Item 4.02 Non-Reliance on Previously Issued Financial Statements or a Related
Audit Report or Completed Interim Review.
On April 12, 2021, the Securities and Exchange Commission (the "SEC") released a
public statement (the "Public Statement") informing market participants that
warrants issued by special purpose acquisition companies ("SPACs") may require
classification as a liability of the entity measured at fair value, with changes
in fair value each period reported in earnings. Revolution Healthcare
Acquisition Corp. (the "Company") has previously classified its private
placement warrants and public warrants (collectively, the "warrants") as equity.
For a full description of the Company's warrants, please refer to the Company's
final prospectus filed in connection with its initial public offering ("IPO") on
March 22, 2020 ("Final Prospectus").
Management of the Company and the Audit Committee of the Board of Directors of
the Company determined that the Company's previous audited balance sheet related
to its IPO on March 22, 2021 (the "Affected Period") should no longer be relied
upon due to changes required for alignment with the SEC's Public Statement. The
SEC's Public Statement discussed "certain features of warrants issued in SPAC
transactions" that "may be common across many entities." The Public Statement
indicated that when one or more of such features is included in a warrant, the
warrant "should be classified as a liability measured at fair value, with
changes in fair value each period reported in earnings." Following consideration
of the guidance in the Public Statement, while the terms and quantum of the
warrants as described in the Final Prospectus have not changed, the Company
concluded the warrants do not meet the conditions to be classified in equity and
instead, the warrants meet the definition of a derivative under ASC 815, under
which the Company should record the warrants as liabilities on the Company's
balance sheet. The Company has discussed this approach with its independent
registered public accounting firm, WithumSmith+Brown, PC, and intends to reflect
this reclassification of the warrants for the Affected Period in its forthcoming
Quarterly Report on Form 10-Q for the period ended March 31, 2021 (the "10-Q").
The Company will file the 10-Q as soon as practicable. The adjustments to the
financial statement items for the Affected Period will be set forth through
expanded disclosure in the financial statements included in the 10-Q, including
further describing the restatement and its impact on previously reported
amounts.
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