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 fair value of the 350,000 representative shares the Company had
issued prior to the closing of the Company's initial public offering (the "IPO")
on March 15, 2021. Historically, the original purchase price of the
representative shares had been recognized as the fair value of the
representative shares. However, pursuant to management's re-evaluation,
management has determined that the representative shares required a
comprehensive fair value analysis conducted by valuation professionals to
determine their fair value. The fair value analysis was conducted by valuation
professionals and completed on November 9, 2021. Management initially determined
that the change in the fair value of the representative shares was not
qualitatively material to the Company's previously issued financial statements
and thus concluded that the Company did need to restate or revise its previously
issued financial statements. However, after management re-evaluated this
conclusion in conjunction with the Company's decision to restate its previously
issued financial statements to report all of the Company's redeemable shares as
temporary equity, management concluded that the Company should restate its
previously issued financial statements to correct the fair value of the
representative shares as well.
Therefore, on January 7, 2022, 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 unaudited interim financial statements included in
the Company's Quarterly Report on Form 10-Q for the quarterly period ended March
31, 2021, June 30, 2021, and September 30, 2021 filed with the SEC on July 27,
2021, August 27, 2021, and November 15, 2021, respectively, (collectively, the
"Affected Periods"), should be restated for the fair value of the representative
shares as determined by the valuation professionals and thus 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. This restatement will be completed concurrently with
the restatement to report all of the Company's redeemable shares as temporary
equity as disclosed in the Company's Form 8-K filed with the SEC on December 28,
2021.
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 fair value 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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