CORNER GROWTH ACQUISITION CORP. 2
Corner Growth Acquisition Corp. 2 is a blank-check special purpose acquisition company (SPAC) formed in February 2021 to merge with or acquire a private business, primarily in the technology sector. The SPAC raised $185 million in its June 2021 IPO (18.5 million units at $10 per unit), plus $7.42...
Corner Growth Acquisition Corp. 2 10-K Review: Will This SPAC Ever Deliver?
Investment Score: 2.0 / 10
Warren.AI đź’° 2.0 / 10
This review breaks down the fundamentals of Corner Growth Acquisition Corp. 2’s 2024 Form 10-K, highlighting the SPAC’s financial position, operational status, key risks, and merger outlook.
1. Company Overview
Corner Growth Acquisition Corp. 2 (Ticker: TRONU) was incorporated on February 10, 2021 in the Cayman Islands as a blank-check company (or SPAC). Its sole corporate purpose is to effect a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more target businesses (the “Business Combination”). Management focuses on technology-driven companies primarily in the United States and other developed markets.
Key dates:
- Feb 10, 2021: Company formed by CGA Sponsor 2, LLC (the original Sponsor).
- June 16, 2021: Registration statement declared effective by the SEC.
- June 21, 2021: Closed IPO of 18.5 million units at $10.00 each, plus private placement of 4.95 million warrants at $1.50 each.
- Aug 15, 2024: Original Sponsor sold founder shares to Connor Square, LLC (new Sponsor), canceling 4.95 million private warrants.
- Aug 14, 2024: SPAC delisted from Nasdaq; began trading OTC.
- Dec 23, 2024: Extended Business Combination deadline to December 31, 2025.
Units consist of one Class A ordinary share and one-third of a redeemable public warrant (exercisable at $11.50). Founder shares (Class B) and private warrants (now canceled) were issued to the Sponsor.
Trust Account
To safeguard public investors, the SPAC placed approximately $185 million (net of underwriting fees) into a segregated Trust Account, invested in low-risk Treasury securities or money market funds. These funds are untouched except:
- Business Combination: Public shareholders may redeem all or part of their shares for their pro rata amount of the Trust Account at the time of a merger vote or tender offer (initially $10.00 per share).
- Failure to Merge: If no merger by the extended deadline (Dec 31, 2025), the SPAC must liquidate, returning Trust Account funds (less up to $100 000 for wind-down expenses) to public holders. Founder shares (and warrants) then expire worthless.
2. Financial Highlights (2022–2024)
Consolidated Statements of Operations
| 2024 | 2023 | |
|---|---|---|
| Operating & Formation Costs | ( $ 747 441 ) | ( $ 1 641 861 ) |
| Trust Account Earnings (net) | + $ 400 179 | + $ 1 008 533 |
| Fair-Value Warrant Adjustments | – $ 54 450 | – $ 172 821 |
| Debt Forgiveness (Sponsor) | + $ 2 000 514 | – |
| Net Income (Loss) | + $ 1 598 802 | – $ 806 149 |
Balance Sheet Snapshot (Dec 31, 2024)
- Cash (Operating): $ 0 (working capital deficit of $32 524)
- Trust Account: $ 182 240
- Total Assets: $ 182 240
- Liabilities: $ 217 506
- Class A Shares subject to redemption: 15 048 at $11.97 redemption price
- Shareholders’ deficit: $ 217 506 (no tangible equity)
Key Points:
- No Operating Cash: The SPAC has zero operating cash, relying on occasional sponsor loans.
- Shrinking Trust: Trust Account down from $21.2 million (Dec 2023) to $182 240 (Dec 2024) after multiple redemptions.
- Net Income Source: Gains came from debt forgiveness and Trust Account interest, not core operations.
- Ongoing Losses: Continued operating expenses and warrant revaluations result in recurring losses.
3. Liquidity & Going Concern
- Operating Liquidity: $ 0 in operating cash; negative $32 524 working capital.
- Trust Account: $ 182 240 to fund potential redemptions.
- Sponsor Support: Post-2024 Sponsor change, the new Sponsor assumed historical liabilities but is under no strict obligation to fund operations or extend deadlines further.
Going Concern Uncertainty
FASB ASC 205-40 requires disclosure if a company may not survive for a year without new financing. The SPAC’s lack of operating cash and deadline-driven model trigger substantial doubt about its ability to continue. Without a merger by Dec 31, 2025:
- Public shareholders redeem at the Trust Account value (likely near $10/share).
- Founder shares and warrants expire worthless.
- The SPAC dissolves under Cayman law within ten business days of redemption.
No Adjustments have been made for a forced liquidation scenario.
4. Key Corporate Actions & Deadlines
Business Combination Extensions:
- Original Termination Date: June 21, 2022
- 1st Extension: to March 21, 2023 (public redemption for 11.09 million shares at ~$10.01/share)
- 2nd Extension: to March 21, 2024 (redemptions of 1.44 million shares at ~$10.59/share)
- 3rd Extension: to December 31, 2024 (redemptions of 1.41 million shares at ~$11.59/share)
- 4th Extension: to December 31, 2025 (redemptions of 0.44 million shares at ~$11.97/share)
Nasdaq Delisting:
- February 2024: Advised non-compliance with minimum public holders (300).
- May 2024: Re-complied with public holders rule and closed that notice.
- June 2024: Received potential delisting notice for failing the 36-month merger requirement. Filed for hearing.
- August 14, 2024: Official delisting from The Nasdaq Capital Market; SPAC now trades OTC.
Sponsor Transition (Aug 15, 2024):
- Original Sponsor transferred 2.685 million founder shares to New Sponsor, Connor Square, LLC.
- 4.95 million private placement warrants canceled (none outstanding post-transaction).
- Original Sponsor’s historical liabilities assigned to itself; new Sponsor not obligated to cover them.
5. Risks & Uncertainties
1. No Operating Business: The SPAC has no revenues or products until post-merger.
2. Deadline Pressure: Multiple extensions signal difficulty finding a deal; merger by Dec 31, 2025 or liquidation.
3. Liquidity Crunch: $0 operating cash; high risk if sponsor funding lapses or additional costs arise.
4. Delisting: Loss of Nasdaq listing reduces visibility and liquidity; OTC trading can be volatile.
5. Redemption Cap: Public holders limited to 15% block redemption cap if conducted via proxy (not tender).
6. Sponsor Conflicts: Sponsor, management, and advisors may pursue multiple SPACs or conflicted deals.
7. Dilution: Potential for working capital financings or equity issuances may dilute shareholders.
8. Regulatory & Tax Issues: Cayman exempted status, potential adverse U.S. tax impacts upon future U.S. merger or reincorporation.
9. PFIC Exposure: Risk of classification as passive foreign investment company with adverse U.S. tax for American investors.
10. Warrant Uncertainty: Equally uncertain value; redemption triggers may be remote.
6. Governance & Management
- Board & Officers: Post-Sponsor change, management includes CEO/CFO/H.Fin Officer Mr. Hao Tian. No independent directors currently.
- Voting Blocks: Founder shares represent ~61% of voting power; Sponsor guaranteed to vote in favor of a merger.
- Indemnification: Sponsor and officers waive claim to Trust Account; indemnity chiefly borne by the SPAC if third-party claims reduce the Trust below $10/share.
- Auditor: Bush & Associates CPA LLC (since June 2024) and Marcum LLP (prior) – no disagreements.
7. Investor Takeaways
Why the low 2/10 Score?
- Execution Risk: Five extensions without a deal signals challenge in identifying or finalizing a target.
- Liquidity Risk: No operating cash, small Trust balance, heavy reliance on sponsor for funding costs.
- Market Risk: OTC trading, delisting speak to weakened investor confidence.
- Time Pressure: A single deadline left — no runway beyond December 31, 2025.
Potential Upside?
- A successful Tech acquisition at attractive valuation could deliver return above liquidation.
- Sponsor’s vested interest in completing a combination may accelerate deal flow.
Key Watchlist:
- Merger Announcements: Any announced deal terms, value, pipeline.
- Sponsor Financings: Working capital loans or commitment letters.
- Deadline Extensions: Further amendments suggest ongoing challenges.
- Resumption of Listing: OTC to Nasdaq (or other exchange) would boost liquidity.
Bottom Line: Corner Growth Acquisition Corp. 2 remains a classic blank-check SPAC—no revenues, high overhead, repeated deadline extensions, and limited cash. Public holders face a binary outcome: merger success or liquidation near $10/share and worthless warrants. This profile and the current $0 operating cash position warrant a highly conservative stance: Score 2/10.
Disclaimer: This analysis is for informational purposes only and is not investment advice. Always perform your own due diligence and consult a qualified advisor.