Item 2.02 Results of Operations and Financial Condition.
The information set forth under Item 4.02 is incorporated into this Item 2.02 by
reference.
Item 4.02 Non-Reliance on Previously Issued Financial Statements or a Related
Audit Report or Completed Interim Review.
On April 12, 2021, the SEC issued a statement (the "Statement") on the
accounting and reporting considerations for warrants issued by special purpose
acquisition companies or "SPACs." The Statement referenced the guidance included
in U.S. Generally Accepted Accounting Principles that entities must consider in
determining whether to classify contracts that may be settled in its own stock,
such as warrants, as equity or as an asset or liability.
Following consideration of the guidance in the Statement, The Simply Good Foods
Company, a Delaware corporation (the "Company") has concluded certain of its
warrants initially issued by Conyers Park Acquisition Corp., a SPAC with which
the Company consummated a business combination transaction in July 2017, no
longer meet the conditions to be classified within equity under the Statement
and the Company must correct the accounting treatment of the warrants to present
them as a liability and marked to fair value each reporting period.
On May 13, 2021, the Audit Committee of the Board of Directors (the "Audit
Committee") of the Company, in response to the Statement, concluded the
Company's previously issued audited consolidated financial statements for the
fiscal years ended August 29, 2020, August 31, 2019 and August 25, 2018 (and the
independent registered accounting firms' reports thereon) included in the
Company's Annual Report on Form 10-K, unaudited condensed consolidated financial
statements for the period ended November 28, 2020 included in the Company's
previously filed Quarterly Report on Form 10-Q for that period and unaudited
condensed consolidated financial statements for the period ended February 27,
2021 included in the Company's previously filed Quarterly Report on Form 10-Q
for that period (collectively, the "Affected Filings") should be restated to
reflect the effect of the SEC's guidance contained in the Statement. As a
result, these financial statements and any previously furnished or filed
reports, related earnings releases, investor presentations or similar
communications of the Company describing the Company's financial results for the
periods covered by the Affected Filings should no longer be relied upon.
The Company intends to amend the Affected Filings in order to provide restated
financial statements and applicable footnote disclosures, restated quarterly
financial information and revisions to information provided in Management's
Discussion and Analysis of Financial Condition and Results of Operations based
on the restated financial information, together with management's assessment of
the effectiveness of internal control over financial reporting.
In light of the restatement discussed above, the Company is also evaluating the
effect on the Company's internal controls over financial reporting.
As a result of the restatement, the Company expects to recognize an incremental
liability on its balance sheet of $110 million to $130 million for the fiscal
quarter ended February 27, 2021. The Company expects there will be no effect on
its historically reported cash and cash equivalents, or cash flows from
operating, investing or financing activities. All estimates contained in this
report are subject to change as management completes its amended filings, and
the Company's independent registered public accounting firms have not audited or
reviewed these estimates or ranges. An audit of annual financial statements
and/or review of quarterly financial statements could result in material changes
to these ranges and estimates. Further details and remediation plans will be
included in the Company's amended filings.
The Company's management and the Audit Committee have discussed the matters
disclosed in this Item 4.02 with the Company's independent registered public
accounting firms, Deloitte & Touche LLP, which audited the Company's financial
statements for the fiscal years ended August 29, 2020 and August 31, 2019, and
Ernst & Young, LLP, which audited the Company's financial statements for the
fiscal year ended August 25, 2018.
Certain statements made in this Current Report on Form 8-K are not historical
facts but are forward-looking statements for purposes of the safe harbor
provisions under The Private Securities Litigation Reform Act of 1995.
Forward-looking statements generally are accompanied by or include words such as
"will", "expect", "intends" or other similar words, phrases or expressions.
These forward-looking statements include the timing of and the expected changes
that will be reflected in our amended filings. In addition, forward-looking
statements provide the Company's expectations, plans or forecasts of future
events and views as of the date of this communication. Except as required by
law, the Company undertakes no obligation to update such statements to reflect
events or circumstances arising after such date, and cautions investors not to
place undue reliance on any such forward-looking
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statements. These forward-looking statements should not be relied upon as
representing the Company's assessments as of any date subsequent to the date of
this communication.
Item 7.01 Regulation FD Disclosure.
The information set forth under Item 4.02 is incorporated into this Item 7.01 by
reference.
On May 14, 2021, the Company issued a press release related to the matters
described in Item 4.02. A copy of the Company's press release is attached hereto
as Exhibit 99.1 and is incorporated herein by reference.
The information in this item, including Exhibit 99.1, is being furnished, not
filed. Accordingly, the information in this item will not be incorporated by
reference into any registration statement unless specifically identified therein
as being incorporated by reference therein.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
Exhibit No. Description
99.1 Press Release dated May 14, 2021
Cover Page Interactive Data File (embedded within the Inline XBRL
104 document)
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