Item 4.02 - Non-Reliance on Previously Issued Financial Statements or Related
Audit Report or Completed Interim Report.
Following the filing of Edify Acquisition Corp.'s (the "Company") financial
statements as of September 30, 2021 in a Quarterly Report on Form 10-Q, the
Company concluded it should restate its prior financial statements to classify
all of the shares held by the Company's public stockholders (the "Public
Shares") in temporary equity. In accordance with ASC 480, paragraph 10-S99,
redemption provisions not solely within the control of the Company require
common stock subject to possible redemption to be classified outside of
permanent equity. 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 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. However, the Company has determined that it is
required to restate its financial statements to include temporary equity in net
tangible assets. Accordingly, following this filing, the Company will present
all redeemable Class A common stock as temporary equity and recognizes accretion
from the initial book value to redemption value at the time of its initial
public offering ("Initial Public Offering") and in accordance with ASC 480.
In accordance with SEC Staff Accounting Bulletin No. 99, "Materiality," and SEC
Staff Accounting Bulletin No. 108, "Considering the Effects of Prior Year
Misstatements when Quantifying Misstatements in Current Year Financial
Statements," the Company evaluated the changes and has determined that the
related impact was material to the previously issued (i) unaudited interim
financial statements included in the Company's Quarterly Report on Form 10-Q for
the quarterly period ended March 31, 2021, filed with the SEC on May 24, 2021
and (ii) 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 (the "Affected Financial Statements") and
such Affected Financial Statements should no longer be relied upon. Therefore,
the Company, in consultation with its Audit Committee, concluded that its
Affected Financial Statements should be restated to report all Public Shares as
temporary equity.
Based upon their evaluation, the Company's Chief Executive Officer and Chief
Financial Officer concluded that the Company's disclosure controls and
procedures were not effective as of September 30, 2021, due to the material
weakness in our internal control over financial reporting as a result of the
revisions of our March 31, 2021, and June 30, 2021 financial statements (the
"revisions") regarding the failure to properly classify redeemable equity
instruments.
Therefore, the March 31, 2021 and June 30, 2021 quarterly financial statements
included in the Company's Form 10-Qs, as filed with the SEC on May 24, 2021 and
on August 16, 2021, respectively, as well as the Company's balance sheet
included on the Company's Form 8-K, as filed with the SEC on January 26, 2021,
should no longer be relied upon because redemption provisions not solely within
the control of the Company require common stock subject to possible redemption
to be classified outside of permanent equity. As a result of the foregoing, the
Company's management reassessed the effectiveness of its disclosure controls and
procedures for the periods affected by the restatement. As a result of that
reassessment, the Company's management determined that its disclosure controls
and procedures for such periods were not effective solely as a result of the
foregoing.
The Company's management and the Audit Committee have discussed the matters
disclosed in this Current Report on Form 8-K pursuant to this Item 4.02 with
WithumSmith+Brown, PC, the Company's independent registered public accounting
firm.
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