T3 Defense Fortifies Supply Chain with ITS Engineering Acquisition

TEL AVIV, Israel – February 17, 2026 – In a strategic move designed to bolster the strained underpinnings of the global defense industry, T3 Defense Inc. (NASDAQ: DFNS) announced today it has secured a 51% majority stake in Industrial Techno-Logic Solutions (ITS) Engineering, a critical Israeli manufacturing and engineering firm. The deal, which includes an option to acquire the remaining 49%, signals a significant step in T3 Defense's mission to consolidate and strengthen the sub-OEM defense sector.

The transaction was structured as a debt-to-equity conversion, where T3 Defense converted a prior loan of approximately $3.24 million (NIS 10,000,000) into its controlling interest in ITS. Notably, the company confirmed that no new cash or securities were issued for the acquisition, a detail that underscores the financial mechanics of its growth strategy. With this move, T3 Defense projects its annual revenue will climb into the $24 to $26 million range, a substantial increase reflecting the immediate impact of integrating ITS's operations.

A Strategic Play to Unclog the Defense Supply Chain

The acquisition targets a growing vulnerability within the international defense apparatus: production bottlenecks at the subcontractor level. As geopolitical tensions drive accelerating demand for military hardware, the larger prime contractors like Lockheed Martin and BAE Systems are increasingly dependent on a complex web of smaller, specialized Tier 2 and Tier 3 suppliers. These sub-OEMs are responsible for precision manufacturing, subsystem integration, and other execution-critical tasks that are essential for delivering final products, from guided missiles to advanced radar systems.

T3 Defense has built its corporate strategy around identifying and acquiring these "structurally constrained" firms. ITS Engineering represents a prime example of such a target. The company operates at the crucial intersection of engineering design and scalable manufacturing, providing end-to-end solutions for complex defense and aerospace programs. By executing both "build-to-spec" and "build-to-print" contracts, ITS bridges the gap between a blueprint concept and a serially produced, fully integrated electro-mechanical system.

This acquisition directly expands T3 Defense’s presence in what it terms the "execution layer" of the industrial base. This layer is where engineering discipline and delivery reliability determine whether a multi-billion-dollar national security program stays on schedule. By taking a majority stake in a company like ITS, T3 Defense is not just buying revenue; it is buying capacity and control over a vital, and often overlooked, link in the national security supply chain.

From Nukkleus to Defense Consolidator: T3's Aggressive Growth

This latest acquisition is a continuation of an aggressive and highly focused M&A campaign. The company, which rebranded from Nukkleus Inc. and changed its ticker to DFNS earlier this month, has been methodically assembling a portfolio of mission-critical defense businesses. Its "federated holding company" model is key to this strategy: T3 provides centralized capital and strategic oversight while allowing its acquired subsidiaries to maintain their operational autonomy, domain expertise, and crucial customer relationships.

The pace of its expansion has been rapid. On January 13, T3 completed the acquisition of Star 26 Capital, a move that expanded its defense AI and manufacturing capabilities. Just three days later, it acquired Nimbus Drones Technologies, an Israeli developer of UAVs and counter-drone systems. Earlier this month, another subsidiary, Rimon, secured multi-year contracts to build components for Israel's renowned Iron Dome air defense system.

This pattern demonstrates a clear intent to become a key consolidator in the fragmented sub-OEM market, particularly within the U.S., Israel, and Europe. The acquisition of ITS fits perfectly into this blueprint, adding robust electro-mechanical manufacturing to a portfolio that now includes UAVs, AI, and other high-tech defense components. The positive market reaction, with DFNS stock gaining nearly 6% following the announcement, suggests investors approve of this disciplined yet aggressive strategy to build a vertically integrated defense technology powerhouse.

The Crown Jewel: Positech's Advanced Motion Control

Embedded within the ITS acquisition is another, perhaps even more critical, technological asset: Positech Ltd. As a wholly-owned subsidiary of ITS, Positech designs and manufactures high-performance precision motion control and stabilization systems. These are not commodity components; they are the sophisticated systems that allow radar arrays to track hypersonic targets, enable sensor turrets on aircraft to remain locked on a point of interest, and ensure mission payloads on naval vessels are stable in rough seas.

Positech's technology is a prime example of a "difficult-to-replace production node." The expertise required to develop and manufacture these systems is highly specialized, and the components themselves are often qualified for specific, long-cycle defense programs, making it difficult for new entrants to compete. These systems are fundamental to the performance of modern military hardware, where accuracy and reliability are paramount.

By acquiring ITS, T3 Defense gains full control over this vital capability. This vertical integration ensures access to Positech's technology for other companies within the T3 portfolio and strengthens its overall value proposition to prime defense contractors. It allows T3 to offer a more complete solution, from advanced components to the integrated systems that use them, solidifying its position within technically demanding segments of the defense market.

“This transaction reinforces our strategy of strengthening constrained production capacity within the defense industrial base,” said Menny Shalom, Chief Executive Officer of T3 Defense Inc., in the company's official statement. “ITS operates at the intersection of advanced engineering and scalable manufacturing, where execution precision and delivery discipline directly impact long-cycle national security programs. With ITS included in our portfolio, we now estimate annual revenue in the range of $24 to $26 million, reflecting the scale of execution-critical assets we are assembling.”

The company's three-year exclusive option to purchase the remaining 49% of ITS provides a clear path to full ownership, with a tiered pricing structure that offers strategic flexibility. As T3 Defense continues to execute its vision, this acquisition serves as a powerful statement of its intent to become an indispensable partner in fortifying the industrial backbone of Western defense infrastructure.