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Item 4.02(a).
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Non-Reliance on Previously Issued Financial Statements or a Related Audit Report or Completed Interim Review.
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The terms “the Company,” “we,” “our” and similar or derivative terms in this Current Report on Form 8-K refer to HumanCo Acquisition Corp. and its consolidated subsidiaries, except where the context otherwise
requires.
Restatement of Previously Issued Consolidated Financial Statements.
In light of the SEC Statement, we undertook a process to re-evaluate the equity classification of (i) the outstanding warrants issued in connection with our initial public offering on December 9, 2020, including the
8,075,000 private placement warrants issued to HumanCo Acquisition Holdings, LLC (our sponsor), the 14,375,000 warrants issued as part of the units sold in our initial public offering, and the 1,250,000 warrants issued as part of the units sold to
CAVU Venture Partners III, LP each with an exercise price of $11.50 (the “Warrants”), in accordance with Accounting Standards Codification (“ASC”) 815-40, Derivatives and Hedging: Contracts in an Entities Own Equity. ASC 815-40 states entities must
consider whether to classify contracts that may be settled in its own stock, such as warrants, as equity of the entity or as an asset or liability. Management and the Audit Committee determined that the Warrants should have been classified as a
liability. Based on Accounting Standards Codification 815-40, Contracts in Entity’s Own Equity, warrant instruments that do not meet the criteria to be considered indexed to an entity’s own stock shall be initially classified as derivative
liabilities at their estimated fair values, regardless of the likelihood that such instruments will ever be settled in cash. In periods subsequent to issuance, changes in the estimated fair value of the derivative instruments should be reported in
the statement of operations.
As a result, the Company, together with its advisors, undertook a process to value the liability of its Warrants. Based on this valuation, Company management, together with the Audit Committee, determined, on May 28,
2021, that the Company’s financial statements and other financial data as of December 31, 2020 and for the period from October 5, 2020 (date of inception) through December 31, 2020 included in the Company’s Annual Report on Form 10-K for the year
ended December 31, 2020 contained an error that was quantitatively material and, as a result, should no longer be relied upon.
As a result, investors and other persons should not rely upon the Company’s previously released financial statements. Similarly, the Report of Independent Registered Public Accounting Firm on the financial statements
as of December 31, 2020 and for the period from October 5, 2020 (date of inception) through December 31, 2020, and any communications describing relevant portions of our financial statements for the periods that need to be restated should no longer
be relied upon. The Company will file a revised Annual Report on Form 10-K/A that includes restated financial statements and that corrects the errors and provides additional explanation of the changes.
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 Audit Committee and management have discussed the matters disclosed in this Item 4.02(a) with the Company’s independent registered public accounting firm.
