Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 or Rule 12b-2 of the
Securities Exchange Act of 1934.
Emerging growth company ☒
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any
new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Historically, a portion of the Class A ordinary shares of ARYA Sciences Acquisition Corp IV (the “Company”) subject to possible
redemption was classified as permanent equity to maintain shareholders’ equity greater than $5 million on the basis that the Company will not redeem its Class A ordinary shares in an amount that would cause its net tangible assets to be less than
$5,000,001. Previously, the Company did not consider redeemable stock classified as temporary equity as part of net tangible assets. Pursuant to the Company’s re-evaluation of the application of ASC 480-10-S99-3A to its accounting classification of
Class A ordinary shares subject to possible redemption, the Company’s management has determined that the Class A ordinary shares include certain provisions that require classification of all of the Class A ordinary shares subject to possible
redemption as temporary equity.
As a result, management has corrected the error by reclassifying all Class A ordinary shares subject to possible redemption as
temporary equity. On November 12, 2021, the Company filed its Form 10-Q for the quarterly period ending September 30, 2021 (the “Q3 Form 10-Q”), which included a Note 2, Revision of Previously Issued Financial Statements (“Note 2”) that describes a
revision to the Company’s classification of its Class A ordinary shares issued in the Company’s initial public offering (“Initial Public Offering”) on March 2, 2021. The reclassification resulted in an adjustment to the initial carrying value of
the Class A ordinary shares subject to possible redemption with the offset recorded to additional paid-in capital (to the extent available), accumulated deficit and Class A ordinary shares. In connection with the change in presentation for the
Class A ordinary shares 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.
The Company determined the changes were not qualitatively material to the Company’s previously issued financial statements and
did not restate its previously issued financial statements. Instead, the Company revised its previously filed financial statements in Note 2 to its Q3 Form 10-Q. However, although the qualitative factors that management assessed tended to support a
conclusion that the misstatements were not material, these factors were not strong enough to overcome the significant quantitative errors in the financial statements. The qualitative and quantitative factors support a conclusion that the
misstatements are material on a quantitative basis. Management thus concluded that the misstatement was of such magnitude that it is probable that the judgment of a reasonable person relying upon the financial statements would have been influenced
by the inclusion or correction of the foregoing items. As such, upon further consideration of the change, the Company determined the change in classification of the Class A ordinary shares subject to possible redemption and change to its
presentation of earnings per share is material quantitatively and it should restate its previously issued financial statements.
Therefore, on December 1, 2021, the Company’s management and the audit committee of the Company’s board of directors (the “Audit
Committee”) concluded that the Company’s previously issued (i) audited balance sheet as of March 2, 2021, filed with the U.S. Securities and Exchange Commission (the “SEC”) on March 8, 2021, (ii) unaudited interim financial statements included in
the Company’s Form 10-Q for the quarterly period ended March 31, 2021, filed with the SEC on May 13, 2021; and (iii) unaudited interim financial statements included in the Company’s Form 10-Q for the quarterly period ended June 30, 2021, filed with
the SEC on August 12, 2021 (collectively, the “Affected Periods”), should be restated to report all Class A ordinary shares subject to possible redemption as temporary equity and should no longer be relied upon.
The Company does not expect that the restatement will have an impact on the Company’s cash position and cash held in its trust
account established in connection with the Initial Public Offering (the “Trust Account”).
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 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 Item 4 of Part 1 to an amendment to the Q3 Form 10-Q.
The Audit Committee and the Company’s management have discussed the matters disclosed pursuant to this Item 4.02(a) with the
Company’s independent registered public accounting firm, WithumSmith+Brown, PC.
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.