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Item 1A. Risk Factors
As of March 31June 30, 2026, there have been no material changes to the risk factors previously disclosed in our RegistratiAnnual Report on Statement on Form S-1 Form 10-K for the fiscal year ended September 30, 2025, filed with the Securities and Exchange Commission (the SEC) on December 31, 2025, and in our Registration Statement on Form S-1 filed with the SEC on April 16, 2026 (the S-1), which is incorporated by reference herein. The following risk factors supplement and highlight certain risks from the S-1 that remain particularly material to the Company in light of events occurring during the quarter ended March 31June 30, 2026. These risks, together with those in the S-1 and our other SEC filings, could materially and adversely affect our business, financial condition, results of operations, cash flows, and the trading price of our Common Stock. Investors should carefully consider these risks before making any investment decision.
We have a history of operating losses, limited operating history, and substantial doubt about our ability to continue as a going concern.
We are an early-stage company with limited operating history. We have incurred significant net losses since inception, and we expect to continue to incur substantial operating losses as we advance our technology development, integration initiatives (including Solar Drone and the SaverOne platform), and commercialization efforts. As of March 31June 30, 2026, our liquidity position and cash runway remain limited. These factors Absent the mitigating plans and the committed financial support described in Note 2 to the accompanying unaudited condensed consolidated financial statements, these conditions would raise substantial doubt about our ability to continue as a going concern within one year after the date these financial statements are issued. Although management has concluded that such doubt has been alleviated, there can be no assurance that the committed support will be sufficient or available when needed. Our ability to continue operations depends on our ability to obtain additional financing, generate revenue from customer orders, and achieve positive cash flow, none of which is assured.
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We willOur current business plans require a significant additional mount of capital, and future financings may result . If we are unable to obtain substantial dilutionfficient funding or be unavailabledo not have access to capital on acceptable terms.
Ou, we may not be able to execute our business plan requires substants, and our prospects, financial capital to fundondition, and results of operations, technology integration, manu could be materially adversely affected.
The extent to which we rely on YA II PN, LTD. (YA II) as a source of funding depends on multiple facturing scale-up, and milestone paymentors, including the prevailing market price of our common stock, our ability to satisfy the conditions necessary to deliver Advance Notices under existing athe Standby Equity Purchase Agreements. Although we completed dated July 25, 2025 (as amended, the StaEPA), the impact of the Exchange 1 ClosingCap and Ownership Limitation under the SaverOne Exchange Agreement and EPA, and our success in securing funding from other sources.
In addition to the SEPA facility (under which we may sell up to $50 million of common stock, subject to limitations), we have received net proceeds from substantial capital from YA II. We received a $5.0 million Pre-Paid Advance under the YA II PN Ltd. senior loan iSEPA, evidenced by convertible notes issued at 94% of principal, bearing 6% interest (increasing to 18% upon default), with a 12-month maturity per tranche (the Convertible Notes). On February 26, 2026, we will need additioentered into a Letter Agreement with YA II pursuant to which YA II provided a $20 million senior loan (the Loan) evidenced by a Promissory Note (the Note) issued at a 15% original funding. Failure to obtain financissue discount, resulting in net cash proceeds of approximately $16.975 million after fees. The Note bears 0% interest (increasing on commercially reasonable terms (or at all) could forto 18% upon an Event of Default), matures in 12 months, and requires monthly amortization payments of $2.5 million of principal plus a 2% premium (commencing on the 60th day after issuance). Amortization may be satisfied in cash or, subject to a 30-day repayment waterfall in favor of YA II, by delivering an Advance us to delander the SEPA. Concurrently, scale back, or abandon owe issued YA II a five-year warrant to purchase 1,333,333 shares of common stock at an exercise price of $9.00 per share. The obligations under the Note are guaranteed by each of our development subsidiaries.
We have experienced operating losses and commercialization planexpect to continue to incur operating losses as we implement our business plans in the defense technology, advanced sensing, AI, and related sectors. We expect our capital expenditures to remain significant as we expand operations, which would materially and adversely affect our business, financiincluding through our network of subsidiaries and strategic initiatives. Our limited operating history in certain areas means our capital requirements are uncertain and may differ materially from current expectations. New growth opportunities may also require additional capital.
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As of June 30, 2026, our principal consource of liquidition, and resultsy is our cash balance in the amount of operations.
Our recent strategic transactionsapproximately $14 million. While the SEPA provides us with the right, but not the obligation, to sell shares to YA II, our ability to utilize the facility is subject to conditions that may not be satisfied, including the SaverOnregistration effectiveness, market conditions, and the Exchange Agreement and BladeRanger/Solar Drone acquCap (unless stockholder approval is obtained in accordance with Nasdaq rules). In addition, certain events under the Convertible Notes (including a Floor Price Event or Exchange Cap Event, subject to post-Rule 144 Date provisition, involve significant ons) may trigger monthly amortization payments of $750,000 plus a 5.0% premium and accrued interest. An uncured Event of Default under the Note could result in acceleration of the full amount, 18% default integration, milestone, rest, and conversion rights at a discount to market (subject to a 4.99% beneficial ownership blocker and execution risks.
The SaverOne transacfloor price).
Any additional debt incurred from YA II or third parties could increase our vulnerability to downturns in operating results or economic conditions. If our cash flow from operations is structured in three stages, with Stainsufficient to meet debt service obligationsincluding monthly amortizations under the Note or potential accelerated payments under the Convertible Noteswe may be required to refinance, dispose of assets, or seek additional financing on unfavorable terms.
As an early-stage 1growth completed on March 5, 2026. Achievement of Stagany, our ability to access capital is critical. We expect to continue seeking additional capital through the SEPA (when conditions permit), other equity or equity-linked offerings, credit facilities, or debt securities to finance future expenditures. Sales 2 and 3 is contingent upon operaof additional equity or equity-linked securities (including under the SEPA, upon conversion of the Note or Convertible Notes, or exercise of the Warrant) will dilute our existing stockholders. Incurrence of additional anindebtedness would increase debt service obligations and commercial milestones, regulatory approvalsuld impose restrictive operating and financial covenants.
Our ability to raise sufficient funds on favorable terms is subject to general market conditions, investor acceptance of our business model, and our compliance with Nasdaq listing rules. The BladeRangthe terms of existing arrangements with YA II. If we are unable to obtain adequate financing, we may need to significantly reduce spending, delay or cancel planned activities, or substantially alter transaction includes potential issuance of Addour corporate or operational structure. We might not obtain any such funding, or we might not have sufficient resources to conduct our business as projected. Either outcome could force us to curtail or discontinue operations, materially adversely affecting our prospects, financial conditional Pre-Funded Warrants if, and consolidated results of operations, in which case investors could lose some or all of their investment.
Our recent strategic transactions, including the VWAP condiSaverOne Exchange Agreement and BladeRanger/Solar Drone acquisition is not met. Failure to achieve milestones, i, involve significant integration, milestone, and execution risks.
The SaverOne transaction is structured in three stages, with Stage 1 3 completed by June 30, 2026. Failure integrate acquired technologies and operations (including Solar Drone), or satisfy regulatory or shareholder approval requirements could result in loss of strategic benefits, unexpected costs, dilution, or termination of the arrangements, any of which would materially and adversely affect our business and financial condition.
The senior secured loan from YA II PN Ltd. and associated Warrant expose us to repayment obligations, restrictive covenants, and dilution risks.
In February 2026, we entered into a $20 million senior loan (with 15% OID) evidenced by a Promissory Note and issued a Warrant to purchase 1,333,333 shares of Common Stock. The Note carries default interest at 18% and is secured by a global guaranty. Events of default or failure to satisfy payment obligations could accelerate repayment and materially impair our liquidity. Exercise of the Warrant and any future equity issuances will cause dilution to existing stockholders.
We face significant dilution risk from outstanding and potential future issuances of Common Stock, Pre-Funded Warrants, and other securities.
As of March 31June 30, 2026, we have outstanding Pre-Funded Warrants (initial and potential Additional PFWs under the BladeRanger Agreement), the YA II Warrant, and shares issuable under the SaverOne Exchange Agreement and management pools. The S-1 registers resale of approximately 6,148,943 shares (including Warrant Shares). Additional issuances pursuant to these instruments, the 2024 and 2025 Incentive Plans, or future financings will dilute existing stockholders and may depress our stock price.
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Commercialization of our technologies is subject to technical, regulatory, and market acceptance risks.
Our products are in various stages of development, prototype testing, and early commercialization (including Solar Drone solar-panel cleaning and defense applications). There can be no assurance that we will successfully complete development, obtain necessary certifications, secure large-scale purchase orders, or achieve market acceptance. Delays or failure in any of these areas would materially and adversely affect our revenue, results of operations, and financial condition.
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Our intellectual property may not provide adequate protection, and we may infringe third-party rights.
We rely on patents, trade secrets, and other intellectual property to protect our technologies, including the recently acquired xCalibre AI video intelligence portfolio and provisional patent filings. There can be no assurance that our patents will issue, be enforceable, or provide meaningful commercial protection. We may face claims of infringement or challenges to our IP rights, any of which could result in costly litigation, licensing obligations, or loss of competitive advantage.
We are subject to stringent regulatory, export-control, and Nasdaq continued-listing requirements.
Our defense and homeland-security technologies are subject to U.S. and Israeli export controls, ITAR/EAR requirements, and other governmental approvals. Failure to obtain or maintain necessary clearances could delay or prevent commercialization. In addition, issuances of Common Stock under our agreements require Nasdaq shareholder approval under Listing Rule 5635 in certain circumstances. Any failure to comply with listing standards could result in delisting, which would materially and adversely affect the liquidity and market price of our Common Stock.
Our international operations, particularly in Israel, expose us to geopolitical, currency, and regulatory risks.
A significant portion of our technology development, manufacturing, and strategic partnerships (SaverOne, BladeRanger, Solar Drone) is located in Israel. Geopolitical instability, armed conflict, currency fluctuations (NIS/USD), and changes in Israeli or U.S. regulatory policy could disrupt operations, increase costs, or impair our ability to integrate acquired assets or fulfill contractual obligations.
We depend on key personnel, face significant challenges in integrating our recent and contemplated acquisitions, asset purchases, joint ventures and strategic transactions, and there can be no assurance that we will successfully close pending stages or future deals or realize the anticipated benefits of our business plan. Any failure could materially and adversely affect our business, financial condition, results of operations, liquidity and the market price of our common stock.
Since late 2025, the Company has entered into multiple material transactions, including:
the January 5, 2026 QuantumSpeed asset purchase from Adrian Holdings S.R.L. (with 7 million contingent shares subject to Nasdaq stockholder approval and potential subsidiary equity transfer if approval is not obtained);
the January 9, 2026 joint venture with BOCA JOM, LLC, GBT Tokenize Corp. and failure to retain or attract qualified management and technical talent could impair our business.
Our success GBT Technologies, Inc. (subject to Nasdaq Rule 5635 approvals, CFIUS/export controls and other regulatory clearances);
the three-stage SaverOne equity exchange dated January 26, 2026 (all three stages have closed);
the December 2025 Blade Ranger acquisition (with additional pre-funded warrants potentially issuable based on VWAP);
the February 2026 51% acquisition (not closed) of C.M. Composite Materials Ltd. and related $5 million loan facility (expressly conditioned on JV Condition in India and subject to Giza Side Letter restrictions, with closing required by June 30, 2026);
the March 2026 SolarDrone/Junko solar business acquisition;
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the March 2026 Letter of Engagement with the National Oil Company of Liberia for Blocks LB-4 and LB-5 (requiring a $600,000 signing bonus and future payments - $4,000,000 if Production agreement will be achieved, subject to regulatory and legislative approvals);
the April 10, 2026 xClibre asset purchase from Dream America Marketing Services, Ltda. (with 3.5 million contingent shares subject to Nasdaq stockholder approval;
Proposed Data Center Joint Venture. On June 12, 2026, the Company entered into a term sheet with Lucky Whale Production Limited to form a joint venture to develop a Tier IV data center in Beth Shemesh, Israel, in which the Company would hold an effective indirect interest of approximately 51%, with consideration of approximately $40 million in Common Stock issuable to the land owner;
T3 Defense Share Exchange. On May 17, 2026, the Company issued 475,492 shares of Common Stock (valued at approximately $2.658 million) to T3 Defense Inc. (Nasdaq: DFNS) in exchange for 6,000,000 shares of DFNS common stock; and
Adrian Holdings Assignment Agreement. On June 22, 2026, the Company assigned to Adrian Holdings S.R.L. its right to receive a portion of the SaverOne shares issuable at the Stage 2 and Stage 3 closings, reducing the outstanding principal of the Adrian Note by approximately $1.43 million.
These and any future transactions expose us to substantial risks, including:
Integration difficulties. Combining acquired technologies (QuantumSpeed IP, SaverOne RF platforms, C.M. Composite materials, Junko operations, Blade Ranger assets, xClibre assets etc.), personnel, operations and systems across multiple jurisdictions may divert significant management attention, result in higher-than-expected costs, loss of key personnel, operational disruptions, control weaknesses and failure to achieve expected synergies or revenue growth.
Failure to close or unwind risks. Many transactions remain subject to conditions outside our control, such as Nasdaq stockholder approvals under Rule 5635, regulatory clearances (CFIUS, export controls, Israeli/Indian/Liberian approvals), milestone achievements and the JV Condition. Failure to satisfy these conditions could result in loss of benefits already partially paid for (including cash advances and issued shares), mandatory equity transfers, or forfeiture of consideration without refund.
Dilution and valuation uncertainty. These deals have caused and will continue to cause substantial dilution through issuance of millions of shares, pre-funded warrants and potential additional securities. The $1.0 billion internal reference value used in the JV was not supported by an independent valuation or fairness opinion.
International and regulatory risks. Operations in or targeting Israel, India, Costa Rica and Liberia expose us to political, economic, currency, anti-corruption (FCPA), sanctions and national-security risks. Failure to obtain or maintain required approvals could render acquired assets unusable.
Our growth strategy depends heavily on our ethe successful execution and integration of these and future transactions. Failure to manage these risks effectively could have a material adverse effect on our business, financial condition, results of operations and stock price.
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We depend on key personnel, and failure to retain or attract qualified management and technical talent could impair our business.
Our success depends heavily on our executive officers (including Douglas Davis, our Executive Chairman and CEO) and key technical personnel. The loss of any of these individuals, or our inability to attract and retain other qualified personnel, could delay technology development, integration efforts, and commercialization, materially and adversely affecting our business, financial condition, and results of operations.
These risk factors are not exhaustive. Additional risks and uncertainties not presently known to us or that we currently deem immaterial may also impair our business operations and the value of our securities. Investors are urged to review the full discussion of risk factors in our S-1 and subsequent SEC filings. All forward-looking statements in this Quarterly Report are qualified in their entirety by reference to these risk factors.
Bannix failure to redeem all remaining public offering shares may expose the Company to legal, regulatory, and reputational risks
Bannix was required to redeem all remaining public offering shares no later than June 27, 2025. Bannix Acquisition Corp. did not redeem the remaining public offering shares as required, and the Business Combination was subsequently consummated on July 14, 2025. The failure to redeem was inconsistent with disclosures in the Bannix IPO prospectus and the Business Combination proxy statement. This failure may expose the Company to legal, regulatory, and reputational risks.
Any of the above mentioned factors, or any other negative impact on the global economy, capital markets or other geopolitical conditions resulting from the Russian invasion of Ukraine, the Israel-Hamas conflict, the Iran conflict and subsequent sanctions or related actions, could adversely affect the Companys operations in the future or with future capital raising activities. The Company has not been affected so far by these conflicts or US tariffs.
81Substantial Sales or Issuances of Common Stock Under Our Financing Arrangements with YA II May Cause Our Stock Price to Decline and Result in Dilution to Our Stockholders.
On July 25, 2025, we entered into the Standby Equity Purchase Agreement (as amended, the SEPA) with YA II PN, LTD. (YA II), pursuant to which we may sell up to $50 million of our common stock from time to time. In connection with the SEPA, YA II provided a $5 million Pre-Paid Advance (evidenced by Convertible Notes issued at 94% of principal, bearing 6% interest, with conversion rights at the lower of $10.00 or 93% of the lowest daily VWAP during the five preceding trading days, subject to a $1.00 floor price). Following effectiveness of the registration statement registering shares issuable under the SEPA, on February 26, 2026, we entered into a Letter Agreement with YA II pursuant to which YA II provided a $20 million senior secured loan (the Loan) evidenced by a Promissory Note (the Note) issued at a 15% original issue discount, resulting in net proceeds of approximately $16.975 million after fees. The Note bears 0% interest (increasing to 18% upon default), requires monthly amortization payments of $2.5 million of principal plus a 2% premium (commencing on the 60th day after issuance and continuing monthly until maturity in 12 months), and may be satisfied in cash or, subject to a 30-day repayment waterfall in favor of YA II, by delivering an Advance under the SEPA. Concurrently, we issued YA II a five-year Warrant to purchase 1,333,333 shares of common stock at $9.00 per share. The obligations under the Note are guaranteed by each of our subsidiaries.
Any sales of shares under the SEPA, issuances upon conversion of the Convertible Notes or the Note (upon an uncured Event of Default at 90% of the lowest daily VWAP during the 10 preceding trading days, subject to a 4.99% beneficial ownership blocker and floor price), or exercises of the Warrant, or the perception that such sales or issuances may occur, could cause the market price of our common stock to decline significantly. These issuances will dilute the ownership interests of our existing stockholders and may dilute earnings per share and book value per share. We have agreed to register the shares issuable upon exercise of the Warrant and have granted YA II demand registration rights covering shares issuable upon conversion of the Note.
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The Number of Shares Issuable and the Proceeds We May Receive Under the SEPA Are Uncertain and May Be Materially Less Than the Maximum Commitment.
We control the timing and amount of any Advances under the SEPA, subject to limitations including the Ownership Limitation, the Exchange Cap (unless stockholder approval is obtained in accordance with Nasdaq rules), and other conditions in the SEPA. The purchase price for shares sold under an Advance is 97% of the lowest daily VWAP during the applicable three-trading-day period. Depending on market conditions and the trading price of our common stock, we may not raise the full $50 million commitment amount even if all currently registered shares are sold, and additional registration statements would be required to sell shares beyond those registered. These factors, together with our obligations under the Note, could limit our access to capital and require us to seek alternative financing on less favorable terms.
Our Obligations Under the Convertible Notes and the Promissory Note May Require Significant Cash Payments That Could Adversely Affect Our Liquidity, Financial Condition, and Operations.
Certain events under the Convertible Notes (including a Floor Price Event, Exchange Cap Event, or Registration Event, subject to post-Rule 144 Date provisions) trigger monthly amortization payments of $750,000 plus a 5% premium and accrued interest. The Note requires substantial monthly amortization payments and contains customary covenants, including restrictions on variable rate transactions, additional indebtedness without YA IIs consent, and use of proceeds. An uncured Event of Default under the Note could result in acceleration, 18% default interest, and immediate conversion rights at a discount to market. These payment obligations, whether satisfied in cash or through SEPA Advances, could materially strain our liquidity and financial resources, particularly if market conditions limit our ability to utilize the SEPA or if we experience Events of Default.
Investors Who Purchase Shares at Different Times May Pay Different Prices and Experience Different Levels of Dilution.
Pursuant to the SEPA, we have discretion over the timing, prices, and number of shares sold to YA II. YA II may resell such shares, the shares issuable upon conversion of the Note (upon default), or the shares issuable upon exercise of the Warrant at different times and prices. As a result, investors purchasing shares in this offering or in the secondary market may experience different levels of dilution and different investment outcomes. The resale of these shares, or the perception that such resales could occur, could also harm the prevailing market price of our common stock.
These risk factors have been prepared on behalf of VisionWave Holdings Inc. (Nasdaq: VWAV) in connection with its SEC reporting obligations and reflect all material facts regarding the SEPA (including the Pre-Paid Advance and Convertible Notes) and the February 26, 2026 Loan transaction with YA II. The disclosures are condensed for clarity while preserving the substance required for investor protection under the Securities Act of 1933, as amended. No additional risks have been identified in the Bylaws or Certificate of Incorporation that require disclosure in this context.