T3 Defense Inc. quarterly report, Q1 FY2023

Business context and reporting period

The supplied filing is Brilliant Acquisition Corporation’s unaudited Form 10-Q for the three months ended March 31, 2023—not a filing identified as T3 Defense Inc. The company is a British Virgin Islands blank-check company (SPAC), with no operating business or operating revenue, seeking a business combination. It reported a proposed merger with Nukkleus Inc.

Financial results and position

MetricQ1 2023Q1 2022 / comparison
Operating costs$78,381$469,271
Net loss$79,306$460,282
Basic and diluted loss per share$0.04$0.08
Operating cash used$107,171$699,248
Financing cash used$1,539,997$5,324,565 used
Cash and total assets at March 31$4,463,639—

The $4.46 million cash balance includes approximately $4.44 million in the Trust Account; only $28,618 was in the operating bank account. The company had a $1.31 million working capital deficit excluding Trust Account cash. Total liabilities were $4.11 million, including $2.77 million in related-party promissory notes and $1.05 million due to a related party. The filing reports no operating revenue or profit; margins are not meaningful for this pre-combination SPAC. The Trust Account was held in cash, with no marketable securities reported.

Changes, outlook, and risks

  • Net loss and operating costs were substantially lower than in Q1 2022. The quarter’s loss included $925 of expense from an increase in the fair value of warrant liabilities; Q1 2022 included $3,948 of interest income and a $5,041 warrant-liability fair-value gain.
  • Financing cash use primarily reflected $1.71 million paid to redeem 159,203 shares. The company received $80,000 in related-party advances and $86,350 under related-party notes during the quarter.
  • Shareholders approved an extension after quarter-end, on April 20, 2023, moving the combination deadline to May 23, 2023, with monthly extensions potentially available through July 23, 2023 upon deposits of $32,450 per month. The filing reports 258 additional shares redeemed in connection with that extension.
  • Management identified substantial doubt about the company’s ability to continue as a going concern, citing limited operating cash, the working capital deficit, and the approaching business-combination deadline. Sponsor or affiliate funding is possible but not committed; there is no assurance that a combination or further extension will occur. Failure to complete a combination within the permitted period would result in winding up and redemption of public shares.
  • Management reported ineffective internal control over financial reporting due to a material weakness in accounting for complex instruments, including warrants and redeemable shares. Remediation was underway, with no assurance it would be successful. The filing also cites potential effects from COVID-19 and the Russia-Ukraine conflict, whose impact was not determinable.

Most important facts to verify

  • Confirm the issuer: the supplied document is for Brilliant Acquisition Corporation, not T3 Defense Inc.
  • Check the subsequent status and terms of the Nukkleus merger proposal and any later extension or liquidation developments.
  • Verify available operating liquidity and related-party funding, including the distinction between Trust Account cash and cash available for operations.
  • Review the material weakness, remediation progress, and any subsequent changes in internal controls.