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 Securities and Exchange Commission ("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 settlement terms
and provisions related to certain tender offers following a business
combination, which terms are similar to those contained in the warrant
agreement, dated as of November 23, 2020, between 10X Capital Venture
Acquisition Corp (the "Company") and Continental Stock Transfer & Trust Company,
a New York corporation, as warrant agent. As a result of the SEC Statement, the
Company reevaluated the accounting treatment of (i) the 10,062,500 redeemable
warrants (the "Public Warrants") that were included in the units issued by the
Company in its initial public offering (the "IPO") and (ii) the 5,500,000
redeemable warrants (together with the Public Warrants, the "Warrants") that
were issued to the Company's sponsor in a private placement that closed
concurrently with the closing of the IPO, and determined to classify the
Warrants as derivative liabilities measured at fair value, with changes in fair
value each period reported in earnings. While the Company has not generated any
operating revenues to date and will not generate any operating revenues until
after completion of its initial business combination, at the earliest, the
change in fair value of the Warrants is a non-cash charge and will be reflected
in the Company's statement of operations.
On May 13, 2021, the Company's management and the Audit Committee of the
Company's Board of Directors (the "Audit Committee") concluded that, in light of
the SEC Statement, it is appropriate to restate (i) certain items on the
Company's previously issued audited balance sheet dated as of November 27, 2020,
which was related to its IPO, and (ii) the Company's previously issued audited
financial statements as of December 31, 2020 and for the period from August 10,
2020 (inception) through December 31, 2020 (the "Relevant Periods"), which was
filed with the SEC on March 30, 2021. Considering such restatements, such
previously filed audited financial statements should no longer be relied upon.
The Company will file an amendment to its Annual Report on Form 10-K as of
December 31, 2020 and for the period from August 10, 2020 (inception) through
December 31, 2020, which will include the restated audited financial statements
for the Relevant Periods. The Company does not expect the restatement to have
any effect on the Company's previously announced business combination.
Going forward, unless we amend the terms of our warrant agreement, we expect to
continue to classify our warrants as liabilities, which would require us to
incur the cost of measuring the fair value of the warrant liabilities, and which
may have an adverse effect on our results of operations.
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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