Extension of our Combination Period
We originally had up to 24 months from the closing of our initial public offering, or until January 12, 2023, to consummate an Initial Business Combination. However, at our 2022 special meeting of stockholders held on December 12, 2022 (the “Extension Meeting”), our stockholders approved the amendment to our Amended and Restated Certificate of Incorporation, including any amendments thereto (the “Certificate of Incorporation”), to extend the date by which we have to consummate an Initial Business Combination from January 12, 2023 on a month-to-month basis to July 12, 2023. In connection with the Extension Meeting, stockholders holding 24,673,073 public shares exercised their right to redeem their shares for a pro rata portion of the funds in our trust account (the “Trust Account”). As a result, approximately $251.6 million (approximately $10.20 per share) was removed from the Trust Account and paid to such holders and approximately $29.8 million remained in the Trust Account. Following the redemptions, as of March 31, 2023, we had 2,926,927 public shares outstanding.
Results of Operations
We have neither engaged in any operations nor generated any revenues to date. Our only activities for the period from August 10, 2020 (inception) through March 31, 2023 were formation and operational activities, and since the closing of the initial public offering, those related to identifying a target company for a Business Combination. We do not expect to generate any operating revenues until after the completion of our Initial Business Combination. We generate non-operating income in the form of interest income on cash and cash equivalents held after the initial public offering. We incur 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, 2023, we had net loss of $749,517, which primarily resulted from operating costs of $925,183, income tax expense of $50,555, franchise tax expense of $35,100, interest expense of $7,200, and a loss on the change in fair value of the convertible promissory note to a related party of $14,300, partially offset by interest income on the Trust Account of $282,821.
For the three months ended March 31, 2022, we had net income of $5,944,018, which resulted primarily from a gain on change in fair value of warrant liabilities for $6,300,000, unrealized gain on investments held in the Trust Account of $7,026, interest income of $1, change in fair value of convertible promissory note - related party of $5,400, partially offset by operating and formation costs of $318,894 and franchise tax expenses of $49,515.
Liquidity, Capital Resources, and Going Concern
On January 12, 2021, we consummated our initial public offering of 27,600,000 units, including 3,600,000 units issued pursuant to the exercise of the underwriter’s over-allotment option in full, generating gross proceeds of $276,000,000. Simultaneously with the consummation of the initial public offering, we completed the private sale of 8,700,000 private placement warrants to the Sponsor at a purchase price of $1.00 per warrant, generating gross proceeds of $8,700,000.
For the three months ended March 31, 2023, net cash used in operating activities was $199,699, which was primarily due to operational costs and franchise taxes paid during the period.
For the three months ended March 31, 2022, net cash used in operating activities was $371,142, which was due to a change in fair value of warrant liabilities of $6,300,000, a decrease in franchise taxes payable of $87,734, change in fair value of convertible promissory note - related party of $5,400, and an unrealized gain on investments held in the Trust Account of $7,026, which was partially offset by net income of $5,944,018, an increase of accrued expenses of $48,880, an increase in prepaid expenses $18,638, and increase of accounts payable for $17,482.
For the three months ended March 31, 2023, net cash used in investing activities was $439,039, which resulted fully from cash deposited into the Trust Account in connection with the extension of our time to consummate a Business Combination.
For the three months ended March 31, 2022, net cash provided by investing activities was $62,738, which resulted from $62,738 in proceeds from the Trust Account to pay for franchise taxes.
For the three months ended March 31, 2023, net cash provided by financing activities was $598,639, which was a result of proceeds from a promissory note.