Upon the closing of the Initial Public Offering, the over-allotment and the Private Placement, $206,281,250 ($10.25 per unit) of the net proceeds of the sale of the Units in the Initial Public Offering, the over-allotment and the Private Placement were placed in the Trust Account with Continental Stock Transfer & Trust Company acting as trustee and invested in United States government treasury bills with a maturity of 185 days or less or in money market funds investing solely in U.S. Treasuries and meeting certain conditions under Rule 2a-7 under the Investment Company Act, as determined by us, until the earlier of: (i) the completion of a business combination and (ii) the distribution of the Trust Account as described below.
Our management and our board of directors have broad discretion with respect to the specific application of the net proceeds of the Initial Public Offering, the over-allotment and the sale of Private Placement Warrants, although substantially all of the net proceeds are intended to be applied generally toward consummating a business combination.
If we have not completed our initial business combination within the Combination Period, we will (i) cease all operations except for the purpose of winding up; (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem the public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest earned on the funds held in the Trust Account and not previously released to us to pay our income taxes, if any (less up to $100,000 of interest to pay dissolution expenses) divided by the number of the then-outstanding public shares, which redemption will completely extinguish public shareholders’ rights as shareholders (including the right to receive further liquidation distributions, if any); and (iii) as promptly as reasonably possible following such redemption, subject to the approval of the remaining shareholders and the board of directors, liquidate and dissolve, subject in the case of clauses (ii) and (iii), to our obligations under Cayman Islands law to provide for claims of creditors and the requirements of other applicable law.
Results of Operations
We have neither engaged in any operations nor generated any revenues to date. Our only activities since February 12, 2021 (inception) have been organizational activities and those necessary to prepare for the IPO. Following the IPO, we will not generate any operating revenues until after completion of our initial Business Combination. We will generate non-operating income in the form of interest income on the investments held in the Trust Account. There has been no significant change in our financial or trading position and no material adverse change has occurred since the date of our audited financial statements. After the IPO, 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 expect our expenses to increase substantially after the closing of the IPO.
For the nine months ended September 30, 2022, we had a net income of $7,628,714, which consists of operating costs of $2,034,395, offset by a gain in fair value of derivative warrant liabilities of $8,271,893 and a gain on marketable securities of $1,391,133 and other income of $83.
For the period from February 12, 2021 (inception) through September 30, 2021, we had a net loss of $20,378, related to formation costs.
Liquidity and Capital Resources
Prior to the consummation of our Public Offering, our only sources of liquidity were an initial purchase of Founder Shares for $25,000 by the Sponsor, and no loans and advances from the Sponsor.
On October 29, 2021, we consummated the Initial Public Offering of 20,125,000 Units at a price of $10.00 per Unit, generating gross proceeds of $201,250,000. Simultaneously with the closing of the Initial Public Offering, we consummated the sale of 10,156,250 Private Placement Warrants to the Sponsor at a price of $1.00 per Private Placement Warrant, generating gross proceeds of $10,156,250.
Following the Initial Public Offering and the sale of the Private Placement Warrants, a total of $206,281,250 (equal to $10.25 per Unit) was placed in the Trust Account, and we had $1,195,395 of cash held outside of the Trust Account, after payment of costs related the Initial Public Offering, and available for working capital purposes.
For the nine months ended September 30, 2022, cash used in operating activities was $662,120. This was made up of a net income of $7,628,714, changes in operating assets and liabilities of $1,372,192, a change in fair value of derivative warrant liabilities of $8,271,893 and a $1,391,133 gain on marketable securities.
For the period from March 25, 2021 (inception) through September 30, 2021 there was no operating cash flow.