We will only have 24 months from the closing of the Initial Public Offering, or November 19, 2022, (the “Combination Period”) and our stockholders have not amended the Certificate of Incorporation to extend such Combination Period, we will (1) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter subject to lawfully available funds therefor, redeem the Public Shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account including interest earned on the funds held in the Trust Account and not previously released to us to pay our franchise and income taxes (less up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding Public Shares, which redemption will completely extinguish Public Stockholders’ rights as stockholders (including the right to receive further liquidating distributions, if any), subject to applicable law, and (iii) as promptly as reasonably possible following such redemption, subject to the approval of the remaining stockholders and the board of directors, dissolve and liquidate, subject in each case to our obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law.
Results of Operations
Our entire activity since inception through November 19, 2020, was in preparation for an Initial Public Offering, and since our Initial Public Offering, our activity has been limited to the search for a prospective initial Business Combination. We will not generate any operating revenues until the closing and completion of our initial Business Combination.
For the three months ended March 31, 2022, we had net income of approximately $4.3 million, which consisted of approximately $5.0 million in change in the fair value of derivative warrant liabilities, offset by approximately $105,000 of loss on investments held in the Trust Account, approximately $490,000 of general and administrative expenses and $49,000 of franchise tax expense.
For the three months ended March 31, 2021, we had net income of approximately $4.2 million, which consisted of approximately $4.5 million in change in the fair value of derivative warrant liabilities and approximately $32,000 of income on investments held in the Trust Account offset by approximately $270,000 of general and administrative expenses and $50,000 of franchise tax expense.
Liquidity and Going Concern
As of March 31, 2022, we had approximately $46,000 in our operating bank account and a working capital deficit of approximately $1.2 million.
Our liquidity needs to date have been satisfied through a capital contribution of $25,000 from our Sponsor to purchase the Founder Shares, a loan under the Note from our Sponsor, and the net proceeds from the consummation of the Private Placement not held in the Trust Account. We had initially borrowed approximately $105,000 under the Note and fully repaid the Note on November 19, 2020. In 2021, we drew down $245,000 under the Note. Subsequently, in 2022, we drew down and additional $242,000. In addition, in order to finance transaction costs in connection with a Business Combination, our officers, directors and initial stockholders may, but are not obligated to, provide us loans (“Working Capital Loans’). As of March 31, 2022 and December 31, 2021, there were no amounts outstanding under any Working Capital Loans.
Until the consummation of a Business Combination, we will be using the funds not held in the Trust Account for identifying and evaluating prospective acquisition candidates, performing due diligence on prospective target businesses, paying for travel expenditures, selecting the target business to acquire, and structuring, negotiating and consummating the Business Combination. We will need to raise additional capital through loans or additional investments from our Sponsor, stockholders, officers, directors, or third parties. Our officers, directors and Sponsor may, but are not obligated to, loan us funds, from time to time or at any time, in whatever amount they deem reasonable in their sole discretion, to meet our working capital needs. Accordingly, we may not be able to obtain additional financing. If we are 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 a potential transaction, and reducing overhead expenses.
We cannot provide any assurance that new financing will be available to it on commercially acceptable terms, if at all. These conditions raise substantial doubt about our ability to continue as a going concern through November 19, 2022. These unaudited condensed financial statements do not include any adjustments relating to the recovery of the recorded assets or the classification of the liabilities that might be necessary should we be unable to continue as a going concern.