UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE
SECURITIES EXCHANGE ACT OF 1934
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| 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 for PropTech Investment Corporation II (the “Company”) as of and for the period ended September 30, 2021, the Company’s management, in consultation with its advisors, identified a classification error made in certain of the Company’s previously issued financial statements, arising from the manner in which, as of the closing of the Company’s initial public offering (“IPO”), 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. The Company’s management determined, after consultation with its advisors, that all of the shares of Class A common stock underlying the units issued in the IPO 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 the 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, the Company noted a classification error related to temporary equity and permanent equity, which it corrected in its condensed financial statements included in its Quarterly Report on Form 10-Q as of and for the periods ended September 30, 2021, filed on November 12, 2021 (“Q3 Form 10-Q”). In the condensed financial statements included in the Q3 Form 10-Q, the Company reclassified the requisite amount of Class A common stock from permanent to temporary equity, with the offset recorded to additional paid-in capital (to the extent available), accumulated deficit and shares of Class A common stock, and presented the effects of the revision on the Company’s previously issued financial statements. The Company also revised its earnings per share calculation to allocate net income evenly to Class A and Class B common stock. This presentation contemplates an initial business combination as the most likely outcome, in which case, both classes of common stock share pro rata in the income (loss) of the Company. The Company presented the reclassification in the Q3 Form 10-Q as a revision that did not require the restatement of previously filed financial statements. Subsequent to the filing of the Q3 Form 10-Q, the Company determined that it needed to restate its prior financial statements due to the quantitative materiality of the reclassification. Upon further review, and in consultation with its advisors, the Company determined that the Q3 Form 10-Q should be updated to indicate that the classification error is a restatement and not a revision.
On December 6, 2021, the audit committee (the “Audit Committee”) of the board of directors of the Company concluded, after discussion with the Company’s management and advisors, that (i) the Company’s audited balance sheet as of December 8, 2020 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 December 14, 2020, (ii) the Company’s audited financial statements as of December 31, 2020 contained in the Company’s Amendment No. 1 to Annual Report on Form 10-K filed with the SEC on May 24, 2021, (iii) the Company’s unaudited financial statements as of March 31, 2021 contained in the Company’s Quarterly Report on Form 10-Q filed with the SEC on May 24, 2021, (iv) the Company’s unaudited financial statements as of June 30, 2021 contained in the Company’s Quarterly Report on Form 10-Q filed with the SEC on August 11, 2021, and (v) the Company’s unaudited financial statements as of September 30, 2021 contained in the Company’s Quarterly Report on Form 10-Q filed with the SEC on November 12, 2021, should no longer be relied upon due to the reclassification of all of the Company’s Class A common stock from permanent equity to temporary equity. The Company will reflect this reclassification in its forthcoming (i) amended Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2021 (the “Amended Q3 Form 10-Q”) and (ii) amended Annual Report on Form 10-K for the period ended December 31, 2020, which the Company plans to file as soon as practicable.
The Company does not expect the changes described above to have any impact on its cash position or the balance held in its 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 will describe its remediation plan with respect to such material weakness in the forthcoming Amended Q3 Form 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 WithumSmith+Brown, PC, the Company’s independent registered accounting firm.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| PropTech Investment Corporation II | |||
| By: | /s/ Thomas D. Hennessy | ||
| Name: | Thomas D. Hennessy | ||
| Title: | Co-Chief Executive Officer | ||
| Dated: December 6, 2021 | |||
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