Liquidity and Capital Resources
We do not have sufficient liquidity to meet our anticipated obligations over the next year from the date of issuance of the financial statements included in our annual report. In connection with our assessment of going concern considerations in accordance with Accounting Standards Update (“ASU”) 2014-15, “Disclosures of Uncertainties about an Entity’s Ability to Continue as a Going Concern,” our management has determined that if we are unsuccessful in consummating an initial business combination, the mandatory liquidation and subsequent dissolution raises substantial doubt about the ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of these uncertainties. Our management has determined that we have access to funds from the sponsor that are sufficient to fund our working capital needs until a potential business combination or up to the mandatory liquidation as stipulated in our amended and restated memorandum of association. The financial statements included in our annual report have been prepared in conformity with generally accepted accounting principles in the United States of America, which contemplate our continuation as a going concern.
On February 12, 2021, we consummated the Initial Public Offering of 69,000,000 Units, including the issuance of 9,000,000 Units as a result of the underwriters’ full exercise of their Over-Allotment Option. The Units sold in the Initial Public Offering were sold at an offering price of $10.00 per Unit, generating total gross proceeds of $690,000,000. Simultaneous with the consummation of the Initial Public Offering, we consummated the private placement of an aggregate of 10,400,000 Private Placement Warrants to our sponsor at a price of $1.50 per Private Placement Warrant, generating total proceeds of $15,600,000. Upon closing of the Initial Public Offering on February 12, 2021, the proceeds of the Initial Public Offering of $690,000,000 were held in cash and subsequently invested in U.S. government securities.
On March 1, 2021, our sponsor executed a promissory note (the “March Note”) with a principal amount of $1,500,000. The March Note bears interest at a rate of 0.11% per annum and is payable on the earlier of an initial business combination or the liquidation of the Company. On March 1, 2021, the Company borrowed $1,500,000 pursuant to the March Note and $1,500,000 remained outstanding as of December 31, 2021. Up to $1,500,000 of the March Note 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.
On September 14, 2021, our sponsor executed a promissory note (the “September Note”) with a principal amount of $1,500,000. The September Note bears interest at a rate of 0.17% per annum and is payable on the earlier of an initial business combination or the liquidation of the Company. On September 14, 2021, the Company borrowed $1,500,000 pursuant to the September Note and $1,500,000 remained outstanding as of December 31, 2021.
As of December 31, 2021 and 2020, we had marketable securities held in the trust account of $690,068,886 (including approximately $68,886 of interest income) consisting of U.S. Treasury Bills with a maturity of 180 days or less. Interest income on the balance in the trust account may be used by us to pay taxes. Through December 31, 2021, we withdrew $0 of interest earned on the trust account.
For the year ended December 31, 2021, cash used in operating activities was $2,072,274. Net income of $11,227,23, primarily as a result of the gain in fair value of the derivative warrant liabilities of $18,890,991 and interest income of $68,886. Changes in operating assets and liabilities used $4,165,876 of cash from operating activities.
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 taxes payable and deferred underwriting commissions) to complete our initial business combination. We may withdraw interest to make permitted withdrawals. Our annual income tax obligations will depend on the amount of interest and other income earned on the amounts held in the trust account. To the extent that our capital shares 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.
As of December 31, 2021, we had cash of $1,204,517 held outside the trust account. We intend to use the funds held outside the trust account primarily 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 an initial business combination.