ner Growth Acquisition 2(TRON) - 2024 Q1 - Quarterly Report

PART I—FINANCIAL INFORMATION Financial Statements Unaudited condensed financial statements for Q1 2024 detail Corner Growth Acquisition Corp. 2's financial position, operations, and cash flows Condensed Balance Sheets Total assets decreased significantly to $5.3 million due to redemptions, increasing the shareholders' deficit to $11.4 million Condensed Balance Sheet Highlights (Unaudited) | Account | March 31, 2024 ($) | December 31, 2023 ($) | | :--- | :--- | :--- | | Total Assets | 5,338,967 | 21,242,036 | | Cash and marketable securities held in trust account | 5,259,324 | 21,200,364 | | Total Liabilities | 11,504,803 | 10,880,344 | | Due to related party | 1,313,609 | 1,065,496 | | Deferred underwriting fee payable | 6,475,000 | 6,475,000 | | Class A ordinary shares subject to possible redemption | 5,259,324 | 21,200,364 | | Total Shareholders' Deficit | (11,425,160) | (10,838,672) | Unaudited Condensed Statements of Operations Net loss improved to $347,750 in Q1 2024, driven by reduced warrant liability changes and lower operating costs Condensed Statement of Operations (Unaudited) | Item | Three Months Ended March 31, 2024 ($) | Three Months Ended March 31, 2023 ($) | | :--- | :--- | :--- | | Operating and formation costs | (419,747) | (500,469) | | Earnings on marketable securities held in Trust Account | 238,738 | 208,954 | | Change in fair value of warrant liabilities | (166,741) | (747,293) | | Net income (loss) | (347,750) | (1,038,808) | | Basic and diluted net income (loss) per share | (0.06) | (0.13) | Unaudited Condensed Statements of Cash Flows Net cash used in operating activities was minimal, with investing proceeds of $16.18 million fully used for share redemptions Condensed Statement of Cash Flows Highlights (Unaudited) | Activity | Three Months Ended March 31, 2024 ($) | | :--- | :--- | | Net cash used in operating activities | (190) | | Net cash provided by investing activities | 16,179,778 | | Net cash used in financing activities | (16,179,778) | | Net change in cash | (190) | Notes to Unaudited Condensed Financial Statements Notes detail the company's SPAC status, business combination deadline, share redemptions, related-party transactions, and going concern doubts - The company is a Special Purpose Acquisition Company (SPAC) formed to effect a business combination, intending to focus on the technology industry in the United States[16][17] - The deadline to complete a business combination has been extended to December 31, 2024. If a combination is not completed by this date, the company will liquidate[36][41] - In March 2024, shareholders redeemed 1,407,653 Class A ordinary shares for approximately $16.3 million, or $11.59 per share. After redemptions, 4,927,561 Class A shares remained outstanding[37] - Management has determined that the mandatory liquidation date and working capital deficit of $4.45 million raise substantial doubt about the company's ability to continue as a going concern[43][46] - As of March 31, 2024, the company is indebted to its Sponsor and affiliates for $1,313,609 for operating and formation costs paid on its behalf[90] - The company accounts for its public and private warrants as liabilities, which are re-measured to fair value at each reporting period, with changes recognized in the statement of operations[93] Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses the company's blank check status, business combination deadline, share redemptions, working capital deficit, going concern doubts, and Nasdaq non-compliance - The company is a blank check company with a purpose to effect a business combination by December 31, 2024[124][143] Results of Operations Comparison | Item | Three Months Ended March 31, 2024 ($) | Three Months Ended March 31, 2023 ($) | | :--- | :--- | :--- | | Net Loss | 347,750 | 1,038,808 | | Earnings on Trust Account | 238,738 | 208,954 | | Change in fair value of warrant liabilities | (166,741) | (747,293) | | Operating and formation costs | (419,747) | (500,469) | - As of March 31, 2024, the company had a working capital deficit of $4,449,937 and cash of $18,780 in its operating account. Management has concluded these conditions raise substantial doubt about its ability to continue as a going concern[144][150] - In March 2024, shareholders redeemed 1,407,653 Class A shares for approximately $16.3 million, reducing the trust account to approximately $5.3 million[138][151] - On May 10, 2024, the company received a notice from Nasdaq for non-compliance with the minimum 500,000 publicly held shares requirement and has until June 24, 2024, to submit a compliance plan[140] Quantitative and Qualitative Disclosures About Market Risk The company is a smaller reporting company and is therefore not required to provide the information requested under this item - As a smaller reporting company defined by Rule 12b-2 of the Exchange Act, the company is not required to provide information for this item[173] Controls and Procedures Management concluded disclosure controls were ineffective as of March 31, 2024, due to a material weakness in accounting for complex financial instruments - Management concluded that disclosure controls and procedures were not effective as of March 31, 2024[175] - A material weakness was identified in internal control over financial reporting, as controls around the accounting for certain complex financial instruments were not effectively designed or maintained[175] - There were no changes in internal control over financial reporting during the quarter that have materially affected, or are reasonably likely to materially affect, the company's internal controls[179] PART II – OTHER INFORMATION Legal Proceedings The company reports that there are no legal proceedings - None[182] Risk Factors This section highlights the risk of Nasdaq delisting due to non-compliance with listing standards, specifically the minimum publicly held shares requirement - There is a significant risk that Nasdaq may delist the company's securities for failure to maintain listing requirements, which could limit investor transactions and reduce liquidity[185][187] - On May 10, 2024, the company received a notice from Nasdaq for not meeting the minimum 500,000 publicly held shares requirement (Nasdaq Listing Rule 5550(a)(4))[192] - The company has until June 24, 2024, to submit a plan to regain compliance with the minimum publicly held shares requirement[192] Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities The company reports no unregistered sales of equity securities, use of proceeds, or issuer purchases of equity securities for the period - None[193] Defaults Upon Senior Securities The company reports no defaults upon senior securities - None[194] Mine Safety Disclosures This item is not applicable to the company - Not applicable[195] Other Information No director or officer adopted or terminated a Rule 10b5-1 or non-Rule 10b5-1 trading arrangement during Q1 2024 - During the first quarter of 2024, no director or officer of the Company adopted or terminated a 'Rule 10b5-1 trading arrangement' or 'non-Rule 10b5-1 trading arrangement'[196] Exhibits This section lists the exhibits filed with the Form 10-Q, including corporate governance documents, officer certifications, and XBRL data - The exhibits filed with this report include: - Amended and Restated Memorandum and Articles of Association (and amendments) - Certifications from the CEO and CFO pursuant to Sarbanes-Oxley Act Sections 302 and 906 - XBRL Instance Document and related taxonomy files[197]