Results of Operations
We have neither engaged in any operations nor generated any revenues to date. Our only activities through March 31, 2023 were organizational activities, those necessary to prepare for the Public Offering, described below, and, after our Public Offering, day-to-day operations and identifying a target company for an Initial 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 marketable securities held in the trust account (the “Trust Account”). 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 income of $7,972,187, which consists of investment income earned on investments held in the Trust Account of $7,429,517 and a gain in fair value of the derivative warrant liabilities of $968,000, partially offset by operating costs of $416,580 and interest expense of $8,750.
For the three months ended March 31, 2022, we had net income of $7,286,617, which consists of a change in fair value of the derivative warrant liabilities of $8,962,749 and interest income on investments held in the Trust Account of $212,079, offset by operating costs of $1,887,176 and interest expense of $1,035.
Liquidity and Capital Resources
On February 12, 2021, we consummated the Public Offering of 69,000,000 units (the “Units”), which includes the full exercise by the underwriters of the over-allotment option, at $10.00 per Unit, generating gross proceeds of $690,000,000. Simultaneously with the closing of the Public Offering, we consummated the sale of 10,400,000 Private Placement Warrants to the Sponsor at a price of $1.50 per warrant, generating gross proceeds of $15,600,000.
Following the Public Offering, the exercise of the over-allotment option and the sale of the Private Placement Warrants, a total of $690,000,000 was placed in the Trust Account.
We incurred $39,065,920 in transaction costs, including $13,800,000 of underwriting fees, $24,150,000 of deferred underwriting fees and $1,115,920 of other costs.
For the three months ended March 31, 2023, cash used in operating activities was $122,554. Net income of $7,972,187 was affected by investment income earned on investments held in the Trust Account of $7,429,517, a gain in fair value of derivative warrant liabilities of $968,000, and changes in operating assets and liabilities, which provided $122,554 of cash from operating activities.
For the three months ended March 31, 2022, cash used in operating activities was $750,621. For the three months ended March 31, 2022, net income of $7,286,617 was affected by a gain in fair value of derivative warrant liabilities of $8,962,749, interest earned on marketable securities held in the Trust Account of $212,079, and changes in operating assets and liabilities, which provided $1,137,590 of cash from operating activities.
As of March 31, 2023 and December 31, 2022, we had cash and U.S. treasury securities held in the Trust Account of $707,633,635 (including approximately $17,564,749 of interest income) and $700,204,118 (including approximately $10,135,232 of interest income), respectively. 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 deferred underwriting commissions and income taxes payable), to complete our Initial Business Combination. We may withdraw interest to pay our tax obligations. During the three months ended March 31, 2023, we did not withdraw any interest earned on the Trust Account. 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.
As of March 31, 2023 and December 31, 2022, we had cash of $210,210 and $332,764, respectively, held outside the Trust Account. 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 an Initial Business Combination.