What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-08-13 compared with 2025-05-14 · 87 added, 41 removed, 120 unchanged (52% of the section changed)

Management’s Discussion and Analysis of Financial

Condition and Results of Operations

Management’s Discussion and Analysis

of Financial Condition and Results of Operations

Readers are advised to

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(“Elbit”), entered into a collaboration agreement (the “Collaboration Agreement”) for the global marketing and

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

which we market under the commercial name “TIKAD.”

sales, and the production and further development by Elbit of our developed advanced robotic system mounted on a UAS, armed with lightweight

firearms, which we then marketed under the commercial name “TIKAD.” On April 2, 2025 we and Elbit executed a supplement letter

(the “Supplement Letter”) to the Collaboration Agreement relating to the stabilized weapons drone system technology that Elbit

has been marketing and deploying under the brand name “Birds of Prey”.

Pursuant to the Supplement Letter, we and

Elbit have agreed to expand their collaboration to allow us to market the system to military, defense, home-land security and

para-military customers, in coordination with Elbit.

We will be entitled to a commission fee, in the mid-single figure percentage

range, from any proceeds resulting from its marketing activities, in addition to the royalties it is entitled to as part of the Collaboration

August 15, 2022, Duke Israel introduced the Insulator Cleaning (“IC”) Drone, a drone technology for conducting routine maintenance

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utility cable insulators.

has a wholly-owned subsidiary, Duke Israel, which was formed under the laws of the State of Israel in March 2014 and became the sole

subsidiary of Duke Inc.

On May 12, 2025, we announced the successful commencement of our 2025 insulator cleaning activity

in Israel with the IEC under our previously announced service agreement.

On June 10, 2025, we announced the launch of our next-generation

IC Drone System - the ICDS2 - representing a significant technological advancement in our innovative utility maintenance drone solution.

The ICDS2 features several key technological advancements over its predecessor, featuring extended flight time, higher payload capacity,

enhanced stability, advanced radar and improved cleaning durability.

It has been successfully deployed at the start of the insulator cleaning

season in May 2025, marking a full-season operational timeline compared to 2024’s mid-season commencement.

has a wholly-owned

subsidiary, Duke Israel, which was formed under the laws of the State of Israel in March 2014 and became the sole subsidiary of Duke Inc.

after its incorporation.

Our mailing address is 10 HaRimon Street, Mevo Carmel Science and Industrial Park, Israel

2069203, and our telephone number is 011-972-4-8124101.

Our mailing address is 10 HaRimon Street, Mevo Carmel Science and Industrial Park, Israel 2069203, and our telephone

number is 011-972-4-8124101.

Our website address is https://dukeroboticsys.com/.

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February 18, 2025, we announced that we established Duke Robotics Hellas M I.K.E (“Duke Greece”), a wholly owned subsidiary,

formed under the laws of Greece.

formed under the laws of Greece, and on February 24, 2025 we appointed Mrs.

Alexandra Papaconstantinou to provide management services

as the Managing Director of Duke Greece.

Critical Accounting Policies

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Results of Operations

Comparison of the three months ended March 31, 2025 and 2024

three months ended March 31, 2025 and 2024 we had no revenues.

When we do recognize revenues, they are mainly derived from our August

2024 commercial agreement for high-voltage insulator washing services with the IEC.

These services to the IEC are seasonal in their nature

(spring to fall seasons).

Comparison of the three months ended June 30, 2025 and 2024

Revenues for the three months ended June 30, 2025 amounted to $143,000, compared to no revenues during the three months ended June

The primary reason for the increase in revenues is attributable to revenues from our IC Drone insulator cleaning

Initial revenues from royalties for sales of the “Birds of Prey” stabilized weapons drone systems, through

our Collaboration Agreement with Elbit, contributed for the first time to our revenues for the period, while the majority of the

revenues for the period continued to be generated from our IC Drone insulator cleaning activities.

Cost of revenues.

Our cost of revenues for the three months ended June 30, 2025, amounted to $55,000, compared to no cost of revenues for the three

months ended June 30, 2024.

The increase in cost of revenues was mainly due to the costs associated with our IC Drone insulator cleaning

Research and Development.

Our research and development expenses for the three months ended March 31, 2025, amounted to $22,000, compared to $38,000 for the three

months ended March 31, 2024.

The decrease in research and development expenses was mainly due to Company’s focus on its commercial

agreement with the IEC.

Our research and

development expenses for the three months ended June 30, 2025, amounted to $24,000, compared to $78,000 for the three months ended June

The decrease in research and development expenses was mainly due to allocating more resources to the execution of our IC Drone

insulator cleaning activities, and less on development activities.

General and Administrative.

Our general and administrative expenses for the three months ended March 31, 2025, which consisted primarily of professional services,

such as accounting, auditing, insurance costs, consulting and legal services, amounted to $258,000, compared to $192,000 for the three

months ended March 31, 2024.

The increase in general and administrative expenses for the three months ended March 31, 2025, was mainly

due to an increase in professional services partially offset by a decrease in stock-based compensation expenses.

Our general and administrative expenses for the three months ended June 30, 2025, which consisted primarily of professional services,

stock-based compensation expenses and legal expenses, amounted to $314,000, compared to $215,000 for the three months ended June 30, 2024.

The increase in general and administrative expenses for the three months ended June 30, 2025 was mainly due to an increase in professional

services and in stock-based compensation expenses.

Financial Income (expenses),

For the three months ended June 30, 2025, we had financial expenses of $8,000 compared to financial income of $15,000 for the

three months ended June 30, 2024.

The reason for the decrease in financial income for the three months ended June 30, 2025, was mainly

due to the decrease in our cash bank deposits which resulted in a decrease in interest income.

a net loss of $269,000 for the three months ended June 30, 2025 as compared to a net loss of $278,000 for the three months ended June

30, 2024, for the reasons set forth above.

Comparison of the six months ended June 30, 2025 and 2024

Revenues for the six months ended June 30, 2025 amounted to $143,000, compared to no revenues during the six months ended June 30,

The primary reason for the increase in revenues is attributable to revenues from our IC Drone insulator cleaning

Initial revenues from royalties for sales of the “Birds of Prey” stabilized weapons drone systems, through

our Collaboration Agreement with Elbit, contributed for the first time to our revenues for the period, while the majority of the

revenues for the period continued to be generated from our IC Drone insulator cleaning activities.

Cost of revenues.

cost of revenues for the six months ended June 30, 2025, amounted to $63,000, compared to $0 for the six months ended June 30,

The increase in cost of revenues was mainly due to our IC Drone insulator cleaning activities.

Research and Development.

Our research and development expenses for the six months ended June 30, 2025, amounted to $45,000, compared to $117,000 for the six months

ended June 30, 2024.

The decrease in research and development expenses was mainly due to allocating more resources to the execution of

our IC Drone insulator cleaning activities, and less on development activities.

General and Administrative.

Our general and administrative expenses for the six months ended June 30, 2025, which consisted primarily of professional services, stock-based

compensation expenses and legal expenses, amounted to $573,000, compared to $406,000 for the six months ended June 30, 2024.

in general and administrative expenses for the six months ended June 30, 2025 was mainly due to an increase in professional services and

in stock-based compensation expenses.

Financial Income, net.

For the three months ended March 31, 2025, we had financial income of $9,000 compared to financial income of $21,000 for the three months

ended March 31, 2024.

The decrease in finance income is mainly due to the decrease in our cash bank deposits which resulted in a decrease

in interest income.

a net loss of $279,000 for the three months ended March 31, 2025, compared to a net loss of $209,000 for the three months ended March

For the six months ended June 30, 2025, we had financial income of less than $1,000 compared to financial income of $36,000 for the six

months ended June 30, 2024.

The reason for the decrease in financial income for the six months ended June 30, 2025, was mainly due to

the decrease in our cash bank deposits which resulted in a decrease in interest income.

a net loss of $548,000 for the six months ended June 30, 2025 as compared to a net loss of $487,000 for the six months ended June 30,

2024, for the reasons set forth above.

Liquidity and Capital Resources

We had $1,014,000 in cash

on March 31, 2025, compared to $2,112,000 in cash on March 31, 2024.

The reason for the decrease in our cash balance was due to the operating

expenses described above.

Cash used in operations for the three months ended March 31, 2025, was $218,000 as compared to cash used in

operations of $169,000 for the three months ended March 31, 2024.

The reason for the increase in cash used in operations is mainly related

to the increase in our operating expenses described above.

Net cash used in investing

activities was $25,000 for the three months ended March 31, 2025, compared to net cash used in investing activities of $0 for the three

months ended March 31, 2024.

We had $581,000 in cash on

June 30, 2025 versus $ 1,766,000 in cash on June 30, 2024.

The reason for the decrease in our cash balance was due to the operating expenses

described above.

Cash used in operations for the six months ended June 30, 2025 was $578,000 as compared to cash used in operations of

$514,000 for the six months ended June 30, 2024.

The reason for the increase in cash used in operations is mainly related to increase

in our operating expenses described above.

Net cash used in investing activities was $96,000

for the six months ended June 30, 2025, as compared to net cash used in investing activities of $0 for the six months ended June 30, 2024.

The increase is mainly related to purchase of property and equipment.

On May 11, 2021, we entered

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Off-Balance Sheet Arrangements

As of March 31, 2025, we did

As of June 30, 2025, we did

not have any off-balance sheet arrangements as defined in Item 303(a)(4) of Regulation S-K.

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-Q

Item 2. Management’s Discussion and Analysis