Item 4.02 Non-Reliance on Previously Issued Financial Statements or a Related
Audit Report or Completed Interim Review.
On November 17, 2022, SCP & CO Healthcare Acquisition Company (the "Company")
filed its Quarterly Report on Form 10-Q for the quarterly period ending
September 30, 2021 (the "Q3 Form 10-Q"), which included in Note 2, Revision of
Previously Issued 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 common stock subject to redemption issued as part
of the units sold in the Company's initial public offering ("IPO") on January
21, 2021. As described in Note 2, upon its IPO, the Company classified a portion
of the Class A common stock 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 common stock subject
to redemption included certain provisions that require classification of the
Class A common stock subject to redemption should be treated 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 common stock subject to redemption as temporary equity.
This resulted in an adjustment to the initial carrying value of the Class A
common stock subject to possible redemption with the offset recorded to
additional paid-in capital (to the extent available), accumulated deficit and
Class A common stock.
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 in 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 common stock
subject to redemption and change to its presentation of earnings per share are
material quantitatively and the Company should restate its previously issued
financial statements.
Therefore, on February 11, 2022, the audit committee of the board of directors
of the Company determined, after discussion with its advisors, that (i) the
Company's audited balance sheet as of January 26, 2021 filed as Exhibit 99.1 to
the Company's Current Report on Form 8-K filed with the Securities and Exchange
Commission (the "SEC") on February 2, 2021 (the "Audited Balance Sheet"), (ii)
the Company's unaudited financial statements as of March 31, 2021 contained in
the Company's Quarterly Report on Form 10-Q filed with the SEC on April 24,
2021, (iii) the Company's unaudited financial statements as of June 30, 2021
contained in the Company's Quarterly Report on Form 10-Q filed with the SEC on
August 13, 2021, and (iv) the Company's unaudited financial statements as of
September 30, 2021 contained in the Q3 Form 10-Q filed with the SEC on November
17, 2021 ((ii) through (iv), collectively, the "Affected Periods"), should no
longer be relied upon due to the reclassification described above.
The Company does not expect the changes described above to have any impact on
its cash position or the balance held in the trust account.
As such, the Company plans to restate (i) its financial statements for the
Affected Periods in the Company's Quarterly Report on Form 10-Q/A for the
quarterly period ended September 30, 2021 (the "Q3 Form 10-Q/A") and (ii) the
Audited Balance Sheet, each to be filed with the SEC.
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. 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
WithumSmith+Brown, PC, the Company's independent registered public accounting
firm.
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