Financial trading software company Nukkleus is going public through a $140 million merger with shell company Brilliant Acquisition that values the company at 90% of its current market capitalization, the companies jointly announced.
The merger will coincide with a reverse stock split in which the 36.7 million outstanding shares of Nukkleus will be converted into approximately 14 million shares of the new company at an acquisition price of $0.38 per action, Nukkleus reported in a filing with the US Securities & Exchange Commission (SEC).
Nukkleus stock closed Wednesday at $0.20 per share. Nukkleus shares trade on the OTC Pink Sheets exchange under the symbol NUKK.
ClearThink Capital is acting as financial advisor to Nukkleus, with Schiff Hardin as legal advisor. Axiom Capital Management, Earlybird Capital and RedEight Capital are acting as financial advisors to the special acquisition company (SPAC) Brilliant Acquisition, with Loeb & Loeb as legal advisors.
Jersey City, New Jersey-based Nukkleus, founded in 2013, was formerly known as Compliance and Risk Management Solutions. Nukkleus makes cloud-based software for cryptocurrency exchanges to convert crypto into fiat currency.
Shanghai, China-based Brilliant Acquisition stock closed Wednesday at $10.27 per share, unchanged during the session. Brilliant Acquisition originally went public in a $40 million IPO in June 2020 at $10 per share in an offering underwritten by Earlybird Capital as lead manager, along with I-Bankers Shares as co-manager.
“Given Brilliant’s international sponsorship, we particularly appreciate that Nukkleus’ Digital RFQ subsidiary operates globally, capturing a global institutional audience for its services” – Peng Jiang, President of Brilliant Acquisition
“We have been looking for a quality opportunity in the global fintech sector for some time,” Brilliant Acquisition Chairman Peng Jiang said in a statement. “Given Brilliant’s international sponsorship, we particularly appreciate that Nukkleus’ Digital RFQ subsidiary operates globally, capturing a global institutional audience for its services.”
Digital RFQ is Nukkleus’ European digital asset execution service for OTC markets in multiple currencies. Digital RFQ was founded in 2018 by Nukkleus COO Jamal Khurshid.
Nukkleus declared a loss in 2021
Nukkleus reported a net loss of $1.94 million on $5.13 million in annual revenue for the full year of 2021, compared to a net loss of $53,595 on $4.80 million in revenue in 2020.
As of December 31, Nukkleus reported $50,623 in cash, with $2.61 million in accounts receivable due from affiliates. Nukkleus has total liabilities of $4.98 million, including $4.41 million in accounts payable from its affiliates.
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The difference between trading assets and CFDs
The main difference between trading CFDs and trading assets, such as commodities and stocks, is that you do not own the underlying asset when trading a CFD.
You can always profit if the market moves in your favor or suffer a loss if it moves against you. However, with traditional trading, you enter into a contract to exchange legal ownership of individual stocks or commodities for cash, and you own them until you sell them again.
CFDs are leveraged products, which means that you only have to deposit a percentage of the total value of the CFD transaction to open a position. But with traditional trading, you buy the assets for the full amount. In the UK there is no stamp duty on CFD trading, but there is when you buy shares, for example.
CFDs attract overnight costs to hold trades (unless you are using 1-1 leverage), which makes them more suitable for short-term trading opportunities. Stocks and commodities are more normally bought and held longer. You might also pay a commission or brokerage fee when buying and selling assets directly and you would need a place to store them securely.
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