Item 4.02 Non-Reliance on Previously Issued Financial
Statements or Related Audit Report or Completed Interim Report.
In connection with the preparation
of its financial statements as of September 30, 2021, the management of CC Neuberger Principal Holdings II (the “Company”),
in consultation with its advisors, identified an error made in certain of its previously issued financial statements, arising from the
manner in which, as of the closing of the Company’s initial public offering (the “IPO”), the Company classified its
Class A ordinary shares (the “Public Shares”) subject to possible redemption. The Company previously determined the value
of such Public Shares to be equal to the redemption value of such shares, 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.
Management has now determined, after consultation with its advisors, that the Public Shares underlying the units issued during its IPO
can be redeemed or become redeemable subject to the occurrence of future events considered to be outside the Company’s control.
Therefore, management has concluded that the redemption value of its Public Shares subject to possible redemption should reflect the possible
redemption of all Public Shares. As a result, management has noted a reclassification error related to temporary equity and permanent
equity, which has resulted in a restatement of 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 Public Shares.
In connection with the change
in presentation for the Public Shares, 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.
Therefore, on December
2, 2021, the Company’s management and the audit committee of the Company’s board of directors (the “Audit
Committee”) concluded that the Company’s previously issued (i) unaudited quarterly financial statements as of and for
the period from May 12, 2020 (inception) through September 30, 2020, as previously restated in the Company’s Annual Report on
Form 10-K/A as of December 31 2020, filed with the U.S. Securities and Exchange Commission (the “SEC“) on May 24, 2021
(the “Form 10-K/A“), (ii) audited financial statements as of December 31, 2020 and for the period from May 12, 2020
(inception) through December 31, 2020, as previously restated in the Form 10-K/A, (iii) unaudited interim financial statements
included in the Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2021, filed with the SEC on May 24, 2021,
(iv) 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 16, 2021 and (v) footnote 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 10, 2021 (collectively, the “Affected Periods”), should be restated to report all Public Shares
as temporary equity and make other related changes and should no longer be relied upon. As such, the Company will restate its
financial statements for the Affected Periods in a Quarterly Report on Form 10-Q/A for the quarterly period ended September 30, 2021
(the “Q3 Form 10-Q/A”), as will be described therein.
None of the above changes
will have any impact on its cash position and cash held in the trust account established in connection with the Company’s IPO (the
“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’s remediation
plan with respect to such material weakness will be described in more detail in the 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 (“Withum”), the Company’s independent registered public accounting firm.
Cautionary Statement Regarding Forward-Looking Statements
This report includes “forward-looking statements” within
the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended.
All statements, including relating to the filing of an amendment to the 10-K, other than statements of historical fact included in this
report are forward-looking statements. When used in this report, words such as “anticipate,” “believe,” “estimate,”
“expect,” “intend” and similar expressions, as they relate to the Company or its management team, identify forward-looking
statements. Such forward-looking statements are based on the beliefs of management, as well as assumptions made by, and information currently
available to, the Company’s management. Actual results could differ materially from those contemplated by the forward-looking statements
as a result of certain factors detailed in the Company’s filings with the SEC. All subsequent written or oral forward-looking statements
attributable to the Company or persons acting on its behalf are qualified in their entirety by this paragraph. Forward-looking statements
are subject to numerous conditions, many of which are beyond the control of the Company, including those set forth in the Risk Factors
section of the Company’s Annual Report on Form 10-K, as it may be amended, filed with the SEC. Copies of such filings are available
on the SEC’s website, www.sec.gov or may be obtained free of charge at the Company’s website at http://hpxcorp.com. The Company
undertakes no obligation to update these statements for revisions or changes after the date of this release, except as required by law.
