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Item
4.02
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Non-Reliance
on Previously Issued Financial Statements or a Related Audit Report or Completed Interim Review.
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In
the evening, Eastern Time, on April 12, 2021, the Acting Chief Accountant and Acting Director of the Division of Corporation Finance
of the Securities and Exchange Commission (the “SEC”) released the Staff Statement on Accounting and Reporting Considerations
for Warrants Issued by Special Purpose Acquisition Companies (the “Staff Statement”). The Staff Statement sets forth the
conclusion of the SEC’s Office of the Chief Accountant that certain provisions included in the warrant agreements entered into
by many special purpose acquisition companies require such warrants to be accounted for as liabilities measured at fair value, rather
than as equity securities, with changes in fair value during each financial reporting period reported in earnings. AST SpaceMobile, Inc.
(formerly known as New Providence Acquisition Corp.) (the “Company”) has previously classified its private placement warrants
and public warrants as equity (for a full description of the Company’s private placement warrants and public warrants (collectively,
the “warrants”), refer to the final prospectus filed in connection with the Company’s initial public offering on September
12, 2019).
On
April 29, 2021, the Audit Committee of the Board of Directors of the Company, in response to the Staff Statement, and after discussion
with its independent registered public accounting firm, Marcum LLP, its valuation firm and its legal advisors, concluded that the Company’s
previously issued audited financial statements for the year ended December 31, 2020 and for the period from May 28, 2019 (inception)
through December 31, 2019 and the Company’s unaudited condensed financial statements for the period from May 28, 2019 (inception)
through September 30, 2019, the three months ended September 30, 2019, the three months ended March 31, 2020 and the three months ended
and year-to-date periods ended June 30, 2020 and September 30, 2020 (collectively, the “Affected Periods”) should be restated
to reflect the impact of the guidance in the Staff Statement and accordingly, should no longer be relied upon. Similarly, any previously
furnished or filed reports, related earnings releases, investor presentations or similar communications of the Company describing the
Company’s financial results for the Affected Periods should no longer be relied upon.
While
the terms and quantum of the warrants have not changed, the Company concluded the warrants do not meet the conditions to be classified
in equity and instead, the warrants meet the definition of a derivative under ASC 815, under which the Company should record the warrants
as liabilities on the Company’s balance sheet. The Company has discussed this approach with its independent registered public accounting
firm and intends to file, as soon as practicable, an amendment to its Annual Report on Form 10-K for the year ended December 31, 2020
filed with the SEC on March 1, 2021 (the “Amended 10-K”) reflecting this reclassification of the warrants for the Affected
Periods. The adjustments to the financial statement items for the Affected Periods will be set forth through expanded disclosure in the
financial statements included in the Amended 10-K, including further describing the restatement and its impact on previously reported
amounts.
Management
is assessing the effect of the restatements on the Company’s internal control over financial reporting and its disclosure controls
and procedures and will report its conclusions in the Amended 10-K.
Forward-Looking
Statements
Some
of the information contained in this Current Report on Form 8-K contains forward-looking statements. When contained in this Current Report
on Form 8-K, and incorporated herein by reference, the words “estimates,” “projected,” “expects,”
“anticipates,” “forecasts,” “plans,” “intends,” “believes,” “seeks,”
“may,” “will,” “should,” “future,” “propose” and variations of these words
or similar expressions (or the negative versions of such words or expressions) are intended to identify forward-looking statements. These
forward-looking statements are not guarantees of future performance, conditions or results, and involve a number of known and unknown
risks, uncertainties, assumptions and other important factors, many of which are outside the Company’s management’s control,
that could cause actual results or outcomes to differ materially from those discussed in the forward-looking statements, including the
completion of the accounting reclassification and preparation of the Amended 10-K described herein. These forward-looking statements
are based on information available as of the date of this Current Report on Form 8-K, and current expectations, forecasts and assumptions,
and involve a number of judgments, risks and uncertainties. Accordingly, forward-looking statements should not be relied upon as representing
our views as of any subsequent date, and the Company does not undertake any obligation to update forward-looking statements to reflect
events or circumstances after the date they were made, whether as a result of new information, future events or otherwise, except as
may be required under applicable securities laws.