DUKE Robotics Corp.: Form 10-Q for the period ended Sep 30, 2025

Readers are advised to review the following discussion and analysis of our financial condition and results of operations together with our consolidated financial statements and related notes thereto included elsewhere in this Quarterly Report on Form 10-Q (the “Quarterly Report”) and the consolidated financial statements and related notes thereto in our Annual Report on Form 10-K for the year ended December 31, 2024. Some of the information contained in this discussion and analysis or set forth elsewhere in this Quarterly Report, including information with respect to our plans and strategy for our business, includes forward-looking statements that involve risks and uncertainties. See “Cautionary Note Regarding Forward-Looking Statements”. You should review the “Risk Factors” section of our Annual Report for the fiscal year ended December 31, 2024, for a discussion of important factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis.

We are a robotics company developing advanced robotics and drone-based systems. Our advanced robotic system enables remote, real-time, pinpoint accurate firing of small arms and light weapons that can achieve pinpoint accuracy regardless of the movement of the weapons platform or the target. 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.

We were founded in 2014 as Unlimited Aerial Systems, LLP (“UAS LLP”), and until the consummation of the Share Exchange Agreement (as hereinafter defined), we were a developer and manufacturer of commercial unmanned aerial systems, or drones, intending to provide a superior Quadrotor aerial platform at an affordable price point in the law enforcement and first responder markets.

On March 9, 2020, we closed on the Share Exchange Agreement (the “Share Exchange Agreement”), under which Duke Robotics, Inc., a Delaware corporation (“Duke Inc.”) became our majority-owned subsidiary (the “Share Exchange”). Such closing date is referred to as the “Effective Time.” As a result of the Share Exchange, the Company adopted the business plan of Duke Inc.

On April 29, 2020, we, Duke Inc., and UAS Acquisition Corp., a Delaware corporation and our wholly-owned subsidiary (“UAS Sub”), executed an Agreement and Plan of Merger (the “Merger Agreement”), under which UAS Sub was to merge, upon the satisfaction of customary closing conditions, with and into Duke Inc., with Duke Inc. surviving as our wholly-owned subsidiary (the “Short-Form Merger”). Under the Merger Agreement, we intended to acquire the remaining outstanding shares of Duke Inc. held by those certain Duke Inc. shareholders who did not participate in the Share Exchange. On June 25, 2020, Duke Inc. filed a Certificate of Merger with the State of Delaware, and consequently, Duke Inc. became our wholly-owned subsidiary and the Short-Form Merger was consummated.

On January 29, 2021, we, through Duke Airborne Systems Ltd. (“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 by Elbit of our developed advanced robotic system mounted on a UAS, armed with lightweight firearms, which we then marketed under the commercial name “TIKAD.” On April 2, 2025 we and Elbit executed a supplement letter (the “Supplement Letter”) to the Collaboration Agreement relating to the stabilized weapons drone system technology that Elbit has been marketing and deploying under the brand name “Birds of Prey”. Pursuant to the Supplement Letter, we and Elbit have agreed to expand their collaboration to allow us to market the system to military, defense, home-land security and para-military customers, in coordination with Elbit. We will be entitled to a commission fee, in the mid-single figure percentage range, from any proceeds resulting from its marketing activities, in addition to the royalties it is entitled to as part of the Collaboration Agreement.

On August 15, 2022, Duke Israel introduced the Insulator Cleaning (“IC”) Drone, a drone technology for conducting routine maintenance of critical infrastructure and signed an agreement with Israel Electric Corporation (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.

Duke Inc. has a wholly-owned subsidiary, Duke Israel, which was formed under the laws of the State of Israel in March 2014 and became the sole subsidiary of Duke Inc. after its incorporation. Our mailing address is 10 HaRimon Street, Mevo Carmel, Israel 3903212, and our telephone number is +972-054-5707050. Our website address is https://dukeroboticsys.com/.

Effective as of October 22, 2020, our Common Stock began to be quoted on the OTCQB tier Venture Market, under the symbol “USDR”.

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

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

On February 18, 2025, we announced that we established Duke Robotics Hellas M I.K.E (“Duke Greece”), a wholly owned subsidiary, formed under the laws of Greece, and on February 24, 2025 we appointed Mrs. Alexandra Papaconstantinou to provide management services as the Managing Director of Duke Greece.

On October 15, 2025, we filed a certificate of amendment to our Articles of Incorporation with the Nevada Secretary of State to increase our authorized Common Stock from 100,000,000 shares of Common Stock, $0.0001 par value per share, to 350,000,000 shares of Common Stock, $0.0001 par value per share, and permit the issuance of up to 10,000,000 shares of blank-check preferred stock, effective as of October 15, 2025.

Critical Accounting Policies

In connection with the preparation of our financial statements, we were required to make assumptions and estimates about future events and apply judgments that affect the reported amounts of assets, liabilities, revenue, expenses, and 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. Regularly, management reviews the accounting policies, assumptions, estimates, and judgments to ensure that our financial statements are presented fairly and by accounting principles generally accepted in the United States of America. 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.

Please see Note 2 of Part I, Item 1 of this Quarterly Report on Form 10-Q for the summary of significant accounting policies. In addition, reference is made to Part I, Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operation of our Annual Report on Form 10-K for the year ended December 31, 2024 (filed on March 20, 2025) concerning our Critical Accounting Policies and Estimates.

Results of Operations

Comparison of the three months ended September 30, 2025 and 2024

Revenues. Revenues for the three months ended September 30, 2025, totaled $216,000, compared to $72,000 during the three months period ended September 30, 2024. The increase in revenues was primarily attributable to the expansion of our IC Drone service operations, following the successful launch of the full cleaning season in May 2025. During 2024, the Company commenced its cleaning operations midway through the season, which limited revenue generation for that period. The increase in revenues during the three months ended September 30, 2025 was partially offset by temporary disruptions to our regular business operations during the quarter, resulting from the ongoing military operations in the Gaza Strip.

Cost of revenues. Our cost of revenues for the three months ended September 30, 2025, totaled $93,000, compared to $41,000 during the three months period ended September 30, 2024. The increase in cost of revenues was mainly due to the costs associated with the increase in our IC Drone service operations.

Research and Development. Our research and development expenses for the three months ended September 30, 2025, amounted to $34,000, compared to $20,000 for the three months ended September 30, 2024. The increase in research and development expenses was mainly due to an increase in subcontracting expenses.

General and Administrative. Our general and administrative expenses for the three months ended September 30, 2025, which consisted primarily of professional services, stock-based compensation expenses and legal expenses, amounted to $302,000, compared to $229,000, for the three months ended September 30, 2024. The increase in general and administrative expenses for the three months ended September 30, 2025, was mainly due to an increase in stock-based compensation expenses offset by a decrease in professional services.

Financial Income (expenses), net. For the three months ended September 30, 2025, we had financial expenses of $17,000 compared to financial income of $7,000 for the three months ended September 30, 2024. The reason for the increase in financial expenses for the three months ended September 30, 2025, was mainly due to the decrease in the balance of our cash bank deposits which resulted in a decrease in interest income.

Net Loss. We incurred a net loss of $230,000 for the three months ended September 30, 2025, as compared to $211,000 for the three months ended September 30, 2024, for the reasons set forth above.

Comparison of the nine months ended September 30, 2025 and 2024

Revenues. Revenues for the nine months ended September 30, 2025 totaled $359,000, compared to $72,000 in revenues during the nine months period ended September 30, 2024. The increase in revenues was primarily attributable to the expansion of our IC Drone service operations, following the successful launch of the full cleaning season in May 2025. During 2024, the Company commenced its cleaning operations midway through the season, which limited revenue generation for that period. The increase in revenues for the nine months ended September 30, 2025 was partially offset by temporary disruptions to our regular business operations during the third quarter of 2025, resulting from the ongoing military operations in the Gaza Strip. Revenues also reflect the initial recognition of revenues from royalties derived from sales of the “Bird of Prey” stabilized weapons drone systems, through our Collaboration Agreement with Elbit, which contributed for the first time to our revenues for the period, while the majority of the revenues for the period continued to be generated from our IC Drone service activities.

Cost of revenues. Our cost of revenues for the nine months ended September 30, 2025, totaled to $156,000, compared to $41,000 in revenues during the nine months period ended September 30, 2024. The increase is attributable the increase in our IC Drone service activities.

Research and Development. Our research and development expenses for the nine months ended September 30, 2025, amounted to $79,000, compared to $137,000 for the nine months ended September 30, 2024. The decrease in research and development expenses was mainly due to allocating more resources to the execution of our IC Drone insulator service activities, and less on development activities.

General and Administrative. Our general and administrative expenses for the nine months ended September 30, 2025, which consisted primarily of professional services, stock-based compensation expenses and legal expenses, amounted to $875,000, compared to $636,000 for the nine months ended September 30, 2024. The increase in general and administrative expenses for the nine months ended September 30, 2025, was mainly due to an increase in professional services and in stock-based compensation expenses.

Financial Income (expenses), net. For the nine months ended September 30, 2025, we had financial expenses of $17,000 compared to financial income of $44,000 for the nine months ended September 30, 2024. The reason for the increase in financial expenses for the nine months ended September 30, 2025, was mainly due to the decrease in the balance of our cash bank deposits which resulted in a decrease in interest income.

Net Loss. We incurred a net loss of $778,000 for the nine months ended September 30, 2025, as compared to a net loss of $698,000 for the nine months ended September 30, 2024, for the reasons set forth above.

Liquidity and Capital Resources

We had $361,000 in cash on September 30, 2025, versus $1,436,000 in cash on September 30, 2024. The reason for the decrease in our cash balance was due to the operating expenses described above. Cash used in operations for the nine months ended September 30, 2025, was $741,000 as compared to cash used in operations of $739,000 for the nine months ended September 30, 2024.

Net cash used in investing activities was $152,000 for the nine months ended September 30, 2025, as compared to net cash used in investing activities of $76,000 for the nine months ended September 30, 2024. The increase is mainly related to purchase of property and equipment.

On May 11, 2021, we entered into securities purchase agreements with eight (8) non-U.S. Investors, pursuant to which we, in a private placement offering, agreed to issue and sell to investors an aggregate of: (i) 12,500,000 shares of our Common Stock at a price of $0.40 per share; and (ii) warrants to purchase 12,500,000 of our Common Stock. The warrants were exercisable immediately and for a term of 18 months and have an exercise price of $0.40 per share. The aggregate gross proceeds from the offering were approximately $5,000,000 and the offering closed on May 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 per share to $0.65 per share; and (iii) include a beneficial ownership blocker that limits the exercise of such warrants if the exercise would result in the holder beneficially owning more than 19.99% of the Company’s common stock immediately following the exercise.

Since our incorporation, we incurred losses from operations and net cash outflows from operating activities as reflected in the consolidated statements of operations and cash flows. As of September 30, 2025, we had an accumulated deficit of $11,940,000, and we expect to incur losses for the foreseeable future. We have historically financed our operations primarily through fundraising from various investors and the revenues that were generated from our operations to date were not sufficient to cover our losses. As a result, we remain dependent upon external sources to finance our operations. There can be no assurance that we will succeed in obtaining the necessary financing to continue our operations. These factors raise substantial doubt about our ability to continue as a going concern through at least twelve months from the date of this Quarterly Report.

We currently believe that our existing capital resources will be sufficient to support our operating plan through the second quarter of 2026. To support our planned growth, strategic initiatives and general working capital needs, we will likely seek to raise additional capital through the issuance of debt, equity, or a combination thereof. There can be no assurance we will be successful in raising additional capital on favorable terms, or at all.

Although we are actively pursuing opportunities to increase revenues, including the potential expansion of commercial sales in additional jurisdictions, some of these efforts remain at an early stage while other initiatives have progressed to more advanced stages of discussion. However, because none of these initiatives have resulted in binding agreements or firm commitments, there can be no assurance that any of them will materialize within our expected timeframes. If we are unable to successfully proceed with these initiatives, our need for additional capital may accelerate.

As a result, there is substantial doubt about our ability to continue as a going concern. If we are unable to obtain sufficient amounts of additional capital, we may be required to reduce the scope of our operations, delay or discontinue development activities, limit our manufacturing or commercial expansion plans, or take other actions that could materially harm our business, financial condition, and operating results. If we obtain additional funds by selling any of our equity, the percentage ownership of our stockholders will be reduced, stockholders may experience additional dilution, or the equity securities may have rights preferences or privileges senior to the common stock. If we issue debt securities, there may be negative covenants which may restrict our company’s activities. If adequate funds are not available to our company when needed on satisfactory terms, we may be required to cease operating or otherwise modify our business strategy. The financial statements included in this Quarterly Report do not include adjustments for measurement or presentation of assets and liabilities, which may be required should we fail to operate as a going concern.

Off-Balance Sheet Arrangements

As of September 30, 2025, we did not have any off-balance sheet arrangements as defined in Item 303(a)(4) of Regulation S-K.

We are a smaller reporting company and therefore are not required to provide the information for this item of Form 10-Q.

Evaluation of Disclosure Controls and Procedures

As of the end of the period covered by this Report, our Chief Executive Officer and Chief Financial Officer (“the Certifying Officers”), conducted evaluations of our disclosure controls and procedures. As defined under Sections 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended, or the Exchange Act, the term “disclosure controls and procedures” means controls and other procedures of an issuer that are designed to ensure that information required to be disclosed by the issuer in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission. Disclosure controls and procedures include without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Exchange Act is accumulated and communicated to the issuer’s management, including the Certifying Officers, to allow timely decisions regarding required disclosures.

Based on their evaluation, the Certifying Officers concluded that, as of September 30, 2025, our disclosure controls and procedures were effective.

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.

In addition to the other information set forth in this Quarterly Report on Form 10-Q, you should carefully consider the factors discussed in Part I, “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2024, which could materially affect our business, financial condition, or future results.

There have been no material changes from the risk factors previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2024, except as noted below.

Risks Related to Our Financial Condition and Capital Requirements

We believe our current cash on hand will not be sufficient to fund our projected operating requirements for a period of twelve months from the issuance of these interim financial statements included in this Quarterly Report. This raises substantial doubt about our ability to continue as a going concern.

We believe that our current cash on hand will not be sufficient to fund our projected operating requirements for a period of twelve months from the issuance of our interim financial statements including in this Quarterly Report. This raises substantial doubt about our ability to continue as a going concern and could materially limit our ability to raise additional funds through the issuance of equity or debt securities or otherwise. If we cannot continue as a going concern, our investors may lose their entire investment in our securities. Until we can generate significant revenues, if ever, we expect to satisfy our future cash needs through debt or equity financing. We cannot be certain that additional funding will be available to us on acceptable terms, if at all. If funds are not available, we may be required to delay, reduce the scope of, or eliminate research or development plans for, or commercialization efforts with respect to our products.

Risks Related to our Business and Industry

Significant changes or developments in U.S. laws or policies, including changes in U.S. trade policies and tariffs and the reaction of other countries thereto, may have a material adverse effect on our business and financial statements.

Significant changes or developments in U.S. laws and policies, such as laws and policies surrounding international trade, foreign affairs, manufacturing and development and investment in the territories and countries where we or our customers operate, can materially adversely affect our business and financial statements. Tariffs imposed by the U.S. government, may increase the cost of certain raw materials and components used in our products. If these tariffs remain in place or are expanded, or if new trade restrictions are implemented, our manufacturing costs could increase, which could materially and adversely affect our margins and financial results.

Furthermore, changes in trade policy have increased uncertainty in our industry, and any escalation in trade tensions could disrupt our supply chain, delay production timelines, or require costly modifications to sourcing and logistics strategies. The extent and duration of the tariffs and the resulting impact on general economic conditions and on our business are uncertain and depend on various factors, such as negotiations between the U.S. and affected countries, the responses of other countries or regions, exemptions or exclusions that may be granted, availability and cost of alternative sources of supply, and demand for our products in affected markets.

Risks Related to Israeli Law and Our Operations in Israel

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 recent attack by Hamas and other terrorist organizations from the Gaza Strip and Israel’s war against them.

Our executive offices and corporate headquarters are located in Israel. In addition, our officers and directors are residents of Israel. Accordingly, political, economic and military and security conditions in Israel and the surrounding region may directly affect our business. Any conflicts, political instability, terrorism, cyberattacks or any other hostilities involving Israel or the interruption or curtailment of trade between Israel and its present trading partners could adversely affect our operations. Ongoing and revived hostilities in the Middle East or other Israeli political or economic factors, could harm our operations.

In October 2023, Hamas terrorists infiltrated Israel’s southern border from the Gaza Strip and conducted a series of attacks on civilian and military targets. Hamas also launched extensive rocket attacks on Israeli population and industrial centers located along Israel’s border with the Gaza Strip and in other areas within the State of Israel. These attacks resulted in extensive deaths, injuries and kidnapping of civilians and soldiers. Following the attack, Israel’s security cabinet declared war against Hamas and a military campaign against these terrorist organizations commenced in parallel to their continued rocket and terror attacks.

Following the attack by Hamas on Israel’s southern border, Hezbollah in Lebanon has also launched missile, rocket and shooting attacks against Israeli military sites, troops, and Israeli towns in northern Israel. In response to these attacks, the Israeli army has carried out a number of targeted strikes on sites belonging to Hezbollah in southern Lebanon. It is possible that other terrorist organizations, including Palestinian military organizations in the West Bank, as well as other hostile countries, such as Iran, will join the hostilities. Such hostilities may include terror and missile attacks. Any hostilities involving Israel or the interruption or curtailment of trade between Israel and its trading partners could adversely affect our operations and results of operations. Although the Israeli government currently covers the reinstatement value of direct damages that are caused by terrorist attacks or acts of war, we cannot assure you that this government coverage will be maintained or that it will sufficiently cover our potential damages. Any losses or damages incurred by us could have a material adverse effect on our business. Any armed conflicts or political instability in the region would likely negatively affect business conditions and could harm our results of operations.

In April 2024 and October 2024, Iran launched direct attacks on Israel involving hundreds of drones and missiles and has threatened to continue to attack Israel. Relations between Israel and Iran continue to be hostile, due to the fact that Iran is a state sponsor of Hamas and Hezbollah, maintains a military presence in Syria and Lebanon, alongside Israel’s northern border, and is viewed as a strategic threat to Israel in light of its nuclear program. On June 13, 2025, in light of continued nuclear threats and intelligence assessments indicating imminent attacks, Israel launched a preemptive strike directly targeting military and nuclear infrastructure inside Iran aimed to disrupt Iran’s capacity to coordinate or launch further hostilities against Israel, as well as disrupt its nuclear program. The United States joined Israel in this military action. A ceasefire between Israel and Iran was declared by the United States on June 24, 2025. Certain ceasefire agreements have also been reached with Hamas and Lebanon (with respect to Hezbollah), however, these agreements have failed to be fully upheld and military activity and hostilities continue to exist at varying levels of intensity, and the situation remains volatile, with the potential for escalation into a broader regional conflict.

On September 10, 2025, a ceasefire agreement was reached between Israel and Hamas, effectively ending the large-scale military operations in the Gaza Strip. As part of the agreement, all remaining living Israeli hostages have been released and returned to Israel. A number of deceased hostages remains are to be returned, and the parties continue to cooperate in that process. The ceasefire has generally held as of the date of these financial statements, although the security situation remains fragile, and the risk of renewed hostilities persists.

In connection with the Israeli security cabinet’s declaration of war against Hamas and possible hostilities with other organizations, several hundred thousand Israeli military reservists were drafted to perform immediate military service. During the quarter ended September 30, 2025, several of our contractors and regular consultants (and their spouses or partners) as well as employees of our customers in Israel have been called for reserve service, resulting in temporary disruptions to our regular business operations during the third quarter of 2025. Additional employees (or their spouses or partners) or contractors may be called, for service in the current or future wars or other armed conflicts with Hamas, and such persons may be absent for an extended period of time. As a result, our operations in Israel may be disrupted by such absences, which disruption may materially and adversely affect our business, prospects, financial condition and results of operations.

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 a downgrade in Israel’s credit rating by rating agencies (such as the recent downgrade by Moody’s of its credit rating of Israel from A1 to A2, as well as the downgrade of its outlook rating from “stable” to “negative”). We may also be targeted by cyber terrorists specifically because we are an Israeli-related company.

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 war against Hamas declared by Israel, regardless of the proposed changes to the judicial system and the related debate. 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.