UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

(Mark One)

☒

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2022

☐

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 001-41128

Jackson Acquisition Company

(Exact name of registrant as specified in its charter)

Delaware		86-2494888
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

2655 Northwinds Parkway Alpharetta, GA		30009 (Zip Code)
(Address of principal executive offices)

(678) 690-1079

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class	Trading Symbol(s)	Name of Each Exchange on Which Registered
Units, each consisting of one share of Class A Common Stock and one-half of one redeemable warrant	RJAC.U	The New York Stock Exchange
Class A Common Stock, par value $0.0001 per share	RJAC	The New York Stock Exchange
Redeemable warrants, each whole warrant exercisable for one share of Class A Common Stock at an exercise price of $11.50	RJAC.WS	The New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☐	Accelerated filer ☐	Non-accelerated filer ☒	Smaller reporting company ☒
			Emerging growth company ☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☒ No ☐

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

As of May 23, 2022, there were 22,250,000 shares of Class A Common Stock and 5,562,500 shares of Class B Common Stock, par value $0.0001 per share, of the registrant issued and outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

None.

TABLE OF CONTENTS

		Page
	FINANCIAL INFORMATION
Item 1:	Financial Statements	F-1
Item 2:	Management’s Discussion and Analysis of Financial Condition and Results of Operation	1
Item 3:	Quantitative and Qualitative Disclosures About Market Risk	5
Item 4:	Controls and Procedures	5

	OTHER INFORMATION
Item 1:	Legal Proceedings	6
Item 1A:	Risk Factors	6
Item 2:	Unregistered Sales of Equity Securities and Use of Proceeds	6
Item 3:	Defaults Upon Senior Securities	7
Item 4:	Mine Safety Disclosures	7
Item 5:	Other Information	7
Item 6:	Exhibits	8

Financial Statements:
Condensed Balance Sheets as of March 31, 2022 (unaudited) and December 31, 2021	F-2
Condensed Statements of Operations for the Three Months ended March 31, 2022 and for the Period March 5, 2021 (inception) through March 31, 2021 (unaudited)	F-3
Condensed Statements of Changes in Stockholders’ Equity for the Three Months ended March 31, 2022 and for the Period from March 5, 2021 (inception) through March 31, 2021 (unaudited)	F-4
Condensed Statements of Cash Flows for the Three Months ended March 31, 2022 and for the Period from March 5, 2021 (inception) through March 31, 2021 (unaudited)	F-5
Notes to the Condensed Financial Statements (unaudited)	F-6

	March 31, 2022			December 31, 2021
	(unaudited)
ASSETS
Current Assets:
Cash	$	877,012		$	1,923,321
Prepaid expenses and other current assets		386,134			395,350
Total Current Assets		1,263,146			2,318,671

Investments held in the Trust Account		225,859,606			203,000,654

Other assets		261,325			355,015
Total Assets	$	227,384,077		$	205,674,340

LIABILITIES, COMMON STOCK SUBJECT TO POSSIBLE REDEMPTION AND STOCKHOLDERS’ DEFICIT
Current Liabilities:
Accounts payable and accrued expenses	$	505,537		$	1,091,191
Accrued offering costs		399,000			410,768
Overallotment liability		—			325,831
Total Current Liabilities		904,537			1,827,790

Derivative warrant liabilities		4,294,500			9,584,400
Deferred underwriting commission		7,787,500			7,000,000
Total liabilities		12,986,537			18,412,190

COMMITMENTS AND CONTINGENCIES (Note 6)

Class A common stock subject to possible redemption; 22,250,000 and 20,000,000 shares at March 31, 2022 and December 31, 2021, respectively (at redemption value of $10.15 per share)		225,837,500			203,000,000

Stockholders’ deficit:
Preferred Stock, $0.0001 par value; 5,000,000 shares authorized; none issued and outstanding		—			—
Class A common stock, $0.0001 par value, 500,000,000 shares authorized, 0 shares issued and outstanding (excluding 22,250,000 and 20,000,000 shares at March 31, 2022 and December 31, 2021, respectively, subject to possible redemption)		—			—
Class B common stock, $0.0001 par value, 50,000,000 shares authorized, 5,562,500 and 5,750,000 shares issued and outstanding at March 31, 2022 and December 31, 2021, respectively (1)		556			575
Additional paid-in capital		—			—
Accumulated deficit		(11,440,516	)		(15,738,425	)
Total Stockholders’ Deficit		(11,439,960	)		(15,737,850	)
Total Liabilities, Common Stock Subject to Possible Redemption and Stockholders’ Deficit	$	227,384,077		$	205,674,340

	For the Three Months Ended March 31, 2022			For the Period From March 5, 2021 (Inception) Through March 31, 2021

EXPENSES
Administration fee - related party	$	30,000		$	—
General and administrative		521,793			14,000
TOTAL EXPENSES		551,793			14,000

OTHER INCOME (EXPENSE)
Income earned on Investments held in Trust Account		21,452			—
Transaction costs allocable to derivative warrant liabilities		(25,112	)		—
Change in fair value of derivative warrant liabilities		6,227,025			—
TOTAL OTHER INCOME		6,223,365			—

Net income (loss)	$	5,671,572		$	(14,000	)

Weighted average number of shares of Class A common stock outstanding, basic and diluted		22,100,000
Basic and diluted net income per share of Class A common stock	$	0.21

Weighted average number of shares of Class B common stock outstanding, basic and diluted⁽¹⁾		5,525,000			5,000,000
Basic and diluted net income per share of Class B common stock	$	0.21		$	(0.00	)

	Class B Common Stock						Additional Paid-In Capital			Accumulated Deficit			Stockholders’ Deficit
	Shares			Amount			Additional Paid-In Capital			Accumulated Deficit			Stockholders’ Deficit
Balance as of January 1, 2022⁽¹⁾		5,750,000		$	575		$	—		$	(15,738,425	)	$	(15,737,850	)

Forfeiture of Class B common stock		(187,500	)		(19	)		19			—			—

Proceeds in excess of fair value of Private Placement Warrants		—			—			401,625			—			401,625

Remeasurement of Class A common stock to redemption value		—			—			(401,644	)		(1,373,663	)		(1,775,307	)

Net income		—			—			—			5,671,572			5,671,572
Balance as of March 31, 2022		5,562,500		$	556		$	—		$	(11,440,516	)	$	(11,439,960	)

	For the Three Months Ended March 31, 2022			For the Period From March 5, 2021 (Inception) Through March 31, 2021
Cash Flows From Operating Activities:
Net income (loss)	$	5,671,572		$	(14,000	)
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Formation and organization costs paid by related parties		—			14,000
Investment income earned on Investments held in the Trust Account		(21,452	)		—
Transaction costs allocable to derivative warrant liabilities		25,112			—
Gain on change in fair value of derivative warrant liabilities		(6,227,025	)		—
Changes in operating assets and liabilities:
Prepaid expenses and other current assets		9,216			—
Other assets		93,690			—
Accounts payable and accrued expenses		(585,654	)		—
Net Cash Used In Operating Activities		(1,034,541	)		—

Cash Flows From Investing Activities:
Cash deposited into Trust Account		(22,837,500	)		—
Net Cash Used In Investing Activities		(22,837,500	)		—

Cash Flows From Financing Activities:
Proceeds from sale of Units in exercise of underwriter over-allotment option, net of underwriting fee		22,050,000			—
Proceeds from sale of Private Placement Warrants		787,500			—
Proceeds from note payable		—			300,000
Proceeds from issuance of Class B common stock to Sponsor		—			25,000
Payment of offering costs		(11,768	)		(89,889	)
Net Cash Provided By Financing Activities		22,825,732			235,111

Net change in cash		(1,046,309	)		235,111

Cash at beginning of period		1,923,321			—
Cash at end of period	$	877,012		$	235,111

Supplemental disclosure of non-cash financing activities:

Deferred offering costs included in accrued offering costs	$	—		$	70,000
Deferred underwriters’ commissions	$	787,500		$	—
Initial classification of fair value of Public and Private warrants from exercise of underwriter over-allotment option	$	937,125		$	—
Initial classification of common stock subject to redemption from exercise of underwriter over-allotment option	$	22,837,500		$	—
Remeasurement of Class A common stock to redemption value	$	1,373,663		$	—

Gross proceeds	$	222,500,000
Less:
Transaction costs allocated to Class A common stock		(12,500,843	)
Proceeds allocated to Public Warrants		(13,751,250	)
		(26,313,306	)

Plus:
Remeasurement of carrying value to redemption value as of December 31, 2021		27,814,286
Remeasurement of carrying value to redemption value as of March 31, 2022		1,775,307
Class A common stock subject to possible redemption	$	225,837,500

Gross proceeds	$	200,000,000
Less:
Transaction costs allocated to Class A common stock		(11,193,526	)
Overallotment liability		(420,760	)
Proceeds allocated to Public Warrants		(13,200,000	)
		(24,815,286	)

Plus:
Remeasurement of carrying value to redemption value		27,814,286
Class A common stock subject to possible redemption	$	203,000,000

	Three months ended March 31, 2022		For the Period From March 5, 2021 (inception) Through March 31, 2021

Class A Redeemable common stock
Numerator: Income allocable to Class A common stock	$	4,537,258
Denominator: Basic and diluted weighted average shares outstanding		22,100,000
Basic and diluted net income per share, Class A Common Stock	$	0.21


Class B Non-redeemable common stock
Numerator: Income (loss) allocable to Class B common stock	$	1,134,314		(14,000	)
Denominator: Basic and diluted weighted average shares outstanding		5,525,000		5,000,000
Basic and diluted net loss per share, Class B Common Stock	$	0.21		(0.00	)

Description:	Level		March 31, 2022		Level		December 31, 2021

Assets:
Investments held in Trust Account		1	$	225,859,606		1	$	203,000,654

Liabilities:
Warrant liability – Private Placement Warrants		3	$	2,225,000		3	$	4,684,400
Warrant liability – Public Warrants		1	$	2,069,500		3	$	4,900,000
Over-allotment option		3	$	-		3	$	325,831


	Fair Value Measurement Using Level 3 Inputs Total
Balance, fair value at December 31, 2021	$	9,910,231
Fair value at issuance over over-allotment warrants		937,125
Exercise and expiration of over-allotment option		(325,831	)
Transfer of public warrants to Level 1 during the three months ended March 31, 2022		(5,451,250	)
Change in fair value of derivative warrant liabilities		(3,000,775	)
Balance, fair value at March 31, 2022	$	2,069,500

	March 31, 2022			January 6, 2022			December 31, 2021
Stock price	$	9.88		$	9.72		$	9.72
Exercise price	$	11.50		$	11.50		$	11.50
Risk-free interest rate		2.42	%		1.26	%		1.26	%
Expected life of warrants		5.73	years		6.70	years		6.70	years
Expected volatility of underlying shares		2.95	%		10.0	%		10.0	%
Dividend yield		0	%		0	%		0	%
Probability of business combination		85	%		90	%		90	%

	December 31, 2021
Risk-free interest rate		0.03	%
Expected life of warrants		0.07	years
Expected volatility of underlying shares		10.0	%
Dividend yield		0	%

	Private Placement Warrants			Public Warrants			Over-allotment Liability			Total
Fair value at December 31, 2021	$	4,684,400		$	4,900,000		$	325,831		$	9,910,231
Issuance upon exercise of over-allotment option		385,875			551,250			-			937,125
Change in fair value		(3,000,775	)		(3,226,250	)		-			(6,227,025	)
Exercise and expiration of over-allotment option		-			-			(325,831	)		(325,831	)
Fair value at March 31, 2022	$	2,069,500		$	2,225,000		$	-		$	4,294,500

SEC Form 10-Q filed by Jackson Acquisition Company