DUKE Robotics Corp. 10-K

Item 9A. Controls and Procedures Evaluation of Disclosure Controls and Procedures We maintain disclosure controls and procedures that are designed to ensure that information we are required to disclose in the reports that we file or submit under the Exchange Act, such as this Annual Report, is recorded, processed, summarized and reported within the time periods specified by SEC rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information we are required to disclose in the reports that we file or submit under the Exchange Act is accumulated and communicated to our management, including the CEO and the CFO, to allow timely decisions regarding required disclosure. Our management, with the participation of our CEO and CFO, as in place as of December 31, 2025, evaluated, the effectiveness of our disclosure controls and procedures as of December 31, 2025, pursuant to paragraph (b) of Rules 13a-15 and 15d-15(e) under the Exchange Act. This evaluation included a review of the controls’ objectives and design, the operation of the controls, and the effect of the controls on the information presented in this Annual Report. Our management, including the CEO and CFO, do not expect that disclosure controls can or will prevent or detect all errors and all fraud, if any. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is accumulated and communicated to management, including our CEO and CFO, or persons performing similar functions, as appropriate, to allow timely decisions regarding required disclosure. Also, the projection of any evaluation of the disclosure controls and procedures to future periods is subject to the risk that the disclosure controls and procedures may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Based on their review and evaluation, and subject to the inherent limitations described above, our CEO and CFO concluded that our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) were effective as of December 31, 2025, at the above-described reasonable assurance level. 29 Internal Control over Financial Reporting Management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. Our internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America. Because of inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Therefore, even internal controls determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. The effectiveness of our internal control over financial reporting is subject to various inherent limitations, including cost limitations, judgments used in decision making, assumptions about the likelihood of future events, the possibility of human error, and the risk of fraud. The projection of any evaluation of effectiveness to future periods is subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with policies may deteriorate. Because of these limitations, there can be no assurance that any system of internal control over financial reporting will be successful in preventing all errors or fraud or in making all material information known in a timely manner to the appropriate levels of management. This Annual Report does not include an attestation report of the Company’s registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by the company’s registered public accounting firm pursuant to rules of the Commission that exempt from this requirement issuers that are neither accelerated filers nor large accelerated filers. Changes in Internal Control over Financial Reporting On March 18, 2025, the Board of directors elected an additional independent director (as defined under Nasdaq Listing Rules) to the board of directors. On April 6, 2025, our Board of Directors approved the establishment of an Audit Committee of the Board of Directors that will assist the board of directors in overseeing our compliance with legal and regulatory requirements, as well as a Compensation Committee of the Board of Directors. In addition, the Company designed and implemented additional controls and procedures such that together with the additional director and committees remediated the material weaknesses by enhancing our segregation of duties and improving our internal control over financial reporting. Management’s Report on Internal Control over Financial Reporting Under the supervision and with the participation of the Company’s management, including our principal executive officer and principal financial officer, we assessed the effectiveness of our internal control over financial reporting as of December 31, 2025. In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO - 2013) in Internal Control - Integrated Framework. Based on this assessment, management, as in place as of December 31, 2025, determined that the Company’s internal control over financial reporting as of December 31, 2025, was effective. Item 9B. Other Information On May 27, 2021, our board of directors approved the 2021 Plan pursuant to which the Company may issue awards, from time to time, consisting of non-qualified stock options, restricted stock grants and restricted stock units. In addition, stock option awards that qualify under Section 102 of the Israeli Tax Ordinance (New Version) 1961 (the “ITO”), and/or under Section 3(i) of the ITO, may be granted. On March 10, 2026, the board of directors approved the following grants: (i) options to purchase 16,000 shares of our common stock to each of Yossef Balucka, our Chief Executive Officer, and Erez Nachtomy, our Vice Chairman; (ii) options to purchase 10,000 shares of our common stock to Shlomi Zakai, our Chief Financial Officer; and (iii) options to purchase 4,000 shares of our common stock to each of Vadim Maor, our Chief Technology Officer, Eran Antebi, a member of our board of directors, and Keren Gousman, a member of our board of directors. Each of the aformentioned options have an exercise price of $7.88 per share, a term of six (6) years from issuance and vest over a three (3) year period, with one third vesting on each of the first three anniversaries of the dates of grant. On March 9, 2026, Mr. Sagiv Aharon resigned from the Board of Directors, effective as of such date. Mr. Aharon’s resignation did not result from any disagreement with the Company on any matter relating to the Company’s operations, policies or practices. Effective March 10, 2026, Mr. Aharon will sit on our Advisory Board and we have entered into a consulting agreement with him and have agreed to pay him a fee of $5,000 per month. On March 10, 2026, our board of directors approved the appointments of Mr. Yehoshua Abramovich and Mr. Ran Ben Yehuda to our Advisory Board, and we have entered into consulting agreements with each of them, effective February 1, 2026, and have agreed to grant them options to purchase 16,000 shares of our common stock and pay each of them a fee of $4,000 per month. Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections None. 30 PART III Item 10. Directors, Executive Officers, and Corporate Governance. Our directors and executive officer and their ages as of March 12, 2026, are as follows: Name Age Position Yariv Alroy 65 Chairman of the Board of Directors Yossef Balucka 57 Chief Executive Officer and President Erez Nachtomy 64 Vice Chairman Eran Antebi 55 Director Keren Gousman Golan 50 Director Shlomo Zakai 56 Chief Financial Officer Vadim Maor 54 Chief Technology Officer Yariv Alroy , Director and Chairman. Mr. Alroy has been serving as a Director and Chairman since March 10, 2020. Mr. Yariv Alroy is the Managing Director of T.N.S.A Consulting and Management LTD., a private consulting services and investments firm. From 1989 to 1993 Mr. Alroy worked for an Israeli law firm, with his last position as a partner. From 1993 to 1997, Mr. Alroy served as COO of SHAHAL Medical Services, and from 1997 to 2000 as Managing Director of SHL International Ltd. From 2000 until January 2016 Mr. Alroy served as Co-CEO of SHL Telemedicine LTD a company in the field of medical technology development and provision of global telemedicine services, including in the United States, Germany, India, Japan and Israel, traded in the Swiss Stock exchange (SWX:SHLTN). From December 2018 to August 2024 Mr. Alroy also served as member of the board of directors and Chairman of SHL Telemedicine. Yariv Alroy holds an LL.B from Tel Aviv University, Israel. Mr. Alroy was selected to serve as Director and Chairman of our Board because of his senior leadership experience in global operations, publicly traded companies and capital markets, as well as his legal background, which the Board believes positions him to provide strategic oversight and corporate governance leadership. Yossef Balucka , CEO and President. Mr. Yossef Balucka has been serving as CEO and President of our Company, Duke and Duke Israel since March 2021. Prior to entering the private sector, Mr. Balucka served for twenty-five years in various field and headquarters positions in the Israeli Navy and retired as Colonel. Following his retirement from the Israeli Navy, between 2014 to 2016, Mr. Balucka served as a senior executive and management member for retail and customer service at Partner Communications Ltd. (TASE:PTNR), one of the leading mobile telecommunications companies in Israel. From 2017 to 2019 Mr. Balucka served as the CEO of Electra Technologies Ltd., a division of Electra Ltd. (TASE:ELTR), which is active in the fields of integrated electro-mechanical and construction. Since 2019 Mr. Balucka is the owner of T.R. Eshkolot Com Services Ltd., providing global strategic consulting services. Mr. Balucka holds a BA in Economics and Business Administration and an MA in Social Sciences from the Haifa University, and MA in Public Administration from the Bar Ilan University. Erez Nachtomy , Director, Vice Chairman of the Board. Mr. Nachtomy has been serving as a Director and Vice Chairman of the Board since March 10, 2020. Mr. Erez Nachtomy is the Managing Director of Ermi Nachtomy Assets Ltd., a private consulting services and investments firm. From May 2020 until September 2024 Mr. Nachtomy served as CEO of SHL Telemedicine Ltd. (SWX:SHLTN). From 1989 until 2001, Mr. Nachtomy practiced law as an associate in one of the leading law firms in Israel, becoming a partner in the firm in 1994 and later on promoted to a senior partner. In March 2001, Mr. Nachtomy joined the executive team of SHL Telemedicine Ltd. (SWX:SHLTN), as Vice President, and from January 2005 to December 2016 he served as Executive Vice President. SHL Telemedicine Ltd. is active in the field of medical technology development and provision of global telemedicine services, including in the United States, Germany, India and Japan. From December 2018 to February 2024 Mr. Nachtomy also served as Member of the Board of SHL Telemedicine. Mr. Nachtomy holds an LL.B. from Tel Aviv University, Israel. Mr. Nachtomy was selected to serve as Director and Vice Chairman of our Board because of his managerial and board-level experience and his expertise in strategic matters and publicly traded companies, which the Board believes strengthens its oversight of operations, capital markets matters and corporate strategy. Eran Antebi , Director. Mr. Antebi has been serving as a Director since March 10, 2020. Mr. Antebi is the Senior Finance Director, Global End to End Surgery Supply Chain at Johnson & Johnson. From 2017 to 2022 he served as Finance Director Biosurgery Supply Chain at Johnson & Johnson. Prior to that he was CFO of SHL Telemedicine Ltd. (SWX:SHLTN) since 2008. Mr. Antebi joined SHL in May 2004 as CFO of Shahal Israel. Prior to joining SHL, from 2000 to 2004, Mr. Antebi was a manager with Ernst & Young in Israel. Mr. Antebi is a certified public accountant (CPA) in Israel and holds a B.A. in Accounting and Economics from Tel Aviv University, Israel. Mr. Antebi was selected to serve on our Board because of his relevant financial experience and qualifications, including his expertise in areas the Board believes are important to the Company’s technology, product development and defense-related markets and operations. 31 Keren Gousman Golan. Director. Ms. Gousman has been serving as a Director since March 18, 2025. Ms. Gousman has 25 years of extensive experience in managing operations and multi-disciplinary task teams. Until 2022 Ms. Gousman served as Head of the Field Unit at the Israeli Prime Minister Office. Following retirement from the Israeli Prime Minister Office and until 2024 she served as CEO of AIRNETTRESS, a baby mattress company that markets and sells the “numu® air™”. In 2024 she served as sales and business development executive for BARIKS, a company that developed portable and foldable oxygen pressure chamber for Hyperbaric Oxygen Therapy (HBOT). Ms. Gousman holds dual-major B.A., from Faculty of Social Sciences from the Tel Aviv University and M.B.A in Business Administration, specializing in Strategy and Business Entrepreneurship from the Ono Academic College. Ms. Gousman Golan was selected to serve on our Board because of her relevant business and leadership experience and her contributions to Board oversight, including as a member of our independent committees. Shlomo Zakai , Chief Financial Officer. Mr. Zakai brings extensive and proven experience in similar positions with companies operating in international markets and related industries. Prior to joining the Company Mr. Zakai served as the Chief Financial Officer of Save Foods, Inc. (OTC:SAFO) (August 2017 to December 2021. Prior to that, Mr Zakai worked as an accountant for nine years at Kost, Forer, Gabbay & Kasierer, an independent registered public accounting firm and a member firm of Ernst & Young Global, where he last served as a Senior Manager and worked with technology companies publicly traded on the Nasdaq Stock Market and on the Tel Aviv Stock Exchange. Mr. Zakai holds a B.A. in accounting from the College of Management in Rishon Le’Zion, Israel. Vadim Maor, Chief Technology Officer . Mr. Maor was appointed as CTO of our Company, Duke and Duke Israel on March 18, 2025. Prior to that he provided research and development (“R&D”) services to the Company during 2024. Mr. Maor is an experienced head of R&D and technology operations in the computer software industry, possessing strong professional skills in product and technology development (IT & SaaS) and enterprise architecture design. Since 2019 Mr. Maor has been the CEO of OSYM Technologies Ltd., a private technology consulting and services company. Between 2011 to 2018 he has been co-founder and CEO of WiseSec, a private company that developed advanced mobile platform micro-location solutions. From 2001 to 2010 Mr. Maor was a director at Rafael Advanced Defense Systems, and prior to that he worked at the MOD - Israeli Ministry of Defense and at IMI - Israeli Military Industries. Mr. Moar holds a B.A. in Near and Middle Eastern Studies from the Hebrew University of Jerusalem, Israel. There are no arrangements or understandings between any of our directors or executive officers and any other person pursuant to which such director or executive officer was selected as a director or officer. Family Relationship There is no family relationship among the directors and officers of the Company. Involvement in Certain Legal Proceedings Over the past ten (10) years, none of our directors or our executive officer have been (i) involved in any petition under Federal bankruptcy laws or any state insolvency law, (ii) convicted in a criminal proceeding or is a named subject of a pending criminal proceeding (excluding traffic violations and other minor offenses), (iii) subject of any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining him from (a) acting as a future’s commission merchant, introducing broker, commodity trading advisor, commodity pool operator, floor broker, leverage transaction merchant, any other person regulated by the Commodity Futures Trading Commission, or an associated person of any of the foregoing, or as an investment adviser, underwriter, broker or dealer in securities, or as an affiliated person, director or employee of any investment company, bank, savings and loan association or insurance company, or engaging in or continuing any conduct or practice in connection with such activity, (b) engaging in any type of business practice, or (c) engaging in any activity in connection with the purchase or sale of any security or commodity or in connection with any violation of Federal or State securities laws or Federal commodities laws, or (d) subject of any order, judgment or decree, not subsequently reversed, suspended or vacated, of any Federal or State authority barring, suspending or otherwise limiting for more than 60 days the right to engage in any activity described in (iii)(a), (iv) found by a court of competent jurisdiction in a civil action or by the U.S. Securities and Exchange Commission (the “SEC”) to have violated any Federal or State securities law, and the judgment in such civil action or finding by the SEC has not been subsequently reversed, suspended, or vacated, (v) found by a court of competent jurisdiction in a civil action or by the Commodity Futures Trading Commission to have violated any Federal commodities law, and the judgment in such civil action or finding by the Commodity Futures Trading Commission has not been subsequently reversed, suspended or vacated. (vi) subject of, or a party to, any Federal or State judicial or administrative order, judgment, decree, or finding, not subsequently reversed, suspended or vacated, relating to an alleged violation of (a) any Federal or State securities or commodities law or regulation, (b) any law or regulation respecting financial institutions or insurance companies, or (c) any law or regulation prohibiting mail or wire fraud or fraud in connection with any business entity, or (vii) the subject of, or a party to, any sanction or order, not subsequently reversed, suspended or vacated, of any self-regulatory organization (as defined in Section 3(a)(26) of the Exchange Act (15 U.S.C. 78c(a)(26))), any registered entity (as defined in Section 1(a)(29) of the Commodity Exchange Act (7 U.S.C. 1(a)(29))), or any equivalent exchange, association, entity or organization that has disciplinary authority over its members or persons associated with a member. Except as set forth in our discussion below in “Transactions with Related Persons; Promoters and Certain Control Persons; Director Independence,” none of our directors, director nominees or executive officers has been involved in any transactions with us or any of our directors, executive officers, affiliates or associates which are required to be disclosed pursuant to the rules and regulations of the SEC. 32 CORPORATE GOVERNANCE Code of Ethics We uphold a set of basic values to guide our actions and are committed to maintaining the highest standards of business conduct and corporate governance. Effective March 9, 2020, we adopted an Amended and Restated Code of Business Conduct and Ethics for directors, officers (including our principal executive officer and principal financial officer) and employees, which, in conjunction with our Certificate of Incorporation, and Bylaws, as amended (the “Bylaws”) form the framework for governance of the Company. The Code of Ethics and Business Conduct, Bylaws and Article of Incorporation are available at our corporate offices. Stockholders may request free printed copies of these documents from: DUKE Robotics Corp. Attn: CFO 10 HaRimon Street Mevo Carmel Science and Industrial Park, Israel 2069203 Committees of the Board of Directors Our Board has established three standing committees the Audit Committee, the Compensation Committee, and the Governance and Nominating Committee. Each of these committees consist solely of independent directors. We have adopted written charters for the Audit Committee, the Compensation Committee, and the Governance and Nominating Committee, which are available on our website, www.dukeroboticsys.com. Our Board may establish other committees as it deems necessary or appropriate from time to time. Audit Committee The Audit Committee is composed of three independent directors: Eran Antebi (Chairman of the Audit Committee and the Company’s audit committee financial expert as such term is defined in Item 407(d)(5) of Regulation S-K), Keren Gousman and Erez Nachtomy. Each member of the Audit Committee is an independent director as defined by the rules of the SEC and Nasdaq. The Audit Committee has the sole authority and responsibility to select, evaluate and engage independent auditors for the Company. The Audit Committee reviews with the auditors and with the Company’s financial management all matters relating to the annual audit of the Company. The Audit Committee monitors the integrity of our financial statements, monitors the independent registered public accounting firm’s qualifications and independence, monitors the performance of our internal audit function and the auditors, and monitors our compliance with legal and regulatory requirements. The Audit Committee also meets with our auditors to review the results of their audit and review of our annual and interim financial statements. The Audit Committee meets at least on a quarterly basis to discuss with management the annual audited financial statements and quarterly financial statements and meets from time to time to discuss general corporate matters. 33 Compensation Committee The Compensation Committee is composed of three independent directors: Eran Antebi, Keren Gousman and Erez Nachtomy. Among other things, the Compensation Committee reviews, recommends and approves salaries and other compensation of the Company’s executive officers, and administers the Company’s equity incentive plans (including reviewing, recommending and approving stock option and other equity incentive grants to executive officers). The Compensation Committee meets in executive session to determine the compensation of the Chief Executive Officer of the Company. In determining the amount, form, and terms of such compensation, the Committee considers the annual performance evaluation of the Chief Executive Officer conducted by the Board in light of company goals and objectives relevant to Chief Executive Officer compensation, competitive market data pertaining to Chief Executive Officer compensation at comparable companies, and such other factors as it deems relevant, and is guided by, and seeks to promote, the best interests of the Company and its shareholders. In addition, subject to existing agreements, the Compensation Committee determines the salaries, bonuses, and other matters relating to compensation of the executive officers of the Company using similar parameters. It sets performance targets for determining periodic bonuses payable to executive officers. It also reviews and makes recommendations to the Board regarding executive and employee compensation and benefit plans and programs generally, including employee bonus and retirement plans and programs (except to the extent specifically delegated to a Board appointed committee with authority to administer a particular plan). In addition, the Compensation Committee approves the compensation of non-employee directors and reports it to the full Board. Governance and Nominating Committee The Governance and Nominating Committee consists of Eran Antebi, Keren Gousman and Erez Nachtomy, each of whom meets the independence requirements of all other applicable laws, rules and regulations governing director independence, as determined by the Board. The Governance and Nominating Committee identifies individuals qualified to become members of the Board, consistent with criteria approved by the Board; recommends to the Board the director nominees for the next annual meeting of stockholders or special meeting of stockholders at which directors are to be elected; recommends to the Board candidates to fill any vacancies on the Board; develops, recommends to the Board, and reviews the corporate governance guidelines applicable to the Company; and oversees the evaluation of the Board and management. In recommending director nominees for the next annual meeting of stockholders, the Governance and Nominating Committee ensures the Company complies with its contractual obligations, if any, governing the nomination of directors. It considers and recruits candidates to fill positions on the Board, including as a result of the removal, resignation or retirement of any director, an increase in the size of the Board or otherwise. The Committee conducts, subject to applicable law, any and all inquiries into the background and qualifications of any candidate for the Board and such candidate’s compliance with the independence and other qualification requirements established by the Committee. The Committee also recommends candidates to fill positions on committees of the Board. In selecting and recommending candidates for election to the Board or appointment to any committee of the Board, the Governance and Nominating Committee will not select nominees through mechanical application of specified criteria. Rather, the Governance and Nominating Committee will consider such factors at it deems appropriate, including, without limitation, the following: personal and professional integrity, ethics and values; experience in corporate management, such as serving as an officer or former officer of a publicly-held company; experience in the Company’s industry; experience as a board member of another publicly-held company; diversity of expertise and experience in substantive matters pertaining to the Company’s business relative to other directors of the Company; practical and mature business judgment; and composition of the Board (including its size and structure). 34 The Governance and Nominating Committee develops and recommends to the Board a policy regarding the consideration of director candidates recommended by the Company’s stockholders and procedures for submission by stockholders of director nominee recommendations. In appropriate circumstances, the Governance and Nominating Committee, in its discretion, will consider and may recommend the removal of a director, in accordance with the applicable provisions of our Articles of Incorporation, as amended, and amended bylaws. If the Company is subject to a binding obligation that requires director removal structure inconsistent with the foregoing, then the removal of a director shall be governed by such instrument. The Governance and Nominating Committee oversees the evaluation of the Board and management. It also develops and recommends to the Board a set of corporate governance guidelines applicable to the Company, which the Governance and Nominating Committee shall periodically review and revise as appropriate. In discharging its oversight role, the Governance and Nominating Committee will be empowered to investigate any matter brought to its attention. Nominees to the Board of Directors During the Company’s 2025 fiscal year, there were no material changes to the procedures by which security holders may recommend nominees to the board of directors. Insider Trading Policy We have adopted an insider trading policy (the “Policy”) governing the purchase, sale and other transactions in our securities that applies to our directors, executive officers, employees, and other covered persons, including immediate family members and entities controlled by any of the foregoing persons, as well as by the Company itself. The Policy prohibits, among other things, insider trading and certain speculative transactions in our securities (including short sales, buying put and selling call options and other hedging or derivative transactions in our securities) and establishes a regular blackout period schedule during which directors, executive officers, employees, and other covered persons may not trade in the Company’s securities, as well as certain pre-clearance procedures that directors and executive officers must observe prior to effecting any transaction in our securities. We believe that the Policy is reasonably designed to promote compliance with insider trading laws, rules and regulations, and listing standards applicable to us. A copy of the Policy is filed as Exhibit 19.1 to this Form 10-K. 35 Item 11. Executive Compensation. Summary Compensation Table The following sets forth the compensation of our Chief Executive Officer during fiscal 2025, and the other persons who served as executive officers during the Company’s fiscal year ended December 31, 2025. Unless otherwise noted, the amounts shown represent what was earned in the Company’s fiscal year ended December 31, 2025. SUMMARY COMPENSATION TABLE - FISCAL YEAR ENDED DECEMBER 31, 2025 Name and principal position Year Salary ($) Bonus ($) Stock awards ($) Option awards ($) Non-equity incentive plan compensation ($) Change in Pension Value and Nonqualified deferred compensation earnings ($) All other compensation ($) Total ($) Yossef Bakula - 2024 110,549 31,830 0 3,149 0 0 0 145,528 CEO 2025 140,107 0 0 103,426 0 0 0 243,533 Shlomo Zakai - 2024 22,957 0 0 793 0 0 0 23,750 CFO 2025 48,784 0 0 5,171 0 0 0 53,955 Restricted Stock Awards There were no shares of restricted stock awarded during the Company’s fiscal year ended December 31, 2025. OUTSTANDING EQUITY AWARDS AT DECEMBER 31, 2025 Outstanding Equity Awards at Fiscal Year End There are no outstanding equity awards for the year ended December 31, 2025 except as disclosed below. Grants of Plan-Based Awards for 2025 The following table presents the outstanding equity awards held as of December 31, 2025 by our named executive officers and directors, all of which have been issued pursuant to our 2021 Equity Compensation Plan, or the 2021 Plan: Name Number of shares that have not vested (#) Market value of shares that have not vested ($) Equity incentive plan awards: Number of shares that have not vested (#) Equity incentive plan awards: Market value of shares that have not vested ($) Yossef Bakula - - - - Erez Nachtomy - - - - Eran Antebi - - - - Sagiv Aharon - - - - Shlomo Zakai - - - - 36 Pension Benefits We have no arrangements or plans, except for those we are obligated to maintain pursuant to the Israeli law, under which we provide pension, retirement or similar benefits for directors or executive officers. Our directors and executive officers may receive share options or restricted shares at the discretion of our Board in the future. Nonqualified Deferred Compensation The Company does not have a Deferred Compensation Plan for its executive officers. Other Potential Post-Employment Payments As of December 31, 2025, there were no named executives with employment contracts that require or required severance or other post-employment payments. Summary Information about Equity Compensation Plans Equity Compensation Plan Information On May 27, 2021, our Board of Directors approved the 2021 Plan, pursuant to which we may issue awards, from time to time, consisting of non-qualified stock options, restricted stock grants and restricted stock units (“RSUs”). In addition, stock option awards that qualify under Section 102 of the Israeli Tax Ordinance (New Version) 1961 (the “ITO”), and/or under Section 3(i) of the ITO, may be granted. A summary of the 2021 Plan is found below. Under the 2021 Plan, options, restricted share and RSUs may be granted to our officers, directors, employees and consultants or the officers, directors, employees and consultants of our subsidiary. On March 18, 2025, our board of directors approved an increase in the amount of shares of Common Stock available under the 2021 Plan from 192,000 to 360,000. On March 10, 2026, the board approved an increase in the number of shares available under the plan from 360,000 to 440,000 shares, and also approved to adjust the number of shares under the 2021 Equity Incentive Plan and the numbers of options and per-option exercise price of the options that were already granted according to the Reverse Stock Split ratio of 25:1. To the extent that an award lapses or is forfeited, the shares subject to such Award will again become available for grant under the terms of the 2021 Plan. We do not have any formal policy that requires the Company to grant, or avoid granting, equity-based compensation at certain times. We do not grant equity awards in anticipation of the release of material nonpublic information that is likely to result in changes to the price of our common stock, and do not time the public release of such information based on award grant dates. The timing of any equity grants to executive officers or directors in connection with new hires, promotions, or other non-routine grants is tied to the event giving rise to the award (such as an executive officer’s commencement of employment or promotion effective date). On March 10, 2026, our board of directors approved the following grants: (i) options to purchase 16,000 shares of our common stock to each of Yossef Balucka, our Chief Executive Officer, and Erez Nachtomy, our Vice Chairman; (ii) options to purchase 10,000 shares of our common stock to Shlomi Zakai, our Chief Financial Officer; and (iii) options to purchase 4,000 shares of our common stock to each of Vadim Maor, our Chief Technology Officer, Eran Antebi, a member of our board of directors, and Keren Gousman, a member of our board of directors. Each of the aformentioned options have an exercise price of $7.88 per share, a term of six (6) years from issuance and vest over a three (3) year period, with one third vesting on each of the first three anniversaries of the dates of grant. The following table summarizes certain information regarding our equity compensation plans as of December 31, 2025: Plan Category Number of securities to be issued upon exercise of outstanding options Weighted- average exercise price of outstanding options Number of securities remaining available for future issuance under equity compensation plans Equity compensation plan not approved by security holders 179,876 20.33 180,124 No Loans for Option Exercises. It is our policy to not make loans to employees or officers for the purpose of paying for the exercise of stock options. 37 Director Compensation We reimburse directors for out-of-pocket expenses they incur when attending meetings of the board of directors. On April 12, 2020, effective as of March 1, 2020, our board of directors approved payment of certain fees to our directors in the amounts of $4,980, $4,980 and $6,950 per month to our directors, Yariv Alroy, Sagiv Aharon and Erez Nachtomy (each, an “Active Director”), respectively. On April 12, 2020, we also enacted a policy to pay each director (that is not otherwise an Active Director) an amount of $1,500 for each calendar quarter and $400 for attendance of each meeting of the board of directors. On May 12, 2024, the board of directors approved an increase of $3,050 per month, in the compensation received by Mr. Erez Nachtomy, from $6,950 per month to $10,000 per month, for his service as a member of the board of directors. These amounts are exclusive of Israeli VAT, if applicable. The following table provides information regarding compensation earned by, awarded or paid to each person for serving as a director who is not an executive officer during the fiscal year ended December 31, 2025: Name Fees Earned or Paid in Cash ($) Stock Awards ($) Total ($) Yariv Alroy 60,249 - 60,249 Sagiv Aharon 59,844 - 59,844 Erez Nachtomy 120,313 - 120,313 Eran Antebi 11,246 - 11,246 Keren Gousman 8,509 12,411 20,920 Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters Security Ownership of Certain Beneficial Owners The following table sets forth certain information as of March 10, 2026 regarding the beneficial ownership of our common stock, for: ● each person (or group of affiliated persons) who, insofar as we have been able to ascertain, beneficially owned more than 5% of the outstanding shares of our common stock; ● each director; ● each named executive officer; and ● all directors and executive officers as a group. Beneficial ownership is determined in accordance with the rules of the SEC and includes voting or investment power with respect to the securities. Except as otherwise indicated, each person or entity named in the table has sole voting and investment power with respect to all shares of our capital shown as beneficially owned, subject to applicable community property laws. In computing the number and percentage of shares beneficially owned by a person, shares that may be acquired by such person within 60 days of March 10, 2026, are counted as outstanding, while these shares are not counted as outstanding for computing the percentage ownership of any other person. Unless otherwise indicated, the address of each person listed below is c/o Duke Robotics Corp., 10 HaRimon Street, Mevo Carmel Science and Industrial Park, Israel, Israel 2069203. 38 We relied on information received from each stockholder as to beneficial ownership, including information contained on Schedules 13D and 13G and Forms 3, 4 and 5. As of March 10, 2026, there were 2,252,151 shares of common stock issued and outstanding. Name and Address of Beneficial Owner Amount and Nature of Beneficial Ownership (1) Percent of Class 5% Stockholders: Afek Trading - Kadosh and Razi Ltd. (2) 296,956 13.19 % Y.D More Investments Ltd. (3) 450,000 19.98 % Named Executive Officers: Yariv Alroy (4) 232,531 10.33 % Eran Antebi 4,800 0.21 % Yossef Balucka 18,000 0.79 % Erez Nachtomy (5) 60,673 2.68 % Shlomo Zakai 2,000 0.09 % Keren Gousman Golan - - Vadim Maor - - All directors and executive officers as a group (7 Persons)** 318,004 14.10 % (1) The persons named in this table have sole voting and investment power with respect to all shares of common stock reflected as beneficially owned by them. A person is deemed to be the beneficial owner of securities that can be acquired by such person within sixty (60) days from March 10, 2026, and the total outstanding shares used to calculate each beneficial owner’s percentage includes such shares, although such shares are not taken into account in the calculations of the total number of shares or percentage of outstanding shares. Beneficial ownership as reported does not include shares subject to option or conversion that are not exercisable within 60 days of March 10, 2026. (2) Address: Rimon 8, Sha’ar Shomron, Israel, 4481800. (3) Based on information contained in Form 13D filed with the SEC on June 20, 2024. Includes (i) 400,000 shares of Common Stock and 400,000 warrants exercisable into 400,000 shares of Common Stock ), held directly by More Co-Invest (L.P.), Limited Partnership, an Israeli limited partnership, whose general partner, More Co-Invest 1 (G.P.) Ltd., is controlled by Y.D More Investments Ltd. Y.D More Investments Ltd. is an Israeli public company controlled through a voting agreement among the following individuals: (a) Yosef Meirov, directly and through B.Y.M. Mor Investments Ltd., a company he controls with Michael Meirov and Dotan Meirov, (b) Benjamin Meirov (c) Yosef Levy and (d) Eli Levy through Elldot Ltd., a wholly owned company and (ii) 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 our common stock immediately following the exercise. (4) Includes 208,673 shares of common stock held by Mr. Alroy directly and 23,858 shares of common stock held by IKI Alroy Investments Ltd., of which Mr. Alroy has control over voting and investment power. (5) Includes 49,684 shares of common stock held by Mr. Nachtomy directly and 2,989 shares of common stock held by ERMI Nachtomy Assets Ltd., of which Mr. Nachtomy has control over voting and investment power. Changes in Control There are no arrangements known to the Company, including any pledge by any person of securities of the Company, the operation of which may at a subsequent date result in a change in control of the Company. 39 Item 13. Certain Relationships and Related Transactions, and Director Independence. Transactions with Related Persons During the fiscal years ended December 31, 2024 and 2025, we did not participate in any transaction, and we are not currently participating in any proposed transaction, or series of transactions, in which the amount involved exceeded the lesser of $120,000 or one percent of the average of our total assets at year end for the last two completed fiscal years, and in which, to our knowledge, any of our directors, officers, five percent beneficial security holders, or any member of the immediate family of the foregoing persons had, or will have, a direct or indirect material interest. Director Independence Our board of directors has determined that Mr. Eran Antebi, Mr. Erez Nachtomy and Ms. Keren Gousman are “independent” directors, as defined by SEC rules and under the Nasdaq Listing Rules. Item 14. Principal Accounting Fees and Services. Our independent registered public accounting firm for the year ended December 31, 2025 is Somekh Chaikin, a member firm of KPMG International, located in Tel Aviv, Israel, PCAOB ID 1057.The following is a summary of the fees billed by Somekh Chaikin, during the calendar years ended December 31, 2025 and 2024: Fee category 2025 2024 Audit Fees $ 105,000 $ 105,000 Audit - related fees - - Tax fees $ 10,000 $ 10,000 All other fees - - Total fees $ 115,000 $ 115,000 Audit fees - Consists of fees for professional services rendered by our principal auditor for the audit of our annual financial statements and the review of financial statements included in our Forms 10-Q or services that are normally provided by our principal accountants in connection with statutory and regulatory filings or engagements. Audit-related fees - Consists of fees for assurance and related services by our principal accountants that are reasonably related to the performance of the audit or review of our financial statements and are not reported under “Audit fees.” Tax fees - Consists of fees for professional services rendered by our principal accountants for tax compliance, tax advice and tax planning. All other fees - Consists of fees for products and services provided by our principal accountants, other than the services reported under “Audit fees,” “Audit-related fees” and “Tax fees” above. 40 PART IV Item 15. Exhibits, Financial Statement Schedules. (b) Exhibits . Exhibit Number Description 2.1 Share Exchange Agreement dated March 4, 2020, by and among the Company, and the shareholders of Duke Robotics, Inc. who execute and deliver this Share Exchange Agreement. (incorporated by reference to Exhibit 2.1 to the Current Report on Form 8-K filed with the Securities and Exchange Commission on March 10, 2020). 2.2 Agreement and Plan of Merger, dated April 29, 2020, by and among the Company, Duke Robotics, Inc., and UAS Acquisition Corp. (incorporated by reference to Exhibit 2.1 to the Current Report on Form 8-K filed with the Securities and Exchange Commission on April 29, 2020). 3.1 Company’s Articles of Incorporation as amended on October 15, 2024 (incorporated by reference to Exhibit 3.2 to the Company’s quarterly report on Form 10-Q filed with the Securities and Exchange Commission on November 14, 2025). 3.2 Bylaws, as amended, on March 4, 2020 (incorporated by reference to Exhibit 3.2 to our Current Report on Form 8-K filed with the Securities and Exchange Commission on March 10, 2020). 3.3 Certificate of Amendment to the Certificate of Incorporation (incorporated by reference to Exhibit 3.1 to our Current Report on Form 8-K filed with the Securities and Exchange Commission on October 29, 2024) 3.4 Certificate of Amendment to the Articles of Incorporation of DUKE Robotics Corp., as filed with the Nevada Secretary of State on October 15, 2025 (incorporated by reference to Exhibit 3.1 to our Current Report on Form 8-K filed with the Securities and Exchange Commission on October 16, 2025). 4.1* Description of Securities. 4.2 Form of Warrant (incorporated by reference to Exhibit 4.1 to our Current Report on Form 8-K filed with the Securities and Exchange Commission on May 12, 2021). 4.3 Form of Warrant (incorporated by reference to Exhibit 4.1 to our Current Report on Form 8-K filed with the Securities and Exchange Commission on January 5, 2026). 10.1 Form of Securities Purchase Agreement (incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K filed with the Securities and Exchange Commission on May 12, 2021). 10.2 2021 Equity Incentive Plan (incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K filed with the Securities and Exchange Commission on May 28, 2021). 10.3*** Collaboration Agreement, dated January 29, 2021, by and between Duke Airborne Systems Ltd. and Elbit Systems Land Ltd. (translation from Hebrew) (incorporated by reference to Exhibit 10.8 to our Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 30, 2021). 10.4 Supplement Letter to the Collaboration Agreement dated April 2, 2025 (incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K filed with the Securities and Exchange Commission on April 3, 2025). 10.5 Services Agreement, dated March 25, 2021, between the Company and Yossef Balucka. (incorporated by reference to Exhibit 10.9 to our Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 30, 2021). 41 Exhibit Number Description 10.6 Amendment to Services Agreement between the Company and Mr. Yossef Balucka, dated August 4, 2024 (incorporated by reference to Exhibit 10.1 to our quarterly report on Form 10-Q filed with the SEC on August 7, 2024). 10.7 Consulting Agreement, dated March 18, 2025, between the Company and Vadim Maor (incorporated by reference to Exhibit 10.6 to our Annual Report on Form 8-K filed with the Securities and Exchange Commission on March 20, 2025). 10.8 Warrant Extension Agreement, dated April 5, 2022, between the Company and the investors signatory thereto (incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K filed with the Securities and Exchange Commission on April 8, 2022). 10.9 Warrant Extension Agreement, dated November 1, 2023, between the Company and the investors signatory thereto (incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K filed with the SEC on November 3, 2023). 10.10 Form of Warrant Amendment Agreement, dated June 20, 2024, between the Company and certain warrant holders (incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K filed with the Securities and Exchange Commission on June 24, 2024). 10.11 Form of Securities Purchase Agreement (incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K filed with the Securities and Exchange Commission on January 5, 2026). 10.12* Amendment No. 1 to 2021 Equity Incentive Plan, as of March 10, 2026. 14.1 Amended and Restated Code of Business Conduct and Ethics (incorporated by reference to Exhibit 14.1 to our Current Report on Form 8-K filed with the Securities and Exchange Commission on March 10, 2020). 19.1 Insider Trading Policy (incorporated by reference to Exhibit 19.1 to our Annual Report on Form 10-K filed with the SEC on March 20, 2025). 21.1 List of Subsidiaries of the Company (incorporated by reference to Exhibit 21.1 to our Annual Report on Form 10-K filed with the SEC on March 20, 2025). 23.1* Consent of Independent Registered Public Accounting Firm 31.1* Certification of Chief Executive Officer pursuant to Sec. 302 of the Sarbanes-Oxley Act of 2002. 31.2* Certification of Chief Financial Officer pursuant to Sec. 302 of the Sarbanes-Oxley Act of 2002. 32.1** Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350. 32.2** Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350. 101 The following materials from the Registrant, formatted in inline XBRL (Extensible Business Reporting Language): (i) Balance Sheets as of December 31, 2025 and 2024, (ii) Statements of Operations for the years ended December 31, 2025 and 2024, (iii) Statements of Stockholders’ Deficit for the years ended December 31, 2025 and 2024, (iv) Statements of Cash Flows for the years ended December 31, 2025, and 2024, and (v) Notes to Financial Statements.** 104 Cover Page Interactive Data File (embedded within the Inline XBRL document) * Filed herewith. ** Furnished herewith. *** Certain identified information in the exhibit has been excluded from the exhibit because it is both (i) not material and (ii) would likely cause competitive harm to the Company if publicly disclosed. (c) Financial Statement Schedules. The following documents are filed as part of this Report: 1. Financial Statements See Index to Financial Statements 2. Financial Statement Schedules: All financial statement schedules have been omitted because they are not applicable or the required information is presented in the financial statements or the notes to the financial statements. Item 16. Form 10-K Summary. None. 42 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. DUKE ROBOTICS CORP. Date: March 12, 2026 By: /s/ Yossef Balucka Yossef Balucka Chief Executive Officer (Principal Executive Officer) By: /s/ Shlomo Zakai Shlomo Zakai Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer) Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. Date: March 12, 2026 By: /s/ Yossef Balucka Yossef Balucka Chief Executive Officer (Principal Executive Officer) Date: March 12, 2026 By : /s/ Shlomo Zakai Shlomo Zakai Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer) Date: March 12, 2026 By: /s/ Yariv Alroy Yariv Alroy Chairman of the Board Date: March 12, 2026 By: /s/ Erez Nachtomy Erez Nachtomy Vice Chairman of the Board Date: March 12, 2026 By: /s/ Eran Antebi Eran Antebi Director Date: March 12, 2026 By: /s/ Keren Gousman Keren Gousman Director 43 DUKE ROBOTICS CORP. CONSOLIDATED FINANCIAL STATEMENTS AS OF DECEMBER 31, 2025 DUKE ROBOTICS CORP. CONSOLIDATED FINANCIAL STATEMENTS AS OF DECEMBER 31, 2025 TABLE OF CONTENTS Page REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM (Firm Name: Somekh Chaikin / PCAOB ID No. 1057 / Location: Tel Aviv, Israel ) F-2 CONSOLIDATED FINANCIAL STATEMENTS: Consolidated Balance Sheets as of December 31, 2025 and December 31, 2024 F-4 Consolidated Statements of Comprehensive Loss for the years ended December 31, 2025 and 2024 F-5 Statements of Changes in Shareholders’ Equity for the years ended December 31, 2025 and 2024 F-6 Consolidated Statements of Cash Flows for the years ended December 31, 2025 and 2024 F-7 Notes to Consolidated Financial Statements F-8 – F-30 F- 1 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM KPMG Somekh Chaikin KPMG Millennium Tower 17 Ha’arba’a street, PO Box 609 Tel Aviv 6100601 Israel +972 3 684 8000 To the Stockholders and Board of Directors DUKE Robotics Corp. Opinion on the Consolidated Financial Statements We have audited the accompanying consolidated balance sheets of DUKE Robotics Corp. and its subsidiaries (the Company) as of December 31, 2025 and 2024, the related consolidated statements of comprehensive loss, changes in stockholders’ equity, and cash flows for each of the years in the two year period ended December 31, 2025, and the related notes (collectively, the consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the years in the two year period ended December 31, 2025, in conformity with U.S. generally accepted accounting principles. Going Concern The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the consolidated financial statements, the Company has incurred significant losses and negative cash flows from operations and has an accumulated deficit that raise substantial doubt about its ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 1. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. Basis for Opinion These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion. KPMG Somekh Chaikin, an Israeli partnership and a member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. F- 2 Critical Audit Matter The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of a critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. Valuation of warrant liability As discussed in Note 9 to the consolidated financial statements, as part of the private placement offering completed on December 30, 2025, the Company issued investors warrants to purchase 83,338 Company’s Common Stock. The warrants have been classified as a liability instrument because of a make-whole provision. The warrants are recorded at fair value amounting to $189 thousand as of December 31, 2025 and will be remeasured at fair value at each reporting date. The Company used both the Monte Carlo Simulation Model and Black-Scholes option-pricing model to value the warrant liability. Key inputs to the models included the Company’s underlying share price, conversion price, risk-free interest rate, expected dividend yield, expected term in years, expected offering date and expected volatility. We identified the evaluation of the fair value of the warrant liability as a critical audit matter. A high degree of auditor judgment, and specialized skills and knowledge, were required in the evaluation of the estimated fair value due to the degree of subjectivity associated with the expected volatility and its sensitivity to variation. The following are the primary procedures we performed to address this critical audit matter. We evaluated the design of certain internal controls over the Company’s warrant liability valuation process, including controls related to the determination of the expected volatility. We involved valuation professionals with specialized skills and knowledge, who assisted in: ● assessing the expected volatility by comparing it against publicly available market data of comparable companies. ● developing an independent range of the fair value of the warrant liability, using independently developed assumptions, including expected volatility, and comparing the independently developed ranges to the respective fair value of the warrant liability recorded by the Company as of December 31, 2025. /s/ Somekh Chaikin Member Firm of KPMG International We have served as the Company’s auditor since 2023. Tel Aviv, Israel March 12, 2026 F- 3 DUKE ROBOTICS CORP. CONSOLIDATED BALANCE SHEETS (USD in thousands except share and per share data) December 31, December 31, 2025 2024 Assets Current Assets Cash and cash equivalents 750 1,256 Restricted Cash - 31 Trade receivables 41 37 Other current assets (Note 3) 116 31 Total Current Assets 907 1,355 Operating lease right-of-use asset and lease deposit (Note 4) 127 184 Property and equipment, net (Note 5) 215 88 Total Assets 1,249 1,627 Liabilities and Shareholders’ Equity Current Liabilities Accounts payable 129 92 Operating lease liability 72 60 Other liabilities (Note 6) 366 193 Stock purchase warrants liability (Note 9B) 189 - Total current liabilities 756 345 Related parties loans (Note 7) 330 322 Operating lease liability (Note 4) 63 109 Total Liabilities 1,149 776 Stockholders’ Equity (**) (Note 9) Common stock of US$ 0.0001 par value each (“Common Stock”): 350,000,000 and 100,000,000 shares authorized as of December 31, 2025 and 2024, respectively; issued and outstanding 2,168,813 shares as of December 31, 2025 and 2024. * * Additional paid-in capital 12,505 12,013 Foreign currency translation adjustments ( 2 ) - Accumulated deficit ( 12,403 ) ( 11,162 ) Total Stockholders’ Equity 100 851 Total liabilities and stockholders’ Equity 1,249 1,627 (*) Less than $1 thousand. (**) Adjusted to reflect one (1) for twenty five (25) reverse stock split on March 10, 2026 (see note 1B). The accompanying notes are an integral part of the consolidated financial statements. F- 4 DUKE ROBOTICS CORP. CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (USD in thousands except share and per share data) Year ended December 31 2025 2024 Revenues (Note 12) 377 108 Cost of revenues ( 198 ) ( 71 ) Gross profit 179 37 Research and development expenses ( 104 ) ( 157 ) General and administrative expenses (Note 11) ( 1,281 ) ( 905 ) Operating loss ( 1,206 ) ( 1,025 ) Financing income (expenses), net ( 25 ) 40 Other loss ( 10 ) - Net loss ( 1,241 ) ( 985 ) Other comprehensive gain (loss) - Foreign currency translation adjustments ( 2 ) - Comprehensive loss ( 1,243 ) ( 985 ) Loss per share (basic and diluted) (*) (Note 14) ( 0.57 ) ( 0.45 ) Basic and diluted weighted average number of shares of Common Stock outstanding (*) 2,186,813 2,186,124 (*) Adjusted to reflect one (1) for twenty five (25) reverse stock split on March 10, 2026 (see note 1B). The accompanying notes are an integral part of the consolidated financial statements. F- 5 DUKE ROBOTICS CORP. STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (**) (USD in thousands, except share and per share data) Number of Shares Amount Additional paid-in capital Foreign currency translation adjustments Accumulated deficit Total stockholders’ equity (deficit) BALANCE AT DECEMBER 31, 2023 2,168,813 * 11,755 - ( 9,947 ) 1,808 - Share based compensation for services - - 28 - - 28 Warrants modification (note 9) - - 230 - ( 230 ) - Net loss for the year - - - - ( 985 ) ( 985 ) BALANCE AT DECEMBER 31, 2024 2,168,813 * 12,013 - ( 11,162 ) 851 Share based compensation for services - - 224 - - 224 Commitment to issue shares under private placement securities purchase agreement (“PIPE Agreement”) - - 268 - - 268 Foreign currency translation adjustments - - - ( 2 ) - ( 2 ) Net loss for the year - - - - ( 1,241 ) ( 1,241 ) BALANCE AT DECEMBER 31, 2025 2,168,813 * 12,505 ( 2 ) ( 12,403 ) 100 (*) Less than $1 thousand. (**) Adjusted to reflect one (1) for twenty five (25) reverse stock split on March 10, 2026 (see note 1B). The accompanying notes are an integral part of the consolidated financial statements. F- 6 DUKE ROBOTICS CORP. CONSOLIDATED STATEMENTS OF CASH FLOWS (USD in thousands, except share and per share data) Year ended December 31 2025 2024 CASH FLOWS FROM OPERATING ACTIVITIES: Net loss for the year ( 1,241 ) ( 985 ) Adjustments required to reconcile net loss for the year to net cash used in operating activities: Depreciation 68 29 Share based compensation 224 28 Interest on loans from related parties 8 8 Reduction in the carrying amount of right-of-use assets 51 51 Change in operating lease liability ( 35 ) ( 48 ) Loss from sale of property and equipment 10 - Increase in trade receivable (*) ( 37 ) Decrease (increase) in other current assets ( 86 ) 10 Increase (decrease) in accounts payable 35 ( 6 ) Increase in other liabilities 155 32 Net cash used in operating activities ( 811 ) ( 918 ) CASH FLOWS FROM INVESTING ACTIVITIES: Purchase of property and equipment ( 205 ) ( 77 ) Net cash used in investing activities ( 205 ) ( 77 ) CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from PIPE Agreement 475 - Net cash provided by financing activities 475 - Effect of exchange rate changes on cash and cash equivalents 4 1 DECREASE IN CASH AND CASH EQUIVALENTS AND RESTRICTED CASH ( 537 ) ( 994 ) CASH AND CASH EQUIVALENTS AND RESTRICTED CASH AT BEGINNING OF YEAR 1,287 2,281 CASH AND CASH EQUIVALENTS AND RESTRICTED CASH AT END OF YEAR 750 1,287 Supplemental disclosure of cash flow information: Non cash transactions: Initial recognition of operating lease - 119 Purchase of fixed assets in trade in transaction 11 - The accompanying notes are an integral part of the consolidated financial statements. F- 7 DUKE ROBOTICS CORP. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (USD in thousands, except share and per share data) NOTE 1 – GENERAL A. DUKE ROBOTICS CORP. ( FORMERLY UAS DRONE CORP .) (“the Company”) was incorporated under the laws of the State of Nevada on February 4, 2015. On March 9, 2020, the Company closed on the Share Exchange Agreement (as defined hereunder), pursuant to which, Duke Robotics, Inc. (“Duke Inc.”) a corporation incorporated under the laws of the state of Delaware, became a majority-owned subsidiary of the Company. Duke Inc. has a wholly-owned subsidiary, Duke Airborne Systems Ltd. (“Duke Israel,” and collectively with Duke Inc., “Duke”), which was formed under the laws of the State of Israel in March 2014 and became the sole subsidiary of Duke after its incorporation. On April 29, 2020, the Company, Duke Inc., and UAS Acquisition Corp., a Delaware corporation and a wholly-owned subsidiary of the Company (“UAS Sub”), executed an Agreement and Plan of Merger (the “Merger Agreement”), pursuant to which UAS Sub merged with and into Duke Inc., with Duke Inc. surviving as our wholly-owned subsidiary (the “Short-Form Merger”). Upon closing of the Short-Form Merger, each outstanding share of UAS Sub’s common stock, par value $ 0.0001 per share, was converted into and became one share of common stock of Duke Inc., with Duke Inc. surviving as a wholly-owned subsidiary of the Company. Following the above transactions, Duke Israel became a wholly-owned subsidiary of Duke Inc., which is a wholly-owned subsidiary of the Company. On February 18, 2025, the Company established Duke Robotics Hellas M I.K.E (“Duke Greece”), a wholly owned subsidiary, formed under the laws of Greece, to support the ongoing global commercialization efforts of the Company’s Insulator Cleaning (“IC”) Drone system. The Company (collectively with Duke, the “Group”) is a robotics company dedicated to developing an advanced robotics stabilization system that enables remote, real-time, pinpoint accurate firing of small arms and light weapons as well as other civilian applications, with an emphasis in the field of routine infrastructure maintenance. The Company offers high-voltage insulator washing abilities using its innovative Insulator Cleaning (“IC”) Drone system. This technology provides an efficient and safe method for cleaning high-voltage insulators, improving their performance, enhancing safety, and reducing maintenance costs. On October 28, 2024, the Company filed a certificate of amendment to its 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. The Company’s Common Stock is quoted on the OTC Markets Group, Inc.’s OTCQB® tier Venture Market, under the symbol “DUKR” (“USDR” prior to November 4, 2024). B. Reverse stock split On February 15, 2026, the Company’s Board of Directors approved a 25-for-1 reverse stock split Stock (the “Reverse Stock Split”) of the Company’s issued and outstanding shares of common stock, par value $ 0.0001 per share, and on August 12, 2025 the majority of the Company’s stockholders approved the Reverse Stock Split. On March 4, 2026 the Company filed a Certificate of Amendment (the “Amendment”) to its Amended and Restated Certificate of Incorporation in Nevada to effect the Reverse Stock Split. The Amendment became effective on March 6, 2026. F- 8 DUKE ROBOTICS CORP. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (USD in thousands, except share and per share data) NOTE 1 – GENERAL (continued) As a result of the Reverse Stock Split, every 25 shares of the Company’s outstanding shares of common stock prior to the effect of the Amendment were combined and reclassified into one share of the Company’s common stock. No fractional shares were issued in connection with or following the reverse split and the shares were rounded to the nearest whole number. The authorized capital and par value of the common stock remained unchanged. All shares, stock option and per share information in these consolidated financial statements have been restated to reflect the Reverse Stock Split on a retroactive basis. C. Going concern uncertainty Since inception, the Company has incurred significant losses and negative cash flows from operations and has an accumulated deficit of $ 12 million. The Company has financed its operations mainly through financing by the issuance of the Company’s equity from various investors. Based on the projected cash flows and cash balances as of December 31, 2025, management currently is of the opinion that its existing cash will be sufficient to fund operations for at least the end of 2026. As a result, there is substantial doubt regarding the Company’s ability to continue as a going concern. Management plans to continue securing sufficient financing through the sale of additional equity securities or capital inflows from strategic partnerships. Additional funds may not be available when the Company needs them, on favorable terms, or at all. If the Company is unsuccessful in securing sufficient financing, it may need to cease operations. The financial statements do not include adjustments for measurement or presentation of assets and liabilities, which may be required should the Company fail to operate as a going concern. D. In October 2023, a large-scale terrorist attack in southern Israel led to the outbreak of armed conflict between Israel and Hamas. The conflict subsequently expanded to additional regional fronts and contributed to a period of heightened geopolitical and security instability in the region. During 2024 and 2025, hostilities included military operations in Lebanon and direct confrontations involving Iran. These developments increased regional uncertainty and, at times, resulted in temporary disruptions to the Company’s operations in Israel, including limited interruptions to routine business activities. In September 2025, a ceasefire agreement was reached between Israel and Hamas, and all remaining living Israeli hostages were released and returned to Israel. While the ceasefire has generally held as of the date of these financial statements, the security situation remains sensitive, and the potential for renewed hostilities or broader regional escalation cannot be ruled out. More recently, on February 28, 2026, hostilities between Israel and Iran escalated again. Israel, together with the United States, 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. Accordingly, the extent of the continued impact on the Company’s operations and financial results, if any, cannot be reasonably estimated at this time. Given that the majority of the Company’s operations are conducted in Israel, and that all members of the Company’s board of directors and management, as well as most employees, consultants, and service providers, are located in Israel, the Company is directly affected by the economic, political, geopolitical, and military conditions impacting the region. As of December 31, 2025, while ceasefire arrangements with Hamas, Lebanon and Iran were generally in effect and large-scale military operations had subsided, the overall security environment in Israel and the surrounding region remained unstable and unpredictable. The recent hostilities resulted in temporary disruptions to the Company’s operations, resulting in a decrease in revenues during certain periods in 2025, and may continue to have an adverse impact on certain business activities. Any further escalation or expansion of the conflict could negatively affect both regional and global conditions, and may adversely impact the Company’s business, financial condition, and results of operations. F- 9 DUKE ROBOTICS CORP. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (USD in thousands, except share and per share data) NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES The consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). A. Principles of Consolidation The accompanying consolidated financial statements include the accounts of the Company and its subsidiaries Duke Inc., Duke Israel and Duke Greece. All significant intercompany balances and transactions have been eliminated on consolidation. B. Use of Estimates in the preparation of financial statements The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, certain revenues and expenses, and disclosure of contingent assets and liabilities as of the date of the financial statements. Actual results could differ from those estimates. As applicable to these financial statements, the most significant estimates and judgments involve valuation of equity and liability classified stock purchase warrants. C. Cash and cash equivalents Cash equivalents are short-term highly liquid investments which include short term bank deposits (up to three months from date of deposit), that are not restricted as to withdrawals or use that are readily convertible to cash with maturities of three months or less as of the date acquired. D. Functional currency Most of the Group’s costs are denominated and determined in dollars. Management believes that the dollar is the currency in the primary economic environment in which the Group operates. Thus, the functional and reporting currency of the Group is the U.S. dollar. The functional currency of Duke Greece is the Euro, which is the currency of the primary economic environment in which that subsidiary operates. Transactions and monetary balances in other currencies are translated into the functional currency using the current exchange rate. Such remeasurement is performed in accordance with Accounting Standards Codification (ASC) 830, “Foreign Currency Matters”, and remeasurement gains and losses are reflected in the statements of comprehensive loss as financial income or expenses, as appropriate. F- 10 DUKE ROBOTICS CORP. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (USD in thousands, except share and per share data) NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES (continued) E. Property, plant and equipment, net 1. Property and equipment are stated at cost, net of accumulated depreciation. Depreciation is calculated using the straight-line method over the estimated useful lives of the assets. When an asset is retired or otherwise disposed of, the related cost and accumulated depreciation are removed from the respective accounts and the net difference less any amount realized from disposition is reflected in the Statements of Comprehensive Loss. 2. Rates of depreciation: % Furniture and office equipment 7 - 15 Computers 33 Drones 50 Vehicles 15 Office improvements 33 F. Impairment of long-lived assets The Group’s long-lived assets are reviewed for impairment in accordance with ASC Topic 360, “Property, Plant and Equipment”, whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to the future undiscounted cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the asset exceeds its fair value. No impairment expenses were recorded during the years ended December 31, 2025 or 2024. F- 11 DUKE ROBOTICS CORP. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (USD in thousands, except share and per share data) NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES (continued) G. Income taxes Income taxes are accounted for under the asset and liability method. The Group accounts for income taxes in accordance with ASC Topic 740, “Income Taxes.” Accordingly, deferred taxes are determined based on the estimated future tax effects of differences between the financial statement carrying amount and the tax bases of assets and liabilities under the applicable tax law. Deferred tax balances are computed using the enacted tax rates expected to be in effect when these differences reverse. Valuation allowances in respect of deferred tax assets are provided for, if necessary, to reduce deferred tax assets to amounts more likely than not to be realized. The Group accounts for tax positions in accordance with ASC Topic 740-10, which prescribes detailed guidance for the financial statement recognition, measurement and disclosure of tax positions in an enterprise’s financial statements. According to ASC Topic 740-10, tax positions must meet a more-likely-than-not recognition threshold. Recognized tax positions are measured as the largest amount of tax benefit that is greater than 50 percent likely of being realized. The Company’s accounting policy is to classify interest and penalties relating to income taxes under income taxes, however the Company did not recognize such items in its fiscal 2025 and 2024 financial statements and did not record any unrecognized tax benefits in its balance sheets. H. Revenue recognition The Group provides services to customers and has related performance obligations and recognizes revenue in accordance with ASC 606. Revenues are recognized when the Group satisfies performance obligations under the terms of its contracts, and control of its services or products is transferred to its customers in an amount that reflects the consideration the Company expects to receive from its customers in exchange for those products. This process involves identifying the customer contract, determining the performance obligations in the contract, determining the transaction price, allocating the transaction price to the distinct performance obligations in the contract, and recognizing revenue when the performance obligations have been satisfied. A performance obligation is considered distinct from other obligations in a contract when it (a) provides a benefit to the customer either on its own or together with other resources that are readily available to the customer and (b) is separately identified in the contract. The Company considers a performance obligation satisfied once it has transferred control of a good or product to a customer, meaning the customer has the ability to direct the use and obtain the benefit of the product. The Company has elected to use the practical expedient provided in ASC 606-10-55-18, which allows revenue to be recognized in the amount to which the Company has a right to invoice. This method is applied to contracts where the invoicing aligns with the performance obligations satisfied over time. (see note 12). I. Research and development expenses Research and development expenses are charged to operations as incurred. J. Basic and diluted loss per share Basic loss per share is computed by dividing the loss for the period applicable to shareholders, by the weighted average number of shares of common stock outstanding during the period. In computing diluted loss per share, basic loss per share is adjusted to reflect the potential dilution that could occur upon the exercise of potential shares. Accordingly, in 2025 and 2024, no potential shares are considered. F- 12 DUKE ROBOTICS CORP. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (USD in thousands, except share and per share data) NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES (continued) K. Stock-based compensation The Company measures and recognizes the compensation expense for all equity-based payments to non employees directors and officers based on their estimated fair values in accordance with ASC 718, “Compensation-Stock Compensation”. Share-based payments including grants of stock options are recognized in the statement of comprehensive loss as an operating expense based on the fair value of the award at the date of grant. The fair value of stock options granted is estimated using the Black-Scholes option-pricing model. The Company has expensed compensation costs, net of forfeitures, over the requisite service period. L. Concentrations of credit risk Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash and cash equivalents as well as certain other current assets that do not amount to a significant amount. Cash and cash equivalents, which are primarily held in Dollars and New Israeli Shekels, are deposited with major banks in Israel and the United States. Management believes that such financial institutions are financially sound and, accordingly, minimal credit risk exists with respect to these financial instruments. The Company does not have any significant off-balance-sheet concentration of credit risk, such as foreign exchange contracts, option contracts or other foreign hedging arrangements. M. Commitments and Contingencies The Company records accruals for loss contingencies arising from claims, litigation and other sources when it is probable that a liability has been incurred and the amount can be reasonably estimated. These accruals are adjusted periodically as assessments change or additional information becomes available. Legal costs incurred in connection with loss contingencies are expensed as incurred. N. Fair Value Measurements Fair value of certain of the Company’s financial instruments including cash, accounts receivable, account payable, accrued expenses, accounts payable, and other accrued liabilities approximate cost because of their short maturities. The Company measures and reports fair value in accordance with ASC 820, “Fair Value Measurements and Disclosure” (“ASC 820”) defines fair value, establishes a framework for measuring fair value in accordance with generally accepted accounting principles and expands disclosures about fair value investments. Fair value, as defined in ASC 820, is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value of an asset should reflect its highest and best use by market participants, principal (or most advantageous) markets, and an in-use or an in-exchange valuation premise. The fair value of a liability should reflect the risk of non-performance, which includes, among other things, the Company’s credit risk. Valuation techniques are generally classified into three categories: the market approach; the income approach; and the cost approach. The selection and application of one or more of the techniques may require significant judgment and are primarily dependent upon the characteristics of the asset or liability, and the quality and availability of inputs. Valuation techniques used to measure fair value under ASC 820 must maximize the use of observable inputs and minimize the use of unobservable inputs. ASC 820 also provides fair value hierarchy for inputs and resulting measurement as follows: Level 1: Quoted prices (unadjusted) in active markets that are accessible at the measurement date for identical assets or liabilities. F- 13 DUKE ROBOTICS CORP. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (USD in thousands, except share and per share data) NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES (continued) Level 2: Quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; inputs other than quoted prices that are observable for the asset or liability; and inputs that are derived principally from or corroborated by observable market data for substantially the full term of the assets or liabilities; and Level 3: Unobservable inputs for the asset or liability that are supported by little or no market activity, and that are significant to the fair values. Fair value measurements are required to be disclosed by the Level within the fair value hierarchy in which the fair value measurements in their entirety fall. Fair value measurements using significant unobservable inputs (in Level 3 measurements) are subject to expanded disclosure requirements including a reconciliation of the beginning and ending balances, separately presenting changes during the period attributable to the following: total gains or losses for the period (realized and unrealized), segregating those gains or losses included in earnings, and a description of where those gains or losses included in earning are reported in the statement of comprehensive loss. The Company’s financial liabilities that are measured at fair value on a recurring basis by level within the fair value hierarchy are as follows: As of December 31, 2025 Level 1 Level 2 Level 3 Total US$ Stock purchase warrants liability - - 189 189 Total - - 189 189 O. Leases The Company determines if an arrangement is or contains a lease at contract inception. Operating leases are included in operating lease right-of-use (“ROU”) assets, other current liabilities, and operating lease liabilities in Company’s consolidated balance sheets. ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Group’s obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As the Company’s leases do not provide an implicit rate, the Company generally uses the incremental borrowing rate based on the estimated rate of interest for collateralized borrowing over a similar term of the lease payments at commencement date. The operating lease ROU asset also includes any lease payments made and excludes lease incentives. The Company’s lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Lease expense for lease payments is recognized on a straight-line basis over the lease term. The Company monitors for events or changes in circumstances that require a reassessment of one of its leases. When a reassessment results in the remeasurement of a lease liability, a corresponding adjustment is made to the carrying amount of the corresponding ROU asset unless doing so would reduce the carrying amount of the ROU asset to an amount less than zero. In that case, the amount of the adjustment that would result in a negative ROU asset balance is recorded in statement of comprehensive loss. F- 14 DUKE ROBOTICS CORP. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (USD in thousands, except share and per share data) NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES (continued) P. New Accounting Pronouncements Recently Adopted Accounting Standards Income Taxes: In December 2023, the Financial Accounting Standards Board (“FASB”) issued ASU (“Accounting Standard Update”) 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (“ASU 2023-09”). The amendments in this ASU add specific requirements for income tax disclosures to improve transparency and decision usefulness. The guidance in ASU 2023-09 requires that public business entities disclose specific categories in the income tax rate reconciliation and provide additional qualitative information for reconciling items that meet a quantitative threshold. In addition, the amendments in ASU 2023-09 require that all entities disclose the amount of income taxes paid disaggregated by federal, state, and foreign taxes and disaggregated by individual jurisdictions. The ASU also includes other disclosure amendments related to the disaggregation of income tax expense between federal, state and foreign taxes. The guidance is effective for the Company for annual periods beginning after December 15, 2024. The Company adopted this ASU effective January 1, 2025. The amendments in this update were applied on a prospective basis, and did not have a material effect on the Company’s consolidated financial statements, but resulted in enhanced income tax disclosures. Accounting Standards Not Yet Adopted In November 2024, the FASB issued ASU No. 2024-03 Income Statement- Reporting Comprehensive Income- Expense Disaggregation Disclosures (Subtopic 220-40). The ASU improves the disclosures about a public business entity’s expenses and provides more detailed information about the types of expenses in commonly presented expense captions. The amendments require that at each interim and annual reporting period an entity will, inter alia, disclose amounts of purchases of inventory, employee compensation, depreciation and amortization included in each relevant expense caption (such as cost of sales, selling, general and administrative expenses, and research and development). Amounts remaining in relevant expense captions that are not separately disclosed will be described qualitatively. Certain amounts that are already required to be disclosed under currently effective U.S GAAP will be included in the same disclosure as the other disaggregation requirements. The amendments also require disclosing the total amount of selling expenses and, in annual reporting periods, the definition of selling expenses. The ASU is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027. Early adoption is permitted. The Company is currently evaluating this ASU to determine its impact on the Company’s disclosures. In December 2025, the FASB issued ASU 2025-11, Interim Reporting (Topic 270): Narrow-Scope Improvements, which clarifies the guidance in Topic 270 to improve the consistency of interim financial reporting. The ASU provides a comprehensive list of required interim disclosures and introduces a disclosure principle requiring entities to disclose events since the end of the last annual reporting period that have a material impact on the entity. ASU 2025-11 is effective for fiscal years beginning after December 15, 2027, including interim periods within those fiscal years, with early adoption permitted. The Company is currently evaluating this ASU to determine its impact on the Company’s disclosures. F- 15 DUKE ROBOTICS CORP. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (USD in thousands, except share and per share data) NOTE 3 – OTHER CURRENT ASSETS December 31, 2025 2024 Prepaid and deferred expenses 98 21 Government Institutions 18 10 116 31 NOTE 4 – LEASES A. On April 4, 2022, the Company signed a lease agreement for an office space in Mevo Carmel Science and Industry Park, Israel for a term of 3 years, with an option to extend the term of the lease agreement for an additional 2 years. The monthly lease payments under the lease agreement, for the first two years are NIS 16.5 (approximately $ 4.6 ) and for the third year NIS 17.2 (approximately $ 4.8 ). The monthly lease payments for the option period will be agreed between the parties, with a minimum increase of 5 % above the third year monthly payment. Lease payment are linked to the Israeli Consumer Price Index. The property became available for Company’s use in February 2023. Based on the lease agreement terms, the Company made a deposit of $ 15 as a guarantee for its lease commitments. The Company utilized the two years extension option under the above lease agreement. B. The components of operating lease expense for the period ended December 31, 2025 and 2024 were as follows: December 31, 2025 2024 Operating lease expense 67 54 C. Supplemental cash flow information related to operating leases was as follows: December 31, 2025 2024 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases 68 59 Right-of-use assets obtained in exchange for lease obligations (non-cash): Operating leases - 119 F- 16 DUKE ROBOTICS CORP. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (USD in thousands, except share and per share data) NOTE 4 – LEASES (continued) D. Supplemental balance sheet information related to operating leases was as follows: Year ended December 31, 2025 2024 Operating leases: Operating leases right-of-use asset and lease deposit 127 184 Current operating lease liabilities 72 60 Non-current operating lease liabilities 63 109 Total operating lease liabilities 135 169 Weighted average remaining lease term (years) 2.08 3.08 Weighted average discount rate 8.75 % 8.75 % E. Future minimum lease payments under non-cancellable leases as of December 31, 2025 are as follows: 2026 75 2027 70 2028 1 Total operating lease payments 146 Less: imputed interest ( 11 ) Present value of lease liabilities 135 NOTE 5 – PROPERTY AND EQUIPMENT, NET December 31, 2025 2024 Computers 12 10 Furniture and office equipment 14 14 Drones 234 52 Vehicles 33 25 Leasehold improvements 66 66 359 167 Less - accumulated depreciation ( 144 ) ( 79 ) Total property and equipment, net 215 88 F- 17 DUKE ROBOTICS CORP. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (USD in thousands, except share and per share data) NOTE 5 – PROPERTY AND EQUIPMENT, NET (continued) In the years ended December 31, 2025 and 2024, depreciation expenses amounted to $ 68 and $ 29 respectively, and additional property and equipment were purchased for cash in an amount of $ 216 and $ 77 during the years ended December 31, 2025 and 2024, respectively. During 2025, the Company sold fixed assets with a cost of $ 24 and with accumulated depreciation in the amount of $ 3 . NOTE 6 – OTHER LIABILITIES December 31, 2025 2024 Accrued expenses 341 180 Other 25 13 366 193 NOTE 7 – RELATED PARTIES LOANS The Company has outstanding loans with related parties. The loans bear an annual fixed interest rate of 3 % and shall be repaid (principal and interest) at the date upon which the Company raises at least $ 15 million and has achieved earnings before interest, tax, depreciation and amortization of $ 3 million. NOTE 8 – CONTINGENCIES On March 23, 2025, a complaint was filed against Duke Israel, by LOOL T.V. Ltd. (the “Plaintiff”), an Israeli company, in the Tel Aviv-Yafo Magistrate’s Court (the “Court”). The complaint asserts that pursuant to an agreement of principles between Duke Israel and the Plaintiff, Duke Israel is in breach of the agreement, specifically with respect to an allegation that the parties were required to set up a partnership with respect to certain services provided to the Israel Electric Corporation (the “IEC”). The complaint asserts a claim for breach of contract, unlawful use of intellectual property that is not exclusively owned by Duke Israel and unjust enrichment with regards to the agreement of principles. In addition, the Plaintiff’s complaint seeks an order for a permanent injunction to prevent Duke Israel from continuing providing these services to the IEC, and an order to enforce the agreement of principles ordering Duke Israel to act as necessary to establish a partnership or joint venture. The Company filed a statement of defense against the complaint and denied the allegations and asserted that the complaint was without merit. On February 26, 2026, following a notice submitted by the Plaintiff, the Court ordered the deletion of the complaint without a ruling on the merits. The Court further ordered the Plaintiff to pay Duke Israel legal expenses and provided that, should the Plaintiff file a new claim, an additional expenses will be payable as a condition for filing such new claim. In light of the deletion of the complaint, the Company does not believe that the matter will impact the continued performance of the agreement between Duke Israel and IEC or have a material effect on its business, financial condition or results of operations. No accrual was made in the financial statements as of December 31, 2025 in respect of the above complaint. F- 18 DUKE ROBOTICS CORP. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (USD in thousands, except share and per share data) NOTE 9 – SHAREHOLDERS’ EQUITY Description of the rights attached to the Shares in the Company : Common stock: The holders of shares of common stock vote together as one class on all matters as to which holders of common stock are entitled to vote. Except as otherwise required by applicable law and subject to the preferential rights of any outstanding preferred stock, all voting rights are vested in and exercised by the holders of common stock with each share of Company’s common stock being entitled to one vote, including in all elections of directors. Subject to preferences that may be applicable to any outstanding preferred stock, the holders of common stock are entitled to receive ratably such dividends, if any, as may be declared from time to time by the board of directors out of legally available funds. In the event of the Company’s liquidation, dissolution or winding up, holders of the common stock are entitled to share ratably in all assets remaining after payment of liabilities, subject to prior liquidation rights of preferred stock, if any, then outstanding. The common stock has no cumulative voting rights and no preemptive or other rights to subscribe for shares of the Company. There is no redemption or sinking fund provisions applicable to the common stock. All shares of common stock currently outstanding are fully paid and non-assessable. As of December 31, 2025 and 2024, there were no outstanding preferred stock. On October 15, 2025, the Company filed a Certificate of Amendment to its Articles of Incorporation with the Nevada Secretary of State, to increase its authorized shares of common stock, from 100,000,000 shares of common stock to 350,000,000 shares of common stock, as well as to permit the issuance of up to 10,000,000 shares of “blank check” preferred stock, par value $ 0.0001 per share. The “blank-check” preferred stock may have such rights and preferences as may be designated by the Company’s Board of Directors from time to time. Transactions : A. On May 11, 2021, the Company entered into securities purchase agreements with eight (8) non-U.S. investors, pursuant to which the Company, in a private placement offering (the “Offering”), agreed to issue and sell to the investors an aggregate of: (i) 500,000 shares of the Company’s common stock, at a price of $ 10 per share; and (ii) warrants (the “Warrants”) to purchase 500,000 Company’s common stock. The Warrants are 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 . The Company recorded $ 1,070 of issuance costs. On May 11, 2021, the Company signed a service agreement with a non U.S. third party pursuant to which the service provider agreed to provide the Company with financial and project oversight services with respect to the Offering. Pursuant to the service agreement, the Company agreed to pay the service provider (1) 6 % of the investment amounts received which amounted to $ 351 and (2) options to receive a number of units (each unit for a price of $ 10 includes one share and one warrant with an exercise price of $ 10 per share) equal to 6 % of the investment amount received, divided by $ 10 . In the event that the investors that participated in the Offering exercise their Warrants, the service provider shall be entitled to receive an additional payment of (1) 6 % of the investment amounts received (2) 6 % of the warrants exercised amounts received and (3) options to receive a number of units equal to 6 % of the warrants exercised amounts received, divided by $ 10 . On April 5, 2022, the Company and the investors executed a warrant amendment agreement, such that the term of the Warrants was extended so that they expire on November 11, 2023. F- 19 DUKE ROBOTICS CORP. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (USD in thousands, except share and per share data) NOTE 9 – SHAREHOLDERS’ EQUITY (continued) On November 1, 2023, the Company and the investors executed an addition warrant amendment agreement, such that the term of the Warrants was extended so that they expire on November 11, 2024 (see also Note 17(2)). On June 20, 2024, the Company entered into a warrant amendment agreement with the existing Warrant (the “June 2024 Amendment”). According to the June 2024 Amendment agreement, the Company and Holders agreed to (i) extend the warrant exercise term to May 11, 2026; (ii) amend the warrant exercise price and increase it from $ 10 per share to $ 16.25 per share; and (iii) include a beneficial ownership blocker that limits the exercise of such warrants if such exercise would result in the holder beneficially owning in excess of 19.99 % of the number of shares of the Company’s Common Stock immediately after giving effect to the issuance of shares of Common Stock issuable upon exercise of the warrant. On March 10, 2026, we entered into an additional warrant amendment agreement with the holders pursuant to which we extended the term of the Warrants such that they now expire on May 1, 2031 (See also note 17(2)). The Company accounted for the Warrant amendments as deemed dividends. The fair value of the Warrant modifications was estimated using the Black-Scholes option-pricing model and is presented within the consolidated statements of changes in shareholders equity as a credit to additional paid in capital and a debit to the accumulated deficit. The following are the data and assumptions used: November 1, 2023 June 20, 2024 Dividend yield 0 0 Expected volatility (%) 128.44 - 184.22 % 125.58 - 143.75 % Risk-free interest rate (%) 5.44 - 5.56 % 4.70 - 5.37 % Contractual term of options (years) 0.03 - 1.11 0.39 - 1.98 Exercise price (US dollars) 10 10 - 16.25 Share price (US dollars) 2 1.75 Fair value (USD in thousands) 205 230 B. On December 30, 2025, the Company entered into Securities Purchase Agreements (each a “Securities Purchase Agreement”) with seven non-U.S. investors (the “2025 Investors”), pursuant to which the Company, in a private placement offering (the “2025 Offering”), agreed to issue and sell to the 2025 Investors an aggregate of: (i) 83,338 shares of the Company’s common stock at a price of $ 9.00 per share (the “Purchase Price”); and (ii) warrants (the “ 2025 Warrants”) to purchase 83,338 shares of common stock. The 2025 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 has not occurred prior to such date. In addition, the Securities Purchase Agreement contains a make whole provision that provides for the 2025 Investors to receive additional shares of Common Stock in the event that the Company 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 2025 Offering were approximately $ 750 (of which $ 475 received as of December 31, 2025). On March 10, 2026, we entered into an additional Warrant Amendment Agreement with the Investors pursuant to which we extended the term of the 2025 Warrants such that they expire on May 1, 2031 (See also note 17). F- 20 DUKE ROBOTICS CORP. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (USD in thousands, except share and per share data) NOTE 9 – SHAREHOLDERS’ EQUITY (continued) The Company analyzed the 2025 Offering in accordance with ASC 480, Distinguishing Liabilities from Equity, and ASC 815, Derivatives and Hedging. The make whole provision included in the 2025 Offering provides the 2025 Investors option to adjust the 2025 Offering strike price with a 20 % discount also in circumstances at which the price per share that would be determined at a future firm-commitment underwritten public offering on a major stock exchange, to be higher than the strike price per share in the 2025 Offering and as a results such make whole provision do not met the criteria of down-round feature under ASC-815 and the 2025 Warrants do not meet the criteria for equity classification. The Company also concluded that the make-whole provision is not legally detachable and cannot be separately exercised, and therefore cannot be considered as a freestanding instrument. Accordingly, the 2025 Warrants, inclusive of the make-whole provision, are accounted for as a single liability-classified instrument. The 2025 Warrants are initially recorded at fair value and will be remeasured at fair value at each reporting date, with changes in fair value recognized in the consolidated statements of operations until settlement or expiration. The Company using a third-party specialist allocated the total proceeds to the 2025 Warrants liability and to equity. Warrant liability The fair value of the 2025 Warrants liability was calculated as the sum of the 2025 Warrants issued and the make-whole provision. The fair value of the 2025 Warrants was calculated based on the probability of the expected offering date, using the Black-Scholes option-pricing model and the make-whole provision was calculated using the Monte Carlo Simulation Model. The 2025 Warrants was estimated at $ 189 and recorded as current liability on the balance sheet. The assumptions used to perform the calculations are detailed below: December 30, 2025 Expected volatility (%) 127.44 % - 179.34 % Risk-free interest rate (%) 3.47 % - 3.48 % Expected dividend yield 0.0 % Expected term (years) 0.316 - 2.417 Conversion price (U.S. dollars) 16.25 Underlying share price (U.S. dollars) 6.25 Fair value (U.S. dollars in thousands) 189 Fair Value Proportional Allocation Based on the above, the fair value proportion allocation as of December 31, 2025 was as follows: December 31, 2025 Equity component 286 2025 Warrants Liability 189 Total 475 F- 21 DUKE ROBOTICS CORP. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (USD in thousands, except share and per share data) NOTE 9 – SHAREHOLDERS’ EQUITY (continued) C. On December 30, 2025, the Company signed a service agreement with a non U.S. third party pursuant to which the service provider agreed to provide the Company with financial and project oversight services with respect to the 2025 Offering. Pursuant to the service agreement, the Company agreed to pay the service provider (1) 6 % of the aggregate gross proceeds which amounted to $ 45 and (2) options to receive a number of units (each unit for a price of $ 9.00 includes one share and one warrant with an exercise price of $ 16.25 per share) equal to 6 % of the investment amount received, divided by $ 9.00 . In the event that the 2025 investors that participated in the 2025 Offering exercise their 2025 Warrants, the service provider shall be entitled to receive an additional payment of (1) 6 % of the 2025 Warrants exercised amounts received and (2) options to receive a number of units (each unit for a price of $ 9.00 includes one share and one warrant with an exercise price of $ 16.25 per share) equal to 6 % of the 2025 Warrants exercised amounts received, divided by $ 9.00 . As of December 31, 2025, aggregate gross proceeds of $ 475 had been received under the Securities Purchase Agreements described above and were partially recorded as proceeds on account of shares and Stock purchase warrants liability (see note 17). The Company recorded an accrued cash fee of $ 28 of which approximately $ 17 was recorded as a reduction of additional paid-in capital and approximately $ 11 was recorded as finance expenses. The Company determined that the 2025 Warrants meet the criteria for equity classification in accordance with ASC 718. The fair value of the warrants granted to the service provider, were estimated at approximately $ 13 , using a third-party appraiser and were recorded $ 8 and $ 5 as issuance costs and share based compensation, respectively, with a corresponding increase to additional paid-in capital. NOTE 10 – SHARE BASED COMPENSATION On May 27, 2021, the board of directors of the Company approved the 2021 Equity Incentive Plan (the “2021 Plan”) pursuant to which the Company may issue awards, from time to time, consisting of non-qualified stock options, restricted stock grants and restricted stock units (“RSUs”). In addition, stock option awards that qualify under Section 102 of the Israeli Tax Ordinance (New Version) 1961 (the “ITO”), and/or under Section 3(i) of the ITO, may be granted. On March 18, 2025, the board of directors of the Company approved an increase in the number of shares of common stock available under the 2021 Plan from 192,000 to 360,000 (see also Note 17(3) On March 18, 2025, the board of directors of the Company approved the issuance of 82,800 options for employees, directors and consultants pursuant to the 2021 Plan (see also note 15 below). The fair value of options granted was estimated at the dates of grant using the Black-Scholes option pricing model. The following are the data and assumptions used: 2025 Dividend yield 0 Expected volatility (%) (*) 249.16 % Risk-free interest rate (%) (**) 4.04 % Expected term of options (years) (***) 4.00 Exercise price (US dollars) 5.25 Share price (US dollars) 5.5 Fair value (US dollars) 446 (*) The expected volatility was based on the historical volatility of the share price of the Company. (**) The risk-free interest rate represented the risk-free rate of $ zero – coupon US Government Loans. (***) Due to the fact that the Company does not have sufficient historical exercise data, the expected term was determined based on the “simplified method”. F- 22 DUKE ROBOTICS CORP. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (USD in thousands, except share and per share data) NOTE 10 – SHARE BASED COMPENSATION (continued) The following table presents the Company’s stock option activity: Number of Options Weighted Average Exercise Price Outstanding at December 31,2023 97,076 20.33 Granted - - Exercised - - Forfeited or expired - - Outstanding at December 31,2024 97,076 20.33 Granted 82,800 5.25 Exercised - - Forfeited or expired - - Outstanding on December 31, 2025 179,876 13.39 Number of options exercisable on December 31, 2025 97,076 20.33 The aggregate intrinsic value of the awards outstanding as of December 31, 2025 is $ 183 . These amounts represent the total intrinsic value, based on the Company’s stock price of $ 6.125 as of December 31, 2025, less the weighted exercise price. The stock options outstanding as of December 31, 2025, have been separated into exercise prices, as follows: Exercise price Stock options outstanding Weighted average remaining contractual life – years Stock options exercisable As of December 31, 2025 0.0025 18,000 0.23 18,000 5.25 82,800 5.21 - 9.50 50,275 1.53 50,275 25.00 3,975 1.50 3,975 56.25 24,826 1.50 24,826 179,876 3.09 97,076 The stock options outstanding as of December 31, 2024, have been separated into exercise prices, as follows: Exercise price Stock options outstanding Weighted average remaining contractual life – years Stock options vested As of December 31, 2024 0.0025 18,000 1.23 18,000 9.50 50,275 2.53 50,275 25.00 3,975 2.50 3,975 56.25 24,826 2.50 24,826 97,076 2.28 97,076 As of December 31, 2025 and 2024, there was $ 226 and $ 0 , respectively of total unrecognized compensation cost related to non-vested options. Compensation expense recorded by the Company in respect of its stock-based compensation awards for the period ended December 31, 2025 and 2024 was $ 219 and $ 28 , respectively and are included in General and Administrative expenses in the Statements of Comprehensive Loss. F- 23 DUKE ROBOTICS CORP. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (USD in thousands, except share and per share data) NOTE 11 – GENERAL AND ADMINISTRATIVE EXPENSES Year ended December 31 2025 2024 Professional services 871 686 Share base compensation 224 28 Insurance 37 41 Rent and office maintenance 78 69 Levies and tolls 8 12 Depreciation 7 18 Promotions 22 3 Other expenses 34 48 1,281 905 NOTE 12 – AGREEMENTS 1. On January 29, 2021, the Company, through its wholly owned subsidiary Duke Israel and Elbit Systems Land Ltd., an Israeli corporation (“Elbit”), entered into a Collaboration Agreement (the “Collaboration Agreement”) for the global marketing and sales, and the production and further development of Duke Israel’s developed advanced robotic system mounted on an Unmanned Aerial Solution (“UAS”), armed with lightweight firearms, which the Company markets under the commercial name “TIKAD.” Pursuant to the Agreement, Duke Israel granted Elbit a worldwide exclusive license for the use of Duke Israel’s know-how and intellectual property and the marketing, sales, production, and further development of the TIKAD for military, defense, homeland security, and para-military uses. As consideration for granting the worldwide exclusive license, Elbit will pay Duke royalties from revenues received from worldwide sales of TIKAD, with royalty rates ranging from low to mid-double-figure percentages, depending on the tiers of the selling price of TIKAD, for a period starting from the date of the Agreement until 15 years following receipt of $ 50,000 in cumulative revenues from sales of TIKAD units. In addition, Duke Israel agreed to pay Elbit similar rates of royalties for revenues received by Duke Israel from sales of its advanced robotic system for civil use, if such systems will include new know-how developed by Elbit. In addition to the above, Elbit paid Duke Israel an upfront fee at the time of signing the Agreement for transfer of the engineering material and support for transferring the required information to Elbit. In the second quarter of 2025, the Company recognized revenues from royalties for sales of Elbit’s “Bird of Prey” stabilized weapons drone systems (formerly marketed under Company’s commercial name “TIKAD”), pursuant to the Company’s Collaboration Agreement with Elbit signed on January 29, 2021. The Company analyzed such revenues under ASC 606, Revenue from Contracts with Customers. In addition, on March 24, 2025, the Company and Elbit agreed to expand the Collaboration Agreement to allow the Company to market the stabilized weapons drone system technology that Elbit has been marketing and deploying under the brand name “Bird of Prey” to military, defense, home-land security and para-military customers, in coordination with Elbit. The Company will be entitled to a commission fee, in the mid-single figure percentage range, from transactions resulting from its marketing activities, in addition to the royalties the Company is entitled to receive as part of the original Collaboration Agreement. F- 24 DUKE ROBOTICS CORP. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (USD in thousands, except share and per share data) NOTE 12 – AGREEMENTS (continued) Pursuant to the terms of the Collaboration Agreement, the parties also agreed to cooperate in continuing a project (the “Project”) that has already started with a customer in the Asia Pacific region. Per the Collaboration Agreement, Duke Israel shall be entitled to portion of the revenues generated in the Evaluation Phase of the Project. In addition, Elbit has agreed to invest, at its discretion and pursuant to certain milestones, in the further development and setting up of serial production lines of TIKAD, and may elect to increase such investment subject to the satisfaction of certain criteria, including Elbit’s right to terminate the Collaboration Agreement if, for example, the Project is cancelled by the customer. Such investment amounts will be made into Elbit’s owned assets and production lines of TIKAD. Elbit will recoup 50 % of its investment amount, up to $ 6,000 , by offsetting 50 % of royalty payments that may be due to Duke Israel. No revenues were generated during 2025 and 2024 or are expected to be generated under the evaluation phase of the Project. 2. On August 15, 2022, Duke Israel, signed a Collaboration and Development Agreement with the IEC, to perform a test pilot together with IEC of a robotic drone-enabled system for cleaning electric utility insulators to be developed by Duke Israel for a total amount of $ 300 . IEC is a 99 % government-owned company that generates, transmits, and supplies electricity to all sectors of the State of Israel. During October 2023, the Company successfully completed its obligations under the agreement with IEC upon delivery of the robotic drone, and accordingly recorded revenues and corresponding expenses at that point in time. As part of the agreement, Duke Israel will be obligated to pay IEC percentage of earned revenues for all future transactions relating to the developed technology up to a maximum of $ 900 . Following the successful pilot program conducted with the IEC, in August 2024, the Company, through Duke Israel, entered into an agreement with the IEC to provide high-voltage insulator washing services using the innovative IC Drone system. Under the terms of the agreement, the IEC will receive washing services for its high-voltage electric insulators using the IC Drone system and Duke Israel. will receive compensation in New Israeli Shekels (NIS) in an amount totaling in the low seven figures (in NIS) during the period that services are provided. The Company accounts for the contract as a single performance obligation and recognizes revenue once it has a right to issue an invoice for the services provided. Additionally, as part of the agreement, the IEC has committed to a minimum guaranteed paid utilization of the service, amounting to approximately half of the total contract value described above, within the first year of the agreement. This contract primarily accounts for the revenues recognized during 2025. On May 27, 2025, IEC extended the agreement for an additional year. NOTE 13 – INCOME TAX U.S. resident companies are taxed on their worldwide income for corporate income tax purposes at a statutory rate of 21 %. If certain conditions are met, income derived from foreign subsidiaries is tax exempt in the US under applicable tax treaties to avoid double taxation. Income of the Israeli company is taxable from 2018 onwards, at corporate tax rate of 23 %. The Company and subsidiaries have not received final tax assessments since their inceptions although the tax reports of Duke Israel for the years ended by December 31, 2019 are deemed to be final. F- 25 DUKE ROBOTICS CORP. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (USD in thousands, except share and per share data) NOTE 13 – INCOME TAX (continued) As of December 31, 2025, the Company and subsidiaries have operating loss carry forwards of approximately $ 6,629 , of which $ 674 can be offset against taxable income generated until 2037, $ 66 can be offset against taxable income generated until 2030 and $ 1,962 can be offset against future taxable income, if any, indefinitely limited to 80 % of the annual taxable income and $ 3,926 can be offset against future taxable income, if any, indefinitely. A. Loss before provision for income taxes was as follows: Year ended December 31 2025 2024 US Dollars United States ( 395 ) ( 102 ) Foreign ( 846 ) ( 883 ) Income before income taxes ( 1,241 ) ( 985 ) B. A reconciliation of the provision for income taxes to the amount computed by applying the 21 % statutory U.S. federal income tax rate to income before income taxes after the adoption of ASU 2023-09 is as follows: Year ended December 31 2025 US Dollars % Tax at U.S. Statutory Rate 261 21.0 % State and Local Income Taxes - - Foreign Tax Effects: Israel: Changes in statutory tax rates 16 1.3 % Other foreign jurisdictions 1 0.1 % Effect of Cross-Border Tax Laws - - Foreign tax credit for withholding taxes - - Other - - Tax Credits - - Changes in Valuation Allowances ( 371 ) ( 29.9 )% Changes in Unrecognized Tax Benefits ( 1 ) ( 0.1 )% Remeasurement of deferred taxes for foreign currency effects 94 7.6 % Effective Tax Rate - - F- 26 DUKE ROBOTICS CORP. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (USD in thousands, except share and per share data) NOTE 13 – INCOME TAX (continued) C. A reconciliation of the provision for income taxes to the amount computed by applying the 21 % statutory U.S. federal income tax rate to income before income taxes for years prior to the adoption of ASU 2023-09 is as follows: Year ended December 31 2024 US Dollars Loss before income taxes ( 985 ) U.S federal statutory income tax rate 21 % Income tax computed at the statutory income tax rate 207 Impact of differences in statutory income tax rates 17 Remeasurement of deferred taxes for foreign currency effects 9 Deferred taxes assets recognition for prior years 244 Change in valuation allowance ( 477 ) - D. Deferred taxes result primarily from noncapital loss carryforwards. Significant components of the Company’s deferred tax assets are as follows: Year ended December 31 2025 2024 Composition of deferred tax assets: US Dollars Operating loss carry-forwards 1,471 1,188 Operating lease liabilities 31 39 Share-based compensation 268 222 Other temporary differences 115 78 Total deferred tax assets 1,885 1,527 Composition of deferred tax liabilities: Right-of-use asset ( 26 ) ( 39 ) Total deferred tax liabilities ( 26 ) ( 39 ) Net deferred tax assets 1,859 1,488 Valuation allowance ( 1,859 ) ( 1,488 ) - - F- 27 DUKE ROBOTICS CORP. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (USD in thousands, except share and per share data) NOTE 14 – LOSS PER SHARE Basic loss per share is computed by dividing net loss by the weighted average number of shares outstanding during the year. The weighted average number of shares of common stock used in computing basic and diluted loss per share for the years ended December 31, 2025 and 2024, are as follows: Year ended December 31 2025 2024 Number of shares Weighted average number of shares of common stock outstanding attributable to shareholders 2,186,813 2,186,124 Total weighted average number of shares of common stock related to outstanding options and warrants, excluded from the calculations of diluted loss per share 840,991 699,073 NOTE 15 – RELATED PARTIES A. Transactions and balances with related parties Year ended December 31 2025 2024 General and administrative expenses: Directors and Officers compensation (*) 748 445 (*) Share base compensation 178 11 Financing: Financing expense 8 8 B. Balances with related parties: As of December 31, 2025 2024 Other accounts liabilities 117 43 Loans 330 322 F- 28 DUKE ROBOTICS CORP. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (USD in thousands, except share and per share data) NOTE 15 – RELATED PARTIES (continued) C. On August 4, 2024, the Company entered into a first amendment to service agreement with Mr. Balucka pursuant to which his monthly fee was increased, from NIS 30,000 (approximately $ 8,200 ) to NIS 40,000 (approximately $ 11,000 ) effective August 1, 2024. In addition, on August 4, 2024, the Company’s board of directors approved an annual bonus of NIS 120,000 (approximately $ 32,900 ) for Mr. Balucka pursuant to the terms of his existing services agreement. D. On March 18, 2025, the board of directors of the Company approved the following grants pursuant to the 2021 Plan (see also note 10 above): (i) Options to purchase 40,000 shares of common stock to Mr. Yossef Balucka, CEO, at an exercise price of $ 5.25 per share, and vest in three equal installments of 33 % at the end of each year. The options expire after six ( 6 ) years from the date of grant, and such other terms and conditions set forth in the 2021 Plan. (ii) Options to purchase 20,000 shares of common stock to Mr. Vadim Maor, Company’s CTO nominated at March 18, 2025, at an exercise price of $ 5.25 per share. The options have the following vesting schedule: 33 % of the options will vest after 12 months and the remaining portion will vest in eight equal installments over eight quarters. The options expire after six ( 6 ) years from the date of grant, and such other terms and conditions set forth in the 2021 Plan. (iii) Options to purchase 4,800 shares of common stock to Ms. Keren Gousman Golan, director at an exercise price of $ 5.25 per share and vest in three equal installments of 33 % at the end of each year. The options expire after six ( 6 ) years from the date of grant, and such other terms and conditions set forth in the 2021 Plan. (iv) Options to purchase 2,000 shares of common stock to Mr. Shlomo Zakai, CFO, at an exercise price of $ 5.25 per share, and vest in three equal installments of 33 % at the end of each year. The options expire after six ( 6 ) years from the date of grant, and such other terms and conditions set forth in the 2021 Plan. F- 29 DUKE ROBOTICS CORP. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (USD in thousands, except share and per share data) NOTE 16 – SEGMENT INFORMATION The Company has one operating and reportable segment, drone insulators washing activity. The chief operating decision maker evaluates segment performance primarily based on segment operating loss. The Company refined the name of the segment previously referred to as ‘Revenue from drones insulators washing’ to ‘Revenues from civil applications segment’ to better reflect its nature. The change had no impact on the composition or nature of the segment’s activities. The following table presents information about the Company’s reportable segment for the year ended December 31, 2025 and 2024: Revenue related to the Company’s reportable segments is as follows: Year ended December 31 2025 2024 Revenue from civil applications segment 361 108 Cost of revenues from civil applications segment ( 198 ) ( 71 ) Gross profit 163 37 Gross profit from other revenues 16 - Research and development expenses ( 104 ) ( 157 ) Depreciation ( 7 ) ( 18 ) Professional services ( 871 ) ( 686 ) Share base compensation ( 224 ) ( 28 ) Other general and administrative expenses ( 179 ) ( 173 ) Operating loss ( 1,206 ) ( 1,025 ) Interest expenses ( 128 ) ( 15 ) Interest income 103 55 Other expenses ( 10 ) - Net loss (1,241 ) (985 ) For the year ended December 31, 2025 and 2024, the Company’s operations were mostly confined to Israel. As of December 31, 2025 and 2024, all of the fixed assets of the Company were located in Israel and Greece. NOTE 17 – SUBSEQUENT EVENTS 1. In January 2026, the Company completed the issuance of 83,338 shares of common stock, $ 0.0001 par value per share, to the 2025 Investors, pursuant to the Securities Purchase Agreements described in Note 9B. Aggregate gross proceeds of $ 275 under these Securities Purchase Agreements had been received in 2026. 2. 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. 3. On March 10, 2026, the board of directors of the Company approved the issuance of 140,000 options for employees, directors and consultants pursuant to the 2021 Plan and in addition an increase in the number of shares of common stock available under the 2021 Plan from 360,000 to 480,000 . 4. On March 9, 2026, Sagiv Aharon resigned from the Board of the Directors of the Company. On March 10, 2026 the Company’s Board of directors approved a consulting agreement with Mr. Sagiv according to which effective as for the same date he will join the Company’s Advisory Board and be entitled for a monthly fee of $ 5 . F- 30