References in this report (the "Quarterly Report") to "we," "us" or the
"Company" refer to Dragoneer Growth Opportunities Corp. II. References to our
"management" or our "management team" refer to our officers and directors, and
references to the "Sponsor" refer to Dragoneer Growth Opportunities Holdings II.
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 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 Quarterly
Report including, without limitation, statements in this "Management's
Discussion and Analysis of Financial Condition and Results of Operations"
regarding the completion of the Proposed Business Combination (as defined
below), 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, including that the
conditions of the Proposed Business Combination are not satisfied. 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 Form
10-K
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.
Recent Developments
On January 19, 2021, we entered into a convertible promissory note with the
Sponsor pursuant to which the Sponsor agreed to loan us up to an aggregate
principal amount of $2,000,000 (the "Convertible Promissory Note"). The
Convertible Promissory Note is
non-interest
bearing and due on the date on which we consummate a Business Combination. If we
do not consummate a Business Combination, we may use a portion of any funds held
outside the Trust Account to repay the Convertible Promissory Note; however, no
proceeds from the Trust Account may be used for such repayment. If such funds
are insufficient to repay the Convertible Promissory Note, the unpaid amounts
would be forgiven. Up to $2,000,000 of the Convertible Promissory Note may be
converted into shares at a price of $10.00 per share at the option of the
Sponsor. The shares would be identical to the Private Placement Shares.
On July 23, 2021, we entered into a Business Combination Agreement (the
"Business Combination Agreement") by and among the Company, Redwood Opportunity
Merger Sub, Inc., a Delaware corporation, Redwood Merger Sub LLC, a Delaware
limited liability company, and Papay Topco, Inc., a Delaware corporation
("Papay"), which is the owner of Cvent, Inc. Concurrently with the execution of
the Business Combination Agreement, we entered into Subscription Agreements with
certain investors, which agreements provide for binding subscriptions to
purchase an aggregate of 47,500,000 shares of the post-transaction combined
business for a purchase price of $10.00 per share, for aggregate gross proceeds
of $475,000,000.
In accordance with the terms and subject to the conditions of the Business
Combination Agreement, we will become a Delaware corporation (the
"Domestication") and all outstanding shares, together with all outstanding
equity awards, of Papay will be exchanged for shares of our common stock or
comparable equity awards that are settled or are exercisable for shares of our
common stock, as applicable, based on an implied Papay equity value of
$4,467,973,959 plus the aggregate exercise price for all in-the-money Company
Equity Awards (as defined in the Business Combination Agreement) issued and
outstanding as of immediately prior to the First Effective Time (as defined in
the Business Combination Agreement).
The Business Combination is expected to close in the fourth quarter of 2021,
following the receipt of the required approval by Dragoneer's shareholders and
the fulfillment of other customary closing conditions. The Business Combination
Agreement and the transactions contemplated thereby were approved by the boards
of directors of each of Dragoneer and Papay.
Overview
We are a blank check company incorporated in the Cayman Islands on September 25,
2020 formed for the purpose of effecting a merger, share exchange, asset
acquisition, share purchase, reorganization or similar business combination with
one or more businesses or entities (a "Business Combination"). We intend to
effectuate our Business Combination using cash derived from the proceeds of the
Initial Public Offering and the sale of the Private Placement Shares, our
shares, debt or a combination of cash, shares 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 nor generated any revenues to date.
Our only activities from September 25, 2020 (inception) through June 30, 2021
were organizational activities, those necessary to prepare for the Initial
Public Offering, described below, and 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. 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 June 30, 2021, we had a net loss of $1,399,497, which
consists of general and administrative expenses of $1,405,778, offset by
interest income on marketable securities held in the Trust Account of $6,281.
For the six months ended June 30, 2021, we had a net loss of $1,771,139, which
consists of general and administrative expenses of $1,779,916, offset by
interest income on marketable securities held in the Trust Account of $8,777.
Liquidity and Capital Resources
On November 19, 2020, we consummated the Initial Public Offering of 27,600,000
Public Shares, which includes the full exercise by the underwriters of their
over-allotment option in the amount of 3,600,000 Public Shares, at $10.00 per
Public Share, generating gross proceeds of $276,000,000. Simultaneously with the
closing of the Initial Public Offering, we consummated the sale of 752,000
Private Placement Shares at a price of $10.00 per Private Placement Share in a
private placement to the Sponsor, generating gross proceeds of $7,520,000.
Following the Initial Public Offering, the exercise of the over-allotment option
and the sale of the Private Placement Shares, a total of $276,000,000 was placed
in the Trust Account. We incurred $15,853,777 in transaction costs, including
$5,520,000 of underwriting fees, $9,660,000 of deferred underwriting fees and
$673,777 of other offering costs.

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For the six months ended June 30, 2021, net cash used in operating activities
was $148,070. Net loss of $1,771,139 was affected by interest income on
marketable securities held in the Trust Account of $8,777 and changes in
operating assets and liabilities which provided $1,631,846 of cash from
operating activities.
As of June 30, 2021, we had marketable securities held in the Trust Account of
$276,008,777 consisting of money market funds, which primarily invest in U.S.
Treasury Bills with a maturity of 185 days or less. We may withdraw interest
from the Trust Account to pay taxes, if any. We intend to use substantially all
of the funds held in the Trust Account, including any amounts representing
interest earned on the Trust Account (less income taxes payable), to complete
our Business Combination. To the extent that our share capital 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 June 30, 2021, we had cash of $1,966,727 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, the Sponsor, or certain of our officers
and directors or their affiliates may, but are not obligated to, loan us funds
as may be required. If we complete a Business Combination, we would repay such
loaned amounts. 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 $2,000,000 of such loans may be convertible into shares at
a price of $10.00 per share, at the option of the lender. The shares would be
identical to the Private Placement Shares.
On January 19, 2021, we entered into a Convertible Promissory Note with the
Sponsor pursuant to which the Sponsor loaned us an aggregate principal amount of
$2,000,000.
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.
Off-Balance
Sheet Arrangements
We have no obligations, assets or liabilities, which would be considered
off-balance
sheet arrangements as of June 30, 2021. We do not participate in transactions
that create relationships with unconsolidated entities or financial
partnerships, often referred to as variable interest entities, which would have
been established for the purpose of facilitating
off-balance
sheet arrangements. We have not entered into any
off-balance
sheet financing arrangements, established any special purpose entities,
guaranteed any debt or commitments of other entities, or purchased any
non-financial
assets.
Contractual obligations
We do not have any long-term debt, capital lease obligations, operating lease
obligations or long-term liabilities, other than described below.
The underwriters are entitled to a deferred fee of $0.35 per Unit, or $9,660,000
in the aggregate. The deferred fee will become payable to the underwriters from
the amounts held in the Trust Account solely in the event that we complete a
Business Combination, subject to the terms of the underwriting agreement.
We entered into a forward purchase agreement pursuant to which an affiliate of
the sponsor agreed to purchase an aggregate of up to 5,000,000 forward purchase
shares for $10.00 per share, or up to $50,000,000 in the aggregate, in a private
placement to close substantially concurrently with the initial Business
Combination. We will determine in its sole discretion the specific number of
forward purchase shares that it sells to the purchaser, if any. The funds from
the sale of forward purchase shares may be used as part of the consideration to
the sellers in the initial Business Combination, expenses in connection with the
initial Business Combination or for working capital in the post transaction
company. The obligations under the forward purchase agreement do not depend on
whether any public shareholders elect to redeem their shares and provide us with
a minimum funding level for the initial Business Combination.
Critical Accounting Policies
The preparation of condensed 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:
Class A Ordinary Shares Subject to Possible Redemption
We account for our ordinary shares subject to possible conversion in accordance
with the guidance in Accounting Standards Codification ("ASC") Topic 480
"Distinguishing Liabilities from Equity." Ordinary shares subject to mandatory
redemption are classified as a liability instrument and measured at fair value.
Conditionally redeemable ordinary shares (including ordinary shares 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 our
control) are classified as temporary equity. At all other times, ordinary shares
are classified as shareholders' equity. Our ordinary shares feature certain
redemption rights that are considered to be outside of our control and subject
to occurrence of uncertain future events. Accordingly, ordinary shares subject
to possible redemption are presented at redemption value as temporary equity,
outside of the shareholders' equity section of our condensed balance sheets.

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Net Income (Loss) Per Ordinary Share
We apply the
two-class
method in calculating earnings per share. Net income per ordinary share, basic
and diluted for Class A redeemable ordinary shares is calculated by dividing the
interest income earned on the Trust Account by the weighted average number of
Class A redeemable ordinary shares outstanding since original issuance. Net loss
per ordinary share, basic and diluted for Class A and Class B
non-redeemable
ordinary shares is calculated by dividing the net income (loss), less income
attributable to Class A redeemable ordinary shares, by the weighted average
number of Class A and Class B
non-redeemable
ordinary shares outstanding for the periods presented.
Recent Accounting Standards
In August 2020, the FASB issued ASU
No. 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):
Accounting for Convertible Instruments and Contracts in an Entity's Own Equity"
("ASU
2020-06"),
which simplifies accounting for convertible instruments by removing major
separation models required under current GAAP. ASU
2020-06
removes certain settlement conditions that are required for equity contracts to
qualify for the derivative scope exception and it also simplifies the diluted
earnings per share calculation in certain areas. ASU
2020-06
is effective for fiscal years beginning after December 15, 2023, including
interim periods within those fiscal years, with early adoption permitted. We
adopted ASU
2020-06
effective as of January 1, 2021. The adoption of ASU
2020-06
did not have an impact on our 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 condensed financial statements.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Not required for smaller reporting companies.
Item 4. Controls and Procedures
Disclosure controls and procedures are controls and other procedures that are
designed to ensure that information required to be disclosed in our reports
filed or submitted under the Exchange Act is recorded, processed, summarized and
reported within the time periods specified in the SEC's rules and forms.
Disclosure controls and procedures include, without limitation, controls and
procedures designed to ensure that information required to be disclosed in our
reports filed or submitted under the Exchange Act is accumulated and
communicated to our management, including our Chief Executive Officer and Chief
Financial Officer, to allow timely decisions regarding required disclosure.
Evaluation of Disclosure Controls and Procedures
As required by Rules
13a-15
and
15d-15
under the Exchange Act, our Chief Executive Officer and Chief Financial Officer
carried out an evaluation of the effectiveness of the design and operation of
our disclosure controls and procedures as of June 30, 2021. Based upon their
evaluation, our Chief Executive Officer and Chief Financial Officer concluded
that our disclosure controls and procedures (as defined in Rules
13a-15
(e) and
15d-15
(e) under the Exchange Act) were not effective due to a material weakness in
internal controls over financial reporting related to inaccurate accounting for
the Class A ordinary shares subject to redemption and permanent equity.
Changes in Internal Control Over Financial Reporting
During the fiscal quarter ended June 30, 2021, there has been no change in our
internal control over financial reporting that has materially affected, or is
reasonably likely to materially affect, our internal control over financial
reporting. Management has identified a material weakness in internal controls
related to the accounting for the Class A ordinary shares subject to redemption
and permanent equity, as described above. While we have processes to identify
and appropriately apply applicable accounting requirements, we plan to enhance
our system of evaluating and implementing the accounting standards that apply to
our financial statements, including through enhanced analyses by our personnel
and third-party professionals with whom we consult regarding complex accounting
applications. The elements of our remediation plan can only be accomplished over
time, and we can offer no assurance that these initiatives will ultimately have
the intended effects.

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