Item 4.02 Non-Reliance on Previously Issued Financial Statements or a Related
Audit Report or Completed Interim Review.
On December 20, 2022, the audit committee of the board of directors of
ClimateRock, a Cayman Islands exempted company (the "Company"), concluded, after
discussion with the Company's management, that the Company's unaudited financial
statements as of September 30, 2022 contained in the Company's Quarterly Report
on Form 10-Q filed with the SEC on November 9, 2022 (the "10-Q"), should no
longer be relied upon due to certain errors made in the recording and accruing
of certain expenses for such reporting period.
During the fiscal quarter ended September 30, 2022, the Company incurred certain
legal expenses with two vendors in connection with the Business Combination
Agreement that was entered into on October 6, 2022 with Eco Energy World PLC
(the "EEW"). Such services were delivered throughout the third quarter of 2022,
but the fees were not properly recorded in accordance with U.S. Generally
Accepted Accounting Principles. This resulted in a misstatement of the
previously reported balances included in the 10-Q.
In view of the above, the Company's Chief Executive Officer and Chief Financial
Officer carried out an evaluation of the effectiveness of the design and
operation of the Company's disclosure controls and procedures. Based upon their
re-evaluation, the Company's Chief Executive Officer and Chief Financial Officer
concluded that the Company's disclosure controls and procedures were not
effective during the period of time the error described above persisted, due to
a material weakness in internal controls over financial reporting in the
Company's accrual process. In light of this material weakness, the Company
performed additional analysis as deemed necessary to ensure that the Company's
unaudited interim financial statements were prepared in accordance with U.S.
generally accepted accounting principles. The Company plans to restate the
financial statements identified above in the Company's Quarterly Report on Form
10-Q/A to be filed with the SEC as soon as practicable. Management intends to
implement remediation steps to improve its disclosure controls and procedures
and its internal controls over financial reporting. Specifically, management
intends to work closely with its financial advisors to ensure balances being
recorded at each period end represent the accurate amounts the Company owes.
The Company's management discussed the above disclosed matters with the
Company's independent registered public accounting firm, UHY LLP ("UHY"). UHY
was provided with a copy of the disclosures made herein and was given the
opportunity to review these disclosures.
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