Omniab, Inc. current report, 30 November 2021

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Filing Overview

This Form 8-K was filed by Avista Public Acquisition Corp. II, not OmniAb, Inc. The report date was November 30, 2021, and it concerns financial statements for the period ended September 30, 2021, as well as the company’s audited balance sheet dated August 12, 2021.

Material Accounting Correction

  • Management and the audit committee determined that previously filed financial statements should no longer be relied upon.
  • The error involved the classification of all Class A ordinary shares subject to possible redemption. The shares should have been classified as temporary equity, outside permanent shareholders’ equity, under ASC 480-10-S99.
  • The company previously classified a portion of these redeemable shares in permanent equity.
  • The company plans to restate the affected financial statements in an amended Form 10-Q for the quarter ended September 30, 2021, to be filed as soon as practicable.

Financial Condition and Liquidity

  • The filing states that the correction is not expected to affect cash or the balance held in the company’s trust account.
  • The filing does not provide revised amounts for total equity, temporary equity, net tangible assets, cash, trust-account balances, revenue, profit, cash flow, margins, debt, or liquidity metrics.
  • The company’s charter prohibits redemptions that would reduce net tangible assets below $5,000,001; the company concluded this provision does not change the required classification of the redeemable shares.

Controls, Risks, and Outlook

  • Management concluded that the classification error represents a material weakness in internal control over financial reporting.
  • Management also concluded that disclosure controls and procedures were not effective.
  • A remediation plan will be described in the forthcoming amended Form 10-Q.
  • The company discussed the matter with Marcum LLP, its independent registered public accounting firm.
  • Forward-looking statements concern the restatement, cash and trust-account balances, and potential remediation measures. Actual results may differ, and the company undertook no obligation to update these statements.

Key Facts for Investors to Verify

  1. Confirm that the filing belongs to Avista Public Acquisition Corp. II rather than OmniAb, Inc.
  2. Review the amended Form 10-Q when filed for the restated balance sheet and quarterly financial statements.
  3. Assess the effect of reclassifying redeemable Class A ordinary shares on temporary equity, permanent equity, and net tangible assets.
  4. Review management’s remediation plan for the identified material weakness and ineffective disclosure controls.
  5. Verify that cash and trust-account balances were unchanged by the restatement.