Item 4.02. Non-Reliance on Previously Issued Financial Statements or a Related
Audit Report or Completed Interim Review.
The management of BOA Acquisition Corp. (the "Company") has re-evaluated the
Company's application of ASC 480-10-S99-3A to its accounting classification of
its Class A common stock subject to possible redemption, 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 February 26, 2021. In accordance with the
ASC 480-10-S99-3A, redemption provisions not solely within the control of the
Company require shares subject to redemption to be classified outside of
permanent equity. The Company had previously classified a portion of its Class A
common stock in permanent equity, or total stockholders' equity, due to the
Company's requirement to only redeem Public Shares in amounts allowing the
Company to maintain at least $5,000,001 of tangible net assets, as set forth in
the Company's Amended and Restated Certificate of Incorporation. Pursuant to
this re-evaluation, the Company's management determined that all Public Shares
subject to redemption include provisions that require classification of the
Public Shares as temporary equity.
Therefore, on January 10, 2022, the Company's management and the audit committee
of the Company's board of directors (the "Audit Committee") concluded that the
Company's previously issued (i) audited balance sheet as of February 26, 2021
(the "Audited Balance Sheet") included in Form 8-K dated March 4, 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 21, 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 4, 2021 (the "Q2 Form 10-Q", and
collectively, the "Affected Prior Periods"), should be restated to classify all
Class A common stock as temporary equity and should no longer be relied upon. In
connection with the change in presentation for the Class A common stock, the
Company will also restate its earnings per share calculation to allocate income
and losses shared pro rata between the two classes of shares.
Similarly, other communications with respect to the Company's financial
statements and related financial information covering the Affected Prior Periods
should no longer be relied upon. In addition, the audit report of the Company's
independent registered public accounting firm, Marcum LLP ("Marcum"), included
in the Company's Form 8-K dated March 4, 2021, should no longer be relied upon.
The notes to the unaudited interim financial statements included in the
Company's Quarterly Report on Form 10-Q for the quarterly period ended
September 30, 2021, filed with the SEC on November 5, 2021 (the "Q3
Form 10-Q"), incorporated these changes as of September 30, 2021; however, the
Q3 Form 10-Q described these changes for the Affected Prior Periods as a
revision rather than a restatement. As such, the Company will recharacterize the
revisions to the financial statements for the Affected Prior Periods as a
material restatement in an amendment to the Q3 Form 10-Q (the "Amended Q3 Form
10-Q").
The above changes did not have any impact on the Company's cash position and
cash held in the trust account established in connection with the IPO.
After re-evaluation, the Company's management has concluded that in light of the
classification error described above, a material weakness existed in the
Company's internal control over financial reporting in analyzing complex
financial instruments during the Affected Prior Periods and that the Company's
disclosure controls and procedures were not effective. This material weakness is
additive to the material weakness previously identified and disclosed regarding
the Company's accounting for Warrants, which was disclosed in the Company's Q1
Form 10-Q, Q2 Form 10-Q and Q3 Form 10-Q. The Company's remediation plan with
respect to such material weaknesses will be described in more detail in the
Amended Q3 Form 10-Q.
The Audit Committee has discussed the matters disclosed in this Current Report
on Form 8-K pursuant to this Item 4.02 with Marcum LLP, the Company's
independent registered public accounting firm. Marcum was provided with a copy
of the disclosures made herein and was given the opportunity, no later than the
day of the filing of this Current Report on Form 8-K, to review these
disclosures.
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