Item 4.02 Non-Reliance on Previously Issued Financial Statements
or a Related Audit Report or Completed Interim Review.
On November 12, 2021
Catalyst Partners Acquisition Corp. (the “Company”) filed its Form 10-Q for the quarterly period ending September 30,
2021 (the “Q3 Form 10-Q”), which included in Note 2, Revision to Previously Reported Financial Statements (“Note
2”), a discussion of the revision to a portion of the Company’s previously issued financial statements for the classification
of its Class A ordinary shares subject to redemption issued as part of the units sold in the Company’s initial public offering
(“IPO”). As described in Note 2, upon its IPO, the Company classified a portion of the Class A ordinary shares subject
to redemption as permanent equity to maintain net tangible assets greater than $5,000,000 on the basis that the Company will consummate
its initial business combination only if the Company has net tangible assets of at least $5,000,001. The Company’s management re-evaluated
the conclusion and determined that the Class A ordinary shares subject to redemption included certain provisions that require classification
of the Class A ordinary shares subject to redemption as temporary equity regardless of the minimum net tangible assets required to
complete the Company’s initial business combination. As a result, management corrected the error by revising all Class A ordinary
shares subject to redemption as temporary equity. This resulted in an adjustment to the initial carrying value of the Class A ordinary
shares subject to possible redemption with the offset recorded to additional paid-in capital (to the extent available), accumulated deficit
and Class A ordinary shares.
Also in Note 2 of the Company’s
Form 10-Q for the quarterly period ending September 30, 2021, in connection with the change in presentation for the Class A
ordinary shares subject to possible redemption, the Company revised its earnings per share calculation to allocate income and losses shared
pro rata between the two classes of shares. This presentation differs from the previously presented method of earnings per share, which
was similar to the two-class method.
As described above, originally
the Company determined the changes were not qualitatively material to the Company’s previously issued financial statements and revised
its previously financial statements in Note 2 to its Q3 Form 10-Q. However, upon further consideration of the material nature of
the changes, the Company determined the change in classification of the Class A ordinary shares subject to redemption and change
to its presentation of earnings per share is material quantitatively and the Company should restate its previously issued financial statements.
Therefore, on December 22,
2021, the audit committee of the board of directors of the Company concluded, after discussion with the Company’s management, that
the Company’s previously issued (i) audited balance sheet as of May 20, 2021, filed as Exhibit 99.1 to the Company’s
Current Report on Form 8-K filed with the Securities and Exchange Commission (the “SEC”) on May 26, 2021, (ii) the
unaudited pro forma balance sheet as of May 20, 2021, filed as Exhibit 99.1 to the Company’s Current Report on Form 8-K
filed with the SEC on June 9, 2021, and (iii) the unaudited interim financial statements included in the Company’s Quarterly
Report on Form 10-Q for the quarterly period ended June 30, 2021 filed with the SEC on August 13, 2021 (collectively, the
“Affected Periods”), should be restated and should no longer be relied upon. Similarly, other communications describing the
Company’s financial statements and other related financial information covering the Affected Periods should no longer be relied
upon.
Additionally, the Audit Committee
determined that it is appropriate to file an amendment to its Q3 Form 10-Q, including restated unaudited interim financial statements
for the quarterly period ended June 30, 2021, reflecting the restatement of the Class A ordinary shares subject to redemption and change to its presentation of earnings
per share for such periods as soon as practicable. An audited restated balance sheet as of May 20, 2021 reflecting the restatement
of the Class A ordinary shares subject to redemption and the change to the Company’s presentation of earnings per share will
be included in the Company’s Annual Report on Form 10-K for the Year Ended December 31, 2021.
The Company does not expect
any of the above changes will have any impact on its cash position and cash held in the trust account established in connection with the
IPO.
After re-evaluation, the Company’s
management has concluded that in light of the errors described above, a material weakness existed in the Company’s internal control
over financial reporting for complex securities during the Affected Periods and that the Company’s disclosure controls and procedures
were not effective. The Company’s remediation plan with respect to such material weakness will be described in more detail in the
Q3 Form 10-Q/A.
The Audit Committee has discussed
the matters disclosed in this Current Report on Form 8-K pursuant to this Item 4.02 with WithumSmith+Brown, P.C., the Company’s
independent registered public accounting firm.