Item 4.02. Non-Reliance on Previously Issued Financial Statements or a Related
Audit Report or Completed Interim Review.
The management of Duddell Street Acquisition Corp. (the "Company") has
re-evaluated the Company's application of ASC 480-10-S99-3A to its accounting
classification of the redeemable shares of Class A ordinary shares, par value
$0.0001 per share (the "Public Shares"), issued as part of the units sold in the
Company's initial public offering (the "IPO") on November 2, 2020. Historically,
a portion of the Public Shares was classified as permanent equity to maintain
net tangible assets greater than $5,000,000 on the basis that the Company will
consummate its initial business combination only if the Company has net tangible
assets of at least $5,000,001. Pursuant to such re-evaluation, the Company's
management has determined that the Public Shares include certain provisions that
require classification of the Public Shares as temporary equity regardless of
the minimum net tangible assets required to complete the Company's initial
business combination.
Therefore, on November 21, 2021, 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 (i) audited balance sheet as of November 2,
2020, included in exhibit 99.1 to our Form 8-K filed with the U.S. Securities
and Exchange Commission (the "SEC") on November 6, 2020; (ii) audited balance
sheet as of December 31, 2020, as previously restated in the Company's annual
report on Form 10-K/A for the year ended December 31, 2020, filed with the SEC
on July 26, 2021 (the "2020 Form 10-K/A No. 1"); (iii) audited statement of
operations, statement of changes in shareholders' equity (deficit) and statement
of cash flows for the year ended December 31, 2020, as previously restated in
the 2020 Form 10-K/A No.1; (iv) unaudited interim financial statements included
in the Company's Quarterly Report on Form 10-Q for the quarterly period ended
March 31, 2021, filed with the SEC on July 26, 2021; and (v) unaudited interim
financial statements included in the Company's Quarterly Report on Form 10-Q for
the quarterly period ended June 30, 2021, filed with the SEC on August 23, 2021
(collectively, the "Affected Periods"), should be restated to report all Public
Shares as temporary equity and should no longer be relied upon. This matter was
discussed with Marcum LLP ("Marcum"), the Company's independent registered
public accounting firm. As such, the Company will restate its financial
statements for the Affected Periods in the Company's Quarterly Report on Form
10-Q for the quarterly period ended September 30, 2021, to be filed with the SEC
on November 24, 2021 (the "2021Q3 Form 10-Q"), except for the annual period
ended December 31, 2020 which will be restated in Form 10-K/A No. 2 as described
therein.
The Company does not expect any of the above changes will have any impact on its
cash position and cash held in the trust account established in connection with
the IPO (the "Trust Account").
The Company's management has concluded that in light of the classification error
described above, a material weakness exists in the Company's internal control
over financial reporting related to the lack of ability to account for complex
financial instruments and that the Company's disclosure controls and procedures
were not effective. The Company's remediation plan with respect to such material
weakness is described in more detail in the 2021Q3 Form 10-Q.
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
Marcum.
Additional Information and Where to Find It
On November 7, 2021, the Company ("DSAC") entered into an Agreement and Plan of
Merger (as it may be amended, supplemented or otherwise modified from time to
time, the "Business Combination Agreement") with FiscalNote Holdings, Inc
("FiscalNote"). The Business Combination Agreement provides for, among other
things, the following transactions on the closing date: (i) DSAC will
domesticate as a Delaware corporation ("Newco", such transaction, the
"Domestication") and, in connection with the Domestication, (A) each then issued
and outstanding Class A ordinary share of DSAC will convert automatically into
one share of Class A common stock of Newco (the "Newco Class A Common Stock"),
(B) each then issued and outstanding Class B ordinary share of DSAC will convert
automatically into one share of Newco Class A Common Stock, and (C) each then
issued and outstanding common warrant of DSAC will convert automatically into
one warrant to purchase one share of Newco Class A Common Stock; and (ii) at
least one day after the Domestication, Merger Sub will merge with and into
FiscalNote, with FiscalNote as the surviving company in the merger and, after
giving effect to such merger, continuing as a wholly-owned subsidiary of Newco
(the "Merger"). The Domestication, the Merger and the other transactions
contemplated by the Business Combination Agreement are hereinafter referred to
as the "Business Combination."
For additional information on the proposed Business Combination, see DSAC's
Current Report on Form 8-K filed on November 8, 2021. In connection with the
proposed Business Combination, DSAC intends to file relevant materials with the
Securities and Exchange Commission ("SEC"), including a registration statement
on Form S-4 with the SEC, which will include a proxy statement/prospectus of
DSAC, and will file other documents regarding the proposed Business Combination
with the SEC. DSAC's shareholders and other interested persons are advised to
read, when available, the preliminary proxy statement/prospectus and the
amendments thereto and the definitive proxy statement and documents incorporated
by reference therein filed in connection with the proposed Business Combination,
as these materials will contain important information about FiscalNote, DSAC and
the proposed Business Combination. Promptly after the Form S-4 is declared
effective by the SEC, DSAC will mail the definitive proxy statement/prospectus
and a proxy card to each shareholder entitled to vote at the meeting relating to
the approval of the Business Combination and other proposals set forth in the
proxy statement/prospectus. Before making any voting or investment decision,
investors and shareholders of DSAC are urged to carefully read the entire
registration statement and proxy statement/prospectus, when they become
available, and any other relevant documents filed with the SEC, as well as any
amendments or supplements to these documents, because they will contain
important information about the proposed Business Combination. The documents
filed by DSAC with the SEC may be obtained free of charge at the SEC's website
at www.sec.gov.
This Current Report on Form 8-K does not constitute an offer to sell or the
solicitation of an offer to buy any securities, or a solicitation of any vote or
approval, nor shall there be any sale of securities in any jurisdiction in which
such offer, solicitation or sale would be unlawful prior to registration or
qualification under the securities laws of any such jurisdiction.
Participants in the Solicitation
DSAC and its directors and executive officers may be deemed participants in the
solicitation of proxies from DSAC's shareholders with respect to the Business
Combination. A list of the names of those directors and executive officers and a
description of their interests in DSAC will be included in the proxy
statement/prospectus for the Business Combination when available at www.sec.gov.
Information about DSAC's directors and executive officers and their ownership of
DSAC shares is set forth in DSAC's prospectus, dated October 28, 2020. Other
information regarding the interests of the participants in the proxy
solicitation will be included in the proxy statement/prospectus pertaining to
the Business Combination when it becomes available. These documents can be
obtained free of charge from the source indicated above.
FiscalNote and its directors and executive officers may also be deemed to be
participants in the solicitation of proxies from the shareholders of DSAC in
connection with the Business Combination. A list of the names of such directors
and executive officers and information regarding their interests in the proposed
Business Combination will be included in the proxy statement/prospectus for the
Business Combination when available.
Cautionary Statement Regarding Forward-Looking Statements
This communication contains "forward-looking statements" within the meaning of
the Private Securities Litigation Reform Act of 1995. Such statements include,
but are not limited to, statements about future financial and operating results,
plans, objectives, expectations and intentions with respect to future
operations, products and services; and other statements identified by words such
as "will," "are expected to," "is anticipated," "estimated," "believe,"
"intend," "plan," "projection," "pro forma," "outlook" or words of similar
meaning. These forward-looking statements include, but are not limited to,
statements regarding FiscalNote's industry and market sizes, future
opportunities for FiscalNote and DSAC, FiscalNote's estimated future results and
the proposed Business Combination between DSAC and FiscalNote, including pro
forma market capitalization, pro forma revenue, the expected transaction and
ownership structure and the likelihood, timing and ability of the parties to
successfully consummate the proposed Business Combination. Such forward-looking
statements are based upon the current beliefs and expectations of DSAC's and
FiscalNote's management and are inherently subject to significant business,
economic and competitive uncertainties and contingencies, many of which are
difficult to predict and generally beyond DSAC's or FiscalNote's control. Actual
results and the timing of events may differ materially from the results
anticipated in these forward-looking statements.
Nothing in this Current Report on Form 8-K should be regarded as a
representation by any person that the forward-looking statements set forth
herein will be achieved or that any of the contemplated results of such
forward-looking statements will be achieved. You should not place undue reliance
on forward-looking statements, which speak only as of the date they are made.
Except as may be required by law, neither DSAC nor FiscalNote undertakes any
duty to update these forward-looking statements.
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