Non-Binding Letter of Intent
On April 22, 2022, we signed a non-binding letter of intent with a business combination target company (the “Target”). The Company’s board of directors currently believes that there will not be sufficient time before June 17, 2022 to complete an initial business combination. Completion of the business combination with the Target is subject to, among other matters, the completion of due diligence, the negotiation of a definitive agreement providing for the transaction, satisfaction of the conditions negotiated therein and approval of the transaction by our stockholders. While we intend to announce the entry into a definitive agreement prior to the stockholder vote at the Extension Meeting, there can be no assurance that a definitive agreement will be entered into or that the proposed transaction will be consummated. In the event that we enter into a definitive agreement for an initial business combination prior to the Extension Meeting, we will issue a press release and file a Current Report on Form 8-K with the SEC announcing the proposed business combination.
Results of Operations
We have neither engaged in any operations (other than searching for a Business Combination after our Initial Public Offering) nor generated any revenues to date. Our only activities from July 20, 2020 (inception) through March 31, 2022 were organizational activities, those necessary to prepare for the Initial Public Offering, described below, and the search for a business combination. We do not expect to generate any operating revenues until after the completion of our Business Combination. We expect to generate non-operating income in the form of interest earned on investments held after the Initial Public Offering. We incur expenses as a result of being a public company (for legal, financial reporting, accounting and auditing compliance), as well as for due diligence expenses.
For the three months ended March 31, 2022, we had a net income of $7,868,169, which consists of interest income on bank account of $8, interest income on cash and marketable securities held in the Trust Account of $23,324 and change in fair value of derivative liabilities of $8,168,089, offset by operating costs of $ $323,252.
For the three months ended March 31, 2021, we had a net income of $5,909,731, which consists of interest income on bank account of $24, interest income on cash and marketable securities held in the Trust Account of $46,112 and change in fair value of derivative liabilities of $6,260,800, offset by operating costs of $ $397,205.
Liquidity and Going Concern
On December 17, 2020, we consummated the Initial Public Offering of 27,600,000 Units at a price of $10.00 per Unit, which includes the full exercise by the underwriters of their over-allotment option in the amount of 3,600,000, generating gross proceeds of $276,000,000. Simultaneously with the closing of the Initial Public Offering, we consummated the sale of 10,280,000 Private Placement Warrants at a price of $1.00 per Private Placement Warrant in a private placement to our initial stockholders, generating gross proceeds of $10,280,000.
Following the Initial Public Offering, the full exercise of the over-allotment option by the underwriters and the sale of the Private Placement Warrants, a total of $278,760,000 was placed in the Trust Account. We incurred $15,688,848 in transaction costs, including $5,520,000 of cash underwriting fees, 9,660,000 of deferred underwriting fees and $902,521 of other offering costs.
For the three months ended March 31, 2022, cash used in operating activities was $95,529. Net income of $7,868,169 was affected by change in fair value of derivative liabilities of $8,168,089 and interest income on cash and marketable securities held in the Trust Account of $23,324. Changes in operating assets and liabilities provided $555,639 of cash for operating activities.
For the three months ended March 31, 2021, cash used in operating activities was $240,537. Net income of $5,909,731 was affected by change in fair value of derivative liabilities of $6,260,800 and interest income on cash and marketable securities held in the Trust Account of $46,112. Changes in operating assets and liabilities provided $156,644 of cash for operating activities.
As of March 31, 2022, we had cash and marketable securities held in the Trust Account of $278,778,904. We intend to use substantially all of the funds held in the Trust Account, including any amounts representing interest earned on the Trust Account to complete our Business Combination. We may withdraw interest to pay taxes. Through March 31, 2022, the Company withdraw $80,500 of interest income from the Trust Account to pay franchise and income taxes. To the extent that our capital stock or debt is used, in whole or in part, as consideration to complete our Business Combination, the remaining proceeds held in the Trust Account will be used as working capital to finance the operations of the target business or businesses, make other acquisitions and pursue our growth strategies.