Item 4.02 Non-Reliance on Previously Issued Financial Statements or a Related
Audit Report or Completed Interim Review.
On December 22, 2021, the management of Executive Network Partnering Corporation
(the "Company") and the audit committee of the Company's board of directors (the
"Audit Committee") concluded that due to a reclassification of the Company's
temporary and permanent equity, the Company's previously issued (i) audited
balance sheet as of September 18, 2020, (ii) audited financial statements as of
December 31, 2020 and for the period from June 22, 2020 (Inception) through
December 31, 2020 included in Amendment No. 1 to the Company's Annual Report on
Form 10-K/A, as filed with the Securities and Exchange Commission (the "SEC") on
June 1, 2021 (the "2020 Form 10-K/A No. 1"), (iii) 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 June 1, 2021, (iv)
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 13, 2021 and (v) 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 no longer be relied upon. Since the Company's
initial public offering ("IPO"), the Company has considered the Class A common
stock subject to possible redemption to be equal to the redemption value of
$10.00 per share of Class A common stock while also taking into consideration a
redemption cannot result in net tangible assets being less than $5,000,001.
Previously, the Company did not consider redeemable stock classified as
temporary equity as part of net tangible assets. Upon further analysis,
management has determined that the Class A common stock issued during the IPO
can be redeemed or become redeemable subject to the occurrence of future events
considered outside the Company's control. Therefore, management concluded that
the redemption value should include all Class A common stock subject to possible
redemption, resulting in the Class A common stock subject to possible redemption
being equal to their redemption value.
As such, the Company plans to restate its financial statements for the Affected
Periods in the Company's Quarterly Report on Form 10-Q/A for the quarterly
period ended September 30, 2021 to be filed with the SEC (the "Q3
Form 10-Q/A"), and in an amendment to the 2020 Form 10-K/A No. 1 to be filed
with the SEC (the "2020 Form 10-K/A No. 2").
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 2020 Form 10-K/A
No. 2 and 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 and the Audit Committee 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.
Cautionary Statements Regarding Forward-Looking Statements
This Current Report on Form 8-K includes "forward-looking statements" within the
meaning of the safe harbor provisions of the U.S. Private Securities Litigation
Reform Act of 1995. 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 Company's cash position and cash held in its Trust
Account. These statements are based on current expectations on the date of
this Form 8-K and involve a number of risks and uncertainties that may cause
actual results to differ significantly. 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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