Item 4.02. Non-Reliance on Previously Issued Financial Statements or a Related
Audit Report or Completed Interim Review.
In light of recent guidance provided by the U.S. Securities and Exchange
Commission (the "SEC") to accounting and audit practitioners regarding the
accounting for certain complex financial instruments, the management of 890 5th
Avenue Partners, Inc. (the "Company") has re-evaluated the Company's application
of ASC 480-10-S99-3A to its accounting classification of the redeemable shares
of Class A common stock, par value $0.0001 per share (the "Public Shares"),
issued as part of the units sold in the Company's initial public offering (the
"IPO") on January 14, 2021. Pursuant to such re-evaluation, the Company's
management has determined that all Public Shares subject to redemption include
certain provisions that require classification of the Public Shares as temporary
equity. The Company had previously classified a portion of its Class A common
stock in permanent equity, or total stockholders' equity. Although the Company
did not specify a maximum redemption threshold, its charter currently provides
that, the Company will not redeem its Public Shares in an amount that would
cause its net tangible assets to be less than $5,000,001. Previously the Company
did not consider redeemable stock classified as temporary equity as part of net
tangible assets. The Company revised its interpretation to include temporary
equity in net tangible assets. As such the Company determined it should evaluate
prior revisions to its previously issued financial statements in light of
guidance from the SEC that restatement of such previously issued financial
statements may be appropriate.
Therefore, on November 15, 2021, the Company's management and the audit
committee of the Company's board of directors (the "Audit Committee"), after
consultation with Marcum LLP ("Marcum"), the Company's independent registered
public accounting firm, concluded that the Company's previously issued (i)
balance sheet as of the closing of the IPO on January 14, 2021, included in the
Company's Current Report on Form 8-K filed with the SEC on January 21, 2021,
(ii) 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 7, 2021, (iii) 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 16, 2021 (collectively, the
"Affected Periods"), should be restated and should no longer be relied upon. As
such, the Company has restated its financial statements for the Affected Periods
in the Company's Quarterly Report on Form 10-Q for the quarterly period ended
September 30, 2021, filed with the SEC today, November 15, 2021 (the "Q3 Form
10-Q"), as described therein.
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 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 is described in more detail in the Q3 Form 10-Q.
The Company's management and the Audit Committee have discussed with Marcum the
matters disclosed in this Current Report on Form 8-K pursuant to this Item 4.02.
Forward-Looking Statements
This Current Report on Form 8-K includes "forward-looking statements" within the
meaning of the safe harbor provisions of the United States 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 impact of the Company's restatement of certain
historical financial statements, the Company's cash position and cash held in
the Trust Account and any proposed remediation measures with respect to
identified material weaknesses. These statements are based on current
expectations on the date of this Current Report on 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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