Item 4.02. Non-Reliance on Previously Issued Financial Statements or a Related
Audit Report or Completed Interim Review.
(a) In connection with Fortress Value Acquisition Corp. IV's (the "Company")
Quarterly Report on Form 10-Q for the nine months ended September 30, 2021 filed
with the Securities Exchange Commission ("SEC") on November 3, 2021 (the "Q3
Form 10-Q"), the Company re-evaluated the accounting for its Class A common
stock subject to possible redemption as temporary equity. In accordance with the
SEC and its staff's guidance on redeemable equity instruments, which has been
codified in Financial Accounting Standards Board's Accounting Standards
Codification Topic 480, "Distinguishing Liabilities from Equity" ("ASC 480"),
paragraph 10-S99-3A, redemption provisions not solely within the control of the
Company require shares of common stock subject to redemption to be classified
outside of permanent equity. The Company had previously classified a portion of
its Class A common stock subject to possible redemption in permanent equity.
Although the Company did not specify a maximum redemption threshold, its amended
and restated certificate of incorporation provides that the Company will not
redeem its public shares in an amount that will cause its net tangible assets to
be less than $5,000,001. Upon re-evaluation, the Company determined that the
Class A common stock includes certain provisions that require classification of
the Class A common stock as temporary equity regardless of the minimum net
tangible assets threshold. As a result, in connection with the Q3 Form 10-Q, the
Company classified all of its Class A common stock as temporary equity as of
September 30, 2021 and adjusted its initial book value to redemption value in
accordance with ASC 480. In connection with the change in presentation for the
Class A common stock subject to possible redemption, the Company also restated
its earnings per share calculation to allocate net income (loss) pro-rata to
Class A and Class F common stock.
On December 8, 2021, management of the Company and the audit committee of the
Company's board of directors (the "Audit Committee"), concluded that the
Company's previously issued (i) audited balance sheet as of March 18, 2021
included in the Company's Current Report on Form 8-K filed with the SEC on
March 24, 2021, (ii) unaudited interim financial statements as of and for the
three months ended March 31, 2021 included in the Company's Quarterly Report on
Form 10-Q filed with the SEC on May 17, 2021, (iii) unaudited interim financial
statements as of and for the three and six months ended June 30, 2021 included
in the Company's Quarterly Report on Form 10-Q filed with the SEC on August 9,
2021 and (iv) unaudited interim financial statements as of and for the three and
nine months ended September 30, 2021 included in the Company's Quarterly Report
on Form 10-Q filed with the SEC on November 3, 2021 (collectively, the "Affected
Periods"), in each case, should no longer be relied upon due to the
reclassification of the Company's temporary and permanent equity and resulting
restatement of the initial carrying value of the Company's shares of Class A
common stock subject to possible redemption (and related changes).
The restatement does not have any impact on the Company's cash position or the
cash held in its trust account.
The Company will restate its financial statements for the Affected Periods as
soon as practicable.
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 Audit Committee and the Company's management have discussed the matters
disclosed in this Current Report on Form 8-K with WithumSmith+Brown, PC, the
Company's independent registered public accounting firm.
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