Filing Summary
Registrant: Aurora Acquisition Corp. The filing was submitted on May 24, 2021, reporting an event occurring on May 19, 2021. The filing metadata identifies Better Home & Finance Holding Co., but the filing itself names Aurora Acquisition Corp. as the registrant.
Business Context and Reporting Period
Aurora is a special purpose acquisition company (SPAC). The filing concerns the accounting treatment of public and private placement warrants issued in connection with its initial public offering. The affected financial statements are those as of March 8, 2021, with related restatement required in the Form 10-Q for the period ended March 31, 2021.
Financial Impact and Key Metrics
- The public and private placement warrants were previously classified as equity instruments.
- The warrants should instead be classified as derivative liabilities, measured at fair value at inception and on a recurring basis under ASC 820.
- Changes in warrant fair value will be recognized in the statement of operations.
- The filing does not provide the amount of the required fair value adjustment or the resulting impact on net income, liabilities, assets, or equity.
- The prior classification error did not affect previously reported investments held in trust, operating expenses, cash flows, or cash.
- No revenue, operating margin, debt, or liquidity figures are provided in this filing.
Material Changes and Restatement
Following the SEC’s April 12, 2021 public statement regarding SPAC warrant accounting, the company determined that its previously issued financial statements were not reliable because the warrants had been incorrectly classified. The audit committee and board concluded that the original financial statements should be restated.
The company stated that it will disclose the restatement impact in its Form 10-Q for the quarter ended March 31, 2021, to be filed as soon as practicable, and will apply the derivative-liability treatment in future financial statements.
Guidance, Risks, and Unusual Items
- The principal unusual item is the required accounting restatement related to warrant classification and fair value remeasurement.
- Reported earnings and balance-sheet liabilities may change because future warrant fair value movements will flow through earnings.
- The filing does not provide management guidance or an outlook.
- The company discussed the matter with Marcum LLP, its independent registered public accounting firm.
Investor Verification Items
- Verify the restated warrant liability and fair value adjustment in the subsequent Form 10-Q.
- Review the effect of the restatement on net income, accumulated deficit, total liabilities, and shareholders’ equity.
- Confirm the valuation methodology and recurring fair value changes for the warrants.
- Confirm whether the filing pertains to Aurora Acquisition Corp. or a later entity name associated with Better Home & Finance Holding Co.