DUKE Robotics Corp. — Filing Summary
Filing identity: The supplied 10-K identifies the registrant as UAS Drone Corp., not DUKE Robotics Corp. The filing covers the fiscal year ended December 31, 2018; it is an annual report, not a standalone fourth-quarter report. Verify that this is the intended filing.
Business context and reporting period
UAS Drone Corp. described itself as a developer and manufacturer of commercial drones targeting law enforcement and first responders. It reported no drone sales in 2018, had no full-time employees, and stated that its manufacturing and distribution agreements with Havis were on hold and could be terminated. The company checked the “shell company” box.
Key financial metrics
| Metric | FY 2018 | FY 2017 |
|---|---|---|
| Revenue | $0 | $5,000 |
| Gross profit (loss) | ($5,111) | $259 |
| Operating expenses | $100,560 | $109,853 |
| Net loss | ($142,324) | ($149,056) |
| Net loss per share | ($0.12) | ($0.13) |
| Cash used in operations | ($60,442) | ($82,657) |
| Cash at year-end | $61 | $343 |
At December 31, 2018, total assets were $26,311 and total current liabilities were $773,776, producing a working-capital deficit of $747,465 and stockholders’ deficit of $747,465. Liabilities included $450,015 in convertible notes, $146,357 owed to a stockholder, and $25,407 in notes payable. The filing reports no income-tax expense. No meaningful operating margin is established; 2018 gross loss reflected a $5,111 inventory write-off.
Changes, outlook, and risks
- Revenue fell from $5,000 to zero. Net loss narrowed by $6,732, while operating expenses declined by $9,293; cash used in operations also decreased year over year.
- The auditor issued an unqualified opinion on the financial statements but highlighted substantial doubt about the company’s ability to continue as a going concern. Management said it planned to seek debt or equity financing, with no assurance funding would be available. Cash on hand was not sufficient to support the next 12 months.
- Management cited limited operations, recurring losses, negative operating cash flow, dependence on outside financing, obsolete-product and technology risk, intense competition, staffing constraints, and reliance on Havis. The filing provides no revenue or profitability guidance.
- Internal controls over financial reporting and disclosure controls were reported ineffective, with material weaknesses related to limited personnel and segregation of duties, lack of full-time executive oversight, and no independent audit committee.
- No pending legal proceedings were reported. Subsequent to year-end, a stockholder advanced $6,704 in January and February 2019 for operating purposes.
Important facts to verify
- Confirm the registrant identity: the filing is for UAS Drone Corp., despite the request naming DUKE Robotics Corp.
- Confirm financing runway and the status, terms, and repayment expectations for convertible notes and related-party advances.
- Reconcile the directors’ and officers’ insurance financing: the filing cites $31,610 in some sections and $30,610 in a note.
- Verify whether Havis agreements remain in force and whether the company has any actionable product, manufacturing, or sales plan.
- Assess remediation of the disclosed material weaknesses and the company’s ability to continue as a going concern.