What changed in this filing

/stocks — the workspaceLOADING

Item 7. Management’s Discussion and Analysis

2026-03-12 compared with 2025-03-20 · 218 added, 130 removed, 81 unchanged (81% of the section changed)

13 unchanged sentences

We are a robotics company

developing an advanced robotics system that enables remote, real-time, pinpoint accurate firing of small arms and light weapons.

robotics system can achieve pinpoint accuracy regardless of the movement of the weapons platform or the target.

We also introduced an

insulator cleaning drone, which is a drone technology for conducting routine maintenance of critical infrastructure for cleaning electric

utility cable insulators.

On March 9, 2020, Duke and

certain shareholders of Duke entered into the Share Exchange with the Company, pursuant to which approximately 99% of the issued and outstanding

shares of common stock of Duke were purchased by the Company in exchange for shares of the Company’s common stock, resulting in

Duke becoming a subsidiary of the Company.

Following the Share Exchange, the Company has adopted the business plan of Duke.

On April 29, 2020, the Company,

Duke, and UAS Sub, entered into the Merger Agreement, pursuant to which UAS Sub was to merge, upon the satisfaction of customary closing

conditions, with and into Duke.

Upon closing of the Short-Form Merger, each outstanding share of UAS Sub’s common stock, par value

$0.0001 per share, was to be converted into and become one share of common stock of Duke, with Duke surviving as a wholly-owned subsidiary

of the Company.

Pursuant to the Merger Agreement, the Company acquired the remaining outstanding shares of Duke held by certain stockholders

of Duke that did not participate in the Share Exchange Agreement.

At the closing of the transaction contemplated by the Merger Agreement,

the Company was to issue 63,856 shares to certain Duke stockholders, and Duke will become a wholly owned subsidiary of the Company.

June 25, 2020, Duke filed a Certificate of Merger with the State of Delaware, and consequently, Duke became a wholly-owned subsidiary

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

On 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.” While the agreement

was intended to facilitate commercialization and we are aware that Elbit is marketing drone-mounted remote weapon systems, including a

system in the name of “Bird of Prey”.

We requested reports from Elbit regarding sales and royalties related to drone-mounted

remote weapon systems, as outlined in the Collaboration Agreement and it is in discussion with Elbit.

developing advanced robotics and drone-based systems.

Our advanced robotic system enables remote, real-time, pinpoint accurate firing

of small arms and light weapons that can achieve pinpoint accuracy regardless of the movement of the weapons platform or the target.

also introduced an insulator cleaning drone, which is a drone technology for conducting routine maintenance of critical infrastructure

for cleaning electric utility cable insulators.

We were founded in 2014 as

UAS LLP, and until the consummation of the Share Exchange Agreement, we were a developer and manufacturer of commercial unmanned aerial

systems, or drones, intending to provide a superior Quadrotor aerial platform at an affordable price point in the law enforcement and

first responder markets.

On March 9, 2020, we closed

on the Share Exchange Agreement under which Duke Inc.

became our majority-owned subsidiary.

Such closing date is referred to as the “Effective

Time.” As a result of the Share Exchange, the Company adopted the business plan of Duke Inc.

On April 29, 2020, we, Duke

Inc., and UAS Sub, executed an Agreement and Plan of Merger, under which UAS Sub was to merge, upon the satisfaction of customary closing

conditions, with and into Duke Inc., with Duke Inc.

surviving as our wholly-owned subsidiary.

Under the Merger Agreement, we intended

to acquire the remaining outstanding shares of Duke Inc.

held by those certain Duke Inc.

shareholders who did not participate in the Share

On June 25, 2020, Duke Inc.

filed a Certificate of Merger with the State of Delaware, and consequently, Duke Inc.

wholly-owned subsidiary and the Short-Form Merger was consummated.

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.

On February 18, 2025, we announced that we established Duke Greece, a wholly owned subsidiary, 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.

Our mailing address is 10 HaRimon Street, Mevo Carmel, Israel 3903212, and our telephone number is +972-054-5707050.

website address is https://dukeroboticsys.com.

Effective as of October 22,

2020, our common stock began to be quoted on the OTCQB tier Venture Market, under the symbol “USDR”.

Effective as of March 6, 2026, our commons stock began trading following

the Reverse Stock Split of the Company’s issued and outstanding common shares, par value $0.0001 per share at a ratio of 25-for-1,

under a new CUSIP Number 90344820 and under the symbol DUKRD for 20 trading days, in accordance with OTC Marketplace

On January 29, 2021, we, through

Duke Airborne Systems Ltd.

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

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

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.

will be entitled to a commission fee, in the mid-single figure percentage range, from any proceeds resulting from our marketing activities,

in addition to the royalties we are entitled to receive as part of the Collaboration Agreement.

On 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.

Following that successful pilot, in August 2024, we, through Duke Israel, entered into

an agreement with the IEC to provide high-voltage insulator washing services using IC Drone system.

October 28, 2024, a Certificate of Amendment to our Articles of Incorporation with the Nevada Secretary of State to change the Company’s

corporate name from UAS Drone Corp.

introduced the IC Drone, a drone technology for conducting routine maintenance of critical infrastructure and signed an agreement with

IEC to provide drone-enabled systems for cleaning electric utility cable insulators.

During October 2023, we completed our obligations

under the agreement with the IEC.

This was followed in August 2024, by a new agreement with the IEC to utilize our innovative IC Drone

system for cleaning electric utility cable insulators.

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.

On October 28, 2024, we filed

a Certificate of Amendment to our Articles of Incorporation with the Nevada Secretary of State to change the Company’s corporate

name from UAS Drone Corp.

to DUKE Robotics Corp.

effective as of November 4, 2024.

connection with the Certificate of Amendment, we also filed an issuer notification form with FINRA reflecting our name change and requesting

a change in its trading symbol from “USDR” to “DUKR”.

Effective as of market open on Monday, November 4, 2024,

the name changed to DUKE Robotics Corp.

and the transition of its OTCQB ticker symbol from “USDR” to “DUKR” took

On February 18, 2025, we announced

that we established Duke Greece, a wholly owned subsidiary which is focused on expanding our innovative IC Drone technology in Greece.

Our innovative IC Drone technology provides utility companies with a safer, more efficient, and environmentally sustainable solution for

maintaining high-voltage electric infrastructure as well as potential other applications of our technologies and capabilities.

The subsidiary

is expected to facilitate market expansion, strategic partnerships, and additional revenue streams in Greece.

While we anticipate initial

setup and operational costs, we believe this investment will drive long-term growth.

In connection with the Certificate

of Amendment, we also filed an issuer notification form with FINRA reflecting our name change and requesting a change in our trading symbol

from “USDR” to “DUKR”.

Effective as of market open on Monday, November 4, 2024, the name changed to DUKE Robotics

and the transition of our OTCQB ticker symbol from “USDR” to “DUKR” took effect.

On October 15, 2025, we filed

a certificate of amendment to our Articles of Incorporation with the Nevada Secretary of State to increase our authorized common stock

from 100,000,000 shares of common stock, $0.0001 par value per share, to 350,000,000 shares of common stock, $0.0001 par value

per share, and permit the issuance of up to 10,000,000 shares of blank-check preferred stock, effective as of October 15,

In February 2026, we announced

the introduction of AEROTRACE™, an aerial monitoring and intelligence solution integrating a combination of capabilities and developments

in the fields of hardware, sensors, software and artificial intelligence (“AI”), including through collaboration with other

parties, designed to support infrastructure operators in assessing asset conditions and enhancing situational awareness.

integrates aerial data capture with software-driven analytics, including AI-assisted image analysis, to help identify areas of interest

and potential anomalies across large-scale and distributed infrastructure assets.

AEROTRACE™ is designed to be deployed as a standalone

monitoring solution and may also complement our existing robotic IC Drone services by informing maintenance planning and prioritization.

The introduction of AEROTRACE™ reflects our ongoing efforts to expand its technology portfolio beyond robotic hardware to include

data- and intelligence-driven solutions.

Operating Results

9 unchanged sentences

Operating loss

Financial income, net

Financial income (expenses), net

Other comprehensive gain (loss) - Foreign currency translation adjustments

Comprehensive loss

Comparison of the year ended December 31,

3 unchanged sentences

During the year ended December 31, 2024, we had $108,000 in revenues.

revenues for the year ended December 31, 2023 were derived from our earlier August 2022 collaboration and development agreement

with IEC to provide drone-enabled systems for high-voltage insulator washing , which we successfully

completed during October 2023.

The revenues for the year ended December 31, 2024, were derived from our August 2024 commercial

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

These services to IEC are seasonal in their nature (spring to fall

seasons) and revenues derived from the 2024 agreement commenced during the mid-season, in August 2024.

in revenue was primarily attributable to the expansion of our IC Drone service operations, following the successful launch of the full

cleaning season in May 2025.

During 2024, the Company commenced its cleaning operations midway through the season, which limited revenue

generation for that period.

The increase in revenue was partially offset by temporary disruptions to our regular business operations

during the third quarter of 2025, resulting from the ongoing military operations in the Gaza Strip.

Revenues also reflect the initial

recognition of revenues from royalties derived from sales of the “Bird of Prey” stabilized weapons drone systems, through

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

the year ended December 31, 2025 continued to be generated from our IC Drone service activities.

Cost of revenues .

During the year ended December 31, 2024, we had $71,000 in cost of

revenues expenses, compared to $273,000 for the year ended December 31, 2023.

The cost of revenues in 2024 mainly consists of professional

services associated with our agreements with the IEC as detailed above.

The cost of revenues for

the year ended December 31, 2023 were derived from our earlier August 2022 collaboration and development agreement

with IEC to provide drone-enabled systems for high-voltage insulator washing , which we successfully

completed during October 2023.

The cost of revenues for the year ended December 31, 2024, were derived from our August 2024 commercial

agreement for high-voltage insulator washing services with the IEC commenced during in August 2024.

the year ended December 31, 2025, we had $198,000 in cost of revenues expenses, compared to $71,000 for the year ended December 31, 2024.

The cost of revenues mainly consists of operational expenses associated with our agreements with the IEC as detailed above.

in cost of revenues was primarily attributed to the growth in our IC Drone service activities.

Research and Development .

1 unchanged sentence

expenses for the year ended December 31, 2024.

The increase in our research and development are mainly due to professional services and

other field tests associated with our continued development of additional capabilities of our IC Drone system.

The decrease in our research and development expenses are mainly due to allocating more

resources to the execution of our IC Drone insulator service activities, and less to development activities.

General and Administrative

For the year ended December 31, 2024, our general and administrative expenses amounted to $905,000, of which $685,000 were

related to professional services, such as accounting, auditing, insurance costs, consulting and legal services, and $28,000 were related

to stock-based compensation expenses, and were $826,000 for the year ended December 31, 2023, of which $575,000 were related to professional

services and $108,000 related to stock-based compensation expenses.

This increase in general and administrative expenses for the year

ended December 31, 2024, was mainly due to an increase in professional services partially offset by a decrease in stock-based compensation

Financial Income, net .

For the year ended December 31, 2024, our financial income amounted to $40,000 as compared to $76,000 for the year ended December 31,

The reason for the decrease in financial income for the year ended December 31, 2024, was mainly due to the decrease in our available

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

ended December 31, 2024 and 2023, we recorded a net loss of $985,000 and $726,000, respectively, which represented an increase compared

to the year ended December 31, 2024, of $259,000.

For the year ended December 31, 2025, our general and administrative

expenses amounted to $1,281,000, of which $871,000 were related to professional services, such as accounting, auditing, insurance costs,

consulting and legal services, and $224,000 were related to stock-based compensation expenses, and were $905,000 for the year ended December

31, 2024, of which $686,000 were related to professional services and $28,000 related to stock-based compensation expenses.

This increase

in general and administrative expenses for the year ended December 31, 2025, was mainly due to an increase in professional services attributable

to our expansion in Greece activities and officer compensation expenses, as well as in stock-based compensation expenses, attributable

to equity awards granted in March 2025.

Financial Income (expenses),

For the year ended December 31, 2025, our financial expenses amounted to $25,000 as compared to financial income of $40,000 for

the year ended December 31, 2024.

The reason for the increase in financial expenses for the year ended December 31, 2025, was mainly due

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

ended December 31, 2025 and 2024, we recorded a net loss of $1,241,000 and $985,000, respectively, which represented an increase of $256,000

in 2025 compared to 2024.

Critical Accounting Policies

3 unchanged sentences

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

of our financial statements, we are 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.

7 unchanged sentences

Our significant accounting

policies are discussed in Note 2, “ Summary of Significant Accounting Policies ,” of the notes to consolidated financial

statement, which are incorporated by reference into this prospectus.

policies and estimates are discussed in Note 2, “Summary of Significant Accounting Policies,” and “ Use of Estimates

in the preparation of financial statements ” of the notes to consolidated financial statement, which are incorporated by reference

into this annual report.

Liquidity and Capital Resources

Since inception, we have devoted

substantially all our efforts to research and development and have incurred accumulated losses of $11,162,000.

During the year ended December 31, 2024, our loss of $985,000 included

non-cash stock-based compensation of $28,000.

As of December 31, 2024, we had a working capital of $1,010,000 as compared to a working

capital of $2,011,000 as of December 31, 2023.

substantially most our efforts to research and development and have incurred accumulated losses of $12,403,000.

During the year ended December

31, 2025, our loss of $1,241,000 included non-cash stock-based compensation of $224,000.

As of December 31, 2025, we had a working capital

of $151,000 as compared to a working capital of $1,010,000 as of December 31, 2024.

As of December 31, 2025, we had a cash balance

1 unchanged sentence

The reason for the decrease in our cash balance was mainly

due to the operating expenses describe above .

due to operating expenses described above.

This balance excludes $275,000 received in January 2026 under our December 30, 2025, Securities

Purchase Agreement.

Cash used in operations for

the year ended December 31, 2025, was $811,000 as compared to cash used in operations of $918,000 for the year ended December 31, 2024.

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

operating expenses .

The reason for the decrease in cash used in operations is mainly related to increase in trade receivable and other liabilities.

Since our inception we and

16 unchanged sentences

December 31, 2024, the outstanding balances of such stockholders’ loans were $330,000 and $322,000, respectively.

On May 11, 2021, we entered

into securities purchase agreements with eight (8) non-U.S.

Investors, pursuant to which we, in a private placement offering, agreed to

issue and sell to investors an aggregate of:

On May 11, 2021, we entered into securities purchase agreements with

eight (8) non-U.S.

investors, pursuant to which we, in a private placement offering, agreed to issue and sell to investors an aggregate

(i) 500,000 shares of our Common Stock at a price of $10.00 per share;

and (ii) warrants

to purchase 12,500,000 of our Common Stock.

The warrants were exercisable immediately and for a term of 18 months and have an exercise

price of $0.40 per share.

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

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 to expire on November 11, 2024.

On June 20, 2024, we entered into a Warrant Amendment Agreement with the Investors

to amend the terms of the warrants issued in connection with the May 11, 2021 securities purchase agreements.

Under the Warrant Amendment

Agreement, we and the Investors agreed to:

and (ii) warrants to purchase 500,000 of our Common Stock.

The warrants were exercisable immediately and for a term of 18 months and have an exercise price of $10 per share.

The aggregate gross

proceeds from the offering were approximately $5,000,000 and the offering closed on May 11, 2021.

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 to expire on November 11,

On June 20, 2024, we entered into a Warrant Amendment Agreement with the Investors to amend the terms of the warrants issued in

connection with the May 11, 2021 securities purchase agreements.

Under the Warrant Amendment Agreement, we and the Investors agreed to:

(i) extend the warrant exercise term to May 11, 2026;

(ii) amend the warrant exercise price,

increasing it from $0.40 per share to $0.65 per share;

and (iii) include a beneficial ownership blocker that limits the exercise of such

warrants if the exercise would result in the holder beneficially owning more than 19.99% of the Company’s common stock immediately

following the exercise.

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 about Market Risk

(ii) amend the warrant exercise price, increasing it from $10.00 per share to $16.25

and (iii) include a beneficial ownership blocker that limits the exercise of such warrants if the exercise would result in

the holder beneficially owning more than 19.99% of the Company’s common stock immediately following the exercise.

On March 10, 2026,

we entered into an additional Warrant Amendment Agreement with the Investors pursuant to which we extended the term of the warrants, to

expire on May 1, 2031.

On December 30, 2025, we entered into securities purchase agreements

with seven (7) non-U.S.

investors, pursuant to which we, in a private placement offering, agreed to issue and sell to the investors an

aggregate of:

(i) 83,338 shares of our common stock at a price of $9.00 per share);

and (ii) warrants to purchase 83,338 shares

of common stock.

The warrants have an exercise price of $16.25 per share, are exercisable immediately and expire on November 30, 2026,

subject to extension to May 30, 2028 if a public offering or other qualifying financing of at least $2,500,000 has not occurred prior

to such date.

In addition, the securities purchase agreement contains a make whole provision that provides for the investors to receive

additional shares of Common Stock in the event that we consummates a firm-commitment underwritten public offering on a major stock exchange

by November 30, 2026 at a price per share (after giving effect to a 20% discount) that is less than the Purchase Price.

The aggregate

gross proceeds from the offering were approximately $750,000 and the offering closed on January 6, 2026.

Proceeds from the offering were

used for general corporate purposes and working capital, including supporting our operational and commercialization initiatives.

10, 2026, we entered into an additional Warrant Amendment Agreement with the Investors pursuant to which we extended the term of the warrants,

to expire on May 1, 2031.

Since our incorporation, we

incurred losses from operations and net cash outflows from operating activities as reflected in the consolidated statements of operations

and cash flows.

As of December 31, 2025, we had an accumulated deficit of $12,403,000, and we expect to incur losses for the foreseeable

We have historically financed our operations primarily through fundraising from various investors and the revenues that were generated

from our operations to date were not sufficient to cover our losses.

As a result, we remain dependent upon external sources to finance

our operations.

There can be no assurance that we will succeed in obtaining the necessary financing to continue our operations.

factors raise substantial doubt about our ability to continue as a going concern through at least twelve months from the date of this

Annual Report.

We currently believe that

our existing capital resources will be sufficient to support our operating plan at least through the fourth quarter of 2026.

our planned growth, strategic initiatives and general working capital needs, we will likely seek to raise additional capital through the

issuance of debt, equity, or a combination thereof.

There can be no assurance we will be successful in raising additional capital on favorable

terms, or at all.

Although we are actively pursuing

opportunities to increase revenues, including the potential expansion of commercial sales in additional jurisdictions, some of these efforts

remain at an early stage while other initiatives have progressed to more advanced stages of discussion.

However, because none of these

initiatives have resulted in binding agreements or firm commitments, there can be no assurance that any of them will materialize within

our expected timeframes.

If we are unable to successfully proceed with these initiatives, our need for additional capital may accelerate.

As a result, there is substantial

doubt about our ability to continue as a going concern.

If we are unable to obtain sufficient amounts of additional capital, we may be

required to reduce the scope of our operations, delay or discontinue development activities, limit our manufacturing or commercial expansion

plans, or take other actions that could materially harm our business, financial condition, and operating results.

If we obtain additional

funds by selling any of our equity, the percentage ownership of our stockholders will be reduced, stockholders may experience additional

dilution, or the equity securities may have rights preferences or privileges senior to the common stock.

If we issue debt securities,

there may be negative covenants which may restrict our company’s activities.

If adequate funds are not available to our company

when needed on satisfactory terms, we may be required to cease operating or otherwise modify our business strategy.

The financial statements

included in this Annual Report do not include adjustments for measurement or presentation of assets and liabilities, which may be required

should we fail to operate as a going concern.

Quantitative and Qualitative Disclosure about Market Risk

Not applicable to smaller

reporting companies.

Financial Statements and Supplementary

All information required by

this item is included in Item 15 of Part IV of this Annual Report and is incorporated into this item by reference.

Changes in and Disagreements with Accountants

on Accounting and Financial Disclosure

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