Financial Position - As of March 31, 2023, the company had cash and marketable securities in the Trust Account totaling $70,789,924, including approximately $409,924 of interest income and unrealized gains [125]. - As of March 31, 2023, the company had cash of $827,272 available for identifying and evaluating target businesses [126]. - The company has no long-term debt or capital lease obligations, but incurs a monthly fee of $10,000 to its Sponsor for office space and administrative services [134]. Income and Expenses - For the three months ended March 31, 2023, the company reported a net income of $251,313, driven by interest income of $354,063 and an unrealized gain of $55,861 on marketable securities [122]. - Operating costs for the three months ended March 31, 2023 amounted to $93,460, with an additional Chinese income tax expense of $65,151 [122]. - Cash used in operating activities for the three months ended March 31, 2023 was $159,853, compared to $1,850 for the same period in 2022 [124]. - The company has not generated any operating revenues to date and does not expect to do so until after completing a Business Combination [121]. Business Combination - The company completed its initial public offering on February 17, 2023, raising gross proceeds of $69,000,000 from the sale of 6,900,000 units at $10.00 per unit [123]. - The company may extend the period to consummate a Business Combination by up to three times, each by an additional three months, requiring a deposit of $690,000 for each extension [128]. - The company has engaged I-Bankers as an advisor for its initial Business Combination, agreeing to pay a cash fee of 4.0% of the gross proceeds of the initial public offering, totaling $2,760,000 [135]. Internal Control and Compliance - The company identified material weaknesses in its internal control over financial reporting as of March 31, 2023, affecting the effectiveness of disclosure controls and procedures [146]. - The material weaknesses relate to ineffective review controls over the financial statement preparation process, including the valuation of complex financial instruments and recording of accrued expenses [146]. - Management has concluded that the current disclosure controls and procedures were not effective due to identified weaknesses [146]. - The remediation plan for the identified weaknesses will take time and there is no assurance of its ultimate effectiveness [147]. - The design of disclosure controls must consider resource constraints and the balance of benefits relative to costs [148]. - There are no changes in internal control over financial reporting during the fiscal quarter that materially affected the internal control [149]. - The company does not expect its disclosure controls and procedures to prevent all errors and instances of fraud, providing only reasonable assurance [148]. Legal Matters - There is no pending or contemplated litigation against the company or its officers and directors [151].
Distoken Acquisition (DIST) - 2023 Q1 - Quarterly Report