Nukkleus Finalizes Star 26 Buy, Betting Big on Defense AI & Supply Chain

NEW YORK and TEL AVIV, Israel – Jan. 13, 2026 – Nukkleus Inc. (NASDAQ: NUKK) today announced the completion of its acquisition of Star 26 Capital Inc., a move that solidifies its dramatic pivot from fintech to the high-stakes world of defense technology. The deal gives Nukkleus 100% ownership of a portfolio of Israeli and American defense-tech companies, significantly expanding its footprint in artificial intelligence, unmanned systems, and critical manufacturing at a time of escalating global tensions.

The acquisition, however, comes as Nukkleus navigates considerable financial turbulence. The company is betting that a strategic alignment with the booming defense sector—and a unique focus on fixing its often-overlooked supply chain—will outweigh investor concerns about stock dilution and a volatile balance sheet.

A Strategic Pivot Amid Market Volatility

The transaction to acquire Star 26 was a complex, two-step process culminating in a deal financed through a mixed package of cash, promissory notes, stock, and warrants. The final consideration included a $16 million investment note, $6 million in short-term notes, 4.77 million shares of Nukkleus common stock, and warrants to purchase another 12 million shares. This represents a significant investment for a company with a market capitalization of approximately $65 million.

This deal cements a strategic transformation for Nukkleus, which previously focused on the cryptocurrency and fintech space. The market's reaction has been a rollercoaster. An initial announcement of a 51% stake in late 2024 sent the penny stock soaring over 900% in a single day, but the enthusiasm was short-lived. Over the past year, Nukkleus's stock has fallen by more than 75%, and the final acquisition announcement was met with a modest 2.15% decline.

Financial analysts point to underlying concerns that the strategic vision has yet to quell. The company holds a current ratio of just 0.3, indicating its short-term liabilities exceed its liquid assets, and it maintains a negative equity position. The issuance of millions of new shares and warrants also poses a significant risk of dilution to existing shareholders. While the warrants could inject over $18 million in capital if exercised, they would also substantially expand the share count. This high-risk financial profile stands in stark contrast to the stability typically sought in the defense sector.

Integrating a Portfolio of Advanced Defense Assets

With the acquisition, Nukkleus instantly gains a portfolio of specialized companies poised to play key roles in modern warfare and national security. These assets, curated by Star 26, provide capabilities spanning the defense value chain, from critical components to advanced AI systems.

A key asset is B. Rimon Agencies Ltd., a leading Israeli supplier for high-profile missile-defense programs, including the battle-proven Iron Dome. With exclusive distribution relationships with defense giants like Rafael Advanced Defense Systems and Elbit Systems, B. Rimon places Nukkleus directly within Israel's critical national security infrastructure.

Further up the technology stack, the deal brings in a majority interest in Water.io (TASE: WATR), which recently acquired Zorronet, a developer of AI-powered unmanned command centers. This provides Nukkleus with sophisticated AI, computer vision, and integrated security platform technology. The acquisition also includes a convertible loan position in ITS/Positech, a specialist in the advanced motion-control, stabilization, and targeting technologies that are essential for the precision of drones, robotic systems, and guided munitions.

This combination of assets is designed for synergy. The plan is to create interoperable systems where Zorronet's AI command-and-control software can be integrated with the hardware and motion-control systems from ITS/Positech, all while leveraging the manufacturing and distribution channels established by B. Rimon.

Tackling the Defense Industrial Base Bottleneck

Beyond technological integration, the core of Nukkleus's strategy is to address a chronic weakness in the Western defense industrial base: the fragile Tier-2 and Tier-3 supplier level. These smaller companies provide the essential components and specialized manufacturing that prime contractors like Lockheed Martin and Boeing depend on, yet they often struggle to scale production to meet surging demand.

“Many of today’s production delays stem from bottlenecks at the Tier-2 and Tier-3 supplier level, where scaling capacity is difficult but essential,” said Menny Shalom, CEO of Nukkleus Inc., in the company's press release. He argues that by bringing these specialized manufacturers into the Nukkleus ecosystem, the company can help them scale responsibly.

The goal is to create a more resilient supply chain by providing capital, shared resources, and streamlined logistics. While each subsidiary will continue to operate independently within its domain, the holding company structure is intended to foster collaboration and efficiency. This approach aims to enable the large original equipment manufacturers (OEMs) to produce advanced systems faster and more reliably, a critical need as nations look to replenish stockpiles and modernize their forces.

Navigating a New Geopolitical and Competitive Landscape

Nukkleus's pivot is timed to coincide with a powerful geopolitical tailwind. The conflict in Ukraine and heightened tensions in the Middle East have spurred a global surge in defense spending, with Israeli and U.S. defense stock indices climbing 120% and 38% respectively. Political rhetoric, such as former President Donald Trump's call for U.S. defense spending to reach $1.5 trillion, underscores a political climate increasingly focused on industrial military readiness.

In this revitalized market, Nukkleus is carving out a unique niche. It is not competing directly with the giant prime contractors. Instead, it is positioning itself as a strategic holding company that consolidates and strengthens the foundational layer of the industrial base. Its competitors are a fragmented landscape of smaller private equity firms and individual suppliers. By integrating these suppliers with advanced technology firms focused on AI and autonomy, Nukkleus aims to build a vertically-aligned ecosystem that is more than the sum of its parts.

The company’s success will depend on its ability to execute this complex integration. It must prove it can generate operational efficiencies and foster genuine innovation across its diverse portfolio, all while managing its precarious financial position. The acquisition of Star 26 gives Nukkleus the assets and the strategic narrative to pursue this vision, but the path forward requires navigating the dual challenges of financial discipline and deep technological integration in one of the world's most demanding industries.