Item 4.02 Non-Reliance on Previously Issued Financial Statements or a Related
Audit Report or Completed Interim Review.
On November 12, 2021 Health Assurance Acquisition Corp. (the "Company") filed
its Form 10-Q for the quarterly period ending September 30, 2021 (the "Q3
Form 10-Q"), which included in Note 2, Revision to Previously Reported 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 SAILSM
securities sold in the Company's initial public offering ("IPO"). 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 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.
Also in Note 2 of the Company's Form 10-Q for the quarterly period ending
September 30, 2021, in connection with the change in presentation for the
Class A common stock subject to possible redemption, the Company revised its
earnings per share calculation to allocate income and losses shared pro rata
between the two classes of shares. This presentation differs from the previously
presented method of earnings per share, which was similar to the two-class
method.
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 to 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 is
material quantitatively and the Company should restate its previously issued
financial statements.
Therefore, on December 22, 2021, the audit committee of the board of directors
of the Company concluded, after discussion with the Company's management, that
the Company's previously issued (i) audited financial statements included in the
Company's Annual Report on Form 10-K for the year ended December 31, 2020, as
amended (the "10-K"), (ii) unaudited interim financial statements included in
the Company's Quarterly Report on Form 10-Q for the quarterly period ended
March 31, 2021, and (iii) unaudited interim financial statements included in the
Company's Quarterly Report on Form 10-Q for the quarterly period ended June 30,
2021 (collectively, the "Affected Periods"), should be restated and should no
longer be relied upon. Similarly, other communications describing the Company's
financial statements and other related financial information covering the
Affected Periods should no longer be relied upon.
Additionally, the Audit Committee determined that it is appropriate to file
(i) an amendment to its Q3 Form 10-Q, including restated unaudited interim
financial statements for the quarterly periods ended March 31, 2021 and June 30,
2021, and (ii) an amendment to its 10-K, including restated audited financial
statements for the year ended December 31, 2020, in each case, reflecting the
restatement of the Class A common stock subject to redemption and the change to
its presentation of earnings per share, as soon as practicable.
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.
After re-evaluation, the Company's management has concluded that in light of the
errors described above, a material weakness existed in the Company's internal
control over financial reporting for complex securities during the Affected
Periods 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 Audit Committee has discussed the matters disclosed in this Current Report
on Form 8-K pursuant to this Item 4.02 with WithumSmith+Brown, P.C., the
Company's independent registered public accounting firm.
© Edgar Online, source Glimpses