Nukkleus Inc. (formerly Brilliant Acquisition Corporation) reported a net loss of $8.5 million for the fiscal year ended September 30, 2024, compared to a net loss of $17.4 million in the prior year. Total revenues decreased significantly to $5.9 million from $21.3 million, primarily due to the termination of a general support services agreement with Triton Capital Markets Ltd. (TCM) effective January 1, 2024, resulting in a $14.4 million reduction in revenue from this segment. Financial services revenue also declined by $984,181 (46.9%), attributed to the closure of primary USD banking rails in March 2023.
Significant changes occurred during the fiscal year, including a reverse stock split at a ratio of one-for-eight, effective October 24, 2024. The company also underwent several executive changes, with Menachem Shalom appointed as Chief Executive Officer in September 2024. Furthermore, Nukkleus entered into a Securities Purchase Agreement to acquire a 51% controlling interest in Star 26 Capital Inc., a defense acquisition company, for a total investment of $15 million. This acquisition, along with the sale of its Digital RFQ Limited subsidiary for £1,000, positions the company to focus on the defense sector.
Operational developments included a decrease in trading volume to $216 million from $432 million, and a reduction in active clients from 217 to 88. The company also completed a private placement in December 2024, raising $10 million through the sale of common stock and warrants. Several other transactions occurred, including the conversion of outstanding debt into common stock and the issuance of restricted stock grants to compensate executive officers, directors, and consultants.
The company's financial performance was significantly impacted by the termination of the GSA with TCM, which historically accounted for a substantial portion of its revenue. The decrease in financial services revenue was also a contributing factor. The company's shift towards the defense sector, contingent on the successful completion of the Star acquisition, is a key strategic development. The company's limited operating history in a volatile industry and its reliance on third parties for critical aspects of its business present significant risks.
Nukkleus's outlook is focused on the defense sector, pending the closing of the Star acquisition. The company anticipates that its existing cash resources and the proceeds from the December 2024 private placement will be sufficient to meet its short-term and long-term cash requirements. However, the company acknowledges several risk factors, including intense competition, cybersecurity threats, regulatory changes, and the potential for additional capital needs. The company's ability to successfully transition to the defense sector and achieve profitability remains uncertain.
About Nukkleus Inc.
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