Item 4.02. Non-Reliance on Previously Issued Financial Statements or a Related
Audit Report or Completed Interim Review.
In light of recent comment letters issued by the U.S. Securities and Exchange
Commission (the "SEC"), the management of Cartesian Growth Corporation (the
"Company") has re-evaluated the Company's application of ASC 480-10-S99-3A to
its accounting classification of its 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 "Offering") on February 26, 2021.
Historically, a portion of the Public Shares was classified as permanent equity
to maintain net tangible assets greater than $5,000,000 on the basis that the
Company will consummate its initial business combination only if the Company has
net tangible assets of at least $5,000,001. Pursuant to such re-evaluation, the
Company's management has determined that the Public Shares include certain
provisions that require classification of the Public Shares as temporary equity
regardless of the minimum net tangible assets required to complete the Company's
initial business combination.
Therefore, on November 12, 2021, the Company's management and the audit
committee of the Company's board of directors (the "Audit Committee"), after
consultation with Marcum LLP ("Marcum"), the Company's independent registered
public accounting firm, concluded that the Company's previously issued
(i) audited balance sheet as of February 26, 2021, as previously restated in the
Company's Quarterly Report on Form 10-Q for the quarterly period ended March 31,
2021, filed with the SEC on May 24, 2021 (the "First Quarter Form 10-Q"),
(ii) unaudited interim financial statements included in the First Quarter Form
10-Q 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 10, 2021 (collectively, the "Affected Periods"),
should be restated to report all Public Shares as temporary equity and should no
longer be relied upon. As such, the Company has restated its financial
statements for the Affected Periods in the Company's Quarterly Report on Form
10-Q for the quarterly period ended September 30, 2021, filed with the SEC on
November 15, 2021 (the "Third Quarter Form 10-Q"), as described therein.
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 Offering (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. The Company's remediation plan with respect to
such material weakness is described in more detail in the Third Quarter Form
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
Marcum.
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 Company's intent to restate certain historical
financial statements, the timing or impact of such restatement and the Company's
cash position and cash held in the Trust Account. 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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