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Item 1A. Risk Factors

2026-03-12 compared with 2025-03-20 · 378 added, 259 removed, 419 unchanged (60% of the section changed)

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Additional risks and uncertainties not presently known to us or that we currently deem immaterial may also affect our business.

Risks Related to Our Financial Condition and Capital Requirements

We believe our current

cash on hand will not be sufficient to fund our projected operating requirements for a period of twelve months from the issuance of these

interim financial statements included in this Quarterly Report.

This raises substantial doubt about our ability to continue as a going

We believe that our current

cash on hand will not be sufficient to fund our projected operating requirements for a period of twelve months from the issuance of our

annual financial statements including in this Annual Report.

This raises substantial doubt about our ability to continue as a going concern

and could materially limit our ability to raise additional funds through the issuance of equity or debt securities or otherwise.

cannot continue as a going concern, our investors may lose their entire investment in our securities.

Until we can generate significant

revenues, if ever, we expect to satisfy our future cash needs through debt or equity financing.

We cannot be certain that additional

funding will be available to us on acceptable terms, if at all.

If funds are not available, we may be required to delay, reduce the scope

of, or eliminate research or development plans for, or commercialization efforts with respect to our products.

Risks Related to our Business and Industry

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Israel was formed in March 2014.

To date, we have generated limited revenues and have not yet begun meaningful commercialization efforts

with respect to our products.

We intend in the long-term to derive substantial revenues from the sales of the IC Drone, as well as future

models of other robots and our UAS platforms for both military and civilian use, but there can be no assurance that we will be able to

To date, we have generated limited revenues, through our commercialization efforts with respect to our

We intend in the long-term to derive substantial revenues from the sales of the IC Drone, as well as future models of other

robots and our UAS platforms for both military and civilian use, but there can be no assurance that we will be able to do so.

In addition, our relatively

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to raise additional funds to continue the design, manufacture, sale and servicing of the IC Drone and our stabilized robotic technology

as well as develop future robot products and other platforms for the implementation of our robot.

as well as develop future robot products and other platforms for the implementation of our products.

We believe that we will need to raise

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the terms of any financing may adversely affect the holdings or the rights of holders of our securities and the issuance of additional

securities, whether equity or debt, by us, or the possibility of such issuance, may cause the market price of our common shares to decline.

securities, whether equity or debt, by us, or the possibility of such issuance, may cause the market price of our common stock to decline.

The incurrence of indebtedness could result in increased fixed payment obligations, and we may be required to agree to certain restrictive

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its business plan from a much different and much more restricted direction, attempting to secure additional funding sources to fund its

growth, borrowing money from lenders or elsewhere or to take other actions to attempt to provide funding.

growth, borrowing money from lenders or elsewhere or to take other actions to attempt to obtain funding.

We may have to engage in common

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We expect to derive most of

our immediate future revenues from the civilian sector directly or indirectly from governmental and quasi-governmental customers in the

energy utility sector.

Technology products from foreign countries have an inherent disadvantage against domestic offerings.

of government programs could be reduced or eliminated due to numerous factors, including geo-political events and macro-economic conditions

that are beyond our control.

Reduction or elimination of government spending under our contracts would imperil the sales of our products

and may cause a negative effect on our revenues, results of operations, cash flow and financial condition.

We face other risks in our

expected international sales.

our immediate future revenues from the civilian sector or from governmental and quasi-governmental customers in the energy utility sector.

As a result, our revenues may be concentrated among a relatively limited number of customers, and the loss of, or a material reduction

in business from, any significant customer could have a disproportionate adverse effect on our revenues, results of operations and cash

Governmental and quasi-governmental customers are subject to budgeting, appropriations and procurement processes that are inherently

uncertain and may be delayed, reduced or eliminated due to numerous factors, including changes in political leadership, shifting policy

priorities, macroeconomic conditions and geo-political events that are beyond our control.

The funding of government programs could be

reduced or eliminated due to numerous factors, including geo-political events and macro-economic conditions that are beyond our control.

Reduction or elimination of government spending under our contracts would imperil the sales of our products and may cause a negative effect

on our revenues, results of operations, cash flow and financial condition.

In addition, our business

is subject to heightened regulatory and compliance requirements applicable to government contractors and suppliers to operators of critical

infrastructure, including requirements relating to cybersecurity, data protection, export controls, safety certifications, reporting obligations

and audit rights.

Compliance with these requirements may increase our operating costs, require significant management attention and expose

us to fines, penalties, contract termination, suspension or debarment if we fail to comply.

Our contracts with governmental

and quasi-governmental customers may also limit our ability to pass through cost overruns, inflationary pressures or other pricing increases,

which could adversely affect our margins and profitability.

Political developments, changes

in government policy or international relations and heightened sensitivity around defense, security and critical infrastructure technologies

may further restrict our ability to compete for contracts or may subject our products and operations to increased scrutiny.

The deployment of our products

and technologies in high-risk or mission-critical applications, including critical infrastructure maintenance or security-sensitive environments,

may expose us to increased litigation risk, including claims arising from alleged product failures, malfunctions, property damage, personal

injury or other adverse events.

Defending against such claims could be costly and time-consuming and could result in significant damages,

reputational harm or limitations on our ability to deploy our technologies.

Any actual or perceived failure

of our products, or adverse publicity related to their use in high-risk environments, could also result in reputational harm that may

adversely affect our relationships with customers, regulators and other stakeholders.

A substantial portion

of our expected revenues is subject to Israeli export control regulations, and any failure to obtain or maintain required approvals or

licenses could materially and adversely affect our business, results of operations and financial condition.

The sale and export of

the “Bird of Prey” stabilized weapons drone systems by Elbit are subject to extensive regulation by the Israeli Ministry

of Defense (“IMOD”) and other governmental authorities.

Israeli law regulates the export of defense-related hardware,

software and technology, as well as certain “dual-use” items, and generally requires the receipt of marketing approvals

and export licenses prior to offering, selling or exporting covered products.

We are required to obtain and maintain applicable IMOD

approvals for each relevant transaction, and such approvals may be delayed, conditioned, limited, revoked or not renewed.

result, our revenues from royalties for sales of the “Bird of Prey” stabilized weapons drone systems through our

collaboration with Elbit are highly dependent on Elbit’s continued ability to obtain and maintain the necessary approvals and

licenses in a timely manner.

Any delay, denial, revocation or non-renewal of required export approvals or licenses, changes in

Israeli export policy, geopolitical developments, or heightened regulatory scrutiny could restrict or prevent marketing, selling or

delivering of these products to certain customers or in certain jurisdictions.

In addition, non-compliance

with applicable export control laws or regulations could result in fines, penalties, suspension or revocation of licenses, criminal liability,

reputational harm and restrictions on our ability to conduct future export activities.

Any of these outcomes could materially and adversely

affect our business, results of operations and financial condition.

We face other risks in our expected international sales.

We expect to derive a significant

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of such components, finding another source could result in added cost and manufacturing delays.

Moreover, if our subcontractors fail to

meet their design, delivery schedule or other obligations we could be held liable by our customers, and we may be unable to obtain full

or partial recovery from our subcontractors for those liabilities.

The foregoing risks could have a material adverse effect on our operating

Our supply chain may also be exposed to

broader risks beyond individual supplier performance, including limited availability of certain specialized or critical components, subcomponents

or raw materials, such as electronics, sensors, batteries, semiconductors or materials that may be sourced from a limited number of suppliers

or geographic regions.

Moreover, if our subcontractors fail to meet their design, delivery schedule or other obligations we could be held

liable by our customers, and we may be unable to obtain full or partial recovery from our subcontractors for those liabilities.

certain components or materials used in our products may be subject to export controls, trade restrictions, tariffs, sanctions or embargoes,

including restrictions related to dual-use technologies, defense-related systems or materials sourced from jurisdictions subject to heightened

regulatory scrutiny.

Changes in trade policy, geo-political tensions or the imposition of new sanctions or embargoes could limit our ability

to procure components, require us to redesign products, seek alternative suppliers or obtain governmental approvals, any of which could

result in increased costs, production delays or reduced margins.

Supply chain disruptions may

also arise from macroeconomic conditions, inflation, labor shortages, transportation constraints, natural disasters or other events beyond

our control, which could further impact the availability, quality or cost of components used in our products.

The foregoing risks could

have a material adverse effect on our operating results.

If we fail to manage growth or to prepare

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and results of operations .

Any significant growth in

the market for our products or our entry into new markets may require an expansion of our employee base for managerial, operational, financial,

and other purposes.

As of March 20 , 2025, we had one full-time employee, our Chief Executive

Officer, and engage two (2) executive officers, our CTO and our Chief Financial Officer (“CFO”).

During any period of growth,

we may face problems related to our operational and financial systems and controls, including quality control and delivery and service

We would also need to continue to expand, train and manage our employee base.

Continued future growth will impose significant

added responsibilities upon the members of management to identify, recruit, maintain, integrate, and motivate new employees.

Any significant growth in the market for our products or our entry

into new markets may require an expansion of our employee base for managerial, operational, financial, and other purposes.

12, 2026, we have engaged three (3) executive officers, our CEO, CTO and our CFO.

During any period of growth, we may face problems related

to our operational and financial systems and controls, including quality control and delivery and service capacities.

We would also need

to continue to expand, train and manage our employee base.

Continued future growth will impose significant added responsibilities upon

the members of management to identify, recruit, maintain, integrate, and motivate new employees.

Aside from increased difficulties

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We were granted a patent with the United States

Office Patent and Trademark Office to protect certain of our key technologies, however, we cannot assure you that we will be able to control

Patent and Trademark Office to protect certain of our key technologies, however, we cannot assure you that we will be able to control

all of the rights for all of our intellectual property.

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Competitors or potential competitors may have filed applications

for, or may have received patents and may obtain additional and proprietary rights to compounds or processes used by or competitive with

for, or may have received patents and may obtain additional and proprietary rights to technologies or processes used by or competitive

Both the patent application process and the process of managing patent disputes can be time-consuming and expensive.

may be able to design around our patents or develop products which provide outcomes which are comparable or may even be superior to ours.

Rapid advances in artificial

intelligence, machine learning and automation technologies may further increase competitive pressure and could, over time, enable competitors

or third parties to replicate, approximate or otherwise achieve similar functional outcomes to certain aspects of our technologies without

infringing our patents or proprietary rights.

While we believe that our technology stack is differentiated by its control software, hardware

design and system-level engineering, there can be no assurance that advances in AI-driven modeling, simulation or autonomous control systems

will not reduce the technological barriers to entry in our markets or diminish the competitive advantage of our proprietary solutions.

In the event a competitor

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in-house only with no sub-contractor involved.

We may become subject to claims of infringement

or misappropriation of the intellectual property rights of others, which could prohibit us from developing our products, require us to

obtain licenses from third parties or to develop non-infringing alternatives and subject us to substantial monetary damages.

In that regard, while our complex kinematic algorithms and control software are developed

entirely in-house and are not shared with subcontractors, we primarily rely on a combination of trade secret protection, copyright law

and contractual confidentiality measures to protect these technologies.

Trade secret protection depends on our ability to maintain the

secrecy of the underlying information, and may be lost if such information is disclosed, misappropriated or independently developed by

third parties.

Copyright protection generally protects the expression of software code, but does not prevent others from developing independent

software, algorithms or systems that perform similar functions or achieve comparable results.

These forms of protection

are subject to inherent limitations and weaknesses, including risks arising from employee turnover, cybersecurity incidents, unauthorized

access, reverse engineering, inadvertent disclosure during product deployment or customer support, and the use of third-party components

or interfaces.

In addition, enforcement of trade secret or copyright rights can be costly, uncertain and time-consuming, particularly

in foreign jurisdictions where legal protections and remedies may be more limited.

As a result, we may be unable to prevent competitors

from replicating or approximating aspects of our proprietary technologies, which could materially adversely affect our competitive position

and business.

We may become subject

to claims of infringement or misappropriation of the intellectual property rights of others, which could prohibit us from developing our

products, require us to obtain licenses from third parties or to develop non-infringing alternatives and subject us to substantial monetary

Third parties could, in the

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could become liable for additional damages to third parties.

The sale of our products is subject to various

regulatory requirements of the Israeli Ministry of Defense and will also be subject to regulatory requirements in countries in which we

seek to sell our products.

Due to the fact that we sell

products used that may be purchased in the defense and/ or military industry, and otherwise conduct business with the IMOD, we may be

required to obtain approval from the IMOD with respect to each agreement for the sale of our products.

In that regard, we are required

to secure the approval of the IMOD prior to offering the sale of our products to any third party.

In addition, we are required to obtain

approvals from the IMOD prior to the execution and performance of any such agreement.

If we fail to obtain approvals in the future, if

approvals previously obtained are revoked or expire and are not renewed or if government policies change, our ability to sell our products

and services to customers would be impacted, resulting in a material adverse effect on our business, revenues, assets, liabilities and

results of operations.

Significant changes

or developments in U.S.

laws or policies, including changes in U.S.

trade policies and tariffs and the reaction of other countries thereto,

may have a material adverse effect on our business and financial statements.

Significant changes or developments

laws and policies, such as laws and policies surrounding international trade, foreign affairs, manufacturing and development and

investment in the territories and countries where we or our customers operate, can materially adversely affect our business and financial

Tariffs imposed by the U.S.

government, may increase the cost of certain raw materials and components used in our products.

If these tariffs remain in place or are expanded, or if new trade restrictions are implemented, our manufacturing costs could increase,

which could materially and adversely affect our margins and financial results.

Furthermore, changes in trade

policy have increased uncertainty in our industry, and any escalation in trade tensions could disrupt our supply chain, delay production

timelines, or require costly modifications to sourcing and logistics strategies.

The extent and duration of the tariffs and the resulting

impact on general economic conditions and on our business are uncertain and depend on various factors, such as negotiations between the

and affected countries, the responses of other countries or regions, exemptions or exclusions that may be granted, availability and

cost of alternative sources of supply, and demand for our products in affected markets.

Risks Related to our Common Stock

Our executive officer, directors and certain

stockholders who are beneficial owners of more than 5% of our outstanding common shares possess the majority of our voting power, and

through this ownership, have the ability to control our Company and our corporate actions.

Following the Share Exchange,

our current executive officer and directors hold approximately 22.20% of the issued and outstanding voting power of the Company’s

outstanding shares.

These persons have a controlling influence in determining the outcome of any corporate transaction or other matters

submitted to our stockholders for approval, including mergers, consolidations and the sale of all or substantially all of our assets,

election of directors, and other significant corporate actions.

As such, our directors and executive officer may have the power, acting

alone or together, to prevent or cause a change in control;

therefore, without their consent we could be prevented from entering into

transactions that could be beneficial to us.

The interests of our executive officer may give rise to a conflict of interest with the Company

and the Company’s shareholders.

Our executive officer,

directors and certain stockholders who are beneficial owners of more than 5% of our outstanding common shares possess the majority of

our voting power, and through this ownership, have the ability to control our Company and our corporate actions.

Our current executive officer

and directors hold approximately 21.38% of the issued and outstanding voting power of the Company’s outstanding shares.

These persons

have a controlling influence in determining the outcome of any corporate transaction or other matters submitted to our stockholders for

approval, including mergers, consolidations and the sale of all or substantially all of our assets, election of directors, and other significant

corporate actions.

As such, our directors and executive officer may have the power, acting alone or together, to prevent or cause a change

therefore, without their consent we could be prevented from entering into transactions that could be beneficial to us.

interests of our executive officer may give rise to a conflict of interest with the Company and the Company’s shareholders.

In addition, we have a number

of stockholders who are beneficial owners of more than 5% of our outstanding common shares, as of the Effective Time, including one such

shareholder who beneficially owns approximately 34.37% of our issued and outstanding shares, and as such, also may have the ability to

prevent us from entering into transactions that could be beneficial to us and/or other shareholders.

In addition, we have one additional

non-affiliated stockholder who beneficially owns more than 5% of our outstanding common shares.

Although none of these non-affiliated

stockholders currently have a controlling influence in determining the outcome of any corporate transaction or other matters submitted

to our stockholders for approval, including mergers, consolidations and the sale of all or substantially all of our assets, election of

directors, and other significant corporate actions, obtaining their vote on certain matters may be necessary to effect certain actions

that our management and directors otherwise deem to be in the best interests of the Company.

of stockholders who are beneficial owners of more than 5% of our outstanding common shares, including one such shareholder

who beneficially owns approximately 19.98% of our issued and outstanding shares, and as such, also may have the ability to prevent us

from entering into transactions that could be beneficial to us and/or other shareholders.

In addition, we have one additional non-affiliated

stockholder who beneficially owns more than 5% of our outstanding common shares.

Although none of these non-affiliated stockholders currently

have a controlling influence in determining the outcome of any corporate transaction or other matters submitted to our stockholders for

approval, including mergers, consolidations and the sale of all or substantially all of our assets, election of directors, and other significant

corporate actions, obtaining their vote on certain matters may be necessary to effect certain actions that our management and directors

otherwise deem to be in the best interests of the Company.

Because we originally became a public company

through a reverse merger, we may continue to face challenges in attracting analyst coverage and institutional investor interest.

We originally became a public

company through a reverse merger, rather than through a traditional underwritten initial public offering.

Companies that enter the public

markets through reverse mergers often receive less attention from securities analysts and institutional investors, and such perceptions

may persist notwithstanding our uplisting to a national securities exchange.

Because no investment bank acted as an underwriter in connection

with our becoming a public company, there is no broker-dealer with an inherent incentive to provide research coverage of our company.

The absence or limited availability of research coverage may reduce the visibility of our business in the public markets, which could

limit investor interest, reduce trading volume and adversely affect the market price and liquidity of our securities.

Although our uplisting

may increase our visibility and improve access to a broader investor base, there can be no assurance that analysts will initiate or maintain

coverage of our company following the uplisting or that we will be able to attract institutional investors.

There is a substantial lack of liquidity

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Our common stock is traded

on the over-the-counter market with quotations published on the OTC Markets Group, Inc.’s OTCQB ®

tier Venture Market, under the symbol “DUKR.” The trading volume of our common stock historically has been limited and sporadic,

and the stock prices have been volatile.

As a result of the limited and sporadic trading activity, the quoted price for our common stock

on the over-the-counter market is not necessarily a reliable indicator of its fair market value.

The price at which our common stock will

trade in the future may be highly volatile and may fluctuate as a result of a number of factors, including, without limitation, any potential

business combination that we announce, as well as the number of shares available for sale in the market.

trading volume of our common stock may be limited and sporadic.

This situation is attributable to a number of factors, including the fact

that we are a small company which is relatively unknown to stock analysts, stock brokers, institutional investors and others in the investment

community that generate or influence sales volume, and that even if we came to the attention of such persons, they tend to be risk-averse

and would be reluctant to follow an unproven company such as ours or purchase or recommend the purchase of our shares until such time

as we became more seasoned and viable.

As a consequence, there may be periods of several days or more when trading activity in our shares

is minimal or non-existent, as compared to a seasoned issuer which has a large and steady volume of trading activity that will generally

support continuous sales without an adverse effect on share price.

We cannot give you any assurance that a broader or more active public

trading market for our common stock will develop or be sustained, or that current trading levels will be sustained.

As a result of such

trading activity, the quoted price for our common stock on the OTCQB may not necessarily be a reliable indicator of our fair market value.

In addition, if our shares of common stock cease to be quoted, holders would find it more difficult to dispose of or to obtain accurate

quotation as to the market value of, our common stock and as a result, the market value of our common stock likely would decline.

on the over-the-counter market with quotations published on the OTC Markets Group, Inc.’s OTCQB® tier Venture Market, under

the symbol “DUKR.” The trading volume of our common stock historically has been limited and sporadic, and the stock prices

have been volatile.

As a result of the limited and sporadic trading activity, the quoted price for our common stock on the over-the-counter

market is not necessarily a reliable indicator of its fair market value.

The price at which our common stock will trade in the future

may be highly volatile and may fluctuate as a result of a number of factors, including, without limitation, any potential business combination

that we announce, as well as the number of shares available for sale in the market.

The trading volume of our

common stock may be limited and sporadic.

This situation is attributable to a number of factors, including the fact that we are a small

company which is relatively unknown to stock analysts, stock brokers, institutional investors and others in the investment community that

generate or influence sales volume, and that even if we came to the attention of such persons, they tend to be risk-averse and would be

reluctant to follow an unproven company such as ours or purchase or recommend the purchase of our shares until such time as we became

more seasoned and viable.

As a consequence, there may be periods of several days or more when trading activity in our shares is minimal

or non-existent, as compared to a seasoned issuer which has a large and steady volume of trading activity that will generally support

continuous sales without an adverse effect on share price.

We cannot give you any assurance that a broader or more active public trading

market for our common stock will develop or be sustained, or that current trading levels will be sustained.

As a result of such trading

activity, the quoted price for our common stock on the OTCQB may not necessarily be a reliable indicator of our fair market value.

addition, if our shares of common stock cease to be quoted, holders would find it more difficult to dispose of or to obtain accurate quotation

as to the market value of, our common stock and as a result, the market value of our common stock likely would decline.

Other factors that could have

a similar impact include, but are not limited to:

● the increased concentration of the ownership of our shares

by a limited number of affiliated stockholders following the Share Exchange may limit interest in our securities;

● limited “public float” in the hands of a small

number of persons whose sales or lack of sales could result in positive or negative pricing pressure on the market price for our common

● variations in quarterly operating results from the expectations;

● revisions in securities analysts’ estimates or reductions;

● our ability to obtain working capital financing;

● announcements of new products or services by us or our competitors

and changes in our industry;

● reductions in the market share of our products;

● announcements by us or our competitors of significant strategic

acquisitions;

● the increased concentration

of the ownership of our shares by a limited number of affiliated stockholders following the Share Exchange may limit interest in our

● limited “public float”

in the hands of a small number of persons whose sales or lack of sales could result in positive or negative pricing pressure on the market

price for our common stock;

● variations in quarterly operating

results from the expectations;

● revisions in securities analysts’

estimates or reductions;

● our ability to obtain working

capital financing;

● announcements of new products

or services by us or our competitors and changes in our industry;

● reductions in the market share

of our products;

● announcements by us or our competitors

of significant strategic acquisitions;

● loss of any strategic relationship;

● regulatory developments;

● general technological, market or economic trends;

● investor perception of our industry or prospects;

● general technological, market

or economic trends;

● investor perception of our industry

or prospects;

● insider selling or buying;

● investors entering into short sale contracts;

● regulatory developments affecting our industry;

● additions or departures of key personnel.

● investors entering into short

sale contracts;

● regulatory developments affecting

our industry;

● additions or departures of key

Many of these factors are

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stock price may be subject to increased volatility.

Sales of a substantial number of shares

of our common stock, including shares that may be issued upon the exercise or conversion of outstanding securities or become freely tradable

under Rule 144, could cause the market price of our common stock to decline.

Out of the currently 2,252,151

outstanding shares of our common stock of which only 834,681 were registered pursuant to a registration statements on Form S-1 with the

SEC on June 5, 2020, the rest of our shares of common stock that are currently outstanding are “restricted securities”

within the meaning of Rule 144 under the Securities Act.

Restricted securities may be sold only pursuant to an effective registration

statement under the Securities Act, in compliance with Rule 144, or under another available exemption from registration, and in each

case in compliance with applicable state securities laws.

In general, once the applicable

holding period and other requirements of Rule 144 are satisfied, a person who is not an “affiliate” of our company and has

not been an affiliate during the preceding three months may resell restricted shares without limitation.

Affiliates may resell restricted

shares in accordance with the volume, manner of sale and other limitations of Rule 144, which, among other things, generally limit the

number of shares that may be sold within any three-month period to the greater of 1% of the then-outstanding shares of our common stock

or the average weekly trading volume of our common stock on the principal trading market during the four calendar weeks immediately preceding

If our existing stockholders,

particularly our affiliates or significant stockholders, sell substantial amounts of our common stock in the public market, or the perception

exists that such sales may occur, the market price of our common stock could decline.

Any such sales, or the perception that they may

occur, could also impair our ability to raise additional capital through the sale of equity or equity-linked securities in the future.

Our common stock is subject to price volatility

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These market fluctuations may also materially and adversely affect the market price of our common stock.

Sales of our currently issued and outstanding

stock may become freely tradable pursuant to Rule 144 and may dilute the market for your shares and have a depressive effect on the price

of the shares of our common stock.

A substantial portion of the

outstanding shares of common stock are “restricted securities” within the meaning of Rule 144 under the Securities Act of

1933, as amended (“Rule 144” and the “Securities Act”, respectively).

As restricted shares, these shares may be

resold only pursuant to an effective registration statement or under the requirements of Rule 144 or other applicable exemptions from

registration under the Securities Act and as required under applicable state securities laws.

Rule 144 provides in essence that a non-affiliate

who has held restricted securities for a period of at least six (6) months may sell their shares of common stock.

Under Rule 144, affiliates

who have held restricted securities for a period of at least six (6) months may, under certain conditions, sell every three months, in

brokerage transactions, a number of shares that does not exceed the greater of 1% of a company’s outstanding shares of common stock

or the average weekly trading volume during the four calendar weeks prior to the sale (the four calendar week rule does not apply to companies

quoted on the OTCQB).

A sale under Rule 144 or under any other exemption from the Securities Act, if available, or pursuant to subsequent

registrations of our shares of common stock, may have a depressive effect upon the price of our shares of common stock in any active market

that may develop.

The securities issued in connection with

the Share Exchange are restricted securities and may not be transferred in the absence of registration or the availability of a resale

The shares of common stock

issued in connection with the Share Exchange were issued in reliance on an exemption from the registration requirements under Section

4(a)(2) of the Securities Act.

Consequently, these securities are subject to restrictions on transfer under the Securities Act and may

not be transferred in the absence of registration or the availability of a resale exemption.

In particular, in the absence of registration,

such securities cannot be resold to the public until certain requirements under Rule 144 promulgated under the Securities Act have been

satisfied, including certain holding period requirements.

As a result, a purchaser who receives any such securities issued in connection

with the Share Exchange may be unable to sell such securities at the time or at the price or upon such other terms and conditions as the

purchaser desires, and the terms of such sale may be less favorable to the purchaser than might be obtainable in the absence of such limitations

and restrictions.

We do not plan to declare or pay any dividends

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to buy and sell the Company’s stock and have an adverse effect on the market for our shares.

Because we may issue preferred stock without

the approval of our shareholders and have other anti-takeover defenses, it may be more difficult for a third party to acquire us and could

depress our stock price.

In general, our Board may

issue, without a vote of our shareholders, one or more additional series of preferred stock that have more than one vote per share, although

the Company’s ability to designate and issue preferred stock is currently restricted by covenants under our agreements with prior

Without these restrictions, our Board could issue preferred stock to investors who support us and our management and give effective

control of our business to our management.

Additionally, issuance of preferred stock could block an acquisition resulting in both a drop

in our stock price and a decline in interest of our common stock.

This could make it more difficult for shareholders to sell their common

This could also cause the market price of our common stock shares to drop significantly, even if our business is performing well.

Risks Related to Israeli Law and Our Operations

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significant operations are located in Israel, and, therefore, our results may be adversely affected by political, economic and military

instability in Israel, including the recent attacks by Hamas and other terrorist organizations and Israel’s war against them.

instability in Israel, including the 2023 attack by Hamas and other terrorist organizations from the Gaza Strip and Israel’s war

against them.

Our executive offices and

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infiltrated Israel’s southern border from the Gaza Strip and conducted a series of attacks on civilian and military targets.

the commencement of these events, there had been additional active hostilities against Israel, including Hezbollah

in Lebanon, the Houthis terrorist group which controls parts of Yemen, and Iran.

In October 2024, Israel began ground operations

against Hezbollah in Lebanon culminating in a 60-day cease fire agreed to between Israel and Lebanon on November 27, 2024.

27, 2025, the ceasefire between Israel and Lebanon was extended to February 18, 2025.

On January 19, 2025, a temporary ceasefire between

Israel and Hamas went into effect, the result of which is uncertain.

While ceasefire agreements have been reached, there is no guarantee

that the parties will continue to comply with the terms of the agreements and, accordingly, it is possible that these hostilities will

resume with little to no warning and that additional terrorist organizations and, possibly, countries will actively join the hostilities.

Such clashes may escalate in the future into a greater regional conflict.

The economic implications

of the political situation in Israel on the Company’s business and operations and on Israel’s economy in general are difficult to

predict and may be intertwined with wider macroeconomic indications of a deterioration of Israel’s economic standing, which may

have a material adverse effect on the Company and its ability to effectively conduct some of its operations.

Additionally, any hostilities

involving Israel or the interruption or curtailment of trade between Israel and its trading partners could adversely affect our operations

and results of operations.

Although the Israeli government currently covers the reinstatement value of direct damages that are caused

by terrorist attacks or acts of war, we cannot assure you that this government coverage will be maintained or that it will sufficiently

cover our potential damages.

Any losses or damages incurred by us could have a material adverse effect on our business.

Any armed conflicts

or political instability in the region would likely negatively affect business conditions and could harm our results of operations.

In connection with the Israeli

security cabinet’s declaration of war against Hamas and possible hostilities with other organizations, several hundred thousand

Israeli military reservists were drafted to perform immediate military service.

As of March 20, 2025, none of our employees and regular

consultants in Israel have been called from time to time for reserve service but may be called, for service in the current or future wars

or other armed conflicts in connection with the multi-front war that Israel is facing, and such persons may be absent for an extended

period of time.

As a result, our operations in Israel may be disrupted by such absences, which disruption may materially and adversely

affect our business, prospects, financial condition and results of operations.

also launched extensive rocket attacks on Israeli population and industrial centers located along Israel’s border with the Gaza

Strip and in other areas within the State of Israel.

These attacks resulted in extensive deaths, injuries and kidnapping of civilians

and soldiers.

Following the attack, Israel’s security cabinet declared war against Hamas and a military campaign against these terrorist

organizations commenced in parallel to their continued rocket and terror attacks.

Following Hamas’s attack

on Israel, other regional hostilities became more pronounced and evolved into a multi-front war.

This included a northern front war between

Israel and Hezbollah in Lebanon.

As of the end of November 2024, Israel entered into a ceasefire agreement with Hezbollah, but there are

no assurances as to whether the agreement will hold or whether further hostilities with Hezbollah will resume.

In addition, the Iranian-backed

Houthi Movement in Yemen launched direct attacks on Israel involving drones and missiles, and attacked container ships on the Red Sea.

Such disruption to our operations previously included certain delays and diversions of the import of certain components for manufacturing

and production as a result of reduced air travel and the attacks on container ships on the Red Sea route by the Houthi Movement.

following the announcement of a ceasefire with Hamas, the Houthi Movement has stated that it will suspend such attacks, so long as the

ceasefire with Hamas remains in place, and the immediate risk of further disruption has temporarily decreased.

In April 2024 and October

2024, Iran launched direct attacks on Israel involving hundreds of drones and missiles.

On June 13, 2025, in light of continued

nuclear threats and intelligence assessments indicating imminent attacks, Israel launched a preemptive strike directly targeting military

and nuclear infrastructure inside Iran aimed to disrupt Iran’s capacity to coordinate or launch further hostilities against Israel,

as well as disrupt its nuclear program.

For 12 days, both sides launched attacks against one another, with Iran targeting civilian

infrastructure.

As a result of the escalation with Iran, Israel temporarily closed its airspace and ceased all port activity related to

commercial shipments.

On June 22, 2025, the United States military joined Israel in launching strikes directly targeting nuclear infrastructure

More recently, in February 2026, hostilities between Israel and Iran escalated again.

In late February 2026, the United States

and Israel conducted a major joint military campaign of air and missile strikes against targets in Iran, which triggered a broad Iranian

response and contributed to significant regional instability.

The situation remains highly fluid, and we are unable to predict when, or

on what terms, this escalation will be resolved.

Further escalation, whether

involving direct confrontation between Israel and Iran or through regional proxy groups, could result in additional mobilization of reserve

personnel, further restrictions on movement or commerce, damage to infrastructure, supply chain interruptions, disruptions to global energy

markets, and heightened cybersecurity threats.

Any of the foregoing could materially and adversely affect our operations, financial condition,

and results of operations, particularly if disruptions are prolonged or recur.

While the intensity and duration of the multi-front conflict have been

difficult to predict, the current ceasefire marks a potential shift towards stability in the region.

If sustained, this could reduce disruptions

to our business and operations, and on Israel’s economy in general.

However, if the war resumes or expands to other fronts, our

operations may be harmed.

Further, in the past, the

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Moreover, we cannot predict how this war will ultimately affect Israel’s economy in general,

which may involve additional downgrade in Israel’s credit rating by rating agencies (such as the recent downgrade by Moody’s

of its credit rating of Israel from A2 to Baa1, maintaining its outlook rating “negative”).

We may also be targeted by cyber

terrorists specifically because we are an Israeli-related company.

In addition, in January 2024 the International Court of Justice, or

ICJ, issued an interim ruling in a case filed by South Africa against Israel in December 2023, making allegations of genocide amid and

in connection with the war in Gaza, and ordered Israel, among other things, to take measures to prevent genocidal acts, prevent and punish

incitement to genocide, and take steps to provide basic services and humanitarian aid to civilians in Gaza.

There are concerns that companies

and businesses will terminate, and may have already terminated, certain commercial relationships with Israeli companies following the

ICJ decision.

The foregoing efforts by countries, activists and organizations, particularly if they become more widespread, as well as

the ICJ rulings and future rulings and orders of other tribunals against Israel (if handed), may materially and adversely impact our

ability to sell our products outside of Israel.

which may involve a downgrade in Israel’s credit rating by rating agencies (such as Moody’s outlook rating of Israel as “stable”

and rating level as Baa1).

We may also be targeted by cyber terrorists specifically because we are an Israeli-related company.

Prior to the Hamas attack

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The risk of such negative developments has increased in light of the recent Hamas

attacks and the multi-front war Israel is facing, regardless of the proposed changes to the judicial system and the related debate.

the extent that any of these negative developments do occur, they may have an adverse effect on our business, our results of operations

attacks and the war against Hamas declared by Israel, regardless of the proposed changes to the judicial system and the related debate.

To the extent that any of these negative developments do occur, they may have an adverse effect on our business, our results of operations

and our ability to raise additional funds, if deemed necessary by our management and board of directors.

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We incur expenses in U.S.

dollars and NIS, but our financial statements are denominated in U.S.

dollars, Euro and NIS, but our financial statements are denominated in U.S.

dollar is our functional currency.

we also incur expenses in NIS, we are affected by foreign currency exchange fluctuations through both translation risk and transaction

As a result, we are exposed to the risk that the NIS may appreciate relative to the dollar, or, if the NIS instead devalues relative

to the dollar, that the inflation rate in Israel may exceed such rate of devaluation of the NIS, or that the timing of such devaluation

may lag behind inflation in Israel.

In any such event, the dollar cost of our operations in Israel would increase and our dollar-denominated

results of operations would be adversely affected.

It may be difficult to enforce a judgment

of a United States court against us and our officers and directors to assert United States securities laws claims in Israel or to serve

process on our officers and directors and these experts.

as we also incur expenses in NIS and Euro, we are affected by foreign currency exchange fluctuations through both translation risk and

transaction risk.

As a result, we are exposed to the risk that the NIS may appreciate relative to the dollar, or, if the NIS instead devalues

relative to the dollar or the Euro, that the inflation rate in Israel may exceed such rate of devaluation of the NIS, or that the timing

of such devaluation may lag behind inflation in Israel.

In any such event, the dollar cost of our operations in Israel would increase

and our dollar-denominated results of operations would be adversely affected.

It may be difficult

to enforce a judgment of a United States court against us and our officers and directors to assert United States securities laws claims

in Israel or to serve process on our officers and directors and these experts.

Our executive office, corporate

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at the time the foreign action was brought.

Our operations may be disrupted as a result

of the obligation of management or key personnel to perform military service.

Our employees and consultants

in Israel, including members of our senior management, may be obligated to perform one month, and in some cases longer periods, of military

reserve duty until they reach the age of 40 (or older, for citizens who hold certain positions in the Israeli armed forces reserves) and,

in the event of a military conflict, may be called to active duty.

In response to increases in terrorist activity, there have been periods

of significant call-ups of military reservists.

It is possible that there will be similar large-scale military reserve duty call-ups in

Our operations could be disrupted by the absence of a significant number of our officers, directors, employees and consultants.

Such disruption could materially adversely affect our business and operations.

General Risk Factors

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resources than us, and therefore may be better positioned to take advantage of economies of scale and develop new technologies.

Undetected problems in our products could

impair our financial results and give rise to potential product liability claims.

there are defects in the design, production or testing of our products and systems, we could face substantial repair, replacement or service

costs, potential liability and damage to our reputation.

Defects or malfunctioning of our products, if they were to occur, would likely

result in significant damage and loss of life.

We may not be able to obtain product liability or other insurance to fully cover such risks,

and our efforts to implement appropriate design, testing and manufacturing processes for our products or systems may not be sufficient

to prevent such occurrences, which could have a material adverse effect on our business, results of operations and financial condition.

Undetected defects or malfunctions in our

products could impair our financial results, harm our reputation and expose us to significant product liability claims that may not be

adequately covered by insurance.

Our products and systems are

complex and may contain undetected defects in design, production or testing.

If such defects or malfunctions were to occur, we could incur

substantial repair, replacement or service costs, suffer reputational harm and experience delays or disruptions in our operations.

addition, defects or malfunctions in our products could result in serious injury, loss of life or other adverse effects, which could expose

us to significant product liability claims.

We may not be able to obtain or maintain product liability or other insurance at reasonable

cost or on acceptable terms, or such insurance may not fully cover all potential liabilities.

Even where insurance coverage is available,

it may be subject to coverage limits, exclusions or deductibles that could leave us exposed to substantial uninsured losses.

Any significant

product liability claims, increased insurance costs or uninsured liabilities could materially and adversely affect our business, results

of operations and financial condition.

Our business depends on proprietary technology

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may be limited because:

● intellectual property laws in

certain jurisdictions may be relatively ineffective;

● detecting infringements and

enforcing proprietary rights may divert management’s attention and company resources;

● contractual measures such as

non-disclosure agreements and confidentiality provisions may afford only limited protection;

● any patents we may receive will

expire, thus providing competitors access to the applicable technology;

● competitors may independently

develop products that are substantially equivalent or superior to our products or circumvent our intellectual property rights;

● competitors may register patents

in technologies relevant to our business areas;

intellectual property laws in certain jurisdictions may be relatively ineffective;

detecting infringements and enforcing proprietary rights may divert management’s attention and company resources;

contractual measures such as non-disclosure agreements and confidentiality provisions may afford only limited protection;

any patents we may receive will expire, thus providing competitors access to the applicable technology;

competitors may independently develop products that are substantially equivalent or superior to our products or circumvent our intellectual property rights;

competitors may register patents in technologies relevant to our business areas.

In addition, various parties

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We do not maintain key person life insurance for any of our employees.

Our management team may not be able to successfully

implement our business strategies.

Our management team may not be able to successfully implement

our business strategies.

If our management team is

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and experience.

Significant disruptions of our information

technology systems or breaches of our data security could adversely affect our business.

A significant invasion, interruption,

destruction or breakdown of our information technology systems and/or infrastructure by persons with authorized or unauthorized access

could negatively impact our business and operations.

We could also experience business interruption, information theft and/or reputational

damage from cyber-attacks, which may compromise our systems and lead to data leakage either internally or at our third-party providers.

The risk of a security breach or disruption, particularly through cyberattacks or cyber intrusion, including by computer hackers, foreign

governments, and cyber terrorists, has generally increased as the number, intensity and sophistication of attempted attacks and intrusions

from around the world have increased.

If such an event were to interrupt our operations, it could result in a material disruption of our

product development programs.

Significant disruptions of our information technology systems

or breaches of our data security could adversely affect our business.

A significant invasion, interruption, destruction

or breakdown of our information technology systems and/or infrastructure by persons with authorized or unauthorized access could negatively

impact our business and operations.

We could also experience business interruption, information theft and/or reputational damage from

cyber-attacks, which may compromise our systems and lead to data leakage either internally or at our third-party providers.

a security breach or disruption, particularly through cyberattacks or cyber intrusion, including by computer hackers, foreign governments,

and cyber terrorists, has generally increased as the number, intensity and sophistication of attempted attacks and intrusions from around

the world have increased.

If such an event were to interrupt our operations, it could result in a material disruption of our product development

Our systems have been, and are expected to continue to be, the target of malware and other cyber-attacks.

Although we have invested in measures to reduce these risks, we cannot assure that these measures will be successful in preventing compromise

and/or disruption of our information technology systems and related data.

Although we have invested

in measures to reduce these risks, we cannot assure that these measures will be successful in preventing compromise and/or disruption

of our information technology systems and related data.

“ Cybersecurity ” for more information.

A decline in the price of our common stock

could affect our ability to raise working capital and adversely impact our ability to continue operations.

A decline in the price of our common stock could affect our ability

to raise working capital and adversely impact our ability to continue operations.

A prolonged decline in the

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to raise sufficient capital in the future, we may not be able to have the resources to continue our normal operations.

The requirements of being a public company

may strain our resources and distract management.

The requirements of being a public company may strain our resources

and distract management.

As a public company, we are

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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 1A. Risk Factors