Item 4.02 Non-Reliance on Previously Issued Financial Statements or a Related
Audit Report or Completed Interim Review.
In light of recent comment letters issued by the U.S. Securities and Exchange
Commission (the "SEC"), the management of Virtuoso Acquisition Corp. (the
"Company") has re-evaluated the Company's application of ASC 480-10-S99-3A to
its accounting classification of its redeemable 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 on January 26, 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.
On November 15, 2021, the audit committee of the board of directors of the
Company concluded, after discussion with the Company's management and with the
Company's independent registered public accounting firm, Marcum LLP ("Marcum"),
that (i) the Company's audited balance sheet as of January 26, 2021 filed as
Exhibit 99.1 to the Company's Current Report on Form 8-K filed with the SEC on
February 1, 2021, (ii) the Company's 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 3, 2021, and (iii) the Company's 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 17, 2021, should no longer be relied upon due to the
reclassification of the Company's Public Shares as temporary equity.
The Company's Chief Executive Officer and Chief Financial Officer carried out an
evaluation of the effectiveness of the design and operation of the Company's
disclosure controls and procedures. Based upon their evaluation, the Company's
Chief Executive Officer and Chief Financial Officer concluded that the Company's
disclosure controls and procedures were not effective as of September 30, 2021,
due to a material weakness in internal controls over financial reporting in
analyzing complex financial instruments. In light of this material weakness, the
Company performed additional analysis as deemed necessary to ensure that the
Company's unaudited interim financial statements were prepared in accordance
with U.S. generally accepted accounting principles. The Company reflected the
restatements in Note 2 of the financial statements included in the Company's
Quarterly Report on Form 10-Q for the period ended September 30, 2021, filed
with the SEC on November 16, 2021 and accordingly, management believes that the
financial statements included in such report present fairly in all material
respects the Company's financial position, results of operations and cash flows
for the periods presented.
1
© Edgar Online, source Glimpses