Broad Capital Acquisition p(BRAC) - 2024 Q1 - Quarterly Report

PART I - FINANCIAL INFORMATION Item 1. Financial Statements Broad Capital Acquisition Corp's unaudited financial statements as of March 31, 2024, detail its SPAC operations, trust account, net loss, and cash flows Balance Sheets Total assets decreased to $19.7 million from $50.8 million due to trust account redemptions, increasing liabilities and widening the deficit Balance Sheet Comparison (Unaudited) | Account | March 31, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Assets | | | | Cash | $164,776 | $15,282 | | Cash and Marketable Securities held in trust account | $19,495,620 | $50,772,949 | | Total Assets | $19,733,873 | $50,817,322 | | Liabilities & Stockholders' Deficit | | | | Total Current Liabilities | $7,856,436 | $6,907,172 | | Total Liabilities | $11,412,110 | $10,462,846 | | Common Stock subject to possible redemption | $18,768,656 | $50,095,136 | | Total Stockholders' Deficit | $(10,446,893) | $(9,740,660) | Statements of Operations Net loss for Q1 2024 was $533,432 or $(0.11) per share, a reduction from Q1 2023's $652,296 loss, primarily due to lower operating costs Quarterly Statement of Operations (Unaudited) | Metric | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | | :--- | :--- | :--- | | Loss from Operations | $(709,065) | $(1,230,502) | | Interest earned on trust account | $288,051 | $727,731 | | Net Loss | $(533,432) | $(652,296) | | Basic and diluted net loss per share | $(0.11) | $(0.05) | Statements of Changes in Stockholders' Deficit Accumulated deficit increased from $(9.74) million to $(10.45) million by March 31, 2024, primarily due to the net loss and extension-related expenses - The total stockholders' deficit grew from $(9,740,660) at the beginning of the period to $(10,446,893) at the end of the quarter, primarily due to the net loss of $533,432[24] Statements of Cash Flows Net cash used in operations was $486,803, with $31.6 million provided by investing and $30.9 million used in financing for redemptions, ending with $164,776 cash Cash Flow Summary (Unaudited) | Cash Flow Activity | Three Months Ended March 31, 2024 | | :--- | :--- | | Net cash used in operating activities | $(486,803) | | Net cash provided by investing activities | $31,565,379 | | Net cash used in financing activities | $(30,929,082) | | Net change in cash | $149,494 | | Cash at the end of the period | $164,776 | Notes to Financial Statements The notes detail the company's blank check operations, IPO, and ongoing business combination efforts, including merger amendments, deadline extensions, and significant shareholder redemptions - The company is a blank check company formed to effect a business combination and has not commenced any operations. All activity relates to its formation, IPO, and search for a business combination[22][31] - The company entered into a merger agreement with Openmarkets Group Pty Ltd. on January 18, 2023. The agreement has been amended four times, most recently on April 29, 2024, to adjust the valuation and consideration, decreasing the closing shares from an initial 9,000,000 to 4,000,000[45][50] - The company has repeatedly extended its deadline to consummate a business combination, now to January 13, 2025. These extensions required deposits into the trust account, funded by the Sponsor. Significant redemptions occurred, with 2.8 million shares redeemed in January 2024 for approximately $31.2 million, leaving 1,717,663 public shares outstanding[59][60][66] - Subsequent to the quarter end, the company made two $60,000 deposits in April and May 2024 to extend the business combination deadline on a monthly basis[129][130] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses the company's financial condition, results of operations, and liquidity, highlighting the net loss, reliance on sponsor loans, and 'Going Concern' uncertainty due to limited cash and the business combination deadline - The company's activities are limited to organizational tasks and the pursuit of its initial Business Combination with Openmarkets Group[138] - Management has determined there is substantial doubt about the company's ability to continue as a going concern due to insufficient cash to operate for the next 12 months and the looming business combination deadline[158][159] Key Financials and Loans | Metric | As of March 31, 2024 | | :--- | :--- | | Cash in operating account | $164,776 | | Marketable securities in Trust Account | $19,495,620 | | Outstanding Working Capital Loan | $833,074 | | Outstanding Extension Loan | $3,083,628 | - The company has contractual obligations for a $10,000 monthly administrative fee to its Sponsor and $3,555,674 in deferred underwriting commissions, payable only upon completion of a Business Combination[155][156] Item 3. Quantitative and Qualitative Disclosures About Market Risk The company faces no material market or interest rate risk, as trust account funds are invested in short-term U.S. government treasury bills or money market funds - The company believes there is no material exposure to interest rate risk due to the short-term nature of the U.S. government securities held in the Trust Account[168] Item 4. Controls and Procedures Management concluded the company's disclosure controls and procedures were not effective as of March 31, 2024, with no material changes to internal control over financial reporting during the quarter - Based on an evaluation, the principal executive and financial officers concluded that the company's disclosure controls and procedures were not effective as of the end of the fiscal quarter[170] - No changes to internal control over financial reporting occurred during the quarter that have materially affected or are likely to materially affect internal controls[171] PART II - OTHER INFORMATION Item 1. Legal Proceedings The company reports no legal proceedings to disclose - None[100] Item 1A. Risk Factors There have been no material changes to the risk factors previously disclosed in the Annual Report on Form 10-K - There have been no material changes to the risk factors disclosed in the company's Annual Report on Form 10-K[115] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds This section indicates no unregistered sales of equity securities or changes in the use of proceeds for the period - None[180] Item 3. Defaults Upon Senior Securities The company reports no defaults upon senior securities - None[101] Item 4. Mine Safety Disclosures This section is not applicable to the company - Not Applicable[110] Item 5. Other Information The company reports no other information - None[104] Item 6. Exhibits This section lists exhibits filed with the Quarterly Report on Form 10-Q, including officer certifications and Inline XBRL documents - The report includes certifications from the Principal Executive Officer and Principal Financial Officer as required by the Sarbanes-Oxley Act, along with XBRL data files[182]