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OFFON

TISHMAN SPEYER INNOVATION CORP. II

(TSIB)
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TISHMAN SPEYER INNOVATION CORP. II MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. (form 10-Q)

11/01/2021 | 03:34pm EST
References in this report to "we," "us" or the "Company" refer to Tishman Speyer
Innovation Corp. II, a Delaware corporation, to our "management" or our
"management team" refer to our officers and directors, and references to the
"Sponsor" refer to Tishman Speyer Innovation Sponsor II, L.L.C., a Delaware
limited liability company. "Tishman Speyer" refers to Tishman Speyer Properties,
L.P., a New York limited partnership, and the parent of our Sponsor. References
to our "initial stockholders" refer to our Sponsor and to our independent
directors, Joshua Kazam, Jennifer Rubio, Ned Segal and Michelangelo Volpi. Refer
to the glossary at the end of this report for additional terms.
Special Note Regarding Forward-Looking Statements
This discussion contains forward-looking statements reflecting our current
expectations, estimates and assumptions concerning events and financial trends
that may affect our future operating results or financial position. Our
forward-looking statements include, but are not limited to, statements regarding
our or our management team's expectations, hopes, beliefs, intentions or
strategies regarding the future. In addition, any statements that refer to
projections, forecasts or other characterizations of future events or
circumstances, including any underlying assumptions, are forward-looking
statements. The words "anticipate," "believe," "continue," "could," "estimate,"
"expect," "intends," "may," "might," "plan," "possible," "potential," "predict,"
"project," "should," "would" and similar expressions may identify
forward-looking statements, but the absence of these words does not mean that a
statement is not forward-looking. The forward-looking statements contained in
this report are based on our current expectations and beliefs concerning future
developments and their potential effects on us. There can be no assurance that
future developments affecting us will be those that we have anticipated. 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
final prospectus for our initial public offering filed with the SEC. 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.
Overview
We are a blank check company, originally incorporated in Delaware on
November 12, 2020, and formed for the purpose of effecting a merger, share
exchange, asset acquisition, share purchase, reorganization or similar business
combination.
Following the closing of our initial public offering (the "IPO"), on
February 17, 2021, $300,000,000 ($10.00 per Unit) from the net proceeds of the
sale of the Units in the IPO and the sale of the Private Placement Warrants was
placed in the Trust Account 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 meeting certain
conditions under Rule
2a-7
promulgated under the Investment Company Act which invest only in direct U.S.
government treasury obligations, until the earlier of: (i) the completion of a
Business Combination, (ii) the redemption of any Public Shares properly
submitted in connection with a stockholder vote to amend the Company's amended
and restated certificate of incorporation, and (iii) the redemption of the
Company's Public Shares if the Company is unable to complete the initial
Business Combination by February 17, 2023, subject to applicable law. The
proceeds deposited in the Trust Account could become subject to the claims of
the Company's creditors, if any, which could have priority over the claims of
the Company's public stockholders.
Our management has broad discretion with respect to the specific application of
the net proceeds of the IPO and the sale of Private Placement Warrants, although
substantially all of the net proceeds are intended to be applied generally
toward consummating a Business Combination.

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Results of Operations
As of September 30, 2021, we had not commenced any operations. All activity for
the period from January 1, 2021 through September 30, 2021, relates to
preparation and consummation of the IPO and our search for a target to
consummate a Business Combination. We will not generate any operating revenues
until after the completion of a Business Combination, at the earliest. We will
generate
non-operating income
in the form of interest income from the proceeds derived from the IPO and placed
in the Trust Account (defined below).
For the three months ended September 30, 2021, we had a net income of
$10,104,931, consisting mostly of change in fair value of warrant liabilities of
$10,527,846 partially offset by $427,524 in formation and operating costs.
For the nine months ended September 30, 2021, we had a net income of $5,422,897,
consisting mostly of change in fair value of warrant liabilities of $6,882,845
offset by $949,475 in formation and operating costs and $521,695 in offering
expense allocated to issuance of the warrants.
Liquidity and Capital Resources
As of September 30, 2021, we had cash outside our trust account of $598,711,
available for working capital needs. All remaining cash was held in the trust
account and is generally unavailable for our use, prior to an initial business
combination.
We intend to use substantially all of the funds held in the Trust Account,
including any amounts representing interest earned on the Trust Account
(excluding deferred underwriting commissions) to complete our Business
Combination. We may withdraw interest to pay our taxes. We estimate our annual
franchise tax obligations, based on the number of shares of our common stock
authorized and outstanding after the completion of the IPO, to be $200,000,
which is the maximum amount of annual franchise taxes payable by us as a
Delaware corporation per annum, which we may pay from funds from the IPO held
outside of the Trust Account or from interest earned on the funds held in the
Trust Account and released to us for this purpose. Our annual income tax
obligations will depend on the amount of interest and other income earned on the
amounts held in the Trust Account. We expect the interest earned on the amount
in the Trust Account will be sufficient to pay our income taxes. To the extent
that our equity 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.
Further, our Sponsor, officers and directors or their respective affiliates may,
but are not obligated to, loan us funds as may be required (the "Working Capital
Loans"). If we complete a Business Combination, we would repay the Working
Capital Loans out of the proceeds of the Trust Account released to us.
Otherwise, the Working Capital Loans would be repaid only out of funds held
outside the Trust Account. In the event that a Business Combination does not
close, we may use a portion of proceeds held outside the Trust Account to repay
the Working Capital Loans but no proceeds held in the Trust Account would be
used to repay the Working Capital Loans. Except for the foregoing, the terms of
such Working Capital Loans, if any, have not been determined and no written
agreements exist with respect to such loans. The Working Capital Loans would
either be repaid upon consummation of a Business Combination or, at the lender's
discretion, up to $1,500,000 of such Working Capital Loans may be convertible
into warrants of the post Business Combination entity at a price of $1.50 per
warrant. The warrants would be identical to the Private Placement Warrants. To
date, we had no borrowings under the Working Capital Loans.

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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 estimates 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. In order to fund working capital
deficiencies or finance transaction costs in connection with an intended
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 our Business Combination, we would repay such loaned
amounts. In the event that our 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 warrants of
the post business combination entity at a price of $1.50 per warrant at the
option of the lender. The warrants would be identical to the Private Placement
Warrants. The terms of such loans, if any, have not been determined and no
written agreements exist with respect to such loans. Prior to the completion of
our Business Combination, we do not expect to seek loans from parties other than
our Sponsor or an affiliate of our Sponsor as we do not believe third parties
will be willing to loan such funds and provide a waiver against any and all
rights to seek access to funds in our Trust Account.
Off-Balance
Sheet Financing Arrangements
We did not have any
off-balance
sheet arrangement as of September 30, 2021.
Contractual Obligations
As of September 30, 2021, we did not have any long-term debt, capital or
operating lease obligations.
We entered into an administrative services agreement pursuant to which we will
pay our Sponsor for office space and secretarial and administrative services
provided to members of our management team, in an amount not to exceed $10,000
per month.
Critical Accounting Policies and Estimates
The preparation of condensed financial statements and related disclosures in
conformity with GAAP 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:
Derivative Warrant Liabilities
We do not use derivative instruments to hedge exposures to cash flow, market, or
foreign currency risks. We evaluate all of our financial instruments, including
issued stock purchase warrants, to determine if such instruments are derivatives
or contain features that qualify as embedded derivatives, pursuant to ASC 480
and ASC
815-15.
The classification of derivative instruments, including whether such instruments
should be recorded as liabilities or as equity, is
re-assessed
at the end of each reporting period.
We account for our 11,333,334 warrants issued in connection with its IPO
(6,000,000) and Private Placement (5,333,334) as derivative warrant liabilities
in accordance with ASC
815-40.
Accordingly, we recognize the warrant instruments as liabilities at fair value
and adjusts the instruments to fair value at each reporting period. The
liabilities are subject to
re-measurement
at each balance sheet date until exercised, and any change in fair value is
recognized in our statement of operations. At September 30, 2021, the Company
used the quoted stock price in the active market to value the public warrants
and a Monte Carlo simulation model to value the private warrants.

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Class A Common Stock Subject to Possible Redemption
We account for our common stock subject to possible redemption in accordance
with the guidance in the Financial Accounting Standards Board's Accounting
Standards Codification Topic 480 "
Distinguishing Liabilities from Equity
." Common stock subject to mandatory redemption (if any) are classified as
liability instruments and are measured at fair value. Conditionally redeemable
Class A common stock (including Class A 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 our control) are
classified as temporary equity. At all other times, Class A common stock is
classified as stockholders' equity. Our Class A common stock feature certain
redemption rights that are considered to be outside of our control and subject
to the occurrence of uncertain future events. Accordingly, at September 30,
2021, 30,000,000 shares of Class A common stock subject to possible redemption
are presented as temporary equity, outside of the stockholders' equity section
of our balance sheet.
Net Income Per Common Share
We have two classes of stock, which are referred to as Class A common stock and
Class B common stock. Earnings and losses are shared pro rata between the two
classes of stock. Private and public warrants to purchase 11,333,334 Class A
common stock at $11.50 per share were issued on February 17, 2021. No warrants
were exercised during the three or nine months ended September 30, 2021. The
calculation of diluted income per common share does not consider the effect of
the warrants issued in connection with the (i) IPO, (ii) exercise of
over-allotment, and (iii) Private Placement since the exercise of the warrants
are contingent upon the occurrence of future events. As a result, diluted net
income per common share
is the same as basic net income per common share for the periods presented.
Recent Accounting Standards
In August 2020, the FASB issued Accounting Standard Update (the "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
, which simplifies accounting for convertible instruments by removing major
separation models required under current GAAP. The ASU also removes certain
settlement conditions that are required for equity-linked contracts to qualify
for the derivative scope exception and it also simplifies the diluted earnings
per share calculation in certain areas. The Company early adopted the ASU on
January 1, 2021. Adoption of the ASU did not impact the Company's financial
position, results of operations or cash flows.
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.

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