Item 4.02 Non-Reliance on Previously Issued Financial Statement and Related
Audit Report.
In light of recent comment letters issued by the U.S. Securities and Exchange
Commission (the "SEC"), the management of Northern Genesis Acquisition Corp. III
(the "Company") has re-evaluated the Company's application of ASC 480-10-S99-3A
to its accounting classification of the redeemable shares of common stock, par
value $0.0001 per share (the "Public Shares"), issued as part of the units sold
in the Company's initial public offering (the "IPO") on March 26, 2021. The
Company previously determined the common stock subject to possible redemption to
be equal to the redemption value of $10.00 per share of common stock while also
taking into consideration a redemption cannot result in net tangible assets
being less than $5,000,001. Management determined that the common stock 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 shares of common stock
subject to possible redemption, resulting in the common stock subject to
possible redemption being equal to their redemption value. As a result,
management has noted a reclassification error related to temporary equity and
permanent equity. This resulted in a restatement to the initial carrying value
of the common stock subject to possible redemption with the offset recorded to
additional paid-in capital (to the extent available), accumulated deficit and
common stock.
Therefore, on November 15, 2021, the Company's management and the audit
committee of the Company's board of directors (the "Audit Committee"), after
consultation with Marcum LLP ("Marcum"), the Company's independent registered
public accounting firm, concluded that the Company's previously issued (i)
audited balance sheet as of March 26, 2021, as previously restated in the
Company's Quarterly Report on Form 10-Q for the quarterly period ended March 31,
2021, filed with the SEC on May 26, 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
16, 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 "Q3 Form 10-Q"), as such will
be described therein.
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 "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 Q3 Form 10-Q.
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.
Cautionary Statements Regarding Forward-Looking Statements
This Current Report on Form 8-K includes "forward-looking statements" within the
meaning of the safe harbor provisions of the U.S. Private Securities Litigation
Reform Act of 1995. Certain of these forward-looking statements can be
identified by the use of words such as "believes," "expects," "intends,"
"plans," "estimates," "assumes," "may," "should," "will," "seeks," or other
similar expressions. These statements are based on current expectations on the
date of this Form 8-K and involve a number of risks and uncertainties that may
cause actual results to differ significantly. The Company does not assume any
obligation to update or revise any such forward-looking statements, whether as
the result of new developments or otherwise. Readers are cautioned not to put
undue reliance on forward-looking statements.
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