References to the "Company," "JAWS Juggernaut Acquisition Corporation, "our,"
"us" or "we" refer to JAWS Juggernaut Acquisition Corporation. The following
discussion and analysis of the Company's financial condition and results of
operations should be read in conjunction with the unaudited interim condensed
financial statements and the notes thereto contained elsewhere in this report.
Certain information contained in the discussion and analysis set forth below
includes forward-looking statements that involve risks and uncertainties.
Cautionary Note Regarding Forward-Looking Statements
This Quarterly Report on Form 10-Q includes forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"). We have based these forward-looking statements on our current
expectations and projections about future events. These forward-looking
statements are subject to known and unknown risks, uncertainties and assumptions
about us that may cause our actual results, levels of activity, performance or
achievements to be materially different from any future results, levels of
activity, performance or achievements expressed or implied by such
forward-looking statements. In some cases, you can identify forward-looking
statements by terminology such as "may," "should," "could," "would," "expect,"
"plan," "anticipate," "believe," "estimate," "continue," or the negative of such
terms or other similar expressions. Such statements include, but are not limited
to, possible business combinations and the financing thereof, and related
matters, as well as all other statements other than statements of historical
fact included in this Form 10-Q. Factors that might cause or contribute to such
a discrepancy include, but are not limited to, those described in our other
Securities and Exchange Commission ("SEC") filings.
Overview
We are a blank check company incorporated as a Cayman Islands exempted company
on December 16, 2020. We were incorporated for the purpose of effecting a
merger, share exchange, asset acquisition, share purchase, reorganization or
similar business combination with one or more businesses (the "Business
Combination") that we have not yet identified. We are an emerging growth company
and, as such, we are subject to all of the risks associated with emerging growth
companies.
Our sponsor is Juggernaut Sponsor LLC, a Delaware limited liability company and
an affiliate of JAWS Estates Capital (the "Sponsor"). The registration statement
for our Initial Public Offering was declared effective on June 17, 2021. On June
22, 2021, we consummated our initial public offering (the "Initial Public
Offering") of 27,600,000 units (the "Units" and, with respect to the Class A
ordinary shares included in the Units being offered, the "Public Shares"), which
included the full exercise of the underwriters' option to purchase an additional
3,600,000 Units to cover over-allotments, at $10.00 per Unit, generating gross
proceeds of $276.0 million. Offering costs totaled approximately $15,286,000
(consisting of approximately $5,220,000 of underwriting fees, net of
approximately $300,000 reimbursed from the underwriters, approximately
$9,660,000 of deferred underwriting fees and approximately $406,000 of other
offering costs), of which approximately $761,000 was charged to the statement of
operations upon the completion of the IPO and approximately $14,526,000 was
charged to shareholders' deficit.
Prior to the closing of the Initial Public Offering, we sold an aggregate of
6,900,000 Class B ordinary shares and 3,760,000 private placement warrants
("Private Placement Warrants") to our Sponsor generating gross proceeds of
$7,545,000.
Upon the closing of the Initial Public Offering and the Private Placement,
$276.0 million ($10.00 per Unit) of the net proceeds of the sale of the Units in
the Initial Public Offering and of the Private Placement Warrants in the Private
Placement were placed in a trust account ("Trust Account") and were invested in
U.S. government securities, within the meaning set forth in Section 2(a)(16) of
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
investing solely in U.S. Treasuries and meeting certain conditions under Rule
2a-7 of the Investment Company Act of 1940, as amended (the "Investment Company
Act"), as determined by the Company, until the earliest of: (i) the completion
of a Business Combination and (ii) the distribution of the funds in the Trust
Account to the Company's shareholders, as described below.
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Our management has broad discretion with respect to the specific application of
the net proceeds of the Initial Public Offering and the sale of Private
Placement Units, although substantially all of the net proceeds are intended to
be applied generally toward consummating a Business Combination. There is no
assurance that we will be able to complete a Business Combination successfully.
We must complete one or more initial Business Combinations having an aggregate
fair market value of at least 80% of the net assets held in the Trust Account
(excluding the amount of deferred underwriting commissions and taxes payable on
the interest earned on the Trust Account) at the time of the signing of the
agreement to enter into the initial Business Combination. However, we 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.
If we are unable to complete a Business Combination within the Combination
Period, we will (i) cease all operations except for the purpose of winding up;
(ii) as promptly as reasonably possible but not more than ten business days
thereafter, redeem 100% of 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 and not previously released to us to pay our taxes, if
any (less up to $100,000 of interest to pay dissolution expenses), divided by
the number of then issued and outstanding Public Shares, which redemption will
completely extinguish the rights of the Public Shareholders as shareholders
(including the right to receive further liquidating distributions, if any), and
(iii) as promptly as reasonably possible following such redemption, subject to
the approval of our remaining Public Shareholders and our Board of Directors,
liquidate and dissolve, subject in each case to our obligations under Cayman
Islands law to provide for claims of creditors and the requirements of other
applicable law. There will be no redemption rights or liquidating distributions
with respect to our warrants, which will expire worthless if we fail to complete
a Business Combination within the Combination Period.
Liquidity and Going Concern
As of September 30, 2022, the Company had approximately $98,000 in its operating
bank account and working capital of approximately $50,000, exclusive of the
working capital loan - related party.
Our liquidity needs to date have been satisfied through a contribution of
$25,000 from Sponsor in exchange for the issuance of the Founder Shares, and
Private Placement Warrants, and loan from the Sponsor of approximately $174,000
under the loan dated as of January 19, 2021 (the "Note"). The Company repaid the
Note in full on June 23, 2021, at which time the Note was terminated. Subsequent
to the consummation of the Initial Public Offering, the Company's liquidity has
been satisfied through the net proceeds from the consummation of the Initial
Public Offering and the Private Placement held outside of the Trust Account. In
addition, in order to finance transaction costs in connection with a Business
Combination, the Sponsor or an affiliate of the Sponsor, or certain of the
Company's officers and directors may, but are not obligated to, provide the
Company Working Capital Loans (as defined in the notes to the unaudited
condensed financial statements included as Item 1 to this Quarterly Report on
Form 10-Q). As of September 30, 2022 and December 31, 2021, $200,000 and $0,
respectively, was outstanding under the Working Capital Loans, and $300,000
remains available to draw as of September 30, 2022.
Based on the foregoing, management believes that the Company will have
sufficient working capital and borrowing capacity to meet its needs through the
earlier of the consummation of a Business Combination or one year from this
filing. Over this time period, the Company will be using the funds held outside
of the Trust Account for paying existing accounts payable, identifying and
evaluating prospective initial Business Combination candidates, performing due
diligence on prospective target businesses, paying for travel expenditures,
selecting the target business to merge with or acquire, and structuring,
negotiating and consummating the Business Combination.
However, in connection with our assessment of going concern considerations in
accordance with FASB ASC Topic 205-40, "Presentation of Financial
Statements-Going Concern," management has determined that mandatory liquidation
and subsequent dissolution raise substantial doubt about the Company's ability
to continue as a going concern. The Company intends to complete its initial
business combination before the mandatory liquidation date; however, there can
be no assurance that the Company will be able to consummate any business
combination by June 22, 2023. No adjustments have been made to the carrying
amounts of assets or liabilities should the Company be required to liquidate
after June 22, 2023. The condensed interim financial statements do not include
any adjustment that might be necessary if the Company is unable to continue as a
going concern.
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Management continues to evaluate the impact of the COVID-19 pandemic on the
industry and has concluded that while it is reasonably possible that the virus
could have a negative effect on our financial position, results of our
operations and/or search for a target company, the specific impact is not
readily determinable as of the date of the condensed financial statements. The
condensed financial statements do not include any adjustments that might result
from the outcome of this uncertainty.
In February 2022, the Russian Federation and Belarus commenced a military action
with the country of Ukraine. As a result of this action, various nations,
including the United States, have instituted economic sanctions against the
Russian Federation and Belarus. Further, the impact of this action and related
sanctions on the world economy are not determinable as of the date of these
unaudited condensed financial statements. The specific impact on the Company's
financial condition, results of operations, and cash flows is also not
determinable as of the date of these condensed unaudited financial statements.
Results of Operations
Our entire activity since inception up to September 30, 2022, was in preparation
for our formation and the Initial Public Offering. We will not be generating any
operating revenues until the closing and completion of our initial Business
Combination.
For the three months ended September 30, 2022, we had net income of
approximately $2.7 million, which consisted of an approximately $1.7 million
gain resulting from the change in fair value of derivative liabilities, and
income from investments held in the Trust Account of approximately $1.3 million,
partly offset by approximately $238,000 in general and administrative expense,
and approximately $30,000 in in general and administrative expenses -related
party.
For the three months ended September 30, 2021, we had net income of
approximately $7.8 million, which consisted of an approximately $8.3 million
non-operating gain resulting from the change in fair value of derivative
liabilities and income from investments held in the Trust Account of
approximately $19,000, partly offset by approximately $503,000 in general and
administrative expense and approximately $30,000 in general and administrative
expenses - related party.
For the nine months ended September 30, 2022, we had net income of approximately
$9.1 million, which consisted of an approximately $8.2 million gain resulting
from the change in fair value of derivative liabilities and income from
investments held in the Trust Account of approximately $1.7 million, partly
offset by approximately $780,000 in general and administrative expense, and
approximately $90,000 in in general and administrative expenses - related party.
For the nine months ended September 30, 2021, we had net income of approximately
$6.8 million, which consisted of an approximately $8.2 million non-operating
gain resulting from the change in fair value of derivative liabilities and
income from investments held in the Trust Account of approximately $8,000,
partly offset by approximately $607,000 in general and administrative expense,
approximately $761,000 of offering costs associated with derivative warrant
liabilities, and approximately $33,000 in in general and administrative expenses
- related party.
Contractual Obligations
Administrative Support Agreement
Commencing on the effective date of our registration statement, we agreed to pay
the Sponsor a total of $10,000 per month for office space, secretarial and
administrative services provided to us. Upon completion of the initial Business
Combination or our liquidation, we will cease paying these monthly fees.
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For the three and nine months ended September 30, 2022 the Company incurred
approximately $30,000 and $90,000, respectively, in such fees, included as
general and administrative fees - related party on the accompanying condensed
statements of operations. For the three and nine months ended September 30, 2021
the Company incurred approximately $30,000 and $33,000 in such fees,
respectively. As of September 30, 2022 and December 31, 2021, there were no
amounts payable for these fees.
Registration and Shareholder Rights
The holders of the Founder Shares, Private Placement Warrants and any warrants
that may be issued upon conversion of Working Capital Loans (and any Class A
ordinary shares issuable upon the exercise of the Private Placement Warrants and
warrants that may be issued upon conversion of the Working Capital Loans) have
registration rights to require the Company to register a sale of any of the
securities held by them pursuant to a registration rights agreement signed upon
the effective date of the Initial Public Offering. The holders of these
securities are entitled to make up to three demands, excluding short form
demands, that we 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 liquidating damages or other cash settlement
provisions resulting from delays in registering our securities. We will bear the
expenses incurred in connection with the filing of any such registration
statements.
Underwriting Agreement
We granted the underwriter a 45-day option from the final prospectus relating to
the Initial Public Offering to purchase up to 3,600,000 additional Units to
cover over-allotments, if any, at the Initial Public Offering price less the
underwriting discounts and commissions. The underwriter fully exercised the
over-allotment option on June 22, 2021.
The underwriter was entitled to an underwriting discount of $0.20 per unit, or
$5.5 million in the aggregate, paid upon the closing of the Initial Public
Offering. In addition, $0.35 per unit, or approximately $9.7 million in the
aggregate will be payable to the underwriter for deferred underwriting
commissions. The deferred fee will become payable to the underwriter 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 and Estimates
The preparation of financial statements in accordance with accounting principles
generally accepted in the United States of America requires management to make
estimates and judgments that affect the reported amounts of assets, liabilities,
revenues and expenses. A summary of our significant accounting policies is
included in Note 2 to our condensed financial statements in Part I, Item 1 of
this Quarterly Report. Certain of our accounting policies are considered
critical, as these policies are the most important to the depiction of our
condensed financial statements and require significant, difficult or complex
judgments, often employing the use of estimates about the effects of matters
that are inherently uncertain. Such policies are summarized in the Management's
Discussion and Analysis of Financial Condition and Results of Operations section
in our 2021 Annual Report on Form 10-K filed with the SEC on March 30 2022.
There have been no significant changes in the application of our critical
accounting policies during the nine months ended September 30, 2022.
Recent Accounting Pronouncements
See Note 2 to the unaudited condensed financial statements included in Part I,
Item 1 of this Quarterly Report for a discussion of recent accounting
pronouncements.
JOBS Act
The Jumpstart Our Business Startups Act of 2012 (the "JOBS Act") contains
provisions that, among other things, relax certain reporting requirements for
qualifying public companies. We qualify as an "emerging growth company" and
under the JOBS Act are allowed to comply with new or revised accounting
pronouncements based on the effective date for private (not publicly traded)
companies. We are electing to delay the adoption of new or revised accounting
standards, and as a result, we may not comply with new or revised accounting
standards on the relevant dates on which adoption of such standards is required
for non-emerging growth companies. As a result, the condensed financial
statements may not be comparable to companies that comply with new or revised
accounting pronouncements as of public company effective dates.
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Additionally, we are in the process of evaluating the benefits of relying on the
other reduced reporting requirements provided by the JOBS Act. Subject to
certain conditions set forth in the JOBS Act, if, as an "emerging growth
company," we choose to rely on such exemptions we may not be required to, among
other things, (i) provide an auditor's attestation report on our system of
internal controls over financial reporting pursuant to Section 404, (ii) provide
all of the compensation disclosure that may be required of non-emerging growth
public companies under the Dodd-Frank Wall Street Reform and Consumer Protection
Act, (iii) comply with any requirement that may be adopted by the PCAOB
regarding mandatory audit firm rotation or a supplement to the auditor's report
providing additional information about the audit and the financial statements
(auditor discussion and analysis) and (iv) disclose certain executive
compensation related items such as the correlation between executive
compensation and performance and comparisons of the CEO's compensation to median
employee compensation. These exemptions will apply for a period of five years
following the completion of our Initial Public Offering or until we are no
longer an "emerging growth company," whichever is earlier.
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