References in this report (the "Quarterly Report") to "we," "us" or the
"Company" refer to Jack Creek Investment Corp. References to our "management" or
our "management team" refer to our officers and directors, and references to the
"Sponsor" refer to JCIC Sponsor LLC. The following discussion and analysis of
the Company's financial condition and results of operations should be read in
conjunction with the 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 final prospectus for its Initial Public
Offering 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.
Overview
Jack Creek Investment Corp. (the "Company") is a blank check company
incorporated as a Cayman Islands exempted company on August 18, 2020. The
Company was incorporated for the purpose of effecting a merger, share exchange,
asset acquisition, share purchase, reorganization or similar business
combination with one or more businesses or entities (a "Business Combination").
We intend to effectuate our Business Combination using cash derived from the
proceeds of the Initial Public Offering and the sale of 9,400,000 Private
Placement Warrants, our shares, debt or a combination of cash, shares 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 18, 2020 (inception) through June 30, 2021 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, 2021, we had a net loss of $8,217,020, which
consists of the change in fair value of warrants of $7,480,116 and interest
income on marketable securities held in the Trust Account of $27,425 offset by
operating costs of $764,329.
For the six months ended June 30, 2021, we had a net income of $8,700,875, which
consists of the change in fair value of warrants of $15,203,384 and interest
income on marketable securities held in the Trust Account of $57,366 offset by
operating costs of $2,611,875 and the loss on initial issuance of private
warrants of $3,948,000. The operating costs included $1,360,701 of offering
costs related to the warrant liabilities.
Liquidity and Capital Resources
On January 26, 2021, we consummated the Initial Public Offering of 34,500,000
Units which includes the full exercise by the underwriter of its over-allotment
option in the amount of 4,500,000 Units, at $10.00 per Unit, generating gross
proceeds of $345,000,000 which is described in Note 3. Simultaneously with the
closing of the Initial Public Offering, we consummated the sale of 9,400,000
Private Placement Warrants at a price of $1.00 per Private Placement Warrant in
a private placement to the Sponsor, generating gross proceeds of $9,400,000,
which is described in Note 5.
For the six months ended June 30, 2021, cash used in operating activities was
$1,511,937. Net income of $8,700,875 was affected by interest earned on
marketable securities held in the Trust Account of $57,366, the change in the
fair value of the warrant liability of $15,203,384, loss on initial issuance of
private warrants of $3,948,000 and transaction costs associated with the
warrants issued at the Initial Public Offering of $1,360,701. Changes in the
operating assets and liabilities used $260,763 of cash for operating activities.
As of June 30, 2021, we had marketable securities held in the Trust Account of
$345,057,366 (including approximately $57,000 of interest income and realized
gains) consisting of money market funds invested in U.S. Treasury Bills with a
maturity of 185 days or less. We may withdraw interest from the Trust Account to
pay taxes, if any. We intend to use substantially all of the funds held in the
Trust Account, including any amounts representing interest earned on the Trust
Account (less income taxes payable), to complete our Business Combination. To
the extent that our 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.

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As of June 30, 2021, we had cash of $330,219. 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 warrants
at a price of $1.00 per warrant, at the option of the lender. The warrants would
be identical to the Private Placement Warrants.
We will need to raise additional capital through loans or additional investments
from our initial stockholders, officers or directors. If we are unable to raise
additional capital, we 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. We cannot provide any assurance that new financing will be
available to us on commercially acceptable terms, if at all. These conditions
raise substantial doubt about our ability to continue as a going concern through
one year and one day from the issuance of this report.
Off-Balance
Sheet Arrangements
We have no obligations, assets or liabilities, which would be considered
off-balance
sheet arrangements as of June 30, 2021. 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 an
affiliate of the Sponsor up to $10,000 per month for office space, secretarial
and administrative services. Upon completion of a Business Combination or its
liquidation, the Company will cease paying these monthly fees.
The underwriters are entitled to a deferred fee of $0.35 per Unit, or
$12,075,000 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.
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:
Class A Ordinary Shares Subject to Possible Redemption
We account for our ordinary shares subject to possible conversion in accordance
with the guidance in Accounting Standards Codification ("ASC") Topic 480
"Distinguishing Liabilities from Equity." Ordinary shares subject to mandatory
redemption are classified as a liability instrument and measured at fair value.
Conditionally redeemable ordinary shares (including ordinary shares 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 our
control) are classified as temporary equity. At all other times, ordinary shares
are classified as shareholders' equity. Our ordinary shares feature certain
redemption rights that are considered to be outside of our control and subject
to occurrence of uncertain future events. Accordingly, ordinary shares subject
to possible redemption are presented at redemption value as temporary equity,
outside of the shareholders' equity section of our condensed balance sheets.
Warrant Liabilities
The Company accounts for the warrants in accordance with the guidance contained
in ASC
815-40
under which the warrants do not meet the criteria for equity treatment and must
be recorded as liabilities. Accordingly, the Company classifies the warrants as
liabilities at their fair value and adjust the warrants to fair value at each
reporting period. This liability is subject to
re-measurement
at each balance sheet date until exercised, and any change in fair value is
recognized in our statement of operations. The Public Warrants for periods where
no observable traded price was available were valued using the Binomial Lattice
Model. For periods subsequent to the detachment of the Public Warrants from the
Units, the Public Warrant quoted market price was used as the fair value as of
each relevant date. The Private Placement Warrants were valued using the Black
Scholes Option Pricing Model as of the Initial Public Offering and the Binomial
Lattice Model as of June 30, 2021.

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Net Income (Loss) Per Ordinary Share
We apply the
two-class
method in calculating earnings per share. Net income per ordinary share, basic
and diluted for Class A redeemable ordinary shares is calculated by dividing the
interest income earned on the Trust Account by the weighted average number of
Class A redeemable ordinary shares outstanding since original issuance. Net
income per ordinary share, basic and diluted for Class A and Class B
non-redeemable
ordinary shares is calculated by dividing the net income, less income
attributable to Class A redeemable ordinary shares, by the weighted average
number of Class A and Class B
non-redeemable
ordinary shares outstanding for the periods presented.
Recent Accounting Standards
Management does not believe that 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 Regarding Market Risk
As of June 30, 2021, we were not subject to any market or interest rate 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 certain U.S. government obligations with a maturity of 185 days or
less or in certain money market funds that invest solely in U.S. 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
Evaluation of Disclosure Controls and Procedures
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, 2021. 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 as of June 30, 2021, due solely
to the material weakness in our internal control over financial reporting
relating to the classification of the Company's Warrants as components of equity
instead of as derivative liabilities. In light of this material weakness, we
performed additional analyses as deemed necessary to ensure that our financial
statements were prepared in accordance with U.S. generally accepted accounting
principles. Accordingly, management believes that the financial statements
included in this Quarterly Report on Form
10-Q
present fairly in all material respects our financial position, results of
operations and cash flows for the period presented.
We do not expect that our disclosure controls and procedures will prevent all
errors and all instances of fraud. Disclosure controls and procedures, no matter
how well conceived and operated, can provide only reasonable, not absolute,
assurance that the objectives of the disclosure controls and procedures are met.
Because of the inherent limitations in all disclosure controls and procedures,
no evaluation of disclosure controls and procedures can provide absolute
assurance that we have detected all our control deficiencies and instances of
fraud, if any. The design of disclosure controls and procedures also is based
partly on certain assumptions about the likelihood of future events, and there
can be no assurance that any design will succeed in achieving its stated goals
under all potential future conditions.
Changes in Internal Control over Financial Reporting
During the most recently completed fiscal quarter, there has been no change in
our internal control over financial reporting that has materially affected, or
is reasonably likely to materially affect, our internal control over financial
reporting, other than as described below. In light of the restatement of our
previously issued financial statement as of January 26, 2021, management has
implemented remediation steps to address the material weakness and to improve
our internal control over financial reporting. Specifically, we expanded and
improved our review process for complex securities and related accounting
standards. We plan to further improve this process by enhancing access to
accounting literature, research materials and documents and increased
communication among our personnel and third-party professionals with whom we
consult regarding complex accounting applications. 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. As
of June 30, 2021, our material weakness has not been fully remediated.

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