Two more companies that went public through SPAC mergers have announced they will restate financial statements as a result of new regulatory guidance on accounting by SPACs.

The guidance issued by the U.S. Securities and Exchange Commission last month addressed how SPACs should account for the warrants that they typically issue as part of initial public offerings.

According to Seeking Alpha, the SEC “threw the SPAC market into turmoil” by indicating that “in some cases, special purpose acquisition companies should account for the warrants as liabilities rather than as equity in the SPAC. That could require many SPACs to restate previous financial statements, and also make accounting much more complicated and expensive going forward.”

On Friday, snack maker Simply Good Foods became the latest SPAC to announce a restatement, saying it had been accounting for warrants as equity under a fixed accounting model.

Consistent with the SEC guidance, the company now intends to restate financial statements “such that the warrants are accounted for as liabilities and marked-to-market each reporting period.”

As a result, Simply Good said, it expects to recognize an incremental liability on its balance sheet of $110 million to $130 million for the quarter ended Feb. 27, 2021.

Simply Good’s restatement came three days after electric pickup truck maker Lordstown Motors said it would restate its statements for the year ended Dec. 31, 2020, for similar reasons.

“The restatement pertains to the accounting treatment for public and private placement warrants that were outstanding at the time of the business combination with DiamondPeak Holdings” in October 2020, Lordstown said in a news release.

Seeking Alpha said the SEC’s move had taken the wind out of the SPAC boom that started last year when a record 248 SPACs went public.

Other SPACs that have restated their results include Social Capital Hedosophia Holdings, Northern Genesis Acquisition, QuantumScape, Virgin Galactic, and DraftKings.

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