Item 4.02 Non-Reliance on Previously Issued Financial Statements or a Related
Audit Report or Completed Interim Review.
Decarbonization Plus Acquisition Corporation III, a Delaware corporation (the
"Company"), was formed for the purpose of effecting a merger, capital stock
exchange, asset acquisition, stock purchase, reorganization or similar business
combination with one or more businesses (the "Initial Business Combination").
The amended and restated certificate of incorporation of the Company (the
"Charter") provides that, prior to the consummation of the Initial Business
Combination, the Company shall provide all holders of shares of Class A common
stock, par value $0.001 per share, of the Company ("Class A common stock")
included as part of the units sold in the Company's initial public offering (the
"Offering Shares") with the opportunity to have their Offering Shares redeemed
upon the consummation of the Initial Business Combination pursuant to, and
subject to the limitations of, the terms of the Charter; provided, however, that
the Company shall not redeem or repurchase Offering Shares to the extent that
such redemption would result in the Company's failure to have net tangible
assets (as determined in accordance with Rule 3a51-1(g)(1) of the Securities
Exchange Act of 1934, as amended, (or any successor rule) in excess of $5
million or any greater net tangible asset or cash requirement which may be
contained in the agreement relating to the Initial Business Combination.
In accordance with Financial Accounting Standards Board Accounting Standards
Codification 480, "Distinguishing Liabilities from Equity" ("ASC 480"),
redemption provisions not solely within the control of the Company require
common stock subject to redemption to be classified outside of permanent equity.
In the Company's (i) financial statements as of March 31, 2021 and for the
period from January 29, 2021 (inception) to March 31, 2021 included in the
Company's Quarterly Report on Form 10-Q filed with the U.S. Securities and
Exchange Commission (the "SEC") on June 4, 2021 and (ii) financial statements as
of June 30, 2021 and for the period from January 29, 2021 (inception) to June
30, 2021 included in the Company's Quarterly Report on Form 10-Q filed with the
SEC on August 16, 2021 (collectively, the "Financial Statements"), the Company
classified a portion of the Offering Shares in permanent equity, or total
stockholder's (deficit) equity. Although the Company did not specify a maximum
redemption threshold, the Charter provision described above does not permit the
Company to redeem Offering Shares in an amount that would cause its net tangible
assets to be less than $5,000,001. Management has now determined, after
consultation with its advisors, that the Offering Shares can be redeemed or
become redeemable subject to the occurrence of future events considered to be
outside the Company's control. Accordingly, the Company's management has
concluded that the Company should present all Offering Shares as temporary
equity and recognize accretion from the initial book value to redemption value
at the time of the Company's initial public offering and in accordance with ASC
480.
On November 22, 2021, the Audit Committee of the Board of Directors of the
Company (the "Audit Committee") concluded, after discussion with the Company's
management, that the Financial Statements should no longer be relied upon due to
changes required to reclassify all of the Company's Offering Shares in temporary
equity. As such, the Company intends to file an amendment to its Quarterly
Report on Form 10-Q for the quarterly period ended September 30, 2021 reflecting
this reclassification (the "Amended Third Quarter 10-Q"). The adjustments to the
Financial Statements will be set forth through expanded disclosure in the
financial statements included in the Amended Third Quarter 10-Q.
The Company's management and the Audit Committee have discussed the matters
disclosed in this Current Report on Form 8-K with WithumSmith+Brown, PC, the
Company's independent registered accounting firm.
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