Broad Capital Acquisition p(BRAC) - 2022 Q2 - Quarterly Report

PART I. FINANCIAL INFORMATION Broad Capital Acquisition Corp.'s unaudited financial statements and management's analysis detail its financial condition and operational results as a blank check company Item 1. Financial Statements This section presents the unaudited financial statements, reflecting the company's status as a blank check entity with assets primarily in a trust account Balance Sheets | Balance Sheet Highlights | June 30, 2022 (Unaudited) | | :--- | :--- | | Assets | | | Cash | $622,351 | | Cash and Marketable Securities in trust account | $102,755,004 | | Total Assets | $103,377,355 | | Liabilities & Equity | | | Total Liabilities | $3,703,489 | | Common Stock subject to possible redemption | $102,606,597 | | Total Stockholders' Deficit | ($2,932,731) | Statements of Operations | Statement of Operations | Three Months Ended June 30, 2022 | Six Months Ended June 30, 2022 | | :--- | :--- | :--- | | Formation and operating costs | ($117,309) | ($576,722) | | Interest earned on trust account | $108,459 | $148,407 | | Net Loss | ($8,850) | ($428,315) | | Basic and diluted net loss per share | ($0.00) | ($0.03) | Statements of Changes in Stockholders' Equity - For the six months ended June 30, 2022, stockholders' equity decreased from $4,905 to a deficit of ($2,932,731), primarily due to reclassification of common stock subject to possible redemption, offering costs, and net loss, partially offset by IPO and private placement proceeds[17] Statements of Cash Flows - For the six months ended June 30, 2022, the company's cash increased by $620,187 - Operating Activities: Net cash used was ($580,234) - Investing Activities: Net cash used was ($102,606,597), primarily for investment of cash into the Trust Account - Financing Activities: Net cash provided was $103,807,018, from the IPO and private placement proceeds[20] Notes to Financial Statements - The company is a blank check company formed on April 16, 2021, for the purpose of effecting a Business Combination, with all activity to date relating to its formation and the Initial Public Offering[23][24] - On January 13, 2022, the company closed its IPO of 10,000,000 units at $10.00 per unit, generating gross proceeds of $100 million, with an additional 159,069 units sold via a partial exercise of the over-allotment option[25][65] - The company must complete a Business Combination within 12 months from the IPO closing (with possible extensions up to 18 months), or it will be required to cease operations and redeem the public shares[38] - Management has determined that the mandatory liquidation requirement if a Business Combination is not consummated raises substantial doubt about the company's ability to continue as a going concern[45] - The company has an agreement to pay its Sponsor $10,000 per month for office space and administrative support, commencing from the date of its Nasdaq listing[77] - Underwriters are entitled to a deferred fee of $0.35 per Unit, payable from the Trust Account only upon the completion of a Business Combination[80] Management's Discussion and Analysis of Financial Condition and Results of Operations This section discusses the company's financial condition and results of operations as a blank check entity, noting its net loss and substantial doubt about its going concern ability Results of Operations | Results of Operations | Three Months Ended June 30, 2022 | Six Months Ended June 30, 2022 | | :--- | :--- | :--- | | Interest Income (Non-operating) | $108,459 | $148,407 | | Net Loss | ($8,850) | ($428,315) | - The company has approximately $650,000 of proceeds held outside the trust account available for working capital to identify and evaluate target businesses[101] - Management has determined that the mandatory liquidation requirement if a Business Combination is not consummated by the deadline (January 13, 2023, subject to extension) raises substantial doubt about the company's ability to continue as a going concern[108] - Key contractual obligations include a $10,000 monthly fee to an affiliate of the Sponsor for administrative support and a deferred underwriting commission of $3,555,674, payable upon a successful Business Combination[110][111] Quantitative and Qualitative Disclosures About Market Risk The company's market risk is minimal, with IPO proceeds in the Trust Account invested in short-term U.S. government treasury securities, minimizing interest rate exposure - The company's exposure to interest rate risk is not material as funds in the Trust Account are invested in U.S. government treasury bills, notes, or bonds with a maturity of 185 days or less, or in certain money market funds[114] Controls and Procedures Management concluded that disclosure controls and procedures were not effective as of June 30, 2022, with no material changes to internal control over financial reporting during the quarter - Based on an evaluation as of June 30, 2022, the company's principal executive officer and principal financial officer concluded that the company's disclosure controls and procedures were not effective[118] - There were no changes in the company's internal control over financial reporting during the quarter ended June 30, 2022, that have materially affected, or are reasonably likely to materially affect, its internal controls[119] PART II. OTHER INFORMATION This section provides other required information, including no legal proceedings, no material changes to risk factors, details on unregistered equity sales, and a list of filed exhibits Legal Proceedings The company reports no legal proceedings - The company is not involved in any legal proceedings[121] Risk Factors There have been no material changes to the risk factors previously disclosed in the company's final prospectus dated January 10, 2022 - No material changes to the risk factors disclosed in the January 10, 2022 prospectus have occurred as of the date of this report[122] Unregistered Sales of Equity Securities and Use of Proceeds This section details the private placement of units to the Sponsor, generating over $4.5 million concurrent with the IPO, with proceeds added to the trust account - Simultaneously with the IPO, the company sold 446,358 Private Placement Units to its Sponsor at $10.00 per unit, raising $4,463,580, with an additional 4,772 units sold in connection with the over-allotment exercise, raising another $47,720[123] - Proceeds from the over-allotment closing, totaling $1,606,597, were placed in the U.S.-based trust account for the benefit of public shareholders[127] Other Items (Defaults, Mine Safety, Other Info, Exhibits) The company reports no defaults, mine safety is not applicable, and other information includes a list of filed exhibits such as officer certifications and XBRL data - The company reports no defaults upon senior securities (Item 3), mine safety disclosures are not applicable (Item 4), and there is no other information to report (Item 5)[128][129] - The report includes required exhibits, such as officer certifications pursuant to the Sarbanes-Oxley Act and Inline XBRL documents (Item 6)[130][131]