Item 4.02 Non-Reliance on Previously Issued Financial Statements or Related
Audit Report or Completed Interim Report.
The management of Stratim Cloud Acquisition Corp. (the "Company") has
re-evaluated the Company's application of ASC 480-10-S99-3A to its accounting
classification of the redeemable shares of Class A common stock, 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 March 16, 2021. Historically, a
portion of the Public Shares was classified 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. Pursuant to such re-evaluation, the Company's
management has determined that the Public Shares include certain provisions that
require classification of the Public Shares as temporary equity regardless of
the minimum net tangible assets required to complete the Company's initial
business combination.
Therefore, on January 25, 2022, the Company's management and the audit committee
of the Company's board of directors (the "Audit Committee"), after consultation
with the Company's Independent Registered Public Accounting Firm, Marcum LLP
("Marcum"), concluded that the Company's previously issued (i) audited balance
sheet as of March 16, 2021 and filed on a Form 8-K dated March 22, 2021, which
was related to the closing of our initial public offering (the "Form 8-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, filed with
the SEC on August 16, 2021 (the "Q1 Form 10-Q) 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, filed with the SEC on August 23, 2021
(the "Q2 Form 10-Q) (collectively, the "Affected Periods"), should be restated
to report all Public Shares as temporary equity and should no longer be relied
upon. In connection with the change in presentation for the Class A common
stock, the Company will also restate its earnings per share calculation to
allocate income and losses shared pro rata between the two classes of shares. As
such, the Company intends to restate its financial statements for the Affected
Periods in amendments to the Q1 and Q2 Form 10-Q, and in an amendment to the
Form 8-K, in each case to be filed with the SEC.
The notes to 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 9, 2021 (the "Q3 Form 10-Q"),
incorporated these changes as of September 30, 2021; however, the Q3 Form 10-Q
described these changes for the Affected Prior Periods as a revision rather than
a restatement. As such, the Company will recharacterize the revisions to the
financial statements for the Affected Prior Periods as a restatement in an
amendment to the Q3 Form 10-Q (the "Amended Q3 Form 10-Q").
The above changes will not have any impact on the Company's 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. The Company's remediation plan with respect to
such material weakness is described in more detail in the Q3 Form 10-Q.
In addition, on December 30, 2021, the Company filed amendments to the Q1 Form
10-Q and the Q2 Form 10-Q to restate the previously issued financial statements
to reflect the application of ASC 480-10-S99-3A to its accounting classification
of the Public Shares (collectively, the Prior Amendments"). The Prior Amendments
were inadvertently filed without review by Marcum and therefore should be
considered incomplete and should not be relied upon. In light of the foregoing,
the Company's management and the Audit Committee identified a material weakness
in the Company's corporate governance controls in relation to review and
approval of financial statements incorporated in SEC filings. This material
weakness is additive to the material weakness previously identified and
disclosed above. 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
Marcum.
1
Forward-Looking Statements Legend
This Current Report on Form 8-K includes "forward-looking statements" within the
meaning of Section 27A of the Securities Act of 1933, as amended, and Section
21E of the Securities Exchange Act of 1934, as amended. All statements other
than statements of historical fact included in this report are forward-looking
statements. When used in this report, words such as "anticipate," "believe,"
"estimate," "expect," "intend" and similar expressions, as they relate to the
Company or its management team, identify forward-looking statements. Such
forward-looking statements are based on the beliefs of management, as well as
assumptions made by, and information currently available to, the Company's
management. Actual results could differ materially from those contemplated by
the forward-looking statements as a result of certain factors detailed in the
Company's filings with the SEC. All subsequent written or oral forward-looking
statements attributable to the Company or persons acting on its behalf are
qualified in their entirety by this paragraph. Forward-looking statements are
subject to numerous conditions, many of which are beyond the control of the
Company, including those set forth in the Risk Factors section of the Company's
Annual Report on Form 10-K, as amended from time to time. Copies of such filings
are available on the SEC's website at www.sec.gov. The Company undertakes no
obligation to update these statements for revisions or changes after the date of
this release, except as required by law.
2
© Edgar Online, source Glimpses