Item 4.02 Non-Reliance on Previously Issued Financial Statements or a Related
Audit Report or Completed Interim Review.
In preparation of the financial statements of Population Health Investment Co.,
Inc., a Cayman Islands exempted company (the "Company"), as of and for the
quarterly period ended September 30, 2021, the Company concluded it should
revise its previously filed financial statements to classify all Class A
ordinary shares, par value $0.0001 per share ("Class A ordinary shares"),
subject to possible redemption in temporary equity. In accordance with
Securities and Exchange Commission ("SEC") and its staff's guidance on
redeemable equity instruments in ASC 480-10-S99, redemption provisions not
solely within the control of the Company require ordinary shares subject to
redemption to be classified outside of permanent equity. The Company had
previously classified a portion of its Class A ordinary shares in permanent
equity, or total shareholders' equity (deficit). Although the Company did not
specify a maximum redemption threshold, its amended and restated memorandum and
articles of association currently provides that the Company will not redeem its
public shares in an amount that would cause its net tangible assets to be less
than $5,000,001. Previously, the Company did not consider redeemable shares
classified as temporary equity as part of net tangible assets. Effective with
its financial statements for quarterly period ended September 30, 2021, the
Company revised this interpretation to include temporary equity in net tangible
assets. In addition, in connection with the change in presentation for the
Class A ordinary shares subject to possible redemption, the Company determined
it should restate its earnings per share calculation to allocate income and
losses shared pro rata between the two classes of shares. This presentation
contemplates an initial business combination as the most likely outcome, in
which case, both classes of shares share pro rata in the income and losses of
the Company.
After further consideration of the impact of the error that led to the revised
September 30, 2021 financial statements, on December 16, 2021, the Company's
management and the audit committee of the Company's board of directors (the
"Audit Committee") concluded that the Company's previously issued (i) audited
balance sheet as of November 20, 2020 (the "Post IPO Balance Sheet"), as
previously restated in Amendment No. 1 to the Annual Report on Form 10-K/A of
the Company for the fiscal year ended December 31, 2020, as filed with the SEC
on May 19, 2021 (the "First Amended Filing"), (ii) audited financial statements
for the period ended December 31, 2020 included in the First Amended Filing,
(iii) unaudited interim financial statements included in the Company's Quarterly
Report on Form 10-Q for the quarterly period ended March 31, 2021, filed with
the SEC on May 24, 2021 and reported as revised in the Company's Quarterly
Report on Form 10-Q for the quarterly period ended September 30, 2021 ( the
"Original Q3 Form 10Q"), (iv) 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 13, 2021 and reported as revised in
the Company's Original Q3 Form 10-Q, and (v) footnote 2 to the unaudited interim
financial statements and Item 4 of Part 1 included in the Company's Original Q3
Form 10-Q (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 intends to restate its financial statements for the Affected
Periods in (i) a Form 10-K/A with respect to the Post IPO Balance Sheet and the
Company's audited financial statements for the period ended December 31, 2020
included in the First Amended Filing and (ii) a Form 10-Q/A for the quarterly
period ended September 30, 2021 with respect to its unaudited condensed
financial statements for the periods ended March 31, 2021, June 30, 2021 and
September 30, 2021.
The restatement does not have an impact on the Company's cash position and cash
held in the trust account established in connection with the IPO.
The Company's management has concluded that a material weakness remains in the
Company's internal control over financial reporting and that the Company's
disclosure controls and procedures were not effective. As a result of that
reassessment, we determined that our disclosure controls and procedures for such
periods were not effective with respect to the proper accounting and
classification of complex financial instruments.
The Audit Committee has discussed the matters disclosed in this Current Report
on Form 8-K pursuant to this Item 4.02 with the Company's current independent
registered public accounting firm, WithumSmith+Brown, PC ("Withum"). Withum was
provided with a copy of the disclosures made herein and was given the
opportunity, no later than the day of the filing of this Current Report on
Form 8-K, to review these disclosures.
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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 United States 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. Such statements may include, but are not limited to,
statements regarding the Company's intent to restate certain historical
financial statements and the timing and impact of the restatement. 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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