Company: PMVC
Filing Date: 2025-05-14
Form Type: 10-Q
Source: 0001213900-25-043278
Chunk: 117

Company: PMV Consumer Acquisition Corp.
Filing Date: 2025-05-14
Form: 10-Q
Item: Part I, Item 8
Chunk 117
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 prior period for which we had previously believed that our internal control over financial reporting
was effective. Matters impacting our internal control over financial reporting may cause us to be unable to report our financial information
on a timely basis, or may cause us to restate previously issued financial information, and thereby subject us to adverse regulatory consequences,
including sanctions or investigations by the SEC, or violations of applicable stock exchange listing rules. There could also be a negative
reaction in the financial markets due to a loss of investor confidence in us and the reliability of our financial statements. Confidence
in the reliability of our financial statements is also likely to suffer if we report a material weakness in the effectiveness of our internal
control over financial reporting. This could materially adversely affect us by, for example, leading to a decline in the price of our
shares/warrants and impairing our ability to attract a business opportunity and/or consummate a transaction.

Our warrants are accounted for as liabilities
and changes in the value of our warrants could have a material effect on our financial results.

On April 12, 2021, the SEC Staff expressed its
view that certain terms and conditions common to SPAC warrants may require the warrants to be classified as liabilities instead of equity
on the SPAC’s balance sheet. As a result of the SEC Staff Statement, we re-evaluated the accounting treatment of our warrants, and
determined to classify the warrants as derivative liabilities measured at fair value, with changes in fair value reported in our statement
of operations for each reporting period.

As a result, included on our balance sheets as
of March 31, 2025 and December 31, 2024, and contained elsewhere in this report, are derivative liabilities related to embedded features
contained within our warrants. ASC 815-40 provides for the re-measurement of the fair value of such derivatives at each balance sheet
date, with a resulting non-cash gain or loss related to the change in the fair value being recognized in earnings in the statement of
operations. As a result of the recurring fair value measurement, our financial statements and results of operations may fluctuate quarterly
based on factors which are outside of our control. Due to the recurring fair value measurement, we expect that we will recognize non-cash
gains or losses on our warrants each reporting period and that the amount of such gains or losses could be material.

Changes in laws
or regulations, or a failure to comply with any laws and regulations, may adversely affect our business, including our ability