Item 4.02 Non-Reliance on Previously Issued Financial Statement or Related Audit
Report or Completed Interim Review.
In connection with the preparation of its financial statements as of
September 30, 2021, the management of Sandbridge X2 Corp (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 March 12, 2021. Historically, a
portion of the Public Shares was classified 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 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
required to complete the Company's initial business combination.
On November 24, 2021, the Company's management concluded that it is appropriate
to restate the Company's previously issued audited balance sheet as of March 12,
2021 as previously restated in the Company's Quarterly Report on Form 10-Q filed
with the SEC on June 22, 2021 (the "Q1 Form 10-Q"); the Company's unaudited
quarterly financial statements as of and for the three months ended March 31,
2021 included in the Q1 Form 10-Q, the Company's unaudited quarterly financial
statements as of and for the six months ended June 30, 2021 included in the
Company's quarterly report on Form 10-Q filed with the SEC on August 13, 2021,
and the Company's unaudited quarterly financial statements as of and for the
nine months ended September 30, 2021 included in the Company's quarterly report
on Form 10-Q filed with the SEC on November 8, 2021 (the "Non-Reliance Affected
Financial Statements"), in each case to report all Public Shares as temporary
equity.
Considering such restatement, the Non-Reliance Affected Financial Statements
should no longer be relied upon. As such, the Company will restate its financial
statements for the periods affected by the Non-Reliance Affected Financial
Statements in an amended Quarterly Report on Form 10-Q/A for the quarterly
period ended September 30, 2021 (the "Q3 Form 10-Q/A"), as described therein.
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 for the periods covered by the Non-Reliance
Affected Financial Statements. 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 above changes will not have any impact on the Company's cash position and
cash held in the trust account established in connection with the IPO.
The Company's management has discussed the matters disclosed in this Current
Report on Form 8-K pursuant to this Item 4.02 with the Audit Committee of the
Company's board of directors and such matters have also been discussed with
WithumSmith+Brown, PC, the Company's independent registered accounting firm.
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