If we are unable to consummate our initial business combination by October 16, 2022, we will, as promptly as reasonably possible but not more than 10 business days thereafter (subject to our amended and restated certificate of incorporation and applicable law), distribute the aggregate amount then on deposit in the trust account (net of taxes payable), pro rata to our public stockholders by way of redemption and cease all operations except for the purposes of winding up of our affairs, as further described herein. This redemption of public stockholders from the trust account shall be effected as required by function of our amended and restated certificate of incorporation and prior to any voluntary winding up.
Risks and Uncertainties
The full long-term impact of the COVID-19 pandemic continues to evolve. The impact of the COVID-19 pandemic on our results of operations, financial position and cash flows will depend on future developments, including the duration and subsequent waves, including due to variants of the virus, of the pandemic and related advisories and restrictions. These developments and the long-term impact of the COVID-19 pandemic on the financial markets and the overall economy are highly uncertain and cannot be predicted. If the financial markets and/or the overall economy are impacted for an extended period, our results of operations, financial position and cash flows may be materially adversely affected. Additionally, our ability to complete an initial business combination, may be materially adversely affected due to significant governmental measures being implemented to contain the COVID-19 pandemic or treat its impact, including travel restrictions, the shutdown of businesses and quarantines, among others, which may limit our ability to have meetings with potential investors or affect the ability of a potential target company’s personnel, vendors and service providers to negotiate and consummate an initial business combination in a timely manner. Our ability to consummate an initial business combination may also be dependent on the ability to raise additional equity and debt financing, which may be impacted by the COVID-19 pandemic and the resulting market downturn.
In February 2022, the Russian Federation and Belarus commenced a military action with the country of Ukraine. As a result of this action, various nations, including the United States, have instituted economic sanctions against the Russian Federation and Belarus. Further, the impact of this action and related sanctions on the world economy are not determinable as of the date of Quarterly Report. The specific impact on our financial condition, results of operations, and cash flows as well as search for a business combination also are not determinable as of the date of this Quarterly Report.
Results of Operations
During the three months ended March 31, 2022, our entire activity has been limited to the search for a prospective initial business combination, and we will not be generating any operating revenues until the closing and completion of our initial business combination. 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.
For the three months ended March 31, 2022, we had a net loss of approximately $419,000, which consisted of approximately $329,000 in general and administrative expenses, approximately $50,000 in general and administrative expenses – related party, $49,000 in franchise tax expense, offset by approximately $8,000 in interest income from investments held in the trust account.
For the three months ended March 31, 2021, we had a net loss of approximately $269,000, which consisted of approximately $175,000 in general and administrative expenses, approximately $50,000 in general and administrative expenses approximately $49,000 in franchise tax expense, offset by approximately $5,000 in interest income from investments held in the trust account.
Liquidity, Capital Resources and Going Concern
As of March 31, 2022, we had approximately $990,000 cash outside of the trust account, approximately $19,000 of interest income available in the trust account to pay for tax obligations and working capital of approximately $785,000.
There have been no material changes to our material cash requirements as disclosed in our Annual Report on Form 10-K.
We did not have any near-term contractual obligations as of March 31, 2022. Our liquidity needs to date have been satisfied through a capital contribution of $20,000 from our sponsor to purchase the founder shares, the loan under a promissory note of $300,000, which was repaid in full on October 16, 2020, the net proceeds from the consummation of the private placement not held in the trust account, and the loan under a promissory note of $1,000,000, as described below. In addition, in order to finance transaction costs in connection with a business combination, our officers, directors and initial stockholders may, but are not obligated to, provide working capital.