UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q/A

(Amendment No. 1)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal quarter ended September 30, 2021

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 001-39951

Atlantic Avenue Acquisition Corp

(Exact Name of Registrant as Specified in Its Charter)

Delaware		85-2200249
(State or Other Jurisdiction of Incorporation or Organization)		(I.R.S. Employer Identification No.)

2200 Atlantic Street Stamford, Connecticut		06902
(Address of Principal Executive Offices)		(Zip Code)

Registrant’s telephone number, including area code: (203) 989-9709

N/A

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class	Trading Symbol(s)	Name of Each Exchange on Which Registered
Units, each consisting of one share of Class A common stock and one-half of one redeemable warrant	ASAQ.U	New York Stock Exchange
Class A common stock, par value $0.0001 per share	ASAQ	New York Stock Exchange
Redeemable warrants, each whole warrant exercisable	ASAQ WS	New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer ☐		Accelerated Filer ☐
Non-accelerated Filer ☒		Smaller Reporting Company ☒
		Emerging Growth Company ☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☒ No ☐

As of March 11, 2022, 25,000,000 shares of Class A common stock, par value $0.0001 per share, and 6,250,000 shares of Class B common stock, par value $0.0001 per share, were issued and outstanding, respectively.

EXPLANATORY NOTE

Atlantic Avenue Acquisition Corp (the “Company,” “we,” “our” or “us”) is filing this Amendment No. 1 to the Quarterly Report on Form 10-Q/A (the “Amendment”) to amend its Quarterly Report on Form 10-Q for the quarter ended September 30, 2021, as originally filed with the U.S. Securities and Exchange Commission (the “SEC”) on November 12, 2021 (the “Original Report”), to restate the financial statements as of and for the period ended September 30, 2021 included in the Original Report.

The Company has re-evaluated its application of ASC 480-10-S99-3A to its accounting classification of the redeemable 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 October 6, 2020. Historically, a portion of the Public Shares was classified as permanent equity to maintain stockholders’ equity greater than $5 million on the basis 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, as described in the Company’s amended and restated certificate of incorporation (the “Charter”). Previously, the Company did not consider redeemable stock classified as temporary equity as part of net tangible assets. Effective with these financial statements, the Company revised this interpretation to include temporary equity in net tangible assets. Pursuant to such re-evaluation, the Company’s management has determined that the Public Shares include certain provisions that require classification of all of the Public Shares as temporary equity. In addition, in connection with the change in presentation for the Public Shares, the Company determined it should restate its earnings per share calculation to allocate income and losses shared pro rata among all shares of common stock. This presentation contemplates a business combination as the most likely outcome, in which case, all shares of common stock participate pro rata in the income and losses of the Company.

Therefore, on December 23, 2021, the Company’s management and the audit committee of the Company’s board of directors (the “Audit Committee”), after discussions with WithumSmith+Brown, PC, 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 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 on 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. As such, the Company is restating the unaudited interim financial statements for the periods ended March 31, 2021, June 30, 2021 and September 30, 2021 (collectively, the “2021 Affected Periods”) in this Quarterly Report on Form 10-Q/A.

None of the above changes impacted the Company’s cash position and cash held in the trust account established in connection with the IPO.

The financial information that has been previously filed or otherwise reported for the 2021 Affected Periods is superseded by the information in this Form 10-Q/A, and the financial statements and related financial information contained in the Original Report should no longer be relied upon.

In connection with the restatement, management has re-evaluated the effectiveness of the Company’s disclosure controls and procedures and internal control over financial reporting as of September 30, 2021. The Company’s management has concluded that, in light of the errors 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 as of September 30, 2021. Management plans to enhance the system of evaluating and implementing the accounting standards that apply to the Company’s financial statements, including enhanced analyses by its personnel and increased communication among its personnel and third-party professionals with whom it consults regarding the application of complex financial instruments. For a discussion of management’s consideration of its disclosure controls and procedures, internal controls over financial reporting, and the material weaknesses identified, see Part I, Item 4, “Controls and Procedures” of this Form 10-Q/A.

ATLANTIC AVENUE ACQUISITION CORP

Quarterly Report on Form 10-Q

TABLE OF CONTENTS

PART I. FINANCIAL INFORMATION		Page

Item 1.	Condensed Financial Statements	2
	Condensed Balance Sheets as of September 30, 2021 (Unaudited) and December 31, 2020	2
	Condensed Statement of Operations for the Three Months and Nine Months Ended September 30, 2021 and for the period from July 27, 2020 (Inception) through September 30, 2020 (Unaudited)	3
	Condensed Statement of Changes in Stockholders’ Equity (Deficit) for the Period from December 31, 2020 through September 30, 2021 and for the Period from July 27, 2020 (Inception) through September 30, 2020 (Unaudited)	4
	Condensed Statement of Cash Flows for the Nine Months Ended September 30, 2021 and for the period from July 27, 2020 (Inception) through September 30, 2020 (Unaudited)	5
	Notes to Unaudited Condensed Financial Statements	6

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	23

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	26

Item 4.	Controls and Procedures	26

PART II. OTHER INFORMATION

Item 1.	Legal Proceedings	27

Item 1A.	Risk Factors	27

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	27

Item 3.	Defaults Upon Senior Securities	27

Item 4.	Mine Safety Disclosures	27

Item 5.	Other Information	27

Item 6.	Exhibits	27

SIGNATURES		28

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PART I – FINANCIAL INFORMATION

ITEM 1.

CONDENSED FINANCIAL STATEMENTS

ATLANTIC AVENUE ACQUISITION CORP

CONDENSED BALANCE SHEETS

	September 30, 2021			December 31, 2020
	(unaudited)
Assets
Cash	$	1,161,975		$	1,527,662
Prepaid expense		126,000			246,814
Total current assets		1,287,975			1,774,476
Investments held in Trust Account		250,015,752			250,004,549
Total assets	$	251,303,727		$	251,779,025

Liabilities, Redeemable Common Stocks and stockholders’ deficit
Current liabilities:
Accounts payable and accrued expenses	$	280,745		$	176,057
Total current liabilities		280,745			176,057
Warrant liabilities		12,997,100			21,370,200
Deferred legal fees		1,293,547			640,067
Total liabilities		14,571,392			22,186,324

Commitments and contingencies
Class A Common stock subject to possible redemption, $0.0001 par value; 25,000,000 at redemption value of $10.00 per share at September 30, 2021 and December 31, 2020		250,000,000			250,000,000

Stockholders’ deficit:
Preferred stock, $0.0001 par value; 1,000,000 shares authorized; none issued or outstanding		—			—
Class A common stock, $0.0001 par value; 300,000,000 shares authorized; no non-redeemable shares issued or outstanding		—			—
Class B common stock, $0.0001 par value; 30,000,000 shares authorized; 6,250,000 shares issued and outstanding at September 30, 2021 and December 31, 2020		625			625
Additional paid-in capital		—			—
Accumulated deficit		(13,268,290	)		(20,407,924	)
Total stockholders’ deficit		(13,267,665	)		(20,407,299	)
Total liabilities, redeemable common stocks, and stockholders’ deficit	$	251,303,727		$	251,779,025

The accompanying notes are an integral part of these condensed financial statements.

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ATLANTIC AVENUE ACQUISITION CORP

UNAUDITED CONDENSED STATEMENT OF OPERATIONS

	For the Three Months Ended September 30, 2021			For the Nine Months Ended September 30, 2021			For the Period from July 27, 2020 (Inception) through September 30, 2020
Operating expenses
Formation and operating costs	$	842,543		$	1,244,789		$	7,826
Loss from operations		(842,543	)		(1,244,789	)		(7,826	)

Other income
Interest earned on investments held in trust		3,776			11,203			—
Interest earned on working capital account		52			120			5
Unrealized gain on change in fair value of warrants		4,146,100			8,373,100			—
Total other income		4,149,928			8,384,423			5

Net income (loss)	$	3,307,385		$	7,139,634		$	(7,821	)

Basic and diluted weighted average shares outstanding, Class A common stock		25,000,000			25,000,000			—
Basic and diluted net income per share, Class A common stock	$	0.11		$	0.23		$	—

Basic and diluted weighted average shares outstanding, Class B common stock		6,250,000			6,250,000			6,250,000
Basic and diluted net income per share, Class B common stock	$	0.11		$	0.23		$	(0.00	)

The accompanying notes are an integral part of these unaudited condensed financial statements.

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ATLANTIC AVENUE ACQUISITION CORP

UNAUDITED CONDENSED STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIT)

FOR THE PERIOD FROM DECEMBER 31, 2020 THROUGH SEPTEMBER 30, 2021

	Class B Common Stock				Additional Paid-in		Accumulated			Stockholders’
	Shares		Amount		Capital		deficit			Deficit

Balance as of December 31, 2020		6,250,000	$	625	$	—	$	(20,407,924	)	$	(20,407,299	)
Net income		—		—		—		6,870,247			6,870,247
Balance as of March 31, 2021 (unaudited) (restated)		6,250,000	$	625	$	—	$	(13,537,677	)	$	(13,537,052	)
Net loss		—		—		—		(3,037,998	)		(3,037,998	)
Balance as of June 30, 2021 (unaudited) (restated)		6,250,000	$	625	$	—	$	(16,575,675	)	$	(16,575,050	)
Net income		—		—		—		3,307,385			3,307,385
Balance as of September 30, 2021 (unaudited)		6,250,000	$	625	$	—	$	(13,268,290	)	$	(13,267,665	)

FOR THE PERIOD FROM JULY 27, 2020 (INCEPTION) THROUGH SEPTEMBER 30, 2020

	Class B Common Stock				Additional Paid-in		Accumulated			Stockholders’
	Shares		Amount		Capital		Deficit			Equity

Balance as of July 27, 2020		—	$	—	$	—	$	—		$	—
Class B common stock issued to Sponsor and ASA Co-Investment LLC		7,187,500		719		24,281		—			25,000
Net loss		—		—		—		(7,821	)		(7,821	)
Balance as of September 30, 2020		7,187,500	$	719	$	24,281	$	(7,821	)	$	17,179

The accompanying notes are an integral part of these unaudited condensed financial statements.

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ATLANTIC AVENUE ACQUISITION CORP

UNAUDITED CONDENSED STATEMENT OF CASH FLOWS

	For the nine months ended September 30, 2021			For the Period from July 27, 2020 (Inception) through September 30, 2020

Cash flows from operating activities:
Net income (loss)	$	7,139,634		$	(7,821	)
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Formation and operating costs included in accrued offering costs and expenses		—			6,076
Interest earned on investments held in Trust Account		(11,203	)		—
Unrealized gain on change in fair value of warrants		(8,373,100	)		—
Changes in operating assets and current liabilities:
Prepaid expense		120,814			—
Accounts payable and accrued expenses		104,688			—
Deferred legal fees		653,480			—
Net cash used in operating activities		(365,687	)		(1,745	)

Cash flows from financing activities:
Proceeds from issuance of founder shares		—			25,000
Proceeds from pre-payment of private placement		—			300,000
Proceeds from issuance of promissory note to related party		—			183,143
Payments of offering costs		—			(96,392	)
Net cash provided by financing activities		—			411,751


Net change in cash		(365,687	)		410,006
Cash, beginning of the period		1,527,662			—
Cash, end of the period	$	1,161,975		$	410,006

Supplemental disclosure of cash flow information:
Deferred offering costs included in deferred legal fees	$	—		$	570,478

The accompanying notes are an integral part of these unaudited condensed financial statements.

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ATLANTIC AVENUE ACQUISITION CORP

NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS

NOTE 1 — ORGANIZATION AND BUSINESS OPERATIONS

Organization and General

Atlantic Avenue Acquisition Corp (formerly known as “Atlantic Street Acquisition Corp”) (the “Company”) was incorporated in Delaware on July 27, 2020. The Company is a blank check company and was formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses that the Company had not yet identified (the “Business Combination”). Although the Company is not limited to a particular industry or geographic region for consummating a Business Combination, the Company intends to capitalize on the ability of its management team to identify, acquire and operate a business that may provide opportunities for attractive risk-adjusted returns.

The Company is an emerging growth company and, as such, the Company is subject to all of the risks associated with emerging growth companies.

As of September 30, 2021, the Company had not commenced any operations. All activity for the period from July 27, 2020 (inception) through September 30, 2021, relates to the Company’s formation and initial public offering (“Public Offering” or “IPO”), and, since the completion of the Public Offering, searching for a target to consummate a Business Combination. The Company will not generate any operating revenues until after the completion of a Business Combination, at the earliest. The Company will generate non-operating income in the form of interest income from the proceeds derived from the Public Offering and placed in the Trust Account (defined below).

Public Offering

On October 6, 2020, the Company consummated the Public Offering of 25,000,000 units (the “Units” and, with respect to the shares of Class A common stock included in the Units sold, the “Public Shares”), at $10.00 per Unit, generating gross proceeds of $250,000,000, which is described in Note 4.

Simultaneously with the closing of the Public Offering on October 6, 2020, the Company consummated the sale of an aggregate of 7,000,000 private warrants (the “Private Placement Warrants”) to Atlantic Avenue Partners LLC (the “Sponsor”), ASA Co-Investment LLC (“ASA Co-Investment”) and the Company’s independent directors, generating gross proceeds to the Company of $7,000,000, which is described in Note 5.

The Company complies with the requirements of the ASC 340-10-S99-1 and SEC Staff Accounting Bulletin (“SAB”) Topic 5A - “Expenses of Offering”. Offering costs consist principally of professional and registration fees incurred through the balance sheet date that are related to the IPO. The Company allocates the offering costs between common stock and public warrants using relative fair value method, the offering costs allocated to the public warrants will be expensed immediately and offering costs associated with equity components will be charged to stockholders’ equity. Accordingly, as of September 30, 2021, the Company incurred offering costs in the aggregate of $5,886,260 of which $5,591,035 have been charged to stockholders’ equity and $295,225 was allocated to the public warrants and was expensed immediately.

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Initial Business Combination

The Company’s management has broad discretion with respect to the specific application of the net proceeds of its Public Offering and Private Placement Warrants, although substantially all of the net proceeds are intended to be applied generally toward consummating a Business Combination. Because the Company’s securities are listed on the New York Stock Exchange (the “NYSE”), the Company’s initial Business Combination must be with one or more operating businesses or assets with a fair market value equal to at least 80% of the assets held in the Trust Account (net of amounts disbursed to management for working capital purposes and excluding the amount of any deferred underwriting discount held in trust) at the time of the Company signing a definitive agreement in connection with its initial Business Combination. However, the Company will only complete a Business Combination if the post-transaction company owns or acquires 50% or more of the outstanding voting securities of the target or otherwise acquires a controlling interest in the target sufficient for it not to be required to register as an investment company under the Investment Company Act. Upon the closing of the Public Offering, management has agreed that an amount equal to at least $10.00 per Unit sold in the Public Offering, including a portion of the proceeds of the Private Placement Warrants, will be held in a Trust Account and invested in U.S. government securities, within the meaning set forth in Section 2(a)(16) of the Investment Company Act, with a maturity of 185 days or less or in any open-ended investment company that holds itself out as a money market fund selected by the Company meeting certain conditions of Rule 2a-7 of the Investment Company Act, as determined by the Company, until the earlier of: (i) the completion of a Business Combination and (ii) the distribution of the Trust Account, as described below.

The Company will provide its stockholders of Public Shares (“Public Stockholders”) with the opportunity to redeem all or a portion of their Public Shares upon the completion of a Business Combination either (i) in connection with a stockholder meeting called to approve the Business Combination or (ii) by means of a tender offer. The decision as to whether the Company will seek stockholder approval of a Business Combination or conduct a tender offer will be made by the Company. If, however, stockholder approval of the transaction is required by applicable law or stock exchange listing requirement, or the Company decides to obtain stockholder approval for business or other reasons, it will: (i) conduct the redemptions in conjunction with a proxy solicitation pursuant to Regulation 14A of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), which regulates the solicitation of proxies, and not pursuant to the tender offer rules; and (ii) file proxy materials with the SEC. The Public Stockholders will be entitled to redeem their Public Shares for a pro rata portion of the amount in the Trust Account (initially approximately $10.00 per share), plus any pro rata interest earned on the funds held in the Trust Account and not previously released to the Company to pay for the Company’s tax obligations, calculated as of two business days prior to the consummation of the Business Combination. The per-share amount to be distributed to Public Stockholders who redeem their Public Shares will not be reduced by the marketing fee the Company will pay to the underwriters (as discussed in Note 9).

If the Company is unable to complete a Business Combination within the Combination Period, the Company will (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but no more than ten business days thereafter, redeem 100% of the outstanding Public Shares which redemption will completely extinguish Public Stockholders’ rights as stockholders (including the right to receive further liquidation distributions, if any) and (iii) as promptly as reasonably possible following such redemption, subject to the approval of the remaining stockholders and the Company’s board of directors, proceed to commence a voluntary liquidation and thereby a formal dissolution of the Company, subject in each case to its obligations to provide for claims of creditors and the requirements of applicable law.

In connection with the redemption of 100% of the Company’s outstanding Public Shares for a portion of the funds held in the Trust Account, each holder will receive a full pro rata portion of the amount then in the Trust Account, plus any pro rata interest earned on the funds held in the Trust Account and not previously released to the Company to pay the Company’s taxes payable (less up to $100,000 of interest to pay dissolution expenses).

The initial stockholders have agreed to waive their liquidation rights with respect to the Founder Shares if the Company fails to complete a Business Combination within the Combination Period. However, if the initial stockholders should acquire Public Shares in or after the Public Offering, they will be entitled to liquidating distributions from the Trust Account with respect to such Public Shares if the Company fails to complete a Business Combination within the Combination Period. The underwriters have agreed to waive their rights to their marketing fee (see Note 9) held in the Trust Account in the event the Company does not complete a Business Combination within the Combination Period and, in such event, such amounts will be included with the funds held in the Trust Account that will be available to fund the redemption of the Company’s Public Shares.

In the event of such distribution, it is possible that the per share value of the residual assets remaining available for distribution (including Trust Account assets) will be only $10.00 per share initially held in the Trust Account (or less than that in certain circumstances). In order to protect the amounts held in the Trust Account, the Sponsor has agreed to be liable to the Company, if and to the extent any claims by a third party for services rendered or products sold to the Company, or a prospective target business with which the Company has discussed entering into a transaction agreement, reduce the amount of funds in the Trust Account. This liability will not apply with respect to any claims by a third party who executed a waiver of any right, title, interest or claim of any kind in or to any monies held in the Trust Account or to any claims under the Company’s indemnity of the underwriters of the Public Offering against certain liabilities, including liabilities under the Securities Act of 1933, as amended (the “Securities Act”). Moreover, in the event that an executed waiver is deemed to be unenforceable against a third party, the Sponsor will not be responsible to the extent of any liability for such third-party claims. The Company will seek to reduce the possibility that the Sponsor will have to indemnify the Trust Account due to claims of creditors by endeavoring to have all third parties, service providers (other than the Company’s independent auditors), prospective target businesses or other entities with which the Company does business, execute agreements with the Company waiving any right, title, interest or claim of any kind in or to monies held in the Trust Account.

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Liquidity, Going Concern, and Capital Resources

As of September 30, 2021, the Company had cash of $1,161,975, and working capital of $1,007,230.

The Company does not believe it will need to raise additional funds in order to meet the expenditures required for operating the business. However, if the estimate of the costs of identifying a target business, undertaking in-depth due diligence and negotiating a Business Combination are less than the actual amount necessary to do so, the Company may have insufficient funds available to operate its business prior to the Business Combination. Moreover, in addition to the access of the Working Capital Loans (as defined below in Note 6), the Company may need to obtain other financing either to complete its Business Combination or because the Company becomes obligated to redeem a significant number of the public shares upon consummation of the Business Combination, in which case the Company may issue additional securities or incur debt in connection with such Business Combination. Subject to compliance with applicable securities laws, the Company would only complete such financing simultaneously with the completion of the Business Combination. If the Company is unable to complete the Business Combination because the Company does not have sufficient funds available, the Company will be forced to cease operations and liquidate the Trust Account. In addition, following the Business Combination, if cash on hand is insufficient, the Company may need to obtain additional financing in order to meet its obligations.

Based on the foregoing, management believes that the Company will have sufficient working capital and borrowing capacity from the Sponsor or an affiliate of the Sponsor, or certain of the Company’s officers and directors to meet its needs through the earlier of the consummation of a Business Combination or one year from this filing. Over this time period, the Company will be using these funds for paying existing accounts payable, identifying and evaluating prospective initial Business Combination candidates, performing due diligence on prospective target businesses, paying for travel expenditures, selecting the target business to merge with or acquire, and structuring, negotiating and consummating the Business Combination.

In connection with the Company’s assessment of going concern considerations in accordance with FASB’s Accounting Standards Update (“ASU”) 2014-15, “Disclosures of Uncertainties about an Entity’s Ability to Continue as a Going Concern,” management has determined that if the Company is unable to complete a Business Combination by October 6, 2022, then the Company will cease all operations except for the purpose of liquidating. The date for mandatory liquidation and subsequent dissolution raise substantial doubt about the Company’s ability to continue as a going concern. No adjustments have been made to the carrying amounts of assets or liabilities should the Company be required to liquidate after October 6, 2022.

NOTE 2 — RESTATEMENT OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS

In connection with the preparation of the Company’s financial statements as of September 30, 2021, management determined it should restate its previously reported financial statements. The Company previously determined the Class A common stock subject to possible redemption to be equal to the redemption value of $10.00 per Class A common stock while also taking into consideration its charter’s requirement that a redemption cannot result in net tangible assets being less than $5,000,001. Previously, the Company did not consider redeemable shares classified as temporary equity as part of net tangible assets. Effective with these financial statements, the Company revised this interpretation to include temporary equity in net tangible assets. Upon review of its financial statements for the nine months ended September 30, 2021, the Company reevaluated the classification of the Class A common stock and determined that the Class A common stock issued during the Initial Public Offering can be redeemed or become redeemable subject to the occurrence of future events considered outside the Company’s control under ASC 480-10-S99.Therefore, management concluded that the carrying value should include all Class A common stock subject to possible redemption, resulting in the Class A common stock subject to possible redemption being classified as temporary equity in its entirety. As a result, management has noted an adjustment related to temporary equity and permanent equity. Accordingly, the Company presents all redeemable Class A common stock as temporary equity and to recognize accretion from the initial book value to redemption value at the time of its Initial Public Offering and in accordance with ASC 480. This resulted in an adjustment to the initial carrying value of the Class A common stock subject to possible redemption with the offset recorded to additional paid-in capital (to the extent available), accumulated deficit and Class A common stock.

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In connection with the change in presentation for the Class A common stock subject to redemption, the Company also restated its earnings per share calculation to allocate net income (loss) pro rata to Class A and Class B common shares. This presentation contemplates a Business Combination as the most likely outcome, in which case, both classes of common stock share pro rata in the income (loss) of the Company.

The impact of the restatement on the Company’s financial statements is reflected in the following table:

	As Reported			Adjustment			As Restated
Balance Sheet as of March 31, 2021
Class A common stock subject to possible redemption	$	231,462,940		$	18,537,060		$	250,000,000
Class A common stock		185			(185	)		—
Class B common stock		625			—			625
Additional paid-in Capital		431,465			(431,465	)		—
Retained earnings (accumulated deficit)	$	4,567,733		$	(18,105,410	)	$	(13,537,677	)
Total stockholders’ equity (deficit)	$	5,000,008		$	(18,537,060	)	$	(13,537,052	)

Statement of Operations for the three months ended March 31, 2021
Basic and diluted net income per share, Class A common stocks	$	—		$	0.22		$	0.22
Basic and diluted net income per share, Class B common stocks	$	1.10		$	(0.88	)	$	0.22

Statement of Changes in Stockholders’ Equity for the three months ended March 31, 2021
Change in shares subject to possible redemption	$	(6,870,240	)	$	6,870,240		$	—

Statement of Cash Flows for the three months ended March 31, 2021
Change in value of Class A common stock subject to possible redemption	$	6,870,240		$	(6,870,240	)	$	—

Balance Sheet as of June 30, 2021
Class A common stock subject to possible redemption	$	228,424,942		$	21,575,058		$	250,000,000
Class A common stock		215			(215	)		—
Class B common stock		625			—			625
Additional paid-in Capital		3,469,434			(3,469,434	)		—
Retained earnings (accumulated deficit)	$	1,529,735		$	(18,105,410	)	$	(16,575,675	)
Total stockholders’ equity (deficit)	$	5,000,009		$	(21,575,059	)	$	(16,575,050	)

Statement of Operations for the three months ended June 30, 2021
Basic and diluted net income (loss) per share, Class A common stocks	$	—		$	(0.10	)	$	(0.10	)
Basic and diluted net loss per share, Class B common stocks	$	(0.49	)	$	0.39		$	(0.10	)

Statement of Operations for the six months ended June 30, 2021
Basic and diluted net income per share, Class A common stocks	$	—		$	0.12		$	0.12
Basic and diluted net income per share, Class B common stocks	$	0.61		$	(0.49	)	$	0.12

Statement of Changes in Stockholders’ Equity for the three months ended June 30, 2021
Change in shares subject to possible redemption	$	3,037,999		$	(3,037,999	)	$	—

Statement of Changes in Stockholders’ Equity for the six months ended June 30, 2021
Change in shares subject to possible redemption	$	(3,832,241	)	$	3,832,241		$	—

Statement of Cash Flows for the six months ended June 30, 2021
Change in value of Class A common stock subject to possible redemption	$	3,832,242		$	(3,832,242	)	$	—

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NOTE 3 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The accompanying unaudited condensed financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and in accordance with the instructions to Form 10-Q and Article 8 of Regulation S-X of the U.S. Securities and Exchange Commission (“SEC”). Certain information or footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted, pursuant to the rules and regulations of the SEC for interim financial reporting. Accordingly, they do not include all the information and footnotes necessary for a complete presentation of financial position, results of operations or cash flows. In the opinion of management, the accompanying unaudited condensed financial statements include all adjustments, consisting of a normal recurring nature, which are necessary for a fair presentation of the financial position, operating results and cash flows for the periods presented.

The accompanying unaudited condensed financial statements should be read in conjunction with the Company’s Amendment No. 2 to its Annual Report on Form 10-K/A for the year ended December 31, 2020, as filed with the SEC on March 11, 2022. The interim results for the three and nine months ended September 30, 2021 are not necessarily indicative of the results to be expected for the year ending December 31, 2021 or for any future periods.

Emerging Growth Company

The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the independent registered public accounting firm attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved.

Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of the Company’s financial statements with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used.

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Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period. Actual results could differ from those estimates.

One of the more significant accounting estimates included in these financial statements is the determination of the fair value of the warrant liability. Such estimates may be subject to change as more current information becomes available and accordingly the actual results could differ significantly from those estimates.

Cash and Cash Equivalents

The Company considers all short-term investments with an original maturity of three months or less when purchased to be cash equivalents. The Company did not have any cash equivalents as of September 30, 2021 and December 31, 2020.

Investments Held in Trust Account

The Company’s portfolio of investments held in the Trust Account is comprised of U.S. government securities, within the meaning set forth in Section 2(a)(16) of the Investment Company Act, with a maturity of 185 days or less, investments in money market funds that invest in U.S. government securities, cash, or a combination thereof. The Company’s investments held in the Trust Account are classified as trading securities. Trading securities are presented on the balance sheets at fair value at the end of each reporting period. Gains and losses resulting from the change in fair value of these securities is included in gain on Investments Held in Trust Account in the accompanying statement of operations. The estimated fair values of investments held in the Trust Account are determined using available market information. At September 30, 2021, the assets held in the Trust Account were invested in money market funds.

Fair Value Measurements

ASC Topic 820 “Fair Value Measurements and Disclosures” (“ASC 820”) defines fair value, the methods used to measure fair value and the expanded disclosures about fair value measurements. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between the buyer and the seller at the measurement date. In determining fair value, the valuation techniques consistent with the market approach, income approach and cost approach shall be used to measure fair value. ASC 820 establishes a fair value hierarchy for inputs, which represent the assumptions used by the buyer and seller in pricing the asset or liability. These inputs are further defined as observable and unobservable inputs. Observable inputs are those that buyer and seller would use in pricing the asset or liability based on market data obtained from sources independent of the Company. Unobservable inputs reflect the Company’s assumptions about the inputs that the buyer and seller would use in pricing the asset or liability developed based on the best information available in the circumstances.

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The fair value hierarchy is categorized into three levels based on the inputs as follows:

Level 1 — Valuations based on unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access. Valuation adjustments and block discounts are not being applied. Since valuations are based on quoted prices that are readily and regularly available in an active market, valuation of these securities does not entail a significant degree of judgment.

Level 2 — Valuations based on (i) quoted prices in active markets for similar assets and liabilities, (ii) quoted prices in markets that are not active for identical or similar assets, (iii) inputs other than quoted prices for the assets or liabilities, or (iv) inputs that are derived principally from or corroborated by market through correlation or other means.

SEC Form 10-Q/A filed by Atlantic Street Acquisition Corp (Amendment)