References in this report (the "Quarterly Report") to "we," "us" or the
"Company" refer to Carney Technology Acquisition Corp. II. References to our
"management" or our "management team" refer to our officers and directors, and
references to the "Sponsor" refer to Carney Technology Sponsor II LLC. The
following discussion and analysis of the Company's financial condition and
results of operations should be read in conjunction with the financial
statements and the notes thereto contained elsewhere in this Quarterly Report.
Certain information contained in the discussion and analysis set forth below
includes forward-looking statements that involve risks and uncertainties.
Special Note Regarding Forward-Looking Statements
This Quarterly Report includes "forward-looking statements" within the meaning
of Section 27A of the Securities Act of 1933, as amended (the "Securities Act")
and Section 21E of the Exchange Act that are not historical facts, and involve
risks and uncertainties that could cause actual results to differ materially
from those expected and projected. All statements, other than statements of
historical fact included in this Form
10-Q/A
including, without limitation, statements in this "Management's Discussion and
Analysis of Financial Condition and Results of Operations" regarding the
Company's financial position, business strategy and the plans and objectives of
management for future operations, are forward-looking statements. Words such as
"expect," "believe," "anticipate," "intend," "estimate," "seek" and variations
and similar words and expressions are intended to identify such forward-looking
statements. Such forward-looking statements relate to future events or future
performance, but reflect management's current beliefs, based on information
currently available. A number of factors could cause actual events, performance,
or results to differ materially from the events, performance and results
discussed in the forward-looking statements. For information identifying
important factors that could cause actual results to differ materially from
those anticipated in the forward-looking statements, please refer to the Risk
Factors section of the Company's Annual Report on
Form10-K/A
filed with the U.S. Securities and Exchange Commission (the "SEC"). The
Company's securities filings can be accessed on the EDGAR section of the SEC's
website at www.sec.gov. Except as expressly required by applicable securities
law, the Company disclaims any intention or obligation to update or revise any
forward-looking statements whether as a result of new information, future events
or otherwise.
This Management's Discussion and Analysis of Financial Condition and Results of
Operations has been amended and restated to give effect to the restatement of
our financial statements as of March 31, 2021 and June 30, 2021. Management
identified errors made in its historical financial statements where, at the
closing of our Initial Public Offering, we improperly valued our Class A common
stock subject to possible redemption. We previously determined the Class A
common stock subject to possible redemption to be equal to the redemption value
of $10.00 per Class A commons share while also taking into consideration a
redemption cannot result in net tangible assets being less than $5,000,001.
Management determined that the Class A common stock issued during the Initial
Public Offering can be redeemed or become redeemable subject to the occurrence
of future events considered outside of the Company's control. Therefore,
management concluded that the redemption value should include all Class A common
stock subject to possible redemption, resulting in the Class A common stock
subject to possible redemption being equal to their redemption value. As a
result, management has noted a reclassification error related to temporary
equity and permanent equity. This resulted in a restatement to the initial
carrying value of the Class A common stock subject to possible redemption with
the offset recorded to additional
paid-in
capital (to the extent available), accumulated deficit and Class A common stock.
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 inception through September 30, 2021, were
organizational activities, those necessary to prepare for the Initial Public
Offering, described below, and, subsequent to the Initial Public Offering,
identifying a target company for a Business Combination. We do not expect to
generate any operating revenues until after the completion of our Business
Combination, at the earliest. We generate
non-operating
income in the form of interest income on marketable securities held in the Trust
Account. 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 three months ended September 30, 2021, we had a net income of
$3,693,465, which consists of a change in the fair value warrant liabilities of
$3,977,833 and interest income on marketable securities held in the trust
account of $27,529 and interest income in bank of $2, offset by operating costs
of $311,899.
For the nine months ended September 30, 2021, we had a net income of $8,081,123,
which consists of a change in the fair value warrant liabilities of $8,915,833
and interest income on marketable securities held in the trust account of
$63,780 and interest income in bank of $2, offset by operating costs of
$898,492.

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For the period from August 31, 2020 (inception) through September 30, 2020, we
had a net loss of $1,000 which consists of operating costs.
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 nine months ended September 30, 2021, cash used in operating activities
was $558,438. Net income of $8,081,123 was affected by changes in the fair value
of warrant liabilities of $8,915,833 and interest earned on investments and
marketable securities held in the Trust Account of $63,780. Changes in operating
assets and liabilities provided $340,052 of cash from operating activities.

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As of September 30, 2021, we had investments held in the Trust Account of
$402,529,236. 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 three and nine months ended September 30, 2021, respectively, the
Company withdraw $41,675 to pay franchise and income taxes. 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 September 30, 2021, we had $318,445 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 September 30, 2021.
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 our liquidation.
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
815-40under
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 tore-measurement at each balance sheets date until
exercised, and any change in fair value is recognized in our Statements of
operations.

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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 the Financial Accounting Standards Board's
("FASB") Accounting Standards Codification ("ASC") Topic 480 "Distinguishing
Liabilities from Equity." Shares of Class A common stock subject to mandatory
redemption are classified as a liability instrument and are 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 sheets.
Net Income (Loss) Per Common Stock
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 common stock is computed by dividing
net loss by the weighted average number of common stock outstanding during the
period. Accretion associated with the redeemable shares of Class A common stock
is excluded from earnings per share as the redemption value approximates fair
value.

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Recent Accounting Standards
In August 2020, the Financial Accounting Standards Board ("FASB") issued
Accounting Standards Update ("ASU") 2020-06, Debt - Debt with Conversion and
Other Options (Subtopic
470-20)
and Derivatives and Hedging - Contracts in Entity's Own Equity (Subtopic
815-40)
("ASU
2020-06")
to simplify accounting for certain financial instruments. ASU 2020-06 eliminates
the current models that require separation of beneficial conversion and cash
conversion features from convertible instruments and simplifies the derivative
scope exception guidance pertaining to equity classification of contracts in an
entity's own equity. The new standard also introduces additional disclosures for
convertible debt and freestanding instruments that are indexed to and settled in
an entity's own equity. ASU 2020-06 amends the diluted earnings per share
guidance, including the requirement to use the
if-converted
method for all convertible instruments. ASU 2020-06 is effective January 1, 2022
and should be applied on a full or modified retrospective basis, with early
adoption permitted beginning on January 1, 2021. The Company adopted ASU 2020-06
effective January 1, 2021. The adoption of ASU 2020-06 did not have an impact on
the Company's financial statements.
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 unaudited condensed financial statements.

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