Item 4.02. Non-Reliance on Previously Issued Financial Statements or a Related
Audit Report or Completed Interim Review.
In connection with the preparation of the financial statements for Hennessy
Capital Investment Corp. V (the "Company") as of and for the periods ended
September 30, 2021, the Company's management, in consultation with its advisors,
identified a classification error made in certain of the Company's previously
issued financial statements, arising from the manner in which, as of the closing
of the Company's initial public offering ("IPO"), the Company valued its Class A
common stock subject to possible redemption. The Company previously determined
the value of such Class A common stock to be equal to the redemption value of
such shares of Class A common stock, after taking into consideration the terms
of the Company's Amended and Restated Certificate of Incorporation, under which
a redemption cannot result in net tangible assets being less than
$5,000,001. The Company's management determined, after consultation with its
advisors, that all of the shares of Class A common stock underlying the
units issued in the IPO can be redeemed or become redeemable subject to the
occurrence of future events considered to be
outside the Company's control. Therefore, management concluded that the
redemption value of the shares of Class A common stock subject to possible
redemption should reflect the possible redemption of all shares of Class A
common stock.
As a result, the Company noted a classification error related to temporary
equity and permanent equity, which it corrected in its condensed financial
statements included in its Quarterly Report on Form 10-Q as of and for the
periods ended September 30, 2021, filed on November 12, 2021 ("Q3 Form 10-Q").
In Note 7 to the condensed financial statements included in the Q3 Form 10-Q,
the Company reclassified the requisite amount of Class A common stock from
permanent to temporary equity, with the offset recorded to additional paid-in
capital (to the extent available), accumulated deficit and shares of Class A
common stock, and presented the effects of the revision on the Company's
previously issued financial statements. The Company also revised its earnings
per share calculation to allocate net income (loss) pro rata to Class A and
Class B common stock. This presentation contemplates an initial business
combination as the most likely outcome, in which case, both classes of common
stock share pro rata in the income (loss) of the Company. The Company presented
the reclassification in the Q3 Form 10-Q as a revision that did not require the
restatement of previously filed financial statements. Subsequent to the filing
of the Q3 Form 10-Q, the Company determined that it needed to restate its prior
financial statements due to the quantitative materiality of the
reclassification. Upon further review, and in consultation with its advisors,
the Company determined that the Q3 Form 10-Q should be updated to indicate that
the classification error is a restatement and not a revision.
On November 23, 2021, the audit committee of the board of directors of the
Company (the "Audit Committee") determined, after discussion with its advisors,
that the Company's (i) audited balance sheet as of January 20, 2021 filed as
Exhibit 99.1 to the Company's Current Report on Form 8-K filed on January 26,
2021, (ii) unaudited financial statements as of and for the quarter ended March
31, 2021 contained in the Company's Quarterly Report on Form 10-Q filed with the
SEC on May 17, 2021 and (iii) unaudited financial statements as of and for the
quarter ended June 30, 2021 contained in the Company's Quarterly Report on Form
10-Q filed on August 16, 2021 (together, and collectively, the "Affected
Periods"), should no longer be relied upon due to the classification error
described above. As a result, the Company plans to restate its financial
statements for all Affected Periods, to indicate that the classification error
is a restatement and not a revision, in an amended Q3 Form 10-Q (the "Amended Q3
Form 10-Q"), which the Company intends to file as soon as practicable. The
Amended Q3 Form 10-Q will include restatements of the audited balance sheet and
the unaudited interim condensed financial statements for the Affected Periods.
The Company does not expect the changes described above to have any impact on
its cash position or the balance held in its 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 will describe its remediation plan
with respect to such material weakness in the forthcoming Amended Q3 Form 10-Q.
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, the Company's independent registered public accounting firm.
1
© Edgar Online, source Glimpses