Khosla Ventures Acquisition III : Non-Reliance on Previously Issued Financial Statements or a Related Audit Report or Completed Interim Review (Form 8-K)

Non-Reliance on Previously Issued Financial Statements or a Related Audit Report or Completed Interim Review.

On August 8, 2021, the Audit Committee of the Company's board of directors (the 'Audit Committee') approved the dismissal of Marcum LLP ('Marcum') as the Company's independent registered public accounting firm, and approved the appointment of BDO USA, LLP ('BDO') as the Company's new independent public accounting firm.

In connection with the Company's engagement of BDO as its auditors, the Company reevaluated the accounting treatment of the shares of the Company's Class K common stock (the 'Class K Shares') that were issued by the Company to the Company's sponsor in a private placement that closed prior to the closing of the Company's initial public offering, and determined to classify the Class K Shares as derivative liabilities measured at fair value, with changes in fair value each period reported in earnings. While the Company has not generated any operating revenues to date and will not generate any operating revenues until after completion of its initial business combination, at the earliest, the change in fair value of the Class K Shares is a non-cash charge and will be reflected in the Company's statement of operations.

On August 31, 2021, after consultation with BDO, the Company's management and the Audit Committee concluded that, in light of its reevaluation, it is appropriate to restate the Company's previously issued unaudited financial statements as of March 31, 2021 and for the period January 15, 2021 (inception) through March 31, 2021 (the 'Non-Reliance Period') that were included in the Company's Quarterly Report on Form 10-Q/A for the quarter ended March 31, 2021 (the 'Non-Reliance Financial Statements').

Considering such restatement, the Non-Reliance Financial Statements should no longer be relied upon. Similarly, (i) the Company's previously issued audited financial statements as of February 1, 2021 and for the period January 29, 2021 (inception) through February 1, 2021 included in the Company's Registration Statement on Form S-1 and (ii) the Company's audited balance sheet as of March 26, 2021 included in the Company's Current Report on Form 8-K filed on April 2, 2021 should no longer be relied upon. The Company will file an amendment to its Quarterly Report on Form 10-Q for the quarter ended March 31, 2021 reflecting the reclassification of the Class K Shares in restated unaudited financial statements for the Non-Reliance Period as soon as practicable.

Going forward, unless the Company amends the terms of the Class K Shares, it expects to continue to classify the Class K Shares as liabilities, which would require the Company to incur the cost of measuring the fair value of the Class K Shares liabilities, and which may have an adverse effect on the Company's results of operations.

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 BDO.