TATTOOED CHEF, INC. : Non-Reliance on Previous Financials, Audits or Interim Review, Financial Statements and Exhibits (form 8-K) – Marketscreener.com

Item 4.02. Non-Reliance on Previously Issued Financial Statements or a Related Audit Report or Completed Interim Review.
On October 6, 2022, Tattooed Chef, Inc. (the “Company”) received a written notice pursuant to Item 4.02(b) from the Company’s former independent registered public accounting firm, BDO USA, LLP, that the Company’s unaudited interim condensed consolidated financial statements for the quarters ended March 31, 2021, June 30, 2021 and September 30, 2021, and its audited annual consolidated financial statements for the year ended December 31, 2021, and accompanying audit report, each as previously filed with the Securities and Exchange Commission (“SEC”), were materially misstated and should no longer be relied upon and should be restated, because the Company (a) incorrectly recorded expenses related to a multi-vendor mailer program with a large customer as operating expenses rather than as a reduction of revenue; and (b) incorrectly recorded expenses for advertising placement by a marketing services firm on a straight-line basis over the life of the contract rather than when the services were actually rendered. For these reasons, pursuant to Item 4.02(a) the Board, after consultation with the Audit Committee, has also determined that the Company’s unaudited interim condensed consolidated financial statements for the quarters ended March 31, 2022 and June 30, 2022 should no longer be relied upon.
As a result of the foregoing, the Company intends to restate the audited and unaudited consolidated financial statements for the periods identified above. The Company expects to file the amended Quarterly Reports on Form 10-Q for the quarterly periods ended March 31, 2021, June 30, 2021, September 30, 2021, March 31, 2022 and June 30, 2022, and its Annual Report on Form 10-K for the year ended December 31, 2021 to include the restated consolidated financial statements with the SEC on or before the filing of the Company’s Report on Form 10-Q for the quarterly period ended September 30, 2022. (All adjustments described below are approximates).
The estimated impact of these restatements on the Company’s unaudited interim condensed consolidated financial statements for the three months ended March 31, 2021 is expected to be a $2 million decrease in revenue, a $2 million decrease in gross profit, a $3 million decrease in operating expenses, and a $1 million decrease in net loss.
The estimated impact of these restatements on the Company’s unaudited interim condensed consolidated financial statements for the three months ended June 30, 2021 is expected to be a $3 million decrease in revenue, a $3 million decrease in gross profit, a $1 million increase in operating expenses, and a $4 million increase in net loss. The estimated impact of these restatements for the six months ended June 30, 2021 is expected to be a $5 million decrease in revenue, a $5 million decrease in gross profit, a $2 million decrease in operating expenses, and a $3 million increase in net loss.
The estimated impact of these restatements on the Company’s unaudited interim condensed consolidated financial statements for the three months ended September 30, 2021 is expected to be a $0.6 million decrease in operating expenses and a $0.5 million decrease in net loss. The estimated impact of these restatements for the nine months ended September 30, 2021 is expected to be a $5 million decrease in revenue, a $5 million decrease in gross profit, a $3 million decrease in operating expenses, and a $2 million increase in net loss.
The estimated impact of the restatements on the Company’s annual consolidated financial statements for the twelve months ended December 31, 2021 is expected to be a $5 million decrease in revenue, a $5 million decrease in gross profit, a $4 million decrease in operating expenses, and a $1 million increase in net loss.
The estimated impact of these restatements on the Company’s unaudited interim condensed consolidated financial statements for the three months ended March 31, 2022 is expected to be a $4 million decrease in revenue, a $4 million decrease in gross profit, a $1 million decrease in operating expenses, and a $3 million increase in net loss.
The estimated impact of these restatements on the Company’s unaudited interim condensed consolidated financial statements for the three months ended June 30, 2022 is expected to be less than a $1 million decrease in revenue, decrease in gross profit, increase in operating expenses and increase in net loss. The estimated impact of these restatements for the six months ended June 30, 2022 is expected to be a $5 million decrease in revenue, a $5 million decrease in gross profit, a $1 million decrease in operating expenses, and a $4 million increase in net loss.
At this time, the Company has not fully completed its review and the expected financial impact of the restatements described above is preliminary and subject to change. The Company cannot predict whether additional periods beyond those referenced above will be affected and the final outcome or timing of the Company’s filing of restated financial statements for the affected annual and quarterly periods.
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The Audit Committee and Company management have discussed the matters disclosed in this Current Report on Form 8-K with BDO USA, LLP, the Company’s former independent registered public accounting firm, and with Deloitte and Touche, LLP, the Company’s current independent registered public accounting firm. The Company is assessing the impact of these misstatements to the Company’s internal controls over financial reporting.
BDO USA, LLP has furnished a letter to the Securities and Exchange Commission pursuant to Item 4.02(c), which is attached as Exhibit 7.1 to this Current Report on Form 8-K, stating that BDO USA, LLP agrees with the disclosures made in this Current Report on Form 8-K in as far as they pertain to BDO USA, LLP.
On October 12, 2022, the Company issued a press release concerning the Company’s determination to restate the financial statements referred to above. A copy of the press release is attached as Exhibit 99.1 to this Current Report on Form 8-K. The press release attached as Exhibit 99.1 is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, except as may be expressly set forth by specific reference in such filing.
Item 9.01 Financial Statements and Exhibits.
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