Business Context and Reporting Period
This Form 8-K was filed by Supernova Partners Acquisition Company II, Ltd., a Cayman Islands special purpose acquisition company that later became associated with Rigetti Computing. The report concerns accounting for the company’s Class A ordinary shares issued in its March 4, 2021 initial public offering. The relevant affected periods are March 31, 2021 and June 30, 2021, with the report dated November 14, 2021 and signed November 16, 2021.
Key Financial and Accounting Matters
- Management determined that all public shares should have been classified as temporary equity rather than partially as permanent equity.
- The classification was revised under ASC 480-10-S99-3A because provisions in the public shares require temporary-equity classification, regardless of the minimum net tangible asset requirement for completing the business combination.
- The filing does not provide clear revenue, profit, cash flow, margin, debt, or liquidity figures.
- The company stated that the correction is not expected to affect its cash position or the cash held in the IPO trust account.
Material Changes Versus Prior Reporting
Management and the audit committee concluded that the previously issued audited balance sheet as of March 31, 2021, the interim financial statements for the quarter ended March 31, 2021, and the interim financial statements for the quarter ended June 30, 2021, should no longer be relied upon. These financial statements were restated in the company’s Form 10-Q for the quarter ended September 30, 2021, filed November 15, 2021.
Controls, Outlook, and Risks
- Management identified a material weakness in internal control over financial reporting resulting from the classification error.
- The company concluded that its disclosure controls and procedures were not effective.
- Management stated that remediation steps would be described in greater detail in the September 30, 2021 Form 10-Q.
- The company consulted with Marcum LLP, its independent registered public accounting firm, and discussed the matter with the audit committee.
- The principal impact disclosed is on financial statement presentation and reliance, not expected cash resources or trust-account balances.
Investor Verification Items
- Review the September 30, 2021 Form 10-Q for the restated financial statements and the specific quantitative effect of reclassifying all public shares as temporary equity.
- Review management’s remediation plan for the material weakness and any subsequent disclosure regarding whether controls were effectively remediated.
- Confirm that cash and trust-account balances were unchanged by the correction.
- Assess whether any related effects occurred in share count, net tangible assets, accumulated deficit, or other balance-sheet classifications.
- Note that this 8-K does not provide operating results, revenue, earnings, cash-flow, debt, or forward-guidance information.