Item 4.02 Non-Reliance on Previously Issued Financial Statements or Related
Audit Report or Completed Interim Report.
The management of Prospector Capital Corp. (the "Company") has re-evaluated the
Company's application of ASC 480-10-S99-3A to its accounting classification of
the redeemable 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 January 12, 2021. Historically, a portion of the Public
Shares was classified as permanent equity to maintain shareholders' equity
greater than $5,000,000 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"). Previously, the Company did not consider
redeemable shares classified as temporary equity as part of net tangible assets.
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. In addition, in connection with the
change in presentation for the Public Shares, the Company determined it should
restate its earnings per share calculation to allocate income and losses shared
pro rata between the two classes of ordinary shares. This presentation
contemplates a business combination as the most likely outcome, in which case,
both classes of ordinary shares share pro rata in the income and losses of the
Company.
Therefore, on December 13, 2021, the Company's management, together with the
audit committee of the Company's board of directors (the "Audit Committee"),
concluded that the Company's previously issued financial statements and other
financial data as of January 12, 2021, filed with the SEC on January 19, 2021,
(i) 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 27, 2021; and (ii) 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 to report all Public Shares as temporary
equity and should no longer be relied upon. As such, the Company will restate
its financial statements for the Affected Periods in a Quarterly Report on Form
10-Q/A for the quarterly period ended September 30, 2021, to be filed with the
SEC.
The restatement does not have an impact on the Company's cash position and cash
held in the trust account established in connection with the Initial Public
Offering (the "Trust Account").
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.
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