Item 4.02. Non- Reliance on Previously Issued Financial Statements or a Related
Audit Report or Completed Interim Review.
(a) In light of recent comments issued by the U.S. Securities and Exchange
Commission (the "SEC"), the management of ITHAX Acquisition Corp., a Cayman
Islands exempted company (the "Company"), has re-evaluated the Company's
application of ASC 480-10-S99-3A to its accounting classification of its
redeemable Class A ordinary shares, par value $0.001 per share (the "Public
Shares"), issued as part of the units sold in the Company's initial public
offering (the "IPO") in January 2021. The Company has determined that, at the
closing of its IPO, and in all of its subsequent periodic reports filed with the
SEC, through and including the Form 10-Q for the quarterly period ended June 30,
2021, it had improperly valued its Public Shares subject to possible redemption.
The Company previously determined the Public Shares subject to possible
redemption to be equal to the redemption value, while also taking into
consideration a redemption cannot result in net tangible assets being less than
$5,000,001. Management determined that the Public Shares issued during the
IPO can be redeemed or become redeemable subject to the occurrence of future
events considered outside of the Company's control. Therefore, management
concluded that the redemption value should include all Public Shares subject to
possible redemption, resulting in the Public Shares subject to possible
redemption being equal to its redemption value. As a result, management has
restated temporary equity and permanent equity. This resulted in a restatement
to the initial carrying value of the Public Shares subject to possible
redemption with the offset recorded to additional paid-in capital (to the extent
available), accumulated deficit and ordinary shares.
As a result of the foregoing, on November 22, 2021, the audit committee of the
Company's board of directors concluded, after discussion with the Company's
management, that the Company's previously issued (i) audited balance sheet as of
February 1, 2021, as previously revised in the Company's Quarterly Report on
Form 10-Q for the quarterly period ended March 31, 2021, filed with the SEC on
May 24, 2021 (the "Q1 Form 10-Q") (ii) unaudited interim financial statements
included in the Q1 Form 10-Q and (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 (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 will 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, to be
filed with the SEC.
The Company's management has concluded that in light of the error described
above, a material weakness exists in the Company's internal control over
financial reporting related to the Company's accounting for complex financial
instruments and that, because of this and additional material weaknesses
identified in the first and second quarters of 2021, the Company's disclosure
controls and procedures were not effective as of September 30, 2021.
The Company does not expect any of the above changes will have any impact on its
cash position and cash held in the trust account established in connection with
the IPO.
The Company's management and 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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