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.
Inflation Reduction Act of 2022
On August 16, 2022, the Inflation Reduction Act of 2022 (the "IR Act") was
signed into federal law. The IR Act provides for, among other things, a new U.S.
federal 1% excise tax on certain repurchases of stock by publicly traded U.S.
domestic corporations and certain U.S. domestic subsidiaries of publicly traded
foreign corporations occurring on or after January 1, 2023. The excise tax is
imposed on the repurchasing corporation itself, not its shareholders from which
shares are repurchased. The amount of the excise tax is generally 1% of the fair
market value of the shares repurchased at the time of the repurchase. However,
for purposes of calculating the excise tax, repurchasing corporations are
permitted to net the fair market value of certain new stock issuances against
the fair market value of stock repurchases during the same taxable year. In
addition, certain exceptions apply to the excise tax. The U.S. Department of the
Treasury (the "Treasury") has been given authority to provide regulations and
other guidance to carry out and prevent the abuse or avoidance of the excise
tax.
Any redemption or other repurchase that occurs after December 31, 2022, in
connection with a Business Combination, extension vote or otherwise, may be
subject to the excise tax. Whether and to what extent the Company would be
subject to the excise tax in connection with a Business Combination, extension
vote or otherwise would depend on a number of factors, including (i) the fair
market value of the redemptions and repurchases in connection with the Business
Combination, extension or otherwise, (ii) the structure of a Business
Combination, (iii) the nature and amount of any "PIPE" or other equity issuances
in connection with a Business Combination (or otherwise issued not in connection
with a Business Combination but issued within the same taxable year of a
Business Combination) and (iv) the content of regulations and other guidance
from the Treasury. In addition, because the excise tax would be payable by the
Company and not by the redeeming holder, the mechanics of any required payment
of the excise tax have not been determined. The foregoing could cause a
reduction in the cash available on hand to complete a Business Combination and
in the Company's ability to complete a Business Combination.
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, 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 September 30, 2022, we had a net loss of $185,819
which consists of general and administrative expenses of $536,676, tax provision
of $72,077 and stock compensation expense of $44,417, offset by interest income
on marketable securities held in the Trust Account of $467,351.
For the nine months ended September 30, 2022, we had a net loss of $880,685
which consists of general and administrative expenses of $1,289,919, tax
provision of $74,134 and stock compensation expense of $134,417, offset by
interest income on marketable securities held in the Trust Account of $617,785.
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.
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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, 2022, cash used in operating activities
was $775,554. Net loss of $880,685 was affected by stock compensation expense of
$134,417, interest earned on marketable securities held in the Trust Account of
$617,785, and changes in operating assets and liabilities provided $588,499 of
cash for operating activities.
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.
As of September 30, 2022, we had marketable securities held in the Trust Account
of $104,160,759 (including $640,357 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 September 30, 2022, 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 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 September 30, 2022, we had cash of $102,452 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 September 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.
On November 18, 2022, the Company issued a press release announcing it will
redeem all of its outstanding Class A common stock, effective as of November 25,
2022, because the Company will not be able to consummate an initial business
combination within the time period required by its amended and restated
memorandum and articles of association.
Off-Balance Sheet Arrangements
We have no obligations, assets or liabilities, which would be considered
off-balance sheet arrangements as of September 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.
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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 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.
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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.
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