Item 4.02. Non-Reliance on Previously Issued Financial
Statements or a Related Audit Report or Completed Interim Review.
On November 3, 2021, Equity Distribution Acquisition Corp. (the
Company) filed its Form 10-Q for the quarterly period ended September 30, 2021 (the Q3 Form 10-Q), which included in Note 2, Revision of
Previously Issued Financial Statements (Note 2), a discussion of the revision to a portion of the Companys previously issued financial statements for the classification of its Class A common stock subject to redemption issued
as part of the units sold in the Companys initial public offering (IPO) on September 18, 2020. As described in Note 2, upon its IPO, the Company classified a portion of the Class A common stock subject to redemption as
permanent equity to maintain net tangible assets greater than $5,000,000 on the basis that the Company will consummate its initial business combination only if the Company has net tangible assets of at least $5,000,001. The Company re-evaluated the conclusion and determined that the Class A common stock subject to redemption included certain provisions that require classification of the Class A common stock subject to redemption as
temporary equity regardless of the minimum net tangible assets required to complete the Companys initial business combination. As a result, the Company corrected the error by revising all Class A common stock subject to redemption as
temporary equity. This resulted in an adjustment to the initial carrying value of the Class A common stock subject to possible redemption with the offset recorded to additional paid-in capital (to the
extent available), accumulated deficit and Class A common stock.
Also in Note 2 of the Q3 Form 10-Q, 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 pro rata between the two classes of shares. This
presentation differs from the previously presented method of earnings per share, which was similar to the two-class method.
As described above, originally the Company determined the changes were not qualitatively material to the Companys previously issued financial statements
and revised its previously issued financial statements in Note 2 to its Q3 Form 10-Q. However, upon further consideration of the material nature of the changes, the Company determined the change in
classification of the Class A common stock subject to redemption and change to its presentation of earnings per share is quantitatively material and the Company should restate its previously issued financial statements.
On December 9, 2021, the Company and the audit committee of the Companys board of directors (the Audit Committee), after discussion
with Marcum LLP (Marcum), the Companys independent registered public accounting firm, concluded that the Companys previously issued (i) audited balance sheet as of September 18, 2020, as previously restated in the
Companys Annual Report on Form 10-K/A as of December 31, 2020, filed with the Securities and Exchange Commission (SEC) on May 24, 2021 (the Form
10-K/A), (ii) audited financial statements as of December 31, 2020 and for the period from July 7, 2020 (inception) through December 31, 2020, as previously restated in the Form 10-K/A, (iii) unaudited financial statements included in the Companys Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2021, filed with
the SEC on May 24, 2021, (iv) unaudited financial statements included in Companys Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2021, filed with the SEC on
August 6, 2021, and (v) unaudited financial statements included in the Q3 Form 10-Q, filed with the SEC on November 3, 2021 (collectively, the Affected Periods), should no longer be
relied upon and that it is appropriate to restate the Companys financial statements for all of the Affected Periods. As a result, the Company plans to restate its financial statements for all of the Affected Periods in a further amended Annual
Report on Form 10-K (the Amended Form 10-K) and an amended Q3 Form 10-Q (the Amended Q3 Form 10-Q), as applicable, each of which the Company intends to file as soon as practicable. The Amended Form 10-K and Amended Q3 Form
10-Q will include restatements of the audited financial statements and the unaudited interim condensed financial statements for the Affected Periods.
The Company does not expect any of the above changes will have any impact on its cash position and cash held in the trust account established in connection
with the IPO.
The Company has concluded that in light of the classification error described above, a material weakness exists in the Companys
internal control over financial reporting for accounting for complex financial instruments during the Affected Periods and that the Companys disclosure controls and procedures were not effective. The Companys remediation plan with
respect to such material weakness will be described in more detail in the Amended Q3 Form 10-Q.
The Company and
the Audit Committee have discussed the matters disclosed in this Current Report on Form 8-K pursuant to this Item 4.02 with Marcum.