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T3 Defense Inc. (NASDAQ:DFNS) announced Friday that its indirect subsidiary, Water IO Ltd., completed the sale of its wholly owned subsidiary Zorro Net Ltd. (“ZorroNet”) to BiomX Inc. (NYSE American:PHGE). The transaction was finalized under a Stock Purchase Agreement dated Friday, according to a statement based on a press release and SEC filing.
Water IO, an Israeli public company listed on the Tel Aviv Stock Exchange and approximately 67% owned by T3 Defense through its wholly owned subsidiary Star 26 Capital Inc., sold 100% of ZorroNet’s issued and outstanding share capital to BiomX.
ZorroNet is an Israeli artificial intelligence defense technology company specializing in AI-powered computer vision and autonomous surveillance systems for defense, homeland security, and critical infrastructure protection. Its technology is deployed at Israel Defense Forces bases and other national security sites, with active engagements with Elbit Systems Ltd. (TASE/NASDAQ:ESLT) and other Israeli defense contractors.
As consideration for the sale, BiomX issued 1,300,000 shares of its common stock to Water IO and provided a non-convertible promissory note with a principal amount of $1,250,000. The note bears interest at the short-term applicable federal rate and matures three months from the date of issuance.InvestingPro data reveals T3 Defense holds more cash than debt on its balance sheet, though the company is quickly burning through cash and remains unprofitable over the last twelve months. These are just 2 of 16 ProTips available to subscribers.
BiomX also assumed certain obligations relating to the founders and former shareholders of ZorroNet. These include a performance-based earnout, payable no later than March 31, 2027, equal to the greater of 125% of ZorroNet’s consolidated revenue or eight times its consolidated EBITDA for fiscal year 2026, as well as a commitment to retain certain key ZorroNet personnel for three years under terms no less favorable than current arrangements.
Following the transaction, Water IO holds 1,300,000 shares of BiomX common stock, representing about 16.57% of BiomX’s outstanding shares post-transaction. Through its ownership in Water IO, T3 Defense may be deemed to beneficially own these BiomX shares indirectly.
This report is based on a press release statement and information disclosed in a recent SEC filing.
In other recent news, T3 Defense Inc. reported the cancellation of a $16 million debt obligation to its subsidiary, Star 26 Capital, Inc., with no cost or dilution to shareholders. The company also announced a non-binding letter of intent for a potential acquisition by SC II Acquisition Corp., a subsidiary of T3 Defense, involving an unnamed payments technology company. Additionally, T3 Defense received a summons in a New York lawsuit filed by Kingswood Capital Partners, LLC, alleging a success fee is owed for investment banking services, which the company denies.
T3 Defense has also appointed Menachem Shalom as CEO under a new consulting agreement with Billio Ltd., effective January 1, 2026. Under this agreement, Shalom will receive a base salary and target cash bonuses contingent on performance goals. Furthermore, the company’s subsidiary, Tiltan Software Engineering Ltd., was featured in a media article and interview with its acting CEO, although specific details about the content were not disclosed. These developments highlight T3 Defense’s ongoing strategic maneuvers and legal challenges.
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