DigiAsia Corp.(US:FAAS)2024-04-16 21:04Part I Item 1. Business StoneBridge, a blank check company, completed its business combination with DigiAsia Bios Pte. Ltd. on April 2, 2024 - StoneBridge is a blank check company formed to effect a merger, share exchange, or similar business combination25 - On January 5, 2023, the company entered into a business combination agreement with DigiAsia Bios Pte. Ltd. ("DigiAsia")32 - The initial business combination with DigiAsia was consummated on April 2, 202460 - The company has obtained multiple extensions to complete its business combination, extending the deadline to July 20, 2024, funded by its Sponsor through deposits into the Trust Account315758 | IPO Details | Value | | :--- | :--- | | IPO Date | July 20, 2021 | | Units Offered | 20,000,000 | | Price per Unit | $10.00 | | Gross Proceeds | $200,000,000 | | Trust Account Initial Deposit | $202,000,000 (including private placement proceeds) | Item 1A. Risk Factors The company faces significant risks, including a 'going concern' warning and material weaknesses in internal controls - The company's independent registered public accounting firm has expressed substantial doubt about its ability to continue as a "going concern" due to its working capital deficit and need for capital105 - The company has identified material weaknesses in its internal control over financial reporting related to accounting for complex financial instruments (like warrants and redeemable shares) and incomplete accounting for accruals371373 - The requirement to complete a business combination within a prescribed timeframe (36 months as extended) may give target businesses leverage in negotiations and reduce due diligence time130131 - The Sponsor, officers, and directors have conflicts of interest as their Founder Shares and Private Placement Warrants will be worthless if a business combination is not completed, incentivizing them to complete a deal that may not be advantageous to public shareholders165166167 - The company may be considered a Passive Foreign Investment Company (PFIC), which could result in adverse U.S. federal income tax consequences for U.S. investors272 Item 1B. Unresolved Staff Comments The company reports that it has no unresolved staff comments - Not applicable379 Item 1C. Cybersecurity The company does not consider itself to face significant cybersecurity risk and lacks a formal risk management program - The company does not consider itself to face significant cybersecurity risk and has not adopted a formal risk management program380 Item 2. Properties The company's executive offices are provided by its Sponsor for a $10,000 monthly fee; it owns no real estate - The company's executive office space is provided by its Sponsor for a fee of $10,000 per month381 Item 3. Legal Proceedings The company is not currently a party to any material legal proceedings or aware of adverse legal exposures - The company is not currently a party to any material legal proceedings382 Item 4. Mine Safety Disclosures This item is not applicable to the company - Not Applicable383 Part II Item 5. Market for Registrant's Units, Related Stockholder Matters and Issuer Purchases of Equity Securities The company's securities trade on Nasdaq; no dividends are paid prior to a business combination | Security | Trading Symbol | | :--- | :--- | | Units | APACU | | Class A ordinary shares | APAC | | Warrants | APACW | - The company has not paid any cash dividends and does not intend to before completing a business combination387 - Simultaneously with the IPO, the company sold 8,000,000 Private Placement Warrants at $1.00 each, generating $8,000,000 in gross proceeds390 Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations The company reported a net loss in 2023, a working capital deficit, and a going concern warning | Financial Metric | For the Year Ended Dec 31, 2023 | For the Year Ended Dec 31, 2022 | | :--- | :--- | :--- | | Net (Loss) Income | ($63,563) | $10,006,245 | | Operating Expenses | $2,074,824 | $1,368,675 | | Interest Income (Trust) | $2,006,969 | $2,920,785 | | Change in Fair Value of Warrants | $0 | $8,452,000 | | Liquidity Position | As of Dec 31, 2023 | | :--- | :--- | | Cash in Operating Account | $104,859 | | Securities in Trust Account | $27,516,260 | | Working Capital Deficit | ($4,872,530) | - Management has determined that there is substantial doubt about the Company's ability to continue as a going concern, given its liquidity condition and the mandatory liquidation date of July 20, 2024, if a business combination is not completed406571 - The underwriters are entitled to a deferred fee of $9,000,000, payable from the trust account only upon completion of a business combination408 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure The company reports no disagreements with its accountants on accounting and financial disclosure - None421 Item 9A. Controls and Procedures. Disclosure controls were ineffective due to material weakness in accounting for complex financial instruments - As of December 31, 2023, the Chief Executive Officer and Chief Financial Officer concluded that the company's disclosure controls and procedures were not effective423 - The ineffectiveness is due to a material weakness in internal control over financial reporting concerning the accounting for complex financial instruments423 - Management's report on internal controls also concluded that they were not effective as of December 31, 2023427 - Remediation plans include enhancing access to accounting literature, research materials, and increasing communication with third-party professionals424428 Part III Item 10. Directors, Executive Officers and Corporate Governance Biographical information for officers and directors, board structure, and potential conflicts of interest are detailed - The board has standing Audit and Compensation committees450 - The company discloses numerous potential conflicts of interest, as its officers and directors have fiduciary or contractual duties to other entities that may compete for acquisition opportunities464468 - The company's amended and restated memorandum and articles of association include a provision renouncing any interest or expectancy in corporate opportunities presented to its directors or officers465 - CEO Bhargava Marepally received an adjudication order from the Securities and Exchange Board of India in 2013 for violating certain trading regulations, resulting in a penalty of approximately $9,220447 Item 11. Executive Compensation Executive officers receive no cash compensation; incentives are tied to Sponsor-held Founder Shares and Warrants - Officers and directors receive no cash compensation prior to a business combination472 - The company pays its Sponsor $10,000 per month for office space, administrative, and support services; for the year ended December 31, 2023, this amounted to $120,000474 - The primary financial incentive for officers and directors is their indirect interest in the Founder Shares and Private Placement Warrants, which could become profitable only upon a successful business combination472473 Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters StoneBridge Acquisition Sponsor LLC holds 69.3% of total outstanding shares; Citadel Advisors LLC owns 8.7% of Class A shares | Beneficial Owner | Class B Shares Owned | % of Class B | % of Total Outstanding Shares | | :--- | :--- | :--- | :--- | | StoneBridge Acquisition Sponsor LLC | 5,000,000 | 100.0% | 69.3% | | Bhargava Marepally (CEO) | 5,000,000 | 100.0% | 69.3% | | Prabhu Antony (CFO) | 5,000,000 | 100.0% | 69.3% | | All directors and executive officers as a group | 5,000,000 | 100.0% | 69.3% | - Citadel Advisors LLC and its affiliates are reported as beneficial owners of 625,002 Class A ordinary shares, representing 8.7% of the class478480 Item 13. Certain Relationships and Related Transactions, and Director Independence Details related party transactions, including Sponsor's Founder Shares purchase and administrative fees - The Sponsor purchased 5,000,000 Founder Shares for $25,000482 - As of December 31, 2023, the company had a Note Payable to a related party (the Sponsor) of $2,963,895, primarily for funds advanced to extend the business combination deadline and for operating costs485602 - The company pays the Sponsor $10,000 per month for administrative services486 - The board of directors has determined that Mses. Barnes and Naidoo, and Messrs. Saldanha, Najarian, and Kothari are independent directors496 Item 14. Principal Accountant Fees and Services BDO India LLP was appointed as new accountant; 2023 fees disclosed for current and former firms - The company appointed BDO India LLP as its new independent accountant on March 20, 2024498 | Accountant | Service | Fees for Year Ended Dec 31, 2023 | | :--- | :--- | :--- | | BDO India LLP | Audit Fees | ~$60,000 | | Marcum LLP (Former) | Audit Fees | ~$184,225 | Part IV Item 15. Exhibits, Financial Statement Schedules This section lists all exhibits filed, including the Business Combination Agreement and other key agreements - Key exhibits filed include the Business Combination Agreement with DigiAsia and its subsequent amendments, which detail the terms of the merger505 - Other significant exhibits include the Warrant Agreement, Registration Rights Agreement, and the Administrative Services Agreement with the Sponsor505506 Item 16. Form 10-K Summary The company reports that there is no Form 10-K summary - None508 Financial Statements and Notes Financial Statements Financial statements show total assets of $27.6 million, a net loss in 2023, and significant share redemptions | Balance Sheet Highlights | Dec 31, 2023 | Dec 31, 2022 | | :--- | :--- | :--- | | Total Assets | $27,621,119 | $206,195,454 | | Investments held in Trust Account | $27,516,260 | $205,927,087 | | Total Liabilities | $14,517,389 | $11,346,469 | | Deferred underwriting fee payable | $9,000,000 | $9,000,000 | | Total Shareholders' Deficit | ($14,412,530) | ($11,078,102) | | Statement of Operations Highlights | Year Ended Dec 31, 2023 | Year Ended Dec 31, 2022 | | :--- | :--- | :--- | | Net (Loss) Income | ($63,563) | $10,006,245 | | Loss from operations | ($2,074,824) | ($1,368,675) | | Change in fair value of warrant liability | $0 | $8,452,000 | - The number of Class A ordinary shares subject to possible redemption decreased from 20,000,000 at year-end 2022 to 2,425,969 at year-end 2023 due to significant redemptions532 Notes to Financial Statements Notes detail the DigiAsia combination, going concern uncertainty, share redemptions, and related party transactions - The company's business combination with DigiAsia was completed on April 2, 2024643 - Management has determined 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 if a business combination is not completed570571 - In 2023, shareholders redeemed a total of 17,574,031 shares in January and 585,456 shares in July, withdrawing approximately $175.3 million and $6.4 million from the trust account, respectively568569 - As of Dec 31, 2023, the company had a Note Payable to its Sponsor of $2,963,895, which includes funds for extension payments and operating costs602 - The company's public and private warrants are accounted for as a liability at fair value, with a total fair value of $540,000 as of December 31, 2023619638