Item 4.02 Non-Reliance on Previously Issued Financial Statements or a Related
Audit Report or Completed Interim Review.
On November 15, 2021, Pathfinder Acquisition Corporation (the "Company") filed
its Form 10-Q for the quarterly period ending September 30, 2021 (the "Q3 Form
10-Q"), which included in Note 2, Revision to Previously Reported Financial
Statements, ("Note 2") a discussion of the revision to a portion of the
Company's previously issued financial statements for the classification of its
Class A ordinary shares subject to redemption issued as part of the units sold
in the Company's initial public offering ("IPO") on February 19, 2021. As
described in Note 2, upon its IPO, the Company classified a portion of the Class
A ordinary shares subject to redemption 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. The Company's management re-evaluated the
conclusion and determined that the Class A ordinary shares subject to redemption
included certain provisions that require classification of the Class A ordinary
shares subject to redemption as temporary equity regardless of the minimum net
tangible assets required to complete the Company's initial business combination.
As a result, management corrected the error by revising all Class A ordinary
shares subject to redemption as temporary equity. This resulted in an adjustment
to the initial carrying value of the Class A ordinary shares subject to possible
redemption with the offset recorded to additional paid-in capital (to the extent
available), accumulated deficit and Class A ordinary shares.
Also in Note 2 of the Company's Form 10-Q for the quarterly period ending
September 30, 2021, in connection with the change in presentation for the Class
A ordinary shares subject to possible redemption, the Company revised its
earnings per share calculation to allocate income and losses shared pro rata
between the two classes of shares. This presentation differs from the previously
presented method of earnings per share, which was similar to the two-class
method.
As described above, originally the Company determined the changes were not
qualitatively material to the Company's previously issued financial statements
and revised its previously financial statements in Note 2 to its Q3 Form 10-Q.
However, upon further consideration of the material nature of the changes, the
Company determined the change in classification of the Class A ordinary shares
subject to redemption and change to its presentation of earnings per share is
material quantitatively and the Company should restate its previously issued
financial statements.
Therefore, on November 29, 2021, the audit committee of the board of directors
of the Company concluded, after discussion with the Company's management, that
the Company's previously issued (i) audited balance sheet as of February 19,
2021, filed as Exhibit 99.1 to the Company's Current Report on Form 8-K filed
with the Securities and Exchange Commission (the "SEC") on February 25, 2021, as
revised in the Company's Quarterly Report on Form 10-Q for the quarterly period
ended March 31, 2021 filed with the SEC on June 4, 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 16, 2021 (collectively, the "Affected Periods"), should be
restated and should no longer be relied upon. Similarly, other communications
describing the Company's financial statements and other related financial
information covering the Affected Periods should no longer be relied upon.
Additionally, the Audit Committee determined that it is appropriate to file an
amendment to its Q3 Form 10-Q, including restated unaudited interim financial
statements for the quarterly periods ended March 31, 2021 and June 30, 2021,
reflecting the restatement of the Class A ordinary shares subject to redemption
and change to its presentation of earnings per share for the Affected 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 held in the trust account established in connection with
the IPO.
After re-evaluation, the Company's management has concluded that in light of the
errors described above, a material weakness existed in the Company's internal
control over financial reporting for complex securities during the Affected
Periods 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/A.
The Audit Committee has discussed the matters disclosed in this Current Report
on Form 8-K pursuant to this Item 4.02 with WithumSmith+Brown, P.C., the
Company's independent registered public accounting firm.
1
© Edgar Online, source Glimpses