On July 28, 2022, Hypebeast entered into a subscription agreement in substantially the same form as the PIPE Subscription Agreements (a “Permitted Equity Subscription Agreement”), including with respect to registration rights, with one third-party investor (the “Additional PIPE Investor”), pursuant to which the Additional PIPE Investor agreed to subscribe for, and Hypebeast agreed to allot and issue to the Additional PIPE Investor, an aggregate of 200,000 ordinary shares of Hypebeast (after taking into account the Recapitalization) (the “Additional Subscription Shares”) at a subscription price of $10.00 per share (such subscription and issuance, the “Additional PIPE Investment”).
Liquidity and Capital Resources
On June 11, 2021, we consummated the Initial Public Offering of 15,000,000 shares of Class A common stock (the “Public Shares”) at $10.00 per Public Share, generating gross proceeds of $150,000,000. Simultaneously with the closing of the Initial Public Offering, the Sponsor purchased an aggregate of 1,090,000 shares of Class A common stock at a price of $10.00 per share (the “Private Placement Shares”), generating gross proceeds of $10,900,000.
On June 16, 2021, the underwriters partially exercised their over-allotment option and purchased an additional 1,680,000 shares (the “Over-Allotment Shares”), and the sale of an additional 100,800 shares (the “Over-Allotment Private Placement Shares”) at $10.00 per share, generating total gross proceeds of $1,008,000.
For the six months ended June 30, 2022, net cash used in operating activities was $532,426, which was due to our net loss of $8,720,068 and interest income on the trust account of $81,331, offset in part by changes in working capital of $8,268,973.
For the period from January 22, 2021 (inception) through June 30, 2021, net cash used in operating activities was $668,381, which was due to our net loss of $102,872, gain on issuance of over-allotment option of $50,400, and changes in working capital of $515,109.
For the six months ended June 30, 2022, we had no cash flows from investing activities.
For the period from January 22, 2021 (inception) through June 30, 2021, net cash used in investing activities was $173,472,000, which was the result of the deposit of the proceeds from the Initial Public Offering into the trust account.
For the six months ended June 30, 2022, net cash provided by financing activities was $100,000, which was the result of proceeds received from an advance from our Sponsor.
For the period from January 22, 2021 (inception) through June 30, 2021, net cash provided by financing activities was $175,148,894, which was comprised of the net proceeds from the Initial Public Offering, net of underwriter’s discount paid of $163,464,000, proceeds from the sale of the Private Placement Shares of $11,908,000, proceeds from the advance from a related party of $60,000 and proceeds from the sale of common stock to the Sponsor of $25,000, offset in part by payment of offering costs of $308,106.
As of June 30, 2022, we had $62,267 in cash held outside of the trust account and working capital deficit of $8,362,826. We have incurred and expects to continue to incur significant costs in pursuit of our acquisition plans. We anticipate that the cash held outside of the trust account as of June 30, 2022, will not be sufficient to allow us to operate until June 11, 2023, the date at which we must complete our initial business combination. While we expect to have sufficient access to additional sources of capital under working capital loans with our Sponsor or certain of or directors and officers (“Working Capital Loans”), there is no current commitment on the part of any financing source to provide additional capital and no assurances can be provided that such additional capital will ultimately be available if necessary. Further, if our initial business combination is not consummated June 11, 2023, there will be a mandatory liquidation and subsequent dissolution of the Company. These conditions raise substantial doubt about our ability to continue as a going concern for a period of time within one year after the date that the accompanying unaudited condensed financial statements are issued.
We plan to address this uncertainty through our initial business combination. There is no assurance that our plans to consummate our initial business combination will be successful or successful within by June 11, 2023. The accompanying unaudited condensed financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Off-Balance Sheet Arrangements
We did not have any off-balance sheet arrangements as of June 30, 2022 and December 31, 2021.