NETANYA, Israel, October 15, 2026 / PRNewswire / -- Tessera Defense and Homeland Security Inc. ( NYSE American : HLSQ, hereinafter referred to as " Tessera " or "the Company") is implementing its acquisition option for RT LTA Systems Ltd (hereinafter referred to as " RT "). The Company has transferred the previously agreed-upon consideration of one million US dollars to retain an option to acquire a controlling stake in RT for a period of 90 days. RT is a developer of tethered balloon systems for tactical intelligence, surveillance, and reconnaissance ( ISR ) purposes.

The company previously disclosed that this payment would be included in the equity acquisition price when Tessera decides to exercise the option; if the option is not exercised, it will be refunded.

Tessera continues to advance its “Predict – Sense – Analyze – Decide – Act” architecture. There is potential for incorporating the RT platform, which aligns with the recent operational progress of Zorronet, a subsidiary under Tessera; Zorronet has already deployed new AI intelligence platforms in Israeli kibbutzim, energy facilities, railway operations, military locations, and command centers. If the RT tethered balloon system is integrated, Tessera indicates that the same perception and response framework will be extended to borders, critical infrastructure, and other large-scale areas for continuous high-altitude coverage.

During the option period, Tessera is conducting due diligence on RT and its business, including verifying whether the so-called outstanding orders and other pipeline projects of RT meet the requirements of Tessera. In the event of final exercise, Tessera expects to pay the acquisition price through an expanded Mandragola credit line, funds obtained from its plan to issue shares at market price (at-the-market), and/or other sources.

According to industry research, the global balloon system market was valued at approximately $2.35 billion in 2025 and is expected to grow to $6.49 billion by 2035, with a compound annual growth rate of around 10.7%. Moored systems account for the majority of the market share, with demand stemming from border protection, military ISR, and continuous surveillance in critical infrastructure applications.

RT develops and manufactures the Skystar™ and SkyGuard™ series of tethered balloon systems. These helium-filled, lighter-than-air platforms can remain in the air for extended periods, carrying day and night cameras, infrared sensors, radar, communication systems, and other ISR equipment, providing continuous high-altitude coverage. The systems are used for border protection, security of strategic locations, coastal and maritime surveillance, troop protection, public safety, large-scale events, search and rescue, and other tasks. RT indicates that the cumulative operating time of their systems worldwide has exceeded 6 million hours. Current customers include Elbit Systems and the Israeli police force. RT also stated that as of October 15, 2026, they have orders totaling approximately 15 million US dollars, including an active contract with the United Arab Emirates worth several million dollars, which is part of a large-scale border protection project. The systems are also deployed by security forces in the United States, Mexico, Australia, France, and other countries. As part of due diligence, the company is verifying these claims regarding current orders and other pipeline projects.

Tethered balloons occupy a unique niche in the fields of aerospace and continuous surveillance. Unlike manned aircraft or most drones, which require frequent refueling and retrieval, tethered systems can provide continuous, wide-area observation from high altitudes at potentially lower per-hour coverage costs. The tether also supplies power and high-bandwidth data connections, allowing multi-sensor payloads to operate for extended periods above fixed or semi-fixed areas. This combination of continuity and high line of sight makes specialized balloon platforms practical tools in military, homeland security, and public safety applications, especially in scenarios that require continuous monitoring of large geographic areas.

According to the options agreement, regardless of whether the option is exercised or not, RT shall sign a non-exclusive, permanent technology license with Tessera within 60 days after the agreement date. This license may enable the integration of data from RT's aerial platform with Tessera's broader perception and response systems, regardless of whether the acquisition is completed or not.

According to the agreement announced on September 24, 2026, Tessera holds an option to acquire a 51% stake in RT for a period of 90 days. Whether to exercise this option is entirely at the discretion of Tessera and is subject to the completion of due diligence and other approvals. The acquisition price will be the lower of the following two amounts: either $13 million based on the equity value, or a price calculated using a formula based on RT's average revenue in 2026, 2027, and 2028 compared to EBITDA. This price will be determined based on audited financial results and will be arranged under a performance-based contract (earnout). Tessera has already deposited $1 million for this option; if the option is exercised, this amount will be included in the acquisition price; if not exercised, it will be refunded.

Tessera CEO Michael Oster stated: "If we determine, based on a satisfactory due diligence process, that exercising this option is in the best interest of shareholders, management believes that RT will add a completely new dimension to the system that Tessera is building. Our strategy is built upon the complete security cycle of Predict, Sense, Analyze, Decide, and Act. RT will enable us to extend this architecture to include continuous surveillance of airspace across borders, in critical infrastructure, and in other large-scale areas. This will expand our portfolio of sensors and enhance our overall capabilities by improving our ability to predict threats on a broader security platform. This capability will also support us in further expanding our homeland security business; at the same time, we see that a new pattern is emerging in the Middle East, with increasing cooperation among regional countries. RT Our operations in the United Arab Emirates are a concrete example of how such regional cooperation can create new opportunities in areas such as border protection."

Regarding Tessera Defense, and, and Homeland Security Inc (originally BiomX Inc).

Tessera Defense and Homeland Security Inc. ( NYSE American : HLSQ ) is a physical security technology company that provides integrated and customized security solutions, connecting detection, intelligence, and response in complex security environments. The Tessera platform integrates cameras, sensors, detection technologies, AI, and other security infrastructure to identify threats in real time, understand events, and coordinate responses. The company offers technical expertise, hardware, and implementation capabilities to customize security solutions according to the specific needs of each location, helping customers deploy and optimize integrated security systems in critical infrastructure, energy, digital infrastructure, and homeland security applications. For more information, please visit https :// thlsq.ai.

About RT LTA Systems

RT LTA Systems develops and manufactures Skystar and SkyGuard series balloon systems for military, homeland security, and civilian applications. These systems provide continuous ISR and communication capabilities for tasks such as border protection, strategic location security, coastal surveillance, law enforcement, public safety, and search and rescue. RT indicates that the total operating time of their systems worldwide has exceeded 6 million hours. For more information, please visit https :// www.rt.co.il.

Forward-looking Statements

This press release contains “forward-looking statements” as defined by the Private Securities Litigation Reform Act of 1995 and Section 21E of the Securities Exchange Act of 1934, as amended, known as the “Safe Harbor” provisions. Forward-looking statements can be identified by words such as “expected,” “intended,” “planned,” “believed,” “will,” “may,” “anticipated,” “estimated,” “potential,” and similar expressions. These statements are based on the company’s current expectations and are subject to various risks and uncertainties, many of which are beyond the company’s control, and may result in significant differences between actual results and those expressed or implied.

These risks and uncertainties include, but are not limited to: Tessera may decide not to exercise its option to acquire a controlling stake in RT, including due to the results of due diligence; the proposed transaction may not be completed under the expected terms, or may not be completed at all; the proportion of RT shares the company intends to acquire may differ from current assumptions; based on the audited revenues for fiscal years 2026, 2027, and 2028, as well as EBITDA, the valuation or final acquisition price may differ from current expectations; the expected performance-based compensation structure may change, resulting in payment amounts that differ from current forecasts; the company may not be able to obtain sufficient financing to complete the transaction, including through an expanded Mandragola credit line, funds from the company's plan to issue shares at market price, or other sources; additional share issuance may lead to dilution of existing shareholders; required approvals may not be obtained; RT existing orders and other pipeline projects may not be validated; the company may not be able to enter into potential command and control transactions under acceptable terms, or may not be able to enter into them at all; both parties may not be able to sign the proposed license agreement under the expected terms, or the agreement may not bring the anticipated business opportunities; RT existing orders may be delayed, changed, or cancelled, resulting in revenue recognition not occurring at the expected time, or generating lower-than-expected revenue or profit margins; the RT Skystar and SkyGuard systems and related technologies may not operate as designed or meet customer requirements; Tessera and RT may not be able to successfully integrate RT's continuous aerial surveillance capabilities with Tessera's existing perception, intelligence, analysis, and response technologies; the strategic, technical, or commercial benefits expected from the transaction may not be realized; Tessera may not be able to expand influence in areas such as homeland security, border protection, critical infrastructure, and other target markets.RT The relationships with existing customers, partners, and international markets may not be able to continue or expand, including in the United Arab Emirates and other regions of the Middle East; geopolitical, regulatory, procurement, budgetary, technical, or other factors may affect current or future projects and business opportunities; the company may not be able to meet the ongoing listing standards of NYSE American within the planned period or may not be able to do so at all; the company may not be able to make progress as planned; the company's common stock may have its trading suspended or it may be delisted from NYSE American; the company may not be able to raise additional capital to carry out its business and strategic initiatives; there are reservations regarding the company's ability to continue as a going concern; and other risks mentioned in the documents submitted by the company to the U.S. Securities and Exchange Commission, including those under the "Risk Factors" heading in the 10-K annual report for the fiscal year ending December 31, 2025 (submitted on February 19, 2026, SEC), and its 10-K/A amendment submitted on April 30, 2026; as well as in the 10-Q quarterly reports for the quarters ending March 31, 2026, and June 30, 2026 (submitted on May 20, 2026, and August 19, 2026, respectively, SEC); and in other documents submitted by the company to SEC.

Except as required by law, the company assumes no obligation to update or revise any forward-looking statements due to new information, future events, or other reasons.

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