Item 4.02. Non- Reliance on Previously Issued Financial Statements or a Related Audit Report or Completed Interim Review.

(a) In light of recent comments issued by the U.S. Securities and Exchange Commission (the "SEC"), the management of European Sustainable Growth Acquisition Corp., a Cayman Islands exempted company (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 "IPO") in January 2021. The Company has determined that, at the closing of its IPO, and in all of its subsequent periodic reports filed with the SEC, through and including the Form 10-Q for the quarterly period ended July 31, 2021, it had improperly valued its Public Shares subject to possible redemption. The Company previously determined the Public Shares subject to possible redemption to be equal to the redemption value, while also taking into consideration a redemption cannot result in net tangible assets being less than $5,000,001. Management determined that the Public Shares issued during the IPO can be redeemed or become redeemable subject to the occurrence of future events considered outside of the Company's control. Therefore, management concluded that the redemption value should include all Public Shares subject to possible redemption, resulting in the Public Shares subject to possible redemption being equal to its redemption value. As a result, management has restated temporary equity and permanent equity. This resulted in a restatement to the initial carrying value of the Public Shares subject to possible redemption with the offset recorded to additional paid-in capital (to the extent available), accumulated deficit and ordinary shares.

As a result of the foregoing, on November 24, 2021, the audit committee of the Company's board of directors concluded, after discussion with the Company's management, that the Company's previously issued (i) audited balance sheet as of January 26, 2021, filed in the Company's Form 8-K on February 2, 2021 as previously revised in the Company's Quarterly Report on Form 10-Q for the quarterly period ended April 30, 2021, filed with the SEC on June 30, 2021 (the "Q2 Form 10-Q") (ii) unaudited interim financial statements included in the Company's Quarterly Report on Form 10-Q for the quarter ended January 31, 2021 (iii) unaudited interim financial statements included in the Q2 Form 10-Q for the quarter ended April 30, 2021 and (iv) unaudited interim financial statements included in the Company's Quarterly Report on Form 10-Q for the quarterly period ended July 31, 2021, filed with the SEC on September 14, 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 will restate its financial statements for the Affected Periods by amending in the Company's Quarterly Report on Form 10-Q/A for the quarterly periods ended January 31, 2021, April 30, 2021 and September 30, 2021, to be filed with the SEC.

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 related to the Company's accounting for complex financial instruments and that, because of this and additional material weaknesses identified in the fiscal quarters ended January 31, 2021, April 30, 2021, and July 31, 2021, the Company's disclosure controls and procedures were not effective for all periods noted above.

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 Company's management and Audit Committee have discussed the matters disclosed in this Current Report on Form 8-K pursuant to this Item 4.02 with Marcum LLP, the Company's independent registered public accounting firm.


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