Business context and reporting period
This is Novus Capital Corporation II’s Form 10-K for the fiscal year ended December 31, 2021—not an operating-company 10-K for Energy Vault Holdings, Inc. Novus was a shell company/SPAC with no operating business or operating revenue during the period. It had agreed in September 2021 to combine with Energy Vault, Inc.; the proposed transaction was still pending at year-end.
Energy Vault develops grid-scale energy storage solutions, but this filing does not report Energy Vault’s standalone operating results. The summary below concerns Novus unless otherwise stated.
Financial performance, cash flow and liquidity
| Metric | FY 2021 / Dec. 31, 2021 |
|---|---|
| Operating revenue | None; Novus had not commenced operations. |
| Net loss | $3.34 million, including $1.25 million of formation and operating costs, $1.87 million non-cash warrant fair-value expense, and $0.24 million of warrant-related transaction costs; partly offset by $15,823 of trust interest. |
| Operating cash flow | $1.15 million used. |
| Cash outside trust | $396,295; working capital was $317,788. |
| Trust assets | $287.52 million, primarily held in U.S. Treasury-focused money market funds. |
| Debt | No long-term debt reported. The $160,000 related-party promissory note outstanding at 2020 year-end was repaid in February 2021. |
| Warrant liability | $18.44 million at year-end. |
Margins are not meaningful because Novus had no revenue. The prior comparable period covers only inception (September 29, 2020) through December 31, 2020, when net loss was $1,104; it is not a full-year comparison. The filing reports no off-balance-sheet arrangements.
Material changes and proposed transaction
- Novus completed its IPO in February 2021, raising $287.5 million gross from 28.75 million units, and placed $287.5 million in trust. IPO and offering costs were approximately $6.22 million.
- The September 2021 agreement contemplated a merger with Energy Vault. The filing estimated 106.6 million Novus shares for Energy Vault security holders, plus up to 8.25 million shares related to equity awards and up to 9 million earn-out shares tied to share-price targets. The stated implied value for the base shares was approximately $1.07 billion using $10 per share.
- PIPE subscriptions were described as totaling 20,000,005 shares at $10 per share, or about $200 million, contingent on closing. The filing identifies $100 million in September agreements and a further $50 million agreement in December; another $50 million agreement was entered into in January 2022.
- At year-end, Novus estimated that Energy Vault holders would own approximately 68% of the combined company assuming no public-share redemptions and no earn-out shares.
Outlook, risks and unusual items
- The company’s business combination deadline was February 8, 2023. If no transaction closed by then, Novus would wind up, redeem public shares from the trust (subject to creditor claims and other terms), and its warrants would expire worthless.
- The auditor included a going-concern explanatory paragraph: Novus’s cash and working capital were insufficient to fund planned activities, raising substantial doubt about its ability to continue as a going concern. Additional funding from sponsors or affiliates was possible but not committed.
- Management reported ineffective disclosure controls and a material weakness in internal control over financial reporting relating to complex financial instruments, including warrant accounting and redeemable-share classification. Remediation was ongoing, with no assurance it would be effective.
- Key SPAC risks include public-share redemptions reducing funds available to close, inability to obtain financing, competition for targets, potential claims against trust assets, dilution from warrants and transaction issuances, and conflicts of interest. A CFO-controlled entity’s trust indemnity may be limited and its ability to pay was not independently verified.
- Novus owed Cowen a $10.06 million marketing fee upon a business-combination closing, equal to 3.5% of IPO gross proceeds. Other transaction-related contingent fees and incurred legal and printing costs were also disclosed; certain amounts were payable only upon closing.
- COVID-19 could adversely affect the search or transaction, but its specific impact was not determinable. No material litigation was reported as pending.
Important facts for investors to verify
- Confirm the issuer and reporting scope: this filing is Novus Capital Corporation II’s SPAC 10-K, and does not provide Energy Vault’s standalone financial statements or operating metrics.
- Check subsequent filings for whether and when the merger closed, actual redemptions, cash delivered at closing, final PIPE proceeds, and final ownership and dilution.
- Review Energy Vault’s separate financials, project pipeline, commercial contracts, revenue, cash needs, margins, and execution risks; this filing does not establish those operating results.
- Verify the company’s liquidity and funding plan in light of the going-concern disclosure, including any sponsor or third-party financing.
- Assess the material weakness remediation and confirm the final accounting and value of warrant liabilities and other transaction costs.
- Reconcile transaction and PIPE amounts across the filing and later disclosures; the filing includes later-dated subscriptions, and its MD&A contains an apparent IPO unit-count typo despite the IPO terms and financial statements reporting 28.75 million units.