References to the "Company," "us," "our" or "we" refer to Carney Technology
Acquisition Corp. II. The following discussion and analysis of our financial
condition and results of operations should be read in conjunction with our
audited financial statements and related notes included herein.
In this Amendment No. 2, we are restating (i) the Post IPO Balance Sheet, as
previously revised in the First Amended Filing, and (ii) the unaudited financial
statements as of and for the year ended December 31, 2020 as previously revised

in the First Amended Filing.
We have
re-evaluated
our application of ASC
480-10-S99-3A

to our accounting and classification of the Public Shares, issued as part of the
units sold in the initial public offering on December 14, 2020. Historically, a
portion of the Public Shares was classified as permanent equity to maintain
stockholders' equity greater than $5 million on the basis that we will not
redeem our Public Shares in an amount that would cause our net tangible assets
to be less than $5,000,001, as described in the Charter. Pursuant to such
re-evaluation,
our management has determined that the Public Shares include certain provisions
that require classification of all of the Public Shares as temporary equity
regardless of the net tangible assets redemption limitation contained in the
Charter. In addition, in connection with the change in presentation for the
Public Shares, management determined it should restate earnings per share
calculation to allocate income and losses shared pro rata between the two
classes of 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 and losses of our Company.
On January 4, 2022, the Audit Committee concluded, after discussion with the
Company's management and consultation with Withum, that our previously issued
(i) the Post IPO Balance sheet, as previously revised in the First Amended
Filing, (ii) audited financial statements for the fiscal year ended December 31,
2020 as previously restated in the First Amended Filing, (iii) unaudited
financial statements included in our Quarterly Report on Form
10-Q
for the quarterly period ended March 31, 2021, filed with the SEC on July 9,
2021 and (iv) unaudited financial statements included in our Quarterly Report on
Form
10-Q
for the quarterly period ended June 30, 2021, filed with the SEC on August 11,
2021, should be restated to report all Public Shares as temporary equity and the
Company revised method for its calculation for earnings per share and should no
longer be relied upon.
The restatement does not have an impact on our cash position.
Our management has concluded that in light of the classification error described
above, a material weakness exists in our internal control over financial
reporting and that our disclosure controls and procedures were not effective as
of December 31, 2020.
In connection with the restatement, our management reassessed the effectiveness
of our disclosure controls and procedures for the periods affected by the
restatement. As a result of that reassessment, we determined that our disclosure
controls and procedures for such periods were not effective with respect to our
internal controls around the proper accounting and classification of complex
financial instruments. For more information, see Item 9A included in this
Amendment No. 2.
The restatement is more fully described in Note 2 of the notes to the financial
statements included herein.
Overview
We are a blank check company formed under the laws of the State of Delaware on
August 31, 2020 for the purpose of effecting a merger, capital stock exchange,
asset acquisition, stock purchase, reorganization or other similar Business
Combination with one or more businesses. We intend to effectuate our Business
Combination using cash from the proceeds of the Initial Public Offering and the
sale of the Placement Units, our capital stock, debt or a combination of cash,
stock and debt.
We expect to continue to incur significant costs in the pursuit of our
acquisition plans. We cannot assure you that our plans to complete a Business
Combination will be successful.
Results of Operations
We have neither engaged in any operations (other than searching for a Business
Combination after our Initial Public Offering) nor generated any revenues to
date. Our only activities from August 31, 2020 (inception) through December 31,
2020 were organizational activities, those necessary to prepare for the Initial
Public Offering, described below. We do not expect to generate any operating
revenues until after the completion of our Business Combination, at the
earliest. We expect to generate
non-operating
income in the form of interest income on marketable securities held after the
Initial Public Offering. We incur expenses as a result of being a public company
(for legal, financial reporting, accounting and auditing compliance), as well as
for due diligence expenses.
For the period from August 31, 2020 (inception) through December 31, 2020, we
had a net loss of $845,189, which consists of operating costs of $133,396 and
transaction costs allocable to warrants of $993,257 offset by a change in the
fair value of warrant liabilities of $274,333 and interest income on investments
and marketable securities held in the Trust Account of $7,131.

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Liquidity and Capital Resources
On December 14, 2020, we consummated the Initial Public Offering of 40,250,000
Units, which included the full exercise by the underwriters of their
over-allotment option in the amount of 5,250,000 Units, at a price of $10.00 per
Unit, generating gross proceeds of $402,500,000. Simultaneously with the closing
of the Initial Public Offering, we consummated the sale of 900,000 Placement
Units at a price of $10.00 per Placement Unit in a private placement to our
Sponsor, generating gross proceeds of $9,000,000.
Following the Initial Public Offering, the full exercise of the over-allotment
option, and the sale of the Placement Units, a total of $402,500,000 was placed
in the Trust Account. We incurred $22,583,792 in transaction costs, including
$7,000,000 of underwriting fees, $15,137,500 of deferred underwriting fees and
$446,292 of other offering costs.
For the period from August 31, 2020 (inception) through December 31, 2020, cash
used in operating activities was $743,500. Net loss of $845,189 was affected by
a change in the fair value of warrant liabilities of $274,333, transaction costs
allocable to warrants of $993,257, interest earned on investments and marketable
securities held in the Trust Account of $7,131 and changes in operating assets
and liabilities, which used $610,104 of cash from operating activities.
As of December 31, 2020, we had cash, investments and marketable securities held
in the Trust Account of $402,507,131. We intend to use substantially all of the
funds held in the Trust Account, including any amounts representing interest
earned on the Trust Account to complete our Business Combination. We may
withdraw interest to pay taxes. During the period ended December 31, 2020, we
did not withdraw any interest income from the Trust Account To the extent that
our capital stock or debt is used, in whole or in part, as consideration to
complete our Business Combination, the remaining proceeds held in the Trust
Account will be used as working capital to finance the operations of the target
business or businesses, make other acquisitions and pursue our growth
strategies.
As of December 31, 2020, we had $835,208 of cash held outside of the Trust
Account. We intend to use the funds held outside the Trust Account primarily to
identify and evaluate target businesses, perform business due diligence on
prospective target businesses, travel to and from the offices, plants or similar
locations of prospective target businesses or their representatives or owners,
review corporate documents and material agreements of prospective target
businesses, and structure, negotiate and complete a Business Combination.
In order to fund working capital deficiencies or finance transaction costs in
connection with a Business Combination, our Sponsor or an affiliate of our
Sponsor or certain of our officers and directors may, but are not obligated to,
loan us funds as may be required. If we complete a Business Combination, we may
repay such loaned amounts out of the proceeds of the Trust Account released to
us. In the event that a Business Combination does not close, we may use a
portion of the working capital held outside the Trust Account to repay such
loaned amounts, but no proceeds from our Trust Account would be used for such
repayment. Up to $1,500,000 of such loans may be convertible into units, at a
price of $10.00 per unit, at the option of the lender. The units would be
identical to the Placement Units.
We do not believe we will need to raise additional funds in order to meet the
expenditures required for operating our business. However, if our estimate of
the costs of identifying a target business, undertaking
in-depth
due diligence and negotiating a Business Combination are less than the actual
amount necessary to do so, we may have insufficient funds available to operate
our business prior to our Business Combination. Moreover, we may need to obtain
additional financing either to complete our Business Combination or because we
become obligated to redeem a significant number of our public shares upon
consummation of our Business Combination, in which case we may issue additional
securities or incur debt in connection with such Business Combination. Subject
to compliance with applicable securities laws, we would only complete such
financing simultaneously with the completion of our Business Combination. If we
are unable to complete our Business Combination because we do not have
sufficient funds available to us, we will be forced to cease operations and
liquidate the Trust Account. In addition, following our Business Combination, if
cash on hand is insufficient, we may need to obtain additional financing in
order to meet our obligations.
Off-Balance
Sheet Arrangements
We did not have any
off-balance
sheet arrangements as of December 31, 2020.
Contractual Obligations
We do not have any long-term debt, capital lease obligations, operating lease
obligations or long-term liabilities, other than an agreement to pay affiliate
of the Sponsor a monthly fee of $15,000 for office space, utilities and
secretarial and administrative support services. We began incurring these fees
on December 9, 2020 and will continue to incur these fees monthly until the
earlier of the completion of the Business Combination and/or our liquidation.

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The underwriters are entitled to a deferred fee of (i) $0.35 per Unit of the
gross proceeds of the initial 35,000,000 Units sold in the Initial Public
Offering, or $12,250,000, and (ii) $0.55 per Unit of the gross proceeds from the
Units sold pursuant to the over-allotment option, or $2,887,500. The deferred
fee will become payable to the underwriters from the amounts held in the Trust
Account solely in the event we complete a Business Combination, subject to the
terms of the underwriting agreement.
Critical Accounting Policies
The preparation of financial statements and related disclosures in conformity
with accounting principles generally accepted in the United States of America
requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities, disclosure of contingent assets and
liabilities at the date of the financial statements, and income and expenses
during the periods reported. Actual results could materially differ from those
estimates. We have identified the following critical accounting policies.
Warrant Liability
We account for the warrants issued in connection with our Initial Public
Offering in accordance with the guidance contained in ASC
815-40
under which the warrants do not meet the criteria for equity treatment and must
be recorded as liabilities. Accordingly, we classify the warrants as liabilities
at their fair value and adjust the warrants to fair value at each reporting
period. This liability is subject to
re-measurement
at each balance sheet date until exercised, and any change in fair value is
recognized in our statement of operations. The fair value of the warrants was
estimated using a Monte Carlo simulation approach.
Class A Common Stock Subject to Possible Redemption
We account for our Class A common stock subject to possible redemption in
accordance with the guidance in Accounting Standards Codification ("ASC") Topic
480 "Distinguishing Liabilities from Equity." Shares of Class A common stock
subject to mandatory redemption is classified as a liability instrument and is
measured at fair value. Conditionally redeemable common stock (including common
stock that feature redemption rights that is either within the control of the
holder or subject to redemption upon the occurrence of uncertain events not
solely within our control) is classified as temporary equity. At all other
times, common stock is classified as stockholders' equity. Our Class A common
stock features certain redemption rights that are considered to be outside of
our control and subject to occurrence of uncertain future events. Accordingly,
shares of Class A common stock subject to possible redemption are presented as
temporary equity, outside of the stockholders' equity section of our balance
sheet.
Effective with the closing of our initial public offering, the Company
recognized the accretion from initial book value to redemption amount, which
resulted in charges against additional
paid-in
capital (to the extent available) and accumulated deficit.
The Company recognizes changes in redemption value immediately as they occur and
adjusts the carrying value of redeemable common stock to equal the redemption
value at the end of each reporting period. This method would view the end of the
reporting period as if it were also the redemption date for the security.
Increases or decreases in the carrying amount of redeemable common stock are
affected by charges against additional paid in capital and accumulated deficit.
Net Income (Loss) per Common Share
We comply with accounting and disclosure requirements of Financial Accounting
Standards Board ("FASB") ASC Topic 260, "Earnings Per Share." We have two
classes of shares, which are referred to as Class A common stock and Class B
common stock. Income and losses are shared pro rata between the two classes of
shares. Net income (loss) per share of common stock is calculated by dividing
the net income (loss) by the weighted average number of common stock outstanding
for the respective period.
We did not consider the effect of the warrants issued in connection with the
initial public offering and the private placement in the calculation of diluted
income (loss) per common stock because their exercise is contingent upon future
events. As a result, diluted net income (loss) per common stock is the same as
basic net income (loss) per common stock. Accretion associated with the
redeemable Class A common stock is excluded from income (loss) per common stock
as the redemption value approximates fair value.
Recent Accounting Standards
Management does not believe that any other recently issued, but not yet
effective, accounting standards, if currently adopted, would have a material
effect on our financial statements.

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