Liquidity and Capital Resources
On October 5, 2020, we consummated the Initial Public Offering of 20,000,000 Units, at $10.00 per unit, generating gross proceeds of $200,000,000. Simultaneously with the closing of the Initial Public Offering, we consummated the sale of 7,750,000 Private Placement Warrants to the Sponsor at a price of $1.00 per warrant, generating gross proceeds of $7,750,000.
On October 23, 2020, the underwriters partially exercised their over-allotment option, resulting in an additional 40,000 Units issued for total gross proceeds of $400,000. As a result of the underwriters’ election to partially exercise their over-allotment option a total of 10,000 Founders Shares are no longer subject to forfeiture and 740,000 Founders Shares were forfeited. In connection with the underwriters’ partial exercise of their over-allotment option, we also consummated the sale of an additional 12,000 Private Placement Warrants at $1.00 per Private Placement Warrant, generating total proceeds of $12,000. A total of $404,000 was deposited into the Trust Account, bringing the aggregate proceeds held in the Trust Account to $202,404,000.
We incurred $11,434,768 in transaction costs, including $4,008,000 of underwriting fees, $7,014,000 of deferred underwriting fees and $412,768 of other costs.
For the three months ended March 31, 2022, cash used in operating activities was $259,908. Net income of $4,360,600 was affected by interest earned on marketable securities held in the Trust Account of $16,683 and unrealized gain on marketable securities held in the Trust Account of $57,594. Changes in operating assets and liabilities used $80,812 of cash for operating activities.
For the three months ended March 31, 2021, cash used in operating activities was $216,287. Net income of $14,897,414 was affected by interest earned on marketable securities held in the Trust Account of $40,072, unrealized gain on marketable securities held in the Trust Account of $5,697 and the change in fair value of warrant liabilities of $15,069,540. Changes in operating assets and liabilities provided $1,608 of cash for operating activities.
As of March 31, 2022, we had cash and marketable securities held in the Trust Account of $202,498,869. 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 and income taxes payable), to complete our Business Combination. We may withdraw interest to pay franchise and income taxes. During the period ended March 31, 2022, we did withdraw an amount of $98,500 in interest earned on the Trust Account to pay franchise and income taxes. 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.
As of March 31, 2022, we had cash of $382,713 outside of 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.
In order to fund working capital deficiencies or finance transaction costs in connection with a Business Combination, the initial stockholders or an affiliate of the initial stockholders or certain of our directors and officers may, but are not obligated to, loan us funds as may be required. If we complete a Business Combination, we would repay such loaned 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 loaned amounts but no proceeds from our Trust Account would be used for such repayment. Up to $1,500,000 of such loans may be convertible into warrants identical of the post-Business Combination entity, at a price of $1.00 per warrant. The warrant would be identical to the Private Placement Warrants.