Results of Operations
As of September 30, 2022, we had not commenced any operations. All activity for the period from March 30, 2021 (Inception) through September 30, 2022 relates to our formation and initial public offering, and, since the completion of the initial public offering, our search for a target to consummate a business combination. We will not generate any operating revenues until after the completion of a business combination, at the earliest. We will generate non-operating income in the form of interest income from the proceeds derived from the initial public offering and placed in a U.S.-based trust account (the “Trust Account”) at JP Morgan Chase Bank, N.A., maintained by Continental Stock Transfer & Trust Company, acting as trustee. We expect 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.
We classify the warrants issued in connection with our initial public offering and private placement as liabilities at their fair value and adjust the warrant instruments to fair value at each reporting period. These liabilities are subject to re-measurement at each balance sheet date until exercised, and any change in fair value is recognized in our statements of operations.
For the three months ended September 30, 2022, we had net income of $4,829,362 which consisted of listing expenses of $21,250, administrative expenses of $51,847, legal and accounting expenses of $72,197, and insurance expense of $178,233, offset by an unrealized gain on fair value changes of warrants of $4,205,250, interest earned on marketable securities held in Trust Account of $381,037, and the unrealized gain on marketable securities (net), dividends and interest on cash held in Trust Account of $566,602. For the three months ended September 30, 2021, the Company had a net loss of $7,193, which consisted solely of formation costs.
For the nine months ended September 30, 2022, we had net income of $6,887,270, which consisted of listing expenses of $63,750, administrative expenses of $200,127, legal and accounting expenses of $384,628, and insurance expense of $534,700, offset by an unrealized gain on fair value changes of warrants of $6,843,000, interest earned on marketable securities held in Trust Account of $461,238, and the unrealized gain on marketable securities (net), dividends and interest on cash held in Trust Account of $766,237. For the period from March 30, 2021 (inception) through September 30, 2021, the Company had a net loss of $17,001, which consisted solely of formation costs.
Liquidity, Capital Resources and Going Concern
As of September 30, 2022, we had $501,294 in cash held outside of the Trust Account and working capital of $383,424.
Following our initial public offering and the sale of warrants in a private placement (the “private placement warrants”) to the Sponsor, a total of $227,250,000 was placed in the Trust Account.
For the nine months ended September 30, 2022, net cash used in operating activities was $530,103. Net income of $6,887,270 was adjusted by interest earned on Treasury Securities held in Trust Account of $461,238, unrealized gains on marketable securities (net), dividends and interest on cash held in Trust Account of $766,237, $6,843,000 unrealized gain on fair value change in warrants, and $653,102 changes in operating assets and liabilities.
As of September 30, 2022, we had marketable securities, and cash held in the Trust Account of $228,489,526 (including $1,239,526 of interest and unrealized gains on marketable securities (net) from October 21, 2021 through September 30, 2022) consisting of securities held in Treasury Securities and a money market fund that invests in U.S. Treasury securities with a maturity of 185 days or less.
As of September 30, 2022, we had cash of $501,294 held outside the Trust Account. We intend 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.
We may need to raise additional funds in order to meet the expenditures required for operating our business prior to our initial business combination. We expect to incur significant costs related to identifying a target business, undertaking in-depth due diligence and negotiating an initial business combination. These conditions raise substantial doubt about our ability to continue as a going concern for a period of time within one year from the date that the financial statements accompanying this Quarterly Report are issued.