Item 4.02 Non-Reliance on Previously Issued Financial Statement or Related Audit
Report or Completed Interim Review.
(a) On April 12, 2021, the staff (the "Staff") of the SEC issued a statement
entitled "Staff Statement on Accounting and Reporting Considerations for
Warrants Issued by Special Purpose Acquisition Companies." In the statement, the
Staff, among other things, highlighted potential accounting implications of
certain terms that are common in warrants issued in connection with the initial
public offerings of special purpose acquisition companies such as the Company.
In connection with such statement, the Company revisited its accounting for its
public warrants and private placement warrants issued in connection with the
Company's initial public offering (the "Warrants"), as well as for the forward
purchase agreement entered into with the Company's anchor investor (the "FPA"),
and determined that the Warrants and FPA should be treated as derivative
liabilities, with changes in fair value each period reported in earnings,
pursuant to Accounting Standards Codification Subtopic 815-40, Contracts in
Entity's Own Equity, rather than as components of equity as the Company
previously treated the Warrants and as a disclosed contractual obligation in the
case of the FPA.
As a result of the foregoing, the Company previously filed Amendment No. 1 to
Form 10-K with the SEC on May 18, 2021 in order to restate its financial
statements for the periods ended June 30, 2020 and September 30, 2020 and its
audited financial statements as of and for the period ended December 31, 2020
(the "Affected Periods") to reflect a correction in its accounting for its
Warrants.
In connection with the preparation of the Form 10-Q for the period end March 31,
2021 ("Q1 Form 10-Q"), the Company determined it is necessary to classify all
Class A ordinary shares as a component of temporary equity. In accordance with
the SEC's guidance on redeemable equity instruments, which has been codified in
ASC 480-10-S99, redemption provisions not solely within the control of the
Company require common stock subject to redemption to be classified outside of
permanent equity. On June 1, 2021, after consultation between the Company's
management and audit committee, the Company concluded that the financial
statements for the Affected Periods should no longer be relied upon and are to
be restated in order to correct the classification error.
As a result, the Company today is announcing that it will file an amendment to
its Annual Report on Form 10-K for the year ended December 31, 2020 (the
"Amendment") to restate its historical financial results for the Affected
Periods, in each case to reflect the change in classification of the Class A
ordinary shares (the "Restatement"). The change in classification of the Class A
ordinary shares did not have any impact on the Company's liquidity, cash flows,
revenues or costs of operating the business. The change in classification of all
Class A ordinary shares as temporary equity does not impact the amounts
previously reported for the Company's cash and cash equivalents, investments
held in trust account, operating expenses or total cash flows from operations
for any of the Affected Periods.
The company intends to file its Q1 Form 10-Q following its filing of the
Amendment.
Management has discussed the matters disclosed pursuant to this Item
4.02(a) with the Company's independent accountant, Marcum LLP.
Cautionary Statements Regarding Forward-Looking Statements
This Current Report on Form 8-K/A 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 Company's intent to restate certain historical
financial statements and the timing and impact of the Restatement. These
statements are based on current expectations on the date of this Form 8-K/A 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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