Thunder Bridge Acquisition II, Ltd. Announces Response to Recent SEC Guidance Applicable to Warrants Issued by Special Purpose Acquisition Companies
Great Falls, VA , May 04, 2021 (GLOBE NEWSWIRE) -- Thunder Bridge Acquisition II, Ltd. (Nasdaq: THBR) (“Thunder Bridge II” or the “Company”) is announcing that as a result of recent guidance issued by the Securities and Exchange Commission regarding the accounting and reporting of warrants issued by Special Purpose Acquisition Companies (“SPACs”) (the “SEC Statement”), it has restated its previously issued financial statements included in the Form 10-K for the year ended December 31, 2020 (the “Restatement”) to change the accounting treatment of its public and private placement warrants (collectively, the “Warrants”).
As the restated financials reflect, there is no cash impact to Thunder Bridge II’s business or historical financial statements in the affected period due to this restatement. The change in the accounting treatment of the warrants has no effect on Thunder Bridge II’s ongoing operations or its plans to complete the business combination that it announced on December 15, 2020 with indie Semiconductor, a leading pure-play provider of next-generation semiconductor and software solutions for the rapidly growing Autotech market, enabling ADAS/Autonomous, Connectivity, User Experience and Vehicle Electrification applications (the “Business Combination”).
Consistent with historical market practice for SPACs, the Company had been accounting for the Warrants as Shareholders’ Equity. With the recent SEC Statement, however, the Company has restated its financial statements such that the Warrants are accounted for as a Warrant liability and marked-to-market each reporting period. In general, under mark-to-market accounting, as the stock price increases, the fair value of the Warrant liability recorded on the Company’s balance sheet increases, and the Company recognizes additional noncash expense in the Statement of Operations for the Change in fair value of warrant liability, with the opposite effect when the stock price declines.
The change in the accounting treatment for the Warrants caused the Company to record a Warrant liability on the restated Balance Sheet at December 31, 2020 and recognize a noncash expense for the Change in fair value of Warrant liability in the restated Statement of Operations for the Year Ended December 31, 2020. There was no change to the Company’s previously Net Change in Cash in the Statement of Cash Flows for the Year Ended December 31, 2020.