Broad Capital Acquisition Corp(BRACU) - 2024 Q4 - Annual Report

Part I Business Broad Capital Acquisition Corp, a SPAC, seeks new business combination targets in high-growth tech after terminating its Openmarkets merger - The company is a blank check company formed to effect a merger, asset acquisition, or similar business combination[18] - The previously announced merger agreement with Openmarkets Group Pty Ltd. was terminated on February 12, 2025[25] - The business strategy focuses on identifying targets in high-growth technology sectors like AI and machine learning, primarily in North America and Asia Pacific, excluding China, Hong Kong, and Macau[26][27][32] - The deadline to complete an initial business combination has been extended to January 13, 2026, through monthly extensions contingent on Sponsor deposits into the Trust Account[65][84] IPO and Over-Allotment Details | IPO and Over-Allotment Details | Value | | :--- | :--- | | Initial Public Offering (Jan 13, 2022) | | | Units Offered | 10,000,000 | | Price per Unit | $10.00 | | Gross Proceeds | $100,000,000 | | Over-Allotment (Feb 10, 2022) | | | Additional Units Purchased | 159,069 | | Gross Proceeds | $1,590,690 | Risk Factors The company faces material risks including business combination failure, financial instability, Nasdaq delisting, and internal control weakness - The company's securities were delisted from Nasdaq on January 22, 2025, due to failing to maintain the minimum publicly held shares requirement[113] - A material weakness in internal control over financial reporting was identified as of December 31, 2024, related to complex financial instruments and inadequate expense reconciliation controls[119] - Substantial doubt exists about the company's ability to continue as a 'going concern' if it does not complete its initial business combination by January 13, 2026[119] - Key risks include the inability to find a suitable target, dependence on key personnel with potential conflicts of interest, and competition from other blank check companies[112] Unresolved Staff Comments The company reports no unresolved staff comments - Not applicable[114] Cybersecurity The company acknowledges cybersecurity threats, with Board oversight, and recognizes potential material impact from future incidents - The Board and/or Audit Committee oversee cybersecurity risk exposures and receive periodic management reports[116] - To date, cybersecurity incidents have not had a material adverse effect on the company's business or financial condition[117] Properties The company's Dallas, TX executive offices are provided by a CEO affiliate for a monthly fee, deemed adequate for operations - The executive office is located at 6208 Sandpebble Court, Dallas, TX 75254[118] - The company pays an affiliate of its CEO $10,000 per month for office space, administrative, and shared personnel support services[118] Legal Proceedings The company reports no current or contemplated litigation against it, its officers, or directors - To the knowledge of management, no litigation is currently pending or contemplated against the company[120] Mine Safety Disclosure This section is not applicable to the company - Not applicable[121] Part II Market For Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities This section details the trading market for the company's securities, stockholder information, and dividend policy, noting Nasdaq delisting - Nasdaq halted trading of the company's securities on January 22, 2025, due to failure to maintain the minimum required publicly held shares[123] - As of April 14, 2025, there were 2 holders of record for units, 6 for common stock, and 1 for rights[124] - The company has not paid any cash dividends and does not plan to before completing its initial business combination[125] Selected Financial Data This item is reserved and contains no information - Item 6 is reserved[131] Management's Discussion and Analysis of Financial Condition and Results of Operations The blank check company, with no operations or revenue, reported a $1,122,587 net loss in FY 2024, facing liquidity concerns and going concern doubt - The merger agreement with Openmarkets was terminated on February 12, 2025, and the company continues its search for an initial Business Combination[133][143] Financial Performance | Financial Performance | FY 2024 | FY 2023 | | :--- | :--- | :--- | | Net Loss | ($1,122,587) | ($513,919) | | Operating Costs | ($1,575,281) | ($2,409,672) | | Interest Earned on Trust | $894,070 | $2,752,194 | Liquidity and Capital | Liquidity and Capital | As of Dec 31, 2024 | As of Dec 31, 2023 | | :--- | :--- | :--- | | Cash in Operating Account | $585 | $15,282 | | Cash in Trust Account | $20,521,640 | $50,772,949 | | Working Capital Loan Outstanding | $1,267,408 | $754,748 | | Extension Loan Outstanding | $3,503,628 | $2,903,628 | - Management has determined there is substantial doubt about the company's ability to continue as a going concern due to potential liquidation if a business combination is not completed within the permitted timeframe[149] - The company has a contractual obligation to pay an affiliate of its Sponsor $10,000 per month for office space and administrative support[150] Quantitative and Qualitative Disclosures About Market Risk The company has limited market risk exposure, with trust account funds moved to an interest-bearing demand deposit account to mitigate Investment Company Act risks - The company has not engaged in any hedging activities and does not expect to[157] - On January 4, 2024, the company instructed its trustee to liquidate marketable securities and invest 100% of the trust account in an interest-bearing demand deposit account[158][268] Financial Statements and Supplementary Data This section presents the company's audited financial statements for FY 2024 and 2023, with the auditor's report highlighting going concern doubt - The independent auditor's report from MaloneBailey, LLP includes a 'Going Concern Matter' paragraph due to the risk of liquidation if a business combination is not completed[241][242] Balance Sheet Highlights | Balance Sheet Highlights | Dec 31, 2024 | Dec 31, 2023 | | :--- | :--- | :--- | | Total Assets | $20,522,225 | $50,817,322 | | Cash held in trust account | $20,521,640 | $50,772,949 | | Total Liabilities | $13,304,617 | $10,462,846 | | Common Stock subject to redemption | $19,830,933 | $50,095,136 | | Total Stockholders' Deficit | ($12,613,325) | ($9,740,660) | Statement of Operations | Statement of Operations | Year Ended Dec 31, 2024 | Year Ended Dec 31, 2023 | | :--- | :--- | :--- | | Loss from Operations | ($1,752,336) | ($2,609,672) | | Interest earned on trust | $894,070 | $2,752,194 | | Net Loss | ($1,122,587) | ($513,919) | | Basic and diluted net loss per share | ($0.24) | ($0.06) | - The company recorded an excise tax liability of $895,904 as of Dec 31, 2024, and $584,031 as of Dec 31, 2023, related to the 1% excise tax on stock redemptions under the Inflation Reduction Act[315] - Subsequent to year-end, stockholders redeemed 1,616,447 shares for approximately $19.3 million in January 2025, leaving 101,216 public shares outstanding[290][354] Changes in and Disagreements with Accountants on Accounting and Financial Disclosure The company reports no changes in or disagreements with its accountants on accounting principles, practices, or financial statement disclosure - None[160] Controls and Procedures Management concluded disclosure controls were ineffective as of December 31, 2024, due to a material weakness in internal control - Management concluded that disclosure controls and procedures were not effective as of the end of the reporting period[161] - A material weakness was identified in internal controls due to inadequate segregation of duties, limited personnel, and insufficient written policies for accounting, IT, and financial reporting[164] - Remediation plans include enhancing the board's composition post-business combination, consulting with third-party experts, and considering additional staff[165] Other Information The company intends to deposit $3,036 into the trust account in April 2025 to extend its termination date - The company intends to deposit $3,036 into the trust account in April 2025 to fund a monthly extension of its termination date[169] Part III Directors, Executive Officers and Corporate Governance This section details the company's leadership, board structure, independent committees, and adopted Code of Ethics Directors and Executive Officers | Name | Position | | :--- | :--- | | Johann Tse | Chief Executive Officer & Director | | Rongrong "Rita" Jiang | Chief Financial Officer & Director | | Nicholas Shao | Independent Director | | Wayne Trimmer | Independent Director | | Teck-Yong Heng | Independent Director | | Keith Adams | Independent Director | - The board of directors has three standing committees: Audit, Compensation, and Corporate Governance and Nominating[188] - The Audit Committee is chaired by Teck-Yong Heng, who qualifies as an 'audit committee financial expert'[189] - A Code of Ethics applicable to all directors, officers, and employees has been adopted[199] Executive Compensation Prior to a business combination, no officers or directors receive cash compensation, though the Sponsor receives $10,000 per month for administrative support - No officers or directors have received any cash compensation for services rendered[202] - The company pays its Sponsor $10,000 per month for office space, utilities, and administrative support[202] - Post-business combination, management compensation will be determined by the new board of directors and fully disclosed to stockholders[203] Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters This section details the beneficial ownership of the company's common stock, with the sponsor owning approximately 98.2% as of April 15, 2025 Beneficial Ownership of Common Stock | Beneficial Owner | Number of Shares | Percentage of Class | | :--- | :--- | :--- | | Johann Tse (CEO, Director) | 3,036,010 | 98.2% | | Rita Jiang (CFO, Director) | 3,036,010 | 98.2% | | All six executive officers and directors as a group | 3,036,010 | 98.2% | | Broad Capital LLC (Sponsor) | 3,036,010 | 98.2% | - Ownership is based on 3,092,113 shares of common stock outstanding as of April 15, 2025[206] Certain Relationships and Related Transactions, and Director Independence This section outlines financial transactions and agreements between the company and its sponsor, officers, and directors, including share sales, loans, and administrative fees - The sponsor, Broad Capital LLC, purchased 2,875,000 insider shares for $25,000[211] - The sponsor provides working capital loans as needed, with $1,267,408 outstanding as of Dec 31, 2024[224][335] - The sponsor has provided extension loans to fund deposits into the trust account, with $3,503,628 outstanding as of Dec 31, 2024[215][336] - The company pays the Sponsor $10,000 per month for office space and administrative support, with $350,000 due as of Dec 31, 2024[223][338] - The board has determined that Keith Adams, Wayne Trimmer, Nicholas Shao, and Teck-Yong Heng are independent directors[229] Principal Accounting Fees and Services This section summarizes fees paid to MaloneBailey, LLP, with audit fees totaling $130,000 in FY 2024, and all services pre-approved Fees Paid to MaloneBailey, LLP | Fees Paid to MaloneBailey, LLP | FY 2024 | FY 2023 | | :--- | :--- | :--- | | Audit Fees | $130,000 | $65,000 | | Audit-Related Fees | $0 | $0 | | Tax Fees | $0 | $0 | | All Other Fees | $0 | $0 | - All auditing and permitted non-audit services are pre-approved by the audit committee[234] Part IV Exhibits, Financial Statement Schedules This section lists documents filed as part of the Form 10-K report, including financial statements and an index of exhibits - The report includes the company's financial statements, starting on page F-1[236] - An index of exhibits filed with the report is provided, including key agreements like the terminated Openmarkets Merger Agreement and various amendments to the Certificate of Incorporation[237][358] Form 10-K Summary This section is not applicable to the company - Not applicable[238]