Item 4.02. Non-Reliance on Previously Issued Financial Statements or a Related
Audit Report or Completed Interim Review.
On November 9, 2021, Frazier Lifesciences Acquisition Corporation (the
"Company") filed its Form 10-Q for the quarterly period ended September 30, 2021
(the "Q3 Form 10-Q"), which included in Note 2, Revision to Previously Reported
Financial Statements ("Note 2"), a discussion of the revision to a portion of
the Company's previously issued financial statements for the classification of
its Class A ordinary shares subject to redemption issued sold in the Company's
initial public offering ("IPO"). As described in Note 2, upon its IPO, the
Company classified a portion of the Class A ordinary shares subject to
redemption as permanent equity to maintain net tangible assets greater than
$5,000,000 on the basis that the Company will consummate its initial business
combination only if the Company has net tangible assets of at least $5,000,001.
The Company's management re-evaluated the conclusion and determined that the
Class A ordinary shares subject to redemption included certain provisions that
require classification of the Class A ordinary shares subject to redemption as
temporary equity regardless of the minimum net tangible assets required to
complete the Company's initial business combination. As a result, management
corrected the error by revising all Class A ordinary shares subject to
redemption as temporary equity. This resulted in an adjustment to the initial
carrying value of the Class A ordinary shares subject to possible redemption
with the offset recorded to additional paid-in capital (to the extent
available), accumulated deficit and Class A ordinary shares.
Also in Note 2 of the Company's Q3 Form 10-Q, in connection with the change in
presentation for the Class A ordinary shares subject to possible redemption, the
Company revised its earnings per share calculation to allocate income and losses
shared pro rata between the two classes of shares. This presentation differs
from the previously presented method of earnings per share, which was similar to
the two-class method.
As described above, originally, the Company determined the changes were not
qualitatively material to the Company's previously issued financial statements
and revised its previously financial statements in Note 2 to its Q3 Form 10-Q.
However, upon further consideration of the material nature of the changes, the
Company determined the change in classification of the Class A ordinary shares
subject to redemption and change to its presentation of earnings per share is
material quantitatively and the Company should restate its previously issued
financial statements.
On January 25, 2022, the audit committee of the board of directors of the
Company (the "Audit Committee") concluded, after discussion with the Company's
management, that the Company's previously issued (i) audited balance sheet as of
December 11, 2020, filed as Exhibit 99.1 to the Company's Current Report on Form
8-K, filed with the SEC on December 17, 2020 (the "Post IPO Balance Sheet");
(ii) audited financial statements as included in the Company's Annual Report on
Form 10-K for the year ended December 31, 2020, as amended, filed with the SEC
on March 26, 2021 (the "2020 Form 10-K"); (iii) unaudited interim financial
statements included in the Company's Quarterly Report on Form 10-Q for the
quarterly period ended March 31, 2021, filed with the SEC on May 24, 2021; (iv)
unaudited interim financial statements included in the Company's Quarterly
Report on Form 10-Q for the quarterly period ended June 30, 2021, filed with the
SEC on August 9, 2021, and (v) Note 2 to the unaudited interim financial
statements and Item 4 of Part I of the Q3 Form 10-Q (collectively, the "Affected
Periods"), should be restated to report all Public Shares as temporary equity
and should no longer be relied upon. Similarly, other communications describing
the Company's financial statements and other related financial information
covering the Affected Periods should no longer be relied upon.
Additionally, the Audit Committee determined that it is appropriate to file (i)
an amendment to its 2020 Form 10-K, including a restated Offering Audited
Balance Sheet, restated unaudited interim financial statements for the quarterly
period ended September 30, 2020, and restated audited financial statements for
the year ended December 31, 2020, and (ii) an amendment to its Q3 Form 10-Q (the
"Q3 Form 10-Q/A"), including restated unaudited interim financial statements for
the quarterly periods ended March 31, 2021 and June 30, 2021, and a restated
Note 2 to the unaudited interim financial statements and Item 4 of Part I of the
Q3 Form 10-Q, in each case, reflecting the restatement of the Class A ordinary
shares subject to redemption and the change to its presentation of earnings per
share, as soon as practicable.
The Company does not 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.
After re-evaluation, the Company's management has concluded that in light of the
errors described above, a material weakness existed in the Company's internal
control over financial reporting for complex securities during the Affected
Periods and that the Company's disclosure controls and procedures were not
effective. The Company's remediation plan with respect to such material weakness
will be described in more detail in the Q3 Form 10-Q/A.
The Audit Committee has discussed the matters disclosed in this Current Report
on Form 8-K pursuant to this Item 4.02 with WithumSmith+Brown, P.C., the
Company's independent registered public accounting firm.
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