Business context and reporting period
Entity: The filing is for Spring Valley Acquisition Corp., a Cayman Islands blank-check company—not NuScale Power Corp. It covers the quarter ended September 30, 2020; the financial statements report activity from the company’s August 20, 2020 inception through September 30, 2020. The company had not begun operations and was seeking a business combination.
Financial results and position
- Revenue: None. The company did not expect operating revenue before completing a business combination.
- Net loss: $7,221, consisting of formation and operating costs. Basic and diluted loss per share was reported as $(0.00).
- Cash flow: Net cash used in operating activities was zero; cash at September 30 was also zero.
- Assets: $487,605, including $4,442 of prepaid expenses and $483,163 of deferred offering costs.
- Liabilities: $469,826, comprising $350,000 of accrued offering costs and a $119,826 related-party promissory note. Shareholders’ equity was $17,779.
- Debt and liquidity: No long-term debt was reported. The company had no cash at quarter-end and relied on sponsor funding before its IPO. The related-party note was repaid on December 7, 2020.
- Margins and comparable-period changes are not meaningful for this newly formed company; the filing provides no prior-year comparable operating period.
Subsequent financing and material changes
After quarter-end, on November 27, 2020, the company completed an IPO of 23 million units at $10 each, raising $230 million gross, and sold 8.9 million private placement warrants for $8.9 million. It placed $232.3 million in a trust account and reported $2,722,982 of cash outside the trust after offering costs. Total transaction costs were $12,467,354, including $8.05 million of deferred underwriting fees payable only if a business combination is completed. These events occurred after the reporting date and do not describe September 30 liquidity.
On October 22, 2020, the sponsor surrendered 1,437,500 founder shares for no consideration; the filing retroactively presents 5,750,000 founder shares outstanding at quarter-end. The underwriters exercised their full over-allotment option.
Outlook, risks and contingencies
- The company intended to use substantially all trust proceeds toward a business combination but provided no target-specific guidance or assurance of completing one. It expected continued search, due-diligence, public-company and transaction expenses.
- The initial deadline to complete a business combination was May 27, 2022, with a possible six-month extension if the sponsor purchased and funded additional warrants. If no transaction is completed within the permitted period, public shares are to be redeemed from the trust, subject to the stated terms; warrants may expire worthless.
- Management said COVID-19 could negatively affect the company’s financial position, results or target search, but the specific impact was not determinable.
- The filing identifies possible negative yields on trust investments as a risk to redemption proceeds. It also describes creditor claims that could reduce trust assets; sponsor indemnification has exceptions and may not fully protect the trust.
- Potential additional sponsor or affiliate working-capital loans were discretionary and had no committed amount. Up to $1.5 million could, at the lender’s option, convert into warrants.
- Management reported disclosure controls as effective and no material change in internal control during the period. No legal proceedings were reported.
Important facts for investors to verify
- Confirm the issuer identity: this is Spring Valley Acquisition Corp., not NuScale Power Corp.
- Review the IPO, trust-account and deferred-underwriting-fee terms, which arose after the September 30 reporting date.
- Verify the business-combination deadline and extension conditions, redemption mechanics, and warrant terms, including the risk that warrants could expire worthless.
- Assess the sponsor’s limited trust-account indemnity and the potential effect of claims, redemptions, financing needs and trust-investment returns.