International Media Acquisition Corp 8-K, filed Nov 19, 2021
International Media Acquisition Corp. (IMAQ)
About this 8-K
International Media Acquisition Corp filed this 8-K on November 19, 2021, reporting on events of November 15, 2021.
Items reported
- Item 4.02: Earlier financial statements no longer reliable
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
Current Report
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Item 4.02 Non-Reliance on Previously Issued Financial Statements or a Related Audit Report or Completed Interim Review.
On November 15, 2021, in connection with the preparation of the financial statements of International Media Acquisition Corp. (the “Company”) as of September 30, 2021, management determined it should restate its previously reported financial statements. The Company previously determined the common stock subject to possible redemption to be equal to the redemption value of $10.00 per share of common stock while also taking into consideration its certificate of incorporation’s requirement that a redemption cannot result in net tangible assets being less than $5,000,001. Upon review of its financial statements for the period ended September 30, 2021, the Company reevaluated the classification of the common stock and determined that the common stock issued during its initial pubic offering and pursuant to the exercise of the underwriters’ over-allotment option can be redeemed or become redeemable subject to the occurrence of future events considered outside the Company’s control under ASC 480-10-S99. Therefore, management concluded that the carrying value should include all common stock subject to possible redemption, resulting in the common stock subject to possible redemption being classified as temporary equity in its entirety. As a result, management has noted a reclassification adjustment related to temporary equity and permanent equity. This resulted in an adjustment to the initial carrying value of the common stock subject to possible redemption with the offset recorded to additional paid-in capital (to the extent available), retained earnings (accumulated deficit) and common stock.
In connection with the change in presentation for the common stock subject to redemption, the Company will restate its previously issued audited balance sheet as of August 2, 2021, included on its Current Reports on Form 8-K filed with the Securities and Exchange Commission on August 6, 2021 and August 11, 2021 (the “8-K Reports”), when it files its Form 10-Q for the quarterly period ended September 30, 2021. There has been no change in the Company’s total assets, liabilities or operating results.
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 due solely to the material weakness in its internal control over financial reporting related to the Company’s the failure to properly classify common stock redeemable equity instruments. In light of this material weakness, the Company performed additional analysis as deemed necessary to ensure that its financial statements were prepared in accordance with U.S. generally accepted accounting principles.
Therefore, the Company’s audited balance sheet as of August 2, 2021, included on the 8-K Reports, should no longer be relied upon because certain redemption provisions not solely within the control of the Company require the common stock subject to redemption to be classified outside of permanent equity. The Company had previously classified a portion of the common stock in permanent equity. The Company will restate its financial statements to classify all common stock subject to possible redemption as temporary equity and any related impact, as the threshold in its certificate of incorporation does not change the nature of the underlying common stock as redeemable and thus would be required to be disclosed 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.
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 Marcum LLP, the Company’s independent registered public accounting firm.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Dated: November 19, 2021 | ||
| INTERNATIONAL MEDIA ACQUISITION CORP. | ||
| By: | /s/ Shibasish Sarkar | |
| Name: | Shibasish Sarkar | |
| Title: | Chief Executive Officer | |