DigiAsia Corp.(FAAS) - 2023 Q3 - Quarterly Report

PART I - FINANCIAL INFORMATION Item 1. Interim Financial Statements (Unaudited) This section presents the unaudited condensed financial statements for StoneBridge Acquisition Corporation as of September 30, 2023, and for the three and nine-month periods then ended Condensed Balance Sheets As of September 30, 2023, total assets were $27.1 million, a sharp decrease from $206.2 million at year-end 2022, primarily due to a reduction in investments held in the Trust Account following shareholder redemptions Condensed Balance Sheet Data (in USD) | Account | Sep 30, 2023 (Unaudited) | Dec 31, 2022 (Audited) | | :--- | :--- | :--- | | Assets | | | | Cash | $123,789 | $93,344 | | Investments held in Trust Account | $26,974,295 | $205,927,087 | | Total Assets | $27,101,417 | $206,195,454 | | Liabilities & Shareholders' Deficit | | | | Note Payable - related party | $2,631,948 | $1,000,000 | | Total Liabilities | $13,556,241 | $11,346,469 | | Class A ordinary shares subject to possible redemption | $26,974,295 | $205,927,087 | | Total Shareholders' Deficit | ($13,429,119) | ($11,078,102) | Unaudited Condensed Statements of Operations For the nine months ended September 30, 2023, the company reported a net income of $377,882, a significant decrease from a net income of $8.6 million in the same period of 2022 Statements of Operations Highlights (in USD) | Period | Net (Loss) Income 2023 | Net Income 2022 | | :--- | :--- | :--- | | Three Months Ended Sep 30 | ($48,532) | $1,239,550 | | Nine Months Ended Sep 30 | $377,882 | $8,631,943 | - The significant decrease in net income for the nine-month period YoY was primarily driven by a non-cash gain of $8,192,000 from the change in fair value of warrant liability in 2022, which did not recur in 2023[7] Unaudited Condensed Statements of Changes in Shareholders' Deficit The total shareholders' deficit increased from $11.1 million at the end of 2022 to $13.4 million as of September 30, 2023 Changes in Shareholders' Deficit (in USD) | Description | Amount | | :--- | :--- | | Balance, December 31, 2022 | ($11,078,102) | | Net adjustments and income/loss for nine months | ($2,351,017) | | Balance, September 30, 2023 | ($13,429,119) | Unaudited Condensed Statements of Cash Flows For the nine months ended September 30, 2023, net cash provided by operating activities was $1.1 million, investing activities provided $180.6 million, and financing activities used $181.7 million, resulting in a net change in cash of $30,445 Cash Flow Summary for Nine Months Ended Sep 30 (in USD) | Cash Flow Activity | 2023 | 2022 | | :--- | :--- | :--- | | Net cash from Operating Activities | $1,112,393 | ($498,983) | | Net cash from Investing Activities | $180,599,743 | $0 | | Net cash from Financing Activities | ($181,681,691) | $0 | | Net Change in Cash | $30,445 | ($498,983) | - The significant cash flows in investing and financing activities in 2023 are directly related to the redemption of 17,574,031 Class A ordinary shares for a total of approximately $181.7 million[12][42][43] Notes to Condensed Financial Statements (Unaudited) The notes detail the company's status as a SPAC, its pending business combination with DigiAsia Bios Pte Ltd, significant shareholder redemptions, liquidity crisis, and related-party transactions - The Company entered into a Business Combination Agreement with DigiAsia Bios Pte Ltd on January 5, 2023, with the termination date of this agreement extended to December 29, 2023[15][28] - Management has determined there is substantial doubt about the Company's ability to continue as a going concern due to liquidity conditions and the mandatory liquidation that will occur if a Business Combination is not consummated by the extended deadline of January 20, 2024[45][139] - In two separate redemptions in January and July 2023, a total of 17,574,031 Class A ordinary shares were redeemed for an aggregate payment of approximately $181.7 million from the trust account[42][43] - The Sponsor has provided loans for extension payments, with a total of $2,631,948 outstanding as a note payable as of September 30, 2023[78] - The deferred underwriting fee of $9,000,000 was renegotiated, where upon closing the DigiAsia deal, the underwriter will forfeit $4.5 million in cash, receive $4.5 million in shares of the merged entity, and receive a cash fee based on funds remaining in the trust[85][87] - Warrants are classified as a liability and re-measured at fair value each period, with the fair value of the warrant liability being $540,000 as of September 30, 2023[97][117] - Subsequent to the quarter end, on October 12, 2023, the Sponsor deposited $60,649 into the Trust Account to extend the business combination deadline to November 20, 2023[119] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses the company's status as a blank check company, its proposed business combination with DigiAsia, and the financial results highlighting a net income of $377,882 for the first nine months of 2023, along with liquidity concerns and renegotiated contractual obligations - The company is a blank check company that has entered into a business combination agreement with DigiAsia Bios Pte Ltd, with the transaction subject to shareholder approval and other closing conditions[122][125] Results of Operations Summary (in USD) | Period | 2023 Result | Key Drivers | | :--- | :--- | :--- | | Three Months Ended Sep 30 | Net Loss $48,532 | Operating expenses of $417,108 offset by investment income of $368,576 | | Nine Months Ended Sep 30 | Net Income $377,882 | Investment income of $1,649,897 offset by operating expenses of $1,272,015 | - As of September 30, 2023, the company had a working capital deficit of $3,889,119 and cash of $123,789 in its operating account, raising substantial doubt about its ability to continue as a going concern[138][139] - The company's contractual obligations primarily consist of a $9,000,000 deferred underwriting fee, which is contingent on completing a business combination and has been partially renegotiated to be paid in a mix of cash and shares[141][142][143] Item 3. Quantitative and Qualitative Disclosures about Market Risk This item is not applicable as the company qualifies as a smaller reporting company - The company is a smaller reporting company and is not required to provide this disclosure[153] Item 4. Controls and Procedures Management, including the CEO and CFO, evaluated the company's disclosure controls and procedures and concluded they were not effective as of September 30, 2023 - As of September 30, 2023, the Chief Executive Officer and Chief Financial Officer concluded that the company's disclosure controls and procedures were not effective[156] - The ineffectiveness was due to material weaknesses in accounting for complex financial instruments and incomplete accounting for accruals[156] - There were no changes to internal control over financial reporting during the quarter that materially affected, or are reasonably likely to materially affect, internal controls[157] PART II - OTHER INFORMATION Item 1. Legal Proceedings The company reports that there are no legal proceedings - None[159] Item 1A. Risk Factors The company states that there have been no material changes to the risk factors previously disclosed in its Annual Report on Form 10-K and subsequent quarterly reports - There have been no material changes to the risk factors disclosed in the Annual Report on Form 10-K filed on March 28, 2023, and subsequent 10-Q filings[160] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds This section reiterates the details of the company's July 2021 Initial Public Offering (IPO) and the simultaneous private placement of warrants - On July 20, 2021, the company consummated its IPO of 20,000,000 units at $10.00 per unit, generating gross proceeds of $200,000,000[161] - Simultaneously, 8,000,000 Private Placement Warrants were sold at $1.00 each, generating gross proceeds of $8,000,000[162] - Following the IPO, $202,000,000 was placed in a trust account[164] Item 3. Defaults Upon Senior Securities The company reports no defaults upon senior securities - None[165] Item 4. Mine Safety Disclosures This item is not applicable to the company - Not applicable[166] Item 5. Other Information The company reports no other information - None[166] Item 6. Exhibits This section lists the exhibits filed with the Form 10-Q, including CEO and CFO certifications pursuant to Sections 302 and 906 of the Sarbanes-Oxley Act, and Inline XBRL documents - Exhibits include certifications from the CEO and CFO under Sarbanes-Oxley Sections 302 and 906[167][168] - Inline XBRL data files are also included as exhibits[167] Signatures - The report was signed on November 6, 2023, by Bhargava Marepally, Chief Executive Officer, and Prabhu Antony, President, Chief Financial Officer[171]