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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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. P. 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 our 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.

DUKE ROBOTICS CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

NOTE 2
– SIGNIFICANT ACCOUNTING POLICIES (continue)

Q.	New Accounting Pronouncements

Recently Adopted Accounting
Standards

Segment Reporting: In November 2023,
the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) No. 2023-07, Segment
Reporting (Topic 280): Improvements to Reportable Segment Disclosures. It requires incremental disclosures related to an entity’s
reportable segments, including (i) significant segment expense categories and amounts for each reportable segment that are provided to
the chief operating decision maker (“CODM”), (ii) an aggregate amount and description of other segment items included in each
reported measure, (iii) all annual disclosures about a reportable segment’s profit or loss and assets required by Topic 280 to be
disclosed in interim periods, (iv) the title and position of the individual or the name of the group identified as the CODM and (v) an
explanation of how the CODM uses the reported measures of segment profit or loss to assess performance and allocate resources to the segment.
The standard improves transparency by providing disaggregated expense information about an entity’s reportable segments. The standard
does not change the definition of a segment, the method for determining segments or the criteria for aggregating operating segments into
reportable segments. This guidance is effective for annual reporting periods beginning after December 15, 2023, and interim reporting
periods beginning after December 15, 2024. The Company adopted this guidance retrospectively, providing the additional disclosures as
required. See note 15, for more information.

Accounting Standards Not Yet
Adopted

Income Taxes: In December
2023, the FASB issued ASU 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. Early adoption is permitted for annual financial statements that have not yet been
issued or made available for issuance. The amendments in this update should be applied on a prospective basis and retrospective
application is permitted. The Company does not expect this ASU to have a material effect on its consolidated financial
statements.

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.

DUKE ROBOTICS CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

NOTE 3 –
OTHER CURRENT ASSETS

December 31,

Prepaid and deferred expenses 21 24

Government Institutions 10 17

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 years monthly payments. Lease payment are linked to the Israeli Consumer Price Index. The
property became available for the 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. As of December 31, 2024, the Company estimates it will utilize the 2 years
extension option under the above lease agreement.

B.	The components of operating lease expense for the period ended December 31, 2024 and 2023 were as follows:

December 31,

Operating lease expense 54 53

C.	Supplemental cash flow information related to operating leases was as follows:

December 31,

Cash paid for amounts included in the measurement of lease liabilities:

Operating cash flows from operating leases 59 52

Right-of-use assets obtained in exchange for lease obligations (non-cash):

Operating leases 119 146

DUKE ROBOTICS CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

NOTE 4 –
LEASES (continue)

D.	Supplemental balance sheet information related to operating leases was as follows:

Year ended
December 31,

Operating leases:

Operating leases right-of-use asset and lease deposit 184 117

Current operating lease liabilities 60 52

Non-current operating lease liabilities 109 46

Total operating lease liabilities 169 98

Weighted average remaining lease term (years) 3.08 2.09

Weighted average discount rate 8.75	% 8.75	%

E.	Future minimum lease payments under leases as of December 31, 2024 are as follows:

Total operating lease payments 191

Less: imputed interest (22	)

Present value of lease liabilities 169

NOTE 5 –
PROPERTY AND EQUIPMENT, NET

December 31,

Computers 10 10

Furniture and office equipment 14 14

Drones 52 -

Vehicles 25 -

Leasehold improvements 66 66

Less - accumulated depreciation (79	) (50	)

Total property and equipment, net 88 40