Item 4.02 Non-Reliance on Previously Issued Financial Statements or a Related
Audit Report or Completed Interim Review.
In connection with the preparation of Mallard Acquisition Corp.'s (the
"Company") financial statements as of September 30, 2021, the Company's
management, in consultation with its advisors, identified a classification error
made in certain of its previously issued financial statements, arising from the
manner in which, as of the closing of the Company's initial public offering, the
Company valued its common stock subject to possible redemption. The Company
previously determined the value of such common stock to be equal to the
redemption value of such shares of common stock, after taking into consideration
the terms of the Company's Amended and Restated Certificate of Incorporation,
under which a redemption cannot result in net tangible assets being less than
$5,000,001. Management has now determined, after consultation with its advisors,
that the shares of common stock underlying the units issued during
the initial public offering can be redeemed or become redeemable subject to the
occurrence of future events considered to be
outside the Company's control. Therefore, management has concluded that the
redemption value of its shares of common stock subject to possible redemption
should reflect the possible redemption of all shares of common stock. As a
result, management has noted a classification error related to temporary equity
and permanent equity. This has resulted in a restatement of the initial carrying
value of the shares of common stock subject to possible redemption, with the
offset recorded to additional paid-in capital (to the extent available),
accumulated deficit and shares of common stock.
On November 22, 2021, the audit committee of the board of directors of the
Company (the "Audit Committee") determined, after discussion with its advisors,
that the Company's (i) audited balance sheet as of October 29, 2020 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 November 4, 2020, (ii) audited
financial statements as of December 31, 2020 contained in the Company's Annual
Report on Form 10-K filed with the SEC on April 22, 2021, (iii) unaudited
financial statements as of March 31, 2021 contained in the Company's Quarterly
Report on Form 10-Q filed with the SEC on June 1, 2021 and (iv) 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 20, 2021, should no longer be
relied upon due to the reclassification described above. The Company will
reflect this reclassification in its forthcoming (i) Quarterly Report on Form
10-Q for the quarterly period ended September 30, 2021 (the "Q3 Form 10-Q") and
(ii) amended Annual Report on Form 10-K for the period ended December 31, 2020.
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.
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.
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
Marcum LLP, the Company's independent registered public accounting firm.
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