Business context and reporting period
Issuer mismatch: Although the request identifies T3 Defense Inc., this Form 10-Q is for Brilliant Acquisition Corporation, a British Virgin Islands blank-check company (SPAC), for the quarter ended September 30, 2021. It was searching for a business combination, with a stated focus on Asia-Pacific businesses, and had not commenced operations or generated operating revenue.
Financial results and liquidity
| Metric | Three months ended September 30 | Nine months ended September 30 |
|---|---|---|
| Operating costs | 2021: $153,337; 2020: $47,262 | 2021: $260,315; 2020: $47,426 |
| Net loss | 2021: $124,611; 2020: $41,430 | 2021: $166,329; 2020: $41,487 |
| Basic and diluted loss per share | 2021: $0.02; 2020: $0.01 | 2021: $0.03; 2020: $0.01 |
Losses were partly offset by noncash gains from decreases in the fair value of derivative warrant liabilities ($27,549 for Q3 and $90,517 for the nine months of 2021) and modest trust-account interest income. Profit margins are not meaningful because the company had no operating revenue.
At September 30, 2021, cash outside the trust was $504,362 and trust-account securities were $46,926,504. Current liabilities were $1,307,525, including $1,164,833 owed under related-party promissory notes; the company reported a $780,908 working capital deficit. Shareholders’ deficit was $11,521. Nine-month operating cash use was $208,455, compared with $10,693 of operating cash provided in the prior-year period. The filing reports no long-term debt or off-balance-sheet financing arrangements.
Changes versus the prior comparable period
Q3 and nine-month net losses increased substantially year over year as operating costs rose. The nine-month comparison is also affected by the 2020 SPAC offering and related activity. Trust assets increased from $46,003,053 at December 31, 2020 to $46,926,504 at September 30, 2021, including sponsor extension deposits and investment income. Cash outside the trust declined from $712,817 to $504,362.
Outlook, risks, contingencies and unusual items
The company had twice extended its business-combination deadline, to December 25, 2021, with the sponsor depositing $460,000 for each extension. If no combination is completed by the applicable deadline, public shares are to be redeemed from the trust and the company would wind up. On November 19, 2021, the sponsor committed to provide up to $1.5 million in loans through December 25; the filing does not establish that the full amount had been funded. Management said it expected available cash, including potential sponsor support, to meet needs through the deadline.
COVID-19 could adversely affect the company’s financial position or target search, but the impact was not determinable. Completion of a combination was not assured; redemptions, additional financing, equity dilution, or debt could affect investors. Public rights and warrants may expire worthless if the company liquidates. Management disclosed a material weakness in internal control over financial reporting related to accounting for the IPO warrants and redeemable shares; remediation was planned, with no assurance it would succeed. The filing reports no legal proceedings.
Important facts for investors to verify
- Confirm the correct issuer: this filing is for Brilliant Acquisition Corporation, not T3 Defense Inc.
- Verify whether the company completed a business combination by the December 25, 2021 deadline and whether further extensions or amendments occurred.
- Confirm the funding, terms, and repayment or forgiveness of the sponsor’s post-quarter loan commitment and outstanding related-party notes.
- Review the material weakness remediation status and any subsequent control evaluations.
- Assess the effect of public-share redemptions, financing needs, and potential dilution on any proposed transaction.