Item 4.02 Non-Reliance on Previously Issued Financial Statements or a Related
Audit Report or Completed Interim Review.
(a) On April 12, 2021, the staff (the "Staff") of the Securities and Exchange
Commission (the "SEC") issued a statement entitled "Staff Statement on
Accounting and Reporting Considerations for Warrants Issued by Special Purpose
Acquisition Companies ("SPACs")." 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
SPACs such as dMY Technology Group, Inc. III (the "Company" or "dMY").
The warrant agreement governing the warrants includes a provision that provides
for potential changes to the settlement amounts dependent on the characteristics
of the holder of the warrant. Upon review of the statement by the SEC Staff, the
Company's management further evaluated the warrants under Accounting Standards
Codification ("ASC") Subtopic 815-40, Contracts in Entity's Own Equity. ASC
Section 815-40-15 addresses equity versus liability treatment and classification
of equity-linked financial instruments, including warrants, and states that a
warrant may be classified as a component of equity only if, among other things,
the warrant is indexed to the issuer's common stock. Under ASC
Section 815-40-15, a warrant is not indexed to the issuer's common stock if the
terms of the warrant require an adjustment to the exercise price upon a
specified event and that event is not an input to the fair value of the warrant.
Based on management's evaluation, the Company's audit committee (the "Audit
Committee"), in consultation with management concluded that the Company's
warrants are not indexed to the Company's common stock in the manner
contemplated by ASC Section 815-40-15 because the characteristics of the holder
of the instrument is not an input into the pricing of a fixed-for-fixed option
on equity shares.
Therefore, the Audit Committee, in consultation with its management, concluded
that the Company's (i) previously issued audited balance sheet dated as of
November 17, 2020 which was related to its initial public offering, (ii)
unaudited interim financial statement as of and for the quarterly period ended
September 30, 2020, as reported in the Company's Quarterly Reports on Form 10-Q
filed with the SEC on December 18, 2020 and (iii) audited financial statements
as of December 31, 2020 and for the period from September 14, 2020 (inception)
through December 31, 2020 as reported in the Company's Annual Report on Form
10-K filed with the SEC on March 25, 2021 (collectively, the "Affected Periods")
should be restated because of a misapplication in the guidance around accounting
for the Warrants and should no longer be relied upon based on the
reclassification of warrants as described above. Similarly, the stockholder
communications, investor presentations or other communications describing
relevant portions of the Company's financial statements for these periods that
need to be restated should no longer be relied upon.
As a result, the Company today is announcing that it will restate its historical
financial results for the Affected Periods, in each case to reflect the change
in accounting treatment (the "Restatement").
The Company's prior accounting for the warrants as components of equity instead
of as derivative liabilities did not have any effect on the Company's previously
reported operating expenses, cash flows or cash or cash equivalents.
The Audit Committee and management have discussed the matters disclosed pursuant
to this Item 4.02(a) with the Company's independent accountant.
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