DigiAsia Corp.(FAAS) - 2023 Q1 - Quarterly Report

PART I - FINANCIAL INFORMATION Interim Financial Statements (Unaudited) This section presents the unaudited condensed financial statements for the quarter ended March 31, 2023, including the balance sheet, statements of operations, changes in shareholders' deficit, and cash flows, along with detailed notes. Condensed Balance Sheets As of March 31, 2023, total assets significantly decreased to $32.2 million from $206.2 million at year-end 2022, primarily due to reduced investments in the Trust Account following share redemptions. Condensed Balance Sheet Highlights (Unaudited) | Account | March 31, 2023 | December 31, 2022 | | :--- | :--- | :--- | | Assets | | | | Cash | $37,183 | $93,344 | | Investments held in Trust Account | $31,987,191 | $205,927,087 | | Total Assets | $32,159,437 | $206,195,454 | | Liabilities & Shareholders' Deficit | | | | Total current liabilities | $2,582,745 | $1,806,469 | | Derivative warrant liabilities | $1,620,000 | $540,000 | | Total Liabilities | $13,202,745 | $11,346,469 | | Class A ordinary shares subject to possible redemption | $31,987,191 | $205,927,087 | | Total Shareholders' Deficit | ($13,030,499) | ($11,078,102) | Unaudited Condensed Statements of Operations For the three months ended March 31, 2023, the company reported a net loss of $606,402, a reversal from the net income of $3,146,507 in the same period of 2022, mainly due to a negative change in warrant liability fair value. Statement of Operations Summary (Unaudited) | Metric | Three Months Ended March 31, 2023 | Three Months Ended March 31, 2022 | | :--- | :--- | :--- | | Loss from operations | ($423,146) | ($325,849) | | Change in fair value of warrant liability | ($1,080,000) | $3,452,000 | | Dividend income from Trust account | $895,995 | $20,342 | | Net (Loss) Income | ($606,402) | $3,146,507 | | Basic and diluted net (loss) income per share, Class A | ($0.01) | $0.13 | | Basic and diluted net (loss) income per share, Class B | ($0.11) | $0.13 | Unaudited Condensed Statements of Changes in Shareholders' Deficit The company's total shareholders' deficit increased from $11,078,102 to $13,030,499 as of March 31, 2023, primarily due to the net loss, remeasurement of Class A ordinary shares, and an extension payment. Changes in Shareholders' Deficit for Q1 2023 (Unaudited) | Description | Amount | | :--- | :--- | | Balance, December 31, 2022 | ($11,078,102) | | Remeasurement of Class A ordinary shares | ($895,995) | | Extension payment paid by Sponsor | ($450,000) | | Net loss | ($606,402) | | Balance, March 31, 2023 | ($13,030,499) | Unaudited Condensed Statements of Cash Flows For the first quarter of 2023, net cash provided by operating activities was $243,839, while investing activities provided $174.8 million, and financing activities used $175.1 million, resulting in a net decrease in cash of $56,161. Cash Flow Summary for Q1 2023 (Unaudited) | Cash Flow Activity | Amount | | :--- | :--- | | Net cash provided by operating activities | $243,839 | | Net cash provided by investing activities | $174,835,891 | | Net cash used in financing activities | ($175,135,891) | | Net Change in Cash | ($56,161) | | Cash, Beginning of Period | $93,344 | | Cash, End of Period | $37,183 | Notes to Condensed Financial Statements (Unaudited) The notes detail the company's SPAC formation, the January 5, 2023 Business Combination Agreement with DigiAsia Bios Pte. Ltd., the extended deadline to July 20, 2023, and the redemption of 16,988,575 Class A shares for approximately $175.3 million, leading to substantial doubt about going concern. - On January 5, 2023, the Company entered into a Business Combination Agreement with DigiAsia Bios Pte. Ltd., a Singapore-based company[19] - The deadline to consummate a business combination was extended to July 20, 2023, through up to 6 monthly extensions[38] - On January 20, 2023, shareholders redeemed 16,988,575 Class A ordinary shares for an aggregate payment of approximately $175.3 million from the trust account[41][79] - Management has determined that there is substantial doubt about the Company's ability to continue as a going concern due to its liquidity condition and the mandatory liquidation date of July 20, 2023, if a business combination is not completed[43] Management's Discussion and Analysis of Financial Condition and Results of Operations This section provides management's perspective on the company's financial condition and operational results, highlighting a net loss of $606,402 in Q1 2023, significant liquidity concerns, and substantial doubt about its ability to continue as a going concern. Q1 2023 vs Q1 2022 Performance | Metric | Three Months Ended March 31, 2023 | Three Months Ended March 31, 2022 | | :--- | :--- | :--- | | Net (Loss) Income | ($606,402) | $3,146,507 | Liquidity Position as of March 31, 2023 | Account | Amount | | :--- | :--- | | Cash in operating bank account | $37,183 | | Securities held in Trust Account | $31,987,191 | | Working capital deficit | ($2,410,499) | - The company has until July 20, 2023, to consummate a Business Combination or it will face mandatory liquidation, which raises substantial doubt about its ability to continue as a going concern[117] - The company is an "emerging growth company" under the JOBS Act and has elected to delay the adoption of new or revised accounting standards[121] Quantitative and Qualitative Disclosures about Market Risk This section is not applicable to the company as it is exempt from providing these disclosures as a smaller reporting company. - This item is not applicable as the company is a smaller reporting company[130] Controls and Procedures Management's evaluation concluded that the company's disclosure controls and procedures were not effective as of March 31, 2023, due to material weaknesses in internal controls over financial reporting, with no material changes during the quarter. - The Chief Executive Officer and Chief Financial Officer concluded that disclosure controls and procedures were not effective as of March 31, 2023[133] - The ineffectiveness is due to material weaknesses related to accounting for complex financial instruments and incomplete accounting for accruals[133] - No changes to internal control over financial reporting occurred during the quarter that materially affected, or are reasonably likely to materially affect, internal controls[134] PART II - OTHER INFORMATION Legal Proceedings The company has reported that there are no legal proceedings against it as of the filing date. - None[136] Risk Factors The company indicates that there have been no material changes to the risk factors previously disclosed in its Annual Report on Form 10-K filed on March 28, 2023. - There have been no material changes to the risk factors disclosed in the Annual Report on Form 10-K filed with the SEC on March 28, 2023[137] Unregistered Sales of Equity Securities and Use of Proceeds This section details the proceeds from the company's Initial Public Offering (IPO) on July 20, 2021, which generated $200 million from units and $8 million from warrants, with $202 million placed into a trust account. - The Initial Public Offering on July 20, 2021, generated gross proceeds of $200,000,000 from the sale of 20,000,000 units[138] - A concurrent private placement of 8,000,000 warrants to the sponsor and underwriters generated gross proceeds of $8,000,000[139] - Following the IPO, $202,000,000 was placed in a trust account[141] Defaults Upon Senior Securities The company has reported that there have been no defaults upon its senior securities. - None[142] Mine Safety Disclosures This item is not applicable to the company's operations. - Not applicable[143] Other Information The company has reported that there is no other information to disclose in this section. - None[143] Exhibits This section lists the exhibits filed with the Form 10-Q. These include certifications from the Chief Executive Officer and Chief Financial Officer as required by Sections 302 and 906 of the Sarbanes-Oxley Act of 2002, as well as various Inline XBRL documents for financial data reporting. - The report includes CEO and CFO certifications pursuant to Sections 302 and 906 of the Sarbanes-Oxley Act[144] - Inline XBRL documents (Instance, Schema, Calculation, Definition, Labels, Presentation) are included as exhibits[144]