Item 4.02 Non-Reliance on Previously Issued Financial Statement or Related Audit
Report or Completed Interim Review.
As a result of changes to industry practice and new consensus in the accounting
profession, the management of Climate Real Impact Solutions II Acquisition
Corporation (the "Company") has reevaluated the Company's application of ASC
480-10-S99-3A to its accounting classification of the redeemable shares of Class
A common stock, 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
January 29, 2021. Historically, a portion of the Public Shares was classified as
permanent equity to maintain stockholders' 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 described in the
Company's amended and restated certificate of incorporation (the "Charter").
Pursuant to such reevaluation, 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
redemption limitation contained in the Charter.
Therefore, on December 8, 2021, the Company's management and the audit committee
of the Company's board of directors (the "Audit Committee") concluded that its
previously issued (i) audited balance sheet as of January 29, 2021, as filed as
Exhibit 99.1 to the Company's Current Report on Form 8-K with the U.S.
Securities and Exchange Commission (the "SEC") on January 29, 2021 (the
"Affected Initial Balance Sheet"); (ii) unaudited interim financial statements
as of and for the quarterly period ended March 31, 2021 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; (iii) unaudited interim financial
statements as of and for the three and six months ended June 30, 2021 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 12, 2021; and (iv) unaudited interim
financial statements as of and for the three and nine months ended September 30,
2021 included 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 (items
(ii), (iii) and (iv) collectively, the "Affected Quarterly Periods" and,
together with the Affected Initial Balance Sheet, 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 will restate its financial statements for (i) the Affected
Quarterly Periods in an amended Quarterly Report on Form 10-Q/A for the
quarterly period ended September 30, 2021 (the "Q3 Form 10-Q/A") and (ii) the
Affected Initial Balance Sheet in an amended Current Report on Form 8-K/A.
In connection with the restatement, as is customary under industry accounting
and corporate governance practices when an issuer concludes its financial
statements should be restated, management has reevaluated the effectiveness of
the Company's disclosure controls and procedures and internal control over
financial reporting as of September 30, 2021. The Company's management has
concluded that, solely as a result of the restatements 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 as of September 30, 2021, for the periods covered by the Affected
Periods. The Company's remediation plan with respect to such material weakness
will be described in more detail in the Q3 Form 10-Q/A.
The Company does not expect that any of the above changes will have any impact
on the Company's cash position and cash held in the trust account established in
connection with the IPO (the "Trust Account").
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(a) with
WithumSmith+Brown, PC, the Company's independent registered public accounting
firm.
Forward-Looking Statements
This Current Report on Form 8-K includes "forward-looking statements" within the
meaning of Section 27A of the Securities Act of 1933, as amended, and Section
21E of the Securities Exchange Act of 1934, as amended. 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.
Forward-looking statements are subject to a number of risks and uncertainties
that may cause actual results to differ materially, many of which are beyond the
control of the Company. Such risks include, without limitation, those set forth
in the Risk Factors section of the Company's final prospectus filed in
connection with the IPO with the SEC on January 27, 2021, as may be amended,
supplemented, or superseded from time to time by other reports the Company files
with the SEC, including its Quarterly Reports on Form 10-Q. Except as may be
required by law, 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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