FXDD parent reports slight operational loss in Q2

abdelaziz Fathi

Nukkleus Inc, which controls FXDD Trading and FXMarkets brands, has reported its financials for the three months ending June 30, 2021.

Over this period, Nukkleus saw its trading revenue unchanged from a year ago, coming in at $4.8 million in FY Q2 2021, which came from support services rendered to FXDD Malta. Revenue for both of the nine months through June 30, 2021, and 2020, was $14.4 million.

In terms of its net income, Nukkleus reversed its operating profit of $11,492 in the prior year’s quarter to a loss, in the amount of $100,538 for the April-June quarter. Taking a YTD perspective, the company also deepened its operating losses to the sum of $154,084, which was worse than the $97,659 it lost in the comparable period of 2020.

Over a nine-month interval spanning from October 2020 to June 2021, Nukkleus’ gross profits was $238,966 compared to $225,000 for the counterpart period a year prior.

Though the company had incurred a 25 percent decrease in revenues in 2020 due to the amendment of its agreement with FXDD Malta, the retail broker reduced services fees it currently pays from $2 million per month to $1.6 million.

The operating costs were pointedly higher on a yearly basis, according to the company’s latest filing with the US Securities and Exchange Commission. The primary culprit for this has been the rise in the amortization of intangible assets.

Specifically, the operating expenses that the company incurred in the last quarter were reported at $188,714, relative to $62,222 for the previous year. Other general & administrative expenses and professional fees were also higher year-over-year, albeit at a modest level.

On April 16, 2021, the company was named as a defendant in the case related to the bankruptcy of Boston Prime and BT Prime, the liquidity providers of Boston Technologies. In the amended complaint, BT Prime seeks to hold Nukkleus and its affiliates liable for all of the debts and liabilities stemming from its bankruptcy proceedings. BT Prime incurred huge losses as a result of unprecedented market volatility following SNB announcement to remove the euro-franc peg in 2015.

The troubled firm alleges that Nukkleus has no activity other than it does through collective business relationship with Forexware, Currency Mountain Holdings LLC, Forexware Malta Holdings Ltd., FXDIRECT, FXDD Malta and CMH. Based on this theory, BT Prime alleges that the company should be jointly liable for any liability attributable to other defendants

“The Company maintains that there is no basis in BT Prime’s claims against it and intends to vigorously defend against it, including by moving to dismiss it,” Nukkleus said.

That motion was fully submitted in December, and the court held an oral argument in February 2021, but no decision has been issued as of the date of this report.

Looking at the rest of the filing, Nukkleus highlighted that it is currently seeking additional capital through private placements or public offerings of its securities. In addition, the company wants to secure funding through public or private debts to finance its business or any mergers or acquisitions in the future.

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