What changed in this filing

/stocks — the workspaceLOADING

Item 7. Management’s Discussion and Analysis

2024-03-15 compared with 2023-03-24 · 81 added, 67 removed, 127 unchanged (54% of the section changed)

5 unchanged sentences

This discussion and analysis

contains forward-looking statements that involve risks, uncertainties and assumptions.

contain forward-looking statements that involve risks, uncertainties and assumptions.

The actual results may differ materially from those

21 unchanged sentences

of the Company, and the Short-Form Merger was consummated.

As the result of the Share

Exchange and the change in business and operations of the Company, a discussion of the past financial results of the Company is not pertinent,

and under applicable accounting principles the historical financial results of Duke, the accounting acquirer, prior to the Share Exchange

are considered the historical financial results of the Company.

January 29, 2021, we, through Duke Israel, and Elbit, entered into the Collaboration Agreement for the global marketing and sales, and

the production and further development of our developed advanced robotic system mounted on an UAS, armed with lightweight firearms, which

we market under the commercial name “TIKAD.”

August 15, 2022, Duke Israel introduced the IC Drone, a drone technology for conducting routine maintenance of critical infrastructure

and has signed an agreement with IEC to provide drone-enabled systems for cleaning electric utility cable insulators.

During October 2023,

we successfully completed our obligations under its agreement with the IEC.

Operating Results

5 unchanged sentences

USD in thousands

Cost of revenues

Research and development expenses

1 unchanged sentence

Operating loss

Financing expense

Financing income

Financial income, net

Comparison of the year ended December 31,

2023 to the year ended December 31, 2022

revenues for the year ended December 31, 2022.

During the year ended December 31, 2021, we had $500,000 in revenues related to the Collaboration

Agreement with Elbit.

Research and Development .

During the year ended December 31, 2022, we had $20,000 research and development expenses, compare to $14,000 in research and development

expenses for the year ended December 31, 2021.

Our research and development expenses, for the year ended December 31, 2022, consisted

primarily of professional services.

Our research and development activity is pending our evaluation of additional different applications

for use of our technology and know-how including for its use in the civil market, while the research and development activities of the

TIKAD product is carried out by ELBIT according to the Collaboration Agreement.

We had $300,000

in revenues for the year ended December 31, 2023.

During the year ended December 31, 2022, we had no revenues.

The revenues for the year

ended December 31, 2023 were derived from our agreement with IEC to provide drone-enabled systems for cleaning electric utility cable

insulators, which we successfully completed during October 2023.

Cost of revenues .

the year ended December 31, 2023, we had $273,000 in cost of revenues expenses, compared to $0 for the year ended December 31, 2022.

cost of revenues in 2023 mainly consists of professional services associated with our agreement with IEC as detailed above.

and Development .

During the year ended December 31, 2023, we had $3,000 in research and development expenses, compared to $20,000

in research and development expenses for the year ended December 31, 2022.

The decrease in our research and development are mainly due

to activities related to the TIKAD product which are carried out by Elbit pursuant to the Collaboration Agreement.

General and Administrative

For the year ended December 31, 2022, our general and administrative expenses amounted to $1,104,000, of which $598,000

were related to professional services, such as accounting, auditing, insurance costs, consulting and legal services, and $426,000

were related to stock-based compensation expenses, and were $1,026,000 for the year ended December 31, 2021, of which $521,000 were related

to professional services and $416,000 related to stock-based compensation expenses.

This increase in general and administrative expenses

for the year ended December 31, 2022 was mainly due to an increase in professional services of $51,000.

Financial Expenses .

For the year ended December 31, 2022, our financial expenses amounted to $19,000 and were $448,000 for the year ended December 31, 2021.

The reason for the decrease in financial expenses for the year ended December 31, 2022, was mainly due to the decrease in interest expense

related to our previously outstanding convertible loans which were repaid and/or converted in full during 2021.

Financial Income .

For the year ended December 31, 2022, our financial income amounted to $42,000 and were $2,000 for the year ended December 31, 2021.

reason for the increase in financial expenses for the year ended December 31, 2022, was mainly due to the interest income on bank deposits

resulted from the increase in interest rates.

year ended December 31, 2022 and 2021, we recorded a net loss of $1,101,000 and $888,000, respectively, which represented an increase

compared to the year ended December 31, 2021, of $213,000.

For the year ended December 31, 2023, our general and administrative expenses amounted to $826,000, of which $575,000 were

related to professional services, such as accounting, auditing, insurance costs, consulting and legal services, and $108,000 were related

to stock-based compensation expenses, and were $1,104,000 for the year ended December 31, 2022, of which $598,000 were related to professional

services and $426,000 related to stock-based compensation expenses.

This decrease in general and administrative expenses for the year

ended December 31, 2023, was mainly due to the decrease in share-based compensations expenses.

Financial Income, net .

For the year ended December 31, 2023, our financial income amounted to $76,000 as compared to $23,000 for the year ended December 31,

The reason for the increase in financial income for the year ended December 31, 2023, was mainly due to the increase in interest

income on bank deposits resulted from the increase in interest rates.

ended December 31, 2023 and 2022, we recorded a net loss of $726,000 and $1,101,000, respectively, which represented a decrease compared

to the year ended December 31, 2022, of $375,000.

Critical Accounting Policies

This MD&A of Financial

Condition and Results of Operations discusses our financial statements, which have been prepared in accordance with accounting principles

generally accepted in the United States of America (“U.S.

In connection with the preparation of our financial statements,

we were required to make assumptions and estimates about future events, and apply judgments that affect the reported amounts of assets,

liabilities, revenue, expenses and the related disclosures.

We base our assumptions, estimates and judgments on historical experience,

current trends and other factors that management believes to be relevant at the time our consolidated financial statements are prepared.

On a regular basis, management reviews the accounting policies, assumptions, estimates and judgments to ensure that our financial statements

are presented fairly and in accordance with U.S.

However, because future events and their effects cannot be determined with certainty,

actual results could differ from our assumptions and estimates, and such differences could be material.

This Management Discussion

and Analysis of Financial Condition and Results of Operations discusses our financial statements, which have been prepared in accordance

with accounting principles generally accepted in the United States of America (“U.S.

In connection with the preparation

of our financial statements, we were required to make assumptions and estimates about future events and apply judgments that affect the

reported amounts of assets, liabilities, revenue, expenses and the related disclosures.

We base our assumptions, estimates and judgments

on historical experience, current trends and other factors that management believes to be relevant at the time our consolidated financial

statements are prepared.

On a regular basis, management reviews the accounting policies, assumptions, estimates and judgments to ensure

that our financial statements are presented fairly and in accordance with U.S.

However, because future events and their effects

cannot be determined with certainty, actual results could differ from our assumptions and estimates, and such differences could be material.

Our significant accounting

6 unchanged sentences

Liquidity and Capital Resources

inception, we have devoted substantially all our efforts to research and development and have incurred accumulated losses of $9,016,000.

During the year ended December 31, 2022, our loss of $1,101,000 included

non-cash stock-based compensation of $426,000.

As of December 31, 2022, we had a working capital of $2,674,000, as compared to a

working capital of $3,389,000 as of December 31, 2021.

Since inception, we have devoted

substantially all our efforts to research and development and have incurred accumulated losses of $9,947,000.

During the year ended December

31, 2023, our loss of $726,000 included non-cash stock-based compensation of $108,000.

As of December 31, 2023, we had a working

capital of $2,011,000 as compared to a working capital of $2,674,000 as of December 31, 2022.

As of December 31, 2023, we

1 unchanged sentence

The reason for the decrease in our

cash balance was mainly due to the operating expenses describe above and the purchase of property and equipment.

cash balance was mainly due to the operating expenses describe above.

Cash used in operations for

the year ended December 31, 2023, was $548,000 as compared to cash used in operations of $672,000 for the year ended December 31, 2022.

The reason for the decrease in cash used in operations is related to the decrease in our operating expenses and cash received under our

Collaboration and Development Agreement with the IEC.

Since our inception we and

10 unchanged sentences

shall be repaid on the later of the following:

(i) three years after the Effective Date;

or (ii) Duke raised capital amounting to at least

$15 million following the Effective Date and the Earnings before interest, tax, depreciation and amortization of Duke has reached an amount

of $3 million.

(i) three years after the Effective Date (March 9, 2020);

or (ii) Duke raised capital amounting

to at least $15 million following the Effective Date and the Earnings before interest, tax, depreciation and amortization of Duke has

reached an amount of $3 million.

As of December 31, 2023, and

55 unchanged sentences

The aggregate gross proceeds from the offering were approximately $5,000,000 and the offering closed on May

On April 5, 2022, we amended the terms of the warrants such that they now expire on November 11, 2023.

believe that we have sufficient cash to fund our operations for at least the next 12 months.

Readers are advised that available resources

may be consumed more rapidly than currently anticipated, resulting in the need for additional funding sooner than expected.

occur, we will need to seek additional capital earlier than anticipated in order to fund (1) further development and, if needed (2) expenses

which will be required in order to expand manufacturing of our products, (3) sales and marketing efforts and (4) general working capital.

Such funding may be unavailable to us on acceptable terms, or at all.

Our failure to obtain such funding when needed could create a negative

impact on our stock price or could potentially lead to the failure of our company.

This would particularly be the case if we are unable

to commercially distribute our products and services in the jurisdictions and in the timeframes we expect.

On April 5, 2022, we entered into an agreement with the Investors pursuant to which we

extended the term of the warrants, to expire on November 11, 2023.

On November 1, 2023, we and the Investors executed a second extension

agreement, such that the term of the warrants was extended so that they now expire on November 11, 2024.

We believe that we have sufficient

cash to fund our operations for at least the next 12 months.

Readers are advised that available resources may be consumed more rapidly

than currently anticipated, resulting in the need for additional funding sooner than expected.

Should this occur, we will need to seek

additional capital earlier than anticipated in order to fund (1) further development and, if needed (2) expenses which will be required

in order to expand manufacturing of our products, (3) sales and marketing efforts and (4) general working capital.

Such funding may be

unavailable to us on acceptable terms, or at all.

Our failure to obtain such funding when needed could create a negative impact on our

stock price or could potentially lead to the failure of our company.

This would particularly be the case if we are unable to commercially

distribute our products and services in the jurisdictions and in the timeframes we expect.

Quantitative and Qualitative Disclosure

3 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 7. Management’s Discussion and Analysis