Item 1.01. Entry into a Material Definitive Agreement.

On December 3, 2021, Fusion Acquisition Corp. II (the "Company" or "we") issued an unsecured convertible promissory note (the "Convertible Note") to John James, the Company's Chief Executive Officer, pursuant to which the Company may borrow up to $300,000 from Mr. James for ongoing expenses reasonably related to the business of the Company and the consummation of the Business Combination, as defined below. All unpaid principal under the Convertible Note will be due and payable in full on the earlier of (i) March 2, 2023 and (ii) the effective date of a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination, involving the Company and one or more businesses (the "Business Combination") (such earlier date, the "Maturity Date"). Mr. James will have the option, at any time on or prior to the Maturity Date, to convert any amounts outstanding under the Convertible Note into warrants to purchase shares of the Company's Class A common stock, par value $0.0001 per share ("Class A common stock"), at a conversion price of $1.50 per warrant, with each warrant entitling the holder to purchase one share of Class A common stock at a price of $11.50 per share, subject to the same adjustments applicable to the private placement warrants sold concurrently with the Company's initial public offering; provided, that Mr. James' optional conversion shall be reduced by the amount of principal in excess of $1,200,000 that Fusion Sponsor LLC II (the "Sponsor") converts under that certain Convertible Promissory Note, dated as of March 5, 2021, by and between the Sponsor and the Company.

The foregoing description of the Convertible Note does not purport to be complete and is qualified in its entirety by the provisions of the Convertible Note, which is attached hereto as Exhibit 10.1 and incorporated by reference herein.

Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

The disclosure set forth above in Item 1.01 of this Current Report on Form 8-K is incorporated by reference herein.

Item 3.02 Unregistered Sales of Equity Securities.

The disclosure set forth above in Item 1.01 of this Current Report on Form 8-K is incorporated by reference herein.

The issuance of the Convertible Note was made pursuant to the exemption from registration contained in Section 4(a)(2) of the Securities Act of 1933, as amended.





                                       1

Item 4.02. Non-Reliance on Previously Issued Financial Statements or a Related Audit Report or Completed Interim Review.

In connection with the preparation of its financial statements as of and for the periods ended September 30, 2021, the Company reevaluated the classification of its shares of Class A common stock (the "Public Shares") issued as part of the units sold in the Company's initial public offering (the "IPO") on March 2, 2021, and concluded that it is appropriate to restate the presentation of the shares of Class A common stock subject to possible redemption to reflect all Public Shares as temporary equity. The Company previously recorded the Public Shares subject to possible redemption to be equal to the redemption value of such shares, while also taking into consideration the requirement in the Company's second amended and restated certificate of incorporation that redemptions cannot result in net tangible assets falling below $5,000,001 (the "Minimum Net Tangible Assets Requirement"). The Company had therefore recorded a portion of the Public Shares as permanent equity. Upon further evaluation, the Company has determined that the Public Shares include certain redemption features that are not solely within the control of the Company. Under Accounting Standards Codification ("ASC") 480-10-S99, Distinguishing Liabilities from Equity, redemption provisions not solely within the control of the Company require shares of common stock subject to redemption to be classified as temporary equity, regardless of the Minimum Net Tangible Assets Requirement. This reclassification of equity was reflected in the Company's Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2021, filed with the U.S. Securities and Exchange Commission (the "SEC") on November 15, 2021 as a revision and not a restatement.

On December 2, 2021, the Company's management and the audit committee of the Company's board of directors (the "Audit Committee") concluded that the Company's previously issued (i) audited balance sheet as of March 2, 2021, (ii) the unaudited interim financial statements included in the Company's Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2021, filed with the SEC on June 25, 2021, (iii) the unaudited interim financial statements included in the Company's Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2021, filed with the SEC on August 13, 2021 and (iii) the unaudited interim financial statements included in the Company's Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2021, filed with the SEC on November 15, 2021 (collectively, the "Affected Periods"), should be restated to report all Public Shares as temporary equity and should no longer be relied upon. As such, the Company intends to restate its financial statements for the Affected Periods in a Quarterly Report on Form 10-Q/A for the quarterly period ended September 30, 2021, to be filed with the SEC (the "Q3 Form 10-Q/A").

The Company does not expect any of the above changes will have any impact on its cash position and cash held in the trust account established in connection with the IPO (the "Trust Account").

The Company's management has concluded that in light of the classification error described above, a material weakness exists in the Company's internal control over financial reporting and that the Company's disclosure controls and procedures were not effective. The Company's remediation plan with respect to such material weakness will be described in more detail in the Q3 Form 10-Q/A.

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 WithumSmith+Brown, PC, the Company's independent registered public accounting firm.





                                       2





Forward-Looking Statements

This Current Report on Form 8-K includes "forward-looking statements" within the meaning of the safe harbor provisions of the United States Private Securities Litigation Reform Act of 1995. Certain of these forward-looking statements can be identified by the use of words such as "believes," "expects," "intends," "plans," "estimates," "assumes," "may," "should," "will," "seeks," or other similar expressions. Such statements may include, but are not limited to, statements regarding the impact of the Company's restatement of certain historical financial statements, the Company's cash position and cash held in the Trust Account and any proposed remediation measures with respect to identified material weaknesses. These statements are based on current expectations on the date of this Current Report on Form 8-K and involve a number of risks and uncertainties that may cause actual results to differ significantly. The Company does not assume any obligation to update or revise any such forward-looking statements, whether as the result of new developments or otherwise. Readers are cautioned not to put undue reliance on forward-looking statements.

© Edgar Online, source Glimpses