Liquidity and Capital Resources
As of December 31, 2021, we had cash of $3,968,177 outside of the Trust Account. As of February 28, 2022, we had cash of $1,930,657 outside of the Trust Account. We paid approximately $2,037,522 relating to accounts payable and accrued expenses subsequent to December 31, 2021. We intend to use the funds held outside the Trust Account primarily to fund working capital, identify and evaluate target businesses, perform business due diligence on 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 our initial Business Combination, our Sponsor or an affiliate of our Sponsor or certain of our officers and directors 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 our initial 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 to the Private Placement Warrants, at a price of $1.50 per warrant at the option of the lender.
We do not currently believe we will need to raise additional funds in order to meet the expenditures required for operating our business. However, if our estimate of the costs of identifying a target business, undertaking due diligence and negotiating a Business Combination are more than we estimate, we may have insufficient funds available to operate our business prior to our initial Business Combination. Moreover, we may need to obtain additional financing either to complete our initial Business Combination or because we become obligated to redeem a significant number of our Public Shares upon consummation of our initial Business Combination, in which case we may issue additional securities or incur debt in connection with such Business Combination. Subject to compliance with applicable securities laws, we would only complete such financing simultaneously with the completion of our initial Business Combination. If we are unable to complete our initial Business Combination because we do not have sufficient funds available to us, we will be forced to cease operations and liquidate the Trust Account. In addition, following our initial Business Combination, if cash on hand is insufficient, we may need to obtain additional financing in order to meet our obligations.
For the year ended December 31, 2021, cash provided by operating activities was $2,157,674. Net income of $14,278,180 was affected by a
non-cash
gain of $15,262,500 related to changes in the fair value of warrants, a loss of $1,605,246 related to offering costs allocated to warrant liabilities, expenses of $27,116 related to the formation and operating expenses funded by a note payable through the Sponsor, and changes in operating assets and liabilities, which provided an aggregate of $1,509,632 of cash from operating activities.
For the period from December 21, 2020 (Inception) through December 31, 2020, cash used in operating activities was $5,000. Net loss of $5,000 was affected by expenses of $5,000 related to the formation and operating expenses funded by a note payable through the Sponsor.
As of December 31, 2021, we had cash of $690,000,000 held in the Trust Account. We intend to use substantially all of the funds held in the Trust Account (less taxes paid and deferred underwriting commissions) to complete our initial Business Combination. To the extent that our capital stock or debt is used, in whole or in part, as consideration to complete our initial 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.
See discussion under the header “Liquidity and Going Concern Consideration” in Note 1 to our consolidated financial statements included in Item 8 of Part II of this Annual Report for discussion of management’s consideration of the Company’s ability to continue as a going concern.
Off-Balance
Sheet Financing Arrangements
We had no obligations, assets or liabilities, which would be considered
off-balance
sheet arrangements as of December 31, 2021 or December 31, 2020. We do not participate in transactions that create relationships with unconsolidated entities or financial partnerships, often referred to as variable interest entities.
We have not entered into any
off-balance
sheet financing arrangements, established any special purpose entities, guaranteed any debt or commitments of other entities, or purchased any
non-financial
assets.