Business context and reporting period
Important entity mismatch: The supplied filing is Novus Capital Corporation II’s unaudited Form 10-Q for the quarter ended June 30, 2021—not an Energy Vault Holdings, Inc. filing. It reports on a blank-check company seeking a business combination; it does not describe Energy Vault or its operating results.
Novus had not commenced operations and had generated no operating revenue. Its activity consisted of formation, its February 2021 IPO, and searching for a target. The filing presents results for the three and six months ended June 30, 2021; it does not provide comparable 2020 operating-period results.
Financial metrics
| Metric | Reported amount |
|---|---|
| Revenue | No operating revenue |
| Net loss, three months ended June 30, 2021 | $6,217 |
| Net loss, six months ended June 30, 2021 | $1,634,254 |
| Operating and formation costs, three / six months | $275,512 / $461,657 |
| Cash at June 30, 2021 | $1,046,586 outside the Trust Account |
| Trust Account securities and cash | $287,505,380 |
| Operating cash used, six months | $503,596 in the cash flow statement |
| Total liabilities at June 30, 2021 | $17,646,975, including $17,508,332 warrant liability |
| Debt | No long-term debt reported; related-party promissory notes were repaid in February 2021 |
| Stockholders’ equity | $5,000,003; redeemable Class A shares of $266,084,570 are presented separately as temporary equity |
There are no meaningful operating margins to assess because the company had no operating revenue. The six-month loss included a $936,666 noncash warrant fair-value expense and $241,311 of transaction costs related to warrant liabilities; the second-quarter warrant remeasurement was a $265,000 gain.
Changes, outlook and risks
- The IPO closed February 8, 2021, raising $287.5 million from 28.75 million units; $287.5 million was placed in the Trust Account. The company also sold 5,166,666 private-placement warrants for $7.75 million.
- Cash outside the Trust Account fell from $1,281,731 after the IPO to $1,046,586 at June 30, 2021. Management expected these funds to cover target-search and transaction costs and said it did not expect to need additional funds, while warning that cost overruns or transaction needs could require financing.
- The company had until February 8, 2023 to complete a business combination. If it failed, public shares would be redeemed from the Trust Account and warrants could expire worthless. The company intended to use substantially all Trust Account funds for a combination, subject to redemptions and applicable deductions.
- Management disclosed a material weakness in accounting for public and private warrants, which were initially misclassified. The warrants were recorded as liabilities and remeasured at fair value. Management concluded disclosure controls were not effective and said remediation would include enhanced analysis and consultation; it gave no assurance the plan would succeed.
- Management said COVID-19 could adversely affect the company’s financial position, operations, or target search, but the impact was not determinable. No material changes to previously disclosed risk factors were reported. No legal proceedings or subsequent events requiring disclosure were identified.
Important facts for investors to verify
- Confirm the requested issuer: this filing is for Novus Capital Corporation II, not Energy Vault Holdings, Inc.
- Review the warrant-accounting restatement or correction history, the material weakness, and the status of remediation.
- Reconcile apparent inconsistencies in the filing text: the unregistered-sales section describes 287.5 million private warrants at $1 each, whereas the financial statements and notes report 5,166,666 warrants at $1.50 each; the MD&A also refers to 287.5 million IPO units, while the notes report 28.75 million.
- Assess the availability of cash outside the Trust Account, potential additional financing, redemption levels, and the ability to complete a business combination before the stated deadline.