Item 4.02 Non-Reliance on Previously Issued Financial Statement and Audit
Report.
In light of recent comment letters issued by the U.S. Securities and Exchange
Commission (the "SEC"), the management of Glass Houses Acquisition Corp. (the
"Company") has re-evaluated the Company's application of ASC 480-10-S99-3A to
its accounting classification of the redeemable shares of 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 March 25, 2021.
Historically, a portion of the Public Shares was classified as permanent equity
to maintain net tangible assets greater than $5,000,000 on the basis that the
Company will consummate its initial business combination only if the Company has
net tangible assets of at least $5,000,001. Pursuant to such re-evaluation, the
Company's management has determined that the Public Shares include certain
provisions that require classification of the Public Shares as temporary equity
regardless of the minimum net tangible assets required to complete the Company's
initial business combination.
Therefore, on November 16, 2021, the Company's management and the audit
committee of the Company's board of directors (the "Audit Committee"), after
consultation with Marcum LLP ("Marcum"), the Company's independent registered
public accounting firm, concluded that the Company's previously reported
financial statements -- (i) audited balance sheet as of March 25, 2021, as
previously restated in the Company's Quarterly Report on Form 10-Q for the
period ended March 31, 2021, filed with the SEC on June 11, 2021 (the "Q1 Form
10-Q"), (ii) unaudited condensed financial statements as of and for the period
ended March 31, 2021 included in the Q1 Form 10-Q and (iii) the Quarterly Report
on Form 10-Q filed on August 16, 2021 with unaudited condensed financial
statements as of and for the periods ended June 30, 2021 (collectively, the
"Affected Periods") -- should be restated to report all Public Shares as
temporary equity and should no longer be relied upon. As such, the Company plans
to restate its financial statements for the Affected Periods in the Company's
Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2021
(the "Q3 Form 10-Q"), to be filed with the SEC.
The Company does not expect any of the above changes will have any impact on its
cash position or 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 the Q3 Form 10-Q.
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
Marcum.
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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