SPAC FAQs: SEC Staff Statement on Accounting Issues for SPAC Warrants

  • The recent statement by the Staff of the SEC (the Staff Statement) will likely impact almost every SPAC or post-de-SPAC entity with warrants in its structure.
  • SPAC/post-de-SPAC entities should review warrant terms to determine appropriate accounting treatment in light of the recent Staff Statement and assess the materiality of any changes required and if a full restatement is needed.
  • If a correction or full restatement is required, SPAC/post-de-SPAC entities should also consider disclosure and filing requirements, as well as the impact on existing SEC filings and commercial agreements, including registration rights agreements, debt facility agreements, and other agreements.