| Item 2.02 | Result of Operations and Financial Condition |
The information set forth under Item 4.02 is incorporated into this Item 2.02 by reference.
| Item 4.02 | Non-Reliance on Previously Issued Financial Statements or a Related Audit Report or Completed Interim Review. |
On April 12, 2021, the Staff of the U.S. Securities and Exchange Commission (the “SEC”) issued the “Staff Statement on Accounting and Reporting Considerations for Warrants Issued by Special Purpose Acquisition Companies (“SPACs”)” (the “Staff Statement”). The Staff Statement clarified guidance for all SPAC-related companies regarding the accounting and reporting for their warrants that could result in the warrants issued by SPACs being classified as a liability measured at fair value, with non-cash fair value adjustments recorded in the statement of operations for each reporting period.
Vincerx Pharma, Inc. (the “Company”) previously classified its private warrants and public warrants (collectively, the “warrants”) as equity, consistent with market practice among SPACs, including the Company’s predecessor, LifeSci Acquisition Corp. (“LSAC”), prior to the business combination with VNRX Corp. (f/k/a Vincera Pharma, Inc.). The Company reviewed and discussed the accounting treatment of its warrants and the related offering costs with WithumSmith+Brown, PC (“Withum”), its independent registered public accounting firm, its financial advisors and the audit committee of its board of directors and evaluated the applicability and potential impact of the Staff Statement on the Company’s consolidated financial statements.
Following this review and evaluation, and after consulting with management, the Company’s board of directors, upon the recommendation of the audit committee, concluded that, in light of the Staff Statement, (i) certain of the Company’s private warrants should be accounted for as liabilities measured at fair value, with non-cash fair value adjustments recorded in the operating statement for each reporting period, (ii) the related warrant offering costs should now be expensed and (iii) the Company’s audited consolidated financial statements for the year ended December 31, 2020 (the “Affected Period”) should no longer be relied upon and should be restated due to the reclassification of these private warrants required for alignment with the Staff Statement. Further, any previously furnished or filed reports, earnings releases, guidance, investor presentations or similar communications regarding the restatement information for the Affected Period should also no longer be relied upon.
Accordingly, the Company is filing an Amendment No. 1 to its Annual Report on Form 10-K for the year ended December 31, 2020 filed with the SEC on March 22, 2021 to restate its consolidated financial statements for the year ended December 31, 2020 to reflect the reclassification of these private warrants for the Affected Period. This restatement will result in non-cash, non-operating financial statement corrections for the Affected Period and will have no impact on the Company’s cash position, operating expenses or cash flows or its ongoing operations or future plans.
The audit committee and management have discussed the matters disclosed in this Item 4.02(a) with Withum, the Company’s independent registered public accounting firm.
