Liquidity and Capital Resources
As of September 30, 2021, we had approximately $187,000 in our operating bank account and working capital of approximately $475,000.
Prior to the completion of the initial public offering, the over-allotment and the private placement, our liquidity needs had been satisfied through the payment of $25,000 from our sponsor to cover for certain expenses on behalf of us in exchange for the issuance of the founder shares, and a loan of $280,000 pursuant to the Note issued to our sponsor. We repaid the Note in full on January 8, 2021. Subsequent to the closing of the initial public offering, the over-allotment and private placement, the proceeds from the consummation of the private placement not held in the trust account will be used to satisfy our liquidity. In addition, in order to finance transaction costs in connection with a business combination, our sponsor may, but is not obligated to, provide us with Working Capital Loans. As of September 30, 2021 and December 31, 2020, there were no amounts outstanding under any Working Capital Loan.
On November 16, 2021, one of our initial shareholders agreed to loan to us up to $1.5 million as a Working Capital Loan, pursuant to a line of credit. We intend to use the borrowings for paying existing accounts payable, identifying and evaluating prospective initial business combination candidates, performing due diligence on prospective target businesses, paying for travel expenditures, selecting the target business to merge with or acquire, and structuring, negotiating and consummating the business combination.
Based on the foregoing, management believes that we will have sufficient working capital and borrowing capacity from the Working Capital Loan and from our sponsor or an affiliate of our sponsor, or certain of our officers and directors to meet our needs through the earlier of the consummation of a business combination or January 8, 2023, which is two years from the closing of our initial business offering. Over this time period, we will be using these funds for paying existing accounts payable, identifying and evaluating prospective initial business combination candidates, performing due diligence on prospective target businesses, paying for travel expenditures, selecting the target business to merge with or acquire, and structuring, negotiating and consummating the business combination.
Results of Operations
Our entire activity since inception up to September 30, 2021 was in connection with our formation and the initial public offering, and the search for a target business for a prospective initial business combination. We will not be generating any operating revenues until the closing and completion of our initial business combination.
For the three months ended September 30, 2021, we had net income of approximately $3.5 million, which consisted of $4.4 million in change in fair value of derivative warrant liabilities, and approximately $4,000 in interest income from investments held in trust account, partially offset by approximately $865,000 of general and administrative expenses inclusive of administrative expenses with related party.
For the nine months ended September 30, 2021, we had net income of approximately $6.3 million, which consisted of $8.9 million in change in fair value of derivative warrant liabilities, and approximately $12,000 in interest income from investments held in trust account, partially offset by approximately $1.9 million of general and administrative expenses inclusive of administrative expenses with related party, and approximately $777,000 of financing costs associated with derivative warrant liabilities.
Contractual Obligations
Registration and Shareholder Rights
The holders of founder shares, private placement warrants and securities that may be issued upon conversion of working capital loans, if any, are entitled to registration rights pursuant to a registration and shareholder rights agreement. The holders of these securities are entitled to make up to three demands, excluding short form demands, that we register such securities. In addition, these holders will have certain “piggy-back” registration rights with respect to registration statements filed subsequent to the completion of the initial business combination. We will bear the expenses incurred in connection with the filing of any such registration statements.