Company: PMVC
Filing Date: 2025-03-27
Form Type: 10-K
Source: 0001013762-25-003340
Chunk: 109

Company: PMV Consumer Acquisition Corp.
Filing Date: 2025-03-27
Form: 10-K
Item: Item 1A
Chunk 109
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 we are required to maintain
effective internal control over financial reporting in accordance with Section 404 of the Sarbanes-Oxley Act of 2002. Internal control
over financial reporting is complex and may be revised over time to adapt to changes in our business, or changes in applicable accounting
rules. We cannot assure you that our internal control over financial reporting will be effective in the future or that a material weakness
will not be discovered with respect to a 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 December 31, 2024 and 2023, 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