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 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, which terms are similar to those contained in the warrant
agreement, dated as of July 30, 2020, between NewHold Investment Corp. (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 the warrants (the
"Public Warrants") that were included in the units issued by the Company in its
initial public offering and the related over-allotment option (the "IPO") and
(ii) the warrants (together with the Public Warrants, the "Warrants") that were
issued to the Company's sponsor and certain other investors in a private
placement that closed concurrently with the closing of the IPO and the related
exercise of the over-allotment option, and determined to classify the Warrants
as derivative liabilities measured at fair value, with changes in fair value
each period reported in earnings. The Company had previously recorded such
warrants as equity. 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 11, 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 and the valuation report it received from an outside
consulting firm regarding the Warrants, (i) certain items on the Company's
previously issued audited balance sheet dated as of August 4, 2020 and its pro
forma balance sheet as of August 4, 2020, which were related to its IPO, (ii)
the Company's financial statements as of an for the period ended September 30,
2020 and (ii) the Company's previously issued audited financial statements as of
and for the period ended December 31, 2020 (the "Relevant Periods") included in
the Company's Annual Report on Form 10-K for the year ended December 31, 2020
(the "Annual Report") should no longer be relied upon and that it is appropriate
to restate the Annual Report. The Company will file an amendment to the Annual
Report, which will include the restated audited financial statements as of and
for the period ended December 31, 2020. The financial statements for all other
Relevant Periods will be superseded by the amended financial statements.
Going forward, unless we amend the terms of the Warrant Agreement, we expect to
continue to classify the Warrants as liabilities, which would require us to
incur the cost of measuring the fair value of the Warrants, 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.
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