Tessera Defense secures new $5 million credit line from Mandragola

Tessera Defense and Homeland Security Inc. entered into a new Line of Credit Agreement on October 5, 2026 with Mandragola Ltd., an Israeli company, under which Mandragola agreed to provide a revolving credit facility to the company and its operating subsidiaries worth up to $5,000,000.¹ This new facility supplements rather than replaces an earlier arrangement, as the new line is in addition to, and does not replace, a $2,000,000 revolving line of credit set up between the company and Mandragola in May 2026, which remains active.¹ As of the report date, no principal amount is outstanding under that earlier Credit Line.¹

Under the new agreement, the company or its operating subsidiaries can request advances with two business days' notice, and each advance will be documented through a convertible promissory note that can be repaid and reborrowed.¹ Interest accrues at a simple annual rate of 12%, with prepayment allowed without penalty, and each note matures on October 5, 2029.¹

Default terms are narrow: an event of default is limited to a payment default lasting fifteen business days after notice, or bankruptcy and insolvency events, after which Mandragola could accelerate amounts owed, with default interest capped at the lesser of 15% annually or the maximum legal rate.¹

Conversion terms set the price at the lower of the lowest closing price in the five trading days before a conversion notice or $1.00 per share, adjusted only for stock splits, dividends, or similar events.¹ No other anti-dilution protections apply, and no warrants were issued alongside this credit line.¹

Share issuance from conversions is capped at 19.99% of outstanding common stock unless shareholders approve more under NYSE American rules, and the company has agreed to seek that approval if needed; shares cannot be issued until NYSE American clears a related listing application.¹

Separately, the company disclosed that between September 29 and October 2, 2026, it issued 2,690,500 restricted shares to Mandragola, including 200,000 shares from full conversion of a note under the earlier Credit Line and 2,490,500 shares from cashless exercises of a warrant tied to the company's 2026 acquisition of a 60% stake in Dr. Frucht Systems Ltd.¹ Following these issuances and shares sold under its at-the-market program, the company reported 8,920,240 shares outstanding as of October 2, 2026.¹