Item 4.02. Non-Reliance on Previously Issued Financial Statements or a Related
Audit Report or Completed Interim Review.
Following the filing of the quarterly report for the period ended September 30,
2021, filed with the SEC on November 12, 2021 (the "Original Filing"), Fifth
Wall Acquisition Corp. III (the "Company"), having performed further assessment,
concluded that, effective with its financial statements for the quarterly period
ended September 30, 2021, it should restate its prior filed financial statements
to classify all Class A ordinary shares subject to redemption as temporary
equity. In accordance with guidance on redeemable equity instruments in ASC
480-10-S99, redemption provisions not solely within the control of the Company
require ordinary shares subject to redemption to be classified outside of
permanent equity. Previously, the Company had revised its financial statements
to classify all Class A ordinary shares subject to redemption as temporary
equity. This resulted in an adjustment to the initial carrying value of the
Class A ordinary shares subject to possible redemption with the offset recorded
to additional paid-in capital (to the extent available), accumulated deficit and
Class A ordinary shares. In connection with the change in presentation for the
Class A ordinary shares subject to possible redemption, the Company revised its
earnings per share calculation to allocate income and losses shared pro rata
between the two classes of shares. This presentation contemplates a Business
Combination as the most likely outcome, in which case, both classes of shares
share pro rata in the income and losses of the Company.
On February 23, 2022, the Company's management and the audit committee of the
Company's board of directors (the "Audit Committee") concluded that the
Company's previously issued (i) audited balance sheet as of May 27, 2021 (the
"Post IPO Balance Sheet") and the audit report of WithumSmith+Brown, PC included
in the Current Report on Form 8-K containing the Post IPO Balance Sheet, filed
with the SEC on June 3, 2021; (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 July 7, 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 13, 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 (collectively, the
"Affected Periods"), should be restated to (a) classify all Class A ordinary
shares subject to possible redemption in temporary equity, and (b) to, where
applicable, restate its earnings per share calculation to allocate income and
loss shared pro rata between the two classes of shares. As such, the Company
will restate its financial statements for the Affected Periods. The Post IPO
Balance Sheet will be amended in a Current Report on Form 8-K/A, and the
unaudited condensed financial statements for the periods ended March 31, 2021,
June 30, 2021 and September 30, 2021 will be amended in the Company's Quarterly
Report on Form 10-Q/A for the quarterly period ended September 30, 2021 (the
"Forms 10-Q/A"). Considering such restatement, such financial statements, as
well as the relevant portions of any communication which describes or are based
on such financial statements, should no longer be relied upon.
The restatement does not have an impact on the Company's cash position 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 errors described
above, a material weakness existed in the Company's internal control over
financial reporting during the Affected Periods and that the Company's
disclosure controls and procedures were not effective during the Affected
Periods. The Company's remediation plan with respect to such material weakness
will be described in more detail in Item 4 of Part I to the Forms 10-Q/A.
The Audit Committee and the Company's management 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.
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 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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