SEC Filing Document

Company: DUKE Robotics Corp.
Ticker: DUKR
CIK: 1638911
Filing Type: DRS
Document Type: DRS
Date Filed: 2025-12-22
Accession Number: 0001213900-25-124553
Exchange: OTC
SIC Code: 3721
SIC Description: Aircraft
URL: https://www.sec.gov/Archives/edgar/data/1638911/000121390025124553/filename1.htm

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transactions: Initial recognition of operating lease 119 146 The accompanying notes are an integral part of the consolidated financial statements. 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.

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).

DUKE ROBOTICS CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(USD in thousands, except share and per share data)

NOTE 1 –
GENERAL (continue)

October 2023, Hamas terrorists infiltrated Israel’s southern border from the Gaza Strip and conducted a series of horrific
terrorist attacks on civilian and military targets. Following the attack, Israel’s security cabinet declared war and commenced
a military campaign in Gaza against Hamas. Since the commencement of these events, there have been additional active hostilities,
including military operations focused in southern Lebanon against Hezbollah, air force operations against the Houthi movement in
Yemen and multiple airstrikes in Iran, in response to Iranian missile attacks. In October 2024, Israel began ground operations
against Hezbollah in Lebanon culminating in a 60-day cease fire agreed to between Israel and Lebanon on November 27, 2024. On
January 27, 2025, the ceasefire between Israel and Lebanon was extended to February 18, 2025. Following February 18,
2025,  Israeli forces retained control over strategic positions in southern Lebanon while seeking for  diplomatic
efforts to resolve the dispute. On January 19, 2025, a temporary ceasefire between Israel and Hamas went into effect, the result of
which is uncertain. While ceasefire agreements have been reached, there is no guarantee that the parties will continue to comply
with the terms of the agreements and, accordingly, it is possible that these hostilities will resume with little to no warning and
that additional terrorist organizations and, possibly, countries will actively join the hostilities. Such clashes may escalate in
the future into a greater regional conflict.

Due to the fact that most of our operations are
conducted in Israel and all members of the Company’s board of directors, management, as well as a majority of its employees and consultants, including
employees of its service providers, are located in Israel, the Company’s business and operations are directly affected by economic, political, geopolitical
and military conditions affecting Israel. Although the current war has not materially impacted the Company’s business or operations as of the date
of this report, any escalation or expansion of the war could have a negative impact on both global and regional conditions and may adversely
affect the Company’s business, financial condition, and results of operations.

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., and Duke Israel. 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.

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.

DUKE ROBOTICS CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(USD in thousands, except share and per share data)

NOTE 2
– SIGNIFICANT ACCOUNTING POLICIES (continue)

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. Transactions and monetary balances in
other currencies are translated into the functional currency using the current exchange rate.

Accordingly, monetary accounts maintained
in currencies other than the dollar are remeasured into dollars in accordance with Accounting Standards Codification (ASC) 830, “Foreign
Currency Matters”. All transaction gains and losses of the remeasured monetary balance sheet items are reflected in the statements
of comprehensive loss as financial income or expenses, as appropriate.

E.	Liquidity

Since inception, the Company has incurred
losses and negative cash flows from operations. The Company has financed its operations mainly through fundraising from various investors.

Based on the projected cash flows and
cash balances as of the date of these financial statements, management is of the opinion that its existing cash will be sufficient to
meet its obligations for a period which is longer than 12 months from the date of the approval of these consolidated financial statements.

F.	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 5

G.	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, 2024 or 2023.

DUKE ROBOTICS CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(USD in thousands, except share and per share data)

NOTE 2
– SIGNIFICANT ACCOUNTING POLICIES (continue)

H.	Income taxes