UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
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Item 4.02. Non-Reliance on Previously Issued Financial Statements or a Related Audit Report or Completed Interim Review.
On November 12, 2021, Big Sky Growth Partners, Inc. (the “Company”) filed its Form 10-Q for the quarterly period ended September 30, 2021 (the “Q3 Form 10-Q”), which included in Note 2, Revision to Previously Reported Financial Statements (“Note 2”), a discussion of the revision to a portion of the Company’s previously issued financial statements for the classification of its shares of Class A common stock subject to redemption issued as part of the units sold in the Company’s initial public offering (“IPO”). As described in Note 2, upon its IPO, the Company classified a portion of the shares of Class A common stock subject to redemption 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. The Company’s management re-evaluated the conclusion and determined that the shares of Class A common stock subject to redemption included certain provisions that require classification of the shares of Class A common stock subject to redemption as temporary equity regardless of the minimum net tangible assets required to complete the Company’s initial business combination. As a result, management corrected the error by revising all shares of Class A common stock subject to redemption as temporary equity. This resulted in an adjustment to the initial carrying value of the shares of Class A common stock subject to possible redemption with the offset recorded to additional paid-in capital (to the extent available), accumulated deficit and shares of Class A common stock.
Also, in Note 2 of the Company’s Q3 Form 10-Q, in connection with the change in presentation for the shares of Class A common stock subject to possible redemption, the Company revised its earnings per share calculation to allocate income and losses shared pro rata between the two classes of shares. This presentation differs from the previously presented method of earnings per share, which was similar to the two-class method.
As described above, originally, the Company determined the changes were not qualitatively material to the Company’s previously issued financial statements and revised its previously reported financial statements in Note 2 to its Q3 Form 10-Q. However, upon further consideration of the material nature of the changes, the Company determined the change in classification of the shares of Class A common stock subject to redemption and change to its presentation of earnings per share is material quantitatively and the Company should restate its previously issued financial statements.
Therefore, on January 25, 2022, the audit committee of the board of directors of the Company (the “Audit Committee”) concluded, after discussion with the Company’s management, that the Company’s previously issued (i) audited balance sheet as of May 3, 2021, filed as Exhibit 99.1 to the Company’s Current Report on Form 8-K, filed with the SEC on May 7, 2021; (ii) 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 16, 2021; and (iii) Note 2 to the unaudited interim financial statements and Item 4 of Part I of the Q3 Form 10-Q (collectively, the “Affected Periods”), should no longer be relied upon and should be restated. Similarly, other communications describing the Company’s financial statements and other related financial information covering the Affected Periods should no longer be relied upon.
Additionally, the Audit Committee determined that it is appropriate to file (i) an amendment to the Company’s Current Report on Form 8-K, filed with the SEC on May 7, 2021; and (ii) an amendment to its Q3 Form 10-Q (the “Q3 Form 10-Q/A”), including restated unaudited interim financial statements for the quarterly period ended June 30, 2021 and a restated Note 2 to the unaudited interim financial statements and Item 4 of Part I of the Q3 Form 10-Q, in each case, reflecting the restatement of the shares of Class A common stock subject to redemption and the change to its presentation of earnings per share, as soon as practicable.
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.
After re-evaluation, the Company’s management has concluded that in light of the errors described above, a material weakness existed in the Company’s internal control over financial reporting for complex securities during the Affected Periods and that the Company’s disclosure controls and procedures were not effective. The Company’s remediation plan with respect to such material weakness will be described in more detail in the Q3 Form 10-Q/A.
The Audit Committee has discussed the matters disclosed in this Current Report on Form 8-K pursuant to this Item 4.02 with Frank, Rimerman + Co. LLP, the Company’s independent registered public accounting firm.
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.
Dated: January 27, 2022
| Big Sky Growth Partners, Inc. | ||
| By: | /s/ Lauren Neiswender | |
| Name: Lauren Neiswender | ||
| Title: Chief Financial Officer and Chief Legal Officer | ||