Financial Performance - Total revenues for Q3 2024 were $175,214, a decrease of 96.6% compared to $5,212,056 in Q3 2023[22] - Net loss for Q3 2024 was $1,616,241, compared to a net loss of $1,209,744 in Q3 2023, representing a 33.5% increase in losses[22] - The company reported a gross profit of $125,476 for Q3 2024, compared to a gross loss of $(158,018) in Q3 2023[22] - For the nine months ended June 30, 2023, Nukkleus reported a net loss of $3,149,315, compared to a net loss of $12,973,753 for the same period in 2024, indicating a significant increase in losses year-over-year[28] - The Company had a working capital deficit of approximately $11,421,000 as of June 30, 2024, and incurred a net loss of approximately $12,974,000 for the nine months ended June 30, 2024[45] - The company reported a net cash used in operating activities of $626,716 for the nine months ended June 30, 2023, compared to $2,619,117 for the same period in 2024, reflecting improved cash flow management[28] Assets and Liabilities - Total current assets decreased to $706,447 as of June 30, 2024, down 76.0% from $2,928,408 as of September 30, 2023[20] - Total liabilities increased to $13,350,255 as of June 30, 2024, up 39.0% from $9,545,855 as of September 30, 2023[21] - Total stockholders' deficit increased to $(12,230,130) as of June 30, 2024, compared to $(6,193,230) as of September 30, 2023[21] - The company had total assets of $1,120,125 as of June 30, 2024, down from $3,352,625 as of September 30, 2023[207] Cash Management - The Company’s cash balance cannot cover operating expenses for the next twelve months, raising substantial doubt about its ability to continue as a going concern[45] - The Company had cash balances of approximately $6,138 as of June 30, 2024, down from $19,318 as of September 30, 2023[58] - The company had cash and cash equivalents of $538,772 as of June 30, 2023, down from $1,854,436 at the beginning of the period[29] - The Company’s cash in the United Kingdom accounted for 66.6% of total cash as of June 30, 2024[58] Customer Assets and Liabilities - Customer custodial cash liabilities decreased to $882,578, down 38.9% from $1,443,011 in the previous period[21] - Customer digital currency assets and liabilities were valued at $7,635 as of June 30, 2024, with no such assets or liabilities reported as of September 30, 2023[66] - Total customer liabilities decreased from $1,443,011 as of September 30, 2023, to $890,213 as of June 30, 2024, a reduction of 38.3%[120] - Customer custodial cash as of June 30, 2024, was $532,634, a decrease from $672,501 as of September 30, 2023, reflecting a decline of 20.8%[120] Agreements and Contracts - Nukkleus has terminated its General Services Agreement with Triton Capital Markets Ltd. effective January 1, 2024, due to non-payment, which previously guaranteed a minimum payment of $1,600,000 per month[35] - Nukkleus has entered into a new General Services Agreement with FXDirectDealer LLC, with a reduced minimum payment of $1,550,000 per month effective May 1, 2023[36] - The Company entered into a $1 million line of credit with a related party on July 31, 2023, with an annual interest rate of 8%[184] Stock and Equity - The weighted average common shares outstanding increased to 14,802,414 as of June 30, 2024, from 10,074,657 as of September 30, 2023[21] - The company issued a total of 1,189,550 common shares as part of a Settlement Agreement with Silverback Capital Corporation from July 1, 2024, to August 27, 2024[211] - During the nine months ended June 30, 2024, the company issued 627,997 shares of common stock for services valued at $2,765,601, recorded as stock-based compensation expense[148] Management and Governance - Emil Assentato resigned as Chief Executive Officer on July 24, 2024, and Jamal Khurshid was appointed as the new Chief Executive Officer[216] - Jamal Khurshid announced his resignation as Chief Executive Officer effective September 4, 2024, following a Settlement Agreement with X Group[217] - The Board increased its size from six to seven members and appointed David Rokach and Menachem Shalom as new directors, with Mr. Shalom also becoming the Chief Executive Officer[218] Expenses - Operating expenses for Q3 2024 were $1,517,123, an increase of 43.8% from $1,054,783 in Q3 2023[22] - The company incurred a bad debt expense of $6,145,942 for the nine months ended June 30, 2024, which was not present in the previous year[22] - Advertising and marketing costs for the three months ended June 30, 2024, were $2,355, compared to $1,670 for the same period in 2023, representing an increase of 40.9%[95] - For the nine months ended June 30, 2024, advertising and marketing costs totaled $43,941, down from $51,087 in 2023, indicating a decrease of 14.0%[95] Digital Assets - The Company’s digital assets are accounted for as intangible assets with indefinite useful lives and are subject to impairment losses[69] - As of June 30, 2024, the company's total digital asset holdings amounted to $5,906 million, a significant increase from $1,973 million as of September 30, 2023, representing a growth of approximately 198%[124][125] - The company recorded an impairment expense of $0 for the three months ended June 30, 2024, compared to $122 million for the same period in 2023, indicating improved asset performance[124] Related Party Transactions - Revenue from related party TCM was $4,800,000 for the nine months ended June 30, 2024, consistent with the same period in 2023[169] - Digital RFQ earned $7,722 in revenue from related parties in Q3 2024, down from $29,343 in Q3 2023[171] - The Company had total due from affiliates of $18,503 as of June 30, 2024, a significant decrease from $2,039,274 as of September 30, 2023[173] - Total due to affiliates increased to $7,944,189 as of June 30, 2024, compared to $6,808,749 as of September 30, 2023[176]
BRILLIANT ACQUIS(BRLIR) - 2024 Q3 - Quarterly Report