Results of Operations and Known Trends or Future Events
We have neither engaged in any significant business operations nor generated any revenues to date. All activities to date relate to the Company’s formation and the Public Offering (the “Public Offering”). We expect to generate non-operating income in the form of interest income on cash, cash equivalents, and marketable securities that will be held in the Trust Account (as defined below). We expect to incur increased expenses as a result of being a public company (for legal, financial reporting, accounting and auditing compliance), as well as for due diligence expenses as we locate a suitable Business Combination.
For the three months ended September 30, 2022, we had a net income of $1,218,043, which consists of interest earned on marketable securities held in the Trust Account of $895,362, and the change in fair value of warrant liabilities of $994,567, offset by operating costs of $507,883 and provision for income taxes of $164,003. For the period from April 22, 2021 to September 30, 2021, we had a net loss of $1,566,987, which consists of interest earned on marketable securities held in the Trust Account of $2,015 offset by loss on the change in fair value of warrant liabilities of $152,375, warrant issuance transactions costs of $1,277,720 and operating costs of $138,907. For the nine months ended September 30, 2022, we had a net income of $20,024,836, which consists of interest earned on marketable securities held in the Trust Account of $1,701,943, the change in fair value of warrant liabilities of $9,600,759, and gain on settlement of deferred underwriting commissions of $10,666,250, offset by operating costs of $1,645,253 and provision for income taxes of $298,863. Through September 30, 2022 our efforts have been limited to organizational activities, activities relating to the Public Offering, activities relating to identifying and evaluating prospective acquisition candidates and activities relating to general corporate matters. We have not generated any revenue, other than interest income earned on the proceeds held in the Trust Account. As of September 30, 2022, $312,272,552 was held in the Trust Account (including $10,666,250 of deferred underwriting discounts and commissions and approximately $8.9 million from the Private Placement) and we had cash outside of the Trust Account of $81,518 and $1,016,289 in accounts payable and accrued expenses.
We do not have any long-term debt, capital lease obligations, operating lease obligations or long-term liabilities, other than an agreement to pay an affiliate of the Sponsor a monthly fee of $20,000 for office space, utilities and secretarial, and administrative support services to the Company. We began incurring these fees on September 25, 2021 and will continue to incur these fees monthly until the earlier of the completion of the Business Combination or the Company’s liquidation.
The underwriters were entitled to a deferred fee of $0.35 per Unit, or $10,666,250 in the aggregate, payable to the underwriter from the amounts held in the Trust Account solely in the event that the Company completes a Business Combination, subject to the terms of the underwriting agreement. In June 2022, the underwriters waived their deferred fee, resulting in a gain from settlement of deferred underwriting commissions of $10,666,250.
Registration Rights
The holders of the Founder Shares, Private Placement Warrants and Warrants that may be issued upon conversion of working capital loans (and any Class A common stock issuable upon the exercise of the Private Placement Warrants and warrants that may be issued upon conversion of working capital loans and upon conversion of the Founder Shares) are entitled to registration rights pursuant to a registration rights agreement, requiring the Company to register such securities for resale. The holders of these securities are entitled to make up to three demands, excluding short form demands, that we register such securities. In addition, the holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent to our completion of our initial business combination. The Company will bear the expenses incurred in connection with the filing of any such registration statements.
Critical Accounting Policies
The preparation of financial statements in accordance with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported in the unaudited condensed financial statements and accompanying notes. Actual results could differ from those estimates. The Company has identified the following as its critical accounting policies:
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