Item 4.02. Non-Reliance on Previously Issued Financial Statements.
In connection with the preparation of its financial statements as of September
30, 2021, the management of KL Acquisition Corp, a Delaware corporation (the
"Company"), in consultation with its advisors, identified an error made in
certain of its previously issued financial statements, arising from the manner
in which, as of the closing of the Company's initial public offering, the
Company classified its Class A common stock subject to possible redemption. The
Company previously determined the value of such Class A common stock to be equal
to the redemption value of such shares, after taking into consideration the
terms of the Company's Amended and Restated Certificate of Incorporation, under
which a redemption cannot result in net tangible assets being less than
$5,000,001, and therefore classified its Class A common stock as permanent
equity. Management has now determined, after consultation with its advisors,
that the Class A common stock underlying the units issued during its initial
public offering can be redeemed or become redeemable subject to the occurrence
of future events considered to be outside the Company's control. Therefore,
management has concluded that the redemption value of its Class A common stock
subject to possible redemption should reflect the possible redemption of all
Class A common stock. As a result, management has noted a reclassification error
related to temporary equity and permanent equity, which has resulted in a
restatement of 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), accumulated deficit and Class A common stock.
On November 22, 2021, the Company's audit committee concluded, after discussion
with the Company's management and its advisors, that the Company's audited
balance sheet as of January 12, 2021, the Company's unaudited condensed
financial statements included in the Company's Form 10-Q for the quarterly
period ended March 31, 2021 and its Form 10-Q for the quarterly period ended
June 30, 2021 should no longer be relied upon due to the reclassification
described above. The Company plans to restate the financial statements
identified above in its upcoming Quarterly Report on Form 10-Q for the quarterly
period ended September 30, 2021, to be filed with Securities and Exchange
Commission.
The Company does not expect the changes described above to have any impact on
its cash position or the balance held in 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 is described in more detail in the upcoming Quarterly
Report on Form 10-Q for the quarterly period ended September 30, 2021.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 its independent
registered public accounting firm.
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