Business Context and Reporting Period
This Form 8-K is filed by Virgin Group Acquisition Corp. II (not Grove Collaborative Holdings, Inc.) on December 7, 2021, regarding events occurring on December 6, 2021. The registrant is a Cayman Islands-based Special Purpose Acquisition Company (SPAC) listed on the New York Stock Exchange under the symbols VGII.U, VGII, and VGII.WS.
Key Financial Metrics
The filing does not provide specific revenue, profit, cash flow, margin, or debt figures. It focuses on a balance sheet reclassification. The filing explicitly states that the changes will have no impact on the Company's cash position or cash held in the trust account.
Material Changes Versus Prior Period
- Equity Reclassification: The Company previously classified Public Shares as permanent equity to maintain net tangible assets above $5,000,000. It has now concluded these shares must be classified as temporary equity regardless of the net tangible asset threshold.
- Restatement: Unaudited interim financial statements for the quarters ended March 31, 2021, June 30, 2021, and September 30, 2021, are being restated. These prior filings should no longer be relied upon.
- Amendment Filed: Amendment No. 1 to the Form 10-Q for the period ended September 30, 2021, was filed on December 7, 2021, to reflect these restatements.
Guidance, Outlook, Risks, and Unusual Items
- Internal Control Weakness: Management and the Audit Committee concluded that a material weakness exists in internal control over financial reporting due to the classification error.
- Disclosure Controls: Disclosure controls and procedures were deemed not effective.
- Management Commentary: Despite the error, management believes the financial statements in the original November 12, 2021, Form 10-Q still present the financial position, results of operations, and cash flows fairly in all material respects.
- Accounting Firm: The matters were discussed with WithumSmith+Brown, PC, the independent registered accounting firm.
Important Facts for Investor Verification
- Verify the restated financial figures in Amendment No. 1 to the Form 10-Q filed on December 7, 2021.
- Confirm that the reclassification of Public Shares to temporary equity does not alter the Company's ability to consummate an initial business combination.
- Review the Company's remediation plan for the identified material weakness in internal controls.
- Note that the filing entity is Virgin Group Acquisition Corp. II, not Grove Collaborative Holdings, Inc.