System1, Inc. (SST): auditor change — System1 restates Q1-Q3 2022 results, delays Q4/FY2022 earnings; errors up to $20M net income impact

System1, Inc.

Errors in accounting for business combination intangible valuations, equity awards, and CouponFollow acquisition lead to material misstatements.
Impact to net income (loss) of up to $15M-$20M in affected quarters.
Q1, Q2, Q3 2022 financial statements should no longer be relied upon; amendments to be filed.
Additional material weaknesses in internal control identified; controls not effective as of Dec 31, 2022.
Q4/FY2022 earnings release postponed; no material changes expected to previously reported revenue or cash expenses.

item 4.02

Key facts

Extracted from this filing and checked against the source text.

Auditor Changes SEC 8-K Item 4.01/4.02 confidence 0.9

System1, Inc. reported that prior financial statements should not be relied upon.

Action: non reliance

Exact text from the filing

As a result, management of the Company and the Audit Committee determined that the previously issued condensed consolidated quarterly financial statements included in the Q1 2022 Form 10-Q, Q2 2022 Form 10-Q and Q3 2022 Form 10-Q, were materially misstated and accordingly each require restatement and should no longer be relied upon.

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Source: SEC EDGAR

accession 0001805833-23-000022

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