Item 4.02 Non-Reliance on Previously Issued Financial Statements or a Related
Audit Report or Completed Interim Review.
On April 12, 2021, the Acting Director of the Division of Corporation Finance
and Acting Chief Accountant of the Securities and Exchange Commission (the
"SEC") together issued a statement regarding the accounting and reporting
considerations for warrants issued by special purpose acquisition companies
entitled "Staff Statement on Accounting and Reporting Considerations for
Warrants Issued by Special Purpose Acquisition Companies ("SPACs")" (the "SEC
Guidance"). Specifically, the SEC Guidance focused on certain settlement terms
and provisions related to certain tender offers following a business
combination, which terms are similar to those contained in the warrant agreement
(the "Warrant Agreement"), dated as of October 26, 2020, between Lux Health Tech
Acquisition Corp. (the "Company") and Continental Stock Transfer & Trust
Company, a New York corporation, as warrant agent. As a result of the SEC
Guidance, the Company reevaluated the accounting treatment of (i) the 11,500,000
redeemable warrants (the "Public Warrants") that were included in the units
issued by the Company in its initial public offering (the "IPO") and (ii) the
5,333,333 privately issued warrants (together with the Public Warrants, the
"Warrants") that were included in the units issued to the Company's sponsor in a
private placement that closed concurrently with the closing of the IPO, and
determined to classify the Warrants 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 Warrants is a
non-cash charge and will be reflected in the Company's statement of operations.
On May 18, 2021, after consultation with Marcum LLP, the Company's independent
registered public accounting firm ("Marcum"), the Company's management and the
Audit Committee of the Company's board of directors (the "Audit Committee")
concluded that, in light of the Staff Statement, it is appropriate to restate
the Company's previously issued audited financial statements as of December 31,
2020 and for the period from September 1, 2020 (inception) through December 31,
2020 (the "Non-Reliance Period") that were included in the Company's Annual
Report on Form 10-K for the year ended December 31, 2020 (the "Non-Reliance
Financial Statements").
Considering such restatement, the Non-Reliance Financial Statements should no
longer be relied upon. Similarly, the Company's balance sheet as of October 29,
2020 included in the Company's Current Report on Form 8-K filed on November 4,
2020 should no longer be relied upon. The Company will file an amendment to its
Annual Report on Form 10-K for the year ended December 31, 2020 reflecting the
reclassification of the Warrants in restated audited financial statements for
the Non-Reliance Period as soon as practicable.
Going forward, unless the Company amends the terms of the Warrant Agreement, it
expects to continue to classify the Warrants as liabilities, which would require
the Company to incur the cost of measuring the fair value of the Warrant
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
Marcum.
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