Item 4.02. Non-Reliance on Previously Issued Financial Statements or a Related
Audit Report or Completed Interim Review.
The management of Dune Acquisition Corporation (the "Company") has re-evaluated
the Company's application of ASC 480-10-S99-3A to its accounting classification
of the redeemable Class A common stock, par value $0.0001 per share (the "Public
Shares"), issued as part of the units sold in the Company's initial public
offering (the "IPO") on December 22, 2020. Historically, a portion of the Public
Shares was classified as permanent equity to maintain stockholders' equity
greater than $5 million on the basis that 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, as described in the Company's amended and restated certificate of
incorporation (the "Charter"). Pursuant to such re-evaluation, the Company's
management has determined that the Public Shares include certain provisions that
require classification of all of the Public Shares as temporary equity
regardless of the net tangible assets redemption limitation contained in the
Charter.
Therefore, on November 19, 2021, the Company's management and the audit
committee of the Company's board of directors (the "Audit Committee"), after
discussion with WithumSmith+Brown, PC ("Withum"), the Company's independent
registered public accounting firm, concluded that the Company's previously
issued (i) audited financial statements included in the Company's Annual Report
on Form 10-K/A for the year ended December 31, 2020, filed with the U.S.
Securities and Exchange Commission (the "SEC") on June 21, 2021 (the "2020 Form
10-K/A"), (ii) unaudited interim financial statements included in the Company's
Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2021,
filed with the SEC on June 21, 2021, (iii) unaudited interim financial
statements included in the Company's Quarterly Report on Form 10-Q for the
quarterly period ended June 30, 2021, filed with the SEC on August 16, 2021 and
(iv) unaudited interim financial statements included in the Company's Quarterly
Report on Form 10-Q for the quarterly period ended September 30, 2021, filed
with the SEC on November 12, 2021 (the "Q3 Form 10-Q") (the periods included in
such Quarterly Reports, the "Affected Quarterly Periods"), should be restated to
report all Public Shares as temporary equity and should no longer be relied
upon. As such, the Company intends to restate its financial statements for the
year ended December 31, 2020 in an Amendment No. 1 to the 2020 Form 10-K/A and
for the Affected Quarterly Periods in an Amendment No. 1 to the Company's Q3
Form 10-Q, to be filed with the SEC (the "Q3 Form 10-Q/A").
The Company does not expect any of the above changes will have any impact on its
cash position, investments and cash held in the trust account established in
connection with the IPO (the "Trust Account").
The Company's management has concluded that in light of the classification error
described above, a material weakness exists in the Company's internal control
over financial reporting and that the Company's disclosure controls and
procedures were not effective. The Company's remediation plan with respect to
such material weakness will be described in more detail in Amendment No. 1 to
the 2020 Form 10-K/A and the Q3 Form 10-Q/A.
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
Withum.
Forward-Looking Statements
This Current Report on Form 8-K 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 impact of the Company's restatement of certain
historical financial statements, the Company's cash position, investments and
cash held in the Trust Account and any proposed remediation measures with
respect to identified material weaknesses. These statements are based on current
expectations on the date of this Current Report on Form 8-K 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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