liquidating distributions with respect to our warrants, which will expire worthless if we fail to complete our initial Business Combination by February 1, 2023, (or May 1, 2023 if the period of time to consummate a Business Combination is extended).
Results of Operations and Known Trends or Future Trends
We have neither engaged in any significant operations nor generated any operating revenue to date. Our only activities from inception related to our formation and our IPO, and since the closing of IPO, the search for a prospective initial Business Combination. Although we have not generated operating revenue, we have generated non-operating income in the form of investment income from investments held in the trust account. We expect to incur increased expenses as a result of being a public company, as well as costs in the pursuit of an initial Business Combination.
We classify the warrants issued in connection with our IPO as liabilities at their fair value and adjust the warrant instrument to fair value at each reporting period. This liability is subject to re-measurement at each balance sheet date until exercised, and any change in fair value is recognized in our statement of operations.
For the three months ended September 30, 2022, we had net income of $489,138, which consisted of $650,744 of interest earned on the balance of the trust account and $450,824 change in fair value of the warrants, offset by $447,376 in general and administrative expenses, $49,864 in franchise tax expense and $115,190 in income tax expense.
For the nine months ended September 30, 2022, we had net income of $3,928,700, which consisted of $855,296 of interest earned on the balance of the trust account and $4,453,807 change in fair value of the warrants, offset by $1,102,765 in general and administrative expenses, $158,416 in franchise tax expense and $119,222 in income tax expense.
For the three and nine months ended September 30, 2021, we had a net loss of $(2,691) and $(9,203), respectively, consisting of formation and operating costs.
Liquidity, Capital Resources and Going Concern
On November 1, 2021, we consummated our initial public offering (“IPO”) of 13,000,000 units. Each unit consists of one share of Class A common stock of the Company, par value $0.0001 per share, and one half of one redeemable warrant of the Company, with each whole warrant entitling the holder thereof to purchase one Class A common stock for $11.50 per share. The units were sold at a price of $10.00 per unit, generating gross proceeds to the Company of $130,000,000. Underwriters were granted a 45-day option to purchase additional units that expired unexercised on December 11, 2021.
Simultaneously with the closing of the IPO, the Company consummated the sale of 4,700,000 warrants at a price of $1.50 per Private Placement Warrant in a private placement to SGAM and Calibre Group and certain of their controlled affiliates, generating gross proceeds of $7,050,000.
A total of $131,950,000 of the net proceeds from the IPO and the Private Placement was placed in a trust account established for the benefit of the Company’s public stockholders, with Continental Stock Transfer & Trust Company acting as trustee.
As of September 30, 2022, we had $126,859 in our operating account held outside of the Trust Account and working capital of $11,768 (including $71,014 of tax obligations).
Through September 30, 2022, our liquidity needs have been satisfied through $400,000 in loans from SGAM and the net proceeds from the private placement not held in the trust account, and, for purposes of tax obligations only, earned interest in the Trust Account. The balance of $400,000 in loans was paid in full at the closing of our IPO on November 1, 2021.
For the nine months ended September 30, 2022, cash used in operating activities was $650,752, which was primarily a result of net income of $3,928,700, offset by interest earned on the balance of the Trust Account of ($855,296), change in fair value of warrant liabilities of ($4,453,807), and changes in operating assets and liabilities, which generated a positive offset of $729,651 of cash from operating activities.
The Company anticipates that the $126,859 outside of the Trust Account as of September 30, 2022, will not be sufficient to allow the Company to operate for at least the next 12 months from the issuance of these financial statements, assuming that a Business