Item 4.02-Non-Reliance on Previously Issued Financial Statements or Related
Audit Report or Completed Interim Report.
On April 12, 2021, the Acting Director of the Division of Corporation Finance
and Acting Chief Accountant of the SEC together issued a statement regarding the
accounting and reporting considerations for warrants issued by special purpose
acquisition companies entitled "Staff Statement on Accounting and Reporting
Considerations for Warrants Issued by Special Purpose Acquisition Companies
("SPACs")" (the "SEC Statement"). Specifically, the SEC Statement focused on
certain provisions that provided for potential changes to the settlement amounts
dependent upon the characteristics of the holder of the warrant, which terms are
similar to those contained in the warrant agreement governing the warrants of
Golden Path Acquisition Corporation (the "Company"). As a result of the SEC
Statement, on January 18, 2022, the Company reevaluated the accounting treatment
of the 5,750,000 warrants that were issued to the Company's public shareholders
in the Company's Initial Public Offering (the "Public Warrants"). The Company
previously accounted for the Public Warrants as components of liabilities. The
Company should have classified the Public Warrants as components of equity in
its previously issued financial statements.
The Company's accounting for the Public Warrants as components of equity instead
of as derivative liabilities did not have any effect on the Company's previously
reported operating expenses or cash.
In addition, in accordance with the SEC and its staff's guidance on redeemable
equity instruments, ASC Topic 480, Distinguishing Liabilities from Equity (ASC
480), paragraph 10-S99, redemption provisions not solely within the control of
the Company require ordinary shares subject to redemption to be classified
outside of permanent equity. The Company had previously classified a portion of
its ordinary shares in permanent equity. Although the Company did not specify a
maximum redemption threshold, its charter provides that currently, 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. On January 18, 2022, the Company determined
that the threshold would not change the nature of the underlying shares as
redeemable and thus would be required to be disclosed outside equity.
As a result, the Company's previously issued (i) audited balance sheet as of
June 24, 2021 included in the Company's Current Report on Form 8-K filed with
the SEC on June 30, 2021, (ii) audited interim financial statements as of June
30, 2021 and for the three and six months ended June 30, 2021 included in the
Company's Quarterly Report on Form 10-Q filed with the SEC on August 16, 2021
(collectively, the "Affected Periods"), in each case, should be corrected to
classify public warrants as equity and all of the public shares as temporary
equity and should no longer be relied upon.
In connection with the restatement, the Company's management reassessed the
effectiveness of its disclosure controls and procedures for the periods affected
by the restatement. As a result of that reassessment, the Company's management
determined that its disclosure controls and procedures for such periods were not
effective due to a material weakness in internal controls over financial
reporting related to the classification of the Company's warrants as components
of equity instead of as derivative liabilities and the allocation and treatment
of the initial transaction costs of the initial public offering. For more
information, see Item 9A included in this Annual Report on Form 10- Q/A.
The Company has reflected these corrections in its Quarterly Report on Form 10-Q
for the quarterly period ended September 30, 2021, filed with SEC on November
15, 2021. The Company does not expect the changes described above to have any
impact on its cash position or the balance held in the trust account. The
Company has not amended its previously filed Quarterly Reports on Form 10-Q or
Current Reports on Form 8-K for the period affected by the restatement. The
financial information that has been previously filed or otherwise reported for
these periods is superseded by the information in this interim Report on Form
10-Q/A, and the financial statements and related financial information contained
in such previously filed reports should no longer be relied upon.
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
Friedman LLP, the Company's independent registered public accounting firm.
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