Item 4.02
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Non-Reliance on Previously Issued Financial Statements or a Related
Audit Report or Completed Interim Review.
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(a) On April 12, 2021, the staff of the Securities and Exchange Commission (the
SEC) issued a public statement entitled Staff Statement on Accounting and Reporting Considerations for Warrants issued by Special Purpose Acquisition Companies (SPACs) (the Statement). In the
Statement, the SEC staff expressed its view that certain terms and conditions common to SPAC warrants may require the warrants to be classified as liabilities on the SPACs balance sheet as opposed to equity.
H.I.G. Acquisition Corp. (the Company) has previously classified its public and private placement warrants (Warrants)
issued in connection with its initial public offering and private placement as equity within the Companys financial statements, and after discussion and evaluation, including with the Companys independent auditors, the Company has
concluded that its warrants should be presented as liabilities as of the initial public offering date reported at fair value with subsequent fair value remeasurement at each reporting period.
On May 21, 2021, the Audit Committee, based on the recommendation of and after consultation with management, concluded that the
Companys (i) audited financial statements as of October 23, 2020 and (ii) audited financial statements as of December 31, 2020, and for the period from September 2, 2020 (inception) to December 31, 2020 (collectively, the Non-Reliance Period), as reported in the Companys Current Report on Form 8-K filed on October 29, 2020 and Annual Report on Form 10-K filed on March 30, 2021, respectively, should no longer be relied upon based on the reclassification of warrants as described above. Similarly, Report of Independent Registered Public Accounting
Firm dated March 30, 2021 on the financial statements as of December 31, 2020 and for the period from September 2, 2020 (date of inception) through December 31, 2020, and the shareholder communications, investor presentations or
other communications describing relevant portions of the Companys financial statements for these periods that need to be restated should no longer be relied upon.
The Company has concurrently filed an amendment to its Annual Report on Form 10-K for the period
September 2, 2020 (inception) through December 31, 2020 (the Amended 10-K) reflecting this change in classification of the warrants for the
Non-Reliance Period, and the corresponding changes to the financial statement items for the Non-Reliance Period will be set forth through disclosures in the financial
statements included in the Amended 10-K. The Audit Committee and management have discussed the matters disclosed pursuant to this Item 4.02(a) with its independent registered public accounting firm,
The Companys prior accounting for the warrants as components of equity instead of as derivative liabilities did not have any effect on
the Companys previously reported operating expenses, cash flows or cash or cash equivalents.