References in this report (the "Quarterly Report") to "we," "us" or the "Company" refer toDragoneer 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 theU.S. Securities and Exchange Commission (the "SEC"). The Company's securities filings can be accessed on the EDGAR section of theSEC'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 OnJanuary 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. OnJuly 23, 2021 , we entered into a Business Combination Agreement (the "Business Combination Agreement") by and among the Company,Redwood Opportunity Merger Sub, Inc. , aDelaware corporation,Redwood Merger Sub LLC , aDelaware limited liability company, andPapay Topco, Inc. , aDelaware corporation ("Papay"), which is the owner ofCvent, 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 aDelaware 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 theCayman Islands onSeptember 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 fromSeptember 25, 2020 (inception) throughJune 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 endedJune 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 endedJune 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 OnNovember 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. 13 -------------------------------------------------------------------------------- Table of Contents For the six months endedJune 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 ofJune 30, 2021 , we had marketable securities held in the Trust Account of$276,008,777 consisting of money market funds, which primarily invest inU.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 ofJune 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. OnJanuary 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 ofJune 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 inthe 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. 14 -------------------------------------------------------------------------------- Table of Contents 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 InAugust 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 afterDecember 15, 2023 , including interim periods within those fiscal years, with early adoption permitted. We adopted ASU 2020-06 effective as ofJanuary 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 theSEC'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 ofJune 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 endedJune 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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