Item 4.02. Non-Reliance on Previously Issued Financial Statements or a Related
Audit Report or Completed Interim Review.
The management of Primavera Capital Acquisition Corporation (the "Company") has
re-evaluated the Company's application of ASC 480-10-S99-3A to its accounting
classification of the Class A redeemable ordinary shares, par value $0.0001 per
share (the "Public Shares"), issued as part of the units sold in the Company's
initial public offering (the "IPO") on January 26, 2021. Historically, a portion
of the Public Shares was classified as permanent equity to maintain
shareholders' equity greater than $5 million on the basis that the Company will
not redeem its Public Shares in an amount that would cause its net tangible
assets to be less than $5,000,001, as described in the Company's amended and
restated certificate of incorporation (the "Charter"). Pursuant to such
re-evaluation, the Company's management has determined that the Public Shares
include certain provisions that require classification of all of the Public
Shares as temporary equity regardless of the net tangible assets redemption
limitation contained in the Charter.
Therefore, on December 24, 2021, the Company's management and the audit
committee of the Company's board of directors (the "Audit Committee"), after
consultation with WithumSmith+Brown, PC ("Withum"), the Company's independent
registered public accounting firm, concluded that the Company's previously
issued (i) audited balance sheet as of January 26, 2021, (ii) the unaudited
interim financial statements included in the Company's Quarterly Report on
amended Form 10-Q for the quarterly period ended March 31, 2021, filed with the
U.S. Securities and Exchange Commission (the "SEC") on July 2, 2021, (iii) the
unaudited interim financial statements included in the Company's Quarterly
Report on Form 10-Q for the quarterly period ended June 30, 2021, filed with the
SEC on August 16, 2021 and (iv) the unaudited interim financial statements
included in the Company's Quarterly Report on Form 10-Q for the quarterly period
ended September 30, 2021, filed with the SEC on November 15, 2021 (collectively,
the "Affected Periods") should be restated to report all Public Shares as
temporary equity and 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, to be filed with the SEC (the "Q3 Form
10-Q/A").
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 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 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 details 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
Withum.
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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