Item 4.02. Non-Reliance on Previously Issued Financial Statements or a Related
Audit Report or Completed Interim Review.
In light of recent comment letters issued by the U.S. Securities and Exchange
Commission (the "SEC"), the management of Revolution Healthcare Acquisition
Corp. (the "Company") has re-evaluated the Company's application of ASC
480-10-S99-3A to its accounting classification of the redeemable shares of
Class A common stock, par value $0.0001 per share (the "Public Shares"), issued
as part of the SAILSM securities sold in the Company's initial public offering
(the "IPO") on March 22, 2021. Historically, a portion of the Public Shares was
classified as permanent equity to maintain net tangible assets greater than
$5,000,000 on the basis that the Company will consummate its initial business
combination only if the Company has net tangible assets of at least $5,000,001.
Pursuant to such re-evaluation, the Company's management has determined that the
Public Shares include certain provisions that require classification of the
Public Shares as temporary equity regardless of the minimum net tangible assets
required to complete the Company's initial business combination.
Therefore, on December 23, 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 March 22,
2021, included in the Company's Current Report on Form 8-K, filed with the SEC
on March 26, 2021, (ii) 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, (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 10, 2021, and
(iv) unaudited interim financial statements included in the Company's Quarterly
Report on Form 10-Q for the quarterly period ended September 30, 2021, filed
with the SEC on November 9, 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 intends to restate its financial statements
for the Affected Periods in an audited restated balance sheet as of March 22,
2021, which will be filed with the SEC on the appropriate form, and in an
amendment to the Company's Quarterly Report on Form 10-Q for the quarterly
period ended September 30, 2021, which will be filed with the SEC (the "Amended
Q3 Form 10-Q"), as described therein.
The company does not expect there to be a change in the Company's total assets,
including cash position, liabilities or operating results or a change to the
cash held in the trust account established in connection with the IPO (the
"Trust Account"), in each case, as a result of such restatement.
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 will be described in more detail in the Amended 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
WithumSmith+Brown, P.C. ("Withum"), the Company's independent registered public
accounting firm.
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 impact of the Company's restatement of certain
historical financial statements, the Company's cash position and cash held in
the Trust Account and any proposed remediation measures with respect to
identified material weaknesses. These statements are based on current
expectations on the date of this Current Report on 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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