Liquidity and Going Concern
As of June 30, 2022, we had approximately $780,000 in its operating bank account and a working capital deficit of approximately $250,000.
Prior to the completion of our Initial Public Offering, our liquidity needs were satisfied through the payment by our Sponsor of $25,000 for certain offering costs on our behalf in exchange for the issuance of the Founder Shares, and loans proceeds from our Sponsor of $300,000 pursuant to the Note. We repaid the Note in full on January 13, 2021.
Subsequent to the consummation of the Initial Public Offering and Private Placement, our liquidity needs are satisfied with a portion of the proceeds of $2.0 million from the consummation of the Private Placement not held in the Trust Account. In addition, in order to finance transaction costs in connection with a Business Combination, the Sponsor may, but is not obligated to, provide the Company Working Capital Loans. As of June 30, 2022, $2.0 million was drawn under the Working Capital Loans.
In connection with the Company’s assessment of going concern considerations if the Company is unable to complete a Business Combination with 24 months from closing of the Initial Public Offering, or January 12, 2023 management has determined that the mandatory liquidation and subsequent dissolution raises substantial doubt about the Company’s ability to continue as a going concern for a period of time which is considered to be one year from the issuance of these financial statements. The financial statements do not include any adjustment that might be necessary if the Company is unable to continue as a going concern.
Management is continuing to evaluate the impact of the
COVID-19
pandemic and has concluded that while it is reasonably possible that the virus could have a negative effect on the Company’s financial position and/or search for a target company, the specific impact is not readily determinable as of the date of the unaudited condensed financial statements. The unaudited condensed financial statements do not include any adjustments that might result from the outcome of this uncertainty.
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 these unaudited condensed financial statements and the specific impact on the Company’s financial condition, results of operations, and cash flows is also not determinable as of the date of these unaudited condensed financial statements.
Our entire activity since inception up to January 12, 2021 was in preparation for our formation and the Initial Public Offering, and since our Initial Public Offering, our activity has been limited to the search for a prospective initial Business Combination. We will not be generating any operating revenues until the closing and completion of our initial Business Combination. We generate
non-operating
income in the form of investment income from our investments held in the Trust Account. 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.
For the three months ended June 30, 2022, we had net income of approximately $6.0 million, which consisted of change in fair value of derivative liabilities of approximately $7.3 million, change in fair value of working capital loan of approximately $552,000 and income from investments held in the Trust Account of approximately $858,000, partially offset by general and administrative expenses of approximately $449,000, general and administrative expenses to related party of $30,000 and change in fair value of derivative assets of approximately $2.3 million.
For the three months ended June 30, 2021, we had net income of approximately $22.7 million, which consisted of change in fair value of derivative liabilities of approximately $22.5 million, change in fair value of working capital loan of approximately $1.0 million and income from investments held in the Trust Account of approximately $9,000, partially offset by general and administrative expenses of approximately $797,000, and general and administrative expenses to related party of $30,000.