Restatement of Previously Issued Financial Statements

12 Months Ended

Jun. 30, 2021

Restatementof Previously Reported Financial Statements Abstract [Abstract]

Restatement of Previously Issued Financial Statements

Note 2 — Restatement of Previously Issued Financial Statements

The Company has re-evaluated its application of ASC 480-10-S99-3A to its Public Shares, issued as part of the units sold in the Company’s IPO on December 15, 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”). 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 regardless of the net tangible assets redemption limitation contained in the Company’s Amended and Restated Certificate of Incorporation. 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 between the two classes of shares. This presentation contemplates a Business Combination as the most likely outcome, in which case, both classes of shares share pro rata in the income and losses of the Company. As a result, the Company concluded it should present all redeemable Class A common stock as temporary equity and recognize accretion from the initial book value to redemption value at the time of its Initial Public Offering and in accordance with ASC 480, and correct is earnings per share presentation.

The Company’s Original Filing included a Note 2, Revision of Previously Reported Financial Statements, that described the revision to the Company’s classification of its Class A common stock subject to redemption issued as part of the units sold in the Company’s initial public offering (“IPO”).

The Company determined the changes were not qualitatively material to the Company’s previously reported financial statements and did not restate its financial statements. Instead, the Company revised its previously reported financial statements within Note 2 to its Original Filing. Although the qualitative factors that management assessed tended to support a conclusion that the misstatements were not material, these factors were not strong enough to overcome the significant quantitative errors in the financial statements. Management concluded that the misstatement was such of magnitude that it is probable that the judgment of a reasonable person relying upon the financial statements would have been influenced by the inclusion or correction of the foregoing items. As such, upon further consideration of the change, the Company determined the change in classification of the Class A common stock was material quantitatively and it should restate its previously reported financial statements including the restatement of earnings per share.

Therefore, on February 11, 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 December 15, 2020 (the “Post-IPO Balance Sheet”) filed as an exhibit to the Company’s Form 8-K filed with the SEC on December 21, 2020, (ii) audited financial statements as of and for the year ended June 30, 2021 included in Original Filing, (iii) unaudited interim financial statements included in the Company’s Quarterly Report on Form 10-Q/A for the quarterly period ended December 31, 2020, filed with the SEC on February 16, 2021; and (iv) 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 July 26, 2021, (collectively, the “Affected Periods”), should be restated to report all Public Shares as temporary equity and to restate earnings per share and should no longer be relied upon. As such, the Company is restating its financial statements for the Affected Periods in this Form 10-K/A.

In preparation of the Company’s interim financial statements for the quarterly period ended September 30, 2021, the Company re-evaluated its accounting for its redeemable Class A common stock and earnings per share. In accordance with SEC and its staff’s guidance on redeemable equity instruments, ASC 480, paragraph 10-S99, redemption provisions not solely within the control of the Company require common stock 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. Although the Company did not specify a maximum redemption threshold, its Amended and Restated Articles of Incorporation currently provides 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. Previously, the Company did not consider redeemable stock classified as temporary equity as part of net tangible assets. The Company revised this interpretation to include temporary equity in net tangible assets. Also, in connection with the change in presentation for the Class A common stock subject to possible redemption, the Company revised its earnings per share calculation to allocate income and losses shared pro rata between the two classes of shares. This presentation contemplates a Business Combination as the most likely outcome, in which case, both classes of shares share pro rata in the income and losses of the Company.

Impact of the Restatement

There was no impact on the reported balance sheet, statement of stockholders’ equity or statement of cash flow as of and for the year ended June 30, 2021 as the reclassification of the Public Shares was reported as revised.

The impact to the reported amounts of weighted average shares outstanding and basic and diluted earnings per common share for the year ended June 30, 2021 is presented below:

	Net Loss Per Share
	As Previously Reported on Form 10-K			Adjustment			As Restated
Year ended June 30, 2021
Net income	$	(322,270	)	$	-		$	(322,270	)
Weighted average shares outstanding - Class A		11,484,848			(5,254,711	)		6,230,137
Basic and diluted earnings per share - Class A	$	-		$	(0.04	)	$	(0.04	)
Weighted average shares outstanding - Class B		2,701,370			-			2,701,370
Basic and diluted earnings per share - Class B	$	(12.00	)	$	11.96		$	(0.04	)

Impact to the Previously Reported Interim Financial Statements

The impact of the restatement on the previously reported unaudited condensed balance sheets, statement of stockholders’ equity, statements of operations and statements of cash flows for the Affected Periods is presented in Note 12 – Quarterly Financial Information (unaudited).

Impact to the Post IPO Balance Sheet

On April 12, 2021, the staff of the Securities and Exchange Commission (the “SEC Staff”) issued a public statement entitled “Staff Statement on Accounting and Reporting Considerations for Warrants issued by Special Purpose Acquisition Companies (“SPACs”)” (the “SEC Staff Statement”). In the SEC Staff Statement, the SEC Staff expressed its view that certain terms and conditions common to SPAC warrants may require the warrants to be classified as liabilities on the SPAC’s balance sheet as opposed to equity. Since issuance in December 2020, the Company’s warrants were accounted for as equity within the Company’s previously reported balance sheets. After discussion and evaluation, including with the Company’s independent registered public accounting firm and the Company’s audit committee, management concluded that the warrants should be presented as liabilities with subsequent fair value remeasurement.

Historically, the Warrants were reflected as a component of equity as opposed to liabilities on the balance sheets and the statements of operations did not include the subsequent non-cash changes in estimated fair value of the Warrants, based on our application of FASB ASC Topic 815-40, Derivatives and Hedging, Contracts in Entity’s Own Equity (“ASC 815-40). The views expressed in the SEC Staff Statement were not consistent with the Company’s historical interpretation of the specific provisions within its warrant agreement and the Company’s application of ASC 815-40 to the warrant agreement. The Company reassessed its accounting for Warrants issued on December 15, 2020, in light of the SEC Staff’s published views. Based on this reassessment, management determined that the Warrants should be classified as liabilities measured at fair value upon issuance, with subsequent changes in fair value reported in the Company’s statement of operations each reporting period.

The impact of the restatement of the IPO Balance Sheet presented below also includes the restatement for the treatment of the warrants as liabilities.

8-K - December 15, 2020	As Reported			Adjustment			As Restated
Total assets	$	102,752,833		$	-		$	102,752,833
Derivative warrant liabilities	$	-		$	6,690,000		$	6,690,000
Total liabilities	$	3,830,120		$	6,690,000		$	10,520,120
Class A common stock subject to redemption		93,922,703			7,577,297			101,500,000
Preferred stock, par value $0.0001		-			-			-
Class A common stock, par value $0.0001		74			(74	)		-
Class B common stock, par value $0.0001		288			-			288
Additional paid-in captial		5,140,487			(5,140,487	)		-
Accumulated deficit		(140,839	)		(9,126,736	)		(9,267,575	)
Total stockholders’ equity (deficit)	$	5,000,010		$	(14,267,297	)	$	(9,267,287	)
Total liabilities, Class A common stock subject to redemption and stockholders’ equity (deficit)	$	102,752,833		$	-		$	102,752,833
Class A common stock subject to redemption		9,262,594			746,532			10,000,000
Class A common stock		737,406			(737,406	)		-