Filing summary
Entity discrepancy: The request identifies NuScale Power Corp., but the supplied filing is Spring Valley Acquisition Corp.’s Form 10-Q for the quarter ended June 30, 2021. The filing describes a blank-check company and a proposed AeroFarms transaction; it does not report NuScale’s results.
Business context and reporting period
Spring Valley was a Cayman Islands SPAC with no operating revenue or business operations as of June 30, 2021. Its activity consisted of formation, its November 2020 IPO, and searching for a business combination. On March 25, 2021, it agreed to a proposed combination involving Dream Holdings and AeroFarms. The interim results cover the three and six months ended June 30, 2021.
Financial performance, liquidity and obligations
| Metric | Reported amount |
|---|---|
| Q2 formation and operating costs | $385,000 |
| Q2 net loss | $4.43 million, primarily reflecting a $4.05 million adverse change in warrant fair value |
| Six-month net income | $4.30 million, mainly reflecting a $4.97 million gain from the change in warrant fair value |
| Six-month operating cash used | $564,000; cash declined $589,000 to $1.32 million |
| Trust investments | $232.31 million, primarily U.S. Treasury securities or equivalent money-market holdings |
| Total assets / total liabilities | $233.80 million / $36.84 million |
| Warrant liabilities | $28.69 million, down from $33.66 million at December 31, 2020 |
| Deferred underwriting fee | $8.05 million, payable only if a business combination is completed |
| Redeemable Class A shares | $191.96 million presented as temporary equity |
Shareholders’ equity was $5.00 million. The company reported no long-term debt. Results are materially affected by noncash warrant remeasurement; the six-month net income is not indicative of operating profitability.
Changes, outlook and risks
- Compared with December 31, 2020, cash fell from $1.91 million to $1.32 million, trust investments were broadly unchanged, and warrant liabilities declined by $4.97 million. The filing does not provide prior-year-quarter operating results for a comparable Q2 comparison.
- The company intended to complete a business combination by May 27, 2022, with one possible six-month extension requiring the sponsor or its designee to purchase $2.30 million of additional warrants and deposit the proceeds into the trust. No assurance of completion was given.
- Management disclosed substantial doubt about the company’s ability to continue as a going concern, citing limited working-capital liquidity and mandatory liquidation if a business combination was not completed by the deadline. Management intended to complete the proposed transaction before then.
- Approximately $3.2 million of merger-related legal fees would be payable from trust funds only if the AeroFarms transaction closed. COVID-19 could adversely affect the search or financial position, but the impact was not determinable. The filing also warns that negative yields on trust investments could reduce public shareholders’ redemption proceeds.
- Disclosure controls were ineffective due to a material weakness in accounting for warrants as equity rather than derivative liabilities. Remediation actions had begun, but the weakness was not fully remediated as of June 30, 2021.
Important facts for investors to verify
- Confirm the intended issuer: the supplied filing is for Spring Valley Acquisition Corp., not NuScale Power Corp.
- Verify the status and terms of the proposed AeroFarms business combination, including closing conditions, redemptions, financing needs and transaction expenses.
- Assess working-capital sufficiency, the going-concern disclosure, the business-combination deadline and any extension funding.
- Review warrant valuation assumptions and the company’s progress in remediating its material weakness in financial reporting controls.
- Distinguish cash available outside the trust from trust assets, which were principally reserved for a business combination or public-share redemptions.