ITEM 7.
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MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
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References to the Company, Juniper Industrial Holdings, Inc. our,
us or we refer to Juniper Industrial Holdings, Inc. The following discussion and analysis of the Companys financial condition and results of operations should be read in conjunction with the 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
All statements other than statements of historical fact included in this Form 10-K/A including,
without limitation, statements under Managements Discussion and Analysis of Financial Condition and Results of Operations regarding our financial position, business strategy and the plans and objectives of management for future
operations, are forward looking statements. When used in this Form 10-K/A, words such as may, should, could, would, expect, plan,
anticipate, believe, estimate, continue, or the negative of such terms or other similar expressions, as they relate to us or our management, identify forward looking statements. Factors that might
cause or contribute to such a discrepancy include, but are not limited to, those described in our other SEC filings. Such forward looking statements are based on the beliefs of management, as well as assumptions made by, and information currently
available to, our management. No assurance can be given that results in any forward-looking statement will be achieved and actual results could be affected by one or more factors, which could cause them to differ materially. The cautionary
statements made in this Annual Report on Form 10-K/A should be read as being applicable to all forward-looking statements whenever they appear in this Annual Report. For these statements, we claim the
protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act. Actual results could differ materially from those contemplated by the forward-looking statements as a result of certain factors
detailed in our filings with the SEC. All subsequent written or oral forward-looking statements attributable to us or persons acting on our behalf are qualified in their entirety by this paragraph.
In this Annual Report of Juniper Industrial Holdings, Inc. (the Company) on Form 10-K/A for the fiscal year ended December 31,
2020, we are restating periods beginning with the period from August 12, 2019 (Inception) through December 31, 2019 through the year ended December 31, 2020 (collectively, the Affected Periods).
The restatement results from our prior accounting for our Public Warrants and Private Placement Warrants issued in connection with our initial
public offering in November 2019 which had been classified as a component of equity on the premise that the instruments were indexed to our own stock and were eligible to be accounted for as equity instruments instead of classifying them as
derivative liabilities.
On April 12, 2021, the staff of the Securities and Exchange Commission (the SEC Staff) issued a public
statement entitled Staff Statement on Accounting and Reporting Considerations for Warrants issued by Special Purpose Acquisition Companies (SPACs) (the SEC Staff Statement). In the SEC Staff Statement, the SEC
Staff expressed its view that certain terms and conditions common to SPAC warrants may require the warrants to be classified as liabilities on the SPACs financial statements as opposed to equity. Since issuance on November 2019, our warrants
were accounted for as equity within our financial statements, and after discussion and evaluation, including with our independent auditors, we have concluded that our warrants should be presented as liabilities as of the IPO date reported at fair
value with subsequent fair value remeasurement at each reporting period.
Therefore, the Company, in consultation with its Audit
Committee, concluded that its previously issued Financial Statements for the periods beginning with the period from August 12, 2019 (Inception) through December 31, 2020 (collectively, the Affected Periods) should be restated because of
a misapplication in the guidance around accounting for our outstanding warrants to purchase common stock (the Warrants) and should no longer be relied upon.
Historically, the Warrants were reflected as a component of equity as opposed to liabilities on the balance sheets and the statements of
operations did not include the subsequent non-cash changes in estimated fair value of the Warrants, based on our application of Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) Topic 815-40,
Derivatives and Hedging, Contracts in Entitys Own Equity (ASC 815-40). The views expressed in the SEC Staff Statement were not consistent with the Companys historical interpretation of the specific provisions within its
warrant agreement and the Companys application of ASC 815-40 to the warrant agreements. We reassessed our accounting for Warrants issued on November 2019, in light of the SEC Staffs published views. Based on this reassessment, we
determined that the Warrants should be classified as liabilities measured at fair value upon issuance, with subsequent changes in fair value reported in our Statement of Operations each reporting period.
Our accounting for the Warrants as components of equity instead of as derivative liabilities did not have any effect on our previously
reported revenue, operating expenses, operating income, cash flows from operations or cash.
In connection with the restatement, our
management reassessed the effectiveness of its disclosure controls and procedures for the periods affected by the restatement. As a result of that reassessment, we determined that its disclosure controls and procedures for such periods were not
effective as of December 31, 2020, due solely to the material weakness in our internal controls over financial reporting, with respect to the classification of the Companys warrants as components of equity instead of as derivative
liabilities. For more information, see Item 9A included in this Annual Report on Form 10-K/A.
We have not amended our previously
filed Quarterly Reports on Form 10-Q for the periods affected by the restatement. The financial information that has been previously filed or otherwise reported for these periods is superseded by the information in this Annual Report on Form
10-K/A, and the financial statements and related financial information contained in such previously filed reports should no longer be relied upon.
The restatement is more fully described in Note 2 of the notes to the financial statements included herein.
Overview
We are a blank check company
incorporated in Delaware on August 12, 2019 for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses (the Business
Combination). Although the Company is not limited to a particular industry, sector or geographical location for purposes of consummating a Business Combination, the Company intends to focus its search for a target business in the industrial
sector. We are an early stage and emerging growth company and, as such, we are subject to all of the risks associated with early stage and emerging growth companies. Our sponsor Juniper Industrial Sponsor, LLC, a Delaware limited liability company
(the Sponsor).
The registration statement for our initial public offering (the Initial Public Offering) was
declared effective on November 7, 2019. We consummated our Initial Public Offering of 34,500,000 units (the Units and, with respect to the Class A common stock included in the Units being offered, the Public
Shares), including 4,500,000 additional Units to cover over-allotments (the Over-Allotment Units), at $10.00 per Unit, generating gross proceeds of $345.00 million, and incurring offering costs of approximately
$19.59 million, inclusive of approximately $12.08 million in deferred underwriting commissions.
Simultaneously with the closing
of the Initial Public Offering, we consummated the private placement (Private Placement) of 10,150,000 warrants (each, a Private Placement Warrant and collectively, the Private Placement Warrants) at a price of
$1.00 per Private Placement Warrant in a private placement to our Sponsor, generating proceeds of $10.15 million.
Upon the closing
of the Initial Public Offering and the Private Placement, $345.00 million ($10.00 per Unit) of the net proceeds of the Initial Public Offering and certain of the proceeds of the Private Placement was placed in a trust account (the Trust
Account), located in the United States with Continental Stock Transfer & Trust Company acting as trustee, 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 maturity of 185 days or less, or in money market funds meeting the conditions of paragraphs (d)(2), (d)(3) and (d)(4)
of Rule 2a-7 under the Investment Company Act of 1940, as amended (the Investment Company Act), which invest only in direct U.S. government treasury obligations, as
determined by the Company, until the earlier of: (i) the completion of a Business Combination and (ii) the distribution of the Trust Account.
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