Item 4.02. Non-Reliance on Previously Issued Financial Statements or a Related
Audit Report or Completed Interim Review.
In connection with the preparation of the financial statements of Austerlitz
Acquisition Corporation II (the "Company") for the quarter ended September 30,
2021, management of the Company re-evaluated the Company's application of ASC
480-10-S99-3A to its accounting classification of the redeemable Class A
ordinary shares, par value $0.0001 per share (the "Public Shares"), issued as
part of the units sold in the Company's initial public offering (the "IPO") on
March 2, 2021. Historically, a portion of the Public Shares was classified as
permanent equity to maintain shareholders' equity greater than $5 million on the
basis that the Company will not redeem its Public Shares in an amount that would
cause its net tangible assets to be less than $5,000,001, as set forth in the
Company's Amended and Restated Memorandum and Articles of Association (the
"Articles"). Pursuant to such re-evaluation, the Company's management determined
that the Public Shares include certain provisions that require classification of
all of the Public Shares as temporary equity regardless of the net tangible
assets redemption limitation contained in the Articles.
In the Company's Quarterly Report on Form 10-Q for the quarterly period ended
September 30, 2021 (the "Original Q3 10-Q") filed with the Securities and
Exchange Commission (the "SEC") on November 12, 2021, the Company disclosed the
revision of its previously reported balance sheet as of the date of its IPO and
financial statements for all periods subsequent to its IPO and determined such
revisions were not material based primarily on qualitative considerations.
Following the filing of the Original Q3 10-Q, in light of recent comment letters
issued by the SEC, management re-evaluated the materiality of the
reclassification and whether the reclassification adjustment related to
temporary equity and permanent equity was material. Although the qualitative
factors that management originally assessed tended to support a conclusion that
the misstatements were not material, upon the Company's reconsideration in light
of recent SEC comment letters, these qualitative factors were not strong enough
to overcome the quantitative impact to the financial statements and the Company
believes the misstatements are material.
Therefore, on January 10, 2022, the Company's management and the audit committee
of the Company's board of directors (the "Audit Committee") concluded that the
Company's previously issued (i) audited balance sheet as of March 2, 2021, filed
in a Current Report on Form 8-K with the SEC on March 8, 2021 (ii) unaudited
interim financial statements included in the Company's Quarterly Report on Form
10-Q for the quarterly period ended March 31, 2021, filed with the SEC on
May 17, 2021 and (iii) unaudited interim financial statements included in the
Company's Quarterly Report on Form 10-Q for the quarterly period ended June 30,
2021, filed with the SEC on August 16, 2021 (collectively, the "Affected
Periods"), should no longer be relied upon. Although the Company previously
included revised financial statements for the Affected Periods in its Original
Q3 10-Q, the Company intends to recharacterize the revisions as a material
restatement to its financial statements in an amendment to the Original Q3 10-Q
to be filed with the SEC (the "Amended Q3 10-Q").
The Company does not expect any of the above changes will have any impact on its
cash position and cash held in the trust account established in connection with
the IPO (the "Trust Account").
The Company's management has concluded that in light of the classification error
described above, a material weakness exists in the Company's internal control
over financial reporting and that the Company's disclosure controls and
procedures were not effective at the reasonable assurance level as of March 2,
2021, March 31, 2021, June 30, 2021 and September 30, 2021. The Company's
remediation plan with respect to such material weakness will be described in
more detail in the Amended Q3 10-Q.
The Company's management and the Audit Committee have discussed the matters
disclosed in this Current Report on Form 8-K pursuant to this Item 4.02 with
WithumSmith+Brown PC.
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Forward-Looking Statements
This Current Report on Form 8-K includes "forward-looking statements" within the
meaning of the safe harbor provisions of the United States Private Securities
Litigation Reform Act of 1995. Certain of these forward-looking statements can
be identified by the use of words such as "believes," "expects," "intends,"
"plans," "estimates," "assumes," "may," "should," "will," "seeks," or other
similar expressions. Such statements may include, but are not limited to,
statements regarding the impact of the Company's restatement of certain
historical financial statements, the Company's cash position and cash held in
the Trust Account and any proposed remediation measures with respect to
identified material weaknesses. These statements are based on current
expectations on the date of this Current Report on Form 8-K and involve a number
of risks and uncertainties that may cause actual results to differ
significantly. The Company does not assume any obligation to update or revise
any such forward-looking statements, whether as the result of new developments
or otherwise. Readers are cautioned not to put undue reliance on forward-looking
statements.
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