References to the "Company," "our," "us" or "we" refer to Decarbonization Plus Acquisition Corporation II. The following discussion and analysis of the Company's financial condition and results of operations should be read in conjunction with the unaudited financial statements and the notes thereto contained in Item 1. of this report. Certain information contained in the discussion and analysis set forth below includes forward-looking statements that involve risks and uncertainties. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of many factors.

Cautionary Note Regarding Forward-Looking Statements

This Quarterly Report on Form 10-Q 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 Securities Exchange Act of 1934, as amended (the "Exchange Act"). We have based these forward-looking statements on our current expectations and projections about future events. These forward-looking statements are subject to known and unknown risks, uncertainties and assumptions about us that may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by such forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as "may," "should," "could," "would," "expect," "plan," "anticipate," "believe," "estimate," "continue," or the negative of such terms or other similar expressions. Such statements include, but are not limited to, possible business combinations and the financing thereof, and related matters, as well as all other statements other than statements of historical fact included in this Form 10-Q. Factors that might cause or contribute to such a discrepancy include, but are not limited to, those described in our other Securities and Exchange Commission ("SEC") filings.

Overview

We are a blank check company incorporated as a Delaware corporation and formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses (the "initial business combination"). Our Sponsor is Decarbonization Plus Acquisition Sponsor II LLC, a Delaware limited liability company ("Sponsor") and an affiliate of Riverstone Investment Group LLC, a Delaware limited liability company, and its affiliates ("Riverstone"). Although we may pursue an acquisition opportunity in any business or industry, we intend to capitalize on the Riverstone platform to identify, acquire and operate a business in industries that may provide opportunities for attractive risk-adjusted returns in one of the multiple sectors that may advance the objectives of global decarbonization. This includes the energy and agriculture, industrials, transportation and commercial and residential sectors.

The registration statement for our initial public offering was declared effective on February 3, 2021 (the "Public Offering"). On February 8, 2021, we consummated the Public Offering of 40,250,000 units (the "Units"), including Over-Allotment Units ( as defined below) at $10.00 per Unit, generating gross proceeds of $402.5 million, and incurring transaction costs of approximately $22.8 million, consisting of $8.05 million of underwriting fees, $14.1 million of deferred underwriting fees and approximately $0.65 million of other offering costs.

In connection with the Public Offering, the underwriters of the Public Offering were granted an option to purchase up to an additional 5,250,000 Units (the "Over-Allotment Units"). On February 4, 2021, the underwriters exercised their over-allotment option and purchased 5,250,000 Over-Allotment Units at an offering price of $10.00 per unit, generating gross proceeds of approximately $52.5 million.

Simultaneously with the closing of the Public Offering, we consummated the sale of 7,366,667 private placement warrants (the "Private Placement Warrants") at a price of $1.50 per Private Placement Warrant in a private placement to our Sponsor and our independent directors (the "Private Placement"), generating gross proceeds of $11.05 million.

Approximately $402.5 million of the net proceeds of the Public Offering (including Over-Allotment Units) were deposited into a U.S.-based trust account (the "Trust Account"), with Continental Stock Transfer & Trust Company acting as trustee and invested only in U.S. "government securities," within the meaning set forth in Section 2(a)(16) of the Investment Company Act, with a maturity of 185 days or less, or in money market funds


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meeting the conditions of paragraphs (d)(1), (d)(2), (d)(3) and (d)(4) of Rule 2a-7 under the Investment Company Act, which invest only in direct U.S. government treasury obligations, as determined by the Company, until the earlier of: (i) the completion of our initial business combination and (ii) the distribution of the Trust Account as otherwise permitted under our amended and restated certificate of incorporation.

If we are unable to complete an initial business combination within 24 months from the closing of the Public Offering, or February 8, 2023, we will (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem the public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest earned on the funds held in the Trust Account and not previously released to us to pay our franchise and income taxes (less up to $100,000 of interest to pay dissolution expenses and net of taxes payable), divided by the number of then-outstanding public shares, which redemption will completely extinguish public stockholders' rights as stockholders (including the right to receive further liquidating distributions, if any), subject to applicable law, and (iii) as promptly as reasonably possible following such redemption, subject to the approval of our remaining stockholders and our board of directors, dissolve and liquidate, subject in each case to our obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law.

Proposed Business Combination

Business Combination Agreement

On May 25, 2021, the Company, Tritium Holdings Pty Ltd, an Australian proprietary company limited by shares ("Tritium"), Tritium DCFC Limited, an Australian public company limited by shares ("NewCo") and Hulk Merger Sub, Inc., a Delaware corporation and wholly owned subsidiary of NewCo ("Merger Sub"), entered into a Business Combination Agreement (the "Business Combination Agreement," and the transactions contemplated thereby, the "Business Combination"), pursuant to which, among other things and subject to the terms and conditions contained therein, (i) the Company, NewCo, Tritium and all existing shareholders of Tritium will enter into a share transfer agreement (the "Share Transfer Agreement") pursuant to which the holders of all of the shares in the capital of Tritium ("Tritium Shares") will transfer their Tritium Shares to NewCo in exchange for an aggregate of 120,000,000 fully paid ordinary shares in the capital of NewCo valued at $10.00 per share ("NewCo Ordinary Shares") to be issued simultaneously with the issuance of NewCo Ordinary Shares in connection with the Merger (as defined below) (the "Share Transfer") and (ii) Merger Sub will merge with and into the Company, with the Company surviving as a wholly owned subsidiary of NewCo (the "Merger"). In connection with the Merger, (i) each holder of warrants to purchase shares of the Company's Class A common stock, par value $0.0001 per share ("Class A Common Stock"), will receive in exchange an equal number of warrants to purchase NewCo Ordinary Shares and (ii) each holder of Class A Common Stock will receive in exchange an equal number of NewCo Ordinary Shares.

On July 27, 2021, the Company, Tritium, NewCo and Merger Sub entered into the First Amendment to the Business Combination Agreement (the "Amendment"). The Amendment provides that (i) the obligations of Tritium, NewCo and Merger Sub to consummate the Business Combination are subject to the condition that the sum of (A) the amount of cash in the Company's Trust Account and (B) the amount of cash proceeds to NewCo resulting from any private placements of New Ordinary Shares be not less than $200,000,000 and (ii) the parties will use reasonable best efforts to consummate any private placements of NewCo Ordinary Shares.

Amended and Restated Registration Rights Agreement

Concurrently with the closing of the Business Combination (the "Closing"), the Company will amend and restate its registration rights agreement, dated February 3, 2021 (as amended and restated, the "Registration Rights Agreement"), pursuant to which NewCo will agree that, within 30 calendar days after the Closing, NewCo will file with the SEC (at NewCo's sole cost and expense) a registration statement registering the resale of certain securities held by or issuable to certain existing shareholders of the Company and Tritium (the "Resale Registration Statement"), and NewCo will use its commercially reasonable efforts to have the Resale Registration Statement declared effective as soon as reasonably practicable after the filing thereof. In certain circumstances, the holders can demand NewCo's assistance with underwritten offerings and block trades. The holders will be entitled to customary piggyback registration rights.


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Lock-Up Agreements

Concurrently with the Closing, all existing shareholders of Tritium, or their attorney-in-fact, will enter into a lock-up agreement (the "Lock-Up Agreement") with NewCo, Tritium and the Company pursuant to which they will agree, subject to certain customary exceptions, not to (i) effect any sale of, offer to sell, contract or agreement to sell, hypothecate, pledge, grant of any option to purchase or otherwise dispose of or agreement to dispose of, directly or indirectly, or establishment or increase of a put equivalent position or liquidation with respect to or decrease of a call equivalent position within the meaning of Section 16 of the Exchange Act, and the rules and regulations of the SEC promulgated thereunder with respect to, any securities of NewCo, (ii) enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of any securities of NewCo, whether any such transaction is to be settled by delivery of such securities, in cash or otherwise or (iii) make any public announcement of any intention to effect any transaction specified in clause (i) or (ii), for six months after the Closing of the Business Combination.

Sponsor Support Agreement

In connection with the execution of the Business Combination Agreement, the Sponsor entered into a letter agreement with the Company, NewCo and Tritium (the "Sponsor Support Agreement"), pursuant to which, among other things, the Sponsor agreed to (i) waive the anti-dilution rights set forth in the Company's amended and restated certificate of incorporation with respect to shares of the Company's Class B common stock, par value $0.0001 per share (the "Founder Shares") held by it, (ii) vote all the Class A Common Stock and Founder Shares held by it in favor of the adoption and approval of the Business Combination Agreement and the Business Combination, (iii) not transfer the Founder Shares (or NewCo Ordinary Shares issuable upon conversion thereof in the Merger) until the earlier of (a) one year after the Closing or (b) subsequent to the Closing, (x) if the last sale price of the NewCo Ordinary Shares equals or exceeds $12.00 per share (as adjusted for share splits, share dividends, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 150 days after the Closing or (y) the date on which NewCo completes a liquidation, merger, capital stock exchange, reorganization or other similar transaction that results in all of NewCo's shareholders having the right to exchange their NewCo Ordinary Shares for cash, securities or other property and (iv) not transfer any warrants (or NewCo Ordinary Shares issued or issuable upon the exercise of the warrants) until 30 days after the Closing.

Commitment Agreement

In connection with the execution of the Business Combination Agreement, each of St Baker Energy Holdings Pty Ltd, as trustee for the St Baker Energy Innovation Trust, Ilwella Pty Ltd, Varley Holdings Pt. Limited and Finnmax Pty Ltd, as trustee for The Finn Family Trust (collectively, the "Committed Shareholders") entered into a commitment agreement (the "Commitment Agreement") with NewCo and the Company pursuant to which, among other things, the Committed Shareholders agreed to execute and deliver the Share Transfer Agreement to the Company.

Termination Fee Side Letter

In connection with the execution of the Business Combination Agreement, the Committed Shareholders and the Company entered into a letter agreement (the "Termination Fee Side Letter") pursuant to which the Committed Shareholders agreed to pay, and cause certain other existing shareholders of Tritium to pay, to the Company a termination fee of $50,000,000 if the Business Combination Agreement is terminated by the Company or Tritium as a result of a certain shareholder of Tritium's acquisition of securities of Tritium (other than the acquisition of securities (a) not in accordance with the shareholders' deed from another Tritium shareholder, (b) of a de minimis amount from another Tritium shareholder or (c) newly issued securities directly from Tritium and without violation of the Business Combination Agreement) pursuant to the Shareholders' Deed.





PIPE Financing

On July 27, 2021, the Company, NewCo and Palantir Technologies Inc. (the "Investor") entered into a subscription agreement (the "Subscription Agreement"), pursuant to which, among other things, the Investor agreed to subscribe for and purchase, and NewCo agreed to issue and sell to the Investor, immediately prior to or substantially concurrently with the Closing, 1,500,000 NewCo Ordinary Shares (the "PIPE Shares") at a purchase price of $10.00 per share, for gross proceeds of $15,000,000 (the "PIPE Financing"). The PIPE Financing is contingent upon, among other things, the consummation of the Business Combination.


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The PIPE Shares to be issued pursuant to the Subscription Agreement will not be registered under the Securities Act, in reliance upon the exemption provided in Section 4(a)(2) of the Securities Act. Pursuant to the Subscription Agreement, NewCo agreed that, within 30 calendar days after the closing of the PIPE Financing, NewCo will file with the SEC (at NewCo's sole cost and expense) a registration statement registering the resale of the PIPE Shares (the "PIPE Resale Registration Statement"), and NewCo will use its commercially reasonable efforts to have the PIPE Resale Registration Statement declared effective as soon as practicable after the filing thereof.

Results of Operations

Our only activities from inception through September 30, 2021 related to our formation and the Public Offering, as well as due diligence costs incurred to identify a target company for a potential initial business combination. We expect to incur increased expenses as a result of being a public company (for legal, financial reporting, accounting and auditing compliance), as well as costs in the pursuit of our acquisition plans.

For the three months ended September 30, 2021, we had a net income of approximately $4.3 million, which consisted of approximately $5.1 million in gains due to the change in the fair value of warrant liabilities and interest earned on marketable securities held in the Trust Account of $6,078, offset by approximately $800,000 in general and administrative expenses, including due diligence costs incurred in the pursuit of our acquisition plans.

For the nine months ended September 30, 2021, we had a net loss of approximately $3.5 million, which consisted of approximately $5.8 million in general and administrative expenses, including due diligence costs incurred in the pursuit of our acquisition plans, and $1 million of offering costs allocated to warrant liabilities, offset by approximately $3.5 million in gains due to the change in the fair value of warrant liabilities and interest earned on marketable securities held in the Trust Account of $15,460.

Liquidity and Capital Resources

Our liquidity needs up to the Public Offering were satisfied through receipt of a $25,000 capital contribution from our Sponsor in exchange for the issuance of Founder Shares to our Sponsor and a loan from our Sponsor for an aggregate amount of $300,000 to cover organizational expenses and expenses related to the Public Offering pursuant to a promissory note (the "Note"). On December 22, 2020, we drew down $300,000 on the Note. We repaid the Note in full to our Sponsor on February 4, 2021. Subsequent to the consummation of the Public Offering, our liquidity needs have been satisfied through the net proceeds of approximately $1.1 million from the Private Placement held outside of the Trust Account.

The Company does not have sufficient liquidity to meet its anticipated obligations over the next year from the date of issuance of these financial statements. In connection with the Company's assessment of going concern considerations in accordance with Accounting Standards Update ("ASU") 2014-15, "Disclosures of Uncertainties about an Entity's Ability to Continue as a Going Concern," management has determined that the Company has access to funds from the Sponsor, which is described in Note 5, and the Sponsor has the financial ability to provide such funds, that are sufficient to fund the working capital needs of the Company until the earlier of the consummation of the initial business combination and one year from the date of issuance of these financial statements.

As of September 30, 2021, there were no amounts outstanding under any working capital loans.





Registration Rights



The holders of the Founder Shares, Private Placement Warrants and warrants that may be issued upon conversion of working capital loans, if any, and any shares of Class A Common Stock issuable upon the exercise of the Private Placement Warrants and warrants that may be issued upon conversion of working capital loans and upon conversion of the Founder Shares will be entitled to registration rights pursuant to a registration rights agreement. These holders will be entitled to certain demand and "piggyback" registration rights. We will bear the expenses incurred in connection with the filing of any such registration statements.





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Underwriting Agreement


The underwriters were entitled to an underwriting discount of $0.20 per Unit, or $8.05 million in the aggregate, paid upon closing of the Public Offering.

In addition, $0.35 per Unit, or approximately $14.1 million in the aggregate, will be payable to the underwriters for deferred underwriting commissions. The deferred fee will become payable to the underwriters from the amounts held in the Trust Account solely in the event that we complete an initial business combination, subject to the terms of the underwriting agreement.

Administrative Services Agreement

Commencing on the date that our securities were first listed on the NASDAQ Capital Market and continuing until the earlier of our consummation of an initial business combination or our liquidation, we have agreed to pay an affiliate of our Sponsor a total of $10,000 per month for office space, utilities, secretarial support and administrative services. We recorded an aggregate of $78,571 for the nine months ended September 30, 2021, in general and administrative expenses in connection with the related agreement in the accompanying statement of operations.

As of September 30, 2021, we recorded an aggregate of approximately $78,571 in related party expenses which remain outstanding.





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 expenses during the periods reported. Actual results could materially differ from those estimates. We have identified the following critical accounting policies:





Warrant Liabilities


We account for the warrants issued in connection with our Public Offering in accordance with Accounting Standards Codification ("ASC") 815-40, Derivatives and Hedging-Contracts in Entity's Own Equity ("ASC 815"), under which the warrants do not meet the criteria for equity classification and must be recorded as liabilities. As the warrants meet the definition of a derivative as contemplated in ASC 815, the warrants are measured at fair value at inception and at each reporting date in accordance with ASC 820, Fair Value Measurement, with changes in fair value recognized in the Statements of Operations in the period of change.

Common stock subject to possible redemption

We account for the Class A Common Stock subject to possible redemption in accordance with the guidance in ASC 480, Distinguishing Liabilities from Equity. 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 are either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within the Company's control) are classified as temporary equity. At all other times, common stock are classified as stockholders' equity. The Company's common stock features certain redemption rights that are considered to be outside of the Company's control and subject to occurrence of uncertain future events.





Impact of COVID-19


Our Sponsor continues to evaluate the impact of the COVID-19 pandemic and has concluded that, while it is reasonably possible that the virus could have a negative effect on our financial position, results of operations and/or search for a target company, the specific impact is not readily determinable as of the balance date.


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Recent Accounting Pronouncements

We do not believe that any recently issued, but not yet effective, accounting pronouncements, if currently adopted, would have a material impact on our financial statements.

Off-Balance Sheet Arrangements

As of the date of this Quarterly Report, we did not have any off-balance sheet arrangements as defined in Item 303(a)(4)(ii) of Regulation S-K.

JOBS Act

On April 5, 2012, the Jumpstart Our Business Startups Act of 2012 (the "JOBS Act") was signed into law. The JOBS Act contains provisions that, among other things, relax certain reporting requirements for qualifying public companies. We qualify as an "emerging growth company" under the JOBS Act and are allowed to comply with new or revised accounting pronouncements based on the effective date for private (not publicly traded) companies. We elected to delay the adoption of new or revised accounting standards, and as a result, we may not comply with new or revised accounting standards on the relevant dates on which adoption of such standards is required for non-emerging growth companies. As a result, our financial statements may not be comparable to companies that comply with new or revised accounting pronouncements as of public company effective dates.

As an "emerging growth company," we are not required to, among other things, (i) provide an auditor's attestation report on our system of internal controls over financial reporting, (ii) provide all of the compensation disclosure that may be required of non-emerging growth public companies, (iii) comply with any requirement that may be adopted by the Public Company Accounting Oversight Board regarding mandatory audit firm rotation or a supplement to the auditor's report providing additional information about the audit and the financial statements (auditor discussion and analysis), and (iv) disclose comparisons of the CEO's compensation to median employee compensation. These exemptions will apply for a period of five years following the completion of our Public Offering or until we otherwise no longer qualify as an "emerging growth company."

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