☒ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Cayman Islands |
A | |
(State or Other Jurisdiction of Incorporation or Organization) |
(I.R.S. Employer Identification No.) | |
65 Bleecker Street, 6th Floor New York, |
10012 | |
(Address of Principal Executive Offices) |
Zip Code |
Title of Each Class |
Trading Symbol(s) |
Name of Each Exchange on Which Registered | ||
Units, each consisting of one Class A ordinary share and one-fifth of one redeemable warrant |
VGII.U |
The New York Stock Exchange | ||
Class A ordinary shares, par value $0.0001 per share |
VGII |
The New York Stock Exchange | ||
Warrants, each warrant exercisable for one Class A ordinary share at an exercise price of $11.50 |
VGII.WS |
The New York Stock Exchange |
Large accelerated filer | ☐ | Accelerated filer | ☐ | |||
Non-accelerated filer |
☒ | Smaller reporting company | ☒ | |||
Emerging growth company | ☒ |
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Item 4. |
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Item 1. |
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Item 1A. |
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Item 2. |
32 |
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Item 3. |
32 |
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Item 4. |
33 |
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Item 5. |
33 |
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Item 6. |
33 |
For the Three Months Ended March 31, 2022 |
For the period from January 13, 2021 (inception) through March 31, 2021 |
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Formation and operating costs |
$ | 1,008,046 | $ | 27,356 | ||||
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|
|
|
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Loss from operations |
(1,008,046 |
) |
(27,356 |
) | ||||
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|
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Other income (expense) |
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Interest income earned on cash and investments held in trust account |
35,883 | 1,444 | ||||||
Offering costs allocated to warrants |
— | (497,634 | ) | |||||
Change in fair value of derivative warrant liabilities |
7,654,280 | (208,793 | ) | |||||
Initial measurement of backstop derivative liabilit y |
|
|
(30,234,314 |
) |
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Total other expense, net |
(22,544,151 |
) |
(704,983 |
) | ||||
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Net loss |
$ |
(23,552,197 |
) |
$ |
(732,339 |
) | ||
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Basic and diluted weighted average shares outstanding, Class A ordinary shares, subject to possible redemption |
40,250,000 | 3,141,026 | ||||||
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Basic and diluted net loss per ordinary share, Class A ordinary shares, subject to possible redemption |
$ | (0.47 | ) | $ | (0.06 | ) | ||
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Basic and diluted weighted average shares outstanding, Class B ordinary shares |
10,062,500 | 8,750,000 | ||||||
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|
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Basic and diluted net loss per ordinary share, Class B ordinary shares |
$ | (0.47 | ) | $ | (0.06 | ) | ||
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Ordinary Shares |
Additional |
Accumulated |
Total Shareholders’ |
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Class A |
Class B |
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Shares |
Amount |
Shares |
Amount |
Paid-In Capital |
Deficit |
Deficit |
||||||||||||||||||||||
Balance as of December 31, 2021 |
— |
$ |
— |
10,062,500 |
$ |
1,006 |
$ | — | $ |
(29,541,309 |
) |
$ |
(29,540,303 |
) | ||||||||||||||
Net loss |
— | — | — | — | — | (23,552,197 | ) | (23,552,197 | ) | |||||||||||||||||||
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Balance as of March 31, 2022, (unaudited) |
— |
$ |
— |
10,062,500 |
$ |
1,006 |
$ |
— |
(53,093,506 |
) | $ |
(53,092,500 |
) | |||||||||||||||
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Class A |
Class B |
Additional |
Total |
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Ordinary Shares |
Ordinary Shares |
Paid-in |
Accumulated |
Shareholders’ |
||||||||||||||||||||||||
Shares |
Amount |
Shares |
Amount |
Capital |
Deficit |
Deficit |
||||||||||||||||||||||
B alance as of January 13, 2021 (inception) |
— |
$— | — |
$— | $— | $— | $— | |||||||||||||||||||||
Issuance of Class B Ordinary shares to Sponsor |
— |
— |
10,062,500 | 1,006 | 23,994 | — | 25,000 | |||||||||||||||||||||
Accretion for Class A Ordinary Shares to redemption amount |
— |
|
— | — |
— |
(23,994 | ) | (28,100,284) |
(28,124,278 | ) | ||||||||||||||||||
Net loss |
— | — |
— |
— |
— |
(732,339 | ) | (732,339 | ) | |||||||||||||||||||
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Balance as of March 31, 2021, (unaudited) |
— |
$ |
— |
10,062,500 |
$ |
1,006 |
$ | — | $ |
(28,832,623 |
) | $ |
(28,831,617 |
) | ||||||||||||||
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For the Three Months Ended March 31, 2022 |
For the period from January 13, 2021 (inception) through March 31, 2021 |
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Cash flows from operating activities: |
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Net loss |
$ | (23,552,197 | ) | $ | (732,339 | ) | ||
Adjustments to reconcile net loss to net cash used in operating activities: |
||||||||
Interest income on investments held in Trust Account |
(35,883 | ) | (1,444 | ) | ||||
Offering costs allocated to derivative warrant liabilities |
— | 497,634 | ||||||
Change in fair value of derivative warrant liabilities |
(7,654,280 | ) | 208,793 | |||||
Initial measurement of backstop derivative liability |
|
|
30,234,314 |
|
|
|
|
|
Changes in operating assets and liabilities: |
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Prepaid assets |
155,123 | (1,244,423 | ) | |||||
Accrued costs and expenses |
395,513 | 1,266,779 | ||||||
Due to related party |
30,000 | — | ||||||
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|
|
|||||
Net cash used in operating activities |
(427,410 |
) |
(5,000 |
) | ||||
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|
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Cash flows from investing activity: |
||||||||
Investment of cash in Trust Account |
— | (350,000,000 | ) | |||||
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|
|
|
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Net cash used in investing activity |
— |
(350,000,000 |
) | |||||
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|
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Cash flows from financing activities: |
||||||||
Proceeds from purchase of Class B shares by initial shareholder |
— | |||||||
Proceeds from initial public offering, net of underwriters’ discount |
— | 343,000,000 | ||||||
Proceeds from private placement |
— | 9,000,000 | ||||||
Payment of offering costs |
— | (595,525 | ) | |||||
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|
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Net cash provided by financing activities |
— |
351,429,475 |
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Net change in cash |
(427,410 | ) | 1,424,475 | |||||
Cash, beginning of the period |
507,233 | — | ||||||
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|
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Cash, end of the period |
$ |
79,823 |
$ |
1,424,475 |
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Supplemental disclosure of cash flow information: |
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Deferred underwriting commissions charged to temporary equity |
$ | — | $ | 12,250,000 | ||||
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|
• | Level 1, defined as observable inputs such as quoted prices (unadjusted) for identical instruments in active markets; |
• | Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable such as quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active; and |
• | Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions, such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable. |
For the three months ended March 31, 2022 |
For the period from January 13, 2021 (inception) through March 31, 2021 |
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Class A |
Class B |
Class A |
Class B |
|||||||||||||
Basic and diluted net loss per ordinary share: |
||||||||||||||||
Numerator: |
||||||||||||||||
Allocation of loss |
$ | (18,841,758 | ) | $ | (4,710,439 | ) | $ | (193,448 | ) | $ | (538,891 | ) | ||||
Denominator: |
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Weighted-average shares outstanding including shares subject to redemption |
40,250,000 | 10,062,500 | 3,141,026 | 8,750,000 | ||||||||||||
Basic and diluted loss per ordinary share |
$ | (0.47 | ) | $ | (0.47 | ) | $ | (0.06 | ) | $ | (0.06 | ) | ||||
Gross proceeds from IPO |
$ | 402,500,000 | ||
Less: |
||||
Proceeds allocated to Public Warrants |
(10,101,143 | ) | ||
Ordinary share issuance costs |
(22,162,529 | ) | ||
Plus: |
||||
Accretion of carrying value to redemption value |
32,263,672 | |||
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|
|||
Contingently redeemable ordinary shares |
$ |
402,500,000 |
||
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|
March 31, 2022 |
Quoted Prices In Active Markets (Level 1) |
Significant Other Observable Inputs (Level 2) |
Significant Other Unobservable Inputs (Level 3) |
|||||||||||||
Assets: |
||||||||||||||||
Mutual Fund held in Trust Account |
$ | 402,566,409 | $ | 402,566,409 | $ |
— |
$ |
— |
||||||||
Liabilities: |
||||||||||||||||
Derivative warrant liability – Public Warrants |
$ | 3,048,919 | $ | 3,048,919 | $ |
— |
$ |
— |
||||||||
Derivative warrant liability – Private Warrants |
2,636,811 | — |
— |
2,636,811 | ||||||||||||
Backstop derivative liability |
30,234,314 | — |
— |
30,234,314 | ||||||||||||
Derivative liabilities |
$ | 35,920,044 | $ | 3,048,919 | $ |
— |
$ | 32,871,125 | ||||||||
December 31, 2021 |
Quoted Prices In Active Markets (Level 1) |
Significant Other Observable Inputs (Level 2) |
Significant Other Unobservable Inputs (Level 3) |
|||||||||||||
Assets: |
||||||||||||||||
Mutual Fund held in Trust Account |
$ | 402,530,526 | $ | 402,530,526 | $ |
— |
$ |
— |
||||||||
Liabilities: |
||||||||||||||||
Derivative warrant liability – Public Warrants |
$ | 6,731,959 | $ | 6,731,959 | $ |
— |
$ |
— |
||||||||
Derivative warrant liability – Private Warrants |
6,608,051 | — |
— |
6,608,051 | ||||||||||||
Derivative warrant liabilities |
$ | 13,340,010 | $ | 6,731,959 | $ |
— |
$ | 6,608,051 | ||||||||
Private Placement Warrants |
Public Warrants |
Warrant Liabilities |
||||||||||
Derivative warrant liability – initial measurement on March 25, 2021 |
$ |
9,020,019 |
$ |
8,776,387 |
$ |
17,796,406 |
||||||
Change in fair value of derivative warrant liabilities |
133,454 |
55,320 |
188,774 |
|||||||||
Derivative warrant liabilities at March 31, 2021 |
$ |
9,153,473 |
$ |
8,831,707 |
$ |
17,985,180 |
||||||
Private Placement Warrants |
Public Warrants |
Warrant Liabilities |
||||||||||
Derivative warrant liabilities at December 31, 2021 |
$ |
6,608,051 |
$ |
— |
$ |
6,608,051 |
||||||
Change in fair value of derivative warrant liabilities |
(3,971,240 |
) |
— |
(3,971,240 |
) | |||||||
Derivative warrant liabilities at March 31, 2022 |
$ |
2,636,811 |
$ |
— |
$ |
2,636,811 |
||||||
March 31, 2022 |
December 31, 2021 |
|||||||
Strike price |
$ | 11.50 | $ | 11.50 | ||||
Share price |
$ | 5.95 | $ | 9.59 | ||||
Volatility |
25 | % | 40 | % | ||||
Risk-free rate |
2.40 | % | 1.28 | % | ||||
Expected term (years) |
5 | 5 |
Share price |
$ | 5.95 | ||
Volatility |
25 | % | ||
Risk-free rate |
2.40 | % | ||
Minimum Redemption Percentage |
92 | % | ||
Maximum Redemption Percentage |
100 | % |
• | in whole and not in part; |
• | at a price of $0.01 per warrant; |
• | upon not less than 30 days’ prior written notice of redemption (the “30-day redemption period”) to each warrant holder; and |
• | if, and only if, the reported closing price of the Class A ordinary shares equals or exceeds $18.00 per share (as adjusted for share splits, share dividends, reorganizations, recapitalizations and the like) for any 20 trading days within a 30-trading day period ending three business days before the Company sends the notice of redemption to the warrant holders. In addition, if (x) the Company issues additional Class A ordinary shares or equity-linked securities for capital raising purposes in connection with the closing of a Business Combination at an issue price or effective issue price of less than $9.20 per Class A ordinary share (with such issue price or effective issue price to be determined in good faith by the Company’s board of directors and, in the case of any such issuance to the Sponsor or its affiliates, without taking into account any Founder Shares held by the Sponsor or such affiliates, as applicable, prior to such issuance) (the “Newly Issued Price”), (y) the aggregate gross proceeds from such issuances represent more than 60% of the total equity proceeds, and interest thereon, available for the funding of a Business Combination, and (z) the volume weighted average trading price of the Class A ordinary shares during the 20 trading day period starting on the trading day prior to the day on which the Company consummates a Business Combination (such price, the “Market Value”) is below $9.20 per share, then the exercise price of the warrants will be adjusted (to the nearest cent) to be equal to 115% of the higher of the Market Value and the Newly Issued Price, and the $18.00 per share redemption trigger price will be adjusted (to the nearest cent) to be equal to 180% of the higher of the Market Value and the Newly Issued Price. |
• | We have implemented procedures intended to ensure that we identify and apply the applicable accounting guidance to all complex transactions. |
• | We are establishing additional monitoring and oversight controls designed to ensure the accuracy and completeness of our consolidated financial statements and related disclosures. |
• | costs and difficulties inherent in managing cross-border business operations; |
• | rules and regulations regarding currency redemption; |
• | complex corporate withholding taxes on individuals; |
• | laws governing the manner in which future business combinations may be effected; |
• | exchange listing and/or delisting requirements; |
• | tariffs and trade barriers; |
• | regulations related to customs and import/export matters; |
• | local or regional economic policies and market conditions; |
• | unexpected changes in regulatory requirements; |
• | challenges in managing and staffing international operations; |
• | longer payment cycles; |
• | tax issues, such as tax law changes and variations in tax laws as compared to the United States; |
• | currency fluctuations and exchange controls; |
• | rates of inflation; |
• | challenges in collecting accounts receivable; |
• | cultural and language differences; |
• | employment regulations; |
• | underdeveloped or unpredictable legal or regulatory systems; |
• | corruption; |
• | protection of intellectual property; |
• | social unrest, crime, strikes, riots and civil disturbances; |
• | regime changes and political upheaval; |
• | terrorist attacks and wars, including the conflict involving Russia and Ukraine and resulting economic sanctions; and |
• | deterioration of political relations with the United States. |
* | Filed herewith. |
** | These certifications are furnished to the SEC pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and are deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, nor shall they be deemed incorporated by reference in any filing under the Securities Act of 1933, except as shall be expressly set forth by specific reference in such filing. |
By: | /s/ Evan Lovell | |||||
Title: Chief Financial Officer | ||||||
(Principal Financial and Accounting Officer) | ||||||
Dated: May 16, 2022 |
EXHIBIT 31.1
CERTIFICATION
PURSUANT TO RULES 13a-14(a) AND 15d-14(a)
UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS ADOPTED PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Josh Bayliss, certify that:
1. I have reviewed this Quarterly Report on Form 10-Q for the quarter ended March 31, 2022 of Virgin Group Acquisition Corp. II;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrants other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:
a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b. [Paragraph omitted pursuant to SEC Release Nos. 33-8238/34-47986 and 33-8392/34-49313];
c. Evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d. Disclosed in this report any change in the registrants internal control over financial reporting that occurred during the registrants most recent fiscal quarter (the registrants fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and
5. The registrants other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants auditors and the audit committee of the registrants board of directors (or persons performing the equivalent functions):
a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrants ability to record, process, summarize and report financial information; and
b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal controls over financial reporting.
Date: May 16, 2022 | By: | /s/ Josh Bayliss | ||||
Name: Josh Bayliss | ||||||
Title: Chief Executive Officer | ||||||
(Principal Executive Officer) |
EXHIBIT 31.2
CERTIFICATION
PURSUANT TO RULES 13a-14(a) AND 15d-14(a)
UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS ADOPTED PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Evan Lovell, certify that:
1. I have reviewed this Quarterly Report on Form 10-Q for the quarter ended March 31, 2022 of Virgin Group Acquisition Corp. II;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrants other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:
a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b. [Paragraph omitted pursuant to SEC Release Nos. 33-8238/34-47986 and 33-8392/34-49313];
c. Evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d. Disclosed in this report any change in the registrants internal control over financial reporting that occurred during the registrants most recent fiscal quarter (the registrants fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and
5. The registrants other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants auditors and the audit committee of the registrants board of directors (or persons performing the equivalent functions):
a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrants ability to record, process, summarize and report financial information; and
b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal controls over financial reporting.
Date: May 16, 2022 | By: | /s/ Evan Lovell | ||||
Name: Evan Lovell | ||||||
Title: Chief Financial Officer | ||||||
(Principal Financial and Accounting Officer) |
EXHIBIT 32.1
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Virgin Group Acquisition Corp. II (the Company) on Form 10-Q for the quarter ended March 31, 2022, as filed with the Securities and Exchange Commission on the date hereof (the Report), I, Josh Bayliss, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:
(1) the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
Date: | May 16, 2022 | By: | /s/ Josh Bayliss | |||
Name: Josh Bayliss | ||||||
Title: Chief Executive Officer (Principal Executive Officer) |
EXHIBIT 32.2
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Virgin Group Acquisition Corp. II (the Company) on Form 10-Q for the quarter ended March 31, 2022, as filed with the Securities and Exchange Commission on the date hereof (the Report), I, Evan Lovell, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:
(1) the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
Date: | May 16, 2022 | By: | /s/ Evan Lovell | |||
Name: Evan Lovell | ||||||
Title: Chief Financial Officer (Principal Financial and Accounting Officer) |