BRILLIANT ACQUISITION CORPORATION
UNAUDITED CONDENSED BALANCE SHEETS
| |
March 31, 2023 | | |
December 31, 2022 | |
ASSETS | |
| | |
| |
Current assets – cash | |
$ | 4,463,639 | | |
$ | 6,110,807 | |
Prepaid expenses and other current assets | |
| 738 | | |
| 738 | |
Total Current Assets | |
| 4,464,377 | | |
| 6,111,545 | |
Total Assets | |
$ | 4,464,377 | | |
$ | 6,111,545 | |
| |
| | | |
| | |
LIABILITIES, ORDINARY SHARES SUBJECT TO POSSIBLE REDEMPTION AND SHAREHOLDERS’ DEFICIT | |
| | | |
| | |
Current liabilities | |
| | | |
| | |
Accounts payable and accrued expenses | |
$ | 286,232 | | |
$ | 315,023 | |
Due to related party | |
| 1,050,600 | | |
| 970,600 | |
Promissory note – related party | |
| 2,766,577 | | |
| 2,680,227 | |
Total Current Liabilities | |
| 4,103,409 | | |
| 3,965,850 | |
Derivative warrant liabilities | |
| 11,568 | | |
| 10,643 | |
Total Liabilities | |
| 4,114,977 | | |
| 3,976,493 | |
| |
| | | |
| | |
Commitments | |
| | | |
| | |
| |
| | | |
| | |
Ordinary shares subject to possible redemption, 405,733 and 564,936 shares as of March 31, 2023 and December 31, 2022, respectively | |
| 4,435,020 | | |
| 6,055,016 | |
| |
| | | |
| | |
Shareholders’ Deficit | |
| | | |
| | |
Preferred shares, no par value; unlimited shares authorized, no shares issued and outstanding | |
| - | | |
| - | |
Ordinary shares, no par value; unlimited shares authorized; 1,511,000 and 1,511,000 shares issued and outstanding (excluding 405,733 and 564,936 shares subject to possible redemption) as of March 31, 2023 and December 31, 2022 | |
| 3,880,288 | | |
| 3,880,288 | |
Accumulated deficit | |
| (7,965,908 | ) | |
| (7,800,252 | ) |
Total Shareholders’ Deficit | |
| (4,085,620 | ) | |
| (3,919,964 | ) |
Total Liabilities, Ordinary Shares Subject to Possible Redemption and Shareholders’ Deficit | |
$ | 4,464,377 | | |
$ | 6,111,545 | |
The accompanying notes are an integral part of
the unaudited condensed financial statements.
BRILLIANT ACQUISITION CORPORATION
UNAUDITED CONDENSED STATEMENTS OF OPERATIONS
| |
Three Months Ended
March 31, | |
| |
2023 | | |
2022 | |
Operating costs | |
$ | 78,381 | | |
$ | 469,271 | |
Loss from operations | |
| (78,381 | ) | |
| (469,271 | ) |
| |
| | | |
| | |
Other income (loss): | |
| | | |
| | |
Changes in fair value of derivative warrant liabilities | |
| (925 | ) | |
| 5,041 | |
Interest income | |
| - | | |
| 3,948 | |
Total other income (loss) | |
| (925 | ) | |
| 8,989 | |
| |
| | | |
| | |
Net loss | |
$ | (79,306 | ) | |
$ | (460,282 | ) |
| |
| | | |
| | |
Weighted average shares outstanding, basic and diluted | |
| 1,948,973 | | |
| 6,040,579 | |
| |
| | | |
| | |
Basic and diluted net loss per ordinary share | |
$ | (0.04 | ) | |
$ | (0.08 | ) |
The accompanying notes are an integral part of
the unaudited condensed financial statements.
BRILLIANT ACQUISITION CORPORATION
UNAUDITED CONDENSED STATEMENTS OF CHANGES IN
SHAREHOLDERS’ DEFICIT
THREE MONTHS ENDED MARCH 31, 2023 AND 2022
| |
Ordinary Shares | | |
Accumulated | | |
Total Shareholders’ | |
| |
Shares | | |
Amount | | |
Deficit | | |
Deficit | |
| |
| | |
| | |
| | |
| |
Balance – January 1, 2022 (audited) | |
| 1,511,000 | | |
$ | 3,880,288 | | |
| (4,332,294 | ) | |
| (452,006 | ) |
| |
| | | |
| | | |
| | | |
| | |
Change in value of ordinary shares subject to redemption | |
| - | | |
| - | | |
| (3,948 | ) | |
| (3,948 | ) |
| |
| | | |
| | | |
| | | |
| | |
Net loss | |
| - | | |
| - | | |
| (460,282 | ) | |
| (460,282 | ) |
| |
| | | |
| | | |
| | | |
| | |
Balance – March 31, 2022 (unaudited) | |
| 1,511,000 | | |
$ | 3,880,288 | | |
| (4,796,524 | ) | |
| (916,236 | ) |
| |
| | | |
| | | |
| | | |
| | |
Balance – January 1, 2023 (audited) | |
| 1,511,000 | | |
$ | 3,880,288 | | |
| (7,800,252 | ) | |
| (3,919,964 | ) |
| |
| | | |
| | | |
| | | |
| | |
Net loss | |
| - | | |
| - | | |
| (79,306 | ) | |
| (79,306 | ) |
| |
| | | |
| | | |
| | | |
| | |
Reclassification of temporary equity | |
| - | | |
| - | | |
| (86,350 | ) | |
| (86,350 | ) |
| |
| | | |
| | | |
| | | |
| | |
Balance – March 31, 2023 (unaudited) | |
| 1,511,000 | | |
$ | 3,880,288 | | |
| (7,965,908 | ) | |
| (4,085,620 | ) |
The accompanying notes are an integral part of
the unaudited condensed financial statements.
BRILLIANT ACQUISITION CORPORATION
UNAUDITED CONDENSED STATEMENTS OF CASH FLOWS
| |
THREE MONTHS ENDED MARCH 31, | |
| |
2023 | | |
2022 | |
Cash Flows from Operating Activities: | |
| | |
| |
Net loss | |
$ | (79,306 | ) | |
$ | (460,282 | ) |
Adjustments to reconcile net loss to net cash used in operating activities: | |
| | | |
| | |
Changes in fair value of derivative warrant liabilities | |
| 925 | | |
| (5,041 | ) |
Accounts payable and accrued expenses | |
| (28,791 | ) | |
| (75,527 | ) |
Net cash used in operating activities | |
| (107,171 | ) | |
| (699,248 | ) |
| |
| | | |
| | |
Cash Flows from Investing Activities: | |
| | | |
| | |
Investment of cash in Trust Account | |
| - | | |
| (634,594 | ) |
Proceeds from sale of investment of cash in trust account | |
| - | | |
| 6,529,259 | |
Net cash provided by investing activities | |
| - | | |
| 5,894,665 | |
| |
| | | |
| | |
Cash Flows from Financing Activities: | |
| | | |
| | |
Advance from related party | |
| 80,000 | | |
| 570,100 | |
Proceeds from promissory note – related parties | |
| 86,350 | | |
| 634,594 | |
Repayment of redemption of ordinary shares | |
| (1,706,347 | ) | |
| (6,529,259 | ) |
Net cash used in financing activities | |
| (1,539,997 | ) | |
| (5,324,565 | ) |
| |
| | | |
| | |
Net Change in Cash | |
| (1,647,168 | ) | |
| (129,148 | ) |
Cash – Beginning | |
| 6,110,807 | | |
| 283,403 | |
Cash – Ending | |
$ | 4,463,639 | | |
$ | 154,255 | |
Supplemental disclosure of non-cash financing activities: | |
| | | |
| | |
Remeasurement adjustment of ordinary shares to redemption value | |
| 86,350 | | |
| 638,542 | |
The accompanying notes are an integral part of
the unaudited condensed financial statements.
BRILLIANT ACQUISITION CORPORATION
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
NOTE 1. DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS
Brilliant Acquisition Corporation (the “Company”) is a
blank check company incorporated in the British Virgin Islands on May 24, 2019. The Company 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 (“Business Combination”).
The Company is an early stage and emerging growth company and, as such,
the Company is subject to all of the risks associated with early stage and emerging growth companies.
At March 31, 2023, the Company had not yet commenced any operations.
All activity through March 31, 2023 relates to the Company’s formation, the initial public offering (“Initial Public Offering”),
which is described below, and, subsequent to the Initial Public Offering, identifying a target company for a Business Combination. The
Company will not generate any operating revenues until after the completion of its initial Business Combination, at the earliest. The
Company will generate nonoperating income in the form of interest income earned from investing the proceeds derived from the Initial Public
Offering that have been placed in a trust account as described below.
The registration statement for the Company’s Initial Public Offering
was declared effective on June 23, 2020. On June 26, 2020, the Company consummated the Initial Public Offering of 4,000,000 units (the
“Units” and, with respect to the ordinary shares included in the Units offered, the “Public Shares”), at $10.00
per Unit, generating gross proceeds of $40,000,000 which is described in Note 3.
Following the closing of the Initial Public Offering on June 26, 2020,
an amount of $40,000,000 ($10.00 per Unit) from the net proceeds of the sale of the Units in the Initial Public Offering and the sale
of the Private Units was placed in a trust account (the “Trust Account”) located in the United States and invested in U.S.
government securities, within the meaning set forth in Section 2(a)(16) of the Investment Company Act, with a maturity of 180 days or
less, or in any open-ended investment company that holds itself out as a money market fund meeting the conditions of Rule 2a-7 of the
Investment Company Act of 1940, as amended (the “Investment Company Act”), as determined by the Company, but since July 8,
2022 has been held entirely in cash, until the earlier of: (i) the consummation of a Business Combination or (ii) the distribution of
the funds in the Trust Account to the Company’s shareholders, as described below.
On June 29, 2020, the underwriters notified the Company of their intention
to exercise their over-allotment option in full. As such, on June 30, 2020, the Company consummated the sale of an additional 600,000
Units, at $10.00 per Unit, and the sale of an additional 21,000 Private Units, at $10.00 per Private Unit, generating total gross proceeds
of $6,210,000. A total of $6,000,000 of the net proceeds was deposited into the Trust Account, bringing the aggregate proceeds held in
the Trust Account to $46,000,000.
Transaction costs amounted to $2,069,154 consisting
of $1,610,000 of underwriting fees and $459,154 of other offering costs. In addition, at March 31, 2023, cash of $28,618 was held outside
of the Trust Account (as defined above) and is available for the payment of offering costs and for working capital purposes.
BRILLIANT ACQUISITION CORPORATION
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
NOTE 1. DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS (CONTINUED)
Business Combination
The Company’s management has broad discretion with respect to
the specific application of the net proceeds of the Initial Public Offering and sale of the Private Units, although substantially all
of the net proceeds are intended to be applied generally toward consummating a Business Combination. NASDAQ rules provide that the Business
Combination must be with one or more target businesses that together have a fair market value equal to at least 80% of the balance in
the Trust Account (excluding the taxes payable on interest earned and less any interest earned thereon that is released for taxes) at
the time of the signing of an agreement to enter into a Business Combination. The Company will only complete a Business Combination if
the post-Business Combination company owns or acquires 50% or more of the outstanding voting securities of the target or otherwise acquires
a controlling interest in the target sufficient for it not to be required to register as an investment company under the Investment Company
Act. There is no assurance that the Company will be able to successfully effect a Business Combination.
The Company will provide its shareholders with the opportunity to redeem
all or a portion of their Public Shares upon the completion of a Business Combination either (i) in connection with a shareholder meeting
called to approve the Business Combination or (ii) by means of a tender offer. In connection with a proposed Business Combination, the
Company may seek shareholder approval of a Business Combination at a meeting called for such purpose at which shareholders may seek to
redeem their shares, regardless of whether they vote for or against the proposed Business Combination.
The shareholders will be entitled to redeem their shares for a pro
rata portion of the amount then in the Trust Account (initially $10.00 per share, but currently approximately $11.02 per share, subject
to increase of up to an additional $0.16 per share in the event that the Sponsor elects to further extend the period of time to consummate
a Business Combination (see below), plus any pro rata interest earned on the funds held in the Trust Account and not previously released
to the Company to pay its tax obligations). There will be no redemption rights upon the completion of a Business Combination with respect
to the Company’s rights or warrants. These Public Shares were recorded at a redemption value and classified as temporary equity
upon the completion of the Initial Public Offering, in accordance with Accounting Standards Codification (“ASC”) Topic 480,
“Distinguishing Liabilities from Equity.” In such case, the Company will proceed with a Business Combination if the Company
has net tangible assets of at least $5,000,001 upon such consummation of a Business Combination and a majority of the shares voted
are voted in favor of the Business Combination.
If a shareholder vote is not required and the Company does not decide
to hold a shareholder vote for business or other legal reasons, the Company will, pursuant to its Amended and Restated Memorandum and
Articles of Association, offer such redemption pursuant to the tender offer rules of the Securities and Exchange Commission (“SEC”),
and file tender offer documents containing substantially the same information as would be included in a proxy statement with the SEC prior
to completing a Business Combination.
If the Company seeks shareholder approval of a Business Combination
and it does not conduct redemptions pursuant to the tender offer rules, the Company’s Amended and Restated Memorandum and Articles
of Association provides that a public shareholder, together with any affiliate of such shareholder or any other person with whom such
shareholder is acting in concert or as a “group” (as defined under Section 13 of the Securities Exchange Act of 1934, as amended
(the “Exchange Act”)), will be restricted from seeking redemption rights with respect to 15% or more of the Public Shares
without the Company’s prior written consent.
The Sponsor, officers, directors and the Company’s business combination
advisor, New Lighthouse Investment Limited, (the “initial shareholders”) have agreed (a) to vote their Founder Shares (as
defined in Note 5), the ordinary shares included in the Private Units (the “Private Shares”) and any Public Shares purchased
during or after the Initial Public Offering in favor of a Business Combination, (b) not to propose an amendment to the Company’s
Memorandum and Articles of Association with respect to the Company’s pre-Business Combination activities prior to the consummation
of a Business Combination unless the Company provides dissenting public shareholders with the opportunity to redeem their Public Shares
in conjunction with any such amendment; (c) not to redeem any shares (including the Founder Shares) and Private Units (including underlying
securities) into the right to receive cash from the Trust Account in connection with a shareholder vote to approve a Business Combination
(or to sell any shares in a tender offer in connection with a Business Combination if the Company does not seek shareholder approval in
connection therewith) or a vote to amend the provisions of the Memorandum and Articles of Association relating to shareholders’
rights of pre-Business Combination activity and (d) that the Founder Shares and Private Units (including underlying securities) shall
not participate in any liquidating distributions upon winding up if a Business Combination is not consummated. However, the initial shareholders
will be entitled to liquidating distributions from the Trust Account with respect to any Public Shares purchased during or after the Initial
Public Offering if the Company fails to complete its Business Combination.
BRILLIANT ACQUISITION CORPORATION
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
NOTE 1. DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS (CONTINUED)
Founder Shares and Private Units (including underlying securities)
shall not participate in any liquidating distributions upon winding up if a Business Combination is not consummated. However, the initial
shareholders will be entitled to liquidating distributions from the Trust Account with respect to any Public Shares purchased during or
after the Initial Public Offering if the Company fails to complete its Business Combination.
Prior to the amendment and restatement of the
Articles of Association, the Company had 12 months from the closing of its Initial Public Offering (or until June 25, 2021) to consummate
a Business Combination. However, if the Company was not able to consummate a Business Combination by June 25, 2021, the Company could
extend the period of time to consummate a Business Combination up to three times, each by an additional three months (for a total of
21 months to complete a Business Combination (the “Combination Period”). In order to extend the time available for the Company
to consummate a Business Combination, the Sponsor or its affiliate or designees were required to deposit into the Trust Account $460,000
or $0.10 per Unit, up to an aggregate amount of $1,380,000, or $0.30 per Unit, on or prior to the date of the applicable deadline, for
each three months. As of the date of this report, the Company was not able to consummate a Business Combination, and extended the period
time to consummate a Business Combination four times. Accordingly, the Sponsor made the first deposit of $460,000 on June 22, 2021, the
second deposit of $460,000 on September 20, 2021, the third deposit of $460,000 on December 23, 2021 to extend the period of time to
consummate its initial business combination by total 13 months from June 25, 2021 until March 23, 2022. On March 18, 2022, the shareholders
of the Company approved the extension of the period of time the Company has to consummate its initial business combination by a further
four months, or until July 23, 2022. In connection with the approval of the extension, shareholders elected to redeem an aggregate amount
of 633,792 ordinary shares. As a result, an aggregate amount of $6,529,259 (or approximately $10.30 per share) was released from the
Trust Account to pay such shareholders. The Sponsor deposited a net amount of $634,594 into the Trust Account, representing $0.16 per
public ordinary share that was not redeemed in connection with the shareholder vote to approve the extension. The sponsor initially deposited
$736,000 and $101,406 was returned to the Sponsor on March 28, 2022 due to the fact that the shareholders elected to redeem an aggregate
amount of 633,792 shares in connection with the Special Meeting. On July 13, 2022, the shareholders of the Company approved the extension
of the period of time the Company has to consummate its initial business combination by a further three months, or until October 23,
2022. In connection with the extension the Sponsor deposited $353,000 into the Trust Account, representing $0.12 per public ordinary
share that was not redeemed in connection with the shareholder vote to approve the extension. In connection with a special meeting to
approve the extension of the business combination period, the Company’s shareholders elected to redeem an aggregate amount of 1,025,281
shares, and the Company redeemed such shares for an aggregate amount of $10,742,906, or approximately $10.48 per share. On October 17,
2022, the shareholders of the Company approved the extension of the period of time the Company has to consummate its initial business
combination from October 23, 2022 to up to not later than January 23, 2023, extendable by the Company on a monthly basis without further
shareholder approval upon deposit of $0.04 per public ordinary share of the Company. In connection with the extension, Nukkleus deposited
$22,600 into the Trust Account, representing $0.04 per public ordinary share that was not redeemed in connection with extending the business
combination completion window until November 23, 2022. In connection with a special meeting to approve the extension of the business
combination period, the Company’s shareholders elected to redeem an aggregate amount of 2,375,991 shares, and the Company redeemed
such shares for an aggregate amount of $25,180,851, or approximately $10.60 per share. On November 18, 2022, Nukkleus deposited $22,600
into the Trust Account, representing $0.04 per public ordinary share that was not redeemed in connection with extending the business
combination completion window until November 23, 2022. On December 19, 2022, Nukkleus deposited $22,600 into the Trust Account, representing
$0.04 per public ordinary share that was not redeemed in connection with extending the business combination completion window until January
23, 2023. On January 19, 2023, the shareholders of the Company approved the extension of the period of time the Company has to consummate
its initial business combination from January 23, 2023 to up to not later than April 23, 2023, extendable by the Company on a monthly
basis without further shareholder approval upon deposit of $0.04 per public ordinary share of the Company (the “Top-up Amount”).
Notwithstanding the Top-up Amount, the Company undertook to increase the amount to be paid into the Trust Account for each monthly extension
from $0.04 to $0.0525. Subsequently, the Company has committed to increase the amount to be paid into the Trust Account for any extension
from February 23, 2023 to March 23, 2023 and from March 23, 2023 to April 23, 2023 to $0.08 per ordinary share outstanding. In connection
with the extension, Nukkleus deposited $21,350 into the Trust Account, representing $0.0525 per public ordinary share that was not redeemed
in connection with extending the business combination completion window until February 23, 2023. In connection with a special meeting
to approve the extension of the business combination period, the Company’s shareholders elected to redeem an aggregate amount of
159,203 shares, and the Company redeemed such shares for an aggregate amount of $1,706,347, or approximately $10.72 per share. On February
23, 2023, Nukkleus deposited $32,500 into the Trust Account, representing $0.08 per public ordinary share that was not redeemed in connection
with extending the business combination completion window until March 23, 2023. On April 20, 2023, the shareholders of the Company approved
the extension of the period of time the Company has to consummate its initial business combination from April 23, 2023 to up to not later
than July 23, 2023, extendable by the Company on a monthly basis without further shareholder approval upon deposit of $0.08 per public
ordinary share of the Company (the “Top-up Amount”). In connection with the extension, Nukkleus deposited $32,450 into the
Trust Account, representing $0.08 per public ordinary share that was not redeemed in connection with extending the business combination
completion window until May 23, 2023. The Company may further extend the business combination completion window to up to July 23, 2023
by placing $32,450 into the Trust Account each month without need for further shareholder approval. In connection with a special meeting
to approve the extension of the business combination period, the Company’s shareholders elected to redeem an aggregate amount of
258 shares, and the Company redeemed such shares for an aggregate amount of $2,820, or approximately $10.93 per share.
BRILLIANT ACQUISITION CORPORATION
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
NOTE 1. DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS (CONTINUED)
If the Company is unable to complete a Business Combination within
the Combination Period, the Company will (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably
possible but no more than five business days thereafter, redeem 100% of the outstanding Public Shares, at a per-share price, payable in
cash, equal to the aggregate amount then on deposit in the Trust Account, including interest earned (net of taxes payable and less interest
to pay dissolution expenses up to $50,000), divided by the number of then outstanding Public Shares, which redemption will completely
extinguish public shareholders’ rights as shareholders (including the right to receive further liquidation distributions, if any),
subject to applicable law, and (iii) as promptly as reasonably possible following such redemption, subject to the approval of the remaining
shareholders and the Company’s board of directors, proceed to commence a voluntary liquidation and thereby a formal dissolution
of the Company, subject in each case to its obligations to provide for claims of creditors and the requirements of applicable law. In
the event of such distribution, it is possible that the per share value of the assets remaining available for distribution will be less
than the Initial Public Offering price per Unit ($10.00).
The Sponsor has agreed that it will be liable to the Company, if and
to the extent any claims by a vendor for services rendered or products sold to the Company, or a prospective target business with which
the Company has discussed entering into a transaction agreement, reduce the amounts in the Trust Account to below $10.00 per share, except
as to any claims by a third party who executed a waiver of any and all rights to seek access to the Trust Account and except as to any
claims under the Company’s indemnity of the underwriters of the Initial Public Offering against certain liabilities, including liabilities
under the Securities Act of 1933, as amended (the “Securities Act”). In the event that an executed waiver is deemed to be
unenforceable against a third party, the Sponsor will not be responsible to the extent of any liability for such third-party claims. The
Company will seek to reduce the possibility that the Sponsor will have to indemnify the Trust Account due to claims of creditors by endeavoring
to have all vendors, service providers, prospective target businesses or other entities with which the Company does business, execute
agreements with the Company waiving any right, title, interest or claim of any kind in or to monies held in the Trust Account.
Going Concern and Management’s Plan
As of March 31, 2023, the Company had $ 28,618 cash held in its
operating bank account and working capital deficit (excluding cash held in Trust Account) of $ 1,307,476. The
Company has incurred and expects to continue to incur significant costs in pursuit of its acquisition plans and will not generate any
operating revenues until after the completion of its initial business combination. In addition, the Company expects to have negative cash
flows from operations as it pursues an initial business combination target. In connection with the Company’s assessment of going
concern considerations in accordance with Accounting Standards Update (“ASU”) 2014-15, “Disclosures of Uncertainties
about an Entity’s Ability to Continue as a Going Concern”, management has determined
that these conditions raise substantial doubt about the Company’s ability to continue as a going concern.
The Company may raise additional capital through loans or additional
investments from the Sponsor or its shareholders, officers, directors, or third parties. The Company’s officers and directors and
the Sponsor may, but are not obligated to (except as described above), loan the Company funds, from time to time, in whatever amount they
deem reasonable in their sole discretion, to meet the Company’s working capital needs.
BRILLIANT ACQUISITION CORPORATION
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
NOTE 1. DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS (CONTINUED)
While the Company expects to have sufficient
access to additional sources of capital if necessary, there is no current commitment on the part of any financing source to provide additional
capital and no assurances can be provided that such additional capital will ultimately be available. In addition, the deadline of a Business
Combination is before May 23, 2023 (or up to July 23, 2023 if further extended by placing $32,450 into the Trust Account each month).
If the Company is unable to complete a Business Combination on or prior to the Deadline, the Company may seek approval from its stockholders
to extend the completion period. These conditions raise substantial doubt about the Company’s ability to continue as a going concern
for a period of time within one year after the date that the unaudited condensed financial statements are issued.
There is no assurance that the Company’s
plans to raise additional capital (to the extent ultimately necessary) or to consummate a Business Combination will be successful or successful
within the Combination Period. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
As is customary for a special purpose acquisition
company, if the Company is not able to consummate a Business Combination during the Combination Period, it will cease all operations and
redeem the Public Shares. Management plans to continue its efforts to consummate a Business Combination during the Combination Period,
which is before May 23, 2023 (or July 23, 2023 if further extended by placing $32,450 into the Trust Account).
Risks and Uncertainties
Management continues to evaluate the impact of the COVID-19 pandemic
and has concluded that while it is reasonably possible that the virus could have a negative effect on the Company’s financial position,
results of its operations and/or search for a target company, the specific impact is not readily determinable as of the date of the financial
statements. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Additionally, as a result of the military action commenced in February
2022 by the Russian Federation and Belarus in the country of Ukraine and related economic sanctions, the Company’s ability to consummate
a Business Combination, or the operations of a target business with which the Company ultimately consummates a Business Combination, may
be materially and adversely affected. In addition, the Company’s ability to consummate a transaction may be dependent on the ability
to raise equity and debt financing which may be impacted by these events, including as a result of increased market volatility, or decreased
market liquidity in third-party financing being unavailable on terms acceptable to the Company or at all. The impact of this action and
related sanctions on the world economy and the specific impact on the Company’s financial position, results of operations and/or
ability to consummate a Business Combination are not yet determinable. The financial statements do not include any adjustments that might
result from the outcome of this uncertainty.
Proposed Business Combination - Nukkleus Inc.
On February 22, 2022, the Company entered into an Agreement and Plan
of Merger (as it may be amended, supplemented or otherwise modified from time to time, the “Merger Agreement”), by and among
the Company and Nukkleus Inc., a Delaware corporation (“Nukkleus”). Upon consummation of the transactions contemplated by
the Merger Agreement, Nukkleus would become the Nasdaq-listed parent company of Brilliant (“PubCo”).
The transactions contemplated by the Merger Agreement,
are hereinafter referred to as the “Business Combination.” The Merger Agreement and the transactions contemplated thereby
have been approved by the boards of directors of each of Brilliant and Nukkleus.
BRILLIANT ACQUISITION CORPORATION
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The accompanying unaudited condensed consolidated financial statements
have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for
interim financial information and in accordance with the instructions to the Quarterly Report on Form 10-Q and Article 8 of Regulation
S-X of the SEC. Certain information or footnote disclosures normally included in financial statements prepared in accordance with GAAP
have been condensed or omitted, pursuant to the rules and regulations of the SEC for interim financial reporting. Accordingly, they do
not include all the information and footnotes necessary for a complete presentation of financial position, results of operations, or cash
flows. In the opinion of management, the accompanying unaudited condensed consolidated financial statements include all adjustments, consisting
of a normal recurring nature, which are necessary for a fair presentation of the financial position, operating results and cash flows
for the periods presented.
The accompanying unaudited condensed consolidated financial statements
should be read in conjunction with the Company’s Annual Report on Form 10-K as filed with the SEC on March 10, 2023. The accompanying
condensed consolidated balance sheet as of December 31, 2022 has been derived from our audited consolidated financial statements included
in the aforementioned Form 10-K. The interim results for the three months ended March 31, 2023 are not necessarily indicative of the results
to be expected for the year ending December 31, 2023 or for any future periods.
Emerging Growth Company
The Company is an “emerging growth company,” as defined
in Section 2(a) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), and
it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are
not emerging growth companies including, but not limited to, not being required to comply with the auditor attestation requirements of
Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy
statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval
of any golden parachute payments not previously approved.
Further, Section 102(b)(1) of the JOBS Act exempts emerging growth
companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that
have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange
Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to
opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election
to opt out is irrevocable. The Company has elected not to opt out of such extended transition period which means that when a standard
is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company,
can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of the
Company’s financial statements with another public company which is neither an emerging growth company nor an emerging growth company
which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting
standards used.
Use of Estimates
The preparation of the financial statements in conformity with GAAP
requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent
assets and liabilities at the date of the financial statements and the reported amounts of income and expenses during the reporting period.
Making estimates requires management to exercise
significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances
that existed at the date of the financial statements, which management considered in formulating its estimate, could change in the near
term due to one or more future confirming events. One of the more significant accounting estimates included in these financial statements
is the determination of the fair value of the warrant liabilities. Such estimates may be subject to change as more current information
becomes available and accordingly the actual results could differ significantly from those estimates.
BRILLIANT ACQUISITION CORPORATION
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Cash and Cash Equivalents
The Company considers all short-term investments
with an original maturity of three months or less when purchased to be cash equivalents. The Company had $28,618 in cash and non-cash
equivalents and all held in its operating bank account as of March 31, 2023 and had $55,789 in cash and non-cash equivalents and all held
in its operating bank account as of December 31, 2022.
Marketable securities held in Trust Account
As of March 31, 2023 and December 31, 2022, substantially
all of the assets held in the Trust Account were held in cash. The Company had nil in Marketable securities held in the Trust Account
as of March 31, 2023 and December 31, 2022.
Ordinary Shares Subject to Possible Redemption
The Company accounts for its
ordinary shares subject to possible redemption in accordance with the guidance in ASC Topic 480. Conditionally redeemable ordinary
share (including ordinary share that feature redemption rights that are either within the control of the holder or subject to redemption
upon the occurrence of uncertain events not solely within the Company’s control) are classified as temporary equity. At all other
times, ordinary share is classified as stockholders’ equity.
The Company’s Public
Shares feature contains certain redemption rights that are considered to be outside of the Company’s control and subject
to occurrence of uncertain future events. Accordingly, Public Shares subject to
possible redemption are classified as temporary equity, outside of the stockholders’ equity section of the Company’s balance
sheet on March 28, 2022, an aggregate amount of 633,792 shares were redeemed in connection with the Special Meeting. On July 7, 2022,
an aggregate amount of 1,025,281 shares were redeemed in connection with the Special Meeting. On October 17, 2022, an aggregate amount
of 2,375,991 shares were redeemed in connection with the Special Meeting. On January 19, 2023, an aggregate amount of 159,203 shares were
redeemed in connection with the Special Meeting. Accordingly, 405,733 and 564,936 shares of Public
Shares subject to possible redemption are presented at redemption value as temporary equity, outside of the stockholders’
equity section of the Company’s balance sheet as of March 31, 2023 and December 31, 2022, respectively.
The Public Shares subject
to possible redemption are subject to the subsequent measurement guidance in ASC Topic 480-10-S99. Under such guidance, the Company
must subsequently measure the shares to their redemption amount because, as a result of the allocation of net proceeds to transaction
costs, the initial carrying amount of the ordinary shares is less than $10.00 per share. In accordance with the guidance, the
Company recognizes changes in redemption value immediately as they occur and adjusts the carrying value of redeemable ordinary shares
to equal the redemption value at the end of each reporting period. Such changes are reflected in additional paid in capital, or in the
absence of additional capital, in accumulated deficit.
As of March 31, 2023 and December 31, 2022, the
ordinary shares reflected in the balance sheets is reconciled in the following table:
Ordinary shares subject to possible redemption as of January 1, 2022 | |
$ | 47,387,687 | |
Less: Redemption of 633,792 shares | |
| (6,529,259 | ) |
Less: Redemption of 1,025,281 shares | |
| (10,742,905 | ) |
Less: Redemption of 2,375,991 shares | |
| (25,180,851 | ) |
Add: Accretion of carrying value to redemption value | |
| 64,950 | |
Add: Reclassification of temporary equity | |
| 1,055,394 | |
Ordinary shares subject to possible redemption as of December 31, 2022 | |
$ | 6,055,016 | |
Less: Redemption of 159,203 shares | |
| (1,706,346 | ) |
Add: Reclassification of temporary equity | |
| 86,350 | |
Ordinary shares subject to possible redemption as of March 31, 2023 | |
$ | 4,435,020 | |
BRILLIANT ACQUISITION CORPORATION
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Income Taxes
The Company complies with the accounting and reporting requirements
of ASC Topic 740, “Income Taxes,” which requires an asset and liability approach to financial accounting and reporting for
income taxes. Deferred income tax assets and liabilities are computed for differences between the financial statement and tax bases of
assets and liabilities that will result in future taxable or deductible amounts, based on enacted tax laws and rates applicable to the
periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce
deferred tax assets to the amount expected to be realized.
ASC Topic 740 prescribes a recognition threshold and a measurement
attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For
those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities. The
Company’s management determined that the British Virgin Islands is the Company’s only major tax jurisdiction. The Company
recognizes accrued interest and penalties related to unrecognized tax benefits, if any, as income tax expense. There were no unrecognized
tax benefits as of March 31, 2023 and December 31, 2022 and no amounts accrued for interest and penalties. The Company is currently not
aware of any issues under review that could result in significant payments, accruals or material deviation from its position. The Company’s
management does not expect that the total amount of unrecognized tax benefits will materially change over the next twelve months.
The Company is considered to be an exempted British Virgin Islands
company with no connection to any other taxable jurisdiction and is presently not subject to income taxes or income tax filing requirements
in the British Virgin Islands or the United States.
Net Loss Per Ordinary Share
Net loss
per share is computed by dividing net Loss by the weighted average number of ordinary shares outstanding during the period, excluding
ordinary shares subject to forfeiture.
The redeemable
ordinary shares are included in the denominator of the EPS calculation reflecting a single class of common shares. This is because the
redemption feature for all of the ordinary shares is at fair value, and therefore it does not create a different class of shares or other
EPS adjustment (i.e. no adjustment to the numerator). The redemption at fair value does not represent an economic benefit to the holders
that is different from what is received by other shareholders, because the shares could be sold on the open market.
| |
Three Months Ended March 31, | |
| |
2023 | | |
2022 | |
Net loss | |
$ | (79,306 | ) | |
$ | (460,282 | ) |
Weighted average shares outstanding, basic and diluted | |
| 1,948,973 | | |
| 6,040,579 | |
Basic and diluted net loss per ordinary share | |
$ | (0.04 | ) | |
$ | (0.08 | ) |
BRILLIANT ACQUISITION CORPORATION
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Concentration of Credit Risk
Financial instruments that potentially subject
the Company to concentrations of credit risk consist of a cash account in a financial institution which, at times may exceed the Federal
Depository Insurance Coverage of $250,000. The Company has not experienced losses on this account and management believes the Company
is not exposed to significant risks on such account.
Financial Instruments
The Company analyses all financial instruments with features of both
liabilities and equity under ASC Topic 480 “Distinguishing Liabilities from Equity” and ASC Topic 815 “Derivatives and
Hedging”. Pursuant to its Initial Public Offering, the Company sold 4,600,000 Units (including underwriters’ full exercise
over-allotment option 6,000,000 Unit) consisting with one ordinary share, one right (“Public Right”), and one warrant (“Public
Warrant”) (see Note 3). Simultaneously with the closing of the Initial Public Offering, the Company sold 261,000 Private Units (see
Note 4), consisting with 261,000 ordinary shares, 261,000 warrants (“Private Warrant”) and 261,000 rights (“Private
Right). The Company accounted for its Public Warrant, Public Right and Private Right as equity instruments. The Company accounted for
Private Warrants as liability instruments.
Fair Value of Financial Instruments
The fair value of the Company’s assets and
liabilities, which qualify as financial instruments under ASC Topic 820, “Fair Value Measurement,” approximates the carrying
amounts represented in the accompanying balance sheets, primarily due to their short-term nature.
Derivative Warrant Liabilities
The Company does not use derivative instruments
to hedge exposures to cash flow, market, or foreign currency risks.
Management evaluates all of its financial instruments,
including issued stock purchase warrants, to determine if such instruments are derivatives or contain features that qualify as embedded
derivatives, pursuant to ASC 480 and ASC 815-15. The classification of derivative instruments, including whether such instruments should
be recorded as liabilities or as equity, is re-assessed at the end of each reporting period. In accordance with ASC 825-10 “Financial
Instruments”, offering costs attributable to the issuance of the derivative warrant liabilities are recognized in the statement
of operations as incurred.
The Company sold 261,000 Private Warrants in connection
with its Initial Public Offering (“Liability Warrant”) (see Note 4). All of the Company’s outstanding Liability Warrants
are recognized as derivative liabilities in accordance with ASC 815-40. Accordingly, we recognize the Warrant instruments as liabilities
at fair value and adjust the instruments to fair value at each reporting period. The liabilities are subject to re-measurement at each
balance sheet date until exercised, and any change in fair value is recognized in our statement of operations.
BRILLIANT ACQUISITION CORPORATION
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Recently Issued Accounting Standards
In August 2020, the FASB issued ASU No. 2020-06,
Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own
Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity (“ASU 2020-06”),
which simplifies accounting for convertible instruments by removing major separation models required under current GAAP. The ASU also
removes certain settlement conditions that are required for equity-linked contracts to qualify for the derivative scope exception, and
it simplifies the diluted earnings per share calculation in certain areas. The Company adopted ASU 2020-06 on January 1, 2021. Adoption
of the ASU did not impact the Company’s financial position, results of operations or cash flows. There are no other ASUs being adopted.
Other than the above, there are no other recently
issued accounting standards which are applicable to the Company.
NOTE 3. INITIAL PUBLIC OFFERING
Pursuant to the Initial Public Offering, the Company
sold 4,000,000 Units, at a purchase price of $10.00 per Unit. Each Unit consists of one ordinary share, one right (“Public Right”)
and one redeemable warrant (“Public Warrant”). Each Public Right entitles the holder to 1/10 of an ordinary share upon consummation
of a Business Combination (see Note 7). Each Public Warrant entitles the holder to purchase one ordinary share at an exercise price of
$11.50 per share (see Note 7). On June 30, 2020, the underwriters fully exercised their over-allotment option to purchase an additional
600,000 Units at $10.00 per Unit.
NOTE 4. PRIVATE PLACEMENT
Simultaneously with the closing of the Initial
Public Offering, the Sponsor purchased an aggregate amount of 240,000 Private Units at a price of $10.00 per Private Unit, or $2,400,000,
from the Company in a private placement. As a result of the underwriters’ election to fully exercise their over-allotment option
on June 30, 2020, the Sponsor purchased an additional 21,000 Private Units, at a purchase price of $10.00 per Private Unit, for an aggregate
purchase price of $210,000. The proceeds from the sale of the Private Units were added to the net proceeds from the Initial Public Offering
held in the Trust Account. The Private Units are identical to the Units sold in the Initial Public Offering, except for the private warrants
(“Private Warrants”), as described in Note 8. If the Company does not complete a Business Combination within the Combination
Period, the proceeds from the sale of the Private Units will be used to fund the redemption of the Public Shares (subject to the requirements
of applicable law) and the Private Warrants and private rights will expire worthless.
BRILLIANT ACQUISITION CORPORATION
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
NOTE 5. RELATED PARTY TRANSACTIONS
Founder Shares
In May, August and September 2019, the Company issued an aggregate
of 1,150,000 founder shares (the “Founder Shares”) to the initial shareholders for an aggregate purchase price of $25,000
in cash. The Founder Shares included an aggregate of up to 150,000 shares subject to forfeiture by the initial shareholders to the extent
that the underwriters’ over-allotment was not exercised in full or in part, so that the initial shareholders would collectively
own 20% of the Company’s issued and outstanding shares after the Initial Public Offering (assuming the initial shareholders did
not purchase any Public Shares in the Initial Public Offering and excluding the Private Units and underlying securities). On June 30,
2020, as a result of the underwriters’ election to fully exercise their over-allotment option, 150,000 Founder Shares are no longer
subject to forfeiture.
The initial shareholders have agreed not to transfer, assign or sell
any of the Founder Shares (except to certain permitted transferees) until the earlier of (i) one year after the date of the consummation
of a Business Combination, or (ii) the date on which the closing price of the Company’s ordinary shares equals or exceeds $12.50
per share (as adjusted for stock splits, stock dividends, reorganizations and recapitalizations) for any 20 trading days within any 30-trading
day period commencing after a Business Combination, upon six months after the date of the consummation of a Business Combination, or earlier,
if, subsequent to a Business Combination, the Company consummates a subsequent liquidation, merger, stock exchange or other similar transaction
which results in all of the Company’s shareholders having the right to exchange their ordinary shares for cash, securities or other
property.
Promissory Note – Related Party and Due to Related Party
On August 21, 2019, as amended on December 31, 2019, the Company issued
an unsecured promissory note to the Sponsor, pursuant to which the Company could borrow up to an aggregate principal amount of $300,000,
of which $243,833 was outstanding under the Promissory Note as of June 26, 2020. The note was non-interest bearing and payable on the
earlier of (i) June 30, 2020 or (ii) the consummation of the Initial Public Offering. Proceeds from the close of the Initial Public Offering
cleared in the bank account of the Company on June 29, 2020. On August 13, 2020, the Promissory Note was amended such that it is due and
payable on October 31, 2020 and effective as of the date of the consummation of the Initial Public Offering, June 26, 2020. On November
12, 2020 the Promissory Note was amended such that it is due and payable on May 31, 2021 and was made effective as of October 30, 2020.
On June 18, 2021 the Promissory Note was amended such that it is due and payable on September 30, 2021 and was made effective as of May
31, 2021. On October 1, 2021, the Promissory Note was amended such that it is due and payable on the date on which we consummate our initial
business combination and was made effective as of October 1, 2021.
BRILLIANT ACQUISITION CORPORATION
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
NOTE 5. RELATED PARTY TRANSACTIONS (CONTINUED)
As discussed in Note 1, the Company may extend the period of time to
consummate a Business Combination up to three times, each by an additional one month. In order to extend the time available for the Company
to consummate a Business Combination, the Sponsor or its affiliates or designees must deposit into the Trust Account US$0.04 per Public
Share outstanding, on or prior to the Deadline or the Deadline as extended by any extension period validly exercised.
Any such payments would be made in the form of a loan. If the Company
completes a Business Combination, the Company would repay such loaned amounts out of the proceeds of the Trust Account released to the
Company. If the Company does not complete a Business Combination, the Company will not repay such loans. Furthermore, the letter agreement
with the initial shareholders contains a provision pursuant to which the Sponsor has agreed to waive its right to be repaid for such loans
in the event that the Company does not complete a Business Combination. The Sponsor and its affiliates or designees are not obligated
to fund the Trust Account to extend the time for the Company to complete a Business Combination.
On June 21, 2021, the Company issued an unsecured promissory note to
our sponsor (the “Promissory Note II”), pursuant to which we could borrow up to an aggregate principal amount of $460,000.
The note was non-interest bearing and payable on the earlier of (i) September 30, 2021 or (ii) the consummation of our initial business
combination. On October 1, 2021, the Promissory Note was amended such that it is due and payable on the date on which we consummate our
initial business combination and was made effective as of October 1, 2021. The amount of $460,000 was outstanding under the Promissory
Note II as of March 31, 2023.
On September 21, 2021, the Company issued an unsecured promissory note
to our sponsor (the “Promissory Note III”), pursuant to which we could borrow up to an aggregate principal amount of $461,000,
of which $461,000 was outstanding under the Promissory Note III as of March 31, 2023. The $460,000 was borrowed for the three months extension
deposit until December 23, 2021 and the other $1,000 was borrowed for the Trust Account management expense. The note was non-interest
bearing and payable on the date on which we consummate our initial business combination.
On December 23, 2021, the Company issued an unsecured promissory note
to our sponsor (the “Promissory Note IV”), pursuant to which we could borrow up to an aggregate principal amount of $460,000.
We borrowed $460,500 in total, including the $460,000 under the Promissory Note IV for the three months extension deposit until March
23, 2022 and $500 due to related party for the Trust Account management expense. The amount of $460,000 was outstanding under the Promissory
Note IV as of March 31, 2023. The note was non-interest bearing and payable on the date on which we consummate our initial business combination.
On March 20, 2022, the Company issued an unsecured promissory note
to our sponsor (the “Promissory Note V”), pursuant to which we could borrow up to an aggregate principal amount of $634,594.
The sponsor initially deposited $736,000 on March 18, 2022, and $101,406 was returned to the sponsor on March 28, 2022 due to the fact
that the Company’s shareholders elected to redeem an aggregate amount of 633,792 shares in connection with the Special Meeting.
As of March 31, 2023, $634,594 was outstanding under the Promissory Note V. The note is non-interest bearing and payable on the date on
which we consummate our initial business combination.
On July 13, 2022, the Company issued an unsecured promissory note to
our sponsor (the “Promissory Note VI”), pursuant to which we could borrow up to an aggregate principal amount of $353,000.
As of March 31, 2023, $353,000 was outstanding under the Promissory Note VI. The note is non-interest bearing and payable on the
date on which we consummate our initial business combination. In connection with a special meeting to approve the extension of the business
combination period, the Company’s shareholders elected to redeem an aggregate amount of 1,025,281 shares, and the Company redeemed
such shares for an aggregate amount of $10,742,906, or approximately $10.48 per share.
On October 17, 2022, the Company issued an unsecured promissory note
to Nukkleus (the “Promissory Note VII”), pursuant to which we could borrow up to an aggregate principal amount of $22,600.
As of March 31, 2023, $22,600 was outstanding under the Promissory Note VII. The note is non-interest bearing and payable on the
date on which we consummate our initial business combination. The proceeds of the Promissory Note VII has been deposited in the Company’s
Trust Account in connection with extending the business combination completion window until November 23, 2022. In addition, the Company
will further extend the business combination completion window on a monthly basis up to a further two months, or until January 23, 2023,
upon deposit of $0.04 per public ordinary share of the Company. In connection with a special meeting to approve the extension of the business
combination period, the Company’s shareholders elected to redeem an aggregate amount of 2,375,991 shares, and the Company redeemed
such shares for an aggregate amount of $25,180,851, or approximately $10.60 per share.
BRILLIANT ACQUISITION
CORPORATION
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
NOTE 5. RELATED PARTY TRANSACTIONS (CONTINUED)
On November 18, 2022, the Company issued an unsecured promissory note
to Nukkleus (the “Promissory Note VIII”), pursuant to which we could borrow up to an aggregate principal amount of $22,600.
As of March 31, 2023 was outstanding under the Promissory Note VIII. The note is non-interest bearing and payable on the date on
which we consummate our initial business combination. The proceeds of the Promissory Note VIII has been deposited in the Company’s
Trust Account in connection with extending the business combination completion window until December 23, 2022.
On December 19, 2022, the Company issued an unsecured promissory note
to Nukkleus (the “Promissory Note IX”), pursuant to which we could borrow up to an aggregate principal amount of $22,600.
As of March 31, 2023, $22,600 was outstanding under the Promissory Note IX. The note is non-interest bearing and payable on the date
on which we consummate our initial business combination. The proceeds of the Promissory Note IX has been deposited in the Company’s
Trust Account in connection with extending the business combination completion window until January 23, 2023.
On January 19, 2023, the Company issued an unsecured promissory note
to Nukkleus (the “Promissory Note X”), pursuant to which we could borrow up to an aggregate principal amount of $21,350.
The note is non-interest bearing and payable on the date on which we consummate our initial business combination. The proceeds of the
Promissory Note X has been deposited in the Company’s Trust Account in connection with extending the business combination completion
window until February 23, 2023. In addition, the Company will further extend the business combination completion window on a monthly basis
up to a further two months, or until April 23, 2023, upon deposit of $0.04 per public ordinary share of the Company (the “Top-up
Amount”). Notwithstanding the Top-up Amount, the Company undertook to increase the amount to be paid into the Trust Account for
each monthly extension from $0.04 to $0.0525. Subsequently, the Company has committed to increase the amount to be paid into the Trust
Account for any extension from February 23, 2023 to March 23, 2023 and from March 23, 2023 to April 23, 2023 to $0.08 per ordinary share
outstanding. In connection with a special meeting to approve the extension of the business combination period, the Company’s shareholders
elected to redeem an aggregate amount of 159,203 shares, and the Company redeemed such shares for an aggregate amount of $1,706,347, or
approximately $10.72 per share.
On February 23, 2023, the Company issued an unsecured promissory note
to Nukkleus (the “Promissory Note XI”), pursuant to which we could borrow up to an aggregate principal amount of $32,500.
The note is non-interest bearing and payable on the date on which we consummate our initial business combination. The proceeds of the
Promissory Note XI has been deposited in the Company’s Trust Account in connection with extending the business combination completion
window until March 23, 2023.
On March 21, 2023, the Company issued an unsecured promissory note
to Nukkleus (the “Promissory Note XII”), pursuant to which we could borrow up to an aggregate principal amount of $32,500.
The note is non-interest bearing and payable on the date on which we consummate our initial business combination. The proceeds
of the Promissory Note XII has been deposited in the Company’s Trust Account in connection with extending the business combination
completion window until April 23, 2023.
On April 20, 2023, the Company issued an unsecured
promissory note to Nukkleus (the “Promissory Note XIII”), pursuant to which we could borrow up to an aggregate principal
amount of $32,450. The note is non-interest bearing and payable on the date on which we consummate our initial business combination. The
proceeds of the Promissory Note XIII has been deposited in the Company’s Trust Account in connection with extending the business
combination completion window until May 23, 2023. In addition, the Company will further extend the business combination completion window
on a monthly basis up to a further two months, or until July 23, 2023, upon deposit of $0.08 per public ordinary share of the Company
(the “Top-up Amount”). In connection with a special meeting to approve the extension of the business combination period, the
Company’s shareholders elected to redeem an aggregate amount of 258 shares, and the Company redeemed such shares for an aggregate
amount of $2,820, or approximately $10.93 per share.
Advance from related party
As of March
31, 2023, the Sponsor advanced $1,050,600 to the Company for working capital purposes. For the three months ended March 31, 2023,
the Company borrowed $80,000 to pay for operating costs and expenses related to the Business Combination. The advance is non-interest
bearing and due on demand.
BRILLIANT ACQUISITION CORPORATION
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
NOTE 6. COMMITMENTS
Registration Rights
Pursuant to a registration rights agreement entered
into on June 23, 2020, the holders of the Founder Shares, Representative Shares (as defined in Note 7), Private Units (and their underlying
securities) and any Units that may be issued upon conversion of the Working Capital Loans (and underlying securities) will be entitled
to registration rights pursuant to a registration rights agreement. The holders of 25% of these securities are entitled to make up to
three demands, excluding short form demands, that the Company register such securities. In addition, the holders have certain “piggy-back”
registration rights with respect to registration statements filed subsequent to the consummation of a Business Combination. Notwithstanding
the foregoing, EarlyBirdCapital, Inc. (“EarlyBirdCapital”) may not exercise its demand and “piggyback” registration
rights after five (5) and seven (7) years after the effective date of the registration statement and may not exercise its demand rights
on more than one occasion. The Company will bear the expenses incurred in connection with the filing of any such registration statements.
Business Combination Marketing Agreement
The Company engaged EarlyBirdCapital as an advisor,
pursuant to a Business Combination Marketing Agreement, in connection with a Business Combination to assist the Company in holding meetings
with its shareholders to discuss the potential Business Combination and the target business’ attributes, introduce the Company to
potential investors that are interested in purchasing the Company’s securities in connection with a Business Combination, assist
the Company in obtaining shareholder approval for the Business Combination and assist the Company with its press releases and public filings
in connection with the Business Combination. The Company agreed to pay EarlyBirdCapital a cash fee for such services upon the consummation
of a Business Combination in an amount equal to 3.5% of the gross proceeds of Initial Public Offering, or $1,610,000, provided, however,
that the this fee shall be reduced by an aggregate amount equal to 1.5% of the dollar amount of the Company’s securities purchased
prior to the closing of the Business Combination by investors that: (i) were introduced to EarlyBirdCapital by the Company (or any of
its direct or indirect affiliates); (ii) have not been previously introduced to a SPAC initial public offering by EarlyBirdCapital; (iii)
continue to hold the Company’s ordinary shares through the closing of a Business Combination, and (iv) do not exercise redemption
rights with respect thereto in connection with such Business Combination.
In addition, the Company agreed to pay EarlyBirdCapital
a cash fee equal to 1.0% of the total consideration payable in a Business Combination if EarlyBirdCapital introduces the Company to the
target business with which the Company completes a Business Combination; provided that the foregoing fee will not be paid prior to the
date that is 90 days from the effective date of the Initial Public Offering, unless FINRA determines that such payment would not be deemed
underwriters’ compensation in connection with the Initial Public Offering pursuant to FINRA Rule 5110(c)(3)(B)(ii).
On June 17, 2022, the Company and EarlyBirdCapital
agreed to terminate, pursuant to a termination agreement (the “Termination Agreement”), the Business Combination Marketing
Agreement. Pursuant to the Termination Agreement, the Representative acknowledged that no amounts are due to it by the Company pursuant
to the terms of the Business Combination Marketing Agreement, and the Company acknowledged that it has no claim against the Representative
in connection with the termination of the Business Combination Marketing Agreement.
BRILLIANT ACQUISITION CORPORATION
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
NOTE 7. SHAREHOLDERS’ EQUITY
Ordinary Shares — On
June 26, 2020, the Company amended its Amended and Restated Memorandum and Articles of Association such that it is authorized to issue
an unlimited number of ordinary shares, with no par value. Holders of the Company’s ordinary shares are entitled to one vote for
each share. There were 1,511,000 shares of ordinary shares issued and outstanding, excluding 405,733 and 564,936 ordinary shares subject
to possible redemption as of March 31, 2023 and December 31, 2022, respectively.
Rights — Each holder
of a right will receive one-tenth (1/10) of one ordinary share upon consummation of a Business Combination, even if the holder of such
right redeemed all shares held by it in connection with a Business Combination. No fractional shares will be issued upon conversion of
the rights. No additional consideration will be required to be paid by a holder of rights in order to receive its additional shares upon
consummation of a Business Combination, as the consideration related thereto has been included in the Unit purchase price paid for by
investors in the Initial Public Offering. If the Company enters into a definitive agreement for a Business Combination in which the Company
will not be the surviving entity, the definitive agreement will provide for the holders of rights to receive the same per share consideration
the holders of the ordinary shares will receive in the transaction on an as-converted into ordinary share basis and each holder of a right
will be required to affirmatively covert its rights in order to receive 1/10 share underlying each right (without paying additional consideration).
The shares issuable upon conversion of the rights will be freely tradable (except to the extent held by affiliates of the Company).
If the Company is unable to complete a Business
Combination within the Combination Period and the Company liquidates the funds held in the Trust Account, holders of rights will not receive
any of such funds with respect to their rights, nor will they receive any distribution from the Company’s assets held outside of
the Trust Account with respect to such rights, and the rights will expire worthless. Further, there are no contractual penalties for failure
to deliver securities to the holders of the rights upon consummation of a Business Combination. Additionally, in no event will the Company
be required to net cash settle the rights. Accordingly, holders of the rights might not receive the shares of ordinary shares underlying
the rights.
Warrants — Public
Warrants may only be exercised for a whole number of shares. No fractional shares will be issued upon exercise of the Public Warrants.
The Public Warrants will become exercisable on the later of (a) 30 days after the consummation of a Business Combination or (b) 12 months
from the effective date of the registration statement relating to the Initial Public Offering. No Public Warrants will be exercisable
for cash unless the Company has an effective and current registration statement covering the ordinary shares issuable upon exercise of
the Public Warrants and a current prospectus relating to such ordinary shares. Notwithstanding the foregoing, if a registration statement
covering the ordinary shares issuable upon the exercise of the Public Warrants is not effective within 90 days from the consummation of
a Business Combination, the holders may, until such time as there is an effective registration statement and during any period when the
Company shall have failed to maintain an effective registration statement, exercise the Public Warrants on a cashless basis pursuant to
an available exemption from registration under the Securities Act. If an exemption from registration is not available, holders will not
be able to exercise their Public Warrants on a cashless basis. The Public Warrants will expire five years from the consummation of a Business
Combination or earlier upon redemption or liquidation.
BRILLIANT ACQUISITION CORPORATION
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
NOTE 7. SHAREHOLDERS’ EQUITY (CONTINUED)
The Company may call the warrants for redemption (excluding the Private
Warrants), in whole and not in part, at a price of $0.01 per warrant:
| ● | at
any time while the Public Warrants are exercisable, |
| ● | upon
not less than 30 days’ prior written notice of redemption to each Public Warrant holder, |
| ● | if,
and only if, the reported last sale price of the ordinary shares equals or exceeds $16.50 per share, for any 20 trading days within a
30-trading day period ending on the third trading day prior to the notice of redemption to Public Warrant holders, and |
| ● | if,
and only if, there is a current registration statement in effect with respect to the ordinary shares underlying such warrants at the
time of redemption and for the entire 30-day trading period referred to above and continuing each day thereafter until the date of redemption. |
In addition, if (x) the Company issues additional ordinary shares or
equity-linked securities for capital raising purposes in connection with the closing of a Business Combination at an issue price or effective
issue price of less than $9.20 per share (with such issue price or effective issue price to be determined in good faith by the Company’s
board of directors and, in the case of any such issuance to the initial shareholders or their affiliates, without taking into account
any Founder Shares held by the initial shareholders or such affiliates, as applicable, prior to such issuance) (the “Newly Issued
Price”), (y) the aggregate gross proceeds from such issuances represent more than 60% of the total equity proceeds, and interest
thereon, available for the funding of a Business Combination on the date of the consummation of a Business Combination (net of redemptions),
and (z) the volume weighted average trading price of the ordinary shares during the 20 trading day period starting on the trading day
prior to the day on which the Company consummates a Business Combination (such price, the “Market Value”) is below $9.20 per
share, the exercise price of the warrants will be adjusted (to the nearest cent) to be equal to 115% of the higher of the Market Value
and the Newly Issued Price, and the $16.50 per share redemption trigger price described above will be adjusted (to the nearest cent) to
be equal to 180% of the higher of the Market Value and the Newly Issued Price.
The Private Warrants are identical to the Public Warrants underlying
the Units sold in the Initial Public Offering, except that the Private Warrants and the ordinary shares issuable upon the exercise of
the Private Warrants will not be transferable, assignable or salable until after the completion of a Business Combination, subject to
certain limited exceptions. Additionally, the Private Warrants will be exercisable on a cashless basis and be non-redeemable so long as
they are held by the initial purchasers or their permitted transferees. If the Private Warrants are held by someone other than the initial
purchasers or their permitted transferees, the Private Warrants will be redeemable by the Company and exercisable by such holders on the
same basis as the Public Warrants.
If the Company calls the Public Warrants for redemption, management
will have the option to require all holders that wish to exercise the Public Warrants to do so on a “cashless basis,” as described
in the warrant agreement. The exercise price and number of ordinary shares issuable upon exercise of the warrants may be adjusted in certain
circumstances including in the event of a stock dividend, extraordinary dividend or recapitalization, reorganization, merger or consolidation.
However, except as described above, the warrants will not be adjusted for issuances of ordinary shares at a price below its exercise price.
Additionally, in no event will the Company be required to net cash settle the warrants. If the Company is unable to complete a Business
Combination within the Combination Period and the Company liquidates the funds held in the Trust Account, holders of warrants will not
receive any of such funds with respect to their warrants, nor will they receive any distribution from the Company’s assets held
outside of the Trust Account with respect to such warrants. Accordingly, the warrants may expire worthless.
BRILLIANT ACQUISITION CORPORATION
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
NOTE 7. SHAREHOLDERS’ EQUITY (CONTINUED)
Representative Shares
EarlyBirdCapital and its designees purchased 100,000
ordinary shares (the “Representative Shares) for an aggregate price of $10.00. The Company accounted for the Representative Shares
as an offering cost of the Initial Public Offering, with a corresponding credit to shareholders’ equity. The Company estimated the
fair value of the Representative Shares to be $2,200 based upon the price of the Founder Shares issued to the initial shareholders. The
holders of the Representative Shares have agreed not to transfer, assign or sell any such shares until the completion of a Business Combination.
In addition, the holders have agreed (i) to waive their conversion rights (or rights to participate in any tender offer) with respect
to such shares in connection with the completion of a Business Combination and (ii) to waive their rights to liquidating distributions
from the Trust Account with respect to such shares if the Company fails to complete a Business Combination within the Combination Period.
The Representative Shares have been deemed compensation
by FINRA and are therefore subject to a lock-up for a period of 180 days immediately following the effective date of the registration
statement related to the Initial Public Offering pursuant to Rule 5110(g)(1) of FINRA’s NASD Conduct Rules. Pursuant to FINRA Rule
5110(g)(1), these securities will not be the subject of any hedging, short sale, derivative, put or call transaction that would result
in the economic disposition of the securities by any person for a period of 180 days immediately following the effective date of the registration
statements related to the Initial Public Offering, nor may they be sold, transferred, assigned, pledged or hypothecated for a period of
180 days immediately following the effective date of the registration statements related to the Initial Public Offering except to any
underwriter and selected dealer participating in the Initial Public Offering and their bona fide officers or partners.
NOTE 8. DERIVATIVE WARRANT LIABILITIES
As of March 31, 2023, the Company had 261,000
Private Warrants outstanding. The Private Warrants are recognized as warrant liabilities and subsequently measured at fair value.
The Private Warrants will be identical to the
Public Warrants (see Note 7) underlying the Units being sold in the Initial Public Offering, except that the Private Warrants and the
ordinary shares issuable upon the exercise of the Private Warrants will not be transferable, assignable or salable until 30 days after
the completion of a Business Combination, subject to certain limited exceptions. Additionally, the Private Warrants will be exercisable
on a cashless basis and be non-redeemable so long as they are held by the initial purchasers or their permitted transferees. If the Private
Warrants are held by someone other than the initial purchasers or their permitted transferees, the Private Warrants will be redeemable
by the Company and exercisable by such holders on the same basis as the Public Warrants.
BRILLIANT ACQUISITION CORPORATION
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
NOTE 9. FAIR VALUE MEASUREMENTS
The Company follows the guidance in ASC Topic
820 for its financial assets and liabilities that are re-measured and reported at fair value at each reporting period, and non-financial
assets and liabilities that are re-measured and reported at fair value at least annually.
The fair value of the Company’s financial
assets and liabilities reflects management’s estimate of amounts that the Company would have received in connection with the sale
of the assets or paid in connection with the transfer of the liabilities in an orderly transaction between market participants at the
measurement date. In connection with measuring the fair value of its assets and liabilities, the Company seeks to maximize the use of
observable inputs (market data obtained from independent sources) and to minimize the use of unobservable inputs (internal assumptions
about how market participants would price assets and liabilities). The following fair value hierarchy is used to classify assets and liabilities
based on the observable inputs and unobservable inputs used in order to value the assets and liabilities:
| ● | Level
1, defined as observable inputs such as quoted prices for identical instruments in active markets; |
| ● | Level
2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable such as quoted prices
for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active; and |
| ● | Level
3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions,
such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable. |
In some circumstances, the inputs used to measure
fair value might be categorized within different levels of the fair value hierarchy. In those instances, the fair value measurement is
categorized in its entirety in the fair value hierarchy based on the lowest level input that is significant to the fair value measurement.
As of March 31, 2023 and December 31, 2022, the
carrying values of cash, prepaid expenses, accounts payable, accrued expenses, franchise tax payable and notes payable to related party
approximate their fair values due to the short-term nature of the instruments. As of March 31, 2023 and December 31, 2022, the Company’s
portfolio of investments held in the Trust Account was comprised of investments in U.S. Treasury securities with an original maturity
of 185 days or less or investments in money market funds that invest in U.S. government securities, or a combination thereof. The fair
value for trading securities is determined using quoted market prices in active markets.
As noted in Note 8, the Company has concluded
that its Private Warrants should be presented as liabilities with subsequent fair value remeasurement. Accordingly, the fair value of
the Private Warrants was classified from Level 1 measurement to Level 3 measurement.
The following table presents information about
the Company’s assets and liabilities that are measured at fair value on a recurring basis as of March 31, 2023 and December 31,
2022 and indicates the fair value of held to maturity securities as follows.
BRILLIANT ACQUISITION CORPORATION
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
NOTE 9. FAIR VALUE MEASUREMENTS (CONTINUED)
| |
Level | | |
March 31, 2023 | | |
December 31, 2022 | |
Description | |
| | |
| | |
| |
Assets: | |
| | |
| | |
| |
Trust Account – U.S. Treasury Securities Money Market Fund | |
| 1 | | |
$ | - | | |
$ | - | |
| |
| | | |
| | | |
| | |
Liabilities: | |
| | | |
| | | |
| | |
Derivative Warrant Liability – Private Warrant | |
| 3 | | |
$ | 11,568 | | |
$ | 10,643 | |
The fair value of the Private Warrants was estimated
using Binomial model for the three months ended March 31, 2023 and 2022, respectively. For the three months ended March 31, 2023 and 2022
on the statements of operations, the Company recognized an increase of $925 and a decrease of $5,041 in the fair value of warrant liabilities
presented respectively, as change in fair value of derivative warrant liabilities on the accompanying statement of operations.
The estimated fair value of the Private Warrants
is determined using Level 3 inputs. Inherent in these valuations are assumptions related to expected stock-price volatility, expected
life, risk-free interest rate and dividend yield. The Company estimates the volatility of its ordinary shares based on historical and
implied volatilities of select peer companies as well as its own that matches the expected remaining life of the warrants. The risk-free
interest rate is based on the U.S. Treasury zero-coupon yield curve on the grant date for a maturity similar to the expected remaining
life of the warrants. The expected life of the warrants is assumed to be equivalent to their remaining contractual term. The dividend
rate is based on the historical rate, which the Company anticipates remaining at zero.
The following table provides quantitative information
regarding Level 3 fair value measurements inputs for the Company’s warrants at their measurement dates:
| |
March 31, 2023 | | |
December 31, 2022 | |
Volatility | |
| 3.23 | % | |
| 3.40 | % |
Share price | |
| 10.98 | | |
| 10.72 | |
Expected life of the warrants to convert | |
| 5.31 | | |
| 5.23 | |
Risk free rate | |
| 3.64 | % | |
| 4.04 | % |
Dividend yield | |
| 0.00 | % | |
| 0.00 | % |
The change in the fair value of the derivative
warrant liabilities for the six months ended March 31, 2023 and 2022 were as below:
Derivative Warrant Liabilities as of December 31, 2021 | |
$ | 180,479 | |
Change in fair value of derivative warrant liabilities | |
| (5,041 | ) |
Derivative Warrant Liabilities as of March 31, 2022 | |
$ | 175,438 | |
| |
| | |
Derivative Warrant Liabilities as of December 31, 2022 | |
$ | 10,643 | |
Change in fair value of derivative warrant liabilities | |
| 925 | |
Derivative Warrant Liabilities as of March 31, 2023 | |
$ | 11,568 | |
BRILLIANT ACQUISITION CORPORATION
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
NOTE 10. SUBSEQUENT EVENTS
On April 20, 2023, the Company issued an unsecured
promissory note to Nukkleus (the “Promissory Note XIII”), pursuant to which we could borrow up to an aggregate principal
amount of $32,450. The note is non-interest bearing and payable on the date on which we consummate our initial business combination. The
proceeds of the Promissory Note XIII has been deposited in the Company’s Trust Account in connection with extending the business
combination completion window until May 23, 2023. In addition, the Company will further extend the business combination completion window
on a monthly basis up to a further two months, or until July 23, 2023, upon deposit of $0.08 per public ordinary share of the Company
(the “Top-up Amount”). In connection with a special meeting to approve the extension of the business combination period, the
Company’s shareholders elected to redeem an aggregate amount of 258 shares, and the Company redeemed such shares for an aggregate
amount of $2,820, or approximately $10.93 per share.
The Company did not identify any other subsequent events that would
have required adjustment or disclosure in the unaudited condensed financial statements.