Item 4.02 Non-Reliance on Previously Issued Financial Statements or Related
Audit Report or Completed Interim Report.
In preparation of its unaudited condensed financial statements as of and for
quarterly period ended September 30, 2021, Seven Oaks Acquisition Corp. (the
"Company") concluded it should revise its financial statements to classify all
Class A common stock subject to possible redemption in temporary equity. In
accordance with ASC 480, paragraph 10-S99, redemption provisions not solely
within the control of the Company require common stock subject to redemption to
be classified outside of permanent equity. The Company had previously classified
a portion of its Class A common stock subject to possible redemption in
permanent equity, or total stockholders' equity. Although the Company did not
specify a maximum redemption threshold, its certificate of incorporation
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. The
Company considered that the threshold would not change the nature of the
underlying shares as redeemable and thus would be required to be disclosed
outside equity. As a result, the Company revised its previously filed financial
statements to classify all of its Class A common stock as temporary equity and
to recognize accretion from the initial book value to redemption value at the
time of its initial public offering and in accordance with ASC 480.
On November 29, 2021, the Company's management and the audit committee of the
Company's board of directors (the "Audit Committee"), after consultation with
Marcum LLP ("Marcum"), the Company's independent registered public accounting
firm, concluded that the Company's previously issued (i) audited balance sheet
as of December 22, 2020, as previously restated in the Company's Annual Report
on Form 10-K/A as of December 31, 2020 (the "Form 10-K/A"), (ii) audited
financial statements as of December 31, 2020 and for the period from September
23, 2020 (inception) through December 31, 2020, as previously restated in the
Form 10-K/A, (iii) unaudited interim financial statements included in the
Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2021 (the
"First Quarter 10-Q"), filed with the SEC on June 3, 2021, (iv) unaudited
interim financial statements included in the Company's Quarterly Report on Form
10-Q for the quarterly period ended June 30, 2021 (the "Second Quarter 10-Q"),
filed with the SEC on August 13, 2021 and (v) unaudited interim financial
statements included in the Company's Quarterly Report on Form 10-Q for the
quarterly period ended September 30, 2021 (the "Third Quarter 10-Q"), filed with
the SEC on November 10, 2021 (collectively, the "Affected Periods"), in each
case, should be restated, rather than revised, 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
amendment to the Form 10-K/A for statements (i) and (ii) above, and an amendment
to its previously filed Third Quarter 10-Q reflecting the restatement for
statements (iii), (iv) and (v) above, as soon as practicable..
The Company does not expect any of the above changes will have any impact on its
previously reported total assets, results of operations or cash flows or on its
cash position and cash held in the trust account established in connection with
the Company's initial public offering (the "Trust Account").
After re-evaluation, the Company's management has also concluded that in light
of the classification errors described above, a material weakness existed in the
Company's internal control over financial reporting during and since the
Affected Periods related to the accounting for complex financial instruments,
and that the Company's disclosure controls and procedures were not effective as
of December 31, 2020, March 31, 2021, June 30, 2021, or September 30, 2021. To
address this material weakness, management has devoted, and plans to continue to
devote, significant effort and resources to the remediation and improvement of
the Company's internal control over financial reporting. While the Company has
processes to identify and appropriately apply applicable accounting
requirements, the Company's management plans to enhance these processes to
better evaluate its research and understanding of the nuances of the complex
accounting standards that apply to its financial statements. The Company plans
to provide enhanced access to accounting literature, research materials and
documents to its accounting personnel and third-party professionals with whom it
consults regarding accounting matters, and to increase communication regarding
accounting matters.
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
Marcum.
Forward Looking Statements
This Current Report on Form 8-K includes "forward-looking statements" within the
meaning of the "safe harbor" provisions of the Private Securities Litigation
Reform Act of 1995. The Company's actual results may differ from their
expectations, estimates and projections and consequently, you should not rely on
these forward looking statements as predictions of future events. Words such as
"expect," "estimate," "project," "budget," "forecast," "anticipate," "intend,"
"plan," "may," "will," "could," "should," "believes," "predicts," "potential,"
"continue," and similar expressions are intended to identify such
forward-looking statements. The Company cautions readers not to place undue
reliance upon any forward-looking statements, which speak only as of the date
made. The Company does not undertake or accept any obligation or undertaking to
release publicly any updates or revisions to any forward-looking statements to
reflect any change in its expectations or any change in events, conditions or
circumstances on which any such statement is based.
© Edgar Online, source Glimpses