JUPITER ACQUISITION CORP Management’s Discussion and Analysis of Financial Condition and Results of Operations (form 10-K)

The following discussion and analysis of our financial condition and results of
operations should be read in conjunction with our audited financial statements
and the notes related 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. Our actual
results may differ materially from those anticipated in these forward-looking
statements as a result of many factors, including those set forth under
“Cautionary Note Regarding Forward-Looking Statements and Risk Factor Summary,”
“Item 1A. Risk Factors” and elsewhere in this report.

Overview

We are a blank check company incorporated as a Delaware corporation on June 17,
2020, formed for the purpose of effecting a merger, capital stock exchange,
asset acquisition, stock purchase, reorganization or other similar business
combination with one or more businesses, which we refer to as our initial
business combination. We intend to effectuate our initial business combination
using cash derived from the proceeds of our initial public offering, including
the partial exercise of the underwriters’ over-allotment option, and the private
placements of the private placement units, the proceeds of the sale of our
shares in connection with our initial business combination (pursuant to forward
purchase agreements or backstop agreements we may enter into), shares issued to
the owners of the target, debt issued to bank or other lenders or the owners of
the target, or a combination of the foregoing.

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We expect to continue to incur significant costs in the pursuit of our
acquisition plans. We cannot assure you that our plans to complete our initial
business combination will be successful.

Recent Developments



Nasdaq Notice

On January 9, 2023, we received the Notice from the Listing Qualifications
Department of Nasdaq indicating that we are not in compliance with the Annual
Stockholders Meeting Rule due to our failure to hold an annual meeting of
stockholders within twelve months of the end of our fiscal year end. The Notice
is only a notification of deficiency, not of imminent delisting, and has no
current effect on the listing or trading of our securities on the Nasdaq Capital
Market. The Notice stated that we had 45 calendar days, or until February 23,
2023, to submit a plan to regain compliance with the Annual Stockholders Meeting
Rule. On February 17, 2023, we submitted to Nasdaq a plan to regain compliance
with the Annual Stockholders Meeting Rule within the required timeframe. On
March 7, 2023, Nasdaq accepted our plan and granted us an extension until June
29, 2023 to regain compliance with the Annual Stockholders Meeting Rule. We
expect to hold an annual meeting of stockholders by such date and to regain
compliance with the Annual Stockholders Meeting Rule, but there can be no
assurance that we will be able to do so.

Results of Operations

We have neither engaged in any operations nor generated any revenues to date.
Our only activities from June 17, 2020 (inception) through December 31, 2022
were organizational activities and those necessary to prepare for our initial
public offering, described below, and, subsequent to our initial public
offering, identifying a target company for our initial business combination. We
do not expect to generate any operating revenues until after the completion of
our initial business combination, at the earliest. 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 in connection with searching for, and completing, an initial
business combination.

For the year ended December 31, 2022, we had a net income of $3,429,080, which
consists of changes in fair value of warrant liability of $3,478,810, interest
earned on marketable securities held in the trust account of $2,073,341 and
unrealized gain on marketable securities held in the Trust Account of $60,412,
offset by operating cost of $1,736,932 and a provision for income taxes of
$446,551.

For the year ended December 31, 2021, we had a net income of $1,017,840 which
consists of changes in fair value of warrant liabilities of $2,272,103 and
interest earned on marketable securities held in the trust account of $32,313,
offset by transaction cost associated with our initial public offering of
$524,859, unrealized loss on marketable securities held in the trust account of
$3,332, and operating cost of $758,385.

Liquidity and Capital Resources

Until the consummation of our initial public offering, our only source of
liquidity was an initial purchase of founder shares by our sponsor and our
independent directors and loans from our sponsor.

On August 17, 2021, we consummated our initial public offering of 15,000,000
units, at $10.00 per unit, generating total gross proceeds of $150,000,000.
Simultaneously with the closing of our initial public offering, we consummated
the private placement of 580,000 private placement units at a price of $10.00
per private placement unit to our sponsor and certain of the underwriters of our
initial public offering and certain of the underwriters’ employees, generating
total gross proceeds of $5,800,000.

On August 23, 2021, the underwriters of our initial public offering notified us
of their exercise of the over-allotment option in part and concurrent forfeiture
of the remaining portion of such option. As such, on August 25, 2021, the
underwriters purchased 761,850 additional units at $10.00 per additional unit
upon the closing of the partial exercise of the over-allotment option,
generating total gross proceeds of $7,618,500. Simultaneously with the closing
of the partial exercise of the over-allotment option, we consummated the private
placement of 15,237 additional private placement units at $10.00 per additional
private placement unit to our sponsor and certain of the underwriters of our
initial public offering and certain of the underwriters’ employees, generating
total gross proceeds of $152,370.

Of the aggregate 15,761,850 units sold in our initial public offering,
13,365,000 units were purchased by our anchor investors. In connection with the
closing of our initial public offering, the anchor investors each acquired from
our sponsor an indirect economic interest in 100,000 founder shares (or an
aggregate of 900,000 founder shares) at the original purchase price that our
sponsor paid for the founder shares. Our sponsor has agreed to distribute such
founder shares to the anchor investors after the completion of our initial
business combination.

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Following our initial public offering, including the partial exercise of the
over-allotment option, and the private placements, a total of $157,618,500 was
placed in the trust account. We incurred $9,292,595 in initial public offering
related costs, including $3,152,370 of underwriting fees, $5,516,648 of deferred
underwriting fees and $623,577 of other offering costs.

For the year ended December 31, 2022, cash used in operating activities was
$1,169,628. Net income of $3,429,080 was affected by interest earned on
marketable securities held in the trust account of $2,073,341, unrealized gain
on marketable securities held in the trust account of $60,412 and change in fair
value of the warrant liability of $3,478,810. Changes in operating assets and
liabilities provided $1,013,855 of cash for operating activities.

For the year ended December 31, 2021, cash used in operating activities was
$858,929. Net income of $1,017,839 was affected by interest earned on marketable
securities held in the trust account of $32,313, unrealized loss on marketable
securities held in the trust account of $3,332, changes in fair value of warrant
liabilities of $2,272,103, offering costs charged directly to operations of
$19,659 and transaction costs associated with our initial public offering of
$524,859. Changes in operating assets and liabilities used $120,202 of cash for
operating activities.

As of December 31, 2022, we had cash and marketable securities of $159,610,253
held in the trust account. We intend to use substantially all of the funds held
in the trust account, including any amounts representing interest earned on the
trust account (less deferred underwriting commissions and taxes payable), to
complete our initial business combination. To the extent that our capital stock
or debt is used, in whole or in part, as consideration to complete our initial
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 December 31, 2022, we had cash of $324,188 held outside 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 our initial business combination, and to
pay for directors and officers liability insurance premiums.

In order to fund working capital deficiencies or finance transaction costs in
connection with an intended initial business combination, our sponsor, 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 our initial
business combination, we would repay such loaned amounts. In the event that our
initial 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 the trust account would be used for such repayment. Up to
$1,500,000 of such loans may be convertible into units at a price of $10.00 per
unit at the option of the lender. The units would be identical to the private
placement units.

Nomura, an underwriter of our initial public offering, has indicated its intent,
if so requested by us, to use its commercially reasonable efforts to underwrite,
arrange and/or syndicate up to $400 million of additional financing for us in
the form of equity or debt (or a combination thereof) in connection with our
initial business combination, subject to market conditions and on terms and
conditions satisfactory in all respects to Nomura in its sole judgment and
determination.

Going Concern

As of December 31, 2022, we had $324,188 in our operating bank account and
working capital of $106,448 (after adding back $40,050 in franchise tax payable
as that liability, which is included in accrued expenses in the accompanying
balance sheet, is allowed to be settled using earnings from the trust account,
$325,312 of franchises taxes paid out of operating cash account not yet
reimbursed from the trust account and $10,156 in prepaid income tax which is
allowed to be settled using earnings from the trust account), which excludes
$2,073,341 of interest earned on the trust account that is available to pay
franchise and income taxes payable.

Until the consummation of our initial business combination, we will be using the
funds not held in the trust account for identifying and evaluating prospective
acquisition candidates, performing due diligence on prospective target
businesses, paying for travel expenditures, selecting the target business to
acquire, and structuring, negotiating and consummating our initial business
combination.

We may need to raise additional capital through loans or additional investments
from the Sponsor or our stockholders, officers, directors, or third parties. Our
officers and directors, our sponsor, or their affiliates, may, but are not
obligated to), loan us additional 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 such additional
financing. If we are unable to raise additional capital, we may be required to
take additional measures to conserve liquidity, which could include, but not
necessarily be limited to, curtailing operations, suspending the pursuit of a
potential transaction, and reducing overhead expenses. We cannot provide any
assurance that new financing will be available to us on commercially acceptable
terms, if at all.

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In connection with our assessment of going concern considerations in accordance
with Financial Accounting Standard Board’s (“FASB”) Accounting Standards Update
(“ASU”) 2014-15, “Disclosures of Uncertainties about an Entity’s Ability to
Continue as a Going Concern,” management has determined that if we are unable to
complete our initial business combination, or effect an extension, by August 17,
2023, then we will cease all operations except for the purpose of liquidating.

In connection with our assessment of going concern considerations in accordance
with FASB Accounting Standards Codification Subtopic 205-40, “Presentation of
Financial Statements – Going Concern,” we have until August 17, 2023 to
consummate an initial business combination or seek an extension. It is uncertain
that we will be able to consummate an initial business combination or seek an
extension by this time. If our initial business combination is not consummated
by this date and an extension has not been approved by our stockholders, there
will be a mandatory liquidation and subsequent dissolution of our company.
Management has determined that the liquidity condition and the mandatory
liquidation, should an initial business combination not occur and an extension
not be approved by our stockholders, and potential subsequent dissolution raise
substantial doubt about our ability to continue as a going concern. No
adjustments have been made to the carrying amounts of assets or liabilities
should we be required to liquidate after August 17, 2023. We intend to continue
to search for and seek to complete our initial business combination before the
mandatory liquidation date.

Moreover, we may need to obtain additional financing either to complete our
initial business combination or because we become obligated to redeem a
significant number of our public shares upon completion of our initial business
combination, in which case we may issue additional securities or incur debt in
connection with such business combination. In addition, we intend to target
businesses larger than we could acquire with the net proceeds of our initial
public offering and the private placements, and may as a result be required to
seek additional financing to complete such proposed initial business
combination. Subject to compliance with applicable securities laws, we would
only complete such financing simultaneously with the completion of our initial
business combination. If we do not complete our initial business combination
because we do not have sufficient funds available to us, we will be forced to
cease operations and liquidate the trust account. In addition, following our
initial business combination, if cash on hand is insufficient, we may need to
obtain additional financing in order to meet our obligations.

Off-Balance Sheet Arrangements

We did not have any off-balance sheet arrangements as of December 31, 2022.

Contractual Obligations

We do not have any long-term debt obligations, capital lease obligations,
operating lease obligations, purchase obligations or other long-term
liabilities, other than an agreement to pay an affiliate of our sponsor a
monthly fee of $15,000 for office space, utilities and secretarial and
administrative support. We began incurring these fees on August 12, 2021 and
will continue to incur these fees monthly until the earlier of the completion of
our initial business combination and our liquidation.

The underwriters of our initial public offering are entitled to a deferred fee
of $0.35 per unit sold in our initial public offering, or $5,516,648 in the
aggregate. Subject to the terms of the underwriting agreement, the deferred fee
(i) will become payable to the underwriters from the amounts held in the trust
account solely in the event that we complete our initial business combination
and (ii) will be waived by the underwriters in the event that we do not complete
our initial business combination.

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Critical Accounting Policies and Estimates

The preparation of financial statements and related disclosures in conformity
with accounting principles generally accepted in the United States of America
(“U.S. GAAP”) 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:

Warrant Liabilities

We account for the warrants issued in connection with our initial public
offering in accordance with the guidance contained in Accounting Standards
Codification (“ASC”) 815-40 under which the warrants do not meet the criteria
for equity treatment and must be recorded as liabilities. Accordingly, we
classify the warrants as liabilities at their fair value and adjust the warrants
to fair value at each reporting period. This liability is subject to
re-measurement at each balance sheet date until exercised, and any change in
fair value is recognized in our statements of operations.

Class A Common Stock Subject to Possible Redemption

We account for our Class A common stock subject to possible redemption in
accordance with the guidance in ASC Topic 480 “Distinguishing Liabilities from
Equity.” Shares of Class A common stock subject to mandatory redemption are
classified as a liability instrument and are 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 Class A common stock features certain
redemption rights that are considered to be outside of our control and subject
to occurrence of uncertain future events. Accordingly, shares of Class A common
stock subject to possible redemption are presented at redemption value as
temporary equity, outside of the stockholders’ equity section of our balance
sheets.

Net Income Per Common Share

Net income per common share is computed by dividing net income (loss) by the
weighted average number of shares of common stock outstanding during the period.
We apply the two-class method in calculating net income per common share.
Accretion associated with the redeemable shares of Class A common stock is
excluded from net income (loss) per common share as the redemption value
approximates fair value.

Recent Accounting Standards

In August 2020, the FASB issued ASU No. 2020-06, “Debt-Debt with Conversion and
Other Options (Subtopic 470-20) and Derivatives and Hedging-Contracts in
Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments
and Contracts in an Entity’s Own Equity” (“ASU 2020-06”), which simplifies
accounting for convertible instruments by removing major separation models
required under current U.S. GAAP. ASU 2020-06 removes certain settlement
conditions that are required for equity contracts to qualify for the derivative
scope exception, and it also simplifies the diluted earnings per share
calculation in certain areas. ASU 2020-06 is effective for fiscal years
beginning after December 15, 2023, including interim periods within those fiscal
years, with early adoption permitted. We adopted ASU 2020-06 effective as of
January 15, 2021. The adoption of ASU 2020-06 did not have an impact on our
financial statements.

Management does not believe that any other recently issued, but not yet
effective, accounting standards, if currently adopted, would have a material
effect on our financial statements.

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