Filing Overview
This Form 8-K was filed by KINS Technology Group Inc. on December 23, 2021, reporting an accounting conclusion reached on December 22, 2021. The filing identifies KINS Technology Group Inc. as the registrant; the request metadata references Cxapp Inc., which does not match the filing.
Material Accounting Correction
- Management re-evaluated the application of ASC 480-10-S99-3A to the redeemable Class A common shares issued in the December 2020 initial public offering.
- The company concluded that all public shares should have been classified as temporary equity rather than partly as permanent equity.
- The previously issued financial statements for the affected periods should no longer be relied upon.
- Affected filings include the December 31, 2020 audited balance sheet and related annual financial statements, the December 17, 2020 post-IPO balance sheet, and interim financial statements for the quarters ended March 31 and June 30, 2021.
- The company intended to restate the affected financial statements through amendments to its third-quarter 2021 Form 10-Q and Form 10-K/A.
Financial Impact and Controls
- The filing states that the classification correction will not affect cash or cash held in the IPO trust account.
- No specific revised amounts for equity, temporary equity, liabilities, net tangible assets, revenue, profit, cash flow, margins, debt, or liquidity are provided in the filing text.
- Management concluded that the accounting error represents a material weakness in internal control over financial reporting.
- Management also concluded that disclosure controls and procedures were not effective.
- The Audit Committee and management discussed the matter with the company’s independent registered public accounting firm, WithumSmith+Brown, PC.
Outlook, Risks, and Unusual Items
The filing does not provide operating guidance or a business outlook. It includes customary forward-looking statement language and refers investors to the company’s SEC filings for risk factors. The principal unusual item is the need to restate previously issued financial statements because of the public-share classification error.
Key Facts to Verify
- Confirm the subsequent amendments to the third-quarter 2021 Form 10-Q and Form 10-K/A and the final restated balances.
- Assess the effect of the reclassification on temporary equity, permanent equity, accumulated deficit, and related presentation disclosures.
- Review remediation efforts for the identified material weakness and ineffective disclosure controls.
- Confirm that cash, the IPO trust account, and any business-combination eligibility requirements were unaffected as stated.
- Verify the registrant identity, because the filing names KINS Technology Group Inc., not Cxapp Inc.