UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
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| Item 4.02. | Non-Reliance on Previously Issued Financial Statements or Related Audit Report or Completed Interim Report. |
The management of Kingswood Acquisition Corp., a Delaware corporation (the “Company”) has re-evaluated the Company’s application of ASC 480-10-S99-3A to its accounting classification of its 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 “initial public offering”) on November 24, 2020 in light of further guidance from the Securities and Exchange Commission (the “SEC”). Historically, a portion of the Public Shares were classified as permanent equity to maintain stockholders’ 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, after taking appropriate professional advice, determined that the Public Shares include certain provisions that require classification of the Public Shares as temporary equity regardless of the net tangible assets redemption limitation contained in the Charter. In addition, in connection with the change in presentation for the Public Shares, the Company determined it should restate its earnings per share calculation to allocate net income (loss) evenly to redeemable and non-redeemable common stock. This presentation contemplates a business combination as the most likely outcome, in which case, both classes of common stock share pro rata in the income (loss) of the Company.
As a result of the foregoing, on February 14, 2022, the Company’s management, together with the Company’s audit committee (the “Audit Committee”), determined that the Company’s previously issued (i) audited financial statements and other financial data as of December 31, 2020, included in the Amendment No. 1 to annual report on Form 10-K, filed with the SEC on March 18, 2021, (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 June 17, 2021, (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 13, 2021, (iv) 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 12, 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 will restate its financial statements for the Affected Periods in Amendment No. 2 to annual report on Form 10-K for the period ended December 31, 2020 and in Amendment No. 1 to quarterly report on Form 10-Q for the quarterly period ended September 30, 2021, filed with the SEC on February 17, 2022, as described therein.
The Company’s management and Audit Committee had discussed the matters disclosed above with Marcum LLP, the Company’s independent registered public accounting firm.
The Company does not expect any of the above changes will have any impact on the amounts previously reported for its cash position and cash held in the trust account established in connection with the initial public offering (the “Trust Account”).
The Company’s management has concluded that, in light of the events described above, a material weakness existed in the Company’s internal control over financial reporting and that the Company’s disclosure controls and procedures were not effective. Management plans to enhance the system of evaluating and implementing the accounting standards that apply to our financial statements, including increased communications among our personnel and third-party professionals with whom we consult regarding application of complex financial instruments.
Forward-Looking Statements
This Current Report on Form 8-K includes “forward-looking statements” within the meaning of the safe harbor provisions of the United States Private Securities Litigation Reform Act of 1995. 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. 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.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| KINGSWOOD ACQUISITION CORP. | |||
| By: | /s/ Michael Nessim | ||
| Name: | Michael Nessim | ||
| Title: | Chief Executive Officer | ||
| Dated: February 17, 2022 | |||