Item 4.02. Non-Reliance on Previously Issued
Financial Statements or a Related Audit Report or Completed Interim Review.
In light of recent comment
letters issued by the U.S. Securities and Exchange Commission (the “SEC”), the management of Atlantic Coastal Acquisition
Corp. (the “Company”) has re-evaluated the Company’s application of ASC 480-10-S99-3A to its accounting classification
of the redeemable shares of Class A common stock, par value $0.0001 per share (the “Public Shares”), issued as part of the
units sold in the Company’s initial public offering (the “IPO”) on March 8, 2021. Historically, a portion of the Public
Shares was classified 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. Pursuant to such re-evaluation, the
Company’s management has determined that the Public Shares include certain provisions that require classification of the Public
Shares as temporary equity regardless of the minimum net tangible assets required to complete the Company’s initial business combination.
Therefore, on November 15,
2021, the Company’s management and the audit committee of the Company’s board of directors (the “Audit Committee”),
after consultation with Marcum LLP (“Marcum”), the Company’s independent registered public accounting firm, concluded
that the Company’s previously issued (i) audited balance sheet as of March 8, 2021 filed as
Exhibit 99.1 to the Company’s Current Report on Form 8-K filed with the SEC on March 12, 2021, as previously restated in
the Company’s Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2021, filed with the SEC on May 24, 2021 (the
“Q1 Form 10-Q”), (ii) unaudited interim financial statements included in the Q1 Form 10-Q, and (iii) unaudited interim financial
statements included in the Company’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2021, filed with the
SEC on August 16, 2021 (collectively, the “Affected Periods”), should be restated to report all Public Shares as temporary
equity and should no longer be relied upon. As such, the Company has restated its financial statements for the Affected Periods in the
Company’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2021, filed with the SEC on November 15, 2021
(the “Q3 Form 10-Q”), as described therein.
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 “Trust Account”).
The Company’s management
has concluded that in light of the classification error 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 Q3 Form 10-Q.
Forward-Looking Statements
This Current Report on Form
8-K includes “forward-looking statements” within the meaning of the safe harbor provisions of the United States Private Securities
Litigation Reform Act of 1995. Certain of these forward-looking statements can be identified by the use of words such as “believes,”
“expects,” “intends,” “plans,” “estimates,” “assumes,” “may,”
“should,” “will,” “seeks,” or other similar expressions. Such statements may include, but are not
limited to, statements regarding the impact of the Company’s restatement of certain historical financial statements, the Company’s
cash position and cash held in the Trust Account and any proposed remediation measures with respect to identified material weaknesses.
These statements are based on current expectations on the date of this Current Report on Form 8-K and involve a number of risks and uncertainties
that may cause actual results to differ significantly. The Company does not assume any obligation to update or revise any such forward-looking
statements, whether as the result of new developments or otherwise. Readers are cautioned not to put undue reliance on forward-looking
statements.