Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Results of Operations
We have not generated any revenues to date, and we will not be generating any operating revenues until the closing and completion of our initial Business Combination. Our entire activity up to June 30, 2021 was related to our formation, the Initial Public Offering and, since the closing of the Initial Public Offering, a search for a Business Combination target. We have, and expect to continue to generate, non-operating income in the form of interest income and unrealized gains on investments held in the Trust Account. We expect to continue 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 in connection with the search for a Business Combination target.
For the three months ended June 30, 2021, we had a net income of $6,293,214, which consisted of $174,834 of general and administrative expenses, offset primarily by the change in fair value of the derivative warrant liabilities of $6,976,878 and change in the fair value of the Trust Account of $14,486. In addition, we recorded offering costs allocated to the Public Warrants and the Private Placement Warrants totaling $494,344.
For the six months ended June 30, 2021, we had a net income of $6,292,489, which consisted of $175,559 of general and administrative expenses, offset primarily by the change in fair value of the derivative warrant liabilities of $6,976,878 and change in the fair value of Trust Account of $14,486. In addition, we recorded offering costs allocated to the Public Warrants and the Private Placement Warrants totaling $494,344.
Liquidity and Capital Resources
Until the consummation of the initial public offering, our only source of liquidity will be the initial sale of the Founder Shares to our Sponsor and advances under the promissory note with the Sponsor.
Pursuant to the Initial Public Offering, which was consummated in May 2021, the Company sold 17,309,719 Units, which includes underwriters’ over-allotment, at a purchase price of $10.00 per Unit generating gross proceeds to the Company in the amount of $173.1 million. Each Unit consists of one share of the Company’s Class A common stock, par value $0.0001 per share (the “Class A Common Stock”), and one-half of one redeemable warrant of the Company (each whole warrant, a “Warrant”), with each whole Warrant entitling the holder thereof to purchase one whole share of Class A Common Stock at a price of $11.50 per share, subject to adjustment.
Simultaneously with the closing of the Initial Public Offering, the Company consummated the private sale (the “Private Placement”) of an aggregate of 583,743 Units, which includes underwriters’ over-allotment, (the “Private Placement Units”) to Maquia Investment North America LLC at a purchase price of $10.00 per Private Placement Unit, generating gross proceeds to the Company in the amount of $5,837,430.
A portion of the proceeds from the Private Placement Units was added to the proceeds from the Initial Public Offering held in the Trust Account. If the Company does not complete a Business Combination within the Combination Period, the proceeds from the sale of the Private Placement Units held in the Trust Account will be used to fund the redemption of the Public Shares (subject to the requirements of applicable law) and the Private Placement Units will be worthless.
We presently have no operating revenue. Our net income was $6,293,214 and $6,292,489 for the three and six months ended June 30, 2021, respectively, and consisted primarily of administrative fees, professional fees and costs related to our search for a Business Combination target, offset primarily by the change in fair value of the Warrant liabilities. Through June 30, 2021, our liquidity needs were satisfied through receipt of $644,995 held outside of the Trust Account from the sale of the Private Placement Warrants upon the closing of the Initial Public Offering. In the future, a portion of interest income on the funds held in the Trust Account may be released to us to pay tax obligations.