Item 4.02. Non-Reliance on Previously Issued Financial Statements or a Related
Audit Report or Completed Interim Review.
(a) In connection with the preparation of its financial statements as of
September 30, 2021, the management of StoneBridge Acquisition Corporation, a
Cayman Islands exempted company (the "Company"), has re-evaluated the Company's
application of ASC 480-10-S99-3A to its accounting classification of its
redeemable Class A ordinary shares, par value $0.0001 per share (the "Public
Shares"), issued as part of the units sold in the Company's initial public
offering (the "IPO") in July 2021. The Company has determined that at the
closing of its IPO it had improperly valued its Public Shares subject to
possible redemption. The Company previously determined the Public Shares subject
to possible redemption to be equal to the redemption value, while also taking
into consideration a redemption cannot result in net tangible assets being less
than $5,000,001. Management determined that the Public Shares issued during the
IPO can be redeemed or become redeemable subject to the occurrence of future
events considered outside of the Company's control. Therefore, management
concluded that the redemption value should include all Public Shares subject to
possible redemption, resulting in the Public Shares subject to possible
redemption being equal to its redemption value. As a result, management has
restated temporary equity and permanent equity. This resulted in a restatement
to the initial carrying value of the Public Shares subject to possible
redemption with the offset recorded to additional paid-in capital (to the extent
available), accumulated deficit and ordinary shares.
As a result of the foregoing, on November 22, 2021, the audit committee of the
Company's board of directors (the "Audit Committee") concluded, after discussion
with the Company's management, that the Company's previously issued audited
balance sheet as of July 20, 2021 reported in the Company's Current Report on
Form 8-K filed with the SEC on July 26, 2021 (the "Affected Period") should be
restated to report all Public Shares as temporary equity and should no longer be
relied upon. As such, the Company has restated its balance sheet for the
Affected Period in the Company's Quarterly Report on Form 10-Q for the quarterly
period ended September 30, 2021 (the "Q3 Form 10-Q").
The Company's management has concluded that in light of the error described
above, a material weakness exists in the Company's internal control over
financial reporting related to the Company's accounting for complex financial
instruments and that, because of this material weakness, the Company's
disclosure controls and procedures were not effective as of September 30, 2021.
The Company's remediation plan with respect to such material weakness is
described in more detail in the Q3 Form 10-Q.
The Company does not expect 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.
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 LLP, the Company's independent registered public accounting firm.
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