Results of Operations
The Company has neither engaged in any operations nor generated any revenues to date. The Company’s only activities from commencement of operations through March 31, 2022 were organizational activities, initial public offering, and search for a prospective initial business combination target. The Company does not expect to generate any operating revenues until after the completion of its business combination. The Company generates non-operating income in the form of interest income on marketable securities held in the trust account. The Company incurs expenses as a result of being a public company (for legal, financial reporting, accounting and auditing compliance), as well as expenses for due diligence related to the search for potential target companies.
For the three months ended March 31, 2022, the Company had a net loss of approximately $0.24 million, which consisted of dividend income of $12,934, other income of $5,000, change in fair value of warrant liabilities of $67,135 and offset by franchise tax expense of approximately $0.05 million and operating costs of approximately $0.28 million.
For the period from January 15, 2021 (commencement of operations) through March 31, 2021, the Company had a net loss of approximately $0.02 million, which consisted of dividend income of $501, change in fair value of warrant liabilities of $5,850 and offset by warrant transaction costs of $2,965 and formation and operating costs of approximately $0.02 million.
Liquidity and Capital Resources
As of March 31, 2022, the Company had approximately $0.01 million in cash and no cash equivalents.
Until the consummation of the initial public offering, the Company’s only source of liquidity was an initial purchase of common stock by the Sponsor and loans from its Sponsor.
On March 25, 2021, the Company’s consummated the initial public offering of 12,000,000 units, at a price of $10.00 per unit, generating gross proceeds of $120.00 million. Simultaneously with the closing of the initial public offering, the Company consummated the sale of 390,000 private units at a price of $10.00 per private unit in a private placement to Sponsor and EarlyBirdCapital, Inc., generating gross proceeds of $3.90 million. On March 30, 2021, the underwriters exercised the over-allotment option in part and purchased an additional 843,937 units, generating gross proceeds of approximately $8.44 million. In connection with the underwriters’ partial exercise of the over-allotment option, the Company sold an additional 16,879 private units at a price of $10.00 per private unit in a private placement to Sponsor and EarlyBirdCapital, Inc., generating gross proceeds of approximately $0.17 million.
Following the initial public offering and the private placement, a total of approximately $128.44 million was placed in the trust account. The Company incurred approximately $3.00 million in transaction costs, including approximately $2.57 million of underwriting fees and approximately $0.43 million of other offering costs.
As of March 31, 2022, the Company had cash held in the trust account of approximately $128.45 million. The Company intends to use substantially all of the funds held in the trust account, including any amounts representing interest earned on the trust account, to complete its business combination. To the extent that the Company’s capital stock or debt is used, in whole or in part, as consideration to complete its 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 the Company’s growth strategies.
As of March 31, 2022, the Company had cash of approximately $0.01 million outside of the trust account. The Company intends to use the funds held outside the trust account primarily to identify and evaluate target businesses, perform business due diligence on prospective target businesses, travel to and from the offices, plants or similar locations of prospective target businesses or their representatives or owners, review corporate documents and material agreements of prospective target businesses, and structure, negotiate and complete a business combination.