UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 10-Q

☒ QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~December~~March 31, ~~2022~~2023

☐ TRANSITION REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from __________ to __________

Commission file number: 000-55922

Nukkleus Inc.

(Exact name of registrant as specified in its charter)

Delaware		38-3912845
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

Delaware 38-3912845

(State or other jurisdiction of (I.R.S. Employer

incorporation or organization) Identification No.)

525 Washington Boulevard, Jersey City, New Jersey 07310

(Address of principal executive offices, including zip code)

212-791-4663

(Registrant’s telephone number, including area code)

Securities registered under Section 12(b) of the Exchange Act: None

Indicate by check mark whether the registrant (1) has filed all reports required by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

State the number of shares outstanding of each of the issuer’s classes of common equity, as of the latest practicable date.

Class		Outstanding ~~May~~June 1920, 2023
Common Stock, $0.0001 par value per share		367,175,886 shares

NUKKLEUS INC.

FORM 10-Q

~~December~~ March 31, ~~2022~~2023

TABLE OF CONTENTS

		Page No.
PART I - FINANCIAL INFORMATION
Item 1.	Interim Financial Statements	1
	Condensed Consolidated Balance Sheets as of December 31, 2022 (Unaudited) and September 30, 2022	1
	Condensed Consolidated Balance Sheets as of March 31, 2023 (Unaudited) and September 30, 2022	1
	Unaudited Condensed Consolidated Statements of Operations and Comprehensive Loss for the Three Months Ended December 31, 2022 and 2021 (as restated)	2
	Unaudited Condensed Consolidated Statements of Operations and Comprehensive Loss for the Three and Six Months Ended March 31, 2023 and 2022 (as restated)	2
	Unaudited Condensed Consolidated Statements of Changes in Stockholders’ Equity for the Three Months Ended December 31, 2022 and 2021	3
	Unaudited Condensed Consolidated Statements of Changes in Stockholders’ Equity for the Three and Six Months Ended March 31, 2023 and 2022	3
	Unaudited Condensed Consolidated Statements of Cash Flows for the Three Months Ended December 31, 2022 and 2021 (as restated)	5
	Unaudited Condensed Consolidated Statements of Cash Flows for the Six Months Ended March 31, 2023 and 2022 (as restated)	5
	Notes to Unaudited Condensed Consolidated Financial Statements	6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	26
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	3335
Item 4.	Controls and Procedures	3435
Item 5.	Other	3436
PART II - OTHER INFORMATION
Item 1.	Legal Proceedings	3537
Item 1A.	Risk Factors	3537
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	3537
Item 3.	Defaults Upon Senior Securities	3537
Item 4.	Mine Safety Disclosures	3537
Item 5.	Other Information	3537
Item 6.	Exhibits	3639
Signatures		3841

FORWARD LOOKING STATEMENTS

This report contains forward-looking statements regarding our business, financial condition, results of operations and prospects. Words such as “expects,” “anticipates,” “intends,” “plans,” “believes,” “seeks,” “estimates” and similar expressions or variations of such words are intended to identify forward-looking statements, but are not deemed to represent an all-inclusive means of identifying forward-looking statements as denoted in this report. Additionally, statements concerning future matters are forward-looking statements.

Although forward-looking statements in this report reflect the good faith judgment of our management, such statements can only be based on facts and factors currently known by us. Consequently, forward-looking statements are inherently subject to risks and uncertainties and actual results and outcomes may differ materially from the results and outcomes discussed in or anticipated by the forward-looking statements. Factors that could cause or contribute to such differences in results and outcomes include, without limitation, those specifically addressed under the headings “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our annual report on Form 10-K, in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in this Form 10-Q and information contained in other reports that we file with the SEC. You are urged not to place undue reliance on these forward-looking statements, which speak only as of the date of this report.

We file reports with the SEC. The SEC maintains a website (www.sec.gov) that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC, including us. You can also read and copy any materials we file with the SEC at the SEC’s Public Reference Room at 100 F Street, NE, Washington, DC 20549. You can obtain additional information about the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330.

We undertake no obligation to revise or update any forward-looking statements in order to reflect any event or circumstance that may arise after the date of this report, except as required by law. Readers are urged to carefully review and consider the various disclosures made throughout the entirety of this quarterly report, which are designed to advise interested parties of the risks and factors that may affect our business, financial condition, results of operations and prospects.

Unless otherwise indicated, references in this report to the “Company”, “Nukkleus”, “we”, “us”, or “our” refer to Nukkleus Inc. and its consolidated subsidiaries.

PART I - FINANCIAL INFORMATION

Item 1. Interim Financial Statements.

NUKKLEUS INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

	As of
	March 31,			September 30,
	December 31,			September 30,
	2023			2022
	2022			2022
	(Unaudited)
ASSETS
CURRENT ASSETS:
Cash	$	~~279~~246,~~728~~650		$	364,023
Customer custodial cash		8240,~~255,411~~296			2,020,394
Customer digital currency assets		~~332~~393,~~079~~045			248,214
Digital assets		6148,~~865~~460			73,415
Due from affiliates		~~646~~255,~~591~~415			931,136
Note receivable - related party		35,000			35,000
Note receivable		67154,~~800~~150			-
Other current assets		2937,~~498~~789			15,617
TOTAL CURRENT ASSETS		91,~~707~~410,~~972~~805			3,687,799
NON-CURRENT ASSETS:
Cost method investment		6,602,000			6,602,000
Intangible assets, net		76,~~482~~930,~~213~~988			8,075,105
TOTAL NON-CURRENT ASSETS		1413,~~084~~532,~~213~~988			14,677,105
TOTAL ASSETS	$	2314,~~792~~943,~~185~~793		$	18,364,904
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES:
Customer custodial cash liabilities	$	8,255,761		$	2,020,717
Accounts payable	$	82,266		$	51,712
Customer digital currency liabilities		332,079			248,214
Customer custodial cash liabilities		240,654			2,020,717
Due to affiliates		4,637,565			4,514,063
Customer digital currency liabilities		393,045			248,214
Accounts payable and accrued liabilities		691,229			691,330
Due to affiliates		4,506,244			4,514,063
TOTAL CURRENT LIABILITIES		13,916,634			7,474,324
Accrued payroll liability and directors’ compensation		335,837			237,205
TOTAL LIABILITIES		13,916,634			7,474,324
Accrued professional fees		210,210			170,058
Accrued liabilities and other payables		33,689			232,355
TOTAL CURRENT LIABILITIES		5,801,945			7,474,324
TOTAL LIABILITIES		5,801,945			7,474,324
COMMITMENTS AND CONTINGENCIES - (Note 15)
STOCKHOLDERS’ EQUITY:
Preferred stock ($0.0001 par value; 15,000,000 shares authorized; 0 share issued and outstanding at December 31, 2022 and September 30, 2022)		-			-
Preferred stock ($0.0001 par value; 15,000,000 shares authorized;
Common stock ($0.0001 par value; 900,000,000 shares authorized; 367,175,886 shares issued and outstanding at December 31, 2022 and September 30, 2022, respectively)		36,718			36,718
0 share issued and outstanding at March 31, 2023 and September 30, 2022)		-			-
Additional paid-in capital		25,283,335			25,136,459
Common stock ($0.0001 par value; 900,000,000 shares authorized;
Accumulated deficit		(15,474,738	)		(14,340,816	)
367,175,886 shares issued and outstanding
Accumulated other comprehensive income		30,236			58,219
at March 31, 2023 and September 30, 2022)		36,718			36,718
TOTAL STOCKHOLDERS’ EQUITY		9,875,551			10,890,580
Additional paid-in capital		25,358,002			25,136,459
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	23,792,185		$	18,364,904
Accumulated deficit		(16,280,387	)		(14,340,816	)
Accumulated other comprehensive income		27,515			58,219
TOTAL STOCKHOLDERS’ EQUITY		9,141,848			10,890,580
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	14,943,793		$	18,364,904

The accompanying notes to unaudited condensed consolidated financial statements are an integral part of these statements.

NUKKLEUS INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

	For the Three Months Ended December 31,
	For the Three Months Ended March 31,						For the Six Months Ended March 31,
	2022			2021
	2023			2022			2023			2022
				(as restated)						(as restated)
REVENUES
Revenue - general support services - related party	$	4,800,000		$	4,800,000		$	9,600,000		$	9,600,000
Revenue - financial services		~~576~~833,~~388~~944			~~329~~289,~~015~~017			1,410,332			618,032
Total revenues		5,~~376~~633,~~388~~944			5,~~129~~089,~~015~~017			11,010,332			10,218,032
COSTS OF REVENUES
Cost of revenue - general support services - related party		4,725,000			4,725,000			9,450,000			9,450,000
Cost of revenue - financial services		~~706~~760,~~261~~982			~~874~~547,~~205~~719			1,467,243			1,421,924
Total costs of revenues		5,~~431~~485,~~261~~982			5,~~599~~272,~~205~~719			10,917,243			10,871,924
GROSS PROFIT (LOSS)
Gross profit - general support services - related party		75,000			75,000			150,000			150,000
Gross loss - financial services		(129,873	)		(545,190	)
Gross profit (loss) - financial services		72,962			(258,702	)		(56,911	)		(803,892	)
Total gross loss		(54,873	)		(470,190	)
Total gross profit (loss)		147,962			(183,702	)		93,089			(653,892	)
OPERATING EXPENSES:
Advertising and marketing		~~49,122~~295			35163,~~222~~427			49,417			198,649
Professional fees		~~677~~566,~~103~~336			1,~~054~~209,~~958~~281			1,243,439			2,264,239
Compensation and related benefits		~~160~~197,~~260~~532			~~125~~129,~~373~~871			357,792			255,244
Amortization of intangible assets		66,~~291~~289			6566,~~354~~290			132,580			131,644
Other general and administrative		~~128~~123,~~846~~874			~~192~~101,~~526~~151			252,720			293,677
Total operating expenses		1954,~~081,622~~326			1,~~473~~670,~~433~~020			2,035,948			3,143,453
LOSS FROM OPERATIONS		(1806,~~136,495~~364	)		(1,~~943~~853,~~623~~722	)		(1,942,859	)		(3,797,345	)
OTHER INCOME (EXPENSE):
OTHER (EXPENSE) INCOME:
Other income (expense)		2,573			(1,216	)
Loss from equity method investment		-			(70,619	)		-			(70,619	)
Total other income (expense), net		2,573			(1,216	)
Other income (expense)		715			(2,273	)		3,288			(3,489	)
LOSS BEFORE INCOME TAXES		(1,133,922	)		(1,944,839	)
Total other income (expense), net		715			(72,892	)		3,288			(74,108	)
INCOME TAXES		-			-
LOSS BEFORE INCOME TAXES		(805,649	)		(1,926,614	)		(1,939,571	)		(3,871,453	)
NET LOSS	$	(1,133,922	)	$	(1,944,839	)
INCOME TAXES		-			-			-			-
COMPREHENSIVE LOSS:
NET LOSS	$	(805,649	)	$	(1,926,614	)	$	(1,939,571	)	$	(3,871,453	)
NET LOSS	$	(1,133,922	)	$	(1,944,839	)
COMPREHENSIVE LOSS:
OTHER COMPREHENSIVE LOSS
NET LOSS	$	(805,649	)	$	(1,926,614	)	$	(1,939,571	)	$	(3,871,453	)
Unrealized foreign currency translation loss		(27,983	)		(2,227	)
OTHER COMPREHENSIVE (LOSS) INCOME
COMPREHENSIVE LOSS	$	(1,161,905	)	$	(1,947,066	)
Unrealized foreign currency translation (loss) gain		(2,721	)		13,214			(30,704	)		10,987
NET LOSS PER COMMON SHARE:
COMPREHENSIVE LOSS	$	(808,370	)	$	(1,913,400	)	$	(1,970,275	)	$	(3,860,466	)
Basic and diluted	$	(0.00	)	$	(0.00	)
NET LOSS PER COMMON SHARE:
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:
Basic and diluted	$	(0.00	)	$	(0.01	)	$	(0.01	)	$	(0.01	)
Basic and diluted		367,175,886			335,720,023
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:
Basic and diluted		367,175,886			354,549,624			367,175,886			345,031,364

The accompanying notes to unaudited condensed consolidated financial statements are an integral part of these statements.

NUKKLEUS INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

For the Three and Six Months Ended ~~December~~March 31, ~~2022~~2023

														Accumulated
	Preferred Stock				Common Stock				Additional					Other			Total
	Number of				Number of				Paid-in		Accumulated			Comprehensive			Stockholders’
	Shares		Amount		Shares		Amount		Capital		Deficit			Income			Equity
Balance as of October 1, 2022		-	$	-		367,175,886	$	36,718	$	25,136,459	$	(14,340,816	)	$	58,219		$	10,890,580
Stock-based compensation		-		-		-		-		146,876		-			-			146,876
Net loss for the three months ended December 31, 2022		-		-		-		-		-		(1,133,922	)		-			(1,133,922	)
Foreign currency translation adjustment		-		-		-		-		-		-			(27,983	)		(27,983	)
Balance as of December 31, 2022		-	$	-		367,175,886	$	36,718	$	25,283,335	$	(15,474,738	)	$	30,236		$	9,875,551
Stock-based compensation		-		-		-		-		74,667		-			-			74,667
Net loss for the three months ended March 31, 2023		-		-		-		-		-		(805,649	)		-			(805,649	)
Foreign currency translation adjustment		-		-		-		-		-		-			(2,721	)		(2,721	)
Balance as of March 31, 2023		-	$	-		367,175,886	$	36,718	$	25,358,002	$	(16,280,387	)	$	27,515		$	9,141,848

The accompanying notes to unaudited condensed consolidated financial statements are an integral part of these statements.

NUKKLEUS INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

For the Three and Six Months Ended ~~December~~March 31, ~~2021~~2022

														Accumulated
	Preferred Stock				Common Stock				Additional					Other			Total
	Number of				Number of				Paid-in		Accumulated			Comprehensive			Stockholders’
	Shares		Amount		Shares		Amount		Capital		Deficit			Income			Equity
Balance as of October 1, 2021		-	$	-		332,024,371	$	33,203	$	11,613,208	$	(2,495,159	)	$	8,440		$	9,159,692
Common stock issued in connection with cost method investment		-		-		20,000,000		2,000		6,600,000		-			-			6,602,000
Stock-based compensation		-		-		-		-		378,746		-			-			378,746
Net loss for the three months ended December 31, 2021		-		-		-		-		-		(1,944,839	)		-			(1,944,839	)
Foreign currency translation adjustment		-		-		-		-		-		-			(2,227	)		(2,227	)
Balance as of December 31, 2021		-	$	-		352,024,371	$	35,203	$	18,591,954	$	(4,439,998	)	$	6,213		$	14,193,372
Common stock issued in connection with equity method investment		-		-		15,151,515		1,515		4,998,485		-			-			5,000,000
Stock options issued for the purchase of an intangible asset		-		-		-		-		11,237		-			-			11,237
Stock-based compensation		-		-		-		-		525,622		-			-			525,622
Net loss for the three months ended March 31, 2022		-		-		-		-		-		(1,926,614	)		-			(1,926,614	)
Foreign currency translation adjustment		-		-		-		-		-		-			13,214			13,214
Balance as of March 31, 2022		-	$	-		367,175,886	$	36,718	$	24,127,298	$	(6,366,612	)	$	19,427		$	17,816,831

The accompanying notes to unaudited condensed consolidated financial statements are an integral part of these statements.

NUKKLEUS INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

	For the Three Months Ended December 31,
	For the Six Months Ended March 31,
	2022			2021
	2023			2022
				(as restated)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(1,~~133~~939,~~922~~571	)	$	(13,~~944~~871,~~839~~453	)
Adjustments to reconcile net loss to net cash
provided by (used in) operating activities:
used in operating activities:
Amortization of intangible assets		~~592~~1,~~892~~185,783			~~911~~1,~~943~~504,834
Stock-based compensation and service expense		~~146~~221,~~876~~543			~~378~~904,~~746~~368
Unrealized foreign currency exchange loss		~~164~~132			-
Impairment of digital assets		7,610			-
Loss on equity method investment		-			70,619
Changes in operating assets and liabilities:
Customer digital currency assets		(60113,~~324~~686	)		~~151~~(170,~~118~~955	)
Accounts receivable		-			~~2,397~~667
Digital assets		931,~~798~~901			(~~214~~528	)
Other current assets		(12,731	)		(355	)
Due from affiliates		676,576			1,138,460
Due from affiliates		284,562			3,474
Other current assets		(20,764	)		(14,943	)
Customer custodial cash liabilities		5,874,714			(709,188	)
Accounts payable		24,053			57,775
Customer digital currency liabilities		60,324			(151,118	)
Customer custodial cash liabilities		(1,934,733	)		309,542
Due to affiliates		93,254			145,999
Customer digital currency liabilities		113,686			170,955
Accounts payable and accrued liabilities		(28,897	)		151,704
Due to affiliates		(43,259	)		(224,287	)
Net cash provided by (used in) operating activities		5,834,320			(1,060,333	)
Accrued payroll liability and directors’ compensation		97,311			20,000
CASH FLOW FROM INVESTING ACTIVITIES:
Accrued professional fees		34,452			(25,202	)
Investment in note receivable		(67,800	)		-
Accrued liabilities and other payables		(215,925	)		111,656
Net cash used in investing activities		(67,800	)		-
Net cash used in operating activities		(1,882,501	)		(18,492	)
EFFECT OF EXCHANGE RATE ON CASH		384,202			1,086
CASH FLOWS FROM INVESTING ACTIVITIES:
NET INCREASE (DECREASE) IN CASH		6,150,722			(1,059,247	)
Investment in note receivable		(154,150	)		-
Purchase of intangible asset		(41,245	)		-
NET CASH USED IN INVESTING ACTIVITIES		(195,395	)		-
EFFECT OF EXCHANGE RATE ON CASH		180,425			(27,915	)
NET DECREASE IN CASH		(1,897,471	)		(46,407	)
Cash - beginning of period		2,384,417			1,203,073
Cash - end of period	$	8486,~~535,139~~946		$	~~143~~1,~~826~~156,666
Cash consisted of the following:
Cash	$	~~279~~246,~~728~~650		$	5274,~~875~~245
Customer custodial cash		8240,~~255,411~~296			901,~~951~~082,421
Total cash	$	8486,~~535,139~~946		$	~~143~~1,~~826~~156,666
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid for:
Interest	$	-		$	-
Income taxes	$	-		$	-
NON-CASH INVESTING AND FINANCING ACTIVITIES:
Common stock issued in connection with cost method investment	$	-		$	6,602,000
Common stock issued in connection with equity method investment	$	-		$	5,000,000
Stock options issued for the purchase of an intangible asset	$	-		$	11,237

The accompanying notes to unaudited condensed consolidated financial statements are an integral part of these statements.

NUKKLEUS INC. AND SUBSIDIARIES NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

~~NOTES TO~~NOTE ~~UNAUDITED~~1 ~~CONDENSED~~– ~~CONSOLIDATED~~THE ~~FINANCIAL~~COMPANY ~~STATEMENTS~~HISTORY AND NATURE OF THE BUSINESS

~~NOTE~~Nukkleus Inc. (f/k/a Compliance & Risk Management 1Solutions –Inc.) ~~THE~~(“Nukkleus” ~~COMPANY~~or ~~HISTORY~~the ~~AND~~“Company”) ~~NATURE~~was OFformed ~~THE~~on ~~BUSINESS~~July 29, 2013 in the State of Delaware as a for-profit Company and established a fiscal year end of September 30.

~~Nukkleus Inc.~~The ~~(f/k/~~Company is a ~~Compliance~~financial &technology ~~Risk~~company which ~~Management~~is ~~Solutions~~focused ~~Inc.)~~on ~~(“Nukkleus”~~providing orsoftware and technology solutions for the worldwide retail foreign exchange (“~~Company~~FX”) ~~was~~trading industry. ~~formed~~The onCompany ~~July 29~~primarily provides its software, ~~2013~~technology, incustomer ~~the~~sales ~~State~~and ofmarketing ~~Delaware~~and risk management technology hardware and software solutions package to Triton Capital Markets Ltd. (“TCM”), formerly known as aFXDD ~~for-profit~~Malta ~~Company~~Limited ~~and~~(“FXDD Malta”). ~~established~~The aFXDD ~~fiscal~~brand ~~year~~(e.g., ~~end~~see ofFXDD.com) ~~September~~is 30the brand utilized in the retail forex trading industry by TCM.

~~The~~Nukkleus Limited, a wholly-owned subsidiary of the Company, isprovides aits ~~financial~~software, technology, ~~company~~customer ~~which~~sales isand ~~focused~~marketing onand ~~providing~~risk ~~software~~management technology hardware and ~~technology~~software solutions package ~~for~~under ~~the~~a ~~worldwide~~General ~~retail~~Services ~~foreign exchange~~Agreement (“FXGSA”) ~~trading~~to ~~industry~~TCM. ~~The~~TCM ~~Company~~is ~~primarily~~a ~~provides~~private ~~its~~limited ~~software,~~liability ~~technology,~~company ~~customer~~formed ~~sales~~under ~~and~~the ~~marketing and~~laws ~~risk~~of ~~management~~Malta. ~~technology~~The ~~hardware~~GSA ~~and~~provides ~~software~~that ~~solutions~~TCM ~~package~~will topay ~~Triton~~Nukkleus ~~Capital~~Limited ~~Markets~~at ~~Ltd~~minimum $1,600,000 per month. Emil Assentato is also the majority member of Max Q Investments LLC (“~~TCM~~Max Q”), ~~formerly~~which ~~known as~~is ~~FXDD~~managed ~~Malta~~by ~~Limited~~Derivative Marketing Associates Inc. (“~~FXDD Malta~~DMA”). ~~The~~Mr. ~~FXDD~~Assentato, who ~~brand~~is our Chief Executive Officer (~~e.g.~~“CEO”), ~~see~~Chief ~~FXDD.com~~Financial Officer (“CFO”) and chairman, is the ~~brand~~sole ~~utilized~~owner and manager of DMA. Max Q owns 79% of Currency Mountain Malta LLC, which in ~~the~~turn ~~retail~~is ~~forex~~the ~~trading industry~~sole byshareholder of TCM.

~~Nukkleus Limited,~~In ~~a wholly-owned subsidiary of the Company~~addition, ~~provides~~in ~~its~~order ~~software,~~to ~~technology,~~appropriately ~~customer sales and marketing and risk management~~service ~~technology~~TCM, ~~hardware~~Nukkleus ~~and~~Limited ~~software~~entered ~~solutions~~into ~~package under~~ a ~~General~~GSA ~~Services~~with ~~Agreement~~FXDirectDealer LLC (“~~GSA~~FXDIRECT”), towhich ~~TCM. TCM is a private limited liability company formed under the laws of Malta. The GSA~~ provides that ~~TCM~~Nukkleus ~~will~~Limited will pay ~~Nukkleus~~FXDIRECT ~~Limited~~a at minimum of $1,~~600~~575,000 per month~~. Emil~~ ~~Assentato~~in isconsideration ~~also~~of ~~the~~providing ~~majority~~personnel ~~member~~engaged ofin ~~Max~~operational Qand ~~Investments~~technical ~~LLC~~support, marketing, ~~(“Max~~sales ~~Q”)~~support, ~~which~~accounting, isrisk ~~managed~~monitoring, bydocumentation ~~Derivative~~processing ~~Marketing~~and ~~Associates Inc.~~customer ~~(“DMA”).~~care Mrand support. ~~Assentato,~~FXDIRECT ~~who~~may isterminate this ~~our~~agreement ~~Chief~~upon ~~Executive~~providing ~~Officer~~90 ~~(“CEO”),~~days’ ~~Chief~~written ~~Financial~~notice. ~~Officer~~Currency ~~(“CFO”) and~~Mountain ~~chairman,~~Holdings LLC is the sole ~~owner~~shareholder ~~and manager~~ of ~~DMA~~FXDIRECT. Max Q ~~owns~~is ~~79%~~the majority shareholder of Currency Mountain ~~Malta~~Holdings LLC~~, which in turn is the sole shareholder of TCM~~.

In July 2018, the Company incorporated Nukkleus ~~addition~~Malta Holding Ltd., inwhich ~~order~~is toa ~~appropriately~~wholly-owned ~~service~~subsidiary. ~~TCM~~In July 2018, Nukkleus ~~Limited~~Malta ~~entered~~Holding ~~into~~Ltd. aincorporated ~~GSA~~Markets ~~with~~Direct ~~FXDirectDealer~~Technology Group ~~LLC~~Ltd (“~~FXDIRECT~~MDTG”), ~~which~~ ~~provides~~formerly ~~that~~known as Nukkleus ~~Limited~~Exchange ~~will~~Malta ~~pay~~Ltd. ~~FXDIRECT~~MDTG awas ~~minimum~~exploring ofpotentially ~~$1,575,000~~obtaining ~~per~~a ~~month~~license into operate ~~consideration~~an ofelectronic ~~providing~~exchange ~~personnel~~whereby ~~engaged in~~it ~~operational~~would ~~and~~facilitate ~~technical~~the ~~support,~~buying ~~marketing,~~and ~~sales~~selling ~~support,~~of ~~accounting,~~various ~~risk~~digital ~~monitoring,~~assets ~~documentation~~as ~~processing~~well ~~and~~as ~~customer~~traditional ~~care~~currency ~~and~~pairs ~~support.~~used ~~FXDIRECT~~in ~~may~~FX ~~terminate~~Trading. ~~this~~During ~~agreement~~the ~~upon~~fourth ~~providing~~quarter 90of ~~days’~~fiscal ~~written~~2020, ~~notice.~~management ~~Currency~~made ~~Mountain~~the ~~Holdings~~decision ~~LLC~~to isexit the ~~sole~~ ~~shareholder~~exchange ofbusiness ~~FXDIRECT.~~and ~~Max~~to no Qlonger ispursue the ~~majority~~regulatory ~~shareholder~~licensing ofnecessary ~~Currency~~to ~~Mountain~~operate ~~Holdings~~an ~~LLC~~exchange in Malta.

~~In July~~On ~~2018~~August 27, 2020, the Company ~~incorporated~~renamed Nukkleus Exchange Malta ~~Holding~~ Ltd., ~~which~~to ~~is a wholly-owned subsidiary. In July 2018, Nukkleus Malta Holding Ltd. incorporated~~ Markets Direct Technology Group Ltd (“MDTG”),. ~~formerly~~MDTG ~~known~~manages asthe ~~Nukkleus~~technology ~~Exchange~~and ~~Malta~~Internet ~~Ltd.~~Protocol ~~MDTG was exploring~~(“IP”) ~~potentially~~behind ~~obtaining~~the aMarkets ~~license~~Direct tobrand ~~operate~~(which anis ~~electronic~~operated ~~exchange~~by ~~whereby~~TCM). itMDTG ~~would~~holds ~~facilitate~~all the ~~buying~~IP addresses and ~~selling~~all ofthe ~~various~~software ~~digital assets~~licenses asin ~~well~~its asname, and ~~traditional~~it ~~currency~~holds ~~pairs~~all ~~used~~the inIP FXrights ~~Trading.~~to ~~During~~ the ~~fourth~~brands ~~quarter~~such ofas ~~fiscal~~Markets ~~2020,~~Direct ~~management~~and ~~made~~TCM. ~~the~~MDTG ~~decision to~~then ~~exit~~leases out the ~~exchange~~rights ~~business and~~ to nouse ~~longer~~these ~~pursue~~names/brands licenses ~~the regulatory licensing necessary~~ to ~~operate~~the anappropriate ~~exchange in Malta~~entities.

~~On August~~In ~~27,~~fiscal ~~2020~~year 2021, the Company ~~renamed~~completed ~~Nukkleus~~its acquisition ~~Exchange~~of ~~Malta~~Match ~~Ltd.~~Financial toLimited, ~~Markets~~a ~~Direct~~private ~~Technology~~limited ~~Group~~company ~~Ltd~~formed ~~(“MDTG”).~~in ~~MDTG~~England ~~manages the technology~~ and ~~Internet~~Wales ~~Protocol~~ (“IPMatch”) ~~behind~~and ~~the~~its ~~Markets Direct brand (which is operated by TCM)~~subsidiaries. ~~MDTG holds all the~~ IPMatch, ~~addresses~~through ~~and~~its ~~all~~Digital ~~the~~RFQ ~~software~~Limited ~~licenses~~(“Digital inRFQ”) ~~its name~~subsidiary, ~~and~~is itengaged ~~holds~~in ~~all~~providing ~~the~~payment IPservices ~~rights~~from toone ~~the brands such as Markets Direct and TCM.~~fiat ~~MDTG~~currency ~~then leases out the rights~~ to ~~use~~another ~~these~~or ~~names/brands licenses~~ to ~~the~~digital ~~appropriate entities~~assets.

~~In fiscal~~On ~~year~~October 20, 2021, the Company ~~completed~~and ~~its~~the ~~acquisition~~shareholders (the “Original Shareholders”) of ~~Match~~Jacobi ~~Financial~~Asset Management Holdings Limited, (“Jacobi”) entered into a ~~private~~Purchase and ~~limited~~Sale ~~company~~Agreement ~~formed~~(the “Jacobi Agreement”) pursuant to which the Company agreed to acquire 5.0% of the issued and outstanding ordinary shares of Jacobi in ~~England~~consideration of 20,000,000 shares of common stock of the Company (the “Jacobi Transaction”). On December 15, 2021, the Company, the Original Shareholders and ~~Wales~~the shareholders of Jacobi that were assigned their interest in Jacobi by the Original Shareholders (the “~~Match~~New Jacobi Shareholders”) entered into an Amendment to Stock Purchase Agreement agreeing that the Jacobi Transaction will be entered between the Company and ~~its~~the ~~subsidiaries~~New Jacobi Shareholders. ~~Match~~The Jacobi Transaction closed on December 15, ~~through~~2021. ~~its~~Jacobi ~~Digital~~is ~~RFQ~~a ~~Limited~~company focused on digital asset management that has received regulatory approval to launch the world’s first tier one Bitcoin exchange-traded fund (“~~Digital RFQ~~ETF”). ~~subsidiary~~Jamal Khurshid and Nicholas Gregory own, directly and indirectly, approximately 40% and 10% of Jacobi, respectively. Jamal Khurshid is ~~engaged~~the Company’s chief operating officer and director and Nicholas Gregory is the Company’s director. The transactions contemplated by the Jacobi Agreement constituted a “related-party transaction” as defined in ~~providing~~Item ~~payment~~404 ~~services~~of ~~from~~Regulation ~~one~~S-K ~~fiat~~because ~~currency~~of toMr. ~~another~~Khurshid’s and Mr. Gregory’s position as beneficial owner of one or tomore ~~digital~~Original ~~assets~~Shareholders and New Jacobi Shareholders.

On October 20, 2021, the Company and the shareholders (the “Original Shareholders”) of Jacobi Asset Management Holdings Limited (“Jacobi”) entered into a Purchase and Sale Agreement (the “Jacobi Agreement”) pursuant to which the Company agreed to acquire 5.0% of the issued and outstanding ordinary shares of Jacobi in consideration of 20,000,000 shares of common stock of the Company (the “Jacobi Transaction”). On December 15, 2021, the Company, the Original Shareholders and the shareholders of Jacobi that were assigned their interest in Jacobi by the Original Shareholders (the “New Jacobi Shareholders”) entered into an Amendment to Stock Purchase Agreement agreeing that the Jacobi Transaction will be entered between the Company and the New Jacobi Shareholders. The Jacobi Transaction closed on December 15, 2021. Jacobi is a company focused on digital asset management that has received regulatory approval to launch the world’s first tier one Bitcoin exchange-traded fund (“ETF”). Jamal Khurshid and Nicholas Gregory own, directly and indirectly, approximately 40% and 10% of Jacobi, respectively. Jamal Khurshid is the Company’s chief operating officer and director and Nicholas Gregory is the Company’s director. The transactions contemplated by the Jacobi Agreement constituted a “related-party transaction” as defined in Item 404 of Regulation S-K because of Mr. Khurshid’s and Mr. Gregory’s position as beneficial owner of one or more Original Shareholders and New Jacobi Shareholders.6

6NUKKLEUS INC. AND SUBSIDIARIES NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

~~NUKKLEUS INC.~~NOTE 1 – THE COMPANY HISTORY AND NATURE ~~SUBSIDIARIES~~OF THE BUSINESS (continued)

~~NOTES~~On December 30, 2021, the Company and the shareholder TO(the ~~UNAUDITED~~“Digiclear ~~CONDENSED~~Shareholder”) ~~CONSOLIDATED~~of ~~FINANCIAL~~Digiclear ~~STATEMENTS~~Ltd. (“Digiclear”) entered into a Purchase and Sale Agreement (the “Digiclear Agreement”) pursuant to which the Company agreed to acquire 5,400,000 of the issued and outstanding ordinary shares of Digiclear in consideration of 15,151,515 shares of common stock of the Company (valued at $5,000,000 based on the market price of the Company’s common stock on the acquisition date) (the “Digiclear Transaction”). In addition to, if and when the Company is acquired by a Special Purpose Acquisition Company (“SPAC”), the Company will fund and capitalize Digiclear with a minimum of $1,000,000 operating capital in exchange for 4.545% of additional shares of Digiclear’s capital stock. Digiclear shall retain the right to unwind the transaction and to have the Company return the 5,400,000 ordinary shares of Digiclear share in return for Digiclear returning to the Company the 15,151,515 of Company common shares. Digiclear can only unwind the transaction if the Company is no longer under contract to be acquired by a SPAC (See Note 15 – Merger). The Digiclear Transaction closed on March 17, 2022. Digiclear is a company developing a custody and settlement utility operating system.

~~NOTE 1~~Liquidity –and ~~THE~~capital ~~COMPANY HISTORY AND NATURE OF THE BUSINESS (continued)~~resources

~~On December~~Liquidity ~~30,~~is ~~2021,~~ the ~~Company~~ability ~~and the shareholder (the “Digiclear Shareholder”)~~ of ~~Digiclear Ltd. (“Digiclear”) entered into~~ a ~~Purchase~~company ~~and Sale Agreement (the “Digiclear Agreement”) pursuant~~ to ~~which the~~generate ~~Company~~funds ~~agreed~~ to ~~acquire~~support ~~5,400,000~~its ofcurrent ~~the issued~~ and ~~outstanding~~future ~~ordinary shares of Digiclear in consideration of 15~~operations,~~151,515~~ ~~shares of~~satisfy ~~common~~its ~~stock~~obligations ofand ~~the~~otherwise ~~Company~~operate ~~(valued at $5,000,000 based~~ on ~~the~~an ~~market~~ongoing ~~price of the Company’s common stock on the acquisition date) (the “Digiclear Transaction”)~~basis. InAt ~~addition~~March to31, if 2023 and ~~when~~September ~~the~~30, ~~Company is acquired by a Special Purpose Acquisition Company (“SPAC”)~~2022, the Company ~~will~~had ~~fund~~cash ~~and capitalize Digiclear with a minimum~~ of $1246,~~000,000 operating~~650 ~~capital in exchange for 4.545% of additional shares of Digiclear’s capital stock. Digiclear shall retain the right to unwind the transaction~~ and ~~to have the Company return the 5~~$364,~~400~~023,~~000~~ ~~ordinary~~respectively, ~~shares~~exclusive of ~~Digiclear~~customer ~~share~~custodial ~~in return for Digiclear returning to the Company the 15,151,515 of Company common shares~~cash. Digiclear can only unwind the transaction if the Company is no longer under contract to be acquired by a SPAC (See Note 15 – Merger). The Digiclear Transaction closed on March 17, 2022. Digiclear is a company developing a custody and settlement utility operating system.

~~Liquidity~~The unaudited condensed consolidated financial statements have been prepared using accounting principles generally accepted in the United States of America applicable for a going concern, which assumes that the Company will realize its assets and discharge its liabilities in the ordinary course of business. The Company had a working capital ~~resources~~deficit of approximately $4,391,000 at March 31, 2023 and incurred a net loss and generated negative cash flow from operating activities of approximately $1,940,000 and $1,883,000 for the six months ended March 31, 2023, respectively. These are indicators of substantial doubt as to the Company’s ability to continue as a going concern for at least one year from issuance of these financial statements. The Company’s ability to continue as a going concern is dependent upon the management of expenses and ability to obtain necessary financing to meet its obligations and pay its liabilities arising from normal business operations when they come due, and upon profitable operations.

~~Liquidity~~The Company cannot be certain that such necessary iscapital ~~the~~through ~~ability~~equity ofor adebt ~~company~~financings towill ~~generate~~be ~~funds~~available to ~~support~~it ~~its~~or ~~current~~whether ~~and~~such ~~future~~capital ~~operations,~~will ~~satisfy~~be ~~its~~available ~~obligations~~on ~~and~~terms ~~otherwise~~that ~~operate~~are acceptable onto anit. ~~ongoing~~Any ~~basis.~~such Atfinancing ~~December~~likely ~~31,~~would ~~2022~~be dilutive to existing stockholders and ~~September~~could ~~30,~~result ~~2022,~~in significant financial operating covenants that would negatively impact the Company ~~had~~business. ~~cash~~In ofthe ~~$279,728~~event ~~and~~that ~~$364~~there are any unforeseen delays or obstacles in obtaining funds through the aforementioned sources,~~023~~ TCM, ~~respectively~~which is wholly-owned by an entity that is majority-owned by Mr. Assentato, ~~exclusive~~has committed ofto ~~customer~~inject ~~custodial~~capital ~~cash.~~into the Company in order to maintain the ongoing operations of the business.

~~The~~Based ~~unaudited~~on ~~condensed consolidated financial statements have been prepared using accounting principles generally accepted in~~ the ~~United States of America applicable for a going concern~~foregoing, ~~which~~ ~~assumes~~management ~~that~~believes ~~the Company will realize~~ that its ~~assets~~current ~~and~~financial ~~discharge~~resources, ~~its~~as ~~liabilities in the ordinary course~~ of ~~business. The Company incurred a net loss for~~ the ~~three~~date ~~months ended December 31, 2022~~ of ~~$1,133,922 and had a working capital deficit of $4,208,662 at December 31, 2022. These are indicators of substantial doubt as to~~ the ~~Company’s ability to continue as a going concern for at least one year from~~ issuance of these financial statements., ~~The~~are ~~Company’s~~sufficient ~~ability~~ to ~~continue~~fund asits acurrent ~~going concern is dependent upon the management~~twelve-month ofoperating ~~expenses~~budget, ~~and~~alleviating ~~ability~~any toconcerns ~~obtain~~by ~~necessary~~its ~~financing~~historical tooperating ~~meet~~results ~~its obligations~~ and ~~pay~~satisfying its ~~liabilities~~estimated ~~arising~~liquidity ~~from~~needs ~~normal~~for ~~business~~the ~~operations~~twelve ~~when~~months ~~they~~from ~~come~~the ~~due,~~issuance ~~and~~of ~~upon~~these ~~profitable~~financial ~~operations~~statements.

~~The Company~~NOTE ~~cannot~~2 be– ~~certain that such necessary capital through equity or debt financings will be available to it or whether such capital~~BASIS ~~will~~OF bePRESENTATION ~~available~~AND onPRINCIPLES ~~terms~~OF that are acceptable to it. Any such financing likely would be dilutive to existing stockholders and could result in significant financial operating covenants that would negatively impact the Company business. In the event that there are any unforeseen delays or obstacles in obtaining funds through the aforementioned sources, TCM, which is wholly-owned by an entity that is majority-owned by Mr. Assentato, has committed to inject capital into the Company in order to maintain the ongoing operations of the business.CONSOLIDATION

~~Based~~These interim condensed consolidated financial onstatements of the ~~foregoing,~~Company ~~management~~and ~~believes~~its ~~that~~subsidiaries ~~its~~are ~~current~~unaudited. ~~financial~~In ~~resources,~~the asopinion of ~~the~~management, ~~date~~all adjustments (consisting of ~~the~~normal ~~issuance~~recurring accruals) and disclosures necessary for a fair presentation of these interim condensed consolidated financial statements, have been included. ~~are~~The ~~sufficient~~results toreported ~~fund~~in ~~its~~the ~~current~~unaudited ~~twelve-month~~condensed ~~operating~~consolidated ~~budget,~~financial ~~alleviating~~statements for any ~~concerns~~interim byperiods ~~its~~are ~~historical~~not ~~operating~~necessarily ~~results~~indicative of ~~and~~the ~~satisfying its~~results ~~estimated~~that ~~liquidity~~may ~~needs~~be reported for the ~~twelve~~entire ~~months~~year. ~~from~~The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with the ~~issuance~~rules and regulations of ~~these~~the Securities and Exchange Commission and do not include all information and footnotes necessary for a complete presentation of financial statements in conformity with accounting principles generally accepted in the United States of America (U.S. GAAP).

~~NOTE~~The Company’s unaudited condensed consolidated 2financial –statements ~~BASIS~~include OFthe ~~PRESENTATION~~accounts ~~AND~~of ~~PRINCIPLES~~the OFCompany ~~CONSOLIDATION~~and its consolidated subsidiaries. These accounts were prepared under the accrual basis of accounting. All significant intercompany accounts and transactions have been eliminated in consolidation.

~~These~~Certain information ~~interim~~and ~~condensed~~footnote ~~consolidated~~disclosures ~~financial~~normally ~~statements~~included ofin the ~~Company~~annual ~~and~~consolidated ~~its~~financial ~~subsidiaries~~statements ~~are~~prepared ~~unaudited.~~in Inaccordance ~~the~~with ~~opinion~~U.S. ofGAAP ~~management,~~have ~~all~~been ~~adjustments~~condensed ~~(consisting~~or ofomitted. ~~normal~~These ~~recurring~~unaudited ~~accruals) and disclosures necessary for a fair presentation of these interim~~ condensed consolidated financial statements ~~have~~should ~~been~~be ~~included.~~read ~~The~~in ~~results~~conjunction ~~reported~~with in the ~~unaudited~~Company’s audited ~~condensed~~ consolidated financial statements ~~for~~ ~~any~~and ~~interim~~notes ~~periods~~thereto ~~are~~included ~~not~~in ~~necessarily indicative of~~ the ~~results~~Company’s ~~that~~Annual ~~may~~Report beon ~~reported~~Form 10-K for the ~~entire~~ year. ~~The accompanying unaudited~~ended ~~condensed~~September ~~consolidated~~30, ~~financial~~2022 ~~statements~~filed ~~have been prepared in accordance~~ with the ~~rules~~Securities and ~~regulations~~Exchange ofCommission ~~the~~on ~~Securities~~April ~~and~~10, ~~Exchange Commission~~2023. ~~and~~The doconsolidated ~~not~~balance ~~include~~sheet ~~all~~as ~~information~~of ~~and~~September 30, ~~footnotes~~2022 ~~necessary~~contained ~~for~~herein ahas ~~complete~~been ~~presentation~~derived offrom the audited consolidated financial statements inas ~~conformity with~~of ~~accounting~~September ~~principles~~30, ~~generally~~2022, ~~accepted~~but indoes ~~the~~not include ~~United~~all ~~States~~disclosures ofrequired ~~America~~by (U.S. GAAP).

The Company’s unaudited condensed consolidated financial statements include the accounts of the Company and its consolidated subsidiaries. These accounts were prepared under the accrual basis of accounting. All significant intercompany accounts and transactions have been eliminated in consolidation.7

~~Certain information~~NUKKLEUS ~~and footnote disclosures normally included in the annual consolidated financial statements prepared in accordance with U~~INC.~~S. GAAP~~ ~~have~~AND ~~been condensed or omitted. These unaudited condensed consolidated financial statements should be read in conjunction with the~~SUBSIDIARIES ~~Company’s~~ ~~audited~~NOTES ~~consolidated~~TO ~~financial~~UNAUDITED ~~statements~~CONDENSED ~~and~~CONSOLIDATED ~~notes~~FINANCIAL thereto included in the Company’s Annual Report on Form 10-K for the year ended September 30, 2022 filed with the Securities and Exchange Commission on April 10, 2023. The consolidated balance sheet as of September 30, 2022 contained herein has been derived from the audited consolidated financial statements as of September 30, 2022, but does not include all disclosures required by U.S. GAAP.STATEMENTS

7NOTE 3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

~~NUKKLEUS INC.~~Use ~~AND~~of ~~SUBSIDIARIES~~estimates

~~NOTES~~The preparation of the unaudited condensed consolidated TOfinancial ~~UNAUDITED~~statements ~~CONDENSED~~in ~~CONSOLIDATED~~conformity ~~FINANCIAL~~with ~~STATEMENTS~~U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Changes in these estimates and assumptions may have a material impact on the unaudited condensed consolidated financial statements and accompanying notes. Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the financial statements, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events. Accordingly, the actual results could differ significantly from those estimates.

~~NOTE~~Significant estimates during the three and six 3months –ended March 31, 2023 and 2022 include the useful life of intangible assets, assumptions used in assessing impairment of long-term assets, valuation of deferred tax assets and the associated valuation allowances, valuation of stock-based compensation, ~~SUMMARY~~and OFfair value ~~SIGNIFICANT~~of ~~ACCOUNTING~~customer ~~POLICIES~~digital currency assets and liabilities.

~~Use of~~Cash ~~estimates~~and cash equivalents

~~The preparation~~At ofMarch ~~the~~31, ~~unaudited~~2023 ~~condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates~~ and ~~assumptions~~September that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Changes in these estimates and assumptions may have a material impact on the unaudited condensed consolidated financial statements and accompanying notes. Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition30, ~~situation or set of circumstances that existed at the date of the financial statements~~2022, ~~which management considered in formulating~~the ~~its~~Company’s ~~estimate,~~cash ~~could~~balances ~~change~~by ingeographic ~~the~~area ~~near~~were ~~term~~as ~~due to one or more future confirming events. Accordingly, the actual results could differ significantly from those estimates.~~follows:

Significant estimates during the three months ended December 31, 2022 and 2021 include the useful life of intangible assets, assumptions used in assessing impairment of long-term assets, valuation of deferred tax assets and the associated valuation allowances, valuation of stock-based compensation, and fair value of customer digital currency assets and liabilities.

Country:	March 31, 2023				September 30, 2022
United States	$	183,686	74.5	%	$	47,860	13.1	%
United Kingdom		61,986	25.1	%		315,989	86.8	%
Lithuania		804	0.3	%		-	-
Malta		174	0.1	%		174	0.1	%
Total cash	$	246,650	100.0	%	$	364,023	100.0	%

~~Cash~~For purposes of the unaudited condensed consolidated statements of cash flows, the Company considers all highly liquid instruments with a maturity of three months or less when purchased and money market accounts to be cash equivalents. The Company had no cash equivalents at March 31, 2023 and September 30, 2022. Cash and cash equivalents excludes customer legal tender, which is reported separately as Customer custodial cash in the accompanying condensed consolidated balance sheets. Refer to “customer custodial cash and customer custodial cash liabilities” below for further details.

AtCustomer custodial ~~December~~cash ~~31, 2022~~ and ~~September~~customer ~~30,~~custodial ~~2022, the Company’s~~ cash ~~balances~~liabilities ~~by geographic area were as follows:~~

Country:	December 31, 2022				September 30, 2022
United States	$	49,251	17.6	%	$	47,860	13.1	%
United Kingdom		229,987	82.2	%		315,989	86.8	%
Lithuania		316	0.1	%		-	-
Malta		174	0.1	%		174	0.1	%
Total cash	$	279,728	100.0	%	$	364,023	100.0	%

Customer custodial cash represents cash and cash equivalents maintained in Company bank accounts that are controlled by the Company but held for the benefit of customers. Customer custodial cash liabilities represent these cash deposits to be utilized for its contractual obligations to its customers. The Company classifies the assets as current based on their purpose and availability to fulfill the Company’s direct obligations to its customers.

~~For purposes~~Customer ~~of the unaudited condensed consolidated statements of cash flows, the Company considers all highly liquid instruments with a~~digital ~~maturity~~currency ofassets ~~three months or less when purchased~~ and money market accounts to be cash equivalents. The Company had no cash equivalents at December 31, 2022 and September 30, 2022. Cash and cash equivalents excludes customer legal tender, which is reported separately as Customer custodial cash in the accompanying condensed consolidated balance sheets. Refer to “customer custodial cash and customer custodial cash liabilities~~” below for further details.~~

~~Customer~~At certain times, Digital ~~custodial~~RFQ’s ~~cash~~customers’ funds that Digital RFQ uses to make payments on behalf of its customers, remain in the form of digital assets in its customers’ wallets at its digital asset trading platforms awaiting final conversion and/or transfer to the customer’s payment ~~custodial~~final ~~cash~~destination. ~~liabilities~~These indirectly held digital assets, may consist of USDT (Stablecoin), Bitcoin, and Ethereum (collectively, “Customer digital currency assets”). Digital RFQ maintains the internal recordkeeping of its customer digital currency assets, including the amount and type of digital asset owned by each of its customers.

~~Customer custodial~~Digital ~~cash~~RFQ ~~represents~~has ~~cash~~control of ~~and~~the ~~cash~~private ~~equivalents~~keys ~~maintained~~and inknows ~~Company~~the ~~bank~~balances ~~accounts~~of ~~that~~all ~~are~~wallets ~~controlled~~with byits ~~the~~digital ~~Company~~asset ~~but~~trading ~~held~~platforms ~~for the~~in ~~benefit~~order ofto ~~customers.~~be ~~Customer~~able ~~custodial~~to ~~cash~~successfully carry ~~liabilities~~out ~~represent~~the ~~these~~movement ~~cash~~of ~~deposits~~digital toassets ~~be utilized~~ for its ~~contractual~~client ~~obligations to~~payment ~~its customers~~instruction. ~~The~~As ~~Company~~part ~~classifies~~of ~~the~~its ~~assets~~customer aspayment ~~current~~instruction, ~~based~~Digital onRFQ can ~~their~~execute ~~purpose~~withdrawals ~~and~~on ~~availability~~the towallets ~~fulfill~~in ~~the~~its ~~Company’s direct~~digital ~~obligations~~asset totrading ~~its customers~~platforms.

~~Customer digital currency assets and liabilities~~8

~~At certain~~NUKKLEUS times, Digital RFQ’s customers’ funds that Digital RFQ uses to make payments on behalf of its customers, remain in the form of digital assets in its customers’ wallets at its digital asset trading platforms awaiting final conversion and/or transfer to the customer’s payment final destinationINC. ~~These~~AND ~~indirectly held digital assets, may consist of USDT (Stablecoin), Bitcoin, and~~SUBSIDIARIES ~~Ethereum~~ ~~(collectively,~~NOTES ~~“Customer~~TO ~~digital~~UNAUDITED ~~currency~~CONDENSED ~~assets”).~~CONSOLIDATED ~~Digital~~FINANCIAL ~~RFQ maintains the internal recordkeeping of its customer digital currency assets, including the amount and type of digital asset owned by each of its customers.~~STATEMENTS

~~Digital RFQ~~NOTE ~~has~~3 ~~control~~– SUMMARY ofOF ~~the private keys and knows the balances of all wallets with its digital asset trading platforms in order to be able~~SIGNIFICANT toACCOUNTING ~~successfully~~POLICIES carry out the movement of digital assets for its client payment instruction. As part of its customer payment instruction, Digital RFQ can execute withdrawals on the wallets in its digital asset trading platforms.(continued)

8Customer digital currency assets and liabilities (continued)

~~NUKKLEUS~~Management has determined ~~INC~~that Digital RFQ has control of the customer digital currency assets and records these assets on its balance sheet with a corresponding liability. ~~AND~~Digital ~~SUBSIDIARIES~~RFQ recognizes customer digital currency liabilities and corresponding customer digital currency assets, on initial recognition and at each reporting date, at fair value of the customer digital currency assets. Subsequent changes in fair value are adjusted to the carrying amount of these customer digital currency assets, with changes in fair value recorded in other general and administrative expense in the unaudited condensed consolidated statements of operations and comprehensive loss.

~~NOTES~~Any loss, theft, or TOother ~~UNAUDITED~~misuse ~~CONDENSED~~would ~~CONSOLIDATED~~impact ~~FINANCIAL~~the ~~STATEMENTS~~measurement of customer digital currency assets. The Company classifies the customer digital currency assets as current based on their purpose and availability to fulfill the Company’s direct obligations to its customers.

~~NOTE 3~~Fair ~~– SUMMARY~~value OFof ~~SIGNIFICANT~~financial instruments ~~ACCOUNTING~~and ~~POLICIES~~fair ~~(continued)~~value measurements

~~Customer~~The Company adopted ~~digital~~the ~~currency~~guidance ~~assets~~of ~~and~~Accounting ~~liabilities~~Standards Codification (~~continued~~“ASC”) 820 for fair value measurements which clarifies the definition of fair value, prescribes methods for measuring fair value, and establishes a fair value hierarchy to classify the inputs used in measuring fair value as follows:

~~Management has~~● ~~determined~~Level ~~that~~1-Inputs ~~Digital~~are ~~RFQ~~unadjusted ~~has~~quoted ~~control~~prices ofin ~~the~~active ~~customer~~markets ~~digital~~for ~~currency~~identical assets ~~and~~or ~~records these assets on its balance sheet with a corresponding liability. Digital RFQ recognizes customer digital currency~~ liabilities ~~and~~available ~~corresponding customer digital currency assets, on initial recognition and~~ at ~~each reporting date, at fair value of~~ the ~~customer~~measurement ~~digital currency assets~~date. Subsequent changes in fair value are adjusted to the carrying amount of these customer digital currency assets, with changes in fair value recorded in other general and administrative expense in the unaudited condensed consolidated statements of operations and comprehensive loss.

~~Any loss,~~● ~~theft,~~Level or2-Inputs ~~other~~are ~~misuse~~unadjusted ~~would~~quoted ~~impact~~prices ~~the~~for ~~measurement~~similar ofassets ~~customer~~and ~~digital~~liabilities ~~currency~~in ~~assets.~~active ~~The~~markets, ~~Company~~quoted ~~classifies~~prices ~~the~~for ~~customer~~identical ~~digital currency~~or similar assets asand ~~current~~liabilities ~~based~~in onmarkets ~~their~~that ~~purpose~~are ~~and~~not ~~availability~~active, toinputs ~~fulfill~~other ~~the~~than ~~Company’s~~quoted ~~direct~~prices ~~obligations~~that toare ~~its~~observable, ~~customers~~and inputs derived from or corroborated by observable market data.

~~Fair value~~● ofLevel ~~financial~~3-Inputs ~~instruments~~are ~~and~~unobservable ~~fair~~inputs ~~value~~which ~~measurements~~reflect the reporting entity’s own assumptions on what assumptions the market participants would use in pricing the asset or liability based on the best available information.

The ~~Company~~ ~~adopted~~fair ~~the~~value ~~guidance~~ of ~~Accounting~~the ~~Standards~~Company’s ~~Codification~~assets and ~~(“ASC”)~~liabilities, ~~820~~which ~~for~~qualify ~~fair~~as ~~value~~financial ~~measurements~~instruments ~~which~~under ~~clarifies the~~ASC ~~definition~~Topic ~~of fair value~~820, ~~prescribes~~“Fair ~~methods~~Value ~~for~~Measurement,” ~~measuring~~approximates ~~fair~~the ~~value,~~carrying amounts ~~and~~represented ~~establishes~~in athe ~~fair~~accompanying ~~value~~unaudited ~~hierarchy~~condensed toconsolidated ~~classify~~financial ~~the~~statements, ~~inputs used~~primarily indue ~~measuring~~to ~~fair~~their ~~value~~short-term ~~as follows:~~nature.

●Assets ~~Level~~and ~~1-Inputs~~liabilities measured at fair value on a recurring basis. Customer digital currency assets and liabilities are ~~unadjusted~~measured ~~quoted~~at ~~prices~~fair invalue ~~active~~on ~~markets~~a ~~for~~recurring ~~identical~~basis. These assets orand liabilities ~~available~~are measured at ~~the~~fair ~~measurement~~value ~~date~~on an ongoing basis.

●The ~~Level~~following ~~2-Inputs~~table ~~are~~provides ~~unadjusted~~these ~~quoted prices for similar~~ assets and liabilities incarried ~~active~~at ~~markets,~~fair ~~quoted prices for identical or similar assets and liabilities in markets that are not active~~value, ~~inputs~~measured ~~other~~as ~~than~~of ~~quoted~~March ~~prices that are observable~~31, ~~and inputs derived from or corroborated by observable market data.~~2023:

● Level 3-Inputs are unobservable inputs which reflect the reporting entity’s own assumptions on what assumptions the market participants would use in pricing the asset or liability based on the best available information.

	Quoted Price in		Significant Other		Significant
	Active Markets		Observable Inputs		Unobservable Inputs		Balance at March 31,
	(Level 1)		(Level 2)		(Level 3)		2023
Customer digital currency assets	$	-	$	393,045	$	-	$	393,045
Customer digital currency liabilities	$	-	$	393,045	$	-	$	393,045

The ~~fair~~ ~~value~~following oftable ~~the~~provides ~~Company’s~~these assets and liabilities, ~~which~~carried ~~qualify~~at asfair ~~financial instruments under ASC Topic 820~~value, ~~“Fair~~measured ~~Value Measurement,”~~as ~~approximates~~of ~~the~~September ~~carrying amounts represented in the accompanying unaudited condensed consolidated financial statements~~30, ~~primarily~~ ~~due to their short-term nature.~~2022:

Assets and liabilities measured at fair value on a recurring basis. Customer digital currency assets and liabilities are measured at fair value on a recurring basis. These assets and liabilities are measured at fair value on an ongoing basis.

	Quoted Price in		Significant Other		Significant
	Active Markets		Observable Inputs		Unobservable Inputs		Balance at September 30,
	(Level 1)		(Level 2)		(Level 3)		2022
Customer digital currency assets	$	-	$	248,214	$	-	$	248,214
Customer digital currency liabilities	$	-	$	248,214	$	-	$	248,214

~~The~~Customer digital currency assets and liabilities ~~following~~represent ~~table~~the ~~provides~~Company’s ~~these~~obligation to safeguard customers’ digital assets. Accordingly, the Company has valued the assets and liabilities ~~carried~~using atquoted ~~fair~~market ~~value,~~prices ~~measured~~for asthe ofunderlying ~~December~~digital ~~31,~~assets ~~2022:~~which is based on Level 2 inputs.

	Quoted Price in Active Markets		Significant Other Observable Inputs		Significant Unobservable Inputs		Balance at December 31,
	(Level 1)		(Level 2)		(Level 3)		2022
Customer digital currency assets	$	-	$	332,079	$	-	$	332,079
Customer digital currency liabilities	$	-	$	332,079	$	-	$	332,079

~~The following~~NUKKLEUS ~~table~~INC. ~~provides~~AND ~~these~~SUBSIDIARIES ~~assets~~NOTES ~~and~~TO ~~liabilities~~UNAUDITED ~~carried~~CONDENSED atCONSOLIDATED ~~fair~~FINANCIAL ~~value, measured as of September 30, 2022:~~STATEMENTS

	Quoted Price in Active Markets		Significant Other Observable Inputs		Significant Unobservable Inputs		Balance at September 30,
	(Level 1)		(Level 2)		(Level 3)		2022
Customer digital currency assets	$	-	$	248,214	$	-	$	248,214
Customer digital currency liabilities	$	-	$	248,214	$	-	$	248,214

NOTE 3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

~~Customer digital~~Fair ~~currency~~value ~~assets~~of ~~and liabilities represent the Company’s obligation to safeguard customers’ digital assets. Accordingly,~~financial ~~the~~instruments ~~Company has valued the assets~~ and ~~liabilities~~fair ~~using~~value ~~quoted~~measurements ~~market prices for the underlying digital assets which is based on Level 2 inputs.~~(continued)

9ASC 825-10 “Financial Instruments”, allows entities to voluntarily choose to measure certain financial assets and liabilities at fair value (fair value option). The fair value option may be elected on an instrument-by-instrument basis and is irrevocable, unless a new election date occurs. If the fair value option is elected for an instrument, unrealized gains and losses for that instrument should be reported in earnings at each subsequent reporting date. The Company did not elect to apply the fair value option to any outstanding instruments.

~~NUKKLEUS INC.~~Credit ~~AND~~risk ~~SUBSIDIARIES~~and uncertainties

~~NOTES~~The ramifications of the outbreak of the novel TOstrain ~~UNAUDITED~~of ~~CONDENSED~~COVID-19, ~~CONSOLIDATED~~reported ~~FINANCIAL~~to ~~STATEMENTS~~have started in December 2019 and spread globally, are filled with uncertainty and changing quickly. Our operations have continued during the COVID-19 pandemic and we have not had significant disruption.

~~NOTE~~The Company is operating in a rapidly changing 3environment ~~– SUMMARY~~so OFthe ~~SIGNIFICANT~~extent ~~ACCOUNTING~~to ~~POLICIES~~which ~~(continued)~~COVID-19 impacts its business, operations and financial results from this point forward will depend on numerous evolving factors that the Company cannot accurately predict. Those factors include the following: the duration and scope of the pandemic; governmental, business and individuals’ actions that have been and continue to be taken in response to the pandemic.

~~Fair~~The Company maintains a portion of its cash in ~~value~~bank and financial institution deposits within U.S. that at times may exceed federally-insured limits of $250,000. The Company manages this credit risk by concentrating its cash balances, including customer custodial cash, in high quality financial ~~instruments~~institutions and ~~fair~~by periodically ~~value~~evaluating ~~measurements~~the ~~(continued)~~credit quality of the primary financial institutions holding such deposits. The Company may also hold cash at digital asset trading platforms and performs a regular assessment of these digital asset trading platforms as part of its risk management process. The Company has not experienced any losses in such bank accounts and believes it is not exposed to any risks on its cash in bank accounts. At March 31, 2023, there were no balances in excess of the federally-insured limits.

~~ASC~~We may maintain our cash assets at financial ~~825-10~~institutions ~~“Financial~~in ~~Instruments~~the U.S. in amounts that may be in excess of the Federal Deposit Insurance Corporation (“FDIC”) insurance limit of $250,000. ~~allows~~Actual ~~entities~~events toinvolving ~~voluntarily~~limited ~~choose~~liquidity, todefaults, ~~measure~~non-performance ~~certain~~or other adverse developments that affect financial institutions, ~~assets~~transactional counterparties or other companies in the financial services industry or the financial services industry generally, or concerns or rumors about any events of these kinds or other similar risks, have in the past and ~~liabilities~~may in the future lead to market-wide atliquidity ~~fair~~problems. ~~value~~For example, in response to the rapidly declining financial condition of regional banks Silicon Valley Bank (~~fair~~“SVB”) and ~~value~~Signature ~~option~~Bank (“Signature”)., ~~The~~the ~~fair~~California ~~value~~Department ~~option~~of ~~may~~Financial beProtection ~~elected~~and Innovation and the New York State Department of Financial Services closed SVB and Signature on anMarch ~~instrument-by-instrument~~10, ~~basis~~2023 and isMarch ~~irrevocable~~12, ~~unless~~2023, respectively, and the FDIC was appointed aas ~~new~~receiver ~~election~~for ~~date~~SVB ~~occurs~~and Signature. IfIn the ~~fair~~event ~~value~~of ~~option~~a isfailure ~~elected~~or ~~for~~liquidity anissues ~~instrument~~of or at any of the financial institutions where we maintain our deposits or other assets, ~~unrealized~~we ~~gains~~may ~~and~~incur ~~losses~~a ~~for~~loss ~~that~~to ~~instrument~~the ~~should~~extent such loss exceeds the FDIC insurance limitation, which could behave ~~reported~~a inmaterial ~~earnings~~adverse ateffect ~~each~~upon ~~subsequent~~our ~~reporting~~liquidity, ~~date~~financial condition and our results of operations. ~~The~~Similarly, ~~Company~~if ~~did~~our ~~not~~customers ~~elect~~experience liquidity toissues ~~apply~~as ~~the~~a ~~fair~~result ~~value~~of ~~option~~financial institution defaults or non-performance where they hold cash assets, their ability to ~~any~~pay ~~outstanding~~us ~~instruments~~may become impaired and could have a material adverse effect on our results of operations, including the collection of accounts receivable and cash flows.

~~Credit~~Financial instruments which potentially subject the Company to concentrations of credit risk ~~and~~consist ~~uncertainties~~principally of trade accounts receivable. A portion of the Company’s sales are credit sales which is to the customer whose ability to pay is dependent upon the industry economics prevailing in these areas; however, concentrations of credit risk with respect to trade accounts receivable is limited due to short-term payment terms. The Company also performs ongoing credit evaluations of its customers to help further reduce credit risk.

~~The ramifications~~Digital of the outbreak of the novel strain of COVID-19, reported to have started in December 2019 and spread globally, are filled with uncertainty and changing quickly. Our operations have continued during the COVID-19 pandemic and we have not had significant disruption.assets

The digital assets held by the Company isare ~~operating~~accounted for inas aintangible ~~rapidly~~assets ~~changing~~with ~~environment~~indefinite souseful ~~the~~lives, ~~extent~~and toare ~~which~~initially ~~COVID-19~~measured ~~impacts~~at ~~its~~cost. ~~business,~~Digital ~~operations~~assets ~~and~~accounted ~~financial~~for as intangible ~~results~~assets ~~from~~are ~~this~~subject ~~point~~to ~~forward~~impairment ~~will~~losses ~~depend~~if onthe ~~numerous~~fair ~~evolving~~value ~~factors~~of ~~that~~digital assets decreases below the ~~Company~~carrying ~~cannot~~value ~~accurately~~at ~~predict.~~any ~~Those~~time ~~factors~~during ~~include~~ the period. ~~following:~~The ~~the~~fair ~~duration~~value ~~and~~is ~~scope~~measured using the quoted price of the ~~pandemic;~~digital ~~governmental,~~asset ~~business~~at ~~and~~the ~~individuals’~~time ~~actions~~its ~~that~~fair ~~have~~value ~~been~~is ~~and~~being ~~continue~~measured. Impairment toexpense beis ~~taken~~reflected in ~~response~~other togeneral and administrative expense in the ~~pandemic~~unaudited condensed consolidated statements of operations and comprehensive loss. The Company assigns costs to transactions on a first-in, first-out basis.

The Company maintains a portion of its cash in bank and financial institution deposits within U.S. that at times may exceed federally-insured limits of $250,000. The Company manages this credit risk by concentrating its cash balances, including customer custodial cash, in high quality financial institutions and by periodically evaluating the credit quality of the primary financial institutions holding such deposits. The Company may also hold cash at digital asset trading platforms and performs a regular assessment of these digital asset trading platforms as part of its risk management process. The Company has not experienced any losses in such bank accounts and believes it is not exposed to any risks on its cash in bank accounts. At December 31, 2022 and September 30, 2022, the Company’s cash and customer custodial cash balances had approximately $8,031,000 and $1,571,000, respectively, in excess of the federally-insured limits.10

~~Financial instruments~~NUKKLEUS ~~which potentially subject the Company to concentrations of credit risk consist principally of trade accounts receivable~~INC. A ~~portion~~AND ~~of the Company’s sales are credit sales which is to the customer whose ability to pay is dependent upon the industry~~SUBSIDIARIES ~~economics~~ ~~prevailing~~NOTES inTO ~~these~~UNAUDITED ~~areas;~~CONDENSED ~~however,~~CONSOLIDATED ~~concentrations~~FINANCIAL of credit risk with respect to trade accounts receivable is limited due to short-term payment terms. The Company also performs ongoing credit evaluations of its customers to help further reduce credit risk.STATEMENTS

10NOTE 3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

~~NUKKLEUS INC.~~Other ~~AND~~current ~~SUBSIDIARIES~~assets

~~NOTES~~Other current assets primarily consist of security TOdeposit, ~~UNAUDITED~~prepaid ~~CONDENSED~~professional ~~CONSOLIDATED~~fee, ~~FINANCIAL~~and ~~STATEMENTS~~prepaid OTC Markets listing fees. As of March 31, 2023 and September 30, 2022, other current assets amounted to $37,789 and $15,617, respectively.

~~NOTE 3~~Revenue ~~– SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)~~recognition

~~Digital~~The Company determines revenue recognition from ~~assets~~contracts with customers through the following steps:

~~The digital~~● ~~assets~~Step ~~held~~1: byIdentify the ~~Company~~contract ~~are accounted for as intangible assets~~ with ~~indefinite useful lives, and are initially measured at cost. Digital assets accounted for as intangible assets are subject to impairment losses if~~ the fair value of digital assets decreases below the carrying value at any time during the period. The fair value is measured using the quoted price of the digital asset at the time its fair value is being measured. Impairment expense is reflected in other general and administrative expense in the unaudited condensed consolidated statements of operations and comprehensive loss. The Company assigns costs to transactions on a first-in, first-out basis.customer

~~Other current~~● ~~assets~~Step 2: Identify the performance obligations in the contract

~~Other~~● ~~current~~Step ~~assets~~3: ~~primarily~~Determine ~~consist~~the oftransaction ~~security deposit and prepaid OTC Markets listing fees. As of December 31, 2022 and September 30, 2022, other current assets amounted to $29,498 and $15,617, respectively.~~price

~~Cost method~~● ~~investment~~Step 4: Allocate the transaction price to the performance obligations in the contract

~~Investment in~~● ~~which~~Step ~~the~~5: ~~Company~~Recognize ~~does~~revenue not have the ability to exercise significant influence over operating and financial matters are accounted for using the cost method. Under the cost method, investment is recorded at cost, with gains and losses recognized as of the sale date, and income recorded when ~~received. The Company periodically evaluates its cost method investment for impairment due to decline considered to be other than temporary. If~~ the ~~Company~~company ~~determines~~satisfies ~~that~~ a ~~decline~~performance in fair value is other than temporary, then a charge to earnings is recorded in “Other (expense) income” in the accompanying unaudited condensed consolidated statements of operations and comprehensive loss, and a new basis in the investment is established. No impairment expense was recorded for the three months ended December 31, 2022 and 2021.obligation

~~Intangible~~Revenue is recognized when control of the promised ~~assets~~goods or services is transferred to the customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services. The Company’s revenues are derived from providing:

~~Intangible assets~~● ~~consist~~General support services under a GSA to a related party. The transaction price is determined in accordance with the terms of ~~trade~~the ~~names~~GSA and payments are due on a monthly basis. There are multiple services provided under the GSA (including operational reporting and technical support infrastructure, ~~regulatory~~website ~~licenses~~hosting and marketing solutions, accounting maintenance, risk monitoring services, new account processing and customer care and continued support) and these performance obligations are combined into a single unit of accounting. Fees are recognized as revenue over time as the services are rendered under the terms of the GSA. The Company recognizes the full contracted amount each period with no deferred revenue. The nature of the performance obligation is to provide the specified goods or services directly to the customer. The Company engages another party to satisfy the performance obligation on its behalf. The Company’s performance obligation is not to arrange for the provision of the specified good or service by another party. The Company is primarily responsible for fulfilling the promise to provide the specified good or service. Therefore, the Company is deemed to be a principal in the transaction and recognizes revenue for that performance obligation. The Company is a financial technology company which is focused on providing software and technology solutions for the worldwide retail foreign exchange (“FX”) trading industry. Under a GSA, the Company is contractually obligated to provide for the fulfillment software, technology, customer sales and marketing and risk management technology hardware and software solutions package to TCM. The Company provides these services, obtained from affiliate service provider FXDirect Dealer, LLC which ~~are~~is ~~being~~under ~~amortized~~common onownership, aand ~~straight-line~~controls ~~method~~the ~~over~~ services of its service provider necessary to legally transfer of the ~~estimated~~services ~~useful~~to ~~life~~TCM. Consequently, the Company is defined as the principal in the transaction. The Company, as principal, satisfies its obligation by providing ongoing service support enabling TCM to conduct its retail FX business without interruption. Upon satisfaction of 3its obligation, the Company recognizes revenue in the gross amount of consideration it is entitled to receive. The monthly GSA price is calculated by applying the Company’s 1.6% mark-up 5to ~~years~~the costs of the services being provided by FXDirect Dealer, LLC.

~~Impairment~~ ● Financial services to its customers. Revenue related to its financial services offerings are recognized at a point in time when service is rendered. Prepayments, if any, received from customers prior to the services being performed are recorded as advances from customers. In these cases, when the services are performed, the appropriate portion of ~~long~~the amount recorded as advance from customers is recognized as revenue. There are 4 distinct stages that each trade must go through to be completed and must be converted from one currency into another. Where possible, fees are taken in United States dollar (“USD”) and therefore if there is an agreed fee with the client then this will be taken on the USD leg of the transaction regardless of whether it is pre-~~lived~~conversion ~~assets~~or post-conversion. The first stage is notification and there is no real opportunity for us to realize revenue at this stage. The second stage is the funding stage and it allows us to charge the agreed fee before any currency conversion, we call this pre-trade revenue. The third stage of the transaction is conversion and we are able to realize revenue in the spread between the price we pay for the conversion and the price we charge the client for the conversion. The fourth opportunity for us to realize revenue (charge our fee) is after the conversion has taken place (post-trade).

In accordance with ASC Topic 360, the Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be fully recoverable, or at least annually. The Company recognizes an impairment loss when the sum of expected undiscounted future cash flows is less than the carrying amount of the asset. The amount of impairment is measured as the difference between the asset’s estimated fair value and its book value. There were no triggering events requiring assessment of impairment as of December 31, 2022. For the three months ended December 31, 2022 and 2021, no impairment of long-lived assets was recognized.11

~~Revenue~~NUKKLEUS INC. AND SUBSIDIARIES ~~recognition~~ NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

~~The Company~~NOTE ~~determines~~3 ~~revenue~~– SUMMARY ~~recognition~~OF ~~from~~SIGNIFICANT ACCOUNTING ~~contracts~~POLICIES ~~with customers through the following steps:~~(continued)

●Disaggregation ~~Step~~of ~~1: Identify the contract with the customer~~revenues

●The ~~Step~~Company’s 2:revenues ~~Identify~~stream ~~the~~detail ~~performance~~are as ~~obligations in the contract~~follows:

●Revenue ~~Step~~Stream 3:Revenue ~~Determine~~Stream ~~the~~Detail ~~transaction~~General ~~price~~support services Providing software, technology, customer sales and marketing and risk management technology hardware and software solutions package under a GSA to a related party Financial services Providing payment services from one fiat currency to another or to digital assets

●In ~~Step~~the 4:following ~~Allocate~~table, revenues ~~the~~are ~~transaction~~disaggregated ~~price~~by tosegment for the ~~performance~~three ~~obligations~~and insix ~~the~~months ~~contract~~ended March 31, 2023 and 2022:

● Step 5: Recognize revenue when the company satisfies a performance obligation

	Three Months Ended March 31,				Six Months Ended March 31,
Revenue Stream	2023		2022		2023		2022
General support services	$	4,800,000	$	4,800,000	$	9,600,000	$	9,600,000
Financial services		833,944		289,017		1,410,332		618,032
Total revenues	$	5,633,944	$	5,089,017	$	11,010,332	$	10,218,032

11Cost method investment

~~NUKKLEUS~~Investment in which the Company does not have ~~INC~~the ability to exercise significant influence over operating and financial matters are accounted for using the cost method. ~~AND~~Under the cost ~~SUBSIDIARIES~~method, investment is recorded at cost, with gains and losses recognized as of the sale date, and income recorded when received. The Company periodically evaluates its cost method investment for impairment due to decline considered to be other than temporary. If the Company determines that a decline in fair value is other than temporary, then a charge to earnings is recorded in “Other (expense) income” in the accompanying unaudited condensed consolidated statements of operations and comprehensive loss, and a new basis in the investment is established. No impairment expense was recorded for the three and six months ended March 31, 2023 and 2022.

~~NOTES TO~~Intangible ~~UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~assets

~~NOTE~~Intangible assets consist of trade names, regulatory 3licenses, ~~– SUMMARY~~technology OFand ~~SIGNIFICANT~~software, ~~ACCOUNTING~~which ~~POLICIES~~are ~~(continued)~~being amortized on a straight-line method over the estimated useful life of 3 - 5 years.

~~Revenue recognition~~Impairment ~~(continued)~~of long-lived assets

~~Revenue is~~In ~~recognized~~accordance ~~when~~with ~~control~~ASC ofTopic 360, the ~~promised~~Company reviews ~~goods~~long-lived orassets ~~services~~for isimpairment ~~transferred~~whenever toevents ~~the~~or ~~customers,~~changes in ancircumstances ~~amount~~indicate that ~~reflects~~the carrying amount of the ~~consideration~~assets ~~the~~may not be fully recoverable, or at least annually. The Company ~~expects~~recognizes toan beimpairment ~~entitled~~loss towhen inthe ~~exchange~~sum ~~for~~of ~~those~~expected ~~goods~~undiscounted orfuture cash ~~services~~flows is less than the carrying amount of the asset. The ~~Company~~amount of impairment is measured as the difference between the asset’s estimated ~~revenues~~fair ~~are~~value ~~derived~~and ~~from~~its ~~providing:~~book value. There were no triggering events requiring assessment of impairment as of March 31, 2023. For the three and six months ended March 31, 2023 and 2022, no impairment of long-lived assets was recognized.

●Advertising ~~General support services under a GSA to a related party. The transaction price is determined in accordance with the terms of the GSA~~ and ~~payments are due on a monthly basis. There are multiple services provided under the GSA (including operational reporting and technical support infrastructure, website hosting and~~ marketing solutions, accounting maintenance, risk monitoring services, new account processing and customer care and continued support) and these performance obligations are combined into a single unit of accounting. Fees are recognized as revenue over time as the services are rendered under the terms of the GSA. The Company recognizes the full contracted amount each period with no deferred revenue. The nature of the performance obligation is to provide the specified goods or services directly to the customer. The Company engages another party to satisfy the performance obligation on its behalf. The Company’s performance obligation is not to arrange for the provision of the specified good or service by another party. The Company is primarily responsible for fulfilling the promise to provide the specified good or service. Therefore, the Company is deemed to be a principal in the transaction and recognizes revenue for that performance obligation. The Company is a financial technology company which is focused on providing software and technology solutions for the worldwide retail foreign exchange (“FX”) trading industry. Under a GSA, the Company is contractually obligated to provide for the fulfillment software, technology, customer sales and marketing and risk management technology hardware and software solutions package to TCM. The Company provides these services, obtained from affiliate service provider FXDirect Dealer, LLC which is under common ownership, and controls the services of its service provider necessary to legally transfer of the services to TCM. Consequently, the Company is defined as the principal in the transaction. The Company, as principal, satisfies its obligation by providing ongoing service support enabling TCM to conduct its retail FX business without interruption. Upon satisfaction of its obligation, the Company recognizes revenue in the gross amount of consideration it is entitled to receive. The monthly GSA price is calculated by applying the Company’s 1.6% mark-up to the costs ~~of the services being provided by FXDirect Dealer, LLC.~~

●All ~~Financial~~costs ~~services to its customers. Revenue~~ related to advertising ~~its~~and ~~financial~~marketing ~~services offerings~~ are ~~recognized~~expensed atas ~~a point in time when service is rendered~~incurred. ~~Prepayments,~~For ~~if any, received from customers prior to~~ the ~~services~~three ~~being~~months ~~performed~~ended ~~are~~March ~~recorded as advances from customers. In these cases~~31, ~~when~~2023 ~~the~~and ~~services are performed~~2022, ~~the~~advertising ~~appropriate~~and ~~portion~~marketing ofcosts amounted ~~the amount recorded as advance from customers is recognized as revenue. There are 4 distinct stages that each trade must go through~~ to be$295 ~~completed~~ and ~~must~~$163,427, ~~be converted from one currency into another. Where possible~~respectively, ~~fees~~which ~~are~~was ~~taken~~included in ~~United~~operating ~~States~~expenses ~~dollar (“USD”) and therefore if there is an agreed fee with the client then this will be taken~~ on the ~~USD~~accompanying ~~leg~~unaudited ofcondensed ~~the~~consolidated statements ~~transaction regardless~~ of ~~whether~~operations itand iscomprehensive ~~pre-conversion or post-conversion~~loss. ~~The~~For ~~first~~the ~~stage~~six ismonths ~~notification~~ended ~~and~~March ~~there~~31, is2023 noand ~~real~~2022, ~~opportunity~~advertising ~~for us to realize revenue at this stage. The second stage is the funding stage~~ and itmarketing ~~allows~~costs us amounted to ~~charge~~$49,417 ~~the~~and ~~agreed~~$198,649, ~~fee before any currency conversion~~respectively, wewhich ~~call this pre-trade revenue. The third stage of the transaction~~ is ~~conversion~~included ~~and we are able to realize revenue~~ in ~~the~~operating ~~spread~~expenses ~~between~~on the ~~price~~accompanying weunaudited ~~pay~~condensed ~~for~~consolidated ~~the~~statements of ~~conversion~~operations and ~~the~~comprehensive ~~price we charge the client for the conversion~~loss. ~~The fourth opportunity for us to realize revenue (charge our fee) is after the conversion has taken place (post-trade).~~

~~Disaggregation of~~Stock-based ~~revenues~~compensation

The Company measures and recognizes compensation expense for all stock-based awards granted to non-employees, including stock options, based on the grant date fair value of the award. The Company’s ~~revenues~~estimates ~~stream~~the ~~detail~~grant ~~are~~date asfair ~~follows:~~value of each option award using the Black-Scholes option-pricing model.

Revenue Stream Revenue Stream Detail General support services Providing software, technology, customer sales and marketing and risk management technology hardware and software solutions package under a GSA to a related party Financial services Providing payment services from one fiat currency to another or to digital assets12

~~In the~~NUKKLEUS ~~following~~INC. ~~table,~~AND ~~revenues~~SUBSIDIARIES ~~are~~NOTES ~~disaggregated~~TO byUNAUDITED ~~segment~~CONDENSED ~~for~~CONSOLIDATED ~~the~~FINANCIAL ~~three months ended December 31, 2022 and 2021:~~STATEMENTS

	Three Months Ended December 31,
Revenue Stream	2022		2021
General support services	$	4,800,000	$	4,800,000
Financial services		576,388		329,015
Total revenues	$	5,376,388	$	5,129,015

NOTE 3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

12Stock-based compensation (continued)

~~NUKKLEUS~~For non-employee stock-based awards, fair value ~~INC~~is measured based on the value of the Company’s common stock on the date that the commitment for performance by the counterparty has been reached or the counterparty’s performance is complete. ~~AND~~The ~~SUBSIDIARIES~~fair value of the equity instrument is calculated and then recognized as compensation expense over the requisite performance period.

~~NOTES TO~~Income ~~UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~taxes

~~NOTE 3~~The ~~– SUMMARY~~Company OFaccounts ~~SIGNIFICANT~~for ~~ACCOUNTING~~income ~~POLICIES~~taxes pursuant to Financial Accounting Standards Board (~~continued~~“FASB”) ASC 740, Income Taxes. Deferred tax assets and liabilities are determined based on temporary differences between the bases of certain assets and liabilities for income tax and financial reporting purposes. The deferred tax assets and liabilities are classified according to the financial statement classification of the assets and liabilities generating the differences.

~~Advertising~~The Company maintains a valuation allowance with respect to deferred tax assets. The Company establishes a valuation allowance based upon the potential likelihood of realizing the deferred tax asset and ~~marketing~~taking ~~costs~~into consideration the Company’s financial position and results of operations for the current period. Future realization of the deferred tax benefit depends on the existence of sufficient taxable income within the carry-forward period under the Federal and foreign tax laws. Changes in circumstances, such as the Company generating taxable income, could cause a change in judgment about the realizability of the related deferred tax asset. Any change in the valuation allowance will be included in income in the period of the change in estimate.

~~All~~The ~~costs~~Company ~~related~~follows ~~to advertising~~the ~~and~~provisions ~~marketing~~of ~~are~~FASB ~~expensed~~ASC 740-10 asUncertainty ~~incurred.~~in ~~For~~Income ~~the~~Taxes ~~three~~(ASC ~~months~~740-10). ~~ended~~Certain ~~December~~recognition ~~31,~~thresholds ~~2022~~must ~~and~~be ~~2021,~~met ~~advertising~~before ~~and~~a ~~marketing~~tax ~~costs amounted~~position tois ~~$49,122~~recognized ~~and~~in ~~$35,222,~~the financial ~~respectively,~~statements. ~~which~~An isentity ~~included~~may inonly ~~operating~~recognize ~~expenses~~or oncontinue ~~the~~to ~~accompanying~~recognize ~~unaudited~~tax ~~condensed~~positions ~~consolidated statements~~that ofmeet ~~operations~~a ~~and comprehensive loss~~“more-likely-than-not” threshold.

~~Stock-based compensation~~Foreign currency translation

The reporting currency of the Company ~~measures~~is U.S. Dollars. The functional currency of the parent company, Nukkleus Inc., Nukkleus Limited, Nukkleus Malta Holding Ltd. and ~~recognizes~~its ~~compensation~~subsidiaries, is ~~expense~~the ~~for~~U.S. ~~all~~dollar, ~~stock-based~~the ~~awards~~functional ~~granted~~currency toof ~~non-employees~~Match Financial Limited and its subsidiary, ~~including~~Digital ~~stock~~RFQ, ~~options~~is the British Pound (“GBP”), the ~~based~~functional currency of Digital RFQ’s subsidiary, DRFQ Europe UAB, is Euro, and the functional currency of Digital RFQ’s onsubsidiary, DRFQ Pay North America, is CAD. Monetary assets and liabilities denominated in currencies other than the ~~grant~~reporting ~~date~~currency are ~~fair~~translated ~~value~~into the reporting currency at the rates of exchange prevailing at the ~~award~~balance sheet date. ~~The~~Revenue ~~Company~~and ~~estimates~~expenses are translated using average rates during each reporting period, and stockholders’ equity is translated at historical exchange rates. Cash flows are also translated at average translation rates for the ~~grant~~periods, ~~date~~therefore, ~~fair~~amounts ~~value~~reported on the statements of ~~each~~cash ~~option~~flows ~~award~~will ~~using~~not necessarily agree with changes in the ~~Black-Scholes~~corresponding balances on the balance sheets. Translation adjustments resulting from the process ~~option-pricing~~of ~~model~~translating the local currency financial statements into U.S. dollars are included in determining comprehensive income/loss.

~~For~~Transactions denominated in foreign currencies ~~non-employee~~are ~~stock-based~~translated ~~awards,~~into ~~fair~~the ~~value~~functional iscurrency ~~measured~~at ~~based~~the exchange rates prevailing on the ~~value~~transaction ofdates. Assets and liabilities denominated in foreign currencies are translated into the ~~Company’s~~functional ~~common~~currency ~~stock~~at onthe exchange rates prevailing at the balance sheet date with any transaction gains and losses that arise from exchange rate fluctuations on transactions denominated in a currency other than the ~~commitment~~functional ~~for~~currency ~~performance~~are byincluded in the ~~counterparty~~results ~~has~~of ~~been~~operations ~~reached~~as orincurred. Most of the ~~counterparty~~Company’s ~~performance~~revenue istransactions ~~complete.~~are ~~The~~transacted ~~fair~~in ~~value~~the functional currency of the ~~equity~~Company. The Company does not enter into any material transaction in foreign currencies. Transaction ~~instrument~~gains isor ~~calculated~~losses have not had, and ~~then~~are ~~recognized~~not asexpected ~~compensation~~to ~~expense~~have, ~~over~~a material effect on the ~~requisite~~results ~~performance~~of ~~period~~operations of the Company.

~~Income~~Asset and liability accounts at March 31, 2023 ~~taxes~~and September 30, 2022 were translated at 0.8099 GBP and 0.8987 GBP to $1.00, respectively, which were the exchange rates on the balance sheet dates. Asset and liability accounts at March 31, 2023 and September 30, 2022 were translated at 0.9206 EUR and 1.0221 EUR to $1.00, respectively, which were the exchange rates on the balance sheet dates. Asset and liability accounts at March 31, 2023 were translated at 1.3529 CAD to $1.00, which was the exchange rate on the balance sheet date. Equity accounts were stated at their historical rates. The average translation rate applied to the statement of operations for the six months ended March 31, 2023 and 2022 was 0.8379 GBP and 0.7439 GBP to $1.00, respectively. The average translation rate applied to the statement of operations for the six months ended March 31, 2023 was 0.9559 EUR to $1.00. The average translation rate applied to the statement of operations for the period from February 18, 2023 through March 31, 2023 was 1.3667 CAD to $1.00. Cash flows from the Company’s operations are calculated based upon the local currencies using the average translation rate.

The Company accounts for income taxes pursuant to Financial Accounting Standards Board (“FASB”) ASC 740, Income Taxes. Deferred tax assets and liabilities are determined based on temporary differences between the bases of certain assets and liabilities for income tax and financial reporting purposes. The deferred tax assets and liabilities are classified according to the financial statement classification of the assets and liabilities generating the differences.13

~~The Company~~NUKKLEUS ~~maintains a valuation allowance with respect to deferred tax assets~~INC. ~~The~~AND ~~Company establishes a valuation allowance based upon~~SUBSIDIARIES ~~the~~ ~~potential~~NOTES ~~likelihood~~TO ofUNAUDITED ~~realizing~~CONDENSED ~~the~~CONSOLIDATED ~~deferred~~FINANCIAL tax asset and taking into consideration the Company’s financial position and results of operations for the current period. Future realization of the deferred tax benefit depends on the existence of sufficient taxable income within the carry-forward period under the Federal and foreign tax laws. Changes in circumstances, such as the Company generating taxable income, could cause a change in judgment about the realizability of the related deferred tax asset. Any change in the valuation allowance will be included in income in the period of the change in estimate.STATEMENTS

~~The Company~~NOTE ~~follows~~3 ~~the~~– SUMMARY ~~provisions~~OF ofSIGNIFICANT ACCOUNTING ~~FASB~~POLICIES ~~ASC 740-10 Uncertainty in Income Taxes~~ (~~ASC 740-10~~continued). Certain recognition thresholds must be met before a tax position is recognized in the financial statements. An entity may only recognize or continue to recognize tax positions that meet a “more-likely-than-not” threshold.

~~Foreign currency~~Comprehensive ~~translation~~loss

~~The reporting~~Comprehensive ~~currency~~loss ~~of the Company~~ is ~~U.S.~~comprised ~~Dollars. The functional currency~~ of ~~the~~net ~~parent~~loss ~~company, Nukkleus Inc., Nukkleus Limited, Nukkleus~~and ~~Malta~~all ~~Holding~~changes ~~Ltd.~~to ~~and its subsidiaries, is~~ the ~~U.S.~~statements ~~dollar, the functional currency~~ of ~~Match Financial Limited and its subsidiary~~equity, ~~Digital RFQ,~~except isthose ~~the~~due ~~British~~to ~~Pound~~investments ~~(“GBP”)~~by ~~and the functional currency of Digital RFQ’s subsidiary~~stockholders, ~~DRFQ~~changes ~~Europe~~in ~~UAB, is Euro. Monetary assets and liabilities denominated~~ paid-in ~~currencies~~capital ~~other than the reporting currency are translated into the reporting currency at the rates of exchange prevailing at the balance sheet date. Revenue~~ and ~~expenses are translated using average rates during each reporting~~distributions ~~period,~~to ~~and~~ stockholders~~’ equity is translated at historical exchange rates~~. ~~Cash~~For ~~flows are also translated at average translation rates for~~ the ~~periods~~Company, ~~therefore,~~comprehensive ~~amounts~~loss ~~reported~~for on the ~~statements~~three ofand ~~cash~~six ~~flows~~months ~~will~~ended ~~not~~March ~~necessarily~~31, ~~agree~~2023 ~~with~~and ~~changes~~2022 inconsisted ~~the~~of ~~corresponding~~net loss ~~balances~~and onunrealized ~~the~~loss/gain ~~balance sheets. Translation adjustments resulting~~ from ~~the~~foreign ~~process of translating the local~~ currency ~~financial~~translation ~~statements into U~~adjustment.~~S. dollars are included in determining comprehensive income/loss.~~

~~Transactions denominated~~Segment in foreign currencies are translated into the functional currency at the exchange rates prevailing on the transaction dates. Assets and liabilities denominated in foreign currencies are translated into the functional currency at the exchange rates prevailing at the balance sheet date with any transaction gains and losses that arise from exchange rate fluctuations on transactions denominated in a currency other than the functional currency are included in the results of operations as incurred. Most of the Company’s revenue transactions are transacted in the functional currency of the Company. The Company does not enter into any material transaction in foreign currencies. Transaction gains or losses have not had, and are not expected to have, a material effect on the results of operations of the Company.reporting

13The Company uses “the management approach” in determining reportable operating segments. The management approach considers the internal organization and reporting used by the Company’s chief operating decision maker for making operating decisions and assessing performance as the source for determining the Company’s reportable segments. The Company’s chief operating decision maker is its Chief Executive Officer (“CEO”), who reviews operating results to make decisions about allocating resources and assessing performance for the entire company.

~~NUKKLEUS~~The Company has determined that it has two reportable ~~INC~~business segments: general support services segment and financial services segment. ~~AND~~These ~~SUBSIDIARIES~~reportable segments offer different types of services and products, have different types of revenue, and are managed separately as each requires different operating strategies and management expertise.

~~NOTES TO~~Per ~~UNAUDITED~~share ~~CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~data

~~NOTE~~ASC Topic 260, Earnings per Share, requires 3presentation ~~– SUMMARY~~of OFboth ~~SIGNIFICANT~~basic ~~ACCOUNTING~~and ~~POLICIES~~diluted earnings per share (~~continued~~“EPS”) with a reconciliation of the numerator and denominator of the basic EPS computation to the numerator and denominator of the diluted EPS computation. Basic EPS excludes dilution. Diluted EPS reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the earnings of the entity.

~~Foreign~~Basic net earnings per share are computed ~~currency~~by ~~translation~~dividing net earnings available to common stockholders by the weighted average number of shares of common stock outstanding during the period. Diluted net earnings per share is computed by dividing net earnings applicable to common stockholders by the weighted average number of shares of common stock, common stock equivalents and potentially dilutive securities outstanding during each period. For the three and six months ended March 31, 2023 and 2022, potentially dilutive common shares consist of the common shares issuable upon the exercise of common stock options (~~continued~~using the treasury stock method). Common stock equivalents are not included in the calculation of diluted net loss per share if their effect would be anti-dilutive. In a period in which the Company has a net loss, all potentially dilutive securities are excluded from the computation of diluted shares outstanding as they would have had an anti-dilutive impact.

~~Asset and~~The ~~liability~~following ~~accounts~~table atsummarizes ~~December 31, 2022 and September 30, 2022 were translated at 0.8266 GBP and 0.8987 GBP to $1.00, respectively, which were~~ the ~~exchange rates on the balance sheet dates. Asset and liability accounts at December 31, 2022 and September 30, 2022 were~~securities ~~translated~~that ~~at 0.9323 EUR and 1.0221 EUR to $1.00, respectively, which~~ were ~~the~~excluded ~~exchange~~from ~~rates on~~ the ~~balance~~diluted ~~sheet~~per ~~dates.~~share ~~Equity~~calculation ~~accounts were~~because ~~stated at their historical rates. The average translation rate applied to~~ the ~~statement~~effect of ~~operations~~including ~~for~~these ~~the~~potential ~~three~~shares ~~months ended December 31, 2022 and 2021~~ was 0.8525 GBP and 0.7422 GBP to $1.00, respectively. The average translation rate applied to the statement of operations for the three months ended December 31, 2022 was 0.9806 EUR to $1.00. Cash flows from the Company’s operations are calculated based upon the local currencies using the average translation rate.antidilutive:

Comprehensive loss

	Three Months Ended March 31,				Six Months Ended March 31,
	2023		2022		2023		2022
Stock options		4,350,000		5,850,000		5,850,000		5,850,000
Potentially dilutive security		4,350,000		5,850,000		5,850,000		5,850,000

Comprehensive loss is comprised of net loss and all changes to the statements of equity, except those due to investments by stockholders, changes in paid-in capital and distributions to stockholders. For the Company, comprehensive loss for the three months ended December 31, 2022 and 2021 consisted of net loss and unrealized loss from foreign currency translation adjustment.Reclassification

~~Segment~~Certain prior period amounts have been reclassified ~~reporting~~to conform to the current period presentation. These reclassifications have no effect on the previously reported financial position, results of operations and cash flows.

~~The Company uses~~Recently ~~“the~~issued ~~management~~accounting approach” in determining reportable operating segments. The management approach considers the internal organization and reporting used by the Company’s chief operating decision maker for making operating decisions and assessing performance as the source for determining the Company’s reportable segments. The Company’s chief operating decision maker is its Chief Executive Officer (“CEO”), who reviews operating results to make decisions about allocating resources and assessing performance for the entire company. The Company has determined that it has two reportable business segments: general support services segment and financial services segment. These reportable segments offer different types of services and products, have different types of revenue, and are managed separately as each requires different operating strategies and management expertise. pronouncements

~~Per~~In June 2016, the FASB issued ASU 2016-13, Financial ~~share~~Instruments ~~data~~- Credit Losses (“Topic 326”). The ASU introduces a new accounting model, the Current Expected Credit Losses model (“CECL”), which requires earlier recognition of credit losses and additional disclosures related to credit risk. The CECL model utilizes a lifetime expected credit loss measurement objective for the recognition of credit losses at the time the financial asset is originated or acquired. ASU 2016-13 is effective for annual period beginning after December 15, 2022, including interim reporting periods within those annual reporting periods. The Company expects that the adoption will not have a material impact on its unaudited condensed consolidated financial statements.

ASC Topic 260, Earnings per Share, requires presentation of both basic and diluted earnings per share (“EPS”) with a reconciliation of the numerator and denominator of the basic EPS computation to the numerator and denominator of the diluted EPS computation. Basic EPS excludes dilution. Diluted EPS reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the earnings of the entity.14

~~Basic net earnings~~NUKKLEUS ~~per share are computed by dividing net earnings available to common stockholders by the weighted average number of shares of common stock outstanding during the period~~INC. ~~Diluted~~AND ~~net earnings per share is computed by dividing net earnings applicable to common~~SUBSIDIARIES ~~stockholders~~ byNOTES ~~the~~TO ~~weighted~~UNAUDITED ~~average~~CONDENSED ~~number~~CONSOLIDATED ofFINANCIAL shares of common stock, common stock equivalents and potentially dilutive securities outstanding during each period. For the three months ended December 31, 2022 and 2021, potentially dilutive common shares consist of the common shares issuable upon the exercise of common stock options (using the treasury stock method). Common stock equivalents are not included in the calculation of diluted net loss per share if their effect would be anti-dilutive. In a period in which the Company has a net loss, all potentially dilutive securities are excluded from the computation of diluted shares outstanding as they would have had an anti-dilutive impact.STATEMENTS

~~The following~~NOTE ~~table~~3 ~~summarizes~~– SUMMARY ~~the~~OF ~~securities that were excluded from the diluted per share calculation because the effect of including these~~SIGNIFICANT ~~potential~~ACCOUNTING ~~shares~~POLICIES ~~was antidilutive:~~(continued)

	Three Months Ended December 31,
	2022		2021
Stock options		5,850,000		1,000,000
Potentially dilutive securities		5,850,000		1,000,000

Recently issued accounting pronouncements (continued)

14Other accounting standards that have been issued or proposed by FASB that do not require adoption until a future date are not expected to have a material impact on the unaudited condensed consolidated financial statements upon adoption. The Company does not discuss recent pronouncements that are not anticipated to have an impact on or are unrelated to its consolidated financial condition, results of operations, cash flows or disclosures.

~~NUKKLEUS~~NOTE 4 - CUSTOMER ~~INC.~~ASSETS AND ~~SUBSIDIARIES~~LIABILITIES

~~NOTES~~The Company includes TOcustomer ~~UNAUDITED~~funds ~~CONDENSED~~in ~~CONSOLIDATED~~the ~~FINANCIAL~~condensed ~~STATEMENTS~~consolidated balance sheets as customer custodial cash and also includes such a corresponding liability reflected as customer custodial cash liabilities in the condensed consolidated balance sheets.

~~NOTE 3~~The ~~– SUMMARY~~following OFtable presents ~~SIGNIFICANT~~customers’ ~~ACCOUNTING~~cash ~~POLICIES~~and ~~(continued)~~digital positions:

Recently issued accounting pronouncements

	March 31, 2023		September 30, 2022
Customer custodial cash	$	240,296	$	2,020,394
Customer digital currency assets		393,045		248,214
Total customer assets	$	633,341	$	2,268,608

Customer custodial cash liabilities	$	240,654	$	2,020,717
Customer digital currency liabilities		393,045		248,214
Total customer liabilities	$	633,699	$	2,268,931

InThe Company controls ~~June~~digital ~~2016,~~assets ~~the~~for ~~FASB~~its ~~issued ASU~~customers ~~2016-13, Financial~~in ~~Instruments~~digital -wallets ~~Credit~~and ~~Losses~~digital ~~(“Topic~~token ~~326”)~~identifiers necessary to access digital assets on digital asset trading platforms. The ~~ASU introduces~~Company maintains a ~~new~~record ~~accounting~~of ~~model,~~all ~~the~~assets ~~Current~~in ~~Expected~~digital ~~Credit~~wallets ~~Losses~~held ~~model~~on ~~(“CECL”),~~digital ~~which~~asset ~~requires earlier recognition~~trading ofplatforms ~~credit~~as ~~losses~~well ~~and~~as the ~~additional~~private ~~disclosures~~keys, ~~related~~which toare ~~credit~~maintained ~~risk. The~~on ~~CECL~~behalf ~~model~~of ~~utilizes~~customers. aThe ~~lifetime~~Company ~~expected~~records ~~credit loss~~the ~~measurement~~assets ~~objective~~and ~~for~~liabilities, on the initial recognition and ofat ~~credit~~each ~~losses~~reporting date, at the ~~time~~fair value of the ~~financial~~digital ~~asset~~assets iswhich ~~originated~~it orcontrols ~~acquired~~for its customers. ~~ASU~~Any ~~2016-13~~loss or theft would impact isthe ~~effective~~measurement ~~for~~of ~~annual~~the ~~period~~customer ~~beginning~~digital ~~after~~currency ~~December~~assets. 15During the three and six months ended March 31, 2023 and 2022, ~~including~~no ~~interim~~losses ~~reporting~~have been ~~periods~~incurred ~~within~~in ~~those~~connection ~~annual~~with ~~reporting~~customer ~~periods~~digital currency assets. The Company ~~expects~~also ~~that~~controls the ~~adoption~~bank ~~will~~accounts ~~not~~holding ~~have~~the acustomer ~~material~~custodial cash, ~~impact~~as reflected on ~~its~~the ~~unaudited~~accompanying condensed consolidated ~~financial~~balance ~~statements~~sheets.

~~Other accounting~~The ~~standards~~following ~~that~~table sets ~~have~~forth ~~been~~the ~~issued~~fair ormarket ~~proposed~~value byof ~~FASB~~customer ~~that~~digital docurrency ~~not~~assets, ~~require~~as ~~adoption~~shown ~~until~~in ~~a future date are not expected to have a material impact on~~ the ~~unaudited~~ condensed consolidated ~~financial~~balance ~~statements~~sheets, ~~upon~~as ~~adoption. The Company does not discuss recent pronouncements~~customer ~~that~~digital ~~are~~currency ~~not~~assets ~~anticipated~~and tocustomer ~~have~~digital ancurrency ~~impact~~liabilities, onas orof ~~are~~March ~~unrelated~~31, to2023 ~~its~~and ~~consolidated~~September ~~financial condition~~30, ~~results of operations, cash flows or disclosures.~~2022:

NOTE 4 - CUSTOMER ASSETS AND LIABILITIES

	March 31, 2023					September 30, 2022
	Fair value		Percentage of total			Fair value		Percentage of total
Bitcoin	$	3,210		0.8	%	$	162,294		65.4	%
Stablecoin/USD Coin		387,868		98.7	%		85,897		34.6	%
Ethereum		1,805		0.5	%		23		0.0	%
Others		162		0.0	%		-		-
Total customer digital currency assets	$	393,045		100.0	%	$	248,214		100.0	%

The Company includes customer funds in the condensed consolidated balance sheets as customer custodial cash and also includes such a corresponding liability reflected as customer custodial cash liabilities in the condensed consolidated balance sheets.15

~~The following~~NUKKLEUS ~~table~~INC. ~~presents~~AND ~~customers’~~SUBSIDIARIES NOTES ~~cash~~TO ~~and~~UNAUDITED ~~digital~~CONDENSED ~~positions:~~CONSOLIDATED FINANCIAL STATEMENTS

	December 31, 2022		September 30, 2022
Customer custodial cash	$	8,255,411	$	2,020,394
Customer digital currency assets		332,079		248,214
Total customer assets	$	8,587,490	$	2,268,608
Customer custodial cash liabilities	$	8,255,761	$	2,020,717
Customer digital currency liabilities		332,079		248,214
Total customer liabilities	$	8,587,840	$	2,268,931

NOTE 5 – DIGITAL ASSETS

The ~~Company~~following ~~controls digital~~table ~~assets~~summarizes ~~for~~the ~~its customers in digital wallets and digital token identifiers necessary to access digital assets on digital asset trading platforms. The~~ Company ~~maintains a record of all assets in~~ ’s digital ~~wallets held on digital~~ asset ~~trading~~holdings ~~platforms~~ as ~~well as the private keys, which are maintained on behalf~~ of ~~customers.~~March The Company records the assets and liabilities, on the initial recognition and at each reporting date, at the fair value of the digital assets which it controls for its customers. Any loss or theft would impact the measurement of the customer digital currency assets. During the three months ended December 31, 2022 and 2021, no losses have been incurred in connection with customer digital currency assets. The Company also controls the bank accounts holding the customer custodial cash, as reflected on the accompanying condensed consolidated balance sheets.2023:

Asset	Estimated useful life	Cost		Impairment		Digital assets
Bitcoin	Indefinite	$	12,526	$	-	$	12,526
Ethereum	Indefinite		1,352		-		1,352
Stablecoin/USD Coin	Indefinite		34,407		-		34,407
Other	Indefinite		175		-		175
Total		$	48,460	$	-	$	48,460

~~NUKKLEUS~~The following table summarizes the Company’s ~~INC.~~digital ~~AND~~asset ~~SUBSIDIARIES~~holdings as of September 30, 2022:

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Asset	Estimated useful life	Cost		Impairment		Digital assets
Bitcoin	Indefinite	$	63,377	$	774	$	62,603
Ethereum	Indefinite		1,289		-		1,289
Stablecoin/USD Coin	Indefinite		9,417		-		9,417
Other	Indefinite		106		-		106
Total		$	74,189	$	774	$	73,415

~~NOTE~~The Company recorded impairment expense of $133 4and -$0 ~~CUSTOMER~~for ~~ASSETS~~the ~~AND~~three ~~LIABILITIES~~months ~~(continued)~~ended March 31, 2023 and 2022, respectively. The Company recorded impairment expense of $7,743 and $0 for the six months ended March 31, 2023 and 2022, respectively.

~~The following~~NOTE ~~table~~6 ~~sets~~– ~~forth~~NOTE the fair market value of customer digital currency assets, as shown in the condensed consolidated balance sheets, as customer digital currency assets and customer digital currency liabilities, as of December 31, 2022 and September 30, 2022:RECEIVABLE

	December 31, 2022					September 30, 2022
	Fair value		Percentage of total			Fair value		Percentage of total
Bitcoin	$	110,705		33.3	%	$	162,294		65.4	%
Stablecoin/USD Coin		221,033		66.6	%		85,897		34.6	%
Ethereum		262		0.1	%		23		0.0	%
Others		79		0.0	%		-		-
Total customer digital currency assets	$	332,079		100.0	%	$	248,214		100.0	%

As of March 31, 2023, the Company made loans with an aggregate principal of $154,150 to Brilliant. The principal shall be payable promptly after the date on which Brilliant consummates an initial business combination with a target business. The principal may be prepaid at any time. These loans bear a fixed interest rate of 0% per annum. These loans shall not be convertible into any securities of Brilliant, and the Company shall have no recourse with respect to Brilliant’s ability to convert these loans into any securities of Brilliant (See Note 15 – Merger).

NOTE 5 7 – COST ~~DIGITAL~~METHOD ~~ASSETS~~INVESTMENT

~~The~~At March 31, 2023, cost method investment amounted ~~following~~to ~~table~~$6,602,000. ~~summarizes~~The investment represents the Company’s minority interest in Jacobi, a private company focused on digital asset management ~~holdings~~that ashas ofreceived ~~December~~regulatory ~~31,~~approval ~~2022:~~to launch the world’s first tier one Bitcoin ETF.

Asset	Estimated useful life	Cost		Impairment		Digital assets
Bitcoin	Indefinite	$	58,276	$	8,690	$	49,586
Ethereum	Indefinite		921		-		921
Stablecoin/USD Coin	Indefinite		10,967		-		10,967
Other	Indefinite		391		-		391
Total		$	70,555	$	8,690	$	61,865

On December 15, 2021, the Company issued 20,000,000 shares of its common stock to Jacobi’s shareholders for acquisition of 5.0% equity interest of Jacobi. These shares were valued at $6,602,000 ($0.3301 per share), the fair market value on the grant date using the reported closing share price of the Company on the date of grant.

In accordance with ASC Topic 321, the Company elected to use the measurement alternative to measure such investments at cost, less any impairment, plus or minus changes resulting from observable price changes in orderly transactions for identical or similar investments of the same issuer, if any. The Company monitors ~~following~~its ~~table~~investment ~~summarizes~~in the non-marketable security and will recognize, if ever existing, a loss in value which is deemed to be other than temporary. The Company's ~~digital~~determined ~~asset~~that ~~holdings~~there was no impairment of this investment as of ~~September~~March 3031, ~~2022:~~2023.

Asset	Estimated useful life	Cost		Impairment		Digital assets
Bitcoin	Indefinite	$	63,377	$	774	$	62,603
Ethereum	Indefinite		1,289		-		1,289
Stablecoin/USD Coin	Indefinite		9,417		-		9,417
Other	Indefinite		106		-		106
Total		$	74,189	$	774	$	73,415

~~The Company~~NUKKLEUS ~~recorded~~INC. ~~impairment~~AND ~~expense of $7,610 and $0 for the three months ended December 31, 2022 and 2021, respectively, which was included~~SUBSIDIARIES inNOTES ~~other~~TO ~~general~~UNAUDITED ~~and~~CONDENSED ~~administrative~~CONSOLIDATED ~~expenses~~FINANCIAL ~~on the accompanying unaudited condensed consolidated statements of operations and comprehensive loss.~~STATEMENTS

16NOTE 8 – EQUITY METHOD INVESTMENT

~~NUKKLEUS~~As of both March 31, 2023 and September 30, 2022, ~~INC~~the equity method investment amounted to $0. ~~AND~~The ~~SUBSIDIARIES~~investment represents the Company’s interest in Digiclear. Digiclear was incorporated on July 13, 2021 in United Kingdom. The company and the other unrelated party accounted for 50% and 50% of the total ownership, respectively. Digiclear is a company developing a custody and settlement utility operating system.

~~NOTES~~The Company accounts for the investment in Digiclear TOunder ~~UNAUDITED~~the ~~CONDENSED~~equity ~~CONSOLIDATED~~method ~~FINANCIAL~~of ~~STATEMENTS~~accounting. Under the equity method, the investment is initially recorded at cost, adjusted for any excess of the Company’s share of the incorporated-date fair values of the investee’s identifiable net assets over the cost of the investment (if any). Thereafter, the investment is adjusted for the post incorporation change in the Company’s share of the investee’s net assets and any impairment loss relating to the investment.

~~NOTE~~In September 2022, the Company assessed its equity 6method –investment ~~NOTE~~for ~~RECEIVABLE~~any impairment and concluded that there were indicators of impairment as of September 30, 2022. The impairment is due to the Company’s conclusion that it will be unable to recover the carrying amount of the investment due to the investee’s a series of operating losses and global economic environment. The Company calculated that the estimated undiscounted cash flows were less than the carrying amount related to the equity method investment. The Company has recognized an impairment loss of $4,310,745 related to the equity method investment for the year ended September 30, 2022, which reduced the investment value to zero.

AsNOTE of9 December 31, 2022, the Company made loans with an aggregate principal of $67,800 to Brilliant. The principal shall be payable promptly after the date on which Brilliant consummates an initial business combination with a target business. The principal may be prepaid at any time. These loans bear a fixed interest rate of 0% per annum. These loans shall not be convertible into any securities of Brilliant, and the Company shall have no recourse with respect to Brilliant’s ability to convert these loans into any securities of Brilliant (See Note 15 – INTANGIBLE ~~Merger).~~ASSETS

~~NOTE~~Intangible assets primarily consist of the valuation 7of ~~– COST~~identifiable ~~METHOD~~intangible ~~INVESTMENT~~ assets acquired, representing trade names, regulatory licenses, and technology. The straight-line method of amortization represents the Company’s best estimate of the distribution of the economic value of the identifiable intangible assets.

At ~~December~~ March 31, ~~2022,~~2023 ~~cost~~and ~~method~~September ~~investment~~30, ~~amounted to $6~~2022,~~602,000.~~ ~~The investment represents the Company’s minority interest in~~intangible ~~Jacobi,~~assets aconsisted ~~private~~of ~~company focused on digital asset management that has received regulatory approval to launch~~ the ~~world’s first tier one Bitcoin ETF.~~following:

	Useful Life	March 31, 2023			September 30, 2022
Trade names	3 Years	$	784,246		$	784,246
Regulatory licenses	3 Years		180,417			138,751
Technology	5 Years		10,300,774			10,300,774
Software	3 Years		11,237			11,237
			11,276,674			11,235,008
Less: accumulated amortization			(4,345,686	)		(3,159,903	)
		$	6,930,988		$	8,075,105

~~In accordance~~For ~~with~~the ~~ASC~~three ~~Topic~~months ~~321,~~ended ~~the~~March ~~Company~~31, ~~elected~~2023 toand 2022, ~~use~~amortization ~~the~~expense ~~measurement~~amounted ~~alternative~~ to ~~measure~~$592,891 and ~~such~~$592,891, ~~investments~~respectively, atof ~~cost~~which, ~~less~~$526,601 and ~~any impairment~~$526, ~~plus~~601 was ~~or minus changes resulting from observable price changes~~ included in ~~orderly~~cost ~~transactions~~of ~~for~~revenue ~~identical~~– orfinancial ~~similar investments of the same issuer~~services, ~~if any. The Company monitors its investment in the non-marketable security~~ and ~~will recognize~~$66,290 and ~~if ever existing~~$66,290 was aincluded ~~loss~~ in ~~value which~~operating isexpenses, ~~deemed to be other than temporary~~respectively. ~~The Company determined that there was no impairment of this investment as of December 31, 2022.~~

~~NOTE~~For the six months ended March 31, 2023 and 2022, 8amortization expense amounted to $1,185,783 and $1,504,834, respectively, of which, $1,053,202 and $1,373,190 was included in cost of revenue – financial services, and $132,581 ~~EQUITY~~and ~~METHOD~~$131,644 was ~~INVESTMENT~~included in operating expenses, respectively.

As Amortization of ~~both~~intangible ~~December~~assets ~~31, 2022 and September 30, 2022, the equity method investment amounted~~ attributable to ~~$0.~~future ~~The~~periods investment represents the Company’s interest in Digiclear. Digiclear was incorporated on July 13, 2021 in United Kingdom. The company and the other unrelated party accounted for 50% and 50% of the total ownership, respectively. Digiclear is aas ~~company developing a custody and settlement utility operating system.~~follows:

The Company accounts for the investment in Digiclear under the equity method of accounting. Under the equity method, the investment is initially recorded at cost, adjusted for any excess of the Company’s share of the incorporated-date fair values of the investee’s identifiable net assets over the cost of the investment (if any). Thereafter, the investment is adjusted for the post incorporation change in the Company’s share of the investee’s net assets and any impairment loss relating to the investment.

For the Twelve-month Period Ending March 31:	Amortization amount
2024	$	2,385,455
2025		2,128,130
2026		2,074,044
2027		343,359
2028 and thereafter		-
	$	6,930,988

In September 2022, the Company assessed its equity method investment for any impairment and concluded that there were indicators of impairment as of September 30, 2022. The impairment is due to the Company’s conclusion that it will be unable to recover the carrying amount of the investment due to the investee’s a series of operating losses and global economic environment. The Company calculated that the estimated undiscounted cash flows were less than the carrying amount related to the equity method investment. The Company has recognized an impairment loss of $4,310,745 related to the equity method investment for the year ended September 30, 2022, which reduced the investment value to zero.17

17NUKKLEUS INC. AND SUBSIDIARIES NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

~~NUKKLEUS INC.~~NOTE 10 – ACCRUED LIABILITIES AND ~~SUBSIDIARIES~~OTHER PAYABLES

~~NOTES~~At March 31, 2023 and September 30, 2022, accrued liabilities and TOother ~~UNAUDITED~~payables ~~CONDENSED~~consisted ~~CONSOLIDATED~~of ~~FINANCIAL~~the ~~STATEMENTS~~following:

NOTE 9 – INTANGIBLE ASSETS

	March 31, 2023		September 30, 2022
Unearned revenue	$	-	$	203,222
Others		33,689		29,133
Total	$	33,689	$	232,355

~~Intangible assets~~NOTE ~~primarily~~11 ~~consist~~– ofSHARE the valuation of identifiable intangible assets acquired, representing trade names, regulatory licenses, and technology. The straight-line method of amortization represents the Company’s best estimate of the distribution of the economic value of the identifiable intangible assets.CAPITAL

~~At December~~Preferred ~~31, 2022 and September 30, 2022, intangible assets consisted of the following:~~stock

	Useful Life	December 31, 2022			September 30, 2022
Trade names	3 Years	$	784,246		$	784,246
Regulatory licenses	3 Years		138,751			138,751
Technology	5 Years		10,300,774			10,300,774
Software	3 Years		11,237			11,237
			11,235,008			11,235,008
Less: accumulated amortization			(3,752,795	)		(3,159,903	)
		$	7,482,213		$	8,075,105

The Company’s Board of Directors is authorized to issue, at any time, without further stockholder approval, up to 15,000,000 shares of preferred stock. The Board of Directors has the authority to fix and determine the voting rights, rights of redemption and other rights and preferences of preferred stock.

For the three months ended December 31, 2022 and 2021, amortization expense amounted to $592,892 and $911,943, respectively, of which, $526,601 and $846,589 was included in cost of revenue – financial services, and $66,291 and $65,354 was included in operating expenses, respectively. Options

~~Amortization~~ The following table summarizes the shares of the ~~intangible~~Company’s ~~assets~~common ~~attributable~~stock toissuable ~~future~~upon ~~periods~~exercise isof asoptions ~~follows~~outstanding at March 31, 2023:

For the Twelve-month Period Ending December 31:		Amortization amount
	Options Outstanding							Options Exercisable
2023		$	2,371,566
	Range of Exercise Price			Number Outstanding at March 31, 2023	Weighted Average Remaining Contractual Life (Years)		Weighted Average Exercise Price	Number Exercisable at March 31, 2023		Weighted Average Exercise Price
2024			2,192,094
$	0.09 – 0.45			3,350,000	3.76	$	0.13	1,150,000	$	0.13
2025			2,060,155
	2.50			1,000,000	3.47		2.50	1,000,000		2.50
2026			858,398
$	0.09 – 2.50			4,350,000	3.69	$	0.67	2,150,000	$	1.23
2027 and thereafter			-
		$	7,482,213

~~NOTE~~Stock option activities 10for ~~– ACCOUNTS~~the ~~PAYABLE~~six ~~AND~~months ~~ACCRUED~~ended ~~LIABILITIES~~March 31, 2023 were as follows:

At December 31, 2022 and September 30, 2022, accounts payable and accrued liabilities consisted of the following:

	Number of Options			Weighted Average Exercise Price
Outstanding at October 1, 2022		5,850,000		$	0.67
Granted		-			-
Expired		(1,500,000	)		(0.67	)
Outstanding at March 31, 2023		4,350,000		$	0.67
Options exercisable at March 31, 2023		2,150,000		$	1.23
Options expected to vest		2,200,000		$	0.12

	December 31, 2022		September 30, 2022
Directors’ compensation	$	267,205	$	237,205
Unearned revenue		210,911		203,222
Professional fees		107,690		170,058
Accounts payable		55,389		51,712
Others		50,034		29,133
Total	$	691,229	$	691,330

The aggregate intrinsic value of both stock options outstanding and stock options exercisable at March 31, 2023 was $0.

18For the three months ended March 31, 2023 and 2022, stock-based compensation expense associated with stock options granted amounted to $74,667 and $525,622, respectively, which was recorded as professional fees on the accompanying unaudited condensed consolidated statements of operations and comprehensive loss.

~~NUKKLEUS~~For the six months ended March 31, 2023 and 2022, ~~INC.~~stock-based ~~AND~~compensation ~~SUBSIDIARIES~~expense associated with stock options granted amounted to $221,543 and $904,368, respectively, which was recorded as professional fees on the accompanying unaudited condensed consolidated statements of operations and comprehensive loss.

~~NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~18

~~NOTE~~NUKKLEUS INC. AND SUBSIDIARIES 11NOTES –TO ~~SHARE~~UNAUDITED ~~CAPITAL~~CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

~~Preferred~~NOTE 11 – SHARE ~~stock~~CAPITAL (continued)

~~The Company’s~~A ~~Board~~summary of ~~Directors~~the isstatus of ~~authorized~~the toCompany’s ~~issue,~~nonvested atstock ~~any~~options ~~time,~~granted ~~without~~as ~~further~~of ~~stockholder~~March ~~approval~~31, up2023 ~~to 15,000,000 shares of~~and ~~preferred~~changes ~~stock.~~during ~~The Board of Directors has~~ the ~~authority~~six tomonths ~~fix~~ended ~~and~~March ~~determine the voting rights~~31, ~~rights~~2023 ~~of redemption and other rights~~is ~~and~~presented ~~preferences of preferred stock.~~ below:

Options

	Number of Options			Weighted Average Exercise Price
Nonvested at October 1, 2022		3,800,000		$	0.35
Granted		-			-
Vested		(1,600,000	)		(0.65	)
Nonvested at March 31, 2023		2,200,000		$	0.12

~~The following~~NOTE ~~table~~12 ~~summarizes~~– ~~the~~RELATED ~~shares~~PARTY ~~of the Company’s common stock issuable upon exercise of options outstanding at December 31, 2022:~~TRANSACTIONS

Options Outstanding								Options Exercisable
Range of Exercise Price		Number Outstanding at December 31, 2022		Weighted Average Remaining Contractual Life (Years)		Weighted Average Exercise Price		Number Exercisable at December 31, 2022		Weighted Average Exercise Price
$	0.09 – 1.00		4,850,000		2.77	$	0.29		1,050,000	$	0.10
	2.50		1,000,000		3.72		2.50		1,000,000		2.50
$	0.09 – 2.50		5,850,000		2.93	$	0.67		2,050,000	$	1.27

Services provided by related parties

~~Stock~~From time to time, Oliver Worsley, a shareholder ~~option~~of ~~activities~~the Company, provides consulting services to the Company. As compensation for professional services provided, the Company recognized consulting expenses of $14,506 and $0 for the three months ended ~~December~~March 31, 2023 and 2022, ~~were~~respectively, aswhich ~~follows:~~have been included in professional fees on the accompanying unaudited condensed consolidated statements of operations and comprehensive loss. As compensation for professional services provided, the Company recognized consulting expenses of $25,063 and $0 for the six months ended March 31, 2023 and 2022, respectively, which have been included in professional fees on the accompanying unaudited condensed consolidated statements of operations and comprehensive loss. As of March 31, 2023 and September 30, 2022, the accrued and unpaid services charge related to Oliver Worsley amounted to $0 and $16,691, respectively, which have been included in accounts payable and accrued liabilities on the accompanying condensed consolidated balance sheets.

	Number of Options		Weighted Average Exercise Price
Outstanding at October 1, 2022		5,850,000	$	0.67
Granted		-		-
Terminated / Exercised / Expired		-		-
Outstanding at December 31, 2022		5,850,000	$	0.67
Options exercisable at December 31, 2022		2,050,000	$	1.27
Options expected to vest		3,800,000	$	0.35

From time to time, Craig Vallis, a shareholder of the Company, provides consulting services to the Company. As compensation for professional services provided, the Company recognized consulting expenses of $51,708 and $40,864 for the three months ended March 31, 2023 and 2022, respectively, which have been included in professional fees on the accompanying unaudited condensed consolidated statements of operations and comprehensive loss. As compensation for professional services provided, the Company recognized consulting expenses of $73,995 and $41,538 for the six months ended March 31, 2023 and 2022, respectively, which have been included in professional fees on the accompanying unaudited condensed consolidated statements of operations and comprehensive loss.

The Company uses affiliate employees for various ~~aggregate~~services ~~intrinsic~~such ~~value~~as the use of ~~both~~accountants ~~stock~~to ~~options~~record ~~outstanding~~the books and ~~stock~~accounts ~~options~~of ~~exercisable~~the Company at ~~December~~no 31charge to the Company, ~~2022~~which ~~was~~are $0considered immaterial.

~~For the~~Office ~~three~~space ~~months~~from ~~ended~~related December 31, 2022 and 2021, stock-based compensation expense associated with stock options granted amounted to $146,876 and $378,746, respectively, which was recorded as professional fees on the accompanying unaudited condensed consolidated statements of operations and comprehensive loss.parties

~~A summary of the status of the~~ The Company’s ~~nonvested~~uses ~~stock~~office ~~options~~space ~~granted as~~ of ~~December 31~~affiliate companies, ~~2022~~free ~~and~~of ~~changes during the three months ended December 31~~rent, ~~2022~~which is ~~presented~~considered ~~below:~~immaterial.

	Number of Options		Weighted Average Exercise Price
Nonvested at October 1, 2022		3,800,000	$	0.35
Granted		-		-
Vested		-		-
Nonvested at December 31, 2022		3,800,000	$	0.35

Revenue from related party and cost of revenue from related party

19The Company’s general support services operate under a GSA with TCM providing personnel and technical support, marketing, accounting, risk monitoring, documentation processing and customer care and support. The minimum monthly amount received is $1,600,000.

~~NUKKLEUS~~The Company’s general support services ~~INC~~operate under a GSA with FXDIRECT receiving personnel and technical support, marketing, accounting, risk monitoring, documentation processing and customer care and support. ~~AND~~The ~~SUBSIDIARIES~~minimum monthly amount payable is $1,575,000.

~~NOTES TO~~Both ~~UNAUDITED~~of ~~CONDENSED~~the ~~CONSOLIDATED~~above ~~FINANCIAL~~entities ~~STATEMENTS~~are affiliates through common ownership.

~~NOTE~~During the three and six months ended March 31, 122023 and 2022, general support services provided to the related party, which was recorded as revenue – ~~RELATED~~general ~~PARTY~~support ~~TRANSACTIONS~~services - related party on the accompanying unaudited condensed consolidated statements of operations and comprehensive loss were as follows:

~~Services provided by related parties~~19

~~From time~~NUKKLEUS ~~to time, Oliver Worsley, a shareholder of the Company, provides consulting services to the Company~~INC. AsAND ~~compensation for professional~~SUBSIDIARIES ~~services~~NOTES ~~provided,~~TO ~~the~~UNAUDITED ~~Company~~CONDENSED ~~recognized~~CONSOLIDATED ~~consulting~~FINANCIAL expenses of $10,557 and $0 for the three months ended December 31, 2022 and 2021, respectively, which have been included in professional fees on the accompanying unaudited condensed consolidated statements of operations and comprehensive loss. As of December 31, 2022 and September 30, 2022, the accrued and unpaid services charge related to Oliver Worsley amounted to $0 and $16,691, respectively, which have been included in accounts payable and accrued liabilities on the accompanying condensed consolidated balance sheets.STATEMENTS

~~From time~~NOTE to12 ~~time,~~– ~~Craig~~RELATED ~~Vallis,~~PARTY ~~a shareholder of the Company, provides consulting services to the Company. As compensation for professional~~TRANSACTIONS services provided, the Company recognized consulting expenses of $22,287 and $674 for the three months ended December 31, 2022 and 2021, respectively, which have been included in professional fees on the accompanying unaudited condensed consolidated statements of operations and comprehensive loss.(continued)

~~The Company~~Revenue ~~uses~~from ~~affiliate~~related ~~employees~~party ~~for various services such as the use of accountants to record the books~~ and ~~accounts~~cost of ~~the~~revenue ~~Company at~~from norelated ~~charge to the Company, which are considered immaterial.~~party (continued)

Office space from related parties

	Three Months Ended March 31,				Six Months Ended March 31,
	2023		2022		2023		2022
Service provided to:
TCM	$	4,800,000	$	4,800,000	$	9,600,000	$	9,600,000
	$	4,800,000	$	4,800,000	$	9,600,000	$	9,600,000

~~The~~During ~~Company~~the three ~~uses~~and ~~office~~six ~~space~~months ofended ~~affiliate~~March ~~companies~~31, ~~free~~2023 ofand ~~rent~~2022, services received from the related party, which iswas ~~considered~~recorded ~~immaterial.~~as cost of revenue – general support services - related party on the accompanying unaudited condensed consolidated statements of operations and comprehensive loss were as follows:

Revenue from related party and cost of revenue from related party

	Three Months Ended March 31,				Six Months Ended March 31,
	2023		2022		2023		2022
Service received from:
FXDIRECT	$	4,725,000	$	4,725,000	$	9,450,000	$	9,450,000
	$	4,725,000	$	4,725,000	$	9,450,000	$	9,450,000

~~The Company’s~~During ~~general~~the ~~support~~three ~~services~~months ~~operate~~ended ~~under~~March a31, ~~GSA~~2023 and ~~with~~2022, ~~TCM~~Digital ~~providing~~RFQ ~~personnel~~earned ~~and~~revenue ~~technical~~from ~~support,~~related ~~marketing~~parties in the amount of $53,772 ~~accounting~~and $5, ~~risk~~002, ~~monitoring~~respectively, ~~documentation~~which ~~processing~~was ~~and~~included ~~customer~~in ~~care~~revenue – ~~and~~financial ~~support.~~services ~~The~~on ~~minimum~~the ~~monthly~~accompanying ~~amount~~unaudited ~~received~~condensed isconsolidated ~~$1,600,000~~statements of operations and comprehensive loss.

~~The Company’s~~During ~~general~~the ~~support~~six ~~services~~months ~~operate~~ended ~~under~~March a31, ~~GSA~~2023 ~~with~~and 2022, ~~FXDIRECT~~Digital ~~receiving~~RFQ ~~personnel~~earned ~~and~~revenue ~~technical~~from ~~support,~~related ~~marketing~~parties in the amount of $78,516 ~~accounting~~and $10, ~~risk~~265, ~~monitoring~~respectively, ~~documentation~~which ~~processing~~was ~~and~~included ~~customer~~in ~~care~~revenue – ~~and~~financial ~~support.~~services ~~The~~on ~~minimum~~the ~~monthly~~accompanying ~~amount~~unaudited ~~payable~~condensed isconsolidated ~~$1,575,000~~statements of operations and comprehensive loss.

~~Both of~~Due ~~the~~from ~~above entities are~~ affiliates ~~through common ownership.~~

~~During the~~At ~~three~~March ~~months ended December~~ 31, ~~2022~~2023 and ~~2021~~September 30, ~~general support services provided to the related party~~2022, ~~which was recorded as revenue~~due –from ~~general~~affiliates ~~support~~consisted ~~services~~of ~~- related party on~~ the ~~accompanying unaudited condensed consolidated statements of operations and comprehensive loss were as follows~~following:

	Three Months Ended December 31,
	March 31, 2023		September 30, 2022
	2022		2021
Digiclear	$	229,838	$	35,762
Service provided to:
Jacobi		23,723		-
TCM	$	4,800,000	$	4,800,000
FXDD Mauritius (1)		1,854		-
	$	4,800,000	$	4,800,000
TCM		-		895,374
Total	$	255,415	$	931,136

~~During the three~~(1) ~~months~~FXDD ~~ended~~Mauritius ~~December~~is ~~31,~~controlled ~~2022~~by ~~and~~Emil ~~2021~~Assentato, ~~services~~the ~~received~~Company’s ~~from~~chief ~~the~~executive ~~related party~~officer, ~~which~~chief ~~was~~financial ~~recorded~~officer ~~as cost of revenue – general support services - related party on the accompanying unaudited condensed consolidated statements of operations~~ and ~~comprehensive loss were as follows:~~chairman.

	Three Months Ended December 31,
	2022		2021
Service received from:
FXDIRECT	$	4,725,000	$	4,725,000
	$	4,725,000	$	4,725,000

The balance due from Digiclear represents advances made to Digiclear and monies that the Company paid on behalf of Digiclear. The balances due from Jacobi and FXDD Mauritius represent monies that the Company paid on behalf of Jacobi and FXDD Mauritius. The balance due from TCM represents unsettled funds due related to the General Services Agreement and monies that the Company paid on behalf of TCM.

~~During~~Management ~~the~~believes ~~three~~that ~~months~~the ~~ended~~related ~~December~~parties’ receivables ~~31,~~are ~~2022~~fully ~~and~~collectable. ~~2021~~Therefore, ~~Digital~~no ~~RFQ earned~~allowance ~~revenue~~for ~~from~~doubtful ~~related~~account ~~parties~~is indeemed ~~the~~to ~~amount~~be ofrequired ~~$24,744~~on ~~and~~its ~~$5,263,~~due ~~respectively,~~from ~~which~~related ~~was~~parties at ~~included~~March in31, ~~revenue~~2023 –and ~~financial services~~September on30, ~~the~~2022. ~~accompanying~~The ~~unaudited~~Company ~~condensed~~historically ~~consolidated~~has ~~statements~~not ofexperienced ~~operations~~uncollectible ~~and~~receivable ~~comprehensive~~from ~~loss~~the related parties.

NUKKLEUS INC. AND SUBSIDIARIES NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

~~NOTES TO~~NOTE ~~UNAUDITED~~12 ~~CONDENSED~~– ~~CONSOLIDATED~~RELATED ~~FINANCIAL~~PARTY ~~STATEMENTS~~TRANSACTIONS (continued)

~~NOTE 12~~Due –to ~~RELATED PARTY TRANSACTIONS (continued)~~affiliates

~~Due~~At March 31, 2023 and September 30, 2022, due ~~from~~to affiliates consisted of the following:

At December 31, 2022 and September 30, 2022, due from affiliates consisted of the following:

	March 31, 2023		September 30, 2022
Forexware LLC ⁽¹⁾	$	1,125,591	$	1,079,229
FXDIRECT		2,909,501		3,042,101
Currency Mountain Holdings Bermuda, Limited (“CMH”)		42,000		42,000
TCM		91,749		-
FXDD Trading ⁽¹⁾		268,608		242,113
Markets Direct Payments ⁽¹⁾		2,346		2,114
Match Fintech Limited ⁽²⁾		66,449		106,506
Total	$	4,506,244	$	4,514,063

	December 31, 2022		September 30, 2022
Digiclear	$	116,262	$	35,762
TCM		530,329		895,374
Total	$	646,591	$	931,136

(1)	Forexware LLC, FXDD Trading, and Markets Direct Payments are controlled by Emil Assentato, the Company’s chief executive officer, chief financial officer and chairman.

~~The balance~~(2) ~~due~~Match ~~from~~Fintech ~~Digiclear~~Limited ~~represents~~is ~~advances~~controlled ~~made~~by toaffiliates ~~Digiclear.~~of ~~The balance due from TCM represents unsettled funds due related to~~ the ~~General Services Agreement and monies that the~~ Company ~~paid on behalf of TCM~~.

~~Management believes~~The ~~that~~balances ~~the~~due ~~related~~to ~~parties’~~affiliates ~~receivables~~represents ~~are~~expenses paid ~~fully~~by ~~collectable.~~Forexware ~~Therefore~~LLC, noFXDIRECT, ~~allowance~~TCM, ~~for~~FXDD ~~doubtful~~Trading, ~~account~~Markets isDirect ~~deemed~~Payments, ~~to be~~and ~~required~~Match onFintech ~~its~~Limited ~~due~~on ~~from~~behalf ~~related~~of ~~parties~~the atCompany ~~December~~and ~~31,~~advances from ~~2022~~CMH. ~~and~~The ~~September~~balance ~~30,~~due ~~2022.~~to ~~The~~FXDIRECT ~~Company~~may ~~historically~~also ~~has~~include ~~not~~unsettled ~~experienced uncollectible~~funds ~~receivable~~due ~~from~~related to the ~~related~~General ~~parties~~Service Agreement.

~~Due~~ Amounts due to affiliates are short-term in nature, non-interest bearing, unsecured and repayable on demand.

AtCustomer ~~December 31,~~digital ~~2022~~currency assets and ~~September~~liabilities – ~~30,~~related ~~2022, due to affiliates consisted of the following:~~parties

	December 31, 2022		September 30, 2022
Forexware LLC (1)	$	1,127,645	$	1,079,229
FXDIRECT		3,095,102		3,042,101
Currency Mountain Holdings Bermuda, Limited (“CMH”)		42,000		42,000
FXDD Trading (1)		263,191		242,113
Markets Direct Payments (1)		2,299		2,114
Match Fintech Limited (2)		107,328		106,506
Total	$	4,637,565	$	4,514,063

At March 31, 2023 and September 30, 2022, related parties’ digital currency, which was controlled by Digital RFQ, amounted to $393,045 and $248,214, respectively, which was included in customer digital currency assets and liabilities on the accompanying condensed consolidated balance sheets.

~~(1)~~Note ~~Forexware~~receivable ~~LLC,~~– related ~~FXDD Trading, and Markets Direct Payments are controlled by Emil Assentato, the Company’s chief executive officer, chief financial officer and chairman.~~party

~~(2)~~The ~~Match~~Company ~~Fintech~~originated ~~Limited~~a isnote ~~controlled~~receivable byto ~~affiliates~~a shareholder ofin the ~~Company~~principal amount of $35,000 on September 1, 2022. The note shall mature with respect to $17,500 on March 1, 2023 and with respect to $17,500 on September 1, 2023. The note bears a fixed interest rate of 5.0% per annum. Currently, this loan is in default.

~~The~~For ~~balances due~~the tothree ~~affiliates~~months ~~represents~~ended ~~expenses~~March ~~paid~~31, by2023, ~~Forexware~~the interest ~~LLC,~~income ~~FXDIRECT,~~related ~~FXDD~~to ~~Trading,~~this ~~Markets~~note ~~Direct~~amounted ~~Payments,~~to $455 and ~~Match~~has ~~Fintech~~been ~~Limited on~~included ~~behalf~~in ofother income on the ~~Company~~accompanying ~~and~~unaudited ~~advances~~condensed ~~from~~consolidated statements ~~CMH~~of operations and comprehensive loss. ~~The~~For ~~balance~~the ~~due~~six tomonths ~~FXDIRECT~~ended ~~may~~March ~~also~~31, ~~include~~2023, ~~unsettled~~the ~~funds~~interest ~~due~~income related to ~~the~~this ~~General~~note amounted ~~Service~~to ~~Agreement~~$894 and has been included in other income on the accompanying unaudited condensed consolidated statements of operations and comprehensive loss.

~~Amounts due~~As toof ~~affiliates~~March ~~are~~31, ~~short-term~~2023 inand ~~nature~~September 30, ~~non-~~2022, the outstanding interest ~~bearing~~balance related to this note was $1,079 ~~unsecured~~and $159, respectively, and ~~repayable~~was included in other current assets on the ~~demand~~accompanying condensed consolidated balance sheets.

~~Customer digital~~Letter ~~currency~~agreement ~~assets~~with ~~and liabilities – related parties~~ClearThink

AtNukkleus ~~December 31,~~is ~~2022~~party ~~and~~to ~~September~~a ~~30,~~letter ~~2022,~~agreement ~~related~~with ClearThink ~~parties’~~dated ~~digital~~as ~~currency~~of November 22, ~~which was controlled by Digital RFQ~~2021, ~~amounted~~pursuant to ~~$264,620~~which ~~and $248,214,~~ClearThink ~~respectively,~~was ~~which~~engaged ~~was~~by ~~included~~Nukkleus in ~~customer~~connection ~~digital~~with ~~currency~~the ~~assets~~Business ~~and~~Combination (See ~~liabilities~~Note on15 ~~the~~- White ~~accompanying~~lion ~~condensed~~stock ~~consolidated balance~~purchase ~~sheets~~agreement).

21Craig Marshak, a member of the Board of Directors of the Company, is a managing director of ClearThink, a transaction advisory firm. ClearThink has been engaged by the Company to serve as the exclusive transactional financial advisor, and finder with respect to the Business Combination, to advise the Company with respect to the Business Combination. As of March 31, 2023, the Company has paid ClearThink $140,000, and upon closing of the Business Combination the Company is obligated to pay ClearThink 1.2% of the total transaction value plus reimbursable expenses less the $140,000 paid to ClearThink as of March 31, 2023.

~~NUKKLEUS INC. AND SUBSIDIARIES~~21

~~NOTES TO~~NUKKLEUS ~~UNAUDITED~~INC. ~~CONDENSED~~AND ~~CONSOLIDATED FINANCIAL STATEMENTS~~SUBSIDIARIES

~~NOTE 12~~NOTES –TO ~~RELATED~~UNAUDITED ~~PARTY~~CONDENSED ~~TRANSACTIONS~~CONSOLIDATED ~~(continued)~~FINANCIAL STATEMENTS

~~Note receivable~~NOTE –13 ~~related party~~– CONCENTRATIONS

The Company originated a note receivable to a shareholder in the principal amount of $35,000 on September 1, 2022. The note shall mature with respect to $17,500 on March 1, 2023 and with respect to $17,500 on September 1, 2023. The note bears a fixed interest rate of 5.0% per annum.Customers

~~For the~~The ~~three~~following ~~months~~table ~~ended~~sets ~~December~~forth ~~31,~~information ~~2022, the interest income related~~ as to ~~this~~each ~~note~~customer ~~amounted~~that toaccounted ~~$439~~for ~~and~~10% ~~has~~or ~~been~~more ~~included~~of ~~in other income on~~ the ~~accompanying~~Company’s ~~unaudited~~revenues ~~condensed~~for ~~consolidated~~the ~~statements~~three ~~of operations~~ and ~~comprehensive~~six ~~loss.~~months Asended ofMarch ~~December~~ 31, ~~2022~~2023 and ~~September~~ ~~30,~~ 2022~~, the outstanding interest balance related to this note was $604 and $159, respectively, and was included in other current assets on the accompanying condensed consolidated balance sheets~~.

Letter agreement with ClearThink

	Three Months Ended March 31,						Six Months Ended March 31,
Customer	2023			2022			2023			2022
A – related party		85.2	%		94.3	%		87.2	%		94.0	%

~~Nukkleus is~~One related party tocustomer, awhose ~~letter~~outstanding receivable ~~agreement~~accounted ~~with~~for 10% ~~ClearThink~~or ~~dated~~more as of ~~November 22,~~the ~~2021,~~Company’s ~~pursuant~~total tooutstanding ~~which~~due ~~ClearThink~~from ~~was~~affiliates ~~engaged~~at byMarch ~~Nukkleus in~~31, ~~connection~~2023, ~~with~~accounted for 90.0% of the ~~Business~~Company’s ~~Combination~~total ~~(See~~outstanding ~~Note~~due 15from ~~- White~~affiliates ~~lion~~at ~~stock~~March ~~purchase~~31, ~~agreement)~~2023.

~~Craig~~One ~~Marshak, a~~related ~~member~~party ~~of the Board of Directors of the Company~~customer, iswhose ~~a managing director of ClearThink, a transaction advisory firm. ClearThink has~~outstanding ~~been~~receivable ~~engaged~~accounted byfor ~~the~~10% ~~Company~~or tomore ~~serve~~of as the ~~exclusive transactional financial advisor, and finder with respect to the Business Combination, to advise the~~ Company’s ~~with~~total ~~respect~~outstanding todue ~~the~~from ~~Business~~affiliates ~~Combination. As~~at ofSeptember ~~December 31~~30, 2022, ~~the~~accounted ~~Company has paid ClearThink $140,000,~~for ~~and upon closing of the Business Combination the Company is obligated to pay ClearThink 1~~96.2% of the Company’s total ~~transaction~~outstanding ~~value~~due ~~plus~~from ~~reimbursable expenses~~affiliates ~~less~~at ~~the~~September ~~$140~~30,~~000~~ ~~paid to ClearThink as of December 31,~~ 2022.

~~NOTE 13 – CONCENTRATIONS~~Suppliers

~~Customers~~The following table sets forth information as to each supplier that accounted for 10% or more of the Company’s costs of revenues for the three and six months ended March 31, 2023 and 2022.

The following table sets forth information as to each customer that accounted for 10% or more of the Company’s revenues for the three months ended December 31, 2022 and 2021.

	Three Months Ended March 31,						Six Months Ended March 31,
Supplier	2023			2022			2023			2022
A – related party		86.1	%		89.6	%		86.6	%		86.9	%

	Three Months Ended December 31,
Customer	2022			2021
A – related party		89.3	%		93.6	%

Two related party suppliers, whose outstanding payables accounted for 10% or more of the Company’s total outstanding accounts payable and due to affiliates at March 31, 2023, accounted for 78.1% of the Company’s total outstanding accounts payable and due to affiliates at March 31, 2023.

Two related party ~~customers~~suppliers, whose outstanding payables ~~receivables~~ accounted for 10% or more of the Company’s total outstanding accounts payable and due ~~from~~to affiliates at ~~December 31~~September 30, 2022, accounted for 9979.92% of the Company’s total outstanding accounts payable and due ~~from~~to affiliates at ~~December~~September 3130, 2022.

~~One related~~NOTE ~~party~~14 ~~customer,~~– SEGMENT whose outstanding receivable accounted for 10% or more of the Company’s total outstanding due from affiliates at September 30, 2022, accounted for 96.2% of the Company’s total outstanding due from affiliates at September 30, 2022.INFORMATION

~~Suppliers~~For the three and six months ended March 31, 2023 and 2022, the Company operated in two reportable business segments - (1) the general support services segment, in which we provide software, technology, customer sales and marketing and risk management technology hardware and software solutions package under a GSA to a related party; and (2) the financial services segment, in which we provide payment services from one fiat currency to another. The Company’s reportable segments are strategic business units that offer different services and products. They are managed separately based on the fundamental differences in their operations.

~~The following table sets forth information as to each supplier that accounted for 10% or more of the Company’s costs of revenues for the three months ended December 31, 2022 and 2021.~~22

	Three Months Ended December 31,
Supplier	2022			2021
A – related party		87.0	%		84.4	%

NUKKLEUS INC. AND SUBSIDIARIES

~~Two~~NOTES ~~related party~~TO ~~suppliers,~~UNAUDITED ~~whose~~CONDENSED ~~outstanding~~CONSOLIDATED ~~payables accounted for 10% or more of the Company’s total outstanding accounts payable~~FINANCIAL ~~and due to affiliates at December 31, 2022, accounted for 79.2% of the Company’s total outstanding accounts payable and due to affiliates at December 31, 2022.~~STATEMENTS

~~Two related~~NOTE ~~party~~14 ~~suppliers, whose outstanding payables accounted for~~– ~~10%~~SEGMENT ~~or more of the Company’s total outstanding accounts~~INFORMATION ~~payable and due to affiliates at September 30, 2022, accounted for 79.2% of the Company’s total outstanding accounts payable and due to affiliates at September 30, 2022.~~(continued)

22Information with respect to these reportable business segments for the three and six months ended March 31, 2023 and 2022 was as follows:

NUKKLEUS INC. AND SUBSIDIARIES

	Three Months Ended March 31,						Six Months Ended March 31,
	2023			2022			2023			2022
				(as restated)						(as restated)
Revenues
General support services	$	4,800,000		$	4,800,000		$	9,600,000		$	9,600,000
Financial services		833,944			289,017			1,410,332			618,032
Total		5,633,944			5,089,017			11,010,332			10,218,032

Costs of revenues
General support services		4,725,000			4,725,000			9,450,000			9,450,000
Financial services		760,982			547,719			1,467,243			1,421,924
Total		5,485,982			5,272,719			10,917,243			10,871,924

Gross profit (loss)
General support services		75,000			75,000			150,000			150,000
Financial services		72,962			(258,702	)		(56,911	)		(803,892	)
Total		147,962			(183,702	)		93,089			(653,892	)

Operating expenses
Financial services		543,688			420,697			1,037,727			956,978
Corporate/Other		410,638			1,249,323			998,221			2,186,475
Total		954,326			1,670,020			2,035,948			3,143,453

Other income (expense)
Financial services		715			(1,185	)		3,288			(2,401	)
Corporate/Other		-			(71,707	)		-			(71,707	)
Total		715			(72,892	)		3,288			(74,108	)

Net income (loss)
General support services		75,000			75,000			150,000			150,000
Financial services		(470,011	)		(680,584	)		(1,091,350	)		(1,763,271	)
Corporate/Other		(410,638	)		(1,321,030	)		(998,221	)		(2,258,182	)
Total		(805,649	)		(1,926,614	)		(1,939,571	)		(3,871,453	)

Amortization
Financial services		591,954			591,955			1,183,910			1,503,898
Corporate/Other		937			936			1,873			936
Total	$	592,891		$	592,891		$	1,185,783		$	1,504,834

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Total assets at March 31, 2023 and September 30, 2022	March 31, 2023		September 30, 2022
Financial services	$	7,753,029	$	10,768,309
Corporate/Other		7,190,764		7,596,595
Total	$	14,943,793	$	18,364,904

~~NOTE 14 – SEGMENT INFORMATION~~23

~~For the~~NUKKLEUS three months ended December 31, 2022 and 2021, the Company operated in two reportable business segments - (1) the general support services segment, in which we provide software, technology, customer sales and marketing and risk management technology hardware and software solutions package under a GSA to a related party; and (2) the financial services segment, in which we provide payment services from one fiat currency to anotherINC. ~~The~~AND ~~Company’s reportable segments are strategic business units that offer different services and products. They are managed separately based on the fundamental differences in their operations.~~SUBSIDIARIES

~~Information with~~NOTES ~~respect~~TO toUNAUDITED ~~these~~CONDENSED ~~reportable~~CONSOLIDATED ~~business segments for the three months ended December 31, 2022 and 2021 was as follows:~~FINANCIAL STATEMENTS

	Three Months Ended December 31,
	2022			2021
				(as restated)
Revenues
General support services	$	4,800,000		$	4,800,000
Financial services		576,388			329,015
Total		5,376,388			5,129,015
Costs of revenues
General support services		4,725,000			4,725,000
Financial services		706,261			874,205
Total		5,431,261			5,599,205
Gross profit (loss)
General support services		75,000			75,000
Financial services		(129,873	)		(545,190	)
Total		(54,873	)		(470,190	)
Operating expenses
Financial services		494,039			536,281
Corporate/Other		587,583			937,152
Total		1,081,622			1,473,433
Other income (expense)
Financial services		2,573			(1,216	)
Total		2,573			(1,216	)
Net income (loss)
General support services		75,000			75,000
Financial services		(621,339	)		(1,082,687	)
Corporate/Other		(587,583	)		(937,152	)
Total		(1,133,922	)		(1,944,839	)
Amortization
Financial services		591,956			911,943
Corporate/Other		936			-
Total	$	592,892		$	911,943

NOTE 15 – COMMITMENTS AND CONTINGENCIES

23Digital asset wallets

~~NUKKLEUS~~Digital RFQ has committed to safeguard all digital ~~INC~~assets and digital token identifiers on behalf of its customers. ~~AND~~As ~~SUBSIDIARIES~~such, Digital RFQ may be liable to its customers for losses arising from theft or loss of customer private keys. Digital RFQ has no reason to believe it will incur any expense associated with such potential liability because (i) it has no known or historical experience of claims to use as a basis of measurement, (ii) it accounts for and continually verifies the amount of digital assets within its control, and (iii) it engages third parties, which are digital asset trading platforms, to provide certain custodial services, including holding its customers’ digital token identifiers, securing its customers’ digital assets, and protecting them from loss or theft, including indemnification against certain types of losses such as theft. Its third-party digital asset trading platforms hold the digital assets in accounts in Digital RFQ’s name for the benefit of Digital RFQ’s customers.

~~NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~Merger

~~NOTE~~On February 22, 2022, the Company entered into 14an ~~– SEGMENT~~Agreement ~~INFORMATION~~and Plan of Merger (~~continued~~as it may be amended, supplemented or otherwise modified from time to time, the “Merger Agreement”), by and among the Company and Brilliant Acquisition Corporation, a British Virgin Islands company (“Brilliant”). The Merger Agreement has been approved by the Company’s boards of directors. On January 20, 2023, parties to the Merger Agreement entered into an Amendment No. 3 to the Merger Agreement (the “Amendment”) solely to extend the Outside Closing Date (as defined in the Merger Agreement), to June 23, 2023 (following the approval by Brilliant’s shareholders of the extension of the life of the SPAC pursuant to Brilliant’s organizational documents, which was granted on April 20, 2023). The transactions contemplated by the Merger Agreement are expected to close in the third quarter of fiscal year 2023, provided however there is no guarantee that the transaction will close.

Total assets at December 31, 2022 and September 30, 2022	December 31, 2022		September 30, 2022
Financial services	$	16,412,436	$	10,768,309
Corporate/Other		7,379,749		7,596,595
Total	$	23,792,185	$	18,364,904

White lion stock purchase agreement

~~NOTE~~On May 17, 2022, the Company entered into a Stock 15Purchase –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 has 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 ~~COMMITMENTS~~or ~~AND~~such ~~CONTINGENCIES~~lower amount as may be required pursuant to the rules of the market on which shares of its common stock trades at such time. Pursuant to terms of the White Lion Agreement and the Registration Rights Agreement (as defined below), the Company is required to use its commercially reasonable efforts to file with the SEC a registration statement covering the shares to be acquired by White Lion within sixty days following the closing of the previously announced business combination with Brilliant Acquisition Corporation described in its Current Report on Form 8-K filed with the SEC on February 23, 2022 (the “Business Combination”).

~~Digital~~The term of the White Lion Agreement commences ~~asset~~on ~~wallets~~the effective date of the registration statement and shall end on December 31, 2024, or, if earlier, the date on which White Lion has purchased the maximum number of shares of the Company’s common stock provided under the White Lion Agreement, in each case on the terms and subject to the conditions set forth in the White Lion Agreement. White Lion’s purchase price will be 96% of the dollar- volume weighted average price of the Company’s common stock over the two consecutive trading days immediately following receipt of the Company’s notice of its intent to make a draw. As of March 31, 2023, the White Lion Agreement is not yet effective.

~~Digital RFQ~~During ~~has~~the ~~committed~~term ~~to safeguard all digital assets and digital token identifiers on behalf~~ of ~~its~~the ~~customers.~~White AsLion ~~such~~Agreement, on ~~Digital~~the ~~RFQ~~terms ~~may be~~and ~~liable~~subject to ~~its~~the ~~customers~~conditions ~~for~~set ~~losses~~forth ~~arising~~therein, ~~from~~the ~~theft~~Company ormay ~~loss~~draw ofup ~~customer private keys. Digital RFQ has no reason~~ to ~~believe~~the itlesser ~~will incur any expense associated with such potential liability because~~ of (i) the itnumber ~~has~~of noshares of ~~known~~the orCompany’s ~~historical~~common ~~experience~~stock ofwhich ~~claims~~would toresult ~~use~~in asbeneficial ~~a basis~~ownership ofby ~~measurement,~~White ~~(ii)~~Lion itof ~~accounts~~more ~~for~~than ~~and~~4.99% ~~continually~~of ~~verifies~~ the ~~amount~~outstanding shares of ~~digital~~the ~~assets~~Company’s ~~within~~common ~~its control~~stock, ~~and~~ (~~iii~~ii) the itnumber ~~engages third~~of ~~parties,~~shares ~~which~~of ~~are~~the ~~digital~~Company’s ~~asset~~common ~~trading~~stock ~~platforms,~~equal to ~~provide~~30% ~~certain~~of ~~custodial~~the ~~services,~~average ~~including~~daily trading ~~holding~~volume ~~its~~of ~~customers~~the Company’ ~~digital~~s ~~token~~common ~~identifiers,~~stock ~~securing~~over ~~its~~the ~~customers’~~five ~~digital~~consecutive ~~assets,~~trading ~~and~~days ~~protecting~~immediately ~~them~~following ~~from~~the ~~loss~~notice ~~or theft~~date, ~~including~~or ~~indemnification~~(iii) the ~~against~~number ~~certain types~~ of ~~losses~~the ~~such~~Company’s ascommon ~~theft.~~stock ~~Its~~obtained ~~third-party~~by ~~digital~~dividing ~~asset~~$1,500,000 ~~trading~~by ~~platforms hold~~ the ~~digital~~closing ~~assets~~sale inprice ~~accounts~~of ~~in Digital~~the ~~RFQ~~Company’s ~~name~~common ~~for~~stock on the ~~benefit~~notice ~~of Digital RFQ’s customers~~date.

~~Merger~~24

OnNUKKLEUS February 22, 2022, the Company entered into an Agreement and Plan of Merger (as it may be amended, supplemented or otherwise modified from time to time, the “Merger Agreement”), by and among the Company and Brilliant Acquisition Corporation, a British Virgin Islands company (“Brilliant”)INC. ~~The~~AND Merger Agreement has been approved by the Company’s boards of directors. On January 20, 2023, parties to the Merger Agreement entered into an Amendment No. 3 to the Merger Agreement (the “Amendment”) solely to extend the Outside Closing Date (as defined in the Merger Agreement), to June 23, 2023 (following the approval by Brilliant’s shareholders of the extension of the life of the SPAC pursuant to Brilliant’s organizational documents, which was granted on April 20, 2023). The transactions contemplated by the Merger Agreement are expected to close in the third quarter of fiscal year 2023, provided however there is no guarantee that the transaction will close.SUBSIDIARIES

~~White lion~~NOTES ~~stock~~TO ~~purchase~~UNAUDITED ~~agreement~~CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

~~On May~~NOTE ~~17,~~15 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 has 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– orCOMMITMENTS ~~such lower~~AND ~~amount as may be required pursuant to the rules of the market on which shares of its common stock trades at such time. Pursuant~~CONTINGENCIES ~~to terms of the White Lion Agreement and the Registration Rights Agreement~~ (~~as defined below~~continued), the Company is required to use its commercially reasonable efforts to file with the SEC a registration statement covering the shares to be acquired by White Lion within sixty days following the closing of the previously announced business combination with Brilliant Acquisition Corporation described in its Current Report on Form 8-K filed with the SEC on February 23, 2022 (the “Business Combination”).

~~The term of the~~ White ~~Lion~~lion Agreement commences on the effective date of the registration statement and shall end on December 31, 2024, or, if earlier, the date on which White Lion has purchased the maximum number of shares of the Company’s common stock ~~provided under the White Lion Agreement, in each case on the terms and subject to the conditions set forth in the White Lion Agreement. White Lion’s~~ purchase ~~price~~agreement will be 96% of the dollar- volume weighted average price of the Company’s common stock over the two consecutive trading days immediately following receipt of the Company’s notice of its intent to make a draw. As of December 31, 2022, the White Lion Agreement is not yet effective.(continued)

24The Company is not entitled to draw on the White Lion Agreement if the closing sale price of the Company’s common stock on the trading day immediately preceding the notice date is less than $1.00 (following the reverse stock split proposed in connection with the closing of the Business Combination and described in the Company’s Current Report on Form 8-K filed with the SEC on February 23, 2022, but adjusted for any other reorganization, recapitalization, non-cash dividend, stock split or other similar transaction). The Company is not entitled to draw on the White Lion Agreement unless each of the following additional conditions is satisfied: (i) each of the Company’s representations and warranties set forth in the White Lion Agreement is true and correct (subject to qualifications as to materiality set forth therein) in all respects as of such time; (ii) a registration statement is and remains effective for the resale of securities in connection with the White Lion Agreement; (iii) the trading of the Company’s common stock shall not have been suspended by the SEC, the applicable trading market or FINRA, or otherwise halted for any reason; (iv) the Company shall have complied with its obligations and shall not otherwise be in breach or default of any agreement set forth in the White Lion Agreement; (v) no statute, regulation, order, guidance, decree, writ, ruling or injunction shall have been enacted, entered, promulgated, threatened or endorsed by any federal, state, local or foreign court or governmental authority of competent jurisdiction, including, without limitation, the SEC, which prohibits the consummation of or which would materially modify or delay any of the transactions contemplated by the White Lion Agreement; (vi) all reports, schedules, registrations, forms, statements, information and other documents required to have been filed by us with the SEC pursuant to the reporting requirements of the Exchange Act of 1934 (other than Forms 8-K) shall have been filed with the SEC within the applicable time periods prescribed for such filings; (vii) to the extent the issuance of the put shares requires shareholder approval under the listing rules of the applicable national exchange or principal quotation system for the Company’s common stock, the Company has or will seek such approval; and (viii) certain other conditions as set forth in the White Lion Agreement.

~~NUKKLEUS~~In addition to the shares to be issued under ~~INC.~~the ~~AND~~White ~~SUBSIDIARIES~~Lion Agreement, the Company will include in its registration statement additional shares of the Company’s common stock in the amount of $750,000 being issued to White Lion in connection with the execution of the White Lion Agreement.

~~NOTES TO~~White ~~UNAUDITED~~lion ~~CONDENSED~~registration ~~CONSOLIDATED~~rights ~~FINANCIAL STATEMENTS~~agreement

~~NOTE~~In connection with the Company’s entry 15into ~~– COMMITMENTS~~the ~~AND~~White ~~CONTINGENCIES~~Lion Agreement, the Company entered into a Registration Rights Agreement with White Lion (~~continued~~the “Registration Rights Agreement”). Pursuant to the terms of the Registration Rights Agreement, the Company has agreed to use its commercially reasonable efforts to file a registration statement under the Securities Act registering the resale of the shares sold under the White Lion Agreement within sixty days of the closing of the Business Combination. The Registration Rights Agreement also provides that the Company is required to use its commercially reasonable efforts to keep the registration effective and to prepare and file with the SEC such amendments and supplements if the foregoing registration statement is not then in effect, and the Company proposes to file certain types of registration statements under as may be necessary to keep the registration statement effective.

~~White lion~~NOTE ~~stock~~16 ~~purchase~~– ~~agreement (continued)~~SUBSEQUENT EVENTS

~~During the~~The ~~term~~Company ofevaluated subsequent ~~the~~events ~~White Lion Agreement, on the terms~~ and ~~subject~~transactions tothat ~~the~~occurred ~~conditions~~after ~~set forth therein,~~ the ~~Company~~balance ~~may~~sheet ~~draw~~date up to the ~~lesser of (i) the~~date ~~number~~that ~~of shares of~~ the ~~Company’s~~financial ~~common~~statements ~~stock~~were ~~which~~issued. Based ~~would~~upon ~~result~~this inreview, ~~beneficial~~other ~~ownership by White Lion of more~~ than ~~4.99%~~as ofdescribed ~~the outstanding shares of the Company’s common stock~~below, ~~(ii)~~ the ~~number of shares of the~~ Company~~’s common~~ ~~stock~~did ~~equal~~not toidentify ~~30%~~any ofsubsequent ~~the~~events ~~average~~that ~~daily~~would ~~trading~~have ~~volume~~required ~~of the Company’s common stock over the five consecutive trading days~~adjustment ~~immediately following the notice date,~~ or ~~(iii) the~~disclosure ~~number~~in of the ~~Company’s~~financial ~~common stock obtained by dividing $1,500,000 by the closing sale price of the Company’s common stock on the notice date~~statements.

The ~~Company~~ ~~is not entitled to draw on the White Lion Agreement if the closing sale price of the~~ Company’s ~~common~~made ~~stock on the trading~~loans ~~day immediately preceding the notice date is less than $1.00 (following the reverse stock split proposed in connection~~ with ~~the closing~~an ofaggregate ~~the~~principal Business Combination and described in the Company’s Current Report on Form 8-K filed with the SEC on February 23, 2022, but adjusted for any other reorganization, recapitalization, non-cash dividend, stock split or other similar transaction). The Company is not entitled to draw on the White Lion Agreement unless each of the following additional conditions is satisfied: (i) each of the Company’s representations and warranties set forth in the White Lion Agreement is true and correct (subject to qualifications as to materiality set forth therein) in all respects as of such time; (ii) a registration statement is and remains effective for the resale of securities in connection with the White Lion Agreement; (iii) the trading of the Company’s common stock shall not have been suspended by the SEC$32,450 the applicable trading market or FINRA, or otherwise halted for any reason; (iv) the Company shall have complied with its obligations and shall not otherwise be in breach or default of any agreement set forth in the White Lion Agreement; (v) no statute, regulation, order, guidance, decree, writ, ruling or injunction shall have been enacted, entered, promulgated, threatened or endorsed by any federal, state, local or foreign court or governmental authority of competent jurisdiction, including, without limitation, the SEC, which prohibits the consummation of or which would materially modify or delay any of the transactions contemplated by the White Lion Agreement; (vi) all reports, schedules, registrations, forms, statements, information and other documents required to ~~have~~Brilliant been filed by us with the SEC pursuant to the reporting requirements of the Exchange Act of 1934 (other than Forms 8-K) shall have been filed with the SEC within the applicable time periods prescribed for such filings; (vii) to the extent the issuance of the put shares requires shareholder approval under the listing rules of the applicable national exchange or principal quotation system for the Company’s common stock, the Company has or will seek such approval; and (viii) certain other conditions as set forth in ~~the~~subsequent ~~White Lion Agreement~~period.

In addition to the shares to be issued under the White Lion Agreement, the Company will include in its registration statement additional shares of the Company’s common stock in the amount of $750,000 being issued to White Lion in connection with the execution of the White Lion Agreement.25

~~White lion~~Item ~~registration~~2. ~~rights~~Management’s ~~agreement~~Discussion and Analysis of Financial Condition and Results of Operations.

~~In connection~~The ~~with~~following ~~the Company’s entry into the White Lion Agreement, the Company entered into a Registration Rights Agreement with~~discussion ~~White~~and ~~Lion~~analysis ~~(the “Registration Rights Agreement”). Pursuant to the terms~~ of ~~the~~our ~~Registration~~financial ~~Rights~~condition ~~Agreement,~~and ~~the~~results ~~Company has agreed to use its commercially reasonable efforts to file a registration statement under the Securities Act registering the resale~~ of ~~the~~operations ~~shares~~for ~~sold under~~ the ~~White~~three ~~Lion~~and ~~Agreement~~six ~~within~~months ~~sixty~~ended ~~days~~March of31, ~~the~~2023 ~~closing~~and of2022 ~~the~~should ~~Business Combination. The Registration Rights~~be ~~Agreement~~read ~~also~~in ~~provides~~conjunction ~~that the Company is required to use its commercially reasonable efforts to keep the registration effective and to prepare and file~~ with ~~the~~our ~~SEC~~unaudited ~~such~~condensed ~~amendments~~consolidated ~~and~~financial ~~supplements~~statements ~~if the foregoing registration statement is not then in effect,~~ and ~~the Company~~related ~~proposes~~notes to ~~file~~those ~~certain~~unaudited ~~types~~condensed ofconsolidated financial ~~registration~~ statements ~~under~~that asare ~~may~~included beelsewhere ~~necessary~~in tothis ~~keep the registration statement effective~~report.

~~NOTE~~Certain matters discussed 16herein –are ~~SUBSEQUENT~~forward-looking ~~EVENTS~~statements. Such forward-looking statements contained in this Form 10-Q involve risks and uncertainties, including statements as to:

~~The~~● ~~Company~~our ~~evaluated~~future ~~subsequent~~operating events and transactions that occurred after the balance sheet date up to the date that the financial statements were issued. Based upon this review, other than as described below, the Company did not identify any subsequent events that would have required adjustment or disclosure in the financial statements.results;

~~The~~● ~~Company~~our ~~made~~business ~~loans with an aggregate principal of $118,800 to Brilliant in subsequent period.~~prospects;

We● ~~currently,~~any ~~and~~contractual ~~may~~arrangements inand ~~the~~relationships ~~future,~~with ~~have~~third assets held at financial institutions that may exceed the insurance coverage offered by the Federal Deposit Insurance Corporation (“FDIC”), the loss of which would have a severe negative affect on our operations and liquidity.parties;

We● ~~may maintain our cash assets at financial institutions in~~ the ~~U.S.~~dependence ~~in amounts that may be in excess~~ of ~~the~~our FDIC insurance limit of $250,000. Actual events involving limited liquidity, defaults, non-performance or other adverse developments that affect financial institutions, transactional counterparties or other companies in the financial services industry or the financial services industry generally, or concerns or rumors about any events of these kinds or other similar risks, have in the past and may in the future ~~lead~~success to market-wide liquidity problems. For example, in response to the rapidly declining financial condition of regional banks Silicon Valley Bank (“SVB”) and Signature Bank (“Signature”), the California Department of Financial Protection and Innovation and the New York State Department of Financial Services closed SVB and Signature on ~~March 10, 2023 and March 12, 2023, respectively, and~~ the ~~FDIC~~general was appointed as receiver for SVB and Signature. In the event of a failure or liquidity issues of or at any of the financial institutions where we maintain our deposits or other assets, we may incur a loss to the extent such loss exceeds the FDIC insurance limitation, which could have a material adverse effect upon our liquidity, financial condition and our results of operations.economy;

~~Similarly,~~● ifany ~~our~~possible ~~customers~~financings; ~~experience liquidity issues as a result of financial institution defaults or non-performance where they hold cash assets, their ability to pay us may become impaired~~ and ~~could have a material adverse effect on our results of operations, including the collection of accounts receivable and cash flows.~~

25● the adequacy of our cash resources and working capital.

~~Item 2.~~Impact ~~Management’s Discussion and Analysis~~ of ~~Financial~~COVID-19 ~~Condition~~on ~~and~~Our ~~Results of~~ Operations.

The ramifications of ~~following~~the ~~discussion~~outbreak ~~and~~of ~~analysis~~the novel strain of ~~our~~COVID-19, ~~financial~~reported ~~condition~~to have started in December 2019 and ~~results~~spread ofglobally, are filled with uncertainty and changing quickly. Our operations ~~for~~have continued during the ~~three~~COVID-19 ~~months~~pandemic ~~ended~~and ~~December~~we ~~31,~~have ~~2022~~not ~~and 2021~~had ~~should~~significant bedisruption. ~~read~~Due into ~~conjunction~~the nature ~~with~~of our ~~unaudited~~business, ~~condensed~~the ~~consolidated~~technology ~~financial~~we ~~statements~~use and ~~related~~offer ~~notes~~to our customers, and our employees’ ability to ~~those~~work ~~unaudited~~remotely, there was ~~condensed~~no ~~consolidated~~material ~~financial~~impact ~~statements~~of ~~that~~COVID-19 ~~are~~on ~~included~~our ~~elsewhere~~business, inoperations ~~this~~and ~~report~~financial results.

~~Certain~~The Company is operating ~~matters~~in ~~discussed~~a ~~herein~~rapidly ~~are~~changing ~~forward-looking~~environment ~~statements.~~so ~~Such~~the ~~forward~~extent to which COVID-~~looking~~19 ~~statements~~impacts ~~contained~~its inbusiness, operations and financial results from this ~~Form~~point forward ~~10-Q~~will ~~involve~~depend ~~risks~~on ~~and~~numerous evolving factors that the Company cannot accurately predict. Those factors include the following: the ~~uncertainties~~duration and scope of the pandemic, ~~including~~and ~~statements~~governmental, asbusiness and individuals’ actions that have been and continue to: be taken in response to the pandemic.

~~● our future operating results;~~Overview

●We are a financial technology company which is focused on providing software and technology solutions for the worldwide retail foreign exchange (“FX”) trading industry. We primarily provide our ~~business~~software, ~~prospects;~~technology, customer sales and marketing and risk management technology hardware and software solutions package to TCM. The FXDD brand (e.g., see FXDD.com) is the brand utilized in the retail forex trading industry by TCM.

●We ~~any~~have ~~contractual~~ownership ~~arrangements~~of FOREXWARE, the primary software suite and ~~relationships~~technology solution which powers the FXDD brand globally today. We also have ownership of the FOREXWARE brand name. We have also acquired ownership of the customer interface and other software trading solutions being used by FXDD.com. By virtue of our relationship with ~~third~~TCM ~~parties;~~and FXDIRECT, we provide turnkey software and technology solutions for FXDD.com. We offer the customers of FXDD 24 hours, five days a week direct access to the global over the counter (“OTC”) FX market, which is a decentralized market in which participants trade directly with one another, rather than through a central exchange.

●In an FX trade, participants effectively buy one currency and simultaneously sell another currency, with the ~~dependence~~two ofcurrencies ~~our~~that ~~future~~make ~~success~~up the trade being referred to as a “currency pair”. Our software and technology solutions enable FXDD to present its customers with price quotations on over the ~~general~~counter ~~economy;~~tradeable instruments, including over the counter currency pairs, and also provide our customers the ability to trade FX derivative contracts on currency pairs through a product referred to as Contracts for Difference (“CFD”). Our software solutions also offer other CFD products, including CFDs on metals, such as gold, and on futures linked to other products.

~~● any possible financings; and~~26

●In July 2018, the ~~adequacy~~Company incorporated Nukkleus Malta Holding Ltd., which is a wholly-owned subsidiary. In July 2018, Nukkleus Malta Holding Ltd. incorporated MDTG, formerly known as Nukkleus Exchange Malta Ltd. MDTG was exploring potentially obtaining a license to operate an electronic exchange whereby it would facilitate the buying and selling of ~~our~~various ~~cash~~digital ~~resources~~assets as well as traditional currency pairs used in FX Trading. During the fourth quarter of fiscal 2020, management made the decision to exit the exchange business and ~~working~~to ~~capital~~no longer pursue the regulatory licensing necessary to operate an exchange in Malta.

~~Impact~~On August 27, 2020, ofthe ~~COVID-19~~Company onrenamed ~~Our~~Nukkleus ~~Operations~~Exchange Malta Ltd. to Markets Direct Technology Group Ltd (“MDTG”). MDTG manages the technology and IP behind the Markets Direct brand (which is operated by TCM). MDTG holds all the IP addresses and all the software licenses in its name, and it holds all the IP rights to the brands such as Markets Direct and TCM. MDTG then leases out the rights to use these names/brands licenses to the appropriate entities.

~~The ramifications~~In offiscal year 2021, the ~~outbreak~~Company ofcompleted ~~the~~its ~~novel~~acquisition ~~strain~~ of ~~COVID-19,~~Match ~~reported~~Financial ~~to have started in December 2019 and spread globally~~Limited, ~~are~~a ~~filled with~~private ~~uncertainty~~limited ~~and~~company ~~changing~~formed ~~quickly.~~in ~~Our~~England ~~operations have continued during the COVID-19 pandemic~~ and weWales ~~have not had significant disruption~~(“Match”). Match ~~Due~~is toengaged ~~the~~in ~~nature~~providing ofpayment ~~our~~services ~~business,~~from ~~the~~one ~~technology~~fiat wecurrency ~~use and offer~~ to ~~our customers, and our employees’ ability to work remotely, there was no material impact of COVID-19 on our business, operations and financial results~~another.

~~The~~On October 20, 2021, the Company isand ~~operating~~the inshareholders (the “Original Shareholders”) of Jacobi Asset Management Holdings Limited (“Jacobi”) entered into a ~~rapidly~~Purchase ~~changing~~and ~~environment~~Sale soAgreement (the ~~extent~~“Jacobi Agreement”) pursuant to which ~~COVID-19~~the ~~impacts~~Company ~~its~~agreed ~~business,~~to ~~operations~~acquire 5.0% of the issued and ~~financial~~outstanding ordinary shares of Jacobi in consideration of 20,000,000 shares of common stock of the Company ~~results~~(the ~~from~~“Jacobi ~~this~~Transaction”). ~~point~~On ~~forward~~December ~~will~~15, ~~depend~~2021, onthe ~~numerous~~Company, ~~evolving~~the ~~factors~~Original Shareholders and the shareholders of Jacobi that were assigned their interest in Jacobi by the ~~Company~~Original ~~cannot~~Shareholders ~~accurately~~(the ~~predict.~~“New ~~Those~~Jacobi ~~factors~~Shareholders”) ~~include~~entered into an Amendment to Stock Purchase Agreement agreeing that the ~~following:~~Jacobi Transaction will be entered between the ~~duration~~Company and ~~scope~~the ofNew Jacobi Shareholders. The Jacobi Transaction closed on December 15, 2021. Jacobi is a company focused on digital asset management that has received regulatory approval to launch the ~~pandemic~~world’s first tier one Bitcoin ETF. Jamal Khurshid and Nicholas Gregory own, directly and ~~governmental~~indirectly, approximately ~~business~~40% and ~~individuals~~10% of Jacobi, respectively. Jamal Khurshid is the Company’s ~~actions~~chief ~~that~~operating ~~have~~officer ~~been~~and director and ~~continue~~Nicholas toGregory beis ~~taken~~the inCompany’s ~~response~~director. toThe transactions contemplated by the ~~pandemic~~Jacobi Agreement constituted a “related-party transaction” as defined in Item 404 of Regulation S-K because of Mr. Khurshid’s and Mr. Gregory’s position as beneficial owner of one or more Original Shareholders and New Jacobi Shareholders.

~~Overview~~On December 30, 2021, the Company and the shareholder (the “Digiclear Shareholder”) of Digiclear Ltd. (“Digiclear”) entered into a Purchase and Sale Agreement (the “Digiclear Agreement) pursuant to which the Company agreed to acquire 5,400,000 of the issued and outstanding ordinary shares of Digiclear in consideration of 15,151,515 shares of common stock of the Company (valued at $5,000,000 based on the market price of the Company’s common stock on the acquisition date) (the “Digiclear Transaction”). In addition to, if and when the Company is acquired by a Special Purpose Acquisition Company (“SPAC”), the Company will fund and capitalize Digiclear with a minimum of $1,000,000 operating capital. Digiclear shall retain the right to unwind the transaction and to have the Company return the 5,400,000 ordinary shares of Digiclear share in return for Digiclear returning to the Company the 15,151,515 of Company common shares. Digiclear can only unwind the transaction if the Company is no longer under contract to be acquired by a SPAC. The Digiclear Transaction closed on March 17, 2022. Digiclear is a company developing a custody and settlement utility operating system.

~~We are~~Financial ~~a financial technology company which is focused on providing software and technology solutions for the worldwide retail foreign exchange~~Services ~~(“FX”)~~Segment’s ~~trading~~Key ~~industry.~~Performance WeIndicators ~~primarily provide our software, technology, customer sales and marketing and risk management technology hardware and software solutions package to TCM. The FXDD brand~~ (~~e.g., see FXDD.com~~KPI) ~~is the brand utilized in the retail forex trading industry by TCM.~~

WeThe key performance ~~have~~indicators ~~ownership~~outlined ofbelow ~~FOREXWARE,~~are ~~the~~our ~~primary~~financial ~~software~~services ~~suite~~segment’s ~~and~~metrics ~~technology~~that ~~solution~~provide ~~which~~management ~~powers~~with the ~~FXDD~~most ~~brand~~immediate ~~globally today. We also have~~understanding ~~ownership~~ of the ~~FOREXWARE~~drivers ~~brand name. We have also acquired ownership~~ of ~~the~~business ~~customer~~performance ~~interface~~ and ~~other~~tracking ~~software trading solutions being used by FXDD.com. By virtue~~ of ~~our~~financial ~~relationship with TCM and FXDIRECT, we provide turnkey software and technology solutions for FXDD~~targets.com. We offer the customers of FXDD 24 hours, five days a week direct access to the global over the counter (“OTC”) FX market, which is a decentralized market in which participants trade directly with one another, rather than through a central exchange.

In an FX trade, participants effectively buy one currency and simultaneously sell another currency, with the two currencies that make up the trade being referred to as a “currency pair”. Our software and technology solutions enable FXDD to present its customers with price quotations on over the counter tradeable instruments, including over the counter currency pairs, and also provide our customers the ability to trade FX derivative contracts on currency pairs through a product referred to as Contracts for Difference (“CFD”). Our software solutions also offer other CFD products, including CFDs on metals, such as gold, and on futures linked to other products.

	Three Months Ended March 31,						Six Months Ended March 31,
Performance Indicator	2023			2022			2023			2022
				(as restated)						(as restated)
Trading volume	$	288,802,729		$	38,121,289		$	430,670,151		$	59,304,826
Financial services revenue	$	833,944		$	289,017		$	1,410,332		$	618,032
Financial services profit (loss)	$	72,962		$	(258,702	)	$	(56,911	)	$	(803,892	)
Average cost per trade	$	588		$	2,853		$	672		$	3,994
Average trade		223,186			198,548			197,374			166,587
Number of trades		1,294			192			2,182			356
Clients active		70			30			127			37
Clients removed		1			0			7			0
Gross trading margin		0.3	%		0.8	%		0.3	%		1.0	%
Gross margin		8.7	%		(89.5	)%		(4.0	)%		(130.1	)%

In July 2018, the Company incorporated Nukkleus Malta Holding Ltd., which is a wholly-owned subsidiary. In July 2018, Nukkleus Malta Holding Ltd. incorporated MDTG, formerly known as Nukkleus Exchange Malta Ltd. MDTG was exploring potentially obtaining a license to operate an electronic exchange whereby it would facilitate the buying and selling of various digital assets as well as traditional currency pairs used in FX Trading. During the fourth quarter of fiscal 2020, management made the decision to exit the exchange business and to no longer pursue the regulatory licensing necessary to operate an exchange in Malta.27

26Trading volume is measured by number of trades and represents aggregate notional value of all trades.

~~On August~~Financial ~~27, 2020, the Company renamed Nukkleus Exchange Malta Ltd. to Markets Direct Technology Group Ltd (“MDTG”). MDTG manages~~services ~~the~~revenue represents ~~technology and IP behind~~ the ~~Markets~~top-line ~~Direct~~revenue ~~brand~~generated ~~(which~~from ~~is operated by TCM). MDTG holds all the IP addresses and all the software licenses in its name~~trades, ~~and~~before itconsidering ~~holds all~~ the IPcosts ~~rights~~associated towith the ~~brands~~generation ~~such as Markets Direct and TCM. MDTG then leases out the rights to~~of ~~use~~financial ~~these~~services ~~names/brands licenses to the appropriate entities~~revenue.

InFinancial services ~~fiscal~~profit ~~year~~(loss) is ~~2021~~measured as financial services revenue, ~~the~~less ~~Company~~costs ~~completed~~which ~~its~~include ~~acquisition~~amortization of intangible assets which consist of license and banking infrastructure acquired on Match ~~Financial~~acquisition, ~~Limited~~introducing broker fees, banking, and trading fees incurred associated with delivery of our services. For the three months ended March 31, 2023, we saw a ~~private~~657.6% ~~limited~~increase in trading volume over the three ~~company~~months ~~formed~~ended March 31, 2022. For the six months ended March 31, 2023, we saw a 626.2% increase in ~~England~~trading ~~and~~volume ~~Wales~~over ~~(“Match”)~~the six months ended March 31, 2022. ~~Match~~ isThe ~~engaged~~increase in ~~providing~~trading ~~payment~~volume ~~services~~had ~~from~~a ~~one~~similar ~~fiat~~positive ~~currency to~~effect ~~another~~on all other KPIs.

~~On October~~Average ~~20,~~cost ~~2021, the Company and the shareholders (the “Original Shareholders”) of Jacobi Asset Management Holdings Limited~~per ~~(“Jacobi”) entered into a Purchase and Sale Agreement (the “Jacobi Agreement”) pursuant to which the Company agreed to acquire~~trade ~~5.0%~~is ofdriven the issued and outstanding ordinary shares of Jacobi in consideration of 20,000,000 shares of common stock of the Company (the “Jacobi Transaction”). On December 15, 2021, the Company, the Original Shareholders and the shareholders of Jacobi that were assigned their interest in Jacobi by ~~the~~financial ~~Original~~services Shareholders (the “New Jacobi Shareholders”) entered into an Amendment to Stock Purchase Agreement agreeing that the Jacobi Transaction will be entered between the Company and the New Jacobi Shareholderscosts. ~~The~~We ~~Jacobi~~gained ~~Transaction~~significant ~~closed~~economies on December 15, 2021. Jacobi is a company focused on digital asset management that has received regulatory approval to launch the world’s first tier one Bitcoin ETF. Jamal Khurshid and Nicholas Gregory own, directly and indirectly, approximately 40% and 10% of ~~Jacobi,~~scale respectively. Jamal Khurshid is the Company’s chief operating officer and director and Nicholas Gregory is the Company’s director. The transactions contemplated by the Jacobi Agreement constituted a “related-party transaction” as ~~defined~~average incost ~~Item 404~~per oftrade ~~Regulation~~decreased ~~S-K because of Mr. Khurshid’s and Mr. Gregory’s~~measurably ~~position~~ as ~~beneficial~~trading ~~owner~~volume ~~of one or more Original Shareholders and New Jacobi Shareholders~~increased.

~~On December~~Active ~~30, 2021, the Company and the shareholder (the “Digiclear Shareholder”) of Digiclear Ltd. (“Digiclear”)~~clients for ~~entered into a Purchase and Sale Agreement (~~the ~~“Digiclear~~three ~~Agreement)~~months ~~pursuant~~ended toMarch ~~which the Company agreed to acquire 5~~31,~~400,000 of~~ ~~the~~2023 ~~issued~~ and ~~outstanding~~2022 ~~ordinary~~was ~~shares~~70 ofand ~~Digiclear in consideration of 15~~30,~~151,515~~ ~~shares~~respectively. ofFor ~~common stock of~~ the ~~Company~~six ~~(valued at~~months ~~$5,000,000~~ended ~~based~~March ~~on the market price of the Company’s common stock on the acquisition date) (the “Digiclear Transaction”). In addition to~~31, if2023 and ~~when~~2022 ~~the~~was ~~Company is acquired by a Special Purpose Acquisition Company (“SPAC”), the Company will fund~~127 and ~~capitalize Digiclear with a minimum of $1~~37,~~000,000~~ ~~operating capital~~respectively. Digiclear shall retain the right to unwind the transaction and to have the Company return the 5,400,000 ordinary shares of Digiclear share in return for Digiclear returning to the Company the 15,151,515 of Company common shares. Digiclear can only unwind the transaction if the Company is no longer under contract to be acquired by a SPAC. The Digiclear Transaction closed on March 17, 2022. Digiclear is a company developing a custody and settlement utility operating system.

~~Financial~~Gross trading margin is ~~Services~~a ~~Segment’s~~metric ~~Key~~that ~~Performance~~measures ~~Indicators~~financial ~~(KPI)~~services revenue to trading volume.

~~The key~~Critical ~~performance indicators outlined below are our financial services segment’s metrics that provide management with the most immediate~~Accounting ~~understanding of the drivers of business performance and tracking of financial targets.~~Policies

	Three Months Ended December 31,
Performance Indicator	2022			2021
				(as restated)
Trading volume	$	141,867,422		$	4,854,373
Financial services revenue	$	576,388		$	329,015
Financial services loss	$	(129,873	)	$	(545,190	)
Average cost per trade	$	795		$	8,571
Average trade		159,761			47,592
Number of trades		888			102
Clients active		57			30
Gross trading margin		0.4	%		6.8	%
Gross margin		(22.5	)%		(165.7	)%

Use of Estimates

~~Trading~~The preparation of the ~~volume is~~unaudited ~~measured~~condensed byconsolidated ~~number~~financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of ~~trades~~assets and ~~represents~~liabilities ~~aggregate~~and ~~notional~~disclosure ~~value~~of contingent assets and liabilities at the date of ~~all~~the ~~trades~~financial statements and the reported amounts of revenues and expenses during the reporting period. Changes in these estimates and assumptions may have a material impact on the unaudited condensed consolidated financial statements and accompanying notes. Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the financial statements, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events. Accordingly, the actual results could differ significantly from those estimates.

~~Financial~~Significant estimates ~~services~~during ~~revenue represents~~ the ~~top-line~~three ~~revenue~~and ~~generated~~six ~~from~~months ~~trades~~ended March 31, ~~before~~2023 ~~considering~~and 2022 include the ~~costs~~useful ~~associated~~life ~~with~~of intangible assets, assumptions used in assessing impairment of long-term assets, valuation of deferred tax assets and the ~~generation~~associated valuation allowances, valuation of stock-based compensation, and fair value of ~~financial~~customer ~~services~~digital ~~revenue~~currency assets and liabilities.

27Customer Custodial Cash and Customer Custodial Cash Liabilities

~~Financial services~~Customer ~~loss is~~custodial ~~measured as financial services revenue, less costs which include amortization of intangible assets which consist~~cash ofrepresents ~~license~~cash and ~~banking~~cash ~~infrastructure~~equivalents ~~acquired~~maintained onin ~~Match~~Company ~~acquisition,~~bank ~~introducing~~accounts ~~broker~~that ~~fees,~~are ~~banking,~~controlled ~~and~~by ~~trading~~the ~~fees~~Company ~~incurred~~but ~~associated with~~held ~~delivery~~for the benefit of ~~our services~~customers. ~~For~~Customer ~~the~~custodial ~~three~~cash ~~months~~liabilities ~~ended~~represent ~~December~~these ~~31,~~cash ~~2022, we~~deposits ~~saw~~to abe ~~2,822.5%~~utilized ~~increase~~for inits ~~trade~~contractual ~~volume~~obligations ~~over~~to ~~the~~its ~~three~~customers. ~~months~~The ~~ended~~Company ~~December~~classifies ~~31,~~the ~~2021.~~assets ~~The~~as ~~increase~~current inbased ~~trading~~on ~~volume~~their ~~had~~purpose aand ~~similar~~availability ~~positive~~to ~~effect~~fulfill onthe ~~all~~Company’s ~~other~~direct obligations ~~KPIs~~to its customers.

~~Average cost~~Customer ~~per trade is driven by financial services costs. We gained significant economies of scale as average cost per trade decreased~~Digital ~~measurably~~Currency asAssets ~~trading~~and ~~volume increased.~~ Liabilities

~~Active~~At certain times, Digital ~~clients for~~RFQ’s ~~the~~customers’ ~~three~~funds ~~months~~that ~~ended~~Digital ~~December~~RFQ 31uses to make payments on behalf of its customers, ~~2022~~remain in the form of digital assets in its customers’ wallets at its digital asset trading platforms awaiting final conversion and/or ~~2021~~transfer ~~was~~to 57the customer’s payment final destination. These indirectly held digital assets, may consist of USDT (Stablecoin), Bitcoin, and 30Ethereum (collectively, “Customer ~~respectively~~digital currency assets”). WeDigital ~~continue~~RFQ tomaintains ~~bring~~the oninternal ~~introducing brokers~~recordkeeping asof ~~well~~its ascustomer ~~increases~~digital incurrency ~~marketing~~assets, including ~~spend~~the ~~from~~amount ~~which~~and wetype ~~continue~~of todigital ~~add~~asset ~~new~~owned ~~clients~~by each of its customers.

~~Gross trading margin is a metric that measures financial services revenue to trading volume.~~28

~~Critical~~Digital RFQ has control ~~Accounting~~of ~~Policies~~the private keys and knows the balances of all wallets with its digital asset trading platforms in order to be able to successfully carry out the movement of digital assets for its client payment instruction. As part of its customer payment instruction, Digital RFQ can execute withdrawals on the wallets in its digital asset trading platforms.

~~Use~~The Company has determined that the Company has control of ~~Estimates~~the customer digital currency assets and records these assets on its balance sheet with a corresponding liability. The Company recognizes customer digital currency liabilities and corresponding customer digital currency assets, on initial recognition and at each reporting date, at fair value of the customer digital currency assets. Subsequent changes in fair value are adjusted to the carrying amount of these customer digital currency assets, with changes in fair value recorded in other general and administrative expense in the unaudited condensed consolidated statements of operations and comprehensive loss.

~~The preparation~~Any ofloss, ~~the~~theft, ~~unaudited condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates~~or ~~and~~other ~~assumptions~~misuse ~~that~~would ~~affect~~impact the ~~reported~~measurement ~~amounts~~ of ~~assets~~customer ~~and~~digital ~~liabilities~~currency ~~and disclosure of contingent~~ assets. ~~and~~The ~~liabilities~~Company atclassifies the ~~date~~ ofcustomer ~~the~~digital ~~financial~~currency ~~statements and the reported amounts of revenues and expenses during the reporting period. Changes in these estimates~~assets ~~and~~as ~~assumptions~~current ~~may~~based ~~have a material impact~~ on ~~the~~their ~~unaudited~~purpose ~~condensed consolidated financial statements~~ and ~~accompanying~~availability ~~notes. Making estimates requires management~~ to ~~exercise~~fulfill ~~significant judgment. It is at least reasonably possible that~~ the ~~estimate~~Company’s ofdirect ~~the~~obligations ~~effect~~to ~~of a condition, situation or set of circumstances that existed at the date of the financial statements, which management considered in formulating~~ its ~~estimate, could change in the near term due to one or more future confirming events~~customers. ~~Accordingly, the actual results could differ significantly from those estimates.~~

~~Significant estimates during the three months ended December 31~~Investment, ~~2022 and 2021 include the useful life of intangible assets, assumptions used in~~at assessing impairment of long-term assets, valuation of deferred tax assets and the associated valuation allowances, valuation of stock-based compensation, and fair value of customer digital currency assets and liabilities.Cost

~~Customer~~Investment in which ~~Custodial~~the ~~Cash~~Company does not have the ability to exercise significant influence over operating and ~~Customer~~financial ~~Custodial~~matters ~~Cash~~is ~~Liabilities~~accounted for using the cost method. Under the cost method, investment is recorded at cost, with gains and losses recognized as of the sale date, and income recorded when received. The Company periodically evaluates its cost method investment for impairment due to decline considered to be other than temporary. If the Company determines that a decline in fair value is other than temporary, then a charge to earnings is recorded in “Other (expense) income” in the accompanying unaudited condensed consolidated statements of operations and comprehensive loss, and a new basis in the investment is established. No impairment expense for cost method investment was recorded for the three and six months ended March 31, 2023 and 2022.

~~Customer custodial~~Intangible cash represents cash and cash equivalents maintained in Company bank accounts that are controlled by the Company but held for the benefit of customers. Customer custodial cash liabilities represent these cash deposits to be utilized for its contractual obligations to its customers. The Company classifies the assets as current based on their purpose and availability to fulfill the Company’s direct obligations to its customers.Assets

~~Customer~~Intangible assets consist ~~Digital~~of ~~Currency~~trade ~~Assets~~names, regulatory licenses, technology and ~~Liabilities~~software, which are being amortized on a straight-line method over the estimated useful life of 3 - 5 years.

~~At certain~~Impairment ~~times, Digital RFQ’s customers’ funds that Digital RFQ uses to make payments on behalf~~ of ~~its customers, remain in~~ ~~the~~Long-lived form of digital assets in its customers’ wallets at its digital asset trading platforms awaiting final conversion and/or transfer to the customer’s payment final destination. These indirectly held digital assets, may consist of USDT (Stablecoin), Bitcoin, and Ethereum (collectively, “Customer digital currency assets”). Digital RFQ maintains the internal recordkeeping of its customer digital currency assets, including the amount and type of digital asset owned by each of its customers.Assets

~~Digital RFQ~~In ~~has~~accordance ~~control~~with ofASC Topic 360, the ~~private~~Company ~~keys~~reviews ~~and~~long-lived ~~knows~~assets for impairment whenever events or changes in circumstances indicate that the ~~balances~~carrying amount of ~~all~~the ~~wallets~~assets ~~with~~may ~~its~~not ~~digital~~be ~~asset~~fully ~~trading~~recoverable, ~~platforms~~or inat ~~order~~least toannually. beThe ~~able to~~Company ~~successfully~~recognizes ~~carry~~an ~~out~~impairment loss when the ~~movement~~sum of ~~digital~~expected undiscounted ~~assets~~future ~~for~~cash ~~its~~flows ~~client~~is ~~payment~~less ~~instruction~~than the carrying amount of the asset. AsThe ~~part~~amount of impairment is measured as the difference between the asset’s estimated fair value and its ~~customer~~book ~~payment~~value. ~~instruction,~~There were no triggering events requiring assessment of impairment ~~Digital~~as ~~RFQ~~of ~~can~~March ~~execute~~31, ~~withdrawals~~2023. onFor the ~~wallets~~three inand ~~its~~six ~~digital~~months ~~asset~~ended ~~trading~~March ~~platforms~~31, 2023 and 2022, no impairment of long-lived assets was recognized.

~~The Company~~Revenue has determined that the Company has control of the customer digital currency assets and records these assets on its balance sheet with a corresponding liability. The Company recognizes customer digital currency liabilities and corresponding customer digital currency assets, on initial recognition and at each reporting date, at fair value of the customer digital currency assets. Subsequent changes in fair value are adjusted to the carrying amount of these customer digital currency assets, with changes in fair value recorded in other general and administrative expense in the unaudited condensed consolidated statements of operations and comprehensive loss.Recognition

28The Company accounts for revenue under the provisions of ASC Topic 606. The Company’s revenues are derived from providing:

~~Any loss,~~● ~~theft,~~General orsupport ~~other~~services ~~misuse~~under ~~would~~a ~~impact~~GSA to a related party. The transaction price is determined in accordance with the ~~measurement~~terms of ~~customer~~the ~~digital~~GSA ~~currency~~and ~~assets~~payments are due on a monthly basis. ~~The~~There ~~Company~~are ~~classifies~~multiple services provided under the ~~customer~~GSA ~~digital currency~~and ~~assets~~these performance obligations are combined into a single unit of accounting. Fees are recognized as ~~current~~revenue ~~based~~over ontime ~~their~~as ~~purpose~~the ~~and~~services ~~availability~~are torendered ~~fulfill~~under the terms of the GSA. Revenue is recorded at gross as the Company’s ~~direct~~is ~~obligations~~deemed to ~~its~~be ~~customers~~a principal in the transactions.

~~Investment,~~ ● Financial services to its customers. Revenue related to its financial services offerings are recognized at ~~Cost~~a point in time when service is rendered.

Investment in which the Company does not have the ability to exercise significant influence over operating and financial matters is accounted for using the cost method. Under the cost method, investment is recorded at cost, with gains and losses recognized as of the sale date, and income recorded when received. The Company periodically evaluates its cost method investment for impairment due to decline considered to be other than temporary. If the Company determines that a decline in fair value is other than temporary, then a charge to earnings is recorded in “Other (expense) income” in the accompanying unaudited condensed consolidated statements of operations and comprehensive loss, and a new basis in the investment is established. No impairment expense for cost method investment was recorded for the three months ended December 31, 2022 and 2021.29

~~Intangible Assets~~Stock-based Compensation

~~Intangible~~The Company measures ~~assets~~and ~~consist~~recognizes ofcompensation ~~trade~~expense ~~names,~~for ~~regulatory~~all ~~licenses,~~stock-based ~~technology~~awards ~~and~~granted ~~software~~to non-employees, ~~which~~including ~~are~~stock ~~being~~options, ~~amortized~~based on athe ~~straight-line~~grant date ~~method~~fair ~~over~~ value of the ~~estimated~~award. ~~useful~~The ~~life~~Company estimates the grant date fair value of 3 each option award using the Black-Scholes ~~5 years~~option-pricing model.

~~Impairment~~For non-employee stock-based awards, fair value is measured based on the value of ~~Long-lived~~the ~~Assets~~Company’s common stock on the date that the commitment for performance by the counterparty has been reached or the counterparty’s performance is complete. The fair value of the equity instrument is calculated and then recognized as compensation expense over the requisite performance period.

~~In accordance~~Results ~~with ASC Topic 360, the Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount~~ of the assets may not be fully recoverable, or at least annually. The Company recognizes an impairment loss when the sum of expected undiscounted future cash flows is less than the carrying amount of the asset. The amount of impairment is measured as the difference between the asset’s estimated fair value and its book value. There were no triggering events requiring assessment of impairment as of December 31, 2022. For the three months ended December 31, 2022 and 2021, no impairment of long-lived assets was recognized.Operations

~~Revenue Recognition~~Summary of Key Results

~~The Company~~For ~~accounts~~the ~~for~~Three ~~revenue~~and Six ~~under~~Months ~~the~~Ended ~~provisions~~March of31, ~~ASC~~2023 ~~Topic~~Versus ~~606.~~the ~~The~~Three ~~Company’s~~and ~~revenues~~Six ~~are~~Months ~~derived~~Ended ~~from~~March ~~providing:~~31, 2022

● General support services under a GSA to a related party. The transaction price is determined in accordance with the terms of the GSA and payments are due on a monthly basis. There are multiple services provided under the GSA and these performance obligations are combined into a single unit of accounting. Fees are recognized as revenue over time as the services are rendered under the terms of the GSA. Revenue is recorded at gross as the Company is deemed to be a principal in the transactions.Revenues

●For ~~Financial~~both of the three months ended March 31, 2023 and 2022, we had revenue from general support services rendered to ~~its~~TCM ~~customers~~under a GSA of $4,800,000. ~~Revenue~~For ~~related~~both of tothe ~~its~~six ~~financial~~months ~~services~~ended ~~offerings~~March ~~are~~31, ~~recognized~~2023 atand a2022, ~~point~~we inhad ~~time~~revenue ~~when~~from ~~service~~general issupport services rendered to TCM under a GSA of $9,600,000.

~~Stock-based~~For the three months ~~Compensation~~ended March 31, 2023, we had revenue from financial services of $833,944, as compared to $289,017 for the three months ended March 31, 2022, an increase of $544,927, or 188.5%. For the six months ended March 31, 2023, we had revenue from financial services of $1,410,332, as compared to $618,032 for the six months ended March 31, 2022, an increase of $792,300, or 128.2%. The significant increase was primarily attributable to our business expansion. We expect that our revenue from financial services will continue to increase in the near future since we are making efforts on expanding our financial services.

~~The Company~~Costs ~~measures and recognizes compensation expense for all stock-based awards granted to non-employees, including stock options, based on the grant date fair value~~ of ~~the award. The Company estimates the grant date fair value of each option award using the Black-Scholes option-pricing model.~~Revenues

For ~~non-employee~~ ~~stock-based~~both ~~awards,~~of ~~fair~~the ~~value~~three months isended ~~measured~~March ~~based~~31, on2023 ~~the~~and ~~value~~2022, our cost of ~~the~~general ~~Company’s~~support ~~common~~services ~~stock~~was on$4,725,000, ~~the~~which ~~date~~represented ~~that~~amount ~~the~~incurred ~~commitment~~ for ~~performance~~services rendered by ~~the~~FXDIRECT ~~counterparty~~under ~~has~~a ~~been~~GSA. ~~reached~~For orboth of the ~~counterparty’s~~six ~~performance~~months isended ~~complete.~~March ~~The~~31, ~~fair~~2023 ~~value~~and 2022, our cost of ~~the~~general ~~equity instrument~~support isservices ~~calculated~~was $9,450,000, ~~and~~which ~~then~~represented ~~recognized~~amount asincurred ~~compensation~~for ~~expense~~services ~~over~~rendered ~~the~~by ~~requisite~~FXDIRECT ~~performance~~under ~~period~~a GSA.

29Cost of financial services include amortization of intangible assets which consist of license and banking infrastructure acquired on Match acquisition, introducing broker fees, banking, and trading fees incurred associated with delivery of our services.

~~Results~~For the three months ended March 31, 2023, cost of ~~Operations~~financial services amounted to $760,982, as compared to $547,719 for the three months ended March 31, 2022, an increase of $213,263, or 38.9%. For the six months ended March 31, 2023, cost of financial services amounted to $1,467,243, as compared to $1,421,924 for the six months ended March 31, 2022, an increase of $45,319, or 3.2%. The increase was primarily attributable to an increase in our revenue from financial services.

~~Summary of~~Gross ~~Key~~Profit ~~Results~~(Loss)

For ~~the~~ ~~Three~~both ~~Months~~of ~~Ended~~the ~~December~~three months ended March 31, 2023 and 2022, ~~Versus~~our gross profit from general support services was $75,000, representing gross margin of 1.6%. For both of the ~~Three~~six ~~Months~~months ~~Ended~~ended ~~December~~March 31, ~~2021~~2023 and 2022, our gross profit from general support services was $150,000, representing gross margin of 1.6%.

~~Revenues~~30

~~For~~Gross profit from financial ~~both~~services offor the three months ended ~~December~~March 31, 2023 was $72,962, as compared to gross loss from financial services of $258,702 for the three months ended March 31, 2022, ~~and~~a ~~2021~~decrease of $331,664, weor ~~had~~128.2%. ~~revenue~~Gross margin increased to 8.7% for the three months ended March 31, 2023 from ~~general~~gross ~~support~~margin of (89.5)% for the three months ended March 31, 2022. Gross loss from financial services ~~rendered~~for the six months ended March 31, 2023 was $56,911, as compared to ~~TCM~~$803,892 ~~under~~for the six months ended March 31, 2022, a ~~GSA~~decrease of $746,981, or 92.9%. Gross margin increased to (4.0)% for the six months ended March 31,~~800~~ 2023 from gross margin of (130.1)% for the six months ended March 31,~~000~~ 2022. The significant increase in our gross margin for the financial services segment for the three and six months ended March 31, 2023 as compared to the corresponding periods in fiscal 2022 was primarily attributed to the increased scale of operations resulting from larger revenue, which is reflected in the allocation of fixed costs, mainly consisting of amortization costs of intangible assets, to cost of revenue. A large portion of our cost of financial services are fixed and do not change along with the increase/decrease in our revenue from financial services. We expect that our gross margin for the financial services segment will continue to increase since we anticipate we will generate more revenue from financial services and we can improve our gross margin from financial services segment to the extent that we can become more efficient by increasing our revenue.

~~For the~~Operating three months ended December 31, 2022, we had revenue from financial services of $576,388, as compared to $329,015 for the three months ended December 31, 2021, an increase of $247,373, or 75.2%. The significant increase was primarily attributable to our business expansion. We expect that our revenue from financial services will continue to increase in the near future since we are making efforts on expanding our financial services.Expenses

~~Costs~~Operating expenses consisted of ~~Revenues~~advertising and marketing, professional fees, compensation and related benefits, amortization of intangible assets, and other general and administrative expenses.

~~For~~Advertising ~~both of the three months ended December 31, 2022~~ and ~~2021, our cost of general support services was $4,725,000, which represented amount incurred for services rendered by FXDIRECT under a GSA.~~marketing

~~Cost~~For the three months ofended ~~financial~~March ~~services~~31, ~~include~~2023, ~~amortization~~advertising ofand ~~intangible~~marketing ~~assets~~expense ~~which~~decreased ~~consist~~by of$163,132, ~~license~~or ~~and~~99.8%, ~~banking~~as ~~infrastructure~~compared ~~acquired~~to onthe ~~Match~~three months ended March ~~acquisition~~31, ~~introducing~~2022. ~~broker~~For ~~fees~~the six months ended March 31, ~~banking~~2023, advertising and ~~trading~~marketing ~~fees~~expense ~~incurred~~decreased ~~associated~~by ~~with~~$149,232, ~~delivery~~or of75.1%, as compared to the six months ended March 31, 2022. The decrease was primarily attributable to our ~~services~~decreased advertising and marketing activities. We expect that our advertising and marketing expense will increase in the near future.

~~For the~~Professional three months ended December 31, 2022, cost of financial services amounted to $706,261, as compared to $874,205 for the three months ended December 31, 2021, a decrease of $167,944, or 19.2%. The decrease was primarily attributable to the decrease in amortization costs of intangible assets which consist of license and banking infrastructure acquired on Match acquisition.fees

~~Gross~~Professional fees primarily ~~Profit~~consisted ~~(Loss)~~of audit fees, legal service fees, advisory fees, and consulting fees. For the three months ended March 31, 2023, professional fees decreased by $642,945, or 53.2%, as compared to the three months ended March 31, 2022. The decrease was primarily attributable to a significant decrease in advisory service fees of approximately $401,000 mainly due to decreased advisory service related to our merger and acquisition, a decrease in legal service fees of approximately $78,000 due to decreased legal service related to our merger and acquisition, a decrease in consulting fees of approximately $148,000 mainly due to decreased consulting services related to our merger and acquisition, and a decrease in other miscellaneous items of approximately $15,000 resulting from our business expansion. For the six months ended March 31, 2023, professional fees decreased by $1,020,800, or 45.1%, as compared to the six months ended March 31, 2022. The decrease was primarily attributable to a significant decrease in advisory service fees of approximately $679,000 mainly due to decreased advisory service related to our merger and acquisition, a decrease in legal service fees of approximately $154,000 due to decreased legal service related to our merger and acquisition, a decrease in consulting fees of approximately $242,000 mainly due to decreased consulting services related to our merger and acquisition, and a decrease in other miscellaneous items of approximately $9,000, offset by an increase in audit fees of approximately $63,000. We expect that our professional fees will remain in its current quarterly level with minimal increase in the near future.

~~For~~Compensation ~~both of the three~~and ~~months~~related ~~ended December 31, 2022 and 2021, our gross profit from general support services was $75,000, representing gross margin of 1.6%.~~benefits

~~Gross loss~~For ~~from financial services for~~ the three months ended ~~December~~March 31, ~~2022 was $129~~2023,~~873,~~ asour ~~compared~~compensation toand ~~$545,190~~related ~~for~~benefits ~~the~~increased ~~three~~by ~~months ended December 31, 2021, a decrease of~~ $~~415~~67,~~317~~661, or 7652.21%., ~~Gross~~as ~~margin~~compared ~~increased~~ to ~~(22.5)% for~~ the three months ended ~~December~~ March 31, ~~2022~~ ~~from gross margin of (165~~2022.~~7)%~~ ~~for~~For the three months ended ~~December~~March 31, ~~2021.~~2023, ~~The gross losses were primarily attributable to a large portion of~~ our ~~cost~~compensation ~~of financial services are fixed~~ and dorelated ~~not~~benefits ~~change~~increased ~~along~~by ~~with~~$102,548, ~~the~~or ~~increase/decrease in our revenue from financial services~~40. ~~The significant increase in our gross margin for the financial services segment for the three months ended December 31~~2%, ~~2022~~ as compared to the three months ended ~~December~~March 31, ~~2021~~2022. The increase was ~~primarily~~mainly ~~attributed~~attributable to ~~the decreased amortization costs of intangible assets and the~~ increased ~~scale~~management ~~of operations resulting from larger revenue, which is reflected~~ in ~~the~~our ~~allocation~~financial ofservices ~~fixed costs, mainly consisting of amortization costs of intangible assets, to cost of revenue~~segment. We expect that our ~~gross~~compensation ~~margin~~and ~~for~~related ~~the~~benefits ~~financial services segment~~ will ~~continue~~ toremain ~~increase~~in ~~since~~its wecurrent ~~anticipate~~quarterly welevel ~~will~~with ~~generate~~minimal ~~more~~increase ~~revenue~~in ~~from financial services and we can improve our gross margin from financial services segment to~~ the ~~extent~~near ~~that we can become more efficient by increasing our revenue~~future.

~~Operating~~Amortization of intangible ~~Expenses~~assets

~~Operating~~For the three months ~~expenses~~ended ~~consisted~~March 31, 2023, our amortization of ~~advertising~~intangible ~~and~~assets ~~marketing~~decreased by $1, ~~professional~~or ~~fees~~0.0%, ~~compensation~~as ~~and~~compared ~~related~~to ~~benefits~~the three months ended March 31, 2022. For the six months ended March 31, 2023, our amortization of intangible assets increased by $936, or 0.7%, as compared to the six ~~and~~months ~~other~~ended ~~general~~March ~~and~~31, ~~administrative~~2022. ~~expenses~~The increase was primarily attributable to increased intangible assets in the six months ended March 31, 2023. We expect that our amortization of intangible assets will remain in its current quarterly level in the near future.

~~Advertising and marketing~~31

~~For the~~Other ~~three~~general ~~months ended December 31, 2022, advertising~~ and ~~marketing expense increased by $13,900, or 39.5%, as compared to the three~~ ~~months~~administrative ended December 31, 2021. The increase was primarily attributable to our incurred advertising and marketing activities to enhance the visibility and marketability of our services and to improve brand recognition and awareness. We expect that our advertising and marketing expense will remain in its current level with minimal increase in the near future.expenses

~~Professional~~Other general and administrative ~~fees~~expenses primarily consisted of rent, filing fee, and other miscellaneous items.

~~Professional fees primarily consisted of audit fees, legal service fees, advisory fees, and consulting fees.~~ For the three months ended ~~December~~ March 31, ~~2022~~2023, ~~professional~~total ~~fees~~other ~~decreased~~general and administrative expenses increased by $~~377~~22,~~855~~723, or 3522.85%, as compared to the three months ended ~~December~~March 31, ~~2021~~2022. The ~~decrease~~increase was ~~primarily~~ ~~attributable~~mainly due to aan ~~significant~~increase ~~decrease~~ in ~~advisory~~filing ~~service~~fee ~~fees~~ of approximately $~~277~~18,000 mainly due to ~~decreased~~the ~~advisory service~~increase ~~related to~~ in our ~~merger~~public ~~and acquisition~~filings, aand ~~decrease~~an increase in ~~legal~~other ~~service~~miscellaneous ~~fees~~items of approximately $765,000. ~~due~~For tothe ~~decreased~~six ~~legal~~months ~~service~~ended March 31, 2023, total ~~related~~other general and administrative expenses decreased by $40,957, or 13.9%, as compared to ~~our~~the ~~merger~~six ~~and~~months ~~acquisition~~ended March 31, 2022. The decrease was mainly due to a decrease in ~~consulting~~rent ~~fees~~ of approximately $9414,000, ~~mainly~~and ~~due~~a todecrease ~~decreased~~in ~~consulting~~other ~~services related~~miscellaneous toitems of approximately $34,000 reflecting our ~~merger~~efforts ~~and~~at ~~acquisition~~stricter controls on corporate expenditure, offset by an increase in ~~other~~filing ~~miscellaneous~~fee ~~items~~ of approximately $697,000 ~~resulting~~mainly ~~from~~due ~~our~~to ~~business~~the ~~expansion~~increase in our public filings. We expect that ~~our~~other ~~professional~~general ~~fees~~and administrative expenses will remain in its current ~~level~~quarterly level with minimal increase in the near future.

30Other (Expense) Income

~~Compensation~~Other (expense) income includes loss from equity method investment and ~~related~~other ~~benefits~~miscellaneous income (expense).

~~For~~Other income, net, totaled $715 for the three months ended ~~December~~March 31, ~~2022~~2023, ~~our~~as ~~compensation~~compared ~~and~~to ~~related~~other ~~benefits~~expense, ~~increased~~net, byof $3472,~~887,~~892 orfor ~~27.8%, as compared to~~ the three months ended ~~December~~March 31, ~~2021.~~2022, a ~~The~~decrease ~~increase~~of ~~was~~$73,607, ~~mainly~~or 101.0%, which was attributable to ~~increased~~a ~~management~~decrease in ~~our~~loss ~~financial~~from ~~services~~equity ~~segment.~~method Weinvestment ~~expect that~~of ~~our~~approximately ~~compensation~~ $71,000 and ~~related~~a ~~benefits~~decrease ~~will remain~~ in ~~its~~other ~~current~~miscellaneous ~~level~~expense ~~with~~of ~~minimal~~approximately ~~increase in the near future~~$3,000.

~~Amortization~~Other income, net, totaled $3,288 for the six months ended March 31, 2023, as compared to other expense, net, of ~~intangible~~$74,108 ~~assets~~for the six months ended March 31, 2022, a decrease of $77,396, or 104.4%, which was attributable to a decrease in loss from equity method investment of approximately $70,000 and a decrease in other miscellaneous expense of approximately $7,000.

~~For the~~Net three months ended December 31, 2022, our amortization of intangible assets increased by $937, or 1.4%, as compared to the three months ended December 31, 2021. The increase was primarily attributable to increased intangible assets in the three months ended December 31 2022. We expect that our amortization of intangible assets will remain in its current level in the near future.Loss

~~Other~~As a result of the factors ~~general~~described above, our net loss was $805,649, or $0.00 per share (basic and ~~administrative~~diluted), ~~expenses~~for the three months ended March 31, 2023, as compared to $1,926,614, or $0.01 per share (basic and diluted), for the three months ended March 31, 2022, a decrease of $1,120,965 or 58.2%.

~~Other~~As a result of the factors ~~general~~described above, our net loss was $1,939,571, or $0.01 per share (basic and ~~administrative~~diluted), ~~expenses~~for ~~primarily~~the ~~consisted~~six ofmonths ~~rent~~ended March 31, ~~filing~~2023, ~~fee~~as compared to $3,871,453, or $0.01 per share (basic and ~~other~~diluted), ~~miscellaneous~~for ~~items~~the six months ended March 31, 2022, a decrease of $1,931,882 or 49.9%.

~~For~~Foreign ~~the three months~~Currency ~~ended~~Translation December 31, 2022, total other general and administrative expenses decreased by $63,680, or 33.1%, as compared to the three months ended December 31, 2021. The decrease was mainly due to a decrease in filing fee of approximately $11,000, a decrease in rent of approximately $8,000, and a decrease in other miscellaneous items of approximately $45,000 reflecting our efforts at stricter controls on corporate expenditure. We expect that other general and administrative expenses will remain in its current level with minimal increase in the near future.Adjustment

~~Other~~The reporting currency of the Company is U.S. Dollars. The functional currency of the parent company, Nukkleus Inc., Nukkleus Limited, Nukkleus Malta Holding Ltd. and its subsidiaries, is the U.S. dollar, the functional currency of Match Financial Limited and its subsidiary, Digital RFQ Limited, is the British Pound (~~Expense~~“GBP”) ~~Income~~and the functional currency of Digital RFQ Limited’s subsidiary, DRFQ Europe UAB, is Euro. The financial statements of our subsidiaries whose functional currency is the GBP or Euro are translated to U.S. dollars using period end rates of exchange for assets and liabilities, average rate of exchange for revenues, costs, and expenses and cash flows, and at historical exchange rates for equity. Net gains and losses resulting from foreign exchange transactions are included in the results of operations. As a result of foreign currency translations, which are a non-cash adjustment, we reported a foreign currency translation loss of $2,721 and a foreign currency translation gain of $13,214 for the three months ended March 31, 2023 and 2022, respectively. As a result of foreign currency translations, which are a non-cash adjustment, we reported a foreign currency translation loss of $30,704 and a foreign currency translation gain of $10,987 for the six months ended March 31, 2023 and 2022, respectively. This non-cash loss/gain had the effect of increasing/decreasing our reported comprehensive loss.

~~Other~~Comprehensive ~~income, net, totaled $2,573 for the three months ended December 31, 2022, as compared to other expense, net, of $1,216 for the three months ended December 31, 2021, an increase of $3,789.~~Loss

~~Net~~As a result of our foreign ~~Loss~~currency translation adjustment, we had comprehensive loss of $808,370 and $1,913,400 for the three months ended March 31, 2023 and 2022, respectively. As a result of our foreign currency translation adjustment, we had comprehensive loss of $1,970,275 and $3,860,466 for the six months ended March 31, 2023 and 2022, respectively.

As a result of the factors described above, our net loss was $1,133,922, or $0.00 per share (basic and diluted), for the three months ended December 31, 2022, as compared to $1,944,839, or $0.00 per share (basic and diluted), for the three months ended December 31, 2021, a decrease of $810,917 or 41.7%.32

~~Foreign Currency~~Liquidity ~~Translation~~and ~~Adjustment~~Capital Resources

~~The reporting~~Liquidity ~~currency~~is of the ~~Company is U.S. Dollars. The functional currency~~ ability of ~~the~~a ~~parent~~ company, ~~Nukkleus~~to ~~Inc.,~~generate ~~Nukkleus~~funds ~~Limited,~~to ~~Nukkleus Malta~~support ~~Holding~~its ~~Ltd.~~current and ~~its~~future ~~subsidiaries~~operations, issatisfy ~~the~~its ~~U.S.~~obligations ~~dollar,~~and ~~the~~otherwise ~~functional~~operate ~~currency~~on ofan ~~Match~~ongoing basis. ~~Financial~~At ~~Limited~~March ~~and its subsidiary~~31, ~~Digital RFQ~~2023 ~~Limited, is the British Pound (“GBP”)~~ and ~~the~~September ~~functional currency of Digital RFQ Limited’s subsidiary~~30, ~~DRFQ Europe UAB~~2022, iswe ~~Euro.~~had ~~The~~cash ~~financial statements~~ of ~~our~~$246,650 ~~subsidiaries whose functional currency is the GBP or Euro are translated to U.S. dollars using period end rates of exchange for assets~~ and ~~liabilities~~$364, ~~average rate of exchange for revenues~~023, ~~costs~~respectively, ~~and~~exclusive ~~expenses~~of ~~and~~customer ~~cash flows,~~custodial ~~and at historical exchange rates for equity~~cash. ~~Net~~We ~~gains~~had ~~and~~working ~~losses~~capital ~~resulting~~deficit ~~from foreign exchange transactions are included in the results~~ of ~~operations. As a result of foreign currency translations~~$4, ~~which are a non-cash adjustment~~391,140 weas ~~reported a foreign currency translation loss~~ of ~~$27,983~~March ~~and $2,227 for the three months ended December~~ 31, ~~2022 and 2021, respectively~~2023. ~~This non-cash loss had the effect of increasing our reported comprehensive loss.~~

~~Comprehensive~~Our ability to continue ~~Loss~~as a going concern is dependent upon the management of expenses and our ability to obtain the necessary financing to meet our obligations and pay our liabilities arising from normal business operations when they come due, and upon profitable operations.

AsWe aneed ~~result~~to ofeither ~~our foreign~~borrow ~~currency~~funds ~~translation~~or ~~adjustment~~raise additional capital through equity or debt financings. However, we ~~had~~cannot ~~comprehensive~~be ~~loss~~certain ofthat ~~$1,161,905~~such capital (from our stockholders or third parties) will be available to us or whether such capital will be available on terms that are acceptable to us. Any such financing likely would be dilutive to existing stockholders and ~~$1,947,066~~could ~~for~~result in significant financial operating covenants that would negatively impact our business. In the ~~three~~event ~~months~~that ~~ended~~there ~~December~~are ~~31,~~any ~~2022~~unforeseen ~~and~~delays or obstacles in obtaining funds through the aforementioned ~~2021~~sources, ~~respectively~~TCM has committed to inject capital into the Company in order to maintain the ongoing operations of the business.

The following table sets forth a summary of changes in our working capital deficit from September 30, 2022 to March 31, 2023:

Liquidity and Capital Resources

	March 31,			September 30,			Changes in
	2023			2022			Amount			Percentage
Working capital deficit:
Total current assets	$	1,410,805		$	3,687,799		$	(2,276,994	)		(61.7	)%
Total current liabilities		5,801,945			7,474,324			(1,672,379	)		(22.4	)%
Working capital deficit	$	(4,391,140	)	$	(3,786,525	)	$	(604,615	)		16.0	%

~~Liquidity~~Our isworking ~~the~~capital deficit ~~ability~~increased by $604,615 to $4,391,140 at March 31, 2023 from $3,786,525 at September 30, 2022. The increase in working capital deficit was primarily attributable to a decrease in cash of approximately $117,000, a ~~company~~significant todecrease ~~generate~~in ~~funds~~customer custodial cash of approximately $1,780,000 due to ~~support~~the ~~its~~decrease ~~current~~in ~~and~~cash ~~future~~maintained ~~operations,~~in ~~satisfy~~our ~~its~~bank ~~obligations~~accounts ~~and~~held ~~otherwise~~for ~~operate~~the onbenefit anof ~~ongoing~~our customers, a decrease ~~basis.~~in Atdue ~~December~~from 31affiliates of approximately $676,000 ~~2022~~resulting ~~and~~from ~~September~~the 30payments received from our affiliates in the six months ended March 31, ~~2022~~2023, wean ~~had~~increase ~~cash~~in customer digital currency liabilities of approximately $~~279~~145,~~728~~000 driven by our business expansion, and an increase in accrued payroll liability and directors’ compensation of approximately $~~364~~99,~~023~~000 due to our business expansion, ~~respectively~~offset by an increase in customer digital currency assets of approximately $145,000 ~~exclusive~~resulting from our business expansion, an increase in note receivable of approximately ~~customer~~$154,000 ~~custodial~~driven by payment made for investment in note receivable in the six months ended March 31, 2023, a significant ~~cash.~~decrease Wein ~~had~~customer ~~working~~custodial ~~capital~~cash ~~deficit~~liabilities of approximately $41,~~208~~780,~~662~~000 asresulting from fulfillment of ~~December~~our 31direct obligations to our customers, ~~2022~~and a decrease in accrued liabilities and other payables of approximately $199,000 mainly due to the decrease in unearned revenue of approximately $203,000.

~~Our~~Because the exchange ~~ability~~rate toconversion ~~continue~~is asdifferent afor ~~going~~the ~~concern~~condensed isconsolidated ~~dependent~~balance ~~upon~~sheets and the ~~management~~unaudited condensed consolidated statements of ~~expenses~~cash flows, ~~and~~the ~~our~~changes ~~ability~~in toassets ~~obtain~~and ~~the~~liabilities ~~necessary~~reflected ~~financing to~~on ~~meet~~the ~~our~~unaudited ~~obligations~~condensed ~~and~~consolidated ~~pay~~statements ~~our~~of ~~liabilities~~cash ~~arising~~flows ~~from~~are ~~normal~~not ~~business~~necessarily identical ~~operations~~with ~~when~~the ~~they~~comparable ~~come~~changes ~~due,~~reflected ~~and~~on ~~upon~~the ~~profitable~~condensed ~~operations~~consolidated balance sheets.

~~We need~~Cash toFlow ~~either~~for ~~borrow~~the ~~funds~~Six orMonths ~~raise~~Ended ~~additional~~March ~~capital through equity or debt financings. However~~31, ~~we cannot be certain that such capital~~ ~~(from~~2023 ~~our~~Compared ~~stockholders or third parties) will be available~~ to us or whether such capital will be available on terms that are acceptable to us. Any such financing likely would be dilutive to existing stockholders and could result in significant financial operating covenants that would negatively impact our business. In the ~~event~~Six ~~that~~Months ~~there~~Ended ~~are~~March ~~any unforeseen delays or obstacles in obtaining funds through the aforementioned sources~~31, ~~TCM has committed to inject capital into the Company in order to maintain the ongoing operations of the business.~~2022

~~The~~Net cash flow used in ~~following~~operating ~~table~~activities ~~sets~~for ~~forth~~the asix ~~summary~~months ended March 31, 2023 was $1,882,501, which primarily reflected our consolidated net loss of approximately $1,940,000, and the changes in operating assets and liabilities, primarily consisting of an increase in customer digital currency assets of approximately $114,000 due to the increase in customer digital currency controlled by us in the six months ended March 31, 2023, a decrease in customer custodial cash liabilities of approximately $1,935,000 driven by fulfillment of our ~~working~~direct ~~capital~~obligations ~~deficit~~to our customers in the six months ended March 31, 2023, and a decrease in accrued liabilities and other payables of approximately $216,000 mainly due to the decrease in unearned revenue of approximately $203,000, offset by a decrease in due from ~~September~~affiliates 30of approximately $677,000 resulting ~~2022~~from the payments received from our affiliates in the six months ended March 31, 2023, an increase in customer digital currency liabilities of approximately $114,000 due to ~~December~~the increase in customer digital currency controlled by us in the six months ended March 31, ~~2022:~~2023, and an increase in accrued payroll liability and directors’ compensation of approximately $97,000, and the non-cash items adjustment primarily consisting of amortization of intangible assets of approximately $1,186,000, and stock-based compensation and service expense of approximately $222,000.

	December 31,			September 30,			Changes in
	2022			2022			Amount			Percentage
Working capital deficit:
Total current assets	$	9,707,972		$	3,687,799		$	6,020,173			163.2	%
Total current liabilities		13,916,634			7,474,324			6,442,310			86.2	%
Working capital deficit	$	(4,208,662	)	$	(3,786,525	)	$	(422,137	)		11.1	%

~~Our~~Net ~~working~~cash ~~capital~~flow ~~deficit~~used in ~~increased~~operating byactivities ~~$422~~for the six months ended March 31,~~137~~ to2022 was $418,~~208~~492,~~662~~ atwhich ~~December~~primarily ~~31,~~reflected ~~2022~~our ~~from~~consolidated net loss of approximately $3,~~786~~871,~~525~~000, atand ~~September~~the 30changes in operating assets and liabilities, ~~2022.~~primarily ~~The~~consisting of an increase in ~~working~~customer ~~capital~~digital ~~deficit~~currency assets ~~was~~of ~~primarily~~approximately ~~attributable~~$171,000 due to the increase in customer digital currency controlled by us in the six months ended March 31, 2022, a decrease in due to affiliates of approximately $224,000 driven by the repayments paid to our affiliates in the six months ended March 31, 2022, offset by a decrease in due from affiliates of approximately $~~285~~1,138,000 resulting from the payments received from our ~~affiliates~~ affiliates in the ~~three~~six months ended ~~December~~March 31, 2022, aan ~~significant~~ increase in customer custodial cash liabilities of approximately $6310,~~235,~~000 resulting from our business expansion, an increase in ~~due~~customer todigital ~~affiliates~~currency liabilities of approximately $~~124~~171,000 ~~driven~~due byto the ~~payments~~increase ~~received from~~in ~~our~~customer ~~affiliates~~digital currency ~~and~~controlled ~~expenses paid~~ by ~~our affiliates on behalf of~~ us in the ~~three~~six months ended ~~December~~March 31, 2022, ~~offset~~and byan ~~a significant~~ increase in ~~customer~~accrued ~~custodial~~liabilities and other payables of approximately $112,000, and the non-cash items adjustment primarily consisting of amortization of intangible assets of approximately $61,~~235~~505,000, ~~resulting~~and stock-based ~~from~~compensation ~~our~~and ~~business~~service ~~expansion~~expense of approximately $904,000.

~~Because the~~Net ~~exchange~~cash ~~rate~~flow ~~conversion~~used isin investing ~~different~~activities ~~for~~was ~~the~~$195,395 ~~condensed~~for ~~consolidated balance sheets and~~ the ~~unaudited~~six ~~condensed~~months ~~consolidated~~ended ~~statements of~~March ~~cash flows~~31, ~~the~~2023. ~~changes~~During inthe ~~assets~~six ~~and~~months ~~liabilities~~ended ~~reflected~~March on31, ~~the~~2023, ~~unaudited~~we ~~condensed~~made ~~consolidated~~payment for ~~statements~~investment ofin ~~cash~~note ~~flows~~receivable ~~are~~of ~~not necessarily~~approximately ~~identical~~$154,000 ~~with~~and ~~the~~payment ~~comparable~~for ~~changes~~purchase ~~reflected~~of onintangible ~~the~~asset ~~condensed~~of ~~consolidated~~approximately ~~balance sheets~~$41,000.

~~Cash Flow~~There ~~for~~was ~~the~~no ~~Three~~investing activity ~~Months~~during ~~Ended December 31, 2022 Compared to~~ the ~~Three~~six ~~Months~~months ~~Ended~~ended ~~December~~March 31, ~~2021~~2022.

~~Net~~Our ~~cash~~operations ~~flow provided~~will byrequire ~~operating~~additional ~~activities~~funding for the ~~three~~foreseeable ~~months~~future. ~~ended~~Unless ~~December~~and ~~31,~~until ~~2022~~we ~~was~~are ~~$5,834,320,~~able ~~which~~to ~~primarily~~generate ~~reflected~~a ~~the~~sufficient ~~non-cash~~amount ~~items adjustment primarily consisting~~ of ~~amortization~~revenue ofand ~~intangible~~reduce our ~~assets~~costs, ~~mainly~~we ~~representing~~expect ~~intangible~~to ~~assets~~finance ~~acquired~~future oncash ~~Match~~needs ~~acquisition,~~through ofpublic ~~approximately $593,000,~~ and/or ~~stock-based~~private ~~compensation~~offerings ~~and service expense~~ of ~~approximately~~equity ~~$147,000~~securities ~~due~~and/or todebt ~~options granted for professional services,~~financings. ~~and~~We ~~the~~do ~~changes~~not incurrently ~~operating~~have ~~assets~~any ~~and~~committed ~~liabilities,~~future ~~primarily~~funding. ~~consisting~~To ofthe aextent ~~decrease~~we inraise ~~due~~additional ~~from~~capital ~~affiliates~~by ofissuing ~~approximately~~equity ~~$285~~securities,~~000~~ our stockholders ~~resulting~~could ~~from~~at ~~the~~that ~~payments~~time ~~received~~experience ~~from~~substantial ~~our~~dilution. ~~affiliates~~Any indebt ~~the~~financing ~~first~~we ~~quarter~~are ofable ~~fiscal~~to ~~2023,~~obtain amay ~~significant~~involve ~~increase~~operating incovenants ~~customer~~that ~~custodial~~restrict ~~cash~~our ~~liabilities~~business. ofOur ~~approximately~~capital ~~$5,875,000~~requirements ~~resulting~~for ~~from~~the ~~our~~next ~~business~~twelve ~~expansion,~~months anprimarily ~~increase~~relate into ~~due~~mergers, toacquisitions ~~affiliates~~and the development of ~~approximately~~business ~~$93,000~~opportunities. ~~driven~~In byaddition, ~~the~~we ~~payments~~expect ~~received~~to ~~from~~use ~~our~~cash ~~affiliates~~to ~~and~~pay ~~expenses~~fees ~~paid~~related byto ~~our~~professional ~~affiliates~~services. onThe ~~behalf~~following oftrends usare inreasonably ~~the~~likely to ~~first~~result ~~quarter~~in ~~of fiscal~~a ~~2023,~~material ~~offset~~decrease byin our ~~consolidated~~liquidity ~~net~~over ~~loss~~the ofnear ~~approximately~~to ~~$1,134,000.~~long term:

~~Net cash flow~~● ~~used~~The inworking ~~operating~~capital ~~activities~~requirements was $1,060,333 for the three months ended December 31, 2021, which primarily reflected our consolidated net loss of approximately $1,945,000, and the changes in operating assets and liabilities, primarily consisting of an decrease in customer custodial cash liabilities of approximately $709,000 due to ~~the~~finance decrease in customer custodial cash in the first quarter of fiscal 2022, a decrease in customer digital currency liabilities of approximately $151,000 due to the decrease in customer digital currency controlled by us in the first quarter of fiscal 2022, offset by a decrease in customer digital currency assets of approximately $151,000 due to the decrease in customer digital currency controlled by us in the first quarter of fiscal 2022, an increase in due to affiliates of approximately $146,000 resulting from the payments received from our ~~affiliates~~current and expenses paid by our affiliates on behalf of us in the first quarter of fiscal 2022, and an increase in accounts payable and accrued liabilities of approximately $152,000 which was mainly due to the increase in accrued professional fees of approximately $170,000 driven by the increase in professional service providers, and the non-cash items adjustment consisting of amortization of intangible assets of approximately $912,000 and stock-based compensation and service expense of approximately $379,000.business;

~~Net~~● ~~cash~~The ~~flow~~use ~~used~~of ~~in investing~~capital ~~activities was $68,000~~ for ~~the three months ended December 31~~mergers, ~~2022.~~acquisitions ~~During~~and the ~~three~~development ~~months ended December 31, 2022, we made payment for note receivable~~ of ~~approximately~~business ~~$68,000.~~opportunities;

~~There~~● ~~were~~Addition noof ~~investing~~personnel ~~activities~~as ~~for~~ the ~~three~~business ~~months~~grows; ~~ended December 31, 2021.~~and

32● The cost of being a public company.

~~Our operations~~We ~~will~~need ~~require additional funding for the foreseeable future. Unless and until we are able~~ to ~~generate~~either ~~a sufficient amount of~~borrow ~~revenue~~funds ~~and~~or ~~reduce~~raise ~~our~~additional ~~costs,~~capital ~~we expect to finance future cash needs~~ through ~~public~~equity ~~and/~~or ~~private~~debt ~~offerings~~financings. ofHowever, ~~equity~~we ~~securities~~cannot ~~and/or debt~~be ~~financings.~~certain Wethat dosuch ~~not~~capital ~~currently~~(from ~~have~~our ~~any~~stockholders or ~~committed~~third ~~future~~parties) ~~funding.~~will Tobe ~~the~~available ~~extent~~to weus ~~raise~~or ~~additional~~whether such capital bywill ~~issuing~~be ~~equity~~available ~~securities, our~~on ~~stockholders~~terms ~~could at~~ that ~~time~~are ~~experience~~acceptable ~~substantial~~to ~~dilution~~us. Any ~~debt~~such financing likely wewould ~~are~~be ~~able~~dilutive to ~~obtain~~existing ~~may~~stockholders ~~involve~~and ~~operating~~could ~~covenants that~~result ~~restrict~~in ~~our~~significant ~~business.~~financial ~~Our~~operating ~~capital~~covenants ~~requirements~~that ~~for~~would ~~the~~negatively impact ~~next~~our ~~twelve~~business. ~~months~~If ~~primarily~~we ~~relate~~are unable to ~~mergers,~~raise ~~acquisitions~~sufficient ~~and~~additional ~~the~~capital ~~development of~~on ~~business~~acceptable ~~opportunities. In addition~~terms, we ~~expect~~will tohave ~~use~~insufficient ~~cash~~funds to operate ~~pay~~our ~~fees~~business ~~related~~or topursue ~~professional~~our ~~services~~planned growth. ~~The~~However, ~~following~~TCM ~~trends~~has ~~are reasonably~~committed ~~likely~~ to ~~result~~inject incapital ainto ~~material~~the ~~decrease~~Company in ~~our~~order ~~liquidity~~to ~~over~~ maintain the ~~near~~ongoing tooperations ~~long~~of ~~term:~~the business.

●Consistent ~~The~~with ~~working~~Section 144 ~~capital~~of ~~requirements~~the toDelaware ~~finance~~General Corporation Law, it is our current ~~business;~~policy that all transactions between us and our officers, directors and their affiliates will be entered into only if such transactions are approved by a majority of the disinterested directors, are approved by vote of the stockholders, or are fair to us as a corporation as of the time it is authorized, approved or ratified by the board. We will conduct an appropriate review of all related party transactions on an ongoing basis.

●Off-Balance ~~The~~Sheet ~~use of capital for mergers, acquisitions and the development of business opportunities;~~Arrangements

●We ~~Addition~~had ofno ~~personnel~~outstanding derivative asfinancial ~~the~~instruments, ~~business~~off-balance ~~grows;~~sheet ~~and~~guarantees, interest rate swap transactions or foreign currency contracts. We do not engage in trading activities involving non-exchange traded contracts.

~~● The cost of being a public company.~~34

~~We need~~Recently toIssued ~~either~~Accounting borrow funds or raise additional capital through equity or debt financings. However, we cannot be certain that such capital (from our stockholders or third parties) will be available to us or whether such capital will be available on terms that are acceptable to us. Any such financing likely would be dilutive to existing stockholders and could result in significant financial operating covenants that would negatively impact our business. If we are unable to raise sufficient additional capital on acceptable terms, we will have insufficient funds to operate our business or pursue our planned growth. However, TCM has committed to inject capital into the Company in order to maintain the ongoing operations of the business.Pronouncements

~~Consistent with~~For ~~Section~~information ~~144 of the Delaware General Corporation Law, it is our current policy that all transactions between us and our officers,~~about ~~directors~~recently ~~and~~issued ~~their~~accounting ~~affiliates will be entered into only if such transactions are approved by a majority of the disinterested directors~~standards, ~~are~~ ~~approved~~refer byto ~~vote~~Note of3 ~~the stockholders, or are fair~~ to usour asUnaudited aCondensed ~~corporation~~Consolidated asFinancial ofStatements ~~the~~appearing ~~time it is authorized, approved or ratified by~~elsewhere ~~the~~in ~~board.~~this ~~We will conduct an appropriate review of all related party transactions on an ongoing basis~~report.

~~Off-Balance~~Foreign Currency ~~Sheet~~Exchange ~~Arrangements~~Rate Risk

WeA portion of our operations ~~had~~are noin ~~outstanding~~United ~~derivative~~Kingdom. ~~financial~~Thus, ~~instruments~~a portion of our revenues and operating results may be impacted by exchange rate fluctuations between GBP and US dollars. For the three months ended March 31, ~~off-balance~~2023 ~~sheet~~and ~~guarantees~~2021, ~~interest~~we ~~rate~~had ~~swap~~an ~~transactions~~unrealized orforeign currency translation loss of approximately $3,000 and an unrealized foreign currency translation gain of approximately $13,000, respectively, because of changes in the exchange ~~contracts~~rates. WeFor dothe ~~not~~six ~~engage~~months inended ~~trading~~March ~~activities~~31, ~~involving~~2023 ~~non-exchange~~and ~~traded~~2021, ~~contracts~~we had an unrealized foreign currency translation loss of approximately $31,000 and an unrealized foreign currency translation gain of approximately $11,000, respectively, because of changes in the exchange rates.

~~Recently Issued Accounting Pronouncements~~Inflation

~~For information~~The ~~about~~effect ~~recently~~of ~~issued~~inflation on ~~accounting standards, refer to Note 3 to~~ our ~~Unaudited~~revenue ~~Condensed~~and ~~Consolidated~~operating ~~Financial~~results ~~Statements appearing~~was ~~elsewhere~~not ~~in this report~~significant.

~~Foreign Currency~~Item ~~Exchange~~3. ~~Rate~~Quantitative and Qualitative Disclosures about Market Risk

~~A portion~~We ~~of our operations~~ are ~~in United Kingdom. Thus,~~ a ~~portion~~smaller ofreporting ~~our~~company ~~revenues~~as ~~and operating results may be impacted by exchange rate~~defined ~~fluctuations~~in ~~between~~Rule ~~GBP~~12b-2 ~~and~~of ~~US dollars. For~~ the ~~three~~Exchange ~~months~~Act ~~ended December 31, 2022~~ and ~~2021,~~are wenot ~~had~~required anto ~~unrealized~~provide ~~foreign~~the ~~currency translation~~information ~~loss~~required ofunder ~~approximately~~this ~~$28,000 and $2,000, respectively, because of changes in the exchange rates~~item.

~~Inflation~~Item 4. Controls and Procedures

~~The effect~~Evaluation of ~~inflation~~Disclosure onControls ~~our revenue~~ and ~~operating results was not significant.~~ Procedures

~~Item~~Disclosure controls 3and procedures are designed to ensure that information required to be disclosed by us in reports filed or submitted under the Securities Exchange Act of 1934, as amended (“Exchange Act”) is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. ~~Quantitative~~Disclosure controls and ~~Qualitative~~procedures ~~Disclosures~~include, ~~about~~without ~~Market~~limitation, ~~Risk~~controls and procedures designed to ensure that information required to be disclosed under the Exchange Act is accumulated and communicated to management, including the principal executive and financial officers, as appropriate to allow timely decisions regarding required disclosure. There are inherent limitations to the effectiveness of any system of disclosure controls and procedures, including the possibility of human error and the circumvention or overriding of the controls and procedures. Accordingly, even effective disclosure controls and procedures can only provide reasonable assurance of achieving their control objectives.

WeIn connection with the ~~are~~preparation aof ~~smaller~~the ~~reporting~~quarterly ~~company~~report ason Form 10-Q for the quarter ended March 31, 2023, our management, including our principal executive officer and principal financial officer, carried out an evaluation of the effectiveness of our disclosure controls and procedures, which are defined in ~~Rule~~Rules ~~12b~~13a-215(e) and 15d-15(e) of the Exchange Act. Disclosure controls and ~~are~~procedures ~~not~~include, without limitation, controls and procedures designed to ensure that information required to ~~provide~~be disclosed by an issuer in the ~~information~~reports that it files or submits under the Act is accumulated and communicated to the issuer’s management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. Our CEO and our CFO ~~under~~is ~~this~~the ~~item~~same person.

33Management regularly assesses controls and did so most recently for our financial reporting as of March 31, 2023. This assessment was based on criteria for effective internal control over financial reporting described in the Internal Control Integrated Framework issued by the Committee of Sponsoring Organizations (COSO) of the Treadway Commission. Based on this assessment, management has concluded that, because of the Company’s small size and limited resources, internal controls over financial reporting were not effective as of March 31, 2023.

~~Item 4. Controls and Procedures~~35

~~Evaluation~~Management determined ofthat ~~Disclosure~~the ~~Controls~~Company ~~and~~has ~~Procedures~~the following material weaknesses:

~~Disclosure controls~~a) ~~and~~we ~~procedures~~have ~~are~~not ~~designed to ensure that information required to be disclosed by us in reports filed or submitted under the~~sufficiently ~~Securities Exchange Act of 1934~~designed, asimplemented ~~amended (“Exchange Act”) is recorded, processed, summarized~~ and ~~reported~~documented ~~within~~internal ~~the time periods specified in the SEC’s rules and forms. Disclosure~~ controls ~~and~~at ~~procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed under~~ the ~~Exchange~~entity ~~Act~~level ~~is accumulated~~ and ~~communicated~~across ~~to management, including~~ the ~~principal~~key ~~executive~~business and financial ~~officers,~~processes ~~as appropriate~~ to allow ~~timely decisions regarding required disclosure. There are inherent~~ ~~limitations~~us to ~~the~~achieve ~~effectiveness of any system of disclosure controls and procedures~~complete, ~~including~~accurate ~~the possibility of human error~~ and ~~the circumvention~~timely orfinancial ~~overriding of the controls and procedures. Accordingly, even effective disclosure controls and procedures can only provide reasonable assurance of achieving their control objectives.~~reporting;

~~In connection~~b) ~~with~~we ~~the~~have ~~preparation~~not ~~of the quarterly report on Form 10-Q for the quarter ended December 31, 2022, our management, including~~designed ~~our principal executive officer~~ and ~~principal~~implemented ~~financial officer, carried out an evaluation of the effectiveness of our disclosure~~ controls ~~and~~ ~~procedures,~~to ~~which~~maintain ~~are~~appropriate ~~defined~~segregation ~~in Rules 13a-15(e) and 15d-15(e)~~ of ~~the~~duties ~~Exchange Act. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer~~ in the reports that it files or submits under the Act is accumulated and communicated to the issuer’s management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. Our CEO and our ~~CFO~~business isprocesses; ~~the same person.~~and

~~Management~~c) ~~regularly assesses~~we ~~controls~~utilize ~~and~~third party ~~did~~service soproviders ~~most~~in ~~recently for~~ our financial ~~reporting~~services ~~as of December 31~~segment, ~~2022.~~for ~~This~~which ~~assessment~~the ~~was~~Company ~~based~~relies on ~~criteria~~ for ~~effective~~determining ~~internal~~amounts ~~control~~pertaining ~~over~~to ~~financial reporting described in the Internal Control Integrated Framework issued by the Committee~~revenue ofand ~~Sponsoring~~cryptocurrency ~~Organizations~~asset ~~(COSO) of the Treadway Commission. Based on this assessment~~completeness, ~~management~~accuracy ~~has concluded that, because of the Company’s small size~~ and ~~limited~~existence. ~~resources,~~The ~~internal~~third ~~controls~~party ~~over~~service ~~financial~~providers ~~reporting~~lack ~~were~~a ~~not~~key ~~effective~~service asorganization ~~of December 31, 2022~~control report.

~~Management~~We ~~determined~~plan to take steps ~~that~~to enhance and improve the ~~Company~~design ~~has~~of our internal control over financial reporting. To remediate such weaknesses, we hope to implement the following ~~material~~changes ~~weaknesses~~during our fiscal year ending September 30, 2023: (i) design, implement and document internal controls at the entity level and across the key business and financial processes and (ii) design and implement controls and appoint or hire sufficient staff to maintain appropriate segregation of duties in our business processes. The remediation efforts set out in (i) and (ii) are largely dependent upon our securing additional financing to cover the costs of implementing the changes required. If we are unsuccessful in securing such funds, remediation efforts may be adversely affected in a material manner.

a)In welight ~~have~~of ~~not~~the ~~sufficiently designed~~material weakness, ~~implemented~~we performed additional analyses and ~~documented~~procedures ~~internal~~in ~~controls~~order atto ~~the~~conclude ~~entity~~that ~~level~~our ~~and~~consolidated ~~across~~financial statements for the ~~key~~quarter ended ~~business~~March ~~and~~31, ~~financial~~2023 ~~processes~~included toin ~~allow~~this usQuarterly toReport ~~achieve~~on ~~complete~~Form 10-Q were fairly stated in accordance with US GAAP. Accordingly, ~~accurate~~management believes ~~and~~that ~~timely~~despite our material weakness, our consolidated financial ~~reporting;~~statements for the quarter ended March 31, 2023 are fairly stated, in all material respects, in accordance with US GAAP.

b)Changes ~~we have not designed and implemented controls to maintain appropriate segregation of duties~~ in ~~our~~Internal Control ~~business~~over ~~processes;~~Financial ~~and~~Reporting

c)There wewere ~~utilize~~no ~~third~~changes in ~~party~~our ~~service~~internal ~~providers~~control inover ~~our~~ financial ~~services~~reporting ~~segment,~~during ~~for~~the ~~which~~most ~~the~~recently ~~Company~~completed ~~relies~~fiscal onquarter ~~for~~that ~~determining~~have ~~amounts~~materially ~~pertaining~~affected toor ~~revenue~~are reasonably ~~and~~likely ~~cryptocurrency~~to ~~asset~~materially ~~completeness~~affect, ~~accuracy~~our ~~and~~internal ~~existence.~~control ~~The~~over ~~third~~financial ~~party service providers lack a key service organization control report~~reporting.

WeItem ~~plan to take steps to enhance and improve the design of our internal control over financial reporting~~5. To remediate such weaknesses, we hope to implement the following changes during our fiscal year ending September 30, 2023: (i) design, implement and document internal controls at the entity level and across the key business and financial processes and (ii) design and implement controls and appoint or hire sufficient staff to maintain appropriate segregation of duties in our business processes. The remediation efforts set out in (i) and (ii) are largely dependent upon our securing additional financing to cover the costs of implementing the changes required. If we are unsuccessful in securing such funds, remediation efforts may be adversely affected in a material manner.Other

In light of the material weaknesses, we performed additional analyses and procedures in order to conclude that our consolidated financial statements for the quarter ended December 31, 2022 included in this Quarterly Report on Form 10-Q were fairly stated in accordance with US GAAPNone. Accordingly, management believes that despite our material weakness, our consolidated financial statements for the three months ended December 31, 2022 are fairly stated, in all material respects, in accordance with US GAAP.

~~Changes in Internal Control over Financial Reporting~~36

~~There were~~Part noII ~~changes~~- inOther our internal control over financial reporting during the most recently completed fiscal quarter that have materially affected or are reasonably likely to materially affect, our internal control over financial reporting.Information

Item 5 1. ~~Other~~Legal Proceedings

~~None~~From time to time, we are subject to ordinary routine litigation incidental to our normal business operations. We are not currently a party to any material legal proceedings.

34Item 1A. Risk Factors

~~Part~~Not applicable to a II“smaller -reporting ~~Other~~company” ~~Information~~as defined in Item 10(f)(1) of SEC Regulation S-K.

Item 1 2. ~~Legal~~Unregistered ~~Proceedings~~Sales of Equity Securities and Use of Proceeds

~~From time to time, we are subject to ordinary routine litigation incidental to our normal business operations~~None. ~~We are not currently a party to any material legal proceedings.~~

Item 1A 3. ~~Risk~~Defaults ~~Factors~~Upon Senior Securities

~~Not applicable to a “smaller reporting company” as defined in Item 10(f)(1) of SEC Regulation S-K~~None.

Item 2 4. ~~Unregistered~~Mine ~~Sales~~Safety ~~of Equity Securities and Use of Proceeds~~Disclosures

~~None~~Not Applicable.

Item 3 5. ~~Defaults~~Other ~~Upon Senior Securities~~Information

~~None.~~Merger

~~Item~~On February 22, 2022, the Company entered into 4an Agreement and Plan of Merger (as it may be amended, supplemented or otherwise modified from time to time, the “Merger Agreement”), by and among the Company and Brilliant Acquisition Corporation, a British Virgin Islands company (“Brilliant”). ~~Mine~~The ~~Safety~~Merger Agreement ~~Disclosures~~has been approved by the Company’s boards of directors. On January 20, 2023, parties to the Merger Agreement entered into an Amendment No. 3 to the Merger Agreement (the “Amendment”) solely to extend the Outside Closing Date (as defined in the Merger Agreement), to June 23, 2023 (following the approval by Brilliant’s shareholders of the extension of the life of the SPAC pursuant to Brilliant’s organizational documents, which was granted on April 20, 2023). The transactions contemplated by the Merger Agreement are expected to close in the third quarter of fiscal year 2023, provided however there is no guarantee that the transaction will close.

~~Not~~White Lion Stock ~~Applicable.~~Purchase Agreement

~~Item~~On May 17, 2022, the Company entered into a Stock 5Purchase Agreement (the “White Lion Agreement”) with White Lion Capital Partners, LLC a California-based investment fund (“White Lion”). ~~Other~~Under ~~Information~~the terms of the White Lion Agreement, the Company has 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 or such lower amount as may be required pursuant to the rules of the market on which shares of its common stock trades at such time. Pursuant to terms of the White Lion Agreement and the Registration Rights Agreement (as defined below), the Company is required to use its commercially reasonable efforts to file with the SEC a registration statement covering the shares to be acquired by White Lion within sixty days following the closing of the previously announced business combination with Brilliant Acquisition Corporation described in its Current Report on Form 8-K filed with the SEC on February 23, 2022 (the “Business Combination”).

~~Merger~~The term of the White Lion Agreement commences on the effective date of the registration statement and shall end on December 31, 2024, or, if earlier, the date on which White Lion has purchased the maximum number of shares of the Company’s common stock provided under the White Lion Agreement, in each case on the terms and subject to the conditions set forth in the White Lion Agreement. White Lion’s purchase price will be 96% of the dollar- volume weighted average price of the Company’s common stock over the two consecutive trading days immediately following receipt of the Company’s notice of its intent to make a draw. As of March 31, 2023, the White Lion Agreement is not yet effective.

On February 22, 2022, the Company entered into an Agreement and Plan of Merger (as it may be amended, supplemented or otherwise modified from time to time, the “Merger Agreement”), by and among the Company and Brilliant Acquisition Corporation, a British Virgin Islands company (“Brilliant”). The Merger Agreement has been approved by the Company’s boards of directors. On January 20, 2023, parties to the Merger Agreement entered into an Amendment No. 3 to the Merger Agreement (the “Amendment”) solely to extend the Outside Closing Date (as defined in the Merger Agreement), to June 23, 2023 (following the approval by Brilliant’s shareholders of the extension of the life of the SPAC pursuant to Brilliant’s organizational documents, which was granted on April 20, 2023). The transactions contemplated by the Merger Agreement are expected to close in the third quarter of fiscal year 2023, provided however there is no guarantee that the transaction will close.37

During the term of the White Lion Agreement, on the terms and subject to the conditions set forth therein, the Company may draw up to the lesser of (i) the number of shares of the Company’s common stock which would result in beneficial ownership by White Lion ~~Stock~~of ~~Purchase~~more ~~Agreement~~than 4.99% of the outstanding shares of the Company’s common stock, (ii) the number of shares of the Company’s common stock equal to 30% of the average daily trading volume of the Company’s common stock over the five consecutive trading days immediately following the notice date, or (iii) the number of the Company’s common stock obtained by dividing $1,500,000 by the closing sale price of the Company’s common stock on the notice date.

OnThe Company is not entitled to draw on the White ~~May~~Lion ~~17,~~Agreement ~~2022,~~if the closing sale price of the Company’s ~~entered~~common ~~into~~stock aon ~~Stock~~the ~~Purchase~~trading ~~Agreement~~day immediately preceding the notice date is less than $1.00 (following the ~~“White~~reverse ~~Lion~~stock ~~Agreement”)~~split proposed in connection with ~~White~~the ~~Lion~~closing ~~Capital~~of ~~Partners,~~the Business Combination and described ~~LLC~~in athe ~~California~~Company’s Current Report on Form 8-~~based~~K ~~investment~~filed ~~fund~~with ~~(“White~~the ~~Lion”~~SEC on February 23, 2022, but adjusted for any other reorganization, recapitalization, non-cash dividend, stock split or other similar transaction). ~~Under~~The ~~the~~Company ~~terms~~is ofnot entitled to draw on the White Lion Agreement, ~~the~~unless ~~Company~~each ~~has~~of the ~~right, but~~following ~~not~~additional conditions is satisfied: (i) each of the ~~obligation,~~Company’s torepresentations ~~require~~and warranties set forth in the White Lion toAgreement ~~purchase~~is ~~shares~~true ofand ~~its~~correct ~~common~~(subject ~~stock~~to upqualifications as to amateriality ~~maximum~~set ~~amount~~forth oftherein) ~~$75,000,000 or~~in ~~such~~all respects ~~lower~~as ~~amount~~of assuch ~~may~~time; be(ii) a ~~required~~registration ~~pursuant~~statement tois and remains effective for the ~~rules~~resale of securities in connection with the ~~market~~White Lion onAgreement; ~~which~~(iii) the ~~shares~~trading of ~~its~~the Company’s common stock ~~trades~~shall atnot ~~such~~have ~~time.~~been ~~Pursuant~~suspended by the SEC, the applicable trading tomarket ~~terms~~or ofFINRA, or otherwise halted for any reason; (iv) the ~~White~~Company ~~Lion~~shall ~~Agreement~~have complied with its obligations and shall not otherwise be in breach or default of any agreement set forth in the ~~Registration~~White ~~Rights~~Lion Agreement; (asv) no ~~defined~~statute, ~~below)~~regulation, ~~the~~order, ~~Company~~guidance, isdecree, writ, ~~required~~ruling toor ~~use~~injunction ~~its~~shall ~~commercially~~have been enacted, entered, promulgated, threatened or endorsed by any federal, state, local or foreign ~~reasonable~~court ~~efforts~~or togovernmental ~~file~~authority ~~with~~of competent jurisdiction, including, without limitation, the SEC, awhich ~~registration~~prohibits ~~statement~~the ~~covering~~consummation ~~the~~of or ~~shares~~which towould bematerially ~~acquired~~modify or delay any of the transactions contemplated by the White Lion ~~within~~Agreement; ~~sixty~~(vi) all ~~days~~reports, ~~following~~schedules, ~~the~~registrations, ~~closing~~forms, ofstatements, ~~the~~information ~~previously~~and ~~announced~~other ~~business~~documents ~~combination~~required ~~with~~to ~~Brilliant~~have ~~Acquisition~~been ~~Corporation~~filed ~~described~~by inus ~~its~~with ~~Current~~the ~~Report~~SEC onpursuant to the reporting ~~Form~~requirements of the Exchange Act of 1934 (other than Forms 8-K) shall have been filed with the SEC onwithin ~~February~~the ~~23,~~applicable ~~2022~~time periods prescribed for such filings; (vii) to the ~~“Business~~extent ~~Combination”~~the issuance of the put shares requires shareholder approval under the listing rules of the applicable national exchange or principal quotation system for the Company’s common stock, the Company has or will seek such approval; and (viii) certain other conditions as set forth in the White Lion Agreement.

~~The term~~In ofaddition ~~the~~to ~~White Lion Agreement commences on~~ the ~~effective date of the registration statement and shall end on December 31, 2024, or, if earlier, the date on which White Lion has purchased the maximum number of~~ shares ofto ~~the~~be ~~Company’s~~issued ~~common stock provided~~ under the White Lion Agreement, ~~in each case on~~ the ~~terms~~Company ~~and~~will ~~subject~~include ~~to the conditions set forth~~ in ~~the~~its ~~White~~registration ~~Lion~~statement ~~Agreement.~~additional ~~White Lion’s~~shares ~~purchase price will be 96%~~ of the ~~dollar- volume weighted average price of the~~ Company’s common stock ~~over the~~ ~~two~~in ~~consecutive trading days immediately following receipt of~~ the ~~Company’s~~amount ~~notice~~ of ~~its~~$750,000 being ~~intent~~issued to ~~make~~White aLion ~~draw.~~in Asconnection ofwith ~~December 31,~~the ~~2022,~~execution of the White Lion Agreement ~~is not yet effective~~.

35White Lion Registration Rights Agreement

~~During~~ In connection with the ~~term~~Company’s ofentry into the White Lion Agreement, onthe Company entered into a Registration Rights Agreement with White Lion (the ~~terms~~“Registration ~~and~~Rights Agreement”). ~~subject~~Pursuant to the ~~conditions~~terms ~~set~~of ~~forth~~the ~~therein~~Registration Rights Agreement, the Company ~~may~~has ~~draw~~agreed up to ~~the~~use ~~lesser~~its commercially reasonable ~~of (i) the~~efforts ~~number~~to offile ~~shares~~a ofregistration statement under the ~~Company’s~~Securities ~~common~~Act ~~stock~~registering ~~which~~the ~~would~~resale ~~result~~of inthe ~~beneficial~~shares ~~ownership~~sold byunder the White Lion ofAgreement ~~more~~within ~~than~~sixty ~~4.99%~~days of the ~~outstanding~~closing ~~shares~~ of the ~~Company’s~~Business ~~common~~Combination. ~~stock,~~The ~~(ii) the~~Registration ~~number~~Rights ofAgreement ~~shares~~also ofprovides that the Company’s is required ~~common~~to ~~stock~~use ~~equal~~its tocommercially ~~30%~~reasonable ofefforts ~~the~~to ~~average~~keep ~~daily~~the ~~trading~~registration ~~volume~~effective ofand ~~the~~to ~~Company’s~~prepare ~~common~~and ~~stock~~file ~~over~~with the ~~five~~SEC ~~consecutive~~such ~~trading~~amendments ~~days~~and ~~immediately~~supplements ~~following~~if the ~~notice~~foregoing ~~date,~~registration orstatement ~~(iii) the~~is ~~number~~not ofthen in effect, and the Company’s ~~common~~proposes ~~stock~~to ~~obtained~~file bycertain ~~dividing~~types ~~$1,500,000~~of byregistration ~~the~~statements ~~closing~~under ~~sale~~as ~~price~~may ofbe ~~the~~necessary ~~Company’s~~to ~~common~~keep ~~stock on~~ the ~~notice~~registration ~~date~~statement effective.

The Company is not entitled to draw on the White Lion Agreement if the closing sale price of the Company’s common stock on the trading day immediately preceding the notice date is less than $1.00 (following the reverse stock split proposed in connection with the closing of the Business Combination and described in the Company’s Current Report on Form 8-K filed with the SEC on February 23, 2022, but adjusted for any other reorganization, recapitalization, non-cash dividend, stock split or other similar transaction). The Company is not entitled to draw on the White Lion Agreement unless each of the following additional conditions is satisfied: (i) each of the Company’s representations and warranties set forth in the White Lion Agreement is true and correct (subject to qualifications as to materiality set forth therein) in all respects as of such time; (ii) a registration statement is and remains effective for the resale of securities in connection with the White Lion Agreement; (iii) the trading of the Company’s common stock shall not have been suspended by the SEC, the applicable trading market or FINRA, or otherwise halted for any reason; (iv) the Company shall have complied with its obligations and shall not otherwise be in breach or default of any agreement set forth in the White Lion Agreement; (v) no statute, regulation, order, guidance, decree, writ, ruling or injunction shall have been enacted, entered, promulgated, threatened or endorsed by any federal, state, local or foreign court or governmental authority of competent jurisdiction, including, without limitation, the SEC, which prohibits the consummation of or which would materially modify or delay any of the transactions contemplated by the White Lion Agreement; (vi) all reports, schedules, registrations, forms, statements, information and other documents required to have been filed by us with the SEC pursuant to the reporting requirements of the Exchange Act of 1934 (other than Forms 8-K) shall have been filed with the SEC within the applicable time periods prescribed for such filings; (vii) to the extent the issuance of the put shares requires shareholder approval under the listing rules of the applicable national exchange or principal quotation system for the Company’s common stock, the Company has or will seek such approval; and (viii) certain other conditions as set forth in the White Lion Agreement.38

~~In addition~~Item to the shares to be issued under the White Lion Agreement, the Company will include in its registration statement additional shares of the Company’s common stock in the amount of $750,000 being issued to White Lion in connection with the execution of the White Lion Agreement6. Exhibits

~~White~~The following exhibits are filed as part of, or incorporated by reference ~~Lion~~into, ~~Registration~~this ~~Rights~~Quarterly ~~Agreement~~Report on Form 10-Q.

In connection with the Company’s entry into the White Lion Agreement, the Company entered into a Registration Rights Agreement with White Lion (the “Registration Rights Agreement”). Pursuant to the terms of the Registration Rights Agreement, the Company has agreed to use its commercially reasonable efforts to file a registration statement under the Securities Act registering the resale of the shares sold under the White Lion Agreement within sixty days of the closing of the Business Combination. The Registration Rights Agreement also provides that the Company is required to use its commercially reasonable efforts to keep the registration effective and to prepare and file with the SEC such amendments and supplements if the foregoing registration statement is not then in effect, and the Company proposes to file certain types of registration statements under as may be necessary to keep the registration statement effective.

Exhibit Number		Description
2.1		Agreement and Plan of Merger, dated as of February 22, 2022, by and among Nukkleus Inc. and Brilliant Acquisition Corporation (12)

3.1		Certificate of Amendment to the Certificate of Incorporation filed June 3, 2016 (2)

3.2		Statement of Designation, Powers, Preferences and Rights of Series A Preferred Stock (2)

3.3		Amended and Restated By-laws of Nukkleus Inc. (3)

4.1		Securities Purchase Agreement between Nukkleus Inc. and Currency Mountain Holdings Bermuda, Limited dated June 3, 2016 (2)

10.1		Purchase and Sale Agreement by and between Nukkleus, Inc. and Michael Stephen Greenacre; Nicholas Aaron Gregory; Jamal Khurshid; Travers David Lee; Azam Shah; Craig Iain Vallis; Bertram Bartholomew Worsley; and Oliver James Worsley dated May 24, 2021 (10)

10.2		General Service Agreement between Nukkleus Limited and FML Malta Limited dated May 24, 2016 (4)

10.3		General Service Agreement between Nukkleus Limited and FXDirectDealer LLC dated May 24, 2016 (1)

10.4		Stock Purchase Agreement dated May 27, 2016 among Nukkleus Inc., IBIH Limited, the shareholders of IBIH Limited and Currency Mountain Holdings LLC (2)

10.5		Amendment No. 1 dated June 2, 2016 to the Asset Purchase Agreement by and between Nukkleus Inc., its majority shareholder Charms Investments Ltd., and its wholly-owned subsidiary, Nukkleus Limited and Currency Mountain Holdings Bermuda, Limited (2)

10.6		Amendment No. 1 dated June 3, 2016 to the General Service Agreement between Nukkleus Limited and FXDD Trading Limited (2)

10.7		Letter Agreement between Nukkleus Inc. and IBIH Limited dated June 3, 2016 (2)

10.8		Director Agreement by and between Nukkleus Inc. and Craig Marshak dated August 1, 2016 (3)

10.9		Amendment dated October 17, 2017 of that certain General Service Agreement between Nukkleus Limited and FML Malta Limited (5)

10.10		Amendment dated October 17, 2017 of that certain General Service Agreement between Nukkleus Limited and FXDirectDealer LLC (5)

10.11		Settlement Agreement and Mutual Release between Nukkleus Inc., IBIH Limited, Terra (FX) Offshore Limited, Ludico Investments Limited, Currency Mountain Holdings LLC and the IBIH Shareholders dated November 17, 2017 (6)

10.12		Letter Agreement entered between FML Malta Ltd., FXDD Malta Limited and Nukkleus Limited (7)

~~Item 6. Exhibits~~39

The following exhibits are filed as part of, or incorporated by reference into, this Quarterly Report on Form 10-Q.

10.13		Stock Redemption Agreement dated February 13, 2018 between Nukkleus Inc. and Currency Mountain Holdings Bermuda, Limited (8)

10.14		Form of Support Agreement, dated as of February 22, 2022 among Brilliant Acquisition Corporation and the investors party thereto (12)

10.15		Form of Registration Rights Agreement (12)

10.15		Form of Lock-Up Agreement (12)

21.1		List of Subsidiaries (11)

31.1*		Rule 13a-14(a) Certification of the Chief Executive and Financial Officer

32.1*		Section 1350 Certification of Chief Executive and Financial Officer

101.INS*		Inline XBRL Instance Document.

101.SCH*		Inline XBRL Taxonomy Extension Schema Document.

101.CAL*		Inline XBRL Taxonomy Extension Calculation Linkbase Document.

101.DEF*		Inline XBRL Taxonomy Extension Definition Linkbase Document.

101.LAB*		Inline XBRL Taxonomy Extension Label Linkbase Document.

101.PRE*		Inline XBRL Taxonomy Extension Presentation Linkbase Document.

104		Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).

Exhibit Number		Description
(1)	Incorporated by reference to the Form 8K Current Report filed with the SEC on May 31, 2016.
2.1		Agreement and Plan of Merger, dated as of February 22, 2022, by and among Nukkleus Inc. and Brilliant Acquisition Corporation (12)
(2)	Incorporated by reference to the Form 8K Current Report filed with the SEC on June 3, 2016.
3.1		Certificate of Amendment to the Certificate of Incorporation filed June 3, 2016 (2)
(3)	Incorporated by reference to the Form 8K Current Report filed with the SEC on August 9, 2016.
3.2		Statement of Designation, Powers, Preferences and Rights of Series A Preferred Stock (2)
(4)	Incorporated by reference to the Form 8K Current Report filed with the SEC on October 25, 2016.
3.3		Amended and Restated By-laws of Nukkleus Inc. (3)
(5)	Incorporated by reference to the Form 8K Current Report filed with the SEC on October 19, 2017.
4.1		Securities Purchase Agreement between Nukkleus Inc. and Currency Mountain Holdings Bermuda, Limited dated June 3, 2016 (2)
(6)	Incorporated by reference to the Form 8K Current Report filed with the SEC on December 5, 2017.
10.1		Purchase and Sale Agreement by and between Nukkleus, Inc. and Michael Stephen Greenacre; Nicholas Aaron Gregory; Jamal Khurshid; Travers David Lee; Azam Shah; Craig Iain Vallis; Bertram Bartholomew Worsley; and Oliver James Worsley dated May 24, 2021 (10)
(7)	Incorporated by reference to the Form 10K Annual Report filed with the SEC on December 27, 2017.
10.2		General Service Agreement between Nukkleus Limited and FML Malta Limited dated May 24, 2016 (4)
(8)	Incorporated by reference to the Form 10Q Quarterly Report filed with the SEC on February 13, 2018.
10.3		General Service Agreement between Nukkleus Limited and FXDirectDealer LLC dated May 24, 2016 (1)
(9)	Incorporated by reference to the Form 10K Annual Report filed with the SEC on December 28, 2020.
10.4		Stock Purchase Agreement dated May 27, 2016 among Nukkleus Inc., IBIH Limited, the shareholders of IBIH Limited and Currency Mountain Holdings LLC (2)
(10)	Incorporated by reference to the Form 8K Current Report filed with the SEC on June 3, 2021.
10.5		Amendment No. 1 dated June 2, 2016 to the Asset Purchase Agreement by and between Nukkleus Inc., its majority shareholder Charms Investments Ltd., and its wholly-owned subsidiary, Nukkleus Limited and Currency Mountain Holdings Bermuda, Limited (2)
(11)	Incorporated by reference to the Form 10K Annual Report filed with the SEC on December 29, 2021.
10.6		Amendment No. 1 dated June 3, 2016 to the General Service Agreement between Nukkleus Limited and FXDD Trading Limited (2)
(12)	Incorporated by reference to the Form 8K Current Report filed with the SEC on February 23, 2022.

3640

10.7		Letter Agreement between Nukkleus Inc. and IBIH Limited dated June 3, 2016 (2)
10.8		Director Agreement by and between Nukkleus Inc. and Craig Marshak dated August 1, 2016 (3)
10.9		Amendment dated October 17, 2017 of that certain General Service Agreement between Nukkleus Limited and FML Malta Limited (5)
10.10		Amendment dated October 17, 2017 of that certain General Service Agreement between Nukkleus Limited and FXDirectDealer LLC (5)
10.11		Settlement Agreement and Mutual Release between Nukkleus Inc., IBIH Limited, Terra (FX) Offshore Limited, Ludico Investments Limited, Currency Mountain Holdings LLC and the IBIH Shareholders dated November 17, 2017 (6)
10.12		Letter Agreement entered between FML Malta Ltd., FXDD Malta Limited and Nukkleus Limited (7)
10.13		Stock Redemption Agreement dated February 13, 2018 between Nukkleus Inc. and Currency Mountain Holdings Bermuda, Limited (8)
10.14		Form of Support Agreement, dated as of February 22, 2022 among Brilliant Acquisition Corporation and the investors party thereto (12)
10.15		Form of Registration Rights Agreement (12)
10.15		Form of Lock-Up Agreement (12)
21.1		List of Subsidiaries (11)
31.1*		Rule 13a-14(a) Certification of the Chief Executive and Financial Officer
32.1*		Section 1350 Certification of Chief Executive and Financial Officer
101.INS*		Inline XBRL Instance Document.
101.SCH*		Inline XBRL Taxonomy Extension Schema Document.
101.CAL*		Inline XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF*		Inline XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB*		Inline XBRL Taxonomy Extension Label Linkbase Document.
101.PRE*		Inline XBRL Taxonomy Extension Presentation Linkbase Document.
104		Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).

SIGNATURES

(1)	Incorporated by reference to the Form 8K Current Report filed with the SEC on May 31, 2016.
(2)	Incorporated by reference to the Form 8K Current Report filed with the SEC on June 3, 2016.
(3)	Incorporated by reference to the Form 8K Current Report filed with the SEC on August 9, 2016.
(4)	Incorporated by reference to the Form 8K Current Report filed with the SEC on October 25, 2016.
(5)	Incorporated by reference to the Form 8K Current Report filed with the SEC on October 19, 2017.
(6)	Incorporated by reference to the Form 8K Current Report filed with the SEC on December 5, 2017.
(7)	Incorporated by reference to the Form 10K Annual Report filed with the SEC on December 27, 2017.
(8)	Incorporated by reference to the Form 10Q Quarterly Report filed with the SEC on February 13, 2018.
(9)	Incorporated by reference to the Form 10K Annual Report filed with the SEC on December 28, 2020.
(10)	Incorporated by reference to the Form 8K Current Report filed with the SEC on June 3, 2021.
(11)	Incorporated by reference to the Form 10K Annual Report filed with the SEC on December 29, 2021.
(12)	Incorporated by reference to the Form 8K Current Report filed with the SEC on February 23, 2022.

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	NUKKLEUS INC.
	(Registrant)

Date: June 20, 2023	By:	/s/ Emil Assentato
		Emil Assentato
		Chief Executive Officer (Principal Executive Officer) and Chief Financial Officer (Principal Financial and Accounting Officer) and Chairman

~~SIGNATURES~~41

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

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	NUKKLEUS INC.
	(Registrant)
Date: May 19, 2023	By:	/s/ Emil Assentato
		Emil Assentato
		Chief Executive Officer (Principal Executive Officer) and Chief Financial Officer (Principal Financial and Accounting Officer) and Chairman

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