NASDAQ: DFNSW

As a result of Business Combination,
we became a financial technology company with the aim of providing blockchain-enabled technology solutions. From the consummation of
the Business Combination until the change of management in September 2024, we operated in the technology business as a full-service transactions
technology and advisory business providing end-to-end transactions technology solutions. We offered an advanced transactions platform
for dealing and risk management with global liquidity and customizable leverage, where users have control over quote and liquidity strategies.

Historically, the Company,
through its wholly owned subsidiary, provided software and technology solutions for the worldwide retail foreign exchange trading industry.
The Company’s primary customer was Triton Capital Markets Ltd. (“TCM”) (formerly known as FXDD Malta Limited). Emil
Assentato, the former CEO and a former director of the Company, is also the majority member of Max Q Investments LLC (“Max Q”),
which is managed by Derivative Marketing Associates Inc. (“DMA”). Mr. Assentato is the sole owner and manager of DMA. Max
Q owns 79% of Currency Mountain Malta LLC, which in turn is the sole shareholder of TCM. In order to define the services rendered to
TCM, Nukkleus Limited, a wholly-owned subsidiary of the Company, entered into a General Services Agreement (“GSA”) with TCM
in May 2016. The GSA provides that TCM will pay Nukkleus Limited a minimum of $1,600,000 per month. Due to non-payment by TCM under the
GSA, the Company advised TCM that the GSA has been terminated. The Company has historically generated substantially most of its revenue
through the services rendered under the GSA. On September 30, 2024, the Company, TCM and FXDirectDealer LLC (“FXDD”) entered
into a Release Agreement pursuant to which the parties confirmed that the GSA between the Company and TCM and the General Services Agreement
dated May 24, 2016, as amended (“FXDD GSA”) between the Company and FXDD were terminated effective January 1, 2024. The parties
further confirmed that there are no obligations or liabilities outstanding or owed between the parties as of September 30, 2024, and
each party released and forever discharged the other party from any and all claims, demands, damages, actions, causes of action, or suits
of any kind or nature whatsoever, both known and unknown, which have arisen or may arise from the GSA or the FXDD GSA.

The Company historically
operated its blockchain payment solutions through Digital RFQ Limited (“DRFQ”), a wholly owned subsidiary of Match Financial
Ltd. (“Match”), a wholly owned subsidiary of the Company. On November 8, 2024, the Company entered into a Settlement Agreement
and Release with Jamal Khurshid and Match providing that Match agreed to sell DRFQ, to Mr. Khurshid or his nominee subject to the Company
obtaining shareholder approval (the “Settlement Agreement”). As required by the Settlement Agreement, the Company, Match
and Mr. Khurshid entered into a Share Purchase Agreement dated December 27, 2024 providing that the Company, subject to it obtaining
shareholder approval, will sell DRFQ to Mr. Khurshid in consideration of £1,000. The Company believed the sale of DRFQ was in the
best interest of the Company due to continuing net loss generated by DRFQ.

As of August 2025, the Company
determined that it no longer had a controlling financial interest in Digital RFQ due to loss of access to financial records. Accordingly,
the Company deconsolidated DRFQ during the third quarter of fiscal year 2025. The Company was notified that on July 29, 2025, Match was
placed into administration in the United Kingdom pursuant to the Insolvency Act 1986 resulting in the appointment of two administrators
(the “Administrators”). The Administrators completed a pre-packaged sale of Match’s entire shareholding in DRFQ to
Match Financial Holdings Limited, a newly formed entity owned by Mr. Khurshid, for nominal consideration of £102,000.

1

T3 Defense 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.

The chart below shows the
current ownership and names of our portfolio companies:

Our Current Portfolio:

Defense and Aerospace Technology Acquisitions:

●

Star 26 Capital Inc. - Defense
technology holding company that owns B. Rimon Agencies Ltd., an Israeli supplier of generators for
“iron dome” launchers and defense systems. [closed January 12, 2026]

●
Tiltan Software Engineering Ltd. - Israeli AI software company specializing in defense and aerospace applications including GPS-denied navigation, 3D mapping, simulation systems, and AI training platforms. [closed December 30, 2025]

●
Nimbus Drones Technologies and Marketing Ltd. – Israeli company specializing in unmanned arial systems and services. [closed January 15, 2026]

●
I.T.S. Industrial Tecno-logic Solutions Ltd.– Israeli company providing design, development, production and manufacturing of serial, fully integrated electro-mechanical machines and sophisticated assembly lines. [closed February 16, 2026]

●
Positech Ltd., wholly owned subsidiary of I.T.S. – designs and manufactures top-of-the line, high performance motion control systems for military and civilian use.

2

Technology Distribution and Licensing:

●

Blade Ranger Ltd. (Exclusive U.S.
Distribution rights) - Distribution agreement for advanced drone payload systems for defense and
homeland security markets, with minimum commitments of 30 payloads over three years. [August 25,
2026]

●
Mandragola Aviation Joint Venture (51% ownership) - Strategic joint venture to establish aviation
and defense infrastructure in the Baltics and Israel, including NATO-compliant logistics hubs, MRO (maintenance, repair and operations)
facilities, and aircraft modernization capabilities. [August 29, 2026]

Star 26 Capital Inc.

Acquisition of 100% of Star 26

On December 15, 2024, the
Company entered into the Securities Purchase Agreement and Call Option with Star 26 Capital, Inc., a Nevada corporation (“Star”),
the shareholders of Star and Menachem Shalom, as representative of the shareholders, which was subsequently amended on each of February
11, 2025, May 13, 2025, June 15, 2025 and July 25, 2025. Said agreement, as amended, provided that we would acquire 51% of Star and the
Star shareholders would grant the Company an option to purchase the balance of the equity. Mr. Shalom, who is the Chief Executive Officer
and a director of the Company, is a controlling shareholder, Chief Executive Officer and a director of Star.

On September 15, 2025, the
parties executed and delivered the Amended and Restated Securities Purchase Agreement (the “Star Agreement”) with Star,
the Star shareholders and Menachem Shalom, the representative of such shareholders, to provide that at closing the Company will acquire
100% of the issued and outstanding capital of Star in consideration of (i) $21,000,000, to be paid by a 12-month $16,000,000 promissory
note (the “Investment Note”) and the balance in $5,000,000 cash, less any amounts lent to Star from the Company since December
15, 2024, the date of the original purchase agreement, (ii) 4,770,340 shares of common stock of the Company (the “Shares”),
(iii) a five-year warrant (the “Star Warrant”) to purchase an aggregate of 12,017,648 shares of the Company’s common
stock for an exercise price of $1.50 per share, (iv) $3,000,000 in cash and (v) a 6-month promissory note in the principal amount of
$3,000,000, which shall accrue interest at the rate of 8%. The Shares, Star Warrant, cash and the 6-month note will be assigned by Star
to the Star shareholders pro ratably. If, for a period of 12 months after the closing, the Common Stock is delisted from Nasdaq, Star
shall have the right, at its own discretion, to require the Company to exchange the Investment Note for all the shares of Star then held
by the Company, provided, however, Star shall retain any cash payments made by the Company to Star and the Company shall retain an equity
interest in Star equivalent to all cash payments made.

The closing of the transaction
was subject to customary closing conditions, including approval by the Company’s shareholders as required under applicable Nasdaq
listing rules. As a result of the above transaction, the Shares issued to Star and assigned to the Star shareholders represented 16.4%
of the issued and outstanding shares of Common Stock, and assuming the Star shareholders exercise the Star Warrant, the Star shareholders
would hold an aggregate of 16,787,988 shares of Common Stock representing 57.6% of the issued and outstanding shares of Common Stock
of the Company as of the date of the closing.

On January 12, 2026, the
Company completed the acquisition of Star. As a result of the acquisition, Star 26 became a wholly owned subsidiary of the Company. The
transaction was approved by the Company’s shareholders on December 16, 2025 and confirmed by the Nasdaq Stock Market on January
9, 2026.

Star Business Description

Star is an acquisition holding
company focused on locating undervalued and undercapitalized companies, primarily in the defense, industrial machinery and application,
manufacturing, transportation, information technology, and aerospace industries, and providing them capitalization and leadership to
maximize their value and the potential of their private enterprises while also promoting diversification and risk mitigation for our
stockholders. Our acquisition strategy focuses on small and medium businesses, which we characterize as those that have an enterprise
value of less than $200 million, in a variety of different industries, with a preference for multinational businesses. To date, we have
completed a single acquisition of a defense technology company. Star has not identified any specific business as a target for its next
acquisition, and it has not entered into any letters of intent, nor has anyone on its behalf, initiated any substantive acquisition discussions,
directly or indirectly, with any such target.

Star completed its first
acquisition on February 15, 2024, in connection with our operating subsidiary in the Israeli defense industry, B. Rimon Agencies Ltd.
Rimon is a defense technology company and has been in business since 1992 serving the country of Israel and acting as an exclusive distributor
in Israel of tier-1 generators, masts, and lighting solutions, as well as a wide range of defense, homeland security and commercial systems.

The Company seeks to acquire
controlling interests in small and medium businesses that it believes operate in industries with long-term growth opportunities, which
continue to have positive and stable earnings and cash flows, face minimal threats from technological or competitive obsolescence, and
have strong management teams largely in place. Star’s mission is to make these businesses its majority-owned subsidiaries and actively
manage and grow such businesses. Star expects to improve its business over the long term through organic growth opportunities, add-on
acquisitions, and operational improvements.

Star currently holds (1)
100% of Rimon, an Israeli corporation engaged as distributor of military-grade generators, masts and lighting systems and that is, among
other clients, a supplier of generators for “Iron Dome” launchers, (2) 67% of Water.IO Ltd., an Israeli corporation listed
on the Tel Aviv Stock Exchange engaged in smart hydration technology, and (3) 51% interest in I.T.S. Industrial Techno-logic Solutions
Ltd., an Israeli corporation which designs, develops and manufactures fully integrated electro-mechanical machines, assembly lines and
custom motion systems. Water.IO owns 100% of ZorroNet Ltd., an Israeli corporation specializing in the development and deployment of
artificial intelligence systems for perimeter security, defense, monitoring and command and control applications.

3

Star’s Corporate History and Structure

Star was incorporated by
its founder, Menachem Shalom, on January 17, 2024, as Star 26 Capital Inc., a Nevada corporation. Billio Inc., Star’s wholly owned
subsidiary, is a Delaware corporation formed by Mr. Shalom on February 12, 2021, to act as an intermediate holding company for Rimon.

Star’s Acquisition of Rimon

On February 15, 2024, Star
executed an assignment and assumption agreement with Mr. Shalom, pursuant to which Star, through its wholly owned subsidiary, Billio,
acquired all of the issued and outstanding capital stock of Rimon. Under the terms of that agreement, Star agreed to assume all of Mr.
Shalom’s rights and obligations toward the sellers of Rimon, as outlined in earlier agreements by and between the same, dated December
22, 2023, and February 15, 2024. Additionally, Star agreed to reimburse Mr. Shalom for his out-of-pocket costs related to the acquisition
of Rimon, and for operating loans which he made to Rimon thereafter. To do so, Star issued him a demand grid promissory note with an
initial principal of $155,405, which increased to $280,857 by August 28, 2024, with the initial principal being advanced to cover Mr.
Shalom’s out-of-pocket costs, and the increase therein related to the advance for operations. The grid note bears interest at 8%
per annum and matures 60 days after the earlier of one year from the issuance date or upon the closing of a private placement or public
offering of at least $5,000,000.

Rimon is an Israeli corporation
engaged as a supplier of generators for “iron dome” launchers and other defense products which business includes the purchase
and sale of generators, masts, and lightning products and solutions, which it acquires through exclusive distributorship agreements with
key third-party suppliers and the engineering, design, production, integration, and maintenance of special tactical vehicles and trailers,
including reconnaissance vehicles, mobile command and control vehicles, firefighting trailers, energy and lighting trailers, and satellite
broadcast mobility platforms which are primarily sold to special defense forces, intelligence agencies and the Israeli Defense Forces.

Star’s Market Opportunity and Growth
Strategy

We believe there is a significant
opportunity for organic growth via the acquisition of small and medium size businesses with an enterprise value of less than $200 million
(based on the opinion of our management team and advisors), that may be operating in highly fragmented markets throughout the world,
including the U.S. and Israel, which are owned and operated by persons within isolated networks of family offices, entrepreneurs, and
intermediaries, each of which with the potential to generate attractive returns for our stockholders and investors. Our core operational
principles focus on managing our acquired enterprises to ensure recurring cash flow and lasting terminal value, while fostering long-term
sustainability in our investments. To do so, the Company aims to invest in and/or buy controlling stakes in operating, revenue-generating
businesses. Controlling stakes would allow us to lead the companies into operational efficiencies, growth in revenues, improved financial
reporting and operational procedures, hire talented employees and managers and increase the overall enterprise value of these companies.
Star’s search for future acquisition targets focuses on companies located in the U.S. or Israel, or both, that provide products
and or services to large defense and aerospace companies and or governments. Notwithstanding the forgoing, we may target and acquire
companies for acquisition that are located outside the U.S. and Israel if such acquisitions fit within our overall acquisition philosophy
and strategy.

We also believe that the
economic and market dislocations resulting from the conflict in Israel, as well as other conflicts worldwide, provide an opportunity
for companies in the defense industry to see higher-than-average demand for their products and services. Such market conditions, if they
persist, would allow us to focus on acquiring profitable businesses in the defense sector, with the opportunity to take advantage of
their potential future growth. Within the Israeli defense market in particular, management expects to see a significant number of businesses
struggling to satisfy growing demand for their products and services due to a lack of access to capital and experienced executive level
leadership among other factors. We believe we will be able to provide these needed resources to any Israeli target company that it acquires.
It is confident that the expertise of our management team and the relationships that they can bring to an acquisition represent a compelling
value proposition for any potential acquisition target looking to add working capital, a pathway to exit, and a solid leadership base,
to assist such a company to grow and expand and to be able to take advantage of market opportunities as they arise.

4

Star’s Acquisition Process and Strategy

T3’s current acquisition
strategy involves the acquisition of small and medium size businesses in various industries, with an initial focus on industries associated
with the defense sector, including but not limited to industrial machinery and application, manufacturing, transportation, information
technology, and aerospace, that we expect will produce positive, stable earnings, and provide attractive returns on our invested capital.
As part of its evaluation of whether it will acquire a particular business, it will perform a comprehensive due diligence review to determine
the quality and intrinsic value of the targeted company. we will also seek to identify operational inefficiencies which it would expect
to resolve, post-closing, by implementing streamlined processes, optimizing resource allocation, and leveraging innovative solutions
with the objective of enhancing overall productivity and effectiveness of such companies. Its due diligence typically includes an analysis
of the target Company’s financial statements, detailed document reviews, meetings with current management, consultations with relevant
industry experts, competitors, suppliers, and customers, and any other information gathering that we deem appropriate in conducting a
comprehensive analysis.

Management believes that
the defense sector is poised to experience significant growth in the next few years due to the increasing number of violent conflicts
in the world, which may cause an increase in direct demand for defense solutions from conflict participants and their allies. We also
anticipate seeing indirect, additional defense industry growth for, as we have observed, countries not involved in or participating in
conflicts tend to increase their defense budgets and spending in anticipation of additional future conflicts in which they may become
involved. It is our belief that acquiring companies in the defense sector will help us establish a unique marketing network and build
expertise in the greater defense sector, thus enabling us to cross-sell products to our large customers and facilitate higher success
rates in our sales efforts.

According to the Company’s
industry specific market research and analysis, and the network and knowledge of its management team, it is our expectation that attractive
opportunities are likely to emerge as private sector owners aim to grow their businesses through scaling or by forming outside partnerships
to add value. Our value-add proposition involves partnering with exceptional entrepreneurs, acquiring their companies, and guiding them
by providing the funding and resources they will need to become global enterprises. We believe that through this approach we will be
more likely to identify and attract potential and appropriate targets for acquisition. Management also believe that the greatest opportunities
for consistent annual returns and residual returns on capital from its acquisitions lie in targeting businesses in niche geographical
markets with a competitive edge in the defense, government, and military sectors, especially in the U.S. and Israel. While we expect
our management team will be most effective working with the types of businesses described above, we will also consider acquiring businesses
outside of these industries and sectors as long as any such businesses are congruent with our acquisition strategy.

Pursuant to the acquisition
strategy, the Company will seek to structure its transactions such that each of the businesses it acquires will become its wholly owned
or controlled subsidiary. However, we may also close acquisitions that result in its ownership of an entity being less than 100%, to
meet certain objectives of the target management team or their then-existing stockholders, or for other strategic reasons; provided
that we will always acquire more than 50% of the outstanding voting control of any target, or otherwise obtain a controlling interest
in such target.

T3 intends to finance acquisitions
primarily through the public or private sale of our equity and debt securities. While the success of this financing strategy cannot be
guaranteed, the ability to finance future acquisitions through its general capital resources, rather than through acquisition-specific
financing, will allow us to minimize delays and closing conditions, thereby enhancing its ability to acquire attractive businesses. Because
the timing and size of future acquisitions cannot be readily predicted, we may need access to funding on short notice to be able to benefit
fully from attractive acquisition opportunities.

As part of the acquisition
strategy, we will seek to evaluate each potential target’s management team and operational and financial strengths and weaknesses.
It will review and compare identified targets to comparable businesses and conduct in-depth research on each potential target’s
industry to enhance our assessment of their financial and operational performance and their growth and success potential. We will thoroughly
negotiate appropriate terms and conditions of any acquisition of a target company that satisfies its acquisition criteria. Some of the
future acquisition targets may be financially unstable or in the early stages of development or growth. Even if pre-existing conditions
do not negatively impact its decision to acquire a target company, such target may also be subject to numerous other risks inherent in
its business and industry, as well as the risks faced by generally by capital markets participants. Although its management team will
endeavor to comprehensively evaluate the risks associated with any particular acquisition target, Star cannot assure you that it will
properly ascertain, assess, or protect against all significant risk factors.

5

Valuation and Due Diligence

We intend to perform rigorous
business operations and financial evaluations of any target businesses (or assets) that it may acquire. During such due diligence, we
intend to evaluate the financial aspects of its acquisition targets using the following metrics:

●
discounted cash flow analysis;

●
evaluation of trading values
of comparable public companies;

●
expected value matrices;

●
assessment of competitor,
supplier, and customer environments; and

●
review and examination
of recent/precedent transactions.

We expect our target review
process will yield two outcomes, (1) an accurate projection of expected cash flows, and (2) an understanding of the types and levels
of risk associated with those projections. While future performance and projections are always uncertain, we believe that our detailed
target company review process will enable us to effectively evaluate the prospects and upside of any given acquisition opportunity. Additionally,
to assist management in identifying material risks and validating key assumptions in our financial and operational analysis, we will
engage third-party experts to review key risk areas, including legal, tax, regulatory, accounting, insurance and environmental. We may
also engage technical, operational or industry consultants, as necessary.

We also engage in an extensive
evaluation of each target’s existing management team, including a focus on recent performance, expertise, experience, culture,
and performance incentives. Where necessary, and consistent with our management strategy, following the acquisition of a target company,
we will actively seek to augment, supplement, or replace existing members of target company management who we believe are not likely
to properly execute our business plan for the target. Star also analyzes and evaluates the operational and financial systems of each
target business and, when necessary, post-acquisition, we will actively seek to enhance and improve those existing systems that are deemed
to be inadequate or insufficient to support our business plan for the target business.

Financing

T3 expects to finance acquisitions
primarily through additional equity and debt offerings. Although we cannot guarantee that we will be successful with this strategy, management
believes that having the ability to finance particular future acquisitions with the general capital resources raised by the company will
provide us with an advantage in acquiring attractive businesses by minimizing delay and closing conditions that are often related to
acquisition-specific financings. In this respect, we believe that, in the future, we will need to pursue access to additional capital
via debt or equity offerings to successfully fund and execute our business and acquisition strategy.

Competition

In identifying, evaluating,
and selecting potential target businesses for our acquisition strategy, we may encounter intense competition from other entities that
have business objectives similar to ours, including blank check companies such as SPACs, leveraged buyout funds, operating businesses
seeking strategic acquisitions, and private equity groups. Many of these entities are well-established and well-financed and may have
greater experience identifying and effecting acquisitions directly or indirectly. These competitors may possess greater financial, technical,
human, and other resources than we do. Our ability to acquire larger target businesses in our target sectors will be limited by its available
financial resources. Our inherent financial limitations may provide others with an advantage to pursue the acquisition of one or more
of its identified target businesses. Any of these factors may place us at a competitive disadvantage in successfully negotiating acquisitions.

6

Competitive Advantages

We believe that the collective
investment experience of our management and approach to executing its investment strategy will enable it to have several competitive
advantages. Our competitive strengths that differentiate us from other acquisition holding companies include:

●

Specialization in the Military
and Defense sector. We believe that our focus on the military and defense sectors will enable
us to be competitive. This industry may be undergoing a significant transformation as government
acquisition processes and new policy incentives align to prioritize national security objectives
and promote the adoption of new commercial technologies for military use. In addition, the combination
of governments of multiple countries having a need for new, advanced technologies to combat modern
threats, along with changing warfare tactics, is driving this specific demand. We believe we are
uniquely positioned to enter and succeed as an acquisition holding company in this industry.

●

International and Sector-Specific
Expertise. Mr. Shalom, the founder and Chief Executive Officer of T3, has operated businesses
internationally, including in Israel. His extensive international experience and knowledge of Israeli
business operations, along with a broad network of contacts, provide us with a competitive advantage.
This network can assist us in identifying new acquisition targets, finding suitable managers, and
securing international capital. Additionally, our directors and executive officers bring executive,
investment, and operational experience in managing and growing small and middle-market companies
in the defense sector. We believe this combined expertise gives us a significant edge in evaluating
future business and acquisition opportunities.

●

Value Proposition for Business
Owners. We employ a creative, flexible approach by tailoring each acquisition structure to meet
the specific liquidity needs and certain qualitative objectives of a target’s owners and management
team. We are open to providing a complete exit strategy to its sellers or providing opportunities
to retain incumbent management. In this effort, we believe that T3 is an appealing buyer for small
business owners and managers. As a result, we believe business owners and managers will find it to
be a dynamic, value-added buyer that brings resources to achieve their strategic, capital and operating
needs, resulting in value creation for the operating subsidiary.

Human Capital

As indicated below, Star’s
operating subsidiary Rimon employs 18 people: three technicians, two engineers, three assembly workers, three sales employees, one customer
support employee, one financial bookkeeper, and five management employees. None of our employees or any of our subsidiary’s employees
are represented by labor unions, and we believe that we have an excellent relationship with such employees.

Sales and Marketing

Star markets its generators,
masts, lightning and utility vehicles through our websites and by working with our internal sales team that offers relevant off-the-shelf
or tailor-made solutions based on specific client needs and requests. In the future, Star intends to utilize numerous avenues to promote
its business, including digital marketing across social media channels, Web3 reservation systems, and various modes of advertisements.

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.

7

Government Regulation

The following is a list of government regulations
which may apply to Star now or in the future as it continues to carry out its business:

●Approval
of U.S. and Other Defense Acquisitions. Many countries, including Israel, require governmental approval of acquisitions of local
defense companies or assets by foreign entities. Mergers and acquisitions of defense-related and other potentially sensitive businesses
in the U.S. are subject to the Foreign Investment Risk Review Modernization Act of 2018 (FIRRMA). Under FIRRMA, its future acquisitions
of defense-related and other potentially sensitive businesses in the U.S., if any, may require review, and in some cases approval, by
the Committee on Foreign Investment in the U.S. (CFIUS). CFIUS has the authority to impose additional restrictions through National Security
Agreements (NSA) as part of its review and approval of the acquisitions.

●
Procurement Regulations.
Solicitations for procurement by governmental purchasing agencies in Israel, the U.S. and other countries are governed by laws, regulations
and procedures such as those relating to procurement integrity, including due diligence, avoiding conflicts of interest and corruption,
and meeting information assurance and cyber-security requirements. Such regulations also include provisions relating to the avoidance
of human trafficking and counterfeit parts in the supply chain. In view of the ongoing conflict between Russia and Ukraine, various
countries and organizations have adopted specific sanctions and regulations to restrict, among other things, the use of certain goods
and technologies originating from Russia. Similarly, the United Stated has adopted specific regulations to restrict, among other
things, the procurement of goods or services from specific Chinese entities. Such regulations may apply to us as well as to our supply
chain.

●
Anti-Bribery/Corruption
Regulations. Star may conduct operations in a number of markets that are considered high risk from an anti-bribery/anti-corruption
compliance perspective. Laws and regulations such as the Israel Penal Code, the OECD Convention on Combating Bribery of Foreign Public
Officials in International Business Transactions, the U.S. Foreign Corrupt Practices Act, the U.K. Bribery Act and corresponding
legislation in other countries, prohibit providing personal benefits or bribes to government officials in connection with the governmental
procurement process. Israeli defense exporters are required to maintain and follow an anti-bribery/corruption compliance program.

●
Cybersecurity and Data
Privacy Regulations. Certain data relating to employees, customers and supply chain that we may receive and maintain, now or
in the future, directly or indirectly, is subject to data privacy regulations, including those of the European General Data Privacy
Regulation and corresponding Israeli legislation. There has also been an increased focus on cybersecurity, as global privacy, cybersecurity
and data protection-related laws and regulations are evolving, extensive, and complex. Star may also be required to comply with expanding
and increasingly complex cybersecurity regulations and guidelines in the United States, Israel and elsewhere with respect to reporting
adverse events and additional requirements for avoiding or responding to an adverse event.

●
Audit Regulations.
In the future, the Israeli Ministry of Defense may audit the books and records of our Israeli defense contractor subsidiaries. Such
books and records and other aspects of projects related to U.S. defense contracts, if any, will also be subject to audit by U.S.
government audit agencies. Such audits review compliance with government contracting cost accounting and other applicable standards.
If discrepancies are found this could result in a downward adjustment of the applicable contract’s price as well as potential
penalties. Some other customers have similar rights under specific regulations or contract provisions.

●
Competition Laws.
Competition laws and regulations in Israel, the U.S. and other countries often require governmental approvals for transactions that
are considered to limit competition. Such transactions may include the formation of joint venture entities, cooperative agreements
for specific programs or areas, as well as mergers and acquisitions.

●
Environmental, Health
and Safety Regulations. Star may become subject to a variety of environmental, health and safety laws and regulations in the
jurisdictions in which we have operations. This potentially includes regulations relating to air, water and ground contamination,
hazardous waste disposal and other areas with a potential environmental, health or safety impact. Increased public concern may result
in more international, U.S. federal, and/or regional requirements to reduce or mitigate the effects of climate change, such as regulating
greenhouse gas emissions, policies mandating or promoting the use of renewable or zero-carbon energy and sustainability initiatives,
and additional taxes on fuel and energy. Legislation or regulations may be enacted or promulgated in any jurisdiction in which we
do business that impose more stringent restrictions and requirements than our current legal or regulatory obligations. In January
2023, the European Corporate Sustainability Reporting Directive (CSRD) came into force, which requires in-scope companies, among
other things, to make sustainability reports including certain mandatory disclosures and other voluntary disclosures on impacts,
risks, and opportunities in relation to sustainability matters identified as material by the relevant entity. On March 6, 2024, new
SEC rules on climate-related disclosure were adopted which may subject us to burdensome and potentially costly emissions and other
data gathering and reporting requirements. We will continue to assess the potential impact of the CSRD and SEC rules on our business
and subsidiaries, if any.

8

B. Rimon Agencies Ltd., Star’s Israeli
Defense Business

Star’s defense military
technology business is operated by B. Rimon Agencies Ltd., our indirect, wholly owned operating subsidiary that Star acquired on February
15, 2024.

Rimon is an Israeli corporation
engaged as a supplier of generators for “iron dome” launchers and other defense products which business includes the purchase
and sale of generators, masts, and lightning products and solutions, which it acquires through exclusive distributorship agreements with
key third-party suppliers and the engineering, design, production, integration, and maintenance of special tactical vehicles and trailers,
including reconnaissance vehicles, mobile command and control vehicles, firefighting trailers, energy and lighting trailers, and satellite
broadcast mobility platforms which are primarily sold to special defense forces, intelligence agencies and the Israeli Defense Forces.

The Defense Industry

The primary geographic market
focus as of the date hereof is Israel where the majority of its customers are located and operate. Israel accounted for 4.4% of global
arms exports between 2021 and 2025, up from 3.1% in the prior five-year period, making Israel the seventh-largest arms exporter in the
world and surpassing the United Kingdom for the first time. Israel’s defense exports reached a record $14.8 billion in 2024, the
fourth consecutive year of record exports, driven by strong global demand for Israeli air defense, unmanned aerial vehicle, and counter-UAS
technologies. Three Israeli companies—Elbit Systems Ltd., Israel Aerospace Industries Ltd. (IAI), and Rafael Advanced Defense Systems
Ltd.—rank among SIPRI’s Top 100 global arms-producing companies, with combined arms revenues of approximately $16.2 billion
in 2024, representing a 16% year-over-year increase. Israel’s military spending increased by 65% in 2024 to $46.5 billion, or 8.8%
of GDP—the second-highest military burden in the world—reflecting the intensity of ongoing multi-front military operations.
Israel remains one of few countries with successful experience operating a multi-tiered missile defense system, and its defense technologies
continue to be adopted by major global militaries. Notable recent transactions include the sale of the Arrow 3 missile defense system
to Germany—the largest arms sale in Israel’s history—and defense agreements with India totaling approximately $10 billion
encompassing air defense systems and drones. Israel exports arms to customers in 23 European countries, 10 Asian countries, and multiple
countries in the Americas and Africa, with Europe (41%) and Asia (40%) representing the largest regional shares of Israeli defense exports.

Global military expenditure
reached a record $2.7 trillion in 2024, representing a 9.4% increase over the prior year, driven by the Russia-Ukraine conflict, regional
tensions in the Middle East and Asia-Pacific, and broader geopolitical realignment. The United States remained the world’s largest
military spender at $997 billion in 2024, and the proposed fiscal year 2026 defense budget represents the first-ever trillion-dollar
U.S. defense budget request. The U.S. defense market was valued at approximately $314 billion in 2024 and is projected to reach approximately
$447 billion by 2033, growing at a CAGR of approximately 4.0%. The broader global defense technology market is estimated at approximately
$750 billion in 2026 and is projected to reach approximately $965 billion by 2030, reflecting a CAGR of approximately 6.5%, with the
United States accounting for approximately 40% of global defense technology revenue. In Europe, 17 of the 30 European NATO members reached
or surpassed the alliance’s 2% of GDP spending guideline in 2024, with notable increases in Romania (+43%), the Netherlands (+35%),
Sweden (+34%), Poland (+31%), and Germany (+28%), and NATO allies agreed at the June 2025 Hague Summit to increase the alliance spending
target to 5% of GDP by 2035, comprising at least 3.5% for core defense expenditures and up to 1.5% for broader defense- and security-related
investments. These trends reflect a structural increase in global defense spending that we believe creates significant market opportunities
for defense technology companies operating in Israel and internationally. While the Company is in the early stages of entering the United
States defense market through its subsidiaries, the Company intends to pursue opportunities in the U.S. and other international markets
over time.

Tiltan Software Engineering Ltd.

Acquisition of 100% of Tiltan

On December 30, 2025, the
Company consummated its acquisition (the “Tiltan Acquisition”) of all of the issued and outstanding shares of Tiltan Software
Engineering Ltd. (“Tiltan”) pursuant to a Stock Purchase Agreement, as amended (the “Tiltan Purchase Agreement”),
among the Company, its wholly owned subsidiary Nukk Picolo Ltd. (“Nukk Picolo”), Tiltan and Arie Shafir (the “Tiltan
Seller”), in consideration of NIS 47,600,000 (approximately $14,000,000). Pursuant to the Tiltan Purchase Agreement, the purchase
price is payable in a combination of (i) cash equal to 75% of the purchase price (the “Cash Portion”), or NIS 35,700,000
(approximately $10,500,000), a portion of which (NIS 5,283,333, less NIS 666,667 retained by the Company as working capital for Tiltan)
will be paid by the Company to the Tiltan Seller and the remainder of which is evidenced by a secured promissory note (the “Tiltan
Note”) in the principal amount of NIS 29,750,000 (approximately $8,750,000), and (ii) shares of Common Stock equal to 25% of the
purchase price (the “Stock Portion”), or NIS 11,900,000 (approximately $3,500,000). The remaining Cash Portion of NIS 29,750,000
(approximately $8,750,000) is payable by the Company in five installments at 36-day intervals until the final payment on June 29, 2026,
with the first two installments each being reduced by NIS 666,667 for working capital to be retained by Tiltan. The cash payments are
evidenced by the Note and secured by the pledge described below. As a result of the acquisition, Tiltan became an indirect wholly owned
subsidiary of the Company.

9

In connection with the closing
of the Tiltan Acquisition, the Company deposited 2,000,000 shares of Common Stock (the “Escrowed Shares”) into escrow with
an escrow agent. On June 29, 2026, the escrow agent shall release to the Tiltan Seller shares of Common Stock having an aggregate value
equal to 25% of the purchase price (NIS 11,900,000), calculated based on the market price of the Common Stock on said date. Any Escrowed
Shares in excess of this amount shall be cancelled and returned to the Company. If the value of the Escrowed Shares on said date is less
than 25% of the purchase price, the Company is required to either (i) issue additional shares of Common Stock to the Tiltan Seller or
(ii) pay the Tiltan Seller the difference in cash, so that the Seller receives shares and/or cash having an aggregate value equal to
25% of the purchase price. as consideration that may be released to the Tiltan Seller in accordance with the Tiltan Purchase Agreement.

Also in connection with the
closing of the Tiltan Acquisition, the Company issued the Tiltan Note to the Tiltan Seller. The Tiltan Note matures in five equal installments
(other than the first two installments which have been reduced by NIS 666,667 for working capital to be retained by Tiltan) at 36-day
intervals beginning on the 36th day following the closing date until the final payment which is due on June 29, 2026. The Tiltan Note
does not bear interest unless an Event of Default (as defined in the Tiltan Note) occurs, in which case the outstanding principal amount
shall bear interest at the rate of 10% per annum from the date of default until payment. Events of Default include failure to timely
make a monthly installment payment within ten (10) business days after written notice is received from the Tiltan Seller, bankruptcy
of the Company or Nukk Picolo, material breach of the Tiltan Purchase Agreement, and cessation of business operations for a continuous
period of twenty (20) days. Upon an Event of Default, the Tiltan Seller may declare all amounts due and payable and exercise remedies
under the Tiltan Note and the Pledge Agreement (as defined below).

As security for the Company’s
payment obligations under the Tiltan Note and the Tiltan Purchase Agreement, Nukk Picolo entered into a pledge agreement (the “Pledge
Agreement”) with the Tiltan Seller, pursuant to which Nukk Picolo granted the Tiltan Seller a first-priority security interest
in all 100 shares of Tiltan acquired in the Tiltan Acquisition. The security interest shall be registered with the Israeli Registrar
of Companies. Upon full payment of all amounts due under the Tiltan Note and the Tiltan Purchase Agreement, the pledge shall be released.

Business of Tiltan

Tiltan develops simulation,
geospatial, and operational software solutions that enable its defense and homeland security customers to train personnel, test systems,
navigate, and operate in complex environments using realistic three-dimensional mapping and sensor-based data. Tiltan’s core capabilities—mapping,
simulation, and machine vision—can be offered as distinct products but are designed to work together as an integrated solution
for situational awareness and decision support. In plain terms, Tiltan makes software that turns complex real-world environments into
clear digital tools: it helps customers create a detailed digital version of a physical area (a “terrain model”), build a
digital copy of a real location that mirrors real-world conditions (a “digital twin”), and construct computer-generated virtual
worlds for training or testing purposes (a “synthetic environment”).

Tiltan offers five principal
products and platforms: (1) T-AWARE, an exploitation system for processing, analyzing, and visualizing multi-sensor intelligence data;
(2) TOPS, a physics-based simulation platform that generates high-fidelity imagery across visible light (standard camera imagery similar
to what the human eye sees), infrared (heat-based imagery useful for seeing in darkness), and synthetic aperture radar or SAR (radar
imaging that can detect objects through clouds, darkness, and adverse weather conditions); (3) Majestic.ai, a generative AI platform
for creating realistic synthetic datasets used to train AI systems more quickly and cost-effectively than using real-world imagery; (4)
T-BAT, a software-only navigation solution for drones and aircraft that enables autonomous operation when GPS signals are unavailable,
jammed, or unreliable; and (5) AGM, a rapid automatic geo-mapping tool that converts spatial data into actionable geospatial intelligence.

History and Structure

Tiltan was founded over 30
years ago and is headquartered in Petach Tikva, Israel. The company has long served as both a direct supplier and subcontractor to all
major Israeli defense companies, both governmental and non-governmental, building a track record in AI-driven simulation, synthetic data
generation, geospatial intelligence, and GPS-denied navigation for defense applications.

Tiltan reported revenues
of approximately $2,964,000 and $2,185,000 for the fiscal years ended December 31, 2024 and December 31, 2025, respectively, but has
not been included in the Company’s 2025 Financial Statements.

10

Market Opportunity and Growth

Tiltan’s products address
several large and growing markets driven by rising global defense spending, heightened geopolitical tensions, and the proliferation of
autonomous systems that require advanced simulation, synthetic training data, and GPS-denied navigation capabilities.

In the synthetic data market,
the global AI training dataset market was valued at approximately $1.73 billion in 2022 and is forecast to reach approximately $8.61
billion by 2030, representing a compound annual growth rate of approximately 22%. According to Gartner, synthetic data is expected to
overshadow more than 85% of real data in AI model training by 2030, reflecting a fundamental shift in how AI systems are developed and
trained. Tiltan’s Majestic.ai platform is positioned to address this growing demand by providing physically accurate, validated
outdoor visual sensor synthetic datasets for defense and, increasingly, commercial AI applications.

In the GPS-denied navigation
market, the broader UAV navigation systems market was valued at approximately $9.73 billion in 2024 and is projected to reach approximately
$20.41 billion by 2029, with a CAGR of approximately 15.97%. The U.S. drone software market is projected to grow at a CAGR of 15.4% through
2030. Tiltan’s T-BAT product addresses the software-only segment of this market, which is in its early stage with only five known
competitors globally offering pure software solutions without requiring dedicated hardware.

Tiltan is actively pursuing
international expansion beyond its Israeli base. In Asia, Tiltan has secured a purchase order from a governmental technology institute
and is in advanced stages of formalizing representative arrangements with additional opportunities under proposal. In Europe, Tiltan
has signed representative consultancy agreements in two major European countries, submitted a price proposal to a major European integrator,
and is in advanced negotiations with another. In the United States, Tiltan is exploring various resellers, value-added resellers, and
representatives, with an opportunity involving a large governmental entity under evaluation.

Competition and Competitive Advantage

Tiltan competes with a range
of Israeli and international defense simulation, geospatial intelligence, and AI training companies across its product lines. Competition
varies by product:

In GPS-denied navigation
(T-BAT), Tiltan competes with five global companies offering software-only solutions: Sightec (Israel), Protrack (Israel), Spleenlab
(Germany, product under development), Daedalean (Switzerland), and SSCI (United States). Most other GPS-denied solution providers offer
complete hardware-software packages that are more complex and expensive, whereas T-BAT is a software-only, customer-agnostic solution
that complements existing UAV OEM platforms and components without requiring dedicated hardware.

In synthetic data for AI
training (Majestic.ai), direct competitors include Sky Engine AI, Parallel Domain, Cognata, Bifrost, Anyverse, and Simerse. Most of these
competitors rely on third-party 3D engines such as Unity or Unreal, which are primarily designed for gaming and 3D display rather than
physics-based sensor simulation. Indirect competitors include large technology companies such as NVIDIA, Microsoft, and Google, which
invest in AI training infrastructure and maintain programs to partner with synthetic dataset providers, representing both competition
and potential collaboration opportunities. Data labeling companies such as Alegion, CloudFactory, and SuperAnnotate are also considered
indirect competitors, as synthetic data represents a threat to their manual labeling business models.

The Company believes that
Tiltan’s key competitive advantages include over 30 years of proven delivery to all major Israeli defense companies; a proprietary
physics-based 3D engine that provides full control over development, special features, and no third-party royalty obligations; the ability
to generate synthetic data across visible light, infrared, and SAR sensor types, addressing the most demanding defense use cases; a working
alpha version of its Majestic.ai platform with early adoption by defense customers; and recognition from the Israeli Ministry of Defense,
including an award in an advanced computer vision competition and validation of its infrared simulation capabilities against competitors,
in which Tiltan’s results outperformed other participants.

Human Capital

Tiltan currently employs
approximately 14 people in Israel, with expertise in AI, computer vision, geospatial engineering, 3D modeling, simulation, and software
development. The team draws from Israel’s defense-technology talent pool and emphasizes innovation and quality in its product development.

11

Sales and Marketing

Tiltan’s sales efforts
are led by its CEO, who dedicates approximately one-third of his time to business development activities, supported by a part-time business
development consultant. Sales activities target defense prime contractors and government agencies, historically through direct contracts
and subcontracting arrangements with major Israeli defense companies. Tiltan’s marketing efforts include technical demonstrations,
participation in defense industry events, and digital channels showcasing the company’s physics-based simulation realism and AI
capabilities. Since the acquisition,

Government Regulations

Tiltan is subject to Israeli
Ministry of Defense export controls applicable to defense items and technologies. The company maintains compliance controls through DECA
(Defense Export Controls Agency) oversight. As an indirect subsidiary of a U.S. public company, Tiltan’s activities involving technology
transfers or international sales are subject to U.S. International Traffic in Arms Regulations (ITAR), Export Administration Regulations
(EAR), cybersecurity standards applicable to defense systems, and anti-corruption laws including the U.S. Foreign Corrupt Practices Act
(FCPA). Tiltan does not currently receive any governmental funding, grants, or R&D support from the Israel Innovation Authority or
other government sources. There are no royalties owed to any third parties. No material regulatory violations have been reported.

Intellectual Property

Tiltan does not currently
hold any registered patents, pending patent applications, registered trademarks, or pending trademark applications. Tiltan’s principal
intellectual property consists of its proprietary software platforms and 3D engine, which are developed in-house and over which Tiltan
maintains full control without third-party royalty obligations. The company’s competitive position is based primarily on its accumulated
know-how developed over more than 30 years of defense software engineering, its proprietary physics-based simulation engine, and the
specialized expertise of its team. Tiltan has not granted, and has not been granted, any material intellectual property licenses.

Nimbus Acquisition

Acquisition of 100% 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.
The Nimbus Note was converted to an aggregate of 1,625,000 shares of Common Stock as of February 17, 2026.

Business Description

Nimbus is an Israeli unmanned
aerial vehicle (UAV) company engaged in the sale of various drone models primarily for the defense, homeland security, and civilian industries.
Nimbus provides end-to-end UAV solutions, including drone hardware sales and maintenance, aerial photography, mapping and imaging services,
and professional UAV pilot training and knowledge transfer. Nimbus serves defense and security organizations, municipalities, local authorities,
and surveying and engineering firms with customized unmanned aerial systems and related services.

History and Structure

Nimbus was founded in 2024
and is headquartered in Jerusalem, Israel.

Nimbus reported approximately
$940,000 in revenue for the fiscal year ended December 31, 2025, but has not been included in the Company’s 2025 Financial Statements.
As a company founded in 2024, Nimbus had limited operations and revenue prior to fiscal year 2025.

12

Market Opportunity and Growth

Nimbus operates in the growing
global UAV and counter-UAS markets, which are driven by increasing adoption in defense, homeland security, public safety, agriculture,
and commercial sectors. Demand for drone-based intelligence, surveillance, and reconnaissance capabilities continues to expand amid heightened
geopolitical tensions, border security requirements, and the proliferation of unmanned systems. In Israel specifically, the Ministry
of Defense has issued tenders for UAV-related contracts valued at approximately NIS 50 million, reflecting the domestic market opportunity.
The ongoing security situation in Israel and globally has further increased demand for UAV operations and counter-drone capabilities.
Nimbus has secured new customers since its acquisition by T3, though these engagements have not yet reached material revenue levels.

Competition and Competitive Advantage

Nimbus competes primarily
with Israeli UAV service providers and drone companies, including Lol TV and Profilor Drones, as well as international UAV service providers
and manufacturers. The UAV market is characterized by a growing number of participants, rapid technological development, and increasing
demand from both defense and civilian sectors. Nimbus’s competitive advantages include its comprehensive end-to-end UAV lifecycle
support encompassing hardware sales, maintenance, aerial operations, certified pilot training, and operational knowledge transfer; its
expertise in customized professional systems for defense and critical applications; its ability to serve diverse sectors including security,
public, commercial, and agriculture with integrated services; and its presence in Israel’s defense and technology ecosystem, which
provides access to operational experience in high-stakes environments.

Human Capital

Nimbus currently employs
2 persons who are involved in both operations and sales activities. None of our employees or any of our subsidiary’s employees
are represented by labor unions, and we believe that we have an excellent relationship with such employees.

Sales and Marketing

Nimbus’s sales activities
are conducted by its 2 employees, who focus on direct engagements with defense and security entities, public sector agencies including
municipalities and local authorities, and commercial clients such as surveying and engineering firms. Historical sales focus has been
on the Israeli market, emphasizing operational reliability and professional-grade UAV applications. Marketing efforts leverage industry
demonstrations, digital channels, and participation in defense and technology events.

Government Regulations

Nimbus holds UAV pilot licenses
issued by the Civil Aviation Authority of Israel (CAAI) and complies with Israeli civil aviation regulations governing drone operations,
including flight restrictions and airspace management requirements. As an Israeli UAV company within a U.S. public entity, Nimbus is
subject to Israeli Ministry of Defense and civil aviation export regulations for drones and dual-use technologies. U.S. activities are
subject to ITAR, EAR, and applicable FAA or equivalent standards for drones, as well as cybersecurity requirements for defense systems
and anti-corruption laws including the FCPA. Nimbus does not currently receive any governmental funding or grants, and there are no royalties
owed to third parties. No material regulatory violations have been reported.

Intellectual Property

Nimbus does not currently
own any patents, patent applications, registered trademarks, or other material intellectual property. The company has not been granted,
and has not granted to others, any intellectual property licenses.

13

Blade Ranger Ltd.

On August 20, 2025, the Company
entered into an Exclusive Distribution Agreement (the “Distribution Agreement”) with Blade Ranger Ltd. (“Blade Ranger”),
an Israeli public company specializing in development of drones payloads. Blade Ranger develops and commercializes drone technologies
for the solar energy market. In addition, it has developed a payload that is used by defense and homeland security forces.

Pursuant to the Distribution
Agreement, Blade Ranger granted the Company exclusive distribution rights for defense and homeland security sector in the United States
for its proprietary product - a unique drone payload that can be used by military forces and homeland security organizations. We agreed
to pay Blade Ranger $100,000 for the exclusive U.S. rights, with the first payment is to be made by the end of November 2025, and equal
payments are due at the end of the next three consecutive quarters. The Company committed to purchase 5 units in Year 1, 10 units in
Year 2, and 15 units in Year 3. Upon meeting these targets, the Distribution Agreement extends for an additional five years with a 20
unit annual commitment. If we achieve 125% of revenue targets in any year, the Company will receive an 8% credit on annual purchases.

As part of this strategic
shift, Nukkleusl incorporated a new subsidiary in Delaware, Nukkleus Defense Technologies, Inc., to focus on the commercialization
of third-party defense-related products, technologies and solutions (including the Blade Ranger products) and to explore the development
and commercialization of proprietary solutions targeting defense and aerospace markets.

Mandragola Aviation Joint Venture

On August 28, 2025, the Company,
Nukk Picolo Ltd., a wholly-owned Israeli subsidiary of ours, and Mandragola Ltd., an Israeli company (“Mandragola”) entered
into a Joint Venture Agreement (the “JV Agreement”). Pursuant to the terms of the JV Agreement, the parties will establish
a joint venture company in Israel (the “JV Company”) which is intended to establish advanced manufacturing zones in both
the Baltics and Israel, designed to support civil and defense aviation needs. Plans also include the development of a NATO-compliant
logistics hub in Riga in cooperation with additional regional partners, as well as facilities dedicated to licensed maintenance and repair
(MRO) services, aircraft modernization, resale, and leasing, including the deployment of the de-icing technology for commercial aircrafts
which the Company recently licensed (on an exclusive basis) from Blade Ranger Ltd. Pursuant to the JV Agreement, Nukk Picolo will
hold 51% equity interest in the JV Company. The JV Agreement provides that, under certain specified conditions, we can require Mandragola
sell to us its participating interest in the JV Company in consideration for the issuance of Nukkleus’ common stock based on the
then specified valuation of JV Company as set forth in the JV Agreement.

Mandragola is a Israeli business
development and investment company specializing in advanced technologies and strategic partnerships. Under the JV Agreement, Mandragola
has undertaken to provide to the JV Company a 24 month committed credit line of up to $2 million on an as needed basis.

Nukk Picolo has the right
to designate three of the five member board of the JV Company with Mandragola designating the remaining two directors.

Under the JV Agreement, we
issued to Mandragola 310,000 restricted shares of common stock, five year warrants to purchase 250,000 shares of Nukkleus’ common
stock at a per share exercise price of $4.40 and five year warrants for an additional 350,000 shares at a per share exercise price of
$6.00 (the “Performance Warrants”). The Performance Warrants only vest upon the JV Company achieving $25
million cumulative revenue. If the revenues targets are not achieved by the JV Company within the five-year period, the Performance Warrants
expire.

14

ITS and Positech

On February 16, 2026, T3
Defense acquired 51% of the outstanding equity capital of I.T.S. Industrial Tecno-logic Solutions Ltd. (“ITS”) on a fully
diluted basis. We have a 3- year option to acquire the remainder 49% from the other shareholder of ITS.

ITS is an Israeli company
providing design, development, production, and manufacturing of serial, fully integrated electro-mechanical machines and sophisticated
assembly lines. Positech Ltd., its wholly-owned subsidiary, designs and manufactures top-of-the-line, high-performance motion control
systems for military and civilian use. ITS and Positech provide small to middle-series one-stop shop “Build to Spec” &
“Build to print” custom-made prototypes and OEM systems in the mechanical, electrical, hardware, firmware and software engineering
fields.

The acquisition was consummated
pursuant to the terms of the Agreement dated June 8, 2025 (the “Agreement”) among Star 26, ITS and its controlling shareholder
Gera Eron. As of February 15, 2026, the Company has lent ITS an aggregate of NIS 10,000,000 (approximately $3,235,500), with interest
accruing at the annual rate of the Israeli Consumer Price Index plus 4%. Pursuant to the Agreement, the loans shall only be repaid after
January 1, 2027 if (i) the aggregate amount of the assets of ITS will be at least 150% higher than the liabilities for at least 6 continuous
months and (ii) the total aggregate amount of bank credit provided to ITS and Positech shall be lower than an aggregate of 3 months of
income generated by ITS and Positech for 6 continuous months.

In consideration for the
loan, Star received 51% of the share capital of ITS on a fully diluted basis. Neither Star nor the Company is required to provide any
additional consideration for the ITS shares.

Pursuant to the terms of
the Agreement, Star was also granted an exclusive 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.

Business Description

ITS is an Israeli engineering
and manufacturing company specializing in the serial production of complex electro-mechanical machines and integrated production systems
on a build-to-spec and build-to-print basis. ITS provides end-to-end engineering and manufacturing solutions—from initial concept
and prototyping through full-scale assembly line deployment—using a Design for Manufacturing (“DFM”) methodology that
enables advanced products to be manufactured reliably and at scale. In plain terms, ITS designs and builds the specialized production
lines and machines that its customers need to manufacture their own complex products in volume. The company’s services encompass
mechanical and electrical engineering design, precision machining, firmware and software development, supply chain management, and factory
deployment.

ITS serves customers across
multiple sectors, including defense and security technologies, digital three-dimensional printing, agricultural technology and smart
farming systems, advanced industrial automation, and specialized research and development and innovation systems. ITS’s named customers
include Netafim Ltd. (a global leader in smart irrigation and agricultural technology), Tritone Technologies Ltd. (a metal additive manufacturing
company), and several other Israeli technology and defense companies.

History and Structure

For over 30 years, ITS has
specialized in engineering and manufacturing integrated electro-mechanical machines, advanced production systems, and assembly lines
for defense and industrial applications. In 2016, ITS acquired a 51% controlling stake in Positech Ltd. (“Positech”) and
acquired full ownership in 2021, making Positech a wholly-owned subsidiary of ITS.

ITS reported revenues of
approximately $6,395,000 and $4,549,000 for the fiscal years ended December 31, 2024 and December 31, 2025, respectively, but has not
been included in the Company’s 2025 Financial Statements.

15

Market Opportunity and Growth

ITS operates in the defense
and advanced manufacturing sectors, serving customers that require precision-engineered production systems for complex electro-mechanical
products. The company’s market opportunity is driven by growing demand for reliable, scalable manufacturing solutions in Israel’s
defense industrial base, as well as in commercial sectors including agricultural technology, additive manufacturing (3D printing), and
industrial automation. Israel’s defense industry, which supports three companies in SIPRI’s Top 100 global arms producers
with combined revenues of approximately $16.2 billion in 2024, relies on a domestic ecosystem of specialized manufacturers and subcontractors
such as ITS to deliver the production infrastructure required for defense programs. Increased global defense spending and the expansion
of Israel’s defense export market—which reached a record $14.8 billion in 2024—create additional demand for manufacturing
capacity within the Israeli defense supply chain. ITS has not secured new customers or contracts since the Company’s acquisition;
however, management believes the company’s integration into the T3 Defense group may create opportunities for expanded business
development over time.

Competition and Competitive Advantage

ITS competes with a number
of Israeli and international engineering and contract manufacturing companies, including Flex Ltd. (a global electronics manufacturing
services provider), Dagesh, Ziv-Av Engineering Ltd., I. Sherman, and ZUK Systems. The defense and industrial contract manufacturing market
is characterized by a significant number of specialized participants, long-standing customer relationships, and high barriers to entry
driven by the need for precision engineering capabilities, defense-grade quality standards, and specialized know-how. ITS’s competitive
advantages include over 30 years of experience in bridging design-to-production with DFM expertise for cost-effective serial manufacturing;
end-to-end capabilities from concept and prototyping through full assembly line deployment; the ability to serve diverse sectors including
defense, agricultural technology, additive manufacturing, and industrial automation with customized build-to-spec and build-to-print
solutions; and a proven track record with established Israeli defense and technology companies.

Human Capital

ITS currently employs approximately
39 people in Israel, including mechanical and electrical engineers, machining specialists, firmware and software developers, and production
technicians.

Sales and Marketing

ITS employs one to two persons
dedicated to sales and business development activities. Sales efforts are focused on defense prime contractors, technology companies,
and industrial clients through direct engagements and customized build-to-spec and build-to-print proposals. ITS has established long-standing
relationships with customers in the Israeli defense ecosystem and in commercial sectors including agricultural technology and additive
manufacturing. Marketing efforts include participation in defense and technology industry events and direct technical demonstrations
of the company’s engineering and manufacturing capabilities.

Government Regulations

ITS is subject to Israeli
Ministry of Defense regulations applicable to defense-related manufacturing, including export controls on defense items and technologies.
As a subsidiary of a U.S. public company, ITS’s activities involving technology transfers or international sales are subject to
U.S. International Traffic in Arms Regulations (ITAR), Export Administration Regulations (EAR), cybersecurity standards applicable to
defense systems, and anti-corruption laws including the U.S. Foreign Corrupt Practices Act (FCPA). ITS does not currently receive any
governmental funding, grants, or R&D support. There are no royalties owed to any third parties. No material regulatory violations
have been reported.

Intellectual Property

ITS does not currently hold
any registered patents, pending patent applications, registered trademarks, or pending trademark applications. ITS’s principal
intellectual property consists of unregistered manufacturing know-how developed over more than 30 years of engineering and production
experience, including proprietary DFM methodologies, process expertise, and technical knowledge related to the design and construction
of complex electro-mechanical production systems. ITS has not granted, and has not been granted, any material intellectual property licenses.

16

Positech Ltd.

Business Description

Positech, a wholly-owned
subsidiary of ITS, is an Israeli defense engineering company specializing in the multi-disciplinary mechanical design, engineering, assembly,
and production of customized servo motion control systems for mission-critical defense platforms. The company develops high-precision
direct-drive, gearless motion technologies that provide accurate stabilization, tracking, and pointing capabilities for sensors, radar
systems, communications platforms, electro-optical and infrared payloads, and remote weapon stations. In plain terms, Positech builds
the motorized pedestals and turrets that allow defense systems—such as radar dishes, cameras, and weapon stations—to rotate,
aim, and stabilize with extreme precision, even on moving vehicles, ships, or aircraft. Positech’s direct-drive technology eliminates
mechanical gears, which reduces maintenance requirements and eliminates backlash (the small amount of play or looseness that occurs in
geared systems), resulting in smoother, more accurate, and more reliable motion. Positech’s systems are deployed across land, sea,
and air defense environments where reliability, accuracy, and durability are essential for operational performance. Positech was funded
in 2001.

Positech reported revenues
of approximately $3,053,000 and $1,600,000 for the fiscal years ended December 31, 2024 and December 31, 2025, respectively, but has
not been included in the Company’s 2025 Financial Statements.

Market Opportunity and Growth

Positech operates in the
defense motion control and stabilization systems market, serving customers that require high-precision pointing, tracking, and stabilization
capabilities for mission-critical platforms. The market for precision motion control in defense applications is driven by increasing
demand for advanced radar, electro-optical, and communication systems across land, sea, and air platforms; the proliferation of remote
weapon stations requiring high-accuracy stabilization; and the broader growth in global defense spending and Israel’s record defense
export market. As a direct supplier to Israel’s largest defense companies, Positech benefits from the continued investment by these
companies in new platforms and systems. Positech has recently secured three new contracts from Israel Aerospace Industries (IAI) and
a new contract with Kappasense, demonstrating continued demand for its capabilities.

Competition and Competitive Advantage

Positech competes with a
number of Israeli and international providers of precision motion control and stabilization systems for defense applications, including
Novatec Ltd., Orbit Communication Systems Ltd. (specifically its Orbit CS division), Capture Ltd., and BL. The defense motion control
market is specialized and characterized by high barriers to entry, including the need for deep expertise in direct-drive motor technology,
stringent defense-grade quality and reliability requirements, and long qualification cycles with defense prime contractors. Positech’s
competitive advantages include its proprietary direct-drive, gearless motor technologies that deliver zero-backlash, high-dynamics stabilization
and pointing performance; its ability to provide fully customized servo motion systems tailored to specific platform requirements; its
established relationships with Israel’s largest defense companies, including IAI/Elta and Rafael Advanced Defense Systems; and
over 20 years of accumulated know-how in designing and manufacturing motion control systems for demanding defense environments.

Human Capital

Positech currently employs
approximately 14 people in Israel, including mechanical and electrical engineers, motion control specialists, and production technicians.
The team specializes in the design, engineering, and production of high-precision servo motion systems. Positech does not have dedicated
sales personnel; business development activities are conducted through its parent company ITS and by Positech’s management directly.

Legal Proceedings

As of the date of this report,
Positech is involved in a legal proceeding with a former employee. Management does not believe that the outcome of this matter will have
a material adverse effect on the company’s business, financial condition, or results of operations of Positech.

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Government Regulations

Positech is subject to Israeli
Ministry of Defense regulations applicable to defense-related manufacturing and the production of defense subsystems. As an indirect
subsidiary of a U.S. public company, Positech’s activities involving defense items, technology transfers, or international sales
are subject to U.S. International Traffic in Arms Regulations (ITAR), Export Administration Regulations (EAR), cybersecurity standards
applicable to defense systems, and anti-corruption laws including the U.S. Foreign Corrupt Practices Act (FCPA). Positech does not currently
receive any governmental funding, grants, or R&D support. There are no royalties owed to any third parties. No material regulatory
violations have been reported.

Intellectual Property

Positech does not currently
hold any registered patents, pending patent applications, registered trademarks, or pending trademark applications. Positech’s
principal intellectual property consists of unregistered know-how developed over more than 20 years of engineering and production experience,
including proprietary expertise in direct-drive motor design, gearless motion control systems, and customized servo stabilization technologies
for defense applications. Positech has not granted, and has not been granted, any material intellectual property licenses.

ZorroNet Ltd.

ZorroNet Ltd. (“Zorronet”) is an indirect
subsidiary of the Company, held through Water.IO Ltd., an Israeli public company traded on the Tel Aviv Stock Exchange in which Star
26 Capital Inc. holds an approximately 67% equity interest. Zorronet is a wholly-owned subsidiary of Water.IO.

Business Description

Zorronet is an Israeli technology
company specializing in the development and deployment of artificial intelligence (AI) systems for perimeter security, defense, monitoring,
and command and control applications. The company develops a smart, dynamic software platform for managing security and safety scenarios
in real time. The platform operates as an external software layer (“middleware”) that connects to deployed cameras, sensors,
analytics systems, and robotic assets (such as drones), as well as to existing infrastructure. The platform enables remote connection
to endpoint devices and existing systems, performs continuous monitoring of data streams, and identifies anomalies using advanced processing
algorithms that simulate human capabilities of detection, analysis, and prediction. The system performs real-time event analysis using
Big Data principles and predictive analytics, operating autonomously to identify abnormal scenarios, generate targeted reports, route
information, activate relevant response measures, and recommend courses of action—all efficiently, accurately, and without the
need for continuous human intervention.

The platform is currently
installed and integrated with existing systems at security operations centers, operational command rooms for border and base protection,
transportation authorities, educational institutions, military and police agencies, energy companies, municipalities, and other organizations.
Since 2025, Zorronet has established and deployed multiple command and control rooms and advanced monitoring capabilities, including
three control rooms at IDF bases designed for multi-user observation and unified situational awareness management, a dedicated control
room at Kibbutz Metzer, and a system connected to a robotic monitoring center managing approximately 3,200 devices simultaneously across
kibbutzim, moshavim, and industrial facilities.

History and Structure

Zorronet was incorporated
in Israel in 2021 as a private limited company. On October 23, 2025, Water.IO Ltd. completed the acquisition of 100% of Zorronet’s
shares, making Zorronet a wholly-owned subsidiary of Water.IO.

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Market Opportunity and Growth

Zorronet operates in the
rapidly growing market for AI-powered video analytics, monitoring, and autonomous security solutions. This market is driven by the increasing
volume of security threats, significant expansion in the number of connected cameras and sensors, and the growing need for skilled monitoring
personnel—factors that create substantial operational burden on organizations and reinforce demand for autonomous solutions capable
of replacing resource-intensive manual processes. The company’s target markets include military, government, and defense organizations
requiring real-time detection and reduced manpower at monitoring centers; transportation and public infrastructure operators (including
a successfully completed pilot with Israel Railways for early detection of track intrusions); industrial facilities and construction
sites requiring perimeter protection and safety monitoring; public institutions and mass event venues requiring crowd flow management
and alert prioritization; and commercial organizations adopting automation for monitoring and cost reduction.

Zorronet’s growth strategy
combines technological and commercial expansion. Technologically, the company is investing in enhanced real-time analytics capabilities,
edge processing, and a unified operational environment combining video, audio, mapping, and control commands. Commercially, the company
operates through three revenue channels: deployment and integration installations (NRE), SaaS-based annual software licenses with per-endpoint
pricing, and co-development of new products with B. Rimon Agencies Ltd., a sister company within the T3 Defense group. In December 2025,
Zorronet signed a distribution agreement with KeepZone AI Inc. in the United States for the installation of crowd analytics systems at
stadiums in Israel and Mexico in preparation for the 2026 World Cup. Zorronet also entered into an exclusive distribution agreement with
MyTrade FZ LLC for marketing and sales of its products in the United Arab Emirates.

Competition and Competitive Advantage

Zorronet operates in a competitive
landscape that includes traditional camera and VMS (Video Management System) providers offering basic analytics, specialized analytics
companies focused on specific detection tasks (such as people counting or object recognition), large defense technology companies integrating
AI as part of broader solution packages, and local system integrators. Zorronet’s competitive advantages include its proprietary
AI platform that functions as an autonomous “decision layer” above existing systems rather than a simple analytics tool;
its ability to integrate with existing infrastructure without requiring customers to replace hardware, enabling rapid deployment and
lower costs; accumulated field-based experience and proprietary intellectual property positioning the company at the forefront of autonomous
security; and active projects with major Israeli defense primes including Elbit Systems and Rafael Advanced Defense Systems, including
classified projects in border defense and command center upgrades. The company demonstrated its capabilities through a successful pilot
at the Jerusalem Arena during the “NEXT” events in December 2025, conducted with official participation from the venue’s
security chief and the Jerusalem District Police Command.

Human Capital

Zorronet employs approximately
7 people in Israel, including software developers, AI engineers, and operations personnel.

Sales and Marketing

Zorronet’s sales activities
target defense and security organizations, military and police agencies, transportation authorities, industrial facilities, and commercial
clients through direct engagements and a growing network of distributors in Israel and internationally. The company has active projects
with Elbit Systems, including a NIS 500,000 pilot for AI-based camera analytics at an IDF base (received January 2026, expanded by an
additional NIS 115,000 in February 2026), as well as approximately three classified projects with Rafael in the areas of border defense
and command center upgrades. On the commercial side, Zorronet operates an autonomous monitoring center at Adirim Security Center serving
construction sites, industrial facilities, and quarries. The company is also jointly submitting with Malam-Team for a tender for Ayalon
Highway traffic monitoring and control based on AI and video analytics technologies.

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Government Regulations

Zorronet is subject to Israeli
data privacy and cybersecurity regulations, including requirements relating to the processing, storage, and analysis of data from cameras,
sensors, and analytics systems. A portion of Zorronet’s activities involve defense and security projects that are subject to Israeli
Ministry of Defense regulations and classification requirements. Zorronet operates as a subcontractor to Elbit Systems Ltd. for certain
defense projects and is required to comply with applicable security and confidentiality requirements. As an indirect subsidiary of a
U.S. public company, Zorronet’s activities involving technology transfers or international sales are subject to U.S. ITAR, EAR,
cybersecurity standards, and anti-corruption laws including the FCPA. No material regulatory violations have been reported.

Intellectual Property

On July 8, 2025, Zorronet
filed a provisional patent application (PPA) in the field of data transfer and processing and received a confirmation of innovation from
the Israel Innovation Authority. The follow-on patent application was not advanced due to the lack of progress on the related railway
project. Zorronet’s primary intellectual property consists of its proprietary AI software platform, including its algorithms for
pattern-of-life analysis, anomaly detection, dynamic scenario generation, and autonomous operational response. Zorronet does not currently
hold any registered patents or trademarks.

Darwin Tokens

On July 30, 2025, the Company
entered into a Warrant to Purchase Tokens agreement with Synthetic Darwin LLC (“Darwin”), pursuant to which the Company paid
a purchase price of $500 in exchange for the right to purchase up to 200,000,000 tokens (the “Warrant Tokens”) at escalating
exercise prices ranging from $0.02 to $0.50 per token. The warrant is exercisable in four tranches of 50,000,000 tokens each over a twelve-month
period and expires one year from the issue date. The warrant may be exercised for cash, by issuance of the Company’s common stock,
by net exercise, or through other agreed forms of payment.

Tokens issued upon exercise
are subject to a six-month transfer restriction, subject to certain parity protections. The agreement also provides anti-dilution style
protections, including entitlement to a pro rata portion of future token issuances, forks, or increases in total token supply.

At the time of initial acquisition
in July 2025, the Company exercised a warrant to acquire 50 million tokens in exchange for the issuance of 147,710 shares of common stock
of the Company at a total exercise price of $1,000 thousands. In addition, on October 8, 2025, the Company exercised the second tranche
and issued 375,000 shares of common stock of the Company to acquire another 50 million tokens at a total exercise price of $3,360 thousands.

Darwin is a blockchain-based
digital token issued and recorded on a distributed ledger. The token may be transferable and trades at market-determined prices on digital
asset platforms. The token does not represent an equity interest or contractual claim to assets or cash flows of Darwin.

Corporate Office

T3 Defense’s principal
executive office is 575 Fifth Ave, 14th Floor, New York, New York 10017. The Company also has an office at 5 Hagvish, Netanya, Israel.
Our main telephone number is 212-791-4663. We maintain a website at www.t3dfns.com through which we make available free of charge
our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, proxy statements on Schedule 14A, and amendments
to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act as soon as reasonably practicable after we
electronically file such materials with, or furnish them to, the Securities and Exchange Commission (the “SEC”). Alternatively,
you may also access our reports at the SEC’s website at www.sec.gov. Information contained on or accessible through our website
is not, and should not be considered, part of, or incorporated by reference into, this annual report.

Employees

T3 and its subsidiaries employ
112 employees, of which 2 work directly for T3, 39 employees work for ITS, 11 for Positech, 14 for Tiltan, 17work for Nukk Picolo Ltd.,
18 for Rimon, 7 for Zorronet, 2 for Water IO and 2 for Nimbus.

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