Business Context and Reporting Period
Company: Nukkleus Inc. (NUKK)
Filing Type: Form 8-K (Current Report)
Date of Report: September 4, 2025
Event: Entry into a Material Definitive Agreement for a private placement of securities.
Context: The Company entered into a Securities Purchase Agreement with accredited investors to raise capital through the issuance of Series A Convertible Preferred Stock and Common Stock Purchase Warrants. The transaction is expected to close on or about September 9, 2025.
Key Financial Metrics and Transaction Terms
Capital Raised: $10,000,000 aggregate purchase price.
Securities Issued: 200 Units.
- Unit Composition: One share of Series A Convertible Preferred Stock (Stated Value: $50,000) and warrants to purchase up to 15,957 shares of Common Stock.
- Preferred Stock Conversion: Initially convertible into 10,224 shares of Common Stock per preferred share (Initial Conversion Price: $4.89).
- Warrant Terms: Initial exercise price of $5.405 per share; 5-year expiration; subject to anti-dilution adjustments.
Transaction Costs:
- Placement Agent Cash Fee: 7.0% of gross proceeds ($700,000).
- Warrant Exercise Fee: 4.0% of cash proceeds from warrant exercises.
Liquidity and Debt: The filing does not provide current balance sheet data, cash flow statements, or existing debt levels. The transaction is intended to provide liquidity through the $10 million raise.
Material Changes and Structural Impacts
Capital Structure: The issuance creates a new class of Series A Convertible Preferred Stock that is senior to Common Stock but junior to existing and future indebtedness.
Dilution Mechanics:
- Anti-Dilution: Both the Preferred Stock conversion price and Warrant exercise price are subject to price-based anti-dilution adjustments for subsequent offerings.
- Ownership Blocker: Conversion and exercise are subject to a 9.9% beneficial ownership limitation.
- Redemption: If stockholder approval is not obtained within one year, holders may redeem shares at 105% of the Stated Value.
Registration Rights: The Company must file an initial registration statement within 30 days and seek effectiveness within 45 days (or 75 days if reviewed). Failure to meet these deadlines triggers liquidated damages of 1.5% of the purchase price per period.
Outlook, Risks, and Management Commentary
Stockholder Approval Requirement: The Company is required to seek stockholder approval for certain provisions within six months of closing. Directors and officers have agreed to vote in favor. If approval is not obtained at the first meeting, the Company must call a meeting every four months thereafter.
Call Provision: The Company may call the warrants for cancellation at $0.001 per share if the VWAP exceeds $6.76 for 10 consecutive trading days and other conditions are met.
Risks and Contingencies:
- Liquidated Damages: Risk of additional share issuance or cash payment if registration deadlines are missed.
- Redemption Risk: Potential cash outflow of 105% of stated value if stockholder approval is delayed beyond one year.
- Market Conditions: The transaction relies on exemptions from registration (Rule 506/Section 4(a)(2)); securities cannot be resold without registration.
Investor Verification Checklist
- Verify the closing date of the Private Placement (expected September 9, 2025) and confirmation of fund receipt.
- Monitor the filing of the Initial Registration Statement (due within 30 days of September 4, 2025) to avoid liquidated damages.
- Track the timeline for the special stockholder meeting required to approve the Certificate of Designation (due within 6 months of closing).
- Review the Company's current cash position and burn rate to assess the impact of the 7% placement fee and potential redemption obligations.
- Confirm the exact number of shares issuable upon conversion and warrant exercise, noting the 9.9% beneficial ownership blocker.