CONXU CONX Corporation

On April 12, 2021, the Staff of the Securities and Exchange Commission (the “SEC”) issued a statement entitled “Staff Statement on Accounting and Reporting Considerations for Warrants Issued by Special Purpose Acquisition Companies (“SPACs”)” (the “SEC Statement”) informing market participants that certain warrants issued by SPACs may require classification as a liability of the entity measured at fair value, with changes in fair value each period reported in earnings. Specifically, the SEC Statement focused on certain settlement terms and provisions in warrant agreements related to certain tender offers following a business combination. The terms described in the SEC Statement are common in SPACs and are similar to those contained in the warrant agreement, dated as of October 29, 2020, between CONX Corp. (the “Company”) and Continental Stock Transfer & Trust Company, as warrant agent. The Company had previously accounted for its private placement warrants and public warrants (collectively, the “warrants”) as equity. After considering the SEC Statement, the Company determined that the warrants should be recorded as derivative liabilities on the balance sheet and measured at fair value at issuance (on the date of the consummation of the Company’s initial public offering) and at each reporting date, with changes in fair value recognized in the statement of operations in the period of the change. While the Company has not generated any operating revenues to date and is not expected to generate any operating revenues until after completion of its initial business combination, at the earliest, the change in fair value of the warrants is a non-cash charge and will be reflected in the Company’s statement of operations.

On May 24, 2021, the audit committee of the Company’s board of directors (the “Audit Committee”), based on the recommendation of and after consultation with management, concluded that the Company’s previously issued audited financial statements as of December 31, 2020 and for the period from August 26, 2020 (inception) through December 31, 2020 and certain items on its audited balance sheet as of November 3, 2020 (collectively, the “Non-Reliance Periods”), as reported in the Company’s Annual Report on Form 10-K filed on March 31, 2021 and the Company’s Current Report on Form 8-K filed on November 9, 2020, respectively, should no longer be relied upon due to misstatements in those financial statements as a result of the reclassification of the Company’s warrants described above. Similarly, the related Report of Independent Registered Public Accounting Firm on the Company’s previously issued financial statements as of December 31, 2020 and for the period from August 26, 2020 (inception) through December 31, 2020, should no longer be relied upon. As a result, the Company determined that it will restate its historical financial results for the Non-Reliance Periods, in each case to reflect the change in accounting treatment. The Company will file an amendment to its Form 10-K for the year ended December 31, 2020 to reflect the restatement and related disclosures described in Item 4.02 of this Current Report on Form 8-K.

The Audit Committee and management have discussed the matters disclosed pursuant to this Item 4.02(a) with WithumSmith+Brown, PC, the Company’s independent accountant.

Note Regarding Forward-Looking Statements

This Current Report includes “forward-looking statements” within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act that are not historical facts, and involve risks and uncertainties that could cause actual results to differ materially from those expected and projected. Words such as “expect,” “believe,” “anticipate,” “intend,” “estimate,” “seek” and variations and similar words and expressions are intended to identify such forward-looking statements. Such forward-looking statements, which include statements related to the restatement described herein, relate to future events or future performance, but reflect management’s current beliefs, based on information currently available. A number of factors could cause actual events, performance or results to differ materially from the events, performance and results discussed in the forward-looking statements. For information identifying important factors that could cause actual results to differ materially from those anticipated in the forward-looking statements, please refer to the “Risk Factors” section of the Company’s Form 10-K and the Company’s future reports filed with the SEC. The Company’s securities filings can be accessed on the EDGAR section of the SEC’s website at www.sec.gov. Except as expressly required by applicable securities law, the Company disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise.