Item 4.02. Non-Reliance on Previously Issued Financial Statements or a Related
Audit Report or Completed Interim Review.
The management of Empowerment & Inclusion Capital I Corp. (the "Company") has
re-evaluated the Company's application of ASC 480-10-S99-3A to its accounting
classification of the redeemable Class A common stock, par value $0.0001 per
share (the "Public Shares"), issued as part of the units sold in the Company's
initial public offering (the "IPO") on January 12, 2021. Historically, a portion
of the Public Shares was classified as permanent equity to maintain
stockholders' equity greater than $5 million on the basis that the Company will
not redeem its Public Shares in an amount that would cause its net tangible
assets to be less than $5,000,001. Pursuant to such re-evaluation, the Company's
management has determined that the Public Shares include certain provisions that
require classification of the Public Shares as temporary equity regardless of
the minimum net tangible assets required to complete the Company's initial
business combination.
Therefore, on November 30, 2021, the Company's management and the audit
committee of the Company's board of directors (the "Audit Committee"), after
discussing with WithumSmith+Brown, PC ("Withum"), the Company's independent
registered public accounting firm, concluded that the Company's previously
issued (i) audited balance sheet as of January 12, 2021, filed as Exhibit 99.1
to the Current Report on Form 8-K with the U.S. Securities and Exchange
Commission (the "SEC") on January 19, 2021, (ii) unaudited interim financial
statements included in the Company's Quarterly Report on Form 10-Q for the
quarterly period ended March 31, 2021, filed with the SEC on May 28, 2021, (iii)
unaudited interim financial statements included in the Company's Quarterly
Report on Form 10-Q for the quarterly period ended June 30, 2021, filed with the
SEC on August 10, 2021, and (iv) unaudited interim financial statements included
in the Company's Quarterly Report on Form 10-Q for the quarterly period ended
September 30, 2021, filed with the SEC on November 12, 2021 (collectively, the
"Affected Periods"), should be restated to report all Public Shares as temporary
equity and should no longer be relied upon. As such, the Company intends to
restate its financial statements for the Affected Periods in an Amendment No. 1
to the Company's Quarterly Report on Form 10-Q for the quarterly period ended
September 30, 2021, to be filed with the SEC (the "Q3 Form 10-Q/A").
The Company does not expect any of the above changes will have any impact on its
cash position and cash held in the trust account established in connection with
the IPO (the "Trust Account").
The Company's management has concluded that in light of the classification error
described above, a material weakness exists in the Company's internal control
over financial reporting and that the Company's disclosure controls and
procedures were not effective. The Company's remediation plan with respect to
such material weakness will be described in more detail in the Q3 Form 10-Q/A.
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
Withum.
Forward-Looking Statements
This Current Report on Form 8-K includes "forward-looking statements" within the
meaning of Section 27A of the Securities Act of 1933, as amended, and Section
21E of the Securities Exchange Act of 1934, as amended. Certain of these
forward-looking statements can be identified by the use of words such as
"believes," "expects," "intends," "plans," "estimates," "assumes," "may,"
"should," "will," "seeks," or other similar expressions. Such statements may
include, but are not limited to, statements regarding the impact of the
Company's restatement of certain historical financial statements, the Company's
cash position and cash held in the Trust Account, and any proposed remediation
measures with respect to identified material weaknesses. These statements are
based on current expectations on the date of this Current Report on Form 8-K.
Forward-looking statements are subject to a number of risks and uncertainties
that may cause actual results to differ materially, many of which are beyond the
control of the Company. Such risks include, without limitation, those set forth
in the Risk Factors section of the Company's Annual Report on Form 10-K filed
with the SEC on March 29, 2021, as may be amended, supplemented, or superseded
from time to time by other reports the Company files with the SEC, including its
Quarterly Reports on Form 10-Q. Except as may be required by law, the Company
does not assume any obligation to update or revise any such forward-looking
statements, whether as the result of new developments or otherwise. Readers are
cautioned not to put undue reliance on forward-looking statements.
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