ScION Tech Growth I
05/17/2021 | Press release | Distributed by Public on 05/17/2021 13:55
Non-Reliance on Previously Issued Financial Statements or Related Audit Report or Completed Interim Report (Form 8-K)
Non-Reliance on Previously Issued Financial Statements or Related Audit Report or Completed Interim Report.
On April 12, 2021, the Acting Director of the Division of Corporation Finance and Acting Chief Accountant of the Securities and Exchange Commission ('SEC') together issued a statement regarding the accounting and reporting considerations for warrants issued by special purpose acquisition companies entitled 'Staff Statement on Accounting and Reporting Considerations for Warrants Issued by Special Purpose Acquisition Companies ('SPACs')' (the 'SEC Statement'). Specifically, the SEC Statement focused on certain settlement terms and provisions related to certain tender offers following a business combination, which terms are similar to those contained in the warrant agreement, dated as of December 16, 2020, between ScION Tech Growth I (the 'Company') and Continental Stock Transfer & Trust Company, a New York corporation, as warrant agent (the 'Warrant Agreement'). As a result of the SEC Statement, the Company reevaluated the accounting treatment of (i) the 19,166,667 redeemable warrants (the 'Public Warrants') that were included in the units issued by the Company in its initial public offering (the 'IPO'), (ii) the 9,000,000 private placement warrants (the 'Private Placement Warrants'), and (iii) the forward purchase warrants (together with the Public Warrants and the Private Placement Warrants, the 'Warrants') that were issued to the Company's sponsor in a private placement that closed concurrently with the closing of the IPO, and determined to classify the Warrants as derivative liabilities measured at fair value, with changes in fair value each period reported in earnings. While the Company has not generated any operating revenues to date and will not generate any operating revenues until after completion of its initial business combination, at the earliest, the change in fair value of the Warrants is a non-cash charge and will be reflected in the Company's statement of operations.
On May 17, 2021, after consultation with Marcum LLP, the Company's independent registered public accounting firm (the 'Independent Accountants'), the Company's management and the Audit Committee of the Company's Board of Directors (the 'Audit Committee') concluded that, in light of the SEC Statement, (i) certain items on the Company's previously issued audited balance sheet dated as of December 21, 2020 which was related to its IPO, and (ii) the Company's previously issued audited financial statements as of December 31, 2020 and for the period from October 7, 2020 (inception) through December 31, 2020 (the 'Relevant Periods') included in the Company's Annual Report on Form 10-K for the year ended December 31, 2020 (the 'Annual Report') should no longer be relied upon and that it is appropriate to restate the Annual Report. The Company will file an amendment to the Annual Report, which will include the restated audited financial statements for the Relevant Periods.
Going forward, unless we amend the terms of the Warrant Agreement, we expect to continue to classify the Warrants as liabilities, which would require us to incur the cost of measuring the fair value of the Warrants, and which may have an adverse effect on our results of operations.
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 the Independent Accountants.