Item 4.02 Non-Reliance on Previously Issued
Financial Statements or Related Audit Report or Completed Interim Report.
On April 12, 2021, the staff of the Securities and Exchange Commission
(the SEC Staff) issued a public statement entitled Staff Statement on Accounting and Reporting Considerations for Warrants issued by Special Purpose Acquisition Companies (SPACs) (the SEC
Staff Statement). In the SEC Staff Statement, the SEC Staff expressed its view that certain terms and conditions common to SPAC warrants may require the warrants to be classified as liabilities on the SPACs balance sheet as opposed
to equity. Since issuance on August 17, 2020, RedBall Acquisition Corp. (the Company) has previously accounted for its public warrants and private placement warrants (collectively, the warrants) as equity
within its balance sheet. For a full description of the Companys warrants, please refer to the Companys final prospectus filed on August 13, 2020 in connection with its initial public offering (IPO)
(Final Prospectus).
On May 19, 2021, management of the Company and the Audit Committee of the Board of Directors of the Company
determined that its previous annual report on Form 10-K for the year ended December 31, 2020 and its previous quarterly report on Form 10-Q for the
quarterly period ended September 30, 2020 (collectively, the Affected Periods) should no longer be relied upon due to changes required for alignment with the SEC Staff Statement.
Historically, the warrants were reflected as a component of equity as opposed to liabilities on the balance sheets and the statements of operations did not
include the subsequent non-cash changes in estimated fair value of the warrants, based on the Companys application of Financial Accounting Standards Board Accounting Standards Codification Topic 815-40, Derivatives and Hedging, Contracts in Entitys Own Equity (ASC 815-40). The views expressed in the SEC Staff Statement were not consistent with
the Companys historical interpretation of the specific provisions within its warrant agreement and the Companys application of ASC 815-40 to the warrant agreement. The Company reassessed its
accounting for its warrants issued in August 2020, in light of the SEC Staffs published views. Based on this reassessment, the Company determined that the warrants should be classified as liabilities measured at fair value upon issuance, with
subsequent changes in fair value reported in its Statement of Operations each reporting period.
The Company intends to file an amendment to its Annual
Report on Form 10-K for the period ended December 31, 2020 reflecting this reclassification of the public and private placement warrants for the Affected Periods. The Company is working
diligently with its auditors and an independent valuation expert to finalize the valuation of the public and private placement warrants and file the restated financial statements as soon as practicable. The adjustments to the financial statements
for the Affected Periods will be set forth through expanded disclosure in the financial statements included in the amended Form 10-K filing, including further describing the restatement and its impact on
previously reported amounts.
Going forward, unless the Company amends the terms of its warrant agreement, the Company expects to continue to classify its
warrants as liabilities, which would require the Company to incur the cost of measuring the fair value of the warrant liabilities, and which may have an adverse effect on the Companys results of operations.
The Companys 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 WithumSmith+Brown, PC, the Companys independent registered public accounting firm.