Item 4.02 Non-Reliance on Previously Issued Financial Statement and Related
Audit Report.
In connection with the preparation of the Company's financial statements as of
September 30, 2021, management, in consultation with its advisors, identified a
correction required to be made in certain of its previously issued financial
statements, arising from the manner in which, as of the closing of the Company's
initial public offering, the Company valued its Class A ordinary shares subject
to possible redemption. The Company previously determined the value of such
Class A ordinary shares to be equal to the redemption value of such shares,
after taking into consideration the terms of the Company's Amended and Restated
Memorandum and Articles of Association, under which a redemption cannot result
in net tangible assets being less than $5,000,001. Management has now
determined, after consultation with its advisors, and in light of SEC staff
guidance on redeemable equity instruments in ASC 480-10-S99, that the Class A
ordinary shares underlying the units issued during the initial public offering
can be redeemed or become redeemable subject to the occurrence of future events
considered to be outside the Company's control. Therefore, management has
concluded that the redemption value of its Class A ordinary shares subject to
possible redemption should reflect the possible redemption of all Class A
ordinary shares. As a result, management has noted a required reclassification
related to temporary equity and permanent equity. This has resulted in a
restatement of the initial carrying value of the Class A ordinary shares subject
to possible redemption, with the offset recorded to additional paid-in capital
(to the extent available), accumulated deficit and ordinary shares.
On November 15, 2021, the Audit Committee of the Board of Directors of the
Company concluded, after discussion with the Company's management that the
Company's audited balance sheet as of January 28, 2021, as restated in the
Company's Form 10-Q for the quarterly period ended March 31, 2021, and the
Company's unaudited condensed financial statements included in the Company's
Form 10-Q for the quarterly period ended March 31, 2021 and its Form 10-Q for
the quarterly period ended June 30, 2021, should no longer be relied upon
because of the required restatement described above. The Company reflected this
reclassification in respect of the financial statements cited in the foregoing
sentence in its Quarterly Report on Form 10-Q for the quarterly period ended
September 30, 2021, filed with SEC on November 15, 2021. In addition, as
disclosed in Part I, Item 4 of the upcoming Quarterly Report on Form 10-Q for
the quarterly period ended September 30, 2021, the Company's management
concluded that, during the period covered by such report, the Company's
disclosure controls and procedures were not effective, because the Company's
internal control over financial reporting did not result in the proper
accounting classification of complex financial instruments, which, represented a
material weakness.
The Company does not expect the changes described above to have any impact on
its cash position or the balance held in the trust account. The Company has
discussed the matters disclosed in this Current Report on Form 8-K with its
independent registered public accounting firm, Marcum LLP.
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