Item 4.02. Non-Reliance on Previously Issued Financial Statements or a Related
Audit Report or Completed Interim Review.
(a) In connection with the preparation of FTAC Hera Acquisition Corp.'s (the
"Company") financial statements as of September 30, 2021, the Company's
management, in consultation with its advisors, identified an error made
in certain of its previously issued financial statements, arising from the
manner in which, as of the closing of the Company's initial public offering, the
Company valued its Class A ordinary shares subject to possible redemption. The
Company previously determined the value of such Class A ordinary shares to be
equal to the redemption value of such Class A ordinary shares, after taking into
consideration the terms of the Company's Amended and Restated Memorandum and
Articles of Association, under which a redemption cannot result in net tangible
assets being less than $5,000,001. Management has now determined, after
consultation with its advisors, that the Class A ordinary shares underlying the
units issued during the initial public offering can be redeemed or become
redeemable subject to the occurrence of future events considered to be
outside the Company's control. Therefore, management has concluded that the
redemption value of its Class A ordinary shares subject to possible redemption
should reflect the possible redemption of all Class A ordinary shares. As a
result, management has noted a reclassification error related to temporary
equity and permanent equity. This has resulted in a restatement of the initial
carrying value of the Class A ordinary shares subject to possible redemption,
with the offset recorded to additional paid-in capital (to the extent
available), accumulated deficit and Class A ordinary shares. In addition, in
connection with the change in presentation for the Class A ordinary
shares subject to possible redemption, the Company has determined it should
restate its income per ordinary share calculation to allocate net income (loss)
pro rata between the two classes of its ordinary shares. This presentation
contemplates a business combination as the most likely outcome, in which case,
both classes of ordinary shares share pro rata in the income (loss) of the
Company.
On December 2, 2021, the audit committee of the board of directors of the
Company (the "Audit Committee"), based on the recommendation of and after
consultation with management, concluded that the Company's (i) audited balance
sheet as of March 8, 2021 (the "Audited Affected Financials") filed as Exhibit
99.1 to the Company's Current Report on Form 8-K filed with the Securities and
Exchange Commission (the "SEC") on March 12, 2021, as amended as set forth in
the Q-1 Unaudited Financials (as defined below), (ii) unaudited financial
statements as of March 31, 2021 (the "Q-1 Unaudited Financials") contained in
the Company's Quarterly Report on Form 10-Q filed with the SEC on June 10, 2021,
(iii) unaudited financial statements as of June 30, 2021 contained in the
Company's Quarterly Report on Form 10-Q filed with the SEC on August 13, 2021
(together with the Q-1 Unaudited Financials, the "Unaudited Affected
Financials") and (iv) Quarterly Report on Form 10-Q filed with the SEC on
November 12, 2021, should no longer be relied upon due to the error described
above. The Company intends to restate the error in an amendment to its Quarterly
Report on Form 10-Q for the quarterly period ended September 30, 2021 (to
include restatements with respect to the Audited Affected Financials and the
Unaudited Affected Financials) (the "Amended Form 10-Q"). Similarly, the related
press releases, stockholder communications, investor presentations or other
communications describing relevant portions of the Company's financial
statements for these periods, should no longer be relied upon.
The Company does not expect the changes described above to have any impact on
its cash position or the balance held in the trust account.
The Company's management has concluded that in light of the error and
restatement 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 Amended
Form 10-Q.
The Audit Committee and management have discussed the matters disclosed pursuant
to this Item 4.02(a) with the Company's independent accountant.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
Exhibit No. Description
104 Cover Page Interactive Data File (embedded within the Inline XBRL
document).
2
© Edgar Online, source Glimpses