Item 1.01 Entry into a Material Definitive Agreement.
On August 10, 2021, Holley Inc. (the "Company") entered into (i) a
Non-Disclosure Agreement with Sentinel Capital Partners, L.L.C. ("Sentinel"),
which beneficially owns approximately 58% of the Company's outstanding common
stock, and Owen Basham and James Coady, each of whom were nominated to serve as
a director of the Company by certain affiliates of Sentinel pursuant to a
stockholders' agreement (the "Stockholders' Agreement") between the Company and
certain affiliates of Sentinel and MidOcean US Advisor, LP ("MidOcean"), and
(ii) a Non-Disclosure Agreement with MidOcean, which beneficially owns
approximately 10% of the Company's outstanding common stock, Matthew Rubel, who
was nominated to serve as a director of the Company by certain affiliates of
MidOcean pursuant to the Stockholders' Agreement, and Graham Clempson, in his
capacity as observer of the board of directors of the Company. The
Non-Disclosure Agreements provide that (i) Messrs. Basham and Coady may share
certain confidential information obtained in their capacity as directors of the
Company with Sentinel and certain Sentinel representatives and (ii) Messrs.
Rubel and Clempson may share certain confidential information obtained in their
capacity as director or board observer, as applicable, with MidOcean and certain
MidOcean representatives. Under the Non-Disclosure Agreements, Sentinel and
MidOcean have each agreed to keep all confidential information shared pursuant
to their respective Non-Disclosure Agreement strictly confidential and not
disclose such information to any person other than certain representatives for
certain specified permissible uses, subject to the terms and conditions of the
applicable Non-Disclosure Agreement.
The foregoing description does not purport to be complete and is qualified in
its entirety by reference to the full text of the Non-Disclosure Agreements,
which are attached hereto as Exhibits 10.1 and 10.2 and are incorporated herein
by reference.
Item 4.01 Changes in Registrant's Certifying Accountant.
As previously disclosed, on July 16, 2021, the Company announced the
consummation of the previously announced business combination pursuant to that
certain Agreement and Plan of Merger dated March 11, 2021, by and among Empower
Ltd., Empower Merger Sub I Inc., Empower Merger Sub II, LLC, and Holley
Intermediate Holdings, Inc. ("Holley Intermediate"). For accounting purposes,
Holley Intermediate is considered the accounting acquirer in the business
combination. Grant Thornton LLP ("Grant Thornton") was the independent
registered public accounting firm for Holley Intermediate and its subsidiaries
prior to the consummation of the business combination.
In connection with the consummation of the business combination, the Company
changed its name from Empower Ltd. to Holley Inc. Marcum LLP ("Marcum") has
served as the Company's independent registered public accounting firm since its
inception in 2020.
(a) Dismissal of Independent Registered Public Accounting Firm
On August 10, 2021, the Audit Committee of the Board of Directors (the "Audit
Committee") of the Company dismissed Marcum as the Company's independent
registered public accounting firm.
Marcum's reports on the Company's consolidated financial statements as of
December 31, 2020 and for the period from August 19, 2020 (inception) through
December 31, 2020 did not contain any adverse opinion or disclaimer of opinion,
nor were they qualified or modified as to uncertainty, audit scope, or
accounting principles.
During the period from August 19, 2020 (inception) through December 31, 2020,
and the subsequent interim period through August 10, 2021, there were: (i) no
disagreements within the meaning of Item 304(a)(1)(iv) of Regulation S-K and the
related instructions between the Company and Marcum on any matters of accounting
principles or practices, financial statement disclosure, or auditing scope or
procedure which, if not resolved to Marcum's satisfaction, would have caused
Marcum's to make reference thereto in their reports; and (ii) no "reportable
events" within the meaning of Item 304(a)(1)(v) of Regulation S-K other than the
material weakness in internal controls identified by the Company's management
related to the accounting treatment for warrants issued in connection with the
Company's initial public offering and an agreement providing for the sale of
forward purchase units to certain investors in a private placement, which
resulted in the restatement of the Company's financial statements as set forth
in the Company's Annual Report on Form 10-K/A (Amendment No. 1) for the year
ended December 31, 2020, as filed with the SEC on May 19, 2021.
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The Company has requested that Marcum furnish a letter addressed to the
Securities and Exchange Commission stating whether or not it agrees with the
above statements. A copy of such letter, dated August 11, 2021, is filed as
Exhibit 16.1 to this Report.
(b) Engagement of Independent Registered Public Accounting Firm
On August 10, 2021, the Audit Committee engaged Grant Thornton LLP as the
Company's independent registered public accounting firm.
During the period from August 19, 2020 (inception) through December 31, 2020,
and the subsequent interim period through August 10, 2021, neither the Company
nor anyone on its behalf has consulted with Grant Thornton regarding: (i) the
application of accounting principles to a specific transaction, either completed
or proposed, or the type of audit opinion that might be rendered on the
Company's financial statements, and neither a written report nor oral advice was
provided to the Company that Grant Thornton concluded was an important factor
considered by the Company in reaching a decision as to any accounting, auditing,
or financial reporting issue; (ii) any matter that was the subject of a
disagreement within the meaning of Item 304(a)(1)(iv) of Regulation S-K and the
related instructions; or (iii) any reportable event within the meaning of Item
304(a)(1)(v) of Regulation S-K.
Item 9.01 Financial Statements and Exhibits
(d) Exhibits
Exhibit
No. Description
10.1 Non-Disclosure Agreement, dated as of August 10, 2021, between the
Company, Sentinel Capital Partners, L.L.C., Owen Basham and James
Coady
10.2 Non-Disclosure Agreement, dated as of August 10, 2021, between the
Company, MidOcean US Advisor, LP, Matthew Rubel and Graham Clempson
16.1 Letter from Marcum LLP addressed to the Securities and Exchange
Commission, dated as of August 11, 2021
104 Cover Page Interactive Data File (formatted as Inline XBRL).
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