For the year ended December 31, 2021, net cash used in operating activities was $1,299,101. Net income of $19,323,177 was affected by the change in fair value of warrant liabilities of $20,935,690, change in fair value of convertible promissory note – related party of $60,511, interest earned on marketable securities held in trust account of $155,704 and an unrealized gain on marketable securities held in trust account of $5,765. Changes in operating assets and liabilities provided $535,392 of cash from operating activities.
For the year ended December 31, 2022, net cash used in financing activities was $305,909,116 as a result of the drawdowns on the Sponsor Convertible Promissory Note (defined below) and redemption of Class A common stock in connection with the Extension vote.
For the year ended December 31, 2021, net cash provided by financing activities was $320,111 as a result of the drawdowns on the Sponsor Convertible Promissory Note.
At December 31, 2022 we had cash held in the trust account of $42,563,076. Interest income on the balance in the trust account may be used by us to pay taxes. As of December 31, 2022, net cash provided by investing activities was $307,366,982 as a result of permitted withdrawals of interest earned on the trust account to pay our franchise and income taxes and the redemption of Class A common stock amounting to $306,349,500 in connection with the Extension vote.
We intend to use substantially all of the funds held in the trust account, including any amounts representing interest earned on the trust account (less deferred underwriting commissions, franchise taxes, and income taxes payable), to complete our business combination. 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.
At December 31, 2022, we had cash of $23,935 outside of the trust account, accounts payable and accrued expenses of $2,176,154, and income taxes payable of $365,164. We intend to use the funds held outside the trust account in addition to the remaining amount unborrowed on the Sponsor Convertible Promissory Note of $239,505 primarily to complete a business combination.
In order to fund working capital deficiencies or finance transaction costs in connection with a business combination, the sponsor or an affiliate of the sponsor or certain of our directors and officers may, but are not obligated to, lend us funds as may be required. If we complete a business combination, we would repay such lent amounts. In the event that a business combination does not close, we may use a portion of the working capital held outside the trust account to repay such lent amounts but no proceeds from our trust account would be used for such repayment. On September 13, 2021, our sponsor agreed to lend us an aggregate of up to $1,000,000 pursuant to a convertible promissory note for working capital purposes (the “Sponsor Convertible Promissory Note”). At December 31, 2022, there was $760,495 of cumulative cash advanced under the Sponsor Convertible Promissory Note. The Sponsor Convertible Promissory Note was valued using the fair value method. The change in the fair value of the note recorded in the statements of operations for the year ended December 31, 2022, was $11,080, resulting in a fair value of the Sponsor Convertible Promissory Note of $482,600. For the year ended December 31, 2021, the change in fair value of the note recorded in the statements of operations was $60,511, resulting in a fair value of the Sponsor Convertible Promissory Note of $259,600.
Going Concern
As of December 31, 2022, we had $23,935 in our operating bank account, $42,563,076 in cash held in the trust account to be used for a business combination, or to repurchase or redeem our stock in connection therewith, and a working capital deficit of $2,020,661, which excludes the permitted withdrawal should we elect to withdraw from the trust account for franchise taxes payable of $40,050 or income taxes payable of $365,164. As of December 31, 2022, $3,912,576 of the amount on deposit in the trust account represented interest income, $122 of which was recorded as an unrealized loss. Interest income earned on the trust account is available to pay our tax obligations. Through December 31, 2022, $1,017,481 was withdrawn from the trust account to pay our tax obligations.
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