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 unaudited condensed financial statements and the notes
thereto contained elsewhere in this Quarterly Report on Form 10-Q. Certain
information contained in the discussion and analysis set forth below includes
forward-looking statements that involve risks and uncertainties.
Cautionary Note Regarding Forward-Looking Statements
This Quarterly Report on Form 10-Q includes forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933, as amended (the
"Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"). When used in this Quarterly Report on
Form 10-Q, 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
filings with the Securities and Exchange Commission ("SEC"). 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
Quarterly Report on Form 10-Q should be read as being applicable to all
forward-looking statements whenever they appear in this Quarterly Report. 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 (a "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 (the "Initial Public
Offering") was declared effective on December 16, 2020. On December 21, 2020, we
consummated our Initial Public Offering of 40,000,000 units, at $10.00 per unit,
generating gross proceeds of $400,000,000, 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, par value $0.0001
per share (the "Class A ordinary shares") and one-third of one redeemable
warrant, each whole public warrant entitling the holder thereof 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 (the "Private Placement") to our 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),
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(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
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 March 31, 2021, we had
$1,536,527 in our operating bank account, and working capital of $2,026,209, and
approximately $75,235 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 prior to the consummation of the Initial Public Offering
were satisfied through the proceeds of $25,000 from the sale of the founder
shares, and loans from our sponsor of approximately $120,000. The loan was
repaid in full on December 22, 2020. Subsequent from the consummation of the
Initial Public Offering, our liquidity has been satisfied through the net
proceeds received from the consummation of the Initial Public Offering and the
Private Placement.
Based on the foregoing, management believes that we will have sufficient working
capital and borrowing capacity to meet its needs through the earlier of the
consummation of a Business Combination or one year from this filing. Over this
time period, we will be using these funds for paying existing accounts payable,
identifying and evaluating prospective initial Business Combination candidates,
performing due diligence on prospective target businesses, paying for travel
expenditures, selecting the target business to merge with or acquire, and
structuring, negotiating and consummating the Business Combination.
Results of Operations
Our entire activity since inception through March 31, 2021 related to our
formation, Initial Public Offering and, since the closing of our Initial Public
Offering, the search for initial Business Combination candidates. For the three
months ended March 31, 2021, $1,536,527 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 three months ended March 31, 2021, we had a net income of $408,648 which
consisted of $69,530 in unrealized gains, dividends and interest, held in the
trust account, a change in the fair value of warrant liabilities of $837,333,
offset by $498,215 in general and administrative expenses.
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Related Party Transactions
Related Party Loans
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. For the three months ended March 31, 2021, there
were no outstanding Working Capital Loans under this arrangement.
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
$120,000 in expenses incurred in connection with the aforementioned arrangements
with the related parties on our Statements of Income for the three months ended
March 31, 2021.
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
The underwriter was entitled to underwriting discounts of $0.20 per unit sold in
the Initial Public Offering, or $8,000,000 in the aggregate, paid upon the
closing of the Initial Public Offering. An additional fee of $0.35 per unit sold
in the Initial Public Offering, 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.
Critical Accounting Policies
Our management's discussion and analysis of our financial condition and results
of operations is based on our consolidated financial statements, which have been
prepared in accordance with U.S. generally accepted accounting principles
("GAAP"). The preparation of these financial statements requires us 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 the reported amounts of revenue and expenses during
the reported period. In accordance with GAAP, we base our estimates on
historical experience and on various other assumptions that we believe are
reasonable under the circumstances. Actual results may differ from these
estimates under different assumptions or conditions.
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Our significant accounting policies are fully described in Note 2 to our
financial statements appearing elsewhere in this Quarterly Report, and we
believe those accounting policies are critical to the process of making
significant judgments and estimates in the preparation of our consolidated
financial statements.
Recent Accounting Pronouncements
Our management does not believe that any recently issued, but not yet effective,
accounting standards if currently adopted would have a material effect on the
accompanying financial statements.
Off-Balance Sheet Arrangements
For the three months ended March 31, 2021, 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 Public Company Accounting Oversight Board 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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CORNER GROWTH ACQUISITION CORP. 
