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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On April 12, 2021, the Staff of the Securities and Exchange Commission (the
SEC) issued a public statement (the Staff Statement) that highlighted the complex nature of warrants issued in connection with the formation and initial public offering of a special purpose acquisition company
(SPAC) and the potential related accounting and reporting considerations. The Staff Statement informed market participants that warrants issued by SPACs may require classification as a liability of the entity measured at fair value,
rather than equity.
Based on the Staff Statement, Hims & Hers Health, Inc. (the Company)
re-evaluated the accounting treatment of the public warrants and private placement warrants (collectively, the Warrants) issued in connection with the initial public offering of Oaktree Acquisition
Corp. (OAC), a SPAC, and recorded in the Companys consolidated financial statements. The Company concluded that the Warrants did not meet the conditions to be classified within equity under the Staff Statement and should have been
presented as a liability and marked to fair value each reporting period. Company management conducted this re-evaluation in consultation with WithumSmith+Brown, PC, the independent registered public accounting
firm of OAC during the Non-Reliance Periods (as defined below), as well as an independent valuation expert and the Companys current independent registered public accounting firm, KPMG LLP.
The historical financial statements of Hims, Inc. are not affected by the Staff Statement. As previously announced, Hims, Inc. and OAC completed their merger
on January 20, 2021. Immediately following the merger, OAC changed its name to Hims & Hers Health, Inc. Consistent with industry practice among SPACs, OAC had been accounting for the Warrants within equity, and recorded the Warrants as
equity classified in its pre-merger, historical consolidated financial statements. Because the merger was consummated on January 20, 2021, the Form 10-Q for the
quarter in which the transaction closed has not yet been filed. However, consistent with the Staff Statement, the Company intends to restate the historical financial statements of OAC such that the Warrants are accounted for as liabilities and marked-to-market each applicable reporting period.
On May 3, 2021, the
Companys board of directors, after considering the recommendations of management and the audit committee (the Audit Committee) of the Companys board of directors, determined that in light of the Staff Statement it was
appropriate for the Company to restate the following financial statements previously filed with the SEC: (i) its audited financial statements as of December 31, 2020 and 2019, for the year ended December 31, 2020 and for the period
from April 9, 2019 (inception) through December 31, 2019 included in the Companys Annual Report on Form 10-K for the year ended December 31, 2020, and (ii) the condensed
consolidated unaudited financial statements included in the Companys Quarterly Reports on Form 10-Q for (a) the three months ended March 31, 2020, (b) the three and six months ended
June 30, 2020, and (c) the three and nine months ended September 30, 2020, the three months ended September 30, 2019 and the period from April 9, 2019 (inception) through September 30, 2019 (collectively, the Non-Reliance Periods). Accordingly, the financial statements referred to in the preceding sentence should not be relied upon. Similarly, the related press releases, the Report of the Independent
Registered Public Accounting Firm on the financial statements as of December 31, 2020 and 2019, for the year ended December 31, 2020 and the period from April 9, 2019 (inception) through December 31, 2019 and the stockholder
communications describing the relevant portions of the Companys financial statements for the Non-Reliance Periods should no longer be relied upon.
The Company is working diligently with its auditors and an independent valuation expert to finalize the valuation of the Warrants, and file an amendment to
its Annual Report on Form 10-K for the year ended December 31, 2020 (the Form 10-K/A) reflecting the reclassification of the Warrants for the Non-Reliance Periods as soon as practicable. The adjustments to the financial statement items for the Non-Reliance Periods will be set forth through disclosures in the
financial statements included in the Form 10-K/A. In light of the restatement, the Company is reassessing the effectiveness of its disclosure controls and procedures and internal controls over financial
reporting as of December 31, 2020. The Companys management, board of directors and Audit Committee have discussed the matters disclosed in this Item 4.02(a) with WithumSmith+Brown, PC, the independent registered public accounting firm of
OAC during the Non-Reliance Period, and the Companys current independent registered public accounting firm, KPMG LLP.