Item 4.02-Non-Reliance on Previously Issued Financial Statements or Related
Audit Report or Completed Interim Report.
On November 15, 2021, in connection with the preparation of the financial
statements of Iron Spark I Inc. (the "Company") as of September 30, 2021,
management determined it should restate its previously reported financial
statements. The Company previously determined the Class A common stock subject
to possible redemption to be equal to the redemption value of $10.00 per Class A
common stock while also taking into consideration its charter's requirement that
a redemption cannot result in net tangible assets being less than $5,000,001.
Upon review of its financial statements for the period ended September 30, 2021,
the Company reevaluated the classification of the Class A common stock and
determined that the Class A common stock issued during the Initial Public
Offering and pursuant to the exercise of the underwriters' overallotment can be
redeemed or become redeemable subject to the occurrence of future events
considered outside the Company's control under ASC 480-10-S99. Therefore,
management concluded that the carrying value should include all Class A common
stock subject to possible redemption, resulting in the Class A common stock
subject to possible redemption being classified as temporary equity in its
entirety. As a result, management has noted a reclassification adjustment
related to temporary equity and permanent equity. This resulted in an adjustment
to the initial carrying value of the Class A common stock subject to possible
redemption with the offset recorded to additional paid-in capital (to the extent
available), retained earnings (accumulated deficit) and Class A common stock.
In connection with the change in presentation for the Class A common stock
subject to redemption, the Company will restate its earnings per share
calculation to allocate net income (loss) proportionally evenly to Class A
common stock subject to redemption and those that are not subject to redemption.
This presentation contemplates a Business Combination as the most likely
outcome, in which case, both classes of Class A common stock share pro rata in
the income (loss) of the Company. There has been no change in the Company's
total assets, liabilities or operating results.
Based upon their evaluation, the Company's Chief Executive Officer and Chief
Financial Officer concluded that the Company's disclosure controls and
procedures were not effective as of September 30, 2021, due to the material
weakness in our internal control over financial reporting as a result of the
revisions of our June 30, 2021 financial statements (the "revisions") regarding
the failure to properly classify Class A common stock redeemable equity
instruments. In light of this material weakness, we performed additional
analysis as deemed necessary to ensure that our unaudited interim financial
statements were prepared in accordance with U.S. generally accepted accounting
principles.
Therefore, the June 30, 2021 quarterly financial statements included in the
Company's Form 10-Qs, as filed with the SEC on August 13, 2021 as well as the
Company's balance sheet included on the Company's Form 8-K, as filed with the
SEC on June 17, 2021, should no longer be relied upon because certain redemption
provisions not solely within the control of the Company require Class A common
stock subject to redemption to be classified outside of permanent equity. The
Company had previously classified a portion of the Class A common stock in
permanent equity. The Company will restate its financial statements to classify
all Class A common stock as temporary equity and any related impact, as the
threshold in its charter does not change the nature of the underlying Class A
common stock as redeemable and thus would be required to be disclosed outside of
permanent equity. As a result of the foregoing, the Company's management
reassessed the effectiveness of its disclosure controls and procedures for the
periods affected by the restatement. As a result of that reassessment, the
Company's management determined that its disclosure controls and procedures for
such periods were not effective.
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 LLP the Company's independent registered public accounting firm.
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