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 Stratim Cloud Acquisition Corp. (the “Company”) has re-evaluated the Company’s application of ASC 480-10-S99-3A to its accounting classification of the 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 “IPO”) on March 16, 2021. Historically, a portion of the Public Shares was classified 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. Pursuant to such re-evaluation, the Company’s management has determined that the Public Shares include certain provisions that require classification of the Public Shares as temporary equity regardless of the minimum net tangible assets required to complete the Company’s initial business combination.
Therefore, on January 25, 2022, the Company’s management and the audit committee of the Company’s board of directors (the “Audit Committee”), after consultation with the Company’s Independent Registered Public Accounting Firm, Marcum LLP (“Marcum”), concluded that the Company’s previously issued (i) audited balance sheet as of March 16, 2021 and filed on a Form 8-K dated March 22, 2021, which was related to the closing of our initial public offering (the “Form 8-K”), (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 August 16, 2021 (the “Q1 Form 10-Q) 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 (the “Q2 Form 10-Q) (collectively, the “Affected Periods”), should be restated to report all Public Shares as temporary equity and should no longer be relied upon. In connection with the change in presentation for the Class A common stock, the Company will also restate its earnings per share calculation to allocate income and losses shared pro rata between the two classes of shares. As such, the Company intends to restate its financial statements for the Affected Periods in amendments to the Q1 and Q2 Form 10-Q, and in an amendment to the Form 8-K, in each case to be filed with the SEC.
The notes to the 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 9, 2021 (the “Q3 Form 10-Q”), incorporated these changes as of September 30, 2021; however, the Q3 Form 10-Q described these changes for the Affected Prior Periods as a revision rather than a restatement. As such, the Company will recharacterize the revisions to the financial statements for the Affected Prior Periods as a restatement in an amendment to the Q3 Form 10-Q (the “Amended Q3 Form 10-Q”).
The above changes will not have any impact on the Company’s cash position and cash held in the trust account established in connection with the IPO (the “Trust Account”).
The Company’s management has concluded that in light of the classification error described above, a material weakness exists in the Company’s internal control over financial reporting and that the Company’s disclosure controls and procedures were not effective. The Company’s remediation plan with respect to such material weakness is described in more detail in the Q3 Form 10-Q.
In addition, on December 30, 2021, the Company filed amendments to the Q1 Form 10-Q and the Q2 Form 10-Q to restate the previously issued financial statements to reflect the application of ASC 480-10-S99-3A to its accounting classification of the Public Shares (collectively, the Prior Amendments”). The Prior Amendments were inadvertently filed without review by Marcum and therefore should be considered incomplete and should not be relied upon. In light of the foregoing, the Company’s management and the Audit Committee identified a material weakness in the Company’s corporate governance controls in relation to review and approval of financial statements incorporated in SEC filings. This material weakness is additive to the material weakness previously identified and disclosed above. 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 Company’s 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 Marcum.
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Forward-Looking Statements Legend
This Current Report on Form 8-K includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements other than statements of historical fact included in this report are forward-looking statements. When used in this report, words such as “anticipate,” “believe,” “estimate,” “expect,” “intend” and similar expressions, as they relate to the Company or its management team, identify forward-looking statements. Such forward-looking statements are based on the beliefs of management, as well as assumptions made by, and information currently available to, the Company’s management. Actual results could differ materially from those contemplated by the forward-looking statements as a result of certain factors detailed in the Company’s filings with the SEC. All subsequent written or oral forward-looking statements attributable to the Company or persons acting on its behalf are qualified in their entirety by this paragraph. Forward-looking statements are subject to numerous conditions, many of which are beyond the control of the Company, including those set forth in the Risk Factors section of the Company’s Annual Report on Form 10-K, as amended from time to time. Copies of such filings are available on the SEC’s website at www.sec.gov. The Company undertakes no obligation to update these statements for revisions or changes after the date of this release, except as required by law.
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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.
| Stratim Cloud Acquisition Corp. | ||
| Date: January 28, 2022 | By: | /s/ Sreekanth Ravi |
| Name: | Sreekanth Ravi | |
| Title: | Chief Executive Officer | |
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