Item 4.02. Non-Reliance on Previously Issued Financial Statements or a Related Audit Report or Completed Interim Review.
Subsequent to the filing of the Annual Report on Form 10-K for the fiscal
year ended December 31, 2021 (the “Original 10-K”) of Quantum FinTech Acquisition Corporation (the “Company”),
the Company re-evaluated its application of ASC 815-40 to its accounting for the derivative liability as a result of the Subscription
Agreements entered into on November 4, 2021, among the Company, TradeStation Group, Inc. (“TradeStation”) and the respective
investors (the “Subscription Agreements”). Pursuant to the Subscription Agreements, additional shares may be issued to certain
investors based on terms and conditions set forth in the Subscription Agreements. As a result, the Subscription Agreements create a potential
obligation to issue additional shares and therefore, the Company should have classified this instrument to issue additional shares as
a derivative liability (the “PIPE derivative liability”) in the Original 10-K. Under this accounting treatment, the Company
is required to measure the fair value of the PIPE derivative liability on the date of issuance, and at the end of each reporting period
and recognize any change in fair value in the Company’s operating results for the current period.
Additionally, the Company has re-evaluated its going concern assessment
as of December 31, 2021. The Company has a commitment from Quantum Ventures LLC (the “sponsor commitment”) to provide working
capital loans to the Company of up to $3,000,000, which the Company believed would alleviate any substantial doubt about the company’s
ability to continue as a going concern that might have resulted from the need to raise additional capital. However, the Company did not
consider that it needs approval from TradeStation to borrow amounts over $500,000, and it is uncertain whether any such approval could
be obtained. As a result, the Company may not be able to utilize the sponsor commitment or obtain additional financing that it would require
to continue as a going concern. Based on the re-evaluation, management has determined that there is substantial doubt about the Company’s
ability to continue as a going concern, that should have been disclosed in the Company’s previously issued audited financial statements
included in the Original 10-K (the “audited financial statements”).
As a result of the foregoing, on April 8, 2022, the audit committee
of the Company’s board of directors concluded, after discussion with the Company’s management and Marcum LLP, the Company’s
independent registered public accounting firm, that the audited financial statements should be restated and should no longer be relied
upon. As such, the Company intends to restate the audited financial statements in Amendment No. 1 to the Original 10-K, to be filed with
the SEC (the “Amendment”) to reclassify the additional shares issuable pursuant to the Subscription Agreements as a derivative
liability and to disclose management’s going concern conclusion.
The Amendment will also include, among other things, additional
information pertaining to the following items (i) the first amendment to the Merger Agreement among the Company, TradeStation and TSG
Merger Sub, Inc., dated as of December 17, 2021 (as amended, the “Merger Agreement”), (ii) the additional shares as described
in the Subscription Agreement and (iii) the incentive shares as described in the Subscription Agreement.
In connection with the restatement, the Company’s
management determined that the Company’s disclosure controls and procedures as of December 31, 2021 were not effective due to material
weaknesses in the Company’s internal control over financial reporting with respect to the Company’s compiling of information
to prepare its financial statements in accordance with U.S. GAAP.
The above changes did not have any impact on the Company’s
cash position and cash held in the trust account established in connection with the initial public offering.
The Company expects to file the Amendment as soon as practicable.