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 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.
This Management's Discussion and Analysis of Financial Condition and Results of
Operations has been amended and restated to give effect to the restatement of
our financial statements as of December 31, 2020, March 30, 2021, and June
30, 2021. Management identified errors made in its historical financial
statements where, at the closing of our Initial Public Offering, we improperly
valued ours Class A common stock subject to possible redemption. We previously
determined the Class A common stock subject to possible redemption to be equal
to the redemption value of $10.00 per share of Class A common stock while also
taking into consideration a redemption cannot result in net tangible assets
being less than $5,000,001. Management determined that the Class A common stock
issued during the Initial Public Offering can be redeemed or become redeemable
subject to the occurrence of future events considered outside of the Company's
control. Therefore, management concluded that the redemption value should
include all Class A common stock subject to possible redemption, resulting in
the Class A common stock subject to possible redemption being equal to their
redemption value. As a result, management has noted a reclassification error
related to temporary equity and permanent equity. This resulted in a restatement
to the initial carrying value of the Class A common stock subject to possible
redemption with the offset recorded to additional paid-in capital (to the extent
available), accumulated deficit and Class A common stock.
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 September 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 September 30, 2021, we had a net loss of $410,971
which consists of general and administrative expenses of $371,708 and stock
compensation expense of $45,000, offset by interest income on marketable
securities held in the Trust Account of $3,221 and an unrealized gain on
marketable securities held in our Trust Account of $2,516.
For the nine months ended September 30, 2021, we had a net loss of $1,321,079,
which consists of general and administrative expenses of $1,198,568, stock
compensation expense of $135,000 and an unrealized loss on marketable securities
held in our Trust Account of $1,225, offset by interest income on marketable
securities held in the Trust Account of $13,714.
For the period from August 27, 2020 (inception) through September 30, 2020, we
had net loss of $1,431, which consist of general and administrative expenses.
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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 nine months ended September 30, 2021, cash used in operating activities
was $828,816. Net loss of $1,321,079 was affected by stock compensation expense
of $135,000, interest earned on marketable securities held in the Trust Account
of $13,714, an unrealized loss on marketable securities held in our Trust
Account of $1,225, and changes in operating assets and liabilities provided
$369,752 of cash for operating activities.
For the period from August 27, 2020 (inception) through September 30, 2020, cash
used in operating activities was $0. Net loss of $1,431 changes in operating
assets and liabilities provided $1,431 of cash for operating activities.
As of September 30, 2021, we had marketable securities held in the Trust Account
of $103,535,018 (including approximately $12,000 of interest income and
unrealized losses, net) consisting of 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 September 30, 2021, we have not withdrawn any interest
earned from the Trust Account.
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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.
As of September 30, 2021, we had cash of $1,007,438 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.
We do not believe we will need to raise additional funds in order to meet the
expenditures required for operating our business. However, if our estimate of
the costs of identifying a target business, undertaking in-depth due diligence
and negotiating a Business Combination are less than the actual amount necessary
to do so, we may have insufficient funds available to operate our business prior
to our Business Combination. Moreover, we may need to obtain additional
financing either to complete our Business Combination or because we become
obligated to redeem a significant number of our Public Shares upon consummation
of our Business Combination, in which case we may issue additional securities or
incur debt in connection with such Business Combination.
Going Concern
It is uncertain that we will have sufficient liquidity to fund the working
capital needs of the Company through twelve months from the issuance of this
report. Additionally, it is uncertain that we will be able to consummate an
initial business combination by this time. The Company may not have sufficient
liquidity to fund the working capital needs of the Company through twelve months
from the issuance of this report. If an initial business combination is not
consummated by this date, there will be a mandatory liquidation and subsequent
dissolution. Management has determined that the mandatory liquidation, should an
initial business combination not occur, and potential subsequent dissolution
raises substantial doubt about our ability to continue as a going concern. No
adjustments have been made to the carrying amounts of assets or liabilities
should we be required to liquidate.
Off-Balance Sheet Arrangements
We have no obligations, assets or liabilities, which would be considered
off-balance sheet arrangements as of September 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.
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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 Samsara
BioCapital 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' equity section of our condensed balance sheets.
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Net Income (Loss) Per Common Share
We calculate earnings per share to allocate net income (loss) evenly to Class A
and Class B ordinary shares. This presentation contemplates a Business
Combination as the most likely outcome, in which case, both classes of common
stock share pro rata in the income (loss) of the Company.
Recent Accounting Standards
In August 2020, the Financial Accounting Standards Board ("FASB") issued
Accounting Standards Update ("ASU") 2020-06, Debt - Debt with Conversion and
Other Options (Subtopic 470-20) and Derivatives and Hedging - Contracts in
Entity's Own Equity (Subtopic 815-40) ("ASU 2020-06") to simplify accounting for
certain financial instruments. ASU 2020-06 eliminates the current models that
require separation of beneficial conversion and cash conversion features from
convertible instruments and simplifies the derivative scope exception guidance
pertaining to equity classification of contracts in an entity's own equity. The
new standard also introduces additional disclosures for convertible debt and
freestanding instruments that are indexed to and settled in an entity's own
equity. ASU 2020-06 amends the diluted earnings per share guidance, including
the requirement to use the if-converted method for all convertible instruments.
ASU 2020-06 is effective January 1, 2022 and should be applied on a full or
modified retrospective basis, with early adoption permitted beginning on January
1, 2021. The Company is currently assessing the impact, if any, that ASU 2020-06
would have on its financial position, results of operations or cash flows.
Management does not believe that any other recently issued, but not yet
effective, accounting standards, if currently adopted, would have a material
effect on our condensed financial statements.
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