Filing identity and reporting period
Important: The supplied filing is for Virgin Group Acquisition Corp. II, a Cayman Islands blank-check company—not Grove Collaborative Holdings, Inc. It therefore does not report Grove’s operating or financial results. The unaudited Form 10-Q covers the quarter ended June 30, 2021 and, for certain statements, the period from the company’s January 13, 2021 inception through June 30, 2021.
Business context and key financial metrics
The company had not begun operations and had not selected a business-combination target. Its activity was formation and an IPO; it expected no operating revenue before a business combination.
| Metric | Reported amount |
|---|---|
| Revenue | None reported |
| Operating costs / loss from operations, quarter ended June 30 | $249,630 |
| Net loss, quarter ended June 30 | $262,247 |
| Operating costs / loss from operations, inception to June 30 | $276,986 |
| Net loss, inception to June 30 | $994,586 |
| Cash outside trust, June 30 | $118,875 |
| Trust assets, June 30 | $402,515,362 |
| Working capital, June 30 | $1,152,490 |
| Total liabilities, June 30 | $34,455,071, including $20,313,609 warrant liability and $14,087,500 deferred underwriting discount |
| Debt | No outstanding working-capital loans; no long-term debt reported |
The trust held short-term U.S. government-related investments. Interest income was $13,918 for the quarter and $15,362 from inception. The filing reports no material market or interest-rate risk from these short-term holdings. The warrant liability is remeasured at fair value, with changes affecting earnings.
Changes, outlook, risks and unusual items
- The company raised $402.5 million through its IPO and over-allotment and sold private-placement warrants for $10.05 million. It reported 40.25 million public units sold.
- Management expected available working capital and borrowing capacity to cover needs through the earlier of a business combination or one year from the filing. It cautioned that costs could exceed estimates and additional financing might be needed.
- The company had to complete a business combination within 24 months of the IPO closing or redeem public shares and liquidate. No target had been selected, and completion was not assured.
- Warrants were classified as derivative liabilities following SEC staff guidance; fair-value changes can cause non-cash earnings volatility. The filing reports $20.3 million of warrant liabilities at June 30.
- Management concluded disclosure controls were not effective and identified a material weakness in warrant accounting. It described planned remediation but gave no assurance it would be successful.
- Management stated COVID-19 could adversely affect the company’s financial position, operations, or target search, though the impact was not readily determinable. No legal proceedings or subsequent events requiring disclosure were reported.
Important facts for investors to verify
- Confirm the issuer: this filing is for Virgin Group Acquisition Corp. II, not Grove Collaborative Holdings, Inc.
- Reconcile trust-account proceeds: the filing gives differing figures in different sections, including $402.5 million, $402.25 million, and a June 30 trust balance of $402,515,362.
- Review the warrant-liability accounting, valuation assumptions, and material-weakness remediation; warrant remeasurement may materially affect reported earnings.
- Verify the business-combination deadline, redemption terms, deferred underwriting fee, and potential need for additional financing.