Item 4.02 Non-Reliance on Previously Issued Financial Statements or Related
Audit Report or Completed Interim Report.
On April 12, 2021, the Acting Director of the Division of Corporation Finance
and Acting Chief Accountant of the Securities and Exchange Commission ("SEC")
together issued a statement regarding the accounting and reporting
considerations for warrants issued by special purpose acquisition companies
entitled "Staff Statement on Accounting and Reporting Considerations for
Warrants Issued by Special Purpose Acquisition Companies ("SPACs")" (the "SEC
Statement"). Specifically, the SEC Statement focused on certain settlement terms
and provisions related to certain tender offers following a business
combination, which terms are similar to those contained in the warrant
agreement, dated as of November 16, 2020, between Zanite Acquisition Corp. (the
"Company") and Continental Stock Transfer & Trust Company, a New York
corporation, as warrant agent (the "Warrant Agreement"). As a result of the SEC
Statement, the Company reevaluated the accounting treatment of (i) the
11,500,000 redeemable warrants (the "Public Warrants") that were included in the
units issued by the Company in its initial public offering (the "IPO") and
(ii) the 9,650,000 redeemable warrants (together with the Public Warrants, the
"Warrants") that were issued to the Company's sponsor in a private placement
that closed concurrently with the closing of the IPO, and determined to classify
the Warrants as derivative liabilities measured at fair value, with changes in
fair value each period reported in earnings. The Company is in the process of
obtaining a valuation of the Warrants as of the relevant dates. While the
Company has not generated any operating revenues to date and will not generate
any operating revenues until after completion of its initial business
combination, at the earliest, the change in fair value of the Warrants is a
non-cash charge and will be reflected in the Company's statement of operations.
On May 10, 2021, the Company's management and the Audit Committee of the
Company's Board of Directors (the "Audit Committee") concluded that, in light of
the SEC Statement, (i) certain items on the Company's previously issued audited
balance sheet dated as of November 19, 2020 which was related to its IPO,
(ii) the Company's previously issued unaudited interim financial statements for
the period from August 7, 2020 (inception) through September 30, 2020 included
in the Company's Quarterly Report on Form 10-Q filed with the SEC on
December 23, 2020 and (iii) the Company's previously issued audited financial
statements as of December 31, 2020 and for the period from August 7, 2020
(inception) through December 31, 2020 (the "Relevant Periods") included in the
Company's Annual Report on Form 10-K for the year ended December 31, 2020 (the
"Annual Report") should no longer be relied upon and that it is appropriate to
restate the Annual Report. The Company will file an amendment to the Annual
Report, which will include the restated audited financial statements for the
Relevant Periods, as soon as those audited financial statements are available.
Going forward, unless we amend the terms of the Warrant Agreement, we expect to
continue to classify the Warrants as liabilities, which would require us to
incur the cost of measuring the fair value of the Warrants, and which may have
an adverse effect on our results of operations.
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, PC, the Company's independent registered public accounting
firm.
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