Item 4.02 |
Non-Reliance on Previously
Issued Financial Statements or a Related Audit Report or Completed
Interim Review.
|
On November 15, 2021, Altimeter Growth Corp. 2 (the “Company”)
filed its Form 10-Q for the
quarterly period ending September 30, 2021 (the “Q3 Form
10-Q”), which included in
Note 2, Revision to Previously Reported Financial Statements (“Note
2”), a discussion of the revision to a portion of the Company’s
previously issued financial statements for the classification of
its Class A ordinary shares subject to redemption issued in
the Company’s initial public offering (“IPO”) on January 11,
2021. As described in Note 2, upon its IPO, the Company classified
a portion of the Class A ordinary shares subject to redemption
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. The Company’s management
re-evaluated the conclusion
and determined that the Class A ordinary shares subject to
redemption included certain provisions that require classification
of the Class A ordinary shares subject to redemption as
temporary equity regardless of the minimum net tangible assets
required to complete the Company’s initial business combination. As
a result, management corrected the error by revising all
Class A ordinary shares subject to redemption as temporary
equity. This resulted in an adjustment to the initial carrying
value of the Class A ordinary shares subject to possible
redemption with the offset recorded to additional paid-in capital (to the extent
available), accumulated deficit and Class A ordinary
shares.
Also in Note 2 of the Q3 Form 10-Q, in connection with the change in
presentation for the Class A ordinary shares subject to
possible redemption, the Company revised its earnings per share
calculation to allocate income and losses shared pro rata between
the two classes of shares. This presentation differs from the
previously presented method of earnings per share, which was
similar to the two-class
method.
As described above, originally the Company determined the changes
were not qualitatively material to the Company’s previously issued
financial statements and revised its previously financial
statements in Note 2 to its Q3 Form 10-Q. However, upon further
consideration of the material nature of the changes, the Company
determined the change in classification of the Class A
ordinary shares subject to redemption and change to its
presentation of earnings per share is material quantitatively and
the Company should restate its previously issued financial
statements.
Therefore, on December 15, 2021, the audit committee of the
board of directors of the Company (the “Audit Committee”)
concluded, after discussion with the Company’s management, that the
Company’s previously issued (i) audited balance sheet as of
January 11, 2021, filed as Exhibit 99.1 to the Company’s
Current Report on Form 8-K
filed with the Securities and Exchange Commission (the “SEC”) on
January 15, 2021, (ii) unaudited interim financial statements
included in the 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 and should no longer be relied upon. Similarly,
other communications describing the Company’s financial statements
and other related financial information covering the Affected
Periods should no longer be relied upon.
Additionally, the Audit Committee determined that it is appropriate
to file an amendment to its Q3 Form 10-Q (“Q3 Form 10-Q/A”), including restated unaudited
interim financial statements for the quarterly periods ended
March 31, 2021 and June 30, 2021, reflecting the
restatement of the Class A ordinary shares subject to
redemption and change to its presentation of earnings per share for
the Affected Periods as soon as practicable.
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”).
After re-evaluation, the
Company’s management has concluded that in light of the errors
described above, a material weakness existed in the Company’s
internal control over financial reporting for complex securities
during the Affected Periods 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 Q3 Form 10-Q/A.
The Audit Committee has discussed the matters disclosed in this
Current Report on Form 8-K
pursuant to this Item 4.02 with WithumSmith+Brown, P.C., the
Company’s independent registered public accounting firm.