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, 2023

☐

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

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

Redeemable warrants, each whole warrant exercisable for one share of Class A Common Stock at an exercise price of $11.50

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 9, 2023, 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	6
Item 4:	Controls and Procedures	6

	OTHER INFORMATION
Item 1:	Legal Proceedings	7
Item 1A:	Risk Factors	7
Item 2:	Unregistered Sales of Equity Securities and Use of Proceeds	7
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, 2023 (unaudited) and December 31, 2022	F-2
Condensed Statements of Operations for the Three Months ended March 31, 2023 and 2022 (unaudited)	F-3
Condensed Statements of Changes in Stockholders’ (Deficit) Equity for the Three Months ended March 31, 2023 and 2022 (unaudited)	F-4
Condensed Statements of Cash Flows for the Three Months ended March 31, 2023 and 2022 (unaudited)	F-5
Notes to the Condensed Financial Statements (unaudited)	F-6

	March 31, 2023 (unaudited)			December 31, 2022
ASSETS
Current Assets:
Cash	$	134,226		$	305,115
Prepaid expenses and other current assets		290,210			368,383
Total Current Assets		424,436			673,498

Investments held in the Trust Account		231,021,253			228,961,837

Total Assets	$	231,445,689		$	229,635,335

LIABILITIES, COMMON STOCK SUBJECT TO POSSIBLE REDEMPTION AND STOCKHOLDERS’ DEFICIT
Current Liabilities:
Accounts payable and accrued expenses	$	563,941		$	417,659
Accrued offering costs		399,000			399,000
Income taxes payable		621,410			452,773
Total Current Liabilities		1,584,351			1,269,432

Deferred tax liability		184,003			153,453
Derivative warrant liabilities		214,725			214,725
Deferred underwriting commission		7,787,500			7,787,500
Total liabilities		9,770,579			9,425,110

COMMITMENTS AND CONTINGENCIES (Note 6)

Class A common stock subject to possible redemption; 22,250,000 shares at March 31, 2023 and December 31, 2022 (at redemption value of $10.32 and $10.25 per share, respectively)		229,532,636			228,122,408

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 at March 31, 2023 and December 31, 2022. subject to possible redemption)		-			-
Class B common stock, $0.0001 par value, 50,000,000 shares authorized, 5,562,500 shares issued and outstanding at March 31, 2023 and December 31, 2022		556			556
Additional paid-in capital		-			-
Accumulated deficit		(7,858,082	)		(7,912,739	)
Total Stockholders’ Deficit		(7,857,526	)		(7,912,183	)
Total Liabilities, Common Stock Subject to Possible Redemption and Stockholders’ Deficit	$	231,445,689		$	229,635,335

	For the Three Months Ended March 31,			For the Three Months Ended March 31,
	2023			2022
EXPENSES
Administration fee - related party	$	30,000		$	30,000
General and administrative		433,008			521,793
TOTAL EXPENSES		463,008			551,793

OTHER INCOME (EXPENSE)
Income earned on Investments held in Trust Account		2,427,082			21,452
Transaction costs allocable to derivative warrant liabilities		-			(25,112	)
Change in fair value of derivative liabilities		-			6,227,025
TOTAL OTHER INCOME		2,427,082			6,223,365

Income before provision for income taxes		1,964,074			5,671,572

Provision for income taxes		(499,187	)		-

Net income	$	1,464,887		$	5,671,572

Weighted average number of shares of Class A common stock outstanding, basic and diluted		22,250,000			22,100,000
Basic and diluted net income per share of Class A common stock	$	0.05		$	0.21

Weighted average number of shares of Class B common stock outstanding, basic and diluted		5,562,500			5,525,000
Basic and diluted net income per share of Class B common stock	$	0.05		$	0.21

	Class B Common Stock
	Shares		Amount		Additional Paid-In Capital		Accumulated Deficit			Stockholders’ Deficit
Balance as of January 1, 2023		5,562,500	$	556	$	-	$	(7,912,739	)	$	(7,912,183	)

Remeasurement of Class A common stock to redemption value		-		-		-		(1,410,230	)		(1,410,230	)

Net income		-		-		-		1,464,887			1,464,887
Balance as of March 31 , 2023		5,562,500	$	556	$	-	$	(7,858,082	)	$	(7,857,526	)

	For the Three Months Ended March 31, 2023			For the Three Months Ended March 31, 2022
Cash Flows From Operating Activities:
Net income	$	1,464,887		$	5,671,572
Adjustments to reconcile net income to net cash used in operating activities:
Income earned on Investments held in Trust Account		(2,427,082	)		(21,452	)
Transaction costs allocable to derivative warrant liabilities		-			25,112
Change in fair value of derivative warrant liabilities		-			(6,227,025	)
Changes in operating assets and liabilities:
Prepaid expenses and other current assets		78,173			9,216
Other assets		-			93,690
Accounts payable and accrued expenses		146,282			(585,654	)
Deferred taxes		30,550			-
Income taxes payable		168,637			-
Net Cash Used In Operating Activities		(538,553	)		(1,034,541	)

Cash Flows From Investing Activities:
Cash deposited into Trust Account		-			(22,837,500	)
Interest released from Trust Account for tax payments		367,664			-
Net Cash Used In Investing Activities		367,664			(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
Payment of offering costs		-			(11,768	)
Net Cash Provided By Financing Activities		-			22,825,732

Net change in cash		(170,889	)		(1,046,309	)

Cash at beginning of period		305,115			1,923,321
Cash at end of period	$	134,226		$	877,012

Supplemental disclosure of non-cash financing activities:

Deferred underwriters’ commissions	$	-		$	787,500
Initial classification of fair value of Public and Private warrants	$	-		$	937,125
Initial classification of common stock subject to redemption	$	-		$	22,837,500
Remeasurement of Class A common stock to redemption value	$	1,410,230		$	1,373,663

Class A common stock subject to possible redemption at December 31, 2022	$	228,122,408
Remeasurement of carrying value to redemption value		1,410,228
Class A common stock subject to possible redemption at March 31, 2023	$	229,532,636

Class A common stock subject to possible redemption at December 31, 2021	$	203,000,000
Gross proceeds of overallotment option partial exercise on January 6, 2022		22,500,000
Less:
Transaction costs allocated to Class A common stock		(1,307,317	)
Proceeds allocated to Public Warrants		(551,250	)
		(1,858,567	)

Plus:
Expiration of overallotment liability		420,760
Remeasurement of carrying value to redemption value		4,060,215
		4,480,975
Class A common stock subject to possible redemption at December 31, 2022	$	228,122,408

	Three Months Ended March 31, 2023		Three Months Ended March 31, 2022

Class A Redeemable common stock
Numerator: Income allocable to Class A common stock	$	1,171,910	$	4,537,258
Denominator: Basic and diluted weighted average shares outstanding		22,250,000		22,100,000
Basic and diluted net income per share, Class A Common Stock	$	0.05	$	0.21

Class B Non-redeemable common stock
Numerator: Income allocable to Class B common stock	$	292,977	$	1,134,314
Denominator: Basic and diluted weighted average shares outstanding		5,562,500		5,525,000
Basic and diluted net income per share, Class B Common Stock	$	0.05	$	0.21

Description:	Level		March 31, 2023		Level		December 31, 2022

Assets:
Investments held in Trust Account		1	$	231,021,253		1	$	228,961,837

Liabilities:
Warrant liability - Private Placement Warrants		3	$	103,475		3	$	103,475
Warrant liability - Public Warrants		1	$	111,250		1	$	111,250

	Fair Value Measurement Using Level 3 Inputs Total
Balance, fair value at December 31, 2022	$	103,475
Change in fair value of derivative warrant liabilities		-
Balance, fair value at March 31, 2023	$	103,475

	March 31, 2023			December 31, 2022
Stock price	$	10.30		$	10.11
Exercise price	$	11.50		$	11.50
Risk-free interest rate		3.60	%		3.99	%
Expected life of warrants	5.24 years			5.35 years
Expected volatility of underlying shares		1.00	%		1.00	%
Dividend yield		0	%		0	%
Probability of business combination		1	%		1	%

	Private Placement Warrants		Public Warrants		Over-allotment Liability		Total
Fair value at December 31, 2022	$	103,475	$	111,250	$	-	$	214,725
Change in fair value		-		-		-		-
Fair value at March 31, 2023		103,475		111,250		-		214,725

	Jackson Acquisition Company

May 12, 2023	By:	/s/ Richard L. Jackson
		Name: Richard L. Jackson
		Title: Chief Executive Officer

May 12, 2023	By:	/s/ Douglas B. Kline
		Name: Douglas B. Kline
		Title: Chief Financial Officer

SEC Form 10-Q filed by Jackson Acquisition Company