Nukkleus Seeks Shareholder Nod for Star Acquisition, Major Dilution

TL;DR

**DFNSW is about to get massively diluted and change its core business, so vote FOR if you believe in the CEO's vision, otherwise, prepare for a wild ride down.**

AI Summary

Nukkleus Inc. (DFNSW) is seeking stockholder approval for four key proposals at a Special Meeting on December 16, 2025, primarily driven by Nasdaq Listing Rules. The most significant is the acquisition of 100% of Star Capital 26, Inc. for a total consideration of $21,000,000, comprising a $16,000,000 promissory note, $5,000,000 cash, 4,770,340 shares of Common Stock, a five-year warrant for 12,017,648 shares at $1.50 per share, an additional $3,000,000 cash, and a 6-month promissory note for $3,000,000. This acquisition is critical as the shares issued to Star Equity Holders will represent 28.7% of outstanding Common Stock, potentially increasing to 100.9% upon warrant exercise, triggering Nasdaq's change of control rules. Additionally, the company seeks approval for the issuance of 3,191,400 shares upon warrant exercise at $5.405 per share, and for shares exceeding the 20% dilution cap under Nasdaq Rule 5635(d) related to a $250,000,000 Equity Line of Credit (ELOC) with Esousa Group Holdings, LLC and the conversion of Series A Convertible Preferred Stock, which initially converts into 2,044,800 shares from a $10,000,000 purchase. These approvals are essential to maintain Nasdaq compliance and facilitate significant capital raises and strategic acquisitions.

Why It Matters

This DEF 14A filing is crucial for Nukkleus Inc. as it outlines significant corporate actions that will fundamentally reshape its ownership structure and financial flexibility. The acquisition of Star Capital 26, Inc., a defense acquisition company with interests in B. Rimon Agencies Ltd. and Water.IO Ltd., signals a strategic pivot into new sectors, potentially diversifying revenue streams but also introducing new operational risks. For investors, the potential dilution from the Star acquisition (28.7% initially, up to 100.9% with warrants) and the ELOC and Preferred Stock conversions could significantly impact per-share value, making shareholder approval vital for future stock performance and competitive positioning against peers in both fintech and defense sectors. Employees and customers of Star and its subsidiaries will be directly affected by the integration into Nukkleus, while the broader market will watch how this small-cap company navigates such substantial changes and regulatory hurdles.

Risk Assessment

Risk Level: high — The risk level is high due to the potential for significant shareholder dilution and a 'change of control' as defined by Nasdaq Listing Rules. The Star acquisition alone could result in Star Equity Holders holding 28.7% of outstanding Common Stock, potentially increasing to 100.9% upon full exercise of the Star Warrant. Furthermore, the ELOC and Preferred Stock conversions could issue shares exceeding 20% of outstanding common stock, leading to substantial dilution for existing shareholders.

Analyst Insight

Investors should carefully evaluate the long-term strategic benefits of the Star acquisition against the immediate and substantial dilution risks. Consider voting 'FOR' if you have high conviction in CEO Menachem Shalom's ability to integrate Star's defense and smart hydration assets and believe the capital raises will fuel profitable growth; otherwise, consider the implications of significant share price pressure.

Key Numbers

• $21,000,000 — Total consideration for Star acquisition (Comprises cash, promissory notes, and stock)
• 4,770,340 — Shares of Common Stock issued to Star Equity Holders (Part of the Star acquisition consideration)
• 12,017,648 — Shares exercisable via Star Warrant (Five-year warrant at $1.50 per share, part of Star acquisition)
• 28.7% — Initial ownership of Star Equity Holders post-acquisition (Percentage of issued and outstanding Common Stock as of Record Date)
• 100.9% — Potential ownership of Star Equity Holders post-warrant exercise (Percentage of issued and outstanding Common Stock as of Record Date, assuming Star Warrant exercise)
• 3,191,400 — Shares exercisable via Warrants (At an exercise price of $5.405 per share for a five-year term)
• $250,000,000 — Maximum commitment for Equity Line of Credit (ELOC) (Potential sale of common shares to Esousa Group Holdings, LLC)
• $10,000,000 — Aggregate purchase price for Series A Convertible Preferred Stock (Purchased by Esousa Group Holdings, LLC and another accredited investor)
• 2,044,800 — Initial shares convertible from Series A Preferred Stock (Calculated at an initial conversion price of $4.89 per share)
• 16,645,766 — Shares of Common Stock outstanding (As of the Record Date, November 17, 2025)

Key Players & Entities

• Nukkleus Inc. (company) — Registrant seeking stockholder approval
• Star Capital 26, Inc. (company) — Company being acquired by Nukkleus Inc.
• Menachem Shalom (person) — CEO and Director of Nukkleus Inc. and controlling shareholder, CEO, and Director of Star Capital 26, Inc.
• Esousa Group Holdings, LLC (company) — Institutional investor in the Equity Line of Credit (ELOC) and Securities Purchase Agreement
• Nasdaq (regulator) — Exchange requiring stockholder approval for various transactions
• B. Rimon Agencies Ltd. (company) — Wholly-owned subsidiary of Star Capital 26, Inc., supplier of generators for 'iron dome' launchers
• Water.IO Ltd. (company) — 67% owned by Star Capital 26, Inc., engaged in smart hydration technology
• I.T.S. Industrial Techno-logic Solutions Ltd. (company) — Recipient of a convertible loan from Star Capital 26, Inc.
• Star Equity Holders (person) — Recipients of shares, warrants, and promissory notes from the Star acquisition
• SEC (regulator) — Securities and Exchange Commission

FAQ

Risk Factors

• Nasdaq Listing Rule Compliance [high — regulatory]: The company requires stockholder approval for several share issuances to comply with Nasdaq Listing Rules 5635(a), (b), and (d). These include shares related to the Star acquisition, warrant exercises, an Equity Line of Credit (ELOC), and preferred stock conversion, as these issuances exceed 19.99% of outstanding shares or trigger change of control provisions.
• Significant Dilution from Acquisitions and Financing [high — financial]: The Star acquisition alone will result in Star Equity Holders owning 28.7% of outstanding common stock, potentially increasing to 100.9% upon warrant exercise. The ELOC and preferred stock conversions also involve substantial share issuances, leading to significant dilution for existing shareholders.
• Reliance on Future Capital Raises [medium — financial]: The company is seeking approval for a $250,000,000 ELOC with Esousa Group Holdings, LLC, indicating a reliance on future capital infusions. The terms and execution of this ELOC are critical for the company's ongoing operations and growth strategy.
• Acquisition Integration and Valuation [medium — financial]: The acquisition of Star Capital 26, Inc. for $21,000,000 involves a complex mix of cash, promissory notes, and stock. The successful integration of Star Capital and the realization of its projected value are crucial for the acquisition to be accretive.
• Promissory Note and Warrant Obligations [medium — legal]: The company has issued a $16,000,000 promissory note and a five-year warrant for 12,017,648 shares at $1.50 per share as part of the Star acquisition. Additionally, a $3,000,000 promissory note and a 6-month promissory note for $3,000,000 are involved, creating future financial obligations.

Industry Context

Nukkleus Inc. operates in a dynamic financial services sector, likely focusing on technology-driven solutions. The industry is characterized by rapid innovation, increasing regulatory scrutiny, and a constant need for capital to fuel growth and acquisitions. Companies often leverage strategic partnerships and equity financing to expand their market reach and service offerings.

Regulatory Implications

The company faces significant regulatory hurdles related to Nasdaq listing requirements. Failure to obtain stockholder approval for the proposed share issuances could jeopardize its Nasdaq listing status, impacting liquidity and investor confidence.

What Investors Should Do

1. Review the dilution impact: Understand the potential increase in outstanding shares from the Star acquisition, warrant exercises, ELOC, and preferred stock conversions, as this will significantly affect per-share metrics.
2. Assess the strategic rationale: Evaluate the long-term benefits and risks associated with the acquisition of Star Capital 26, Inc. and the terms of the ELOC with Esousa Group Holdings, LLC.
3. Vote on the proposals: Stockholders are urged to vote 'FOR' all proposals to ensure the company maintains Nasdaq compliance and can execute its strategic initiatives.
4. Monitor Nasdaq compliance: Pay close attention to the company's adherence to Nasdaq rules, as any missteps could lead to delisting.

Key Dates

• 2025-12-16: Special Meeting of Stockholders — Stockholders will vote on critical proposals including the Star acquisition, warrant exercises, ELOC, and preferred stock conversion, which are essential for Nasdaq compliance and future financing.
• 2025-11-17: Record Date for Special Meeting — Determines which stockholders are entitled to vote at the Special Meeting. As of this date, 16,645,766 shares of common stock were outstanding.

Glossary

DEF 14A

A filing with the U.S. Securities and Exchange Commission (SEC) that provides detailed information about a company's annual meeting of shareholders, including executive compensation, corporate governance, and other important matters. (This document contains the proposals and information relevant to the upcoming Special Meeting of Nukkleus Inc. stockholders.)

Nasdaq Listing Rules 5635(a), (b), and (d)

These rules require stockholder approval for certain share issuances, including those exceeding 19.99% of outstanding shares, those involving a change of control, or those related to acquisitions or private placements. (Nukkleus Inc. requires stockholder approval for multiple proposals in this filing to comply with these Nasdaq rules.)

Equity Line of Credit (ELOC)

An agreement where a company can sell shares to an investor at its discretion over a period, up to a certain maximum amount, providing flexible access to capital. (Nukkleus Inc. has a $250,000,000 ELOC with Esousa Group Holdings, LLC, which requires stockholder approval for share issuances exceeding Nasdaq limits.)

Series A Convertible Preferred Stock

A class of preferred stock that can be converted into a predetermined number of common stock shares, often used as a financing instrument. (Nukkleus Inc. is seeking approval for the issuance of shares related to the conversion of Series A Preferred Stock, purchased for $10,000,000.)

Promissory Note

A written promise by one party (the maker) to pay a definite sum of money to another party (the payee), either on demand or at a specified future date. (A $16,000,000 promissory note is part of the consideration for the Star acquisition, representing a significant debt obligation.)

Warrant

A security that gives the holder the right, but not the obligation, to purchase a company's stock at a specified price (exercise price) within a certain period. (A five-year warrant for 12,017,648 shares at $1.50 per share is part of the Star acquisition consideration, and another warrant for 3,191,400 shares at $5.405 per share is also relevant.)

Year-Over-Year Comparison

This DEF 14A filing is focused on seeking stockholder approval for significant corporate actions, including a major acquisition and substantial equity issuances, which are critical for maintaining Nasdaq compliance and future growth. Unlike a typical annual report, this filing highlights specific transactions and their implications for share structure and Nasdaq listing rules, suggesting a period of significant strategic transition for Nukkleus Inc.

Key Financial Figures

• $0.0001 — ares of Company common stock, par value $0.0001 per share (the “Common Stock&rdqu
• $5.405 — her adjustment, at an exercise price of $5.405 per share for a term of five years for
• $21,000,000 — capital of Star in consideration of (i) $21,000,000 to be paid by a 12-month $16,000,000 pr
• $16,000,000 — i) $21,000,000 to be paid by a 12-month $16,000,000 promissory note and the balance in $5,0
• $5,000,000 — ,000 promissory note and the balance in $5,000,000 cash, less any amounts lent to Star fro
• $1.50 — s Common Stock for an exercise price of $1.50 per share (the “Star Warrant&rdqu
• $3,000,000 — (the “Star Warrant”), (iv) $3,000,000 in cash and (iv) a 6-month promissory n
• $250,000,000 — to the Investor up to the lesser of (i) $250,000,000 of the Company’s common shares, p
• $10,000,000 — sed, for an aggregate purchase price of $10,000,000, (i) Series A Convertible Preferred Sto
• $50,000 — A Preferred Stock has a stated value of $50,000 (the “Stated Value”) and wi
• $4.89 — y the initial conversion price equal to $4.89 per Share (the “Initial Conversio

Filing Documents

• ea0266162-def14a_nukkleus.htm (DEF 14A) — 1851KB
• image_001.jpg (GRAPHIC) — 2KB
• image_002.jpg (GRAPHIC) — 6KB
• image_003.jpg (GRAPHIC) — 642KB
• image_004.jpg (GRAPHIC) — 402KB
• 0001213900-25-114245.txt ( ) — 3300KB

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT 34 PRINCIPAL STOCKHOLDERS OF THE COMPANY FOLLOWING THE CLOSING OF THE STAR PURCHASE 35 FINANCIAL INFORMATION RELATED TO THE STAR PURCHASE 36 PROPOSAL TWO: STOCKHOLDER APPROVAL OF THE ISSUANCE OF SHARES UPON EXERCISE OF WARRANTS 46 PROPOSAL THREE: APPROVAL OF THE ISSUANCE OF SHARES IN EXCESS OF NASDAQ RULE 5635(d) LIMIT IN CONNECTION WITH EQUITY LINE OF CREDIT 48 PROPOSAL FOUR: APPROVAL OF THE ISSUANCE OF SHARES IN EXCESS OF NASDAQ RULE 5635(d) LIMIT IN CONNECTION WITH CONVERSION OF THE SERIES A PREFERRED STOCK 50 PROXY SOLICITATION COSTS 52 WHERE YOU CAN FIND MORE INFORMATION 52 ANNEX A – Financials Statements of Star 26 Capital Inc. and B. Rimon Agencies Ltd. A-1 i Nukkleus Inc. 575 Fifth Ave, 14th Floor New York, New York 10017 646-257-4214 SPECIAL MEETING OF STOCKHOLDERS PROXY STATEMENT This proxy statement (the “Proxy Statement”) is being sent to the holders of shares of voting stock of Nukkleus Inc., a Delaware corporation (the “Company”), in connection with the solicitation of proxies by our Board of Directors (the “Board”) for use at the Special Meeting of Stockholders of the Company which will be held at 10:00 a.m. eastern time on December 16, 2025, virtually at www.virtualshareholdermeeting.com/NUKK2025SM (the “Special Meeting”). QUESTIONS AND ANSWERS REGARDING THE SPECIAL MEETING OF STOCKHOLDERS Who is entitled to vote at the Special Meeting? The Board has fixed the close of business on November 17, 2025 as the record date (the “Record Date”) for a determination of the stockholders entitled to notice of, and to vote at, the Special Meeting. As of the Record Date, there were 16,645,766 shares of common stock, par value $0.0001 per share (“Common Stock”), of the Company outstanding. Each share of Common Stock represents one vote that may be voted on each matter that may come

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View this DEF 14A filing on SEC EDGAR