Item 4.02 Non-Reliance on Previously Issued Financial Statement and Related
Audit Report.
In light of recent comment letters issued by the U.S. Securities and Exchange
Commission (the "SEC"), the management of EJF Acquisition Corp., a Cayman
Islands exempted company (the "Company"), has re-evaluated the Company's
application of ASC 480-10-S99-3A to its accounting classification of its
redeemable Class A Ordinary Shares, 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 March 1, 2021. Historically, a portion of the Public
Shares was classified as permanent equity to maintain net tangible assets
greater than $5,000,000 on the basis that the Company will consummate its
initial business combination only if the Company has net tangible assets of at
least $5,000,001. Pursuant to such re-evaluation, the Company's management has
determined that the Public Shares include certain provisions that require
classification of the Public Shares as temporary equity regardless of the
minimum net tangible assets required to complete the Company's initial business
combination.
Therefore, on November 12, 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) audited balance sheet as of March 1, 2021, as previously restated in the
Company's Quarterly Report on Form 10-Q for the quarterly period ended March 31,
2021, filed with the SEC on May 18, 2021 (the "Q1 Form 10-Q"), (ii) unaudited
interim financial statements included in the Q1 Form 10-Q and (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 to
report all Public Shares as temporary equity 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 on November 18,
2021 (the "Q3 Form 10-Q"), as described therein. Management discussed this
evaluation and conclusion with Marcum.
The Company does not expect any of the above changes will have any impact on its
cash position or 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.
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 materially.
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.
--------------------------------------------------------------------------------
© Edgar Online, source Glimpses