Item 4.02 Non-Reliance on Previously Issued Financial Statements or a Related
Audit Report or Completed Interim Review.
In September 2021, the Securities and Exchange Commission (the "SEC") staff
addressed ("SEC Staff Statement") the treatment of redeemable shares issued by
special purpose acquisition companies ("SPACs") and objected to the historical
accounting classification for such shares as partially permanent equity,
notwithstanding the typical provisions in a SPAC's charter providing that the
company cannot redeem public shares that would cause the company's net tangible
assets to be less than US $5,000,001 following such redemptions ("Redemption
Limit Provision"). Consistent with market practice at the time, KKR Acquisition
Holdings I Corp. (the "Company") previously classified a portion of its Class A
common stock, par value $0.0001 per share (the "Class A common stock") in
permanent equity due to the Company's certificate of incorporation containing a
Redemption Limit Provision.
Following consideration of the guidance in the SEC Staff Statement, the Company
concluded the Class A common stock did not meet the conditions to be classified
in permanent equity and the Redemption Limit Provision governing the Company's
Class A common stock did not change the nature of the underlying shares as
redeemable and thus would require the Class A common stock to be classified as
temporary equity, and to recognize accretion from the initial book value to
redemption value at the time of the Company's initial public offering in an
accordance with ASC Topic 480, "Distinguishing Liabilities from Equity" (ASC
480). The Company also concluded following such guidance that the Class A common
stock should have been included in temporary equity in its previously issued
financial statements as of March 19, 2021 and for the quarters ended March 31,
2021 and June 30, 2021 (the "Affected Periods").
The Company has included in Note 9 to the unaudited condensed financial
statements contained in its Form 10-Q for the quarter ended September 30, 2021
filed on November 15, 2021 ("Form 10-Q") a restatement of the financial
statements for the Affected Periods to give effect to the above reclassification
of the Class A common stock, and such information is incorporated by reference
herein. In addition, as disclosed in Part II, Item 4 of the Form 10-Q, the
Company's management concluded that in connection with the restatement there was
a material weakness in the Company's internal controls relating to its
interpretation and accounting for certain complex features of the Class A common
stock.
As a result of the foregoing, on November 14, 2021, management of the Company
and the Audit Committee of the Board of Directors of the Company determined that
the financial statements for the Affected Periods filed prior to the date hereof
should no longer be relied upon.
The Company has discussed the matters disclosed in this Current Report on Form
8-K with its independent registered public accounting firm, Marcum LLP.
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