Item 4.02 - Non-Reliance on Previously Issued Financial Statements or a Related
Audit Report or Completed Interim Review
The Company has re-evaluated the Company's application of ASC 480, paragraph
10-S99, to its accounting classification of the redeemable Class A common stock,
par value $0.0001 per share, issued as part of the units sold in the Company's
initial public offering on August 12, 2021. The Company had previously
classified a portion of its Class A common stock in permanent equity, or total
stockholders' equity. Although the Company did not specify a maximum redemption
threshold, its charter currently provides that the Company will not redeem its
Class A common stock in an amount that would cause its net tangible assets to be
less than $5,000,001. Previously, the Company did not consider redeemable stock
classified as temporary equity as part of net tangible assets. Pursuant to such
re-evaluation, the Company's management revised this interpretation to include
temporary equity in net tangible assets. This reclassification of equity was
reflected in its Quarterly Report on Form 10-Q for the quarterly period ended
September 30, 2021, filed with the SEC on November 12, 2021, as a revision and
not as a restatement.
On February 9, 2022 the Company's management and the audit committee of the
Company's board of directors (the "Audit Committee") concluded that the
Company's previously issued audited balance sheet as of August 12, 2021 (the
"Post IPO Balance Sheet"), included in the Original Form 8-K, should be restated
to classify all Class A common stock subject to possible redemption in temporary
equity and such restated audited balance sheet is attached hereto as Exhibit
99.1. Considering such restatement, the Post IPO Balance Sheet, as well as the
relevant portions of any communications which describe or are based on the Post
IPO Balance Sheet, should no longer be relied upon. Because the Company's
controls over financial reporting did not provide for the proper classification
of the Class A common stock within the Company's financial statements, such
disclosure controls and procedures were not effective, which indicates a
material weakness in the Company's internal controls in the Company's other
periodic filings with the SEC.
The reclassification of amounts from permanent equity to temporary equity
results only in non-cash financial statement corrections and will have no impact
on the Company's current or previously reported cash position, operating
expenses or total operating, investing or financing cash flows. The Company's
management and the Audit Committee have discussed the matters disclosed in this
Current Report on Form 8-K pursuant to this Item 4.02 with WithumSmith+Brown,
PC, the Company's independent registered public accounting firm.
The audited balance sheet and related financial information that was included in
the Original Form 8-K is superseded by the audited balance sheet attached to
this Form 8-K/A, and the audited balance sheet and related financial information
contained in the Original Form 8-K should no longer be relied upon. The
following item has been amended as a result of the restatement: Exhibit No.
99.1, "Audited Balance Sheet".
Refer to Note 2, "Restatement of Previously Issued Financial Statement" of
Exhibit 99.1 attached to this Form 8-K/A for additional information and for the
summary of the accounting impacts of these adjustments to the Company's balance
sheet as of August 12, 2021.
Item 9.01 - Financial Statements and Exhibits
(d) Exhibits.
The following exhibits are filed herewith:
Exhibit No. Document Description
99.1 Audited Balance Sheet
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