Item 4.02. Non-Reliance on Previously Issued Financial Statements or Related
Audit Report or Completed Interim Report.
The management of Archimedes Tech SPAC Partners Co. (the "Company") has
re-evaluated the Company's application of ASC 480-10-S99-3A to its accounting
classification of the shares of common stock the Company issued as part of the
units sold in the Company's initial public offering (the "IPO") on March 15,
2021 and the subsequent exercise of the underwriters' over-allotment option on
March 19, 2021 (the "Public Shares"). Historically, a portion of the Public
Shares was classified as permanent equity to maintain shareholders' equity
greater than $5 million on the basis that the Company will not redeem its Public
Shares in an amount that would cause its net tangible assets to be less than
$5,000,001, as described in the Company's amended and restated certificate of
incorporation (the "Charter"). Pursuant to such re-evaluation, the Company's
management has determined that the Public Shares include certain provisions that
require classification of all of the Public Shares as temporary equity
regardless of the net tangible assets redemption limitation contained in the
Charter.
Therefore, on December 21, 2021, the Company's management and the audit
committee of the Company's board of directors (the "Audit Committee") concluded
that the Company's previously issued (i) audited balance sheet as of March 15,
2021 included in the Company's Current Report on Form 8-K, filed with the
Securities and Exchange Commission (the "SEC") on March 19, 2021 and (ii)
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 July 27, 2021 (collectively, the "Affected Periods"), should be
restated to report all Public Shares as temporary equity and should no longer be
relied upon. As such, the Company intends to restate its financial statements
for the Affected Periods in an amendment to the Company's Quarterly Report on
Form 10-Q for the quarterly period ended September 30, 2021 ("Q3 Form 10-Q/A"),
to be filed with the SEC.
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 (the "Trust Account").
The Company's 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 at the reasonable assurance level as of March 31,
2021; June 30, 2021 and September 30, 2021. 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 Company's management and the Audit Committee have discussed the matters
disclosed in this Current Report on Form 8-K pursuant to this Item 4.02 with UHY
LLP, the Company's independent registered public accounting firm.
Cautionary Statement Regarding Forward Looking Statements
This Current Report on Form 8-K includes "forward-looking statements" within the
meaning of the federal securities laws. Certain of these forward-looking
statements can be identified by the use of words such as "believes," "expects,"
"intends," "plans," "estimates," "assumes," "may," "should," "will," "seeks," or
other similar expressions. Such statements may include, but are not limited to,
statements regarding the impact of the Company's restatement of certain
historical financial statements, the Company's cash position and cash held in
the Trust Account and any proposed remediation measures with respect to
identified material weaknesses. These statements are based on current
expectations on the date of this Current Report on Form 8-K and involve a number
of risks and uncertainties that may cause actual results to differ
significantly. These risks and uncertainties include, but are not limited to,
further changes in or developments regarding accounting treatment, among others.
The Company does not assume any obligation to update or revise any such
forward-looking statements, whether as the result of new developments or
otherwise. Readers are cautioned not to put undue reliance on forward-looking
statements.
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