Item 4.02.
|
Non-Reliance on Previously Issued Financial Statements or a Related
Audit Report or Completed Interim Review.
|
On April 12, 2021, the Acting Director of the Division of Corporation
Finance and Acting Chief Accountant of the Securities and Exchange Commission (SEC) together issued a statement entitled Staff Statement on Accounting and Reporting Considerations for Warrants Issued by Special Purpose Acquisition
Companies (SPACs) (the SEC Staff Statement). The SEC Staff Statement, among other things, discussed potential accounting implications of certain terms that are common in warrants issued in connection with the initial
public offerings of special purpose acquisition companies, and similar to terms contained in the Warrant Agreement, dated December 2, 2020 (the Warrant Agreement), between Far Peak Acquisition Corporation (the Company)
and Continental Stock Transfer & Trust Company, as warrant agent.
In light of the SEC Staff Statement, the Company reevaluated
the accounting treatment of (i) the 20,000,000 redeemable warrants (the Public Warrants) that were included as part of the units issued by the Company in its initial public offering (the IPO) and subsequent partial
exercise by the underwriters in the IPO of their overallotment option (the Over-allotment Exercise), and (ii) the 7,000,000 private placement warrants (with the Public Warrants, the Warrants) that were issued to the
Companys sponsor and certain funds and accounts managed by subsidiaries of BlackRock, Inc. in a private placement that closed concurrently with the IPO, and determined to classify the Warrants as derivative liabilities measured at fair value,
with changes in fair value each period being reported in earnings. While the Company has not generated any operating revenues to date and does not expect to generate any operating revenues until after completion of its initial business combination,
the change in fair value of the Warrants is a non-cash charge and will be reflected in the Companys statement of operations.
On May 24, 2021, the Audit Committee of the Companys board of directors (the Audit Committee), based on the recommendation
of and after consultation with the Companys management, concluded that it is appropriate to restate certain items in (i) the Companys previously issued audited balance sheet dated as of December 7, 2020, which was related to
the Companys IPO, that was filed on December 11, 2020, and (ii) the Companys previously issued unaudited financial statements for the period from October 19, 2020 (inception) through December 31, 2020 (the
Relevant Period) that were filed on February 16, 2021. Considering such restatements, such financial statements should no longer be relied upon. The Company will file an amendment to its Quarterly Report on Form 10-Q for the fiscal period from October 19, 2020 (inception) through December 31, 2020, which will include the restated financial statements for the Relevant Period.
The Company intends to file such amendment to its Quarterly Report on Form 10-Q for the fiscal period from October 19, 2020 (inception)
through December 31, 2020, as well as its Quarterly Report on Form 10-Q for the quarterly period from January 1, 2021 to March 31, 2021, as soon as practicable.
Management and the Audit Committee have discussed the matters disclosed pursuant to this Item 4.02 with the Companys independent
auditors.
Going forward, unless the Company amends the terms of the Warrants, the Company expects to continue to classify the Warrants as
liabilities, which would require the Company to incur the cost of measuring the fair value of the warrant liabilities.