Financial Performance - Total revenues for the quarter were $175,214, a decrease of 96.6% compared to $5,212,056 in the same quarter last year[17]. - The company reported a net loss of $1,616,241 for the quarter, compared to a net loss of $1,209,744 in the same quarter last year, representing a 33.5% increase in losses[17]. - The accumulated deficit as of September 30, 2023, was $(48,986,099), compared to $(31,769,244) a year earlier, indicating a significant increase in losses[14]. - Total stockholders' deficit reached $(12,230,130), compared to $(6,193,230) in the previous period, marking a 97.5% increase[15]. - The company incurred operating expenses of $1,517,123, which is a 43.8% increase from $1,054,783 in the same quarter last year[17]. - Net loss for the three months ended December 31, 2023, was $(8,928,095)[23]. - Net loss for the three months ended March 31, 2024, was $(2,429,417)[24]. - Net loss for the three months ended June 30, 2024, was $(1,616,241)[26]. Cash Flow and Liquidity - Total cash as of June 30, 2024, was $538,772, down from $1,854,436 at the beginning of the period[32]. - Net cash used in operating activities for 2024 was $(2,619,117), compared to $(626,716) in 2023[31]. - Nukkleus has cash balances of approximately $6,000 and $19,000 as of June 30, 2024, and September 30, 2023, respectively[47]. - As of June 30, 2024, total cash amounted to $6,138 million, a decrease from $19,318 million as of September 30, 2023, representing a decline of 68.3%[62]. - The company reported a working capital deficit of approximately $11,421,000 as of June 30, 2024, with a net loss of approximately $12,974,000 for the nine months ended June 30, 2024[48]. - The company generated negative cash flow from operating activities of approximately $2,619,000 for the nine months ended June 30, 2024[48]. Assets and Liabilities - Balance as of March 31, 2024, included total assets of $14,102,414 and total liabilities of $(47,369,858)[25]. - Customer custodial cash liabilities, which represent cash deposits for contractual obligations to customers, are classified as current assets[63]. - Customer digital currency assets were valued at $7,635 million as of June 30, 2024, with corresponding liabilities also at $7,635 million, indicating a new asset class for the company[71]. - The company had no customer digital currency assets or liabilities as of September 30, 2023, marking a significant increase in digital asset management[72]. - Other current assets increased from $32,522 million as of September 30, 2023, to $135,631 million as of June 30, 2024, reflecting a growth of 317.5%[82]. - The company maintains a portion of its cash in financial institutions that may exceed the FDIC insurance limit of $250,000, managing credit risk through high-quality institutions[76]. - The company has established an allowance for doubtful accounts of $0 as of June 30, 2024, down from $637,072 as of September 30, 2023, indicating improved credit quality[79]. Revenue Streams - Total revenues for June 2024 were $175,214, a decrease from $5,677,362 in June 2023, representing a decline of approximately 97%[95]. - General support services revenue was $4,800,000 for the nine months ended June 30, 2024, compared to $14,400,000 for the same period in 2023, indicating a 67% decrease[95]. - Financial services revenue for the nine months ended June 30, 2024, was $877,362, down from $1,822,388 in 2023, reflecting a decline of about 52%[95]. Stock and Equity - The weighted average common shares outstanding increased to 14,340,876 from 10,074,657, reflecting a 42.5% increase[18]. - The company issued 425,295 shares of common stock for services, contributing to an increase in additional paid-in capital to $36,764,869 from $25,543,048[20]. - During the nine months ended June 30, 2024, the company issued 627,997 shares of common stock for services valued at $2,765,601, resulting in a stock-based compensation expense of the same amount[151]. - On December 19, 2023, the company converted $2,727,061 of debt into 757,678 shares of common stock, with the fair market value of the shares exceeding the debt by $3,900,255[152]. - The company settled a $324,601 debt by issuing 660,000 shares of common stock, with a fair value of $463,716, resulting in a loss on debt settlement of $139,115[154]. Related Party Transactions - The company issued promissory notes totaling $1,167,500 to Emil Assentato and Max Q during the nine months ended June 30, 2024, with an interest rate of 5.0% per annum[195]. - The outstanding principal balance of a loan from Craig Vallis was $405,676 as of June 30, 2024, with a repayment due by July 31, 2024[192]. - Two related party customers accounted for 87.9% of the total outstanding accounts receivable and due from affiliates as of June 30, 2024[200]. - Two related party suppliers represented 70.8% of the total outstanding accounts payable, accrued liabilities, and other payables as of June 30, 2024[203]. - The interest expense related to loans from related parties for the nine months ended June 30, 2024, amounted to $41,671, compared to $0 in the same period of 2023[195]. Business Operations - Nukkleus completed its merger with Brilliant Acquisition Corporation on December 22, 2023, resulting in the formation of a financial technology company focused on the retail foreign exchange trading industry[36]. - The company acquired 51% of Match Financial Nigeria Limited at no cost to expand its business into Nigeria[42]. - The company operates in two reportable business segments: general support services and financial services, which are managed separately due to fundamental operational differences[205]. - The general support services segment provides software, technology, customer sales and marketing, and risk management technology solutions under a GSA to a related party[205]. - The financial services segment offers payment services from one fiat currency to another or to digital assets[205].
Brilliant Acquisition (BRLI) - 2024 Q2 - Quarterly Report