
|2.||Are entitled to share ratably in all of the Company’s assets available for distribution to
holders of common stock upon liquidation.|
|3.||Do not have the right to preemptive, subscription or conversion rights and there are no redemption
or sinking fund provisions or rights.|
|4.||Are entitled to cast one non-cumulative vote for each share held on all matters on which holders
of common stock may vote and, with respect to the election of directors, one non-cumulative vote for each share held for each of
the duly nominated directors.|
The rights, preferences,
and privileges of the holders of common stock may be adversely affected by, the rights of the holders of any series of Preferred
Stock that may be issued by Ondas.
The Board may, without
further action of the Company’s stockholders, issue shares of Preferred Stock in one or more series, fix the number of shares,
determine or alter for each such series, such voting powers, full or limited, or no voting powers, and such designation, preferences,
and relative, participating, optional, or other rights and such qualifications, limitations, or restrictions thereof, as shall
be stated and expressed in the resolution or resolutions adopted by the Board providing for the issuance of such shares and as
may be permitted under Chapter 78 of the NRS.
The Board may also
increase or decrease the number of shares of any series of Preferred Stock subsequent to the issuance of shares of that series
of Preferred Stock, but not below the number of shares of such series of Preferred Stock then outstanding. In case the number of
shares of any series of Preferred Stock shall be decreased in accordance with the foregoing sentence, the shares constituting such
decrease shall resume the status that they had prior to the adoption of the resolution originally fixing the number of shares of
such series of Preferred Stock.
The number of authorized
shares of Preferred Stock may be increased or decreased (but not below the number of shares thereof then outstanding) by the affirmative
vote of the holders of a majority of the voting power of the stock of Ondas entitled to vote thereon, without a separate vote of
the holders of the Preferred Stock, or of any series thereof, unless a vote of any such holders is required pursuant to the terms
of any certificate of designation filed with respect to any series of Preferred Stock.
On August 14, 2020,
the Company filed a Certificate of Designation with the State of Nevada to designate 5,000,000 shares of the Company’s Preferred
Stock as Series A Preferred. Shares of Series A Preferred rank pari passu with the Company’s common stock, except that holders
of Series A Preferred shall have certain liquidation preferences as set forth in the Certificate of Designation and the holders
of the Series A Preferred are not entitled to vote on any matters presented to the stockholders of the Company. The Certificate
of Designation became effective on the August 14, 2020.
In connection with
the Company’s underwritten public offering of common stock consummated on December 8, 2020, the Company’s then outstanding
2,350,390 shares of Series A Convertible Preferred Stock mandatorily converted into an aggregate of 979,361 shares of Common Stock.
Chapter 78 of the NRS
contains a provision governing “Acquisition of Controlling Interest.” This “control share act” (NRS 78.378
through 78.3793, inclusive) provides generally that any person, individually or in association with others, that acquires 20% or
more of the outstanding voting shares of certain Nevada corporations may be denied voting rights with respect to the acquired shares,
unless a majority of the disinterested stockholders of the corporation elects to restore such voting rights in whole or in part.
The control share act will apply to the Company if the Company were to have 200 or more stockholders of record (at least 100 of
whom have addresses in Nevada appearing on the Company’s stock ledger) and if the Company does business in the State of Nevada
directly or through an affiliated corporation, unless the Company’s Articles of Incorporation or bylaws in effect on the
tenth day after the acquisition of a controlling interest provide otherwise. The control share act provides that a person, individually
or in association with others, acquires a “controlling interest” when it acquires ownership of outstanding voting shares
that, but for the operation of the control share act, would bring its voting power of the Company in the election of directors
within any of the following three ranges:
Once an acquirer crosses
one of the above thresholds, shares that it acquired in the transaction taking it over the threshold and within the 90 days immediately
preceding the date when the acquiring person acquired or offered to acquire a controlling interest become “control shares”
to which the voting restrictions described above apply. A corporation may elect to opt-out from the provisions of the control share
act by providing in the articles of incorporation or bylaws that such provisions do not apply to the corporation. The Company’s
Articles of Incorporation and bylaws do not exempt the Company’s common stock from the control share act. As of the date
of this filing, the Company does not have 200 or more stockholders of record and, as a result, the control share act does not currently
apply to the Company.
Exclusive Jurisdiction of Certain
Unless we consent in
writing to the selection of an alternative forum, the Eighth Judicial District Court of Clark County of the State of Nevada (the
“Court”) shall be the sole and exclusive forum for any stockholder (including a beneficial owner) to bring (i) any
derivative action or proceeding brought on behalf of the Company, (ii) any action asserting a claim of breach of a fiduciary duty
owed by any Director, officer or other employee of the Company to the Company or the Company’s stockholders, (iii) any action
asserting a claim against the Company, any director or the Company’s officers or employees arising pursuant to any provision
of the NRS, Chapters 78 or 92A of the NRS or our Amended and Restated Articles of Incorporation or our Bylaws, or (iv) any action
asserting a claim against the Company, any director or the Company’s officers or employees governed by the internal affairs
doctrine. However, each of these clauses (i) through (iv) will not apply to any claim (x) as to which the Court determines that
there is an indispensable party not subject to the jurisdiction of the Court (and the indispensable party does not consent to the
personal jurisdiction of the Court within ten (10) days following such determination), (y) for which the Court does not have
subject matter jurisdiction, or (z) which is vested in the exclusive jurisdiction of a court or forum other than the Court, including
pursuant to Section 27 of the Exchange Act, which provides for exclusive federal jurisdiction over suits brought to enforce any
duty or liability created by the Exchange Act or the rules and regulations thereunder. Furthermore, Section 22 of the Securities
Act provides for concurrent jurisdiction for federal and state courts over all suits brought to enforce any duty or liability created
by the Securities Act or the rules and regulations thereunder, and as such the exclusive jurisdiction clauses set forth above would
not apply to such suits.
Although we believe
these provisions benefit us by providing increased consistency in the application of Nevada law for the specified types of actions
and proceedings, the provisions may have the effect of discouraging lawsuits against us or our directors and officers. Any person
or entity purchasing or otherwise acquiring any interest in our shares of capital stock shall be deemed to have notice of and consented
to this exclusive forum provision, but will not be deemed to have waived our compliance with the federal securities laws and the
rules and regulations thereunder.
Transfer Agent and Registrar
Our transfer agent
and registrar is Globex Transfer, LLC, 780 Deltona Blvd., Suite 202, Deltona, Florida. Its telephone number is (813) 344-4490.
Stock Exchange Listing
Our common stock is
listed on The Nasdaq Stock Market (the “Nasdaq”) under the symbol “ONDS.”