Brilliant Acquisition (BRLI) - 2021 Q1 - Quarterly Report

PART 1 – FINANCIAL INFORMATION Item 1. Financial Statements Unaudited condensed financial statements for Brilliant Acquisition Corporation as of March 31, 2021, covering balance sheets, operations, equity, and cash flows Condensed Balance Sheets Total assets were $46.66 million as of March 31, 2021, slightly down from $46.73 million in 2020, with most in the Trust Account Condensed Balance Sheet Summary | Account | March 31, 2021 (Unaudited) | December 31, 2020 | | :--- | :--- | :--- | | Total Assets | $46,659,696 | $46,730,470 | | Marketable securities held in Trust Account | $46,004,188 | $46,003,053 | | Cash | $626,953 | $712,817 | | Total Liabilities | $525,261 | $575,662 | | Derivative warrant liabilities | $190,733 | $247,634 | | Total Shareholders' Equity | $134,435 | $154,808 | Condensed Statements of Operations Net loss for the three months ended March 31, 2021, was $20,373, an increase from $124 in 2020, driven by operating costs offset by warrant fair value changes Three Months Ended March 31 | Metric | 2021 | 2020 | | :--- | :--- | :--- | | Operating costs | $78,411 | $124 | | Changes in fair value of derivative warrant liabilities | $56,901 | - | | Interest income | $1,137 | - | | Net loss | ($20,373) | ($124) | | Basic and diluted net loss per share | ($0.00) | ($0.00) | Condensed Statements of Changes in Shareholders' Equity Shareholders' equity decreased from $154,808 to $134,435 as of March 31, 2021, solely due to the $20,373 net loss - Total Shareholders' Equity decreased by $20,373 during the first quarter of 2021, reflecting the net loss for the period[15] Condensed Statements of Cash Flows Net cash used in operating activities was $85,864 for the three months ended March 31, 2021, decreasing cash from $712,817 to $626,953 Cash Flow Summary (Three Months Ended March 31, 2021) | Cash Flow Item | Amount | | :--- | :--- | | Net cash used in operating activities | ($85,864) | | Net cash used in investing activities | $0 | | Net cash used in financing activities | $0 | | Net Change in Cash | ($85,864) | | Cash – Beginning | $712,817 | | Cash – Ending | $626,953 | Notes to Condensed Financial Statements Details the company's blank check status, June 2020 IPO proceeds of $46 million in trust, related party transactions, and accounting for redeemable shares and warrants - The company is a blank check company formed to effect a business combination, intending to focus on businesses with primary operations in the Asia Pacific region[20] - The company consummated its Initial Public Offering in June 2020, ultimately placing $46,000,000 of proceeds into a Trust Account[21][24] - The period to consummate a Business Combination was extended to December 25, 2021, after the Sponsor made two deposits totaling $920,000 into the Trust Account[36][125] - As of March 31, 2021, the company had an outstanding promissory note of $243,833 payable to its Sponsor[84] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management's analysis of financial condition and operations, covering net loss, liquidity, capital resources, and critical accounting policies Overview A British Virgin Islands blank check company targeting an Asia-Pacific business combination, potentially using IPO cash, shares, or debt, with associated dilution and financial risks - The company is a blank check company seeking a business combination, with a focus on the Asia-Pacific region[129] - A future business combination may involve issuing additional shares, which could dilute existing investors, or taking on debt, which could introduce financial risks such as default or restrictive covenants[129][131] Results of Operations Since inception, the company has generated no revenue, with activities limited to organizational tasks and target search, resulting in a $20,373 net loss for Q1 2021 Net Loss Comparison (Three Months Ended March 31) | Period | Net Loss | Key Components | | :--- | :--- | :--- | | 2021 | $20,373 | Operating costs of $78,411, offset by a $56,901 gain on warrant liabilities and $1,137 interest income | | 2020 | $124 | Consisted solely of operating costs | Liquidity and Capital Resources Liquidity from IPO and private placement, with $46 million in Trust Account and $626,953 cash for working capital, deemed sufficient until business combination - Following the IPO and over-allotment exercise, a total of $46,000,000 was placed in the Trust Account[137] - As of March 31, 2021, the company had $626,953 in cash held outside the Trust Account for operating purposes[139] - The Sponsor or affiliates may loan the company up to $1,500,000 for working capital, which can be converted into Private Units at $10.00 per unit[140] Critical Accounting Policies Key accounting policies involve significant estimates, including classification of redeemable ordinary shares, net loss per share, and fair value measurement of derivative warrant liabilities - Ordinary shares subject to possible redemption are classified as temporary equity outside of the shareholders' equity section[147] - Derivative warrant liabilities are re-measured to fair value at each reporting period, with changes recognized in the statement of operations[149] Item 3. Quantitative and Qualitative Disclosures about Market Risk The company faces no material market or interest rate risk, with Trust Account funds invested in short-term U.S. government securities - The company's funds, including those in the Trust Account, are invested in short-term U.S. government securities or money market funds, resulting in no material exposure to interest rate risk[152] Item 4. Controls and Procedures Management identified a material weakness in internal control over financial reporting related to warrant and redeemable share accounting, with a remediation plan - Management identified a material weakness in internal control over financial reporting as of March 31, 2021, related to the accounting for warrants and redeemable shares[154] - Remediation plans include enhancing access to accounting literature and increasing communication with third-party professionals to better handle complex accounting applications[155][156] PART II – OTHER INFORMATION Item 1. Legal Proceedings The company reports that there are no legal proceedings - The company has no legal proceedings to report[158] Item 1A. Risk Factors The company states there have been no material changes to the risk factors previously disclosed in its final prospectus and other SEC filings - There have been no material changes to the risk factors previously disclosed in the company's prospectus and other filings[158] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds Details proceeds from the IPO and simultaneous private placement to the Sponsor, with $46 million from IPO placed in the Trust Account - The IPO and full exercise of the over-allotment option resulted in the sale of 4,600,000 units, generating gross proceeds of $46,000,000, which were placed in the Trust Account[159][160] - Simultaneously, the Sponsor purchased 261,000 Private Units at $10.00 per unit in a private placement exempt from registration[159][160] Item 6. Exhibits Lists exhibits filed as part of the quarterly report, including underwriting and warrant agreements, and other related documents