Item 4.02 Non-Reliance on Previously Issued Financial Statements or a Related
Audit Report or Completed Interim Review.
In connection with the preparation of Southport Acquisition Corporation's (the
"Company") financial statements as of and for the year ended December 31, 2022,
the Company's management identified a correction required to be made to its
previously issued financial statements as of and for the three and nine months
ended September 30, 2022 (the "Original Financial Statements"), which financial
statements were included in the Company's Quarterly Report on Form 10-Q for the
quarter ended September 30, 2022, filed with the U.S. Securities and Exchange
Commission (the "SEC") on November 14, 2022. The errors arose from the
presentation of the Company's Statement of Cash Flows. Specifically, the Company
previously presented dividend and interest income on marketable securities held
in the trust account as an adjustment to net income in the cash flows from
operating activities section of the Statement of Cash Flows. Management has
since determined that it should present dividend and interest income on
marketable securities held in the trust account within the cash flows from
investing activities section of the Statement of Cash Flows. Additionally, a
sale and purchase of marketable securities held in the trust account was not
presented within the cash flows from investing activities section of the
Statement of Cash Flows. As a result, management has noted a required
reclassification related to dividend and interest income on marketable
securities of $990,869 held in the trust account from the cash flows from
operating section to the cash flows from investing section of the Statement of
Cash Flows. The Company will also present the sale and purchase of marketable
securities held in the trust account of $235,156,272 within the cash flows from
investing section of the Statement of Cash Flows. These adjustments have
resulted in a restatement of the Original Financial Statements.
As a result, after discussion with BDO LLP, the Company's independent registered
public accounting firm, on May 3, 2023, the Company's management and the audit
committee of the Company's board of directors concluded that the Original
Financial Statements should no longer be relied upon and are to be restated in
order to correct the presentation errors on the Statements of Cash Flows.
Accordingly, the Company will disclose the impact of such restatement on its
Original Financial Statements in its Annual Report on Form 10-K as of and for
the year ended December 31, 2022 (the "2022 Form 10-K"), which the Company
intends to file with the SEC as soon as reasonably practicable after the filing
of this Current Report on Form 8-K. The Company has not amended its previously
filed Quarterly Report on Form 10-Q for the quarter ended September 30, 2022.
The financial information that has been previously filed or otherwise reported
in the Original Financial Statements will be superseded by the information in
the 2022 Form10-K.
The Company's management has concluded that in light of the errors described
above, a material weakness exists in the Company's internal control over
financial reporting 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 2022 Form 10-K.
Forward-Looking Statements
This Current Report on Form 8-K includes "forward-looking statements" within the
meaning of the "safe harbor" provisions of the United States Private Securities
Litigation Reform Act of 1995. Forward-looking statements may be identified by
the use of words such as "may", "should", "expect", "intend", "will",
"estimate", "anticipate", "believe", "predict", "potential" or "continue", or
other similar expressions (or negative versions of such words or expressions)
that predict or indicate future events or trends or that are not statements of
historical matters. Such forward-looking statements are subject to risks,
uncertainties, and other factors which could cause actual results to differ
materially from those expressed or implied by such forward-looking statements.
You should not place undue reliance on forward-looking statements, which speak
only as of the date they are made. The Company undertakes no duty to update
these forward-looking statements.
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