Corner Growth Acquisition Corp. (NASDAQ:COOL) is a special purpose acquisition company (SPAC) that was formed in October 2020 with the goal of identifying and acquiring a business, primarily in the technology industry in the United States and other developed countries. The company completed its initial public offering (IPO) in December 2020, raising $400 million.
Business Overview
Corner Growth Acquisition Corp. was incorporated as a Cayman Islands exempted company with the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses. The company is focused on identifying and acquiring a target in the technology industry, leveraging the expertise of its management team.The company's management team is led by Co-Chairmen Marvin Tien and Alexandre Balkanski, who have extensive experience in the technology and investment sectors. Tien previously served as the CEO of a technology company, while Balkanski has a long history of investing in and advising technology startups.
Financials
For the year ended December 31, 2023, Corner Growth Acquisition Corp. reported an annual net loss of $3,489,963. The company did not generate any revenue during the year. Its annual operating cash flow and free cash flow were both -$9,916.On a quarterly basis, for the three months ended March 31, 2024, the company reported a net loss of $2,513,203. It did not generate any revenue during the quarter. The company's quarterly operating cash flow and free cash flow were both -$100.
Liquidity
As of March 31, 2024, Corner Growth Acquisition Corp. had $21,531 in cash and a working capital deficit of $4,990,531. The company's liquidity needs prior to its IPO were satisfied through a $25,000 investment from its sponsor and loans from the sponsor. Since the IPO, the company's liquidity has been provided by the net proceeds from the offering and the private placement.Management has stated that the company will not have sufficient working capital to meet its needs through the consummation of a business combination. The company may need to rely on loans from its sponsor or other sources to finance transaction costs related to a potential business combination.
Nasdaq Listing and Compliance
On December 18, 2023, Corner Growth Acquisition Corp. received a notice from Nasdaq stating that its securities would be subject to suspension and delisting due to the company's non-compliance with Nasdaq's requirement that a SPAC complete a business combination within 36 months of its IPO. The company timely requested a hearing with the Nasdaq Hearings Panel, which stayed the suspension of trading until the panel issued a decision.On March 15, 2024, the Nasdaq Hearings Panel granted the company an exception to its listing deficiencies until June 17, 2024, in view of the company's substantial steps toward closing its previously announced business combination with Noventiq Holdings PLC and its plan for achieving compliance with Nasdaq listing rules upon closing of the transaction.
However, on May 10, 2024, the company received a second notice from Nasdaq stating that it no longer meets the minimum 500,000 publicly held shares requirement for the Nasdaq Capital Market. The company has 45 days to submit a plan to regain compliance with this requirement.
Business Combination Agreement
In May 2023, Corner Growth Acquisition Corp. entered into a Business Combination Agreement with Noventiq Holdings PLC, a global digital transformation and cybersecurity solutions and services provider. Under the terms of the agreement, the company will merge with a wholly-owned subsidiary of Noventiq's parent company, with Noventiq surviving as a wholly-owned subsidiary of the parent.The transaction is expected to close in the second quarter of 2024, subject to shareholder approvals and other customary closing conditions. If the business combination is not completed by June 17, 2024, the company may face delisting from Nasdaq and potential liquidation.
Risks and Uncertainties
As a SPAC, Corner Growth Acquisition Corp. faces several risks and uncertainties. The company may be unable to complete a business combination by its deadline, which would result in its liquidation. Even if a business combination is completed, the acquired company may not perform as expected, leading to poor financial results.Additionally, the company's reliance on its sponsor and other related parties for financing and support creates potential conflicts of interest. The company's ability to maintain its Nasdaq listing is also an ongoing concern, as evidenced by the recent notices it has received.