References in this Quarterly Report on Form 10-Q (this "Quarterly Report") to "we," "us," "our" or the "Company" are toGS Acquisition Holdings Corp II . References to our "management" or our "management team" refer to our officers and directors. The following discussion and analysis should be read in conjunction with our condensed financial statements and related notes thereto included elsewhere in this Quarterly Report. Forward-Looking Statements This Quarterly Report includes forward-looking statements. 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 Company's financial position, business strategy and the plans and objectives of management for future operations, are 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. We have based these forward-looking statements on our current expectations and projections about future events. 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. Factors that might cause or contribute to such a discrepancy include, but are not limited to, those described in the Risk Factors section of our final prospectus for our Public Offering (as defined below) and in our otherSecurities and Exchange Commission ("SEC") filings. Except as expressly required by applicable securities law, we disclaim any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise. Overview We are a blank check company incorporated as aDelaware 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 (an "Initial Business Combination"). We intend to effectuate an Initial Business Combination using cash from the proceeds of our initial public offering (the "Public Offering") that closed onJuly 2, 2020 (the "Closing Date") and the private placement of warrants to purchase shares of our Class A common stock ("Private Placement Warrants") that closed on the Closing Date, and from additional issuances of, if any, our capital stock and our debt, or a combination of cash, stock and debt. AtJune 30, 2021 , we had current assets of$1,247,124 and current liabilities of$72,804,364 . Further, we expect to continue to incur significant costs in the pursuit of our acquisition plans. We have reviewed a number of opportunities to enter into an Initial Business Combination with operating businesses and have recently entered into a Business Combination Agreement, as described below. Recent Developments Proposed Initial Business Combination OnJune 17, 2021 , the Company announced that it entered into a Business Combination Agreement (the "Business Combination Agreement"), dated as ofJune 17, 2021 , by and among the Company,Mirion Technologies (TopCo), Ltd. , a Jersey private company limited by shares ("Mirion"),CCP IX LP No. 1,CCP IX LP No. 2, CCP IX Co-Investment LP and CCP IX Co-Investment No. 2 LP (collectively, the "Charterhouse Parties"), each acting by their general partner,Charterhouse General Partners (IX) Limited , for the limited purpose set forth therein, each of the other persons set forth on Annex I thereto (together with the Charterhouse Parties, the "Supporting Mirion Holders") and the other holders of existing shares of Mirion who become a party thereto by executing a joinder agreement (each, a "Joining Seller" and, collectively, the "Joining Sellers" and, together with each SupportingMirion Holder , each, a "Seller" and, collectively, the "Sellers"). Pursuant to the terms of the Business Combination Agreement, the parties thereto will enter into a business combination transaction (the "Business Combination") pursuant to which Mirion will combine with a subsidiary of the Company as described below. The proposed Business Combination is expected to be consummated after the required approval by the stockholders of the Company and the satisfaction of certain other conditions summarized below. 17 -------------------------------------------------------------------------------- Table of Contents The Business Combination Agreement Transaction Consideration Subject to the terms of the Business Combination Agreement and adjustments set forth therein, the consideration to be paid in connection with the Business Combination is$1,700,000,000 (the "Total Consideration") and will be paid in a combination of equity and cash consideration. The cash consideration will be an amount equal to$1,310,000,000 ; provided, that if the Minimum Cash Condition (as defined below) is not met, and Mirion and the Charterhouse Parties elect to waive the Minimum Cash Condition, then the Cash Consideration will be equal to$1,310,000,000 less the amount by which$1,310,000,000 exceeds the Available Closing Cash (as defined below). In exchange for the A Ordinary Shares of$0.01 each in the capital of Mirion, the B Ordinary Shares of$0.01 each in the capital of Mirion and certain loan notes due 2026 issued byMirion Technologies (HoldingSub1), Ltd , each Seller may elect to receive cash or equity consideration or a combination thereof, which equity consideration shall be in the form of either shares of the Company's Class A common stock or shares of the Company's Class B common stock combined with shares of Class B common stock of a subsidiary that will be majority owned by the Company. The Available Closing Cash will be an amount equal to (i) the amount of funds contained in the Company's trust account (after reduction for the aggregate amount of payments required to be made in connection with any valid stockholder redemptions), plus (ii) the aggregate amount of cash that has been funded to and remains with the Company pursuant to the Subscription Agreements (as defined below) as of immediately prior to the closing of the Business Combination (the "Closing"), plus (iii) the amounts delivered pursuant to the Debt Financing (as defined in the Business Combination Agreement), plus (iv) the cash and cash equivalents of Mirion and its subsidiaries on a consolidated basis as of the date of the Closing (the "Closing Date"), plus (v) the proceeds, if any, from the sale by the Company toGSAM Holdings LLC of shares of the Company's Class A common stock, pursuant to a backstop agreement betweenGSAM Holdings LLC and the Company, less (vi) the total amount required to be paid to fully satisfy all obligations related to Mirion's credit agreement as of the Closing Date, less (vii) certain transaction expenses, less (viii)$50,000,000 (collectively, the "Available Closing Cash"). Covenants The Business Combination Agreement includes customary covenants of the parties with respect to operation of their respective businesses prior to consummation of the Business Combination and efforts to satisfy conditions to consummation of the Business Combination. The Business Combination Agreement contains additional covenants of the parties, including, among others: (i) covenants providing that the parties use reasonable best efforts and take certain actions to obtain all necessary regulatory approvals; (ii) covenants providing that the parties cooperate with respect to the registration statement, prospectus and proxy statement to be filed in connection with the Business Combination; (iii) covenants providing that the parties shall take further actions as may be necessary, proper or advisable to consummate and make effective the Business Combination; (iv) a covenant of the Company to convene a meeting of the Company's stockholders and to solicit proxies from its stockholders in favor of the approval of the Business Combination and other related stockholder proposals; and (v) covenants providing that the parties will not solicit, initiate, engage in or continue discussions with respect to any other business combination. Conditions to the Consummation of the Transactions Consummation of the transactions contemplated by the Business Combination Agreement (the "Transactions") is subject to certain closing conditions, including approval by the Company's stockholders, the expiration or termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act and the approval of certain governmental authorities. The Business Combination Agreement also contains other conditions, including, among others: (i) the Company having at least an aggregate of$1.310 billion in cash available at Closing (the "Minimum Cash Condition"); (ii) the registration statement becoming effective in accordance with the Securities Act; (iii) customary bringdown conditions; (iv) no material adverse effect having occurred; and (v) to the extent requested by the Company, Mirion having issued a notice of suspension or termination of business with certain partners. Subscription Agreements Concurrently with the execution of the Business Combination Agreement, the Company entered into subscription agreements (the "Subscription Agreements") with certain investors (collectively, the "PIPE Investors "), pursuant to, and on the terms and subject to the conditions of which, thePIPE Investors have collectively subscribed for 90,000,000 shares of the Company's Class A common stock for an aggregate purchase price equal to$900,000,000 (the "PIPE Investment " and, such shares, the "PIPE Shares"), a portion of which is expected to be funded byGSAM Holdings LLC . The Subscription Agreements for thePIPE Investors (other thanGSAM Holdings LLC , whose registration rights are governed by the Amended and Restated Registration Rights Agreement)provide for certain registration rights. In particular, the Company is required to, as soon as practicable but no later than (i) 30 calendar days following the Closing Date, file with theSEC (at the Company's sole cost and expense) a registration statement registering the resale of such PIPE Shares. Profit Interests In connection with the Business Combination Agreement, the Sponsor issued 8,100,000 membership interests in the Sponsor as profits interests to certain individuals affiliated with or expected to be affiliated with Mirion after the Business Combination. The holders of the profits interests will have an indirect interest in the Founder Shares held by the Sponsor. The profits interests are subject to service and performance vesting conditions, including the occurrence of the Closing, and do not fully vest until all of the applicable conditions are satisfied. In addition, the profits interests are subject to certain forfeiture conditions. 18 -------------------------------------------------------------------------------- Table of Contents Results of Operations For the six months endedJune 30, 2021 , we had net income (loss) of$1,013,683 , of which$9,232,566 is related to the change in the fair value of the warrant liability and$(8,755,122) is related to general and administrative expenses, which were primarily related to the proposed Business Combination. For the six months endedJune 30, 2020 we had net income (loss) of$(46,399) of which$(58,661) related to general and administrative expenses. Our business activities from inception toJune 30, 2021 consisted primarily of our formation and completing our Public Offering, and since the offering, our activity has been limited to identifying and evaluating prospective acquisition targets for an Initial Business Combination. Liquidity and Capital Resources Prior to the closing of the Public Offering, our only source of liquidity was an initial sale of shares (the "Founder Shares") of Class B common stock, par value$0.0001 per share, to our sponsor,GS Sponsor II LLC , aDelaware limited liability company (the "Sponsor"), and the proceeds of a promissory note (the "Note") from an affiliate of the Sponsor, in the amount of$300,000 . The Note was repaid upon the closing of the Public Offering. The registration statement relating to our Public Offering was declared effective by theSEC onJune 29, 2020 . OnJune 30, 2020 , the underwriters exercised a portion of their option to purchase additional units. Our Public Offering of 75,000,000 units (the "Units"), including 5,000,000 Units pursuant to the underwriters' partial exercise of such option, closed onJuly 2, 2020 . Simultaneously with the closing of the Public Offering, we closed the private placement of an aggregate of 8,500,000 warrants (the "Private Placement Warrants"), each exercisable to purchase one share of our Class A common stock, par value$0.0001 per share, at an exercise price of$11.50 per share, to the Sponsor, at a price of$2.00 per Private Placement Warrant, generating proceeds of$17,000,000 . On the Closing Date, we placed$750,000,000 of proceeds (including$26,250,000 of deferred underwriting discount) from the Public Offering and the Private Placement Warrants into aU.S. -based trust account, withContinental Stock Transfer & Trust Company acting as trustee (the "Trust Account") and held 2,000,000 of such proceeds outside the Trust Account. AtJune 30, 2021 , we had cash held in a custodian account of$799,624 and working capital of ($71,557,240 ). We do not believe we will need to raise additional funds in order to meet the expenditures required for operating our business prior to our Initial Business Combination, due to the Working Capital Note (as defined below) and Letter Agreement (as defined below). However, if our estimates of the costs of identifying a target business, undertaking in-depth due diligence and negotiating an Initial 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 Initial Business Combination. Moreover, we may need to obtain additional financing either to complete our Initial Business Combination or because we become obligated to redeem a significant number of our shares of Class A common stock upon completion of our Initial Business Combination, in which case we may issue additional securities or incur debt in connection with such Business Combination (including from our affiliates or affiliates of our Sponsor). OnNovember 12, 2020 , the Sponsor agreed to loan us up to an aggregate of$2,000,000 pursuant to the working capital note (the "Working Capital Note"). Any amounts borrowed under the Working Capital Note are non-interest bearing, unsecured and are due at the earlier of the date we are required to complete our Initial Business Combination pursuant to our amended and restated certificate of incorporation, as amended from time to time, and the closing of the Initial Business Combination. As ofJune 30, 2021 , we borrowed$2,000,000 under the Working Capital Note. OnAugust 12, 2021 , we entered into a letter agreement with the Sponsor (the "Letter Agreement") pursuant to which the Sponsor agreed that if the Business Combination does not close on or beforeJuly 2, 2022 , or if before such date the Business Combination Agreement is terminated, it will pay any costs and expenses incurred by us (the "Additional Expenses") in excess of any expenses that are paid (i) with our working capital or (ii) with funds borrowed by us under the Working Capital Note; provided that the maximum amount of Additional Expenses payable by the Sponsor shall not exceed$15,000,000 . Any amounts paid by the Sponsor under the Letter Agreement are non-interest bearing and unsecured. As ofAugust 13, 2021 , the Sponsor has not paid any amounts under the Letter Agreement. 19 -------------------------------------------------------------------------------- Table of Contents Off-Balance Sheet Arrangements We have no obligations, assets or liabilities which would be considered off-balance sheet arrangements. 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 entered into any non-financial agreements involving assets. Contractual Obligations AtJune 30, 2021 , we did not have any long-term debt, capital lease obligations, operating lease obligations or long-term liabilities. OnJune 29, 2020 , we entered into an administrative support agreement pursuant to which we have agreed to pay an affiliate of the Sponsor a total of$10,000 per month for office space, administrative and support services. Upon the earlier of the completion of the Initial Business Combination and the Company's liquidation, we will cease paying these monthly fees. For the three and six months endedJune 30, 2021 , we incurred expenses of$30,000 and$60,000 , respectively, under this agreement. The underwriters of the Public Offering are entitled to underwriting discounts and commissions of 5.5%, of which 2.0% ($15,000,000 ) was paid at the closing of the Public Offering and 3.5% ($26,250,000 ) was deferred. The deferred underwriting discount will be paid to the underwriters upon the completion of the Initial Business Combination. Critical Accounting Policies/Estimates The preparation of financial statements and related disclosures in conformity with accounting principles generally accepted inthe United States 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 condensed financial statements, and expenses during the periods reported. Actual results could materially differ from those estimates. We have identified the following as our critical accounting policies: Net Income Per Common Share Net income per share of common stock is computed by dividing net income by the weighted average number of common shares outstanding during the period. We apply the two-class method in calculating earnings per share. Accretion associated with the redeemable shares of Class A common stock is excluded from earnings per share as the redemption value exceeds fair value. As ofJune 30, 2021 , we had outstanding warrants to purchase of up to 27,250,000 shares of Class A common stock. The weighted average of these shares was excluded from the calculation of diluted net income per share of common stock since the exercise of the warrants is contingent upon the occurrence of future events. As ofJune 30, 2021 , we did not have any dilutive securities or other contracts that could, potentially, be exercised or converted into shares of common stock and then share in our earnings. As a result, diluted net income per common share is the same as basic net income per common share for the periods. Redeemable Shares of Class A Common Stock All of the 75,000,000 shares of Class A common stock sold as parts of the Units in the Public Offering contain a redemption feature. In accordance with the Accounting Standards Codification 480-10-S99-3A ("ASC 480"), "Classification and Measurement of Redeemable Securities", redemption provisions not solely within the control of the Company require the security to be classified outside of permanent equity. Ordinary liquidation events, which involve the redemption and liquidation of all of the entity's equity instruments, are excluded from the provisions of ASC 480. The Company classifies all shares of Class A common stock as redeemable. Warrant Liability We account for the warrants in accordance with the guidance contained in Accounting Standards Codification 815 ("ASC 815"), "Derivatives and Hedging", under which the warrants do not meet the criteria for equity treatment and must be recorded as derivative liabilities. Accordingly, we classify the warrants as liabilities at their fair value and adjusts the warrants to fair value at each reporting period. This liability is subject to re-measurement at each balance sheet date until the warrants are exercised, and any change in fair value is recognized in our statement of operations. The fair value of the Private Placement Warrants have been estimated using a Black-Scholes-Merton model and the fair value of Public Warrants issued in connection with the Public Offering have been measured based on the listed market price of such Public Warrants. Profit Interests Membership interests issued by the Sponsor as profits interests represent compensation to certain individuals for services the Company receives from these individuals through closing of the Business Combination. Although the Company is not a direct party to the profits interests, it attributes compensation expense equal to the change in the fair value of these arrangements. There was no impact of compensation expense attribution for the three months or six months endedJune 2021 orJune 2020 . Subscription Agreements The Subscription Agreements involve only physical settlement in a fixed number, it qualifies for equity classification under Accounting Standards Codification 815 ("ASC 815"), "Derivatives and Hedging", and, therefore, is not periodically remeasured to fair value. Backstop Agreement The Backstop Agreement involves a conditional obligation that the Company must settle by issuing a variable number of its shares, where the monetary value is predominantly based on variations in something other than the fair value of the Company's shares, it is initially and subsequently measured at fair value under Accounting Standards Codification ("ASC") 480, "Distinguishing Liabilities from Equity." Recent Accounting Pronouncements Management does not believe that any recently issued, but not yet effective, accounting pronouncements, if currently adopted, would have a material effect on our financial statements. 20
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