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RESTATEMENT OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS | 12 Months Ended
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Dec. 31, 2022
Accounting Changes and Error Corrections [Abstract] |
RESTATEMENT OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS | RESTATEMENT OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS In connection with preparing the consolidated financial statements for the year ended December 31, 2022 (this “Annual Report”) the Company determined that: •the technical requirements under ASC 718 for establishing a grant date on the date when the PBNQSO were awarded to employees and non-employees were not met since a mutual understanding of the terms and conditions did not exist as the Company’s compensation committee has the ability to adjust, at its discretion, how AOP against the performance target will be measured. Consequently, the service inception date of these PBNQSO precedes the grant date and the Company should have recognized compensation expense beginning on the service inception date and remeasured the fair value of the PBNQSO at the end of each reporting period until a grant date is established. Under the previously applied accounting treatment, the Company recorded compensation costs based on the grant date fair value calculated using the Black-Scholes option-pricing model (the “Stock Options Error”); and •the amortization of the step-up in basis of inventory, which is a non-cash adjustment to inventory cost established at the time of Business Combination was understated during the period from November 9, 2021 through December 31, 2021 (the “Inventory Amortization Error”). Management evaluated the effect of the Stock Options Error and the Inventory Amortization Error on the Company’s previously issued consolidated financial statements under ASC 250, “Accounting Changes and Error Corrections”, Staff Accounting Bulletin No. 99, “Materiality”, and Staff Accounting Bulletin No. 108, “Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements” and concluded that: •the Stock Options Error and the Inventory Amortization Error were material to the previously issued unaudited condensed consolidated financial statements for the quarterly and year-to-date periods ended September 30, 2022 (“September 2022 Quarter”) and June 30, 2022 (“June 2022 Quarter”), and, as a result, such unaudited financial statements should be restated; •the Stock Options Error and the Inventory Amortization Error were immaterial to the previously issued unaudited condensed consolidated financial statements for the quarter ended March 31, 2022 (“March 2022 Quarter”). However, as the Stock Options Error and the Inventory Amortization Error impacted prior periods, such unaudited financial statements should be revised. •the Inventory Amortization Error was immaterial to the previously issued audited consolidated financial statements as of December 31, 2021 and for the period from November 9, 2021 through December 2021 (“December 2021 Period”). However, as the Inventory Amortization Error impacted the prior period, such financial statements should be revised. The impact of the restatement on the Company’s unaudited financial statements for the September 2022 Quarter and June 2022 Quarter are presented below: SEPTEMBER 2022 QUARTER PERIMETER SOLUTIONS, SA AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEET (in thousands, except share and per share data) (Unaudited)
| September 30, 2022
| As Reported |  | Adjustment |  | As Restated
ASSETS |  |  |  |  |
Current assets: |  |  |  |  |
Cash and cash equivalents | $ | 166,256 |  |  | $ | — |  |  | $ | 166,256 |
Accounts receivable, net | 85,612 |  |  | — |  |  | 85,612 |
Inventories | 120,467 |  |  | — |  |  | 120,467 |
Income tax receivable | 655 |  |  | — |  |  | 655 |
Prepaid expenses and other current assets | 4,876 |  |  | — |  |  | 4,876 |
Total current assets | 377,866 |  |  | — |  |  | 377,866 |
Property, plant and equipment, net | 57,187 |  |  | — |  |  | 57,187 |
Goodwill | 1,019,387 |  |  | — |  |  | 1,019,387 |
Customer lists, net | 715,829 |  |  | — |  |  | 715,829 |
Technology and patents, net | 233,861 |  |  | — |  |  | 233,861 |
Tradenames, net | 95,047 |  |  | — |  |  | 95,047 |
Other assets, net | 1,877 |  |  | — |  |  | 1,877 |
Total assets | $ | 2,501,054 |  |  | $ | — |  |  | $ | 2,501,054 |
LIABILITIES AND SHAREHOLDERS’ EQUITY |  |  |  |  |
Current liabilities: |  |  |  |  |
Accounts payable | $ | 31,856 |  |  | $ | — |  |  | $ | 31,856 |
Accrued expenses and other current liabilities | 124,429 |  |  | (65,401) |  |  | 59,028 |
Founders advisory fees payable - related party | 9,836 |  |  | — |  |  | 9,836 |
Deferred revenue | 1,272 |  |  | — |  |  | 1,272 |
Total current liabilities | 167,393 |  |  | (65,401) |  |  | 101,992 |
Long-term debt | 664,986 |  |  | — |  |  | 664,986 |
Deferred income taxes | 222,952 |  |  | 50,467 |  |  | 273,419 |
Founders advisory fees payable - related party | 134,598 |  |  | — |  |  | 134,598 |
Redeemable preferred shares | 100,263 |  |  | — |  |  | 100,263 |
Redeemable preferred shares - related party | 3,245 |  |  | — |  |  | 3,245 |
Other non-current liabilities | 8,951 |  |  | — |  |  | 8,951 |
Total liabilities | 1,302,388 |  |  | (14,934) |  |  | 1,287,454 |
Commitments and contingencies |  |  |  |  |
Shareholders’ equity: |  |  |  |  |
Ordinary shares, $1 nominal value per share, 4,000,000,000 shares authorized; 163,234,542 shares issued; 162,316,326 shares outstanding | 163,235 |  |  | — |  |  | 163,235 |
Treasury shares, at cost; 918,216 shares | (7,572) |  |  | — |  |  | (7,572) |
Additional paid-in capital | 1,697,644 |  |  | (11,746) |  |  | 1,685,898 |
Accumulated other comprehensive loss | (41,561) |  |  | — |  |  | (41,561) |
Accumulated deficit | (613,080) |  |  | 26,680 |  |  | (586,400) |
Total shareholders’ equity | 1,198,666 |  |  | 14,934 |  |  | 1,213,600 |
Total liabilities and shareholders’ equity | $ | 2,501,054 |  |  | $ | — |  |  | $ | 2,501,054 |
PERIMETER SOLUTIONS, SA AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) (in thousands, except share and per share data) (Unaudited)
| Three Months Ended September 30, 2022 |  | Nine Months Ended September 30, 2022
| As Reported |  | Adjustment |  | As Restated |  | As Reported |  | Adjustment |  | As Restated
Net sales | $ | 160,509 |  |  | $ | — |  |  | $ | 160,509 |  |  | $ | 319,232 |  |  | $ | — |  |  | $ | 319,232 |
Cost of goods sold | 74,707 |  |  | (946) |  |  | 73,761 |  |  | 191,757 |  |  | (4,603) |  |  | 187,154 |
Gross profit | 85,802 |  |  | 946 |  |  | 86,748 |  |  | 127,475 |  |  | 4,603 |  |  | 132,078 |
Operating expenses: |  |  |  |  |  |  |  |  |  |  |
Selling, general and administrative expense | 22,381 |  |  | (6,731) |  |  | 15,650 |  |  | 64,803 |  |  | (10,320) |  |  | 54,483 |
Amortization expense | 13,738 |  |  | — |  |  | 13,738 |  |  | 41,395 |  |  | — |  |  | 41,395 |
Founders advisory fees - related party | (73,713) |  |  | — |  |  | (73,713) |  |  | (154,026) |  |  | — |  |  | (154,026) |
Other operating expense | (51) |  |  | — |  |  | (51) |  |  | 405 |  |  | — |  |  | 405 |
Total operating expenses | (37,645) |  |  | (6,731) |  |  | (44,376) |  |  | (47,423) |  |  | (10,320) |  |  | (57,743) |
Operating income | 123,447 |  |  | 7,677 |  |  | 131,124 |  |  | 174,898 |  |  | 14,923 |  |  | 189,821 |
Other expense (income): |  |  |  |  |  |  |  |  |  |  |
Interest expense, net | 9,944 |  |  | — |  |  | 9,944 |  |  | 32,582 |  |  | — |  |  | 32,582 |
Gain on contingent earn-out | (3,644) |  |  | — |  |  | (3,644) |  |  | (13,042) |  |  | — |  |  | (13,042) |
Unrealized foreign currency loss | 4,705 |  |  | — |  |  | 4,705 |  |  | 8,741 |  |  | — |  |  | 8,741 |
Other income, net | (785) |  |  | — |  |  | (785) |  |  | (820) |  |  | — |  |  | (820) |
Total other expense, net | 10,220 |  |  | — |  |  | 10,220 |  |  | 27,461 |  |  | — |  |  | 27,461 |
Income before income taxes | 113,227 |  |  | 7,677 |  |  | 120,904 |  |  | 147,437 |  |  | 14,923 |  |  | 162,360 |
Income tax (expense) benefit | (34,516) |  |  | 19,839 |  |  | (14,677) |  |  | (23,692) |  |  | 13,449 |  |  | (10,243) |
Net income | 78,711 |  |  | 27,516 |  |  | 106,227 |  |  | 123,745 |  |  | 28,372 |  |  | 152,117 |
Other comprehensive loss, net of tax: |  |  |  |  |  |  |  |  |  |  |
Foreign currency translation adjustments | (18,181) |  |  | — |  |  | (18,181) |  |  | (34,426) |  |  | — |  |  | (34,426) |
Total comprehensive income | $ | 60,530 |  |  | $ | 27,516 |  |  | $ | 88,046 |  |  | $ | 89,319 |  |  | $ | 28,372 |  |  | $ | 117,691 |
Earnings per share: |  |  |  |  |  |  |  |  |  |  |
Basic | $ | 0.48 |  |  | $ | 0.17 |  |  | $ | 0.65 |  |  | $ | 0.76 |  |  | $ | 0.18 |  |  | $ | 0.94 |
Diluted | $ | 0.45 |  |  | $ | 0.15 |  |  | $ | 0.60 |  |  | $ | 0.70 |  |  | $ | 0.16 |  |  | $ | 0.86 |
Weighted average number of ordinary shares outstanding: |  |  |  |  |  |  |  |  |  |  |
Basic | 162,635,592 |  |  | — |  |  | 162,635,592 |  |  | 161,943,492 |  |  | — |  |  | 161,943,492 |
Diluted | 176,777,958 |  |  | — |  |  | 176,777,958 |  |  | 176,085,858 |  |  | — |  |  | 176,085,858 |
PERIMETER SOLUTIONS, SA AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY (in thousands, except share data) (Unaudited)
| Ordinary Shares |  | Treasury Shares |  | Additional Paid-in Capital |  | Accumulated Other Comprehensive Loss |  | Accumulated Deficit |  | Total Shareholders' Equity
| Shares |  | Amount |  | Shares |  | Amount |  |  |  |
As Reported |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Balance, June 30, 2022 | 163,234,542 |  |  | $ | 163,235 |  |  | 597,513 |  |  | $ | (5,008) |  |  | $ | 1,690,812 |  |  | $ | (23,380) |  |  | $ | (691,791) |  |  | $ | 1,133,868 |
Share-based compensation | — |  |  | — |  |  | — |  |  | — |  |  | 6,832 |  |  | — |  |  | — |  |  | 6,832 |
Ordinary shares repurchased | — |  |  | — |  |  | 320,703 |  |  | (2,564) |  |  | — |  |  | — |  |  | — |  |  | (2,564) |
Net income | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 78,711 |  |  | 78,711 |
Other comprehensive loss | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (18,181) |  |  | — |  |  | (18,181) |
Balance, September 30, 2022 | 163,234,542 |  |  | $ | 163,235 |  |  | 918,216 |  |  | $ | (7,572) |  |  | $ | 1,697,644 |  |  | $ | (41,561) |  |  | $ | (613,080) |  |  | $ | 1,198,666 |
Adjustments |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Balance, June 30, 2022 | — |  |  | $ | — |  |  | — |  |  | $ | — |  |  | $ | (4,069) |  |  | $ | — |  |  | $ | (836) |  |  | $ | (4,905) |
Share-based compensation | — |  |  | — |  |  | — |  |  | — |  |  | (7,677) |  |  | — |  |  | — |  |  | (7,677) |
Net income | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 27,516 |  |  | 27,516 |
Total Adjustments | — |  |  | $ | — |  |  | — |  |  | $ | — |  |  | $ | (11,746) |  |  | $ | — |  |  | $ | 26,680 |  |  | $ | 14,934 |
As Restated |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Balance, June 30, 2022 | 163,234,542 |  |  | $ | 163,235 |  |  | 597,513 |  |  | $ | (5,008) |  |  | $ | 1,686,743 |  |  | $ | (23,380) |  |  | $ | (692,627) |  |  | $ | 1,128,963 |
Share-based compensation | — |  |  | — |  |  | — |  |  | — |  |  | (845) |  |  | — |  |  | — |  |  | (845) |
Ordinary shares repurchased | — |  |  | — |  |  | 320,703 |  |  | (2,564) |  |  | — |  |  | — |  |  | — |  |  | (2,564) |
Net income | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 106,227 |  |  | 106,227 |
Other comprehensive loss | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (18,181) |  |  | — |  |  | (18,181) |
Balance, September 30, 2022 | 163,234,542 |  |  | $ | 163,235 |  |  | 918,216 |  |  | $ | (7,572) |  |  | $ | 1,685,898 |  |  | $ | (41,561) |  |  | $ | (586,400) |  |  | $ | 1,213,600 |
PERIMETER SOLUTIONS, SA AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (in thousands) (Unaudited)
| Nine Months Ended September 30, 2022
| As Reported |  | Adjustment |  | As Restated
Cash flows from operating activities: |  |  |  |  |
Net income | $ | 123,745 |  |  | $ | 28,372 |  |  | $ | 152,117 |
Adjustments to reconcile net income to net cash used in operating activities: |  |  |  |  |
Founders advisory fees - related party (change in accounting fair value) | (154,026) |  |  | — |  |  | (154,026) |
Depreciation and amortization expense | 49,536 |  |  | — |  |  | 49,536 |
Interest and payment-in-kind on preferred shares | 4,903 |  |  | — |  |  | 4,903 |
Share-based compensation | 19,297 |  |  | (11,746) |  |  | 7,551 |
Deferred income taxes | (72,441) |  |  | 51,953 |  |  | (20,488) |
Amortization of deferred financing costs | 1,196 |  |  | — |  |  | 1,196 |
Amortization of acquisition related inventory step-up | 27,973 |  |  | (3,177) |  |  | 24,796 |
Gain on contingent earn-out | (13,042) |  |  | — |  |  | (13,042) |
Unrealized loss on foreign currency | 8,741 |  |  | — |  |  | 8,741 |
Loss on disposal of assets | 9 |  |  | — |  |  | 9 |
Changes in operating assets and liabilities, net of acquisitions: |  |  |  |  |
Accounts receivable | (63,838) |  |  | — |  |  | (63,838) |
Inventories | (40,759) |  |  | — |  |  | (40,759) |
Prepaid expenses and other current assets | 9,058 |  |  | — |  |  | 9,058 |
Accounts payable | 4,975 |  |  | — |  |  | 4,975 |
Deferred revenue | 889 |  |  | — |  |  | 889 |
Income taxes payable, net | 88,673 |  |  | (65,402) |  |  | 23,271 |
Accrued expenses and other current liabilities | 15,547 |  |  | — |  |  | 15,547 |
Founders advisory fees - related party (cash settled) | (53,547) |  |  | — |  |  | (53,547) |
Other liabilities | (73) |  |  | — |  |  | (73) |
Net cash used in operating activities | (43,184) |  |  | — |  |  | (43,184) |
Cash flows from investing activities: |  |  |  |  |
Purchase of property and equipment | (6,024) |  |  | — |  |  | (6,024) |
Purchase price adjustment under Business Combination Agreement | (1,638) |  |  | — |  |  | (1,638) |
Net cash used in investing activities | (7,662) |  |  | — |  |  | (7,662) |
Cash flows from financing activities: |  |  |  |  |
Ordinary shares repurchased | (7,572) |  |  | — |  |  | (7,572) |
Proceeds from exercise of warrants | 529 |  |  |  |  | 529 |
Net cash used in financing activities | (7,043) |  |  | — |  |  | (7,043) |
Effect of foreign currency on cash and cash equivalents | (1,409) |  |  | — |  |  | (1,409) |
Net change in cash and cash equivalents | (59,298) |  |  | — |  |  | (59,298) |
Cash and cash equivalents, beginning of period | 225,554 |  |  | — |  |  | 225,554 |
Cash and cash equivalents, end of period | $ | 166,256 |  |  | $ | — |  |  | $ | 166,256 |
Supplemental disclosures of cash flow information: |  |  |  |  |
Cash paid for interest | $ | 18,299 |  |  | $ | — |  |  | $ | 18,299 |
Cash paid for income taxes | $ | 7,588 |  |  | $ | — |  |  | $ | 7,588 |
Non-cash investing and financing activities: |  |  |  |  |
Liability portion of founders advisory fees - related party reclassified to additional paid in capital | $ | 13,783 |  |  | $ | — |  |  | $ | 13,783 |
JUNE 2022 QUARTER PERIMETER SOLUTIONS, SA AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEET (in thousands, except share and per share data) (Unaudited)
| June 30, 2022
| As Reported |  | Adjustment |  | As Restated
ASSETS |  |  |  |  |
Current assets: |  |  |  |  |
Cash and cash equivalents | $ | 125,502 |  |  | $ | — |  |  | $ | 125,502 |
Accounts receivable, net | 68,458 |  |  | — |  |  | 68,458 |
Inventories | 123,065 |  |  | — |  |  | 123,065 |
Income tax receivable | 25,608 |  |  | (14,167) |  |  | 11,441 |
Prepaid expenses and other current assets | 6,763 |  |  | — |  |  | 6,763 |
Total current assets | 349,396 |  |  | (14,167) |  |  | 335,229 |
Property, plant and equipment, net | 59,155 |  |  | — |  |  | 59,155 |
Goodwill | 1,031,219 |  |  | — |  |  | 1,031,219 |
Customer lists, net | 730,339 |  |  | — |  |  | 730,339 |
Technology and patents, net | 239,043 |  |  | — |  |  | 239,043 |
Tradenames, net | 96,960 |  |  | — |  |  | 96,960 |
Other assets, net | 1,992 |  |  | — |  |  | 1,992 |
Total assets | $ | 2,508,104 |  |  | $ | (14,167) |  |  | $ | 2,493,937 |
LIABILITIES AND SHAREHOLDERS’ EQUITY |  |  |  |  |
Current liabilities: |  |  |  |  |
Accounts payable | $ | 42,967 |  |  | $ | — |  |  | $ | 42,967 |
Accrued expenses and other current liabilities | 22,876 |  |  | — |  |  | 22,876 |
Founders advisory fees payable - related party | 27,116 |  |  | — |  |  | 27,116 |
Deferred revenue | 5,387 |  |  | — |  |  | 5,387 |
Total current liabilities | 98,346 |  |  | — |  |  | 98,346 |
Long-term debt | 664,696 |  |  | — |  |  | 664,696 |
Deferred income taxes | 304,993 |  |  | (9,262) |  |  | 295,731 |
Founders advisory fees payable - related party | 191,031 |  |  | — |  |  | 191,031 |
Redeemable preferred shares | 99,312 |  |  | — |  |  | 99,312 |
Redeemable preferred shares - related party | 3,215 |  |  | — |  |  | 3,215 |
Other non-current liabilities | 12,643 |  |  | — |  |  | 12,643 |
Total liabilities | 1,374,236 |  |  | (9,262) |  |  | 1,364,974 |
Commitments and contingencies |  |  |  |  |
Shareholders’ equity: |  |  |  |  |
Ordinary shares, $1 nominal value per share, 4,000,000,000 shares authorized; 163,234,542 shares issued; 162,637,029 shares outstanding | 163,235 |  |  | — |  |  | 163,235 |
Treasury shares, at cost; 597,513 shares | (5,008) |  |  | — |  |  | (5,008) |
Additional paid-in capital | 1,690,812 |  |  | (4,069) |  |  | 1,686,743 |
Accumulated other comprehensive loss | (23,380) |  |  | — |  |  | (23,380) |
Accumulated deficit | (691,791) |  |  | (836) |  |  | (692,627) |
Total shareholders’ equity | 1,133,868 |  |  | (4,905) |  |  | 1,128,963 |
Total liabilities and shareholders’ equity | $ | 2,508,104 |  |  | $ | (14,167) |  |  | $ | 2,493,937 |
PERIMETER SOLUTIONS, SA AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) (in thousands, except share and per share data) (Unaudited)
| Three Months Ended June 30, 2022 |  | Six Months Ended June 30, 2022
| As Reported |  | Adjustment |  | As Restated |  | As Reported |  | Adjustment |  | As Restated
Net sales | $ | 100,965 |  |  | $ | — |  |  | $ | 100,965 |  |  | $ | 158,723 |  |  | $ | — |  |  | $ | 158,723 |
Cost of goods sold | 72,423 |  |  | (373) |  |  | 72,050 |  |  | 117,050 |  |  | (3,657) |  |  | 113,393 |
Gross profit | 28,542 |  |  | 373 |  |  | 28,915 |  |  | 41,673 |  |  | 3,657 |  |  | 45,330 |
Operating expenses: |  |  |  |  |  |  |  |  |  |  |
Selling, general and administrative expense | 22,614 |  |  | (2,935) |  |  | 19,679 |  |  | 42,422 |  |  | (3,589) |  |  | 38,833 |
Amortization expense | 13,802 |  |  | — |  |  | 13,802 |  |  | 27,657 |  |  | — |  |  | 27,657 |
Founders advisory fees - related party | (20,465) |  |  | — |  |  | (20,465) |  |  | (80,313) |  |  | — |  |  | (80,313) |
Other operating expense | 260 |  |  | — |  |  | 260 |  |  | 456 |  |  | — |  |  | 456 |
Total operating expenses | 16,211 |  |  | (2,935) |  |  | 13,276 |  |  | (9,778) |  |  | (3,589) |  |  | (13,367) |
Operating income | 12,331 |  |  | 3,308 |  |  | 15,639 |  |  | 51,451 |  |  | 7,246 |  |  | 58,697 |
Other expense (income): |  |  |  |  |  |  |  |  |  |  |
Interest expense, net | 12,142 |  |  | — |  |  | 12,142 |  |  | 22,638 |  |  | — |  |  | 22,638 |
Gain on contingent earn-out | (9,398) |  |  | — |  |  | (9,398) |  |  | (9,398) |  |  | — |  |  | (9,398) |
Unrealized foreign currency loss | 3,156 |  |  | — |  |  | 3,156 |  |  | 4,036 |  |  | — |  |  | 4,036 |
Other income, net | (200) |  |  | — |  |  | (200) |  |  | (35) |  |  | — |  |  | (35) |
Total other expense, net | 5,700 |  |  | — |  |  | 5,700 |  |  | 17,241 |  |  | — |  |  | 17,241 |
Income before income taxes | 6,631 |  |  | 3,308 |  |  | 9,939 |  |  | 34,210 |  |  | 7,246 |  |  | 41,456 |
Income tax benefit (expense) | 592 |  |  | (1,604) |  |  | (1,012) |  |  | 10,824 |  |  | (6,390) |  |  | 4,434 |
Net income | 7,223 |  |  | 1,704 |  |  | 8,927 |  |  | 45,034 |  |  | 856 |  |  | 45,890 |
Other comprehensive loss, net of tax: |  |  |  |  |  |  |  |  |  |  |
Foreign currency translation adjustments | (16,371) |  |  | — |  |  | (16,371) |  |  | (16,245) |  |  | — |  |  | (16,245) |
Total comprehensive (loss) income | $ | (9,148) |  |  | $ | 1,704 |  |  | $ | (7,444) |  |  | $ | 28,789 |  |  | $ | 856 |  |  | $ | 29,645 |
Earnings per share: |  |  |  |  |  |  |  |  |  |  |
Basic | $ | 0.04 |  |  | $ | 0.01 |  |  | $ | 0.05 |  |  | $ | 0.28 |  |  | $ | — |  |  | $ | 0.28 |
Diluted | $ | 0.04 |  |  | $ | 0.01 |  |  | $ | 0.05 |  |  | $ | 0.26 |  |  | $ | — |  |  | $ | 0.26 |
Weighted average number of ordinary shares outstanding: |  |  |  |  |  |  |  |  |  |  |
Basic | 162,917,478 |  |  | — |  |  | 162,917,478 |  |  | 161,591,704 |  |  | — |  |  | 161,591,704 |
Diluted | 177,059,844 |  |  | — |  |  | 177,059,844 |  |  | 175,734,070 |  |  | — |  |  | 175,734,070 |
PERIMETER SOLUTIONS, SA AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY (in thousands, except share data) (Unaudited)
| Ordinary Shares |  | Treasury Shares |  | Additional Paid-in Capital |  | Accumulated Other Comprehensive Loss |  | Accumulated Deficit |  | Total Shareholders' Equity
| Shares |  | Amount |  | Shares |  | Amount |  |  |  |
As Reported |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Balance, March 31, 2022 | 163,234,542 |  |  | $ | 163,235 |  |  | — |  |  | $ | — |  |  | $ | 1,684,071 |  |  | $ | (7,009) |  |  | $ | (699,014) |  |  | $ | 1,141,283 |
Share-based compensation | — |  |  | — |  |  | — |  |  | — |  |  | 6,741 |  |  | — |  |  | — |  |  | 6,741 |
Ordinary shares repurchased | — |  |  | — |  |  | 597,513 |  |  | (5,008) |  |  | — |  |  | — |  |  | — |  |  | (5,008) |
Net income | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 7,223 |  |  | 7,223 |
Other comprehensive loss | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (16,371) |  |  | — |  |  | (16,371) |
Balance, June 30, 2022 | 163,234,542 |  |  | $ | 163,235 |  |  | 597,513 |  |  | $ | (5,008) |  |  | $ | 1,690,812 |  |  | $ | (23,380) |  |  | $ | (691,791) |  |  | $ | 1,133,868 |
Adjustments |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Balance, March 31, 2022 | — |  |  | $ | — |  |  | — |  |  | $ | — |  |  | $ | (761) |  |  | $ | — |  |  | $ | (2,540) |  |  | $ | (3,301) |
Share-based compensation | — |  |  | — |  |  | — |  |  | — |  |  | (3,308) |  |  | — |  |  | — |  |  | (3,308) |
Net income | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 1,704 |  |  | 1,704 |
Total Adjustments | — |  |  | $ | — |  |  | — |  |  | $ | — |  |  | $ | (4,069) |  |  | $ | — |  |  | $ | (836) |  |  | $ | (4,905) |
As Restated |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Balance, March 31, 2022 | 163,234,542 |  |  | $ | 163,235 |  |  | — |  |  | $ | — |  |  | $ | 1,683,310 |  |  | $ | (7,009) |  |  | $ | (701,554) |  |  | $ | 1,137,982 |
Share-based compensation | — |  |  | — |  |  | — |  |  | — |  |  | 3,433 |  |  | — |  |  | — |  |  | 3,433 |
Ordinary shares repurchased | — |  |  | — |  |  | 597,513 |  |  | (5,008) |  |  | — |  |  | — |  |  | — |  |  | (5,008) |
Net income | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 8,927 |  |  | 8,927 |
Other comprehensive loss | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (16,371) |  |  | — |  |  | (16,371) |
Balance, June 30, 2022 | 163,234,542 |  |  | $ | 163,235 |  |  | 597,513 |  |  | $ | (5,008) |  |  | $ | 1,686,743 |  |  | $ | (23,380) |  |  | $ | (692,627) |  |  | $ | 1,128,963 |
PERIMETER SOLUTIONS, SA AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (in thousands) (Unaudited)
| Six Months Ended June 30, 2022
| As Reported |  | Adjustment |  | As Restated
Cash flows from operating activities: |  |  |  |  |
Net income | $ | 45,034 |  |  | $ | 856 |  |  | $ | 45,890 |
Adjustments to reconcile net income to net cash used in operating activities: |  |  |  |  |
Founders advisory fees - related party (change in accounting fair value) | (80,313) |  |  | — |  |  | (80,313) |
Depreciation and amortization expense | 33,086 |  |  | — |  |  | 33,086 |
Interest and payment-in-kind on preferred shares | 3,268 |  |  | — |  |  | 3,268 |
Share-based compensation | 12,465 |  |  | (4,069) |  |  | 8,396 |
Deferred income taxes | 7,648 |  |  | (7,777) |  |  | (129) |
Amortization of deferred financing costs | 793 |  |  | — |  |  | 793 |
Amortization of acquisition related inventory step-up | 27,315 |  |  | (3,177) |  |  | 24,138 |
Gain on contingent earn-out | (9,398) |  |  | — |  |  | (9,398) |
Unrealized loss on foreign currency | 4,036 |  |  | — |  |  | 4,036 |
Loss on disposal of assets | 9 |  |  | — |  |  | 9 |
Changes in operating assets and liabilities, net of acquisitions: |  |  |  |  |
Accounts receivable | (44,477) |  |  | — |  |  | (44,477) |
Inventories | (41,431) |  |  | — |  |  | (41,431) |
Income tax receivable | (24,778) |  |  | 14,167 |  |  | (10,611) |
Prepaid expenses and other current assets | 7,301 |  |  | — |  |  | 7,301 |
Accounts payable | 15,834 |  |  | — |  |  | 15,834 |
Deferred revenue | 4,991 |  |  | — |  |  | 4,991 |
Accrued expenses and other current liabilities | 2,789 |  |  | — |  |  | 2,789 |
Founders advisory fees - related party (cash settled) | (53,547) |  |  | — |  |  | (53,547) |
Other liabilities | 24 |  |  | — |  |  | 24 |
Net cash used in operating activities | (89,351) |  |  | — |  |  | (89,351) |
Cash flows from investing activities: |  |  |  |  |
Purchase of property and equipment | (4,006) |  |  | — |  |  | (4,006) |
Purchase price adjustment under Business Combination Agreement | (1,638) |  |  | — |  |  | (1,638) |
Net cash used in investing activities | (5,644) |  |  | — |  |  | (5,644) |
Cash flows from financing activities: |  |  |  |  |
Ordinary shares repurchased | (5,008) |  |  | — |  |  | (5,008) |
Proceeds from exercise of warrants | 529 |  |  |  |  | 529 |
Net cash used in financing activities | (4,479) |  |  | — |  |  | (4,479) |
Effect of foreign currency on cash and cash equivalents | (578) |  |  | — |  |  | (578) |
Net change in cash and cash equivalents | (100,052) |  |  | — |  |  | (100,052) |
Cash and cash equivalents, beginning of period | 225,554 |  |  | — |  |  | 225,554 |
Cash and cash equivalents, end of period | $ | 125,502 |  |  | $ | — |  |  | $ | 125,502 |
Supplemental disclosures of cash flow information: |  |  |  |  |
Cash paid for interest | $ | 17,919 |  |  | $ | — |  |  | $ | 17,919 |
Cash paid for income taxes | $ | 6,572 |  |  | $ | — |  |  | $ | 6,572 |
Non-cash investing and financing activities: |  |  |  |  |
Liability portion of founders advisory fees - related party reclassified to additional paid in capital | $ | 13,783 |  |  | $ | — |  |  | $ | 13,783 |
The impact of the revision on the Company’s unaudited financial statements for the March 2022 Quarter are presented below (in thousands): MARCH 2022 QUARTER
|  | March 31, 2022
Condensed Consolidated Balance Sheet |  | As Reported |  | Adjustment |  | As Revised
Income tax receivable |  | $ | 17,935 |  |  | $ | (10,182) |  |  | $ | 7,753 |
Total current assets |  | 332,225 |  |  | (10,182) |  |  | 322,043 |
Total assets |  | 2,523,596 |  |  | (10,182) |  |  | 2,513,414 |
Deferred income taxes |  | 304,974 |  |  | (6,881) |  |  | 298,093 |
Total liabilities |  | 1,382,313 |  |  | (6,881) |  |  | 1,375,432 |
Additional paid-in capital |  | 1,684,071 |  |  | (761) |  |  | 1,683,310 |
Accumulated deficit |  | (699,014) |  |  | (2,540) |  |  | (701,554) |
Total shareholders’ equity |  | 1,141,283 |  |  | (3,301) |  |  | 1,137,982 |
Total liabilities and shareholders’ equity |  | 2,523,596 |  |  | (10,182) |  |  | 2,513,414 |
Condensed Consolidated Statement of Operations and Comprehensive Income (Loss) |  | Three Months Ended March 31, 2022
| As Reported |  | Adjustment |  | As Revised
Cost of goods sold |  | $ | 44,627 |  |  | $ | (3,284) |  |  | $ | 41,343 |
Gross profit |  | 13,131 |  |  | 3,284 |  |  | 16,415 |
Selling, general and administrative expense |  | 19,808 |  |  | (654) |  |  | 19,154 |
Total operating expenses |  | (25,989) |  |  | (654) |  |  | (26,643) |
Operating income |  | 39,120 |  |  | 3,938 |  |  | 43,058 |
Income before income taxes |  | 27,579 |  |  | 3,938 |  |  | 31,517 |
Income tax benefit (expense) |  | 10,232 |  |  | (4,786) |  |  | 5,446 |
Net income (loss) |  | 37,811 |  |  | (848) |  |  | 36,963 |
Total comprehensive income (loss) |  | 37,937 |  |  | (848) |  |  | 37,089 |
Earnings per share: |  |  |  |  |  |
Basic |  | $ | 0.24 |  |  | $ | (0.01) |  |  | $ | 0.23 |
Diluted |  | $ | 0.22 |  |  | $ | (0.01) |  |  | $ | 0.21 |
|  | Three Months Ended March 31, 2022
Condensed Consolidated Statement of Shareholders’ Equity |  | Additional Paid-in Capital |  | Accumulated Deficit |  | Total Shareholders’ Equity
Balance, December 31, 2021, as reported |  | $ | 1,670,033 |  |  | $ | (736,825) |  |  | $ | 1,083,310 |
Adjustments |  | — |  |  | (1,692) |  |  | (1,692) |
Balance, December 31, 2021, as revised |  | 1,670,033 |  |  | (738,517) |  |  | 1,081,618 |
Share-based compensation, as reported |  | $ | 5,724 |  |  | $ | — |  |  | $ | 5,724 |
Adjustments |  | (761) |  |  | — |  |  | (761) |
Share-based compensation, as revised |  | 4,963 |  |  | — |  |  | 4,963 |
Net income, as reported |  | $ | — |  |  | $ | 37,811 |  |  | $ | 37,811 |
Adjustments |  | — |  |  | (848) |  |  | (848) |
Net income, as revised |  | — |  |  | 36,963 |  |  | 36,963 |
Balance, March 31, 2022, as reported |  | $ | 1,684,071 |  |  | $ | (699,014) |  |  | $ | 1,141,283 |
Adjustments |  | (761) |  |  | (2,540) |  |  | (3,301) |
Balance, March 31, 2022, as revised |  | 1,683,310 |  |  | (701,554) |  |  | 1,137,982 |
Condensed Consolidated Statement of Cash Flows |  | Three Months Ended March 31, 2022
| As Reported |  | Adjustment |  | As Revised
Cash flow from operating activities: |  |  |  |  |  |
Net income (loss) |  | $ | 37,811 |  |  | $ | (848) |  |  | $ | 36,963 |
Adjustments to reconcile net income to net cash used in operating activities: |  |  |  |  |  |
Share-based compensation |  | $ | 5,724 |  |  | $ | (761) |  |  | $ | 4,963 |
Deferred income taxes |  | 6,239 |  |  | (5,396) |  |  | 843 |
Amortization of acquisition related inventory step-up |  | 9,299 |  |  | (3,177) |  |  | 6,122 |
Changes in operating assets and liabilities, net of acquisitions: |  |  |  |  |  |
Income tax receivable |  | $ | (16,150) |  |  | $ | 10,182 |  |  | $ | (5,968) |
The impact of the revision on the Company’s audited financial statements for the December 2021 Period are presented below (in thousands): DECEMBER 2021 PERIOD
|  | December 31, 2021
Consolidated Balance Sheet |  | As Reported |  | Adjustment |  | As Revised
Inventories |  | $ | 110,087 |  |  | $ | (3,177) |  |  | $ | 106,910 |
Total current assets |  | 374,937 |  |  | (3,177) |  |  | 371,760 |
Total assets |  | 2,581,560 |  |  | (3,177) |  |  | 2,578,383 |
Deferred income taxes |  | 298,633 |  |  | (1,485) |  |  | 297,148 |
Total liabilities |  | 1,498,250 |  |  | (1,485) |  |  | 1,496,765 |
Accumulated deficit |  | (736,825) |  |  | (1,692) |  |  | (738,517) |
Total shareholders’ equity |  | 1,083,310 |  |  | (1,692) |  |  | 1,081,618 |
Total liabilities and shareholders’ equity |  | 2,581,560 |  |  | (3,177) |  |  | 2,578,383 |
Consolidated Statement of Operations and Comprehensive Income (Loss) |  | November 9, 2021 Through December 31, 2021
| As Reported |  | Adjustment |  | As Revised
Cost of goods sold |  | $ | 20,533 |  |  | $ | 3,177 |  |  | $ | 23,710 |
Gross profit |  | 490 |  |  | (3,177) |  |  | (2,687) |
Operating loss |  | (677,578) |  |  | (3,177) |  |  | (680,755) |
Loss before income taxes |  | (685,132) |  |  | (3,177) |  |  | (688,309) |
Income tax benefit |  | 4,675 |  |  | 1,485 |  |  | 6,160 |
Net loss |  | (680,457) |  |  | (1,692) |  |  | (682,149) |
Total comprehensive loss |  | (687,592) |  |  | (1,692) |  |  | (689,284) |
Net loss per share: |  |  |  |  |  |
Basic and diluted |  | $ | (4.33) |  |  | $ | (0.01) |  |  | $ | (4.34) |
|  | November 9, 2021 Through December 31, 2021
Consolidated Statement of Shareholders’ Equity |  | Accumulated Deficit |  | Total Shareholders’ Equity
Net loss, as reported |  | $ | (680,457) |  |  | $ | (680,457) |
Adjustments |  | (1,692) |  |  | (1,692) |
Net loss, as revised |  | $ | (682,149) |  |  | $ | (682,149) |
Balance, December 31, 2021, as reported |  | $ | (736,825) |  |  | $ | 1,083,310 |
Adjustments |  | (1,692) |  |  | (1,692) |
Balance, December 31, 2021, as revised |  | $ | (738,517) |  |  | $ | 1,081,618 |
Consolidated Statement of Cash Flows |  | November 9, 2021 Through December 31, 2021
| As Reported |  | Adjustment |  | As Revised
Cash flow from operating activities: |  |  |  |  |  |
Net loss |  | $ | (680,457) |  |  | $ | (1,692) |  |  | $ | (682,149) |
Adjustments to reconcile net loss to net cash provided by operating activities: |  |  |  |  |  |
Deferred income taxes |  | (670) |  |  | (1,485) |  |  | (2,155) |
Amortization of acquisition related inventory step-up |  | 2,948 |  |  | 3,177 |  |  | 6,125 |

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- Definition The entire disclosure for reporting error correction. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 250 -SubTopic 10 -Section 50 -Paragraph 7 -URI https://asc.fasb.org/extlink&oid=124431687&loc=d3e22644-107794 + Details
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