Virgin Galactic Holdings Inc. and DraftKings Inc., two of the biggest names to go public through “blank check” companies in recent years, said on Friday they will have to reaffirm some of their financial results after the comments earlier this month from US securities regulators. Virgin Galactic SPCE, -1.73%, citing guidance from the U.S. Securities and Exchange Commission regarding accounting for warrants issued by blank checks or special purpose acquisition companies, said it will reformulate the financial statements included in your 2020 annual report.
See also: SPAC investors worry about ‘stigma’ after SEC warnings, lawsuits surge Due to restatement, Virgin also postponed first-quarter earnings results to May 10, from a date of report originally scheduled for Tuesday. Virgin said it decided on the reformulation and postponement following a mid-April review of the SEC’s filings regarding SPACs and after consulting with its advisers. “The restatement is solely due to the accounting treatment of Social Capital Hedosophia Holdings Corp. warrants that were outstanding at the time of the company’s business combination” in October 2019, Virgin said. Virgin said it expects to present the restated financial statements by May 10 and estimates that it will recognize incremental non-operating and non-cash expenses for each of fiscal 2020 and 2019. Previously reported non-GAAP financial metrics, including Adjusted EBITDA and free. cash flow is unlikely to change, Virgin said. Virgin Galactic shares fell 0.5% in the extended session on Friday after ending the regular trading day down 1.7%. Don’t Miss: SEC’s Coates Tells Investors to Ignore Billionaire Investor SPAC’s Legal Advice. Similarly, DraftKings DKNG, -1.39% said, after consulting with its audit committee and board executives, you have determined that you need to classify your warrants as liabilities. That led to the need to reformulate some financial statements for 2020, and the company will submit an amendment to its 2020 annual report that reflects that change. However, the earlier form of accounting “had no effect on the company’s outstanding revenue, operating expenses, cash flows, cash or ordinary shares,” DraftKings said. Shares in DraftKings were flat in the extended session on Friday after ending the regular trading day down 1.4%.