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 VPC Impact
Acquisition Holdings II (the "Company") for the quarter ended September 30,
2021, the 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 4, 2021. Historically, a portion of the Public Shares was classified as
permanent equity to maintain shareholders' equity greater than $5,000,000 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 described in the
Company's amended and restated memorandum and articles of association (the
"Charter"). Pursuant to such re-evaluation, the Company's management has
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 Charter.
Therefore, on December 10, 2021, the Company's management and the audit
committee of the Company's board of directors (the "Audit Committee"), after
discussion with WithumSmith+Brown, PC ("Withum"), the Company's independent
registered public accounting firm, concluded that the Company's previously
issued (i) audited balance sheet as of March 9, 2021, as previously restated in
the Company's Quarterly Report for the quarterly period ended March 31, 2021,
filed with the SEC on May 24, 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 24, 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 13, 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 intends to restate its financial statements for the
Affected Periods in the Company's Amendment No. 1 to Quarterly Report on
Form 10-Q for the quarterly period ended September 30, 2021, to be filed with
the SEC (the "Amended Third Quarter 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. The Company's remediation plan with respect to
such material weakness will be described in more detail in the Amended Third
Quarter 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
Withum.
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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