NUSCALE POWER Corp current report, 29 April 2022

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NuScale Power Corporation Form 8-K Summary

Business Context and Reporting Period

This Form 8-K reports NuScale Power Corporation’s transition from Spring Valley Acquisition Corp. to a Delaware corporation following the domestication and business combination with NuScale Power, LLC. The report date is April 29, 2022, while several transaction-related events occurred on May 2–5, 2022. NuScale develops small modular nuclear reactor technology. The filing is primarily a transaction, capitalization, governance, and Form 10 information report rather than a quarterly earnings filing.

Key Financial and Capitalization Information

  • PIPE financing: Investors subscribed for 23,700,002 shares of Class A common stock for aggregate gross proceeds of $235.0 million.
  • Contribution to NuScale LLC: NuScale contributed $145.5 million in gross proceeds and became NuScale LLC’s managing member.
  • Shares outstanding after the transactions: 43,615,304 shares of Class A common stock, including 1,643,924 sponsor earn-out shares, and 178,396,711 shares of Class B common stock.
  • Additional dilution potential: 20,400,000 warrants, 14,799,894 existing options, 178,396,711 exchangeable NuScale LLC Class B units, and 17,760,961 shares reserved under the long-term incentive plan were outstanding or available as described in the filing.
  • Ownership immediately after the transactions: legacy NuScale equityholders owned approximately 80.4%, PIPE investors 10.7%, former Spring Valley public shareholders 6.5%, and the sponsor and related parties 2.4% of outstanding common stock.
  • Revenue, profit, cash flow, margins, debt and liquidity: The filing text does not provide clear current-period values for these metrics. Historical financial statements and pro forma information are incorporated by reference or filed separately; March 31, 2022 financial statements and pro forma information were to be filed in a subsequent amendment.
  • Dividends: NuScale has not paid cash dividends and does not anticipate declaring dividends in the foreseeable future.

Material Changes Versus the Prior Comparable Period

  • Spring Valley domesticated from a Cayman Islands exempted company into Delaware and changed its name to NuScale Power Corporation.
  • The business combination with NuScale LLC closed on May 2, 2022, creating the public operating company.
  • Spring Valley Class A ordinary shares and public warrants ceased trading on Nasdaq. NuScale Class A common stock and warrants began trading on the NYSE on May 3, 2022 under SMR and SMR WS.
  • NuScale adopted a dual-class structure. Class B common stock carries voting rights but no economic interests and is paired with NuScale LLC Class B units that may be exchanged for Class A common stock.
  • NuScale entered into amended registration rights and tax receivable agreements and adopted a new long-term incentive plan.
  • Ernst & Young LLP replaced WithumSmith+Brown, PC as independent registered public accounting firm. The filing reports no disagreements or reportable events with Withum.
  • New executive officers and directors were appointed, including John L. Hopkins as Chief Executive Officer and President and Chris Colbert as Chief Financial Officer.

Outlook, Risks, Contingencies and Unusual Items

  • The filing provides no specific revenue, earnings, cash flow, or operating guidance.
  • Management’s forward-looking statements depend on regulatory approvals for deployment of NuScale reactors, customer adoption, market growth, financing availability, supply-chain execution, cost control, and retention of key personnel.
  • NuScale faces substantial nuclear, environmental, safety, and other regulatory requirements in the United States and internationally.
  • The company identifies risks related to dependence on a limited number of customers and suppliers, material shortages, inflation or cost increases, cybersecurity, intellectual property, product liability, COVID-19 effects, and the need for additional capital.
  • On April 25, 2022, five NuScale LLC common-unit holders sued in Oregon state court, alleging that the conversion of preferred units and implementation of the amended LLC agreement violated the prior LLC agreement, required separate class approval, oppressed minority holders, and diluted common-unit value. NuScale LLC stated that it believes the claims lack merit and intends to defend them.
  • The transaction created significant potential dilution from warrants, options, exchangeable LLC units, earn-out shares, and equity awards.
  • Fluor Enterprises was reported as holding approximately 56.9% of NuScale’s outstanding common stock on an aggregate basis, creating significant ownership concentration.

Important Facts for Investors to Verify

  1. Review the subsequent amendment containing NuScale LLC’s unaudited March 31, 2022 financial statements and related pro forma information.
  2. Reconcile the $235.0 million PIPE commitment and $145.5 million contribution to NuScale LLC with transaction expenses, cash balances, and post-closing liquidity.
  3. Review the fully diluted share count, including warrants, options, exchangeable LLC units, earn-out shares, and the long-term incentive plan.
  4. Assess the terms and potential future payments under the tax receivable agreement and registration rights agreement.
  5. Monitor the Oregon litigation concerning the preferred-unit conversion and amended LLC agreement.
  6. Evaluate the status and timing of nuclear regulatory approvals, customer commitments, deployment plans, and available financing.
  7. Review the audited historical financial statements and the unaudited pro forma financial information incorporated by reference or filed as exhibits.