Item 8.01. Other Events.



Monthly Sponsor Contributions

On September 16, 2022, Atlantic Avenue Acquisition Corp (the "Company") issued a press release announcing that the Company and Atlantic Avenue Partners LLC (the "Sponsor") have agreed that, if the extension proposals to amend (i) the Company's Amended and Restated Certificate of Incorporation to allow the Company, without another stockholder vote, to elect to extend the date by which the Company must consummate a business combination (the "Extension") from October 6, 2022 (the date that is 24 months from the closing date of the Company's initial public offering of units (the "IPO")), on a monthly basis for up to six times to April 6, 2023 (the date that is 30 months from the closing date of the IPO), and (ii) the Company's Investment Management Trust Agreement, dated October 1, 2020, by and between the Company and Continental Stock Transfer & Trust Company (the "Trustee"), to allow the Company, without another stockholder vote, to elect to extend the date on which the Trustee must liquidate the trust account established by the Company in connection with its IPO if the Company has not completed its initial business combination, on a monthly basis for up to six times from October 6, 2022 (the date that is 24 months from the closing date of the IPO) to April 6, 2023 (the date that is 30 months from the closing date of the IPO), are both approved, the Sponsor will deposit (or cause to be deposited) into the trust account, for each one-month extension, the lesser of: (x) $150,000 or (y) $0.05 per share multiplied by the number of public shares that are not redeemed in connection with the upcoming special meeting on September 29, 2022 (each, a "Monthly Contribution").

Each Monthly Contribution will be deposited in the trust account no later than one business day prior to the beginning of the applicable extension period. The Monthly Contribution(s) will bear no interest and will be repayable by the Company to the Sponsor (or its designee(s)) upon consummation of an initial business combination. The loans will be forgiven if the Company is unable to consummate an initial business combination, except to the extent of any funds held outside of the trust account. In the event the extension is approved by Stockholders and the Sponsor elects to not fund a Monthly Contribution, which it may do in its sole discretion, the Company will dissolve and liquidate in accordance with its charter.

A copy of the press release is attached as Exhibit 99.1 to this Current Report on Form 8-K.

Risk Factor

A new 1% U.S. federal excise tax could be imposed on us in connection with future redemptions by us of our shares.

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On August 16, 2022, the Inflation Reduction Act of 2022 (the "IR Act") was signed into federal law. The IR Act provides for, among other things, a new U.S. federal 1% excise tax on certain repurchases (including redemptions) of stock by publicly traded domestic corporations and certain domestic subsidiaries of publicly traded foreign corporations. The excise tax is imposed on the repurchasing corporation itself, not its stockholders from which shares are repurchased. The amount of the excise tax is generally 1% of the fair market value of the shares repurchased at the time of the repurchase. However, for purposes of calculating the excise tax, repurchasing corporations are permitted to net the fair market value of certain new stock issuances against the fair market value of stock repurchases during the same taxable year. In addition, certain exceptions apply to the excise tax. The U.S. Department of the Treasury has been given authority to provide regulations and other guidance to carry out and prevent the abuse or avoidance of the excise tax. The IR Act applies only to repurchases that occur after December 31, 2022. It is unclear at this time how and to what extent it will apply to SPAC redemptions and liquidations.

However, any redemption that occurs in connection with the Extension would occur before December 31, 2022, and therefore we would not be subject to the excise tax as a result of any redemptions in connection with the Extension.

Forward-Looking Statements

This communication includes "forward-looking statements" within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. The Company's actual results may differ from its expectations, estimates and projections and consequently, you should not rely on these forward-looking statements as predictions of future events. Words such as "expect," "estimate," "project," "budget," "forecast," "anticipate," "intend," "plan," "may," "will," "could," "should," "believes," "predicts," "potential," "continue," and similar expressions (or the negative versions of such words or expressions) are intended to identify such forward-looking statements. These forward-looking statements include, without limitation, the Sponsor's commitment to funding the Monthly Contributions. These forward-looking statements involve significant risks and uncertainties that could cause the actual results to differ materially from the expected results. Most of these factors are outside the Company's control and are difficult to predict. The Company cautions investors not to place undue reliance upon any forward-looking statements, which speak only as of the date made. The Company does not undertake or accept any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements to reflect any change in its expectations or any change in events, conditions or circumstances on which any such statement is based.

Item 9.01. Financial Statements and Exhibits.





(d) Exhibits.

Exhibit
Number     Description
  99.1     Press Release issued September 16, 2022.
104        Cover Page Interactive Data File (formatted as Inline XBRL and contained
           in Exhibit 101)

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