Business Context and Reporting Period
Grove Collaborative Holdings, Inc. (GROV) filed this Form 8-K on August 19, 2022, to disclose a material restatement of its previously issued unaudited condensed consolidated financial statements for the three and six months ended June 30, 2021. The filing addresses errors in the calculation of weighted-average shares outstanding related to the Company's merger agreement.
Key Financial Metrics and Restatement Impact
The filing does not report current period revenue, profit, or cash flow figures. Instead, it details corrections to prior period per-share metrics. The error resulted in a material overstatement of net loss per share. The filing explicitly states the error had no impact on cash balances, net loss, or operating cash flows.
| Period | Metric | As Previously Reported | Adjustment | As Restated |
|---|---|---|---|---|
| Three Months Ended June 30, 2021 | Net Loss Per Share (Basic & Diluted) | $(3.97) | $0.59 | $(3.38) |
| Three Months Ended June 30, 2021 | Weighted-Average Shares | 7,182,025 | 1,264,328 | 8,446,353 |
| Six Months Ended June 30, 2021 | Net Loss Per Share (Basic & Diluted) | $(9.13) | $0.96 | $(8.17) |
| Six Months Ended June 30, 2021 | Weighted-Average Shares | 7,277,677 | 848,070 | 8,125,747 |
Material Changes and Control Deficiencies
The primary material change is the restatement of historical per-share data due to the failure to apply the correct exchange ratio from the December 7, 2021, Agreement and Plan of Merger. Consequently, management and the Audit Committee concluded that the Company's disclosure controls and procedures were not effective as of June 30, 2022. This deficiency has been identified as a material weakness in internal controls.
Outlook, Risks, and Management Commentary
Management has concluded that previously issued reports, press releases, and investor presentations covering the Affected Periods should no longer be relied upon. The Company plans to file an amendment to its Original Quarterly Report to include the restated financial statements and details regarding remediation actions for the identified material weakness. The filing does not provide updated forward-looking guidance or specific risk factors beyond the control deficiency.
Investor Verification Checklist
- Verify the upcoming amendment to the Quarterly Report for the restated financial statements.
- Review the specific remediation plan for the material weakness in disclosure controls.
- Confirm that all prior investor communications regarding 2021 per-share metrics are superseded.
- Note that total net loss and cash flow figures for the affected periods remain unchanged.