| Organization and Business Operations | Note 1 – Organization and Business
Operations Organization and General 8i Enterprises Acquisition Corp. (the “Company”
or “we”) is a newly incorporated company incorporated on November 24, 2017, under the laws of the British Virgin Islands
for the purpose of entering into a merger, share exchange, asset acquisition, stock purchase, recapitalization, reorganization
or other similar business combination with one or more businesses or entities (a “Initial Business Combination”). The
Company is an “emerging growth company”, as defined in Section 2(a) of the Securities Act of 1933, as amended (the
Securities Act”), as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). The Company’s
efforts to identify a prospective target business will not be limited to a particular industry or geographic location. As of October 31, 2019, the Company had not
yet commenced any operations. All activity for the period from November 24, 2017 (inception) through October 31, 2019 relates to
the Company’s formation, the Initial Public Offering (“IPO”), and the potential acquisition of Diginex Ltd. described
below. The Company will not generate any operating revenues until after the completion of its Initial Business Combination, at
the earliest. The Company will generate non-operating income in the form of interest income on cash and cash equivalents from the
proceeds derived from the IPO. The Company has selected July 31 as its fiscal year-end. Sponsor and Financing The Company issued one share to its founding
director upon its inception on November 24, 2017 for $1. On April 17, 2018, this share was transferred to the 8i Holdings Limited.
On July 25 2018, the Company issued 1,437,499 shares to 8i Holdings Limited for $24,999. The Company’s sponsor is 8i Holdings
Limited (“the “Sponsor”), a Limited Liability Exempted Company incorporated in the Cayman Islands on November
24, 2017. The registration statements for the Company’s IPO were declared effective on March 27, 2019. On April 1, 2019,
the Company consummated the Initial Public Offering of 5,000,000 units (“Units” or “Public Units” and,
with respect to the ordinary shares included in the Public Units being offered, the “Public Shares”), generating gross
proceeds of $50,000,000, which is described in Note 3. Simultaneously with the closing of the IPO, the Company consummated the
private placement (“Private Placement”) with 8i Enterprises Pte. Ltd., a company wholly owned by Mr. James Tan, of
221,250 units (the “Private Units”) at a price of $10.00 per Private Unit, generating total proceeds of $2,212,500. Upon closing of the IPO and the private placement,
the proceeds, less $2,212,500 was held in a trust account (the “Trust Account”) (discussed below). On April 4, 2019, the underwriters exercised
the over-allotment option in full and the closing of the issuance and sale of the additional Units occurred on April 8, 2019. The
total aggregate issuance by the Company of 750,000 units at a price of $10.00 per unit resulted in total gross proceeds of $7,500,000,
less underwriters’ discount of $1,437,500. On April 8, 2019, simultaneously with the sale of the over-allotment units, the
Company consummated the private sale of an additional 18,750 Private Units, generating gross proceeds of $187,500. The Trust Account The funds held in the Trust Account will be
invested only in United States government treasury bills, bonds or notes having a maturity of 180 days or less, or in money market
funds meeting the applicable conditions under Rule 2a-7 promulgated under the Investment Company Act of 1940 and that invest solely
in United States government treasuries. Except with respect to interest earned on the funds held in the trust account that may
be released to the Company to pay its income or other tax obligations, the proceeds will not be released from the Trust Account
until the earlier of the completion of a business combination or the Company’s liquidation. Initial Business Combination The Company will have until 12 months from
the consummation of the IPO to consummate its initial business combination. However, if we anticipate that we may not be able to
consummate our initial business combination within 12 months, we may, but are not obligated to, extend the period of time to consummate
a business combination two times by an additional three months each time (for a total of up to 18 months to complete a business
combination). Pursuant to the terms of our amended and restated memorandum and articles of association and the trust agreement
entered into between us and Wilmington Trust Company, in order to extend the time available for us to consummate our initial business
combination, our insiders or their affiliates or designees, upon five days’ advance notice prior to the applicable deadline,
must deposit into the trust account $500,000, or $575,000 if the underwriters’ over-allotment option is exercised in full
($0.10 per share in either case), on or prior to the date of the applicable deadline. The insiders will receive a non-interest
bearing, unsecured promissory note equal to the amount of any such deposit that will not be repaid in the event that we are unable
to close a business combination unless there are funds available outside the trust account to do so. Such notes would either be
paid upon consummation of our initial business combination, or, at the relevant insider’s discretion, converted upon consummation
of our business combination into additional private units at a price of $10.00 per unit. Our shareholders have approved the issuance
of the private units upon conversion of such notes, to the extent the holder wishes to so convert such notes at the time of the
consummation of our initial business combination. In the event that we receive notice from our insiders five days prior to the
applicable deadline of their intent to effect an extension, we intend to issue a press release announcing such intention at least
three days prior to the applicable deadline. In addition, we intend to issue a press release the day after the applicable deadline
announcing whether or not the funds had been timely deposited. Our insiders and their affiliates or designees are not obligated
to fund the trust account to extend the time for us to complete our initial business combination. To the extent that some, but
not all, of our insiders, decide to extend the period of time to consummate our initial business combination, such insiders (or
their affiliates or designees) may deposit the entire amount required. If we are unable to consummate our initial business combination
within such time period, we will, as promptly as possible but not more than ten business days thereafter, redeem or purchase 100%
of our outstanding public shares for a pro rata portion of the funds held in the trust account, including a pro rata portion of
any interest earned on the funds held in the trust account and not previously released to us or necessary to pay our taxes, and
then seek to liquidate and dissolve. However, we may not be able to distribute such amounts as a result of claims of creditors
which may take priority over the claims of our public shareholders. In the event of our dissolution and liquidation, the public
rights will expire and will be worthless. If the Company is not able to consummate a
Business Combination before April 1, 2020, the Company will commence an automatic winding up, dissolution and liquidation, unless
the Company seeks and receives the consent of its’ shareholders to otherwise extend the life of the Company. These conditions
raise substantial doubt about the Company’s ability to continue as a going concern. These financial statements do not include
any adjustments that might result from the outcome of these uncertainties. If we are unable to consummate our initial
business combination within this time period, we will liquidate the trust account and distribute the proceeds held therein to our
public shareholders and dissolve. If we are forced to liquidate, we anticipate that we would distribute to our public shareholders
the amount in the trust account calculated as of the date that is two days prior to the distribution date (including any accrued
interest). Prior to such distribution, we would be required to assess all claims that may be potentially brought against us by
our creditors for amounts they are actually owed and make provision for such amounts, as creditors take priority over our public
shareholders with respect to amounts that are owed to them. We cannot assure you that we will properly assess all claims that may
be potentially brought against us. As such, our shareholders could potentially be liable for any claims of creditors to the extent
of distributions received by them as an unlawful payment in the event we enter an insolvent liquidation. Pursuant to the Nasdaq listing rules, our initial
business combination must be with a target business or businesses whose collective fair market value is at least equal to 80% of
the balance in the trust account (excluding any deferred underwriting discounts and commissions and taxes payable on the income
earned on the trust account) at the time of the execution of a definitive agreement for such business combination, although this
may entail simultaneous acquisitions of several target businesses. The fair market value of the target will be determined by our
board of directors based upon one or more standards generally accepted by the financial community (such as actual and potential
sales, earnings, cash flow and/or book value). Our board of directors will have broad discretion in choosing the standard used
to establish the fair market value of any prospective target business. The target business or businesses that we acquire may have
a collective fair market value substantially in excess of 80% of the trust account balance. Share Exchange Agreement On July 9, 2019, the Company entered into a
share exchange agreement (the “Share Exchange Agreement”) with Diginex Ltd., a Hong Kong company (“Diginex”),
the shareholders of Diginex (the “Sellers”) and Pelham Limited, a Hong Kong company, as representative of the Sellers
(the “Representative”), pursuant to which the Company would acquire all of the outstanding equity interests of Diginex
(the “Acquisition”). Diginex is in the business of providing blockchain technologies for an ecosystem infrastructure
to enable adoption of digital assets across financial markets through the offer of advisory, markets and asset management services.
Pursuant to the terms of the Share Exchange Agreement, the Sellers agreed to sell, transfer, convey, assign and deliver to the
Company all of the issued and outstanding ordinary shares of Diginex owned by the Sellers in exchange for the issuance to the Sellers
of an aggregate of 20,000,000 Ordinary Shares (the “Share Exchange”). On October 8, 2019, each of the parties to
the Share Exchange Agreement entered into an amendment and joinder to the Share Exchange Agreement (the “Amendment,”
and together with the Share Exchange Agreement, the “Amended Share Exchange Agreement”) with Digital Innovative Limited,
a Singapore public company limited by shares (“Singapore NewCo”), and its wholly-owned subsidiary Digital Innovative
Limited, a British Virgin Islands business company (“BVI NewCo”), for the purpose of joining both entities as parties
to the Share Exchange Agreement. The Amendment reflects that prior to the consummation of the Share Exchange, BVI NewCo will merge
with and into the Company (the “Reincorporation Merger”), and the Company will be the surviving entity and a wholly-owned
subsidiary of Singapore NewCo pursuant to a merger agreement by and among Singapore NewCo, BVI NewCo and the Company (the “Merger
Agreement”) and a plan of merger by and among the Company and BVI NewCo (the “Plan of Merger”). At the closing
of the Reincorporation Merger, Singapore NewCo will issue ordinary shares, with no par value (the “Singapore NewCo Ordinary
Shares”), and warrants to the Company’s shareholders (the “Singapore NewCo Warrants”), as set forth in
the Merger Agreement. The Amendment also provides, among other things, (i) that Singapore NewCo Ordinary Shares will be issued
to the Sellers in the Share Exchange in lieu of Ordinary Shares, (ii) that references to the proxy statement in the Share Exchange
Agreement were replaced with references to the definitive proxy statement/prospectus and (iii) that references to the Purchaser
and its obligations (x) post-closing, (y) with respect to Nasdaq matters, and (z) for directors’ and officers’ indemnification
and liability insurance in the Share Exchange Agreement, were replaced with Singapore NewCo. Of the 20,000,000 Singapore NewCo Ordinary
Shares issuable to the Sellers in the Share Exchange, 2,000,000 Singapore NewCo Ordinary Shares (which will not be fully paid at
issuance) will be deposited into an escrow account for a period of twelve months (the “Escrow Period”) to satisfy any
potential indemnification claims against Sellers brought pursuant to the Amended Share Exchange Agreement (the “Escrow Shares”).
At the closing of the Share Exchange, each option to purchase ordinary shares of Diginex (the “Diginex Options”) outstanding
under Diginex’s existing incentive plan, whether vested or unvested, will be cancelled and the holders of the Diginex Options
will receive options to acquire an aggregate of 4,200,000 Singapore NewCo Ordinary Shares (the “Singapore NewCo Options”)
in exchange for such cancellation. The Singapore NewCo Options may not be transferred, assigned or sold for a period of fifteen
(15) months following the consummation of the Business Combination. Each Singapore NewCo Option will, without any requirement for
payment, automatically convert into one (1) Singapore NewCo Ordinary Share, which Singapore NewCo Ordinary Shares shall be issued
to each holder of a Singapore NewCo Option as follows: (a) one-third (1/3) on the date that is fifteen (15) months after the Closing
Date, (b) one-third (1/3) on the date that is eighteen (18) months after the Closing Date, and (c) one-third (1/3) on the date
that is twenty-one (21) months after the Closing Date, in the case of each of (a), (b) and (c), rounded to the nearest Singapore
NewCo Ordinary Share, subject to certain limitations set forth herein. The Singapore NewCo Options to be issued in the Share Exchange
will be separate from and in addition to any options or other awards issued or issuable under the Digital Innovative Limited 2019
Omnibus Incentive Plan (the “Incentive Plan”). The Sellers will be entitled to receive up
to an additional 5,000,000 Singapore NewCo Ordinary Shares, which we refer to as “Earnout Shares,” after the closing
of the Business Combination if the closing price of Singapore NewCo Ordinary Shares on the Nasdaq Capital Market (“Nasdaq”)
(or any other applicable securities exchange) is equal to or greater than the stock prices set forth below during any five trading
days out of any 30 trading day period (the “Trading Period”) following the closing of the Business Combination until
the applicable milestone date: (1) 2,000,000 Earnout Shares if the closing price is USD$15.00 during any Trading Period ending
on or before December 31, 2020; (2) 2,000,000 Earnout Shares if the closing price is $20.00 during any Trading Period ending on
or before December 31, 2021; and (3) 1,000,000 Earnout Shares if the closing price is U$30.00 during any Trading Period ending
on or before December 31, 2022. All share and per share amounts above shall be proportionally adjusted for share splits, dividends,
and similar events. Conditions to Closing General Conditions Consummation of the Share Exchange Agreement
is conditioned upon, among other things:
● no applicable law or Order (as defined in the Share Exchange Agreement) that restrains, prohibits or imposes any condition on the consummation of the Closing shall be in force;
● no Action being brought by any governmental Authority to enjoin or otherwise restrict the consummation of the Closing;
● the Additional Agreements (as defined in the Share Exchange Agreement) shall have been entered into by each party thereto and the same shall be in full force and effect;
● the Company having at least $5,000,001 in the trust after any redemptions of ordinary shares;
● the Company having obtained the approval of the Transaction by its shareholders at a duly convened special meeting of shareholders;
● the consideration shares to be issued having been approved for listing on Nasdaq; and
● the Company’s redemption of any ordinary shares having been completed in accordance with the terms of the Company’s charter and the Share Exchange Agreement. Diginex’s Conditions to Closing The obligation of Diginex to consummate the
Share Exchange Agreement, in addition to the conditions described above, are conditioned upon, among other things, each of the
following:
● the Company having performed in all material respects with its obligations required to be performed by it in the Share Exchange Agreement at or prior to Closing;
● the representations and warranties of the Company being true on and correct as of the Closing date as if made at and as of such time (except for representations and warranties that speak as of a specific date prior to the Closing Date, in which case such representations and warranties need only be true and correct as of such earlier date); provided, that this condition shall be deemed satisfied unless any and all inaccuracies in such representations and warranties, in the aggregate, result in a Purchaser Material Adverse Effect (as defined in the Share Exchange Agreement), in each case without giving effect to any limitation as to materiality or Purchaser Material Adverse Effect set forth therein;
● the Company shall have executed and delivered to the Company a copy of each Additional Agreement to which it is a party;
● the Sellers designees shall have been appointed to the board of directors of the Purchaser, effective as of the Closing;
● there shall have not occurred and be continuing any Purchaser Material Adverse Effect (on the Purchaser); and;
● the Company shall have filed with the BVI Registrar of Corporate Affairs the Second Amended and Restated Memorandum and Articles of Association in the form included in the Proxy Statement and approved by the Purchaser’s shareholders at the Purchaser Special Meeting. The Company’s Conditions to Closing The obligations of the Company to consummate
the transactions contemplated by the Share Exchange Agreement, in addition to the conditions described above in the first paragraph
of this section, are conditioned upon, among other things, each of the following:
● Diginex having performed in all material respects its obligations required to be performed by it in the Share Exchange Agreement at or prior to Closing;
● there shall have not occurred and be continuing any Company Material Adverse Effect (as defined in the Share Exchange Agreement) on Diginex and its subsidiaries;
● the representations and warranties of Diginex being true and correct on and as of the Closing as if made at and as of such time (except for representations and warranties that speak as of a specific date prior to the Closing Date, in which case such representations and warranties need only be true and correct as of such earlier date); provided, that this condition shall be deemed satisfied unless any and all inaccuracies in such representations and warranties, in the aggregate, result in a Company Material Adverse Effect (as defined in the Share Exchange Agreement), in each case without giving effect to any limitation as to materiality or Company Material Adverse Effect set forth therein;
● there shall have not occurred and be continuing any Company Material Adverse Effect,
● Diginex’s key personnel shall have executed the non-compete agreements and Diginex shall have entered into labor agreements with each of its employees to the extent required by law, and satisfied all accrued obligations of the Purchaser applicable to its employees; and
● Diginex shall have provided executed copies of lock-up agreements by each of the Sellers and each Diginex option holder. Accounting for the Acquisition The Business Combination will be accounted
for as a “reverse merger” in accordance with U.S. GAAP. Under this method of accounting the Company will be treated
as the “acquired” company for financial reporting purposes. This determination is primarily based on the fact that
subsequent to the Business Combination, Diginex securityholders are expected to have a majority of the voting power of the combined
company, Diginex comprising all of the ongoing operations of the combined entity, Diginex comprising a majority of the governing
body of the combined company, and Diginex’s senior management comprising all of the senior management of the combined company.
Accordingly, for accounting purposes, the Business Combination will be treated as the equivalent of Diginex issuing stock for the
net assets of the Company, accompanied by a recapitalization. The net assets of the Company will be stated at fair value which
approximates historical costs as the Company has only cash and short-term liabilities. No goodwill or other intangible assets recorded.
Operations prior to the Business Combination will be those of Diginex. Liquidation However, the holders of the initial shares
will not participate in any liquidation distribution with respect to such securities. In the event of such distribution, it is
possible that the per share value of the residual assets remaining available for distribution (including Trust Account assets)
will be less than the $10.00 per Unit in the Initial Public Offering. In order to protect the amounts held in the Trust Account,
an affiliate of the sponsor will contractually agree, pursuant to a written agreement to the Company, that if the Company liquidates
the Trust Account prior to the consummation of a business combination, it will be liable to ensure that the proceeds in the Trust
Account are not reduced by the claims of target businesses or claims of vendors or other entities that are owed money by the Company
for services rendered or contracted for or products sold to the Company. This liability will not apply with respect to any claims
by a third party who executed a waiver of any right, title, interest or claim of any kind in or to any monies held in the Trust
Account. Moreover, in the event that an executed waiver is deemed to be unenforceable against a third party, the affiliate of the
sponsor will not be responsible to the extent of any liability for such third party claims. The Company will seek to reduce the
possibility that the affiliate of the sponsor will have to indemnify the Trust Account due to claims of creditors by endeavoring
to have all vendors, service providers (other than the Company’s independent auditors), prospective target businesses or
other entities with which the Company does business, execute agreements with the Company waiving any right, title, interest or
claim of any kind in or to monies held in the Trust Account. The Company will pay the costs of liquidating
the trust account from the remaining assets outside of the trust account. If such funds are insufficient, the Sponsor has contractually
agreed to advance the Company the funds necessary to complete such liquidation (currently anticipated to be no more than approximately
$18,500) and has contractually agreed not to seek repayment for such expenses. Liquidity As of October 31, 2019, the Company had cash
outside the Trust Account of $161,439 available for working capital needs. All remaining cash was held in the Trust Account and
is generally unavailable for use, prior to an initial Business Combination, and is restricted for use either in a Business Combination
or to redeem ordinary shares. As of October 31, 2019, none of the amount on deposit in the Trust Account was available to be withdrawn
as described above. Through October 31, 2019, the Company’s
liquidity needs were satisfied through receipt of an aggregate of $976,185 from an affiliate of the Sponsor, of which $326,185
were repaid upon the IPO, and the remaining net proceeds from the IPO and Private Placement (as described in Note 3 and Note 4). Until consummation of its Business Combination,
the Company will be using the funds not held in the Trust Account, and any additional funding from the Sponsor’s promissory
note commitment, for identifying and evaluating prospective acquisition candidates, performing business due diligence on prospective
target businesses, traveling to and from the offices, plants or similar locations of prospective target businesses, reviewing corporate
documents and material agreements of prospective target businesses, selecting the target business to acquire and structuring, negotiating
and consummating the Business Combination. If the Company’s estimates of the costs
of undertaking in-depth due diligence and negotiating Business Combination is less than the actual amount necessary to do so,
the Company may have insufficient funds available to operate its business prior to the Business Combination. Moreover, the Company
will need to raise additional capital through loans from its Sponsor, officers, directors, or third parties. None of the Sponsor,
officers or directors are under any obligation to advance funds to, or to invest in, the Company. If the Company is unable to
raise additional capital, it may be required to take additional measures to conserve liquidity, which could include, but not necessarily
be limited to, curtailing operations, suspending the pursuit of its business plan, and reducing overhead expenses. The Company
cannot provide any assurance that new financing will be available to it on commercially acceptable terms, if at all. Furthermore,
if the Company is not able to consummate a Business Combination within 12 months from its IPO, the Company may exercise its option
to extend the timeframe for an additional three months, which would require the Company to deposit into the trust account $575,000
(an additional $0.10 per IPO share), or commence an automatic winding up, dissolution and liquidation of the Company. These conditions
raise substantial doubt about the Company’s ability to continue as a going concern. These financial statements do not include
any adjustments that might result from the outcome of these uncertainties. |
