Filing Summary
Registrant and period: The filing is a Form 8-K filed January 7, 2022 by Venus Acquisition Corporation, a Cayman Islands special purpose acquisition company (SPAC). The request metadata identifies Microalgo Inc., but the filing itself identifies Venus Acquisition Corporation as the registrant.
Material Accounting Corrections
- The company reevaluated the accounting for 4,600,000 public warrants following the SEC’s April 12, 2021 guidance on SPAC warrant accounting.
- The public warrants, previously classified as derivative liabilities, should have been classified as equity.
- All public shares subject to redemption should have been classified as temporary equity rather than permanent equity because the redemption provisions were not solely within the company’s control.
- The corrections did not affect previously reported operating expenses, cash, the company’s cash position, or the balance held in the trust account.
Affected Reporting Periods and Controls
- The affected filings include the audited balance sheet as of June 10, 2021 and the audited interim financial statements for the three and six months ended June 30, 2021.
- Those previously filed financial statements and related information should no longer be relied upon; the company stated that the corrections were reflected in its Form 10-Q for the quarter ended September 30, 2021, filed November 12, 2021.
- Management determined that disclosure controls and procedures were ineffective for the affected periods due to a material weakness in internal control over financial reporting involving warrant classification and the allocation and treatment of initial public offering transaction costs.
- Management and the Audit Committee discussed the matters with Friedman LLP, the independent registered public accounting firm.
Financial Metrics, Liquidity, and Outlook
The filing does not provide revenue, profit, cash flow, margin, debt, or other operating performance metrics. It states that the accounting corrections were not expected to affect cash or the trust account. No guidance or business outlook was provided.
Investor Verification Items
- Verify the corrected classification of public warrants as equity and redeemable public shares as temporary equity in the amended or subsequent financial statements.
- Review the company’s Form 10-Q/A and related disclosures for the material weakness and remediation plans.
- Confirm that the corrected accounting has no impact on cash, the trust account, or the company’s ability to complete its proposed transaction.
- Reconcile the registrant name in the source filing—Venus Acquisition Corporation—with the metadata reference to Microalgo Inc.