References to "we", "us", "our" or the "company" are to Juniper II Corp., except
where the context requires otherwise. The following discussion should be read in
conjunction with our financial statements and related notes thereto included
elsewhere in this report ("Report"). You should read the following discussion
and analysis of our financial condition and results of operations in conjunction
with our condensed financial statements and related notes included in Part I,
Item 1 of this Report. This discussion and other parts of this Report contain
forward-looking statements that involve risks and uncertainties, such as
statements of our plans, objectives, expectations and intentions. Our actual
results could differ materially from those discussed in these forward-looking
statements. See "Cautionary Note Regarding Forward-Looking Statements." Factors
that could cause or contribute to such differences include, but are not limited
to, those discussed in Part I, Item 1A "Risk Factors" of our Annual Report on
Form 10-K for the year ended December 31, 2021, as filed with the SEC on
March 31, 2022 (the "2021 Annual Report").
Cautionary Note Regarding Forward-Looking Statements
This Report includes forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933, as amended (the "Securities Act"),
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" or "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 Report. Factors that might cause or contribute
to such a discrepancy include, but are not limited to, those described in our
other filings with the U.S. Securities and Exchange Commission (the "SEC").
Overview
We are a blank check company incorporated in Delaware on December 30, 2020 for
the purpose of effecting a merger, capital stock exchange, asset acquisition,
stock purchase, reorganization or similar business combination with one or more
businesses ("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 ("sponsor") is Juniper II
Management, LLC, a Delaware limited liability company and an affiliate of
certain of our officers and directors.
Our registration statement for our initial public offering (the "initial public
offering") was declared effective on November 3, 2021. On November 8, 2021, we
consummated the initial public offering of 29,900,000 units (the "units" and,
with respect to the shares of our Class A common stock, $0.0001 par value per
share ("Class A common stock"), included in the units sold in the initial public
offering (whether purchased in the initial public offering or thereafter in the
open market), the "public shares"), including 3,900,000 units to cover
over-allotments, at $10.00 per unit, generating gross proceeds of
$299.0 million, and incurring offering costs of approximately $17.3 million, of
which approximately $10.5 million and approximately $560,000 was for deferred
underwriting commissions and offering costs allocated to derivative warrant
liabilities, respectively.
Simultaneously with the closing of the initial public offering, we consummated
the private placement (the "private placement") of 14,960,000 private placement
warrants to our sponsor, each private placement warrant exercisable to purchase
one share of Class A common stock at $11.50 per share, at a price of $1.00 per
private placement warrant, generating gross proceeds of approximately
$15.0 million.
Upon the closing of the initial public offering and the private placement,
approximately $305.0 million ($10.20 per unit) of net proceeds, including the
net proceeds of the initial public offering and certain of the proceeds of the
private placement, was placed in the 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,
with a
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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 trust account, as described below. Except with respect to
interest earned on the funds held in the trust account that may be released to
us to pay our taxes, if any, the funds held in the trust account will not be
released until the earliest to occur of: (a) the completion of our initial
business combination; (b) the redemption of any public shares properly tendered
in connection with a stockholder vote to amend our amended and restated
certificate of incorporation (i) to modify the substance or timing of our
obligation to allow redemption in connection with our initial business
combination or to redeem 100% of our public shares if we do not complete our
initial business combination within 18 months from the closing of the initial
public offering (or 24 months, if we extend the period of time to consummate a
business combination) or (ii) with respect to any other provisions relating to
the rights of holders of our Class A common stock; and (c) the redemption of all
of our public shares if we have not completed our initial business combination
within 18 months (or 24 months, if extended) from the closing of the initial
public offering, subject to applicable law. Based on current interest rates, we
expect that interest income earned on the trust account (if any) will be
sufficient to pay our income and franchise taxes.
If we are unable to complete a business combination within 18 months from the
closing of the initial public offering, or May 8, 2023, (or 24 months, if
extended), we will (i) cease all operations except for the purpose of winding
up, (ii) as promptly as reasonably possible but not more than 10 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 us to pay our tax obligations (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 each case to the company's obligations under Delaware
law to provide for claims of creditors and the requirements of other applicable
law.
Results of Operations
Our entire activity since inception up to September 30, 2022 related to our
formation, the preparation for the initial public offering, and since the
closing of the initial public offering, the search for a prospective initial
business combination. We will not be generating any operating revenues until the
closing and completion of our initial business combination, at the earliest.
For the three months ended September 30, 2022, we had net income of
approximately $2.6 million, which consisted of approximately $1.7 million in
interest income from investments held in the trust account and non-operating
income of approximately $1.6 million resulting from changes in fair value of
derivative warrant liabilities, partially offset by approximately $230,000 in
general and administrative expenses, approximately $59,000 in franchise tax
expense, $30,000 general and administrative expenses-related party and
approximately $336,000 in income tax expense.
For the three months ended September 30, 2021, we had a net loss of $55, which
consisted entirely of general and administrative expenses.
For the nine months ended September 30, 2022, we had net income of approximately
$20.1 million, which consisted of approximately $1.9 million in interest income
from investments held in the trust account and non-operating income of
approximately $19.7 million resulting from changes in fair value of derivative
warrant liabilities, partially offset by approximately $859,000 in general and
administrative expenses, $90,000 in general and administrative expenses-related
party, approximately $158,000 in franchise tax expense and approximately
$324,000 in income tax expense.
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For the nine months ended September 30, 2021, we had a net loss of approximately
$51,000, which consisted of approximately $49,000 in franchise tax expense and
approximately $2,000 in general and administrative expenses.
Liquidity and Going Concern
As of September 30, 2022, we had approximately $804,000 in cash and working
capital of approximately $592,000.
Our liquidity needs prior to the consummation of the initial public offering
were satisfied through the payment of $25,000 from our sponsor to cover certain
offering costs in exchange for issuance of the founder shares, a loan under a
promissory note from our sponsor of $300,000 (the "Promissory Note") and
advances from related parties in the amount of approximately $13.1 million. We
fully repaid the Promissory Note balance upon closing of the initial public
offering. Subsequent from the consummation of the initial public offering, our
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.
Our management has determined that we could have insufficient liquidity to meet
our anticipated obligations for at least twelve months after the financial
statements are available to be issued due to recurring operating losses and
negative cash utilized in operating activities. We may need to raise additional
capital through loans or additional investments from our sponsor, shareholders,
officers, directors or third parties as needed. Our officers, directors and
sponsor may, but are not obligated to, loan us funds, from time to time or at
any time, in whatever amount they deem reasonable in their sole discretion, to
meet our working capital needs. Accordingly, we may not be able to obtain
additional financing. We cannot provide any assurance that new financing will be
available to us or on acceptable terms, if at all. These conditions raise
substantial doubt about our ability to continue as a going concern.
In connection with our management's assessment of going concern considerations
in accordance with FASB ASC Topic 205-40, "Presentation of Financial
Statements-Going Concern," our management has also determined that these
considerations taken together with the mandatory liquidation and subsequent
dissolution raise substantial doubt about our ability to continue as a going
concern one year from the date that these financial statements are issued. No
adjustments have been made to the carrying amounts of assets or liabilities
should we be unable to continue as a going concern.
Related Party Transactions
Founder Shares
On January 21, 2021, our sponsor paid $25,000 on behalf of us to cover certain
offering costs in exchange for issuance of 8,625,000 shares of our Class B
common stock, $0.0001 par value per share ("Class B common stock" and, with
respect to such shares of Class B common stock, the "founder shares"). On
February 4, 2021, we effected a forward stock split that increased the number of
founder shares held by our sponsor from 8,625,000 to 11,500,000. On July 12,
2021, our sponsor surrendered, for no consideration, an aggregate of 5,031,250
founder shares, which we canceled, resulting in an aggregate of 6,468,750
founder shares outstanding. Immediately prior to the consummation of the initial
public offering, we effected a stock dividend with respect to our Class B common
stock, resulting in an aggregate of 7,475,000 shares of Class B common stock
outstanding. The founder shares included an aggregate of up 975,000 shares
subject to forfeiture by our sponsor to the extent that the underwriters' option
to purchase additional units was not exercised in full or in part, so that our
initial stockholders would own, on an as-converted basis, 20% of our issued and
outstanding shares after the initial public offering. The underwriters exercised
their over-allotment option in full on November 8, 2021; thus, these 975,000
founder shares were no longer subject to forfeiture.
In March and April 2021, our sponsor transferred 35,000 founder shares to each
of our independent directors and to Darius Adamczyk, one of our advisors. The
transfer of the founder shares is in the scope of Financial Accounting Standards
Board ("FASB") Accounting Standards Codification ("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 September 30, 2022, we determined that a business
combination was 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 that ultimately vest multiplied times the grant date fair value
per share (unless subsequently modified).
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Our sponsor agreed, subject to limited exceptions, not to transfer, assign or
sell any of our founder shares until the earlier to occur of: (A) 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 150 days after a business
combination, or (y) the date on which we complete a liquidation, merger, capital
stock exchange or other similar transaction that results in all of our
stockholders having the right to exchange their shares of common stock for cash,
securities or other property.
Private Placement Warrants
Simultaneously with the closing of the initial public offering, we consummated
the private placement of 14,960,000 private placement warrants (the "private
placement warrants"), at a price of $1.00 per private placement warrant to our
sponsor, generating proceeds of approximately $15.0 million.
Each private placement warrant will be exercisable to purchase one share of
Class A common stock at a price of $11.50 per share. A portion of the proceeds
from the private placement warrants was added to the proceeds from the initial
public offering held in the trust account. If we do not complete a business
combination within 18 months from the closing of the initial public offering, or
May 8, 2023, (or 24 months, if extended), the proceeds of the sale of the
private placement warrants will be used to fund the redemption of the public
shares (subject to the requirements of applicable law), and the private
placement warrants will expire worthless. There will be no redemption rights or
liquidating distributions from the trust account with respect to the private
placement warrants.
Related Party Loans
Our sponsor agreed to loan us an aggregate of up to $300,000 to cover expenses
related to the initial public offering pursuant to a promissory note dated
January 21, 2021, which was later amended on September 30, 2021. The Promissory
Note was non-interest bearing and payable upon the completion of the initial
public offering. We fully borrowed $300,000 under the Promissory Note. In
addition, we received additional advances from related parties of approximately
$13.1 million to cover for certain offering costs and pre-payment for private
placement warrants. We fully repaid the Promissory Note and the advances as of
the consummation of the initial public offering.
In addition, in order to finance transaction costs in connection with a business
combination, our sponsor or an affiliate of our sponsor, or certain of our
officers and directors may, but are not obligated to, loan us funds as may be
required. If we complete a business combination, we would repay the working
capital loans out of the proceeds of the trust account released to us.
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, we 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. The working capital loans would either
be repaid upon consummation of a business combination, without interest, or, at
the lender's discretion, up to $1.5 million of such working capital loans may be
convertible into warrants of the post-business combination entity at a price of
$1.00 per warrant. The warrants would be identical to the private placement
warrants. 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.
If we anticipate that we may not be able to consummate the initial business
combination within 18 months from the closing of the initial public offering, we
may, but are not obligated to, extend the period of time to consummate a
business combination by an additional six months (for a total of 24 months to
complete an initial business combination). In connection with such extension,
our sponsor or affiliates or designees may loan us the required funds to deposit
into the trust account an amount of $0.10 per public share, or approximately
$3.0 million in the aggregate. Any such payments would be made in the form of a
loan (the "extension loans"). The extension loans will be non-interest bearing
and payable upon the consummation of the initial business combination. If we
complete our initial business combination, we would be obligated to repay such
extension loans. Except for the foregoing, the terms of such extension loans, if
any, have not been determined and no written agreements exist with respect to
such loans.
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Commitments and Contingencies
Registration Rights
The holders of the founder shares, private placement warrants and warrants that
may be issued upon conversion of working capital loans (and any shares of
Class A common stock issuable upon the exercise of the private placement
warrants and warrants that may be issued upon conversion of working capital
loans and upon conversion of the founder shares) are entitled to registration
rights pursuant to a registration rights agreement signed upon the effective
date of initial public offering, requiring us to register such securities for
resale (in the case of the founder shares, only after conversion to Class A
common stock). The holders of the majority of these securities will be 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 and rights to require us to register for
resale such securities pursuant to Rule 415 under the Securities Act. We will
bear the expenses incurred in connection with the filing of any such
registration statements.
Underwriting Agreement
We granted the underwriters of our initial public offering a 45-day option from
the date of initial public offering to purchase up to 3,900,000 additional units
at the initial public offering price less the underwriting discounts and
commissions. The underwriters exercised such over-allotment option in full on
November 8, 2021.
The underwriters were entitled to a cash underwriting discount of $0.20 per
unit, approximately $6.0 million in the aggregate, paid upon the closing of the
initial public offering. In addition, the underwriters are entitled to a
deferred fee of $0.35 per unit, or approximately $10.5 million 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 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 Report. Certain of our accounting policies are considered critical, as
these policies are the most important to the depiction of our 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 31, 2022. There have been
no significant changes in the application of our critical accounting policies
and estimates during the nine months ended September 30, 2022.
Recent Accounting Pronouncements
See Note 2 to the condensed financial statements included in Part I, Item 1 of
this Report for a discussion of recent accounting pronouncements.
Off-Balance Sheet Arrangements
As of September 30, 2022, we did not have any off-balance sheet arrangements as
defined in Item 303(a)(4)(ii) of Regulation S-K.
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 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 have elected to rely on the other reduced reporting
requirements provided by the JOBS Act. Subject to certain conditions set forth
in the JOBS Act, as an "emerging growth company," 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 Public Company
Accounting Oversight Board 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 Chief Executive Officer'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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