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Item 4.02. Non-Reliance on Previously Issued Financial Statements or a Related Audit Report or Completed Interim Review.
(a) In light of recent comments issued by the U.S. Securities and Exchange Commission (the “SEC”), the management of Quantum FinTech Acquisition 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 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”) in February 2021. The Company has determined that, at the closing of its IPO, and in all of its subsequent periodic reports filed with the SEC, through and including the Form 10-Q for the quarterly period ended June 30, 2021, it had improperly valued its common stock subject to possible redemption. The Company previously determined the common stock subject to possible redemption to be equal to the redemption value, while also taking into consideration a redemption cannot result in net tangible assets being less than $5,000,001. Management determined that the common stock issued during the IPO can be redeemed or become redeemable subject to the occurrence of future events considered outside of the Company’s control. Therefore, management concluded that the redemption value should include all common stock subject to possible redemption, resulting in the common stock subject to possible redemption being equal to its redemption value. As a result, management has restated temporary equity and permanent equity. This resulted in a restatement to the initial carrying value of the common stock subject to possible redemption with the offset recorded to additional paid-in capital (to the extent available), accumulated deficit and common stock.
As a result of the foregoing, on November 15, 2021, the audit committee of the Company’s board of directors concluded, after discussion with the Company’s management and Marcum LLP, the Company’s independent registered public accounting firm, that the Company’s previously issued (i) audited balance sheet as of February 9, 2021, as previously restated in the Company’s Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2021, filed with the SEC on May 24, 2021 (the “Q1 Form 10-Q”), as amended on July 9, 2021 (the “Q1 Form 10-Q/A”), (ii) unaudited interim financial statements included in the Q1 Form 10-Q and Q1 Form 10-Q/A 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 (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 has restated its financial statements for the Affected Periods in the Company’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2021, which will be concurrently filed with the SEC on November 15, 2021, as described therein.
The Company’s management has concluded that in light of the error described above, a material weakness exists in the Company’s internal control over financial reporting related to the Company’s accounting for complex financial instruments and that, because of this and additional material weaknesses identified in the first and second quarters of 2021, the Company’s disclosure controls and procedures were not effective as of September 30, 2021.
The Company does not expect any of the above changes will have any impact on its cash position and cash held in the trust account established in connection with the IPO.
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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.
| Quantum FinTech Acquisition CorpORATION | |||
| By: | /s/ John Schaible | ||
| Name: | John Schaible | ||
| Title: | Chief Executive Officer | ||
Date: November 15, 2021
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