Business Context and Reporting Period
This Form 8-K is filed by Virgin Group Acquisition Corp. II (a Cayman Islands special purpose acquisition company, or SPAC), not Grove Collaborative Holdings, Inc. The report covers events occurring between March 22, 2021, and April 13, 2021, with the filing date of April 19, 2021. The Company is an emerging growth company focused on completing an initial business combination.
Key Financial Metrics and Capital Structure
- Over-Allotment Exercise: On April 9, 2021, underwriters fully exercised the option to purchase 5,250,000 additional Units.
- Proceeds from Option Units: Net proceeds of approximately $51,450,000 were received on April 13, 2021, after deducting underwriter discounts.
- Private Placement Proceeds: Simultaneously, the Company sold 700,000 private placement warrants to the Sponsor for $1,050,000 ($1.50 per warrant).
- Total New Proceeds: Approximately $52,500,000 in aggregate from the over-allotment and private placement.
- Liquidity and Trust Account: Proceeds are held in a U.S.-based trust account at J.P. Morgan Chase Bank, N.A. Funds are restricted until the completion of an initial business combination or specific redemption events.
- Debt: The filing does not disclose any outstanding debt obligations.
Material Changes Versus Prior Period
The primary material change is the increase in cash held in the trust account due to the full exercise of the over-allotment option and the concurrent private placement. This follows the initial IPO consummated on March 25, 2021, which raised funds for 35,000,000 Units. The filing references an unaudited pro-forma balance sheet (Exhibit 99.1) reflecting these new proceeds, whereas the previously filed audited balance sheet (March 25, 2021) did not include them.
Guidance, Risks, and Unusual Items
- SEC Accounting Statement: On April 12, 2021, the SEC issued a statement regarding the accounting for warrants issued by SPACs. The Company is currently evaluating whether its warrants should be reclassified from equity to a liability on the balance sheet as of March 25, 2021.
- Redemption Rights: Public shareholders have the right to redeem shares if the Company does not complete an initial business combination within 24 months of the IPO closing.
- Warrant Terms: Private placement warrants held by the Sponsor have different redemption and exercise terms compared to public warrants, including cashless exercise options and transfer restrictions for 30 days post-business combination.
Investor Verification Checklist
- Verify the total cash balance in the trust account post-over-allotment exercise.
- Confirm the outcome of the Company's evaluation regarding the reclassification of warrants from equity to liability per the April 12, 2021 SEC Staff Statement.
- Review the unaudited pro-forma balance sheet (Exhibit 99.1) for updated capitalization details.
- Monitor the 24-month deadline for completing an initial business combination to avoid mandatory liquidation.