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Item 4.02
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Non-Reliance on Previously Issued Financial Statements or
Related Audit Report or Completed Interim Report.
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On April 12, 2021, the Acting Director of the Division
of Corporation Finance and Acting Chief Accountant of the Securities and Exchange Commission (“SEC”) together issued a statement
regarding the accounting and reporting considerations for warrants issued by special purpose acquisition companies entitled “Staff
Statement on Accounting and Reporting Considerations for Warrants Issued by Special Purpose Acquisition Companies (“SPACs”)
(the “SEC Statement”). Specifically, the SEC Statement focused on certain settlement terms and provisions related to certain
tender offers following a business combination, which terms are similar to those contained in the warrant agreement, dated as of September
14, 2020, between Software Acquisition Group Inc. II (the “Company”) and Continental Stock Transfer & Trust Company, a
New York corporation, as warrant agent. As a result of the SEC Statement, the Company reevaluated the accounting treatment of (i) the
8,625,000 redeemable warrants (the “Public Warrants”) that were included in the units issued by the Company in its initial
public offering (the “IPO”) and (ii) the 5,200,000 warrants (together with the Public Warrants, the “Warrants”)
that were issued to the Company’s sponsor in a private placement that closed concurrently with the closings of the IPO, and determined
to classify the Warrants as derivative liabilities measured at fair value, with changes in fair value each period reported in earnings.
While the Company has not generated any operating revenues to date and will not generate any operating revenues until after completion
of its initial business combination, at the earliest, the change in fair value of the Warrants is a non-cash charge and will be reflected
in the Company’s statement of operations.
On April 23, 2021, after consultation with Marcum LLP,
the Company’s independent registered public accounting firm (the “Independent Accountants”), the Company’s management
and the Audit Committee of the Company’s Board of Directors (the “Audit Committee”) concluded that, in light of the
SEC Statement, it is appropriate to restate (i) certain items on the Company’s previously issued audited balance sheet dated as
of September 17, 2020, which was related to its IPO, (ii) the Company’s quarterly unaudited financial statements for the period
ended September 30, 2020 and (iii) the Company’s previously issued audited financial statements as of December 31, 2020 and for
the period from June 16, 2020 (inception) through December 31, 2020 (the “Relevant Periods”). Considering such restatement,
such financial statements should no longer be relied upon. The Company will file an amendment to its Annual Report on Form 10-K as of
December 31, 2020 and for the period from June 16, 2020 (inception) through December 31, 2020, which will include the restated audited
financial statements for the Relevant Periods.
Going forward, unless we amend the terms of our warrant
agreement, we expect to continue to classify our warrants as a liabilities, which would require us to incur the cost of measuring the
fair value of the warrant liabilities, and which may have an adverse effect on our results of operations.
The Company’s management and the Audit Committee
have discussed the matters disclosed in this Current Report on Form 8-K pursuant to this Item 4.02 with the Independent Accountants.
Additional Information
This Current Report on Form 8-K (this “Report”)
relates to a proposed business combination (the “Business Combination”) between the Company and Otonomo Technologies Ltd.
(“Otonomo”). In connection with the proposed Business Combination, Otonomo has filed a registration statement on Form F-4
that includes a proxy statement of the Company in connection with the Company’s solicitation of proxies for the vote by the Company’s
stockholders with respect to the proposed Business Combination and a prospectus of Otonomo. The proxy statement/prospectus will be sent
to all Company stockholders and Otonomo and the Company will also file other documents regarding the proposed Business Combination with
the SEC. This Report does not contain all the information that should be considered concerning the proposed Business Combination and is
not intended to form the basis of any investment decision or any other decision in respect of the Business Combination. Before making
any voting or investment decision, investors and security holders are urged to read the registration statement, the proxy statement/prospectus
and all other relevant documents filed or that will be filed with the SEC in connection with the proposed Business Combination as they
become available because they will contain important information about the proposed transactions.
Investors and security holders will be able to obtain
free copies of the registration statement, proxy statement/prospectus and all other relevant documents filed or that will be filed with
the SEC by Otonomo and the Company through the website maintained by the SEC at www.sec.gov. In addition, the documents filed by Otonomo
may be obtained free of charge from the Otonomo’s website at www.otonomo.io or by written request to Otonomo at Otonomo Technologies
Ltd., 16 Abba Eban Blvd., Herzliya Pituach 467256, Israel.
Participants in Solicitation
Otonomo, the Company and their respective directors
and executive officers may be deemed to be participants in the solicitation of proxies from the Company’s shareholders with respect
to the proposed Business Combination. You can find information about the Company’s directors and executive officers and their ownership
of the Company’s securities in the Company’s final prospectus relating to its initial public offering, dated September 14,
2020, which was filed with the SEC on September 15, 2020 and is available free of charge at the SEC’s web site at www.sec.gov. Additional
information regarding the participants in the solicitation of proxies from the Company’s shareholders and their direct and indirect
interests will be included in the proxy statement/prospectus for the proposed Business Combination when it becomes available. Shareholders,
potential investors and other interested persons should read the proxy statement/prospectus carefully when it becomes available before
making any voting or investment decisions. You may obtain free copies of these documents from the sources indicated above.
Forward-Looking Statements
This Report includes forward-looking statements within
the meaning of the federal securities laws with respect to the proposed Business Combination between Otonomo and the Company, including
statements regarding the anticipated timing of the Business Combination. These forward-looking statements are generally identified by
terminology such as “believe,” “may,” “will,” “potentially,” “estimate,” “continue,”
“anticipate,” “intend,” “could,” “would,” “project,” “target,”
“plan,” “expect,” or the negatives of these terms or variations of them or similar terminology. These forward-looking
statements are based upon estimates and assumptions that, while considered reasonable by the Company and its management, and Otonomo and
its management, as the case may be, are inherently uncertain. Such forward-looking statements are subject to risks, uncertainties, and
other factors that could cause actual results to differ materially from those expressed or implied by such forward looking statements.
New risks and uncertainties may emerge from time to time, and it is not possible to predict all risks and uncertainties. Many factors
could cause actual future events to differ materially from the forward-looking statements in this Report, including but not limited to:
(i) the risk that the transaction may not be completed in a timely manner or at all, which may adversely affect the price of the Company’s
securities, (ii) the risk that the transaction may not be completed by the Company’s Business Combination deadline and the potential
failure to obtain an extension of the Business Combination deadline if sought by the Company, (iii) the failure to satisfy the conditions
to the consummation of the transaction, including the adoption of the Business Combination Agreement by the shareholders of Otonomo and
the Company, the satisfaction of the minimum trust account amount following redemptions by the Company’s public shareholders and
the receipt of certain governmental and regulatory approvals, (iv) the lack of a third party valuation in determining whether to pursue
the proposed Business Combination, (v) the occurrence of any event, change or other circumstance that could give rise to the termination
of the Business Combination Agreement, (vi) the effect of the announcement or pendency of the transaction on Otonomo’s business
relationships, performance, and business generally, (vii) risks that the proposed Business Combination disrupts current plans of Otonomo
and potential difficulties in Otonomo employee retention as a result of the proposed transaction, (viii) the outcome of any legal proceedings
that may be instituted against Otonomo or against the Company related to the Business Combination agreement or the proposed Business Combination,
(ix) the ability of Otonomo to list its ordinary shares on the Nasdaq, (x) volatility in the price of the combined company’s securities
due to a variety of factors, including changes in the competitive and highly regulated industries in which Otonomo plans to operate, variations
in performance across competitors, changes in laws and regulations affecting Otonomo’s business and changes in the combined capital
structure, and (xi) the ability to implement business plans, forecasts, and other expectations after the completion of the proposed Business
Combination, and to identify and realize additional opportunities. The foregoing list of factors is not exhaustive. You should carefully
consider the foregoing factors and the other risks and uncertainties described in the “Risk Factors” section of the Company’s,
Quarterly Report on Form 10-Q, and other documents filed by the Company from time to time with the U.S. Securities and Exchange Commission
(the “SEC”) and the registration statement on Form F-4 and proxy statement/prospectus discussed above. These filings identify
and address other important risks and uncertainties that could cause actual events and results to differ materially from those contained
in the forward-looking statements. Forward-looking statements speak only as of the date they are made. Readers are cautioned not to put
undue reliance on forward-looking statements, and Otonomo and the Company assume no obligation and do not intend to update or revise these
forward-looking statements, whether as a result of new information, future events, or otherwise.
Nothing in this Report should be regarded as a representation
by any person that the forward-looking statements set forth herein will be achieved or that any of the contemplated results of such forward-looking
statements will be achieved. You should not place undue reliance on forward-looking statements in this Report, which speak only as of
the date they are made and are qualified in their entirety by reference to the cautionary statements herein. Neither Otonomo nor the Company
undertakes any duty to update these forward-looking statements.
Any financial and capitalization information or projections
in this Report are forward-looking statements that are based on assumptions that are inherently subject to significant uncertainties and
contingencies, many of which are beyond Otonomo’s and the Company’s control. While such information and projections are necessarily
speculative, Otonomo and the Company believe that the preparation of prospective financial information involves increasingly higher levels
of uncertainty the further out the projection extends from the date of preparation. The assumptions and estimates underlying the projected
results are inherently uncertain and are subject to a wide variety of significant business, economic and competitive risks and uncertainties
that could cause actual results to differ materially from those contained in the projections. The inclusion of financial information or
projections in this Report should not be regarded as an indication that Otonomo or the Company, or their respective representatives and
advisors, considered or consider the information or projections to be a reliable prediction of future events.