Cover
Cover - USD ($) | 12 Months Ended | ||
Sep. 30, 2023 | Jun. 11, 2024 | Mar. 31, 2023 | |
Document Information [Line Items] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
Document Financial Statement Error Correction [Flag] | false | ||
Entity Interactive Data Current | Yes | ||
ICFR Auditor Attestation Flag | false | ||
Amendment Flag | false | ||
Document Period End Date | Sep. 30, 2023 | ||
Document Fiscal Year Focus | 2023 | ||
Document Fiscal Period Focus | FY | ||
Entity Information [Line Items] | |||
Entity Registrant Name | Nukkleus Inc. | ||
Entity Central Index Key | 0001787518 | ||
Entity File Number | 001-39341 | ||
Entity Tax Identification Number | 38-3912845 | ||
Entity Incorporation, State or Country Code | DE | ||
Current Fiscal Year End Date | --09-30 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | No | ||
Entity Shell Company | false | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | true | ||
Entity Ex Transition Period | false | ||
Entity Public Float | $ 7,133,000 | ||
Entity Incorporation, Date of Incorporation | May 24, 2019 | ||
Entity Contact Personnel [Line Items] | |||
Entity Address, Address Line One | 525 Washington Boulevard | ||
Entity Address, City or Town | Jersey City | ||
Entity Address, State or Province | NJ | ||
Entity Address, Postal Zip Code | 07310 | ||
Entity Phone Fax Numbers [Line Items] | |||
City Area Code | 212 | ||
Local Phone Number | 791-4663 | ||
Entity Listings [Line Items] | |||
Entity Common Stock, Shares Outstanding | 14,802,414 | ||
Common Stock, $0.0001 par value per share | |||
Entity Listings [Line Items] | |||
Title of 12(b) Security | Common Stock, $0.0001 par value per share | ||
Trading Symbol | NUKK | ||
Security Exchange Name | NASDAQ | ||
Warrants, each warrant exercisable for one Share of Common Stock for $11.50 per share | |||
Entity Listings [Line Items] | |||
Title of 12(b) Security | Warrants, each warrant exercisable for one Share of Common Stock for $11.50 per share | ||
Trading Symbol | NUKKW | ||
Security Exchange Name | NASDAQ |
Audit Information
Audit Information | 12 Months Ended |
Sep. 30, 2023 | |
Auditor [Table] | |
Auditor Name | Marcum LLP |
Auditor Firm ID | 688 |
Auditor Location | New Jersey |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Sep. 30, 2023 | Sep. 30, 2022 | |
CURRENT ASSETS: | |||
Cash | $ 19,318 | $ 364,023 | |
Customer custodial cash | 672,501 | 2,020,394 | |
Customer digital currency assets | 248,214 | ||
Digital assets | 1,973 | 73,415 | |
Due from affiliates | 2,039,274 | 931,136 | |
Note receivable - related parties, net | 162,820 | 35,000 | |
Other current assets | 32,522 | 15,617 | |
TOTAL CURRENT ASSETS | 2,928,408 | 3,687,799 | |
NON-CURRENT ASSETS: | |||
Cost method investment | 391,217 | 6,602,000 | |
Intangible assets, net | 33,000 | 8,075,105 | |
TOTAL NON-CURRENT ASSETS | 424,217 | 14,677,105 | |
TOTAL ASSETS | 3,352,625 | 18,364,904 | |
CURRENT LIABILITIES: | |||
Accounts payable | 138,666 | 51,712 | |
Customer custodial cash liabilities | 1,443,011 | 2,020,717 | |
Customer digital currency liabilities | 248,214 | ||
Due to affiliates | 6,808,749 | 4,514,063 | |
Accrued payroll liability and directors’ compensation | 402,241 | 237,205 | |
Accrued professional fees | 160,926 | 170,058 | |
Accrued liabilities and other payables | 169,872 | 232,355 | |
TOTAL CURRENT LIABILITIES | 9,123,465 | 7,474,324 | |
NON-CURRENT LIABILITIES: | |||
TOTAL NON-CURRENT LIABILITIES | 422,390 | ||
TOTAL LIABILITIES | 9,545,855 | 7,474,324 | |
COMMITMENTS AND CONTINGENCIES - (Note 16) | |||
STOCKHOLDERS’ (DEFICIT) EQUITY (1): | |||
Preferred stock ($0.0001 par value; 15,000,000 shares authorized; 0 share issued and outstanding at September 30, 2023 and 2022) | [1] | ||
Common stock ($0.0001 par value; 40,000,000 shares authorized; 10,074,657 shares issued and outstanding at September 30, 2023 and 2022) | [1] | 1,007 | 1,007 |
Additional paid-in capital | [1] | 25,543,048 | 25,172,170 |
Accumulated deficit | [1] | (31,769,244) | (14,340,816) |
Accumulated other comprehensive income | [1] | 31,959 | 58,219 |
TOTAL STOCKHOLDERS’ (DEFICIT) EQUITY | [1] | (6,193,230) | 10,890,580 |
TOTAL LIABILITIES AND STOCKHOLDERS’ (DEFICIT) EQUITY | 3,352,625 | 18,364,904 | |
Related Party | |||
NON-CURRENT LIABILITIES: | |||
Loan payable - related parties | 420,619 | ||
Interest payable - related parties | $ 1,771 | ||
[1]Retroactively restated for the reverse recapitalization as described in Note 3 and 18. |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parentheticals) - $ / shares | Sep. 30, 2023 | Sep. 30, 2022 | |
Statement of Financial Position [Abstract] | |||
Preferred stock, shares authorized | [1] | 15,000,000 | 15,000,000 |
Preferred stock par value (in Dollars per share) | [1] | $ 0.0001 | $ 0.0001 |
Preferred stock, shares issued | [1] | 0 | 0 |
Preferred stock, shares outstanding | [1] | 0 | 0 |
Common stock par value (in Dollars per share) | [1] | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | [1] | 40,000,000 | 40,000,000 |
Common stock, shares, issued | [1] | 10,074,657 | 10,074,657 |
Common stock, shares, outstanding | [1] | 10,074,657 | 10,074,657 |
[1]Retroactively restated for the reverse recapitalization as described in Note 3 and 18. |
Consolidated Statements of Oper
Consolidated Statements of Operations and Comprehensive Loss - USD ($) | 12 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | ||
REVENUES | |||
Total revenues | $ 21,297,642 | $ 21,513,474 | |
COSTS OF REVENUES | |||
Total costs of revenues | 21,640,783 | 22,174,870 | |
GROSS PROFIT (LOSS) | |||
Total gross loss | (343,141) | (661,396) | |
OPERATING EXPENSES: | |||
Advertising and marketing | 55,889 | 420,186 | |
Professional fees | 2,423,773 | 4,329,988 | |
Compensation and related benefits | 822,625 | 508,471 | |
Amortization of intangible assets | 273,711 | 264,224 | |
Bad debt expense | 1,179,772 | 1,454 | |
Other general and administrative | 449,988 | 645,860 | |
Impairment loss | 11,914,322 | 4,310,745 | |
Total operating expenses | 17,120,080 | 10,480,928 | |
LOSS FROM OPERATIONS | (17,463,221) | (11,142,324) | |
OTHER (EXPENSE) INCOME: | |||
Loss from equity method investment | (689,255) | ||
Interest expense - related parties | (1,776) | ||
Other income (expense) | 36,569 | (14,078) | |
Total other income (expense), net | 34,793 | (703,333) | |
LOSS BEFORE INCOME TAXES | (17,428,428) | (11,845,657) | |
INCOME TAXES | |||
NET LOSS | [1] | (17,428,428) | (11,845,657) |
COMPREHENSIVE LOSS: | |||
NET LOSS | [1] | (17,428,428) | (11,845,657) |
OTHER COMPREHENSIVE (LOSS) INCOME | |||
Unrealized foreign currency translation (loss) gain | (26,260) | 49,779 | |
COMPREHENSIVE LOSS | $ (17,454,688) | $ (11,795,878) | |
NET LOSS PER COMMON SHARE (1): | |||
Basic net loss per common share (in Dollars per share) | [2] | $ (1.73) | $ (1.21) |
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING: | |||
Basic weighted average common shares outstanding (in Shares) | 10,074,657 | 9,771,734 | |
General Support Services | |||
REVENUES | |||
Total revenues | $ 19,200,000 | $ 19,200,000 | |
COSTS OF REVENUES | |||
Total costs of revenues | 18,775,000 | 18,900,000 | |
GROSS PROFIT (LOSS) | |||
Total gross loss | 425,000 | 300,000 | |
Financial Services | |||
REVENUES | |||
Total revenues | 2,097,642 | 2,313,474 | |
COSTS OF REVENUES | |||
Total costs of revenues | 2,865,783 | 3,274,870 | |
GROSS PROFIT (LOSS) | |||
Total gross loss | $ (768,141) | $ (961,396) | |
[1] Retroactively restated for the reverse recapitalization as described in Note 3 and 18. |
Consolidated Statements of Op_2
Consolidated Statements of Operations and Comprehensive Loss (Parentheticals) - $ / shares | 12 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | ||
Income Statement [Abstract] | |||
Diluted net loss per common share | [1] | $ (1.73) | $ (1.21) |
Diluted weighted average common shares outstanding | 10,074,952 | 9,771,734 | |
[1]Retroactively restated for the reverse recapitalization as described in Note 3 and 18. |
Consolidated Statements of Chan
Consolidated Statements of Changes in Stockholders’ Equity (Deficit) - USD ($) | Preferred Stock | Common Stock | Additional Paid-in Capital | Accumulated Deficit | Accumulated Other Comprehensive Income | Total | ||
Balance at Sep. 30, 2021 | [1] | $ 911 | $ 11,645,500 | $ (2,495,159) | $ 8,440 | $ 9,159,692 | ||
Balance (in Shares) at Sep. 30, 2021 | [1] | 9,110,157 | ||||||
Common stock issued in connection with cost method investment | [1] | $ 55 | 6,601,945 | 6,602,000 | ||||
Common stock issued in connection with cost method investment (in Shares) | [1] | 548,767 | ||||||
Common stock issued in connection with equity method investment | [1] | $ 41 | 4,999,959 | 5,000,000 | ||||
Common stock issued in connection with equity method investment (in Shares) | [1] | 415,733 | ||||||
Stock options issued for the purchase of an intangible asset | [1] | 11,237 | 11,237 | |||||
Stock-based compensation | [1] | 1,913,529 | 1,913,529 | |||||
Net loss for the year | [1] | (11,845,657) | (11,845,657) | |||||
Foreign currency translation adjustment | [1] | 49,779 | 49,779 | |||||
Balance at Sep. 30, 2022 | $ 1,007 | 25,172,170 | (14,340,816) | 58,219 | 10,890,580 | [2] | ||
Balance (in Shares) at Sep. 30, 2022 | 10,074,657 | |||||||
Stock-based compensation | [1] | 370,878 | 370,878 | |||||
Net loss for the year | [1] | (17,428,428) | (17,428,428) | |||||
Foreign currency translation adjustment | [1] | (26,260) | (26,260) | |||||
Balance at Sep. 30, 2023 | $ 1,007 | $ 25,543,048 | $ (31,769,244) | $ 31,959 | $ (6,193,230) | [2] | ||
Balance (in Shares) at Sep. 30, 2023 | 10,074,657 | |||||||
[1] Retroactively restated for the reverse recapitalization as described in Note 3 and 18. |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | ||
CASH FLOWS FROM OPERATING ACTIVITIES: | |||
Net loss | [1] | $ (17,428,428) | $ (11,845,657) |
Adjustments to reconcile net loss to net cash (used in) provided by operating activities: | |||
Amortization of intangible assets | 2,380,115 | 2,690,617 | |
Stock-based compensation and service expense | 370,878 | 1,913,529 | |
Provision for bad debt | 1,179,772 | 1,454 | |
Unrealized foreign currency exchange loss (gain) | 3,221 | (768) | |
Loss on equity method investment | 689,255 | ||
Impairment of digital assets | 7,950 | 887 | |
Impairment loss | 11,914,322 | 4,310,745 | |
Changes in operating assets and liabilities: | |||
Customer digital currency assets | 273,337 | 822,650 | |
Accounts receivable | (618) | 53,474 | |
Digital assets | 70,913 | (84,241) | |
Due from affiliates | (1,338,432) | 1,686,737 | |
Other current assets | (25,775) | (4,716) | |
Accounts payable | 82,366 | 7,276 | |
Customer custodial cash liabilities | (775,511) | 1,560,251 | |
Customer digital currency liabilities | (273,337) | (822,650) | |
Due to affiliates | 2,261,395 | 323,129 | |
Accrued payroll liability and directors’ compensation | 165,288 | 66,667 | |
Accrued professional fees | (17,071) | 56,006 | |
Interest payable - related parties | 1,776 | ||
Accrued liabilities and other payables | (84,543) | 190,961 | |
NET CASH (USED IN) PROVIDED BY OPERATING ACTIVITIES | (1,232,382) | 1,615,606 | |
CASH FLOWS FROM INVESTING ACTIVITIES: | |||
Investment in note receivable – related parties | (1,920,754) | (35,000) | |
Proceeds from note receivable – related parties | 852,651 | ||
Purchase of intangible asset | (41,833) | ||
NET CASH USED IN INVESTING ACTIVITIES | (1,109,936) | (35,000) | |
CASH FLOWS FROM FINANCING ACTIVITIES | |||
Proceeds from loan payable - related parties | 418,316 | ||
NET CASH PROVIDED BY FINANCING ACTIVITIES | 418,316 | ||
EFFECT OF EXCHANGE RATE ON CASH | 231,404 | (399,262) | |
NET (DECREASE) INCREASE IN CASH | (1,692,598) | 1,181,344 | |
Cash - beginning of year | 2,384,417 | 1,203,073 | |
Cash - end of year | 691,819 | 2,384,417 | |
Cash consisted of the following: | |||
Cash | 19,318 | 364,023 | |
Customer custodial cash | 672,501 | 2,020,394 | |
Total cash | 691,819 | 2,384,417 | |
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 | ||
Adjustment for common stock issued in connection with asset acquisition | $ 2,861,631 | ||
[1] Retroactively restated for the reverse recapitalization as described in Note 3 and 18. |
Company History and Nature of t
Company History and Nature of the Business | 12 Months Ended |
Sep. 30, 2023 | |
Company History and Nature of the Business [Abstract] | |
COMPANY HISTORY AND NATURE OF THE BUSINESS | NOTE 1 – COMPANY HISTORY AND NATURE OF THE BUSINESS Nukkleus Inc. (formerly known as, Brilliant Acquisition Corporation) (“Nukkleus”) was formed on May 24, 2019. Nukkleus was formed for the purpose of acquiring, engaging in a share exchange, share reconstruction and amalgamation with, purchasing all or substantially all of the assets of, entering into contractual arrangements with, or engaging in any other similar business combination with one or more businesses or entities. On June 23, 2023, Brilliant Acquisition Corporation, a British Virgin Islands company (prior to the Merger “Brilliant”, and following the Merger, a Delaware corporation “Nukkleus”), entered into an Amended and Restated Agreement and Plan of Merger (as amended by the First Amendment to the Amended and Restated Agreement and Plan of Merger on November 1, 2023, the “Merger Agreement”), by and among Brilliant BRIL Merger Sub, Inc., a Delaware corporation and wholly-owned subsidiary of Brilliant (“Merger Sub”), and Nukkleus Inc., a Delaware corporation (“Old Nukk” or the “Company”). Old Nukk (f/k/a Compliance & Risk Management Solutions Inc.) was formed on July 29, 2013 in the State of Delaware as a for-profit Company and established a fiscal year end of September 30. The Merger Agreement provides that, among other things, at the closing (the “Closing”) of the transactions contemplated by the Merger Agreement, Merger Sub merged with and into Old Nukk (the “Merger”), with Old Nukk surviving as a wholly-owned subsidiary of Brilliant. In connection with the Merger, Brilliant changed its name to “Nukkleus Inc.” (“Nukkleus” or “Combined Company”). The Merger and other transactions contemplated by the Merger Agreement are hereinafter referred to as the “Business Combination.” In connection with the Business Combination, Brilliant changed its name to “Nukkleus Inc.” The Business Combination was completed on December 22, 2023. The accompanying financial statements are those of Old Nukk, as adjusted for the reverse recapitalization, as described in Note 3. As a result of Business Combination, Nukkleus now is a financial technology company which is focused on providing software and technology solutions for the worldwide retail foreign exchange (“FX”) trading industry. The Company primarily provides its software, technology, customer sales and marketing and risk management technology hardware and software solutions package to Triton Capital Markets Ltd. (“TCM”), formerly known as FXDD Malta Limited (“FXDD Malta”). The FXDD brand (e.g., see FXDD.com) is the brand utilized in the retail forex trading industry by TCM. Nukkleus Limited, a wholly-owned subsidiary of the Company, provides its software, technology, customer sales and marketing and risk management technology hardware and software solutions package under a General Services Agreement (“GSA”) to TCM. TCM is a private limited liability company formed under the laws of Malta. The GSA provides that TCM will pay Nukkleus Limited at minimum $1,600,000 per month. Emil Assentato is also the majority member of Max Q Investments LLC (“Max Q”), which is managed by Derivative Marketing Associates Inc. (“DMA”). Mr. Assentato, who is the Company’s Chief Executive Officer (“CEO”) and chairman, is the sole owner and manager of DMA. Max Q owns 79% of Currency Mountain Malta LLC, which in turn is the sole shareholder of TCM. In addition, in order to appropriately service TCM, Nukkleus Limited entered into a GSA with FXDirectDealer LLC (“FXDIRECT”), which provides that Nukkleus Limited will pay FXDIRECT a minimum of $1,575,000 per month in consideration of providing personnel engaged in operational and technical support, marketing, sales support, accounting, risk monitoring, documentation processing and customer care and support. Effective May 1, 2023, the minimum amount payable by Nukkleus Limited to FXDIRECT for services was reduced from $1,575,000 per month to $1,550,000 per month. FXDIRECT may terminate this agreement upon providing 90 days’ written notice. Currency Mountain Holdings LLC is the sole shareholder of FXDIRECT. Max Q is the majority shareholder of Currency Mountain Holdings LLC. In July 2018, the Company incorporated Nukkleus Malta Holding Ltd., which is a wholly-owned subsidiary. In July 2018, Nukkleus Malta Holding Ltd. incorporated Markets Direct Technology Group Ltd (“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. On August 27, 2020, the Company renamed Nukkleus Exchange Malta Ltd. to Markets Direct Technology Group Ltd (“MDTG”). MDTG manages the technology and Internet Protocol (“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. In fiscal year 2021, the Company completed its acquisition of Match Financial Limited, a private limited company formed in England and Wales (“Match”) and its subsidiaries. Match, through its Digital RFQ Limited (“Digital RFQ”) subsidiary, is engaged in providing payment services from one fiat currency to another or to digital assets. 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 548,767 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. On December 30, 2021, Old Nukk and the shareholder (the “Digiclear Shareholder”) of Digiclear Ltd. (“Digiclear”) entered into a Purchase and Sale Agreement (the “Digiclear Agreement”) pursuant to which Old Nukk acquired 5,400,000 of the issued and outstanding ordinary shares of Digiclear in consideration of shares of common stock, which following the Merger represented 415,733 shares of common stock of the Company (valued at $5,000,000 based on the market price of Old Nukk’s common stock on the acquisition date) (the “Digiclear Transaction”). The Digiclear Transaction closed on March 17, 2022. In addition, upon the closing of the Merger, the Company agreed to provide an additional $1 million in investment to Digiclear in exchange for 4.545% of additional shares of Digiclear’s capital stock subject to the parties entering a definitive agreement. The Company and Digiclear have not entered into an additional agreement outlining the terms pursuant to which the Company would acquire the additional shares of Digiclear. The Company has provided $229,837 additional funds to Digiclear since the initial closing 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 June 23, 2023, the Company, Brilliant and BRIL Merger Sub, Inc., a Delaware corporation and wholly-owned subsidiary of Brilliant (“Merger Sub”), entered into an Amended and Restated Agreement and Plan of Merger (the “A&R Merger Agreement”). The A&R Merger Agreement extended the Outside Closing Date (as defined in the A&R Merger Agreement), to the later of (i) July 23, 2023, or, (ii) following the approval by Brilliant’s shareholders of an extension of the life of the SPAC pursuant to Brilliant’s organizational documents, to the date so approved, but not later than December 23, 2023. The transactions contemplated by the A&R Merger Agreement are closed on December 22, 2023. Liquidity and capital resources Liquidity is the ability of a company to generate funds to support its current and future operations, satisfy its obligations and otherwise operate on an ongoing basis. At September 30, 2023 and 2022, the Company had cash of approximately $19,000 and $364,000, respectively, exclusive of customer custodial cash. The 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 deficit of approximately $6,195,000 at September 30, 2023 and incurred a net loss and generated negative cash flow from operating activities of approximately $17,428,000 and $1,232,000 for the year ended September 30, 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. The Company cannot be certain that such necessary capital through equity or debt financings will be available to it or whether such capital will be available on terms 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. Based on the foregoing, management believes that its current financial resources, as of the date of the issuance of these financial statements, are sufficient to fund its current twelve-month operating budget, alleviating any concerns by its historical operating results and satisfying its estimated liquidity needs for the twelve months from the issuance of these financial statements. |
Basis of Presentation and Princ
Basis of Presentation and Principles of Consolidation | 12 Months Ended |
Sep. 30, 2023 | |
Basis of Presentation and Principles of Consolidation [Abstract] | |
BASIS OF PRESENTATION AND PRINCIPLES OF CONSOLIDATION | NOTE 2 – BASIS OF PRESENTATION AND PRINCIPLES OF CONSOLIDATION The accompanying consolidated financial statements and related notes have been prepared in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP) and with the rules and regulations of the U.S. Securities and Exchange Commission for financial information. The consolidated financial statements include the accounts of the Old Nukk and its consolidated subsidiaries. These accounts were prepared under the accrual basis of accounting. All intercompany accounts and transactions have been eliminated in consolidation. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Sep. 30, 2023 | |
Summary of Significant Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Use of estimates The preparation of the consolidated financial statements in conformity with 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 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. Significant estimates during the years ended September 30, 2023 and 2022 include the allowance for doubtful accounts, 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. Reverse recapitalization Pursuant to the Merger Agreement, the merger between Brilliant and Old Nukk was accounted for as a reverse recapitalization in accordance with US GAAP (the “Reverse Recapitalization”). Accordingly, for accounting purposes, the Reverse Recapitalization was treated as the equivalent of Old Nukk issuing stock for the net assets of Brilliant, accompanied by a recapitalization. The net assets of Brilliant are stated at historical cost, with no goodwill or other intangible assets recorded. Old Nukk was determined to be the accounting acquirer based on the following predominant factors: ● Old Nukk’s existing stockholders have the greatest voting interest in the Combined Company; ● Old Nukk controls the majority of the board of directors of the Combined Company and, given the board of directors election and retention provisions, Old Nukk holds the ability to maintain control of the board of directors on a go-forward basis; and ● Old Nukk’s senior management is the senior management of the Combined Company. The consolidated assets, liabilities, and results of operations prior to the Reverse Recapitalization are those of Old Nukk. The shares and corresponding capital amounts and losses per share, prior to the Reverse Recapitalization, have been retroactively restated based on shares reflecting the exchange ratio of 36.44532 established in the Business Combination. Cash and cash equivalents At September 30, 2023 and 2022, the Company’s cash balances by geographic area were as follows: Country: September 30, 2023 September 30, 2022 United States $ 7,675 39.7 % $ 47,860 13.1 % United Kingdom 11,469 59.4 % 315,989 86.8 % Malta 174 0.9 % 174 0.1 % Total cash $ 19,318 100.0 % $ 364,023 100.0 % For purposes of the 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 September 30, 2023 and 2022. Cash and cash equivalents excludes customer legal tender, which is reported separately as Customer custodial cash in the accompanying consolidated balance sheets. Refer to “customer custodial cash and customer custodial cash liabilities” below for further details. Customer custodial cash and customer custodial cash liabilities 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. Customer digital currency assets and liabilities At certain 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 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. Digital RFQ has control of 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. Management has determined that Digital RFQ has control of the customer digital currency assets and records these assets on its balance sheet with a corresponding liability. Digital 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 consolidated statements of operations and comprehensive loss. Any loss, theft, or other misuse would impact the 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. Fair value of financial instruments and fair value measurements The Company adopted the guidance of Accounting Standards Codification (“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 : ● Level 1-Inputs are unadjusted quoted prices in active markets for identical assets or liabilities available at the measurement date. ● Level 2-Inputs are unadjusted quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, inputs other than quoted prices that are observable, and inputs derived from or corroborated by observable market data. ● 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. The fair value of the Company’s assets and liabilities, which qualify as financial instruments under ASC Topic 820, “Fair Value Measurement,” approximates the carrying amounts represented in the accompanying consolidated financial statements, primarily due to their short-term nature. Assets and liabilities measured at fair value on a recurring basis. As of September 30, 2023, the Company did not have any customer digital currency assets and liabilities. The following table provides these assets and liabilities carried at fair value, measured as of September 30, 2022: Quoted Price in Significant Other Significant Balance at (Level 1) (Level 2) (Level 3) 2022 Customer digital currency assets $ - $ 248,214 $ - $ 248,214 Customer digital currency liabilities $ - $ 248,214 $ - $ 248,214 Customer digital currency assets and liabilities represent the Company’s obligation to safeguard customers’ digital assets. Accordingly, the Company has valued the assets and liabilities using quoted market prices for the underlying digital assets which is based on Level 2 inputs. Assets and liabilities measured at fair value on a nonrecurring basis. Intangible assets Investments. ASC 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. Credit risk and uncertainties The ramifications 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. The Company is operating in a rapidly changing environment so the extent to which 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. 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 September 30, 2023, the Company’s customer custodial cash balance had approximately $317,000 in excess of the federally-insured limits. We may maintain our cash assets at financial institutions in the U.S. in amounts that may be in excess of the Federal Deposit Insurance Corporation (“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 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 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. Similarly, if our customers 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. Financial instruments which potentially subject the Company to concentrations of credit risk consist 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. Digital assets The digital assets held by the Company 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 consolidated statements of operations and comprehensive loss. The Company assigns costs to transactions on a first-in, first-out basis. Note receivable – related parties Note receivable – related parties is presented net of an allowance for doubtful account. The Company maintains allowance for doubtful account for estimated loss. The Company reviews the note receivable – related parties on a periodic basis and makes general and specific allowance when there is doubt as to the collectability of individual balance. In evaluating the collectability of individual receivable balance, the Company considers many factors, including the age of the balance, a borrower’s historical payment history, its current credit-worthiness and current economic trend. Note is written off after exhaustive efforts at collection. At September 30, 2023 and 2022, the Company has established, based on a review of its outstanding balances, an allowance for doubtful account in the amounts of $637,072 and $0, respectively, for its note receivable – related parties. Investments Investment in which the Company does 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 determines that a decline in fair value is other than temporary, then a charge to earnings is recorded in “Operating expenses – Impairment loss” in the accompanying consolidated statements of operations and comprehensive loss, and a new basis in the investment is established. Impairment of cost method investment amounted to $6,210,783 for the year ended September 30, 2023. The Company did not record any impairment charge for cost method investment for the year ended September 30, 2022 as there was no impairment indicator noted. The Company uses the equity method of accounting for its investment in, and earning or loss of, a company that it does not control but over which it does exert significant influence. The Company considers whether the fair value of its equity method investment has declined below its carrying value whenever adverse events or changes in circumstances indicate that recorded value may not be recoverable. If the Company considers any decline to be other than temporary (based on various factors, including historical financial results and the overall health of the investee), then a write-down would be recorded to estimated fair value. No impairment of equity method investment was recorded for the year ended September 30, 2023. Impairment of equity method investment amounted to $4,310,745 for the year ended September 30, 2022. Variable interest entity (“VIE”) A VIE is an entity that either (i) has insufficient equity to permit the entity to finance its activities without additional subordinated financial support or (ii) has equity investors who lack the characteristics of a controlling financial interest. The primary beneficiary of a VIE is the party with both the power to direct the activities of the VIE that most significantly impact the VIE’s economic performance and the obligation to absorb the losses or the right to receive benefits that could potentially be significant to the VIE. To assess whether the Company has the power to direct the activities of a VIE that most significantly impact its economic performance, the Company considers all the facts and circumstances including its ongoing rights and responsibilities. This assessment includes identifying the activities that most significantly impact the VIE’s economic performance and identifying which party, if any, has power over those activities. In general, the party that makes the most significant decisions affecting the VIE is determined to have the power to direct the activities of the VIE. To assess whether the Company has the obligation to absorb the losses or the right to receive benefits that could potentially be significant to the VIE, the Company considers all of its economic interests, including debt and equity interests, and any other variable interests in the VIE. If the Company determines that it is the party with the power to make the most significant decisions affecting the VIE, and the Company has an obligation to absorb the losses or the right to receive benefits that could potentially be significant to the VIE, then the Company consolidates the VIE. The Company analyzes its investment in Jacobi to determine whether it is a VIE and, if so, whether the Company is the primary beneficiary in accordance with ASC 810 Consolidation. The Company determines Jacobi is a VIE since it has insufficient equity to permit it to finance its activities without additional subordinated financial support. In determining whether it is the primary beneficiary, the Company considers whether it has the power to direct the activities of the VIE that most significantly impact the VIE’s economic performance. The Company also considers whether it has the obligation to absorb losses of, or the right to receive benefits from, the VIE. The Company is not the primary beneficiary of Jacobi as it does not have the power to direct the activities that most significantly impact the economic performance of Jacobi, due to Jacobi’ management and board of directors’ structure. As a result, the variable interest entity is not consolidated. Creditors of the Company’s variable interest entity do not have recourse against the general credit of the Company. The Company uses the cost method to account for its investment in Jacobi in which the Company is not deemed to be the primary beneficiary. The Company’s investment in unconsolidated variable interest entity is classified as cost method investment in the consolidated balance sheets. The Company’s assets and liabilities with the variable interest entity are classified as due from/to affiliates. As of September 30, 2023 and 2022, the carrying value of assets and liabilities recognized in the consolidated balance sheets related to the Company’s interest in the non-consolidated VIE and the Company’s maximum exposure to loss relating to non-consolidated VIE were as follows: September 30, September 30, Cost method investment $ 391,217 $ 6,602,000 Due from affiliates 95,274 - Total VIE assets $ 486,491 $ 6,602,000 Maximum exposure to loss $ 486,491 $ 6,602,000 Intangible assets Intangible assets consist of trade names, regulatory licenses, technology and software, which are being amortized on a straight-line method over the estimated useful life of 3 - 5 years. Impairment of long-lived assets 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. In September 2023, the Company assessed its long-lived assets for any impairment and concluded that there were indicators of impairment as of September 30, 2023 and it calculated that the estimated undiscounted cash flows related to its intangible assets and cost method investment were less than their carrying amounts. Based on its analysis, the Company recognized an impairment loss of $11,914,322 for the year ended September 30, 2023. The Company did not record any impairment charge for its intangible assets and cost method investment for the year ended September 30, 2022 as there was no impairment indicator noted. In September 2022, the Company assessed its long-lived assets for any impairment and concluded that there were indicators of impairment as of September 30, 2022 and it calculated that the estimated undiscounted cash flows related to its equity method investment were less than the carrying amount of the equity method investment. Based on its analysis, the Company recognized an impairment loss of $4,310,745 for the year ended September 30, 2022, which reduced the value of equity method investment to $0. Disaggregation of revenues The Company’s revenues stream detail are as follows: 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 assets In the following table, revenues are disaggregated by segment for the years ended September 30, 2023 and 2022: Years Ended September 30, Revenue Stream 2023 2022 General support services $ 19,200,000 $ 19,200,000 Financial services 2,097,642 2,313,474 Total revenues $ 21,297,642 $ 21,513,474 Revenue recognition The Company determines revenue recognition from contracts with customers through the following steps: ● Step 1: Identify the contract with the customer ● Step 2: Identify the performance obligations in the contract ● Step 3: Determine the transaction price ● Step 4: Allocate the transaction price to the performance obligations in the contract ● Step 5: Recognize revenue when the company satisfies a performance obligation Revenue is recognized when control of the promised 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: ● 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 approximately 2% mark-up to the costs of the services being provided by FXDirect Dealer, LLC. ● 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 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-conversion 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). Advertising and marketing costs All costs related to advertising and marketing are expensed as incurred. For the years ended September 30, 2023 and 2022, advertising and marketing costs amounted to $55,889 and $420,186, respectively, which was included in operating expenses on the accompanying consolidated statements of operations and comprehensive loss. Stock-based 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 estimates the grant date fair value of each option award using the Black-Scholes option-pricing model. For non-employee stock-based awards, fair value 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. The fair value of the equity instrument is calculated and then recognized as compensation expense over the requisite performance period. Income taxes 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. 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 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. The Company follows the provisions of FASB ASC 740-10 Uncertainty in Income Taxes (ASC 740-10). 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 translation 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, is the British Pound (“GBP”), the functional currency of Digital RFQ’s subsidiary, DRFQ Europe UAB, is Euro, and the functional currency of Digital RFQ’s subsidiary, DRFQ Pay North America, is CAD. Monetary assets and liabilities denominated in currencies 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 period, and stockholders’ equity is translated at historical exchange rates. Cash flows are also translated at average translation rates for the periods, therefore, amounts reported on the statements of cash flows will not necessarily agree with changes in the corresponding balances on the balance sheets. Translation adjustments resulting from the process of translating the local currency financial statements into U.S. dollars are included in determining comprehensive income/loss. Transactions denominated 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. Asset and liability accounts at September 30, 2023 and 2022 were translated at 0.8199 GBP and 0.8987 GBP to $1.00, respectively, which were the exchange rates on the balance sheet dates. Asset and liability accounts at September 30, 2023 and 2022 were translated at 0.9446 EUR and 1.0221 EUR to $1.00, respectively, which were the exchange rates on the balance sheet dates. Asset and liability accounts at September 30, 2023 were translated at 1.3591 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 years ended September 30, 2023 and 2022 was 0.8161 GBP and 0.7835 GBP to $1.00, respectively. The average translation rate applied to the statement of operations for the year ended September 30, 2023 and for the period from January 12, 2022 through September 30, 2022 was 0.9368 EUR and 0.9440 EUR to $1.00. The average translation rate applied to the statement of operations for the period from February 1 |
Other Current Assets
Other Current Assets | 12 Months Ended |
Sep. 30, 2023 | |
Other Current Assets [Abstract] | |
OTHER CURRENT ASSETS | NOTE 4 – OTHER CURRENT ASSETS At September 30, 2023 and 2022, other current assets consisted of the following: September 30, September 30, Security deposit $ 21,954 $ - Others 10,568 15,617 Total $ 32,522 $ 15,617 |
Customer Assets and Liabilities
Customer Assets and Liabilities | 12 Months Ended |
Sep. 30, 2023 | |
Customer Assets and Liabilities [Abstract] | |
CUSTOMER ASSETS AND LIABILITIES | NOTE 5 - CUSTOMER ASSETS AND LIABILITIES The Company includes customer funds in the consolidated balance sheets as customer custodial cash and includes these cash deposits to be utilized for its contractual obligations to its customers as customer custodial cash liabilities in the consolidated balance sheets. The following table presents customers’ cash and digital positions: September 30, September 30, Customer custodial cash $ 672,501 $ 2,020,394 Customer digital currency assets - 248,214 Total customer assets $ 672,501 $ 2,268,608 Customer custodial cash liabilities $ 1,443,011 $ 2,020,717 Customer digital currency liabilities - 248,214 Total customer liabilities $ 1,443,011 $ 2,268,931 The Company controls digital assets for 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 digital wallets held on digital asset trading platforms as well as the private keys, which are maintained on behalf of customers. 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 years ended September 30, 2023 and 2022, 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 consolidated balance sheets. The following table sets forth the fair market value of customer digital currency assets, as shown in the consolidated balance sheets, as customer digital currency assets and customer digital currency liabilities, as of September 30, 2023 and 2022: September 30, 2023 September 30, 2022 Fair Value Percentage of Fair Value Percentage of Bitcoin $ - - $ 162,294 65.4 % Stablecoin/USD Coin - - 85,897 34.6 % Ethereum - - 23 0.0 % Total customer digital currency assets $ - - $ 248,214 100.0 % |
Digital Assets
Digital Assets | 12 Months Ended |
Sep. 30, 2023 | |
Digital Assets [Abstract] | |
DIGITAL ASSETS | NOTE 6 – DIGITAL ASSETS The following table summarizes the Company’s digital asset holdings as of September 30, 2023: Asset Estimated Useful Life Cost Impairment Digital Assets Bitcoin Indefinite $ 894 $ - $ 894 Ethereum Indefinite 709 - 709 Stablecoin/USD Coin Indefinite 284 - 284 Other Indefinite 86 - 86 Total $ 1,973 $ - $ 1,973 The following table summarizes the Company’s digital asset holdings as of September 30, 2022: 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 recorded impairment expense of $7,950 and $887 for the years ended September 30, 2023 and 2022, respectively, which was included in other general and administrative expenses on the accompanying consolidated statements of operations and comprehensive loss. |
Cost Method Investment
Cost Method Investment | 12 Months Ended |
Sep. 30, 2023 | |
Cost Method Investment [Abstract] | |
COST METHOD INVESTMENT | NOTE 7 – COST METHOD INVESTMENT At September 30, 2023 and 2022, cost method investment amounted to $391,217 and $6,602,000, respectively. The investment represents the Company’s minority interest in Jacobi, a private company focused on digital asset management that has received regulatory approval to launch the world’s first tier one Bitcoin ETF. On December 15, 2021, the Company issued 548,767 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, 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 its investment in the non-marketable security and will recognize, if ever existing, a loss in value which is deemed to be other than temporary. In September 2023, the Company assessed its cost method investment for any impairment and concluded that there were indicators of impairment as of September 30, 2023. 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 cost method investment. The Company recognized an impairment loss of $6,210,783 related to the cost method investment for the year ended September 30, 2023, which reduced the investment value to $391,217. The Company did not record any impairment charge for cost method investment for the year ended September 30, 2022 as there was no impairment indicator noted. The investee is the Company’s variable interest entity. |
Equity Method Investment
Equity Method Investment | 12 Months Ended |
Sep. 30, 2023 | |
Equity Method Investment [Abstract] | |
EQUITY METHOD INVESTMENT | NOTE 8 – EQUITY METHOD INVESTMENT As of both September 30, 2023 and 2022, the equity method investment amounted to $0. The 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. 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. 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. Under the equity method, if there is a commitment for the Company to fund the losses of its equity method investee, the Company would continue to record its share of losses resulting in a negative equity method investment, which would be presented as a liability on the consolidated balance sheets. Commitments may be explicit and may include formal guarantees, legal obligations, or arrangements by contract. Implicit commitments may arise from reputational expectations, intercompany relationships, statements by the Company of its intention to provide support, a history of providing financial support or other facts and circumstances. When the Company has no commitment to fund the losses of its equity method investee, the carrying value of its equity method investment will not be reduced below zero. The Company had no commitment to fund additional losses of its equity method investment during the year ended September 30, 2023. |
Intangible Assets
Intangible Assets | 12 Months Ended |
Sep. 30, 2023 | |
Intangible Assets [Abstract] | |
INTANGIBLE ASSETS | NOTE 9 – INTANGIBLE ASSETS Intangible assets primarily consist of 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. At September 30, 2023 and 2022, intangible assets consisted of the following: Useful Life September 30, September 30, Trade names 3 Years $ 784,246 $ 784,246 Regulatory licenses 3 Years 180,227 138,751 Technology 5 Years 10,300,774 10,300,774 Software 3 Years 11,237 11,237 11,276,484 11,235,008 Less: accumulated amortization (5,539,945 ) (3,159,903 ) Less: impairment loss (5,703,539 ) - $ 33,000 $ 8,075,105 For the years ended September 30, 2023 and 2022, amortization expense amounted to $2,380,115 and $2,690,617, respectively, of which, $2,106,404 and $2,426,393 was included in cost of revenue – financial services, and $273,711 and $264,224 was included in operating expenses, respectively. In September 2023, the Company assessed its intangible assets which were solely related to the Match acquisition (which consisted of trade names, regulatory licenses, and technology) and purchased software for any impairment and concluded that there were indicators of impairment as of September 30, 2023. The Company calculated that the estimated undiscounted cash flows were less than the carrying amount related to these intangible assets. The Company has not been able to realize the financial projections provided by Match at the time of the intangible assets purchase and has recognized an impairment loss of $5,703,539 related to these intangible assets for the year ended September 30, 2023. Amortization of intangible assets attributable to future periods is as follows: For the Year Ending September 30: Amortization Amount 2024 $ 13,825 2025 13,825 2026 5,350 2027 and thereafter - $ 33,000 |
Accrued Liabilities and Other P
Accrued Liabilities and Other Payables | 12 Months Ended |
Sep. 30, 2023 | |
Accrued Liabilities and Other Payables [Abstract] | |
ACCRUED LIABILITIES AND OTHER PAYABLES | NOTE 10 – ACCRUED LIABILITIES AND OTHER PAYABLES At September 30, 2023 and 2022, accrued liabilities and other payables consisted of the following: September 30, September 30, Unearned revenue $ 151,617 $ 203,222 Others 18,255 29,133 Total $ 169,872 $ 232,355 |
Share Capital
Share Capital | 12 Months Ended |
Sep. 30, 2023 | |
Share Capital [Abstract] | |
SHARE CAPITAL | NOTE 11 – SHARE CAPITAL Common stock issued for cost method investment On December 15, 2021, the Company issued 548,767 shares of its common stock to the original shareholders of Jacobi as consideration of acquisition of 5.0% of the issued and outstanding ordinary shares of Jacobi. These shares were valued at $6,602,000, the fair market value on the grant date using the reported closing share price of the Company on the date of grant, and the Company recorded cost method investment of $6,602,000 (see Note 8). Common stock issued for equity method investment On March 17, 2022, the Company issued 415,733 shares of its common stock to the Digiclear Shareholder for acquisition of 50% equity interest of Digiclear. These shares were valued at $5,000,000, the fair market value on the grant date using the reported closing share price on the date of grant. Options The following table summarizes the shares of the Company’s common stock issuable upon exercise of options outstanding at September 30, 2023 Options Outstanding Options Exercisable Range of Number Weighted Weighted Number Weighted $ 3.15 – 15.75 95,715 3.26 $ 4.44 61,429 $ 3.99 87.50 28,571 2.97 87.50 28,571 87.50 $ 3.15 – 87.50 124,286 3.19 $ 23.53 90,000 $ 30.50 Stock option activities for the years ended September 30, 2023 and 2022 were as follows: Number of Weighted Outstanding at October 1, 2021 28,571 $ 87.50 Granted 138,572 10.15 Terminated / Exercised / Expired - - Outstanding at September 30, 2022 167,143 23.45 Expired (42,857 ) (23.33 ) Outstanding at September 30, 2023 124,286 $ 23.53 Options exercisable at September 30, 2023 90,000 $ 30.50 Options expected to vest 34,286 $ 5.25 The aggregate intrinsic value of both stock options outstanding and stock options exercisable at September 30, 2023 was $0. For the years ended September 30, 2023 and 2022, stock-based compensation expense associated with stock options granted amounted to $370,878 and $1,913,529, respectively, which was recorded as professional fees on the accompanying consolidated statements of operations and comprehensive loss. In January 2022, the Company issued 1,429 stock options for software purchase. The fair value of 1,429 stock options granted was $11,237 which was recorded as the cost of software. For the years ended September 30, 2023 and 2022, amortization in connection with the software amounted to $3,746 and $2,809, respectively, which was included in amortization of intangible assets on the accompanying consolidated statements of operations and comprehensive loss. A summary of the status of the Company’s nonvested stock options granted as of September 30, 2023 and changes during the years ended September 30, 2023 and 2022 is presented below: Number of Weighted Nonvested at October 1, 2021 28,571 $ 87.50 Granted 138,572 10.15 Vested (58,571 ) (44.45 ) Nonvested at September 30, 2022 108,572 12.25 Vested (74,286 ) (15.28 ) Nonvested at September 30, 2023 34,286 $ 5.25 |
Income Taxes
Income Taxes | 12 Months Ended |
Sep. 30, 2023 | |
Income Taxes [Abstract] | |
INCOME TAXES | NOTE 12 – INCOME TAXES The components for net loss for the years ended September 30, 2023 and 2022 was as follows: Years Ended September 30, 2023 2022 United States $ 16,285,346 $ 11,665,650 Bermuda - 10,456 Malta 56,374 74,772 United Kingdom 1,032,885 90,318 Lithuania 45,274 4,461 Canada 8,549 - Total $ 17,428,428 $ 11,845,657 The components of income taxes expense (benefit) for the years ended September 30, 2023 and 2022 consisted of the following: Years Ended September 30, 2023 2022 Current: Federal $ - $ - State - - Malta - - United Kingdom - - Lithuania - - Total current income taxes expense $ - $ - Deferred: Federal $ (665,382 ) $ (977,249 ) State (225,279 ) (330,869 ) Malta (19,731 ) (26,170 ) United Kingdom (72,082 ) (17,138 ) Lithuania (6,791 ) (669 ) Total deferred income taxes (benefit) $ (989,265 ) $ (1,352,095 ) Change in valuation allowance 989,265 1,352,095 Total income taxes expense $ - $ - The reconciliations of the statutory income tax rate and the Company’s effective income tax rate were as follows: Years Ended September 30, 2023 2022 Statutory federal income tax rate 21.0 % 21.0 % State tax 0.8 % 2.4 % Non-U.S. income taxed at different rates (0.1 )% 0.1 % Permanent differences (17.2 )% (13.7 )% Prior year true-up - (0.8 )% Valuation allowance (4.5 )% (9.0 )% Effective tax rate 0.0 % 0.0 % The components of the Company’s net deferred tax assets (liabilities) as of September 30, 2023 and 2022 were as follows: September 30, September 30, Deferred tax assets Net operating loss carry-forwards $ 1,726,620 $ 1,129,699 Accrued directors’ compensation 100,410 66,678 Stock-based compensation 653,976 549,722 Impairment of digital assets 1,511 169 Allowance for doubtful accounts 123,554 - Unrealized foreign currency exchange loss 612 - Capitalized SPAC acquisition related professional fee 364,902 236,198 Total deferred tax assets, gross 2,971,585 1,982,466 Valuation allowance (2,971,585 ) (1,982,320 ) Total deferred tax assets, net $ - $ 146 Deferred tax liabilities Unrealized foreign currency exchange gain - (146 ) Total deferred tax liabilities $ - $ (146 ) Net deferred tax assets $ - $ - The Company provided a valuation allowance equal to the deferred income tax assets for years ended September 30, 2023 and 2022 because it is not presently known whether future taxable income will be sufficient to utilize the loss carry-forwards. The valuation allowance could be reduced or eliminated based on future earnings and future estimates of taxable income. As of September 30, 2023, the Company had $4,803,360 in U.S. federal net operating loss carry-forwards that can be utilized in future periods to reduce taxable income. However, due to changes in stock ownership, the use of the U.S. federal net operating loss carry-forwards is limited under Section 382 of the Internal Revenue Code. The Company has not performed a study to determine if the loss carryforwards are subject to these Section 382 limitations. $258,405 of the net operating loss carry-forwards will expire in fiscal years 2033 through 2038. The remaining net operating loss carry-forwards do not expire. In addition, the Company has net operating losses in Malta and United Kingdom totaling $633,098 and $758,433, respectively, with no expiration date. As of September 30, 2023 and 2022, the Company did not identify any uncertain tax positions that would require either recognition or disclosure in the accompanying consolidated financial statements. The Company recognizes interest and penalties related to uncertain income tax positions in income tax expense. However, no such interest and penalties were recorded as of September 30, 2023 and 2022. The Company has a December 31 tax year-end. The federal, state and foreign income tax returns of the Company are subject to examination by various tax authorities, generally for three years after they are filed. The Company is not subject to income taxes in Bermuda. The Company’s 2020 through 2023 tax years are subject to examination. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Sep. 30, 2023 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | NOTE 13 – RELATED PARTY TRANSACTIONS Services provided by related parties From time to time, Oliver Worsley, a shareholder of the Company, provides consulting services to the Company. As compensation for professional services provided, the Company recognized consulting expenses of $55,140 and $45,310 for the years ended September 30, 2023 and 2022, respectively, which have been included in professional fees on the accompanying consolidated statements of operations and comprehensive loss. As of September 30, 2023 and 2022, the accrued and unpaid services charge related to Oliver Worsley amounted to $0 and $16,691, respectively, which have been included in accrued professional fees on the accompanying consolidated balance sheets. 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 $136,625 and $80,026 for the years ended September 30, 2023 and 2022, respectively, which have been included in professional fees on the accompanying consolidated statements of operations and comprehensive loss. The Company uses affiliate employees for various services such as the use of accountants to record the books and accounts of the Company at no charge to the Company, which are considered immaterial. Office space from related parties The Company uses office space of affiliate companies, free of rent, which is considered immaterial. Revenue from related party and cost of revenue from related party The 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. The Company’s general support services operate under a GSA with FXDIRECT receiving personnel and technical support, marketing, accounting, risk monitoring, documentation processing and customer care and support. The minimum monthly amount payable is $1,575,000. E ffective May 1, 2023, the minimum amount payable by the Company to FXDIRECT for services was reduced from $1,575,000 per month to $1,550,000 per month. Both of the above entities are affiliates through common ownership. During the years ended September 30, 2023 and 2022, general support services provided to the related party, which was recorded as revenue – general support services - related party on the accompanying consolidated statements of operations and comprehensive loss were as follows : Years Ended September 30, 2023 2022 Service provided to: TCM $ 19,200,000 $ 19,200,000 $ 19,200,000 $ 19,200,000 During the years ended September 30, 2023 and 2022, services received from the related party, which was recorded as cost of revenue – general support services - related party on the accompanying consolidated statements of operations and comprehensive loss were as follows: Years Ended September 30, 2023 2022 Service received from: FXDIRECT $ 18,775,000 $ 18,900,000 $ 18,775,000 $ 18,900,000 During the years ended September 30, 2023 and 2022, Digital RFQ earned revenue from related parties in the amount of $138,419 and $38,112, respectively, which was included in revenue – financial services on the accompanying consolidated statements of operations and comprehensive loss. Due from affiliates At September 30, 2023 and 2022, due from affiliates consisted of the following: September 30, September 30, Digiclear $ - $ 35,762 Jacobi 95,274 - FXDD Mauritius (1) 1,500 - TCM 1,942,500 895,374 Total $ 2,039,274 $ 931,136 (1) FXDD Mauritius is controlled by Emil Assentato, the Company’s chief executive officer and chairman. At September 30, 2023, the balance of due from Digiclear with the amount of $229,837, which represented advances made to Digiclear and monies that the Company paid on behalf of Digiclear, was written off after exhaustive efforts at collection. 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. Management believes that the affiliates’ receivables are fully collectable. Therefore, no allowance for doubtful account is deemed to be required on its due from affiliates at September 30, 2023 and 2022. Due to affiliates At September 30, 2023 and 2022, due to affiliates consisted of the following: September 30, September 30, Forexware LLC (1) $ 1,211,778 $ 1,079,229 FXDIRECT (3) 5,064,428 3,042,101 Currency Mountain Holdings Bermuda, Limited (“CMH”) 42,000 42,000 FXDD Trading (1) 396,793 242,113 Markets Direct Payments (1) 2,317 2,114 Match Fintech Limited (2) 91,433 106,506 Total $ 6,808,749 $ 4,514,063 (1) Forexware LLC, FXDD Trading, and Markets Direct Payments are controlled by Emil Assentato, the Company’s chief executive officer and chairman. (2) Match Fintech Limited is controlled by affiliates of the Company. (3) The amount of $2,727,061 due to FXDIRECT was converted into 757,678 shares of common stock of the Company in December 2023 (See Note 17 – Common shares issued for debt conversion). The balances due to affiliates represent expenses paid by Forexware LLC, FXDIRECT, FXDD Trading, Markets Direct Payments, and Match Fintech Limited on behalf of the Company and advances from CMH. The balance due to FXDIRECT may also include unsettled funds due related to the General Service Agreement. Amounts due to affiliates are short-term in nature, non-interest bearing, unsecured and repayable on demand. Customer digital currency assets and liabilities – related parties At September 30, 2023 and 2022, related parties’ digital currency, which was controlled by Digital RFQ, amounted to $0 and $248,214, respectively, which was included in customer digital currency assets and liabilities on the accompanying consolidated balance sheets. Note receivable – related parties Promissory note The Company originated a note receivable to a shareholder in the principal amount of $35,000 on September 1, 2022. The note matured 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. The principal was funded with cash custodial money. Currently, this loan is in default. For the years ended September 30, 2023 and 2022, the interest income related to this note amounted to $1,836 and $159, respectively, and has been included in other (expense) income: other income (expense) on the accompanying consolidated statements of operations and comprehensive loss. As of September 30, 2023 and 2022, the outstanding interest balance related to this note was $1,980 and $159, respectively, and was included in other current assets on the accompanying consolidated balance sheets. During the year ended September 30, 2023, the Company made loans with an aggregate principal of $299,650 to Brilliant. The principal was payable promptly after the date on which Brilliant consummated an initial business combination with a target business. 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 16 – Merger). the amount of $299,650 was written off after exhaustive efforts at collection. Line of credit On July 31, 2023, the Company entered into a Credit Deed (the “Credit Deed”) providing a $1 million line of credit (the “Line of Credit”) to a related party company which is a client of Digital RFQ. The Line of Credit allows the related party company to request loans thereunder until amount reaches $1 million. Loan drawn under the Line of Credit bears interest at an annual rate of 8% and will be receivable in installments commencing on December 31, 2023. The Line of Credit was collateralized by 133,514 shares of common stock of the Company. In the year ended September 30, 2023, activity recorded for the Line of Credit is summarized in the following table: Outstanding principal under the Line of Credit at September 30, 2022 $ - Draw down from Line of Credit 764,892 Outstanding principal under the Line of Credit at September 30, 2023 $ 764,892 Less: allowance for doubtful account (637,072 ) Outstanding principal under the Line of Credit at September 30, 2023, net $ 127,820 For the year ended September 30, 2023, the interest income related to the Line of Credit amounted to $10,246 and has been included in other income (expense) on the accompanying consolidated statements of operations and comprehensive loss. As of September 30, 2023, the related accrued and unpaid interest for Line of Credit was $10,199 and the Company has established, based on a review of its outstanding interest receivable, an allowance for doubtful account in the amounts of $10,199 for the receivable. On December 27, 2023, the Company and the related party company entered into a Stock Transfer Agreement pursuant to which the collateral, 133,514 shares of common stock of the Company, will be transferred to the Company. Although both parties signed the Stock Transfer Agreement, the Company’s management determine the likelihood of transferring the 133,514 shares to the Company is remote. The Company reviews the Line of Credit and corresponding accrued and unpaid interest on a periodic basis and makes general and specific allowances when there is doubt as to the collectability of individual balances. After evaluating the collectability of individual receivable balances, the Company increased the allowance for doubtful accounts in the amount of $650,285 for the year ended September 30, 2023. Loan payable – related parties and interest payable – related parties On July 19, 2023, Digital RFQ issued a promissory note (the “July 2023 Loan”) in the principal amount of $75,619 to Jamal Khurshid, the Company’s chief operating officer and director, in consideration of cash proceeds in the amount of $75,619. The July 2023 Loan bears interest of 5.0% per annum and is due and payable on July 19, 2026. On August 15, 2023, Digital RFQ issued a promissory note (the “August 2023 Loan”) in the principal amount of $75,000 to Emil Assentato, the Company’s chief executive officer and chairman, in consideration of cash proceeds in the amount of $75,000. The August 2023 Loan bears interest of 5.0% per annum and is due and payable on August 15, 2026. On September 18, 2023, the Company issued a promissory note (the “September 2023 Loan”) in the principal amount of $270,000 to Emil Assentato, the Company’s chief executive officer and chairman, in consideration of cash proceeds in the amount of $270,000. The September 2023 Loan bears interest of 5.0% per annum and is due and payable on September 18, 2026. In December 2023, the September 2023 Loan principal of $270,000 was converted into 70,129 shares of common stock of the Company (See Note 17 – Common shares issued for debt conversion). As of September 30, 2023, the outstanding principal balance totaled $420,619. For the year ended September 30, 2023, the interest expense related to above loans amounted to $1,776 and has been reflected as interest expense – related parties on the accompanying consolidated statements of operations and comprehensive loss. As of September 30, 2023, the related accrued and unpaid interest for above loans was $1,771 and has been reflected as interest payable – related parties on the accompanying consolidated balance sheets. Letter agreement with ClearThink Nukkleus was party to a letter agreement with ClearThink dated as of November 22, 2021, pursuant to which ClearThink was engaged by Nukkleus in connection with the Business Combination (See Note 16 - White lion stock purchase agreement). Craig Marshak, a former member of the Board of Directors of the Company, was a managing director of ClearThink, a transaction advisory firm. ClearThink had 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. The letter agreement was terminated on October 27, 2023. The Company paid ClearThink $210,000 as of the date of closing of the Business Combination. |
Concentrations
Concentrations | 12 Months Ended |
Sep. 30, 2023 | |
Concentrations [Abstract] | |
CONCENTRATIONS | NOTE 14 – CONCENTRATIONS Customers The following table sets forth information as to each customer that accounted for 10% or more of the Company’s revenues for the years ended September 30, 2023 and 2022. Years Ended September 30, Customer 2023 2022 A – related party 90.2 % 89.2 % One related party customer, whose outstanding receivable accounted for 10% or more of the Company’s total outstanding accounts receivable and due from affiliates at September 30, 2023, accounted for 95.2% of the Company’s total outstanding accounts receivable and due from affiliates at September 30, 2023. One related party customer, 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. Suppliers 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 years ended September 30, 2023 and 2022. Years Ended September 30, Supplier 2023 2022 A – related party 86.8 % 85.2 % 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 September 30, 2023, accounted for 81.7% of the Company’s total outstanding accounts payable and due to affiliates at September 30, 2023. 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 September 30, 2022, accounted for 79.2% of the Company’s total outstanding accounts payable and due to affiliates at September 30, 2022. |
Segment Information
Segment Information | 12 Months Ended |
Sep. 30, 2023 | |
Segment Information [Abstract] | |
SEGMENT INFORMATION | NOTE 15 – SEGMENT INFORMATION For the years ended September 30, 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 or to digital assets. 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. Information with respect to these reportable business segments for the years ended September 30, 2023 and 2022 was as follows: Years Ended September 30, 2023 2022 Revenues General support services $ 19,200,000 $ 19,200,000 Financial services 2,097,642 2,313,474 Total 21,297,642 21,513,474 Costs of revenues General support services 18,775,000 18,900,000 Financial services 2,865,783 3,274,870 Total 21,640,783 22,174,870 Gross profit (loss) General support services 425,000 300,000 Financial services (768,141 ) (961,396 ) Total (343,141 ) (661,396 ) Operating expenses Financial services 2,721,746 1,808,399 Corporate/Other 14,398,334 8,672,529 Total 17,120,080 10,480,928 Other (expense) income Financial services 35,356 (12,792 ) Corporate/Other (563 ) (690,541 ) Total 34,793 (703,333 ) Net income (loss) General support services 425,000 300,000 Financial services (3,454,531 ) (2,782,587 ) Corporate/Other (14,398,897 ) (9,363,070 ) Total (17,428,428 ) (11,845,657 ) Amortization Financial services 2,106,404 2,687,808 Corporate/Other 273,711 2,809 Total $ 2,380,115 $ 2,690,617 Total assets at September 30, 2023 and 2022 September 30, September 30, Financial services $ 1,004,708 $ 10,768,309 Corporate/Other 2,347,917 7,596,595 Total $ 3,352,625 $ 18,364,904 |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Sep. 30, 2023 | |
Commitments and Contingencies [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE 16 – COMMITMENTS AND CONTINGENCIES Digital asset wallets Digital RFQ has committed to safeguard all digital assets and digital token identifiers on behalf of its customers. As 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. Merger 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 June 23, 2023, the Company, Brilliant and BRIL Merger Sub, Inc., a Delaware corporation and wholly-owned subsidiary of Brilliant (“Merger Sub”), entered into an Amended and Restated Agreement and Plan of Merger (the “A&R Merger Agreement”). The A&R Merger Agreement extended the Outside Closing Date (as defined in the A&R Merger Agreement), to the later of (i) July 23, 2023, or, (ii) following the approval by Brilliant’s shareholders of an extension of the life of the SPAC pursuant to Brilliant’s organizational documents, to the date so approved, but not later than December 23, 2023. The transactions contemplated by the A&R Merger Agreement are closed on December 22, 2023. White lion stock purchase agreement On May 17, 2022, the Company entered into a Stock Purchase Agreement (the “White Lion Agreement”) with White Lion Capital Partners, LLC a California-based investment fund (“White Lion”). Under the terms of the White Lion Agreement, the Company had the right, but not the obligation, to require White Lion to purchase shares of its common stock up to a maximum amount of $75,000,000. On February 21, 2024, the Company terminated the White Lion Agreement. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Sep. 30, 2023 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 17 – SUBSEQUENT EVENTS The Company evaluated subsequent 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. Merger The Company completed a Business Combination with Brilliant on December 22, 2023. All references in these consolidated financial statements to shares and corresponding capital amounts and losses per share, prior to the reverse recapitalization, have been retroactively restated based on shares reflecting the exchange ratio of 36.44532 established in the Business Combination. Common shares issued for services In December 2023, the Company issued a total of 425,295 shares of its common stock for services rendered. In January 2024, the Company issued 202,702 shares of its common stock for services rendered. Common shares issued for debt conversion On December 19, 2023, the Company and a related party entered into a Debt Conversion Agreement pursuant to which the outstanding amount of $2,727,061 was converted into 757,678 shares of common stock of the Company. On December 19, 2023, the Company and a related party entered into a Debt Conversion Agreement pursuant to which the outstanding amount of $270,000 was converted into 70,129 shares of common stock of the Company. Common shares issued for Settlement Agreement and Stipulation On May 28, 2024, the Company entered into a Settlement Agreement and Stipulation (the “Settlement Agreement”) with Silverback Capital Corporation (“SCC”) to settle outstanding claims owed to SCC. Pursuant to the Settlement Agreement, on May 31, 2024, the Company issued 700,000 shares of its common stock. Financing On March 6, 2024, the Company and a related party entered into a Facility Agreement, pursuant to which the Company borrowed $500,000 from the related party. In March 2024, the Company and an individual, who is a shareholder of the Company, entered into a Loan Agreement, pursuant to which the Company can borrow up to GBP395,000 from the individual. In June 2024, the Company and a third party entered into several agreements, pursuant to which the Company borrowed $375,000 and will have the right for a period of six months from June 11, 2024 to borrow an additional $500,000 from the third party. |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) | 12 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | ||
Pay vs Performance Disclosure | |||
Net Income (Loss) | [1] | $ (17,428,428) | $ (11,845,657) |
[1] Retroactively restated for the reverse recapitalization as described in Note 3 and 18. |
Insider Trading Arrangements
Insider Trading Arrangements | 12 Months Ended |
Sep. 30, 2023 | |
Trading Arrangements, by Individual | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |
Accounting Policies, by Policy
Accounting Policies, by Policy (Policies) | 12 Months Ended |
Sep. 30, 2023 | |
Summary of Significant Accounting Policies [Abstract] | |
Use of estimates | Use of estimates The preparation of the consolidated financial statements in conformity with 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 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. Significant estimates during the years ended September 30, 2023 and 2022 include the allowance for doubtful accounts, 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. |
Reverse recapitalization | Reverse recapitalization Pursuant to the Merger Agreement, the merger between Brilliant and Old Nukk was accounted for as a reverse recapitalization in accordance with US GAAP (the “Reverse Recapitalization”). Accordingly, for accounting purposes, the Reverse Recapitalization was treated as the equivalent of Old Nukk issuing stock for the net assets of Brilliant, accompanied by a recapitalization. The net assets of Brilliant are stated at historical cost, with no goodwill or other intangible assets recorded. Old Nukk was determined to be the accounting acquirer based on the following predominant factors: ● Old Nukk’s existing stockholders have the greatest voting interest in the Combined Company; ● Old Nukk controls the majority of the board of directors of the Combined Company and, given the board of directors election and retention provisions, Old Nukk holds the ability to maintain control of the board of directors on a go-forward basis; and ● Old Nukk’s senior management is the senior management of the Combined Company. The consolidated assets, liabilities, and results of operations prior to the Reverse Recapitalization are those of Old Nukk. The shares and corresponding capital amounts and losses per share, prior to the Reverse Recapitalization, have been retroactively restated based on shares reflecting the exchange ratio of 36.44532 established in the Business Combination. |
Cash and cash equivalents | Cash and cash equivalents At September 30, 2023 and 2022, the Company’s cash balances by geographic area were as follows: Country: September 30, 2023 September 30, 2022 United States $ 7,675 39.7 % $ 47,860 13.1 % United Kingdom 11,469 59.4 % 315,989 86.8 % Malta 174 0.9 % 174 0.1 % Total cash $ 19,318 100.0 % $ 364,023 100.0 % For purposes of the 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 September 30, 2023 and 2022. Cash and cash equivalents excludes customer legal tender, which is reported separately as Customer custodial cash in the accompanying consolidated balance sheets. Refer to “customer custodial cash and customer custodial cash liabilities” below for further details. |
Customer custodial cash and customer custodial cash liabilities | Customer custodial cash and customer custodial cash liabilities 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. |
Customer digital currency assets and liabilities | Customer digital currency assets and liabilities At certain 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 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. Digital RFQ has control of 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. Management has determined that Digital RFQ has control of the customer digital currency assets and records these assets on its balance sheet with a corresponding liability. Digital 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 consolidated statements of operations and comprehensive loss. Any loss, theft, or other misuse would impact the 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. |
Fair value of financial instruments and fair value measurements | Fair value of financial instruments and fair value measurements The Company adopted the guidance of Accounting Standards Codification (“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 : ● Level 1-Inputs are unadjusted quoted prices in active markets for identical assets or liabilities available at the measurement date. ● Level 2-Inputs are unadjusted quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, inputs other than quoted prices that are observable, and inputs derived from or corroborated by observable market data. ● 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. The fair value of the Company’s assets and liabilities, which qualify as financial instruments under ASC Topic 820, “Fair Value Measurement,” approximates the carrying amounts represented in the accompanying consolidated financial statements, primarily due to their short-term nature. Assets and liabilities measured at fair value on a recurring basis. As of September 30, 2023, the Company did not have any customer digital currency assets and liabilities. The following table provides these assets and liabilities carried at fair value, measured as of September 30, 2022: Quoted Price in Significant Other Significant Balance at (Level 1) (Level 2) (Level 3) 2022 Customer digital currency assets $ - $ 248,214 $ - $ 248,214 Customer digital currency liabilities $ - $ 248,214 $ - $ 248,214 Customer digital currency assets and liabilities represent the Company’s obligation to safeguard customers’ digital assets. Accordingly, the Company has valued the assets and liabilities using quoted market prices for the underlying digital assets which is based on Level 2 inputs. Assets and liabilities measured at fair value on a nonrecurring basis. Intangible assets Investments. ASC 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. |
Credit risk and uncertainties | Credit risk and uncertainties The ramifications 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. The Company is operating in a rapidly changing environment so the extent to which 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. 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 September 30, 2023, the Company’s customer custodial cash balance had approximately $317,000 in excess of the federally-insured limits. We may maintain our cash assets at financial institutions in the U.S. in amounts that may be in excess of the Federal Deposit Insurance Corporation (“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 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 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. Similarly, if our customers 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. Financial instruments which potentially subject the Company to concentrations of credit risk consist 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. |
Digital assets | Digital assets The digital assets held by the Company 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 consolidated statements of operations and comprehensive loss. The Company assigns costs to transactions on a first-in, first-out basis. |
Note receivable – related parties | Note receivable – related parties Note receivable – related parties is presented net of an allowance for doubtful account. The Company maintains allowance for doubtful account for estimated loss. The Company reviews the note receivable – related parties on a periodic basis and makes general and specific allowance when there is doubt as to the collectability of individual balance. In evaluating the collectability of individual receivable balance, the Company considers many factors, including the age of the balance, a borrower’s historical payment history, its current credit-worthiness and current economic trend. Note is written off after exhaustive efforts at collection. At September 30, 2023 and 2022, the Company has established, based on a review of its outstanding balances, an allowance for doubtful account in the amounts of $637,072 and $0, respectively, for its note receivable – related parties. |
Investments | Investments Investment in which the Company does 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 determines that a decline in fair value is other than temporary, then a charge to earnings is recorded in “Operating expenses – Impairment loss” in the accompanying consolidated statements of operations and comprehensive loss, and a new basis in the investment is established. Impairment of cost method investment amounted to $6,210,783 for the year ended September 30, 2023. The Company did not record any impairment charge for cost method investment for the year ended September 30, 2022 as there was no impairment indicator noted. The Company uses the equity method of accounting for its investment in, and earning or loss of, a company that it does not control but over which it does exert significant influence. The Company considers whether the fair value of its equity method investment has declined below its carrying value whenever adverse events or changes in circumstances indicate that recorded value may not be recoverable. If the Company considers any decline to be other than temporary (based on various factors, including historical financial results and the overall health of the investee), then a write-down would be recorded to estimated fair value. No impairment of equity method investment was recorded for the year ended September 30, 2023. Impairment of equity method investment amounted to $4,310,745 for the year ended September 30, 2022. |
Variable interest entity (“VIE”) | Variable interest entity (“VIE”) A VIE is an entity that either (i) has insufficient equity to permit the entity to finance its activities without additional subordinated financial support or (ii) has equity investors who lack the characteristics of a controlling financial interest. The primary beneficiary of a VIE is the party with both the power to direct the activities of the VIE that most significantly impact the VIE’s economic performance and the obligation to absorb the losses or the right to receive benefits that could potentially be significant to the VIE. To assess whether the Company has the power to direct the activities of a VIE that most significantly impact its economic performance, the Company considers all the facts and circumstances including its ongoing rights and responsibilities. This assessment includes identifying the activities that most significantly impact the VIE’s economic performance and identifying which party, if any, has power over those activities. In general, the party that makes the most significant decisions affecting the VIE is determined to have the power to direct the activities of the VIE. To assess whether the Company has the obligation to absorb the losses or the right to receive benefits that could potentially be significant to the VIE, the Company considers all of its economic interests, including debt and equity interests, and any other variable interests in the VIE. If the Company determines that it is the party with the power to make the most significant decisions affecting the VIE, and the Company has an obligation to absorb the losses or the right to receive benefits that could potentially be significant to the VIE, then the Company consolidates the VIE. The Company analyzes its investment in Jacobi to determine whether it is a VIE and, if so, whether the Company is the primary beneficiary in accordance with ASC 810 Consolidation. The Company determines Jacobi is a VIE since it has insufficient equity to permit it to finance its activities without additional subordinated financial support. In determining whether it is the primary beneficiary, the Company considers whether it has the power to direct the activities of the VIE that most significantly impact the VIE’s economic performance. The Company also considers whether it has the obligation to absorb losses of, or the right to receive benefits from, the VIE. The Company is not the primary beneficiary of Jacobi as it does not have the power to direct the activities that most significantly impact the economic performance of Jacobi, due to Jacobi’ management and board of directors’ structure. As a result, the variable interest entity is not consolidated. Creditors of the Company’s variable interest entity do not have recourse against the general credit of the Company. The Company uses the cost method to account for its investment in Jacobi in which the Company is not deemed to be the primary beneficiary. The Company’s investment in unconsolidated variable interest entity is classified as cost method investment in the consolidated balance sheets. The Company’s assets and liabilities with the variable interest entity are classified as due from/to affiliates. As of September 30, 2023 and 2022, the carrying value of assets and liabilities recognized in the consolidated balance sheets related to the Company’s interest in the non-consolidated VIE and the Company’s maximum exposure to loss relating to non-consolidated VIE were as follows: September 30, September 30, Cost method investment $ 391,217 $ 6,602,000 Due from affiliates 95,274 - Total VIE assets $ 486,491 $ 6,602,000 Maximum exposure to loss $ 486,491 $ 6,602,000 |
Intangible assets | Intangible assets Intangible assets consist of trade names, regulatory licenses, technology and software, which are being amortized on a straight-line method over the estimated useful life of 3 - 5 years. |
Impairment of long-lived assets | Impairment of long-lived assets 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. In September 2023, the Company assessed its long-lived assets for any impairment and concluded that there were indicators of impairment as of September 30, 2023 and it calculated that the estimated undiscounted cash flows related to its intangible assets and cost method investment were less than their carrying amounts. Based on its analysis, the Company recognized an impairment loss of $11,914,322 for the year ended September 30, 2023. The Company did not record any impairment charge for its intangible assets and cost method investment for the year ended September 30, 2022 as there was no impairment indicator noted. In September 2022, the Company assessed its long-lived assets for any impairment and concluded that there were indicators of impairment as of September 30, 2022 and it calculated that the estimated undiscounted cash flows related to its equity method investment were less than the carrying amount of the equity method investment. Based on its analysis, the Company recognized an impairment loss of $4,310,745 for the year ended September 30, 2022, which reduced the value of equity method investment to $0. |
Disaggregation of revenues | Disaggregation of revenues The Company’s revenues stream detail are as follows: 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 assets In the following table, revenues are disaggregated by segment for the years ended September 30, 2023 and 2022: Years Ended September 30, Revenue Stream 2023 2022 General support services $ 19,200,000 $ 19,200,000 Financial services 2,097,642 2,313,474 Total revenues $ 21,297,642 $ 21,513,474 |
Revenue recognition | Revenue recognition The Company determines revenue recognition from contracts with customers through the following steps: ● Step 1: Identify the contract with the customer ● Step 2: Identify the performance obligations in the contract ● Step 3: Determine the transaction price ● Step 4: Allocate the transaction price to the performance obligations in the contract ● Step 5: Recognize revenue when the company satisfies a performance obligation Revenue is recognized when control of the promised 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: ● 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 approximately 2% mark-up to the costs of the services being provided by FXDirect Dealer, LLC. ● 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 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-conversion 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). |
Advertising and marketing costs | Advertising and marketing costs All costs related to advertising and marketing are expensed as incurred. For the years ended September 30, 2023 and 2022, advertising and marketing costs amounted to $55,889 and $420,186, respectively, which was included in operating expenses on the accompanying consolidated statements of operations and comprehensive loss. |
Stock-based compensation | Stock-based 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 estimates the grant date fair value of each option award using the Black-Scholes option-pricing model. For non-employee stock-based awards, fair value 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. The fair value of the equity instrument is calculated and then recognized as compensation expense over the requisite performance period. |
Income taxes | Income taxes 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. 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 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. The Company follows the provisions of FASB ASC 740-10 Uncertainty in Income Taxes (ASC 740-10). 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 translation | Foreign currency translation 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, is the British Pound (“GBP”), the functional currency of Digital RFQ’s subsidiary, DRFQ Europe UAB, is Euro, and the functional currency of Digital RFQ’s subsidiary, DRFQ Pay North America, is CAD. Monetary assets and liabilities denominated in currencies 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 period, and stockholders’ equity is translated at historical exchange rates. Cash flows are also translated at average translation rates for the periods, therefore, amounts reported on the statements of cash flows will not necessarily agree with changes in the corresponding balances on the balance sheets. Translation adjustments resulting from the process of translating the local currency financial statements into U.S. dollars are included in determining comprehensive income/loss. Transactions denominated 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. Asset and liability accounts at September 30, 2023 and 2022 were translated at 0.8199 GBP and 0.8987 GBP to $1.00, respectively, which were the exchange rates on the balance sheet dates. Asset and liability accounts at September 30, 2023 and 2022 were translated at 0.9446 EUR and 1.0221 EUR to $1.00, respectively, which were the exchange rates on the balance sheet dates. Asset and liability accounts at September 30, 2023 were translated at 1.3591 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 years ended September 30, 2023 and 2022 was 0.8161 GBP and 0.7835 GBP to $1.00, respectively. The average translation rate applied to the statement of operations for the year ended September 30, 2023 and for the period from January 12, 2022 through September 30, 2022 was 0.9368 EUR and 0.9440 EUR to $1.00. The average translation rate applied to the statement of operations for the period from February 18, 2023 through September 30, 2023 was 1.3475 CAD to $1.00. Cash flows from the Company’s operations are calculated based upon the local currencies using the average translation rate. |
Comprehensive loss | Comprehensive loss 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 years ended September 30, 2023 and 2022 consisted of net loss and unrealized loss/gain from foreign currency translation adjustment. |
Segment reporting | Segment reporting The 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. 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. |
Per share data | Per share data 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. Basic net earnings 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. 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 years ended September 30, 2023 and 2022, 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. The following table summarizes the securities that were excluded from the diluted per share calculation because the effect of including these potential shares was antidilutive: Years Ended September 30, 2023 2022 Stock options 167,143 167,143 Potentially dilutive securities 167,143 167,143 |
Reclassification | Reclassification Certain prior period amounts have been reclassified to conform to the current period presentation. These reclassifications have no effect on the previously reported financial position, results of operations and cash flows. |
Merger | Merger Old Nukk completed a Business Combination with Brilliant on December 22, 2023. All references in these consolidated financial statements to shares and corresponding capital amounts and losses per share, prior to the reverse recapitalization, have been retroactively restated based on shares reflecting the exchange ratio of 36.44532 established in the Business Combination. |
Recently issued accounting pronouncements | Recently issued accounting pronouncements In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (“Topic 326”). Other 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 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. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Sep. 30, 2023 | |
Summary of Significant Accounting Policies [Abstract] | |
Schedule of Cash Balances by Geographic Area | At September 30, 2023 and 2022, the Company’s cash balances by geographic area were as follows: Country: September 30, 2023 September 30, 2022 United States $ 7,675 39.7 % $ 47,860 13.1 % United Kingdom 11,469 59.4 % 315,989 86.8 % Malta 174 0.9 % 174 0.1 % Total cash $ 19,318 100.0 % $ 364,023 100.0 % |
Schedule of Assets and Liabilities Carried at Fair Value Measured | The following table provides these assets and liabilities carried at fair value, measured as of September 30, 2022: Quoted Price in Significant Other Significant Balance at (Level 1) (Level 2) (Level 3) 2022 Customer digital currency assets $ - $ 248,214 $ - $ 248,214 Customer digital currency liabilities $ - $ 248,214 $ - $ 248,214 |
Schedule of Carrying Value of Assets and Liabilities Recognized | As of September 30, 2023 and 2022, the carrying value of assets and liabilities recognized in the consolidated balance sheets related to the Company’s interest in the non-consolidated VIE and the Company’s maximum exposure to loss relating to non-consolidated VIE were as follows: September 30, September 30, Cost method investment $ 391,217 $ 6,602,000 Due from affiliates 95,274 - Total VIE assets $ 486,491 $ 6,602,000 Maximum exposure to loss $ 486,491 $ 6,602,000 |
Schedule of Revenues Are Disaggregated By Segment | In the following table, revenues are disaggregated by segment for the years ended September 30, 2023 and 2022: Years Ended September 30, Revenue Stream 2023 2022 General support services $ 19,200,000 $ 19,200,000 Financial services 2,097,642 2,313,474 Total revenues $ 21,297,642 $ 21,513,474 |
Schedule of Diluted Per Share | The following table summarizes the securities that were excluded from the diluted per share calculation because the effect of including these potential shares was antidilutive: Years Ended September 30, 2023 2022 Stock options 167,143 167,143 Potentially dilutive securities 167,143 167,143 |
Other Current Assets (Tables)
Other Current Assets (Tables) | 12 Months Ended |
Sep. 30, 2023 | |
Other Current Assets [Abstract] | |
Schedule of Other Current Assets | At September 30, 2023 and 2022, other current assets consisted of the following: September 30, September 30, Security deposit $ 21,954 $ - Others 10,568 15,617 Total $ 32,522 $ 15,617 |
Customer Assets and Liabiliti_2
Customer Assets and Liabilities (Tables) | 12 Months Ended |
Sep. 30, 2023 | |
Customer Assets and Liabilities [Abstract] | |
Schedule of Cash and Digital Positions | The following table presents customers’ cash and digital positions: September 30, September 30, Customer custodial cash $ 672,501 $ 2,020,394 Customer digital currency assets - 248,214 Total customer assets $ 672,501 $ 2,268,608 Customer custodial cash liabilities $ 1,443,011 $ 2,020,717 Customer digital currency liabilities - 248,214 Total customer liabilities $ 1,443,011 $ 2,268,931 |
Schedule of Fair Market Value of Customer Digital Currency Assets | The following table sets forth the fair market value of customer digital currency assets, as shown in the consolidated balance sheets, as customer digital currency assets and customer digital currency liabilities, as of September 30, 2023 and 2022: September 30, 2023 September 30, 2022 Fair Value Percentage of Fair Value Percentage of Bitcoin $ - - $ 162,294 65.4 % Stablecoin/USD Coin - - 85,897 34.6 % Ethereum - - 23 0.0 % Total customer digital currency assets $ - - $ 248,214 100.0 % |
Digital Assets (Tables)
Digital Assets (Tables) | 12 Months Ended |
Sep. 30, 2023 | |
Digital Assets [Abstract] | |
Schedule of Digital Asset | The following table summarizes the Company’s digital asset holdings as of September 30, 2023: Asset Estimated Useful Life Cost Impairment Digital Assets Bitcoin Indefinite $ 894 $ - $ 894 Ethereum Indefinite 709 - 709 Stablecoin/USD Coin Indefinite 284 - 284 Other Indefinite 86 - 86 Total $ 1,973 $ - $ 1,973 The following table summarizes the Company’s digital asset holdings as of September 30, 2022: 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 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 12 Months Ended |
Sep. 30, 2023 | |
Intangible Assets [Abstract] | |
Schedule of Intangible Assets | At September 30, 2023 and 2022, intangible assets consisted of the following: Useful Life September 30, September 30, Trade names 3 Years $ 784,246 $ 784,246 Regulatory licenses 3 Years 180,227 138,751 Technology 5 Years 10,300,774 10,300,774 Software 3 Years 11,237 11,237 11,276,484 11,235,008 Less: accumulated amortization (5,539,945 ) (3,159,903 ) Less: impairment loss (5,703,539 ) - $ 33,000 $ 8,075,105 |
Schedule of Amortization of Intangible Assets Attributable to Future Periods | Amortization of intangible assets attributable to future periods is as follows: For the Year Ending September 30: Amortization Amount 2024 $ 13,825 2025 13,825 2026 5,350 2027 and thereafter - $ 33,000 |
Accrued Liabilities and Other_2
Accrued Liabilities and Other Payables (Tables) | 12 Months Ended |
Sep. 30, 2023 | |
Accrued Liabilities and Other Payables [Abstract] | |
Schedule of Accrued Liabilities and Other Payables | At September 30, 2023 and 2022, accrued liabilities and other payables consisted of the following: September 30, September 30, Unearned revenue $ 151,617 $ 203,222 Others 18,255 29,133 Total $ 169,872 $ 232,355 |
Share Capital (Tables)
Share Capital (Tables) | 12 Months Ended |
Sep. 30, 2023 | |
Share Capital [Abstract] | |
Schedule of Common Stock Issuable Upon Exercise of Options Outstanding | The following table summarizes the shares of the Company’s common stock issuable upon exercise of options outstanding at September 30, 2023 Options Outstanding Options Exercisable Range of Number Weighted Weighted Number Weighted $ 3.15 – 15.75 95,715 3.26 $ 4.44 61,429 $ 3.99 87.50 28,571 2.97 87.50 28,571 87.50 $ 3.15 – 87.50 124,286 3.19 $ 23.53 90,000 $ 30.50 |
Schedule of Stock Option Activities | Stock option activities for the years ended September 30, 2023 and 2022 were as follows: Number of Weighted Outstanding at October 1, 2021 28,571 $ 87.50 Granted 138,572 10.15 Terminated / Exercised / Expired - - Outstanding at September 30, 2022 167,143 23.45 Expired (42,857 ) (23.33 ) Outstanding at September 30, 2023 124,286 $ 23.53 Options exercisable at September 30, 2023 90,000 $ 30.50 Options expected to vest 34,286 $ 5.25 |
Schedule of NonVested Stock Options Granted | A summary of the status of the Company’s nonvested stock options granted as of September 30, 2023 and changes during the years ended September 30, 2023 and 2022 is presented below: Number of Weighted Nonvested at October 1, 2021 28,571 $ 87.50 Granted 138,572 10.15 Vested (58,571 ) (44.45 ) Nonvested at September 30, 2022 108,572 12.25 Vested (74,286 ) (15.28 ) Nonvested at September 30, 2023 34,286 $ 5.25 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Sep. 30, 2023 | |
Income Taxes [Abstract] | |
Schedule of Components for Net Loss | The components for net loss for the years ended September 30, 2023 and 2022 was as follows: Years Ended September 30, 2023 2022 United States $ 16,285,346 $ 11,665,650 Bermuda - 10,456 Malta 56,374 74,772 United Kingdom 1,032,885 90,318 Lithuania 45,274 4,461 Canada 8,549 - Total $ 17,428,428 $ 11,845,657 |
Schedule of Components of Income Taxes Expense (Benefit) | The components of income taxes expense (benefit) for the years ended September 30, 2023 and 2022 consisted of the following: Years Ended September 30, 2023 2022 Current: Federal $ - $ - State - - Malta - - United Kingdom - - Lithuania - - Total current income taxes expense $ - $ - Deferred: Federal $ (665,382 ) $ (977,249 ) State (225,279 ) (330,869 ) Malta (19,731 ) (26,170 ) United Kingdom (72,082 ) (17,138 ) Lithuania (6,791 ) (669 ) Total deferred income taxes (benefit) $ (989,265 ) $ (1,352,095 ) Change in valuation allowance 989,265 1,352,095 Total income taxes expense $ - $ - |
Schedule of Statutory Income Tax Rate | The reconciliations of the statutory income tax rate and the Company’s effective income tax rate were as follows: Years Ended September 30, 2023 2022 Statutory federal income tax rate 21.0 % 21.0 % State tax 0.8 % 2.4 % Non-U.S. income taxed at different rates (0.1 )% 0.1 % Permanent differences (17.2 )% (13.7 )% Prior year true-up - (0.8 )% Valuation allowance (4.5 )% (9.0 )% Effective tax rate 0.0 % 0.0 % |
Schedule of Net Deferred Tax Assets (Liabilities) | The components of the Company’s net deferred tax assets (liabilities) as of September 30, 2023 and 2022 were as follows: September 30, September 30, Deferred tax assets Net operating loss carry-forwards $ 1,726,620 $ 1,129,699 Accrued directors’ compensation 100,410 66,678 Stock-based compensation 653,976 549,722 Impairment of digital assets 1,511 169 Allowance for doubtful accounts 123,554 - Unrealized foreign currency exchange loss 612 - Capitalized SPAC acquisition related professional fee 364,902 236,198 Total deferred tax assets, gross 2,971,585 1,982,466 Valuation allowance (2,971,585 ) (1,982,320 ) Total deferred tax assets, net $ - $ 146 Deferred tax liabilities Unrealized foreign currency exchange gain - (146 ) Total deferred tax liabilities $ - $ (146 ) Net deferred tax assets $ - $ - |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 12 Months Ended |
Sep. 30, 2023 | |
Related Party Transactions [Abstract] | |
Schedule of General Support Services Provided to the Related Party | During the years ended September 30, 2023 and 2022, general support services provided to the related party, which was recorded as revenue – general support services - related party on the accompanying consolidated statements of operations and comprehensive loss were as follows : Years Ended September 30, 2023 2022 Service provided to: TCM $ 19,200,000 $ 19,200,000 $ 19,200,000 $ 19,200,000 Years Ended September 30, 2023 2022 Service received from: FXDIRECT $ 18,775,000 $ 18,900,000 $ 18,775,000 $ 18,900,000 |
Schedule of Due From Related Parties | At September 30, 2023 and 2022, due from affiliates consisted of the following: September 30, September 30, Digiclear $ - $ 35,762 Jacobi 95,274 - FXDD Mauritius (1) 1,500 - TCM 1,942,500 895,374 Total $ 2,039,274 $ 931,136 (1) FXDD Mauritius is controlled by Emil Assentato, the Company’s chief executive officer and chairman. |
Schedule of Due to Related Parties | At September 30, 2023 and 2022, due to affiliates consisted of the following: September 30, September 30, Forexware LLC (1) $ 1,211,778 $ 1,079,229 FXDIRECT (3) 5,064,428 3,042,101 Currency Mountain Holdings Bermuda, Limited (“CMH”) 42,000 42,000 FXDD Trading (1) 396,793 242,113 Markets Direct Payments (1) 2,317 2,114 Match Fintech Limited (2) 91,433 106,506 Total $ 6,808,749 $ 4,514,063 (1) Forexware LLC, FXDD Trading, and Markets Direct Payments are controlled by Emil Assentato, the Company’s chief executive officer and chairman. (2) Match Fintech Limited is controlled by affiliates of the Company. (3) The amount of $2,727,061 due to FXDIRECT was converted into 757,678 shares of common stock of the Company in December 2023 (See Note 17 – Common shares issued for debt conversion). |
Schedule of Activity Recorded for the Line of Credit | In the year ended September 30, 2023, activity recorded for the Line of Credit is summarized in the following table: Outstanding principal under the Line of Credit at September 30, 2022 $ - Draw down from Line of Credit 764,892 Outstanding principal under the Line of Credit at September 30, 2023 $ 764,892 Less: allowance for doubtful account (637,072 ) Outstanding principal under the Line of Credit at September 30, 2023, net $ 127,820 |
Concentrations (Tables)
Concentrations (Tables) | 12 Months Ended |
Sep. 30, 2023 | |
Concentrations [Abstract] | |
Schedule of Customer Revenues | The following table sets forth information as to each customer that accounted for 10% or more of the Company’s revenues for the years ended September 30, 2023 and 2022. Years Ended September 30, Customer 2023 2022 A – related party 90.2 % 89.2 % Years Ended September 30, Supplier 2023 2022 A – related party 86.8 % 85.2 % |
Segment Information (Tables)
Segment Information (Tables) | 12 Months Ended |
Sep. 30, 2023 | |
Segment Information [Abstract] | |
Schedule of Reportable Business Segments | Information with respect to these reportable business segments for the years ended September 30, 2023 and 2022 was as follows: Years Ended September 30, 2023 2022 Revenues General support services $ 19,200,000 $ 19,200,000 Financial services 2,097,642 2,313,474 Total 21,297,642 21,513,474 Costs of revenues General support services 18,775,000 18,900,000 Financial services 2,865,783 3,274,870 Total 21,640,783 22,174,870 Gross profit (loss) General support services 425,000 300,000 Financial services (768,141 ) (961,396 ) Total (343,141 ) (661,396 ) Operating expenses Financial services 2,721,746 1,808,399 Corporate/Other 14,398,334 8,672,529 Total 17,120,080 10,480,928 Other (expense) income Financial services 35,356 (12,792 ) Corporate/Other (563 ) (690,541 ) Total 34,793 (703,333 ) Net income (loss) General support services 425,000 300,000 Financial services (3,454,531 ) (2,782,587 ) Corporate/Other (14,398,897 ) (9,363,070 ) Total (17,428,428 ) (11,845,657 ) Amortization Financial services 2,106,404 2,687,808 Corporate/Other 273,711 2,809 Total $ 2,380,115 $ 2,690,617 |
Schedule of Total Assets | Total assets at September 30, 2023 and 2022 September 30, September 30, Financial services $ 1,004,708 $ 10,768,309 Corporate/Other 2,347,917 7,596,595 Total $ 3,352,625 $ 18,364,904 |
Company History and Nature of_2
Company History and Nature of the Business (Details) - USD ($) | 12 Months Ended | |||||||
May 01, 2023 | Mar. 17, 2022 | Dec. 30, 2021 | Dec. 15, 2021 | Oct. 20, 2021 | Sep. 30, 2023 | Sep. 30, 2022 | ||
The Company History and Nature of the Business [Line Items] | ||||||||
Date of incorporation | May 24, 2019 | |||||||
Related party transaction expense | $ 138,419 | $ 38,112 | ||||||
Description of directly own | 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. | |||||||
Shares issued (in Shares) | [1] | 10,074,657 | 10,074,657 | |||||
Share outstanding (in Shares) | [1] | 10,074,657 | 10,074,657 | |||||
Market price of common stock | $ 5,000,000 | $ 6,602,000 | ||||||
Operating capital | $ 1 | |||||||
Exchange of additional shares, percentage | 4.545% | |||||||
Additional funds | $ 229,837 | |||||||
Cash | $ 19,318 | $ 364,023 | ||||||
Working capital deficit | 6,195,000 | |||||||
Cash flow from operating activities | (1,232,382) | 1,615,606 | ||||||
Cash and Cash Equivalents [Member] | ||||||||
The Company History and Nature of the Business [Line Items] | ||||||||
Cash | 19,000 | $ 364,000 | ||||||
Cash flow from operating activities | 1,232,000 | |||||||
Cash and Cash Equivalents [Member] | Accumulated Gain (Loss), Net, Cash Flow Hedge, Parent [Member] | ||||||||
The Company History and Nature of the Business [Line Items] | ||||||||
Cash flow from operating activities | $ 17,428,000 | |||||||
FXDirectDealer [Member] | ||||||||
The Company History and Nature of the Business [Line Items] | ||||||||
Written notice period | 90 years | |||||||
Triton Capital Market Ltd [Member] | FXDirectDealer [Member] | Minimum [Member] | ||||||||
The Company History and Nature of the Business [Line Items] | ||||||||
Related party transaction expense | $ 1,550,000 | |||||||
Triton Capital Market Ltd [Member] | FXDirectDealer [Member] | Maximum [Member] | ||||||||
The Company History and Nature of the Business [Line Items] | ||||||||
Related party transaction expense | $ 1,575,000 | |||||||
Digiclear Agreement [Member] | ||||||||
The Company History and Nature of the Business [Line Items] | ||||||||
Shares issued (in Shares) | 5,400,000 | |||||||
Share outstanding (in Shares) | 5,400,000 | |||||||
Triton Capital Market Ltd [Member] | GSA [Member] | ||||||||
The Company History and Nature of the Business [Line Items] | ||||||||
Percentage of shares owned | 79% | |||||||
Triton Capital Market Ltd [Member] | GSA [Member] | Minimum [Member] | ||||||||
The Company History and Nature of the Business [Line Items] | ||||||||
Generated revenue per month | $ 1,600,000 | |||||||
Triton Capital Market Ltd [Member] | FXDirectDealer [Member] | Minimum [Member] | ||||||||
The Company History and Nature of the Business [Line Items] | ||||||||
Related party transaction expense | $ 1,575,000 | |||||||
Jacobi Agreement [Member] | ||||||||
The Company History and Nature of the Business [Line Items] | ||||||||
Acquire to issued and outstanding percentage | 5% | |||||||
Consideration of shares | $ 548,767 | |||||||
Digiclear Transaction [Member] | ||||||||
The Company History and Nature of the Business [Line Items] | ||||||||
Consideration shares (in Shares) | 415,733 | |||||||
Market price of common stock | $ 5,000,000 | |||||||
[1]Retroactively restated for the reverse recapitalization as described in Note 3 and 18. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Details) - USD ($) | 12 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Dec. 15, 2021 | |
Summary of Significant Accounting Policies (Details) [Line Items] | |||
Shares reflecting exchange ratio | 36.44532 | ||
Impairment of intangible assets | $ 5,703,539 | ||
Impairment of investments | 6,210,783 | $ 4,310,745 | |
Federally-insured limits | 250,000 | ||
Federal deposit insurance corporation insurance limit | 250,000 | ||
Allowance for doubtful account amount | 637,072 | 0 | |
Impairment of cost method investment | 6,210,783 | ||
Impairment loss | 11,914,322 | 4,310,745 | |
Equity method investment | 0 | $ 6,602,000 | |
Advertising and marketing costs | $ 55,889 | 420,186 | |
Foreign currency translation description | Asset and liability accounts at September 30, 2023 and 2022 were translated at 0.8199 GBP and 0.8987 GBP to $1.00, respectively, which were the exchange rates on the balance sheet dates. Asset and liability accounts at September 30, 2023 and 2022 were translated at 0.9446 EUR and 1.0221 EUR to $1.00, respectively, which were the exchange rates on the balance sheet dates. Asset and liability accounts at September 30, 2023 were translated at 1.3591 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 years ended September 30, 2023 and 2022 was 0.8161 GBP and 0.7835 GBP to $1.00, respectively. The average translation rate applied to the statement of operations for the year ended September 30, 2023 and for the period from January 12, 2022 through September 30, 2022 was 0.9368 EUR and 0.9440 EUR to $1.00. The average translation rate applied to the statement of operations for the period from February 18, 2023 through September 30, 2023 was 1.3475 CAD to $1.00. Cash flows from the Company’s operations are calculated based upon the local currencies using the average translation rate. | ||
Minimum [Member] | |||
Summary of Significant Accounting Policies (Details) [Line Items] | |||
Estimated useful life | 3 years | ||
Maximum [Member] | |||
Summary of Significant Accounting Policies (Details) [Line Items] | |||
Estimated useful life | 5 years | ||
Federally-Insured Limits [Member] | |||
Summary of Significant Accounting Policies (Details) [Line Items] | |||
Federally-insured limits | $ 317,000 | ||
FXDirect Dealer, LLC [Member] | Revenue Benchmark [Member] | Supplier Concentration Risk [Member] | |||
Summary of Significant Accounting Policies (Details) [Line Items] | |||
Services cost percentage | 2% | ||
Ownership [Member] | |||
Summary of Significant Accounting Policies (Details) [Line Items] | |||
Impairment loss | $ 4,310,745 | ||
Impairment Loss [Member] | |||
Summary of Significant Accounting Policies (Details) [Line Items] | |||
Impairment loss | $ 11,914,322 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details) - Schedule of Cash Balances by Geographic Area - USD ($) | 12 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Schedule of Cash Balances by Geographic Area [Abstract] | ||
Total cash | $ 19,318 | $ 364,023 |
Cash percentage | 100% | 100% |
United States [Member] | ||
Schedule of Cash Balances by Geographic Area [Abstract] | ||
Total cash | $ 7,675 | $ 47,860 |
Cash percentage | 39.70% | 13.10% |
United Kingdom [Member] | ||
Schedule of Cash Balances by Geographic Area [Abstract] | ||
Total cash | $ 11,469 | $ 315,989 |
Cash percentage | 59.40% | 86.80% |
Malta [Member] | ||
Schedule of Cash Balances by Geographic Area [Abstract] | ||
Total cash | $ 174 | $ 174 |
Cash percentage | 0.90% | 0.10% |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies (Details) - Schedule of Assets and Liabilities Carried at Fair Value Measured - USD ($) | Sep. 30, 2023 | Sep. 30, 2022 |
Schedule of Assets and Liabilities Carried at Fair Value Measured [Abstract] | ||
Customer digital currency assets | $ 248,214 | |
Customer digital currency liabilities | 248,214 | |
Quoted Price in Active Markets (Level 1) [Member] | ||
Schedule of Assets and Liabilities Carried at Fair Value Measured [Abstract] | ||
Customer digital currency assets | ||
Customer digital currency liabilities | ||
Significant Other Observable Inputs (Level 2) [Member] | ||
Schedule of Assets and Liabilities Carried at Fair Value Measured [Abstract] | ||
Customer digital currency assets | 248,214 | |
Customer digital currency liabilities | 248,214 | |
Significant Unobservable Inputs (Level 3) [Member] | ||
Schedule of Assets and Liabilities Carried at Fair Value Measured [Abstract] | ||
Customer digital currency assets | ||
Customer digital currency liabilities |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies (Details) - Schedule of Carrying Value of Assets and Liabilities Recognized - VIE [Member] - USD ($) | Sep. 30, 2023 | Sep. 30, 2022 |
Condensed Balance Sheet Statements, Captions [Line Items] | ||
Cost method investment | $ 391,217 | $ 6,602,000 |
Due from affiliates | 95,274 | |
Total VIE assets | 486,491 | 6,602,000 |
Maximum exposure to loss | $ 486,491 | $ 6,602,000 |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies (Details) - Schedule of Revenues Are Disaggregated By Segment - USD ($) | 12 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Disaggregation of Revenue [Line Items] | ||
Total revenues | $ 21,297,642 | $ 21,513,474 |
General Support Services [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues | 19,200,000 | 19,200,000 |
Financial Service [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues | $ 2,097,642 | $ 2,313,474 |
Summary of Significant Accoun_8
Summary of Significant Accounting Policies (Details) - Schedule of Diluted Per Share - shares | 12 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Equity Option [Member] | ||
Schedule of Diluted Per Share [Abstract] | ||
Potentially dilutive securities | 167,143 | 167,143 |
Other Current Assets (Details)
Other Current Assets (Details) - Schedule of Other Current Assets - USD ($) | Sep. 30, 2023 | Sep. 30, 2022 |
Schedule of Other Current Assets [Abstract] | ||
Security deposit | $ 21,954 | |
Others | 10,568 | 15,617 |
Total | $ 32,522 | $ 15,617 |
Customer Assets and Liabiliti_3
Customer Assets and Liabilities (Details) - Schedule of Cash and Digital Positions - USD ($) | Sep. 30, 2023 | Sep. 30, 2022 |
Schedule of cash and digital positions [Abstract] | ||
Customer custodial cash | $ 672,501 | $ 2,020,394 |
Customer digital currency assets | 248,214 | |
Total customer assets | 672,501 | 2,268,608 |
Customer custodial cash liabilities | 1,443,011 | 2,020,717 |
Customer digital currency liabilities | 248,214 | |
Total customer liabilities | $ 1,443,011 | $ 2,268,931 |
Customer Assets and Liabiliti_4
Customer Assets and Liabilities (Details) - Schedule of Fair Market Value of Customer Digital Currency Assets - USD ($) | Sep. 30, 2023 | Sep. 30, 2022 |
Schedule of fair market value of customer digital currency assets [Abstract] | ||
Fair value (in Dollars) | $ 248,214 | |
Percentage of total | 100% | |
Bitcoin [Member] | ||
Schedule of fair market value of customer digital currency assets [Abstract] | ||
Fair value (in Dollars) | $ 162,294 | |
Percentage of total | 65.40% | |
Stablecoin/USD Coin [Member] | ||
Schedule of fair market value of customer digital currency assets [Abstract] | ||
Fair value (in Dollars) | $ 85,897 | |
Percentage of total | 34.60% | |
Ethereum [Member] | ||
Schedule of fair market value of customer digital currency assets [Abstract] | ||
Fair value (in Dollars) | $ 23 | |
Percentage of total | 0% |
Digital Assets (Details)
Digital Assets (Details) - USD ($) | 12 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Digital Assets [Abstract] | ||
Impairment expense | $ 7,950 | $ 887 |
Digital Assets (Details) - Sche
Digital Assets (Details) - Schedule of Digital Asset - USD ($) | 12 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Schedule of Digital Asset [Line Items] | ||
Estimated useful life | ||
Gross carrying amount | $ 1,973 | $ 74,189 |
Impairment | 774 | |
Digital assets, net | $ 1,973 | $ 73,415 |
Bitcoin [Member] | ||
Schedule of Digital Asset [Line Items] | ||
Estimated useful life | Indefinite | Indefinite |
Gross carrying amount | $ 894 | $ 63,377 |
Impairment | 774 | |
Digital assets, net | $ 894 | $ 62,603 |
Ethereum [Member] | ||
Schedule of Digital Asset [Line Items] | ||
Estimated useful life | Indefinite | Indefinite |
Gross carrying amount | $ 709 | $ 1,289 |
Impairment | ||
Digital assets, net | $ 709 | $ 1,289 |
Stablecoin/USD Coin [Member] | ||
Schedule of Digital Asset [Line Items] | ||
Estimated useful life | Indefinite | Indefinite |
Gross carrying amount | $ 284 | $ 9,417 |
Impairment | ||
Digital assets, net | $ 284 | $ 9,417 |
Other [Member] | ||
Schedule of Digital Asset [Line Items] | ||
Estimated useful life | Indefinite | Indefinite |
Gross carrying amount | $ 86 | $ 106 |
Impairment | ||
Digital assets, net | $ 86 | $ 106 |
Cost Method Investment (Details
Cost Method Investment (Details) - USD ($) | 12 Months Ended | ||
Dec. 15, 2021 | Sep. 30, 2023 | Sep. 30, 2022 | |
Cost Method Investment [Line Items] | |||
Cost method investment | $ 6,602,000 | $ 6,602,000 | $ 391,217 |
Impairment loss | 6,210,783 | ||
Reduced the investment | $ 391,217 | ||
Jacobi [Member] | |||
Cost Method Investment [Line Items] | |||
Percentage of equity interest rate | 5% | ||
Jacobi [Member] | |||
Cost Method Investment [Line Items] | |||
Common stock shres issued (in Shares) | 548,767 |
Equity Method Investment (Detai
Equity Method Investment (Details) - USD ($) | 12 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Equity Method Investment [Line Items] | ||
Investment amount | $ 0 | $ 0 |
Impairment loss | 11,914,322 | 4,310,745 |
Equity method investment drease value | $ 0 | $ 0 |
Other Unrelated Party [Member] | ||
Equity Method Investment [Line Items] | ||
Ownership, percentage | 50% | |
Ownership [Member] | ||
Equity Method Investment [Line Items] | ||
Ownership, percentage | 50% |
Intangible Assets (Details)
Intangible Assets (Details) - USD ($) | 12 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Intangible Assets (Details) [Line Items] | ||
Amortization expense | $ 2,380,115 | $ 2,690,617 |
Cost of revenue | 21,640,783 | 22,174,870 |
Operating expenses | 273,711 | 264,224 |
Impairment loss | 5,703,539 | |
Financial Service [Member] | ||
Intangible Assets (Details) [Line Items] | ||
Cost of revenue | 2,865,783 | 3,274,870 |
Financial Service [Member] | Segments [Member] | ||
Intangible Assets (Details) [Line Items] | ||
Cost of revenue | $ 2,106,404 | $ 2,426,393 |
Intangible Assets (Details) - S
Intangible Assets (Details) - Schedule of Intangible Assets - USD ($) | Sep. 30, 2023 | Sep. 30, 2022 |
Schedule of Intangible Assets [Line Items] | ||
Intangible assets, gross | $ 11,276,484 | $ 11,235,008 |
Less: accumulated amortization | (5,539,945) | (3,159,903) |
Less: impairment loss | (5,703,539) | |
Intangible assets, net | $ 33,000 | 8,075,105 |
Trade names [Member] | ||
Schedule of Intangible Assets [Line Items] | ||
Intangible assets Useful Life | 3 years | |
Intangible assets, gross | $ 784,246 | 784,246 |
Regulatory licenses [Member] | ||
Schedule of Intangible Assets [Line Items] | ||
Intangible assets Useful Life | 3 years | |
Intangible assets, gross | $ 180,227 | 138,751 |
Technology [Member] | ||
Schedule of Intangible Assets [Line Items] | ||
Intangible assets Useful Life | 5 years | |
Intangible assets, gross | $ 10,300,774 | 10,300,774 |
Software [Member] | ||
Schedule of Intangible Assets [Line Items] | ||
Intangible assets Useful Life | 3 years | |
Intangible assets, gross | $ 11,237 | $ 11,237 |
Intangible Assets (Details) -_2
Intangible Assets (Details) - Schedule of Amortization of Intangible Assets Attributable to Future Periods - USD ($) | Sep. 30, 2023 | Sep. 30, 2022 |
Schedule of Amortization of Intangible Assets Attributable to Future Periods [Abstract] | ||
2024 | $ 13,825 | |
2025 | 13,825 | |
2026 | 5,350 | |
2027 and thereafter | ||
Total | $ 33,000 | $ 8,075,105 |
Accrued Liabilities and Other_3
Accrued Liabilities and Other Payables (Details) - Schedule of Accrued Liabilities and Other Payables - USD ($) | Sep. 30, 2023 | Sep. 30, 2022 |
Schedule of accrued liabilities and other payables [Abstract] | ||
Unearned revenue | $ 151,617 | $ 203,222 |
Others | 18,255 | 29,133 |
Total | $ 169,872 | $ 232,355 |
Share Capital (Details)
Share Capital (Details) - USD ($) | 12 Months Ended | ||||
Mar. 17, 2022 | Jan. 31, 2022 | Dec. 15, 2021 | Sep. 30, 2023 | Sep. 30, 2022 | |
Share Capital [Line Items] | |||||
Common stock issued (in Shares) | 548,767 | ||||
Shares were valued at fair market value | $ 5,000,000 | $ 6,602,000 | |||
Cost method investment | $ 6,602,000 | $ 0 | |||
Aggregate intrinsic value of stock options outstanding | 0 | ||||
Stock-based compensation expense | 370,878 | $ 1,913,529 | |||
Stock options for software purchase (in Shares) | 1,429 | ||||
Fair value of stock options granted (in Shares) | 1,429 | ||||
Cost of software | $ 11,237 | ||||
Amount of amortization software | $ 3,746 | $ 2,809 | |||
Common Stock [Member] | |||||
Share Capital [Line Items] | |||||
Shares issued (in Shares) | 415,733 | ||||
Jacobi [Member] | |||||
Share Capital [Line Items] | |||||
Percentage of issued and outstanding ordinary shares | 5% | ||||
Business Acquisition [Member] | Common Stock [Member] | |||||
Share Capital [Line Items] | |||||
Percentage of Equity Interest | 50% |
Share Capital (Details) - Sched
Share Capital (Details) - Schedule of Common Stock Issuable Upon Exercise of Options Outstanding - Stock Option [Member] | 12 Months Ended |
Sep. 30, 2023 $ / shares shares | |
Range of Exercise Price 3.15 – 15.75 [Member] | |
Schedule of Common Stock Issuable Upon Exercise of Options Outstanding [Line Items] | |
Number Outstanding at September 30, 2023 (in Shares) | shares | 95,715 |
Weighted Average Remaining Contractual Life (Years) | 3 years 3 months 3 days |
Weighted Average Exercise Price | $ 4.44 |
Number Exercisable at September 30, 2023 (in Shares) | shares | 61,429 |
Weighted Average Exercise Price | $ 3.99 |
Range of Exercise Price 87.50 [Member] | |
Schedule of Common Stock Issuable Upon Exercise of Options Outstanding [Line Items] | |
Range of Exercise Price | $ 87.5 |
Number Outstanding at September 30, 2023 (in Shares) | shares | 28,571 |
Weighted Average Remaining Contractual Life (Years) | 2 years 11 months 19 days |
Weighted Average Exercise Price | $ 87.5 |
Number Exercisable at September 30, 2023 (in Shares) | shares | 28,571 |
Weighted Average Exercise Price | $ 87.5 |
Range of Exercise Price 3.15-87.50 [Member] | |
Schedule of Common Stock Issuable Upon Exercise of Options Outstanding [Line Items] | |
Number Outstanding at September 30, 2023 (in Shares) | shares | 124,286 |
Weighted Average Remaining Contractual Life (Years) | 3 years 2 months 8 days |
Weighted Average Exercise Price | $ 23.53 |
Number Exercisable at September 30, 2023 (in Shares) | shares | 90,000 |
Weighted Average Exercise Price | $ 30.5 |
Minimum [Member] | Range of Exercise Price 3.15 – 15.75 [Member] | |
Schedule of Common Stock Issuable Upon Exercise of Options Outstanding [Line Items] | |
Range of Exercise Price | 3.15 |
Minimum [Member] | Range of Exercise Price 3.15-87.50 [Member] | |
Schedule of Common Stock Issuable Upon Exercise of Options Outstanding [Line Items] | |
Range of Exercise Price | 3.15 |
Maximum [Member] | Range of Exercise Price 3.15 – 15.75 [Member] | |
Schedule of Common Stock Issuable Upon Exercise of Options Outstanding [Line Items] | |
Range of Exercise Price | 15.75 |
Maximum [Member] | Range of Exercise Price 3.15-87.50 [Member] | |
Schedule of Common Stock Issuable Upon Exercise of Options Outstanding [Line Items] | |
Range of Exercise Price | $ 87.5 |
Share Capital (Details) - Sch_2
Share Capital (Details) - Schedule of Stock Option Activities - $ / shares | 12 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Schedule of Stock Option Activities [Abstract] | ||
Number of Options, Outstanding at beginning | 167,143 | 28,571 |
Weighted Average Exercise Price outstanding, Outstanding at beginning | $ 23.45 | $ 87.5 |
Number of Options, Granted | 138,572 | |
Weighted Average Exercise Price, Granted | $ 10.15 | |
Number of Options, Terminated / Exercised / Expired | ||
Weighted Average Exercise Price, Terminated / Exercised / Expired | ||
Number of Options, Outstanding at ending | 124,286 | 167,143 |
Weighted Average Exercise Price, Outstanding at ending | $ 23.53 | $ 23.45 |
Number of Options, exercisable | 90,000 | |
Weighted Average Exercise Price Options, exercisable | $ 30.5 | |
Number of Options, expected to vest | shares | 34,286 | |
Weighted Average Exercise Price Options, expected to vest | $ / shares | $ 5.25 | |
Number of Options, Expired | (42,857) | |
Weighted Average Exercise Price Options, Expired | $ (23.33) |
Share Capital (Details) - Sch_3
Share Capital (Details) - Schedule of NonVested Stock Options Granted - $ / shares | 12 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Schedule of NonVested Stock Options Granted [Abstract] | ||
Number of Options, Nonvested at beginning | 108,572 | 28,571 |
Weighted Average Exercise Price, Nonvested at beginning | $ 12.25 | $ 87.5 |
Number of Options, Granted | 138,572 | |
Weighted Average Exercise Price, Granted | $ 10.15 | |
Number of Options, Vested | (74,286) | (58,571) |
Weighted Average Exercise Price, Vested | $ (15.28) | $ (44.45) |
Number of Options, Nonvested at ending | 34,286 | 108,572 |
Weighted Average Exercise Price, Nonvested at ending | $ 5.25 | $ 12.25 |
Income Taxes (Details)
Income Taxes (Details) | Sep. 30, 2023 USD ($) |
Income Tax [Line Items] | |
Operating loss carry-forwards | $ 258,405 |
Malta [Member] | |
Income Tax [Line Items] | |
Operating loss carry-forwards | 633,098 |
United Kingdom [Member] | |
Income Tax [Line Items] | |
Operating loss carry-forwards | 758,433 |
U.S. federal [Member] | |
Income Tax [Line Items] | |
Operating loss carry-forwards | $ 4,803,360 |
Income Taxes (Details) - Schedu
Income Taxes (Details) - Schedule of Components for Net Loss - USD ($) | 12 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Schedule of Components for Net Loss [Line Items] | ||
Net Loss, Total | $ 17,428,428 | $ 11,845,657 |
United States [Member] | ||
Schedule of Components for Net Loss [Line Items] | ||
Net Loss, Total | 16,285,346 | 11,665,650 |
Bermuda [Member] | ||
Schedule of Components for Net Loss [Line Items] | ||
Net Loss, Total | 10,456 | |
Malta [Member] | ||
Schedule of Components for Net Loss [Line Items] | ||
Net Loss, Total | 56,374 | 74,772 |
United Kingdom [Member] | ||
Schedule of Components for Net Loss [Line Items] | ||
Net Loss, Total | 1,032,885 | 90,318 |
Lithuania [Member] | ||
Schedule of Components for Net Loss [Line Items] | ||
Net Loss, Total | 45,274 | 4,461 |
Canada [Member] | ||
Schedule of Components for Net Loss [Line Items] | ||
Net Loss, Total | $ 8,549 |
Income Taxes (Details) - Sche_2
Income Taxes (Details) - Schedule of Components of Income Taxes Expense (Benefit) - USD ($) | 12 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Current: | ||
Federal | ||
State | ||
Total current income taxes expense | ||
Deferred: | ||
Federal | (665,382) | (977,249) |
State | (225,279) | (330,869) |
Total deferred income taxes (benefit) | (989,265) | (1,352,095) |
Change in valuation allowance | 989,265 | 1,352,095 |
Total income taxes expense | ||
Malta [Member] | ||
Current: | ||
Total current income taxes expense | ||
Deferred: | ||
Total deferred income taxes (benefit) | (19,731) | (26,170) |
United Kingdom [Member] | ||
Current: | ||
Total current income taxes expense | ||
Deferred: | ||
Total deferred income taxes (benefit) | (72,082) | (17,138) |
Lithuania [Member] | ||
Current: | ||
Total current income taxes expense | ||
Deferred: | ||
Total deferred income taxes (benefit) | $ (6,791) | $ (669) |
Income Taxes (Details) - Sche_3
Income Taxes (Details) - Schedule of Statutory Income Tax Rate | 12 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Schedule of Statutory Income Tax Rate [Line Items] | ||
Statutory federal income tax rate | 21% | 21% |
State tax | 0.80% | 2.40% |
Non-U.S. income taxed at different rates | (0.10%) | 0.10% |
Permanent differences | (17.20%) | (13.70%) |
Prior year true-up | (0.80%) | |
Valuation allowance | (4.50%) | (9.00%) |
Effective tax rate | 0% | 0% |
Income Taxes (Details) - Sche_4
Income Taxes (Details) - Schedule of Net Deferred Tax Assets (Liabilities) - USD ($) | Sep. 30, 2023 | Sep. 30, 2022 |
Deferred tax assets | ||
Net operating loss carry-forwards | $ 1,726,620 | $ 1,129,699 |
Accrued directors’ compensation | 100,410 | 66,678 |
Stock-based compensation | 653,976 | 549,722 |
Impairment of digital assets | 1,511 | 169 |
Allowance for doubtful accounts | 123,554 | |
Unrealized foreign currency exchange loss | 612 | |
Capitalized SPAC acquisition related professional fee | 364,902 | 236,198 |
Total deferred tax assets, gross | 2,971,585 | 1,982,466 |
Valuation allowance | (2,971,585) | (1,982,320) |
Total deferred tax assets, net | 146 | |
Deferred tax liabilities | ||
Unrealized foreign currency exchange gain | (146) | |
Total deferred tax liabilities | (146) | |
Net deferred tax assets |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) | 12 Months Ended | ||||||||||||
Dec. 27, 2023 | Dec. 19, 2023 | Sep. 30, 2023 | May 01, 2023 | Sep. 30, 2023 | Sep. 30, 2022 | Sep. 18, 2023 | Sep. 01, 2023 | Aug. 15, 2023 | Jul. 31, 2023 | Jul. 19, 2023 | Mar. 01, 2023 | Sep. 01, 2022 | |
Related Party Transactions (Details) [Line Items] | |||||||||||||
Consulting expenses | $ 136,625 | $ 80,026 | |||||||||||
Accrued and unpaid services | $ 0 | 0 | 16,691 | ||||||||||
Minimum monthly amount received | 1,600,000 | ||||||||||||
Minimum monthly amount payable | 1,575,000 | ||||||||||||
Revenue from related parties | $ 138,419 | 38,112 | |||||||||||
Due from related parties | $ 229,837 | ||||||||||||
Outstanding amount | 2,861,631 | ||||||||||||
Principal amount | $ 35,000 | ||||||||||||
Mature with respect amount | $ 17,500 | $ 17,500 | |||||||||||
Interest rate | 5% | 5% | |||||||||||
Interest income | $ 1,836 | 159 | |||||||||||
Outstanding interest | 1,980 | 159 | |||||||||||
Written off | 299,650 | ||||||||||||
Line of credit | $ 1,000,000 | ||||||||||||
Principal amount | $ 270,000 | $ 75,000 | $ 75,619 | ||||||||||
Cash proceeds | 270,000 | 75,000 | 75,619 | ||||||||||
Loan bears interest | $ 5 | $ 5 | $ 5 | ||||||||||
Outstanding principal balance | 420,619 | ||||||||||||
Interest expense | 1,776 | ||||||||||||
Interest payable | $ 1,771 | $ 1,771 | |||||||||||
Maximum [Member] | |||||||||||||
Related Party Transactions (Details) [Line Items] | |||||||||||||
Minimum monthly amount payable | 1,575,000 | ||||||||||||
Minimum [Member] | |||||||||||||
Related Party Transactions (Details) [Line Items] | |||||||||||||
Minimum monthly amount payable | $ 1,550,000 | ||||||||||||
Line of Credit [Member] | |||||||||||||
Related Party Transactions (Details) [Line Items] | |||||||||||||
Line of credit | $ 1,000,000 | ||||||||||||
Annual interest rate | 8% | ||||||||||||
collateral shares (in Shares) | 133,514 | ||||||||||||
Line of credit interest amount | $ 10,246 | ||||||||||||
Amount of accrued and unpaid interest | 10,199 | ||||||||||||
Line of credit allowance of doubtful account receivable | 10,199 | ||||||||||||
Amount of increased in allowance for doubtful accounts | 650,285 | ||||||||||||
Brilliant [Member] | |||||||||||||
Related Party Transactions (Details) [Line Items] | |||||||||||||
Aggregate principal | $ 299,650 | ||||||||||||
Interest rate | 0% | ||||||||||||
Subsequent Event [Member] | |||||||||||||
Related Party Transactions (Details) [Line Items] | |||||||||||||
Outstanding amount | $ 2,727,061 | ||||||||||||
Amount are converted into shares (in Shares) | 757,678 | ||||||||||||
collateral shares (in Shares) | 133,514 | ||||||||||||
Agreement of transferred shares (in Shares) | 133,514 | ||||||||||||
Subsequent Event [Member] | Common Stock [Member] | |||||||||||||
Related Party Transactions (Details) [Line Items] | |||||||||||||
Outstanding amount | $ 270,000 | ||||||||||||
Amount are converted into shares (in Shares) | 70,129 | ||||||||||||
ClearThink [Member] | |||||||||||||
Related Party Transactions (Details) [Line Items] | |||||||||||||
Business combination transaction amount | $ 210,000 | $ 210,000 | |||||||||||
RFQ [Member] | FXDD Trading [Member] | |||||||||||||
Related Party Transactions (Details) [Line Items] | |||||||||||||
Digital RFQ, amount | 0 | 248,214 | |||||||||||
Related Party [Member] | |||||||||||||
Related Party Transactions (Details) [Line Items] | |||||||||||||
Consulting expenses | $ 55,140 | $ 45,310 |
Related Party Transactions (D_2
Related Party Transactions (Details) - Schedule of General Support Services Provided to the Related Party - USD ($) | 12 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Service provided to: | ||
Service provided to related parties | $ 19,200,000 | $ 19,200,000 |
Service received from: | ||
Service received from related parties | 18,775,000 | 18,900,000 |
TCM [Member] | ||
Service provided to: | ||
Service provided to related parties | 19,200,000 | 19,200,000 |
FXDIRECT [Member] | ||
Service received from: | ||
Service received from related parties | $ 18,775,000 | $ 18,900,000 |
Related Party Transactions (D_3
Related Party Transactions (Details) - Schedule of Due From Related Parties - USD ($) | Sep. 30, 2023 | Sep. 30, 2022 | |
Related Party Transactions (Details) - Schedule of Due From Related Parties [Line Items] | |||
Due from related parties | $ 2,039,274 | $ 931,136 | |
Digiclear [Member] | |||
Related Party Transactions (Details) - Schedule of Due From Related Parties [Line Items] | |||
Due from related parties | 35,762 | ||
Jacobi [Member] | |||
Related Party Transactions (Details) - Schedule of Due From Related Parties [Line Items] | |||
Due from related parties | 95,274 | ||
FXDD Mauritius [Member] | |||
Related Party Transactions (Details) - Schedule of Due From Related Parties [Line Items] | |||
Due from related parties | [1] | 1,500 | |
TCM [Member] | |||
Related Party Transactions (Details) - Schedule of Due From Related Parties [Line Items] | |||
Due from related parties | $ 1,942,500 | $ 895,374 | |
[1]FXDD Mauritius is controlled by Emil Assentato, the Company’s chief executive officer and chairman. |
Related Party Transactions (D_4
Related Party Transactions (Details) - Schedule of Due to Related Parties - USD ($) | Sep. 30, 2023 | Sep. 30, 2022 | |
Related Party Transactions (Details) - Schedule of Due to Related Parties [Line Items] | |||
Due to related parties | $ 6,808,749 | $ 4,514,063 | |
Forexware LLC [Member] | |||
Related Party Transactions (Details) - Schedule of Due to Related Parties [Line Items] | |||
Due to related parties | [1] | 1,211,778 | 1,079,229 |
FXDIRECT [Member] | |||
Related Party Transactions (Details) - Schedule of Due to Related Parties [Line Items] | |||
Due to related parties | [2] | 5,064,428 | 3,042,101 |
Currency Mountain Holdings Bermuda, Limited (“CMH”) [Member] | |||
Related Party Transactions (Details) - Schedule of Due to Related Parties [Line Items] | |||
Due to related parties | 42,000 | 42,000 | |
FXDD Trading [Member] | |||
Related Party Transactions (Details) - Schedule of Due to Related Parties [Line Items] | |||
Due to related parties | [1] | 396,793 | 242,113 |
Markets Direct Payments [Member] | |||
Related Party Transactions (Details) - Schedule of Due to Related Parties [Line Items] | |||
Due to related parties | [1] | 2,317 | 2,114 |
Match Fintech Limited [Member] | |||
Related Party Transactions (Details) - Schedule of Due to Related Parties [Line Items] | |||
Due to related parties | [3] | $ 91,433 | $ 106,506 |
[1] Forexware LLC, FXDD Trading, and Markets Direct Payments are controlled by Emil Assentato, the Company’s chief executive officer and chairman. Match Fintech Limited is controlled by affiliates of the Company. |
Related Party Transactions (D_5
Related Party Transactions (Details) - Schedule of Activity Recorded for the Line of Credit - USD ($) | 12 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Schedule of Activity Recorded for the Line of Credit [Abstract] | ||
Outstanding principal under the Line of Credit | $ 764,892 | |
Less: allowance for doubtful account | (637,072) | 0 |
Outstanding principal under the Line of Credit at September 30, 2023, net | $ 127,820 | |
Draw down from Line of Credit | $ 764,892 |
Concentrations (Details)
Concentrations (Details) | 12 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Revenue Benchmark [Member] | Suppliers [Member] | Customer [Member] | ||
Concentrations [Line Items | ||
Concentration risk percentage | 10% | 10% |
Accounts Receivable [Member] | ||
Concentrations [Line Items | ||
Number of customer | 1 | |
Related party customer | One | |
Accounts Receivable [Member] | Suppliers [Member] | Related Party Customer One [Member] | ||
Concentrations [Line Items | ||
Concentration risk percentage | 10% | 10% |
Accounts Receivable [Member] | Suppliers [Member] | Related Party Customer Two [Member] | ||
Concentrations [Line Items | ||
Concentration risk percentage | 95.20% | 96.20% |
Accounts Payable [Member] | ||
Concentrations [Line Items | ||
Related party suppliers | Two | Two |
Supplier [Member] | Revenue Benchmark [Member] | Suppliers [Member] | ||
Concentrations [Line Items | ||
Concentration risk percentage | 10% | 10% |
Related Party Supplier One [Member] | Accounts Payable [Member] | Suppliers [Member] | ||
Concentrations [Line Items | ||
Concentration risk percentage | 10% | 10% |
Related Party Supplier Two [Member] | Accounts Payable [Member] | Suppliers [Member] | ||
Concentrations [Line Items | ||
Concentration risk percentage | 81.70% | 79.20% |
Concentrations (Details) - Sche
Concentrations (Details) - Schedule of Customer Revenues | 12 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Customer A [Member] | ||
Revenue, Major Customer [Line Items] | ||
Related party | 90.20% | 89.20% |
Supplier A [Member] | ||
Revenue, Major Customer [Line Items] | ||
Related party | 86.80% | 85.20% |
Segment Information (Details)
Segment Information (Details) | 12 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Segment Information [Abstract] | ||
Reportable business segments | 2 | 2 |
Segment Information (Details) -
Segment Information (Details) - Schedule of Reportable Business Segments - USD ($) | 12 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | ||
Segment Reporting Information [Line Items] | |||
Revenues | $ 21,297,642 | $ 21,513,474 | |
Costs of revenues | 21,640,783 | 22,174,870 | |
Gross profit (loss) | (343,141) | (661,396) | |
Operating expenses | 17,120,080 | 10,480,928 | |
Other (expense) income | 34,793 | (703,333) | |
Net loss | [1] | (17,428,428) | (11,845,657) |
Amortization | 2,380,115 | 2,690,617 | |
General Support Services [Member] | |||
Segment Reporting Information [Line Items] | |||
Revenues | 19,200,000 | 19,200,000 | |
Costs of revenues | 18,775,000 | 18,900,000 | |
Gross profit (loss) | 425,000 | 300,000 | |
Net loss | 425,000 | 300,000 | |
Financial Services [Member] | |||
Segment Reporting Information [Line Items] | |||
Revenues | 2,097,642 | 2,313,474 | |
Costs of revenues | 2,865,783 | 3,274,870 | |
Gross profit (loss) | (768,141) | (961,396) | |
Operating expenses | 2,721,746 | 1,808,399 | |
Other (expense) income | 35,356 | (12,792) | |
Net loss | (3,454,531) | (2,782,587) | |
Amortization | 2,106,404 | 2,687,808 | |
Corporate/Other [Member] | |||
Segment Reporting Information [Line Items] | |||
Operating expenses | 14,398,334 | 8,672,529 | |
Other (expense) income | (563) | (690,541) | |
Net loss | (14,398,897) | (9,363,070) | |
Amortization | $ 273,711 | $ 2,809 | |
[1] Retroactively restated for the reverse recapitalization as described in Note 3 and 18. |
Segment Information (Details)_2
Segment Information (Details) - Schedule of Total Assets - USD ($) | Sep. 30, 2023 | Sep. 30, 2022 |
Schedule of Total Assets [Line Items] | ||
Total assets | $ 3,352,625 | $ 18,364,904 |
Financial services [Member] | ||
Schedule of Total Assets [Line Items] | ||
Total assets | 1,004,708 | 10,768,309 |
Corporate/Other [Member] | ||
Schedule of Total Assets [Line Items] | ||
Total assets | $ 2,347,917 | $ 7,596,595 |
Commitments and Contingencies (
Commitments and Contingencies (Details) | May 17, 2022 USD ($) |
Commitments and Contingencies [Line Items] | |
Common stock amount | $ 75,000,000 |
Subsequent Events (Details)
Subsequent Events (Details) | 1 Months Ended | 12 Months Ended | ||||||||
May 31, 2024 shares | Dec. 19, 2023 USD ($) shares | Jan. 31, 2024 shares | Dec. 31, 2023 shares | Sep. 30, 2023 USD ($) shares | Sep. 30, 2022 USD ($) | Jun. 30, 2024 USD ($) | Jun. 11, 2024 USD ($) | Mar. 31, 2024 GBP (£) | Mar. 06, 2024 USD ($) | |
Subsequent Events [Line Items] | ||||||||||
Outstanding amount (in Dollars) | $ | $ 2,861,631 | |||||||||
Forecast [Member] | ||||||||||
Subsequent Events [Line Items] | ||||||||||
Outstanding amount (in Dollars) | $ | $ 2,727,061 | |||||||||
Amount are converted into shares | shares | 757,678 | |||||||||
Forecast [Member] | Common Stock [Member] | ||||||||||
Subsequent Events [Line Items] | ||||||||||
Outstanding amount (in Dollars) | $ | $ 270,000 | |||||||||
Amount are converted into shares | shares | 70,129 | |||||||||
Stock Issued During Period, Shares, New Issues | shares | 700,000 | |||||||||
Forecast [Member] | Common Stock [Member] | ||||||||||
Subsequent Events [Line Items] | ||||||||||
Common stock service share | shares | 202,702 | 425,295 | ||||||||
Related Party [Member] | Forecast [Member] | ||||||||||
Subsequent Events [Line Items] | ||||||||||
Borrowed amount | $ | $ 500,000 | |||||||||
Individual [Member] | Forecast [Member] | ||||||||||
Subsequent Events [Line Items] | ||||||||||
Borrowed amount | £ | £ 395,000 | |||||||||
Third Party [Member] | Forecast [Member] | ||||||||||
Subsequent Events [Line Items] | ||||||||||
Borrowed amount | $ | $ 375,000 | $ 500,000 | ||||||||
Special Purpose Acquisition Company [Member] | ||||||||||
Subsequent Events [Line Items] | ||||||||||
Business combination | shares | 36.44532 |