Item 4.02 Non-Reliance on Previously Issued Financial Statements or Related Audit
Report or Completed Interim Report.
On November 22, 2021, the Company's management (the "Management") and the audit
committee of the Company's board of directors (the "Audit Committee"), after
discussion with Marcum LLP ("Marcum"), the Company's independent registered
public accounting firm, concluded that the Company's (i) previously issued
audited balance sheet related to its initial public offering ("IPO") dated
March 25, 2021, filed with the U.S. Securities and Exchange Commission (the
"SEC") as Exhibit 99.1 to the Company's Current Report on Form 8-K on March 31,
2021 and revised in Note 2B to the Company's Quarterly Report on Form 10-Q for
the quarterly period ended June 30, 2021, filed with the SEC on August 24, 2021
(the "June Form 10-Q"), and (ii) the unaudited interim financial statements and
related footnotes included in the Company's Quarterly Report on Form 10-Q for
the quarterly period ended March 31, 2021, filed with the SEC on June 1, 2021,
and in the June Form 10-Q (collectively, the "Affected Periods"), should no
longer be relied upon due to a reclassification of the Company's temporary and
permanent equity. In addition, the audit report of Marcum included in the
Current Report on Form 8-K filed with the SEC on March 31, 2021 should no longer
be relied upon.
Since the Company's IPO, the Company has considered the Class A ordinary shares
subject to possible redemption to be equal to the redemption value of $10.00 per
Class A ordinary share while also taking into consideration that a redemption
cannot result in net tangible assets being less than $5,000,001, pursuant to the
Company's memorandum and articles of association. Upon further analysis,
Management has determined that the Class A ordinary shares issued during the IPO
and pursuant to the exercise of the underwriters' overallotment option can be
redeemed or become redeemable subject to the occurrence of future events
considered outside the Company's control. Therefore, Management concluded that
the redemption value should include all Class A ordinary shares subject to
possible redemption, resulting in the Class A ordinary shares subject to
possible redemption being equal to their redemption value. In connection with
the change in presentation for the ordinary shares subject to redemption, the
Company also restated its earnings per share calculation to allocate net income
(loss) evenly to ordinary shares subject to redemption and those that are not
subject to redemption. This presentation contemplates a Business Combination as
the most likely outcome, in which case, both classes of ordinary shares
participate pro rata in the income (loss) of the Company.
The Company does not expect 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.
As such, the Company intends to restate the financial statements for the
Affected Periods in its upcoming Quarterly Report on Form 10-Q for the quarterly
period ended September 30, 2021 (the "Q3 Form 10-Q").
Management has concluded that in light of the classification error 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 with respect to such material
weakness will be described in more detail in the amendment to the Q3 Form 10-Q.
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