SEC filing summary
Issuer discrepancy: The request identifies T3 Defense Inc., but the supplied Form 10-Q is for Brilliant Acquisition Corporation. The summary below reflects the filing text, not T3 Defense.
Business context and reporting period
This unaudited Form 10-Q covers the quarter ended June 30, 2020. Brilliant Acquisition Corporation is a British Virgin Islands blank-check company formed to pursue a business combination, with a stated focus on businesses operating primarily in the Asia-Pacific region. It had not begun operating activities or identified a completed business combination in the supplied filing.
Financial results and liquidity
- Revenue: No operating revenue. Management expects operating revenue, if any, only after a business combination.
- Profit/loss: Three-month net income was $67, comprising $107 of trust-account interest and $40 of operating costs. Six-month net loss was $57, comprising $164 of operating costs partly offset by $107 of interest income. Net loss for May 24, 2019 (inception) through June 30, 2019 was $19,998; that inception-period comparison is not equivalent to a full prior-year quarter.
- Cash flow: Six-month operating cash use was $581; investing cash use was $46.0 million, primarily the trust deposit; financing cash provided was $46.8 million. Cash outside the trust account rose to $860,654.
- Assets and liquidity: At June 30, 2020, total assets were $46.9 million, including $46.0 million of trust-account marketable securities and $860,654 of cash outside the trust. Current liabilities were $313,426. Trust funds are generally reserved for a business combination or shareholder redemptions, rather than ordinary operating expenses.
- Debt: A $243,833 non-interest-bearing related-party promissory note was outstanding at June 30. It was amended on August 13, 2020, to be due October 31, 2020. The company reported no long-term debt.
- Margins: Not meaningful because the company had no operating revenue.
Material changes and unusual items
- The company completed its IPO on June 26, selling 4.0 million units at $10 each, and raised a further $6.0 million from the underwriters’ fully exercised over-allotment on June 30. Private-unit sales brought total gross proceeds from public and private units to $51.01 million; $46.0 million was placed in the trust account.
- IPO transaction costs were $2,069,154, including $1,610,000 of underwriting fees. At June 30, 4,154,723 ordinary shares were classified as subject to possible redemption at $41,547,327, outside shareholders’ equity.
- Shareholders’ equity was $5,000,008. The balance sheet also reports a $20,721 accumulated deficit.
- The filing reports no legal proceedings, defaults on senior securities, or off-balance-sheet financing arrangements. Management concluded disclosure controls were effective and reported no material change in internal control during the quarter.
Outlook, risks, and contingencies
- The company had until June 26, 2021 to complete a business combination, with up to three optional three-month extensions. Each extension would require a $460,000 sponsor or affiliate loan to the trust account; the sponsor is not obligated to provide it.
- Management expected outside-trust cash to fund target searches and transaction costs, but cautioned that actual costs could exceed estimates and require additional financing. Sponsor, affiliate, officer, or director working-capital loans are possible but not required.
- Public shareholders may redeem shares in connection with a business combination. If no transaction is completed within the permitted period, public shares are to be redeemed from the trust, while warrants and rights may expire worthless. The filing warns that trust investments could earn negative interest, reducing redemption value below $10 per share.
- Potential business-combination advisory fees include a $1.61 million fee payable upon completion, subject to specified reductions, and a possible additional fee of 1% of transaction consideration if the advisor introduces the target.
- No specific target, transaction guidance, or operating forecast is provided. Management states there is no assurance a business combination will be completed.
Important facts for investors to verify
- Confirm the issuer: the supplied filing is for Brilliant Acquisition Corporation, not T3 Defense Inc.
- Check subsequent filings for any identified target, business-combination agreement, extensions, or change to the June 26, 2021 deadline.
- Review the status and terms of the related-party promissory note after its August 13 amendment, and whether additional sponsor funding was obtained.
- Verify trust-account balances, redemption provisions, and the treatment of public shares, rights, and warrants in any proposed transaction.
- Assess transaction-related fees, dilution, and potential additional financing needs in light of shareholder redemptions and actual deal costs.