Item 4.02 Non-Reliance on Previously Issued Financial Statement or Related Audit
Report or Completed Interim Review.
In connection with the preparation of the Ross Acquisition Corp II's (the
"Company") financial statements as of September 30, 2021, the Company's
management, in consultation with its advisors, identified an error made in
previously issued financial statements, arising from the manner in which, as of
the closing of the Company's initial public offering, the Company valued its
Class A common stock subject to possible redemption. The Company previously
determined the value of such Class A common stock to be equal to the redemption
value of such shares of Class A common stock, after taking into consideration
the terms of the Company's Amended and Restated Certificate of Incorporation,
under which a redemption cannot result in net tangible assets being less than
$5,000,001. Management determined, after consultation with its advisors, that
the shares of Class A common stock underlying the units issued during the
initial public offering can be redeemed or become redeemable subject to the
occurrence of future events considered to be outside the Company's control.
Therefore, management concluded that the redemption value of its shares of Class
A common stock subject to possible redemption should reflect the possible
redemption of all shares of Class A common stock. As a result, management has
noted a reclassification error related to temporary equity and permanent equity.
This has resulted in a restatement of the initial carrying value of the shares
of Class A common stock subject to possible redemption, with the offset recorded
to additional paid-in capital (to the extent available), accumulated deficit and
shares of Class A common stock.
On December 16, 2021, as a result of the foregoing, 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
January 22, 2021, filed with the U.S. Securities and Exchange Commission ("SEC")
on March 15, 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 27, 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 be restated to report all the
redeemable Class A common stock as temporary equity and should no longer be
relied upon. As such, the Company will restate its financial statements for the
Affected Periods in the Company's amended Quarterly Report on Form 10-Q for the
quarterly period ended September 30, 2021, to be filed with the SEC (the "Q3
Form 10-Q/A"). The Company had previously determined to present this revision in
a prospective manner, pursuant to which the preciously Affected Period financial
statements would not be amended, but historical amounts presented in the Form
10-Q for the quarterly period ended September 30, 2021 and future filings would
be recast to be consistent with the current presentation.
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 initial public offering.
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The Company's management has concluded that in light of the 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.
Management and the Audit Committee have discussed the matters disclosed pursuant
to this Item 4.02 with WithumSmith+Brown, PC, the Company's independent
registered public accounting firm.
Cautionary Statements Regarding Forward-Looking Statements
This Current Report on Form 8-K/A 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 and the timing and impact of the Restatement. These
statements are based on current expectations on the date of this Form 8-K/A 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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