What changed in Nukkleus Inc.'s 10-K — 2023 vs 2024

We expect that the transfer process that DigiClear’s technology will offer will be fully automated, monitored and can be processed within milliseconds.

(2) Emil Assentato directly owns approximately 85% of Max Q, and indirectly owns an additional 1%. The remainder of Max Q is owned by various individuals and entities unaffiliated with Nukkleus’s officers and directors.

(3) Emil Assentato owns 1% of Currency Mountain Malta LLC, and the remainder of Currency Mountain Malta LLC is owned by Rubens Investment Services, Inc., a wholly owned subsidiary of Compagnie Financière Tradition, a public company based in Switzerland, both of which are unaffiliated with Nukkleus’s officers and directors.

(4) See section entitled “ Security Ownership of Certain Beneficial Owners and Management ” for director and officer beneficial ownership of Nukkleus shares. As Nukkleus’s common stock is quoted for trading on the OTC Pink Sheets, information on its other owners is not readily available.

(5) Jamal Khurshid and Nicholas Gregory own, directly and indirectly, approximately 40% and 10% of Jacobi, respectively. The remainder of Jacobi is owned by various individuals and entities unaffiliated with Nukkleus’s officers and directors. (6) Navarock, Ltd., an entity unaffiliated with Nukkleus’s officers and directors, owns the remaining 50% of Digiclear.

The Merger Agreement provides that, among other things, at the closing (the “Closing”) of the transactions contemplated by the Merger Agreement, Merger Sub merged with and into Old Nukk (the “Merger”), with Old Nukk surviving as a wholly-owned subsidiary of Brilliant. In connection with the Merger, Brilliant changed its name to “Nukkleus Inc.” (“Nukkleus” or “Combined Company”).

The Merger and other transactions contemplated by the Merger Agreement are hereinafter referred to as the “Business Combination.” Brilliant held a special meeting, at which its shareholders voted to approve the proposals outlined in the final prospectus and definitive proxy statement dated November 13, 2023 (the “Joint Proxy Statement/Prospectus”) and filed with the Securities and Exchange Commission (“SEC”), including, among other things, the adoption of the Merger Agreement.

On December 22, 2023, as contemplated by the Merger Agreement, Merger Sub merged with and into Old Nukk, and the separate corporate existence of Merger Sub ceased, with Old Nukk being the surviving corporation and wholly owned subsidiary of Brilliant. The reverse transaction was accounted for as a reverse recapitalization and the financial information throughout is Old Nukk.

In connection with the Business Combination, Brilliant (a) re-domiciled out of the British Virgin Islands and continued as a company incorporated in the State of Delaware, prior to the Closing (the “Domestication”); (b) upon the Domestication adopted the Interim Charter; (c) filed an amended and restated certificate of incorporation (the “Amended Certificate of Incorporation”) and (d) changed its name to “Nukkleus Inc.” Business Combination Consideration As a result of the Business Combination, all of the outstanding shares of common stock, par value $0.0001 per share, of Old Nukk (“Old Nukk Common Stock”) were cancelled in exchange for the right to receive a pro-rata portion of 10,500,000 shares of common stock of Brilliant (“Brilliant Common Stock”).

Each outstanding option to purchase shares of Old Nukk Common Stock (whether vested or unvested) was assumed by Brilliant and automatically converted into an option to purchase shares of Brilliant Common Stock (each, an “Assumed Option”).

The holder of each Assumed Option has: (i) the right to acquire a number of shares of Brilliant Common Stock equal to (as rounded down to the nearest whole number) the product of (A) the number of shares of Old Nukk Common Stock subject to such option prior to the effective time of the Merger, multiplied by (B) the exchange ratio of 1:35 (the “Exchange Ratio”); (ii) have an exercise price equal to (as rounded up to the nearest whole cent) the quotient of (A) the exercise price of the option, divided by (B) the Exchange Ratio; and (iii) be subject to the same vesting schedule as the applicable option of Old Nukk.

In connection with the Domestication, all of the issued and outstanding ordinary shares, no par value per share, of Brilliant (“Brilliant Ordinary Shares”), rights to receive one-tenth of one ordinary share of Brilliant per right (“Brilliant Rights”) and warrants entitling the holder thereof to purchase one Brilliant Ordinary Share at a price of $11.50 per Brilliant Ordinary Share (“Brilliant Warrants”) will remain outstanding and become substantially identical securities of the SPAC as a Delaware corporation.

The holders of Brilliant securities, other than Brilliant’s sponsor or affiliates, received an additional issuance, as follows: (1) in the case of holders of Brilliant Ordinary Shares, such number of newly issued shares of Brilliant Common Stock equal to a pro rata share of the Backstop Pool (as defined below); and (2) in the case of holders of Brilliant Rights, such number of shares of Brilliant Common Stock equal to a pro rata share of the Backstop Pool, in each case subject to rounding in accordance with the Merger Agreement (such ratio of the aggregate number of shares of Brilliant Common Stock issuable to each Brilliant public shareholder, including such shareholder’s share in the Backstop Pool, to the aggregate number of Brilliant Ordinary Shares and Brilliant Rights held by such Brilliant public shareholder, the “SPAC Additional Share Ratio”).

Outstanding Brilliant Warrants held by holders other than Brilliant’s sponsor or affiliates received a number of Brilliant Warrants equal to one warrant exercisable to receive one share of Brilliant Common Stock plus an additional number of warrants equal to the SPAC Additional Share Ratio, with each warrant exercisable to receive one share of Brilliant Common Stock per warrant.

The Backstop Pool is defined in the Merger Agreement as a pool of shares of Brilliant Common Stock equal to the lower of (1) 1,012,000 and (2) 40% of the aggregate number of Brilliant Ordinary Shares and Brilliant Rights, subject to rounding in accordance with the Merger Agreement.

In connection with the Business Combination, the Backstop Pool was equal to 40% of the aggregate number of Brilliant Ordinary Shares and Brilliant Rights. 3 Closing In connection with the Business Combination, holders of 330,345 shares of Brilliant Ordinary Shares exercised their right to redeem their shares for cash at a redemption price of approximately $11.57 per share, for an aggregate redemption amount of $3,822,431.16.

Immediately after giving effect to the redemption of 256,994 shares of Brilliant Ordinary Shares in connection with the Business Combination, there were 1,557,702 shares of Brilliant Ordinary Shares (consisting of Brilliant public shares Brilliant founder shares, and Brilliant private shares) and 6,701,000 Brilliant Warrants outstanding.

After giving effect to the redemption of Brilliant Common Stock in connection with the Business Combination, and the Business Combination, there are 13,899,712 shares of Nukkleus Common Stock, and 6,701,000 Nukkleus Warrants outstanding.

Upon the consummation of the Business Combination, Nukkleus Common Stock and Nukkleus Warrants began trading on December 26, 2023 on the NASDAQ under the symbols “NUKK and “NUKKW” respectively. The Brilliant Common Stock, Brilliant Units, Brilliant Rights and Brilliant Warrants ceased trading under the symbols BRLI, BRLIU, BRLIR and BRLIW.

Following the Business Combination, Old Nukk stockholders own approximately 78.3% of the Combined Company, Brilliant’s public stockholders own approximately 0.5% of the Combined Company, Brilliant’s sponsor and Brilliant’s, officers, directors and advisors (collectively the “Initial Stockholders”) own approximately 8.0% of the Combined Company.

Lock-Up Agreement In connection with the Closing, the Sponsor, certain stockholders of Brilliant and certain former equity holders of Old Nukk (each, a “Lock-up Holder”) entered into an agreement (the “Lock-Up Agreement”), pursuant to which and subject to certain customary exceptions, during the period commencing on the date of the Closing and ending on the date that is two (2) years after the consummation of the Business Combination such Lock-up Holder agreed not to (i) offer, sell, contract to sell, pledge or otherwise dispose of, directly or indirectly, any of the Lock-up Shares (as defined in the Lock-Up Agreement, which shall include certain securities held by the Lock-Up Holders), (ii) enter into a transaction that would have the same effect, or enter into any swap, hedge or other arrangement that transfers, in whole or in part, any of the economic consequences of ownership of such Lock-up Shares, whether any of these transactions are to be settled by delivery of any such Lock-up Shares, in cash or otherwise, (iii) publicly disclose the intention to make any offer, sale, pledge or disposition, or (iv) enter into any transaction, swap, hedge or other arrangement, or engage in any short sales with respect to any security of Brilliant.

Registration Rights Agreement In connection with the Closing, Nukkleus entered into a registration rights agreement (the “Registration Rights Agreement”), pursuant to which, Brilliant, Nukkleus and the other parties thereto agreed to, among other things, file a resale shelf registration statement registering certain of the securities held by the Holders (as defined in the Registration Rights Agreement, which includes certain stockholders of Brilliant and certain equity holders of Old Nukk) no later than 45 business days after the Closing of the Business Combination.

The Registration Rights Agreement also provides certain registration rights, including customary demand registration rights and piggyback registration rights to the Holders, subject to customary exceptions, terms and conditions. Nukkleus also agreed to pay certain fees and expenses relating to registrations under the Registration Rights Agreement.

White Lion Stock Purchase Agreement On May 17, 2022, the Company entered into a Stock Purchase Agreement (the “White Lion Agreement”) with White Lion Capital Partners, LLC a California-based investment fund (“White Lion”).

Under the terms of the White Lion Agreement, the Company had the right, but not the obligation, to require White Lion to purchase shares of its common stock up to a maximum amount of $75,000,000.

The Market Opportunity The FX market is a global, decentralized market for the trading of currencies. Nukkleus’s management believes that FX trading involves the simultaneous buying and selling of a currency pair for the purposes of hedging currency risk or to generate a profit.

Nukkleus’s management believes that the FX market, once limited to large financial institutions, has expanded and matured over the past decade, and now captures a wide range of participants, including central banks, commercial banks, non-bank corporations, hedge funds, brokers and individual investors and traders. The market’s expansion has helped lead to a significant increase in trading activity.

In addition to the increase in the breadth of market participants, management believes the key factors driving higher transaction volumes include the adoption of electronic and high frequency trading, tighter trading spreads, rising volatility among currencies and enhanced access to FX trading markets for retail investors.

Management believes that FX trading, initially utilized primarily for hedging purposes, has evolved as investor sophistication levels have risen, trading costs have fallen, and as currencies have become increasingly viewed as a viable investment asset class. FX’s low, (or even negative) correlation among certain other portfolio assets, namely equities and fixed income, may help investors reduce overall portfolio volatility.

As such, we believe that currencies are often viewed as an important portfolio diversification tool. 5 Participants in the retail FX market are geographically dispersed. Retail FX brokers are seeking to expand their presence in projected high growth regional areas, such as Asia and the Middle East. Systems and Services Nukkleus provides its services in the following service categories.

Under the General Services Agreement which is presently in process of being cancelled, Nukkleus has historically provided software technology and technical support to TCM in each of these service categories. ● Category One: Introducing Broker Dealer Network and the Introducing Broker Interface ● Category Two: Bridging software to the XWare (MT4 and MT5) platforms ● Category Three: Forex Market Liquidity Access ● Category Four: Turnkey risk management support software and Risk Management Team ● Category Five: Front End Software Retail Trading Platforms and Customer Application Systems ● Category Six: Back Office Systems management Cate g ory One: Introducing Broker Dealer Network Nukkleus has historically provided clients an introducing broker (IB) network spread across China, Japan and the Middle East.

The Company initially provided TCM with FX services. The agreement with TCM is presently in the process of being cancelled and, as a result, the Company is now seeking other clients to offer the services it provides to the FX industry.

Our approach to the retail FX market is to focus on the development of relationships with independent local referring brokers who provide a recurring source of new customers. These referring brokers do not have an exclusive relationship with us, but are offered a competitive commission structure to deliver new customers to us.