Nukkleus Inc. Files Q2 2024 10-Q Report

TL;DR

Nukkleus Inc. filed its Q2 2024 10-Q. Check financials.

AI Summary

Nukkleus Inc. filed its quarterly report on Form 10-Q for the period ended June 30, 2024. The company, formerly known as Brilliant Acquisition Corp., is incorporated in Delaware and headquartered in Jersey City, New Jersey. Its principal executive offices are located at 525 Washington Blvd, Jersey City, NJ 07310, with a contact phone number of 212-791-4663.

Why It Matters

This filing provides investors with an update on Nukkleus Inc.'s financial performance and operational status for the second quarter of 2024, crucial for investment decisions.

Risk Assessment

Risk Level: low — This filing is a standard quarterly report and does not contain immediate red flags or significant new risks.

Key Players & Entities

• Nukkleus Inc. (company) — Registrant
• June 30, 2024 (date) — Quarterly period end date
• Brilliant Acquisition Corp. (company) — Former company name
• 525 Washington Blvd, Jersey City, New Jersey 07310 (location) — Principal executive offices address
• 212-791-4663 (phone_number) — Registrant's telephone number

FAQ

Key Financial Figures

• $0.0001 — ange on which registered Common Stock, $0.0001 par value per share NUKK The Nasdaq Sto
• $11.50 — sable for one Share of Common Stock for $11.50 per share NUKKW The Nasdaq Stock Market

Filing Documents

• ea0212112-10q_nukkleus.htm (10-Q) — 1235KB
• ea021211201ex31-1_nukkleus.htm (EX-31.1) — 9KB
• ea021211201ex32-1_nukkleus.htm (EX-32.1) — 3KB
• 0001213900-24-077772.txt ( ) — 7582KB
• nukk-20240630.xsd (EX-101.SCH) — 82KB
• nukk-20240630_cal.xml (EX-101.CAL) — 47KB
• nukk-20240630_def.xml (EX-101.DEF) — 384KB
• nukk-20240630_lab.xml (EX-101.LAB) — 644KB
• nukk-20240630_pre.xml (EX-101.PRE) — 382KB
• ea0212112-10q_nukkleus_htm.xml (XML) — 946KB

- FINANCIAL INFORMATION

PART I - FINANCIAL INFORMATION Item 1. Interim Financial Statements Condensed Consolidated Balance Sheets as of June 30, 2024 (Unaudited) and September 30, 2023 1 Unaudited Condensed Consolidated Statements of Operations and Comprehensive Loss for the Three and Nine Months Ended June 30, 2024 and 2023 2 Unaudited Condensed Consolidated Statements of Changes in Stockholders' (Deficit) Equity for the Three and Nine Months Ended June 30, 2024 and 2023 3 Unaudited Condensed Consolidated Statements of Cash Flows for the Nine Months Ended June 30, 2024 and 2023 5 Notes to Unaudited Condensed Consolidated Financial Statements 6 Item 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 31 Item 3.

Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative Disclosures About Market Risk 41 Item 4.

Controls and Procedures

Controls and Procedures 41 Item 5. Other 41

- OTHER INFORMATION

PART II - OTHER INFORMATION Item 1.

Legal Proceedings

Legal Proceedings 42 Item 1A.

Risk Factors

Risk Factors 42 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 42 Item 3. Defaults Upon Senior Securities 42 Item 4. Mine Safety Disclosures 42 Item 5. Other Information 42 Item 6. Exhibits 43

FORWARD LOOKING STATEMENTS

FORWARD LOOKING STATEMENTS This report contains forward-looking statements regarding our business, financial condition, results of operations and prospects. Words such as "expects," "anticipates," "intends," "plans," "believes," "seeks," "estimates" and similar expressions or variations of such words are intended to identify forward-looking statements, but are not deemed to represent an all-inclusive means of identifying forward-looking statements as denoted in this report. Additionally, statements concerning future matters are forward-looking statements. Although forward-looking known by us. Consequently, forward-looking statements are inherently subject to risks and uncertainties and actual results and outcomes may differ materially from the results and outcomes discussed in or anticipated by the forward-looking statements. Factors that could cause or contribute to such differences in results and outcomes include, without limitation, those specifically addressed under the headings "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our annual report on Form 10-K, in "Management's Discussion and Analysis of Financial Condition and Results of Operations" in this Form 10-Q and information contained in other reports that we file with the SEC. You are urged not to place undue reliance on these

forward-looking statements, which speak only as of the date of this report

forward-looking statements, which speak only as of the date of this report. We file reports with the SEC. The SEC maintains a website (www.sec.gov) that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC, including us. You can also read and copy any materials we file with the SEC at the SEC's Public Reference Room at 100 F Street, NE, Washington, DC 20549. You can obtain additional information about the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. We undertake no obligation to revise or update any forward-looking statements in order to reflect any event or circumstance that may arise after the date of this report, except as required by law. Readers are urged to carefully review and consider the various disclosures made throughout the entirety of this quarterly report, which are designed to advise interested parties of the risks and factors that may affect our business, financial condition, results of operations and prospects . Unless otherwise indicated, references in this report to the "Company", "Nukkleus", "we", "us", or "our" refer to Nukkleus Inc. and its consolidated subsidiaries. ii

- FINANCIAL INFORMATION

PART I - FINANCIAL INFORMATION

Interim Financial Statements

Item 1. Interim Financial Statements. NUKKLEUS INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS June 30, September 30, 2024 2023 (Unaudited) ASSETS CURRENT ASSETS: Cash $ 6,138 $ 19,318 Customer custodial cash 532,634 672,501 Customer digital currency assets 7,635 - Digital assets 5,906 1,973 Due from affiliates 18,503 2,039,274 Note receivable - related parties, net - 162,820 Other current assets 135,631 32,522 TOTAL CURRENT ASSETS 706,447 2,928,408 NON-CURRENT ASSETS: Cost method investment 391,217 391,217 Intangible assets, net 22,461 33,000 TOTAL NON-CURRENT ASSETS 413,678 424,217 TOTAL ASSETS $ 1,120,125 $ 3,352,625 LIABILITIES AND STOCKHOLDERS' DEFICIT CURRENT LIABILITIES: Accounts payable $ 343,542 $ 138,666 Customer custodial cash liabilities 882,578 1,443,011 Customer digital currency liabilities 7,635 - Convertible promissory note payable, net 29,514 - Promissory note payable, net 43,997 - Due to affiliates 7,944,189 6,808,749 Loan payable - related parties 681,059 - Accrued payroll liability and directors' compensation 551,870 402,241 Accrued professional fees 1,445,431 160,926 Accrued liabilities and other payables 197,307 169,872 TOTAL CURRENT LIABILITIES 12,127,122 9,123,465 NON-CURRENT LIABILITIES: Loan payable - related parties 1,192,500 420,619 Interest payable - related parties 30,633 1,771 TOTAL NON-CURRENT LIABILITIES 1,223,133 422,390 TOTAL LIABILITIES 13,350,255 9,545,855 COMMITMENTS AND CONTINGENCIES - (Note 14) STOCKHOLDERS' DEFICIT: Preferred stock ($ 0.0001 par value; 15,000,000 shares authorized; 0 share issued and outstanding at June 30, 2024 and September 30, 2023) - - Common stock ($ 0.0001 par value; 40,000,000 shares authorized; 14,802,414 and 10,074,657 shares issued and outstanding at June 30, 2024 and September 30, 2023, respectively) 1,480 1,007 Additional paid-in capital 36,764,869

financial statements are an integral part of these statements

financial statements are an integral part of these statements. 1 NUKKLEUS INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (Unaudited) For the Three Months Ended For the Nine Months Ended June 30, June 30, 2024 2023 2024 2023 REVENUES Revenue - general support services - related party $ - $ 4,800,000 $ 4,800,000 $ 14,400,000 Revenue - financial services 175,214 412,056 877,362 1,822,388 Total revenues 175,214 5,212,056 5,677,362 16,222,388 COSTS OF REVENUES Cost of revenue - general support services - related party - 4,675,000 4,650,000 14,125,000 Cost of revenue - financial services 49,738 695,074 246,625 2,162,317 Total costs of revenues 49,738 5,370,074 4,896,625 16,287,317 GROSS PROFIT Gross profit - general support services - related party - 125,000 150,000 275,000 Gross profit (loss) - financial services 125,476 ( 283,018 ) 630,737 ( 339,929 ) Total gross profit 125,476 ( 158,018 ) 780,737 ( 64,929 ) OPERATING EXPENSES: Advertising and marketing 2,355 1,670 43,941 51,087 Professional fees 1,109,315 571,761 6,009,832 1,815,200 Compensation and related benefits 219,589 233,569 743,273 591,361 Bad debt expense - - 6,145,942 - Other general and administrative 185,864 247,783 596,474 633,083 Total operating expenses 1,517,123 1,054,783 13,539,462 3,090,731 LOSS FROM OPERATIONS ( 1,391,647 ) ( 1,212,801 ) ( 12,758,725 ) ( 3,155,660 ) OTHER (EXPENSE) INCOME: Interest expense - amortization of debt discount ( 36,315 ) - ( 36,315 ) - Interest expense - other ( 3,392 ) - ( 3,392 ) - Interest expense - related parties ( 23,901 ) - ( 41,671 ) - Loss on debts settlement ( 176,399 ) - ( 176,399 ) - Other income 15,413 3,057 42,749 6,345 Total other (expense) income, net ( 224,594 ) 3,057 ( 215,028 ) 6,345 LOSS BEFORE INCOME TAXES ( 1,616,241 ) ( 1,209,744 ) ( 12,973,753 ) ( 3,

financial statements are an integral part of these statements

financial statements are an integral part of these statements. 2 NUKKLEUS INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIT For the Three and Nine Months Ended June 30, 2024 (Unaudited) Preferred Stock Common Stock Additional Accumulated Other Total Number of Number of Paid-in Accumulated Comprehensive Stockholders' Shares Amount Shares Amount Capital Deficit Income (Loss) Deficit Balance as of October 1, 2023 - $ - 10,074,657 $ 1,007 $ 25,543,048 $ ( 31,769,244 ) $ 31,959 $ ( 6,193,230 ) Issuance of common stock for services - - 425,295 43 2,015,558 - - 2,015,601 Conversion of related party debts into common stock - - 827,807 83 7,240,643 ( 4,243,102 ) - 2,997,624 Issuance of common stock in connection with reverse recapitalization - - 2,571,953 257 149,904 - - 150,161 Stock-based compensation - - - - 74,667 - - 74,667 Net loss for the three months ended December 31, 2023 - - - - - ( 8,928,095 ) - ( 8,928,095 ) Foreign currency translation adjustment - - - - - - ( 63,313 ) ( 63,313 ) Balance as of December 31, 2023 - - 13,899,712 1,390 35,023,820 ( 44,940,441 ) ( 31,354 ) ( 9,946,585 ) Issuance of common stock for services - - 202,702 20 749,980 - - 750,000 Stock-based compensation - - - - 74,668 - - 74,668 Net loss for the three months ended March 31, 2024 - - - - - ( 2,429,417 ) - ( 2,429,417 ) Foreign currency translation adjustment - - - - - - 26,582 26,582 Balance as of March 31, 2024 - - 14,102,414 1,410 35,848,468 ( 47,369,858 ) ( 4,772 ) ( 11,524,752 ) Allocated value of warrants related to issuance of convertible debt - - - - 237,509 - - 237,509 Beneficial conversion feature related to convertible debt

financial statements are an integral part of these statements

financial statements are an integral part of these statements. 3 NUKKLEUS INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY For the Three and Nine Months Ended June 30, 2023 (Unaudited) Preferred Stock Common Stock Additional Accumulated Other Total Number of Number of Paid-in Accumulated Comprehensive Stockholders' Shares Amount Shares Amount Capital Deficit Income Equity Balance as of October 1, 2022 - $ - 10,074,657 $ 1,007 $ 25,172,170 $ ( 14,340,816 ) $ 58,219 $ 10,890,580 Stock-based compensation - - - - 146,876 - - 146,876 Net loss for the three months ended December 31, 2022 - - - - - ( 1,133,922 ) - ( 1,133,922 ) Foreign currency translation adjustment - - - - - - ( 27,983 ) ( 27,983 ) Balance as of December 31, 2022 - - 10,074,657 1,007 25,319,046 ( 15,474,738 ) 30,236 9,875,551 Stock-based compensation - - - - 74,667 - - 74,667 Net loss for the three months ended March 31, 2023 - - - - - ( 805,649 ) - ( 805,649 ) Foreign currency translation adjustment - - - - - - ( 2,721 ) ( 2,721 ) Balance as of March 31, 2023 - - 10,074,657 1,007 25,393,713 ( 16,280,387 ) 27,515 9,141,848 Stock-based compensation - - - - 74,667 - - 74,667 Net loss for the three months ended June 30, 2023 - - - - - ( 1,209,744 ) - ( 1,209,744 ) Foreign currency translation adjustment - - - - - - ( 20,859 ) ( 20,859 ) Balance as of June 30, 2023 - $ - 10,074,657 $ 1,007 $ 25,468,380 $ ( 17,490,131 ) $ 6,656 $ 7,985,912 The accompanying notes to condensed consolidated

financial statements are an integral part of these statements

financial statements are an integral part of these statements. 4 NUKKLEUS INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) For the Nine Months Ended June 30, 2024 2023 CASH FLOWS FROM OPERATING ACTIVITIES: Net loss $ ( 12,973,753 ) $ ( 3,149,315 ) Adjustments to reconcile net loss to net cash used in operating activities: Amortization of debt discount 36,315 - Amortization of intangible assets 10,364 1,778,675 Stock-based compensation and service expense 2,989,603 296,210 Loss on debts settlement 176,399 Provision for bad debt 6,145,942 - Bad debt recovery ( 4,942 ) - Unrealized foreign currency exchange gain ( 2,895 ) ( 441 ) Impairment of digital assets - 7,865 Changes in operating assets and liabilities: Customer digital currency assets ( 7,586 ) 270,421 Accounts receivable ( 1,886 ) ( 298 ) Digital assets ( 3,835 ) 71,062 Due from affiliates ( 4,128,855 ) 648,073 Other current assets ( 103,236 ) ( 34,864 ) Accounts payable 198,421 45,496 Customer custodial cash liabilities ( 610,352 ) ( 576,514 ) Customer digital currency liabilities 7,586 ( 270,421 ) Due to affiliates 3,845,945 506,149 Accrued payroll liability and directors' compensation 147,906 126,450 Accrued professional fees 1,609,098 ( 111,362 ) Accrued liabilities and other payables 50,644 ( 233,902 ) NET CASH USED IN OPERATING ACTIVITIES ( 2,619,117 ) ( 626,716 ) CASH FLOWS FROM INVESTING ACTIVITIES: Investment in note receivable - ( 154,150 ) Purchase of intangible asset - ( 41,706 ) Proceeds from note receivable – related parties 131,740 - NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES 131,740 ( 195,856 ) CASH FLOWS FROM FINANCING ACTIVITIES Cash received in reverse recapitalization 150,161 - Proceeds from loan payable 50,000 - Repayments of loan payable ( 50,000 ) - Proceeds from loan payable - related parties 1,901,629 - Repayments

financial statements are an integral part of these statements

financial statements are an integral part of these statements. 5 NUKKLEUS INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) NOTE 1 – THE COMPANY HISTORY AND NATURE OF THE BUSINESS Nukkleus Inc. (formerly known as, Brilliant Acquisition Corporation) ("Nukkleus") was formed on May 24, 2019. Nukkleus was formed for the purpose of acquiring, engaging in a share exchange, share reconstruction and amalgamation with, purchasing all or substantially all of the assets of, entering into contractual arrangements with, or engaging in any other similar business combination with one or more businesses or entities. On June 23, 2023, Brilliant Acquisition Corporation, a British Virgin Islands company (prior to the Merger "Brilliant", and following the Merger, a Delaware corporation "Nukkleus"), entered into an Amended and Restated Agreement and Plan of Merger (as amended by the First Amendment to the Amended and Restated Agreement and Plan of Merger on November 1, 2023, the "Merger Agreement"), by and among Brilliant BRIL Merger Sub, Inc., a Delaware corporation and wholly-owned subsidiary of Brilliant ("Merger Sub"), and Nukkleus Inc., a Delaware corporation ("Old Nukk" or the "Company"). Old Nukk (f/k/a Compliance & Risk Management Solutions Inc.) was formed on July 29, 2013 in the State of Delaware as a for-profit Company and established a fiscal year end of September 30. The Merger Agreement provides that, among other things, at the closing (the "Closing") of the transactions contemplated by the Merger Agreement, Merger Sub merged with and into Old Nukk (the "Merger"), with Old Nukk surviving as a wholly-owned subsidiary of Brilliant. In connection with the Merger, Brilliant changed its name to "Nukkleus Inc." ("Nukkleus" or "Combined Company"). The Merger and other transactions contemplated by the Merger Agreement are hereinafter referred to as the "Business Combination." The Business Combination was completed on December 22, 2023

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