Business Context and Reporting Period
This Form 8-K, filed on December 30, 2025, reports the completion of an acquisition by Nukkleus Inc. (NUKK). The registrant, an emerging growth company, finalized the purchase of all issued and outstanding shares of Tiltan Software Engineering Ltd. ("Tiltan") on December 30, 2025. Tiltan is now an indirect wholly-owned subsidiary of Nukkleus.
Key Financial Metrics and Transaction Structure
The total purchase price for Tiltan is NIS 47,600,000 (approximately $14,000,000). The consideration is structured as follows:
- Cash Portion (75%): NIS 35,700,000 (approx. $10,500,000).
- Immediate Payment: NIS 5,283,333 paid at closing (net of NIS 666,667 retained for working capital).
- Deferred Payment: NIS 29,750,000 (approx. $8,750,000) evidenced by a Secured Promissory Note.
- Stock Portion (25%): NIS 11,900,000 (approx. $3,500,000).
- 2,000,000 shares of Common Stock were issued and deposited into escrow.
- Final settlement of the stock portion occurs on June 29, 2026, based on market value, with potential for additional shares or cash if the value falls short.
- Pre-closing Dividend: NIS 3,236,088 payable by the Company in 2026 from select customer payments.
Debt and Liquidity: The deferred cash portion is secured by a pledge of 100% of Tiltan's shares. The Note bears no interest unless an Event of Default occurs, at which point interest accrues at 10% per annum. The filing does not provide specific liquidity metrics (e.g., cash on hand) for Nukkleus Inc. at the time of filing.
Material Changes and Obligations
The primary material change is the addition of Tiltan as a subsidiary and the creation of a direct financial obligation via the Secured Promissory Note. Key terms include:
- Payment Schedule: The Note matures in five installments at 36-day intervals, concluding on June 29, 2026. The first two installments are reduced by NIS 666,667 each for working capital retention.
- Covenants: The Seller is subject to non-competition and non-solicitation covenants from closing until June 2027.
- Default Triggers: Include failure to pay within 10 business days of notice, bankruptcy, material breach, or cessation of business for 20 consecutive days.
Guidance, Risks, and Unusual Items
Forward-Looking Statements: The filing contains statements regarding anticipated benefits and payment timing, which are subject to risks and uncertainties. The Company disclaims any obligation to update these statements.
Risks and Contingencies:
- Escrow Risk: The final stock consideration is variable based on the market price of NUKK on June 29, 2026. If the value is insufficient, the Company must issue additional shares or pay cash.
- Default Risk: Failure to meet the installment schedule triggers immediate acceleration of the debt and a 10% penalty interest rate.
- Pro Forma Data: Unaudited pro forma financial information is not included in this filing and will be filed within 71 days.
Investor Verification Checklist
- Verify the current market price of NUKK to assess the potential dilution or cash requirement for the escrow settlement on June 29, 2026.
- Review the audited financial statements of Tiltan (Exhibit 99.1) and unaudited statements for the nine months ended September 30, 2025 (Exhibit 99.2) to evaluate the target's financial health.
- Monitor the Company's cash flow to ensure it can meet the five deferred cash installments due between January and June 2026.
- Check for the upcoming filing of pro forma financial information within 71 days to understand the combined entity's financial position.
- Confirm the status of the pre-closing dividend payment (NIS 3,236,088) scheduled for 2026.