SEC Clarifies Its Position on SPAC Warrants

Published: April 2021

 

On April 12, 2021, the SEC issued a statement to clarify its view of warrants that SPAC sponsors receive at the SPAC’s formation. Among the possible outcomes of the SEC’s commentary, experts anticipate the accounting treatment of these warrants could be reclassified from equity to a liability. Many “in process” SPACs have paused as accounting and law firms digest this announcement and determine next steps with respect to client advice and what confirmations are necessary in order to “sign-off” on the financial statements, SEC filings, and related material.

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