References to the "company," "Corner Growth," "our," "us" or "we" refer to
Corner Growth Acquisition Corp. 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 Annual Report on Form 10-K. Certain information contained in
the discussion and analysis set forth below includes forward-looking statements
that involve risks and uncertainties.
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Cautionary Note Regarding Forward-Looking Statements
All statements other than statements of historical fact included in this Annual
Report on Form 10-Kincluding, without limitation, statements under "Management's
Discussion and Analysis of Financial Condition and Results of Operations"
regarding our financial position, business strategy and the plans and objectives
of management for future operations, are forward looking statements. When used
in this Annual Report on Form 10-K, words such as "may," "should," "could,"
"would," "expect," "plan," "anticipate," "believe," "estimate," "continue," or
the negative of such terms or other similar expressions, as they relate to us or
our management, identify forward looking statements. Factors that might cause or
contribute to such a discrepancy include, but are not limited to, those
described in our other SEC filings. Such forward looking statements are based on
the beliefs of management, as well as assumptions made by, and information
currently available to, our management. No assurance can be given that results
in any forward-looking statement will be achieved and actual results could be
affected by one or more factors, which could cause them to differ materially.
The cautionary statements made in this Annual Report on Form 10-K should be read
as being applicable to all forward-looking statements whenever they appear in
this Annual Report. For these statements, we claim the protection of the safe
harbor for forward-looking statements contained in the Private Securities
Litigation Reform Act. Actual results could differ materially from those
contemplated by the forward-looking statements as a result of certain factors
detailed in our filings with the SEC. All subsequent written or oral
forward-looking statements attributable to us or persons acting on our behalf
are qualified in their entirety by this paragraph.
Overview
We are a blank check company incorporated on October 20, 2020 (inception) as a
Cayman Islands exempted company for the purpose of effecting a merger, share
exchange, asset acquisition, share purchase, reorganization or similar business
combination with one or more businesses (the "Business Combination"). While we
may pursue an acquisition opportunity in any business, industry, sector or
geographical location, we focus on industries that complement our management
team's background, and in our search for targets for our Business Combination
seek to capitalize on the ability of our management team to identify and acquire
a business, focusing on the technology industry in the United States and other
developed countries.
The registration statement for our Initial Public Offering was declared
effective on December 16, 2020. On December 21, 2020, we consummated the Initial
Public Offering of 40,000,000 Units at $10.00 per Unit, generating gross
proceeds of $400,000,000 million, and incurring offering costs of approximately
$22,766,000, inclusive of $14,000,000 in deferred underwriting commissions. Each
Unit consists of one Class A ordinary share and one-half of one redeemable
warrant. Each whole public warrant entitles the holder to purchase one Class A
ordinary share at a price of $11.50 per share, subject to adjustment.
Simultaneously with the closing of the Initial Public Offering, we consummated
the private placement of 7,600,000 private placement warrants at a price of
$1.50 per private placement warrant to the sponsor, generating gross proceeds of
$11,400,000. Each private placement warrant is exercisable for one Class A
ordinary share at a price of $11.50 per share.
Upon the closing of the Initial Public Offering and private
placement, $400,000,000 ($10.00 per Unit) of the net proceeds of the Initial
Public Offering and certain of the proceeds of the private placement were
placed in the trust account, located in the United States at J.P. Morgan Chase
Bank, N.A., with Continental Stock Transfer & Trust Company acting as trustee,
and are only invested in U.S. government securities, within the meaning set
forth in Section 2(a)(16) of the Investment Company Act, with a maturity of 180
days or less or in any open-ended investment company that holds itself out as a
money market fund selected by us meeting the conditions of paragraphs (d)(2),
(d)(3) and (d)(4) of Rule 2a-7 of the Investment Company Act, as determined by
us, until the earlier of: (i) the completion of a Business Combination and
(ii) the distribution of the assets held in the trust account. Our management
has broad discretion with respect to the specific application of the net
proceeds of the Initial Public Offering and the private placement, although
substantially all of the net proceeds are intended to be applied toward
consummating an initial Business Combination.
If we are unable to complete a Business Combination within 24 months from the
closing of the Initial Public Offering, or December 21, 2022, we will (i) cease
all operations except for the purpose of winding up, (ii) as promptly as
reasonably possible but not more than ten business days thereafter, redeem the
public shares, at a per-share price, payable in cash, equal to the aggregate
amount then on deposit in the trust account including interest earned on the
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funds held in the trust account and not previously released to us to pay for our
income taxes (less up to $100,000 of interest to pay dissolution expenses),
divided by the number of then outstanding public shares, which redemption will
completely extinguish public shareholders' rights as shareholders (including the
right to receive further liquidating distributions, if any), subject to
applicable law, and (iii) as promptly as reasonably possible following such
redemption, subject to the approval of our remaining shareholders and our board
of directors, proceed to commence a voluntary liquidation and thereby a formal
dissolution of our company, subject in each case to our obligations under Cayman
Islands law to provide for claims of creditors and the requirements of other
applicable law.
Liquidity and Capital Resources
As indicated in the accompanying financial statements, at December 31, 2020, we
had $1,916,935 our operating bank account, and working capital of $2,520,111,
and approximately $5,705 of unrealized gains on the proceeds deposited in the
trust account. We expect to continue to incur significant costs in pursuit of
our initial Business Combination plans.
Our liquidity needs have been satisfied prior to the completion of the Initial
Public Offering through receipt of a $25,000 capital contribution from our
sponsor in exchange for the issuance of the founder shares to our sponsor and a
commitment from our sponsor to loan up to $300,000 to us to cover our expenses
in connection with our Initial Public Offering. Our sponsor loaned us $120,000
to cover expenses on our behalf under the note agreement. On December 22, 2020,
the Company repaid the Note in full.
Critical Accounting Policy
Class A Ordinary Shares subject to possible redemption
We account for our Class A ordinary shares subject to possible redemption in
accordance with the guidance in FASB ASC Topic 480 "Distinguishing Liabilities
from Equity." Class A ordinary shares subject to mandatory redemption (if any)
are classified as liability instruments and are measured at fair value.
Conditionally redeemable Class A ordinary shares (including Class A 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, Class A ordinary shares are classified as shareholders' equity. Our
Class A ordinary shares feature certain redemption rights that are considered to
be outside of our control and subject to the occurrence of uncertain future
events. Accordingly, at December 31, 2020, 38,352,581 Class A ordinary shares
subject to possible redemption at the redemption amount are presented as
temporary equity, outside of the shareholders' equity section of our balance
sheet.
Results of Operations
All activity during the year ended December 31, 2020, was in preparation for our
formation, the Initial Public Offering and, since the closing of our Initial
Public Offering, a search for initial Business Combination candidates. As of
December 31, 2020, $1,916,935 was held outside the trust account and was being
used to fund the company's operating expenses. We are not generating any
operating revenues until the closing and completion of our initial Business
Combination.
For the period from October 20, 2020 (inception) to December 31, 2020, we had a
net loss of $133,104, which consisted of $138,809 in general and administrative
costs offset by $5,705 in unrealized gains on securities held in the trust
account.
Related Party Transactions
Founder Shares
On October 28, 2020, our sponsor paid $25,000, or approximately $0.003 per
share, to cover certain expenses on our behalf in consideration of 8,625,000
Class B ordinary shares, par value $0.0001. In November 2020, our sponsor
transferred 50,000 Class B ordinary shares to each of our independent directors.
On December 16, 2020, we effected a share capitalization of 1,437,500 Class B
ordinary shares, resulting in an aggregate of 10,062,500 Class B
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ordinary shares outstanding. The number of founder shares issued was determined
based on the expectation that such founder shares would represent 20% of the
issued and outstanding shares upon completion of this offering. Up to 1,312,500
of the Class B ordinary shares outstanding were subject to forfeiture by our
sponsor to the extent that the underwriters' over-allotment in connection with
the Initial Public Offering was not exercised in full or in part. As a result of
the underwriters' election to partially exercise their over-allotment option,
the sponsor forfeited 62,500 Class B ordinary shares for no consideration,
resulting in an aggregate of 10,000,000 Class B ordinary shares outstanding as
of December 31, 2020. The founder shares (including the Class A ordinary shares
issuable upon exercise thereof) may not, subject to certain limited exceptions,
be transferred, assigned or sold by the holder.
The initial shareholders agreed, subject to limited exceptions, not to transfer,
assign or sell any of their founder shares until the earlier to occur of:
(A) one year after the completion of the initial Business Combination or
(B) subsequent to the initial Business Combination, (x) if the last sale price
of the Class A ordinary shares equals or exceeds $12.00 per share (as adjusted
for share splits, share dividends, reorganizations, recapitalizations and the
like) for any 20 trading days within any 30-trading day period commencing at
least 150 days after the initial Business Combination, or (y) the date on which
we complete a liquidation, merger, share exchange or other similar transaction
that results in all of our shareholders having the right to exchange their
ordinary shares for cash, securities or other property.
Private Placement Warrants
Concurrently with the closing of the Initial Public Offering, our sponsor
purchased 7,600,000 private placement warrants at a price of $1.50 per private
placement warrant, generating proceeds of $11,400,000 in the private placement.
Each private placement warrant is exercisable for one Class A ordinary share at
a price of $11.50 per share. A portion of the proceeds from the sale of the
private placement warrants was added to the proceeds from the Initial Public
Offering held in the trust account. If we do not complete a business combination
within 24 months after the closing of our Initial Public Offering, the private
placement warrants will expire worthless. The private placement warrants will be
non-redeemable and exercisable on a cashless basis so long as they are held by
our sponsor or its permitted transferees.
Our sponsor and our officers and directors agreed, subject to limited
exceptions, not to transfer, assign or sell any of their private placement
warrants until 30 days after the completion of the initial Business Combination.
Related Party Loans
On October 28, 2020, the Sponsor agreed to loan the Company up to $300,000 to
cover expenses related to the Initial Public Offering pursuant to a promissory
note (the "Note"). This loan is non-interest bearing and payable on the earlier
of June 30, 2021 or the completion of the Initial Public Offering. As of
December 21, 2020, the Company had borrowed $120,000 under the Note. On
December 22, 2020, the Company repaid the Note in full.
In addition, in order to finance transaction costs in connection with a 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 ("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
is not completed, we may use a portion of the 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, without interest, 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. As of December 31, 2020, there
were no outstanding Working Capital Loans under this arrangement.
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Administrative Support Agreement
We agreed, commencing on the effective date of the Initial Public Offering
through the earlier of the company's consummation of a Business Combination and
its liquidation, to pay our sponsor a total of $40,000 per month for office
space, utilities and secretarial and administrative support. We recognized
$40,000 in expenses incurred in connection with the aforementioned arrangements
with the related parties on our Statements of Operations for the period from
October 20, 2020 (inception) to December 31, 2020.
Contractual Obligations
Registration and Shareholder Rights
The holders of founder shares, private placement warrants and warrants that may
be issued upon conversion of Working Capital Loans, if any, will be entitled to
registration rights (in the case of the founder shares, only after conversion of
such shares into Class A ordinary shares) pursuant to a registration and
shareholder rights agreement to be entered into upon consummation of the Initial
Public Offering. These holders will be entitled to certain demand and
"piggyback" registration and shareholder rights. However, the registration and
shareholder rights agreement provides that we will not permit any registration
statement filed under the Securities Act to become effective until the
termination of the applicable lock-up period for the securities to be
registered. We will bear the expenses incurred in connection with the filing of
any such registration statements.
Underwriting Agreement
We granted the underwriters a 45-day option from the date of the final
prospectus relating to the Initial Public Offering to purchase up to 5,250,000
additional Units to cover over-allotments, if any, at $10.00 per Unit, less
underwriting discounts and commissions. The underwriters partially exercised
their option and purchased an additional 5,000,000 Units.
The underwriters were entitled to underwriting discounts of $0.20 per Unit, or
$8,000,000 in the aggregate, paid upon the closing of the Initial Public
Offering. An additional fee of $0.35 per Unit, or $14,000,000 in the aggregate
will be payable to the underwriters for deferred underwriting commissions. The
deferred underwriting commissions 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.
Off-Balance Sheet Arrangements
As of December 31, 2020, we did not have any off-balance sheet arrangements as
defined in Item 303(a)(4)(ii) of Regulation S-K and did not have any commitments
or contractual obligations.
JOBS Act
On April 5, 2012, the JOBS Act was signed into law. The JOBS Act contains
provisions that, among other things, relax certain reporting requirements for
qualifying public companies. We qualify as an "emerging growth company" and
under the JOBS Act are allowed to comply with new or revised accounting
pronouncements based on the effective date for private (not publicly traded)
companies. We are electing to delay the adoption of new or revised accounting
standards, and as a result, we may not comply with new or revised accounting
standards on the relevant dates on which adoption of such standards is required
for non-emerging growth companies. As such, our financial statements may not be
comparable to companies that comply with public company effective dates.
Additionally, we are in the process of evaluating the benefits of relying on the
other reduced reporting requirements provided by the JOBS Act. Subject to
certain conditions set forth in the JOBS Act, if, as an "emerging growth
company," we choose to rely on such exemptions we may not be required to, among
other things, (i) provide an auditor's attestation report on our system of
internal controls over financial reporting pursuant to Section 404 of the
Sarbanes-Oxley Act, (ii) provide all of the compensation disclosure that may be
required of non-emerging growth public companies under the Dodd-Frank Wall
Street Reform and Consumer Protection Act, (iii) comply with any requirement
that may be adopted by the PCAOB regarding mandatory audit firm rotation or a
supplement to the auditor's report providing additional information about the
audit and the financial statements (auditor discussion and analysis) and
(iv) disclose certain executive compensation related items such as the
correlation between executive compensation and performance and comparisons of
the principal executive officer's compensation to median employee compensation.
These exemptions will apply for a period of five years following the completion
of our initial public offering or until we are no longer an "emerging growth
company," whichever is earlier.
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