# EDGAR Filing Document

**Accession Number:** 0001787518
**File Stem:** 0001213900-26-059606
**Filing Date:** 2026-5
**Character Count:** 195076
**Document Hash:** 59f7951be059504c9ab67c1e0cb22336
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001213900-26-059606.hdr.sgml**: 20260520

**ACCESSION NUMBER**: 0001213900-26-059606

**CONFORMED SUBMISSION TYPE**: 10-Q

**PUBLIC DOCUMENT COUNT**: 74

**CONFORMED PERIOD OF REPORT**: 20260331

**FILED AS OF DATE**: 20260520

**DATE AS OF CHANGE**: 20260520

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** T3 Defense Inc.
- **CENTRAL INDEX KEY:** 0001787518
- **STANDARD INDUSTRIAL CLASSIFICATION:** SERVICES-MANAGEMENT CONSULTING SERVICES [8742]
- **ORGANIZATION NAME:** 07 Trade & Services
- **EIN:** 383912845
- **STATE OF INCORPORATION:** DE
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** 10-Q
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 001-39341
- **FILM NUMBER:** 261004917

**BUSINESS ADDRESS:**
- **STREET 1:** 575 FIFTH AVENUE, 14TH FLOOR
- **CITY:** NEW YORK
- **STATE:** NY
- **ZIP:** 10017
- **BUSINESS PHONE:** 212-791-4663

**MAIL ADDRESS:**
- **STREET 1:** 575 FIFTH AVENUE, 14TH FLOOR
- **CITY:** NEW YORK
- **STATE:** NY
- **ZIP:** 10017

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** Nukkleus Inc.
- **DATE OF NAME CHANGE:** 20240102

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** Brilliant Acquisition Corp
- **DATE OF NAME CHANGE:** 20190909

?xml version='1.0' encoding='ASCII'?

**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**Washington, D.C. 20549**

**FORM 10-Q**

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended **<u>March 31, 2026</u>**

or

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from __________________________ to __________________________

Commission file number **<u>001-39341</u>**

**<u>T3 Defense Inc.</u>**

(Exact name of registrant as specified in its charter)

---

| | |
|:---|:---|
| **<u>Delaware</u>** | **38-3912845** |
| (State or other jurisdiction | (I.R.S. Employer |
| of incorporation or organization) | Identification No.) |

---

---

| | |
|:---|:---|
| **575 Fifth Avenue, 14<sup>th</sup> Floor**<br> **New York, New York** | **10017** |
| (Address of Principal Executive Offices) | (Zip Code) |

---

**<u>(212) 791-4663</u>**

(Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

---

| | | |
|:---|:---|:---|
| **Title of each class** | **Trading symbol(s)** | **Name of each exchange on which registered** |
| Common Stock, $0.0001 par value per share | DFNS | The Nasdaq Stock Market LLC |
| Warrants, each warrant exercisable for one share of common stock for $92.00 per share | DFNSW | The Nasdaq Stock Market LLC |

---

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a small reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company" or an "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☐ Accelerated filer ☐ <br> Non-accelerated filer ☒ Smaller reporting company ☒ <br> Emerging Growth company ☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act: ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of May 20, 2026, there were 60,270,525 shares of the registrant's common stock outstanding.

**T3 DEFENSE INC. AND SUBSIDIARIES**

**FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2026**

---

| | | |
|:---|:---|:---|
| | | **Page** |
| **PART I. FINANCIAL INFORMATION** | **PART I. FINANCIAL INFORMATION** |  |
| ITEM 1. | FINANCIAL STATEMENTS (UNAUDITED) |  |
|  | [Unaudited Condensed Consolidated Balance Sheet as of March 31, 2026](#f_001) | F-2 |
|  | [Unaudited Condensed Consolidated Statements of Operations and Comprehensive Loss for the Three Months Ended March 31, 2026 and March 31, 2025](#f_002) | F-4 |
|  | [Unaudited Condensed Consolidated Statements of Changes in Stockholders' (Deficit) Equity for the Three Months Ended March 31, 2026 and March 31, 2025](#f_003) | F-6 |
|  | [Unaudited Condensed Consolidated Statements of Cash Flow for the Three Months Ended March 31, 2026 and March 31, 2025](#f_004) | F-8 |
|  | [Notes to Unaudited Condensed Consolidated Financial Statements](#f_005) | F-11 |
| ITEM 2. | [MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS](#a_002) | 1 |
| ITEM 3. | [QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK](#a_003) | 6 |
| ITEM 4. | [CONTROLS AND PROCEDURES](#a_004) | 6 |
| ITEM 5. | [OTHER](#a_005) | 6 |
| [**PART II. OTHER INFORMATION**](#a_006) | [**PART II. OTHER INFORMATION**](#a_006) | 7 |
| ITEM 1. | [LEGAL PROCEEDINGS](#a_007) | 7 |
| ITEM 1A. | [RISK FACTORS](#a_008) | 7 |
| ITEM 2. | [UNREGISTERED SALES OF EQUITY SECURITES AND USE OF PROCEEDS](#a_009) | 7 |
| ITEM 3. | [DEFAULTS UPON SENIOR SECURITIES](#a_010) | 7 |
| ITEM 4. | [MINE SAFETY DISCLOSURES](#a_011) | 7 |
| ITEM 5. | [OTHER INFORMATION](#a_012) | 8 |
| ITEM 6. | [EXHIBITS](#a_013) | 9 |
| [**SIGNATURES**](#a_014) | [**SIGNATURES**](#a_014) | 10 |

---

i

**T3 DEFENSE INC.**

CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (UNAUDITED)

AS OF MARCH 31, 2026

**TABLE OF CONTENTS**

---

| | |
|:---|:---|
|  | **Page** |
| **CONDENSED CONSOLIDATED FINANCIAL STATEMENTS:** |  |
| &nbsp;&nbsp;&nbsp;[Unaudited Condensed Consolidated Interim Balance sheets as of March 31, 2026, and December 31, 2025](#f_001) | F-2 |
| &nbsp;&nbsp;&nbsp;[Unaudited Condensed Consolidated Interim Statements of Comprehensive (income) loss for three months ended March 31, 2026 and 2025](#f_002a) | F-5 |
| &nbsp;&nbsp;&nbsp;[Unaudited Condensed Consolidated Interim Statements of Stockholders' Equity (Deficit) for the period of three months ended March 31, 2026 and 2025](#f_003) | F-6 |
| &nbsp;&nbsp;&nbsp;[Unaudited Condensed Consolidated Interim Statements of Cash Flows for the three months ended March 31, 2026 and 2025](#f_004) | F-8 |
| &nbsp;&nbsp;&nbsp;[Notes to Unaudited Condensed Consolidated Interim Financial Statements](#f_005) | F-11 – F-34 |

---

_______________________

_______________________________

_______________________

**T3 DEFENSE INC.**

UNAUDITED CONDENSED CONSOLIDATED INTERIM BALANCE SHEETS

(USD in thousands except share and per share data)

---

| | | |
|:---|:---|:---|
|  | **March 31,**<br>**2026** | **December 31,**<br>**2025** |
| **Assets** |  |  |
| **Current Assets** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Cash and cash equivalents | 6431 | 2627 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Current assets of consolidated variable interest entities |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Cash and cash equivalents | 931 | 1270 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other current assets | 159 | 102 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Short term deposits and restricted cash | 334 | 50 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Marketable Securities | 120 | 250 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Inventories | 3501 | - |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Note receivable - related party | - | 4500 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Due from related parties | - | 1641 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts receivable, less allowance for credit losses of $27 as of March 31, 2026 | 3639 | 506 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other current assets | 1877 | 224 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Loan granted | 2455 | 2385 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Current assets held for sale | 3364 | - |
| **Total Current assets** | **22811** | **13555** |
| **Non-Current Assets** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Operating right of use assets | 4386 | 823 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Non-Current assets of consolidated variable interest entities |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Cash and securities held in trust account | 174568 | 172779 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other non-current assets | 14 | 36 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Property and equipment, net | 559 | 101 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Goodwill | 100150 | 7688 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other intangible asset | 12543 | 7388 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Intangible asset | 10 | 16 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Deferred taxes | 360 | - |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Funds in respect of employee rights upon termination | 85 | - |
| **Total Non-Current assets** | **292675**  | **188831** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total Assets** | **315486**  | **202386** |

---

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

**T3 DEFENSE INC.**

UNAUDITED CONDENSED CONSOLIDATED INTERIM BALANCE SHEETS

(USD in thousands except share and per share data)

---

| | | |
|:---|:---|:---|
|  | **March 31,**<br>**2026** | **December 31,**<br>**2025** |
| **Liabilities and Stockholders' Equity (Deficit)** |  |  |
| **Current Liabilities** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Short term loan | 4165 | 12 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts payable | 2485 | 124 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Operating lease liability, current portion | 1531 | 504 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Promissory note – related party | 5691 | - |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Due to related parties | 1001 | 255 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other current liabilities | 7729 | 3117 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other current liabilities of consolidated variable interest entities | 206 | 104 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Loans payable - former related parties, current | 1250 | 842 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Stock purchase warrant liabilities | 56194 | 24521 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Deferred considerations | 9025 | 14067 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Derivative liability | 110 | - |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Current liabilities held for sale | 2238 | - |
| **Total current liabilities** | **91625** | **43546** |
| **Non-Current liabilities** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Non-current operating lease liabilities | 2883 | 143 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Long term loan | 3084 | - |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Loan payable - former related parties, net of current portion | - | 850 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Liability in respect of employee rights upon termination | 120 | - |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Deferred tax liability | 683 | 647 |
| **Total Non-Current liabilities** | **6770** | **1640** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total Liabilities** | **98395** | **45186** |
| **Noncontrolling interests Subject to Possible Redemption** | **174568** | **172779** |
| **Stockholders' Equity (Deficit)** |  |  |
| &nbsp;&nbsp;&nbsp;**Preferred stock ($0.0001 par value; 15,000,000 shares authorized; 400 and 0 shares issued and outstanding at March 31, 2026 and December 31, 2025, respectively)** | \* | - |
| &nbsp;&nbsp;&nbsp;Common stock ($0.0001 par value; 150,000,000 shares authorized; 38,215,119 and 19,025,767 shares issued and outstanding at March 31, 2026 and December 31, 2025, respectively) | 4 | 2 |
| &nbsp;&nbsp;&nbsp;Additional paid-in capital | 185859 | 102737 |
| &nbsp;&nbsp;&nbsp;Accumulated other comprehensive loss | (24) | - |
| &nbsp;&nbsp;&nbsp;Accumulated deficit | (149674) | (122527) |
| &nbsp;&nbsp;&nbsp;**Total Company's stockholders' equity (deficit)** | 36165 | (19788) |
| &nbsp;&nbsp;&nbsp;**Non-controlling interest** | 6358 | 4209 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total stockholders' equity (deficit)** | 42523 | (15579) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total liabilities and stockholders' equity (deficit)** | **315486**  | **202386** |

---

---

| | |
|:---|:---|
| (\*) | Less than $1 thousand. |

---

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

**T3 DEFENSE INC.**

UNAUDITED CONDENSED CONSOLIDATED INTERIM STATEMENTS OF OPERATIONS

(USD in thousands except share and per share data)

---

| | | |
|:---|:---|:---|
|  | **Three months ended** | **Three months ended** |
|  | **March 31** | **March 31** |
|  | **2026** | **2025** |
| **Revenues** | 3653 | - |
| **Cost of revenues** | (3282) | - |
| **Gross profit** | 371 | - |
| **Operating expenses** |  |  |
| &nbsp;&nbsp;&nbsp;Research and development expenses | (274) | - |
| &nbsp;&nbsp;&nbsp;Selling and marketing expenses | (157) | - |
| &nbsp;&nbsp;&nbsp;General and administrative expenses | (3528) | (1507) |
| &nbsp;&nbsp;&nbsp;General and administrative expenses of consolidated variable interest entities | (223) | - |
| **Total operating expenses** | (4182) | (1507) |
| **Loss from operations** | (3811) | (1507) |
| **Other income (expenses)** |  |  |
| &nbsp;&nbsp;&nbsp;Interest expense | (2591) | (197) |
| &nbsp;&nbsp;&nbsp;Interest income of consolidated variable interest entities | 1790 | - |
| &nbsp;&nbsp;&nbsp;Interest on related parties promissory note | (354) | - |
| &nbsp;&nbsp;&nbsp;Change in fair value - convertible note | 5392 | 567 |
| &nbsp;&nbsp;&nbsp;Change in fair value - stock purchase warrant liabilities | (26635) | 104278 |
| **Total other income (expense), net** | (22398) | 104648 |
| **Net income (loss) before income taxes** | (26209) | 103141 |
| &nbsp;&nbsp;&nbsp;Income taxes | (38) | - |
| **Net income (loss) from continuing operations** | **(26247)** | **103141** |
| &nbsp;&nbsp;&nbsp;Net loss from discontinued operations | (104) | (183) |
| **Net income (loss)** | **(26351)** | **102958** |
| Net income (loss) attributable to non-controlling interests | 796 | - |
| Net income **(loss)** attributable to the Company's stockholders | (27147) | 102958 |
| **Net income (loss)** | **(26351)** | **102958** |
| Earnings (loss) per share from continuing operations (basic) | (1.01) | 20.80 |
| Earnings (loss) per share from discontinued operations (basic) | - | (0.04) |
| **Total loss per share (basic)** | (1.01) | 20.76 |
| **Weighted average number of shares of Common Stock outstanding - basic** | 28158248 | 4959516 |
| Earnings (loss) per share from continuing operations (diluted) | (1.14) | 18.19 |
| Earnings (loss) per share from discontinued operations (diluted) | - | (0.04) |
| **Total loss per share (diluted)** | (1.14) | 18.15 |
| **Weighted average number of shares of Common Stock outstanding – diluted** | 30874436 | 5671702 |

---

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

**T3 DEFENSE INC.**

UNAUDITED CONDENSED CONSOLIDATED INTERIM STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(USD in thousands except share and per share data)

---

| | | |
|:---|:---|:---|
|  | **Three months ended** | **Three months ended** |
|  | **March 31** | **March 31** |
|  | **2026** | **2025** |
| **Comprehensive income (loss):** |  |  |
| **Net income (loss)** | **(26351)** | **102958** |
| Unrealized foreign currency translation (loss) gain | **243** | (59) |
| **Comprehensive income (loss)** | **(26108)** | **102899** |
| Comprehensive income (loss) attributable to non-controlling interests | 924 | - |
| Comprehensive income (loss) attributable to the Company's stockholders | (27032) | 102899 |
| **Comprehensive income (loss)** | **(26108)** | **102899** |

---

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

**T3 DEFENSE INC.**

UNAUDITED CONDENSED CONSOLIDATED INTERIM STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)

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

---

| | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Preferred Stock** | **Preferred Stock** | **Common Stock** | **Common Stock** | | | | | |
|  | **Number of <br> Shares** | **Amount** | **Number of<br> Shares** | **Amount** | **Additional**<br>**paid-in<br> capital** |<br>**Accumulated<br> deficit** | **Accumulated<br> Other<br> Comprehensive**<br>**Income <br> (Loss)** | **Non-**<br>**controlling<br> interest** | **Total<br> stockholders'**<br>**equity<br> (deficit)** |
| **BALANCE AT DECEMBER 31, 2025** | **-**  | **-**  | **19025767** | **2** | **102737** | **(122527)** | **-**  | **4209** | **(15579)** |
| Issuance of common stock from exercise of warrants | **-** | **-**  | 3483848 | \* | 4960 | **-**  | **-**  | **-**  | **4960** |
| Stock based compensation | **-** | **-**  | 475000 | \* | 1907 | **-**  | **-**  | **-**  | **1907** |
| Issuance of common stock in relation to private placement | **-** | **-**  | 2439000 | \* | \* | **-**  | **-**  | **-**  | **\*** |
| Issuance of common stock for purchase of subsidiaries | **-** | **-**  | 6620340 | 1 | 24902 | **-**  | **-**  | **-**  | **24903** |
| Conversion of note into equity |  |  | 1625000 | \* | 3153 |  |  |  | **3153** |
| Equity classified warrants issued at part of purchase of subsidiaries | **-** | **-**  |  | - | 45646 | **-**  | **-**  | **-**  | **45646** |
| Issuance of preferred stock in relation to private placement | **200** | **\*** |  | - | - | **-**  | **-**  | **-**  | **-**  |
| Shares issue as penalty | **-** | **-**  | 73170 | \* | \* | **-**  | **-**  | **-**  | **\*** |
| Shares issued to settle commitment under ELOC agreement | **-** | **-**  | 304878 | \* |  | **-**  | **-**  | **-**  | **\*** |
| Issuance of shares from ELOC exercises | **-** | **-**  | 3968116 | 1 | 3529 | **-**  | **-**  | **-**  | **3530** |
| Issuance of shares for settlement of debt on related party | **-** | **-**  | 200000 | \* | 300 | - | - | **-**  | **300** |
| Subsidiary consolidation for the first time | **-** | **-**  |  | -- | - | - | (139) | 1739 | **1600** |
| Accretion of Noncontrolling interests Subject to Possible Redemption | **-** | **-**  |  | - | (1275) | - | - | (514) | **(1789)** |
| Foreign currency translation adjustments | **-** | **-**  |  | - | - | - | 115 | 128 | 243 |
| Comprehensive loss for the periord | **-** | **-**  | - | - | - | **(27147)** | **-**  | **796** | **(26351)** |
| **BALANCE AT MARCH 31, 2026** | **200** | **-**  | **38215119** | **4** | **185859** | **(149674)** | **(24)** | **6358** | **42523**  |

---

---

| | |
|:---|:---|
| (\*) | Less than $1 thousand. |

---

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

**T3 DEFENSE INC.**

UNAUDITED CONDENSED CONSOLIDATED INTERIM STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)

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

---

| | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Preferred Stock** | **Preferred Stock** | **Common Stock** | **Common Stock** | | | | | |
|  | **Number of<br> Shares** | **Amount** | **Number of <br> Shares** | **Amount** | **Additional**<br>**paid-in<br> capital** |<br>**Accumulated<br> deficit** | **Accumulated Other Comprehensive**<br>**Income<br> (Loss)** |<br>**Non-controlling<br> interest** | **Total<br> stockholders'**<br>**equity<br> (deficit)** |
| **BALANCE AT DECEMBER 31, 2024** |  |  | **4930531** | **&nbsp;&nbsp;&nbsp;&nbsp;**\*** | **37760** | **(201076)** | **(34)** |  | **(163350)** |
| Issuance of common stock from exercise of pre-funded warrants |  |  | 83332 | \* | 3056 | **-** | **-** |  | **3056** |
| Stock based compensation |  |  |  |  | 178 | **-** | **-** |  | **178** |
| Foreign currency translation adjustments |  |  |  |  |  |  | **(59)** |  | **(59)** |
| Net loss for the period |  |  | - | - | - | **102958** | **-** |  | **102958** |
| **BALANCE AT MARCH 31, 2025** |  |  | **5013863** | **\*** | **40994** | **(98118)** | **(93)** |  | **(57217)** |

---

---

| | |
|:---|:---|
| (\*) | Less than $1 thousand. |

---

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

**T3 DEFENSE INC.**

UNAUDITED CONDENSED CONSOLIDATED INTERIM STATEMENTS OF CASH FLOWS

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

---

| | | |
|:---|:---|:---|
|  | **Three months ended** | **Three months ended** |
|  | **March 31,** | **March 31,** |
|  | **2026** | **2025** |
| **CASH FLOWS FROM OPERATING ACTIVITIES:** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net income (loss) for the period from continuing | (26351) | 102958 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net loss from discontinued operations | (104) | (183) |
| &nbsp;&nbsp;&nbsp;**Net income (loss) for the year from continuing operations** | **(26247)** | **103141** |
| &nbsp;&nbsp;&nbsp;**Adjustments required to reconcile net loss for the year to net cash used in operating activities:** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Amortization of debt discount | 166 | 135 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Depreciation | 22 | \* |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Stock-based compensation | 1907 | 178 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Interest earned on marketable securities held in trust account | (1789) | -  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Employee termination benefits | (3) | -  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Change in deferred taxes | (42) | -  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Interest on loans | 183 | - |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Gain on marketable securities | 91 | - |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Day one loss on stock purchase warrants issued in connection with private placement | 15429 | - |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Change in fair value - stock purchase warrant liabilities | 6188 | (104846) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Change in fair value of liability-classified stock purchase warrants | (124) | - |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Changes in lease assets and lease liabilities | 88 | - |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Changes in operating assets and liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Trade receivables | (400) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other current assets | 139 | 35 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Inventory | 285 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts payable | (1453) | (51) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Due to affiliates | - | 2 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Interest payable - related parties | - | 34 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accrued expenses and other current liabilities | 995 | (250) |
| **Net cash used in operating activities – continuing operations** | (4565) | (1622) |
| **Net cash used in operating activities – discontinuing operations** | (362) | 280 |
| **Net cash used in operating activities** | (4927) | (1342) |

---

**T3 DEFENSE INC.**

UNAUDITED CONDENSED CONSOLIDATED INTERIM STATEMENTS OF CASH FLOWS

(USD in thousands except share and per share data)

---

| | | |
|:---|:---|:---|
|  | **Three months ended** | **Three months ended** |
|  | **March 31,** | **March 31,** |
|  | **2026** | **2025** |
| **CASH FLOWS FROM INVESTING ACTIVITIES:** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Cash used in purchase of subsidiaries | (5042) | - |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Investment in short term securities | 239 | - |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Due to affiliates | (4) | - |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Cash provided by purchase of subsidiary | 1138 | - |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Payment on property and equipment | (154) | (10) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Advance to target of planned acquisition | - | (800) |
| &nbsp;&nbsp;&nbsp;**Net cash used in investing activities** | (3823) | (810) |
| **CASH FLOWS FROM FINANCING ACTIVITIES:** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Repayment of short term bank credit | (575) | - |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Proceeds from issuance of loans payable - related parties | 411 | - |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Dividend payment | (297) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Proceeds from issuance of private placement | 10000 | - |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Repayments on loans payable - related parties | (593) | - |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Proceeds from issuance of ELOC shares | 3530 | - |
| &nbsp;&nbsp;&nbsp;**Net cash provided by financing activities** | 12476 | - |
| &nbsp;&nbsp;&nbsp;**Effect of exchange rate changes on cash and cash equivalents– continuing operations** | - | (3) |
| &nbsp;&nbsp;&nbsp;**Effect of exchange rate changes on cash and cash equivalents– discontinuing operations** | - | 35 |
| **INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH** | 3726 | (2120) |
| **CASH, CASH EQUIVALENTS AND RESTRICTED CASH AT BEGINNING OF PERIOD, INCLUDING DISCONTINUED OPERATIONS** | 3947 | 7858 |
| **CASH, CASH EQUIVALENTS, RESTRICTED CASH CASH FROM HELD FOR SALE COMPANY AT END OF PERIOD, INCLUDING DISCONTINUED OPERATIONS** | 7673 | 5738 |
| **LESS CASH FROM DISCONTINUED OPERATIONS** | - | 1275 |
| **CASH, CASH EQUIVALENTS, RESTRICTED CASH CASH FROM DISCONTINUED OPERATIONS AT END OF PERIOD FROM CONTINUING OPERATIONS** | 7673 | 4463 |

---

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

**T3 DEFENSE INC.**

UNAUDITED CONDENSED CONSOLIDATED INTERIM STATEMENTS OF CASH FLOWS

(USD in thousands except share and per share data)

---

| | | |
|:---|:---|:---|
| **Supplemental disclosure of cash flow information:** | | |
| **Non cash transactions:** | | |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Purchase of subsidiaries against issuance of common stock and warrants | 70549 | - |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Issuance of common stock to settle loans payable – related parties | 300 | &nbsp;&nbsp;&nbsp;&nbsp; - |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Fair value of pre-funded warrants exercised | - | 3056 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Initial recognition of operating lease liability and a corresponding right-of- use asset | 38 | - |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Fair value of warrants exercised | 4960 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Fair value of common stock issued in connection with conversion of convertible note | 3153 | - |

---

---

| | |
|:---|:---|
| **Cash provided by purchase of subsidiaries consolidated for the first time:** |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Working capital (excluding cash and cash equivalents) | (16026) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Long terms assets | 7723 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Intangible assets | 5182 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Goodwill | 92460 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Intangible assets held for sale | 905 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Long terms liabilities | (19233) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other comprehensive income | 139 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Non-controlling interest | (1739) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Issuance of common stock and warrants | (70549) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash provided by from the purchase of subsidiary consolidated for the first time | (1138) |

---

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

**T3 DEFENSE INC.**

NOTES TO UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

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

**NOTE 1 – GENERAL**

&nbsp;&nbsp;&nbsp;&nbsp;A. T3 Defense Inc. (formerly known as Nukkleus Inc.) (the "Company" or "T3") was formed on May 24, 2019 under the name Brilliant Acquisition Corporation. On June 23, 2023, Brilliant Acquisition Corporation, a British Virgin Islands company, entered into an Amended and Restated Agreement and Plan of Merger (as amended by the First Amendment to the Amended and Restated Agreement and Plan of Merger on November 1, 2023, (the "Merger Agreement"), by and among Brilliant BRIL Merger Sub, Inc., a Delaware corporation and wholly-owned subsidiary of Brilliant ("Merger Sub"), and Nukkleus Inc., a Delaware corporation ("Old Nukk"). Old Nukk (f/k/a Compliance & Risk Management Solutions Inc.) was formed on July 29, 2013 in the State of Delaware. The Merger Agreement provided that, at the closing, among other things (the "Closing") of the transactions contemplated by the Merger Agreement, Merger Sub merged with and into Old Nukk (the "Merger"), with Old Nukk surviving as a wholly-owned subsidiary of Brilliant.

The Business Combination was completed on December 22, 2023. On the Closing Date, and in connection with the closing of the Business Combination, Brilliant changed its name to Nukkleus Inc. and the Company's common stock began trading on the NASDAQ under the ticker symbol NUKK.

Effective February 9, 2026, the Company changed its name to "T3 Defense Inc." As a result of the name change, the new ticker symbol for the Company's common stock is "DFNS" and trading continued under the new ticker symbol on The Nasdaq Global Market.

While Brilliant was the legal acquirer, Old Nukk was the accounting acquirer; therefore, the historical financial statements of Old Nukk became those of the Company. Accordingly, the consolidated financial statements reflect: (i) Old Nukk's historical results prior to the Business Combination; (ii) the combined results thereafter; (iii) Old Nukk's assets and liabilities at their historical cost; and (iv) the Company's equity structure for all periods presented.

Due to non-payment by TCM under the GSA, the Company notified TCM of termination of the agreement. On September 30, 2024, the Company entered into a Release Agreement with TCM and FXDirectDealer LLC confirming that the GSA (and a related services agreement with FXDirectDealer LLC) had been terminated effective January 1, 2024, and that no obligations or liabilities remained outstanding between the parties as of the agreement date. The parties mutually released one another from all claims arising under the agreements.

**T3 DEFENSE INC.**

NOTES TO UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

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

**NOTE 1 – GENERAL (continued)**

The Company historically operated its blockchain payment solutions through Digital RFQ Limited ("DRFQ"), an indirect wholly owned subsidiary of the Company. In January 2024, the Company ceased its general support service operations, terminating the existing customer and supplier contracts with a related party, and shifted its focus to the payment services operations. On December 27, 2024, the Company entered into a Share Purchase Agreement to sell DRFQ for nominal consideration of £1,000, subject to shareholder approval. As of August 2025, the Company determined that it no longer had a controlling financial interest in Digital RFQ. Accordingly, the Company deconsolidated DRFQ during the third quarter of fiscal year 2025.

On December 30, 2025, the Company consummated the acquisition of all of the issued and outstanding shares of Tiltan Software Engineering Ltd. ("Tiltan") pursuant to a Stock Purchase Agreement, as amended, among the Company, its wholly owned subsidiary Nukk Picolo Ltd. ("Nukk Picolo"), Tiltan and Arie Shafir (the "Tiltan Seller").

&nbsp;&nbsp;&nbsp;&nbsp;**B.** **SC II Acquisition Corp.** 

On October 16, 2025, a registration statement was filed with the Securities and Exchange Commission (the "SEC") regarding a proposed initial public offering ("IPO") of units of SC II Acquisition Corp. ("SC II" or the "SPAC"), a newly formed special purpose acquisition company and indirect subsidiary of the Company. The SPAC's sponsor, SC Capital II Sponsor LLC (the "Sponsor"), a Delaware limited liability company, is controlled and majority owned by Nukkleus Defense Technologies Inc., a wholly-owned subsidiary of the Company.

On November 28, 2025, SC II consummated its initial public offering ("IPO") of 17,250,000 units (the "Units"), including the full exercise by the underwriters of their over-allotment option to purchase an additional 2,250,000 Units. The Units were sold at a public offering price of $10.00 per Unit, generating gross proceeds of approximately $172.5 million. Each Unit consists of one Class A ordinary share, par value $0.0001 per share, and one right to receive one-fifth (1/5) of one Class A ordinary share upon the consummation of SC II's initial business combination (each, a "Share Right").

Simultaneously with the closing of the IPO, the Sponsor purchased 255,000 private placement units (the "Sponsor Units") at $10.00 per unit, pursuant to a Sponsor Private Placement Units Purchase Agreement dated November 25, 2025. The issuance of the Sponsor Units was made pursuant to the exemption from registration under Section 4(a)(2) of the Securities Act of 1933, as amended (the "Securities Act").

The proceeds of the IPO were placed in a trust account to be used for the purpose of completing a business combination in accordance with SC II's amended and restated memorandum and articles of association.

As of March 31, 2026, the Class A ordinary shares subject to possible redemption reflected in the balance sheet are reconciled in the following table:

---

| | |
|:---|:---|
| **Class A ordinary shares subject to redemption as of December 31, 2025** | **172,779** |
| Plus: |  |
| Remeasurement of carrying value to redemption value | 1,789 |
| **Class A ordinary shares subject to redemption as of March 31, 2026** | **174,568** |

---

On March 31, 2026, the SPAC entered into a non-binding letter of intent (the "LOI") with a payments technology company (the "Target"), which outlines the general terms and conditions of a potential business combination (the "Proposed Transaction") pursuant to which the SPAC would acquire 100% of the outstanding equity and equity equivalents of the Target.

The LOI is a preliminary, non-binding expression of mutual interest and does not constitute a binding commitment, obligation or agreement of the SPAC or the Target to consummate the Proposed Transaction or any other transaction. Except for certain limited binding provisions, including, among other things, exclusivity, confidentiality, the waiver of claims against the SPAC's trust account, and governing law, neither the SPAC nor the Target has any legal obligation to the other party with respect to the Proposed Transaction by virtue of the LOI.

**T3 DEFENSE INC.**

NOTES TO UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

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

**NOTE 1 – GENERAL (continued)**

&nbsp;&nbsp;&nbsp;&nbsp;**C**. **Star 26 Capital Inc. Acquisition** 

On January 12, 2026, the Company consummated the acquisition of 100% of the issued and outstanding equity of Star 26 Capital Inc. ("Star") pursuant to the terms of the Amended and Restated Securities Purchase Agreement and Call Option, dated September 15, 2025 (the "Star Agreement"), with Star, the equity holders of Star, and Menachem Shalom, as the representative of said equity holders. Mr. Shalom, the Company's Chief Executive Officer and a director, is also a controlling shareholder and director of Star. Pursuant to the Star Agreement, T3 acquired a 100% interest in Star. See note 3.

&nbsp;&nbsp;&nbsp;&nbsp;**D.** **Nimbus Drones Technologies and Marketing Ltd Acquisition** 

On January 15, 2026, the Company consummated its acquisition (the "Nimbus Acquisition") of 100% of Nimbus Drones Technologies and Marketing Ltd., an Israeli private company ("Nimbus") specializing in unmanned aerial systems and services. See Note 4.

&nbsp;&nbsp;&nbsp;&nbsp;**E.** **I.T.S. Industrial Techno-Logic Solutions Ltd. Acquisition** 

On February 16, 2026, the Company consummated its acquisition (the "ITS Acquisition") of 51% of I.T.S. Industrial Techno-Logic Solutions Ltd., an Israeli private company ("ITS"). ITS is engaged in the design, development, and serial production of fully integrated electro-mechanical systems and sophisticated assembly lines.

ITS's operations are conducted by ITS and its wholly-owned subsidiary, Positech Ltd., which specializes in the design and manufacture of high-performance motion control systems for both defense and commercial applications. See Note 5.

&nbsp;&nbsp;&nbsp;&nbsp;**F.** **Israel –war** 

In October 2023, a large-scale terrorist attack in southern Israel led to the outbreak of armed conflict between Israel and Hamas. The conflict subsequently expanded to additional regional fronts and contributed to a period of heightened geopolitical and security instability in the region.

During 2024 and 2025, hostilities included military operations in Lebanon and direct confrontations involving Iran. These developments increased regional uncertainty and, at times, resulted in temporary disruptions to the Company's operations in Israel, including limited interruptions to routine business activities.

In September 2025, a ceasefire agreement was reached between Israel and Hamas, and all remaining living Israeli hostages were released and returned to Israel. While the ceasefire has generally held as of the date of these financial statements, the security situation remains sensitive, and the potential for renewed hostilities or broader regional escalation cannot be ruled out. More recently, on February 28, 2026, hostilities between Israel and Iran escalated again. Israel, together with the United States, conducted a major joint military campaign of air and missile strikes against targets in Iran, which triggered a broad Iranian response and contributed to significant regional instability. The situation remains highly fluid, and management is unable to predict when, or on what terms, this escalation will be resolved. Accordingly, the extent of the continued impact on the Company's operations and financial results, if any, cannot be reasonably estimated at this time.

Given that the majority of the Company's operations are conducted in Israel, and that all members of the Company's board of directors and management, as well as most employees, consultants, and service providers, are located in Israel, the Company is directly affected by the economic, political, geopolitical, and military conditions impacting the region. As of March 31, 2026, while ceasefire arrangements with Hamas, Lebanon and Iran were generally in effect and large-scale military operations had subsided, the overall security environment in Israel and the surrounding region remained unstable and unpredictable. Any further escalation or expansion of the conflict could negatively affect both regional and global conditions, and may adversely impact the Company's business, financial condition, and results of operations.

In April 2026, a ceasefire agreement was reached; however, the ceasefire remains fragile and the overall security situation in Israel and the region continues to be uncertain.

**T3 DEFENSE INC.**

NOTES TO UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

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

**NOTE 1 – GENERAL (continued)**

&nbsp;&nbsp;&nbsp;&nbsp;**G.** **Going concern** 

These consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (GAAP) assuming the Company will continue as a going concern.

At March 31, 2026, the Company had negative working capital of approximately $69 million (of which $56 million consists of stock purchase warrant liabilities that do not require cash settlement) and stockholders' equity of $42.5 million; For the three month ended March 31, 2026, the Company reported a net operating loss of $3.8 million and net cash used in operations of $4.9 million. Absent any other action, the Company will require additional liquidity to continue its operations for the next 12 months.

After evaluating these conditions, management concluded that its plans, when considered in aggregate, alleviate substantial doubt about the Company's ability to continue as a going concern. Those plans include: (i) the Company's existing unrestricted cash balance of approximately $7.4 million, sufficient to fund projected operating expenses through the look-forward period; (ii) an active Equity Line of Credit ("ELOC") with Esousa Holdings, LLC — legally binding, SEC-registered, and shareholder-approved — providing drawdown capacity, which exceeds the Company's projected annual operating cash needs; (iii) the Company's majority-owned subsidiaries, including Rimon Ltd. and Nimbus Drones , which are cash-positive and require no capital support from the Company; (iv) management's ongoing efforts to assist subsidiaries in securing or expanding bank credit facilities; and (v) the option to satisfy certain obligations through issuance of equity in lieu of cash.

In addition, management believes that the completion of the sale by Water IO Ltd., a majority-owned indirect subsidiary of the Company, of Zorro Net Ltd. to BiomX Inc., pursuant to which Water IO received 1,300,000 shares of BiomX common stock and a $1.25 million promissory note due within three months (see note 12 below), may provide additional liquidity and financial flexibility to the Company and its subsidiaries. The sale occurred on April 10, 2026.

Management has determined that its plans are probable of being effectively implemented and probable of mitigating the conditions described above, enabling continuation of the Company's operations for the foreseeable future.

**NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PRESENTATION**

**Basis of presentation**

The condensed interim consolidated financial statements included in this Quarterly Report are unaudited. These financial statements have been prepared in accordance with accounting principles generally accepted in the United States ("U.S. GAAP") and applicable rules and regulations of the Securities and Exchange Commission ("SEC") regarding interim financial reporting and reflect, in the opinion of management, all adjustments of a normal and recurring nature that are necessary for a fair statement of the Company's financial position as of March 31, 2026, and its results of operations changes in stockholders' equity, and cash flows for the three months ended March 31, 2026 and 2025. The results of operations for the three months ended March 31, 2026 are not necessarily indicative of the results to be expected for the year ending December 31, 2026 or for any other future annual or interim period. These financial statements should be read in conjunction with the audited financial statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2025 as filed with the SEC on March 31, 2026. The Company's significant accounting policies are disclosed in the audited financial statements for the year ended December 31, 2025 included in such Form 10-K except as mentioned below.

**Use of Estimates**

The preparation of unaudited condensed consolidated interim financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, certain revenues and expenses, and disclosure of contingent assets and liabilities as of the date of the financial statements. Actual results could differ from those estimates. As applicable to these financial statements, the most significant estimates and assumptions relate to calculation of fair value of the financial instruments.

**T3 DEFENSE INC.**

NOTES TO UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

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

**NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PRESENTATION (continued)**

**Revenue recognition:**

Significant management judgments and estimates must be made and used in connection with the recognition of revenue in any accounting period. Material differences in the amount of revenue in any given period may result if these judgments or estimates prove to be incorrect or if management's estimates change on the basis of development of business or market conditions.

The Company follows the provisions of Accounting Standards Codification ("ASC") Topic 606, Revenue from Contracts with Customers ("ASC 606"). The guidance provides a unified model to determine how revenue is recognized.

Revenues are recognized when control of the promised goods or services are transferred to the customers in an amount that reflects the consideration that the Company expects to receive in exchange for those goods or services.

The Company determines revenue recognition through the following steps: (1) identification of the contract with a customer; (2) identification of the performance obligations in the contract; (3) determination of the transaction price; (4) allocation of the transaction price to the performance obligations in the contract; and (5) recognition of revenue when, or as, the Company satisfies a performance obligation.

The Company has two main types of revenues –

Revenues from selling goods imported by the Company – like generators, masts and lightning

Revenues from integration projects where the Company designs, engineers, sources raw materials, assembles and completes tactical vehicles and trailers.

The Company provides services to customers and has related performance obligations and recognizes revenue in accordance with ASC 606. Revenues are recognized when the Company satisfies performance obligations under the terms of its contracts, and control of its services or products is transferred to its customers in an amount that reflects the consideration the Company expects to receive from its customers in exchange for those products. Control is transferred upon delivery of its services or products.

A typical contract with a customer specifies that the Company would receive an advance payment once the contract is signed, an additional payment would be made to the Company once the ordered product is manufactured and ready to be shipped to the customer and the remainder of the contract's consideration would be made once the system is installed in the customer's factory and its accepted by the customer.

According to ASC-606-10-50, and given the mentioned-above, once signed, the Company's contracts are considered Contract Liability – as the Company has received the amount prior to delivering the goods to the customer. Those amounts would not be considered as revenues. Once the goods are shipped to the customer – the contract becomes Contract Asset – as the Company transferred the goods to the client prior to receiving the full consideration for it. At the time the receipt of the consideration is conditional upon a successful installation of the product by the Company at the customer's location and the full acceptance of the product by the customer. Only after such installation and acceptance the consideration owed to the Company is categorized as receivable. In all cases the time interval between the delivery of the product and its installation and acceptance by the customer happens within days.

**T3 DEFENSE INC.**

NOTES TO UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

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

**NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PRESENTATION (continued)**

This process involves identifying the customer contract, determining the performance obligations in the contract, determining the transaction price, allocating the transaction price to the distinct performance obligations in the contract, and recognizing revenue when the performance obligations have been satisfied. A performance obligation is considered distinct from other obligations in a contract when it (a) provides a benefit to the customer either on its own or together with other resources that are readily available to the customer and (b) is separately identified in the contract. The Company considers a performance obligation satisfied once it has transferred control of a good or product to a customer, meaning the customer has the ability to direct the use and obtain the benefit of the product.

**Assets held for sale**

The Company accounts for assets held for sale in accordance with ASC 360 at the lower of carrying value or fair value less costs to sell. Fair value is the amount obtainable from the sale of the asset in an arm's length transaction. The reclassification occurs when the assets are available for immediate sale and the sale is highly probable. These conditions are usually met from the date on which a letter of intent or agreement to sell is ready for signing. Assets and liabilities of a component classified as held for sale are presented separately in the consolidated balance sheets as "Assets held for sale" and "Liabilities held for sale". If such component also qualifies as a discontinued operation under ASC 205-20, its results of operations are presented separately from continuing operations in the consolidated statements of operations.

**Cost of Goods Sold:**

The Cost of Goods Revenues represents the costs incurred in the production of goods sold by the Company. These costs include, but are not limited to:

**-** Raw Materials– Costs related to the procurement of raw materials and other direct inputs used in the production process.

**-** Direct Labor – Wages and related expenses for employees directly involved in the manufacturing or production process.

**-** Manufacturing Overhead – Indirect production costs, including factory utilities, depreciation of production equipment, and maintenance expenses.

**-** Other Direct Costs – Any additional costs directly attributable to the production of goods, including packaging and quality control.

**Research and Development Costs**

Research and development ("R&D") costs are accounted for in accordance with ASC 730, Research and Development. R&D costs are expensed as incurred and include, among other things, payroll and related costs for employees engaged in research and development activities, external consulting services, materials, prototype development, testing activities, and other directly attributable costs.

Software development costs incurred prior to the establishment of technological feasibility of a software, as well as costs incurred after general release of software products (including routine maintenance, bug fixes, and minor enhancements), are expensed as incurred.

**T3 DEFENSE INC.**

NOTES TO UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

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

**NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PRESENTATION (continued)**

Technological feasibility is generally determined based on the completion and approval of detail program design documentation together with the successful validation of an internal working model demonstrating that the software product can be produced to meet its design specifications. Accordingly, technological feasibility is generally achieved prior to a working model ready for customer testing.

In accordance with ASC 985-20-25-1 through 25-6, all software development costs incurred prior to the establishment of technological feasibility are expensed as research and development costs.

**Severance pay:**

All the Company's employees, besides one, have been signed on Section 14 of Israel's Severance Compensation Law, 1963 ("Section 14"). Pursuant to Section 14, the Company's employees, covered by this section, are entitled only to monthly deposits, at a rate of 8.33% of their monthly salary, made on their behalf by the Company. Payments in accordance with Section 14 release the Company from any future severance liabilities in respect of those employees. Neither severance pay liability nor severance pay fund under Section 14 are recorded in the Company's balance sheets.

As to the employee that has not signed the Section 14 clause, the Company contributes the on-going contributions on monthly basis

**T3 DEFENSE INC.**

NOTES TO UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

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

**NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PRESENTATION (continued)**

**Fair value**

Fair value of certain of the Company's financial instruments including cash, accounts payable, accrued expenses, and other accrued liabilities approximate cost because of their short maturities. The Company measures and reports fair value in accordance with Accounting Standards Codification ("ASC") 820, "Fair Value Measurements" which defines fair value, establishes a framework for measuring fair value in accordance with generally accepted accounting principles and expands disclosures about fair value measurements.

Fair value, as defined by ASC 820, is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value of an asset should reflect its highest and best use by market participants, principal (or most advantageous) markets, and an in-use or an in-exchange valuation premise.

Valuation techniques are generally classified into three categories: (i) the market approach; (ii) the income approach; and (iii) the cost approach. The selection and application of one or more of the techniques may require significant judgment and are primarily dependent upon the characteristics of the asset or liability, and the quality and availability of inputs. Valuation techniques used to measure fair value under ASC 820 must maximize the use of observable inputs and minimize the use of unobservable inputs. ASC 820 also provides fair value hierarchy for inputs and resulting measurement as follows:

Level 1: Quoted prices (unadjusted) in active markets that are accessible at the measurement date for identical assets or liabilities.

Level 2: Quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; inputs other than quoted prices that are observable for the asset or liability; and inputs that are derived principally from or corroborated by observable market data for substantially the full term of the assets or liabilities; and

Level 3: Unobservable inputs for the asset or liability that are supported by little or no market activity, and that are significant to the fair values.

Fair value measurements are required to be disclosed by the level within the fair value hierarchy in which the fair value measurements in their entirety fall. Fair value measurements using significant unobservable inputs (in level 3 measurements) are subject to expanded disclosure requirements including a reconciliation of the beginning and ending balances, separately presenting changes during the period attributable to the following: (i) total gains or losses for the period (realized and unrealized), (ii) segregating those gains or losses included in earnings, and (iii) a description of where those gains or losses included in earning are reported in the statement of operations.

**T3 DEFENSE INC.**

NOTES TO UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

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

**NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PRESENTATION (continued)**

The Company's financial assets that are measured at fair value on a recurring basis by level within the fair value hierarchy are as follows:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **As of March 31, 2026** | **As of March 31, 2026** | **As of March 31, 2026** | **As of March 31, 2026** |
|  | **Level 1** | **Level 2** | **Level 3** | **Total** |
|  | **US$** | **US$** | **US$** | **US$** |
| **Assets:** | | | | |
| Marketable Securities | 120 |  |  | **120** |
| **Total assets** | **120** |  |  | **120** |

---

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **As of December 31, 2025** | **As of December 31, 2025** | **As of December 31, 2025** | **As of December 31, 2025** |
|  | **Level 1** | **Level 2** | **Level 3** | **Total** |
|  | **US$** | **US$** | **US$** | **US$** |
| **Assets:** | | | | |
| Marketable Securities | 250 |  |  | **250** |
| **Total assets** | **250** |  |  | **250** |

---

The Company's financial liabilities that are measured at fair value on a recurring basis by level within the fair value hierarchy are as follows:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **As of March 31, 2026** | **As of March 31, 2026** | **As of March 31, 2026** | **As of March 31, 2026** |
|  | **Level 1** | **Level 2** | **Level 3** | **Total** |
|  | **US$** | **US$** | **US$** | **US$** |
| **Liabilities:** | | | | |
| Derivative liability | - | - | 110 | 110 |
| September 2025 Private Placement Warrant |  |  | 12691 | **12691** |
| February 2026 Warrants |  |  | 43503 | **43503** |
| **Total liabilities** |  |  | **56304** | **56304** |

---

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **As of December 31, 2025** | **As of December 31, 2025** | **As of December 31, 2025** | **As of December 31, 2025** |
|  | **Level 1** | **Level 2** | **Level 3** | **Total** |
|  | **US$** | **US$** | **US$** | **US$** |
| **Liabilities:** | | | | |
| September 2025 Private Placement Warrant |  |  | 24521 | **24521** |
| **Total liabilities** |  |  | **24521** | **24521** |

---

**T3 DEFENSE INC.**

NOTES TO UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

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

**NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PRESENTATION (continued)**

The following table presents the changes in fair value of the level 3 liabilities for the period from December 31, 2025 through March 31, 2026.

Changes in fair value are recognized in the consolidated statement of operations within finance expenses. The fair value of the Level 3 liabilities was determined using valuation models. Significant unobservable inputs include expected volatility, expected term, risk-free interest rate and discount rates.

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Private Placement Warrant** | **February 2026 Warrants** | **Derivative liabilities** | **Total** |
| **Liabilities:** | | | | |
| Outstanding at December 31, 2025 | **24521** | **-**  |  | **24521** |
| Additions | - | 25429 | - | **25429** |
| Liabilities assumed in part of subsidiary consolidated for the first time | - | - | 8779 | **8779** |
| Exercised | (4960) | - | (3153) | **(8113)** |
| Changes in fair value | (6870) | 18074 | (5516) | **5688** |
| Outstanding at March 31, 2026 | **12691** | **43503** | **110** | **56304** |

---

**Goodwill:**

Goodwill represents the excess of the purchase price over the fair value of the identifiable net assets acquired in business combinations accounted for in accordance with the "purchase method" and is allocated to reporting units at acquisition. Goodwill is not amortized but rather tested for impairment at least annually in accordance with the provisions of ASC Topic 350, "Intangibles - Goodwill and Other". The Company performs its goodwill annual impairment test for the reporting units at December 31 of each year, or more often if indicators of impairment are present.

Intangible assets with finite lives are amortized using the straight-line basis over their useful lives, to reflect the pattern in which the economic benefits of the intangible assets are consumed or otherwise used up.

As of March 31, 2026 the Company did not identify any triggers requiring impairment test of its reporting units. Due to the equity of the Company being above the market capitalization of the Company as of March 31, 2026, a further sustained decline in the Company's share price and market capitalization may require further testing, which may result in an impairment.

**NOTE 3 – ACQUISITION OF STAR 26**

On December 15, 2024, the Company entered into a Securities Purchase Agreement and Call Option, as amended by Amendment No. 1 dated February 11, 2025, Amendment No. 2 dated May 13, 2025, and Amendment No. 3 dated June 15, 2025 with Star 26 Capital Inc. ("Star"), the shareholders of Star ("Star Equity Holders") and Menachem Shalom, the representative of the Star Equity Holders, to acquire a controlling 51% interest in Star, an Israeli corporation engaged as a supplier of generators for "iron dome" launchers and other defense products.

On September 15, 2025, the Company entered into an Amended and Restated Securities Purchase Agreement (the "Star Agreement") with Star, Star Equity Holders, and Menachem Shalom, pursuant to which the Company agreed to acquire 100% of the issued and outstanding equity of Star. Mr. Shalom, the Company's Chief Executive Officer and a director, is also a controlling shareholder and director of Star.

**T3 DEFENSE INC.**

NOTES TO UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

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

**NOTE 3 – ACQUISITION OF STAR 26 (continued)**

On January 12, 2026, T3 acquired 100% interest in Star pursuant to the terms of the Star Agreement. The consideration consisted of $21,000,000, to be paid by a 12-month $16,000,000 promissory note and the balance in $5,000,000 cash, less $4,000,000 representing all amounts lent to Star from T3 since December 15, 2024, the date the original Star Agreement was signed.

In addition, Star received:

● 4,770,340 shares of common stock of T3,

● a five-year warrant to purchase an aggregate of 12,017,648 shares of T3's common stock for an exercise price of $1.50 per share,

● A promissory note in the principal amount of $3,000,000 (the "Six-Month Note"), which note accrues interest at the rate of 8% per annum and matures July 12, 2026; and

● A promissory note in the principal amount of $3,000,000 (the "Three-Month Note"), which note matures April 12, 2026.

The shares, warrants, the Six-Month Note and the Three-Month Note were assigned by Star to the Star Equity Holders pro-ratably.

The transaction was approved by the Company's shareholders on December 16, 2025 and was completed on January 12, 2026, at which time Star became a wholly owned subsidiary of the Company.

On March 31, 2026, the Company agreed on the termination of its obligation to pay $16,000,000 to its wholly-owned subsidiary Star. Pursuant to the Cancellation Agreement (the "Cancellation Agreement"), while all terms and provisions of the Purchase Agreement remain in full force and effect, and the Company's ownership of Star, including all assets, operations, and subsidiaries, is unaffected, the Company eliminated $16,000,000 of indebtedness, effective immediately, at no cost, no dilution, and with no offsetting obligation to the Company or its shareholders.

The acquisition has been accounted for as a business combination under ASC 805, Business Combinations. The Company determined that Star constitutes a business as defined under ASC 805 as the acquired set includes inputs, processes, and the ability to generate outputs.

The Company, with the assistance of a third-party specialist, calculated the total consideration at $69,433. The fair value of the share issued was determined at $18,151 based on the share price of Company's common stock as the date of the closing. The Fair value of the promissory notes issued was determined at $5,636.

The fair value of the Common Warrant was calculated using the Black Scholes option pricing model. The assumptions used to perform the calculations are detailed below:

---

| | |
|:---|:---|
|  | **January 12, 2026** |
| Expected volatility (%) | 264% |
| Risk-free interest rate (%) | 3.66% |
| Expected dividend yield | 0.0% |
| Expected term (years) | 5 |
| Conversion price (U.S. dollars) | 1.5 |
| Underlying share price (U.S. dollars) | 3.81 |
| Fair value (U.S. dollars in thousands) | 45645 |

---

**T3 DEFENSE INC.**

NOTES TO UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

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

**NOTE 3 – ACQUISITION OF STAR 26 (continued)**

The table below summarizes the fair value of assets acquired and liabilities assumed following the adjustments mentioned above as of the acquisition date:

---

| | |
|:---|:---|
|  | **January 12,<br> 2026**<br>**U.S. Dollars<br> (in thousands)** |
| Working capital | (6683) |
| Long terms assets | 4805 |
| Intangible assets | 333 |
| Intangible assets of available for sale, net | 697 |
| Goodwill | 72255 |
| Other comprehensive income | 139 |
| Non-controlling interest | (734) |
| Long term liabilities | (1379) |
| Net assets acquired | 69433 |

---

As of March 31, 2026, the Company, with the assistance of a third-party valuation specialist, completed the initial allocation of the purchase price to the identifiable assets acquired and liabilities assumed based on their estimated fair values as of the acquisition date. The aggregate fair value of consideration transferred was approximately $69.4 million.

The allocation of the purchase price was as follows (in thousands):

---

| | |
|:---|:---|
|  | **January 12,<br> 2026**<br>**January 1,<br> 2026** |
| Net tangible assets acquired | (3702) |
| Customer relationships (2-year useful life) | 31 |
| Distributor relations (3-year useful life) | 16 |
| Order backlog (2-year useful life) | 190 |
| Intangible assets of available for sale | 905 |
| Deferred tax liabilities | (54) |
| Deferred tax liabilities of available for sale | (208) |
| Goodwill | 72255 |
|  | **69433** |

---

Customer relationships, distributor relations and order backlog were valued using the multi-period excess earnings method. Developed technology was valued using the relief-from-royalty method. The identified intangible assets are being amortized on a straight-line basis over their estimated useful lives.

Deferred tax liabilities were recognized primarily in respect of the fair value adjustments to identifiable intangible assets.

Goodwill represents the excess of the purchase price over the fair value of identifiable net assets acquired and is primarily attributable to expected synergies, future growth opportunities, assembled workforce and other intangible benefits that do not qualify for separate recognition. The goodwill recognized is not expected to be deductible for income tax purposes.

**T3 DEFENSE INC.**

NOTES TO UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

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

**NOTE 4 – ACQUISITION OF NIMBUS**

On January 15, 2026, the Company consummated its acquisition (the "Nimbus Acquisition") of 100% of Nimbus Drones Technologies and Marketing Ltd., an Israeli private company ("Nimbus") specializing in unmanned aerial systems and services, pursuant to the terms of that certain Stock Purchase Agreement, dated January 15, 2026 (the "Nimbus Purchase Agreement"), by and among the Company, Nimbus and Elad Defense LLC ("Elad"). In connection with the closing of the Nimbus Acquisition, the Company issued to Elad as consideration (i) 1,850,000 shares of Common Stock and (ii) a $3,250,000 convertible 24-month note (the "Nimbus Note") bearing 6% interest, which is convertible at the option of the holder at a fixed price of $2.00 per share. The Nimbus Note also prohibits the Company from issuing the holder shares that would result in the holder beneficially owning more than 4.99% of the outstanding shares of Common Stock. As of February 17, 2026, the Nimbus Note was converted into an aggregate of 1,625,000 shares of Common Stock.

The acquisition has been accounted for as a business combination under ASC 805, *Business Combinations*. The Company determined that Nimbus constitutes a business as defined under ASC 805 as the acquired set includes inputs, processes, and the ability to generate outputs.

The total consideration of the acquisition was calculated using a third-party appraiser at approximately $15,298 and is comprised of the following components:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. Share consideration consisting of 1,850,000 shares of the
Company's Common Stock, issued to Elad, with an estimated fair value of $6,753, based on Company's closing share price of $3.65
on the acquisition date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. The Nimbus Note, with an estimated fair value of approximately $8,545
thousand. The fair value of the Nimbus Note was estimated as of the acquisition date with the assistance of a third-party valuation specialist,
considering the terms of the Nimbus Note, including the fixed conversion price of $2.00 per share, the Company's closing share price
of $3.65 on the acquisition date.

The Company completed the initial allocation of the purchase price to the identifiable assets acquired and liabilities assumed based on their estimated fair values as of the acquisition date. The following table summarizes the allocation of the purchase price as of January 15, 2026:

---

| | |
|:---|:---|
|  | **January 15,<br> 2026**<br>**U.S. Dollars <br> (in thousands)** |
| Working capital | 21 |
| Long terms assets | 2 |
| Long term liabilities | (84) |
| Goodwill | 15359 |
| Total consideration transferred | **15298** |

---

No separately identifiable intangible assets were recognized, as the Company, with the assistance of the valuation specialist, did not identify any material order backlog, customer relationships, proprietary technology or non-compete arrangements that met the recognition criteria under ASC 805.

Goodwill represents the excess of the purchase price over the fair value of the identifiable net liabilities assumed and is primarily attributable to expected synergies, future growth opportunities, assembled workforce and other intangible benefits that do not qualify for separate recognition. The goodwill recognized is not expected to be deductible for income tax purposes.

The acquisition was completed on January 15, 2026.

**T3 DEFENSE INC.**

NOTES TO UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

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

**NOTE 5 – ACQUISITION OF ITS**

On June 8, 2025, Star Twenty Six Ltd. ("Star Twenty Six") entered into an agreement with ITS and its shareholder Mr. Gera Eron, pursuant to which Star Twenty Six will lend to ITS NIS 10,000,000 (approximately USD 3 miliion). In return Star Twenty Six would receive 51% of the share capital of ITS on a fully diluted basis. Pursuant to the terms of the agreement, Star Twenty Six was also granted an option to purchase the remainder 49% of ITS for three years from the controlling shareholder. Depending on whether the option is exercised in the first, second- or third-year hereafter, the agreed purchase price for the 49% is 25 million NIS, 30 million NIS or 35 million NIS, respectively.

On February 16, 2026, Star Twenty Six acquired 51% of the outstanding equity capital of ITS on a fully diluted basis and has a 3- year option to acquire the remainder 49% from the other shareholder of ITS.

The Company completed the initial allocation of the purchase price to the identifiable assets acquired and liabilities assumed based on their estimated fair values as of the acquisition date. The following table summarizes the allocation of the purchase price as of February 16, 2026:

---

| | |
|:---|:---|
|  | **February 16,<br> 2026**<br>**U.S. Dollars<br> (in thousands)** |
| Working capital | (2592) |
| Long terms assets | 2915 |
| Goodwill and Intangible assets | 9698 |
| Non-controlling interest | (1005) |
| Long term liabilities | (7972) |
| Net assets acquired | 1044 |

---

The Company equally allocated the excess of the purchase price over the fair value of identifiable net assets acquired between goodwill and intangible assets.

The acquisition was completed on February 16, 2026.

**NOTE 6 – STOCKHOLDERS' EQUITY**

**Transactions:**

&nbsp;&nbsp;&nbsp;&nbsp;A. On
February 26, 2026, the Company closed a private placement pursuant to the terms of a Securities Purchase Agreement with an accredited
investor (the "Securities Purchase Agreement") for a private placement (the "Private Placement") pursuant to
which the investor (the "Purchaser") agreed to purchase from the Company 400 units for an aggregate purchase price
of $20,000,000, or a per unit price of $50,000. Each unit consists of (i) one share (each a "Share" and collectively,
the "Shares") of Series B Convertible Preferred Stock, par value $0.0001 per share (the "Series B Preferred Stock"),
and (ii) Common Warrants to purchase shares of common stock, par value $0.0001 per share, representing 150% of the number of shares of
Common Stock initially issuable upon conversion of one share of Series B Preferred Stock, subject to adjustment as described herein (the
"Common Warrants" and the shares of Common Stock issuable upon exercise or exchange of the Common Warrants, the "Warrant
Shares"). The Private Placement is structured as a two stage investment. At the initial closing, which occurred on February 26,
2026, the Company sold 200 units for gross proceeds of $10 million. The Purchaser agreed to purchase an additional 200 units
for an additional investment of $10 million following (i) the effectiveness of the registration statement described below, (ii)
stockholder approval of the issuance of the transactions contemplated by the Securities Purchase Agreement as required pursuant to Nasdaq
rules, (iii) the stock price is at least $1.00 and (iv) subject to the condition that the value of the trading in the Company's
stock on Nasdaq for the 10 consecutive days preceding the second closing is at or above $900,000 (the "Second Closing
Market Trading Value"), provided that if the Second Closing Market Trading Value is less than $900,000, then there will be a proportionate
reduction in the number of units to be sold at the second closing.

**T3 DEFENSE INC.**

NOTES TO UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

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

**NOTE 6 – STOCKHOLDERS' EQUITY (continued)**

Pursuant to the Securities Purchase Agreement, the Company is required to seek stockholder approval (the "Stockholder Approval") related to the issuance of the units to be issued in the Private Placement. The Company is required to file a preliminary proxy statement for a special meeting of the Company's stockholders within 75 days of the initial closing of the Private Placement. The Company's directors and officers have agreed to execute voting agreements to vote in favor of the applicable proposals. If the Company does not obtain Stockholder Approval at the first such meeting, the Company is required to call a meeting every 4 months thereafter to seek Stockholder Approval until the earlier of the date on which Stockholder Approval is obtained or the securities are no longer outstanding.

The Company also granted the Purchaser a right of participation in subsequent financings of the Company for a period of time following closing, subject to certain exempt issuances, and has agreed not to issue securities for a period of time following the closing of the Private Placement, subject to certain exempt issuances, including issuances pursuant to strategic transactions.

Under the terms of the Securities Purchase Agreement, the Company agreed not to deliver any purchase notices under Company's equity line of credit with the Purchaser until after the later of the date on which (i) the registration statement is declared effective and (ii) the Company obtains Stockholder Approval and even after such date, certain market conditions must be satisfied.

Series B Preferred Stock

Pursuant to the Certificate of Designations of Rights, Preferences and Limitations which was filed with the Secretary of State of the State of Delaware prior to closing of the Private Placement, each share of Series B Preferred Stock has a stated value of $50,000 (the "Stated Value") and will initially be convertible into 23,474 shares of Common Stock (the "Conversion Shares") (or pre-funded warrants in lieu thereof (the "Pre-Funded Warrants")), calculated by dividing the Stated Value by the initial conversion price equal to $2.13 per Share (the "Initial Conversion Price"). The Initial Conversion Price is subject to adjustment upon stock splits, distributions, reorganizations, reclassifications, change of control and the like, and is also subject to price-based anti-dilution adjustments for subsequent offerings made by the Company while the Series B Preferred Stock remains outstanding (subject to certain exempt issuances). The Initial Conversion Price will also be adjusted upon receipt of Stockholder Approval (as hereinafter defined), if obtained, to the lower of (i) the then applicable conversion price and (ii) the price per share of the Common Stock on its trading market upon the earlier of (A) effectiveness of the registration statement required to be filed pursuant to the Registration Rights Agreement (as defined herein) or (B) upon applicability of Rule 144 as it relates to the sale of the Conversion Shares.

The Series B Preferred Stock is convertible at the option of the holder at any time and will be automatically converted into Common Stock or Pre-Funded Warrants in lieu thereof on the effective date of the registration statement, whether or not the Stockholder Approval has been obtained. If at any time after the one-year anniversary of the closing of the Private Placement, the Series B Preferred Stock is then outstanding and the Company has not received Stockholder Approval, the Series B Preferred Stock is redeemable at the option of the holder at a price per Share equal to 105% of the Stated Value. The conversion of the Series B Preferred Stock is subject to a 9.9% beneficial ownership limitation blocker. The Series B Preferred Stock is not entitled to receive dividends, other than on an as-converted basis if dividends are paid to holders of Common Stock.

The holders of Series B Preferred Stock are entitled to 10,000 votes per each share of Series B Preferred Stock. The holders of Series B Preferred Stock have voting rights with respect to certain corporate actions that affect the rights of the Series B Preferred Stockholders and also have certain consent rights in connection with certain proposed Fundamental Transactions (as defined in the Certificate of Designations). The Series B Preferred Stock is (i) senior to the Common Stock of the Company and any other equity securities that the Company may issue in the future, the terms of which specifically provide that such equity securities rank junior to the Series B Preferred Stock, (ii) equal with any class or series of capital stock established after the closing date of the Private Placement, the terms of which specifically provide that such equity securities rank on par with such Series B Preferred Stock, in each case with respect to payment of amounts upon liquidation, dissolution or winding up and (iii) junior to all of the Company's existing and future indebtedness.

**T3 DEFENSE INC.**

NOTES TO UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

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

**NOTE 6 – STOCKHOLDERS' EQUITY (continued)**

The Company has agreed not to issue any parity stock or senior securities without the written consent of a majority in interest of the Series B Preferred Stock. Upon a change of control, liquidation or winding up of the Company the holders of the Series B Preferred Stock are entitled to a liquidation preference of $50,000 per Share.

Common Warrants

The Common Warrants are exercisable on a cash or cashless basis at the earlier of (i) 180 days following their issuance and (ii) the date the stockholder approval is obtained, and expire 5 years from the date of issuance. Each Common Warrant will be initially exercisable for one share of Common Stock at an initial exercise price of $2.13 per share, subject to adjustment for stock splits, distributions and the like (the "Initial Exercise Price"). The Initial Exercise Price is also subject to price-based anti-dilution adjustments for subsequent offerings made by the Company while the Common Warrants remain outstanding (subject to certain exempt issuances). At any time after the closing of the Private Placement, the holder of the Common Warrants may exchange the Common Warrants on a cashless basis for a number of shares of Common Stock determined by multiplying the total number of Warrant Shares with respect to which the Common Warrant is then being exercised by the Black Scholes Value (as defined in the Common Warrant) divided by the lower of the two closing bid prices of the Common Stock in the two days prior the time of such exercise, but in any event not less than $0.01 (as may be adjusted for stock dividends, subdivisions, or combinations and the like). The exercise of the Common Warrants is subject to a 9.9% beneficial ownership limitation blocker.

In the event of a Fundamental Transaction (as defined in the Common Warrants), the holders of the Common Warrants will be entitled to receive upon exercise of the Common Warrants the kind and amount of securities, cash or other property that the holders would have received had they exercised the Common Warrants immediately prior to such Fundamental Transaction. Additionally, as more fully described in the Common Warrants, the holders of the Common Warrants will be entitled to receive consideration in an amount equal to the Black Scholes value of the Common Warrant in connection with a Fundamental Transaction.

If the Company fails to timely deliver the Warrant Shares issuable upon exercise of the Common Warrants, the Company will be subject to liquidated damages, payable in the Company's discretion in cash or shares on the Registration Date (as defined therein) or buy-in. If the Company elects to pay in shares, the number of shares due will be based on the LD Share Formula (as defined below).

Registration Rights Agreement

In connection with the Private Placement, on February 24, 2026, the Company and the Purchaser entered into a Registration Rights Agreement (the "Registration Rights Agreement"). Pursuant to the terms of the Registration Rights Agreement, the Company is required to register the resale of the Conversion Shares (and any shares underlying the Pre-Funded Warrants, if any) and the Warrant Shares. The Company is required to prepare and file an initial registration statement (the "Initial Registration Statement") with the Securities and Exchange Commission within 45 days of the date of the Securities Purchase Agreement (the "Filing Deadline") and to use commercially reasonable efforts to have the Initial Registration Statement declared effective within 75 days of the date of the Securities Purchase Agreement (the "Effectiveness Deadline"). In certain circumstances including, but not limited to, if the Company misses the Filing Deadline or the Effectiveness Deadline, then the Company will be required to pay to the Purchasers an amount in shares or cash, at the Company's discretion, as partial liquidated damages and not as a penalty, equal to the product of 1.5% multiplied by the aggregate purchase price paid by such Purchaser. Liquidated damages, if any, will accrue and be paid on the earlier of the effective date of a resale registration statement registering the sale of the shares that may be issued in lieu of cash or the date on which such shares can be sold pursuant to Rule 144 (the "Registration Date"). If the Company elects to pay liquidated damages in shares of Common Stock, the number of shares of Common Stock issuable to the Purchaser will be determined by dividing the aggregate amount of accrued liquidated damages by the closing price of the Company's Common Stock on the trading market of the Common Stock on the day immediately prior to the Registration Date (the "LD Share Formula").

**T3 DEFENSE INC.**

NOTES TO UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

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

**NOTE 6 – STOCKHOLDERS' EQUITY (continued)**

In connection with the Private Placement, the Company entered into a Placement Agency Agreement, dated February 24, 2026, with Dawson James Securities Inc. (the "Placement Agent"), pursuant to which the Placement Agent acted as the sole placement agent for the Private Placement. In consideration for the foregoing, the Company has agreed to pay customary placement fees to the Placement Agent, including a cash fee equal to 3.5% of the gross proceeds raised in the Private Placement and issue warrants equal to 7.5% of the securities placed in the Offering. Pursuant to the Placement Agency Agreement, the Company has also agreed to reimburse certain expenses of the Placement Agent incurred in connection with the Private Placement.

The Company analyzed the February 2026 Private Placement in accordance with ASC 480, Distinguishing Liabilities from Equity, and ASC 815, Derivatives and Hedging. The Company determined that the Common Warrant do not meet the criteria for equity classification. Accordingly, the Common Warrant were accounted for as a liability-classified instrument. The Common Warrants are initially recorded at fair value and are remeasured at fair value at each reporting date, with changes in fair value recognized in the consolidated statements of operations until settlement or expiration.

The Company, with the assistance of a third-party specialist allocated the total proceeds received in the initial closing of the February 2026 Private Placement between the Common Warrant liability and the Series B Preferred Stock. Because the initial fair value of the Common Warrant liability exceeded the gross proceeds received, the entire $10.0 million of gross proceeds was allocated to the Common Warrant liability, the Series B Preferred Stock was initially recorded at zero, and the excess of approximately $15,429 thousand was recognized as financing expense upon initial recognition

*Warrant Shares liability*

The fair value of the Common Warrant was calculated using the Monte Carlo Simulation Model. The assumptions used to perform the calculations are detailed below:

---

| | | |
|:---|:---|:---|
|  | **February 24, <br> 2026** | **March 31, <br> 2026** |
| Expected volatility (%) | 85.6% | 85.5% |
| Risk-free interest rate (%) | 3.61% | 3.91% |
| Expected dividend yield | 0.0% | 0.0% |
| Expected term (years) | 5 | 4.91 |
| Conversion price (U.S. dollars) | 2.130 | 2.130 |
| Underlying share price (U.S. dollars) | 2.130 | 0.717 |
| Fair value (U.S. dollars in thousands) | 25429 | 43503 |

---

Based on the above the entire February 2026 Private Placement proceeds were allocated to the Common Warrants liability.

For the three months ended March 31, 2026, the Company recognized a loss from the change in fair value of the Common Warrant liability of approximately $18,074 thousand, representing the increase in fair value from approximately $25,429 thousand at initial recognition to approximately $43,503 thousand as of March 31, 2026.

On January 2, 2026, the Company issued 2,439,000 shares of common stock in connection with the conversion of previously issued Series A convertible preferred stock.

In addition, on January 2, 2026, the Company issued 73,170 shares of common stock to satisfy the penalty incurred from late effectiveness of the registration statement for the securities from the September 2025 Private Placement. The fair value of the penalty shares was estimated at $300 and was included as other expenses in the financial statements for the year ended December 31, 2025.

**T3 DEFENSE INC.**

NOTES TO UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

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

**NOTE 6 – STOCKHOLDERS' EQUITY (continued)**

&nbsp;&nbsp;&nbsp;&nbsp;B. On September 19, 2025, the Company and Esousa Company Holdings,
LLC, a New York limited liability company (the "Investor"), entered into a common stock purchase agreement (the "ELOC
Purchase Agreement"), pursuant to which, subject to the terms and conditions set forth therein, the Company may sell to the Investor,
from time to time during the term of the ELOC Purchase Agreement, up to the lesser of (i) $250,000,000 of the Company's common
stock, par value $0.0001 per share (the "Common Shares"), and (ii) the Exchange Cap (as defined below) (subject to certain
exceptions provided in the ELOC Purchase Agreement) (the "Total Commitment"). Upon entering into the ELOC Purchase Agreement,
the Company agreed to issue to the Investor $1,250 worth of the Company's Common Stock (the "Commitment Shares"), determined
by the lower of (i) the VWAP on the effective date of the registration statement covering the Common Shares and the Commitment Shares
and (ii) the closing sale price on the effective date of such registration statement; provided, however, that if the Company elects to
terminate the ELOC Purchase Agreement, the Commitment Shares' calculation shall be based on the date of termination rather than
the effective date of the registration statement.

Additionally, on September 19, 2025, the Company and the Investor entered into a registration rights agreement (the "<u>ELOC RRA</u>"), pursuant to which the Company agreed to file a registration statement with the United States Securities and Exchange Commission ("<u>SEC</u>") covering the resale of Common Shares that are issued to the Investor under the ELOC Purchase Agreement, including the Commitment Shares.

On January 2, 2026, the Company issued 304,878 shares of common stock in connection with the Commitment Shares. The fair value of the Commitment shares was estimated at $1,250 and was included as other expense in the financial statements for the year ended December 31, 2025.

During the period from January 1, 2026 to February 4, 2026, the Company elected to sell to the Investor an aggregate of 868,116 shares of Common Stock for total proceeds of $2,208. In addition, during February 2026, the Company advanced the Investor 3,100,000 shares of Common Stock to be applied against future sales of the Company's Common Stock under the ELOC Purchase Agreement. During the period from February 9, 2026 to February 19, 2026, the Company elected to sell to the Investor an aggregate of 688,943 shares of Common Stock from the advance shares, for total proceeds of $1,322.

Advance shares are not treated as completed sales on the date they were transferred to the Investor. Rather, the related share issuances and proceeds were recognized upon each drawdown, when the applicable purchase price was determined in accordance with the VWAP pricing provisions of the ELOC Purchase Agreement

**T3 DEFENSE INC.**

NOTES TO UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

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

**NOTE 7 – WARRANTS**

The following table summarizes the shares of the Company's common stock issuable upon exercise of warrants outstanding as of March 31, 2026:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Warrants Outstanding** | **Warrants Outstanding** | **Warrants Outstanding** | **Warrants Outstanding** |
|  | **Range of<br> Exercise<br> Price** | **Number<br> Outstanding at<br> December 31,<br> 2025** | **Weighted<br> Average<br> Remaining<br> Contractual<br> Life (Years)** | **Weighted<br> Average<br> Exercise<br> Price** |
| Public and Private Warrants | 92.00 | 837625 | 0.28 | 7.27 |
| September 2025 Private Placement Warrant | 5.405 | 2716388 | 3.35 | 1.39 |
| February 2026 Warrants | 2.13 | 7042200 | 4.91 | 1.42 |
|  | **2.13-92.00** | **10596213** | **4.14** | **10.08** |

---

The following table summarizes the shares of the Company's common stock issuable upon exercise of warrants outstanding as of December 31, 2025:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Warrants Outstanding** | **Warrants Outstanding** | **Warrants Outstanding** | **Warrants Outstanding** |
|  | **Range of<br> Exercise<br> Price** | **Number<br> Outstanding at<br> December 31,<br> 2025** | **Weighted<br> Average<br> Remaining<br> Contractual<br> Life (Years)** | **Weighted<br> Average<br> Exercise<br> Price** |
| Public and Private Warrants | 92.00 | 837625 | 0.53 | 16.19 |
| April 2024 Warrants | 6.88 | 14535 | 0.01 | 0.02 |
| August 2025 Warrant | 4.4 | 250000 | 0.24 | 0.23 |
| September 2025 Private Placement Warrant | 5.405 | 3658537 | 3.60 | 4.15 |
|  | **4.4 – 92.00** | **4760697** | **2.87** | **20.59** |

---

Warrant activities for the three month ended March 31, 2026 were as follows:

---

| | | |
|:---|:---|:---|
|  | **Number<br> of warrants** | **Weighted<br> Average<br> Exercise<br> Price** |
|  | | **USD** |
| Outstanding at December 31, 2025 | 4760697 | 17.12 |
| Expired | (14535) | 6.88 |
| Granted | 7042200 | 2.13 |
| Exercised | (1192149) | 5.19 |
|  | **10596213** | **10.08** |

---

**T3 DEFENSE INC.**

NOTES TO UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

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

**NOTE 8 – STOCK BASED COMPENSATION** 

Stock options generally vest over one to three years, with a maximum term of ten years from the date of grant. These awards become available to the recipient upon the satisfaction a vesting condition based on a period of service. Total stock options activity for the year ended March 31, 2026 is summarized as follows:

---

| | | |
|:---|:---|:---|
|  | **Number<br> of Options** | **Weighted<br> Average<br> Exercise<br> Price** |
|  | | **USD** |
| Outstanding at December 31, 2025 | 4823 | 550.60 |
| Granted | - | - |
| Exercised | - | **-**  |
| Outstanding at March 31, 2026 | 4823 | 550.60 |
| Exercisable at March 31, 2026 | 4823 | 550.60 |
| Options expected to vest | - | - |

---

Stock-based compensation expense for three month ended March 31, 2026 and 2025, was $0 and $178, respectively. Stock-based compensation expense were recorded as professional fees on the accompanying consolidated statements of operations and comprehensive loss. There was no unrecognized Stock-based compensation at March 31, 2026.

**NOTE 9 – LITIGATION**

On March 3, 2026, the Company, obtained a copy of a summons and complaint filed in the Supreme Court of the State of New York dated February 24, 2026 by Kingswood Capital Partners, LLC against Star, Nukkleus, Inc. and the Company. The complaint alleges that a success fee is due for an earned investment banking success fee arising from a transaction. The Company denies all the allegations and intends to vigorously defend such action, which it believes is without merit.

**T3 DEFENSE INC.**

NOTES TO UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

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

**NOTE 10 – RELATED PARTIES**

&nbsp;&nbsp;&nbsp;&nbsp;**A.** **Balances with related parties and officers:** 

---

| | | |
|:---|:---|:---|
|  | **As of<br> March 31,**<br>**2026** | **As of<br> December 31,**<br>**2025** |
| Note receivable - related party | - | 4500 |
| Promissory note – related party | 5691 | - |
| Due from related parties | 1250 | 1657 |
| Other current liabilities | 1001 | 255 |

---

&nbsp;&nbsp;&nbsp;&nbsp;**B.** **Other information:** 

On February 17, 2026, the Board of Directors, based on the recommendations and approval of the Compensation Committee, approved the terms of the terms and provisions of a Consulting Agreement between the Company and Billio Ltd., a company in Israel, to provide the services of Menachem Shalom as the principal executive officer of the Company. The consulting agreement terminates and supersedes the (i) Consulting Agreement dated December 16, 2024 between the Company and Billio Ltd., pursuant to which the Company obtained consulting services from the Consultant through Menachem Shalom; (ii) Management Services Agreement dated June 28, 2024, as amended by Amendment No. 1 dated August 8, 2024, between Star 26 Capital, Inc. ("Star Capital") and Zero One Capital LLC, a Nevada limited liability company ("Zero One") in which Mr. Shalom is the chief executive officer and controlling member and shareholder of Zero One; and (iii) Offsetting Management Services Agreement dated August 12, 2024 between Zero One and B. Rimon Agencies Ltd., an Israeli company which is currently wholly-owned by Star Capital.

Given the performance of the Company within the last 15 months, the Compensation Committee and the Board of Directors determined that it was in the best interest of the Company to provide Mr. Shalom with the amended consulting agreement and increased compensation. The Committee and the Board also authorized a cash bonus to Mr. Shalom in the amount of $250,000 for his past services to the Company. The Company, under the supervision and guidance of Mr. Shalom, has completed several acquisitions within the last 15 months, including without limitation, Star 26, Tiltan Software Engineering, Nimbus Drones and ITS.

Pursuant to the terms of the Consulting Agreement, which is effective as of January 1, 2026, Mr. Shalom will continue to act as the chief executive officer of the Company while maintaining other executive roles in non-competing companies. For his services, Mr. Shalom will receive a base salary of $60,000 per month and target cash bonuses equal to 50% of base salary, subject to achievement of performance goals to be set by the Compensation Committee. He could also be entitled to additional milestone-based bonuses as determined by the Board. Mr. Shalom will receive 250,000 shares of common stock quarterly, subject to availability under approved incentive plans; if there is no plan or no availability, the quarterly amount of shares shall accrue until there is availability under an approved incentive plan. Such plan will also require shareholder approval pursuant to applicable Nasdaq rules. He will also be entitled to a relocation grant of $175,000 if Mr. Shalom relocates to the United States with his family. Mr. Shalom will also be entitled to all executive benefit plans including health and 401(k) plans and 30 business days per year vacation.

In the event Mr. Shalom is terminated for cause or is no longer employed by the Company for reason of death or disability, he shall only be entitled to his compensation at such time. If he is terminated by the Company without cause, he shall be entitled to 6 months of his base compensation, and if Mr. Shalom resigns, he shall be entitled to compensation for 12 months. If he is terminated for cause, Mr. Shalom shall not be entitled to any compensation.

The Consulting Agreement contains customary non-competition, non-solicitation and confidentiality provisions.

On February 23, 2026, the Company received a letter of resignation from Ms. Aviya Volodarsky pursuant to which Ms. Volodarsky resigned from her position as a member of the board of directors of the Company and from all the committees on which she served for personal reasons. The resignation was effective immediately.

**T3 DEFENSE INC.**

NOTES TO UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

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

**NOTE 11 – SEGMENT REPORTING**

As of March 31, 2026, the Company has several subsidiaries, each representing an operating segment: (i) Rimon, (ii) ITS, (iii) Tiltan, (iv) Nimbus and (v) Water. As of March 31, 2026, Nimbus and Water were not considered material and therefore were reported at other reportable segments.

The Company's chief operating decision maker is its chief executive officer.

The chief operating decision maker assesses performance and decides how to allocate resources based on net income (loss) that is also reported on the income statement as net income (loss).

The measurement of segment assets is reported on the balance sheet as total consolidated assets.

The chief operating decision maker uses gross profit (loss) to evaluate income generated from the segment assets (return on assets) in deciding whether to reinvest profits into the segment or into other parts of the entity.

The following table presents information about the Company's reportable segments for the three months ended March 31, 2026 and 2025:

---

| | | |
|:---|:---|:---|
|  | **Three months ended** | **Three months ended** |
|  | **March 31** | **March 31** |
|  | **2026** | **2025** |
| Revenue from Rimon | 1601 | - |
| Salaries and related compensation | (215) |  |
| Depreciation | (6) |  |
| Other cost related to Rimon (mainly materials) | (1056) | - |
| **Gross income** | 325 | - |
| Revenue from ITS | 1403 | - |
| Salaries and related compensation | (722) |  |
| Depreciation | (134) |  |
| Other cost related to ITS (mainly materials) | (759) | - |
| **Gross loss** | (212) | - |
| Revenue from TILTAN | 592 | - |
| Salaries and related compensation | (164) |  |
| Depreciation and amortization | (152) |  |
| Cost related to TILTAN (mainly lease expenses) | (33) | - |
| **Gross income** | 243 | - |
| Revenue from other reportable segments | 57 | - |
| Cost related to other reportable segments | (42) | - |
| **Gross income** | 15 | - |
| Research and development expenses | (274) | - |
| Selling and marketing expenses | (157) | - |
| Professional services | (995) | (1187) |
| Salaries and related compensation | (1263) | (33) |
| Other general and administrative expenses | (1270) | (287) |
| General and administrative expenses of consolidated variable interest entities | (223) | - |
| &nbsp;&nbsp;&nbsp;**Total Operating expenses** | (4182) | (1507) |
| **Loss from operations** | (3811) | (1507) |
| Interest expense | (2591) | (197) |
| Interest income of consolidated variable interest entities | 1790 | - |
| Interest on related parties promissory note | (354) | - |
| Change in fair value - convertible note | 5392 | 567 |
| Change in fair value - stock purchase warrant liabilities | (26635) | 104278 |
| **Net loss before tax** | (26209) | 103141 |
| Discontinued operation | (104) | (183) |
| Income taxes | (38) | - |
| **Net loss** | (26351) | 102958 |

---

**T3 DEFENSE INC.**

NOTES TO UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

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

**NOTE 12 – SUBSEQUENT EVENTS**

*Nasdaq Deficiency*

 

On May 5, 2026, the Company received a written notice (the "Notice") from The Nasdaq Stock Market, LLC ("Nasdaq") that it is not in compliance with the minimum bid requirements set forth in Nasdaq Listing Rule 5450(a)(1) for continued listing on The Nasdaq Global Market. Nasdaq Listing Rule 5450(a)(1) requires listed securities to maintain a minimum bid price of $1.00 per share, and Nasdaq Listing Rule 5810(c)(3)(A) provides that a failure to meet the minimum bid price requirement exists if the deficiency continues for a period of 30 consecutive business days. Based on the closing bid price of the Company's common stock between March 23, 2026 to May 4, 2026, the Company no longer meets the minimum bid price requirement. The Notice has no immediate effect on the listing or trading of the Company's common stock on The Nasdaq Global Market and, at this time, the common stock will continue to trade on The Nasdaq Global Market under the symbol "DFNS."

The Notice provides that the Company has 180 calendar days, or until November 2, 2026, to regain compliance with Nasdaq Listing Rule 5450(a)(1). To regain compliance, the bid price of the Company's common stock must have a closing bid price of at least $1.00 per share for a minimum of 10 consecutive business days. If the Company does not regain compliance by November 2, 2026, the Company may be eligible for additional time to regain compliance. In such instance, the Company must submit an application and a non-refundable $5,000 application fee, so long as the Company applies to transfer the listing of its common stock to The Nasdaq Capital Market and meets the continued listing requirement for market value of publicly held shares and all other initial listing standards for The Nasdaq Capital Market (except for the bid price requirement) and notifies Nasdaq in writing of its intention to cure the deficiency during the second compliance period. If the Company does not qualify or fails to regain compliance, then Nasdaq will notify the Company of its determination to delist the Company's common stock.

The Company intends to monitor the closing bid price of its common stock and may, if appropriate, consider implementing available options, including, but not limited to, implementing a reverse stock split of its outstanding securities, to regain compliance with the minimum bid price requirement under the Nasdaq Listing Rules.

 

*Conversion of Debt*

On April 27, 2026, the Company, and Mr. Shalom, executed and delivered the Note Exchange Agreement, pursuant to which the original principal amount of the notes issued to Mr. Shalom and accrued interest thereon in the amount of $2,138,962 was cancelled in its entirety in exchange for the issuance of 4,174,399 shares of common stock (the "Exchange Shares"). The exchange price of $0.5124 was the last consolidated bid price of a share of common stock as reported by The Nasdaq Stock Market LLC. The Exchange Shares are restricted shares and may not be sold without registration or an applicable exemption therefrom.

The notes were assigned to Mr. Shalom from Star 26 Capital Inc. ("Star 26") pursuant to the terms of the Amended and Restated Securities Purchase Agreement and Call Option dated September 15, 2025 (the "Star Purchase Agreement") among the Company, Star 26 and the other parties signatory thereto and pursuant to the exercise by Mr. Shalom of his right to obtain shares, notes and warrants from Esousa Group Holdings LLC ("Esousa") in accordance with the terms of the Call Option Agreement dated January 13, 2026.

In connection with the consummation of the transactions contemplated by the Star Purchase Agreement on January 12, 2026, the Company issued to Star 26 a warrant to purchase a total of 12,017,648 shares of Common Stock at an exercise price of $1.50 per share (the "Star Warrant"), which was then distributed to the equity holders of Star 26 on a pro rata basis. Mr. Shalom's pro rata amount of the Star Warrant was to purchase 7,175,662 shares of Common Stock.

*Sale of Zorronet*

On April 10, 2026, Water IO Ltd. ("Water IO"), an Israeli public company traded on the Tel Aviv Stock Exchange in which Star 26 Capital Inc. ("Star 26"), a wholly-owned subsidiary of the Company, holds an approximately 67% equity interest, completed the sale of 100% of the issued and outstanding share capital of Zorro Net Ltd. ("Zorronet"), a wholly-owned subsidiary of Water IO, to BiomX Inc. ("BiomX") (NYSE American: PHGE), pursuant to a Stock Purchase Agreement.

**T3 DEFENSE INC.**

NOTES TO UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

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

**NOTE 12 – SUBSEQUENT EVENTS (continued)**

As consideration for the Zorronet shares, BiomX issued to Water IO: (i) 1,300,000 shares of BiomX common stock; and (ii) a non-convertible promissory note in the principal amount of $1,250,000, bearing interest at the short-term applicable federal rate, maturing three months from the date of issuance. Additionally, BiomX assumed certain obligations of Water IO with respect to the founders and former shareholders of Zorronet, including a performance-based earnout payable no later than March 31, 2027 equal to the greater of 125% of Zorronet's consolidated revenue or eight times Zorronet's consolidated EBITDA for fiscal year 2026, and a commitment to retain certain key Zorronet personnel for three years on no less favorable terms.

As a result of the transaction, Water IO holds 1,300,000 shares of BiomX common stock, representing approximately 16.57% of BiomX's issued and outstanding common stock following the issuance. The Company, through Star 26, beneficially owns approximately 67% of Water IO's equity, and accordingly may be deemed to beneficially own such BiomX shares indirectly.

*Resignation of Directors and Appointment of New Directors*

 

On May 19, 2026, Shiran Fridman and Asaf Nachum were appointed to the Board of Directors of the Company, effective as of May 19, 2026.

Ms. Fridman, age 39, has been an independent business and financial consultant since 2025. From 2007 through 2025 she was an investment manager at Four Seasons Real Estate in Israel.

Mr. Nachum, age 49, is an independent investment advisor and portfolio manager.

Each of Ms. Fridman and Mr. Nachum is entitled to $5,000 per quarter they serve as directors of the Company and 5,000 shares of common stock of the Company.

The appointments were made to replace David Rokach and Reuven Yeganeh, both of whom resigned as of May 19, 2026.

 

*Exchange of Shares with VisionWave*

 

On May 17, 2026, T3 exchanged 6,000,000 newly issued restricted shares of common stock of the Company, representing 9.96% of the issued and outstanding shares, for 475,492 shares of common stock (the "Exchange Shares") of VisionWave Holdings, Inc., a Delaware corporation listed on the Nasdaq Capital Market ("VisionWave"). The per share price of the shares of VisionWave was $5.59 and the per share price of the Company was $0.443. The market value of the Exchange Shares as of May 15, 2026 was $2,658,000.

VisionWave, through its own internal developments, various industry partnerships, and through its wholly owned subsidiaries VisionWave Technologies Inc., a Nevada corporation, and Solar Drone Ltd, an Israeli corporation, is at the forefront of creating software and hardware solutions for UxV (Unmanned Vehicles including UAVs, UGVs and USVs – Aerial, Ground and Submersible) capabilities by integrating advanced artificial intelligence (AI) and autonomous solutions for both defense and aerospace applications, and commercial uses. Its technologies, both those available for sale and in development— ranging from high-resolution radars and advanced vision systems; to radio frequency (RF) sensing technologies; to high-speed computer platforms; to payload management for various UxVs like drones and UGVs, seek to improve operational efficiency and precision dual markets; for military and homeland security applications, and for commercial use cases worldwide.

The exchange was consummated pursuant to the terms of the Share Exchange and Swap Agreement dated as of May 13, 2026 (the "Exchange Agreement") by and between the Company and VisionWave. Both VisionWave and the Company agreed to a 6-month lockup of the shares exchanged and no registration rights were provided. The Exchange Agreement also contained typical representations and warranties for an agreement of this nature.

**ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS**

This Quarterly Report on Form 10-Q includes forward-looking statements that reflect management's current views with respect to future events and financial performance. Forward-looking statements are statements in respect of future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology such as "may," "should," "expects," "plans," "anticipates," "believes," "estimates," "predicts," "potential" or "continue" or the negative of these terms or other comparable terminology. These statements include statements regarding the intent, belief or current expectations of our management team, as well as the assumptions on which such statements are based. Prospective investors are cautioned that any such forward-looking statements are not guarantees of future performance and involve risk and uncertainties, and that actual results may differ materially from those contemplated by such forward-looking statements. These statements are only predictions and involve known and unknown risks, uncertainties and other factors, including the risks set forth in the section entitled "Risk Factors" in our Annual Report on Form 10-K for the fiscal year end December 31, 2025, as filed with the Securities and Exchange Commission (the "SEC") on April 9, 2026, any of which may cause our company's or our industry's actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied in our forward-looking statements. These risks and factors include, by way of example and without limitation:

● the availability and adequacy of capital to support and grow our business;

● economic, competitive, business and other conditions in our local and regional markets;

● actions taken or not taken by others, including competitors, as well as legislative, regulatory, judicial and other governmental authorities;

● competition in our industry;

● the availability of additional capital to support development;

● the retention and availability of key personnel;

● our ability to successfully implement our business plan; and

● other factors discussed elsewhere in this quarterly report.

We undertake no obligation to update or revise forward-looking statements to reflect events or circumstances occurring after the date of this Quarterly Report, except as required by law.

As used in this Quarterly Report and unless otherwise indicated, the terms "Company," "we," "us," and "our," refer to T3 Defense Inc. and its consolidated subsidiaries.

 

*The following discussion and analysis summarizes the significant factors affecting our financial condition, operating results, liquidity and cash flows as of and for the periods presented below. The following discussion and analysis should be read in conjunction with our consolidated financial statements and related notes thereto included elsewhere in this report. The discussion contains forward-looking statements that are based on the beliefs of management, as well as assumptions made by, and information currently available to, management. Actual results could differ materially from those discussed in or implied by forward-looking statements as a result of various factors, including those discussed below and elsewhere in this report, particularly in the sections titled "Risk Factors" and "Special Note Regarding Forward-Looking Statements."*

**Overview**

Following the appointment in September 2024 of Menachem Shalom, our current chief executive officer and a director, we have transformed from a financial technology services provider into a strategic acquirer and operator of aerospace and defense (A&D) businesses. We are building a portfolio of mission-critical suppliers and advanced technology companies and strategic infrastructure opportunities across the defense, aerospace, and advanced manufacturing sectors across the United States, Israel and Europe.

The Company is positioned as a strategic platform company focused on acquiring, integrating, and scaling high-impact businesses in the aerospace and defense industries. Our strategy targets Tier 2 and Tier 3 suppliers that form the industrial backbone of national security infrastructure, with particular emphasis on companies offering dual-use technologies, advanced AI applications, and critical manufacturing capabilities.

**Recent Developments**

*Nasdaq Deficiency*

 

On May 5, 2026, the Company received a written notice (the "Notice") from The Nasdaq Stock Market, LLC ("Nasdaq") that it is not in compliance with the minimum bid requirements set forth in Nasdaq Listing Rule 5450(a)(1) for continued listing on The Nasdaq Global Market. Nasdaq Listing Rule 5450(a)(1) requires listed securities to maintain a minimum bid price of $1.00 per share, and Nasdaq Listing Rule 5810(c)(3)(A) provides that a failure to meet the minimum bid price requirement exists if the deficiency continues for a period of 30 consecutive business days. Based on the closing bid price of the Company's common stock between March 23, 2026 to May 4, 2026, the Company no longer meets the minimum bid price requirement. The Notification Letter has no immediate effect on the listing or trading of the Company's common stock on The Nasdaq Global Market and, at this time, the common stock will continue to trade on The Nasdaq Global Market under the symbol "DFNS."

The Notice provides that the Company has 180 calendar days, or until November 2, 2026, to regain compliance with Nasdaq Listing Rule 5450(a)(1). To regain compliance, the bid price of the Company's common stock must have a closing bid price of at least $1.00 per share for a minimum of 10 consecutive business days. If the Company does not regain compliance by November 2, 2026, the Company may be eligible for additional time to regain compliance. In such instance, the Company must submit an application and a non-refundable $5,000 application fee, so long as the Company applies to transfer the listing of its common stock to The Nasdaq Capital Market and meets the continued listing requirement for market value of publicly held shares and all other initial listing standards for The Nasdaq Capital Market (except for the bid price requirement) and notifies Nasdaq in writing of its intention to cure the deficiency during the second compliance period. If the Company does not qualify or fails to regain compliance, then Nasdaq will notify the Company of its determination to delist the Company's common stock.

The Company intends to monitor the closing bid price of its common stock and may, if appropriate, consider implementing available options, including, but not limited to, implementing a reverse stock split of its outstanding securities, to regain compliance with the minimum bid price requirement under the Nasdaq Listing Rules.

 

*Conversion of Debt*

On April 27, 2026, the Company, and Mr. Shalom, executed and delivered the Note Exchange Agreement, pursuant to which the original principal amount of the notes issued to Mr. Shalom and accrued interest thereon in the amount of $2,138,962 was cancelled in its entirety in exchange for the issuance of 4,174,399 shares of common stock (the "Exchange Shares"). The exchange price of $0.5124 was the last consolidated bid price of a share of common stock as reported by The Nasdaq Stock Market LLC. The Exchange Shares are restricted shares and may not be sold without registration or an applicable exemption therefrom.

The notes were assigned to Mr. Shalom from Star 26 Capital Inc. ("Star 26") pursuant to the terms of the Amended and Restated Securities Purchase Agreement and Call Option dated September 15, 2025 (the "Star Purchase Agreement") among the Company, Star 26 and the other parties signatory thereto and pursuant to the exercise by Mr. Shalom of his right to obtain shares, notes and warrants from Esousa Group Holdings LLC ("Esousa") in accordance with the terms of the Call Option Agreement dated January 13, 2026.

In connection with the consummation of the transactions contemplated by the Star Purchase Agreement on January 12, 2026, the Company issued to Star 26 a warrant to purchase a total of 12,017,648 shares of Common Stock at an exercise price of $1.50 per share (the "Star Warrant"), which was then distributed to the equity holders of Star 26 on a pro rata basis. Mr. Shalom's pro rata amount of the Star Warrant was to purchase 7,175,662 shares of Common Stock.

*Sale of Zorronet*

On April 10, 2026, Water IO Ltd. ("Water IO"), an Israeli public company traded on the Tel Aviv Stock Exchange in which Star 26 Capital Inc. ("Star 26"), a wholly-owned subsidiary of the Company, holds an approximately 67% equity interest, completed the sale of 100% of the issued and outstanding share capital of Zorro Net Ltd. ("Zorronet"), a wholly-owned subsidiary of Water IO, to BiomX Inc. ("BiomX") (NYSE American: PHGE), pursuant to a Stock Purchase Agreement.

As consideration for the Zorronet shares, BiomX issued to Water IO: (i) 1,300,000 shares of BiomX common stock; and (ii) a non-convertible promissory note in the principal amount of $1,250,000, bearing interest at the short-term applicable federal rate, maturing three months from the date of issuance. Additionally, BiomX assumed certain obligations of Water IO with respect to the founders and former shareholders of Zorronet, including a performance-based earnout payable no later than March 31, 2027 equal to the greater of 125% of Zorronet's consolidated revenue or eight times Zorronet's consolidated EBITDA for fiscal year 2026, and a commitment to retain certain key Zorronet personnel for three years on no less favorable terms.

As a result of the transaction, Water IO holds 1,300,000 shares of BiomX common stock, representing approximately 16.57% of BiomX's issued and outstanding common stock following the issuance. The Company, through Star 26, beneficially owns approximately 67% of Water IO's equity, and accordingly may be deemed to beneficially own such BiomX shares indirectly.

*Results of Operations*

**Comparison of the Three Months Ended March 31, 2026 to the Three Months Ended March 31, 2025**

Revenues

For the three months ended March 31, 2026 we had revenues of $3,653,000, as compared to revenues of $0 for the three months ended March 31, 2025.

Operating Expenses

For the three months ended March 31, 2026 we had operating expenses of $4,182,000, as compared to operating expenses of $1,507,107 for the three months ended March 31, 2025. Operating expenses consisted of research and development expenses ($274,000), selling and marketing expenses ($157,000), and other general and administrative expenses ($3,528,000), as well as general and administrative expenses of consolidated variable entities of $223,000. The $3,528,000 of general and administrative expenses was comprised of professional services ($995,000), salaries and related compensation ($1,263,000) and other general and administrative expenses ($1,270,000), For the three months ended March 31, 2025, professional fees were $1,187,000, compensation and benefits was $33,000 and other general and administrative expenses was $287,000.

Other Income (Expenses)

For the three months ended March 31, 2026, other income (expenses) decreased from $104,648,000 for the three months ended March 31, 2025, as compared to an expense of $22,398,000 the three months ended March 31, 2026. The decrease was mainly attributable to the change in fair value of stock purchase warrant liabilities from $104,278,000 as of March 31, 2025 to a loss of $26,635,000 as of March 31, 2026.

<u>Net Income (Loss)</u>

For the three months ended March 31, 2026, we had a net loss of $26,351,000, as compared to net income of $102,958,000 for the three months ended March 31, 2025.

Liquidity and Capital Resources

As of March 31, 2026, we had $22,811,000 of current assets, including $7,362,000 of cash and cash equivalents. Based on management's current expectations, we anticipate that we will need approximately $6,000,000 for the next 12 months of operations.

At March 31, 2026, the Company had negative working capital of approximately $69 million (of which $56 million consists of stock purchase warrant liabilities that do not require cash settlement) and stockholders' equity of $42.5 million as of March 31, 2026; For the three month ended March 31, 2026, the Company reported a net operating loss of $3.8 million and net cash used in operations of $4.9 million. Absent any other action, the Company will require additional liquidity to continue its operations for the next 12 months.

After evaluating these conditions, management concluded that its plans, when considered in aggregate, alleviate substantial doubt about the Company's ability to continue as a going concern. Those plans include: (i) the Company's existing unrestricted cash balance of approximately $7.4 million, sufficient to fund projected operating expenses through the look-forward period; (ii) an active Equity Line of Credit ("ELOC") with Esousa Holdings, LLC — legally binding, SEC-registered, and shareholder-approved — providing drawdown capacity, which exceeds the Company's projected annual operating cash needs; (iii) the Company's majority-owned subsidiaries, including Rimon Ltd. and Nimbus Drones, which are cash-positive and require no capital support from the Company; (iv) management's ongoing efforts to assist subsidiaries in securing or expanding bank credit facilities; and (v) the option to satisfy certain obligations through issuance of equity in lieu of cash.

In addition, management believes that the completion of the sale by Water IO Ltd., a majority-owned indirect subsidiary of the Company, of Zorro Net Ltd. to BiomX Inc., pursuant to which Water IO received 1,300,000 shares of BiomX common stock and a $1.25 million promissory note due within three months, may provide additional liquidity and financial flexibility to the Company and its subsidiaries. The sale occurred on April 10, 2026.

Management has determined that its plans are probable of being effectively implemented and probable of mitigating the conditions described above, enabling continuation of the Company's operations for the foreseeable future. In the event management is incorrect in its determination and current and anticipated future sources of liquidity are insufficient to fund our future business activities, we may be required to seek additional equity or debt financing. The sale of additional equity would result in additional dilution to our stockholders.

**Cash Flows**

Investing Activities

Net cash used in investing activities for the three months ended March 31, 2026 was $3,823,000, as compared to $810,000 for the three months ended March 31, 2025.

Financing Activities

Net cash provided by financing activities for the three months ended March 31, 2026 was $12,476,000, as compared to having no net cash from financing activities in the three months ended March 31, 2025.

**Off-Balance Sheet Arrangements**

We had no outstanding derivative financial instruments, off-balance sheet guarantees, interest rate swap transactions or foreign currency contracts. We do not engage in trading activities involving non-exchange traded contracts.

**Critical Accounting Estimates**

Our consolidated financial statements and the related notes included elsewhere in this Quarterly Report on Form 10-Q are prepared in accordance with GAAP. The preparation of consolidated financial statements also requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, costs, and expenses and related disclosures. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances. Actual results could differ significantly from our estimates. To the extent that there are differences between our estimates and actual results, our future financial statement presentation, financial condition, operating results, and cash flows will be affected.

See Note 2 Summary of Significant Accounting Policies of the Notes for a summary of significant accounting policies and significant estimates and assumptions and their effects on our financial statements. Below are the significant estimates and assumptions that we consider critical because they involve a significant amount of estimation uncertainty and have had or are reasonably likely to have a material impact on our financial condition or results of operations.

**Recently Issued Accounting Pronouncements**

For information about recently issued accounting standards, refer to Note 2 to our Consolidated Financial Statements appearing elsewhere in this report.

**Foreign Currency Risk**

*Foreign currency transaction risk*

**ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK**

We are a smaller reporting company as defined in Rule 12b-2 of the Exchange Act and are not required to provide the information required under this item.

**ITEM 4. CONTROLS AND PROCEDURES**

Our management, under the supervision of and with the participation of our principal executive officer and our principal financial officer, has evaluated the effectiveness of our disclosure controls and procedures, as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (Exchange Act), as of March 31, 2026.

Based on such evaluation, management concluded that our disclosure controls and procedures as of March 31, 2026 were (1) designed and functioning effectively to ensure that material information relating to T3 Defense Inc., including its consolidated subsidiaries, is made known to our principal executive officer and principal financial officer by others within those entities, particularly during the period in which this report was being prepared and (2) operating effectively in that they provided reasonable assurance that information required to be disclosed by T3 Defense Inc. in the reports that it files or submits under the Exchange Act (i) is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms and (ii) accumulated and communicated to management, including our principal executive officer or principal financial officer, as appropriate, to allow timely decisions regarding required disclosure.

There have not been any changes in our internal control over financial reporting during our fiscal quarter ended March 31, 2026 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

**Changes in Internal Control Over Financial Reporting**

There were no changes in our internal control over financial reporting that occurred during the three months ended March 31, 2026 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

**Limitations on Effectiveness of Controls and Procedures**

In designing and evaluating the disclosure controls and procedure, management recognizes that any controls and procedures, no matter how well designed and operated, cannot provide absolute assurance that the objectives of the controls system are met, and no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within a company have been detected. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints and that management is required to apply judgment in evaluating the benefits of possible controls and procedure relative to their costs.

**ITEM 5. OTHER**

None.

**PART II - OTHER INFORMATION**

**Item 1. Legal Proceedings**

On March 3, 2026, the Company obtained a copy of a summons and complaint filed in the Supreme Court of the State of New York dated February 24, 2026 by Kingswood Capital Partners, LLC against Star 26 Capital, Inc., Nukkleus, Inc. and the Company. The complaint alleges that a success fee is due for an earned investment banking success fee arising from a transaction. The Company denies all the allegations and intends to vigorously defend such action, which it believes is without merit.

**Item 1A. Risk Factors**

An investment in our common stock involves significant risk. We describe the most significant risks that management believes affect or could affect us under Part I, Item 1A "Risk Factors," in our Annual Report on Form 10-K for the fiscal year end December 31, 2025, as filed with the Securities and Exchange Commission (the "SEC") on April 9, 2026 ("Annual Report"). There have been no material changes in our risk factors from those previously disclosed in our Annual Report. You should carefully consider the risks described in our Annual Report which could materially affect our business, financial condition or future results. The risks described in our Annual Report are not the only risks we face. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition, and/or operating results. If any of the risks actually occur, our business, financial condition, and/or results of operations could be negatively affected.

**Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.**

Not applicable.

**Item 3. Defaults Upon Senior Securities**

Not applicable.

**Item 4. Mine Safety Disclosures**

Not Applicable.

**Item 5. Other Information**

*Insider Trading Arrangements and Policies*

 

During the quarter ended March 31, 2026, no director or officer adopted or terminated (i) any contract, instruction or written plan for the purchase or sale of securities of the Company intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) or (ii) any "non-Rule 10b5-1 trading arrangement" as defined in paragraph (c) of item 408 of Regulation S-K.

*Resignation of Directors and Appointment of New Directors*

 

On May 19, 2026, Shiran Fridman and Asaf Nachum were appointed to the Board of Directors of the Company, effective as of May 19, 2026.

Ms. Fridman, age 39, has been an independent business and financial consultant since 2025. From 2007 through 2025 she was an investment manager at Four Seasons Real Estate in Israel.

Mr. Nachum, age 49, is an independent investment advisor and portfolio manager.

Each of Ms. Fridman and Mr. Nachum is entitled to $5,000 per quarter they serve as directors of the Company and 5,000 shares of common stock of the Company.

Ms. Fridman and Mr. Nachum will become members of the Audit Committee, the Compensation Committee and the Nominating and Corporate Governance Committees of the Board of Directors of the Company.

There are no arrangements or understandings between either Ms. Fridman or Mr. Nachum and any other persons pursuant to which each of them was appointed a director of the Company, and there are no family relationships between either Ms. Fridman or Mr. Nachum and any director or executive officer of the Company.

The appointments were made to replace David Rokach and Reuven Yeganeh, both of whom resigned as of May 19, 2026.

The Company is not aware of any disagreements between either of Messrs. Rokach or Yeganeh and any other officer or director of the Company.

We are providing Messrs. Rokach and Yeganeh with copies of this Form 10-Q concurrent with this filing. Should any subsequent communications with any director regarding their respective decision to resign reveal any disagreement between them and the Company, the Board of Directors or any executive officer of the Company regarding our operations, policies or practices, we will amend this report accordingly to disclose any such disagreement.

*Exchange of Shares with VisionWave*

 

On May 17, 2026, T3 exchanged 6,000,000 newly issued restricted shares of common stock of the Company, representing 9.96% of the issued and outstanding shares, for 475,492 shares of common stock (the "Exchange Shares") of VisionWave Holdings, Inc., a Delaware corporation listed on the Nasdaq Capital Market ("VisionWave"). The per share price of the shares of VisionWave was $5.59 and the per share price of the Company was $0.443. The market value of the Exchange Shares as of May 15, 2026 was $2,658,000.

VisionWave, through its own internal developments, various industry partnerships, and through its wholly owned subsidiaries VisionWave Technologies Inc., a Nevada corporation, and Solar Drone Ltd, an Israeli corporation, is at the forefront of creating software and hardware solutions for UxV (Unmanned Vehicles including UAVs, UGVs and USVs – Aerial, Ground and Submersible) capabilities by integrating advanced artificial intelligence (AI) and autonomous solutions for both defense and aerospace applications, and commercial uses. Its technologies, both those available for sale and in development— ranging from high-resolution radars and advanced vision systems; to radio frequency (RF) sensing technologies; to high-speed computer platforms; to payload management for various UxVs like drones and UGVs, seek to improve operational efficiency and precision dual markets; for military and homeland security applications, and for commercial use cases worldwide.

The exchange was consummated pursuant to the terms of the Share Exchange and Swap Agreement dated as of May 13, 2026 (the "Exchange Agreement") by and between the Company and VisionWave. Both VisionWave and the Company agreed to a 6-month lockup of the shares exchanged and no registration rights were provided. The Exchange Agreement also contained typical representations and warranties for an agreement of this nature. The description of the Exchange Agreement is qualified in its entirety by reference to the Agreement, a copy of which is attached hereto as Exhibit 10.54.

***Availability of Information***

T3 Defense's website address is www.t3dfns.com. Investors and others should note that the Company announces material information to its investors using SEC filings, press releases, its investor relations website, public conference calls, webcasts and certain social media channels, including the following LinkedIn account: https://www.linkedin.com/in/mennyshalom/. The Company uses these channels to communicate with investors, customers and the public about the Company, its products and other issues and for complying with its disclosure obligations under Regulation FD. The information on, or that may be accessed through, T3's website is not incorporated by reference into this Quarterly Report on Form 10-Q and should not be considered a part of this Quarterly Report on Form 10-Q.

**Item 6. Exhibits**

---

| | |
|:---|:---|
| **Exhibit<br> Number** | **Description** |
| 10.54 | [Share Exchange and Swap Agreement dated as of May 17, 2026, by and between T3 Defense Inc. and VisionWave Holdings, Inc.](ea029092001ex10-54.htm) |
| 31.1 | [Certification of the Chief Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002](ea029092001ex31-1.htm) |
| 31.2 | [Section 302 Certification under the Sarbanes-Oxley Act of 2002 of the Chief Financial Officer](ea029092001ex31-2.htm) |
| 32.1 | [Section 906 Certification under the Sarbanes-Oxley Act of 2002 of the Chief Executive Officer](ea029092001ex32-1.htm) |
| 32.2 | [Section 302 Certification under the Sarbanes-Oxley Act of 2002 of the Chief Financial Officer](ea029092001ex32-2.htm) |
| 101.INS | Inline XBRL Instance Document |
| 101.SCH | Inline XBRL Taxonomy Extension Schema Document |
| 101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document |
| 101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document |
| 101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document |
| 101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document |
| 104 | Cover Page Interactive Data File - the cover page XBRL tags are embedded within the Inline XBRL document |

---

**SIGNATURES**

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

---

| | |
|:---|:---|
| **T3 DEFENSE INC.** | **T3 DEFENSE INC.** |
| By: | */s/ Menachem Shalom* |
|  | Menachem Shalom |
|  | Chief Executive Officer |
|  | (Principal Executive Officer) |
|  | */s/ Morel Levi* |
|  | Morel Levi |
|  | Chief Financial Officer |
|  | (Principal Financial and Accounting Officer) |
| Date: | May 20, 2026 |

---

## Exhibit 10.54

**Exhibit 10.54**

**SHARE EXCHANGE AND SWAP AGREEMENT**

by and between

**T3 DEFENSE INC.**

(Nasdaq: DFNS)

and

**VISIONWAVE HOLDINGS INC.**

(Nasdaq: VWAV)

**Dated as of May 17, 2026**

------

**THIS SHARE EXCHANGE AND SWAP AGREEMENT** (this "**Agreement**"), dated as of May 17, 2026 (the "**Effective Date**"), is entered into by and between:

**T3 Defense Inc.**, a Delaware corporation, with its principal executive offices located at 575 Fifth Ave, 14th Floor, New York, New York 10017, whose common stock is listed on the Nasdaq Capital Market under the ticker symbol "DFNS" (**"DFNS"** or "**T3 Defense**"); and

**VisionWave Holdings, Inc.**, a Delaware corporation, whose common stock is listed on the Nasdaq Global Market under the ticker symbol "VWAV" (**"VWAV"** or "**VisionWave**").

DFNS and VWAV are referred to herein individually as a **"Party"** and collectively as the **"Parties."**

**RECITALS**

**WHEREAS**, as of the Effective Date, DFNS has approximately 54,270,525 shares of common stock issued and outstanding (the "**DFNS Outstanding Shares**"), as confirmed by DFNS's transfer agent;

**WHEREAS**, the closing price of DFNS common stock on the Nasdaq Capital Market on May 15, 2026 (the most recent full trading day prior to the Effective Date) was $0.443 per share (the "**DFNS Reference Price**"), and the closing price of VWAV common stock on the Nasdaq Capital Market on May 15, 2026 was $5.590 per share (the "**VWAV Reference Price**"), in each case as reported by the Nasdaq Capital Market;

Share Exchange and Swap Agreement — DFNS / VWAV \| Page 1 of 15

**WHEREAS**, DFNS desires to issue to VWAV, and VWAV desires to receive from DFNS, 6,000,000 newly issued, restricted shares of DFNS common stock, par value $0.0001 per share (the "**DFNS Exchange Shares**"), which represent 9.96% of the DFNS Outstanding Shares as of the Effective Date, at the DFNS Reference Price, for an aggregate Exchange Value (as defined herein) equal to $2,658,000;

**WHEREAS**, in exchange for the DFNS Exchange Shares, VWAV desires to issue to DFNS, and DFNS desires to receive from VWAV, 475,492 newly issued, restricted shares of VWAV common stock (the "**VWAV Exchange Shares**"), representing equivalent dollar value at the VWAV Reference Price;

**WHEREAS**, the DFNS Exchange Shares and the VWAV Exchange Shares (together, the "**Exchange Shares**") shall each be issued as "restricted securities" within the meaning of Rule 144 under the Securities Act of 1933, as amended (the "**Securities Act**"), subject to applicable holding period and resale restrictions, and neither Party shall be entitled to registration rights with respect to the Exchange Shares received by it; and

**WHEREAS**, each Party has determined that the Share Exchange is in the best interests of its respective stockholders and its business, and has duly authorized, approved, and directed its officers to execute this Agreement and consummate the transactions contemplated hereby.

**NOW, THEREFORE**, in consideration of the mutual covenants, representations, warranties, and agreements contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and intending to be legally bound, the Parties agree as follows:

**ARTICLE I**

**DEFINITIONS**

**Section 1.1.** Defined Terms. As used in this Agreement, the following terms shall have the meanings set forth below:

**"Affiliate"** means with respect to any Person, any other Person that directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with, such Person.

**"Board"** means the board of directors of the applicable Party.

**"Business Day"** means any day other than a Saturday, Sunday, or other day on which commercial banks in New York, New York are authorized or required by applicable law to be closed.

**"Closing"** has the meaning set forth in Section 3.1.

**"Closing Date"** has the meaning set forth in Section 3.1.

**"DFNS Exchange Shares"** has the meaning set forth in the Recitals, being 6,000,000 newly issued, restricted shares of DFNS common stock.

**"DFNS Outstanding Shares"** has the meaning set forth in the Recitals, being approximately 54,270,525 shares of DFNS common stock issued and outstanding as of the Effective Date.

Share Exchange and Swap Agreement — DFNS / VWAV \| Page 2 of 15

**"DFNS Reference Price"** means $0.443 per share, being the Nasdaq closing price of DFNS common stock on May 15, 2026.

**"Exchange Value"** means $2,658,000, being the aggregate dollar value of the DFNS Exchange Shares, calculated as the product of 6,000,000 DFNS Exchange Shares multiplied by the DFNS Reference Price.

**"Exchange Shares"** means collectively and/or respectively, the DFNS Exchange Shares and/or the VWAV Exchange Shares.

**"Governmental Authority"** means any federal, state, local, or foreign government, governmental authority, regulatory or administrative agency, governmental commission, department, board, bureau, agency, court, tribunal, or arbitral body, or any self-regulatory organization.

**"Lien"** means any mortgage, pledge, security interest, lien, charge, claim, option, right of first refusal, encumbrance, or restriction of any kind, other than pursuant to applicable securities rules and regulations.

**"Material Adverse Effect"** means with respect to a Party, any event, change, occurrence, circumstance, or effect that, individually or in the aggregate, has had or would reasonably be expected to have a material adverse effect on (a) the business, assets, liabilities, financial condition, or results of operations of such Party and its subsidiaries taken as a whole, or (b) such Party's ability to perform its obligations under this Agreement or to consummate the transactions contemplated hereby; provided, however, that no event, change, or effect resulting from (i) general economic, financial market, business, or geopolitical conditions, (ii) changes in applicable laws or accounting standards, (iii) conditions generally affecting the defense technology industry, or (iv) the announcement of this Agreement shall be deemed to constitute, or shall be taken into account in determining the occurrence of, a Material Adverse Effect, except in each case to the extent that such Party is disproportionately affected thereby relative to other participants in the same industry.

**"Nasdaq"** means the Nasdaq Global or Capital Market or any successor thereof.

**"Person"** means any individual, corporation, partnership, limited liability company, trust, association, joint venture, Governmental Authority, or other entity.

**"Registration Rights"** means any contractual or other right to require registration of securities under the Securities Act, including any demand registration rights, piggyback registration rights, or shelf registration rights.

**"Restricted Shares"** means shares of capital stock constituting "restricted securities" within the meaning of Rule 144 promulgated under the Securities Act, subject to applicable holding period and volume, manner-of-sale, and current public information requirements prior to public resale.

**"Rule 144"** means Rule 144 promulgated under the Securities Act.

**"Securities Act"** means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

**"Securities Exchange Act"** means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

Share Exchange and Swap Agreement — DFNS / VWAV \| Page 3 of 15

**"Transfer Agent"** means with respect to each Party, its duly appointed transfer agent and registrar.

**"VWAV Exchange Shares"** means has the meaning set forth in the Recitals, being 475,492 newly issued, restricted shares of VWAV common stock.

**"VWAV Reference Price"** means $5.590 per share, being the Nasdaq closing price of VWAV common stock on May 15, 2026.

**Section 1.2.** Interpretation. In this Agreement: (a) references to an Article, Section, or Schedule mean an Article, Section, or Schedule of this Agreement unless otherwise specified; (b) the words "include," "includes," and "including" shall be deemed to be followed by the phrase "without limitation"; (c) words in the singular shall include the plural, and vice versa; (d) references to any agreement, instrument, or document include all amendments, supplements, restatements, and other modifications thereto; and (e) headings are for convenience only and shall not affect the interpretation of this Agreement.

**ARTICLE II**

**THE SHARE EXCHANGE**

**Section 2.1. DFNS Exchange Shares.** Subject to the terms and conditions of this Agreement, DFNS hereby agrees to issue and deliver to VWAV at the Closing, and VWAV hereby agrees to accept from DFNS, 6,000,000 newly issued shares of DFNS common stock, par value $0.0001 per share (the "**DFNS Exchange Shares**"), representing 9.96% of the DFNS Outstanding Shares as of the Closing Date. The aggregate Exchange Value of the DFNS Exchange Shares, calculated at the DFNS Reference Price of $0.443 per share, is $2,658,000.

**Section 2.2. VWAV Exchange Shares.** Subject to the terms and conditions of this Agreement, VWAV hereby agrees to issue and deliver to DFNS at the Closing, and DFNS hereby agrees to accept from VWAV, 475,492 newly issued shares of VWAV common stock (the "**VWAV Exchange Shares**"). The number of VWAV Exchange Shares has been calculated by dividing the Exchange Value of $2,658,000 by the VWAV Reference Price of $5.590 per share, which equals 475,492 shares (rounded to the nearest whole share, with no fractional shares to be issued).

**Section 2.3. Restricted Shares; No Registration Rights.** (a) Each of the DFNS Exchange Shares and the VWAV Exchange Shares shall be issued as Restricted Shares, in each case bearing a customary restrictive legend in substantially the following form:

"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION. THE SECURITIES MAY NOT BE OFFERED, SOLD, PLEDGED, TRANSFERRED, OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS, AS EVIDENCED BY A LEGAL OPINION OF COUNSEL SATISFACTORY TO THE ISSUER. THE SECURITIES REPRESENTED HEREBY ARE ALSO SUBJECT TO CERTAIN CONTRACTUAL RESTRICTIONS ON TRANSFER AND LEGEND REMOVAL SET FORTH IN A SHARE EXCHANGE AND SWAP AGREEMENT, AND NO RESTRICTIVE LEGEND MAY BE REMOVED EXCEPT IN ACCORDANCE THEREWITH."

Share Exchange and Swap Agreement — DFNS / VWAV \| Page 4 of 15

(b) Neither Party shall be granted, and neither Party shall have, any Registration Rights with respect to the Exchange Shares it receives pursuant to this Agreement. Each Party hereby expressly waives and disclaims any Registration Rights, whether arising under any agreement, by operation of law, or otherwise, with respect to the Exchange Shares. The Exchange Shares shall be subject in all respects to the restrictions on transfer applicable to Restricted Shares under the Securities Act, including the volume limitations and other conditions set forth in Rule 144.

(c) Each Party, as a recipient of the other Party's Exchange Shares, acknowledges and agrees that it is acquiring such shares for investment purposes only, and not with a view toward, or for resale in connection with, any distribution thereof in violation of applicable securities laws.

(d) Notwithstanding anything to the contrary contained herein, no restrictive legend borne by any of the Exchange Shares may be removed, and no instruction to remove such legend shall be delivered to any Transfer Agent, unless and until: (i) the applicable requirements of the Securities Act and all applicable state securities laws permitting such removal have been satisfied; and (ii) both DFNS and VWAV shall have provided their prior written consent to such legend removal.

Each Party agrees that its Transfer Agent shall be instructed not to remove any restrictive legend from the Exchange Shares absent joint written instructions executed by authorized representatives of both Parties. The Parties acknowledge and agree that the restrictions set forth in this Section are contractual restrictions in addition to any restrictions imposed under applicable securities laws.

**Section 2.4. Fractional Shares.** Neither Party shall be required to issue fractional shares pursuant to this Agreement. In the event that the calculation of any Exchange Shares results in a fraction, such fraction shall be rounded to the nearest whole share, with 0.5 rounded up to the next whole share.

**Section 2.5. Reference Price Confirmation.** The Parties acknowledge and agree that: (a) the DFNS Reference Price of $0.4430 represents the official Nasdaq closing price of DFNS common stock on May 15, 2026, as reported by the Nasdaq Capital Market; (b) the VWAV Reference Price of $5.590 represents the official Nasdaq closing price of VWAV common stock on May 15, 2026, as reported by the Nasdaq Global Market; and (c) the Parties have mutually agreed to use such closing prices as the most recently available confirmed market prices as of the date of this Agreement.

**ARTICLE III**

**CLOSING**

**Section 3.1. Time and Place of Closing.** The closing of the transactions contemplated by this Agreement (the "**Closing**") shall occur simultaneously as soon as practicable, and in any event no later than five (5) Business Days following the satisfaction or waiver (to the extent permitted hereunder) of the conditions set forth in Article VI, at such place (which may be by electronic exchange of executed documents and/or book-entry issuances) and time as the Parties shall mutually agree in writing (the date upon which the Closing actually occurs, the "**Closing Date**").

Share Exchange and Swap Agreement — DFNS / VWAV \| Page 5 of 15

**Section 3.2. DFNS Closing Deliverables.** At the Closing, DFNS shall deliver or cause to be delivered to VWAV: (a) book-entry credit of the DFNS Exchange Shares to an account designated in writing by VWAV, registered in the name of VWAV (or its designated custodian), bearing the applicable restrictive legend set forth in Section 2.3; (b) a certificate of an authorized officer of DFNS, dated as of the Closing Date, certifying that the representations and warranties of DFNS set forth in Article IV are true and correct in all material respects as of the Closing Date; (c) evidence satisfactory to VWAV of all requisite corporate authorizations of DFNS, including resolutions of the Board authorizing the execution, delivery, and performance of this Agreement and the issuance of the DFNS Exchange Shares; and (d) any other documents or instruments reasonably requested by VWAV.

**Section 3.3. VWAV Closing Deliverables.** At the Closing, VWAV shall deliver or cause to be delivered to DFNS: (a) book-entry credit of the VWAV Exchange Shares to an account designated in writing by DFNS, registered in the name of DFNS (or its designated custodian), bearing the applicable restrictive legend set forth in Section 2.3; (b) a certificate of an authorized officer of VWAV, dated as of the Closing Date, certifying that the representations and warranties of VWAV set forth in Article V are true and correct in all material respects as of the Closing Date; (c) evidence satisfactory to DFNS of all requisite corporate authorizations of VWAV, including resolutions of the Board authorizing the execution, delivery, and performance of this Agreement and the issuance of the VWAV Exchange Shares; and (d) any other documents or instruments reasonably requested by DFNS.

**Section 3.4. Simultaneous Exchange.** All transactions at the Closing shall be deemed to occur simultaneously, and no transaction shall be deemed to have been consummated until all transactions at the Closing have been consummated. Neither Party shall be obligated to deliver its Exchange Shares unless the other Party delivers its Exchange Shares substantially simultaneously.

**ARTICLE IV**

**REPRESENTATIONS AND WARRANTIES OF DFNS**

DFNS hereby represents and warrants to VWAV, as of the Effective Date and as of the Closing Date, as follows:

**Section 4.1. Organization.** DFNS is a corporation duly organized, validly existing, and in good standing under the laws of the State of Delaware, with full corporate power and authority to own, lease, and operate its properties and assets and to carry on its business as presently conducted.

**Section 4.2. Authorization.** DFNS has full corporate power and authority to execute, deliver, and perform this Agreement and to consummate the transactions contemplated hereby. The execution, delivery, and performance of this Agreement by DFNS and the consummation of the transactions contemplated hereby have been duly authorized by all requisite corporate action on the part of DFNS. This Agreement constitutes the legal, valid, and binding obligation of DFNS, enforceable against it in accordance with its terms, subject to applicable bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium, and similar laws affecting creditors' rights generally and to general principles of equity (the "**Enforceability Exceptions**").

**Section 4.3. Capitalization; Outstanding Shares.** As of the Effective Date, the total number of shares of DFNS common stock issued and outstanding is approximately 54,270,525, as confirmed by DFNS's Transfer Agent. The DFNS Exchange Shares, when issued and delivered in accordance with this Agreement, will be (a) duly authorized, validly issued, fully paid, and non-assessable, (b) free and clear of all Liens, except for restrictions on transfer arising under applicable securities laws and the terms of this Agreement, and (c) not subject to any preemptive rights or rights of first refusal.

Share Exchange and Swap Agreement — DFNS / VWAV \| Page 6 of 15

**Section 4.4. No Conflicts.** The execution, delivery, and performance of this Agreement by DFNS, and the consummation of the transactions contemplated hereby, do not and will not: (a) conflict with or violate any provision of DFNS's certificate of incorporation or bylaws; (b) conflict with, violate, or result in any breach or default under any material agreement to which DFNS is a party or by which DFNS or its assets are bound; (c) violate any applicable law, rule, regulation, order, judgment, or decree of any Governmental Authority applicable to DFNS; or (d) require any consent, approval, authorization, or permit of, or filing with or notification to, any Governmental Authority, except as required under applicable federal or state securities laws (including any required Nasdaq filings or notifications) and (ii) for such consents which have been obtained prior to the Effective Date.

**Section 4.5. SEC Filings; No Material Non-Public Information.** DFNS has timely filed (or furnished) all required reports, schedules, forms, proxy statements, and other documents with the U.S. Securities and Exchange Commission (the "**SEC**") required to be filed or furnished (the "**DFNS SEC Documents**"), and all such DFNS SEC Documents, at the time of their filing (or, if amended, at the time of such amendment), complied in all material respects with the applicable requirements of the Securities Act, the Securities Exchange Act, and the rules and regulations of the SEC thereunder. DFNS does not possess any material non-public information relating to DFNS that has not been disclosed to VWAV prior to the execution of this Agreement that would reasonably be expected to affect VWAV's decision to enter into this Agreement.

**Section 4.6. Nasdaq Listing; Compliance.** DFNS common stock is listed on Nasdaq and DFNS is in compliance in all material respects with Nasdaq's continued listing standards and the applicable Nasdaq Marketplace Rules. DFNS shall promptly prepare and submit to Nasdaq any required notifications or filings in connection with the issuance of the DFNS Exchange Shares.

**Section 4.7. No Brokers.** DFNS has not engaged any investment banker, broker, finder, or financial advisor in connection with the transactions contemplated by this Agreement, and DFNS shall be solely responsible for any fees, commissions, or compensation owed to any such Person engaged by DFNS.

**Section 4.8. Investment Representation.** DFNS is acquiring the VWAV Exchange Shares for its own account for investment purposes only, and not with a view to, or for sale in connection with, any distribution thereof in violation of any applicable securities laws. DFNS is an "accredited investor" as defined in Rule 501(a) of Regulation D promulgated under the Securities Act. DFNS acknowledges that the VWAV Exchange Shares are Restricted Shares and may not be resold or transferred absent an effective registration statement or an exemption from registration under the Securities Act.

**Section 4.9. No Material Adverse Effect.** Since the date of the most recent audited financial statements included in the DFNS SEC Documents, there has been no event, occurrence, or development that has had, or would reasonably be expected to have, a Material Adverse Effect on DFNS.

Share Exchange and Swap Agreement — DFNS / VWAV \| Page 7 of 15

**ARTICLE V**

**REPRESENTATIONS AND WARRANTIES OF VWAV**

VWAV hereby represents and warrants to DFNS, as of the Effective Date and as of the Closing Date, as follows:

**Section 5.1. Organization.** VWAV is a corporation duly organized, validly existing, and in good standing under the laws of the State of Delaware, with full corporate power and authority to own, lease, and operate its properties and assets and to carry on its business as presently conducted.

**Section 5.2. Authorization.** VWAV has full corporate power and authority to execute, deliver, and perform this Agreement and to consummate the transactions contemplated hereby. The execution, delivery, and performance of this Agreement by VWAV and the consummation of the transactions contemplated hereby have been duly authorized by all requisite corporate action on the part of VWAV. This Agreement constitutes the legal, valid, and binding obligation of VWAV, enforceable against it in accordance with its terms, subject to the Enforceability Exceptions.

**Section 5.3. Capitalization; Valid Issuance.** The VWAV Exchange Shares, when issued and delivered in accordance with this Agreement, will be (a) duly authorized, validly issued, fully paid, and non-assessable, (b) free and clear of all Liens, except for restrictions on transfer arising under applicable securities laws and the terms of this Agreement, and (c) not subject to any preemptive rights or rights of first refusal.

**Section 5.4. No Conflicts.** The execution, delivery, and performance of this Agreement by VWAV, and the consummation of the transactions contemplated hereby, do not and will not: (a) conflict with or violate any provision of VWAV's certificate of incorporation or bylaws; (b) conflict with, violate, or result in any breach or default under any material agreement to which VWAV is a party or by which VWAV or its assets are bound; (c) violate any applicable law, rule, regulation, order, judgment, or decree of any Governmental Authority applicable to VWAV; or (d) require any consent, approval, authorization, or permit of, or filing with or notification to, any Governmental Authority, except as required under applicable federal or state securities laws.

**Section 5.5. SEC Filings; No Material Non-Public Information.** VWAV has timely filed (or furnished) all required documents with the SEC required to be filed or furnished (the "**VWAV SEC Documents**"), and all such VWAV SEC Documents complied in all material respects with the applicable requirements of the Securities Act, the Securities Exchange Act, and the rules and regulations of the SEC thereunder. VWAV does not possess any material non-public information relating to VWAV that has not been disclosed to DFNS prior to the execution of this Agreement that would reasonably be expected to affect DFNS's decision to enter into this Agreement.

**Section 5.6. Nasdaq Listing; Compliance.** VWAV common stock is listed on Nasdaq and VWAV is in compliance in all material respects with Nasdaq's continued listing standards and the applicable Nasdaq Marketplace Rules. VWAV shall promptly prepare and submit to Nasdaq any required notifications or filings in connection with the issuance of the VWAV Exchange Shares.

**Section 5.7. No Brokers.** VWAV has not engaged any investment banker, broker, finder, or financial advisor in connection with the transactions contemplated by this Agreement, and VWAV shall be solely responsible for any fees, commissions, or compensation owed to any such Person engaged by VWAV.

Share Exchange and Swap Agreement — DFNS / VWAV \| Page 8 of 15

**Section 5.8. Investment Representation.** VWAV is acquiring the DFNS Exchange Shares for its own account for investment purposes only, and not with a view to, or for sale in connection with, any distribution thereof in violation of any applicable securities laws. VWAV is an "accredited investor" as defined in Rule 501(a) of Regulation D promulgated under the Securities Act. VWAV acknowledges that the DFNS Exchange Shares are Restricted Shares and may not be resold or transferred absent an effective registration statement or an exemption from registration under the Securities Act.

**Section 5.9. No Material Adverse Effect.** Since the date of the most recent audited financial statements included in the VWAV SEC Documents, there has been no event, occurrence, or development that has had, or would reasonably be expected to have, a Material Adverse Effect on VWAV.

**ARTICLE VI**

**CONDITIONS TO CLOSING**

**Section 6.1. Mutual Conditions.** The obligations of each Party to consummate the Closing are subject to the satisfaction (or written waiver by both Parties) of the following conditions:

&nbsp;&nbsp;&nbsp;&nbsp;(a) No order, injunction, judgment, or decree of any Governmental
Authority shall be in effect prohibiting or enjoining the consummation of the transactions contemplated hereby, and no applicable law
shall have been enacted, entered, promulgated, enforced, or made applicable that prohibits, restricts, or makes illegal the consummation
of the transactions contemplated hereby;

&nbsp;&nbsp;&nbsp;&nbsp;(b) All required Nasdaq notifications and filings in connection
with the issuance of the Exchange Shares shall have been submitted and any required waiting or review period shall have expired or been
waived; and

&nbsp;&nbsp;&nbsp;&nbsp;(c) All required authorizations, approvals, and consents of any
Governmental Authority necessary for the consummation of the transactions contemplated hereby shall have been obtained.

**Section 6.2. Conditions to DFNS's Obligations.** The obligations of DFNS to consummate the Closing are also subject to the satisfaction (or written waiver by DFNS) of each of the following conditions:

&nbsp;&nbsp;&nbsp;&nbsp;(a) The representations and warranties of VWAV set forth in Article
V shall be true and correct in all material respects as of the Effective Date and as of the Closing Date as if made on and as of such
dates (except that representations and warranties that are made as of a specified date shall be true and correct in all material respects
as of such specified date);

&nbsp;&nbsp;&nbsp;&nbsp;(b) VWAV shall have performed and complied in all material respects
with all covenants, obligations, and agreements required to be performed or complied with by VWAV under this Agreement at or prior to
the Closing; and

&nbsp;&nbsp;&nbsp;&nbsp;(c) DFNS shall have received the deliverables set forth in Section
3.3. **Section 6.3. Conditions to VWAV's Obligations.** The obligations of VWAV to consummate the Closing are also subject to the satisfaction (or written waiver by VWAV) of each of the following conditions:

&nbsp;&nbsp;&nbsp;&nbsp;(a) The representations and warranties of DFNS set forth in Article
IV shall be true and correct in all material respects as of the Effective Date and as of the Closing Date as if made on and as of such
dates (except that representations and warranties that are made as of a specified date shall be true and correct in all material respects
as of such specified date);

Share Exchange and Swap Agreement — DFNS / VWAV \| Page 9 of 15

&nbsp;&nbsp;&nbsp;&nbsp;(b) DFNS shall have performed and complied in all material respects
with all covenants, obligations, and agreements required to be performed or complied with by DFNS under this Agreement at or prior to
the Closing; and

&nbsp;&nbsp;&nbsp;&nbsp;(c) VWAV shall have received the deliverables set forth in Section
3.2. **ARTICLE VII**

**COVENANTS**

**Section 7.1. Public Disclosure.** Neither Party shall issue any press release or make any public announcement regarding this Agreement or the transactions contemplated hereby without the prior written consent of the other Party (not to be unreasonably withheld, conditioned, or delayed), except: (a) to the extent required by applicable law, rule, or regulation (including rules and regulations of the SEC and Nasdaq), in which case the disclosing Party shall provide the other Party with reasonable prior notice and a reasonable opportunity to review and comment on the proposed disclosure; and (b) as necessary to fulfill each Party's reporting obligations under the Securities Exchange Act, including the timely filing of any required Current Report on Form 8-K.

**Section 7.2. SEC Reporting.** Each Party shall be responsible for complying with its own obligations under the Securities Exchange Act in connection with the transactions contemplated hereby, including: (a) the timely filing of any required Current Report on Form 8-K and any required Schedule 13D or Schedule 13G or amendments thereto, as applicable; and (b) any required disclosures in its periodic reports filed with the SEC.

**Section 7.3. Nasdaq Notifications.** Each Party shall use commercially reasonable efforts to promptly submit to Nasdaq all notifications, filings, and applications required in connection with the listing of the Exchange Shares it issues pursuant to this Agreement and shall use commercially reasonable efforts to obtain any required approvals from Nasdaq.

**Section 7.4. Transfer Agent Instructions.** Promptly following the execution of this Agreement, each Party shall deliver irrevocable written instructions to its Transfer Agent authorizing and directing the Transfer Agent to issue and record the applicable Exchange Shares as set forth herein, subject to the Closing conditions set forth in Article VI.

**Section 7.5. Further Assurances.** Each Party shall, and shall cause its respective Affiliates to, execute and deliver, at the reasonable request of the other Party, such additional documents, instruments, and agreements, and shall take such further actions as may be reasonably required to consummate the transactions contemplated by this Agreement and to carry out the intent and purposes of this Agreement.

**Section 7.6. Holding Period; Rule 144 Compliance.** Each Party, in its capacity as a holder of the other Party's Exchange Shares, shall comply with all applicable requirements under Rule 144 and other applicable securities laws in connection with any proposed resale or transfer of such Exchange Shares following the expiration of any applicable holding period.

Share Exchange and Swap Agreement — DFNS / VWAV \| Page 10 of 15

**Section 7.7. No Short Sales.** From the date of this Agreement through the date that is ninety (90) days following the Closing Date, each Party agrees that it shall not, and shall cause its Affiliates not to, directly or indirectly effect, or enter into any agreement or understanding to effect, any short sale (as defined in Rule 200 of Regulation SHO) of the other Party's securities.

**Section 7.8. Lock-Up.** Each Party, as holder of the other Party's Exchange Shares, agrees that, during the period commencing on the Closing Date and ending on the date that is one hundred eighty (180) days thereafter, such Party shall not, without the prior written consent of the other Party, offer, sell, pledge, transfer, assign, or otherwise dispose of, or enter into any agreement to do any of the foregoing with respect to, any of the Exchange Shares received by such Party pursuant to this Agreement; provided, however, that the foregoing restriction shall not apply to any transfer by a Party to an Affiliate of such Party that agrees in writing to be bound by the restrictions contained in this Section 7.8.

**ARTICLE VIII**

**TERMINATION**

**Section 8.1. Termination Events.** This Agreement may be terminated at any time prior to the Closing:

&nbsp;&nbsp;&nbsp;&nbsp;(a) by mutual written consent of both Parties;

&nbsp;&nbsp;&nbsp;&nbsp;(b) by either Party, upon written notice to the other Party, if
(i) the Closing shall not have occurred on or before sixty (60) days following the Effective Date (the "**Outside Date** "),
unless such failure to close is primarily the result of the terminating Party's breach of this Agreement; or (ii) any Governmental Authority
shall have issued a final and non-appealable order, injunction, or decree prohibiting the consummation of the transactions contemplated
hereby;

&nbsp;&nbsp;&nbsp;&nbsp;(c) by DFNS, upon written notice to VWAV, if VWAV shall have breached
or failed to perform any of its representations, warranties, covenants, or agreements set forth in this Agreement, which breach or failure
(i) would result in a failure of any condition set forth in Section 6.2 and (ii) cannot be or has not been cured within twenty (20) Business
Days after delivery of written notice from DFNS identifying such breach; or

&nbsp;&nbsp;&nbsp;&nbsp;(d) by VWAV, upon written notice to DFNS, if DFNS shall have breached
or failed to perform any of its representations, warranties, covenants, or agreements set forth in this Agreement, which breach or failure
(i) would result in a failure of any condition set forth in Section 6.3 and (ii) cannot be or has not been cured within twenty (20) Business
Days after delivery of written notice from VWAV identifying such breach.

**Section 8.2. Effect of Termination.** In the event of termination of this Agreement pursuant to Section 8.1, this Agreement shall forthwith become void and have no further force or effect, and none of the Parties (or their respective directors, officers, employees, representatives, or Affiliates) shall have any liability or further obligation to the other Party under this Agreement; provided, however, that (a) no termination shall relieve any Party from liability for any willful breach of this Agreement, and (b) Sections 8.2, 9.1, 9.6, 9.7, 9.9, 9.10, 9.11, and 9.12 shall survive any termination of this Agreement.

Share Exchange and Swap Agreement — DFNS / VWAV \| Page 11 of 15

**ARTICLE IX**

**GENERAL PROVISIONS**

**Section 9.1. Survival.** The representations and warranties of the Parties contained in this Agreement shall survive the Closing for a period of twelve (12) months; provided that the representations and warranties set forth in Sections 4.1, 4.2, 4.3, 5.1, 5.2, and 5.3 (the "**Fundamental Representations**") shall survive until the applicable statute of limitations. The covenants and agreements of the Parties set forth in this Agreement shall survive the Closing in accordance with their respective terms.

**Section 9.2. Notices.** All notices, requests, demands, and other communications under this Agreement shall be in writing and shall be deemed given if: (a) delivered personally; (b) sent by nationally recognized overnight courier (with written confirmation of receipt); (c) sent by certified or registered mail, return receipt requested, postage prepaid; or (d) sent by e-mail (with confirmation of receipt by the intended recipient, other than by auto-reply). All notices shall be addressed to the Parties at the following addresses or such other addresses as a Party may designate by notice hereunder:

**If to DFNS:**

T3 Defense Inc.

500 Seventh Avenue, 8th Floor

New York, New York 10018

Attn: Chief Executive Officer

Email: menny@t3defense.com

**If to VWAV:**

VisionWave Holdings, Inc.

300 Delaware Ave, Suite 210, #310

Wilmington, Delaware 19801

Attn: Chief Executive Officer

Email: ddavis@vwav.inc

**Section 9.3. Entire Agreement.** This Agreement (together with all Schedules hereto) constitutes the entire agreement between the Parties with respect to the subject matter hereof, and supersedes all prior agreements, understandings, negotiations, representations, and warranties (whether written or oral) between the Parties with respect to the subject matter hereof.

**Section 9.4. Amendments; Waivers.** This Agreement may not be amended, modified, or supplemented except by a written instrument signed by authorized representatives of each of the Parties. No waiver of any provision of this Agreement shall be valid unless set forth in a written instrument signed by the waiving Party. No waiver by any Party of any breach or default hereunder shall be deemed a waiver of any subsequent breach or default, and no waiver shall affect the other terms of this Agreement.

**Section 9.5. Successors and Assigns.** This Agreement shall be binding upon and inure to the benefit of the Parties and their respective heirs, executors, legal representatives, successors, and permitted assigns. Neither Party may assign, transfer, or delegate any of its rights, obligations, or interests under this Agreement without the prior written consent of the other Party, provided that either Party may assign its rights hereunder to an Affiliate without such consent, so long as the assigning Party remains primarily liable for the performance of its obligations hereunder.

Share Exchange and Swap Agreement — DFNS / VWAV \| Page 12 of 15

**Section 9.6. Governing Law.** This Agreement shall be governed by, and construed in accordance with, the laws of the State of Delaware, without regard to its conflict of laws principles.

**Section 9.7. Dispute Resolution; Jurisdiction.** Any dispute, controversy, or claim arising out of or relating to this Agreement, or the breach, termination, or validity thereof, shall be brought exclusively in the Court of Chancery of the State of Delaware (or, if such court lacks subject matter jurisdiction, then in the U.S. District Court for the District of Delaware). Each Party hereby irrevocably submits to the personal jurisdiction of such courts and waives any objection it may now or hereafter have to the laying of venue of any such action or proceeding in such courts.

**Section 9.8. Waiver of Jury Trial.** EACH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LEGAL ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

**Section 9.9. Specific Performance.** Each Party agrees that irreparable damage would occur if any provision of this Agreement were not performed in accordance with the terms hereof and that the Parties shall be entitled to specific performance of the terms hereof, in addition to any other remedy at law or equity to which they may be entitled, without the necessity of proving actual damages or posting a bond or other security.

**Section 9.10. Severability.** If any term or provision of this Agreement is determined by a court of competent jurisdiction to be invalid, illegal, or unenforceable, such invalidity, illegality, or unenforceability shall not affect any other term or provision of this Agreement, and this Agreement shall be construed as if such invalid, illegal, or unenforceable term or provision were not contained herein, so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner materially adverse to any Party.

**Section 9.11. Counterparts; Electronic Signatures.** This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, and all of which together shall constitute one and the same instrument. Electronic signatures (including PDF and DocuSign or similar electronic signature platform) shall be deemed original signatures and shall be binding to the same extent as original ink signatures.

**Section 9.12. No Third-Party Beneficiaries.** This Agreement is entered into for the sole benefit of the Parties and their respective successors and permitted assigns, and nothing herein, express or implied, is intended to or shall confer upon any other Person any legal or equitable right, benefit, or remedy of any nature whatsoever under or by reason of this Agreement.

**Section 9.13. Independent Counsel.** Each Party acknowledges that it has had the opportunity to seek, and has been advised by, independent legal counsel of its choosing in connection with the negotiation and execution of this Agreement, and that neither Party has been required to rely on any representation of the other Party's counsel.

**Section 9.14. Expenses.** Except as otherwise expressly set forth in this Agreement, each Party shall bear its own costs and expenses (including legal fees and expenses) incurred in connection with the negotiation, preparation, execution, delivery, and performance of this Agreement and the consummation of the transactions contemplated hereby.

**Section 9.15. Privileged Communications.** The Parties acknowledge that, to the extent privileged communications exist between either Party and its legal counsel relating to the transactions contemplated by this Agreement, such privilege belongs to such Party and shall not be waived by reason of the consummation of the transactions contemplated hereby.

Share Exchange and Swap Agreement — DFNS / VWAV \| Page 13 of 15

***[SIGNATURE PAGE FOLLOWS]***

**IN WITNESS WHEREOF**, the Parties have caused this Share Exchange and Swap Agreement to be executed as of the Effective Date first written above.

---

| | | | |
|:---|:---|:---|:---|
| **T3 DEFENSE INC.** <br> (Nasdaq: DFNS) | **T3 DEFENSE INC.** <br> (Nasdaq: DFNS) | **VISIONWAVE HOLDINGS, INC.** <br> (Nasdaq: VWAV) | **VISIONWAVE HOLDINGS, INC.** <br> (Nasdaq: VWAV) |
| By: | /s/ Menachem (Menny) Shalom | By: | /s/ Douglas Davis |
| Name: | Menachem (Menny) Shalom | Name: | Douglas Davis |
| Title: | Chief Executive Officer and Chairman | Title: | Chief Executive Officer |
| Date: | May 17, 2026 | Date: | May 17, 2026 |

---

Share Exchange and Swap Agreement — DFNS / VWAV \| Page 14 of 15

**SCHEDULE A**

**SUMMARY OF SHARE EXCHANGE TERMS**

---

| | | |
|:---|:---|:---|
| **Parameter** | **DFNS (Issuer)** | **VWAV (Issuer)** |
| **Reference Price** | $0.443 / share | $5.590 / share |
| **Price Date** | May 15, 2026 (Nasdaq close) | May 15, 2026 (Nasdaq close) |
| **Shares Outstanding (DFNS)** | 54270525 |  |
| **% Issued** | 9.99% | Equivalent dollar value |
| **New Shares Issued** | 6000000 | 475492 |
| **Aggregate Exchange Value** | $2.658000 | $2658000 |
| **Share Type** | Restricted (Rule 144) | Restricted (Rule 144) |
| **Registration Rights** |  |  |
| **Lock-Up Period** | 180 days from Closing | 180 days from Closing |
| **No-Short-Sale Period** | 90 days from Closing | 90 days from Closing |

---

**Notes:**

1. All share counts are rounded to the nearest whole share; no
fractional shares will be issued.

2. The DFNS shares outstanding figure (54,270,525) is confirmed
with DFNS's Transfer Agent.

3. Reference prices reflect the most recently confirmed Nasdaq
closing prices as of the date of this Agreement .

4. This Schedule is for reference only and is subject in all respects
to the terms and conditions of the Agreement.

Share Exchange and Swap Agreement — DFNS / VWAV \| Page 15 of 15

## Exhibit 31.1

**Exhibit 31.1**

**T3 DEFENSE INC.**

**CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002**

I, Menachem Shalom, certify that:

&nbsp;&nbsp;&nbsp;&nbsp;1. I have reviewed this Quarterly
 Report on Form 10-Q of T3 Defense Inc.;

2. Based on my knowledge,
 this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements
 made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this
 report;

3. Based on my knowledge,
 the financial statements, and other financial information included in this report, fairly present in all material respects the financial
 condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's
 other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in
 Exchange Act Rules 13a–15(e) and 15d–15(e)) and internal control over financial reporting (as defined in Exchange Act
 Rules 13a–15(f) and 15d–15(f)) for the registrant and have:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) designed such disclosure
 controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material
 information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities,
 particularly during the period in which this report is being prepared;

(b) designed such internal
 control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision,
 to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for
 external purposes in accordance with generally accepted accounting principles;

(c) evaluated the effectiveness
 of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness
 of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) disclosed in this report
 any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent
 fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control
 over financial reporting; and

&nbsp;&nbsp;&nbsp;&nbsp;5. The registrant's
 other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting,
 to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the
 equivalent functions):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) all significant deficiencies
 and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely
 affect the registrant's ability to record, process, summarize and report financial information; and

(b) any fraud, whether or not
 material, that involves management or other employees who have a significant role in the registrant's internal control over
 financial reporting.

---

| | |
|:---|:---|
| By: | */s/ Menachem Shalom* |
|  | Menachem Shalom |
|  | Chief Executive Officer |
|  | (Principal Executive Officer) |
| Date: | May 20, 2026 |

---

## Exhibit 31.2

**Exhibit 31.2**

**T3 DEFENSE INC.**

**CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002**

I, Morel Levi, certify that:

&nbsp;&nbsp;&nbsp;&nbsp;1. I have reviewed this Quarterly
 Report on Form 10-Q of T3 Defense Inc.;

2. Based on my knowledge,
 this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements
 made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this
 report;

3. Based on my knowledge,
 the financial statements, and other financial information included in this report, fairly present in all material respects the financial
 condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's
 other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in
 Exchange Act Rules 13a–15(e) and 15d–15(e)) and internal control over financial reporting (as defined in Exchange Act
 Rules 13a–15(f) and 15d–15(f)) for the registrant and have:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) designed such disclosure
 controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material
 information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities,
 particularly during the period in which this report is being prepared;

(b) designed such internal
 control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision,
 to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for
 external purposes in accordance with generally accepted accounting principles;

(c) evaluated the effectiveness
 of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness
 of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) disclosed in this report
 any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent
 fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control
 over financial reporting; and

&nbsp;&nbsp;&nbsp;&nbsp;5. The registrant's
 other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting,
 to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the
 equivalent functions):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) all significant deficiencies
 and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely
 affect the registrant's ability to record, process, summarize and report financial information; and

(b) any fraud, whether or not
 material, that involves management or other employees who have a significant role in the registrant's internal control over
 financial reporting.

---

| | |
|:---|:---|
| By: | */s/ Morel Levi* |
|  | Morel Levi |
|  | Chief Financial Officer |
|  | (Principal Financial and Accounting Officer) |
| Date: | May 20, 2026 |

---

## Exhibit 32.1

**Exhibit 32**.**1**

**T3 DEFENSE INC.**

**CERTIFICATION PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002**

In connection with this Quarterly Report on Form 10-Q of T3 Defense Inc. as filed with the Securities and Exchange Commission on the date hereof (the "Report"), the undersigned, in the capacity and on the date indicated below, hereby certifies pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to his knowledge:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operation of the registrant.

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| | |
|:---|:---|
| By: | */s/ Menachem Shalom* |
|  | Menachem Shalom |
|  | Chief Executive Officer |
|  | (Principal Executive Officer) |
| Date: | May 20, 2026 |

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## Exhibit 32.2

**Exhibit 32**.**2**

**T3 DEFENSE INC.**

**CERTIFICATION PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002**

In connection with this Quarterly Report on Form 10-Q of T3 Defense Inc. as filed with the Securities and Exchange Commission on the date hereof (the "Report"), the undersigned, in the capacity and on the date indicated below, hereby certifies pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to his knowledge:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operation of the registrant.

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| | |
|:---|:---|
| By: | */s/ Morel Levi* |
|  | Morel Levi |
|  | Chief Financial Officer |
|  | (Principal Financial and Accounting Officer) |
| Date: | May 20, 2026 |

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