DUKR 10-K & 10-Q changes, risk factors and insider trading

Our limited operating history makes evaluating the business and future prospects difficult and may increase the risk of your investment. Our operating subsidiary in Israel was formed in March 2014. To date, we have generated limited revenuesrevenues, andthrough have not yet begun meaningfulour commercialization efforts with respect to our products. We intend in the long-term to derive substantial revenues from the sales of the IC Drone, as well as future models of other robots and our UAS platforms for both military and civilian use, but there can be no assurance that we will be able to do so.

We expect that we will need to raise additional funds to continue the design, manufacture, sale and servicing of the IC Drone and our stabilized robotic technology as well as develop future robot products and other platforms for the implementation of our robot.products. We believe that we will need to raise additional capital in the future to fund our research and development and commercialization efforts. If we seek to raise additional capital, we may do so through the issuance of equity, equity-related, or debt securities or through obtaining credit from government or financial institutions or other persons. This capital will be necessary to fund ongoing operations, continue research, development and design efforts, establish a sales infrastructure and make the investments in tooling and equipment required to develop and manufacture our products. Moreover, the terms of any financing may adversely affect the holdings or the rights of holders of our securities and the issuance of additional securities, whether equity or debt, by us, or the possibility of such issuance, may cause the market price of our common sharesstock to decline. The incurrence of indebtedness could result in increased fixed payment obligations, and we may be required to agree to certain restrictive covenants, such as limitations on our ability to incur additional debt, limitations on our ability to acquire, sell or license intellectual property rights and other operating restrictions that could adversely impact our ability to conduct our business. We could also be required to seek funds through arrangements with collaborative partners or otherwise at an earlier stage than otherwise would be desirable, and we may be required to relinquish rights to some of our technologies or product candidates or otherwise agree to terms unfavorable to us, any of which may have a material adverse effect on our business, operating results and prospects. Even if we believe that we have sufficient funds for our current or future operating plans, we may seek additional capital if market conditions are favorable or if we have specific strategic considerations.

We have limited funds, and such funds are not fully adequate to fully support our future development and business plans. Our ultimate success may depend on our ability to raise additional capital. In the absence of additional financing or significant revenues and profits, the Company will have to approach its business plan from a much different and much more restricted direction, attempting to secure additional funding sources to fund its growth, borrowing money from lenders or elsewhere or to take other actions to attempt to provideobtain funding.

We expect to derive most of our immediate future revenues from the civilian sector directly or indirectly from governmental and quasi-governmental customers in the energy utility sector. As Technologya productsresult, fromour foreignrevenues countriesmay be concentrated among a relatively limited number of customers, and the loss of, or a material reduction in business from, any significant customer could have ana inherentdisproportionate disadvantageadverse againsteffect domesticon offerings.our revenues, results of operations and cash flows. Governmental and quasi-governmental customers are subject to budgeting, appropriations and procurement processes that are inherently uncertain and may be delayed, reduced or eliminated due to numerous factors, including changes in political leadership, shifting policy priorities, macroeconomic conditions and geo-political events that are beyond our control. The funding of government programs could be reduced or eliminated due to numerous factors, including geo-political events and macro-economic conditions that are beyond our control. Reduction or elimination of government spending under our contracts would imperil the sales of our products and may cause a negative effect on our revenues, results of operations, cash flow and financial condition.

The manufacturing process for some of our products largely consists of the assembly, integration and testing of purchased components. If a supplier stops delivery of such components, finding another source could result in added cost and manufacturing delays. Our supply chain may also be exposed to broader risks beyond individual supplier performance, including limited availability of certain specialized or critical components, subcomponents or raw materials, such as electronics, sensors, batteries, semiconductors or materials that may be sourced from a limited number of suppliers or geographic regions. Moreover, if our subcontractors fail to meet their design, delivery schedule or other obligations we could be held liable by our customers, and we may be unable to obtain full or partial recovery from our subcontractors for those liabilities. TheIn foregoingaddition, certain riskscomponents or materials used in our products may be subject to export controls, trade restrictions, tariffs, sanctions or embargoes, including restrictions related to dual-use technologies, defense-related systems or materials sourced from jurisdictions subject to heightened regulatory scrutiny. Changes in trade policy, geo-political tensions or the imposition of new sanctions or embargoes could have a material adverse effect onlimit our operatingability results.to procure components, require us to redesign products, seek alternative suppliers or obtain governmental approvals, any of which could result in increased costs, production delays or reduced margins.

Any significant growth in the market for our products or our entry into new markets may require an expansion of our employee base for managerial, operational, financial, and other purposes. As of March 12, 20, 2025,2026, we hadhave oneengaged full-time employee, our Chief Executive Officer, and engage twothree (23) executive officers, our CEO, CTO and our Chief Financial Officer (“CFO”).CFO. During any period of growth, we may face problems related to our operational and financial systems and controls, including quality control and delivery and service capacities. We would also need to continue to expand, train and manage our employee base. Continued future growth will impose significant added responsibilities upon the members of management to identify, recruit, maintain, integrate, and motivate new employees.

Our success depends significantly on our ability to protect our proprietary rights to the technologies used in our products. We were granted a patent with the United States Office Patent and Trademark Office to protect certain of our key technologies, however, we cannot assure you that we will be able to control all of the rights for all of our intellectual property. We do not know whether any of our future patent applications, if any, will result in the issuance of any patents. Even issued patents may be challenged, invalidated or circumvented. Patents may not provide a competitive advantage or afford protection against competitors with similar technology. Competitors or potential competitors may have filed applications for, or may have received patents and may obtain additional and proprietary rights to compoundstechnologies or processes used by or competitive with with ours. Both the patent application process and the process of managing patent disputes can be time-consuming and expensive. Competitors may be able to design around our patents or develop products which provide outcomes which are comparable or may even be superior to ours.

In addition, we have taken steps to protect our intellectual property and proprietary technology, including entering into confidentiality agreements and intellectual property assignment agreements with all of our executive officers, employees, consultants and advisors, however, such agreements may not provide meaningful protection for our trade secrets or other proprietary information in the event of unauthorized use or disclosure or other breaches of the agreements. Furthermore, the laws of foreign countries may not protect our intellectual property rights to the same extent as do the laws of the United States. However, we have not executed confidentiality agreement or non-compete agreements with our third-party suppliers and there is no restriction on their working with our competitors or selling our component designs to other parties. In that regard, we deem our complex kinematic algorithms and control software to be our most valuable intellectual property and is done in-house only with no sub-contractor involved. In that regard, while our complex kinematic algorithms and control software are developed entirely in-house and are not shared with subcontractors, we primarily rely on a combination of trade secret protection, copyright law and contractual confidentiality measures to protect these technologies. Trade secret protection depends on our ability to maintain the secrecy of the underlying information, and may be lost if such information is disclosed, misappropriated or independently developed by third parties. Copyright protection generally protects the expression of software code, but does not prevent others from developing independent software, algorithms or systems that perform similar functions or achieve comparable results.

Following the Share Exchange, ourOur current executive officer and directors hold approximately 22.20%21.38% of the issued and outstanding voting power of the Company’s outstanding shares. These persons have a controlling influence in determining the outcome of any corporate transaction or other matters submitted to our stockholders for approval, including mergers, consolidations and the sale of all or substantially all of our assets, election of directors, and other significant corporate actions. As such, our directors and executive officer may have the power, acting alone or together, to prevent or cause a change in control; therefore, without their consent we could be prevented from entering into transactions that could be beneficial to us. The interests of our executive officer may give rise to a conflict of interest with the Company and the Company’s shareholders.

In addition, we have a number of stockholders who are beneficial owners of more than 5% of our outstanding common shares, as of the Effective Time, including one such shareholder shareholder who beneficially owns approximately 34.37%19.98% of our issued and outstanding shares, and as such, also may have the ability to prevent us from entering into transactions that could be beneficial to us and/or other shareholders. In addition, we have one additional non-affiliated non-affiliated stockholder who beneficially owns more than 5% of our outstanding common shares. Although none of these non-affiliated stockholders currently have a controlling influence in determining the outcome of any corporate transaction or other matters submitted to our stockholders for approval, including mergers, consolidations and the sale of all or substantially all of our assets, election of directors, and other significant corporate actions, obtaining their vote on certain matters may be necessary to effect certain actions that our management and directors otherwise deem to be in the best interests of the Company.

Our principal executive offices and other significant operations are located in Israel, and, therefore, our results may be adversely affected by political, economic and military instability in Israel, including the recent2023 attacksattack by Hamas and other terrorist organizations from the Gaza Strip and Israel’s war against them.

Further, in the past, the State of Israel and Israeli companies have been subjected to economic boycotts. Several countries still restrict business with the State of Israel and with Israeli companies. These restrictive laws and policies may have an adverse impact on our operating results, financial condition or the expansion of our business. A campaign of boycotts, divestment and sanctions has been undertaken against Israel, which could also adversely impact our business. Moreover, we cannot predict how this war will ultimately affect Israel’s economy in general, which may involve additionala downgrade in Israel’s credit rating by rating agencies (such as theMoody’s recent downgrade by Moody’s of its creditoutlook rating of Israel fromas A2 to Baa1, maintaining its outlook“stable” and rating “negative”level as Baa1). We may also be targeted by cyber terrorists specifically because we are an Israeli-related company. In addition, in January 2024 the International Court of Justice, or ICJ, issued an interim ruling in a case filed by South Africa against Israel in December 2023, making allegations of genocide amid and in connection with the war in Gaza, and ordered Israel, among other things, to take measures to prevent genocidal acts, prevent and punish incitement to genocide, and take steps to provide basic services and humanitarian aid to civilians in Gaza. There are concerns that companies and businesses will terminate, and may have already terminated, certain commercial relationships with Israeli companies following the ICJ decision. The foregoing efforts by countries, activists and organizations, particularly if they become more widespread, as well as the ICJ rulings and future rulings and orders of other tribunals against Israel (if handed), may materially and adversely impact our ability to sell our products outside of Israel.

Prior to the Hamas attack in October 2023, the Israeli government pursued extensive changes to Israel’s judicial system. In response to the foregoing developments, individuals, organizations and institutions, both within and outside of Israel, have voiced concerns that the proposed changes may negatively impact the business environment in Israel including due to reluctance of foreign investors to invest or transact business in Israel as well as to increased currency fluctuations, downgrades in credit rating, increased interest rates, increased volatility in securities markets, and other changes in macroeconomic conditions. The risk of such negative developments has increased in light of the recent Hamas attacks and the multi-front war Israelagainst isHamas facing,declared by Israel, regardless of the proposed changes to the judicial system and the related debate. To To the extent that any of these negative developments do occur, they may have an adverse effect on our business, our results of operations and our ability to raise additional funds, if deemed necessary by our management and board of directors.

We incur expenses in U.S. dollarsdollars, Euro and NIS, but our financial statements are denominated in U.S. dollars. The U.S. dollar is our functional currency. However, as as we also incur expenses in NIS,NIS and Euro, we are affected by foreign currency exchange fluctuations through both translation risk and transaction transaction risk. As a result, we are exposed to the risk that the NIS may appreciate relative to the dollar, or, if the NIS instead devalues relative relative to the dollar,dollar or the Euro, that the inflation rate in Israel may exceed such rate of devaluation of the NIS, or that the timing of such devaluation may lag behind inflation in Israel. In any such event, the dollar cost of our operations in Israel would increase and our dollar-denominated results of operations would be adversely affected.

Undetected problemsdefects or malfunctions in our products could impair our financial resultsresults, harm our reputation and giveexpose riseus to potentialsignificant product liability claims.claims that may not be adequately covered by insurance.

If thereOur products and systems are complex and may contain undetected defects in the design, production or testingtesting. ofIf oursuch productsdefects andor systems,malfunctions were to occur, we could face incur substantial repair, replacement or service costs, potentialsuffer liabilityreputational harm and damageexperience todelays or disruptions in our reputation.operations. DefectsIn addition, defects or malfunctioningmalfunctions ofin our products,products ifcould they were to occur, would likely result in significantserious damage andinjury, loss of life.life or other adverse effects, which could expose us to significant product liability claims. We may not be able to obtain or maintain product liability or other insurance toat reasonable cost or on acceptable terms, or such insurance may not fully cover suchall risks,potential liabilities. Even where insurance coverage is available, andit ourmay effortsbe subject to implementcoverage appropriatelimits, design,exclusions testingor deductibles that could leave us exposed to substantial uninsured losses. Any significant product liability claims, increased insurance costs or uninsured liabilities could materially and manufacturingadversely processes for our products or systems may not be sufficient to prevent such occurrences, which could have a material adverse effect onaffect our business, results of operations and financial condition.

We are a robotics company developing an advanced robotics and drone-based systems. Our advanced robotic system that enables remote, real-time, pinpoint accurate firing of small arms and light weapons.weapons Our advanced robotics systemthat can achieve pinpoint accuracy regardless of the movement of the weapons platform or the target. We also introduced an insulator cleaning drone, which is a drone technology for conducting routine maintenance of critical infrastructure for cleaning electric utility cable insulators.

On April 29, 2020, thewe, Company,Duke Duke,Inc., and UAS Sub, enteredexecuted intoan theAgreement Mergerand Agreement,Plan pursuantof toMerger, under which UAS Sub was to merge, upon the satisfaction of customary closing conditions, with and into Duke.Duke Upon closing of the Short-Form Merger, each outstanding share of UAS Sub’s common stock, par value $0.0001 per share, was to be converted into and become one share of common stock of Duke,Inc., with Duke Inc. surviving as aour wholly-owned subsidiary ofsubsidiary. the Company. Pursuant toUnder the Merger Agreement, thewe Companyintended to acquiredacquire the remaining outstanding shares of Duke Inc. held by those certain stockholders of Duke thatInc. shareholders who did not participate in the Share Exchange Agreement. At the closing of the transaction contemplated by the Merger Agreement, the Company was to issue 63,856 shares to certain Duke stockholders, and Duke will become a wholly owned subsidiary of the Company.Exchange. On June 25, 2020, Duke Inc. filed a Certificate of Merger with the State of Delaware, and consequently, Duke Inc. became a our wholly-owned subsidiary of the Company, and the Short-Form Merger was consummated.

On October 28, 2024, we filed a Certificate of Amendment to our Articles of Incorporation with the Nevada Secretary of State to change the Company’s corporate corporate name from UAS Drone Corp. to DUKE Robotics Corp. effective as of November 4, 2024.

In connection with the Certificate of Amendment, we also filed an issuer notification form with FINRA reflecting our name change and requesting a change in itsour trading symbol from “USDR” to “DUKR”. Effective as of market open on Monday, November 4, 2024, the name changed to DUKE Robotics Corp. and the transition of itsour OTCQB ticker symbol from “USDR” to “DUKR” took effect.

Cost of revenues. During the year ended December 31, 2024,2025, we had $71,000$198,000 in cost of revenues expenses, compared to $273,000$71,000 for the year ended December 31, 2023. 2024. The cost of revenues in 2024 mainly consists of professional servicesoperational expenses associated with our agreements with the IEC as detailed above. The cost of revenues forincrease the year ended December 31, 2023 were derived from our earlier August 2022 collaboration and development agreement with IEC to provide drone-enabled systems for high-voltage insulator washing, which we successfully completed during October 2023. Thein cost of revenues forwas primarily attributed to the yeargrowth ended December 31, 2024, were derived fromin our AugustIC 2024Drone commercial agreementservice for high-voltage insulator washing services with the IEC commenced during in August 2024.activities.

Research and Development. During the year ended December 31, 2024,2025, we had $157,000$104,000 in research and development expenses, compared to $3,000$157,000 in research and development expenses for the year ended December 31, 2023.2024. The increasedecrease in our research and development expenses are mainly due to professionalallocating servicesmore resources and otherto fieldthe tests associated with our continued development of additional capabilitiesexecution of our IC Drone system.insulator service activities, and less to development activities.

General and Administrative Expenses. For the year ended December 31, 2024,2025, our general and administrative expenses amounted to $905,000,$1,281,000, of which $685,000$871,000 were related to professional services, such as accounting, auditing, insurance costs, consulting and legal services, and $28,000$224,000 were related to stock-based compensation expenses, and were $826,000$905,000 for the year ended December 31, 2023,2024, of which $575,000$686,000 were related to professional services and $108,000$28,000 related to stock-based compensation expenses. This increase in general and administrative expenses for the year ended December 31, 2024,2025, was mainly due to an increase in professional services partiallyattributable to offsetour byexpansion ain decreaseGreece activities and officer compensation expenses, as well as in stock-based compensation expenses, attributable expenses.to equity awards granted in March 2025.

Financial Income,Income (expenses), net. For the year ended December 31, 2024,2025, our financial incomeexpenses amounted to $40,000$25,000 as compared to $76,000financial income of $40,000 for the year ended December 31, 2023. 2024. The reason for the decreaseincrease in financial incomeexpenses for the year ended December 31, 2024,2025, was mainly due to the decrease in the balance of our available cash bank deposits which resulted in a decrease in interest income on our bank deposits.income.

Net Loss. For the year ended December 31, 20242025 and 2023,2024, we recorded a net loss of $985,000$1,241,000 and $726,000,$985,000, respectively, which represented an increase of $256,000 in 2025 compared to the year ended December 31, 2024, of $259,000.2024.

This Management Discussion and Analysis of Financial Condition and Results of Operations discusses our financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). In connection with the preparation of our financial statements, we wereare required to make assumptions and estimates about future events and apply judgments that affect the reported amounts of assets, liabilities, revenue, expenses and the related disclosures. We base our assumptions, estimates and judgments on historical experience, current trends and other factors that management believes to be relevant at the time our consolidated financial statements are prepared. On a regular basis, management reviews the accounting policies, assumptions, estimates and judgments to ensure that our financial statements are presented fairly and in accordance with U.S. GAAP. However, because future events and their effects cannot be determined with certainty, actual results could differ from our assumptions and estimates, and such differences could be material.

Our significant accounting policies and estimates are discussed in Note 2, “Summary of Significant Accounting Policies,” and “Use of Estimates in the preparation of financial statements” of the notes to consolidated financial statement, which are incorporated by reference into this prospectus.annual report.

Since inception, we have devoted substantially allmost our efforts to research and development and have incurred accumulated losses of $11,162,000.$12,403,000.

As of December 31, 2024,2025, we had a cash balance of $1,256,000$750,000 compared to a cash balance of $2,281,000$1,256,000 as of December 31, 2023.2024. The reason for the decrease in our cash balance was mainly due to the operating expenses describedescribed above. This balance excludes $275,000 received in January 2026 under our December 30, 2025, Securities Purchase Agreement.

Cash used in operations for the year ended December 31, 2024,2025, was $918,000$811,000 as compared to cash used in operations of $548,000$918,000 for the year ended December 31, 2023.2024. The reason for the increasedecrease in cash used in operations is mainly related to the increase in our operatingtrade expenses.receivable and other liabilities.

On May 11, 2021, we entered into securities purchase agreements with eight (8) non-U.S. Investors,investors, pursuant to which we, in a private placement offering, agreed to issue and sell to investors an aggregate of: (i) 12,500,000500,000 shares of our Common Stock at a price of $0.40$10.00 per share; and (ii) warrants to purchase 12,500,000500,000 of our Common Stock. The warrants were exercisable immediately and for a term of 18 months and have an exercise price of $0.40$10 per share. The aggregate gross proceeds from the offering were approximately $5,000,000 and the offering closed on May 11, 2021. On April 5, 2022, we entered into an agreement with the Investors pursuant to which we extended the term of the warrants, to expire on November 11, 2023. On November 1, 2023, we and the Investors executed a second extension agreement, such that the term of the warrants was extended to expire on November 11, 2024. On June 20, 2024, we entered into a Warrant Amendment Agreement with the Investors to amend the terms of the warrants issued in connection with the May 11, 2021 securities purchase agreements. Under the Warrant Amendment Agreement, we and the Investors agreed to: (i) extend the warrant exercise term to May 11, 2026; (ii) amend the warrant exercise price, increasing it from $0.40$10.00 per share to $0.65 $16.25 per share; and (iii) include a beneficial ownership blocker that limits the exercise of such warrants if the exercise would result in the holder beneficially owning more than 19.99% of the Company’s common stock immediately following the exercise. On March 10, 2026, we entered into an additional Warrant Amendment Agreement with the Investors pursuant to which we extended the term of the warrants, to expire on May 1, 2031.

On August 15, 2022, Duke Israel introduced the Insulator Cleaning (“IC”) Drone, a drone technology for conducting routine maintenance of critical infrastructure, and has signed an agreement with Israel Electric Corporation Ltd. (the “IEC”) to provide drone-enabled systems for cleaning electric utility cable insulators. During October 2023, we completed our obligations under the agreement with the IEC. This was followed in August 2024, by a new agreement with the IEC to utilize our innovative IC Drone system for cleaning electric utility cable insulators. On May 12, 2025, we announced the successful commencement of our 2025 insulator cleaning activity in Israel with the IEC under our previously announced service agreement. On June 10, 2025, we announced the launch of our next-generation IC Drone System - the ICDS2 - representing a significant technological advancement in our innovative utility maintenance drone solution. The ICDS2 features several key technological advancements over its predecessor, featuring extended flight time, higher payload capacity, enhanced stability, advanced radar and improved cleaning durability. It has been successfully deployed at the start of the insulator cleaning season in May 2025, marking a full-season operational timeline compared to 2024’s mid-season commencement. On June 2, 2026, we announced the successful commencement of our 2026 IC Drone season with the IEC, under the expanded service agreement. The 2026 cleaning season is being executed with a materially broader operational footprint than any prior season, encompassing a substantially larger volume of high-voltage insulators serviced and an increased number of active field crews deploying the Company’s ICDS2.

On May 14, 2026, we entered into an underwriting agreement (the “Underwriting Agreement”) with Maxim Group LLC, as representative of the several underwriters identified therein (the “Underwriters”), relating to the public offering (the “Offering”) of 1,125,000 units, with each unit consisting of one share of our common stock, par value $0.0001 (the “Shares”), and warrants to purchase one share of our common stock (the “Warrants”) at an exercise price of $8.60 per share, exercisable for a period of five years, subject to certain adjustments and cashless exercise provisions. The combined price public offering price per Unitunit was $8.20. Under the terms of the Underwriting Agreement, we granted the Underwriters an option, exercisable for 45 days following the closing of the Offering, to purchase up to an additional 168,750 shares of common stock and/or Warrants to purchase 168,750 shares of common stock to cover over-allotments, if any. On May 15, 2026, the Underwriter partially exercised its over-allotment option with respect to Warrants to purchase 168,750 shares of common stock. On May 18, 2026, we closed the Offering, as well as the partial exercise of the over-allotment option, and issued the Shares and Warrants, resulting in aggregate gross proceeds of approximately $9,225,000, before deducting underwriting discounts and commissions and estimated offering expenses.

Comparison of the three months ended MarchJune 31,30, 2026 and 2025

Research andRevenues. Development. Our research and development expensesRevenues for the three months ended MarchJune 31,30, 2026, amounted to $29,000,$149,000, compared to $22,000 for$143,000 in revenues during the three months ended MarchJune 31,30, 2025. The increase in researchrevenues andis development expenses was mainly dueattributable to continuedan improvements toincrease thein revenues from our IC Drone insulator washingcleaning system.activities.

Financial IncomeResearch (expenses),and net.Development. ForOur theresearch threeand months ended March 31, 2026, we had financialdevelopment expenses of $408,000 compared to financial income of $9,000 for the three months ended MarchJune 31,30, 2026, amounted to $32,000 compared to $24,000 for the three months ended June 30, 2025. The reason for the increase in financialresearch expenses,and development expenses was mainly attributabledue to the modificationcontinued ofimprovements theto termsour ofinsulator certainwashing warrant agreements, which resulted in a change in the warrant liability.system.

Net Loss. We incurred a net loss of $921,000$726,000 for the three months ended MarchJune 31,30, 2026, as compared to a net loss of $279,000$269,000 for the three months ended MarchJune 31,30, 2025, for the reasons set forth above.

We had $475,000$6,951,000 in cash on MarchJune 31,30, 2026,2026 versus $1,014,000$581,000 in cash on MarchJune 31,30, 2025. The primary reason for the decreaseincrease in our cash balance was due to thenet proceeds received from our May 2026 public offering of $7,263,000, as well as proceeds from issuance of shares under our December 30, 2025, securities purchase agreements partially offset by operating expenses described above. Cash used in operations for the threesix months ended MarchJune 31,30, 2026,2026 was $517,000$1,283,000 as compared to cash used in operations of $218,000$578,000 for the threesix months ended MarchJune 31,30, 2025. The reason for the increase in cash used in operations is mainly related to one-time expenses related to our Nasdaq uplisting and the associated Offering and increase in our operating expenses described above.

Net cash used in investing activities was $0 for the threesix months ended MarchJune 31,30, 2026, as compared to net cash used in investing activities of $25,000$96,000 for the threesix months ended MarchJune 31,30, 2025.

Net cash provided by financing activities was $275,000$7,524,000 for the threesix months ended MarchJune 31,30, 2026, compared to net cash used in investing activities of $0 for the threesix months ended MarchJune 31,30, 2025. The reason for the increase is related to proceeds received from shareour issuance.May 18, 2026 public offering of $7,263,000 as well as proceeds from issuance of shares under our December 30, 2025, securities purchase agreements.

Since our inception we and Duke have funded our operations through equity and debt financing, bank loans, loans provided by shareholdersshareholders, and demonstration projects of its technology to potential customers.customers and providing our ICD services to the IEC.

As of MarchJune 31,30, 2026 and MarchJune 31,30, 2025, the outstanding balances of such stockholders’ loans were $332,000$334,000 and $324,000,$326,000, respectively.

On December 30, 2025, we entered into securities purchase agreements with seven (7) non-U.S. investors, pursuant to which we, in a private placement offering, agreed to issue and sell to the investors an aggregate of: (i) 83,338 shares of our common stock at a price of $9.00 per share); and (ii) warrants to purchase 83,338 shares of common stock. The warrants have an exercise price of $16.25 per share, are exercisable immediately and expire on November 30, 2026, subject to extension to May 30, 2028 if a public offering or other qualifying financing of at least $2,500,000 has not occurred prior to such date. In addition, the securities purchase agreement contains a make whole provision that provides for the investors to receive additional shares of Common Stock in the event that we consummatesconsummate a firm-commitment underwritten public offering on a major stock exchange by November 30, 2026 at a price per share (after giving effect to a 20% discount) that is less than the Purchase Price. The aggregate gross proceeds from the offering were approximately $750,000 and the offering closed on January 6, 2026. Proceeds from the offering were used for general corporate purposes and working capital, including supporting our operational and commercialization initiatives. On March 10, 2026, we entered into an additional Warrant Amendment Agreement with the Investors pursuant to which we extended the term of the warrants, to expire on May 1, 2031.

On May 14, 2026, we entered into the Underwriting Agreement with the Underwriters relating to the the Offering of 1,125,000 units, with each unit consisting of one share of our common stock and warrants to purchase one share of our common stock at an exercise price of $8.60 per share, exercisable for a period of five years, subject to certain adjustments and cashless exercise provisions. The combined price public offering price per unit was $8.20. Under the terms of the Underwriting Agreement, we granted the Underwriters an option, exercisable for 45 days following the closing of the Offering, to purchase up to an additional 168,750 shares of common stock and/or Warrants to purchase 168,750 shares of common stock to cover over-allotments, if any. On May 15, 2026, the Underwriter partially exercised its over-allotment option with respect to Warrants to purchase 168,750 shares of common stock.

We currently believe that our existing capital resources will be sufficient to support our operating for beyond the next twelve months.

As of MarchJune 31,30, 2026, we did not have any off-balance sheet arrangements as defined in Item 303(a)(4) of Regulation S-K.