Item 4.02 Non-Reliance on Previously Issued Financial Statement or Related Audit
Report or Completed Interim Review.
(a) On December 23, 2021, the management of Atlantic Avenue Acquisition Corp
(the "Company"), and the audit committee of the Company's board of directors
(the "Audit Committee"), after discussions with WithumSmith+Brown, PC
("Withum"), the Company's independent registered public accounting firm,
concluded that the Company's previously issued (i) audited balance sheet as of
October 6, 2020 included in the Company's Current Report on Form 8-K filed with
the Securities and Exchange Commission ("SEC") on October 13, 2020 (the "Post
IPO Balance Sheet"), (ii) audited financial statements as of and for the period
from July 27, 2020 (inception) through December 31, 2020 included in Amendment
No. 1 to the Company's Annual Report on Form 10-K filed with the SEC June 15,
2021 ("Amendment No. 1 to Form 10-K"), (iii) unaudited interim financial
statements as of and for the three months ended March 31, 2021 included in the
Company's Quarterly Report on Form 10-Q filed with the SEC on June 28, 2021,
(iv) unaudited interim financial statements as of and for the three and six
months ended June 30, 2021 included in the Company's Quarterly Report on Form
10-Q filed with the SEC on August 11, 2021 and (v) unaudited interim financial
statements as of and for the three and nine months ended September 30, 2021
included in the Company's Quarterly Report on Form 10-Q filed with the SEC on
November 12, 2021 (collectively, the "Affected Periods"), in each case, should
no longer be relied upon due to a reclassification of the Company's temporary
and permanent equity and resulting restatement of the initial carrying value of
the Company's Class A common stock subject to possible redemption (and related
changes). The reclassification has resulted from a determination by the
Company's management that the Class A common stock issued in connection with its
initial public offering ("Initial Public Offering") can be redeemed or become
redeemable subject to the occurrence of future events considered to be outside
of the Company's control. Therefore, the Class A common stock subject to
possible redemption should be valued at $10.00 per share and should not take
into account the fact that a redemption of Class A ordinary shares cannot result
in net tangible assets being less than $5,000,001.
As such, the Company will restate its financial statements for the Affected
Periods (i) for the Post IPO Balance Sheet and the audited financial statements
included in Amendment No. 1 to Form 10-K in an amendment No. 2 to Form 10-K/A
("Amendment No. 2 to Form 10-K/A") and (ii) for the unaudited interim financial
statements for the periods ended March 31, 2021, June 30, 2021 and September 30,
2021 in an Amendment No. 1 to the Company's Quarterly Report on Form 10-Q for
the quarterly period ended September 30, 2021 to be filed with the Securities
and Exchange Commission ("Amendment No. 1 to Q3 Form 10-Q"). 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 Initial
Public Offering.
The Company's management has concluded that in light of the misclassification
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 will be described in more detail in Amendment No. 2 to
Form 10-K/A and Amendment No. 1 to Q3 Form 10-Q to be filed with the SEC.
The Audit Committee and management have discussed the matters disclosed pursuant
to this Item 4.02(a) with Withum, 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 Amendment No. 2 to Form 10-K/A and Amendment No. 1 to Q3 Form 10-Q. 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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