Item 4.02 Non-Reliance on Previously Issued Financial Statements or Related
Audit Report or Completed Interim Report.
On April 12, 2021, the Acting Director of the Division of Corporation Finance
and Acting Chief Accountant of the U.S. Securities and Exchange Commission
("SEC") together issued a statement regarding the accounting and reporting
considerations for warrants issued by special purpose acquisition companies
entitled "Staff Statement on Accounting and Reporting Considerations for
Warrants Issued by Special Purpose Acquisition Companies ('SPACs')" (the "SEC
Statement"). Specifically, the SEC Statement focused on certain settlement terms
and provisions related to certain tender offers following a business
combination, which terms are similar to those contained in the warrant
agreement, dated as of November 18, 2020, between Reinvent Technology Partners
Z, a Cayman Islands exempted company ("RTPZ" or the "Company") and Continental
Stock Transfer & Trust Company, a New York corporation, as warrant agent (the
"Warrant Agreement"). As a result of the SEC Statement, the Company reevaluated
the accounting treatment of (i) the 4,600,000 redeemable warrants (the "Public
Warrants") that were included in the units issued by the Company in its initial
public offering (the "IPO") and (ii) the 4,400,000 redeemable warrants (together
with the Public Warrants, the "Warrants") that were issued to the Company's
sponsor in a private placement that closed concurrently with the closing of the
IPO, and determined to classify the Warrants as derivative liabilities measured
at fair value, with changes in fair value each period reported in earnings.
While the Company has not generated any operating revenues to date and will not
generate any operating revenues until after completion of its initial business
combination, at the earliest, the change in fair value of the Warrants is a
non-cash charge and will be reflected in the Company's statement of operations.
On May 10, 2021, the Company's management and the Audit Committee of the
Company's Board of Directors (the "Audit Committee") concluded that, in light of
the SEC Statement, it is appropriate to restate (i) certain items on the
Company's previously issued audited balance sheet as of November 23, 2020, which
was related to the IPO, and (ii) the audited financial statements as of
December 31, 2020 and for the period from October 2, 2020 (inception) through
December 31, 2020 (collectively, the "Relevant Periods"). Considering such
restatement, such financial statements, as well as the relevant portions of any
communication which describes or are based on such financial statements, should
no longer be relied upon. The Company will file an amendment to its Annual
Report on Form 10-K as of December 31, 2020 and for the period from October 2,
2020 (inception) through December 31, 2020, which will include the restated
financial statements for the Relevant Periods.
Going forward, we currently expect to continue to classify our warrants as
liabilities, which would require us to incur the cost of measuring the fair
value of the warrant liabilities, and which may have an adverse effect on our
results of operations.
The Company's management and the Audit Committee have discussed the matters
disclosed in this Current Report on Form 8-K pursuant to this Item 4.02 with
WithumSmith+Brown, PC, the Company's independent registered public accounting
firm.
Cautionary Statement Regarding Forward-Looking Statements
This Current Report on Form 8-K contains certain forward-looking statements
within the meaning of the federal securities laws with respect to the proposed
transaction between Hippo Enterprises Inc., a Delaware corporation ("Hippo"),
and RTPZ. These forward-looking statements generally are identified by the words
"believe," "project," "expect," "anticipate," "estimate," "intend," "strategy,"
"future," "opportunity," "plan," "may," "should," "will," "would," "will be,"
"will continue," "will likely result," and similar expressions. Forward-looking
statements are predictions, projections and other statements about future events
that are based on current expectations and assumptions and, as a result, are
subject to risks and uncertainties. Many factors could cause actual future
events to differ materially from the forward-looking statements in this Current
Report on Form 8-K, including but not limited to: (i) the risk that the
transaction may not be completed in a timely manner or at all, which may
adversely affect the price of RTPZ's securities, (ii) the risk that the
transaction may not be completed by RTPZ's business combination deadline and the
potential failure to obtain an extension of the business combination deadline if
sought by RTPZ, (iii) the failure to satisfy the conditions to the consummation
of the transaction, including the adoption of that certain Agreement and Plan of
Merger, dated as of March 3, 2021 (the "Merger Agreement"), by and among RTPZ,
Hippo, and RTPZ Merger Sub Inc., by the shareholders of RTPZ, the satisfaction
of the minimum cash condition following redemptions by RTPZ's public
shareholders and the receipt of certain governmental and regulatory approvals,
(iv) the
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lack of a third party valuation in determining whether or not to pursue the
transaction, (v) the inability to complete the PIPE investment in connection
with the transaction, (vi) the occurrence of any event, change or other
circumstance that could give rise to the termination of the Merger Agreement,
(vii) the effect of the announcement or pendency of the transaction on Hippo's
business relationships, operating results and business generally, (viii) risks
that the proposed transaction disrupts current plans and operations of Hippo and
potential difficulties in Hippo employee retention as a result of the
transaction, (ix) the outcome of any legal proceedings that may be instituted
against Hippo or against RTPZ related to the Merger Agreement or the
transaction, (x) the ability to maintain the listing of RTPZ's securities on a
national securities exchange, (xi) the potential volatility of the price of
RTPZ's securities due to a variety of factors, including changes in the
competitive and highly regulated industries in which RTPZ plans to operate or
Hippo operates, variations in operating performance across competitors, changes
in laws and regulations affecting RTPZ's or Hippo's business and changes in the
combined capital structure, (xii) the ability to implement business plans,
forecasts, and other expectations after the completion of the proposed
transaction, and identify and realize additional opportunities, (xiii) changes
in domestic and foreign business, market, financial, political, and legal
conditions; (xiv) natural or man-made catastrophes such as wildfires,
hurricanes, typhoons, earthquakes, floods, climate change (including effects on
weather patterns; greenhouse gases; sea, land and air temperatures; sea levels;
and rain and snow), nuclear accidents, pandemics (including COVID-19), or
terrorism or civil unrest; (xv) the continued impact of COVID-19 and related
risks; (xvi) the ability to collect reinsurance recoverable, credit developments
of reinsurers, and any delays with respect thereto and changes in the cost,
quality, or availability of reinsurance; (xvii) the actual amount of new and
renewal business, market acceptance of products, and risks associated with the
introduction of new products and services and entering new markets; (xviii) the
ability to increase the use of data analytics and technology; and (xix) the
ability to attract, retain, and expand RTPZ's or Hippo's customer base. The
foregoing list of factors is not exhaustive. You should carefully consider the
foregoing factors and the other risks and uncertainties described in the "Risk
Factors" section of RTPZ's Annual Report on Form 10-K, as it may be amended, the
registration statement on Form S-4 discussed below, as it may be amended, and
other documents filed by RTPZ from time to time with the SEC. These filings
identify and address other important risks and uncertainties that could cause
actual events and results to differ materially from those contained in the
forward-looking statements. Forward-looking statements speak only as of the date
they are made. Readers are cautioned not to put undue reliance on
forward-looking statements, and Hippo and RTPZ assume no obligation and do not
intend to update or revise these forward-looking statements, whether as a result
of new information, future events, or otherwise. Neither Hippo nor RTPZ gives
any assurance that either Hippo or RTPZ or the combined company will achieve its
expectations.
Additional Information and Where to Find It
This Current Report on Form 8-K relates to a proposed transaction between Hippo
and RTPZ. This Current Report on Form 8-K does not constitute an offer to sell
or exchange, or the solicitation of an offer to buy or exchange, any securities,
nor shall there be any sale of securities in any jurisdiction in which such
offer, sale or exchange would be unlawful prior to registration or qualification
under the securities laws of any such jurisdiction. In connection with the
proposed transaction, RTPZ filed a registration statement on Form S-4 with the
SEC on March 25, 2021, which includes a document that serves as a prospectus and
proxy statement of RTPZ (the "proxy statement/prospectus"). The proxy
statement/prospectus will be sent to all RTPZ shareholders. RTPZ also will file
other documents regarding the proposed transaction with the SEC. Before making
any voting decision, investors and security holders of RTPZ are urged to read
the registration statement, the proxy statement/prospectus included therein and
all other relevant documents filed or that will be filed with the SEC in
connection with the proposed transaction as they become available because they
will contain important information about the proposed transaction.
Investors and security holders may obtain free copies of the registration
statement, the proxy statement/prospectus included therein and all other
relevant documents filed or that will be filed with the SEC by RTPZ through the
website maintained by the SEC at www.sec.gov.
The documents filed by RTPZ with the SEC also may be obtained free of charge at
RTPZ's website at https://z.reinventtechnologypartners.com or upon written
request to 215 Park Avenue, Floor 11 New York, NY.
Participants in Solicitation
RTPZ and Hippo and their respective directors and executive officers may be
deemed to be participants in the solicitation of proxies from RTPZ's
shareholders in connection with the proposed transaction. Additional information
regarding the interests of those persons and other persons who may be deemed
participants in the proposed transaction may be obtained by reading the proxy
statement/prospectus regarding the proposed transaction. You may obtain a free
copy of these documents as described in the preceding paragraph.
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