Item 4.02. Non-Reliance on Previously Issued
Financial Statements or a Related Audit Report or Completed Interim Review.
On
November 12, 2021, Research Alliance Corp. II (the “Company”) filed its Form 10-Q for the quarterly period ended September
30, 2021 (the “Q3 Form 10-Q”), which included in Note 2, Revision to Previously Reported Financial Statements (“Note
2”), a discussion of the revision to a portion of the Company’s previously issued financial statements for the classification
of its shares of Class A common stock subject to redemption issued in the Company’s initial public offering (“IPO”).
As described in Note 2, upon its IPO, the Company classified a portion of the shares of Class A common stock subject to redemption 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 re-evaluated the conclusion
and determined that the shares of Class A common stock subject to redemption included certain provisions that require classification of
the shares of Class A common stock subject to redemption as temporary equity regardless of the minimum net tangible assets required to
complete the Company’s initial business combination. As a result, management corrected the error by revising all shares of Class
A common stock subject to redemption as temporary equity. This resulted in an adjustment to 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.
Also
in Note 2 of the Company’s Q3 Form 10-Q, in connection with the change in presentation for the shares of Class A common stock subject
to possible redemption, the Company revised its earnings per share calculation to allocate income and losses shared pro rata between the
two classes of shares. This presentation differs from the previously presented method of earnings per share, which was similar to the
two-class method.
As
described above, originally, the Company determined the changes were not qualitatively material to the Company’s previously issued
financial statements and revised Note 2 to its Q3 Form 10-Q. However, upon further consideration of the material nature of the changes,
the Company determined the change in classification of the shares of Class A common stock subject to redemption and change to its presentation
of earnings per share is material quantitatively and the Company should restate its previously issued financial statements.
Therefore,
on February 17, 2022, the audit committee of the board of directors of the Company (the “Audit Committee”) concluded, after
discussion with the Company’s management, that the Company’s previously issued (i) audited balance sheet as of March 22, 2021,
filed as Exhibit 99.1 to the Company’s Current Report on Form 8-K, filed with the SEC on March 26, 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 11, 2021; (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 9, 2021; and (iv) Note
2 to the unaudited interim financial statements and Item 4 of Part 1 included in the Company’s Quarterly Report on Form 10-Q for
the quarterly period ended September 30, 2021, filed with the SEC on November 12, 2021 (collectively, the “Affected Periods”),
should be restated and should no longer be relied upon. Similarly, other communications describing the Company’s financial statements
and other related financial information covering the Affected Periods should no longer be relied upon.
The
Company’s Form 10-K for the year ended December 31, 2021 (the “Form 10-K”) will reflect the restatement of the shares
of Class A common stock subject to redemption and the change to its presentation of earnings per share.
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.
After
re-evaluation, the Company’s management has concluded that in light of the errors described above, a material weakness existed in
the Company’s internal control over financial reporting for complex securities during the Affected Periods and that the Company’s
disclosure controls and procedures were not effective. The Company’s remediation plan with respect to such material weakness will
be described in more detail in the Form 10-K.
The
Audit Committee has discussed the matters disclosed in this Current Report on Form 8-K pursuant to this Item 4.02 with WithumSmith+Brown,
P.C., the Company’s independent registered public accounting firm.