For the six months ended June 30, 2021, we had a net income of
$1,526,423, which consists of change in fair value of warrant
liability gain of $1,907,500 and interest earned on marketable
securities held in Trust Account of $15,422, offset by formation
and operational costs of $396,499.
Liquidity and Capital Resources
On December 17, 2020, we consummated the Initial Public
Offering of 11,500,000 Units, at a price of $10.00 per Unit, which
included the full exercise by the underwriter of its over-allotment
option in the amount of 1,500,000 Units, generating gross proceeds
of $115,000,000. Simultaneously with the closing of the Initial
Public Offering, we consummated the sale of 5,450,000 Private
Warrants to the Sponsor at a price of $1.00 per Private Warrant
generating gross proceeds of $5,450,000.
Following the Initial Public Offering, the full exercise by the
underwriters of their over-allotment option and sale of the Private
Warrants, a total of $116,150,000 was placed in the Trust Account.
We incurred $2,712,986 in transaction costs, including $2,300,000
of cash underwriting fees, and $412,986 of other offering
costs.
For the six months ended June 30, 2021, cash used in operating
activities was $234,538. Net income of $1,526,423 was affected by
change in fair value of warrant liability of $1,907,500 interest
earned on marketable securities held in Trust Account of $15,422.
Changes in operating assets and liabilities provided $161,961 of
cash for operating activities.
As of June 30, 2021, we had marketable securities held in the Trust
Account of $116,167,331 (including approximately $17,331 of
interest income) consisting of U.S. Treasury Bills with a maturity
of 185 days or less. We may withdraw interest from the Trust
Account to pay taxes, if any. 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 income
taxes payable), to complete our Business Combination. To the extent
that our share capital 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 June 30, 2021, we had cash of $1,018,664. 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, 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 may repay
such loaned amounts out of the proceeds of the Trust Account
released to us. 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
$1,000,000 of such loans may be convertible into warrants, at a
price of $1.00 per warrant, at the option of the lender. The
warrants would be identical to the Private Warrants.
We do not 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 in-depth due diligence and negotiating a
Business Combination are less than the actual amount necessary to
do so, 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
Business Combination or because we become obligated to redeem a
significant number of our public shares upon completion of our
Business Combination, in which case we may issue additional
securities or incur debt in connection with such Business
Combination.
Derivative Warrant Liabilities
We do not use derivative instruments to hedge exposures to cash
flow, market, or foreign currency risks. We evaluate all of our
financial instruments, including issued stock purchase warrants, to
determine if such instruments are derivatives or contain features
that qualify as embedded derivatives, pursuant to ASC 480 and
ASC 815-15. The classification of derivative instruments,
including whether such instruments should be recorded as
liabilities or as equity, is reassessed at the end of each
reporting period.