On April 12, 2021, the Securities and Exchange Commission (the
) released a public statement (the
) informing market participants that warrants issued by special purpose acquisition companies (
) may require classification as a
liability of the entity measured at fair value, with changes in fair value each period reported in earnings.
Acquisition Corp. (the
previously classified its private placement warrants and public warrants (collectively, the
) as equity. For a full description of the Companys warrants, please refer to the Companys final prospectus filed in
connection with its initial public offering (
) on November 23, 2020 (
May 13, 2021, management of the Company and the Audit Committee of the Board of Directors of the Company determined that the Companys previous audited balance sheet related to its IPO on November 23, 2020, its unaudited financial
statements for the period August 21, 2020 (inception) through September 30, 2020 filed on Form
and its audited financial statements for the period August 21, 2020 (inception) through
December 31, 2020 filed on the Companys Annual Report on Form
) should no longer be relied upon
due to changes required for alignment with the SECs Public Statement. The SECs Public Statement discussed certain features of warrants issued in SPAC transactions that may be common across many entities. The
Public Statement indicated that when one or more of such features is included in a warrant, the warrant should be classified as a liability measured at fair value, with changes in fair value each period reported in earnings. Following
consideration of the guidance in the Public Statement, while the terms and quantum of the warrants as described in the Final Prospectus have not changed, the Company concluded the warrants do not meet the conditions to be classified in equity and
instead, the warrants meet the definition of a derivative under ASC 815, under which the Company should record the warrants as liabilities on the Companys balance sheet. The Company has discussed this approach with its independent registered
public accounting firm, Marcum LLP, and intends to file an amendment to its Annual Report on Form
for the year ended December 31, 2020 filed
with the SEC on March 31, 2021 (the
) reflecting this reclassification of the warrants. The Company worked with an independent valuation expert to finalize the valuation of
the warrants and will file the Amended
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
including further describing the restatement and its impact on previously reported amounts.
An extraordinary general meeting of the Companys shareholders is expected to be scheduled for shareholders consideration of the
Companys initial business combination with Surrozen, Inc. (the
) and the other proposals which will be described in its proxy statement/prospectus relating to the business combination to be filed with the
SEC. As noted above, the terms and quantum of the warrants and all other securities issued by the Company have not changed and the restatement is not indicative of any change in managements expectations regarding the business prospects for the
Company. The restatement is required for alignment with the SECs Public Statement and would be undertaken regardless of the completion of the business combination. For those and other reasons, the Company does not believe the restatement
should materially impact its shareholders consideration of the business combination proposal and other proposals to be considered and voted upon at the meeting.
with the Business Combination, the Company intends to file with the SEC a Registration Statement on
Form S-4 (the
), which will include the prospectus noted
above with respect to the securities of CHFW to be issued in connection with the Business Combination to Surrozen stockholders and as well as a proxy statement with respect to the shareholder meeting of CHFW to vote on the Business Combination and
related matters. CHFW will mail a definitive proxy statement/final prospectus and other relevant documents to its shareholders after the Registration Statement is declared effective by the SEC. This communication is not a substitute for the
Registration Statement, the definitive proxy statement/final prospectus or any other document that CHFW will send to its shareholders in connection with the Business Combination. The definitive proxy statement/final prospectus will contain important
information about CHFW, Surrozen and their respective business and related risks, the combined company, including pro forma financial information and the proposed Business Combination and related matters.
Investors and security
holders of CHFW are advised to read, when available, the proxy statement/prospectus in connection with CHFWs solicitation of proxies for its extraordinary general meeting of shareholders to be held to approve the Business Combination (and
related matters) because the proxy statement/prospectus will contain important information about the Business Combination and the parties to the Business Combination. Investors and security holders of Surrozen are advised to read, when available,
the proxy statement/prospectus in connection with the written consent of Surrozen stockholders.
The definitive proxy statement/final prospectus will be mailed to shareholders of CHFW as of a record date to be established for voting on the
Business Combination. Shareholders will also be able to obtain copies of the proxy statement/prospectus, without charge, once available, at the SECs website at www.sec.gov or by directing a request
to: Consonance-HFW Acquisition
Corp., 1 Palmer Square, Suite 305, Princeton, NJ.
Participants in the Solicitation
CHFW, Surrozen and their respective directors, executive officers, other members of management, and employees, under SEC rules, may be
deemed to be participants in the solicitation of proxies of CHFWs shareholders in connection with the Business Combination.
Investors and security holders may obtain more detailed information regarding the names and interests in the
Business Combination of CHFWs directors and officers in CHFWs filings with the SEC, including the Registration Statement to be filed with the SEC by CHFW, which will include the proxy statement of CHFW for the Business Combination, and
such information and names of Surrozens directors and executive officers will also be in the Registration Statement to be filed with the SEC by CHFW, which will include the proxy statement of CHFW for the Business Combination.
Forward Looking Statements
statements made herein are not historical facts but are forward-looking statements for purposes of the safe harbor provisions under The Private Securities Litigation Reform Act of 1995. Forward-looking statements generally are accompanied by words
similar 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 future events, the Business Combination
between CHFW and Surrozen, the impact of the warrant-related and restatement matters, including on the Business Combination, the estimated or anticipated future results and benefits of the combined company following the Business Combination,
including the likelihood and ability of the parties to successfully consummate the Business Combination, future opportunities for the combined company, and other statements that are not historical facts. These statements are based on the current
expectations of CHFWs 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 will differ from assumptions. Many actual events and circumstances are beyond the
control of CHFW and Surrozen. These statements are subject to a number of risks and uncertainties regarding CHFWs businesses and the Business Combination, and actual results may differ materially. These risks and uncertainties include, but are
not limited to, general economic, political and business conditions; the inability of the parties to consummate the Business Combination or the occurrence of any event, change or other circumstances that could give rise to the termination of the
Business Combination Agreement; the outcome of any legal proceedings that may be instituted against the parties following the announcement of the Business Combination; the receipt of an unsolicited offer from another party for an alternative
business transaction that could interfere with the Business Combination; the risk that the approval of the shareholders of CHFW or the stockholders of Surrozen for the potential transaction is not obtained; failure to realize the anticipated
benefits of the Business Combination, including as a result of a delay in consummating the potential transaction or difficulty in integrating the businesses of CHFW and Surrozen; the risk that the Business Combination disrupts current plans and
operations as a result of the announcement and consummation of the Business Combination; the ability of the combined company to grow and manage growth profitably and retain its key employees; the amount of redemption requests made by CHFWs
shareholders; the inability to obtain or maintain the listing of the post-acquisition companys securities on Nasdaq following the Business Combination; costs related to the Business Combination; risks related to the matters set forth in the
Staff Statement on Accounting and Reporting Considerations for Warrants Issued by Special Purpose Acquisition Companies, issued by the Division of Corporate Finance of the SEC on April 12, 2021; and those factors discussed in CHFWs annual
report on Form
for the year ended December 31, 2020, filed with the SEC on March 31, 2021 (and as shall be amended and restated on or about the date hereof), and other filings with the SEC.
There may be additional risks that CHFW presently does not know or that CHFW currently believes are immaterial that could also cause actual results to differ from those contained in the forward-looking statements. In addition, forward-looking
statements provide CHFWs expectations, plans or forecasts of future events and views as of the date of this communication. CHFW anticipates that subsequent events and developments will cause CHFWs assessments to change. However, while
CHFW may elect to update these forward-looking statements at some point in the future, CHFW specifically disclaims any obligation to do so. These forward-looking statements should not be relied upon as representing CHFWs assessments as of any
date subsequent to the date of this communication. Accordingly, undue reliance should not be placed upon the forward-looking statements.
This communication is for informational purposes only and is neither a proxy statement, nor a solicitation of a proxy, consent or
authorization with respect to any securities or in respect of the potential transaction, nor an offer to purchase, nor a solicitation of an offer to sell, subscribe for or buy any securities or the solicitation of any vote in any jurisdiction
pursuant to the Business Combination or otherwise, nor shall there be any sale, issuance or transfer or securities in any jurisdiction in contravention of applicable law. No offer of securities shall be made except by means of a prospectus meeting
the requirements of Section 10 of the Securities Act.
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
Dated: May 14, 2021
/s/ Gad Soffer
Chief Executive Officer
makes a similar move, sign up!
Other recent filings from the company include the following: