Business Context and Reporting Period
This Form 8-K Current Report was filed by Microvast Holdings, Inc. on October 22, 2021, regarding events occurring on October 18, 2021. The Company, an emerging growth company incorporated in Delaware, operates in the energy storage sector. The filing primarily addresses a change in the Company's independent registered public accounting firm following a business combination with Tuscan Holdings Corp. completed on July 23, 2021.
Key Financial Metrics
The filing text does not provide specific values for revenue, profit, cash flow, margins, debt, or liquidity for the current period. The document focuses exclusively on governance and audit matters rather than operational financial performance.
Material Changes
- Dismissal of Auditor: The Audit Committee approved the dismissal of Marcum LLP as the independent registered public accounting firm, effective October 18, 2021. Marcum had served as the auditor for the predecessor entity, Tuscan Holdings Corp.
- Appointment of New Auditor: Deloitte Touche Tohmatsu Certified Public Accountants LLP was appointed as the new independent registered public accounting firm for the fiscal year ending December 31, 2021. Deloitte has served Microvast, Inc. since 2011.
- Historical Audit Context: Marcum's reports for Tuscan for fiscal years 2019 and 2020 did not contain adverse opinions, though the 2020 report included an explanatory paragraph regarding substantial doubt about Tuscan's ability to continue as a going concern.
Guidance, Risks, and Contingencies
The filing discloses a specific "reportable event" related to the predecessor entity, Tuscan Holdings Corp. Management identified a material weakness in internal controls over financial reporting. This weakness stemmed from the accounting treatment of private warrants issued during Tuscan's initial public offering, which were initially classified as equity components rather than derivative liabilities. This error necessitated a restatement of Tuscan's financial statements, filed as Amendment No. 1 to the Form 10-K on June 1, 2021. The Company confirmed there were no disagreements with Marcum regarding accounting principles or practices other than this restatement matter.
Investor Verification Checklist
- Verify the details of the restatement filed as Amendment No. 1 to Tuscan's 2020 Form 10-K regarding the classification of private warrants.
- Confirm the transition timeline and scope of work between Marcum LLP and Deloitte Touche Tohmatsu LLP.
- Review the letter from Marcum LLP (Exhibit 16.1) to ensure they concur with the Company's disclosures regarding the dismissal.
- Assess the impact of the previously identified material weakness in internal controls on the Company's current financial reporting processes.