Item 4.02 Non-Reliance on Previously Issued Financial Statements or a Related
Audit Report or Completed Interim Review.
On April 12, 2021, the Securities and Exchange Commission (the "SEC") released a
public statement (the "Public Statement") informing market participants that
warrants issued by special purpose acquisition companies ("SPACs") may require
classification as a liability of the entity measured at fair value, with changes
in fair value each period reported in earnings. Qell Acquisition Corporation
(the "Company") has previously classified its private placement warrants and
public warrants (collectively, the "warrants") as equity. For a full description
of the Company's warrants, please refer to the Company's final prospectus filed
in connection with its initial public offering ("IPO") on October 2, 2020
("Final Prospectus").
On May 3, 2021, management of the Company and the Audit Committee of the Board
of Directors of the Company determined that the Company's previous audited
balance sheet related to its IPO on October 2, 2020, its quarterly unaudited
financial statements for the period from August 7, 2020 through September 30,
2020 filed on Form 10-Q with the SEC on November 13, 2020, and its audited
financial statements for the period ended December 31, 2020 filed on the
Company's Annual Report on Form 10-K (the "Affected Periods") should no longer
be relied upon due to changes required for alignment with the SEC's Public
Statement. The SEC's Public Statement discussed "certain features of warrants
issued in SPAC transactions" that "may be common across many entities." The
Public Statement indicated that when one or more of such features is included in
a warrant, the warrant "should be classified as a liability measured at fair
value, with changes in fair value each period reported in earnings." Following
consideration of the guidance in the Public Statement, while the terms and
quantum of the warrants as described in the Final Prospectus have not changed,
the Company concluded the warrants do not meet the conditions to be classified
in equity and instead, the warrants meet the definition of a derivative under
ASC 815, under which the Company should record the warrants as liabilities on
the Company's balance sheet. The Company has discussed this approach with its
independent registered public accounting firm, WithumSmith+Brown, PC, and
intends to file an amendment to its Annual Report on Form 10-K for the year
ended December 31, 2020 filed with the SEC on March 31, 2021 (the "Amended
10-K") reflecting this reclassification of the warrants for the Affected
Periods. The Company has worked diligently with an independent valuation expert
to finalize the valuation of the warrants and will file the Amended 10-K as soon
as practicable. The adjustments to the financial statement items for the
Affected Periods will be set forth through expanded disclosure in the financial
statements included in the Amended 10-K, including further describing the
restatement and its impact on previously reported amounts.
Item 8.01. Other Events.
An extraordinary general meeting of the Company's shareholders is expected to be
scheduled for shareholders' consideration of the Company's initial business
combination and the other proposals which will be described in its proxy
statement/prospectus relating to the business combination to be filed with the
SEC. As noted above, the terms and quantum of the warrants and all other
securities issued by the Company have not changed and the restatement is not
indicative of any change in management's expectations regarding the business
prospects for the Company. The restatement is required for alignment with the
SEC's Public Statement and would be undertaken regardless of the completion of
the business combination. For those and other reasons, the Company does not
believe the restatement should materially impact its shareholders' consideration
of the business combination proposal and other proposals to be considered and
voted upon at the meeting.
Additional Information
A full description of the terms of the proposed business combination between
Qell Acquisition Corp. ("Qell") and Lilium GmbH ("Lilium") will be provided in a
registration statement on Form F-4 to be filed with the SEC by Lilium B.V.,
which will later be converted into a Netherlands public limited liability
company (naamloze vennootschap) ("Lilium N.V.") that will include a prospectus
with respect to Lilium N.V.'s securities to be issued in connection with the
business combination and a proxy statement with respect to the shareholder
meeting of Qell to vote on the business combination. Qell urges its investors,
shareholders and other interested persons to read, when available, the
preliminary proxy statement/prospectus filed with the SEC and documents
incorporated by reference therein because these documents will contain important
information about Qell, Lilium and the transaction. After the registration
statement is declared effective, the definitive proxy statement/prospectus to be
included in the registration statement will be mailed to shareholders of Qell
as of a record date to be established for voting on the proposed business
combination. Once available, shareholders will also be able to obtain a copy of
the Form F-4, including the proxy statement/prospectus, and other documents
filed with the SEC without charge by directing a request to: Qell,
info@qellspac.com. These documents will also be made available on Qell's
website. The preliminary and definitive proxy statement/prospectus to be
included in the registration statement, once available, can also be obtained,
without charge, on the SEC's website (sec.gov).
Participants in the Solicitation Process
Qell, Lilium and their respective directors and executive officers may be deemed
participants in the solicitation of proxies from Qell's stockholders with
respect to the business combination. A list of the names of those directors and
executive officers and a description of their interests in Qell will be filed in
the registration statement to be filed by Lilium B.V., which will later be
converted into Lilium N.V. on Form F-4, which will include the proxy
statement/prospectus, for the proposed business combination and be available,
without charge, at sec.gov.
Forward-Looking Statements
This communication contains certain forward-looking statements within the
meaning of the federal securities laws, including, but not limited to,
statements regarding Lilium's and Lilium N.V.'s proposed business and business
model, the markets and industry in which Lilium and Lilium N.V. (collectively,
the "Lilium Group") intend to operate, the anticipated timing of the
commercialization and launch of the Lilium Group's business in phases, and the
expected results of the Lilium Group's business and business model when launched
in phases. These forward-looking statements generally are identified by the
words "believe," "project," "expect," "anticipate," "estimate," "intend,"
"strategy," "future," "opportunity," "plan," "may," "should," "will," "would,"
"will be," "will continue," "will likely result," and similar expressions. Such
statements are based on management's belief or interpretation of information
currently available. Forward-looking statements are predictions, projections and
other statements about future events that are based on management's current
expectations with respect to future events and are based on assumptions and
subject to risk and uncertainties and subject to change at any time. The Lilium
Group will operate in a rapidly changing emerging industry. New risks emerge
every day. Given these risks and uncertainties, you should not rely on or place
undue reliance on these forward-looking statements. Actual events or results may
differ materially from those contained in the projections or forward-looking
statements.
Many factors could cause actual future events to differ materially from the
forward-looking statements in this communication, including, but not limited to,
the following risks: (i) the transaction may not be completed in a timely manner
or at all, which may adversely affect the price of Qell's securities; (ii) the
transaction may not be completed by Qell's business combination deadline and the
potential failure to obtain an extension of the business combination deadline if
sought by Qell; (iii) the parties' failure to satisfy the conditions to the
consummation of the business combination, such as Qell's shareholders or
Lilium's shareholders failing to adopt the business combination agreement,
failing to satisfy the minimum trust account amount following redemptions by
Qell's public shareholders or an inability to secure necessary governmental and
regulatory approvals; (iv) the Lilium Group's ability to implement business
plans, operating models, forecasts and other expectations and identify and
realize additional business opportunities after the completion of the proposed
business combination; (v) the failure of the Lilium Group and its current and
future business partners to successfully develop and commercialize the Lilium
Group's business or significant delays in its ability to do so; (vi) the Lilium
Group's inability to secure or protect its intellectual property; (vii) the
effect of the announcement or pendency of the proposed business combination on
Lilium's business relationships, performance and operations generally; and
(viii) the outcome of any legal proceedings that may be instituted against Qell
or the Lilium Group related to the proposed business combination. The foregoing
list of factors is not exhaustive. Forward-looking statements speak only as of
the date they are made. You are cautioned not to put undue reliance on
forward-looking statements, and the Lilium Group assumes no obligation and does
not intend to update or revise these forward-looking statements, whether as a
result of new information, future events or otherwise.
No Offer or Solicitation
This communication shall not constitute a solicitation of a proxy, consent or
authorization with respect to any securities or in respect of the proposed
business combination. This communication shall also not constitute an offer to
sell or the solicitation of an offer to buy any securities, nor shall there be
any sale of securities in any states or jurisdictions in which such offer,
solicitation or sale would be unlawful prior to registration or qualification
under the securities laws of any such jurisdiction. No offering of securities
shall be made except by means of a prospectus meeting the requirements of
Section 10 of the Securities Act of 1933, as amended.
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