Item 4.02 Non-Reliance on Previously Issued Financial Statements or Related
Audit Report or Completed Interim Report.
On November 5, 2021, PWP Forward Acquisition Corp. I (the "Company") filed its
Form 10-Q for the quarterly period ended September 30, 2021 (the "Q3 Form
10-Q"), which included a subsection in Note 2 entitled, "Revision to Previously
Reported Financial Statements," ("Note 2") that describes a revision to the
Company's previously issued financial statements for the classification of its
Class A common stock, par value $0.0001 per share, sold in the Company's initial
public offering ("IPO") on March 12, 2021 and upon exercise of the underwriters'
over-allotment option (collectively, the "Public Shares"). As described in Note
2, upon its IPO and subsequent closing of the over-allotment option, the Company
classified a portion of its Class A common stock as permanent equity. The
Company's management re-evaluated the conclusion and in accordance with ASC 480,
paragraph 10-S99, determined that the Class A common stock subject to possible
redemption included certain provisions, not solely within the control of the
Company, that require accounting for all Public Shares as temporary equity. As a
result, management reclassified all Class A common stock subject to possible
redemption as temporary equity. This resulted in an adjustment to the initial
carrying value of the Class A common stock subject to possible redemption with
the offset recorded to additional paid-in capital, accumulated deficit and Class
A common stock.
Also, in Note 2 of the Q3 Form 10-Q, in connection with the change in
presentation for the Class A common stock subject to possible redemption, the
Company revised its earnings per share calculation to allocate income and losses
shared pro rata between the Class A and Class B common stock. This presentation
contemplates a Business Combination as the most likely outcome, in which case,
both Class A and Class B common stock share pro rata in the income and losses of
the Company.
As described above, the Company had originally determined that the changes were
not qualitatively material (and therefore outweighed the quantitative factors)
and revised its previously issued financial statements in Note 2 to its Q3 Form
10-Q. However, upon further consideration of the changes, the Company has
determined that the change in classification of the Class A common stock subject
to possible redemption and the change to its presentation of earnings per share
are quantitatively material and cannot be overcome by qualitative factors.
Therefore, the Company will restate its previously issued financial statements.
On December 13, 2021, the audit committee (the "Audit Committee") of the board
of directors of the Company, after consultation with the Company's management,
concluded that the Company's previously issued (i) audited balance sheet as of
March 12, 2021, filed as Exhibit 99.1 to the Company's Current Report on Form
8-K filed with the SEC on March 18, 2021 (the "Post IPO Balance Sheet"); (ii)
the unaudited 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; (iii) the unaudited 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; and (iv) Note 2 to the unaudited
financial statements and Part I, Item 4 included in the Q3 Form 10-Q (with (ii),
(iii) and (iv) collectively referred to as the "Affected Quarterly Periods"), as
well as the relevant portions of any communication which describes or are based
on such financial statements, should no longer be relied upon and that it is
appropriate to restate the Company's financial statements for the Affected
Quarterly Periods and the Post IPO Balance Sheet.
Accordingly, the Company will restate its financial statements for the Affected
Quarterly Periods in amendments to each of the Form 10-Q's for the periods ended
March 31, 2021, June 30, 2021 and September 30, 2021, to be filed with the SEC
as soon as practicable, in each case, reflecting the restatement of the Class A
common stock subject to possible redemption and change to its presentation of
earnings per share. The Company will restate its Post IPO Balance Sheet in an
amendment to its Form 8-K filed with the SEC on March 18, 2021, to be filed with
the SEC as soon as practicable, to present all outstanding shares of Class A
common stock subject to possible redemption as temporary equity, to recognize
accretion from the initial book value to redemption value at the time of its
Initial Public Offering, and to classify all outstanding warrants as
liabilities, as previously described in Note 9 to the unaudited 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.
The Company does not expect that 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.
After re-evaluation, 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 for all reporting periods.
The Company's remediation plan with respect to such material weakness will be
described in more detail in the amendment to the Q3 Form 10-Q to be filed with
the SEC.
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 the
Independent Accountants.
IMPORTANT LEGAL INFORMATION
Cautionary Statement Regarding Forward-Looking Statements
This report may include "forward-looking statements" within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. All statements, including those
relating to the filing of the amendments to each of the filings listed above,
other than statements of historical fact included in this report are
forward-looking statements. When used in this report, words such as
"anticipate," "believe," "estimate," "expect," "intend" and similar expressions,
as they relate to the Company or its management team, identify forward-looking
statements. Such forward-lo2oking statements are based on the beliefs of
management, as well as assumptions made by, and information currently available
to, the Company's management. Actual results could differ materially from those
contemplated by the forward-looking statements as a result of certain factors
detailed in the Company's filings with the SEC. All subsequent written or oral
forward-looking statements attributable to the Company or persons acting on its
behalf are qualified in their entirety by this paragraph. Forward-looking
statements are subject to numerous conditions, many of which are beyond the
control of the Company, including those set forth in the Risk Factors section of
the Company's final prospectus filed with the SEC on March 11, 2021. Copies of
such filings are available on the SEC's website, www.sec.gov. The Company
undertakes no obligation to update these statements for revisions or changes
after the date of this release, except as required by law.
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