Item 4.02 Non-Reliance on Previously Issued Financial Statements or a Related
Audit Report or Completed Interim Review.
On April 12, 2021, the Acting Director of the Division of Corporation Finance
and Acting Chief Accountant of the Securities and Exchange Commission (the
"SEC") together issued a statement regarding the accounting and reporting
considerations for warrants issued by special purpose acquisition companies
entitled "Staff Statement on Accounting and Reporting Considerations for
Warrants Issued by Special Purpose Acquisition Companies ("SPACs")" (the
"Statement"). Specifically, the SEC Guidance focused on certain settlement terms
and provisions, which terms are similar to those contained in the warrant
agreements (the "Warrant Agreements"), both dated as of November 19, 2020,
between Cascade Acquisition Corp. (the "Company") and Continental Stock Transfer
& Trust Company, a New York corporation, as warrant agent.
As a result of the SEC Guidance, the Company's management, after discussion with
the Company's accounting advisors and Marcum LLP, the Company's independent
registered public accounting firm, has reevaluated the accounting treatment of
(i) the 11,500,000 redeemable warrants (the "Public Warrants") that were
included in the units issued by the Company in its initial public offering (the
"IPO") and (ii) the aggregate of 8,217,000 privately issued warrants (together
with the Public Warrants, the "Warrants") that were included in a private
placement that closed concurrently with the closing of the IPO, and determined
that the Warrants should be classified as derivative liabilities measured at
fair value, with changes in fair value each period reported in earnings. While
the Company has not generated any operating revenues to date and will not
generate any operating revenues until after completion of its initial business
combination, at the earliest, the change in fair value of the Warrants is a
non-cash charge and will be reflected in the Company's statement of operations.
On May 16, 2021, the Audit Committee of the Company's Board of Directors (the
"Audit Committee") concluded, after discussion with the Company's management,
that, in light of the Statement, the following financial statements should no
longer be relied upon due to changes required to reclassify the Warrants as
liabilities to align with the requirements set forth in the Statement:
(i) the Company's previously issued audited balance sheet dated as of
November 24, 2020 (which was related to the Company's IPO and filed as
an exhibit to the Company's Current Report on Form 8-K dated December
1, 2020); and
(ii) the Company's previously issued audited financial statements as of
December 31, 2020 (balance sheet), and for the period from August 14,
2020 (inception) through December 31, 2020 (statement of operations,
statement of changes in stockholders' equity, statement of cash flows)
(which were included in the Company's Annual Report on Form 10-K for
the period from August 14, 2020 (inception) through December 31, 2020)
(the periods in (i) and (ii), the "Non-Reliance Periods," and the
financial statements in (i) and (ii), the "Non-Reliance Financial
Statements").
Additionally, the Audit Committee determined that it is appropriate to file an
amendment to its Annual Report on Form 10-K for the period from August 14, 2020
(inception) through December 31, 2020 reflecting the reclassification of the
Warrants for the Non-Reliance Periods as soon as practicable.
The Company does not expect any of the above changes will have any impact on its
cash position and cash and marketable securities held in the trust account.
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