U.S. SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 1-A

REGULATION A OFFERING CIRCULAR UNDER THE SECURITIES ACT OF 1933

Duke Robotics, Inc.

(Exact name of issuer as specified in its charter)

Delaware 

(State of other jurisdiction of incorporation or organization)

14 Live Oak St., Suite A

Gulf Breeze, FL 32561

850-677-0935

(Address, including zip code, and telephone number,

including area code of issuer’s principal executive office)

Zysman, Aharoni, Gayer and

Sullivan & Worcester LLP

1633 Broadway

New York, New York 10019

Phone: (212) 660-5000 

(Name, address, including zip code, and telephone number,

including area code, of agent for service)

Copies to:

Oded Har-Even

Edwin L. Miller Jr.

Ron Ben-Bassat

Zysman, Aharoni, Gayer and

Sullivan & Worcester LLP

1633 Broadway

New York, New York 10019

Phone: (212) 660-5000

This Preliminary Offering Circular shall only be qualified upon order of the Commission, unless a subsequent amendment is filed indicating the intention to become qualified by operation of the terms of Regulation A.

This Preliminary Offering Circular is following the offering circular format described in Part II of Form 1-A.

An offering statement pursuant to Regulation A relating to these securities has been filed with the Securities and Exchange Commission. Information contained in this Preliminary Offering Circular is subject to completion or amendment. These securities may not be sold nor may offers to buy be accepted before the offering statement filed with the Commission is qualified. This Preliminary Offering Circular shall not constitute an offer to sell or the solicitation of an offer to buy nor may there be any sales of these securities in any state in which such offer, solicitation or sale would be unlawful before registration or qualification under the laws of any such state. We may elect to satisfy our obligation to deliver a Final Offering Circular by sending you a notice within two business days after the completion of our sale to you that contains the URL where the Final Offering Circular or the offering statement in which such Final Offering Circular was filed may be obtained.

Up to $15,000,000

5,000,000 Shares of Common Stock

Price per Share: $3.00

Minimum purchase: 150 Shares ($450)

Implicit valuation of outstanding shares: $60,216,669 

This is an offering of shares of Common Stock (“Offered Shares”) of Duke Robotics, Inc. pursuant to Regulation A of the U.S. Securities and Exchange Commission (the “SEC”).

* Does not include expenses of the offering, including costs of blue sky compliance, fees to be paid to JumpStart Securities, LLC, as well as legal, accounting, printing, due diligence, marketing, consulting, finders fees, administrative services and other costs. The company estimates these expenses to be approximately $1,150,000 in the aggregate, assuming a sale of all 5,000,000 shares of common stock for an aggregate purchase price of $15,000,000. If the company engages the services of additional broker-dealers in connection with the offering, their commissions will be an additional expense of the offering. The company expects to enter into service agreements with JumpStart Securities, LLC (“JumpStart”), a member of FINRA, to provide subscription and administrative services for the offering. JumpStart Securities, LLC is not an underwriter and will not be paid underwriting fees, but will be paid service fees. See the “Plan of Distribution” for details regarding the compensation payable in connection with this offering.

The offering will terminate at the earliest of:

The target dollar amount of the offering is up to $15,000,000 (the “Target Offering Amount”). The implicit valuation of the company’s outstanding shares is calculated by multiplying the number of shares currently outstanding by the offering price per share. The offering is being conducted on a best efforts basis without any minimum number of shares required to be sold or amount of proceeds required to be received. The company may not be able to sell the Target Offering Amount. The company will conduct one or more closings on a rolling basis as funds are received from investors, at the company’s sole discretion. Funds tendered by investors will be kept in an escrow account until the next closing after they are received by the escrow agent. At each closing, with respect to subscriptions accepted by the company, funds held in escrow will be distributed to the company, and the associated Offered Shares will be issued to the investors that purchased such Offered Shares. Investors may not withdraw their shares from escrow unless the offering is terminated without a closing having occurred. No investor funds will be returned to any subscriber if an insufficient amount of capital is raised from this offering to enable the Company to implement its business plan. 

The proposed sale will begin within two (2) calendar days after this Preliminary Offering Circular has been qualified by the Securities and Exchange Commission (the “SEC”). The company will provide final pricing information in a final Offering Circular or supplemental Preliminary Offering Circular. The net proceeds of the offering will be the gross proceeds of the Offered Shares sold minus the expenses of the offering.

We are not listed on any trading market or stock exchange, and our ability to list our stock in the future is uncertain. Investors should not assume that the Offered Shares will be listed. A public trading market for the shares may not develop.

Investing in our Common Stock involves a high degree of risk. You should purchase these securities only if you can afford a complete loss of your investment.  See “Risk Factors” beginning on page 4.

THE SEC DOES NOT PASS UPON THE MERITS OR GIVE ITS APPROVAL OF ANY SECURITIES OFFERED OR THE TERMS OF THE OFFERING, NOR DOES IT PASS UPON THE ACCURACY OR COMPLETENESS OF ANY OFFERING CIRCULAR OR OTHER SOLICITATION MATERIALS. THESE SECURITIES ARE OFFERED PURSUANT TO AN EXEMPTION FROM REGISTRATION WITH THE COMMISSION; HOWEVER, THE COMMISSION HAS NOT MADE AN INDEPENDENT DETERMINATION THAT THE SECURITIES OFFERED ARE EXEMPT FROM REGISTRATION.

NOTICE TO FOREIGN INVESTORS

IF AN INVESTOR LIVES OUTSIDE THE UNITED STATES, IT IS THE INVESTOR’S RESPONSIBILITY TO FULLY OBSERVE THE LAWS OF ANY RELEVANT TERRITORY OR JURISDICTION OUTSIDE THE UNITED STATES IN CONNECTION WITH ANY PURCHASE OF THE SECURITIES, INCLUDING OBTAINING REQUIRED GOVERNMENTAL OR OTHER CONSENTS OR OBSERVING ANY OTHER REQUIRED LEGAL OR OTHER FORMALITIES. THE COMPANY RESERVES THE RIGHT TO DENY THE PURCHASE OF THE SECURITIES BY ANY FOREIGN INVESTOR.

Limitation on the amount you may purchase: Generally, no sale may be made to you in this offering if the aggregate purchase price you pay is more than 10% of the greater of your annual income or net worth.  Different rules apply to accredited investors.  Before making any representation that your investment does not exceed this applicable threshold, we encourage you to review Rule 251(d)(2)(i)(C) of Regulation A which can be found on the SEC’s website at www.sec.gov.  For general information on investing, we encourage you to refer to www.investor.gov. 

The company is following the “Offering Circular” format of disclosure under Regulation A. 

The company’s physical address and its website address are:

Duke Robotics, Inc.

14 Live Oak St., Suite A 

Gulf Breeze, FL 32561

850-677-0935 

www.dukeroboticsys.com

TABLE OF CONTENTS

We are offering to sell, and seeking offers to buy, our securities only in jurisdictions where such offers and sales are permitted. You should rely only on the information contained in this Preliminary Offering Circular. We have not authorized anyone to provide you with any information other than the information contained in this Preliminary Offering Circular. The information contained in this Preliminary Offering Circular is accurate only as of its date, regardless of the time of its delivery or of any sale or delivery of our securities. Neither the delivery of this Preliminary Offering Circular nor any sale or delivery of our securities shall, under any circumstances, imply that there has been no change in our affairs since the date of this Preliminary Offering Circular. This Preliminary Offering Circular will be updated and made available for delivery to the extent required by the federal securities laws.

Unless otherwise indicated, data contained in this Preliminary Offering Circular concerning the business of the company are based on information from various public sources. Although we believe that these data are generally reliable, such information is inherently imprecise, and our estimates and expectations based on these data involve a number of assumptions and limitations. As a result, you are cautioned not to give undue weight to such data, estimates or expectations.

All information contained herein has been retroactively restated to reflect a 10,000-for-1 stock split effected on August 15, 2016.

In this Preliminary Offering Circular, unless the context indicates otherwise, references to “we,” “us,” “our,” or the “company” means Duke Robotics, Inc. and our wholly-owned subsidiary, Duke Airborne Systems Ltd., an Israeli corporation.

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

Some of the statements under “Summary”, “Risk Factors”, “Management’s Discussion and Analysis of Financial Condition and Results of Operations”, “Our Business” and elsewhere in this Preliminary Offering Circular constitute forward-looking statements. Forward-looking statements relate to expectations, beliefs, projections, future plans and strategies, anticipated events or trends and similar matters that are not historical facts. In some cases, you can identify forward-looking statements by terms such as “anticipate”, “believe”, “could”, “estimate”, “expect”, “intend”, “may”, “plan”, “potential”, “should”, “will” and “would” or the negatives of these terms or other comparable terminology.

You should not place undue reliance on forward looking statements. The cautionary statements set forth in this Preliminary Offering Circular, including in “Risk Factors” and elsewhere, identify important factors which you should consider in evaluating our forward-looking statements. These factors include, among other things:

Although the forward-looking statements in this Preliminary Offering Circular are based on our beliefs, assumptions and expectations, taking into account all information currently available to us, we cannot guarantee future transactions, results, performance, achievements or outcomes. No assurance can be made to any investor by anyone that the expectations reflected in our forward-looking statements will be attained, or that deviations from them will not be material and adverse. We undertake no obligation, other than as maybe be required by law, to re-issue this Preliminary Offering Circular or otherwise make public statements updating our forward-looking statements.

RISK FACTORS

An investment in our common stock involves a high degree of risk and many uncertainties.  You should carefully consider the specific factors listed below, together with the cautionary statement that follows this section and the other information included in this offering circular, before purchasing our common stock in this offering.  If one or more of the possibilities described as risks below actually occur, our operating results and financial condition would likely suffer and the trading price, if any, of our shares could fall, causing you to lose some or all of your investment.  The following is a description of what we consider the key challenges and material risks to our business and an investment in our securities.

Risks Related to our Business and Industry

We have a limited operating history and have generated no revenues to date.

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 revenues and have not yet begun meaningful commercialization efforts with respect to our products. We intend in the long-term to derive substantial revenues from the sales of our DKL-MK1 SU and SM robots as well as future models of other robots and our UAV platforms for both military and civilian use, but there can be no assurance that we will be able to do so. 

We may not be able to obtain adequate financing to continue our operations.

We expect that we will need to raise additional funds to continue the design, manufacture, sale and servicing of our DKL-MK1 SU and SM robots as well as develop future robot products and UAV platforms.   Even if we successfully raise significant funds from this offering, 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.  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. There can be no assurance that we will be able to raise additional funds when needed or that any financing that we may be able to raise will be on favorable terms.

Terms of subsequent financing, if any, may adversely impact your investment.

We may have to engage in common equity, debt, or preferred stock financings in the future.  Your rights and the value of your investment in the common stock could be reduced by the dilution caused by future equity issuances.  Interest on debt securities could increase costs and negatively impact operating results.  In the event we are permitted to issue preferred stock pursuant to the terms of our amended and restated certificate of incorporation, preferred stock could be issued in series from time to time with such designation, rights, preferences, and limitations as needed to raise capital.  The terms of preferred stock would be more advantageous to those investors than to the holders of common stock.  In addition, if we need to raise more equity capital from the sale of common stock, institutional or other investors may negotiate terms at least as, and possibly more, favorable than the terms of your investment.  Shares of common stock which we sell could be sold into any market that develops, which could adversely affect the market price.

Our independent auditor firm has expressed in its report to our 2016 audited financial statements a substantial doubt about our ability to continue as a going concern.

We only recently entered the commercialization stage and the development and commercialization of our products are uncertain and expected to require substantial expenditures. We have not yet generated sufficient revenues from our operations to fund our activities, and are therefore dependent upon external sources for financing our operations. There is a risk that we will be unable to obtain necessary financing to continue our operations on terms acceptable to us or at all. As a result, our independent auditor firm has expressed in its auditors’ report on the financial statements for December 31, 2016 a substantial doubt regarding our ability to continue as a going concern. Our financial statements do not include any adjustments that might result from the outcome of the uncertainty regarding our ability to continue as a going concern. This going concern opinion could materially limit our ability to raise additional funds through the issuance of equity or debt securities or otherwise. Future reports on our financial statements may include an explanatory paragraph with respect to our ability to continue as a going concern. If we cannot continue as a going concern, our stockholders may lose their entire investment in the common stock.

We face several regulatory hurdles.

As described in “Business,” our products will need to comply with many governmental standards and regulations (including various export control regimes) relating to the marketing, use and sale of systems in general, and specifically with regards to defense and military applications. Further, because of security concerns, we must receive government clearances before marketing our products to specific customers. In addition, as the use of UAVs is becoming more prevalent, we expect that governments around the world may develop new regulatory schemes relating to the use and sale of UAVs for both military and civilian use. Compliance with all of these requirements may delay, or prohibit, commercialization in various countries, thereby adversely affecting our business and financial condition.

Our revenues will depend heavily on government contracts in the short term.

We expect to derive most of our short term future revenues directly or indirectly from government agencies, mainly the Israeli Ministry of Defense (IMOD). In addition, we intend to offer our products to other governmental agencies around the world, including the U.S. Department of Defense (DoD) and equivalent authorities of various countries pursuant to contracts awarded to us under defense and homeland security-related programs. Technology products from foreign countries have an inherent disadvantage against domestic offerings. 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.

We face other risks in our expected international sales.

We expect to derive a significant portion of our revenues ultimately from international sales. Changes in international, political, economic or geographic events could cause significant reductions in our revenues, which could harm our business, financial condition and results of operations. In addition to the other risks from international operations set forth elsewhere in these Risk Factors, some of the risks of doing business internationally include imposition of tariffs and other trade barriers and restrictions, political and economic instability in the countries of our customers and suppliers, changes in diplomatic and trade relationships and increasing instances of terrorism worldwide. Due to our subsidiary being located in the State of Israel, some of these risks may be affected by Israel’s overall political situation. (See “Risks Related to Israeli Law and Our Operations in Israel” below.)

We operate in a competitive industry.

While we believe that we are the only developer and manufacturer of UAVs capable of pinpoint accurate firing of light weapons, the UAV market generally in which we participate is highly competitive and becoming more so. This market is also characterized by rapid and innovative technological change. If we are unable to improve existing systems and products and develop new systems and technologies in order to meet evolving customer demands, our business could be adversely affected. In addition, our competitors could introduce new products with innovative capabilities, which could adversely affect our business. We compete with many large and mid-tier defense companies on the basis of system performance, cost, overall value, delivery and reputation. Many of these competitors are larger and have greater resources than us, and therefore may be better positioned to take advantage of economies of scale and develop new technologies.

We may experience production delays if suppliers fail to make compliant or timely deliveries.

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. 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. The foregoing risks could have a material adverse effect on our operating results.

Undetected problems in our products could impair our financial results and give rise to potential product liability claims.

If there are defects in the design, production or testing of our products and systems, we could face substantial repair, replacement or service costs, potential liability and damage to our reputation. Defects or malfunctioning of our products, if they were to occur, would likely result in significant damage and loss of life. We may not be able to obtain product liability or other insurance to fully cover such risks, and our efforts to implement appropriate design, testing and manufacturing processes for our products or systems may not be sufficient to prevent such occurrences, which could have a material adverse effect on our business, results of operations and financial condition. 

Our business depends on proprietary technology that may be infringed.

Many of our systems and products depend on our proprietary technology for their success. Like other technology-oriented companies, we rely on a combination of trade secrets, copyrights and trademarks, together with non-disclosure agreements, confidentiality provisions in sales, procurement, employment and other agreements and technical measures to establish and protect proprietary rights in our products. While we are in the process of seeking patents for our technology, there is no guarantee that such patents will be granted. Our ability to successfully protect our technology may be limited because:

In addition, various parties may assert infringement claims against us. The cost of defending against infringement claims could be significant, regardless of whether the claims are valid. If we are not successful in defending such claims, we may be prevented from the use or sale of certain of our products, or liable for damages and required to obtain licenses, which may not be available on reasonable terms, any of which may have a material adverse impact on our business, results of operation or financial condition.

We would be adversely affected if we are unable to retain key employees.

Our success depends in part on key management, scientific and technical personnel and our continuing ability to attract and retain highly qualified personnel. There is competition for the services of such personnel. The loss of the services of key personnel, and the failure to attract highly qualified personnel in the future, may have a negative impact on our business. Moreover, our competitors may hire and gain access to the expertise of our former employees.

Significant disruptions of our information technology systems or breaches of our data security could adversely affect our business.

A significant invasion, interruption, destruction or breakdown of our information technology systems and/or infrastructure by persons with authorized or unauthorized access could negatively impact our business and operations. We could also experience business interruption, information theft and/or reputational damage from cyber-attacks, which may compromise our systems and lead to data leakage either internally or at our third party providers. Our systems have been, and are expected to continue to be, the target of malware and other cyber-attacks. Although we have invested in measures to reduce these risks, we cannot assure that these measures will be successful in preventing compromise and/or disruption of our information technology systems and related data. 

We are in the process of applying for patents for certain of our key technologies. Our ability to protect our intellectual property and proprietary technology is uncertain and may be inadequate, which may have a material and adverse effect on us.

Our success depends significantly on our ability to protect our proprietary rights to the technologies used in our products. We are in the process of applying for patents to protect certain of our key technologies, but we do not have any patents pending and thus 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 current or future patent applications 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 compounds or processes used by or competitive 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 the event a competitor infringes upon our intellectual property rights, enforcing those rights may be costly, uncertain, difficult and time consuming. Even if successful, litigation to enforce our intellectual property rights or to defend our patents against challenge could be expensive and time consuming and could divert our management’s attention. We may not have sufficient resources to enforce our intellectual property rights or to defend our patents rights against a challenge. The failure to obtain patents and/or protect our intellectual property rights could have a material and adverse effect on our business, results of operations and financial condition.

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 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.

We may become subject to claims of infringement or misappropriation of the intellectual property rights of others, which could prohibit us from developing our products, require us to obtain licenses from third parties or to develop non-infringing alternatives and subject us to substantial monetary damages.

Third parties could, in the future, assert infringement or misappropriation claims against us with respect to products we develop. Whether a product infringes a patent or misappropriates other intellectual property involves complex legal and factual issues, the determination of which is often uncertain. Therefore, we cannot be certain that we have not infringed the intellectual property rights of others. Our potential competitors may assert that some aspect of our product infringes their patents. Because patent applications may take years to issue, there also may be applications now pending of which we are unaware that may later result in issued patents upon which our products could infringe. There also may be existing patents or pending patent applications of which we are unaware upon which our products may inadvertently infringe.

Any infringement or misappropriation claim could cause us to incur significant costs, place significant strain on our financial resources, divert management’s attention from our business and harm our reputation. If the relevant patents in such claim were upheld as valid and enforceable and we were found to infringe them, we could be prohibited from selling any product that is found to infringe unless we could obtain licenses to use the technology covered by the patent or are able to design around the patent. We may be unable to obtain such a license on terms acceptable to us, if at all, and we may not be able to redesign our products to avoid infringement. A court could also order us to pay compensatory damages for such infringement, plus prejudgment interest and could, in addition, treble the compensatory damages and award attorney fees. These damages could be substantial and could harm our reputation, business, financial condition and operating results. A court also could enter orders that temporarily, preliminarily or permanently enjoin us and our customers from making, using, or selling products, and could enter an order mandating that we undertake certain remedial activities. Depending on the nature of the relief ordered by the court, we could become liable for additional damages to third parties.

The sale of our products is subject to various regulatory requirements of the Israeli Ministry of Defense and will also be subject to regulatory requirements in countries in which we seek to sell our products.

Due to the fact that we sell products used that may be purchased in the defense and/ or military industry, and otherwise conduct business with the IMOD, we may be required to obtain approval from the IMOD with respect to each agreement for the sale of our products. In that regard, we are required to secure the approval of the IMOD prior to offering the sale of our products to any third party. In addition, we are required to obtain approvals from the IMOD prior to the execution and performance of any such agreement. If we fail to obtain approvals in the future, if approvals previously obtained are revoked or expire and are not renewed or if government policies change, our ability to sell our products and services to customers would be impacted, resulting in a material adverse effect on our business, revenues, assets, liabilities and results of operations.

Risks Related to the Investment in our Common Stock

There has been no public market for our Common Stock prior to this offering, and an active market in which investors can resell their shares may not develop for a significant period of time if at all.

Prior to this offering, there has been no public market for our Common Stock. We do not intend in the short-term to seek the listing of our stock on any trading market. Consequently, a significant trading market is not likely to develop following this offering. The initial offering price of our Common Stock in this offering has been set by the company and may not reflect the price at which our common stock will ultimately trade, if it trades at all. As a result, investors may not be able to sell their stock for an indefinite period of time.

Sales of our common stock by insiders under Rule 144 or otherwise could reduce the price of our stock, if a trading market should develop.

Our officers and directors hold restricted stock, but will be able to sell their stock in a trading market if one should develop. In general, our officers and directors and major shareholders, as affiliates, under SEC Rule 144 may not sell more than one percent of the total issued and outstanding shares in any 90-day period, and must resell the shares in an unsolicited brokerage transaction at the market price. However, Rule 144 will only be available for resale in the 90 days after the company files its semi-annual reports on Form 1-SA and annual reports on Form 1-K, unless the company voluntarily files interim quarterly reports on Form 1-U, which the company has not yet decided to do. The availability for sale of substantial amounts of common stock under Rule 144 could reduce prevailing market prices for our securities in any trading market that may develop.

Because we do not have an audit or compensation committee, shareholders will have to rely on our directors to perform these functions.

We do not have an audit or compensation committee comprised of independent directors. Indeed, we do not have any audit or compensation committee. The board of directors performs these functions as a whole. No members of the board of directors are independent directors. Thus, there is a potential conflict in that board members who are also part of management will participate in discussions concerning management compensation and audit issues that may affect management decisions.

The ownership of our common stock is concentrated among existing executive officers and directors.

Upon the sale of all of the shares offered in this offering, our executive officers and directors will continue to own beneficially, in the aggregate, a vast majority of the outstanding shares.  As a result, they will be able to exercise a significant level of control over all matters requiring stockholder approval, including the election of directors, amendments to our Certificate of Incorporation, and approval of significant corporate transactions.  This control could have the effect of delaying or preventing a change of control of the company or changes in management and will make the approval of certain transactions difficult or impossible without the support of these stockholders.

Investors in this offering will experience immediate and substantial dilution.

Due to our significant accumulated deficit, investors in this offering will suffer immediate and substantial dilution of $2.46 per share or approximately 82% of the offering price of the shares if the maximum offering is sold. Further, if all of the shares offered hereby are sold, investors in this offering will own approximately 20% of the then outstanding shares of common stock, but will have paid approximately 100% of the total consideration for our outstanding shares. See “Dilution.”

There is no minimum capitalization required in this offering.

We cannot assure that all or a significant number of shares of common stock will be sold in this offering. Investors’ subscription funds will be used by us as soon as we conduct a closing, which the company may elect to do at any time and at its sole discretion, and no refunds will be given if an inadequate amount of money is raised from this offering to enable us to conduct our business. If we raise substantially less than the entire amount that we are seeking in the offering, then we may not have sufficient capital to meet our operating requirements. We cannot assure that we could obtain additional financing or capital from any source, or that such financing or capital would be available to us on terms acceptable to us. Under such circumstances, investors in our common stock could lose their investment in us.

Risks Related to Israeli Law and Our Operations in Israel

We have 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.

While our executive offices are located in the United States, we maintain offices in Israel. In addition, many of our officers and directors are residents of Israel. Accordingly, political, economic and military conditions in Israel may directly affect our business. Since the establishment of the State of Israel in 1948, a number of armed conflicts have taken place between Israel and its neighboring countries. 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. During November 2012 and July 2014, Israel was engaged in an armed conflict with a militia group and political party who control the Gaza Strip. In addition, recent political uprisings and conflicts in various countries in the Middle East, including Egypt and Syria, are affecting the political stability of those countries. It is not clear how this instability will develop and how it will affect the political and security situation in the Middle East. This instability has raised concerns regarding security in the region and the potential for armed conflict. In addition, it is widely believed that Iran, which has previously threatened to attack Israel, has been increasing efforts to achieve nuclear capability. Iran is also believed to have a strong influence among extremist groups in the region, such as Hamas in Gaza and Hezbollah in Lebanon. Additionally, the Islamic State of Iraq and Levant, or ISIL, a violent jihadist group, is involved in hostilities in Iraq and Syria and has been growing in influence. Although ISIL’s activities have not directly affected the political and economic conditions in Israel, ISIL’s stated purpose is to take control of the Middle East, including Israel. The tension between Israel and Iran and/or these groups may escalate in the future and turn violent, which could affect the Israeli economy in general and us in particular. Any potential future conflict could also include missile strikes against parts of Israel, including our offices and facilities. Any armed conflicts, terrorist activities or political instability in the region could adversely affect business conditions, could harm our results of operations and could make it more difficult for us to raise capital. Parties with whom we do business may sometimes decline to travel to Israel during periods of heightened unrest or tension, forcing us to make alternative arrangements when necessary in order to meet our business partners face to face. In addition, the political and security situation in Israel may result in parties with whom we have agreements involving performance in Israel claiming that they are not obligated to perform their commitments under those agreements pursuant to force majeure provisions in such agreements.

Our commercial insurance does not cover losses that may occur as a result of an event associated with the security situation in the Middle East. Although the Israeli government has in the past covered the reinstatement value of certain damages that were caused by terrorist attacks or acts of war, we cannot assure that this government coverage will be maintained or, if maintained, will be sufficient to compensate us fully for damages incurred. 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 generally and could harm our 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 conditions or the expansion of our business.

Our operations are subject to currency and interest rate fluctuations.

We incur expenses in U.S. dollars and NIS, but our financial statements are denominated in U.S. dollars. The U.S. dollar is our functional currency. However, as we also incur expenses in NIS, we are affected by foreign currency exchange fluctuations through both translation risk and 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 to the dollar, 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.

It may be difficult to enforce a judgment of a United States court against us and our officers and directors to assert United States securities laws claims in Israel or to serve process on our officers and directors and these experts.

Our operational subsidiary was incorporated in Israel. Currently, our Chief Executive Officer and Chief Customer Officer reside in the United Stated, but the remainder of our executive officers and directors reside outside of the United States, and most of our assets and most of the assets of these persons are located outside of the United States. Therefore, a judgment obtained against us, or any of these persons, including a judgment based on the civil liability provisions of the U.S. federal securities laws, may not be collectible in the United States and may not necessarily be enforced by an Israeli court. It also may be difficult to affect service of process on these persons in the United States or to assert U.S. securities law claims in original actions instituted in Israel. Additionally, it may be difficult for an investor, or any other person or entity, to initiate an action with respect to United States securities laws in Israel. Israeli courts may refuse to hear a claim based on an alleged violation of United States securities laws reasoning that Israel is not the most appropriate forum in which to bring such a claim. In addition, even if an Israeli court agrees to hear a claim, it may determine that Israeli law and not United States law is applicable to the claim. If United States law is found to be applicable, the content of applicable United States law must be proven as a fact by expert witnesses, which can be a time consuming and costly process. Certain matters of procedure will also be governed by Israeli law. There is little binding case law in Israel that addresses the matters described above. As a result of the difficulty associated with enforcing a judgment against us in Israel, you may not be able to collect any damages awarded by either a United States or foreign court.

Our operations may be disrupted as a result of the obligation of management or key personnel to perform military service.

Our employees and consultants in Israel, including members of our senior management, may be obligated to perform one month, and in some cases longer periods, of military reserve duty until they reach the age of 40 (or older, for citizens who hold certain positions in the Israeli armed forces reserves) and, in the event of a military conflict, may be called to active duty. In response to increases in terrorist activity, there have been periods of significant call-ups of military reservists. It is possible that there will be similar large-scale military reserve duty call-ups in the future. Our operations could be disrupted by the absence of a significant number of our officers, directors, employees and consultants. Such disruption could materially adversely affect our business and operations.

USE OF PROCEEDS

Assuming that the target dollar amount of this offering is raised, we estimate that, at a per share price of $3.00, the net proceeds from the sale of the Offered Shares in this offering will be approximately $13,850,000, after deducting the estimated offering expenses¹ of approximately $1,150,000.  

Upon a successful offering of all of our Offered Shares for maximum aggregate gross proceeds of $15,000,000, we anticipate that our use of proceeds will be as follows:

Upon a successful Offering of our Offered Shares for aggregate gross proceeds of $7,500,000, we anticipate that our use of proceeds will be as follows:

The foregoing information is an estimate based on our current business plan.  We may find it necessary or advisable to re-allocate portions of the net proceeds reserved for one category to another, and we will have broad discretion in doing so.  Pending these uses, we intend to invest the net proceeds of this offering in short-term, interest-bearing securities.

CAPITALIZATION

The following table sets forth our capitalization as of December 31, 2016, on: 

The unaudited pro forma and pro forma as adjusted information below is illustrative only, and cash and cash equivalents and short-term investments, total stockholders’ equity and total capitalization after this offering will be adjusted based on the actual initial offering price and other terms of this offering determined at pricing. You should read this table in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Description of Capital Stock” and our consolidated financial statements and related notes included elsewhere in this prospectus.

The foregoing capitalization information does not reflect (i) 510,000 shares of our common stock issuable upon exercise of outstanding stock options at a weighted average exercise price of $2.55; and (ii) 1,250,000 shares of common stock which we intend to reserve for issuance under a stock incentive plan which has yet to be adopted.

DILUTION

If you invest in our shares of common stock, your interest will be diluted to the extent of the difference between the offering price per share of our common stock and the as adjusted net tangible book value per share of our common stock after this offering. Our net tangible book value as of December 31, 2016 was $(544,250), or $(0.03) per share of outstanding common stock. Without giving effect to any changes in the net tangible book value after December 31, 2016 other than the sale of an assumed number of 5,000,000 shares in this offering at an assumed initial offering price of $3.00 per share, our pro forma net tangible book value as of December 31, 2016 was $13,429,750, or $0.54 per share of outstanding capital stock. Dilution in net tangible book value per share represents the difference between the amount per share paid by the purchasers of our shares in this offering and the net tangible book value per share of our capital stock immediately afterwards. This represents an immediate increase of $0.56 per share of capital stock to existing stockholders and an immediate dilution of $2.46 per share of common stock to the new investors, or approximately 82% of the assumed initial public offering price of $3.00 per share. The following table illustrates this per share dilution: 

The following table summarizes the differences between the existing stockholders and the new investors with respect to the number of shares of common stock purchased, the total consideration paid, and the average price per share paid, assuming the sale of 5,000,000 shares at $3.00 per share:

BUSINESS

Overview

We have developed, and are in the process of commercializing our products of an advanced robotics system that enables remote, real-time, pinpoint accurate firing of small arms and light weapons. Our commercialization efforts are focused inside and outside the United States, however we are focused primarily on the United States market. In addition, our commercialization efforts are directed from our United States offices by our Chief Executive Officer and Chief Customer Officer that reside in the United States. Although our first product has been designed to be used by unmanned aerial vehicles, or UAVs, our robotic solutions are also adaptable to other military vehicles, boats and stationary environments, as well as civilian purposes like high definition, high-end stabilized cameras. We are able to achieve pinpoint accuracy regardless of the movement of the weapons platform or the target. Our system is to small arms and light weapons (e.g., weapons weighing less than 9 kg) what drones are to air-to-ground missiles. 

We have completed our first generation of our robotic systems. Prior to marketing our systems to potential customers, for security reasons, we are required to obtain various governmental approvals for each sale. We have filed marketing applications with the Israeli Ministry of Defense (IMOD) and already received marketing approvals for more than 15 countries, including the United States.

The classic confrontation of army against army has become rare, while guerilla (or asymmetric) warfare has unfortunately become commonplace. Further, the foreign policy of the United States and other countries is increasingly designed around the parameter of not employing “boots on the ground” while at the same time minimizing collateral damage. In fighting the global war on terror, the United States and other countries around the world have significantly increased their use of UAVs for intelligence gathering, surveillance and tactical applications, such as delivery of heavy ordnance bombs and missiles. The use of UAVs to fire small arms and light weapons from the air, however, has not yet become a viable option. Our technology thus addresses a crucial need of modern guerrilla warfare to bring a wide range of weapons other than bombs and missiles to bear on remote hostile targets without risk to the military personnel deploying the weapons, while at the same time minimizing collateral damage.

Our system was designed with input from veterans of Israel’s elite special forces. It is operated intuitively via a touch-based tablet which serves as its control unit. Minimal prior training is required in order to operate the robot. In June 2016, our DKL-MK1-SM robot was awarded the top prize at the Combating Terrorism Technology Conference sponsored by the United States Defense Department’s Combating Terrorism Technical Support Office (CTTSO), Israel’s Ministry of Defense Directorate of Defense Research and Development (DDR&D / MAFAAT), and the MIT Enterprise Forum of Israel.

Company

Our principal business operations are located in the United States and our Chief Executive Officer currently directs, controls and coordinates our activities in our domestic offices. Our research and development activities are conducted by our wholly owned Israeli subsidiary, Duke Airborne Systems Ltd., which was formed in March 2014. In 2016 we reorganized as a U.S. holding company Our principal executive offices are located at 14 Oak St., Suite A, Gulf Breeze, FL 32561; Tel: 850-677-0935.

Product Lines

We currently offer two lines of products:

We have filed marketing applications with the Israeli Ministry of Defense (IMOD) and already received marketing approvals for more than 15 countries including the United States and Western Europe, while we will be restricted from selling in other major markets like China and Russia. 

Expertise of Founders and Management 

We believe that our products provide a solution for modern asymmetrical warfare focused on needs identified by veterans of elite special military forces. All of our products result from a deep familiarity with current military operational demands and challenges. In that regard, our management team has extensive experience in the UAV and robotics fields, as well as experience in the Israeli special forces. Our expertise is based on years of developing complex military airborne systems, advanced robotics, real-time software and innovative user interface technologies.

Technological and Competitive Advantages.

The combination of the military experience of our founders and employees, the high level of technological know-how and diversified skills, has enabled us to introduce a unique high end technology solution – a six degrees of freedom parallel robotic system that works in real time and can stabilize objects up to triple its weight. In that sense, our unique robotic stabilization platform permits a payload to “float” against rotations in all three axes, as well as against vibration and motion in all three directions of movement. We have found this stabilization platform to be particularly important with respect to our DKL-MK1-SM lightweight robot that is mounted with weapons. We believe that in many instances, our product will be able to provide cover for, and replace troops in the battlefield. In addition, we believe that the system will limit broad collateral damage in the battle field.

Products

DKL-MK1-SM Robot – Military Use

Our DKL-MK1-SM lightweight robot allows accurate firing from various configurations consisting of UAV-mounted, land-mounted on light all-terrain vehicles and sea-mounted on boats. The DKL-MK1-SM robot is mounted on our standard DK-HIPPOGRIFF UAV platform, a combined system which we market under the commercial name TIKAD. In addition to the various configurations and mounting options, the DKL-MK1-SM robots also permit the utilization of a wide range of small arms and light weapons, with a maximum weight of 9 kg. The combination of our DKL-MK1-SM robot, along with our stabilization platform and software, provides a unique firing platform that permits precision firing regardless of weather conditions or other variables. For example, the DKL-MK1-SM robot can be mounted with an M4 assault carbine, as pictured below.

Additionally, our DKL-MK1-SM robot may also be utilized as a ground sniper platform. Since the robot is a standalone unit, it can be mounted on a patrol or attack vehicle or be positioned at a strategic location. The capability of remote operation without the need to expose the operator to tactical danger can replace human snipers in an urban setting. This capability may reduce the number of casualties due to “friendly fire” incidents and may also significantly reduce exposure and risk to combat troops.

Our DKL-MK1-SM is controlled by a remote control device that permits the user to exert full control over the elevation and flight direction of the robot. In addition, the remote control device also permits the user to arm the robot as well as control the firing mechanism, as pictured below.

DKL-MK1-SU Robot – Civilian Use

Our DKL-MK1-SU lightweight robot is intend primarily for civilian purposes and can be mounted on our standard DK-HIPPOGRIFF UAV platform. We believe that the DKL-MK-1-SU robot can bring solutions that yet exists for different tasks that require high end stabilization, such as: vertical takeoff and landing (VTOL) robotic landing gear for drones and VTOL aircrafts and medical aid robotic uses.

We do not initially intend to focus on the sales of the DKL-MK1-SU robot but expect our sales of the robot to increase as additional product options expand. We will also address, as needed, evolving regulation of civilian UAVs.

Assembly and Testing

Currently, we assemble both of our DKL-MK1-SM and DKL-MK1-SU robots at our facilities in Israel. We outsource components to third party manufacturers, from which we purchase components and custom-made machined parts required for the production of our robots. We currently source our parts and materials from approximately 12 suppliers located primarily in the United States, Europe, Israel and China. We are not, however, dependent on any single manufacturer. In addition, while the components we purchase are built according to our specific designs and requests, we believe the components and materials we purchase are common in nature and can easily be obtained from alternative suppliers, if necessary. We are not dependent on any single manufacturer, and upon receipt of the components, we assemble the final product in-house. In addition, we have not executed supply agreements with our third-party suppliers. More importantly, our proprietary and confidential complex kinematic algorithms and control software is our most valuable intellectual property. We have built an in-house laboratory to support the assembly and commercialization of our products. We believe that the current size and capacity of our in-house laboratory, located at our facilities in Israel, will be sufficient to support all of our commercialization activities in the near future. 

UAVs

DK-HIPPOGRIFF 

We also manufacture our special purpose Hippogriff UAV to integrate for operational uses with our robots. The Hippogriff is the UAV platform for our current DKL-MK1-SM and DKL-MK1-SU robots and utilizes a multi-rotor propulsion system. The UAV platform is designed to have a number of different configurations in that it may accept multiple robotic system attachments. In that regard, we intend to sell our Hippogriff UAV for both military and civilian use, depending on the robotic system attachment that the end user ultimately seeks to purchase from us. Importantly, the Hippogriff UAV is capable of carrying a payload of up to 10 kg for operational missions. 

Similarly to our robotic systems, we currently manufacture the UAV in our facilities in Israel after sourcing parts and raw materials from multiple third-party suppliers. Additionally, once we are able to commercialize and sell our products in the United States, we may establish assembly operations in the United States. In addition to assembling the UAV platform, we currently test all of our products in our in-house laboratory, located at our facilities in Israel. We believe our in-house laboratory will be sufficient to support all of our commercialization activities in the near future. 

Product Testing

We have been granted the AS9100 designation, the most stringent aerospace standard. Our robot and UAV systems have been designed, tested and manufactured in accordance with these standards. We are subject to annual audits and testing in order to maintain our AS9100 designation. Major aerospace manufacturers and suppliers worldwide require compliance and/or registration to AS9100 as a condition of doing business with them.

Components are tested and approved against the expected points of failure during extended and aggressive operations. For example, we test items such as the load carrying capacity of our products as well as various software components. After the lab testing phase, the robot and UAVs undergoes a series of field tests which examine the operation of each function. Results are combined with multi-phased airborne testing.

Our Growth Strategy

We expect that our growth will initially derive from sales of our DKL-MK1-SM robot, and later from sales of DKL-MK1-SU robot.

Sales and Marketing

Marketing and sales efforts are currently concentrated on our model DKL-MK1-SM robot. We have received interest and an initial order from the Israel Defense Forces (IDF). Our DKL-MK1-SM robot has been designated as a unique system by the Israel Ministry of Defense (IMOD) and has received official approval as the sole supplier of this solution. In addition, we have received inquiries from foreign officials regarding our DKL-MK1-SM.

We are currently in the process of building up our sales and marketing infrastructure primarily in the United States but also globally to implement our marketing strategy. This includes cooperation with agents, distributors and resellers of products that are experienced in our market. We have engaged an experienced U.S.-based sales agent with a proven track record relating to our type of products. We intend to focus our sales efforts in the United States because the U.S. military in general and Special Forces in particular are expected to be our largest customers, both in our early commercialization stage and for the foreseeable future. For this reason, we have established our headquarters in Florida, because the units of the U.S. military and Special Forces that are our initial strategic target customers, with which we have already established a relationship, are located in Florida.

Operations and Manufacturing

We currently assemble our systems and products at our facilities in Israel. Additionally, once we are able to commercialize and sell our products in the United States, we may establish assembly operations in the United States. Our manufacturing process involves outsourcing components to third party manufacturers, from whom we purchase component parts and raw materials required for the production of our products. We currently source our parts and materials from approximately 12 suppliers located primarily in the United States, Europe, Israel and China; we are not dependent, however, on any single manufacturer. In addition, while the components we purchase are built according to our specific designs and requests, we believe the components and materials we purchase are common in nature and can easily be obtained from alternative suppliers, if necessary. We are not dependent on any single manufacturer, and upon receipt of the components, we assemble the final product in-house. In addition, we have not executed supply agreements with our third-party suppliers. We have built an in-house laboratory to support the assembly and commercialization of our products. We believe that the current size and capacity of our in-house laboratory located at our facilities in Israel will be sufficient to support all of our commercialization activities in the near future.

Intellectual Property

Our success depends, at least in part, on our ability to protect our proprietary technology and intellectual property, and to operate without infringing or violating the proprietary rights of others. We rely on a combination of trade-secrets, know-how, and other contractual rights (including confidentiality and invention assignment agreements) to protect our intellectual property rights. We also restrict access to our sensitive intellectual property information to our most senior management.

We are in the process of applying for patents to protect certain of our key technologies, but we do not have any patents pending and thus 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 current or future patent applications will result in the issuance of any patents.

Additionally, our DKL-MK1-SM robot has been designated as a unique system by the Israeli Ministry of Defense (IMOD) and has received official approval as the sole supplier of this solution.

Governmental Regulation

Government Contracting Regulations. We operate under laws, regulations and administrative rules governing defense and other government contracts, mainly in Israel and the United States. Some of these carry major penalty provisions for non-compliance, including disqualification from participating in future contracts. In addition, our participation in governmental procurement processes in Israel, the United States and other countries is subject to specific regulations governing the conduct of the process of procuring defense and homeland security contracts.

Israeli Export Regulations. Israel’s defense export policy regulates the sale of a number of our systems and products. Current Israeli policy encourages exports to approved customers of defense systems and products such as ours, as long as the export is consistent with Israeli government policy. Subject to certain exemptions, a license is required to initiate marketing activities. We also must receive a specific export license for defense related hardware, software and technology exported from Israel. Israeli law also regulates export of “dual use” items (items that are typically sold in the commercial market but that also may be used in the defense market). We currently have filed marketing applications with the Israeli Ministry of Defense (IMOD) for more than 15 countries including the U.S.

It is expected that in the mid-term more than 75% of our revenue will be derived from exports subject to Israeli export regulations.

Approval of Israeli Defense Acquisition. The Israeli Defense Entities Law (Protection of Defense Interests) establishes conditions for the approval of an acquisition or transfer of control of an entity that is determined to be an Israeli “defense entity” under the terms of the law. Designation as a “defense entity” is to occur through an order to be issued jointly by the Israeli Prime Minister, Defense Minister and Economy Minister. Although no such orders relating to us have been issued as of the date hereof, it is possible that our Israeli subsidiary may be designated as “defense entities” under the law. An order (pursuant to the law) would establish conditions and restrictions regarding non-Israeli control of our Israeli subsidiary. For example, the Israeli government approval might be required for acquisition of 25% or more of the voting securities or a smaller percentage of shares that grant “means of control” in our company, if such were to directly affect the control of our Israeli subsidiary.

Approval of U.S. and Other Defense Acquisitions. Many countries in addition to Israel also require governmental approval of acquisitions of local defense companies or assets by foreign entities. Mergers and acquisitions of defense related businesses in the U.S. are subject to the Foreign Investment and National Security Act (FINSA). Under FINSA, foreign acquisitions of defense related businesses in the U.S. require review, and in some cases approval, by the Committee on Foreign Investment in the United States. In that regard, if a foreign entity attempts to acquire our company or all of our domestic assets, such transactions may be subject to FINSA.

“Buy American” Laws. The U.S. “Buy American” laws impose price differentials or prohibitions on procurement of products purchased under U.S. government programs. The price differentials or prohibitions apply to products that are not made in the United States or that do not contain U.S. components making up at least 50% of the total cost of all components in the product. However, a Memorandum of Agreement between the United States and Israeli governments waives the Buy American laws for specified products, including most of the products we are currently selling in the United States.

Procurement Regulations. Solicitations for procurements by governmental purchasing agencies in Israel, the United States and other countries are governed by laws, regulations and procedures relating to procurement integrity, including avoiding conflicts of interest, corruption, human trafficking and conflict minerals in the procurement process. Such regulations also include provisions relating to information assurance and for the avoidance of counterfeit parts in the supply chain.

Anti-Bribery Regulations. We conduct operations in a number of markets that are considered high risk from an anti-bribery compliance perspective. Laws and regulations such as the Israel Penal Code, the Organization for Economic Cooperation and Development (OECD) Convention on Combating Bribery of Foreign Public Officials in International Business Transactions, the U.S. Foreign Corrupt Practices Act, the U.K. Bribery Act and corresponding legislation in other countries, prohibit providing personal benefits or bribes to government officials in connection with the governmental procurement process. Israeli defense exporters, like ourselves, are required to maintain an anti-bribery compliance program, including specific procedures, record keeping and training.

Audit Regulations. The IMOD may audit our books and records relating to its contracts with us. Our books and records and other aspects of projects that will be related to the U.S. defense contracts will be subject to audit by U.S. government audit agencies. Such audits review compliance with government contracting cost accounting and other applicable standards. If discrepancies are found this could result in a downward adjustment of the applicable contract’s price. Some other customers have similar rights under specific contract provisions.

Civil Aviation Regulations. Several of our products for commercial aviation applications are subject to flight safety and airworthiness standards of the U.S. Federal Aviation Administration (FAA) and similar civil aviation authorities in Israel, Europe and other countries.

Environmental, Health and Safety Regulations. We are subject to a variety of environmental, health and safety laws and regulations in the jurisdictions in which we have operations. This includes regulations relating to air, water and ground contamination, hazardous waste disposal and other areas with a potential environmental or safety impact.

Competition

While we believe that our products are novel, and that we have unique knowledge of military operational demands and challenges and years of developing complex military airborne systems and advanced robotics, the defense industry is a competitive environment. Competition is based on product and program performance, price, reputation, reliability, life cycle costs, overall value to the customer and responsiveness to customer requirements. This includes the ability to respond to rapid changes in technology. In addition, our competitive position sometimes may be affected by specific requirements in particular markets.

Continuing consolidation in the defense industry has affected competition. In addition, many major prime contractors are increasing their in-house capabilities. These factors have decreased the number but increased the relative size and resources of our competitors. We adapt to market conditions by adjusting our business strategy to changing market conditions. We also anticipate continued competition in defense markets due to declining defense budgets in many countries.

Our competitors, either alone or through their strategic partners, might have substantially greater name recognition and financial, technical, manufacturing, marketing and human resources than we do and significantly greater experience and infrastructure in commercializing defense products, obtaining regulatory approval for those products and commercializing those products around the world.

Research and Development

During the fiscal years ended December 31, 2016 and 2015, we spent $167,000 and $56,000, respectively, on engineering, research and development activities.

Employees

As of June 29, 2017, we employed a total of 8 individuals on a full-time basis. Our principal executive officer and chief customer officer are based in the United States. None of our employees are covered by a collective bargaining agreement.

Legal Proceedings

There are no legal proceedings material to our business or financial condition pending and, to the best of our knowledge, there are no such legal proceedings contemplated or threatened.

Properties

Our principal office is located at 14 Live Oak St., Suite A, Gulf Breeze, FL, 32561. We executed a lease for our Florida office on August 1, 2016 which is for a 2 year term. Our current monthly rent is $500. We executed a lease for our Israeli facilities in July 2016 for a 1 year term. Our current monthly rent is approximately $1,000.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS

We were originally organized as an Israeli corporation in March 2014. During 2016, we reorganized as a Delaware corporation, and have a wholly owned Israeli subsidiary, Duke Airborne Systems Ltd. Since March 2014, we have been engaged primarily in developing, and are now in the process of commercializing, an advanced robotics system that enables remote, real-time, pinpoint accurate firing of small arms and light weapons.

Operating Results

Year Ended December 31, 2016 Compared to Year Ended December 31, 2015.

Revenues. During the fourth quarter of 2016, we obtained our first order. Revenues for this order are recognized on the percentage-of-completion basis under which sales and profit are recorded based on the ratio of costs incurred to estimated total costs at completion. As a result, revenues for the quarter totaling $ 220,000 have been recognized. 

Cost of Revenues. During 2016, costs incurred to date on the order comprising components and equipment purchased from suppliers, sub-contractors and labor costs amounted to $262,000.

Research and Development. Our research and development expenses consist primarily of professional services as well as the purchase of components and equipment. Research and development expenses for the 2016 fiscal year excluding those relating directly to our first order totaled $167,000 as compared to $56,000 for the 2015 fiscal year. This increase was due to the expanded research and development activities that were carried out during the 2016 fiscal year.

General and Administrative Expenses. Our general and administrative expenses for the 2016 fiscal year totaled $209,000 as compared to $28,000 for the 2015 fiscal year. This increase of $181,000 was primarily due to increased costs associated with the development of the business of the Company and costs incurred with regard to this offering.

Financial Expenses. Financial expenses for the 2016 fiscal year totaled $27,000, as compared to $5,000 in the 2015 fiscal year. The increase in the finance expenses was due to the interest payments made on loans received by the Company to finance its activities as well as exchange rate differences.

Other Income. Other income of $99,000 represents the receipt of the top prize at the Combating Terrorism Technology Conference sponsored by the United States Defense Department’s Combating Terrorism Technical Support Office (CTTSO) Israel’s Ministry of Defense Directorate of Defense Research and Development (DDR&D / MAFAAT), and the MIT Enterprise Forum of Israel for our DKL-MK1-SM.

Net Loss. We recorded a net loss of $346,000 for the 2016 fiscal year, compared with a net loss of $89,000 for the 2015 fiscal year. The increase in the loss in the 2016 fiscal year was due to increased research and development costs, a loss resulting from our first order, costs incurred with regard to this offering and an increase in other general and administrative costs and interest costs.

Liquidity and Capital Resources

December 31, 2016. As of December 31, 2015 and December 31, 2016 we had a cash balance of $87,000 compared with a cash balance of $0 as of December 2015.

Since the inception of the company we have primarily funded our operations through bank loans and loans provided by our shareholders.

On November 19, 2014, we signed on a loan agreement with an Israeli bank pursuant to which we received proceeds of $67,000 at a variable annual rate of 6.5%. We are required to repay this loan in 54 equal installments through April 30, 2019.

On August 5, 2015, we obtained a loan from an Israeli bank pursuant to which we received proceeds of $65,000 at a variable annual rate of 3.6%. We are required to repay this loan in 60 equal installments through August 15, 2020.

On February 29, 2016, we obtained a loan from an Israeli bank pursuant to which we received proceeds of $128,000 at a variable annual rate of 4.25%. We are required to repay this loan in 60 equal installments through February 28, 2021. The loan is collateralized by substantially all of the assets of our subsidiary and all of its ordinary shares.

As of December 31, 2016 the outstanding balance of the bank loans stood at $199,000 and as of December 31, 2015 at $113,000

Since inception, the company’s Stockholders(the “Stockholders”) provided loans from time to time, as needed. Some of the loans bear an annual fixed interest at 3% and some of the loans bear an annual interest rate as defined in Section 3(j) of the Israeli tax ordinance (the interest rate for 2015 is 3.05% and 2.56% for 2016).

The Stockholders’ loans, including the accumulated interest amount, shall be repaid in full within 7-15 days from any capital raised by the company or related parties of the company, whether by a stock offering and /or loans in excess of NIS 10 million (approximately $2.5 million)

As of December 31, 2016 and December 31, 2015, the outstanding balance of the Stockholders’ loans is $499,000 and $107,000, respectively.

In June 2016, we were awarded the top prize at the Combating Terrorism Technology Conference sponsored by the United States Defense Department’s Combating Terrorism Technical Support Office (CTTSO) Israel’s Ministry of Defense Directorate of Defense Research and Development (DDR&D / MAFAAT), and the MIT Enterprise Forum of Israel for our DKL-MK1-SM. As part of our top prize, we were awarded $99,000 recorded as Other Income.

During the first quarter of 2017 we issued 55,556 shares of our common stock to an investor in a private placement transaction for aggregate gross proceeds of $125,000. 

We believe that based on our current cash balances, together with the investment made by a third party and our ability to obtain additional Stockholder loans on similar terms as set forth above, we will be able to sustain our operations at current levels for approximately 12 months. During this period, we intend to develop our marketing and sales capabilities in order to generate revenues, and we will then need to increase our marketing and sales expenses. We estimate that in the midterm the company will be focused on marketing DKL-MK1-SM, manufacturing and delivering the orders.

Plan of Operations

Over the next 12 months, the company plans to increase its sales and marketing plan. Upon completion of this offering, the company will focus its resources in three key areas: (i) hiring additional key members to its management, marketing and sales team; (ii) expanding sales and marketing to enable increased revenue for the sales of our DKL-MK1-SM; and (iii) continuing the development of new generations of its products. In that regard, the company has engaged an experienced U.S. based sales agent with a proven track record relating to its products and activity in order to assist in the of sales of products in the United States. During February 2017 we took further steps to expand the management team and recruited a local executive to the position of Chief Customer Officer. We also set up an Advisory Board and have recruited a well experienced U.S. based person to lead it.

Our plans include establishing sales and marketing infrastructure in the United States, Far East and Europe – including participation in demonstrations and pilots in different parts of these markets, with a major focus being in the United States. We intend to continue to hire experienced local candidates with a proven track record relating to military and government agencies. We expect that, assuming a successful raise of the full offering amount, we will be able to sustain our plans and operations for at least a twenty-four month period following the closing of the offering.

DIRECTORS, EXECUTIVE OFFICERS AND SIGNIFICANT EMPLOYEES

Our directors, executive officers and significant employees, and their ages as of May 15, 2017, are as follows:

All of our executive officers and significant employees work on a full-time basis, except for Mr. Bregman who provides services pursuant to a consulting agreement.  There are no family relationships between any director, executive officer or significant employee.  During the past five years, none of the persons identified above has been involved in any bankruptcy or insolvency proceeding or convicted in a criminal proceeding, excluding traffic violations and other minor offenses.

Executive Officers and Directors

Raziel Atuar, Lt. Col. (Reserves), Co-Founder and Chief Executive Officer (CEO). In 2014, Mr. Atuar co-founded Duke Airborne Systems Ltd. Since 2016, Mr. Atuar has served as the Chief Executive Officer (CEO) of Duke Robotics Inc. From 1998 to 2004 Mr. Atuar served in an IDF Special Forces Unit, received an Excellence Award and planned and commanded covert operations. From 2005 to 2013, Mr. Atuar served as Special Agent in the Israeli Secret Service on complex missions in foreign countries. From 2013 to 2014, Mr. Atuar provided commercial consulting and management services to IMI LTD (Israel Military Industry). Mr. Atuar holds a B.A in Geography from Haifa University and M.F.A in Film Studies from Tel-Aviv University.

Sagiv Aharon, Co-Founder, Chief Technology Officer (CTO), President and Director. In March 2014, Mr. Sagiv Aharon co-founded Duke Airborne Systems Ltd. From 2008 to 2010, Mr. Aharon worked at the Israeli Aerospace Industry (IAI) as a structural design engineer on a classified hybrid structure (composite/metal) air vehicle. From 2010 to 2011, Mr. Aharon worked at Rafael Advanced Weapon Systems as a mechanical design engineer for complex active/reactive armor solutions for land vehicles. From 2011 to 2012, Mr. Aharon worked for Elbit Systems Ltd. (NASDAQ:ESLT) as a mechanical design engineer and a system integrator at several remotely operated weapon systems upon land vehicles. From 2012 until March 2014, Mr. Aharon served as the CEO of Axis Aerospace Mechanical Design Ltd. in the field of airborne structural projects and flight experiments, following strict aerospace level quality standards (AS9100). Mr. Aharon holds a B.Sc. in mechanical engineering with specialty in control and robotics from the Technion – Israel Institute of Technology.

Amir Kadosh, Advocate, Co-Founder and Chief Logistics Officer (CLO). Amir Kadosh co-founded the Company in 2014 and has been our Chief Logistics Officer (CLO) since 2016. Between 2014 and 2016, Mr. Kadosh served as the Chief Logistics Officer of Duke Robotics Ltd. From 2012 to 2014, Mr. Kadosh worked as a lawyer, specializing in commercial and companies law. From 2007 to 2011, he served as a Special Agent in the Israeli Secret Service, and from 2001 to 2006, he served as an embassy security team member. Mr. Kadosh also served in the Israeli Defense Forces in a Special Forces Unit. Mr. Kadosh holds a law degree and a business management degree from IDC Herzelia (Interdisciplinary Center Herzliya).

Raanan (Ron) Bregman, Chief Customer Officer. In 2017, Mr. Bregman became our Chief Customer Officer. From 2001 to 2007, Mr. Bregman was President and Chief Executive Officer of Tadiran Telecom Business Systems Ltd., a privately held Israeli company, providing unified communication and collaboration systems globally. From 2009 to 2017, Mr. Bregman was the President and Chief Executive Officer of Telco Depot. Mr. Bregman studied computer science at Fairleigh Dickinson University.

Erez Nachtomy, Director. Mr. Erez Nachtomy is the Managing Director of Erez Nachtomy Consulting Services Ltd, currently engaged in consulting services. 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., 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, Japan and Israel and is traded on the Swiss Stock Exchange (SWX:SHLTN). Mr. Nachtomy holds an LL.B. from Tel Aviv University, Israel.

Yariv Alroy, Director. Mr. Yariv Alroy is the Managing Director of T.N.S.A Consulting and Management LTD., currently engaged in strategic consulting services and investments. 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 (SHLTN:SWX). Yariv Alroy holds an LL.B from Tel Aviv University.

At the beginning of 2017, we also formed an advisory board consisting of various industry professionals. Biographies of our current advisory board members is found below.

Leslie Jay Cohen, Ph.D. – Advisory Board Member. From 1984 to 1989, Mr. Cohen worked at McDonnell Douglas Aerospace, as Director of Technical Operations and then as Director of Advance Launch System. From 1989 to 1996, Mr. Cohen served as Vice President of Advance Programs for McDonnell Douglas in Russia, working closely with launch vehicle manufacturers and strategic weapon systems designers, and in the United States as Director of the Army/Grumman/McDonnell Douglas Neutral Particle Beam Experiment. From 1996 to 2001, Mr. Cohen served as Director of Advance Program Development for Cytec Fiberite Inc. & AMT I and was responsible for the Aerospace Advanced Program development. From 2001 to 2017, Mr. Cohen served as Senior Vice President of New Business Development and Strategic Technology for Hitco Carbon Composites, a major supplier to the aerospace and industrial markets, where he was responsible for all business development and strategic technology. Mr. Cohen was a Fullbright Hayes Post Doctoral Fellow at the Israel Institute of Technology, and has published over 40 professional papers over the course of his career. Mr. Cohen holds a B.S., M.S., and Ph.D. in Civil Engineering (Structures & Materials) from the Carnegie Institute of Technology.

Danny Rothschild (Major General, Res.) – Advisory Board Member. Gen. Rothschild served in the IDF Intelligence Corps for over thirty years, in various capacities, including Assistant to IDF Chief of Staff, commander of IDF Units in Southern Lebanon, Deputy Director of Military Intelligence and Chief of Intelligence Research and Analysis. In 1995, upon retiring from the IDF, Gen. Rothschild co-founded Netacs Security Ltd. where he continues to serve as President. Gen. Rothschild was most recently the Director of the Institute for Policy and Strategy at the Interdisciplinary Center Herzliya and is currently the Chairman of the Annual Herziliya Conference Series on the Balance of Israel’s National Security. Gen. Rothschild has served as a member of the advisory board of the Central Bank of Israel, chairman of the board of trustees of the Afeka Tel Aviv Academic College of Engineering, chairman of the Israeli Board of the America-Israel Friendship League, and member of the board of governors of the Hebrew University Jerusalem.

COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS

The following table sets forth information about the annual compensation of each of our three highest paid persons who were executive officers or directors during our last completed fiscal year.

Compensation of Directors

We do not compensate our directors for attendance at meetings.  We reimburse our officers and directors for reasonable expenses incurred during the course of their performance.  

Employment Agreements

Raziel Atuar. Upon the closing of the offering, the company will enter into an employment agreement with Raziel Atuar relating to his employment as the Chief Executive Officer of the company which shall provide for a minimum term of 36 months, require a 6 month notice if Mr. Atuar seeks to terminate his employment, monthly compensation equal to approximately $8,000 (32,000 NIS), eligibility for an annual bonus equal to 3 months salary based on terms to be determined by the Board of Directors, and customary non-compete (for a 3 year period following his employment with the company), confidentiality and non-solicitation provisions and the assignment of all intellectual property developed while employed by the company.

Sagiv Aharon. Upon the closing of the offering, the company will enter into an employment agreement with Sagiv Aharon relating to his employment as the Chief Technology Officer and President of the company, which shall provide for a minimum term of 36 months, require a 6 month notice if Mr. Aharon seeks to terminate his employment, monthly compensation equal to approximately $8,000 (32,000 NIS), eligibility for an annual bonus equal to 3 months salary based on terms to be determined by the Board of Directors, and customary non-compete (for a 3 year period following his employment with the company), confidentiality and non-solicitation provisions and the assignment of all intellectual property developed while employed by the company.

Amir Kadosh. Upon the closing of the offering, the company will enter into an employment agreement with Sagiv Aharon relating to his employment as the Chief Technology Officer and President of the company, which shall provide for a minimum term of 36 months, require a 6 month notice if Mr. Kadosh seeks to terminate his employment, monthly compensation equal to approximately $8,000 (32,000 NIS), eligibility for an annual bonus equal to 3 months salary based on terms to be determined by the Board of Directors, and customary non-compete (for a 3 year period following his employment with the company), confidentiality and non-solicitation provisions and the assignment of all intellectual property developed while employed by the company.

Employee Stock Option Plan

Assuming a successful final closing of this offering, the company and its stockholders intend to adopt a stock incentive plan, in customary form in the United States, which will reserve for future issuance under the plan up to 5% of the number of shares of common stock outstanding following the final closing of this offering.

Consulting Agreement with Raanan (Ron) Bregman

On February 21, 2017, the company entered into a consulting agreement with Raanan (Ron) Bregman. Pursuant to the terms of the consulting agreement, Mr. Bregman has agreed to serve as Chief Customer Officer of the company, responsible for customer strategy, customer acquisition, retention and profitability. Mr. Bregman shall be granted the option to purchase 5,000 shares of common stock of the company per month, during the term of the agreement, at an exercise price of $3.00 per share. The options will be granted for a period of 5 years and will vest over a 12 month period, all in accordance with the company’s option plan. The company has agreed to pay Mr. Bregman a monthly fee of $6,000. The consulting agreement shall continue until terminated by the company or Mr. Bregman with 30 days’ prior notice.

SECURITY OWNERSHIP OF MANAGEMENT AND CERTAIN SECURITY HOLDERS

Set forth below is information regarding the beneficial ownership of our common stock, our only outstanding class of capital stock as of the date of this Preliminary Offering Circular by (i) each person whom we know owned, beneficially, more than 10% of the outstanding shares of our common stock, and (ii) all of the current directors and executive officers as a group.  We believe that, except as otherwise noted below, each named beneficial owner has sole voting and investment power with respect to the shares listed.  Unless otherwise indicated herein, beneficial ownership is determined in accordance with the rules of the Securities and Exchange Commission, and includes voting or investment power with respect to shares beneficially owned.

INTEREST OF MANAGEMENT AND OTHERS IN CERTAIN TRANSACTIONS

Share Purchase Agreement

On June 5, 2016, the company completed a reorganization according to which it issued 1,000 common shares to Sagiv Aharon, the company’s Chief Technology Officer and President, and to Aphek Trading Kadosh and Razi Ltd. (a company held by Raziel Atuar, the company’s Chief Executive Officer, and Amir Kadosh, the company’s Chief Logistics Officer). Under the terms of the governing agreement, the company issued an aggregate of 1,000 shares of common stock, and in consideration for such issuance, the company received all of the outstanding shares of Duke Airborne Systems Ltd., an Israeli corporation. As a result of this transaction, Duke Airborne Systems Ltd. became the company’s wholly owned subsidiary.

Stockholders Agreement

On June 5, 2016, the company executed a stockholders agreement (the “Stockholders Agreement”) with Yariv Alroy, Erez Alroy, Erez Nachtomy, Sagiv Aharon and Aphek Trading Kadosh and Razi Ltd. (collectively, the “Parties”). Pursuant to the Stockholders Agreement, the Parties agreed to become subject to a bring along provision, whereby prior to an initial public offering, if stockholders holding 50% of the outstanding shares of the company transferred their shares in the company, then the remaining Parties would be eligible to join such a transaction. In addition, each of the Parties would be entitled to a right of first refusal which would entitle them to purchase a selling Parties’ shares of the company’s common stock prior to a sale to a third party. The Stockholders Agreement also provide each of the Parties with a preemptive right to purchase any shares of equity securities to be offered by the company to any third parties. The parties have agreed to terminate the Stockholders Agreement in conjunction with the first closing of this offering.

Loan Agreement

On January 1, 2015 the company executed a Loan Agreement with Aphek Trading Kadosh and Razi Ltd. (“Aphek”) whereby Aphek agreed to provide a loan up to an amount of approximately $132,000 (“Aphek Loan”). On January 1, 2015 the company executed a Loan Agreement with Sagiv Aharon (“Sagiv”) whereby Sagiv agreed to provide a loan of approximately $55,000 (“Sagiv Loan”). The Aphek Loan and Sagiv Loan bears interest rates as defined in Section 3(j) of the Israeli tax ordinance (the interest rate for 2015 is 3.05% and 2.56% for 2016). On June 5, 2016, the company executed a Loan Agreement with Iki Alroy Investment Ltd., Erez Alroy Investment Ltd. and Ermi Nachtomy Assets Ltd. (collectively, the “Lenders”), whereby the Lenders agreed to provide a loan in an aggregate amount of $100,000 to $500,000 in the aggregate. The Lenders will provide monthly installments of between $20,000 and $40,000, subject to the Lender’s discretion. The Loan bears an annual fixed interest rate of 3%. The Aphek Loan and Sagiv Loan and all unpaid accumulated interest, shall be repaid in full within 15 days of the receipt by the company of funds in excess of NIS 10,000,000 (approximately - $2,500,000). The Lenders Loan, and all unpaid and accumulated interest, shall be repaid in full within 7 days of the receipt by the company of funds in excess of $2,500,000.

Consulting Agreement with T.N.S.A. Consulting and Management Ltd.

On August 15, 2016, the company entered into a consulting agreement with T.N.S.A. Consulting and Management Ltd., an entity controlled by Yariv Alroy, a director of the company, which will take effect upon the final closing of this offering. Pursuant to the terms of the consulting agreement, the consultant has agreed to provide services including advice related to strategic planning, guidance regarding sales and marketing, operational improvements and product development as well as advice relating to mergers and acquisitions and capital raising. The consultant is required to provide a minimum of 10 hours per week or 40 hours per month. The company has agreed to pay the consultant a monthly fee of $4,500. The consulting agreement is for a guaranteed term of 12 months and will be renewed automatically unless terminated by the company or the consultant with 90 days prior notice.

Consulting Agreement with Erez Nachtomy Consulting Services Ltd.

On August 15, 2016, the company entered into a consulting agreement with Erez Nachtomy Consulting Services Ltd., an entity controlled by Erez Nachtomy, a director of the company, which will take effect upon the final closing of this offering. Pursuant to the terms of the consulting agreement, the consultant has agreed to provide services including advice related to strategic planning, guidance regarding sales and marketing, operational improvements and product development as well as advice relating to mergers and acquisitions and capital raising. The consultant is required to provide a minimum of 10 hours per week or 40 hours per month. The company has agreed to pay the consultant a monthly fee of $3,800. The consulting agreement is for a guaranteed term of 12 months and will be renewed automatically unless terminated by the company or the consultant with 90 days prior notice.

Future Transactions

We do not have an audit or compensation committee comprised of independent directors. Indeed, we do not have any audit or compensation committee. The board of directors performs these functions as a whole. No members of the board of directors are independent directors. Thus, there is a potential conflict in that board members who are also part of management will participate in discussions concerning management compensation and audit issues that may affect management decisions.

To the extent possible, a majority of the disinterested members of our board of directors will approve future affiliated transactions.

RECENT TRANSACTIONS

In January 2017, we entered into a consulting agreement with a consultant for financial management services. Pursuant to the terms of such agreement, we agreed to issue such consultant an option to purchase 200,000 shares of common stock at an exercise price of $2.25 per share. The options will be granted for a period of 5 years, with a third of the options vesting over a 12 month period.

In February 2017, we entered into an advisory board consulting agreement with Dr. Leslie Jay Cohen. Pursuant to the terms of such agreement, we agreed to issue Dr. Cohen an option to purchase 200,000 shares of common stock at an exercise price of $3.00 per share. The options will be granted for a period of 5 years, with such options vesting over a 12 month period, a third over a 24 month period and the remaining third over a 36 month period, subject to acceleration by half in the event the company receives a material purchase order.

In February 2017, we entered into an advisory board consulting agreement with Mr. Danny Rothschild. Pursuant to the terms of such agreement, we agreed to issue Mr. Rothschild an option to purchase 100,000 shares of common stock at an exercise price of $2.25 per share. The options will be granted for a period of 5 years, with a third of the options vesting over a 12 month period, a third over a 24 month period and the remaining third over a 36 month period, subject to acceleration by half in the event the company receives a material purchase order.

In February 2017, we issued 55,556 shares of common stock to an investor in a private placement transaction pursuant to exemptions from the registration requirements of the Securities Act of 1933, as amended, including Section 4(a)(2) thereof and Rule 506(b) of Regulation D thereunder at a price per share of $2.25, for aggregate gross proceeds of $125,000.

On September 21, 2016, we issued 16,667 shares of restricted stock to a consultant. According to the restricted stock purchase agreement, the shares of common stock were intended to vest in four tranches over a vesting period of one year and were to be restricted for one year following their full vesting. In April 2017, we agreed to amend the restricted stock purchase agreement such that all of the then remaining unvested shares of restricted stocks became fully vested.

In May 2017, we engaged a digital media agency as a consultant to assist with the marketing of this offering. Pursuant to the terms of such agreement, we agreed to issue such consultant an option to purchase 15,000 shares of common stock at an exercise price of $3.00 per share. The options will be granted for a period of 3 years and are only exercisable upon a successful completion of this offering.

DESCRIPTION OF CAPITAL STOCK

Our authorized capital stock consists of 50,000,000 shares of common stock, $0.0001 par value per share.  As of the date of this Preliminary Offering Circular, we had 20,072,223 shares of common stock outstanding. On August 15, 2016, we amended our Certificate of Incorporation to increase our authorized shares of common stock to 50,000,000 and effectuated a 10,000-for-1 stock split.

The following is a summary of the rights of our capital stock as provided in our articles of incorporation and bylaws.  For more detailed information, please see our certificate of incorporation and bylaws, which have been filed as exhibits to the offering statement of which this offering circular is a part.

Common Stock

Holders of our common stock are entitled to one vote per share. Our certificate of incorporation, as amended, does not provide for cumulative voting. Holders of our common stock are entitled to receive ratably such dividends, if any, as may be declared by our board of directors out of legally available funds. Upon liquidation, dissolution or winding-up, the holders of our common stock are entitled to share ratably in all of our assets which are legally available for distribution, after payment of or provision for all liabilities and the liquidation preference of any outstanding preferred stock. The holders of our common stock have no preemptive, subscription, redemption or conversion rights.

Certain Anti-takeover Effects

Delaware Law

We are subject to Section 203 of the DGCL, or Section 203. This provision generally prohibits a Delaware corporation from engaging in any business combination with any interested stockholder for a period of three years following the date the stockholder became an interested stockholder, unless:

Section 203 defines a business combination to include:

In general, Section 203 defines an “interested stockholder” as any entity or person beneficially owning 15% or more of the outstanding voting stock of a corporation, or an affiliate or associate of the corporation and was the owner of 15% or more of the outstanding voting stock of a corporation at any time within three years prior to the time of determination of interested stockholder status; and any entity or person affiliated with or controlling or controlled by such entity or person.

The provisions of Section 203 may encourage persons interested in acquiring us to negotiate in advance with our board of directors, since the stockholder approval requirement would be avoided if a majority of the directors then in office approve either the business combination or the transaction which results in any such person becoming an interested stockholder. Such provisions also may have the effect of preventing changes in our management.

Section 214 of the DGCL provides that stockholders are denied the right to cumulate votes in the election of directors unless our certificate of incorporation, as amended, provides otherwise. Our certificate of incorporation, as amended, does not provide for cumulative voting. These statutory provisions could delay or frustrate the removal of incumbent directors or a change in control of our company. They could also discourage, impede, or prevent a merger, tender offer, or proxy contest, even if such event would be favorable to the interests of our stockholders.

Authorized but Unissued Shares

Our authorized but unissued shares of common stock will be available for future issuance without stockholder approval. We may use additional shares of common stock for a variety of purposes, including future offerings to raise additional capital or as compensation to third party service providers. The existence of authorized but unissued shares of common stock could render more difficult or discourage an attempt to obtain control of us by means of a proxy contest, tender offer, merger or otherwise.

Certificate of Incorporation and Bylaw Provisions

Our certificate of incorporation and bylaws contain provisions that could have the effect of discouraging potential acquisition proposals or making a tender offer or delaying or preventing a change in control, including changes a stockholder might consider favorable. In particular, the certificate of incorporation, as amended, and amended and restated bylaws, as applicable, among other things:

Such provisions may have the effect of discouraging a third-party from acquiring us, even if doing so would be beneficial to our stockholders. These provisions are intended to enhance the likelihood of continuity and stability in the composition of our board of directors and in its policies, and to discourage some types of transactions that may involve an actual or threatened change in control of our company. These provisions are designed to reduce our vulnerability to an unsolicited acquisition proposal and to discourage some tactics that may be used in proxy fights. We believe that the benefits of increased protection of our potential ability to negotiate with the proponent of an unfriendly or unsolicited proposal to acquire or restructure our company outweigh the disadvantages of discouraging such proposals because, among other things, negotiation of such proposals could result in an improvement of their terms. However, these provisions could have the effect of discouraging others from making tender offers for our shares that could result from actual or rumored takeover attempts. These provisions also may have the effect of preventing changes in our management.

Transfer Agent and Registrar

VStock Transfer, LLC, 18 Lafayette Place, Woodmere, NY 11598 serves as the transfer agent and registrant for our common stock.

PLAN OF DISTRIBUTION

We are offering a Target Offering Amount of up to $15,000,000 in shares of our common stock. The offering is being conducted on a best-efforts basis without any minimum number of shares or amount of proceeds required to be sold. The company will not initially sell the Offered Shares through commissioned broker-dealers, but may do so after the commencement of the offering. Any such arrangement will add to our expenses in connection with the offering. If we engage one or more commissioned sales agents or underwriters, we will supplement this Offering Statement to describe the arrangement. The company will undertake one or more closings on a rolling basis as funds are received from investors. Funds tendered by investors will be kept in an escrow account until the next closing after they are received by the escrow agent. There is no minimum offering amount for this offering and the company may close on investor funds held in escrow at any time at its sole discretion. At each closing, funds held in escrow will be distributed to the company, and the associated Offered Shares will be issued to the investors in such Offered Shares. All subscribers will be instructed by the company or its agents to transfer funds by wire, credit or debit cards or ACH transfer directly to the escrow account established for this offering or deliver checks made payable to “Prime Trust, LLC as Escrow Agent for Investors in Duke Robotics Securities Offering” which the escrow agent shall deposit into such escrow account and release to the company at each closing. Except as stated above, subscribers have no right to a return of their funds unless no closings have occurred by the termination date of the offering, in which event investor funds held in escrow will promptly be refunded to each investor without interest. The company may terminate the offering at any time for any reason at its sole discretion.

After the Offering Statement has been qualified by the Securities and Exchange Commission (the “SEC”), the company will accept tenders of funds to purchase the shares. The company intends to engage Prime Trust, LLC, as escrow agent and the escrow agreement filed as Exhibit 8.1 to the Offering Statement of which this Preliminary Offering Circular is a part. Pursuant to the proposed escrow agreement, we will agree to pay Prime Trust, LLC, the following fees for its services: (i) $500 for the segregated account set up fee, (ii) $25 per month account fees for so long as the offering is being conducted, (iii) an accounting fee of $5 per transaction, (iv) $5 per AML exception review, and (v) any applicable fees for fund transfers (ACH $.50, check $10, wire $15 domestic, $35 international).

We initially will use our existing website, www.dukeroboticsys.com, to provide notification of the offering.  Persons who desire information will also be directed to www.bankroll.ventures, a website owned and operated by an unaffiliated third party that provides technology support to issuers engaging in equity crowdfunding efforts. We will not be required to pay a platform administrative posting fee or any other fee to BRV Technology, LLC d/b/a BankRoll Ventures as long as we enter into a broker-dealer agreement with Jumpstart Securities LLC or another broker-dealer approved by BankRoll. We have agreed to retain Kendall Almerico as our consultant with respect to the offering and have entered into a Restricted Stock Purchase Agreement with Mr. Almerico, pursuant to which he has purchased 16,667 shares of the company’s common stock at a purchase price of $0.0001 per share. Pursuant to the Restricted Stock Purchase Agreement, the shares shall vest as follows: 4,166 shares vest upon execution of the Restricted Stock Purchase Agreement, 4,167 shares on the 120 day, 240-day and 360-day anniversary of the date of Restricted Stock Purchase Agreement. In April 2017, we agreed to amend the restricted stock purchase agreement such that all of the then remaining unvested shares of restricted stock became fully vested. The Restricted Stock Purchase Agreement is filed as Exhibit 3.1 to this Offering Circular and is incorporated by reference herein. The foregoing is only a brief description of the material terms of the Restricted Stock Purchase Agreement and does not purport to be a complete description of the rights and obligations of the parties thereunder and is qualified in its entirety by reference to such exhibit.

This Preliminary Offering Circular will be furnished to prospective investors via download 24 hours per day, 7 days per week on the www.bankroll.ventures website.

You will be required to complete a subscription agreement in order to invest. The subscription agreement includes a representation to the effect that, if you are not an “accredited investor” as defined under securities law, you are investing an amount that does not exceed the greater of 10% of your annual income or 10% of your net worth, as described in the subscription agreement.

We intend to engage JumpStart Securities, LLC, a broker-dealer registered with the SEC and a member of the Financial Industry Regulatory Authority (“FINRA”), to perform the following administrative and technology related functions in connection with this offering, but not for underwriting or placement agent services. Please see the “Proposed Administrative Agreement” for more information.

Proposed Administrative Agreement

The Company has agreed to pay JumpStart Securities, LLC a facilitation fee equal to (i) 3.75% of the gross proceeds from the sale of the shares offered by this Offering Circular up to $5 million, and (ii) 4.00% of the gross proceeds from the sale of the shares offered by this Offering Circular between $5 million to $10 million, and (iii) 4.25% of the gross proceeds from the sale of the shares offered by this Offering Circular between $10 million to $15 million. Additionally, we will pay JumpStart Securities, LLC the following administrative service fees: (i) $5.00 fee per AML exception. In no event shall the fees charged by JumpStart Securities, LLC exceed a maximum of $750,000 in the aggregate. Administrative service fees will be charged to Issuer at the time of the service.

In addition, JumpStart Securities, LLC has agreed to pay certain fees on our behalf to third party provider for such services. Such fees include: (i) up to $1,000 for accounting fees charged by Prime Trust, LLC, (ii) up to $500 for ACH exception fees charged by Prime Trust, LLC, (iii) up to $4,000 for custodial account fees charged by Prime Trust, LLC and (iv) up to $5,000 for set up fees charged by FundAmerica.

Any subscription checks should be sent to Prime Trust, LLC, 3445 Peachtree Road NE, 5th Floor, Atlanta, Georgia 30326, and be made payable to “Prime Trust, LLC as Escrow Agent for Investors in Duke Robotics Securities Offering.” If a subscription is rejected, funds will be returned to subscribers within ten days of such rejection without deduction or interest. Upon acceptance by us of a subscription, a confirmation of such acceptance will be sent to the subscriber by the company. Prime Trust LLC has not investigated the desirability or advisability of investment in the shares nor approved, endorsed or passed upon the merits of purchasing the shares.

JumpStart Securities, LLC is not participating as an underwriter and under no circumstance will it solicit any investment in the company, recommend the company’s securities or provide investment advice to any prospective investor, or make any securities recommendations to investors. JumpStart Securities, LLC is not distributing any securities offering prospectuses or making any oral representations concerning the securities offering prospectus or the securities offering. Based upon JumpStart Securities, LLC’s anticipated limited role in this offering, it has not and will not conduct extensive due diligence of this securities offering and no investor should rely on JumpStart’s involvement in this offering as any basis for a belief that it has done extensive due diligence. JumpStart does not expressly or impliedly affirm the completeness or accuracy of the Offering Circular presented to investors by the issuer. All inquiries regarding this offering should be made directly to the company.

Offering Period and Expiration Date

This offering will commence on the qualification of this Offering Circular, as determined by the Securities and Exchange Commission and continue for a maximum period of 180 days. We may extend the offering for an additional 180 days unless the offering is completed or otherwise terminated by us. Funds received from investors will be counted towards the offering only if the form of payment, such as a check, clears the banking system and represents immediately available funds held by us prior to the termination of the 180 day subscription period, or prior to the termination of the extended subscription period if extended by our Board of Directors.

Procedures for Subscribing

If you decide to subscribe for any common stock in this offering, you must deliver a check or certified funds for acceptance or rejection. The minimum investment amount for a single investor is 150 shares of common stock in the principal amount of $450.00. All subscription checks should be sent to Prime Trust, LLC at the following address: 3455 Peachtree Road, NE, 5th Floor, Atlanta, Georgia 30326. In such case, subscription checks should be made payable to “Prime Trust, LLC as Escrow Agent for Investors in Duke Robotics Securities Offering.” If a subscription is rejected, all funds will be returned to subscribers within ten days of such rejection without deduction or interest. Upon acceptance by the company of a subscription, a confirmation of such acceptance will be sent to the investor. The escrow agent has not investigated the desirability or advisability of investment in the shares nor approved, endorsed or passed upon the merits of purchasing the shares.

Right to Reject Subscriptions

The company maintains the right to accept or reject subscriptions in whole or in part, for any reason or for no reason. All monies from rejected subscriptions will be returned by the company to the investor, without interest or deductions.

Investor Suitability

This is an offering made under “Tier 2” of Regulation A, and the shares will not be listed on a registered national securities exchange upon qualification. Therefore, the shares will be sold only to a person if the aggregate purchase price paid by such person is no more than 10% of the greater of such person’s annual income or net worth, not including the value of his primary residence, as calculated under Rule 501 of Regulation D promulgated under Section 4(a)(2) of the Securities Act of 1933, as amended. See the Purchaser Qualification Questionnaire in the Subscription Documents in Exhibit A to this Offering Circular. In the case of sales to fiduciary accounts (Keogh Plans, Individual Retirement Accounts (IRAs) and Qualified Pension/Profit Sharing Plans or Trusts), the above suitability standards must be met by the fiduciary account, the beneficiary of the fiduciary account, or by the donor who directly or indirectly supplies the funds for the purchase of the shares. Investor suitability standards in certain states may be higher than those described in this Offering Circular. These standards represent minimum suitability requirements for prospective investors, and the satisfaction of such standards does not necessarily mean that an investment in the company is suitable for such persons. Different rules apply to accredited investors.  

Each investor must represent in writing that he/she meets the applicable requirements set forth above and in the Subscription Agreement, including, among other things, that (i) he/she is purchasing the shares for his/her own account and (ii) he/she has such knowledge and experience in financial and business matters that he/she is capable of evaluating without outside assistance the merits and risks of investing in the shares, or he/she and his/her purchaser representative together have such knowledge and experience that they are capable of evaluating the merits and risks of investing in the shares. Broker-dealers and other persons participating in the offering must make a reasonable inquiry in order to verify an investor’s suitability for an investment in the company. Transferees of the shares will be required to meet the above suitability standards.

The shares may not be offered, sold, transferred, or delivered, directly or indirectly, to any person who (i) is named on the list of “specially designated nationals” or “blocked persons” maintained by the U.S. Office of Foreign Assets Control (“OFAC”) at www.ustreas.gov/offices/enforcement/ofac/sdn or as otherwise published from time to time, (ii) an agency of the government of a Sanctioned Country, (iii) an organization controlled by a Sanctioned Country, or (iv) is a person residing in a Sanctioned Country, to the extent subject to a sanctions program administered by OFAC. A “Sanctioned Country” means a country subject to a sanctions program identified on the list maintained by OFAC and available at www.ustreas.gov/offices/enforcement/ofac/sdn or as otherwise published from time to time. Furthermore, the shares may not be offered, sold, transferred, or delivered, directly or indirectly, to any person who (i) has more than fifteen percent (15%) of its assets in Sanctioned Countries or (ii) derives more than fifteen percent (15%) of its operating income from investments in, or transactions with, sanctioned persons or Sanctioned Countries.

LEGAL MATTERS

Certain legal matters with respect to the shares of common stock offered hereby will be passed upon by Zysman, Aharoni, Gayer and Sullivan and Worcester LLP, New York, New York.

EXPERTS

The consolidated financial statements of the company appearing elsewhere in this Preliminary Offering Circular have been included herein in reliance upon the report, which includes an explanatory paragraph as to the company’s ability to continue as a going concern, of Brightman Almagor Zohar & Co., a member firm of Deloitte Touche Tohmatsu, an independent auditor, appearing elsewhere herein, and upon the authority of that firm as experts in accounting and auditing.

WHERE YOU CAN FIND MORE INFORMATION

We have filed with the SEC a Regulation A Offering Statement on Form 1-A under the Securities Act of 1933 with respect to the shares of common stock offered hereby. This Preliminary Offering Circular, which constitutes a part of the Offering Statement, does not contain all of the information set forth in the Offering Statement or the exhibits and schedules filed therewith. For further information about us and the common stock offered hereby, we refer you to the Offering Statement and the exhibits and schedules filed therewith. Statements contained in this Offering Circular regarding the contents of any contract or other document that is filed as an exhibit to the Offering Statement are not necessarily complete, and each such statement is qualified in all respects by reference to the full text of such contract or other document filed as an exhibit to the Offering Statement. Upon the completion of this offering, we will be required to file periodic reports, proxy statements, and other information with the SEC pursuant to the Securities Exchange Act of 1934. You may read and copy this information at the SEC’s Public Reference Room, 100 F Street, N.E., Room 1580, Washington, D.C. 20549. You may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. The SEC also maintains an internet website that contains reports, proxy statements and other information about issuers, including us, that file electronically with the SEC. The address of this site is www.sec.gov. 

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

DUKE ROBOTICS, INC.

TABLE OF CONTENTS

INDEPENDENT AUDITORS’ REPORT

TO THE STOCKHOLDERS OF

Duke Robotics, Inc.

We have audited the consolidated financial statements of Duke Robotics, Inc. (the “Company”) and its subsidiary which comprise the balance sheets as of December 31, 2016 and 2015, and the related Statements of Operations, Changes in Stockholders’ deficiency and Cash Flows for the years then ended, and the related notes to the financial statements.

Management’s Responsibility for the Financial Statements

Management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.

Auditors’ Responsibility

Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of the Company as of December 31, 2016 and 2015, and the consolidated results of their operations and their cash flows for the years then ended in accordance with accounting principles generally accepted in the United States of America.

Emphasis of Matter Regarding Going Concern

The accompanying consolidated financial statements for the year ended December 31, 2016 have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1(B) to the financial statements, the Company has devoted substantially all its efforts to research and development. The Company is still in its development stages and the extent of the Company’s future operating losses and the timing of becoming profitable are uncertain. The Company has incurred losses of $346, and $89 thousands for the years ended December 31, 2016, and 2015, respectively, and accumulated losses of $555 thousands. These conditions raise substantial doubt about its ability to continue as a going concern. The financial statements do not include any adjustments that may result from the outcome of this uncertainty. Our opinion is not modified with respect to this matter.

Brightman Almagor Zohar & Co.

Certified Public Accountants

A member firm of Deloitte Touche Tohmatsu Limited

Tel Aviv, Israel

April 30, 2017

Duke Robotics, Inc.

Consolidated Balance Sheets

USD in thousands

The accompanying notes are an integral part of the consolidated financial statements.

Duke Robotics, Inc.

Consolidated Statements of Operations

USD in thousands, except share and per share data

The accompanying notes are an integral part of the consolidated financial statements.

Duke Robotics, Inc.

Statements of Changes in Stockholders’ Deficiency

USD in thousands, except share data

* Less than 1 USD (in thousands)

** The number of common stocks does not include the balance of unvested and unpaid 12,500 common stocks issued to a consultant (see Note 8D).

The accompanying notes are an integral part of the consolidated financial statements.

Duke Robotics, Inc.

Consolidated Statements of Cash Flows

USD in thousands

* Less than 1 USD (in thousands)

The accompanying notes are an integral part of the consolidated financial statements.

NOTE 1    -   GENERAL

The Company is the owner of 100% of the stocks of Duke Airborne Systems Ltd. (“Duke” or the “Subsidiary”) (together: the “Group”) through restructuring under common control. The Subsidiary incorporated under the laws of the state of Israel on March 5, 2014 and commenced its operations on May 1, 2014.

The restructuring had been performed such that every stockholder of Duke has tendered its stock in Duke in exchange for stock in the Company, causing Duke to become the wholly owned subsidiary of the Company. Since the above reorganization was made between companies under common control, the consolidated financial statements of the Company and the Subsidiary are presented as if the above transaction had occurred on the first day of earliest year presented.

The financial operations overview refers to the financial information of Duke as the predecessor of the Company.

The Company is engaged, through its subsidiary, in developing robotic stabilization platforms.

These conditions raise substantial doubt about the Company’s ability to continue to operate as a going concern. The Company’s ability to continue operating as a “going concern” is dependent on several factors, among them is the ability to raise sufficient additional funding.

The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

NOTE 2    -   SIGNIFICANT ACCOUNTING POLICIES

The financial statements have been prepared in conformity with accounting principles generally accepted in United Sates of America (“GAAP”).

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. The Company’s management believes that the estimates, judgement and assumptions used are reasonable based upon information available at the time they are made. These estimates, judgement and assumptions can affect reported amounts and disclosures made. Actual results could differ from those estimates.

NOTE 2    -   SIGNIFICANT ACCOUNTING POLICIES (Cont.)

The functional currency of the Company is the U.S dollar (“dollar”) since the dollar is the currency of the primary economic environment in which the Company has operated and expects to continue to operate in the foreseeable future.

Transactions and balances denominated in dollars are presented at their original amounts. Transactions and balances denominated in foreign currencies have been re-measured to dollars in accordance with the provisions of Accounting Standards Codification (“ASC”) 830-10, “Foreign Currency Translation”.

All transaction gains and losses from re-measurement of monetary balance sheet items denominated in non-dollar currencies are reflected in the statement of operations as financial income or expenses, as appropriate.

Cash and cash equivalents consist of cash and demand deposits in banks, and other short-term liquid investments (primarily interest-bearing time deposits) with original maturities of less than three months.

Fixed assets are presented at cost, net of investment grants received and less accumulated depreciation. Depreciation is calculated based on the straight-line method over the estimated useful lives of the assets, as the following annual rates:

Basic loss per share is computed by dividing the net loss applicable to holders of common stock by the weighted average number of shares of common stock outstanding during the year. Diluted loss per share is computed by dividing the net loss applicable to holders of common stock by the weighted average number of shares of common stock outstanding plus the number of additional Common stocks that would have been outstanding if all potentially dilutive shares of common stock had been issued, using the treasury stock method, in accordance with ASC 260-10 “Earnings per Share”. Potentially dilutive shares of common stock were excluded from the diluted loss per share calculation because they were anti-dilutive.

The weighted average number of shares of common stock outstanding has been retrospectively restated for the equivalent number of stocks as a result of the stock split.

The Group generates revenues from long-term contracts involving the design, development, manufacture and integration of robotic stabilization platforms.

Revenues from long-term contracts are recognized using ASC 605-35, “Revenue Recognition - Construction-Type and Production-Type Contracts”, according to which revenues are recognized on the percentage-of-completion (“POC”) basis.

NOTE 2    -   SIGNIFICANT ACCOUNTING POLICIES (Cont.)

Sales under long-term fixed-price contracts which provide for a substantial level of development efforts in relation to total contract efforts are recorded using the cost-to-cost method of accounting as the basis to measure progress toward completing the contract and to recognize revenues using the POC basis. According to this method, sales and profits are recorded based on the ratio of costs incurred to estimated total costs at completion. When measuring progress toward completion, the Group may consider other factors, such as contracts’ performance obligations or the achievement of milestones.

The POC method of accounting requires management to estimate the cost and gross profit margin for each individual contract. Estimated gross profit or loss from long-term contracts may change due to differences between actual performance and original estimated forecasts.

When adjustments are required for the estimated total revenue on a contract, these changes are recognized with an inception-to-date effect in the current period. In addition, when estimates of total costs to be incurred exceed estimates of total revenue to be earned, a provision for the entire loss on the contract is recorded in the period in which the loss is determined

During December, 2016, the Group received its first order which involves a long–term design and development work.

Research and development expenses are charged to the statement of operations as incurred.

From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board (“FASB”) or other standard setting bodies and adopted by the Company as of the specified effective date. Unless otherwise discussed, the impact of recently issued standards that are not yet effective will not have a material impact on our financial position or results of operations upon adoption.

In May 2014, the FASB issued Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (“ASU 2014-09”), which stipulates that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for such goods or services. To achieve this core principle, an entity should apply the following steps: (1) identify the contract(s) with a customer; (2) identify the performance obligations in the contract(s); (3) determine the transaction price(s); (4) allocate the transaction price(s) to the performance obligations in the contract(s); and (5) recognize revenue when (or as) the entity satisfies a performance obligation. The guidance also requires advanced disclosures regarding the nature, amount, timing and uncertainty of revenue and cash flows arising from an entity’s contracts with customers. In August 2015, the FASB issued Accounting Standards Update No. 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date (“ASU 2015-14”), which defers the effective date of FASB’s revenue standard under ASU 2014-09 by one year for all entities and permits early adoption on a limited basis. As a result of ASU 2015-14, the guidance under ASU 2014-09 shall apply for annual reporting periods beginning after December 15, 2017, including interim reporting periods within that period. Early adoption is permitted as of annual reporting periods beginning after December 15, 2016, including interim reporting periods within those annual periods. In March 2016, the FASB issued Accounting Standards Update No. 2016-08, Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net), which clarified the implementation guidance on principal versus agent considerations.

NOTE 2    -   SIGNIFICANT ACCOUNTING POLICIES (Cont.)

In April 2016, the FASB issued Accounting Standards Update No. 2016-10, Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing, which clarified the implementation guidance regarding performance obligations and licensing arrangements. In May 2016, the FASB issued ASU 2016-12, which amends guidance in the new revenue standard on collectability, noncash consideration, presentation of sales tax and transition. ASU 2016-08, ASU 2016-10 and ASU 2016-12 must be adopted together with the new revenue standard. The Company is currently reviewing and evaluating this guidance and its impact on its consolidated financial statements.

NOTE 3    -   UNBILLED RECEIVABLES, NET

Unbilled receivables on long-term contracts principally represent sales recorded under the POC method of accounting, when sales or revenues based on performance attainment, though appropriately recognized, cannot be billed yet under terms of the contract as of the balance sheet date.

NOTE 4    -   BANK LOANS

On November 19, 2014, Duke signed a loan agreement with an Israeli bank pursuant to which NIS 260 ($67) was provided at the closing date at a variable annual rate of 6.5%. The outstanding loan will be repaid in 54 equal installments through April 30, 2019.

On August 5, 2015, Duke obtained a loan from an Israeli bank pursuant to which NIS 250 ($65) was provided at the closing date at a variable annual rate of 3.6%. The outstanding loan will be repaid in 60 equal installments through August 15, 2020.

On February 29, 2016, Duke signed a loan agreement with an Israeli bank pursuant to which NIS 500 ($128) was provided at the closing date at a variable annual rate of 4.25%. The outstanding loan will be repaid in 60 equal installments through February 28, 2021.

The loan is collateralized by substantially all of the assets of Duke and its common stock.

NOTE 5    -   PROVISION FOR LOSSES ON LONG-TERM CONTRACTS, NET

NOTE 6    -   STOCKHOLDERS LOANS

Since inception, the Company’s Stockholders (“Stockholders”) provided loans to the Group from time to time, as needed. Some of the Stockholders loans bear an annual fixed interest at 3% and some of the Stockholders loans bears an annual interest rate as defined in section 3(j) of the Israeli tax ordinance (the interest rate for 2015 is 3.05% and 2.56% for 2016).

The Stockholders loans, including the accumulated interest amount, shall be repaid in full within 7-15 days from any capital raised by the Company or related parties of the Company, whether by a stock offering and / or loans in excess of NIS 10 million (approximately $2.5 million).

As of December 31, 2016 and 2015, the outstanding balance of the Stockholders loans is $498 and $107, respectively.

NOTE 7    -   COMMITMENTS AND CONTINGENT LIABILITIES

Upon the closing of the Regulation A offering, 3 of the Group officers will enter into employment agreements which shall provide for a minimum term of 36 months, require a 6 month notice if they seek to terminate their employment, monthly compensation equal to approximately $8, eligibility for an annual bonus equal to 3 months’ salary based on terms to be determined by the Board of Directors, and customary non-compete (for a 3 year period following their employment with the Group), confidentiality and non-solicitation provisions and the assignment of all intellectual property developed while employed by the Group.

The future minimum lease commitments of the Group under non-cancelable operating lease agreements in respect of its office as of December 31, 2016, are as follows:

NOTE 8    -   STOCKHOLDERS’ EQUITY

The common stock confers upon the holders the right to receive notice to participate and vote in general meetings of stockholders of the Company, the right to receive dividends, if declared, and the right to participate in a distribution of surplus of assets upon liquidation of the Company.

On August 15, 2016, the board of Directors and the stockholders of the Company approved:

On September 21, 2016, in connection with the proposed Regulation A offering, the Company issued 16,667 shares of restricted stock to a consultant. According to the agreement, the shares of common stock will vest in four tranches over a vesting period of one year and will be restricted for one year following their full vesting. The fair value of the services will be $35, representing a price of $2.10 per share. By December 31, 2016, 4,167 shares had been vested and as a result, for the year ended December 31, 2016, the Company recognized compensation expenses in the amount of $9 included in General and Administrative expenses in the Consolidated Statements of Operations. In April 2017 the agreement was amended and all of the then remaining unvested shares of restricted stocks became fully vested.

NOTE 9    -   TAXES ON INCOME

The Group is subject to income taxes under the Israeli and U.S. tax laws:

NOTE 10   -  TRANSACTIONS AND BALANCES WITH INTERESTED AND RELATED PARTIES

Composition:

NOTE 11   -  SUBSEQUENT EVENTS

PART III

Index to Exhibits

* To be filed by amendment.

** Previously filed.

SIGNATURES

Pursuant to the requirements of Regulation A, the issuer certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form 1-A and has duly caused this offering statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the city of Gulf Breeze, Florida, on June 29, 2017.

KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Raziel Atuar, his true and lawful attorney-in-fact and agent, with full power of substitution, for him and in his name, place and stead, in any and all capacities, to sign any and all amendments to this Form 1-A offering statement, and to file the same with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorney-in-fact and agent full power and authority to do and perform each and every act and thing requisite and ratifying and confirming all that said attorney-in-fact and agent or his substitute or substitutes may lawfully do or cause to be done by virtue hereof.

This offering statement has been signed by the following persons in the capacities and on the dates indicated.

Attorney-in-Fact

III-2

Exhibit 2.3

AMENDED AND RESTATED CERTIFICATE OF INCORPORATION
OF
Duke robotics, Inc.

First: The name of the Corporation is Duke Robotics, Inc.

Second: The address of the registered office of the Corporation in the State of Delaware is 1013 Centre Road, Suite 403S, in the City of Wilmington, County of New Castle, 19805.  The name of the Corporation’s registered agent at such address is Registered Agents Legal Services, LLC.

Third: The nature of the business or purposes to be conducted or promoted by the Corporation is to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of the State of Delaware.

Fourth: The total number of shares of stock which the Corporation shall have authority to issue is 50,000,000 shares of common stock, par value $0.0001 per share.

Fifth: Except as otherwise provided herein, the Corporation reserves the right to amend, alter, change or repeal any provision contained in this Certificate of Incorporation, in the manner now or hereafter prescribed by statute and this Certificate of Incorporation, and except as set forth in Article EIGHTH, all rights conferred upon stockholders, directors or any other persons by and pursuant to this Certificate of Incorporation are granted subject to this reservation.

Sixth: In furtherance and not in limitation of the powers conferred upon it by the General Corporation Law of the State of Delaware, the Board of Directors shall have the power to adopt, amend, alter or repeal the Bylaws of the Corporation, in whole or in part, or new Bylaws may be adopted, by the affirmative vote of a majority of the directors present at any regular or special meeting of the Board of Directors at which a quorum is present. The stockholders may not adopt, amend, alter or repeal the Bylaws of the Corporation, or adopt any provision inconsistent therewith, unless such action is approved, in addition to any other vote required by this Certificate of Incorporation, by the affirmative vote of the holders of at least two-thirds of the votes that all the stockholders would be entitled to cast in an election of directors or class of directors. Notwithstanding any other provision of law, this Certificate of Incorporation or the Bylaws of the Corporation, and notwithstanding the fact that a lesser percentage may be specified by law, the affirmative vote of the holders of at least two-thirds of the votes that all the stockholders would be entitled to cast in an election of directors or class of directors shall be required to amend, alter or repeal, or to adopt any provision inconsistent with, this Article SIXTH.

Seventh: Except to the extent that the General Corporation Law of the State of Delaware, as the same exists or hereafter may be amended, prohibits the elimination or limitation of liability of directors for breaches of fiduciary duty, no person who is or was a director of the Corporation shall be personally liable to the Corporation or its stockholders for monetary damages for any breach of fiduciary duty as a director, notwithstanding any provision of law imposing such liability. No amendment to or repeal of this provision by the stockholders of the Corporation or by changes in law, or the adoption of any other provision of this Certificate of Incorporation inconsistent with this Article SEVENTH, unless otherwise required by law, shall apply to or have any effect on the liability or alleged liability of any director of the Corporation for or with respect to any acts or omissions of such director occurring prior to such amendment, repeal or adoption of such inconsistent provision, provided, however, that if the General Corporation Law of the State of Delaware is amended to permit further elimination or limitation of the personal liability of directors, then the liability of a director of the Corporation shall be eliminated or limited to the fullest extent permitted by the General Corporation Law of the State of Delaware as so amended.

Eighth: The Corporation shall provide indemnification as follows:

1.          Actions, Suits and Proceedings Other than by or in the Right of the Corporation. The Corporation shall indemnify each person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the Corporation) by reason of the fact that he or she is or was, or has agreed to become, a director or officer of the Corporation, or is or was serving, or has agreed to serve, at the request of the Corporation, as a director, officer, employee or agent of another corporation, partnership, joint venture, sole proprietorship, trust, employee benefit plan or other enterprise (all such persons being referred to hereafter as an “Indemnitee”), or by reason of any action alleged to have been taken or omitted in such capacity, against all expenses (including attorneys’ fees), liabilities, losses, judgments, fines, excise taxes and penalties arising under the Employee Retirement Income Security Act of 1974, and amounts paid in settlement actually and reasonably incurred by or on behalf of Indemnitee in connection with such action, suit or proceeding and any appeal therefrom, if Indemnitee acted in good faith and in a manner that Indemnitee reasonably believed to be in, or not opposed to, the best interests of the Corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his or her conduct was unlawful. The termination of any action, suit or proceeding by judgment, order, settlement, conviction or upon a plea of  nolo contendere  or its equivalent, shall not, of itself, create a presumption that Indemnitee did not act in good faith and in a manner that Indemnitee reasonably believed to be in, or not opposed to, the best interests of the Corporation, and, with respect to any criminal action or proceeding, had reasonable cause to believe that his or her conduct was unlawful.

2.          Actions or Suits by or in the Right of the Corporation. The Corporation shall indemnify any Indemnitee who was or is a party to or threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the Corporation to procure a judgment in its favor by reason of the fact that Indemnitee is or was, or has agreed to become, a director or officer of the Corporation, or is or was serving, or has agreed to serve, at the request of the Corporation, as a director, officer, employee or agent of another corporation, partnership, joint venture, sole proprietorship, trust, employee benefit plan or other enterprise, or by reason of any action alleged to have been taken or omitted in such capacity, against all expenses (including attorneys’ fees) and, to the extent permitted by law, amounts paid in settlement actually and reasonably incurred by or on behalf of Indemnitee in connection with such action, suit or proceeding and any appeal therefrom, if Indemnitee acted in good faith and in a manner that Indemnitee reasonably believed to be in, or not opposed to, the best interests of the Corporation, except that no indemnification shall be made under this Section 2 in respect of any claim, issue or matter as to which Indemnitee shall have been adjudged to be liable to the Corporation, unless, and only to the extent, that the Court of Chancery of Delaware or the court in which such action or suit was brought shall determine upon application that, despite the adjudication of such liability but in view of all the circumstances of the case, Indemnitee is fairly and reasonably entitled to indemnity for such expenses (including attorneys’ fees) that the Court of Chancery of Delaware or such other court shall deem proper.

3.          Indemnification for Expenses of Successful Party. Notwithstanding any other provisions of this Article EIGHTH, to the extent that an Indemnitee has been successful, on the merits or otherwise, in defense of any action, suit or proceeding referred to in Sections 1 and 2 of this Article EIGHTH, or in defense of any claim, issue or matter therein, or on appeal from any such action, suit or proceeding, Indemnitee shall be indemnified against all expenses (including attorneys’ fees) actually and reasonably incurred by or on behalf of Indemnitee in connection therewith. Without limiting the foregoing, Indemnitee shall be considered for the purposes hereof to have been wholly successful with respect to any action, suit or proceeding, or in defense of any claim, issue or matter therein or any appeal therefrom, that is disposed of, on the merits or otherwise (including a disposition without prejudice), without (i) the disposition being adverse to Indemnitee, (ii) an adjudication that Indemnitee was liable to the Corporation, (iii) a plea of guilty or nolo contendere by Indemnitee, (iv) an adjudication that Indemnitee did not act in good faith and in a manner he or she reasonably believed to be in or not opposed to the best interests of the Corporation, and (v) with respect to any criminal proceeding, an adjudication that Indemnitee had reasonable cause to believe his or her conduct was unlawful.

4.          Notification and Defense of Claim. As a condition precedent to an Indemnitee’s right to be indemnified, such Indemnitee must notify the Corporation in writing as soon as practicable of any action, suit, proceeding or investigation involving such Indemnitee for which indemnity will or could be sought. With respect to any action, suit, proceeding or investigation of which the Corporation is so notified, the Corporation will be entitled to participate therein at its own expense and/or to assume the defense thereof at its own expense, with legal counsel reasonably acceptable to Indemnitee. After notice from the Corporation to Indemnitee of its election so to assume such defense, the Corporation shall not be liable to Indemnitee for any legal or other expenses subsequently incurred by Indemnitee in connection with such action, suit, proceeding or investigation, other than as provided below in this Section 4. Indemnitee shall have the right to employ his or her own counsel in connection with such action, suit, proceeding or investigation, but the fees and expenses of such counsel incurred after notice from the Corporation of its assumption of the defense thereof shall be at the expense of Indemnitee unless (i) the employment of counsel by Indemnitee has been authorized by the Corporation, (ii) counsel to Indemnitee shall have reasonably concluded that there may be a conflict of interest or position on any significant issue between the Corporation and Indemnitee in the conduct of the defense of such action, suit, proceeding or investigation or (iii) the Corporation shall not in fact have employed counsel to assume the defense of such action, suit, proceeding or investigation, in each of which cases the fees and expenses of counsel for Indemnitee shall be at the expense of the Corporation, except as otherwise expressly provided by this Article EIGHTH. The Corporation shall not be entitled, without the consent of Indemnitee, to assume the defense of any claim brought by or in the right of the Corporation or as to which counsel for Indemnitee shall have reasonably made the conclusion provided for in clause (ii) above. The Corporation shall not be required to indemnify Indemnitee under this Article EIGHTH for any amounts paid in settlement of any action, suit, proceeding or investigation effected without its written consent. The Corporation shall not settle any action, suit, proceeding or investigation in any manner that would impose any penalty or limitation on Indemnitee without Indemnitee’s written consent. Neither the Corporation nor Indemnitee will unreasonably withhold or delay its consent to any proposed settlement.

5.          Advancement of Expenses. Subject to the provisions of Section 6 of this Article EIGHTH, in the event of any threatened or pending action, suit, proceeding or investigation of which the Corporation receives notice under this Article EIGHTH, any expenses (including attorneys’ fees) incurred by or on behalf of Indemnitee in defending an action, suit, proceeding or investigation or any appeal therefrom shall be paid by the Corporation in advance of the final disposition of such matter;  provided,  however, that the payment of such expenses incurred by or on behalf of Indemnitee in advance of the final disposition of such matter shall be made only upon receipt of an undertaking by or on behalf of Indemnitee to repay all amounts so advanced in the event that it shall ultimately be determined by final judicial decision from which there is no further right to appeal that Indemnitee is not entitled to be indemnified by the Corporation as authorized in this Article EIGHTH; and  provided, further, that no such advancement of expenses shall be made under this Article EIGHTH if it is determined (in the manner described in Section 6) that (i) Indemnitee did not act in good faith and in a manner he or she reasonably believed to be in, or not opposed to, the best interests of the Corporation, or (ii) with respect to any criminal action or proceeding, Indemnitee had reasonable cause to believe his or her conduct was unlawful. Such undertaking shall be accepted without reference to the financial ability of Indemnitee to make such repayment.

6.          Procedure for Indemnification and Advancement of Expenses. In order to obtain indemnification or advancement of expenses pursuant to Section 1, 2, 3 or 5 of this Article EIGHTH, an Indemnitee shall submit to the Corporation a written request. Any such indemnification and advancement of expenses shall be made by the Corporation only as authorized in the specific case upon a determination that indemnification of the director or officer is proper in the circumstances because he has met the applicable standard of conduct set forth in Section 145 of the Delaware General Corporation Law. Such determination shall be made in each instance (a) by a majority vote of the directors of the Corporation consisting of persons who are not at that time parties to the action, suit or proceeding in question (“disinterested directors”), whether or not a quorum, (b) if there are no disinterested directors, or if disinterested directors so direct, by independent legal counsel in a written opinion, or (c) by the authorized representative of the Board of Directors, or (iv) by the stockholders.

7.          Remedies. The right to indemnification or advancement of expenses as granted by this Article EIGHTH shall be enforceable by Indemnitee in any court of competent jurisdiction. Neither the failure of the Corporation to have made a determination prior to the commencement of such action that indemnification is proper in the circumstances because Indemnitee has met the applicable standard of conduct, nor an actual determination by the Corporation pursuant to Section 6 of this Article EIGHTH that Indemnitee has not met such applicable standard of conduct, shall be a defense to the action or create a presumption that Indemnitee has not met the applicable standard of conduct. In any suit brought by Indemnitee to enforce a right to indemnification, or brought by the Corporation to recover an advancement of expenses pursuant to the terms of an undertaking, the Corporation shall have the burden of proving that Indemnitee is not entitled to be indemnified, or to such advancement of expenses, under this Article EIGHTH. Indemnitee’s expenses (including attorneys’ fees) reasonably incurred in connection with successfully establishing Indemnitee’s right to indemnification, in whole or in part, in any such proceeding shall also be indemnified by the Corporation. Notwithstanding the foregoing, in any suit brought by Indemnitee to enforce a right to indemnification hereunder it shall be a defense that the Indemnitee has not met any applicable standard for indemnification set forth in the General Corporation Law of the State of Delaware.

8.          Limitations. Notwithstanding anything to the contrary in this Article EIGHTH, except as set forth in Section 7 of this Article EIGHTH, the Corporation shall not indemnify an Indemnitee pursuant to this Article EIGHTH in connection with a proceeding (or part thereof) initiated by such Indemnitee unless the initiation thereof was approved by the Board of Directors of the Corporation. Notwithstanding anything to the contrary in this Article EIGHTH, the Corporation shall not indemnify an Indemnitee to the extent such Indemnitee is reimbursed from the proceeds of insurance, and in the event the Corporation makes any indemnification payments to an Indemnitee and such Indemnitee is subsequently reimbursed from the proceeds of insurance, such Indemnitee shall promptly refund indemnification payments to the Corporation to the extent of such insurance reimbursement.

9.          Subsequent Amendment. No amendment, termination or repeal of this Article EIGHTH or of the relevant provisions of the General Corporation Law of the State of Delaware or any other applicable laws, or the adoption of any other provision of this Certificate of Incorporation inconsistent with this Article EIGHTH, shall adversely affect or diminish in any way the rights of any Indemnitee to indemnification under the provisions hereof with respect to any action, suit, proceeding or investigation arising out of or relating to any actions, transactions or facts occurring prior to the final adoption of such amendment, termination or repeal (except to the extent such amendment, termination or repeal permits the Corporation to provide broader indemnification rights on a retroactive basis than permitted prior thereto).

10.         Other Rights. The indemnification and advancement of expenses provided by this Article EIGHTH shall not be deemed exclusive of any other rights to which an Indemnitee seeking indemnification or advancement of expenses may be entitled under any law (common or statutory), this Certificate of Incorporation, the Bylaws of the Corporation, an agreement or vote of stockholders or disinterested directors or otherwise, both as to action in Indemnitee’s official capacity and as to action in any other capacity while holding office for the Corporation, and shall continue as to an Indemnitee who has ceased to be a director or officer, and shall inure to the benefit of the estate, heirs, executors and administrators of Indemnitee. Nothing contained in this Article EIGHTH shall be deemed to prohibit, and the Corporation is specifically authorized to enter into, agreements with officers and directors providing indemnification rights and procedures different from those set forth in this Article EIGHTH. In addition, the Corporation may, to the extent authorized from time to time by its Board of Directors, grant indemnification rights to other employees or agents of the Corporation or other persons serving the Corporation and such rights may be equivalent to, or greater or less than, those set forth in this Article EIGHTH.

11.         Partial Indemnification. If an Indemnitee is entitled under any provision of this Article EIGHTH to indemnification by the Corporation for some or a portion of the expenses (including attorneys’ fees), liabilities, losses, judgments, fines (including excise taxes and penalties arising under the Employee Retirement Income Security Act of 1974) or amounts paid in settlement actually and reasonably incurred by or on behalf of Indemnitee in connection with any action, suit, proceeding or investigation and any appeal therefrom but not, however, for the total amount thereof, the Corporation shall nevertheless indemnify Indemnitee for the portion of such expenses (including attorneys’ fees), liabilities, losses, judgments, fines (including excise taxes and penalties arising under the Employee Retirement Income Security Act of 1974) or amounts paid in settlement to which Indemnitee is entitled.

12.         Insurance. The Corporation may purchase and maintain insurance, at its expense, on behalf of itself and any person who is or was a director or officer of the Corporation, or is or was a director or officer of the Corporation serving at the request of the Corporation as a director, officer, employee or agent of another enterprise, or on behalf of any employee or agent who may be entitled to indemnification under this Article EIGHTH, against any expense, liability or loss incurred by him or her in any such capacity, or arising out of his or her status as such, whether or not the Corporation would have the power to indemnify such person against such expense, liability or loss under the General Corporation Law of the State of Delaware.

13.         Savings Clause. If this Article EIGHTH or any portion hereof shall be held invalid, illegal or unenforceable on any ground whatsoever by any court of competent jurisdiction, (a) the validity, legality and enforceability of the remaining provisions of this Article EIGHTH shall not in any way be effected or impaired thereby; and (b) the Corporation shall nevertheless indemnify each Indemnitee as to any expenses (including attorneys’ fees), liabilities, losses, judgments, fines (including excise taxes and penalties arising under the Employee Retirement Income Security Act of 1974) and amounts paid in settlement in connection with any action, suit, proceeding or investigation, whether civil, criminal or administrative, including an action by or in the right of the Corporation, to the fullest extent permitted by any applicable portion of this Article EIGHTH that shall not have been invalidated and to the fullest extent permitted by applicable law, provided further, that to the fullest extent possible, the provisions of this Article EIGHTH (including, without limitation, each such portion of this Article EIGHTH containing any such provisions held to be invalid, illegal or unenforceable) shall be construed so as to give effect to the intent manifested by the provision held invalid, illegal or unenforceable.

14.         Definitions. Terms used herein and defined in Section 145(h) and Section 145(i) of the General Corporation Law of the State of Delaware shall have the respective meanings assigned to such terms in such Section 145(h) and Section 145(i).

Ninth: This Article NINTH is inserted for the management of the business and for the conduct of the affairs of the Corporation.

1.          General Powers. The business and affairs of the Corporation shall be managed by or under the direction of the Board of Directors.

2.          Number of Directors; Election of Directors. The Board of Directors shall consist of not less than one nor more than seven members, the exact number of which shall be fixed form time to time by the Board of Directors.

3.          Term of Office. Each director shall serve for a term ending on the date of the next annual meeting following the annual meeting at which such director was elected; provided that the term of each director shall continue until the election and qualification of his successor and be subject to his earlier death, resignation or removal.

4.          Quorum. Except as otherwise provided by law, a majority of the directors at any time in office shall constitute a quorum. A majority of the directors present, whether or not a quorum is present, may adjourn a meeting from time to time to another time and place without notice.

5.          Action at Meeting. Every act or decision done or made by a majority of the directors present at a meeting duly held at which a quorum is present shall be regarded as the act of the Board of Directors unless a greater number is required by law or by this Certificate of Incorporation.

6.          Removal. To the extent permitted by law, any or all directors of the Corporation may be removed, with or without cause, by the holders of a majority of the shares of stock outstanding and entitled to vote for the election of directors.

7.          Vacancies. Any vacancies or newly-created directorships in the Board of Directors, however occurring, shall be filled only by vote of a majority of the directors then in office, although less than a quorum, or by a sole remaining director. A director elected to fill a vacancy or to fill a position resulting from a newly-created directorship shall hold office as set forth in Section 4 of this Article NINTH.

8.          Stockholder Nominations and Introduction of Business, Etc. Advance notice of stockholder nominations for election of directors and other business to be brought by stockholders before a meeting of stockholders shall be given in the manner provided by the Bylaws of the Corporation.

IN WITNESS WHEREOF, this Amended and Restated Certificate of Incorporation, which restates, integrates and amends the certificate of incorporation of the Corporation, and which has been duly adopted in accordance with Sections 228, 242 and 245 of the General Corporation Law of the State of Delaware, has been executed by its duly authorized officer on [●], 2017.

7

Exhibit 2.5

AMENDED AND RESTATED BYLAWS

OF

Duke robotics, Inc.

Adopted [●], 2017

ARTICLE I - STOCKHOLDERS

1.1       Place of Meetings. The annual meeting shall be held within or without the State of Delaware, as the Board of Directors shall determine. Special meetings of the stockholders may be called by order of the Board of directors or by stockholders holding together at least a majority of all the shares of the corporation entitled to vote at the meeting, and shall be held within or without the State of Delaware, as may be specified by such order. The Board of Directors may, in its sole discretion, determine that the annual meeting shall not be held at any place, but may instead be held solely by means of remote communication as authorized by Section 211(a)(2) of the Delaware General Corporation Law.

1.2       Annual Meeting. The annual meeting of stockholders for the election of directors and for the transaction of such other business as may properly be brought before the meeting shall be held on a date and at a time, within or without the state of Delaware, designated by the Board of Directors. The purposes for which the annual meeting is to be held, in addition to those prescribed by law, by the Certificate of Incorporation or by these Bylaws, may be specified by the Board of Directors.

1.3       Special Meetings. Special meetings of stockholders for any purpose or purposes may be called at any time by the Board of Directors or by the stockholders holding together at least a majority of all the shares of the corporation entitled to vote at the meeting. The Board of Directors may postpone or reschedule any previously scheduled special meeting of stockholders. Business transacted at any special meeting of stockholders shall be limited to matters relating to the purpose or purposes stated in the notice of meeting.

1.4       Notice of Meetings. Except as otherwise provided by law, a copy of the notice of each meeting of stockholders, whether annual or special, shall be given by the Secretary (or other person as authorized by these Bylaws or by law) not less than 10 nor more than 60 days before the date of the meeting to each stockholder entitled to vote at such meeting. Without limiting the manner by which notice otherwise may be given to stockholders, any notice shall be effective if given by a form of electronic transmission consented to (in a manner consistent with the General Corporation Law of the State of Delaware) by the stockholder to whom the notice is given. The notices of all meetings shall state the place, date and time of the meeting and the means of remote communications, if any, by which stockholders and proxyholders may be deemed to be present in person and vote at such meeting. The notice of a special meeting shall state, in addition, the purpose or purposes for which the meeting is called. If notice is given by mail, such notice shall be deemed given when deposited in the United States mail, postage prepaid, directed to the stockholder at such stockholder’s address as it appears on the records of the corporation. If notice is given by electronic transmission, such notice shall be deemed given at the time specified in Section 232 of the General Corporation Law of the State of Delaware.

1.5       Voting List. The officer who has charge of the stock ledger of the corporation shall prepare, at least 10 days before every meeting of stockholders, a complete list of the stockholders and the number of shares registered in the name of each stockholder. Such list shall be open to the examination of any stockholder, for any purpose germane to the meeting, for a period of at least 10 days prior to the meeting, either at a place within the city or other municipality or community where the meeting is to be held, which place shall be specified in the notice of the meeting, or if not so specified at the place where the meeting is to be held. The list shall also be produced and kept at the time and place of the meeting during the whole time thereof, and may be inspected by any stockholder who is present. The list shall also be produced and kept at the time and place where the meeting is to be held and during the whole time of the meeting, and may be inspected by any stockholder who is present. The list shall presumptively determine the identity of the stockholders entitled to vote at the meeting and the number of shares held by each of them.

1.6       Quorum. Except as otherwise provided by law, the Certificate of Incorporation or these Bylaws, the holders of a majority in voting power of the shares of the capital stock of the corporation issued and outstanding and entitled to vote at the meeting, present in person or represented by proxy, shall constitute a quorum for the transaction of business.

1.7       Adjournments. Any meeting of stockholders may be adjourned from time to time to any other time and to any other place at which a meeting of stockholders may be held under these Bylaws by holders of record of a majority of the shares present or represented by proxy, although less than a quorum without notice other than announcement at the meeting. At any adjourned meeting at which a quorum is present the corporation may transact any business that might have been transacted at the original meeting.

1.8       Voting. Each stockholder shall have one vote for each share of stock entitled to vote held of record by such stockholder and a proportionate vote for each fractional share so held, unless otherwise provided by law or the Certificate of Incorporation. In the election of directors, a plurality of the votes cast shall elect, except where a larger vote is required by law, by the Certificate of Incorporation or by these Bylaws. Any other action shall be authorized by a majority of the votes cast, except where a larger vote is required by law, by the Certificate of Incorporation or by these Bylaws. Voting by ballot shall not be required for the election of directors or any other corporate action, except as otherwise provided by law. The corporation shall not directly or indirectly vote any shares of its own stock; provided however, that the corporation may vote shares that it holds in a fiduciary capacity to the extent permitted by law.

1.9       Proxy Representation. Each stockholder of record entitled to vote at a meeting of stockholders may vote in person or may authorize another person or persons to act for him by proxy in all matters in which a stockholder is entitled to participate, whether by waiving notice of any meeting, voting or participating at a meeting, or expressing consent or dissent without a meeting. Every proxy must be signed by the stockholder granting such proxy or by his attorney-in-fact. No such proxy shall be voted upon after three years from the date of its execution, unless the proxy expressly provides for a longer period. Proxies shall be filed with the Secretary of the meeting, or of any adjournment thereof. Except as otherwise limited thereby, proxies shall entitle the persons authorized thereby to vote at any adjournment of such meeting.

1.10       Action at Meeting. When a quorum is present at any meeting, any matter other than the election of directors to be voted upon by the stockholders at such meeting shall be decided by the vote of the holders of shares of stock having a majority in voting power of the votes cast by the holders of all of the shares of stock present or represented at the meeting and voting affirmatively or negatively on such matter, except when a different vote is required by law, the Certificate of Incorporation or these Bylaws. When a quorum is present at any meeting, any election by stockholders of directors shall be determined by a plurality of the votes cast by the stockholders entitled to vote on the election, except when a different vote is required by law, the Certificate of Incorporation or these Bylaws.

1.11       Written Consent of Stockholders Without a Meeting. Unless otherwise provided in the Certificate of Incorporation, any action required to be taken at any annual or special meeting of stockholders of the corporation, or any action which may be taken at any annual or special meeting of such stockholders, may be taken without a meeting, without prior notice and without a vote, if a consent or consents in writing, setting forth the action so taken, shall be signed by the holders of outstanding stock having no less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted and shall be delivered to the corporation by delivery to its registered office in the State, its principal place of business, or an officer or agent of the corporation having custody of the book in which proceedings of meetings of stockholders are recorded. Delivery made to a corporation’s registered office shall be by hand or by certified or registered mail, return receipt requested or to the corporation’s principal place of business or the officer of the corporation having custody of the minute book. Written consent shall bear the date of the signature of each stockholder who signs the consent and no consent shall be effective to take the corporate action referred to therein unless written consents sufficient to approve the action are delivered to the corporation within sixty (60) days of the earliest dated consent. Prompt notice of the taking of the corporate action without a meeting by less than unanimous written consent shall be given to those stockholders who have not consented in writing and who, if the action had been taken at a meeting, would have been entitled to notice of the meeting if the record date for such meeting had been the date that written consents signed by a sufficient number of holders to take action were delivered to the corporation as provided in this Article I, Section 11.

1.12       Nomination of Directors.

a.       Except for (1) any directors entitled to be elected by the holders of preferred stock, (2) any directors elected in accordance with Section 2.9 hereof by the Board of Directors to fill vacancies or newly-created directorships or (3) as otherwise required by applicable law or stock exchange regulation, at any meeting of stockholders, only persons who are nominated in accordance with the procedures in this Section 1.12 shall be eligible for election as directors. Nomination for election to the Board of Directors at a meeting of stockholders may be made (i) by or at the direction of the Board of Directors or (ii) by any stockholder of the corporation who (x) timely complies with the notice procedures in Section 1.10(b), (y) is a stockholder of record on the date of the giving of such notice and on the record date for the determination of stockholders entitled to vote at such meeting and (z) is entitled to vote at such meeting.

b.       To be timely, a stockholder’s notice must be received in writing by the Secretary at the principal executive offices of the corporation as follows: (1) in the case of an election of directors at an annual meeting of stockholders, not less than 90 days nor more than 120 days prior to the first anniversary of the preceding year’s annual meeting; provided, however, that (x) in the case of the annual meeting of stockholders of the corporation to be held in 2013 or (y) in the event that the date of the annual meeting in any other year is advanced by more than 20 days, or delayed by more than 60 days, from the first anniversary of the preceding year’s annual meeting, a stockholder’s notice must be so received not earlier than the 120th day prior to such annual meeting and not later than the close of business on the later of (A) the 90th day prior to such annual meeting and (B) the tenth day following the day on which notice of the date of such annual meeting was mailed or public disclosure of the date of such annual meeting was made, whichever first occurs; or (2) in the case of an election of directors at a special meeting of stockholders, provided that the Board of Directors, the Chairman of the Board or the Chief Executive Officer has determined, in accordance with Section 1.3, that directors shall be elected at such special meeting and provided further that the nomination made by the stockholder is for one of the director positions that the Board of Directors, the Chairman of the Board or the Chief Executive Officer, as the case may be, has determined will be filled at such special meeting, not earlier than the 120th day prior to such special meeting and not later than the close of business on the later of (x) the 90th day prior to such special meeting and (y) the tenth day following the day on which notice of the date of such special meeting was mailed or public disclosure of the date of such special meeting was made, whichever first occurs. In no event shall the adjournment or postponement of a meeting (or the public disclosure thereof) commence a new time period (or extend any time period) for the giving of a stockholder’s notice.

The stockholder’s notice to the Secretary shall set forth: (A) as to each proposed nominee (1) such person’s name, age, business address and, if known, residence address, (2) such person’s principal occupation or employment, (3) the class and series and number of shares of stock of the corporation that are, directly or indirectly, owned, beneficially or of record, by such person, (4) a description of all direct and indirect compensation and other material monetary agreements, arrangements and understandings during the past three years, and any other material relationships, between or among (x) the stockholder, the beneficial owner, if any, on whose behalf the nomination is being made and the respective affiliates and associates of, or others acting in concert with, such stockholder and such beneficial owner, on the one hand, and (y) each proposed nominee, and his or her respective affiliates and associates, or others acting in concert with such nominee(s), on the other hand, including all information that would be required to be disclosed pursuant to Item 404 of Regulation S-K if the stockholder making the nomination and any beneficial owner on whose behalf the nomination is made or any affiliate or associate thereof or person acting in concert therewith were the “registrant” for purposes of such Item and the proposed nominee were a director or executive officer of such registrant, and (5) any other information concerning such person that must be disclosed as to nominees in proxy solicitations pursuant to Regulation 14A under the Securities Exchange Act of 1934, as amended (the “Exchange Act”); and (B) as to the stockholder giving the notice and the beneficial owner, if any, on whose behalf the nomination is being made (1) the name and address of such stockholder, as they appear on the corporation’s books, and of such beneficial owner, (2) the class and series and number of shares of stock of the corporation that are, directly or indirectly, owned, beneficially or of record, by such stockholder and such beneficial owner, (3) a description of any agreement, arrangement or understanding between or among such stockholder and/or such beneficial owner and each proposed nominee and any other person or persons (including their names) pursuant to which the nomination(s) are being made or who may participate in the solicitation of proxies in favor of electing such nominee(s), (4) a description of any agreement, arrangement or understanding (including any derivative or short positions, swaps, profit interests, options, warrants, convertible securities, stock appreciation or similar rights, hedging transactions, and borrowed or loaned shares) that has been entered into by, or on behalf of, such stockholder or such beneficial owner, the effect or intent of which is to mitigate loss to, manage risk or benefit of share price changes for, or increase or decrease the voting power of, such stockholder or such beneficial owner with respect to shares of stock of the corporation, (5) any other information relating to such stockholder and such beneficial owner that would be required to be disclosed in a proxy statement or other filings required to be made in connection with solicitations of proxies for the election of directors in a contested election pursuant to Section 14 of the Exchange Act and the rules and regulations promulgated thereunder, (6) a representation that such stockholder intends to appear in person or by proxy at the meeting to nominate the person(s) named in its notice and (7) a representation whether such stockholder and/or such beneficial owner intends or is part of a group that intends (x) to deliver a proxy statement and/or form of proxy to holders of at least the percentage of the corporation’s outstanding capital stock reasonably believed by such stockholder or such beneficial owner to be sufficient to elect the nominee (and such representation shall be included in any such proxy statement and form of proxy) and/or (y) otherwise to solicit proxies from stockholders in support of such nomination (and such representation shall be included in any such solicitation materials). Not later than 10 days after the record date for the meeting, the information required by items (A)(1)-(5) and (B)(1)-(5) of the prior sentence shall be supplemented by the stockholder giving the notice to provide updated information as of the record date. In addition, to be effective, the stockholder’s notice must be accompanied by the written consent of the proposed nominee to serve as a director if elected. The corporation may require any proposed nominee to furnish such other information as the corporation may reasonably require to determine the eligibility of such proposed nominee to serve as a director of the corporation or whether such nominee would be independent under applicable Securities and Exchange Commission and stock exchange rules and the corporation’s publicly disclosed corporate governance guidelines. A stockholder shall not have complied with this Section 1.12(b) if the stockholder (or beneficial owner, if any, on whose behalf the nomination is made) solicits or does not solicit, as the case may be, proxies in support of such stockholder’s nominee in contravention of the representations with respect thereto required by this Section 1.12.

c.       The chairman of any meeting shall have the power and duty to determine whether a nomination was made in accordance with the provisions of this Section 1.12 (including whether the stockholder or beneficial owner, if any, on whose behalf the nomination is made solicited (or is part of a group that solicited) or did not so solicit, as the case may be, proxies in support of such stockholder’s nominee in compliance with the representations with respect thereto required by this Section 1.12), and if the chairman should determine that a nomination was not made in accordance with the provisions of this Section 1.12, the chairman shall so declare to the meeting and such nomination shall not be brought before the meeting.

d.       Except as otherwise required by applicable law, nothing in this Section 1.12 shall obligate the corporation or the Board of Directors to include in any proxy statement or other stockholder communication distributed on behalf of the corporation or the Board of Directors information with respect to any nominee for director submitted by a stockholder.

e.       Notwithstanding the foregoing provisions of this Section 1.12, unless otherwise required by law, if the stockholder (or a qualified representative of the stockholder) does not appear at the meeting to present a nomination, such nomination shall not be brought before the meeting, notwithstanding that proxies in respect of such nominee may have been received by the corporation. For purposes of this Section 1.12, to be considered a “qualified representative of the stockholder”, a person must be authorized by a written instrument executed by such stockholder or an electronic transmission delivered by such stockholder to act for such stockholder as proxy at the meeting of stockholders and such person must produce such written instrument or electronic transmission, or a reliable reproduction of the written instrument or electronic transmission, at the meeting of stockholders.

f.       For purposes of this Section 1.12, “public disclosure” shall include disclosure in a press release reported by the Dow Jones News Service, Associated Press or comparable national news service or in a document publicly filed by the corporation with the Securities and Exchange Commission pursuant to Section 13, 14 or 15(d) of the Exchange Act.

1.13       Notice of Business at Annual Meetings.

a.       At any annual meeting of the stockholders, only such business shall be conducted as shall have been properly brought before the meeting. To be properly brought before an annual meeting, business must be (1) specified in the notice of meeting (or any supplement thereto) given by or at the direction of the Board of Directors, (2) otherwise properly brought before the meeting by or at the direction of the Board of Directors, or (3) properly brought before the meeting by a stockholder. For business to be properly brought before an annual meeting by a stockholder, (i) if such business relates to the nomination of a person for election as a director of the corporation, the procedures in Section 1.10 must be complied with and (ii) if such business relates to any other matter, the business must constitute a proper matter under Delaware law for stockholder action and the stockholder must (x) have given timely notice thereof in writing to the Secretary in accordance with the procedures in Section 1.11(b), (y) be a stockholder of record on the date of the giving of such notice and on the record date for the determination of stockholders entitled to vote at such annual meeting and (z) be entitled to vote at such annual meeting.

b.       To be timely, a stockholder’s notice must be received in writing by the Secretary at the principal executive offices of the corporation not less than 90 days nor more than 120 days prior to the first anniversary of the preceding year’s annual meeting; provided, however, that (1) in the case of the annual meeting of stockholders of the corporation to be held in 2013 or (2) in the event that the date of the annual meeting in any other year is advanced by more than 20 days, or delayed by more than 60 days, from the first anniversary of the preceding year’s annual meeting, a stockholder’s notice must be so received not earlier than the 120th day prior to such annual meeting and not later than the close of business on the later of (x) the 90th day prior to such annual meeting and (y) the tenth day following the day on which notice of the date of such annual meeting was mailed or public disclosure of the date of such annual meeting was made, whichever first occurs. In no event shall the adjournment or postponement of an annual meeting (or the public disclosure thereof) commence a new time period (or extend any time period) for the giving of a stockholder’s notice. 

The stockholder’s notice to the Secretary shall set forth: (A) as to each matter the stockholder proposes to bring before the annual meeting (1) a brief description of the business desired to be brought before the annual meeting, (2) the text of the proposal (including the exact text of any resolutions proposed for consideration and, in the event that such business includes a proposal to amend the Bylaws, the exact text of the proposed amendment), and (3) the reasons for conducting such business at the annual meeting, and (B) as to the stockholder giving the notice and the beneficial owner, if any, on whose behalf the proposal is being made (1) the name and address of such stockholder, as they appear on the corporation’s books, and of such beneficial owner, (2) the class and series and number of shares of stock of the corporation that are, directly or indirectly, owned, beneficially or of record, by such stockholder and such beneficial owner, (3) a description of any material interest of such stockholder or such beneficial owner and the respective affiliates and associates of, or others acting in concert with, such stockholder or such beneficial owner in such business, (4) a description of any agreement, arrangement or understanding between or among such stockholder and/or such beneficial owner and any other person or persons (including their names) in connection with the proposal of such business or who may participate in the solicitation of proxies in favor of such proposal, (5) a description of any agreement, arrangement or understanding (including any derivative or short positions, swaps, profit interests, options, warrants, convertible securities, stock appreciation or similar rights, hedging transactions, and borrowed or loaned shares) that has been entered into by, or on behalf of, such stockholder or such beneficial owner, the effect or intent of which is to mitigate loss to, manage risk or benefit of share price changes for, or increase or decrease the voting power of, such stockholder or such beneficial owner with respect to shares of stock of the corporation, (6) any other information relating to such stockholder and such beneficial owner that would be required to be disclosed in a proxy statement or other filings required to be made in connection with solicitations of proxies for the business proposed pursuant to Section 14 of the Exchange Act and the rules and regulations promulgated thereunder, (7) a representation that such stockholder intends to appear in person or by proxy at the annual meeting to bring such business before the meeting and (8) a representation whether such stockholder and/or such beneficial owner intends or is part of a group that intends (x) to deliver a proxy statement and/or form of proxy to holders of at least the percentage of the corporation’s outstanding capital stock required to approve or adopt the proposal (and such representation shall be included in any such proxy statement and form of proxy) and/or (y) otherwise to solicit proxies from stockholders in support of such proposal (and such representation shall be included in any such solicitation materials). Not later than 10 days after the record date for the meeting, the information required by Items (A)(3) and (B)(1)-(6) of the prior sentence shall be supplemented by the stockholder giving the notice to provide updated information as of the record date. Notwithstanding anything in these Bylaws to the contrary, no business shall be conducted at any annual meeting of stockholders except in accordance with the procedures in this Section 1.13; provided that any stockholder proposal that complies with Rule 14a-8 of the proxy rules (or any successor provision) promulgated under the Exchange Act and is to be included in the corporation’s proxy statement for an annual meeting of stockholders shall be deemed to comply with the notice requirements of this Section 1.13. A stockholder shall not have complied with this Section 1.13(b) if the stockholder (or beneficial owner, if any, on whose behalf the proposal is made) solicits or does not solicit, as the case may be, proxies in support of such stockholder’s proposal in contravention of the representations with respect thereto required by this Section 1.13.

c.       The chairman of any annual meeting shall have the power and duty to determine whether business was properly brought before the annual meeting in accordance with the provisions of this Section 1.13 (including whether the stockholder or beneficial owner, if any, on whose behalf the proposal is made solicited (or is part of a group that solicited) or did not so solicit, as the case may be, proxies in support of such stockholder’s proposal in compliance with the representation with respect thereto required by this Section 1.13), and if the chairman should determine that business was not properly brought before the annual meeting in accordance with the provisions of this Section 1.13, the chairman shall so declare to the meeting and such business shall not be brought before the annual meeting.

d.       Except as otherwise required by law, nothing in this Section 1.13 shall obligate the corporation or the Board of Directors to include in any proxy statement or other stockholder communication distributed on behalf of the corporation or the Board of Directors information with respect to any proposal submitted by a stockholder.

e.       Notwithstanding the foregoing provisions of this Section 1.13, unless otherwise required by applicable law, if the stockholder (or a qualified representative of the stockholder) does not appear at the annual meeting to present business, such business shall not be considered, notwithstanding that proxies in respect of such business may have been received by the corporation.

f.       For purposes of this Section 1.13, the terms “qualified representative of the stockholder” and “public disclosure” shall have the same meaning as in Section 1.12.

1.14       Conduct of Meetings.

a.       Meetings of stockholders shall be presided over by the President, the Chief Executive Officer, or, if none of the foregoing is present, by a chairman to be chosen by the stockholders entitled to vote who are present in person or by proxy at the meeting. The Secretary of the corporation shall act as secretary of every meeting, but if the Secretary is not present, the presiding officer of the meeting shall appoint any person present to act as secretary of the meeting.

b.       The Board of Directors may adopt by resolution such rules, regulations and procedures for the conduct of any meeting of stockholders of the corporation as it shall deem appropriate including, without limitation, such guidelines and procedures as it may deem appropriate regarding the participation by means of remote communication of stockholders and proxyholders not physically present at a meeting. Except to the extent inconsistent with such rules, regulations and procedures as adopted by the Board of Directors, the chairman of any meeting of stockholders shall have the right and authority to prescribe such rules, regulations and procedures and to do all such acts as, in the judgment of such chairman, are appropriate for the proper conduct of the meeting. Such rules, regulations or procedures, whether adopted by the Board of Directors or prescribed by the chairman of the meeting, may include, without limitation, the following: (i) the establishment of an agenda or order of business for the meeting; (ii) rules and procedures for maintaining order at the meeting and the safety of those present; (iii) limitations on attendance at or participation in the meeting to stockholders of record of the corporation, their duly authorized and constituted proxies or such other persons as shall be determined; (iv) restrictions on entry to the meeting after the time fixed for the commencement thereof; and (v) limitations on the time allotted to questions or comments by participants. Unless and to the extent determined by the Board of Directors or the chairman of the meeting, meetings of stockholders shall not be required to be held in accordance with the rules of parliamentary procedure.

c.       The chairman of the meeting shall announce at the meeting when the polls for each matter to be voted upon at the meeting will be opened and closed. After the polls close, no ballots, proxies or votes or any revocations or changes thereto may be accepted.

d.       In advance of any meeting of stockholders, the Board of Directors, the Chairman of the Board, the Chief Executive Officer or the President shall appoint one or more inspectors of election to act at the meeting and make a written report thereof. One or more other persons may be designated as alternate inspectors to replace any inspector who fails to act. If no inspector or alternate is present, ready and willing to act at a meeting of stockholders, the chairman of the meeting shall appoint one or more inspectors to act at the meeting. Unless otherwise required by law, inspectors may be officers, employees or agents of the corporation. Each inspector, before entering upon the discharge of such inspector’s duties, shall take and sign an oath faithfully to execute the duties of inspector with strict impartiality and according to the best of such inspector’s ability. The inspector shall have the duties prescribed by law and shall take charge of the polls and, when the vote is completed, shall make a certificate of the result of the vote taken and of such other facts as may be required by law. Every vote taken by ballots shall be counted by a duly appointed inspector or duly appointed inspectors.

ARTICLE II - DIRECTORS

2.1       General Powers. The business and affairs of the corporation shall be managed by or under the direction of a Board of Directors, who may exercise all of the powers of the corporation except as otherwise provided by applicable law or the Certificate of Incorporation.

2.2       Number, Election and Qualification. The Board of Directors shall consist of not less than, nor more than seven members, the exact number of which shall be fixed from time to time by the Board of Directors. Election of directors need not be by written ballot. Directors need not be stockholders of the corporation, a citizen of the United States or a resident of the state of Delaware.

2.3       Classes of Directors. The Board of Directors shall consist of one class.

2.4       Terms of Office. Each director shall serve for a term ending on the date of the next annual meeting of stockholders following the annual meeting of stockholders at which such director was elected, provided that the term of each director shall continue until the election and qualification of his or her successor and be subject to his or her earlier death, resignation or removal.

2.5       Quorum. A majority of the directors at any time in office shall constitute a quorum of the Board of Directors. A majority of the directors present, whether or not a quorum is present, may adjourn the meeting from time to time without further notice.

2.6       Action at Meeting. Every act or decision done or made by a majority of the directors present at a meeting duly held at which a quorum is present shall be regarded as the act of the Board of Directors, unless a greater number is required by law or by the Certificate of Incorporation.

2.7       Removal. To the extent permitted by law, any or all directors of the corporation may be removed, with or without cause, by the holders of a majority of the shares of stock outstanding and entitled to vote for the election of directors.

2.8       Vacancies. Vacancies or newly-created directorships on the Board of Directors, however occurring, shall be filled only by vote of a majority of the directors then in office, although less than a quorum, or by a sole remaining director. A director elected to fill a vacancy shall hold office for the term of such director’s predecessor, and a director elected to fill a newly-created director position shall hold until the next annual meeting of stockholders, in each case subject to the election and qualification of a successor or until such director’s earlier death, resignation or removal.

2.9       Resignation. Any director may resign at any time by delivering a resignation to the President or the Secretary. Such resignation shall be effective upon delivery unless it is specified to be effective at some later time or upon the happening of some later event.

2.10       Regular Meetings. Regular meetings of the Board of Directors may be held without notice at such time and place as shall be determined from time to time by the Board of Directors, except that the first meeting of a newly election Board of Directors shall be held as soon after its election as the directors may conveniently assemble, either at a place within the city or other municipality or community where the meeting is to be held, which place shall be specified in the notice of the meeting, or if not so specified, at the place where the meeting is to be held.

2.11       Special Meetings. Special meetings of the Board of Directors may be held at any time and place designated by the President, two or more directors, or by one director in the event that there is only a single director in office.

2.12       Notice of Special Meetings. Written, oral, electronic or any other mode of notice of the time and place shall be given for special meetings in sufficient time for the convenient assembly of the directors thereat. Notice need not be given to any director or to any member of a committee of directors who submits a written waiver of notice signed by him or her before or after the time stated therein. Attendance of any such person at a meeting shall constitute a wavier of notice of such meeting, except when he or she attends a meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened. Neither the business to be transaction at, nor the purpose of any regular or special meeting of the directors, need be specified in any written waiver of notice.

2.13       Meetings by Conference Communications Equipment. Directors may participate in meetings of the Board of Directors or any committee thereof by means of conference telephone or other communications equipment by means of which all persons participating in the meeting can hear each other, and participation by such means shall constitute presence in person at such meeting.

2.14       Action by Consent. Any action required or permitted to be taken at any meeting of the Board of Directors or of any committee thereof may be taken without a meeting, if all members of the Board of Directors or committee, as the case may be, consent to the action in writing or by electronic transmission, and the written consents or electronic transmissions are filed with the minutes of proceedings of the Board of Directors or committee.

2.15       Committees. From time to time the Board of Directors by a resolution adopted by a majority of the Board of Directors may appoint any committee or committees for any purpose or purposes, to the extent lawful, which shall have such powers as shall be determined and specified by the Board of Directors in the resolution of appointment. The Board of Directors may designate one or more committees, each committee to consist of one or more of the directors of the corporation with such lawfully delegable powers and duties as the Board of Directors thereby confers, to serve at the pleasure of the Board of Directors. The Board of Directors may designate one or more directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of the committee. The presence of a majority of the then appointed members of a committee shall constitute a quorum for the transaction of business by that committee, and in every case where a quorum is present the affirmative vote of a majority of the members of the committee present shall be the act of the committee. In the absence or disqualification of a member of a committee, the member or members of the committee present at any meeting and not disqualified from voting, whether or not such member or members constitute a quorum, may unanimously appoint another member of the Board of Directors to act at the meeting in the place of any such absent or disqualified member. Each such committee shall keep minutes of its proceedings, and any action taken by a committee shall be reported to the Board of Directors at its meeting next succeeding such action. Except as the Board of Directors may otherwise determine, any committee may make rules for the conduct of its business, and shall meet where and as provided by such rules or by resolution of the Board of Directors. Except as otherwise provided in the Certificate of Incorporation, these Bylaws, or the resolution of the Board of Directors designating the committee, a committee may create one or more subcommittees, each subcommittee to consist of one or more members of the committee, and delegate to a subcommittee any or all of the powers and authority of the committee.

2.16       Compensation of Directors. Directors may be paid such compensation for their services and such reimbursement for expenses of attendance at meetings as the Board of Directors may from time to time determine. No such payment shall preclude any director from serving the corporation or any of its parent or subsidiary entities in any other capacity and receiving compensation for such service.

ARTICLE III - OFFICERS

3.1       Titles. The officers of the corporation shall consist of a President and a Secretary, and such other officers with such other titles as the Board of Directors shall determine, which may include a Chief Executive Officer, a Treasurer, a Chief Financial Officer and Chief Operating Officer. The Board of Directors may appoint such other officers as it may deem appropriate. The Board of Directors may delegate to any other officer of the corporation the power to choose such other officers and to prescribe their respective duties and powers. If any of the additional officers set forth in this Section 3.1 is not appointed, the President or such other officer designated by the Board of Directors shall have the powers and responsibilities allotted to such officer hereunder.

3.2       Election. The President and Secretary shall be elected annually by the Board of Directors at its first meeting following the annual meeting of stockholders. Other officers may be appointed by the Board of Directors at such meeting or at any other meeting.

3.3       Qualification. No officer need be a stockholder. Any two or more offices may be held by the same person.

3.4       Tenure. Except as otherwise provided by law, by the Certificate of Incorporation or by these Bylaws, each officer shall hold office until such officer’s successor is elected and qualified, unless a different term is specified in the resolution electing or appointing such officer, or until such officer’s earlier death, resignation or removal.

3.5       Resignation and Removal. Any officer may resign at any time by delivering a resignation to the President or the Secretary. Such resignation shall be effective upon receipt unless it is specified to be effective at some later time or upon the happening of some later event. Any officer may be removed at any time, with or without cause, by vote of a majority of the directors then in office. Except as the Board of Directors may otherwise determine, no officer who resigns or is removed shall have any right to any compensation as an officer for any period following such officer’s resignation or removal, or any right to damages on account of such removal, whether such officer’s compensation be by the month or by the year or otherwise, unless such compensation is expressly provided for in a duly authorized written agreement with the corporation.

3.6       Vacancies. The Board of Directors may fill any vacancy occurring in any office for any reason and may, in its discretion, leave unfilled for such period as it may determine any offices other than those of President and Secretary. Each such successor shall hold office for the unexpired term of such officer’s predecessor and until a successor is elected and qualified, or until such officer’s earlier death, resignation or removal.

3.7       President. The President shall be an executive officer of the corporation and shall have the general powers and duties of supervision and management of the corporation, subject, however, to the control of the Board of Directors. The President shall also perform all duties incident to the office of President and such other duties as may from time to time be assigned to him by the Board of Directors.

3.8       Chief Executive Officer. The Chief Executive Officer, if any, shall, subject to the control of the Board of Directors, have general supervisory responsibility over the business of the Corporation and shall see that all orders and resolutions of the Board of Directors are carried into effect. He shall be the primary executive officer of the corporation and shall execute all bonds, mortgages, contracts and other instruments of the corporation requiring a seal, under the seal of the corporation, except where required or permitted by law to be otherwise signed and executed and except that the other officers of the corporation may sign and execute documents when so authorized by these Bylaws, the Board of Directors, or the Chief Executive Officer. The Chief Executive Officer shall also perform such other duties and may exercise such other powers as from time to time may be assigned to him by these Bylaws or by the Board of Directors. If no Chief Executive Officer is appointed, references to the Chief Executive Officer in Sections 8 of this Article III shall be deemed to refer to the President or such other officer designated by the Board of Directors instead.

3.9       Secretary and Assistant Secretaries. The Secretary shall keep the minutes of all proceedings of the Board of Directors and the minutes of all meetings of the stockholders and also, unless otherwise directed by such committee, the minutes of each committee, in books provided for that purpose, of which he shall be the custodian; he shall attend to the giving and serving of all notices for the corporation; he shall have charge of the seal of the corporation, of the stock certificate books and such other books and papers as the Board of Directors may direct; and he shall in general perform all the duties incident to the office of Secretary and such other duties as may be assigned to him by the Board of Directors or the President.

3.10       Treasurer. Subject to the direction of the Board of Directors, the Treasurer shall have the general care and custody of all the funds and securities of the corporation which may come into his hands and shall deposit the same to the credit of the corporation in such bank or banks or depositories as from time to time may be designated by the Board of Directors, and shall pay out and dispose of the same under the direction of the Board of Directors. The Treasurer shall in general perform all duties incident to the position of Treasurer and such other duties as may be assigned to him by the Board of Directors or the President.

3.11       Salaries. Officers and agents of the corporation shall be entitled to such salaries, compensation or reimbursement as shall be fixed or allowed from time to time by the Board of Directors.

3.12       Delegation of Authority. The Board of Directors may from time to time delegate the powers or duties of any officer to any other officer or agent, notwithstanding any provision hereof.

ARTICLE IV - CAPITAL STOCK

4.1       Issuance of Stock. Subject to the provisions of the Certificate of Incorporation, the whole or any part of any unissued balance of the authorized capital stock of the corporation or the whole or any part of any shares of the authorized capital stock of the corporation held in the corporation’s treasury may be issued, sold, transferred or otherwise disposed of by vote of the Board of Directors in such manner, for such lawful consideration and on such terms as the Board of Directors may determine.

4.2       Stock Certificates. If certificates of stock of the corporation are issued as evidence of the ownership thereof, said certificates of shares of stock of the corporation shall be in such form as shall be approved by the Board of Directors. The certificates shall be signed by the President and the Secretary or an Assistant Secretary or the Treasurer or an Assistant Treasurer. Such signatures may be facsimile. In case any officer who has so signed such certificate shall have ceased to be such officer before such certificate is issued, it may be issued by the corporation with the same effect as if he were such officer at the date of its issue. Every certificate for shares of stock which are subject to any restriction on transfer and every certificate issued when the corporation is authorized to issue more than one class or series of stock shall contain such legend with respect thereto as is required by law.

4.3       Transfers. Shares of stock of the corporation shall be transferable in the manner prescribed by law and in these Bylaws. Unless specifically requested to issue stock certificates, transfers of shares of stock of the corporation shall be made only on the books of the corporation. Subject to applicable law, shares of stock represented by certificates shall be transferred only on the books of the corporation by the surrender to the corporation or its transfer agent of the certificate representing such shares properly endorsed or accompanied by proper evidence of succession, assignation or authority to transfer, and with such proof of authority or the authenticity of signature as the corporation or its transfer agent may reasonably require. Except as may be otherwise required by law, by the Certificate of Incorporation or by these Bylaws, the corporation shall be entitled to treat the record holder of stock as shown on its books as the owner of such stock for all purposes, including the payment of dividends and the right to vote with respect to such stock, regardless of any transfer, pledge or other disposition of such stock until the shares have been transferred on the books of the corporation in accordance with the requirements of these Bylaws.

4.4       Lost, Stolen or Destroyed Certificates. The corporation shall issue a new certificate of stock in place of any previously issued certificate alleged to have been lost, stolen or destroyed, upon such terms and conditions as the Board of Directors may prescribe, including requiring the owner of any lost, stolen or destroyed certificates, or his legal representative, to give the corporation a signed affidavit detailing the person’s claim that the certificate was destroyed, lost or stolen, the giving of such indemnity and posting of such bond sufficient to indemnify the corporation as the Board of Directors may require for the protection of the corporation or any transfer agent or registrar.

4.5       Record Date. The Board of Directors may fix in advance a date as a record date for the determination of the stockholders entitled to notice of or to vote at any meeting of stockholders, or entitled to receive payment of any dividend or other distribution or allotment of any rights in respect of any change, conversion or exchange of stock, or for the purpose of any other lawful action. Such record date shall not precede the date on which the resolution fixing the record date is adopted, and such record date shall not be more than 60 nor less than 10 days before the date of such meeting, nor more than 60 days prior to any other action to which such record date relates.

If no record date is fixed, the record date for determining stockholders entitled to notice of or to vote at a meeting of stockholders shall be at the close of business on the day before the day on which notice is given, or, if notice is waived, at the close of business on the day before the day on which the meeting is held. If no record date is fixed, the record date for determining stockholders for any other purpose shall be at the close of business on the day on which the Board of Directors adopts the resolution relating to such purpose.

A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; provided, however, that the Board of Directors may fix a new record date for the adjourned meeting.

4.6       Regulations. The issue, transfer, conversion and registration of shares of stock of the corporation shall be governed by such other regulations as the Board of Directors may establish.

ARTICLE V - GENERAL PROVISIONS

5.1       Fiscal Year. The fiscal year shall be fixed, and shall be subject to change, by the Board of Directors.

5.2       Corporate Seal. The Board of directors may adopt a corporate seal. The seal of the corporation, if any, shall be circular in form and contain the name of the corporation, the words “Corporate Seal” and “Delaware” and the year of incorporation of the corporation, which seal shall be in charge of the Secretary to be used as directed by the Board of Directors.

5.3       Waiver of Notice. Whenever notice is required to be given by law, by the Certificate of Incorporation or by these Bylaws, a written waiver signed by the person entitled to notice, or a waiver by electronic transmission by the person entitled to notice, whether given before, at or after the time of the event for which notice is to be given, shall be deemed equivalent to notice required to be given to such person. Neither the business nor the purpose of any meeting need be specified in any such waiver. Attendance of a person at a meeting shall constitute a waiver of notice of such meeting, except when the person attends a meeting for the express purpose of objecting at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened.

5.4       Voting of Securities. Except as the Board of Directors may otherwise designate, the Chief Executive Officer, the President or the Treasurer may waive notice of, vote, or appoint any person or persons to vote, on behalf of the corporation at, and act as, or appoint any person or persons to act as, proxy or attorney-in-fact for this corporation (with or without power of substitution) at, any meeting of stockholders or securityholders of any other entity, the securities of which may be held by this corporation.

5.5       Evidence of Authority. A certificate by the Secretary, or an Assistant Secretary, or a temporary Secretary, as to any action taken by the stockholders, directors, a committee or any officer or representative of the corporation shall as to all persons who rely on the certificate in good faith be conclusive evidence of such action.

5.6       Certificate of Incorporation. All references in these Bylaws to the Certificate of Incorporation shall be deemed to refer to the Certificate of Incorporation of the corporation, as it may be amended and in effect from time to time.

5.7       Severability. Any determination that any provision of these Bylaws is for any reason inapplicable, illegal or ineffective shall not affect or invalidate any other provision of these Bylaws.

5.8       Pronouns. All pronouns used in these Bylaws shall be deemed to refer to the masculine, feminine or neuter, singular or plural, as the identity of the person or persons may require.

ARTICLE VI - AMENDMENTS

These Bylaws may be altered, amended or repealed, in whole or in part, or new Bylaws may be adopted by the Board of Directors or by the stockholders as provided in the Certificate of Incorporation.

14

Exhibit 4.1

THE SECURITIES OFFERED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY STATE SECURITIES OR BLUE SKY LAWS AND ARE BEING OFFERED AND SOLD IN RELIANCE ON EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS OF THE ACT AND STATE SECURITIES OR BLUE SKY LAWS. ALTHOUGH AN OFFERING STATEMENT HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION (THE “SEC”), THAT OFFERING STATEMENT DOES NOT INCLUDE THE SAME INFORMATION THAT WOULD BE INCLUDED IN A REGISTRATION STATEMENT UNDER THE ACT. THE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SEC, ANY STATE SECURITIES COMMISSION OR OTHER REGULATORY AUTHORITY, NOR HAVE ANY OF THE FOREGOING AUTHORITIES PASSED UPON THE MERITS OF THIS OFFERING OR THE ADEQUACY OR ACCURACY OF THE SUBSCRIPTION AGREEMENT OR ANY OTHER MATERIALS OR INFORMATION MADE AVAILABLE TO INVESTOR IN CONNECTION WITH THIS OFFERING.

SUBSCRIPTION AGREEMENT

14 Live Oak St., Suite A

Gulf Breeze, FL 32561

Ladies and Gentlemen:

(a)           The Investor (the “Investor”) hereby irrevocably subscribes for and agrees to purchase shares of common stock, par value $0.0001 per share (the “Shares”), of Duke Robotics, Inc., a Delaware corporation (the “Company”), at a purchase price of $3.00 per share, rounded down to the nearest whole share based on the Investor’s subscription amount, upon the terms and conditions set forth herein. The purchase price of each Share is payable in the manner provided in Section 2 below.

(b)          The Investor understands that the Shares are being offered pursuant to the Offering Circular dated _______________ and its exhibits (the “Offering Circular”) as filed with the Securities and Exchange Commission (the “SEC”). By subscribing to the Offering, the Investor acknowledges that the Investor has received this Subscription Agreement, a copy of the Offering Statement of the Company filed with the SEC, has had the opportunity to ask such questions as it has deemed necessary of, and to receive answers from, representatives of the Company concerning the terms and conditions of the offering and any other information reasonably required by the Investor to make an investment decision.

(c)           This Subscription may be accepted or rejected in whole or in part, at any time prior to the Termination Date (as hereinafter defined), by the Company at its sole discretion. The Company will notify the Investor whether this subscription is accepted (whether in whole or in part) or rejected. If the Investor’s subscription is rejected, the Investor’s payment (or portion thereof if partially rejected) will be returned to the Investor without interest and all of the Investor’s obligations hereunder shall terminate.

(d)           The aggregate number of Shares that may be sold by the Company in this offering shall not exceed 5,000,000 shares (the “Maximum Offering”). The Company may accept subscriptions until the earlier of the date at which the Maximum Offering amount has been sold, or the date which is six months from this offering being qualified by the SEC, provided, however that the company may extend such date for an additional six months at its sole discretion (the “Termination Date”). The Company may terminate the offering at any date in its sole discretion. The Company may elect at any time to close all or any portion of this offering on various dates at or prior to the Termination Date (each a “Closing”). The Company anticipates that Closings will be held such that no cleared investor funds will remain in escrow for more than approximately 30 business days.

(e)          In the event of rejection of this subscription in its entirety, or in the event the sale of the Shares (or any portion thereof) to the Investor is not consummated  for any reason, this Subscription Agreement shall have no force or effect, except for Section 5 hereof, which shall remain in force and effect.

(a)           Payment. The purchase price for the Shares shall be paid simultaneously with the Investor’s execution of this Subscription Agreement. The Investor shall deliver payment for the aggregate purchase price of the Shares by ACH, credit or debit card, check, electronic transfer or by wire transfer to an account designated by the Company. The minimum investment made by each Investor in the offering must equal not less than 150 Shares for an aggregate purchase price of $450. Payment for the Shares by the Investor shall be received by Prime Trust, LLC (the “Escrow Agent”) from the Investor prior to the applicable Closing in the amount of the Investor’s subscription using the instructions below. Upon such Closing, the Escrow Agent shall release such funds to the Company. The Investor shall receive notice and evidence of the digital entry of the number of the Shares owned by the Investor reflected in their investor account.

3.           Representations and Warranties of the Company. The Company represents and warrants to Investor that the following representations and warranties are true and complete in all material respects as of the date hereof, and will be true and complete in all material respects as of the date of each Closing (except in the latter case, for representations that speak as of a particular date which shall have been true and correct in all material respects as of that date):

(a)           Organization and Standing. The Company, and its subsidiary, are each a corporation duly formed, validly existing and in good standing under the laws of their respective jurisdictions of incorporation. The Company has all requisite power and authority to own and operate its properties and assets, to execute and deliver this Subscription Agreement, the Shares and any other agreements or instruments required hereunder. The Company is duly qualified and is authorized to do business and is in good standing as a foreign corporation in all jurisdictions in which the nature of its activities and of its properties (both owned and leased) makes such qualification necessary, except for those jurisdictions in which failure to do so would not have a material adverse effect on the Company or its business.

(b)           Issuance of the Shares. The issuance, sale and delivery of the Shares in accordance with this Subscription Agreement have been duly authorized by all necessary corporate action on the part of the Company. The Shares, when issued, sold and delivered against payment therefor in accordance with the provisions of this Subscription Agreement, will be duly and validly issued, fully paid and non-assessable.

(c)           Authority for Agreement. The acceptance by the Company of this Subscription Agreement and the consummation of the transactions contemplated hereby and thereby, are within the Company’s powers and have been duly authorized by all necessary corporate action on the part of the Company. Upon the Company’s acceptance of this Subscription Agreement, this Subscription Agreement shall constitute a valid and binding agreement of the Company, enforceable against the Company in accordance with its terms, except (i) as limited by applicable bankruptcy, insolvency, reorganization, moratorium, and other laws of general application affecting enforcement of creditors’ rights generally, (ii) as limited by laws relating to the availability of specific performance, injunctive relief, or other equitable remedies and (iii) with respect to provisions relating to indemnification and contribution, as limited by considerations of public policy and by federal or state securities laws.

(d)           No Filings. Assuming the accuracy of the Investor’s representations and warranties set forth in Section 4 hereof, no order, license, consent, authorization or approval of, or exemption by, or action by or in respect of, or notice to, or filing or registration with, any governmental body, agency or official is required by or with respect to the Company in connection with the acceptance, delivery and performance by the Company of this Subscription Agreement except (i) for such filings as may be required under Regulation A or under any applicable state securities laws, (ii) for such other filings and approvals as have been made or obtained, or (iii) where the failure to obtain any such order, license, consent, authorization, approval or exemption or give any such notice or make any filing or registration would not have a material adverse effect on the ability of the Company to perform its obligations hereunder.

(e)           Capitalization. As of the date hereof, the outstanding shares of Common Stock, options, warrants and other securities of the Company are as set forth in “Security Ownership of Management and Certain Security Holders” in the Offering Circular; and, except as set forth in the Offering Circular, there are no outstanding options, warrants, rights (including conversion or preemptive rights and rights of first refusal), or agreements of any kind (oral or written) for the purchase or acquisition from the Company of any of its securities.

(f)           Financial Statements. Complete copies of the Company’s audited financial statements consisting of the statement of financial position of the Company as of December 31, 2016 and the related consolidated statements of income and cash flows for the two-year period then ended (the “Financial Statements”) have been made available to the Subscriber and appear in the Offering Circular. The Financial Statements are based on the books and records of the Company and fairly present, in all material respects, the financial condition of the Company as of the respective dates they were prepared and the results of the operations and cash flows of the Company for the periods indicated. Brightman Almagor Zohar & Co., Certified Public Accountants, a member firm of Deloitte Touche Tohmatsu, which has audited the Financial Statements, is an independent auditor firm within the rules and regulations adopted by the SEC.

(g)           Proceeds. The Company shall use the proceeds from the issuance and sale of the Shares sold in the offering substantially as set forth in “Use of Proceeds” in the Offering Circular.

4.           Representations and Warranties of the Investor. By subscribing to the Offering, Investor (and, if Investor is purchasing the Shares subscribed for hereby in a fiduciary capacity, the person or persons for whom Investor is so purchasing) represents and warrants as of the date hereof and as of the closing date on which the Investor purchases Shares:

(a)           Requisite Power and Authority. The Investor has all necessary power and authority under all applicable provisions of law to subscribe to the Offering, to execute and deliver this Subscription Agreement and any other agreements required hereunder, and to carry out the provisions of the Subscription Agreement. All action on the Investor’s part required for the lawful subscription to the offering have been or will be effectively taken prior to the Closing. Upon subscribing to the Offering, this Subscription Agreement and other agreements hereunder will be valid and binding obligations of the Investor, enforceable in accordance with their terms, except (i) as limited by applicable bankruptcy, insolvency, reorganization, moratorium or other laws of general application affecting enforcement of creditors’ rights and (ii) as limited by general principles of equity that restrict the availability of equitable remedies.

(b)           Company Information. The Investor acknowledges that except as set forth herein, no representations or warranties have been made to the Investor, or to the Investor’s advisors or representative, by the Company or others with respect to the business or prospects of the Company or its financial condition.

(c)           Investment Experience. The Investor has sufficient experience in financial and business matters to be capable of utilizing such information to evaluate the merits and risks of the Investor’s investment in the Shares, and to make an informed decision relating thereto; or the Investor has utilized the services of a purchaser representative and together they have sufficient experience in financial and business matters that they are capable of utilizing such information to evaluate the merits and risks of the Investor’s investment in the Shares, and to make an informed decision relating thereto.

(d)           Investor Determination of Suitability. The Investor has evaluated the risks of an investment in the Shares, including those described in the section of the Offering Circular captioned “Risk Factors”, and has determined that the investment is suitable for the Investor. The Investor has adequate financial resources for an investment of this character, and at this time the Investor could bear a complete loss of the Investor’s investment in the Company.

(e)           No Registration.   The Investor understands that the Shares are not being registered under the Securities Act of 1933, as amended (the "Securities Act"), on the ground that the issuance thereof is exempt under Regulation A of Section 3(b) of the Securities Act, and that reliance on such exemption is predicated in part on the truth and accuracy of the Investor's representations and warranties, and those of the other purchasers of the Shares in the offering. The Investor further understands that the Shares are not being registered under the securities laws of any states on the basis that the issuance thereof is exempt as an offer and sale not involving a registerable public offering in such state, since the Shares are "covered securities" under the National Securities Market Improvement Act of 1996. The Investor covenants not to sell, transfer or otherwise dispose of any Shares unless such Shares have been registered under the Securities Act and under applicable state securities laws, or exemptions from such registration requirements are available.

(f)           Illiquidity and Continued Economic Risk. The Investor acknowledges and agrees that there is no ready public market for the Shares and that there is no guarantee that a market for their resale will ever exist. The Company has no obligation to list any of the Shares on any market or take any steps (including registration under the Securities Act or the Securities Exchange Act of 1934, as amended) with respect to facilitating trading or resale of the Shares. The Investor must bear the economic risk of this investment indefinitely and the Investor acknowledges that the Investor is able to bear the economic risk of losing the Investor’s entire investment in the Shares.

(g)           Accredited Investor Status or Investment Limits. The Investor represents that either:

(i)          The Investor is an “accredited investor” within the meaning of Rule 501 of Regulation D under the Securities Act, and the information set forth on the signature page regarding accredited investor status is true and correct; or

(ii)          The purchase price, together with any other amounts previously used to purchase Shares in this offering, does not exceed 10% of the greater of the Investor’s annual income or net worth (or in the case where the Investor is a non-natural person, their revenue or net assets for such Investor's most recently completed fiscal year end).

The Investor represents that to the extent it has any questions with respect to its status as an accredited investor, or the application of the investment limits, it has sought professional advice.

(h)            Valuation. The Investor acknowledges that the price of the Shares to be sold in this offering was set by the Company on the basis of the Company’s internal valuation and no warranties are made as to value. The Investor further acknowledges that future offerings of securities of the Company may be made at lower valuations, with the result that the Investor’s investment will bear a lower valuation.

(i)           Domicile. The Investor maintains the Investor’s domicile (and is not a transient or temporary resident) at the address provided with the Investors subscription.

(j)            Foreign Investors. If the Investor is not a United States person (as defined by Section 7701(a)(30) of the Internal Revenue Code of 1986, as amended), the Investor hereby represents that it has satisfied itself as to the full observance of the laws of its jurisdiction in connection with any invitation to subscribe for the Shares or any use of this Subscription Agreement, including (i) the legal requirements within its jurisdiction for the purchase of the Shares, (ii) any foreign exchange restrictions applicable to such purchase, (iii) any governmental or other consents that may need to be obtained, and (iv) the income tax and other tax consequences, if any, that may be relevant to the purchase, holding, redemption, sale, or transfer of the Shares. The Investor’s subscription and payment for and continued beneficial ownership of the Shares will not violate any applicable securities or other laws of the Investor’s jurisdiction.

(k)       Broker-Dealer Relationship. Each Investor understands and acknowledges that JumpStart Securities, LLC is not participating as an underwriter and has not solicited any investment in the Company, recommended the Company’s securities or provided investment advice to Investor, nor made any securities recommendations to any Investors. The Investor further understands and acknowledges that JumpStart Securities, LLC has not distributed any securities offering prospectuses or made any oral representations concerning the securities offering prospectus or the securities offering to any Investor.

(l)       Escrow Agent Relationship. Each Investor understands and acknowledges that the Escrow Agent has not investigated the desirability or advisability of the investment in the Common Stock nor approved, endorsed, or passed upon the merits of purchasing the Common Stock.

5.           Indemnity. The representations, warranties and covenants made by the Investor herein shall survive the closing of this Subscription Agreement. The Investor agrees to indemnify and hold harmless the Company and its respective officers, directors and affiliates, and each other person, if any, who controls the Company within the meaning of Section 15 of the Securities Act against any and all loss, liability, claim, damage and expense whatsoever (including, but not limited to, any and all reasonable attorneys’ fees, including attorneys’ fees on appeal) and expenses reasonably incurred in investigating, preparing or defending against any false representation or warranty or breach of failure by the Investor to comply with any covenant or agreement made by the Investor herein or in any other document furnished by the Investor to any of the foregoing in connection with this transaction.

6.           [RESERVED]

7.           Conditions to Transfer. The terms of this Subscription Agreement shall be binding upon the Investor and its transferees, heirs, successors and assigns (collectively, “Transferees”); provided that for any such transfer to be deemed effective, the Transferee shall have executed and delivered to the Company in advance an instrument in form acceptable to the Company in its sole discretion, pursuant to which the proposed Transferee shall be acknowledge, agree, and be bound by the representations and warranties of the Investor in substantially the form set forth herein in Section 4, and the Company consents to the transfer in its sole discretion. The Company shall not record any transfer of Shares on its books unless and until such Transferee shall have complied with the terms of this Section 7.

8.           Conditions to Obligations of the Investor and the Company. The obligations of the Investor to purchase and pay for the Shares and of the Company to sell the Shares are subject to the satisfaction at or prior to the applicable Closing Date of the following conditions precedent: the representations and warranties of the Company contained in Section 3 hereof and of the Investor contained in Section 4 hereof shall be true and correct as of the Closing in all respects with the same effect as though such representations and warranties had been made as of the Closing.

9.           Governing Law; Jurisdiction. This Subscription Agreement shall be governed and construed in accordance with the laws of the State of New York.