UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(MARK ONE)
For the quarter ended June 30, 2022
For the transition period from to
Commission file number: 001-39719
(Exact Name of Registrant as Specified in Its Charter)
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(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification No.)
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(Address of principal executive offices)
(650 ) 285-4270
(Issuer’s telephone number)
Securities registered pursuant to Section 12(b) of the Act:
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Title of each class
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Trading Symbol(s)
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Name of each exchange on which
registered
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Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such
reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the
preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See definitions of “large
accelerated filer”, “accelerated filer”, “smaller reporting company”, and “emerging growth company” in Rule 12b-2 of the Exchange Act.
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Large accelerated filer
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Accelerated filer
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Smaller reporting company
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Emerging growth company
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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided
pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☒
No ☐
As of August 31, 2022, there were 10,859,081 shares of Class A common stock, $0.0001 par value and
2,588,010 shares of Class B common stock, $0.0001 par value, issued and outstanding.
JIYA ACQUISITION CORP.
FORM 10-Q FOR THE QUARTER ENDED JUNE 30, 2022
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JIYA ACQUISITION CORP.
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June 30,
2022
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December 31,
2021
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(Unaudited)
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ASSETS
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Current assets
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Cash
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$
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$
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Prepaid expenses
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Total Current Assets
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Marketable securities held in Trust Account
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TOTAL ASSETS
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$
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$
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LIABILITIES AND STOCKHOLDERS’ DEFICIT
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Current liabilities
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Accrued expenses
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$
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$
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Income taxes payable
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Promissory note – related party
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Total Current Liabilities
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Deferred underwriting payable
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Total Liabilities
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Commitments
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Class A common stock subject to possible redemption,
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Stockholders’ Deficit
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Preferred stock, $
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Class A common stock, $
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Class B common stock, $
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Additional paid-in capital
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Accumulated deficit
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(
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(
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Total Stockholders’ Deficit
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(
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(
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TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT
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$
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$
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The accompanying notes are an integral part of the unaudited condensed financial statements.
JIYA ACQUISITION CORP.
(UNAUDITED)
| For the Three Months Ended June 30, |
For the Six Months Ended
June 30, |
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| 2022 |
2021 | 2022 |
2021 | |||||||||||||
| General and administrative expenses |
$ | $ | $ | $ | ||||||||||||
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Stock-based compensation expenses
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Loss from operations
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(
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Other income (expense):
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Interest earned on marketable securities held in Trust Account
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Unrealized loss on marketable securities held in Trust Account
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Total Other income (expense), net
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| Loss before provision for income taxes |
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| Provision for income taxes |
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Net loss
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$ | ( |
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$
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(
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$ | ( |
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Basic and diluted weighted average shares outstanding, Class A common stock
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Basic and diluted net loss per share, Class A common stock
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$ | ( |
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Basic and diluted weighted average shares outstanding, Class B common stock
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Basic and diluted net loss per share, Class B common stock
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$ | ( |
) | $ | ( |
) | $ | ( |
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The accompanying notes are an integral part of the unaudited condensed financial statements.
JIYA ACQUISITION CORP.
(UNAUDITED)
FOR THE THREE AND SIX MONTHS
ENDED JUNE 30, 2022
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Class A
Common Stock
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Class B
Common Stock
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Additional
Paid-in
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Accumulated
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Total
Stockholders’
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||||||||||||||||||||||||
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Shares
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Amount
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Shares
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Amount
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Capital
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Deficit
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Deficit
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Balance — January 1, 2022
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$
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$
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$
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$
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$
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Stock-based compensation expense
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—
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—
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Net loss
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—
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—
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(
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(
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Balance – March 31, 2022
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$
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$
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$
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$
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(
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$
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Stock-based compensation expense
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— | — | ||||||||||||||||||||||||||
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Net loss
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— | — | ( |
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Balance – June 30, 2022
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$ | $ | $ | $ | ( |
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FOR THE THREE AND SIX MONTHS ENDED JUNE 20, 2021
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Class A Common Stock
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Class B Common Stock
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Additional
Paid-in
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Accumulated
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Total
Stockholders’
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Shares
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Amount
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Shares
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Amount
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Capital
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Deficit
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Deficit
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Balance — January 1, 2021
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$ |
$ |
$ |
$ |
( |
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Stock-based compensation expense
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— | — | ||||||||||||||||||||||||||
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Net loss
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—
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—
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(
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(
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Balance – March 31, 2021
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$
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$ |
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$
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$
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(
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$
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(
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Stock-based compensation expense
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— | — | ||||||||||||||||||||||||||
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Net loss
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— | — | ( |
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Balance – June 30, 2021
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$ |
$ |
$ |
$ |
( |
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The accompanying notes are an integral part of the unaudited condensed financial statements.
JIYA ACQUISITION CORP.
(UNAUDITED)
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For the Six Months Ended June 30,
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| 2022 |
2021 |
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Cash Flows from Operating Activities:
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Net loss
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$ | ( |
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Adjustments to reconcile net loss to net cash used in operating activities:
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Stock-based compensation expense
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Interest earned on marketable securities held in Trust Account
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Unrealized loss on marketable securities held in Trust Account
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Changes in operating assets and liabilities:
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Prepaid expenses
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Accounts payable and accrued expenses
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Income taxes payable
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Net cash used in operating activities
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Cash Flows from Financing Activities:
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| Repayment of funds to sponsor | ( |
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Proceeds from promissory note – related party
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| Repayment of promissory note – related party | ( |
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Payment of offering costs
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Net cash provided by (used in) financing activities
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Net Change in Cash
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Cash – Beginning of period
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Cash – End of period
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$
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$ | |||||
The accompanying notes are an integral part of the unaudited condensed financial statements.
NOTE 1. DESCRIPTION OF ORGANIZATION AND
BUSINESS OPERATIONS, AND GOING CONCERN
Jiya Acquisition Corp. (formerly known
as SMSR Holding Co.) (the “Company”) is a blank check company incorporated in Delaware on August 27, 2020. The Company is a blank check company formed for the purpose of entering into a merger, share exchange, asset acquisition, stock
purchase, recapitalization, reorganization or other similar business combination with one or more businesses or entities (the “Business Combination”).
The Company is an early stage and
emerging growth company and, as such, the Company is subject to all of the risks associated with early stage and emerging growth companies.
As of June 30, 2022, the Company had not
commenced any operations. All activity through June 30, 2022 relates to the Company’s formation, initial public offering (the “Initial Public Offering”), which is described below, and subsequent to the Initial Public Offering, identifying a
target company for a Business Combination. The Company will not generate any operating revenues until after the completion of its initial Business Combination, at the earliest. The Company generates non-operating income on cash and cash
equivalents in the form of interest income from the proceeds derived from the Initial Public Offering.
The registration
statement for the Company’s Initial Public Offering became effective on November 18, 2020. On November 23, 2020, the Company consummated the Initial Public Offering of 10,000,000 shares of Class A common stock (the “Public Shares”), at $10.00
per Public Share, generating gross proceeds of $100,000,000 which is described in Note 4.
Simultaneously with the closing of the
Initial Public Offering, the Company consummated the sale of 500,000 shares (the “Private Placement Shares”) at a price of $10.00 per Private Placement Share in a private placement to Jiya Holding Company LLC (the “Sponsor”), generating gross proceeds of $5,000,000 , which is described in Note 5.
Following the closing of the Initial
Public Offering on November 23, 2020, an amount of $100,000,000 ($10.00 per Public Share) from the net proceeds of the sale of the Public Shares in the Initial Public Offering and the sale of the Private Placement Shares was placed in a trust account
(the “Trust Account”), located in the United States and invested only in U.S. government securities, within the meaning set forth in Section 2(a)(16) of the Investment Company Act of 1940, as amended (the “Investment Company Act”), with a
maturity of 185 days or less or in any open-ended investment company that holds itself out as a money market fund selected by the Company meeting the conditions of Rule 2a-7 of the Investment Company Act, as determined by the Company, until
the earlier of: (i) the completion of a Business Combination and (ii) the distribution of the funds in the Trust Account, as described below.
On December 10,
2020, the Company consummated the sale of an additional 352,040 Shares, at $10.00 per Share, and the sale of an additional 7,041 Private Placement
Shares, at $10.00 per Private Placement Share, generating total gross proceeds of $3,590,810 . A total of $3,520,402 of the net proceeds was
deposited into the Trust Account, bringing the aggregate proceeds held in the Trust Account to $103,520,402 .
Transaction costs amounted to $6,168,021 , consisting of $2,070,408
of underwriting fees, $3,623,214 of deferred underwriting fees and $474,399 of other offering costs.
The Company’s management has broad
discretion with respect to the specific application of the net proceeds of the Initial Public Offering and the sale of the Private Placement Shares, although substantially all of the net proceeds are intended to be applied generally toward
consummating a Business Combination. There is no assurance that the Company will be able to complete a Business Combination successfully. The Company must complete a Business Combination having an aggregate fair market value of at least 80 % of the assets held in the Trust Account (excluding the deferred underwriting commissions and taxes payable on interest earned on the Trust
Account) at the time of the agreement to enter into an initial Business Combination. The Company will only complete a Business Combination if the post-transaction company owns or acquires 50 % or more of the outstanding voting securities of the target or otherwise acquires a controlling interest in the target sufficient for it not to be required to register
as an investment company under the Investment Company Act.
The Company will provide its holders of
the outstanding Public Shares (the “public stockholders”) with the opportunity to redeem all or a portion of their Public Shares upon the completion of a Business Combination either (i) in connection with a stockholder meeting called to
approve the Business Combination or (ii) by means of a tender offer. The decision as to whether the Company will seek stockholder approval of a Business Combination or conduct a tender offer will be made by the Company, solely in its
discretion. The public stockholders will be entitled to redeem their Public Shares for a pro rata portion of the amount then in the Trust Account (initially $10.00 per Public Share, plus any pro rata interest earned on the funds held in the Trust Account and not previously released to the Company to pay its tax obligations).
The Company will proceed with a Business
Combination if the Company has net tangible assets of at least $5,000,001 immediately prior to or upon consummation of the Business
Combination and, solely if the Company seeks stockholder approval, a majority of the shares voted are voted in favor of the Business Combination. If a stockholder vote is not required by law and the Company does not decide to hold a
stockholder vote for business or other legal reasons, the Company will, pursuant to its Amended and Restated Certificate of Incorporation (the “Amended and Restated Certificate of Incorporation”), conduct the redemptions pursuant to the
tender offer rules of the U.S. Securities and Exchange Commission (“SEC”) and file tender offer documents with the SEC containing substantially the same information as would be included in a proxy statement prior to completing a Business
Combination. If, however, stockholder approval of the transaction is required by law, or the Company decides to obtain stockholder approval for business or legal reasons, the Company will offer to redeem shares in conjunction with a proxy
solicitation pursuant to the proxy rules and not pursuant to the tender offer rules. If the Company seeks stockholder approval in connection with a Business Combination, the Sponsor has agreed to vote its Founder Shares (as defined in Note
6), Private Placement Shares and any Public Shares purchased during or after the Initial Public Offering (a) in favor of approving a Business Combination and (b) not to redeem any shares in connection with a stockholder vote to approve a
Business Combination or sell any shares to the Company in a tender offer in connection with a Business Combination. Additionally, each public stockholder may elect to redeem their Public Shares irrespective of whether they vote for or against
the proposed transaction or do not vote at all and whether or not they are a holder of record on the record date to be established by the Company to determine who can vote on the proposed Business Combination.
Notwithstanding the above, if the
Company seeks stockholder approval of a Business Combination and it does not conduct redemptions pursuant to the tender offer rules, the Amended and Restated Certificate of Incorporation provides that a public stockholder, together with any
affiliate of such stockholder or any other person with whom such stockholder is acting in concert or as a “group” (as defined under Section 13 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), will be restricted from
redeeming its shares with respect to more than an aggregate of 15 % or more of the Public Shares, without the prior consent of the
Company.
The Sponsor has agreed (a) to waive its
redemption rights with respect to its Founder Shares, Private Placement Shares and Public Shares held by it in connection with the completion of a Business Combination, (b) not to propose an amendment to the Amended and Restated Certificate
of Incorporation that would affect a public stockholders’ ability to convert or sell their shares to the Company in connection with a Business Combination or affect the substance or timing of the Company’s obligation to redeem 100 % of its Public Shares if the Company does not complete a Business Combination within the time period required by its Amended and Restated
Certificate of Incorporation, unless the Company provides the public stockholders with the opportunity to redeem their Public Shares in conjunction with any such amendment and (c) waive its liquidation rights with respect to the Founder
Shares if the Company fails to complete a Business Combination within the Combination Period (defined below).
The Company will have until November 23,
2022 to complete a Business Combination (the “Combination Period”). If the Company is unable to complete a Business Combination within the Combination Period, the Company will (i) cease all operations except for the purpose of winding up,
(ii) as promptly as reasonably possible but not more than business days thereafter, redeem the Public Shares, at a per-share
price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account including interest earned on the funds held in the Trust Account and not previously released to the Company to pay taxes (less up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding Public Shares, which redemption will completely
extinguish public stockholders’ rights as stockholders (including the right to receive further liquidating distributions, if any), subject to applicable law, and (iii) as promptly as reasonably possible following such redemption, subject to
the approval of the Company’s remaining stockholders and the Company’s Board of Directors, dissolve and liquidate, subject in the case of clauses (ii) and (iii) to the Company’s obligations under Delaware law to provide for claims of
creditors and the requirements of other applicable law.
The Sponsor has agreed to waive its
liquidation rights with respect to the Private Placement Shares if the Company fails to complete a Business Combination within the Combination Period. However, if the Sponsor acquires Public Shares in or after the Initial Public Offering,
such Public Shares will be entitled to liquidating distributions from the Trust Account if the Company fails to complete a Business Combination within the Combination Period. The underwriters will agree to waive their rights to their deferred
underwriting commission (see Note 7) held in the Trust Account in the event the Company does not complete a Business Combination within the Combination Period and, in such event, such amounts will be included with the funds held in the Trust
Account that will be available to fund the redemption of the Public Shares. In the event of such distribution, it is possible that the per share value of the assets remaining available for distribution will be less than the Initial Public
Offering price per Public Share ($10.00 ).
In order to protect the amounts held in
the Trust Account, the Sponsor has agreed to be liable to the Company if and to the extent any claims by a third party for services rendered or products sold to the Company, or a prospective target business with which the Company has
discussed entering into a transaction agreement, reduce the amount of funds in the Trust Account to below the lesser of (i) $10.00
per Public Share and (ii) the actual amount per Public Share held in the Trust Account as of the date of the liquidation of the Trust Account, if less than $10.00 per Public Share due to reductions in the value of the trust assets, less taxes payable, provided that such liability will not apply to any claims by a third party or prospective target business who
executed a waiver of any and all rights to the monies held in the Trust Account (whether or not such waiver is enforceable) nor will it apply to any claims under the Company’s indemnity of the underwriters of Initial Public Offering against
certain liabilities, including liabilities under the Securities Act of 1933, as amended (the “Securities Act”). Moreover, in the event that an executed waiver is deemed to be unenforceable against a third party, the Sponsor will not be
responsible to the extent of any liability for such third-party claims. The Company will seek to reduce the possibility that Sponsor will have to indemnify the Trust Account due to claims of creditors by endeavoring to have all vendors,
service providers, prospective target businesses or other entities with which the Company does business, execute agreements with the Company waiving any right, title, interest or claim of any kind in or to monies held in the Trust Account,
except for the Company’s auditors.
Liquidity and Going Concern
The Company has principally financed its operations from inception using proceeds from the sale of its equity
securities to its stockholders prior to the Initial Public Offering and such amount of proceeds from the Initial Public Offering that were placed in an account outside of the Trust Account for working capital purposes. At June 30, 2022, the
Company had cash outside the trust of $235,730 and a working capital deficit of $110,471 , excluding Delaware franchise taxes of $100,000 and
Federal income taxes of $2,057 . The Company has incurred and expects to continue to incur significant costs in pursuit of its
financing and acquisition plans.
Until the consummation of a Business Combination, the Company will be using the funds not held in the Trust
Account for identifying and evaluating prospective acquisition candidates, performing due diligence on prospective target businesses, paying for travel expenditures, selecting the target business to acquire, and structuring, negotiating and
consummating the Business Combination.
The Company will need to raise further additional capital through loans or additional investments from its
Sponsor, stockholders, officers, directors, or third parties. The Company’s officers, directors and Sponsor may, but are not obligated to, loan the Company funds, from time to time or at any time, in whatever amount they deem reasonable in
their sole discretion, to meet the Company’s working capital needs. Accordingly, the Company may not be able to obtain additional financing. If the Company is unable to raise additional capital, it may be required to take additional measures
to conserve liquidity, which could include, but not necessarily be limited to, curtailing operations, suspending the pursuit of a potential transaction, and reducing overhead expenses. The Company cannot provide any assurance that new
financing will be available to it on commercially acceptable terms, if at all.
In
connection with the Company’s assessment of going concern considerations in accordance with Financial Accounting Standards Board’s Accounting Standards Codification Topic 205-40, “Presentation of Financial Statements – Going Concern,” the
Company has until November 23, 2022, to consummate an initial business combination. It is uncertain that the Company will be able to consummate an initial business combination by this time. If an initial business combination is not
consummated by this date, there will be a mandatory liquidation and subsequent dissolution of the Company. Additionally, the Company may not have sufficient liquidity to fund the working capital needs of the Company through one year from
the issuance of these financial statements. Management has determined that the liquidity condition and mandatory liquidation, should an initial business combination not occur, and potential subsequent dissolution raises substantial doubt
about the Company’s ability to continue as a going concern. No adjustments have been made to the carrying amounts of assets or liabilities should the Company be required to liquidate after November 23, 2022.
Risks and Uncertainties
Management continues to evaluate the
impact of the COVID-19 pandemic and has concluded that while it is reasonably possible that the virus could have a negative effect on the Company’s financial position, results of its operations and/or search for a target company, the specific
impact is not readily determinable as of the date of these financial statements. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
NOTE 2. REVISION OF PREVIOUSLY REPORTED
BALANCES
The Company notes that the basic and diluted weighted average shares outstanding for
both Class A common stock and Class B common stock for the three and six months ended June 30, 2021 were not restated correctly within the restatement note of the September 30, 2021 Form 10-Q filed on November 19, 2021. The Company has included
this revision note to revise the previously restated and reported balances of basic and diluted weighted average shares outstanding of Class A common stock and basic and diluted weighted average shares outstanding of Class B common stock within the
Statement of Operations for the three and six months ended June 30, 2021.
The impact of the revision on the Company’s financial statements is reflected in the
following table.
|
Statement of Operations for the Three and Six Months Ended June 30, 2021
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As Previously
Reported
|
Adjustment
|
As Revised
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Basic and diluted weighted average shares outstanding, Class A common stock
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$
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$
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$
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Basic and diluted weighted average shares outstanding, Class B common stock
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$
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$
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(
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)
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$
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NOTE 3.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The accompanying unaudited condensed financial statements have been prepared
in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and in accordance with the instructions to Form 10-Q and Article 8 of Regulation S-X of the SEC. Certain
information or footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted, pursuant to the rules and regulations of the SEC for interim financial reporting. Accordingly, they
do not include all the information and footnotes necessary for a complete presentation of financial position, results of operations, or cash flows. In the opinion of management, the accompanying unaudited condensed financial statements
include all adjustments, consisting of a normal recurring nature, which are necessary for a fair presentation of the financial position, operating results and cash flows for the periods presented.
The accompanying unaudited condensed financial statements should be read in
conjunction with the Company’s Annual Report on Form 10-K for the period ended December 31, 2021, as filed with the SEC on April 15, 2022. The interim results for the three and six months ended
June 30, 2022 are not necessarily indicative of the results to be expected for the year ending December 31, 2022 or for any future periods.
Emerging Growth Company
The Company is an “emerging growth company,” as defined in Section 2(a) of the
Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not
emerging growth companies including, but not limited to, not being required to comply with the independent registered public accounting firm attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations
regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not
previously approved.
Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies
from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities
registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements
that apply to non-emerging growth companies but any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different
application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of the Company’s
financial statement with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential
differences in accounting standards used.
Use of Estimates
The preparation of the condensed
financial statements in conformity with GAAP requires the Company’s management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses during the reporting period.
Making estimates requires management
to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the financial statements, which management considered in
formulating its estimate, could change in the near term due to one or more future confirming events.
Cash and Cash Equivalents
The Company considers all short-term investments with an original maturity of
three months or less when purchased to be cash equivalents. The Company did no
Class A Common Stock Subject to Possible Redemption
The Company accounts for its Class A common stock subject
to possible redemption in accordance with the guidance in Accounting Standards Codification (“ASC”) Topic 480 “Distinguishing Liabilities from Equity.” Shares of Class A common stock subject to mandatory redemption are classified as a
liability instrument and are measured at fair value. Conditionally redeemable common stock (including common stock that feature redemption rights that are either within the control of the holder or subject to redemption upon the occurrence of
uncertain events not solely within the Company’s control) are classified as temporary equity. At all other times, common stock is classified as stockholders’ equity. The Company’s Class A common stock feature certain redemption rights that
are considered to be outside of the Company’s control and subject to occurrence of uncertain future events. Accordingly, at June 30, 2022 and December 31, 2021, Class A common stock subject to possible redemption are presented at redemption
value as temporary equity, outside of the stockholders’ deficit section of the Company’s balance sheets. The common stock subject to possible redemption of 10,352,040 shares excludes the 507,041 Private Placement Shares that are classified as Class A
common stock but are not redeemable.
The Company recognizes changes in
redemption value immediately as they occur and adjusts the carrying value of redeemable common stock to equal the redemption value at the end of each reporting period. Immediately upon the closing of the Initial Public Offering, the Company
recognized the accretion from initial book value to redemption amount value. Increases or decreases in the carrying amount of redeemable common stock are affected by charges against additional paid in capital and accumulated deficit.
At
June 30, 2022 and December 31, 2021, the Class A common stock reflected in the condensed balance sheets are reconciled in the following table:
|
Gross proceeds
|
$
|
|
||
|
Less:
|
||||
|
Class A common stock issuance costs
|
(
|
)
|
||
|
Plus:
|
||||
|
Accretion of carrying value to redemption value
|
|
|||
|
Common stock subject to possible redemption
|
$
|
|
Marketable Securities Held in Trust Account
At June 30, 2022 and December 31, 2021, substantially all of the assets held in the Trust Account
were held in money market funds, which are invested primarily in U.S. Treasury securities. The Company accounts for its marketable securities as Trading Securities under ASC 320 “Investments – Debt Securities,” where securities are presented at fair value on the balance sheet and with unrealized gains or losses, if any,
presented on the statements of operations.
Share-Based Payment Arrangements
The Company accounts for stock awards in accordance with ASC 718,
“Compensation - Stock Compensation,” which requires that all equity awards be accounted for at their “fair value.” Fair value is measured on the grant date and is equal to the underlying value of the stock.
Costs equal to these fair values are recognized ratably over the requisite
service period based on the number of awards that are expected to vest, or in the period of grant for awards that vest immediately and have no future service condition. For awards that vest over time, cumulative adjustments in later periods
are recorded to the extent actual forfeitures differ from the Company’s initial estimates; previously recognized compensation cost is reversed if the service or performance conditions are not satisfied and the award is forfeited.
Income Taxes
The Company accounts for income taxes under ASC 740, “Income Taxes.” ASC 740, Income Taxes, requires the recognition of deferred
tax assets and liabilities for both the expected impact of differences between the unaudited condensed financial statements and tax basis of assets and liabilities and for the expected future tax benefit to be derived from tax loss and
tax credit carry forwards. ASC 740 additionally requires a valuation allowance to be established when it is more likely than not that all or a portion of deferred tax assets will not be realized. As of June 30, 2022 and December 31, 2021,
the Company’s deferred tax asset had a full valuation allowance recorded against it. Our effective tax rates were (0.74 %) and
0.00 % for the three months ended June 30, 2022 and 2021, respectively, and (0.30 %) and 0.00 % for the six months ended June 30,
2022 and 2021, respectively. The effective tax rate differs from the statutory tax rate of 21
ASC 740 also clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements and prescribes a
recognition threshold and measurement process for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be
more-likely-than-not to be sustained upon examination by taxing authorities. ASC 740 also provides guidance on derecognition, classification, interest and penalties, accounting in interim period, disclosure and transition.
The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. There were no no
The Company has identified the United States as its only “major” tax jurisdiction. The Company is subject to income taxation by major taxing authorities since inception. These examinations may include
questioning the timing and amount of deductions, the nexus of income among various tax jurisdictions and compliance with federal and state tax laws. The Company’s management does not expect that the total amount of unrecognized tax
benefits will materially change over the next twelve months.
Net Loss per Common Share
The Company complies with accounting and disclosure requirements of FASB ASC Topic 260, “Earnings Per Share”. Net loss per common
stock is computed by dividing net loss by the weighted average number of common stock outstanding for the period. The Company applies the two-class method in calculating earnings per share. Accretion associated with the redeemable shares
of Class A common stock is excluded from earnings per share as the redemption value approximates fair value.
As of June 30, 2022 and 2021, the Company did no
The following table reflects the calculation of basic and diluted net loss per common share (in dollars, except per share amounts):
|
Three Months Ended
June 30, 2022
|
Three Months Ended
June 30, 2021
|
Six Months Ended
June 30, 2022
|
Six Months Ended
June 30, 2021
|
|||||||||||||||||||||||||||||
| Class A | Class B | Class A | Class B |
Class A
|
Class B
|
Class A
|
Class B
|
|||||||||||||||||||||||||
|
Basic and diluted net loss per common stock
|
||||||||||||||||||||||||||||||||
|
Numerator:
|
||||||||||||||||||||||||||||||||
|
Allocation of
net loss, as adjusted
|
$ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) |
$
|
(
|
)
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
(
|
)
|
||||||||
|
Denominator:
|
||||||||||||||||||||||||||||||||
|
Basic and
diluted weighted average common stock outstanding
|
|
|
|
|
||||||||||||||||||||||||||||
|
Basic and diluted net loss per common stock
|
$ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) |
$
|
(
|
)
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
(
|
)
|
||||||||
Concentration of Credit Risk
Financial instruments that potentially subject the Company to
concentrations of credit risk consist of cash accounts in a financial institution, which, at times may exceed the Federal Depository Insurance Coverage of $250,000. The Company has not experienced losses on these accounts.
Fair Value of Financial Instruments
The fair value of the Company’s assets and liabilities, which qualify as
financial instruments under ASC Topic 820, “Fair Value Measurement,” approximates the carrying amounts represented in the accompanying condensed balance sheets, primarily due to their short-term nature.
Recent Accounting Standards
Management does not believe that there are any recently issued, but not yet effective, accounting standards, if
currently adopted, would have a material effect on the Company’s condensed financial statements.
NOTE 4. INITIAL PUBLIC OFFERING
Pursuant to the Initial
Public Offering on November 23, 2020, the Company sold 10,352,040 public shares, inclusive of 352,040 shares sold to the underwriters on December 10, 2020 upon the underwriters’ election to partially exercise their over-allotment option, at a purchase price of $10.00
NOTE 5. PRIVATE PLACEMENT
Simultaneously with the
closing of the Initial Public Offering, the Sponsor purchased an aggregate of 500,000 Private Placement Shares at a price of $10.00 per Private Placement Share, for an aggregate purchase price of $5,000,000 . On December 10, 2020, in connection with the underwriters’ election to partially exercise their over-allotment option, the Company sold an additional 7,041 Private Placement Shares to the Sponsor, at a price of $10.00
per Private Placement share, generating gross proceeds of $70,410 . The proceeds from the sale of the Private Placement Shares were added to
the net proceeds from the Initial Public Offering held in the Trust Account. If the Company does not complete a Business Combination within the Combination Period, the proceeds from the sale of the Private Placement Shares held in the Trust Account
will be used to fund the redemption of the Public Shares (subject to the requirements of applicable law).
NOTE 6. RELATED PARTY TRANSACTIONS
Founder Shares
On September 9,
2020, the Sponsor purchased 4,312,500 shares (the “Founder Shares”) of the Company’s Class B common stock for an aggregate price
of $25,000 . On October 30, 2020, the Sponsor forfeited 1,437,500 Founder Shares back to the Company for no consideration, which the Company cancelled, resulting in an aggregate of 2,875,000 375,000 shares subject to forfeiture by the Sponsor to the extent that the underwriter’s over-allotment was not exercised in full or in part, so that the number of Founder Shares would
collectively represent approximately 20 % of the Company’s issued and outstanding shares after the Initial Public Offering. As a
result of the underwriters’ election to partially exercise their over-allotment option on December 10, 2020, a total of 88,010
Founder Shares are no longer subject to forfeiture and 286,990 Founder Shares were forfeited, resulting in an aggregate of 2,588,010
The Sponsor has
agreed, subject to certain limited exceptions, not to transfer, assign or sell any of the Founder Shares until the earlier to occur of: (1) one year
after the completion of a Business Combination or (B) subsequent to a Business Combination, (x) if the closing price of the Class A common stock equals or exceeds $12.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within any 30 -trading day period commencing at least 120 days after a Business Combination, or (y) the date on which the Company completes a liquidation, merger, capital stock exchange or other
similar transaction that results in all of the Company’s stockholders having the right to exchange their shares of common stock for cash, securities or other property.
On November 13,
2020, the Sponsor transferred 30,000
On September 23, 2021, Perry Karsen resigned from the Board effective immediately, and such, forfeited their Class B shares
back to the sponsor. On September 24, 2021, the Company announced that Dr. Lori Friedman was appointed to serve as a Class I director of the Company and was granted 30,000 Class B shares of the Company, which were granted from the sponsor. No new Class B shares were issued as part of Dr. Friedman’s appointment or Perry Karsen’s resignation.
The Company entered
into an agreement with Ms. Hemrajani, the Company’s Chief Executive Officer, pursuant to which Ms. Hemrajani has agreed to provide up to 60 %
of her normal working time to the Company in her capacity as Chief Executive Officer. In connection with her services, Ms. Hemrajani will receive an annual base salary of $270,000 and will be eligible to participate in the Company’s benefit programs in effect from time to time. In addition, on November 16, 2020, the Sponsor transferred to Ms. Hemrajani 200,000 Founder Shares, which will vest 25 %
on the first anniversary of the grant date, with the remaining 75 % vesting in equal monthly installments over 36 months, in each case, subject to Ms. Hemrajani’s continued employment with the Company. The shares are generally subject to the same terms and
conditions as the Founder Shares held by the Sponsor, except that they were not subject to forfeiture in the event the underwriters’ over-allotment option was not exercised. Ms. Hemrajani’s agreement also provides that, in the event Ms.
Hemrajani’s employment is terminated by the Company without “cause” or Ms. Hemrajani resigns for “good reason” (such terms are defined in the agreement), then Ms. Hemrajani will be entitled to receive (i) base salary continuation and payment
of monthly COBRA premiums, in each case for three months following the date of her termination and (ii) an additional three months of vesting for purposes of her Class B shares (or, if such termination of employment occurs prior to August 24, 2021, acceleration of
25 % of her Class B shares). Payment of the severance benefits is contingent on Ms. Hemrajani’s execution and non-revocation of a
release of claims, as a well as her continued compliance with customary confidentiality and non-solicitation restrictions set forth in her agreement. In addition, in the event Ms. Hemrajani is not offered a position as an executive officer of
the target business following the initial Business Combination, then 100 % of Ms. Hemrajani’s Class B shares will become fully
vested.
The Company has
also entered into an agreement on November 4, 2020 with Mayank Gandhi, the Company’s Vice President, Corporate Development, pursuant to which Mr. Gandhi will receive an annual base salary of $225,000 and will be eligible to participate in the Company’s benefit programs in effect from time to time. In addition, on November 16, 2020, the Sponsor transferred to
Mr. Gandhi 40,000 Founder Shares, which will vest 25 % on the first anniversary of the transfer date, with the remaining 75 %
vesting in equal monthly installments over 36 months, in each case subject to Mr. Gandhi’s continued employment with the Company.
The Sponsor also transferred 8,000 Founder Shares to Mr. Gandhi on November 16, 2020 that will vest on the second anniversary of
the consummation of the initial Business Combination, subject to Mr. Gandhi’s continued employment through such date. In the event Mr. Gandhi is not offered an ongoing role with the target business following the initial Business Combination,
then 100 % of Mr. Gandhi’s Class B shares will become fully vested. For the three and six months ended June 30, 2022, the Company
incurred approximately $133,200 and $267,000 ,
respectively for executive payroll related expenses. For the three and six months ended June 30, 2021, the Company incurred approximately $130,600
and $292,700 , respectively for executive payroll related expenses.
The transfer of the Founders Shares is in the scope of FASB
ASC Topic 718, “Compensation-Stock Compensation” (“ASC 718”). Under ASC 718, stock-based compensation associated with equity-classified awards is measured at fair value upon the grant date. The Founders Shares were granted subject to a performance condition (i.e., the occurrence of a Business
Combination). Compensation expense related to the Founders Shares is recognized only when the performance condition is probable of occurrence under the applicable accounting literature in this circumstance. As of June 30, 2022, the Company determined that a Business Combination is not considered probable, and, therefore, no stock-based compensation expense has been recognized. Stock-based
compensation would be recognized at the date a Business Combination is considered probable (i.e., upon consummation of a Business Combination) in an amount equal to the number of Founders Shares times the grant date fair value per
share (unless subsequently modified) less the amount initially received for the purchase of the Founders Shares.
Administrative Services Agreement
The Company entered into an
agreement, commencing on November 18, 2020 through the earlier of the Company’s consummation of a Business Combination or its liquidation, to pay the Sponsor a total of $10,000 per month for office space, secretarial and administrative support. For the three and six months ended June 30, 2022 and 2021, the Company incurred $30,000 60,000 no amount and $30,000 , respectively, for these services. For the
three and six months ended June 30, 2021, the Company paid $50,000 and $60,000 , respectively, for these services. As of June 30, 2022 and December 31, 2021, $30,000 and no balance, respectively, are included in accrued
expenses in the accompanying condensed balance sheets.
Promissory Note —
Related Party
On September 9,
2020, the Company issued an unsecured promissory note to the Sponsor (the “Promissory Note”), pursuant to which the Company could borrow up to an aggregate principal amount of $200,000 . The Promissory Note was non-interest bearing and payable on the earlier of (i) April 30, 2021 or (ii) the consummation of the Initial Public Offering. As of June 30, 2022 and
December 31, 2021, there was no
On June 13, 2022,
the Company issued an non-convertible promissory note to the Sponsor, pursuant to which the Company could borrow up to an aggregate principal amount of $1,500,000 . The Promissory Note was non-interest bearing and payable on the earlier (i) November 23, 2022 or (ii) the date on which Borrower consummates a business combination. As of
June 30, 2022 and December 31, 2021, there was $250,000 and no amount outstanding under the promissory note, respectively.
Related Party Loans
In addition, in
order to finance transaction costs in connection with a Business Combination, the Sponsor, an affiliate of the Sponsor or certain of the Company’s officers and directors may, but are not obligated to, loan the Company funds on a non-interest
basis as may be required (“Working Capital Loans”). If the Company completes a Business Combination, the Company would repay the Working Capital Loans out of the proceeds of the Trust Account released to the Company. Otherwise, the Working
Capital Loans would be repaid only out of funds held outside the Trust Account. In the event that a Business Combination does not close, the Company may use a portion of proceeds held outside the Trust Account to repay the Working Capital
Loans, but no proceeds held in the Trust Account would be used to repay the Working Capital Loans. Except for the foregoing, the terms of such Working Capital Loans, if any, have not been determined and no written agreements exist with
respect to such loans. The Working Capital Loans would be repaid upon consummation of a Business Combination, without interest, or, at the lender’s discretion, up to $1,500,000 of such Working Capital Loans may be convertible into shares at a price of $10.00
per share. As of June 30, 2022 and December 31, 2021, no
NOTE 7. COMMITMENTS
Registration Rights
Pursuant to a
registration rights agreement entered into on November 18, 2020, the holders of the Founder Shares, Private Placement Shares and shares that may be issued upon conversion of Working Capital Loans will have registration rights to require the
Company to register a sale of any of its securities held by them. The holders of these securities are entitled to make up to three
demands, excluding short form demands, that the Company register such securities. In addition, the holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent to the completion of a Business
Combination. The registration rights agreement does not contain liquidated damages or other cash settlement provisions resulting from delays in registering our securities. The Company will bear the expenses incurred in connection with the
filing of any such registration statements.
Pursuant to the
forward purchase agreement, the Company will agree that it will use its commercially reasonable efforts to file within 30 days after the closing of a Business Combination a registration statement with the SEC for a secondary offering of the
forward purchase shares and to cause such registration statement to be declared effective as soon as practicable after it is filed.
Underwriting
Agreement
The underwriters
are entitled to a deferred fee of $0.35 per share, or $3,623,214 in the aggregate. The fee is deferred and will become payable to the underwriters from the amounts held in the Trust Account solely in the event that the
Company completes a Business Combination, subject to the terms of the underwriting agreement.
Forward Purchase Agreement
The Company
entered into a forward purchase agreement pursuant to which the Sponsor has agreed to purchase an aggregate of up to 2,500,000
shares (the “forward purchase shares”), for a purchase price of $10.00 per share, or an aggregate of $25,000,000 , in a private placement to close concurrently with the closing of a Business Combination. The obligations under the forward
purchase agreement will not depend on whether any shares of Class A common stock are redeemed by the public stockholders. The Sponsor’s obligation to purchase forward purchase shares will, among other things, be conditioned on the
Business Combination (including the target assets or business, and the terms of the Business Combination) being reasonably acceptable to the Sponsor and on a requirement that such initial Business Combination is approved by a unanimous
vote of the Company’s Board of Directors. The Sponsor does not have the ability to override the Board of Directors vote. The forward purchase shares will be identical to the shares of Class A common stock included in the Public Shares
being sold in the Initial Public Offering, except that they will be subject to certain registration rights.
NOTE 8. STOCKHOLDERS’ DEFICIT
Preferred Stock — The Company is
authorized to issue 1,000,000 shares of preferred stock with a par value of $0.0001 per share with such designation, rights and preferences as may be determined from time to time by the Company’s Board of Directors. At June 30, 2022 and December
31, 2021, there were no
Class A Common Stock —
The Company is authorized to issue 100,000,000 shares of Class A common stock with a par value of $0.0001 per share. Holders of Class A common stock are entitled to one vote for each share. At June 30, 2022 and December 31, 2021, there were 507,041 10,352,040
Class B Common Stock —
The Company is authorized to issue 10,000,000 shares of common stock with a par value of $0.0001 per share. Holders of Class B common stock are entitled to one vote for each share. At June 30, 2022 and December 31, 2021, there were 2,588,010
Holders of Class A
common stock and Class B common stock will vote together as a single class on all other matters submitted to a vote of stockholders, except as required by law.
The shares of Class B common stock will automatically convert into shares of Class A common stock concurrently with or
immediately following the consummation of a Business Combination on a one -for-one basis, subject to adjustment. In the case that
additional shares of Class A common stock or equity-linked securities are issued or deemed issued in connection with a Business Combination, the number of shares of Class A common stock issuable upon conversion of all Founder Shares will
equal, in the aggregate, on an as-converted basis, 20 % of the total number of shares of Class A common stock outstanding after
such conversion (after giving effect to any redemptions of shares of Class A common stock by public stockholders), including the total number of shares of Class A common stock issued, or deemed issued or issuable upon conversion or exercise
of any equity-linked securities or rights issued or deemed issued, by the Company in connection with or in relation to the consummation of a Business Combination, excluding any shares of Class A common stock or equity-linked securities or
rights exercisable for or convertible into shares of Class A common stock issued, or to be issued, or forward purchase shares, to any seller in a Business Combination.
NOTE 9 – STOCK-BASED COMPENSATION
On November 16,
2020, the Sponsor transferred 200,000 Founder Shares to the Chief Executive Officer. The fair value of the Founder Shares on the
grant date was $3.00 per share, based upon a valuation performed by the Company. The valuation performed by the Company determined
the fair value of the shares on the date of grant by applying a discount based upon a) the probability of a successful business combination, b) expected dilution concession as a result of a closed business combination and c) the lack of
marketability of the Founder Shares. The aggregate grant date fair value of the award amounted to $600,000 . For the three and six
months ended June 30, 2022, the Company recorded $37,500 and $75,000 as compensation expense, respectively. For the three and six months ended June 30, 2021, $37,500 and $75,000 was recorded as compensation expense,
respectively.
On November 16,
2020, the Sponsor transferred 48,000 Founder Shares to the Vice President, Corporate Development. The fair value of the Founder
Shares on the grant date was $3.00 per share, based upon a valuation performed by the Company. The valuation performed by the
Company determined the fair value of the shares on the date of grant by applying a discount based upon a) the probability of a successful business combination, b) expected dilution concession as a result of a closed business combination and
c) the lack of marketability of the Founder Shares. The aggregate grant date fair value of the award amounted to $144,000 . For the
three and six months ended June 30, 2022, the Company recorded $7,500 and $15,000 as compensation expense, respectively. For the three and six months ended June 30, 2021, $7,500 and $15,000 was recorded as compensation expense,
respectively.
A summary of the restricted stock award and restricted unit activity for the six months ending June 30, 2022 is as follows:
|
Number of
Shares
|
||||
|
Unvested Shares Outstanding at August 27, 2020 (inception)
|
|
|||
|
Granted
|
|
|||
|
Forfeited
|
|
|||
|
Vested
|
(
|
)
|
||
|
Unvested Outstanding at June 30, 2022
|
|
|||
The Company recorded non-cash compensation expense of $45,000 90,000
Total unrecognized compensation expense related to unvested Founder Shares at June 30, 2022 amounted to $451,500 and is
expected to be recognized over a weighted average period of 2.3 years.
NOTE 10. FAIR VALUE MEASUREMENTS
The Company follows
the guidance in ASC 820 for its financial assets and liabilities that are re-measured and reported at fair value at each reporting period, and non-financial assets and liabilities that are re-measured and reported at fair value at least
annually.
The fair value of
the Company’s financial assets and liabilities reflects management’s estimate of amounts that the Company would have received in connection with the sale of the assets or paid in connection with the transfer of the liabilities in an orderly
transaction between market participants at the measurement date. In connection with measuring the fair value of its assets and liabilities, the Company seeks to maximize the use of observable inputs (market data obtained from independent
sources) and to minimize the use of unobservable inputs (internal assumptions about how market participants would price assets and liabilities). The following fair value hierarchy is used to classify assets and liabilities based on the
observable inputs and unobservable inputs used in order to value the assets and liabilities:
|
|
Level 1:
|
Quoted prices in active
markets for identical assets or liabilities. An active market for an asset or liability is a market in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an
ongoing basis.
|
|
|
Level 2:
|
Observable inputs other
than Level 1 inputs. Examples of Level 2 inputs include quoted prices in active markets for similar assets or liabilities and quoted prices for identical assets or liabilities in markets that are not active.
|
|
Level 3:
|
Unobservable inputs based
on our assessment of the assumptions that market participants would use in pricing the asset or liability.
|
The following table presents information about the
Company’s assets that are measured at fair value on a recurring basis at June 30, 2022 and December 31, 2021, and indicates the fair value hierarchy of the valuation inputs the Company utilized to determine such fair value:
|
Description
|
Level
|
June 30,
2022
|
December 31,
2021
|
|||||||||
|
Assets:
|
||||||||||||
|
Marketable securities held in Trust Account
|
1
|
$
|
|
$
|
|
|||||||
NOTE 11. SUBSEQUENT EVENTS
The Company
evaluated subsequent events and transactions that occurred after the balance sheet date up to the date that the condensed financial statements were issued. Based upon this review, the Company did not identify any subsequent events that
would have required adjustment or disclosure in the condensed financial statements.
| Item 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
References in this report (the “Quarterly Report”) to “we,” “us” or the “Company” refer to Jiya Acquisition Corp. References to our “management” or our “management team” refer to our officers and directors, and
references to the “Sponsor” refer to Jiya Holding Company LLC. The following discussion and analysis of the Company’s financial condition and results of operations should be read in conjunction with the unaudited condensed financial statements and
the notes thereto contained elsewhere in this Quarterly Report. Certain information contained in the discussion and analysis set forth below includes forward-looking statements that involve risks and uncertainties.
Special Note Regarding Forward-Looking Statements
This Quarterly Report includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Exchange Act that are not historical facts and involve risks and
uncertainties that could cause actual results to differ materially from those expected and projected. All statements, other than statements of historical fact included in this Form 10-Q including, without limitation, statements in this
“Management’s Discussion and Analysis of Financial Condition and Results of Operations” regarding the completion of the Proposed Business Combination (as defined below), the Company’s financial position, business strategy and the plans and
objectives of management for future operations, are forward-looking statements. Words such as “expect,” “believe,” “anticipate,” “intend,” “estimate,” “seek” and variations and similar words and expressions are intended to identify such
forward-looking statements. Such forward-looking statements relate to future events or future performance, but reflect management’s current beliefs, based on information currently available. A number of factors could cause actual events,
performance or results to differ materially from the events, performance and results discussed in the forward-looking statements, including that the conditions of the Proposed Business Combination are not satisfied. For information identifying
important factors that could cause actual results to differ materially from those anticipated in the forward-looking statements, please refer to the Risk Factors section of the Company’s Annual Report on Form 10-K filed with the U.S. Securities and
Exchange Commission (the “SEC”). The Company’s securities filings can be accessed on the EDGAR section of the SEC’s website at www.sec.gov. Except as expressly required by applicable securities law, the Company disclaims any intention or obligation
to update or revise any forward-looking statements whether as a result of new information, future events or otherwise.
Risks and Uncertainties
We continue to evaluate the impact of the COVID-19 pandemic and have concluded that while it is reasonably possible that the virus could have a negative effect on the Company’s financial position, results of its
operations and/or search for a target company, the specific impact is not readily determinable as of the date of these financial statements. The financial statements do not include any adjustments that might result from the outcome of this
uncertainty.
Overview
We are a blank check company formed under the laws of the State of Delaware on August 27, 2020 for the purpose of entering into a merger, share exchange, asset acquisition, stock purchase,
recapitalization, reorganization or other similar business combination with one or more businesses or entities (the “Business Combination”). We intend to effectuate our Business Combination using cash from the proceeds of the Initial Public
Offering and the sale of the Private Placement Shares, our capital stock, debt or a combination of cash, stock and debt.
We expect to continue to incur significant costs in the pursuit of our acquisition plans. We cannot assure you that our plans to complete a Business Combination will be
successful.
Results of Operations
We have neither engaged in any operations nor generated any revenues to date. Our only activities from August 27, 2020 (inception) through June 30, 2022 were organizational activities, those
necessary to prepare for the Initial Public Offering, described below, and identifying a target company for a Business Combination. We do not expect to generate any operating revenues until after the completion of our Business Combination. We
generate non-operating income in the form of interest income on marketable securities held in 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 June 30, 2022, we had a net loss of $281,637 which consists of general and administrative expenses of $383,928, tax provision of $2,057 and stock compensation expense
of $45,000, offset by interest income on marketable securities held in the Trust Account of $149,348.
For the six months ended June 30, 2022, we had a net loss of $694,866 which consists of general and administrative expenses of $753,243, tax provision of $2,057 and stock compensation expense of
$90,000, offset by interest income on marketable securities held in the Trust Account of $150,434.
For the three months ended June 30, 2021, we had a net loss of $451,325 which consists of general and administrative expenses of $405,188, stock-based compensation expense of $45,000 and an
unrealized loss on marketable securities held in our Trust Account of $4,285, offset by interest earned on marketable securities held in the Trust Account of $3,148.
For the six months ended June 30, 2021, we had a net loss of $910,108, which consists of general and administrative expenses of $826,860, stock-based compensation expense of $90,000 and an unrealized loss on
marketable securities held in our Trust Account of $3,741, offset by interest earned on marketable securities held in the Trust Account of $10,493.
Liquidity and Capital Resources
On November 23, 2020, we completed the Initial Public Offering of 10,000,000 Public Shares, at $10.00 per Public Share, generating gross proceeds of $100,000,000. Simultaneously with the closing
of the Initial Public Offering, we completed the sale of 500,000 Private Placement Shares at a price of $10.00 per Private Placement Share in a private placement to the Sponsor, generating gross proceeds of $5,000,000.
On December 10, 2020, we consummated the sale of an additional 352,040 Shares, at $10.00 per Share, and the sale of an additional 7,041 Private Placement Shares, at $10.00 per Private Placement
Share, generating total gross proceeds of $3,590,810. Following the Initial Public Offering and the sale of the Private Placement Shares, a total of $103,520,402 of the net proceeds was deposited into the Trust Account.
For the six months ended June 30, 2022, cash used in operating activities was $642,276. Net loss of $694,866 was affected by stock compensation expense of $90,000, interest earned on marketable
securities held in the Trust Account of $150,434, and changes in operating assets and liabilities provided $113,024 of cash for operating activities.
For the six months ended June 30, 2021, cash used in operating activities was $640,142. Net loss of $910,108 was affected by interest earned on marketable securities held in the Trust Account of
$10,493, stock-based compensation expense of $90,000 and an unrealized loss on marketable securities held in our Trust Account of $3,741. Net changes in operating assets and liabilities provided $186,718 of cash for operating activities.
As of June 30, 2022, we had marketable securities held in the Trust Account of $103,693,408 (including approximately $173,000 of interest income) consisting of money market funds invested in U.S.
Treasury Bills with a maturity of 185 days or less. Interest income on the balance in the Trust Account may be used by us to pay taxes. Through June 30, 2022, we have not withdrawn any interest earned from the Trust Account.
We intend to use substantially all of the funds held in the Trust Account, including any amounts representing interest earned on the Trust Account to complete our Business
Combination. We may withdraw interest to pay franchise and income taxes. To the extent that our capital stock 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, 2022, we had cash of $235,730 outside of 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 a Business Combination.
In order to fund working capital deficiencies or finance transaction costs in connection with a Business Combination, the Sponsor, or certain of our officers and directors or their affiliates
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 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 $1,500,000 of such loans may be convertible into shares at a price of $10.00 per share, at the option of the
lender. The shares would be identical to the Private Placement Shares.
On June 13, 2022, we issued an unsecured promissory note to the Sponsor, pursuant to which the we could borrow up to an aggregate principal amount of $1,500,000. The Promissory Note was
non-interest bearing and payable on the earlier (i) November 23, 2022 or (ii) the date on which Borrower consummates a business combination. As of June 30, 2022 and December 31, 2021, there was $250,000 and no amount outstanding under the
promissory note, respectively.
Going Concern
In connection with our assessment of going concern considerations in accordance with Financial Accounting Standards Board’s Accounting Standards Codification Topic 205-40, “Presentation of
Financial Statements – Going Concern,” we have until November 23, 2022, to consummate an initial business combination. It is uncertain that we will be able to consummate an initial business combination by this time. If an initial business
combination is not consummated by this date, there will be a mandatory liquidation and subsequent dissolution of the Company. Additionally, we may not have sufficient liquidity to fund the working capital needs of the Company through one year from
the issuance of these financial statements. We have determined that the liquidity condition and mandatory liquidation, should an initial business combination not occur, and potential subsequent dissolution raises substantial doubt about the
Company’s ability to continue as a going concern. No adjustments have been made to the carrying amounts of assets or liabilities should the Company be required to liquidate after November 23, 2022.
Off-Balance Sheet Arrangements
We have no obligations, assets or liabilities, which would be considered off-balance sheet arrangements as of June 30, 2022. We do not participate in transactions that create relationships with
unconsolidated entities or financial partnerships, often referred to as variable interest entities, which would have been established for the purpose of facilitating off-balance sheet arrangements. 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.
Contractual obligations
We do not have any long-term debt, capital lease obligations, operating lease obligations or long-term liabilities, other than an agreement to pay the Sponsor a monthly fee of $10,000 for office
space, secretarial and administrative support. We began incurring these fees on November 18, 2020 and will continue to incur these fees monthly until the earlier of the completion of the Business Combination and our liquidation.
The underwriters are entitled to a deferred fee of $0.35 per Share, or $3,623,214 in the aggregate. The deferred fee will become payable to the underwriters from the amounts held in the Trust
Account solely in the event that we complete a Business Combination, subject to the terms of the underwriting agreement.
We intend to enter into forward purchase agreements pursuant to which the Sponsor has agreed to purchase an aggregate of up to 2,500,000 shares (the “forward purchase shares”), for a purchase
price of $10.00 per share, or an aggregate of $25,000,000, in a private placement to close concurrently with the closing of a Business Combination. The obligations under the forward purchase agreements will not depend on whether any Public Shares
are redeemed by the public stockholders. The Sponsor’s obligation to purchase forward purchase shares will, among other things, be conditioned on the Business Combination (including the target assets or business, and the terms of the Business
Combination) being reasonably acceptable to the Sponsor and on a requirement that such initial Business Combination is approved by a unanimous vote of the Company’s Board of Directors. The forward purchase shares will be identical to the shares of
Class A common stock included in the Public Shares being sold in the Initial Public Offering, except that they will be subject to certain registration rights.
Critical Accounting Policies
The preparation of condensed financial statements and related disclosures in conformity with accounting principles generally accepted in the United States of America requires management to make
estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and income and expenses during the periods reported. Actual results could
materially differ from those estimates. We have identified the following critical accounting policies:
Common Stock Subject to Possible Redemption
We account for our common stock subject to possible conversion in accordance with the guidance in Accounting Standards Codification (“ASC”) Topic 480 “Distinguishing Liabilities from Equity.”
Common stock subject to mandatory redemption is classified as a liability instrument and measured at fair value. Conditionally redeemable common stock (including common stock that features redemption rights that are either within the control of the
holder or subject to redemption upon the occurrence of uncertain events not solely within our control) is classified as temporary equity. At all other times, common stock is classified as stockholders’ equity. Our common stock features certain
redemption rights that are considered to be outside of our control and subject to occurrence of uncertain future events. Accordingly, common stock subject to possible redemption is presented at redemption value as temporary equity, outside of the
stockholders’ deficit section of our condensed balance sheets.
Net Loss Per Common Share
We calculate earnings per share to allocate net loss evenly to Class A and Class B common stock. This presentation contemplates a Business Combination as the most likely outcome, in which case,
both classes of common stock share pro rata in the loss of the Company.
Recent Accounting Standards
Management does not believe that there are any recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on our condensed financial
statements.
| Item 3. |
Quantitative and Qualitative Disclosures About Market Risk
|
Following the consummation of our Initial Public Offering, the net proceeds of our Initial Public Offering, including amounts in the Trust Account, have been invested in U.S. government treasury bills, notes or
bonds with a maturity of 185 days or less or in certain money market funds that invest solely in US treasuries. Due to the short-term nature of these investments, we believe there will be no associated material exposure to interest rate risk.
| Item 4. |
Controls and Procedures
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Evaluation of Disclosure Controls and Procedures
Disclosure controls are procedures that are designed with the objective of ensuring that information required to be disclosed in our reports filed under the Exchange Act is recorded, processed,
summarized, and reported within the time period specified in the SEC’s rules and forms. Disclosure controls are also designed with the objective of ensuring that such information is accumulated and communicated to our management, including the
chief executive officer and chief financial officer, as appropriate to allow timely decisions regarding required disclosure.
As required by Rules 13a-15 and 15d-15 under the Exchange Act, our Chief Executive Officer and Chief Financial Officer carried out an evaluation of the effectiveness of the design and operation
of our disclosure controls and procedures as of June 30, 2022. Based upon their evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e)
under the Exchange Act) were not effective, due to the material weaknesses in our internal control over financial reporting related to the Company’s accounting for complex financial instruments and review of the Company’s liabilities. As a result,
we performed additional analysis as deemed necessary to ensure that our financial statements were prepared in accordance with GAAP. Accordingly, management believes that the financial statements included in this Annual Report present fairly in all
material respects our financial position, results of operations and cash flows for the period presented.
Management has identified a material weakness in internal controls related to the accounting for complex financial instruments and review of the Company’s liabilities. While we have processes to
identify and appropriately apply applicable accounting requirements, we plan to continue to enhance our system of evaluating and implementing the accounting standards that apply to our financial statements, including through enhanced analyses by
our personnel and third-party professionals with whom we consult regarding complex accounting applications. While we have a control to reconcile accrued liabilities, we plan to continue to enhance our control around the search of unrecorded
liabilities. The elements of our remediation plan can only be accomplished over time, and we can offer no assurance that these initiatives will ultimately have the intended effects.
Changes in Internal Control over Financial Reporting
There were no changes in our internal control over financial reporting during the most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, our
internal control over financial reporting.
| Item 1. |
Legal Proceedings
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None
| Item 1A. |
Risk Factors
|
Factors that could cause our actual results to differ materially from those in this report include the risk factors described in our Annual Report on Form 10-K filed with the
SEC. As of the date of this Report, there have been no material changes to the risk factors disclosed in our Annual Report on Form 10-K filed with the SEC.
| Item 2. |
Unregistered Sales of Equity Securities and Use of Proceeds.
|
On November 23, 2020, we consummated the Initial Public Offering of 10,000,000 Public Shares. The Public Shares were sold at an offering price of $10.00 per unit, generating
total gross proceeds of $100,000,000. Citigroup acted as sole book-running manager of the Initial Public Offering. The securities in the offering were registered under the Securities Act on registration statement on Form S-1 (No. 333-249808). The
Securities and Exchange Commission declared the registration statements effective on November 18, 2020.
Simultaneous with the consummation of the Initial Public Offering, the Sponsor consummated the private placement of an aggregate of 500,000 Private Shares at a price of
$10.00 per Private Share, generating total proceeds of $5,000,000. The issuance was made pursuant to the exemption from registration contained in Section 4(a)(2) of the Securities Act.
On December 10, 2020, in connection with the underwriters’ election to partially exercise of their over-allotment option, we consummated the sale of an additional 352,040
Shares and the sale of an additional 7,041 Private Placement Shares, generating total gross proceeds of $3,590,810.
We paid a total of $5,693,622 in underwriting discounts and commissions and $474,399 for other costs and expenses related to the Initial Public Offering.
For a description of the use of the proceeds generated in our Initial Public Offering, see Part I, Item 2 of this Form 10-Q.
| Item 3. |
Defaults Upon Senior Securities
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None
| Item 4. |
Mine Safety Disclosures
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None
| Item 5. |
Other Information
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None
| Item 6. |
Exhibits
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The following exhibits are filed as part of, or incorporated by reference into, this Quarterly Report on Form 10-Q.
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No.
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Description of Exhibit
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Certification of the Registrant’s Chief Executive Officer (Principal Executive Officer) Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted
Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
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Certification of the Registrant’s Chief Financial Officer (Principal Financial and Accounting Officer) Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934,
as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
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Certification of the Registrant’s Chief Executive Officer (Principal Executive Officer) Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of
2002.
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|
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Certification of the Registrant’s Chief Financial Officer (Principal Financial and Accounting Officer) Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.
|
|
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101.INS*
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XBRL Instance Document
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101.SCH*
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XBRL Taxonomy Extension Schema Document
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101.CAL*
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XBRL Taxonomy Extension Calculation Linkbase Document
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101.DEF*
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XBRL Taxonomy Extension Definition Linkbase Document
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101.LAB*
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XBRL Taxonomy Extension Labels Linkbase Document
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101.PRE*
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XBRL Taxonomy Extension Presentation Linkbase Document
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| * |
Filed herewith.
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In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
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JIYA ACQUISITION CORP.
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||
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Date: August 31, 2022
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By:
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/s/ Rekha Hemrajani
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Name:
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Rekha Hemrajani
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|
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Title:
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Chief Executive Officer
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