Item 4.02. Non-Reliance on Previously Issued Financial Statements or a Related
Audit Report or Completed Interim Review.
On April 12, 2021, the Acting Director of the Division of Corporation Finance
and Acting Chief Accountant of the Securities and Exchange Commission (the
"SEC") released a public statement (the "Public Statement") addressing
accounting and reporting considerations for warrants issued by special purpose
acquisition companies ("SPACs"), including, among other things, that such
warrants may require classification as a liability of the entity measured at
fair value, with changes in fair value each period reported in earnings. The
Public Statement focused on warrants that have certain settlement terms and
provisions related to certain tender offers or warrants which do not meet the
criteria to be considered indexed to an entity's own stock, which terms are
similar to those contained in the warrant agreement, dated as of August 11,
2020, between Fortress Value Acquisition Corp. II (the "Company") and
Continental Stock Transfer & Trust Company as warrant agent (the "Warrant
Agreement"). The Company previously classified its private placement warrants
and public warrants (collectively, the "Warrants") as equity. For a full
description of the Warrants, please refer to the Company's final prospectus
dated August 11, 2020 and filed with the SEC on August 13, 2020 (the "Final
Prospectus") in connection with its initial public offering ("IPO"). As a result
of the Public Statement, the Company reevaluated the accounting treatment of the
Warrants and determined that the Warrants should be reclassified as derivative
liabilities measured at fair value, with changes in fair value each period
reported in earnings. 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 adjustment and will be reflected in the Company's
statement of operations. The change in accounting for the Warrants will have no
impact on the Company's current or previously reported liquidity, cash flows or
revenues, including the Company following the proposed business combination
between the Company and Wilco Holdco, Inc. (the "Business Combination").
On April 28, 2021, after consultation with WithumSmith+Brown, PC, the Company's
independent registered public accounting firm, (the "Independent Accountants"),
management of the Company and the Audit Committee of the Board of Directors of
the Company (the "Audit Committee") determined that, in light of the Public
Statement, it is appropriate to restate the Company's previously audited
financial statements for the period from June 10, 2020 (inception) through
December 31, 2020, its quarterly unaudited financial statements for the three
months ended September 30, 2020 and for the period from June 10, 2020
(inception) through September 30, 2020 and the Company's previously audited
balance sheet related to its IPO dated August 14, 2020 (the "Affected Periods").
Such financial statements should no longer be relied upon after consideration of
the SEC's Public Statement.
Management of the Company and the Audit Committee have discussed the matters
disclosed in this Current Report on Form 8-K pursuant to this Item 4.02 with the
Independent Accountants, and intends to file an amendment to its Annual Report
on Form 10-K for the period from June 10, 2020 (inception) through December 31,
2020 filed with the SEC on March 9, 2021 ("Amended 10-K") reflecting this
reclassification of the Warrants for the Affected Periods. The Company is
working diligently with its auditors and an independent valuation expert to
finalize the valuation of the Warrants and file the Amended 10-K as soon as
practicable. The adjustments to the financial statement items for the Affected
Periods will be set forth through expanded disclosure in the financial
statements included in the Amended 10-K, including further describing the
restatement and its impact on previously reported amounts.
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Forward-Looking Statements
All statements other than statements of historical facts contained in this
Current Report on Form 8-K are forward-looking statements. Forward-looking
statements may generally be identified by the use of words such as "believe,"
"may," "will," "estimate," "continue," "anticipate," "intend," "expect,"
"should," "would," "plan," "project," "forecast," "predict," "potential,"
"seem," "seek," "future," "outlook," "target" or other similar expressions (or
the negative versions of such words or expressions) that predict or indicate
future events or trends or that are not statements of historical matters. These
forward-looking statements include, but are not limited to, statements regarding
the Company's intent to restate certain historical financial statements and the
timing and impact of any such restatement. These statements are based on various
assumptions, whether or not identified in this Current Report on Form 8-K, and
on the current expectations of Wilco's and the Company's management and are not
predictions of actual performance. These forward-looking statements are provided
for illustrative purposes only and are not intended to serve as, and must not be
relied on by any investor as, a guarantee, an assurance, a prediction or a
definitive statement of fact or probability. Actual events and circumstances are
difficult or impossible to predict and may differ from assumptions, and such
differences may be material. Many actual events and circumstances are beyond the
control of Wilco Holdco, Inc. ("Wilco") and the Company. These forward-looking
statements are subject to a number of risks and uncertainties, including
(i) changes in domestic and foreign business, market, financial, political and
legal conditions; (ii) the inability of the parties to successfully or timely
consummate the Business Combination, including the risk that (a) the approval of
the stockholders of the Company is not obtained or (b) legal or regulatory
developments (such as the SEC's recently released statement on accounting and
reporting considerations for warrants in SPACs) could cause unforeseen delays in
the timing of the Business Combination and negatively impact the trading price
of the Company's securities and the attractiveness of the Business Combination
to investors; (iii) the ability to maintain the listing of the combined
company's securities on NYSE; (iv) the inability to complete the concurrent
private equity offering in connection with the Business Combination; (v) the
risk that the proposed Business Combination disrupts current plans and
operations of the Company or Wilco as a result of the announcement and
consummation of the transaction described herein; (vi) the risk that any of the
conditions to closing are not satisfied in the anticipated manner or on the
anticipated timeline; (vii) the failure to realize the anticipated benefits of
the proposed Business Combination; (viii) risks relating to the uncertainty of
the projected financial information with respect to Wilco and costs related to
the proposed Business Combination; (ix) risks related to the rollout of Wilco's
business strategy and the timing of expected business milestones; (x) the
effects of competition on Wilco's future business and the ability of the
combined company to grow and manage growth profitably, maintain relationships
with customers and suppliers and retain its management and key employees;
(xi) risks related to political and macroeconomic uncertainty; (xii) the outcome
of any legal proceedings that may be instituted against the Company, Wilco or
any of their respective directors or officers, following the announcement of the
potential transaction; (xiii) the amount of redemption requests made by the
Company's public stockholders; (xiv) the ability of the Company or the combined
company to issue equity or equity-linked securities or obtain debt financing in
connection with the proposed Business Combination or in the future; (xv) the
impact of the
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global COVID-19 pandemic on any of the foregoing risks; and (xvi) those factors
discussed in the preliminary proxy statement (the "Proxy Statement") filed with
the SEC on March 12, 2021, the Company's Annual Report on Form 10-K for the year
ended December 31, 2020 and any Quarterly Report on Form 10-Q, in each case,
under the heading "Risk Factors," and other documents of the Company's filed, or
to be filed, with the SEC. If any of these risks materialize or our assumptions
prove incorrect, actual results could differ materially from the results implied
by these forward-looking statements. There may be additional risks that neither
the Company nor Wilco presently know or that the Company and Wilco currently
believe are immaterial that could also cause actual results to differ from those
contained in the forward-looking statements. In addition, forward-looking
statements reflect the Company's and Wilco's expectations, plans or forecasts of
future events and views as of the date of this Current Report on Form 8-K. The
Company and Wilco anticipate that subsequent events and developments will cause
the Company's and Wilco's assessments to change. However, while the Company and
Wilco may elect to update these forward-looking statements at some point in the
future, the Company and Wilco specifically disclaim any obligation to do so,
unless required by applicable law. These forward-looking statements should not
be relied upon as representing the Company's and Wilco's assessments as of any
date subsequent to the date of this press release. Accordingly, undue reliance
should not be placed upon the forward-looking statements.
Additional Information About the Proposed Business Combination and Where To Find
It
This Current Report on Form 8-K is being made in respect of the proposed
Business Combination involving the Company and Wilco. The Company filed the
Proxy Statement with the SEC on March 12, 2021 relating to the proposed Business
Combination, which will be mailed (if and when available) to its stockholders
once definitive. This Current Report on Form 8-K does not contain all the
information that should be considered concerning the proposed Business
Combination and is not intended to form the basis of any investment decision or
any other decision in respect of the proposed Business Combination. The
Company's stockholders and other interested persons are advised to read the
Proxy Statement filed with the SEC on March 12, 2021, any amendments thereto,
the definitive proxy statement and any other documents filed, in connection with
the Company's solicitation of proxies for its special meeting of stockholders to
be held to approve the proposed Business Combination and other matters, as these
materials will contain important information about the Company, Wilco and the
proposed Business Combination.
When available, the definitive proxy statement and other relevant materials for
the proposed Business Combination will be mailed to stockholders of the Company
as of the record date to be established for voting on the proposed Business
Combination. Stockholders of the Company will also be able to obtain copies of
the proxy statement and other documents filed with the SEC, without charge, once
available, at the SEC's website at www.sec.gov. In addition, the documents filed
by the Company may be obtained free of charge from the Company at
https://www.fortressvalueac2.com/sec-filings or upon written request to the
Company at 1345 Avenue of the Americas, 46th Floor, New York, New York 10105,
Attention: Investor Relations, or by calling (212) 798-6100.
Participants in Solicitation
The Company, Wilco and certain of their respective directors, executive officers
and other members of management and employees may, under SEC rules, be deemed to
be participants in the solicitations of proxies from the Company's stockholders
in connection with the proposed Business Combination.
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Information regarding the persons who may, under SEC rules, be deemed
participants in the solicitation of the Company's stockholders in connection
with the proposed Business Combination is set forth in the Proxy Statement, and
will be set forth in the definitive proxy statement when it becomes available.
You can find more information about the Company's directors and executive
officers in the Company's final prospectus dated August 11, 2020 and filed with
the SEC on August 13, 2020. Additional information regarding the participants in
the proxy solicitation and a description of their direct and indirect interests,
by security holdings or otherwise, are included in the Proxy Statement and will
be included in the definitive proxy statement when it becomes available.
Stockholders, potential investors and other interested persons should read the
proxy statement carefully when it becomes available before making any voting or
investment decisions. When available, these documents can be obtained free of
charge from the sources indicated above.
This Current Report does not constitute a solicitation of a proxy, an offer to
purchase or a solicitation of an offer to sell any securities.
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