Item 4.02. Non-Reliance on Previously Issued Financial Statements or a Related
Audit Report or Completed Interim Review.
The management of Forum Merger IV Corporation (the "Company") has re-evaluated
the Company's application of ASC 480-10-S99-3A to its accounting classification
of the redeemable Class A common stock, 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 March 22, 2021. Historically, a portion of the Public
Shares was classified as permanent equity to maintain shareholders' equity
greater than $5 million on the basis that the Company will not redeem its Public
Shares in an amount that would cause its net tangible assets to be less than
$5,000,001, as described in the Company's amended and restated certificate of
incorporation (the "Charter"). Pursuant to such re-evaluation, the Company's
management has determined that the Public Shares include certain provisions that
require classification of all of the Public Shares as temporary equity
regardless of the net tangible assets redemption limitation contained in the
Charter.
Therefore, on November 22, 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 March 22,
2021, as previously revised in the Company's Quarterly Report on Form 10-Q for
the quarterly period ended March 31, 2021, filed with the U.S. Securities and
Exchange Commission (the "SEC") on June 7, 2021 (the "Q1 Form 10-Q"), (ii)
unaudited interim financial statements included in the Q1 Form 10-Q and (iii)
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 12, 2021 (collectively, the "Affected Periods"), should be
restated to report all Public Shares as temporary equity and should no longer be
relied upon. As such, the Company intends to restate its financial statements
for the Affected Periods in Amendment No. 1 to the Company's Quarterly Report on
Form 10-Q for the quarterly period ended September 30, 2021, to be filed with
the SEC (the "Q3 Form 10-Q").
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 and that the Company's disclosure controls and
procedures were not effective. The Company's remediation plan with respect to
such material weakness will be described in more detail in the Q3 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
WithumSmith+Brown, PC, the Company's independent registered public accounting
firm.
Forward-Looking Statements
This Current Report on Form 8-K includes "forward-looking statements" within the
meaning of the safe harbor provisions of the United States Private Securities
Litigation Reform Act of 1995. Certain of these forward-looking statements can
be identified by the use of words such as "believes," "expects," "intends,"
"plans," "estimates," "assumes," "may," "should," "will," "seeks," or other
similar expressions. Such statements may include, but are not limited to,
statements regarding the impact of the Company's restatement of certain
historical financial statements, the Company's cash position and cash held in
the Trust Account and any proposed remediation measures with respect to
identified material weaknesses. These statements are based on current
expectations on the date of this Current Report on Form 8-K and involve a number
of risks and uncertainties that may cause actual results to differ
significantly. The Company does not assume any obligation to update or revise
any such forward-looking statements, whether as the result of new developments
or otherwise. Readers are cautioned not to put undue reliance on forward-looking
statements.
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