Item 4.02 Non-Reliance on Previously Issued Financial Statement or Related Audit
Report or Completed Interim Review.
(a) On May 24, 2021, the Audit Committee of the Board of Directors (the "Audit
Committee") of Atlantic Avenue Acquisition Corp (the "Company"), after
consultation with management and our independent public accountants,
WithumSmith+Brown, PC, concluded that the Company's audited financial statements
as of and for the period from July 27, 2020 (inception) through December 31,
2020 and its audited balance sheet as of October 6, 2020 (collectively, the
"Non-Reliance Periods"), as reported in the Company's Annual Report on Form 10-K
filed March 25, 2021 and October 13, 2020, should no longer be relied upon
because of the errors identified therein.
On April 12, 2021, the staff (the "Staff") of the Securities and Exchange
Commission (the "SEC") issued a statement entitled "Staff Statement on
Accounting and Reporting Considerations for Warrants Issued by Special Purpose
Acquisition Companies ("SPACs")." In the statement, the Staff, among other
things, highlighted potential accounting implications of certain terms that are
common in warrants issued in connection with the initial public offerings of
special purpose acquisition companies such as the Company. In connection with
such statement, the Company revisited its accounting for its public warrants and
private placement warrants issued in connection with the Company's initial
public offering (the "Warrants"), and determined that they should be treated as
derivative liabilities pursuant to ASC 815-40 rather than as components of
equity as the Company previously treated the Warrants. The correction involves
only non-cash adjustments.
As a result, the Company today is announcing that it will restate its historical
financial results for the Non-Reliance Periods, in each case to reflect the
change in accounting treatment (the "Restatement"). Further details will be
included in the Company's Form 10-K/A, which the Company intends to file as soon
The Audit Committee and management have discussed the matters disclosed pursuant
to this Item 4.02(a) with the Company's independent accountant.
Cautionary Statements Regarding 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 Company's intent to restate certain historical
financial statements and the timing and impact of the Restatement and the filing
of the Form 10-K/A. These statements are based on current expectations on the
date of this 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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