Article 4.02. Non-reliance on previously issued financial statements or any related
Audit Report or Completed Interim Review. (a)
At the closing of the company’s business combination with
The Sponsor Vesting Shares are accounted for as liability-classified instruments because the earn-out trigger events that determine the number of Sponsor Vesting Shares to be earned back by the SPAC sponsor include outcomes that are not indexed solely to the Common Stock. As part of the company’s accounting for the expected liability related to the sponsor vesting shares in connection with the preparation of the financial statements for the third quarter of 2022, the company evaluated the valuation assumptions used for the fair To estimate the value of the sponsor vesting. Stocks using a Monte Carlo simulation model. During this evaluation, it was determined that the volatility assumption used in the assessment of the earn-out liability related to the Sponsor Vesting Shares was based on a weighted average of the volatilities of the trading price of the common stock for a group of comparable. public companies and the Common Stock and the trading price of the company’s public warrants in the assumption, should be revised to include a greater weight for the volatility of the trading price of the company’s public warrants and should thus have a greater weight in include the preparation of the company. Concerned finance. This revised weighting used for the volatility assumption in estimating the fair value of the sponsor vesting shares is expected to have the following impact:
• a decrease in the Earnout Liabilities recorded on the unaudited condensed consolidated balance sheet as of
March 31, 2022and June 30, 2022included in the Affected Financials; • a decrease in the Change in the Fair Value of Earn-out Liability recorded in the unaudited condensed consolidated statements of operations for the periods ended March 31, 2022and June 30, 2022included in the Affected Financials; • an increase in Net loss and Net loss per share recorded in the unaudited condensed consolidated statements of operations for the periods ended March 31, 2022and June 30, 2022included in the Affected Financials; and • a decrease in the Fair value of earn-out liability recorded in the unaudited condensed consolidated statements of cash flows as supplemental disclosure of non-cash financing activities for the periods ended March 31, 2022and June 30, 2022included in the Affected Financials.
In addition, the Company completes its analysis with respect to the treatment of additional operating expenses estimated at approximately approx
financial statements for the quarter ended
As part of the restatement of the financial statements for the quarter ended
The company’s management assesses the effect of the foregoing on the company’s internal control over financial reporting and disclosure controls and procedures, resulting in a material weakness in its internal control related to accounting for complex instruments in addition to the previously reported Material from the company may result. Weakness in its internal control over financial reporting related to the lack of effective review controls over the accounting for complex warrant instruments, which resulted in its disclosure controls and procedures being determined to be ineffective in the first quarter of 2022 and the second quarter of 2022. , as previously revealed. It is possible that such assessment may result in the identification of other material weaknesses.
In addition, the related press releases, shareholder communications, investor presentations or other communications describing the relevant portions of the affected financials should no longer be relied upon. As a result, the Company intends to disclose the affected financials through a Form 10-Q/A, Amendment No.
The Company’s management and the Audit Committee have discussed the matters disclosed in this Current Report on Form 8-K with BDO.
Cautionary Language Regarding Forward-Looking Statements
Certain statements in this Current Report on Form 8-K may be considered forward-looking statements, including statements with respect to the expected adjustments and effects on the Company’s financial statements, the expected revision of the valuation methodology with respect to sponsor vesting Shares, the estimated amount and impact of additional operating costs related to electricity consumption on the company’s financial statements, expectations regarding the company’s internal control over financial reporting and disclosure controls and procedures, expectations regarding the valuation methodology for the accounting of the private guarantee and the impact on the financial statements of the company, the potential for additional adjustments to the financial statements of the company, expectations about the reflection of the warrants issued to Trinity Capital in the financial statements , and the expected filing of a Form 10-Q/A, Amendment No. 1, for each of the quarters passed
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