UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q/A
Amendment No. 1
(MARK ONE)
☒QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarter ended September 30, 2021
☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission file number: 001-39736
SPRING VALLEY ACQUISITION CORP.
(Exact Name of Registrant as Specified in Its Charter)
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| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
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☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Delaware | 98-1588588 | ||||||||||
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | ||||||||||
6650 SW Redwood Ln Suite 210 | Portland | Oregon | 97224 | ||||||||
(Address of | (Zip Code) |
(214) 308-5230
(Issuer’s
code
6650 SW Redwood Lane | ||||||||
Suite 210 | ||||||||
Portland | OR | 97224 |
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Warrants, |
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CheckIndicate by check mark whether the issuerregistrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the pastpreceding 12 months (or for such shorter period that the registrant was required to file such reports),; and (2) has been subject to such filing requirements for the past 90 days. Yes ☒x No ☐o
Large accelerated filer |
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Non-accelerated filer |
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Emerging growth company |
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As of December 20, 2021, there were 23,000,000
Explanatory Note
References throughout this Amendment No. 1 to the Quarterly Report on Form 10-Q to “we,” “us,” the “Company” or “our company” are to Spring Valley Acquisition Corp., unless the context otherwise indicates.
This Amendment No. 1 (“Amendment No. 1”) to the Quarterly Report on Form 10-Q/A amends the Quarterly Report on Form 10-Q of Spring Valley Acquisition Corp. (the “Company”) as of and for the period ended September 30, 2021, as filed with the Securities and Exchange Commission (“SEC”) on November 8, 2021.
On November 8, 2021, Company filed its Form 10-Q for the quarterly period ending September 30, 2021 (the “Q3 2021 Form 10-Q”), which included a Note 2, Revision of Previously Issued Financial Statements, (“Note 2”) that describes a revision to the Company’s classification of its Class A ordinary shares subject to redemption issued as part of the units sold in the Company’s initial public offering (“IPO”) on November 27, 2020. As described in Note 2, upon its IPO, the Company classified a portion of the Class A ordinary shares as permanent equity to maintain net tangible assets greater than $5,000,000 on the basis that the Company will consummate its initial business combination only if the Company has net tangible assets of at least $5,000,001. Previously, the Company did not consider redeemable shares classified as temporary equity as part of net tangible assets. Effective with these condensed financial statements, the Company revised this interpretation to include temporary equity in net tangible assets. As a result, management corrected the error by restating all Class A ordinary shares subject to redemption as temporary equity. This resulted in an adjustment to the initial carrying value of the Class A ordinary shares subject to possible redemption with the offset recorded to additional paid-in capital (to the extent available), accumulated deficit and Class A ordinary shares.
In connection with the change in presentation for the Class A ordinary shares subject to possible redemption, the Company revised its earnings per share calculation to allocate income and losses shared pro rata between the two classes of shares. This presentation differs from the previously presented method of earnings per share, which was similar to the two-class method.
The Company determined the changes were not qualitatively material to the Company’s previously issued financial statements and did not restate its financial statements. Instead, the Company revised its previously financial statements in Note 2 to its Q3 2021 Form 10-Q. Although the qualitative factors that management assessed tended to support a conclusion that the misstatements were not material, these factors were not strong enough to overcome the significant quantitative errors in the financial statements. The qualitative and quantitative factors support a conclusion that the misstatements are material on a quantitative basis. Management concluded that the misstatement was such of magnitude that it is probable that the judgment of a reasonable person relying upon the financial statements would have been influenced by the inclusion or correction of the foregoing items. As such, upon further consideration of the change, the Company determined the change in classification of the Class A ordinary shares and change to its presentation of earnings per share is quantitatively material and it should restate its previously issued financial statements.
Therefore, on December 10, 2021, the Company’s management and the audit committee of the Company’s board of directors (the “Audit Committee”) concluded that the Company’s previously issued (i) unaudited interim financial statements included in the Company’s Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2021, filed with the SEC on May 21, 2021; and (ii) unaudited interim financial statements included in the Company’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2021, filed with the SEC on August 13, 2021 (iii) Note 2 to the unaudited interim financial statements and Item 4 of Part 1 included in the Company’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2021, filed with the SEC on November 8, 2021 (collectively, the “Affected Periods”), should be restated to report all Public Shares as temporary equity and should no longer be relied upon.
As such, the Company will restate its financial statements for the Affected Periods in this Quarterly Report on Form 10-Q/A.
The Company does not expect any of the above changes will have any impact on its cash position and cash held in the trust account established in connection with the IPO.
After re-evaluation, the Company’s management has concluded that in light of the errors described above, a material weakness existed in the Company’s internal control over financial reporting during the Affected Periods and that the Company’s disclosure controls and procedures were not effective. The Company’s remediation plan with respect to such material weakness is described in more detail in Item 4 of the Q3 2021 Form 10-Q.
SPRING VALLEY ACQUISITION CORP.
FORM 10-Q/A FOR THE QUARTER ENDED SEPTEMBER 30, 2021
TABLE OF CONTENTS
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Glossary of Terms | |||||||||
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SPRING VALLEY ACQUISITION CORP.
CONDENSED BALANCE SHEETS
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| September 30, |
| December 31, | ||
| | 2021 | | 2020 | ||
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ASSETS | | | | | |
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Cash |
| $ | 1,190,307 | | $ | 1,906,348 |
Prepaid expenses | | | 108,370 | | | 237,088 |
Total current assets | | | 1,298,677 | | | 2,143,436 |
Investments held in trust account | | | — | | | 232,301,973 |
Investments held in brokerage account | | | 232,316,486 | |
| — |
Total assets | | $ | 233,615,163 | | $ | 234,445,409 |
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LIABILITIES AND SHAREHOLDERS' DEFICIT | | | | |
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Current liabilities: | | | | |
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Accounts payable | | $ | 345,062 | | $ | 0 |
Accrued expenses | | | 10,550 | | | 49,934 |
Total current liabilities | | | 355,612 | | | 49,934 |
Deferred underwriting fees payable | | | 8,050,000 | |
| 8,050,000 |
Derivative warrant liabilities | | | 30,174,000 | | | 33,660,000 |
Total liabilities | | | 38,579,612 | |
| 41,759,934 |
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Commitments and Contingencies (Note 7) | | | | |
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Class A ordinary shares subject to possible redemption, 23,000,000 shares at $10.10 redemption value as of September 30, 2021 and December 31, 2020 | | | 232,300,000 | |
| 232,300,000 |
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Shareholders' Deficit | | | | |
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Preference shares, $0.0001 par value; 1,000,000 shares authorized; NaN issued and outstanding | | | — | |
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Class A ordinary shares, $0.0001 par value; 300,000,000 shares authorized; 0 non-redeemable shares issued or outstanding as of September 30, 2021 and December 31, 2020 | | | 0 | |
| 0 |
Class B ordinary shares, $0.0001 par value; 30,000,000 shares authorized; 5,750,000 shares issued and outstanding as of September 30, 2021 and December 30, 2020 | | | 575 | |
| 575 |
Additional paid-in capital | | | — | |
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Accumulated deficit | | | (37,265,024) | |
| (39,615,100) |
Total shareholders' deficit | | | (37,264,449) | |
| (39,614,525) |
Total Liabilities and Shareholders' Deficit | | $ | 233,615,163 | | $ | 234,445,409 |
(in thousands) | June 30, 2022 | December 31, 2021 | ||||||||||||
(unaudited) | ||||||||||||||
ASSETS | ||||||||||||||
Current assets | ||||||||||||||
Cash and cash equivalents | $ | 350,823 | $ | 77,094 | ||||||||||
Prepaid expenses | 7,670 | 4,147 | ||||||||||||
Accounts receivable | 15,001 | 4,833 | ||||||||||||
Total current assets | 373,494 | 86,074 | ||||||||||||
Property, plant and equipment, net | 5,325 | 4,960 | ||||||||||||
In-process research and development | 16,900 | 16,900 | ||||||||||||
Intangible assets, net | 1,148 | 1,236 | ||||||||||||
Goodwill | 8,255 | 8,255 | ||||||||||||
Other assets | 2,109 | 3,772 | ||||||||||||
Total assets | $ | 407,231 | $ | 121,197 | ||||||||||
LIABILITIES AND EQUITY | ||||||||||||||
Current liabilities | ||||||||||||||
Accounts payable and accrued expenses | $ | 24,135 | $ | 22,375 | ||||||||||
Accrued compensation | 5,647 | 10,552 | ||||||||||||
Convertible notes payable | — | 14,041 | ||||||||||||
Other accrued liabilities | 657 | 1,440 | ||||||||||||
Total current liabilities | 30,439 | 48,408 | ||||||||||||
Warrant liabilities | 41,412 | — | ||||||||||||
Noncurrent liabilities | 2,848 | 2,976 | ||||||||||||
Deferred revenue | 794 | 1,415 | ||||||||||||
Total liabilities | 75,493 | 52,799 | ||||||||||||
Mezzanine equity | — | 2,140 | ||||||||||||
Stockholders’ Equity | ||||||||||||||
Convertible preferred units | — | 819,694 | ||||||||||||
Common units | — | 28,184 | ||||||||||||
Class A common stock, par value $0.0001 per share, 332,000,000 shares authorized, 42,028,341 shares issued and outstanding as of June 30, 2022 | 4 | — | ||||||||||||
Class B common stock, par value $0.0001 per share, 179,000,000 shares authorized, 178,396,711 shares issued and outstanding as of June 30, 2022 | 18 | — | ||||||||||||
Additional paid-in capital | 221,379 | — | ||||||||||||
Accumulated deficit | (158,771) | (781,620) | ||||||||||||
Total Stockholders’ Equity Excluding Noncontrolling Interests | 62,630 | 66,258 | ||||||||||||
Noncontrolling interests | 269,108 | — | ||||||||||||
Total Stockholders' Equity | 331,738 | 66,258 | ||||||||||||
Total Liabilities, Mezzanine Equity and Stockholders' Equity | $ | 407,231 | $ | 121,197 |
SPRING VALLEY ACQUISITION CORP.
CONDENSED STATEMENTS OF OPERATIONS
(Unaudited)
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| | | | | | | | August 20, 2020 | |
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| Three Months |
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| | Ended | | Ended | | through | |||
| | September 30, | | September 30, | | September 30, | |||
| | 2021 | | 2021 | | 2020 | |||
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Formation and operating costs | | $ | 441,400 | | $ | 1,125,437 | | $ | 7,221 |
Loss from operations | | | (441,400) | | | (1,125,437) | | | (7,221) |
Gain on investments, dividends and interest, held in Trust Account | | | 2,992 | | | 14,513 | | | — |
Change in fair value of derivative liabilities | | | (1,488,000) | | | 3,486,000 | | | — |
Net Income (Loss) | | $ | (1,926,408) | | $ | 2,375,076 | | $ | (7,221) |
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Weighted average shares outstanding of Class A ordinary shares | | | 23,000,000 | | | 23,000,000 | | | — |
Basic and diluted net income (loss) per ordinary share, Class A | | $ | (0.07) | | $ | 0.08 | | $ | — |
Weighted average shares outstanding of Class B ordinary shares | | | 5,750,000 | | | 5,750,000 | | | 5,750,000 |
Basic and diluted net income (loss) per ordinary share, Class B | | $ | (0.07) | | $ | 0.08 | | $ | (0.00) |
NuScale Power Corporation
(in thousands) | Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | |||||||||||||||||||||||
Revenue | $ | 2,749 | $ | 372 | $ | 5,194 | $ | 1,036 | ||||||||||||||||||
Cost of sales | (1,739) | (245) | (2,944) | (651) | ||||||||||||||||||||||
Gross margin | 1,010 | 127 | 2,250 | 385 | ||||||||||||||||||||||
Research and development expenses | 28,628 | 20,900 | 53,008 | 39,651 | ||||||||||||||||||||||
General and administrative expenses | 15,443 | 10,893 | 25,963 | 18,838 | ||||||||||||||||||||||
Other expenses | 9,605 | 9,280 | 19,793 | 19,301 | ||||||||||||||||||||||
Loss from operations | (52,666) | (40,946) | (96,514) | (77,405) | ||||||||||||||||||||||
Department of Energy cost share | 25,177 | 16,833 | 45,639 | 31,569 | ||||||||||||||||||||||
Change in fair value of warrant liabilities | 6,120 | — | 6,120 | — | ||||||||||||||||||||||
Other cost share (interest expense) | (11) | (566) | 2 | (1,509) | ||||||||||||||||||||||
Loss before income taxes | (21,380) | (24,679) | (44,753) | (47,345) | ||||||||||||||||||||||
Provision (benefit) for income taxes | — | — | — | — | ||||||||||||||||||||||
Net loss | (21,380) | (24,679) | (44,753) | (47,345) | ||||||||||||||||||||||
Net loss attributable to legacy NuScale LLC holders prior to Transaction | (7,782) | — | (31,155) | — | ||||||||||||||||||||||
Net loss attributable to noncontrolling interests | (11,005) | — | (11,005) | — | ||||||||||||||||||||||
Net Loss Attributable to Class A Common Stockholders | $ | (2,593) | $ | (24,679) | $ | (2,593) | $ | (47,345) | ||||||||||||||||||
Loss per Share of Class A Common Stock: | ||||||||||||||||||||||||||
Basic and Diluted | $ | (0.06) | $ | — | $ | (0.06) | $ | — | ||||||||||||||||||
Weighted-Average Shares of Class A Common Stock Outstanding: | ||||||||||||||||||||||||||
Basic and Diluted | 42,028,341 | — | 42,028,341 | — |
(in thousands) | Common Stock | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Mezzanine Equity | Convertible Preferred Units | Common Units | Class A | Class B | Additional Paid-in Capital | Accumulated Deficit | Noncontrolling Interests | Total Stockholders’ Equity | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Units | Amount | Units | Amount | Units | Amount | Shares | Amount | Shares | Amount | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balances at March 31, 2022 (unaudited) | 6,000 | $ | 2,140 | 633,261 | $ | 819,694 | 11,671 | $ | 29,082 | — | $ | — | — | $ | — | — | $ | (804,993) | $ | — | $ | 43,783 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Exercise of common unit options | — | — | — | — | 836 | 377 | — | — | — | — | — | — | — | 377 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Repurchase of common units | — | — | — | — | (15) | (3) | — | — | — | — | — | — | — | (3) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Issuance of treasury units | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Conversion of equity award to liability award | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity-based compensation expense | — | — | — | — | — | 338 | — | — | — | — | 773 | — | — | 1,111 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reverse recapitalization, net | (6,000) | (2,140) | (633,261) | (819,694) | (12,492) | (29,794) | 42,028 | 4 | 178,397 | 18 | 220,606 | 656,597 | 280,113 | 307,850 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net loss attributable to legacy NuScale prior to Transaction | — | — | — | — | — | — | (7,782) | (7,782) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net loss after the Transaction | — | — | — | — | — | — | — | — | — | — | — | (2,593) | (11,005) | (13,598) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balances at June 30, 2022 (unaudited) | — | $ | — | — | $ | — | — | $ | — | 42,028 | $ | 4 | 178,397 | $ | 18 | 221,379 | $ | (158,771) | $ | 269,108 | $ | 331,738 |
SPRING VALLEY ACQUISITION CORP.
(in thousands) | Common Stock | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Mezzanine Equity | Convertible Preferred Units | Common Units | Class A | Class B | Additional Paid-in Capital | Accumulated Deficit | Noncontrolling Interests | Total Stockholders’ Equity | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Units | Amount | Units | Amount | Units | Amount | Shares | Amount | Shares | Amount | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balances at December 31, 2021 | 6,000 | $ | 2,140 | 633,261 | $ | 819,694 | 9,074 | $ | 28,184 | — | $ | — | — | $ | — | — | $ | (781,620) | $ | — | $ | 66,258 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Exercise of common unit options | — | — | — | — | 3,764 | 847 | — | — | — | — | — | — | — | 847 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Repurchase of common units | — | — | — | — | (358) | (566) | — | — | — | — | — | — | — | (566) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Issuance of treasury units | — | — | — | — | 12 | 20 | — | — | — | — | — | — | — | 20 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Conversion of equity award to liability award | — | — | — | — | — | (50) | — | — | — | — | — | — | — | (50) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity-based compensation expense | — | — | — | — | — | 1,359 | — | — | — | 773 | — | — | 2,132 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reverse recapitalization, net | (6,000) | (2,140) | (633,261) | (819,694) | (12,492) | (29,794) | 42,028 | 4 | 178,397 | 18 | 220,606 | 656,597 | 280,113 | 307,850 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net loss attributable to legacy NuScale prior to Transaction | — | — | — | — | — | — | — | — | — | — | — | (31,155) | — | (31,155) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net loss after the Transaction | — | — | — | — | — | — | — | — | — | — | — | (2,593) | (11,005) | (13,598) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balances at June 30, 2022 (unaudited) | — | $ | — | — | $ | — | — | $ | — | 42,028 | $ | 4 | 178,397 | $ | 18 | 221,379 | $ | (158,771) | $ | 269,108 | $ | 331,738 |
CONDENSED STATEMENT OF CHANGES IN SHAREHOLDERS’ DEFICIT
For the three and nine months ended September 30, 2021 (Unaudited)
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| | Ordinary Shares | | Additional | | | | | Total | |||||
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| Class B | | Paid-In | | Accumulated | | Shareholders' | ||||||
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| Shares |
| Amount |
| Capital |
| Deficit |
| Deficit | ||||
Balance as of January 1, 2021 | | 5,750,000 | | $ | 575 | | $ | — | | $ | (39,615,100) | | $ | (39,614,525) |
Accretion of Class A Ordinary Shares to redemption value | | — | | | — | |
| — | |
| (25,000) | |
| (25,000) |
Net income | | — | | | — | |
| — | |
| 8,734,669 | |
| 8,734,669 |
Balance as of March 31, 2021, as restated (unaudited) | | 5,750,000 | | $ | 575 | | $ | — | | $ | (30,905,431) | | $ | (30,904,856) |
Net loss | | — | | | — | | | — | | | (4,433,185) | | | (4,433,185) |
Balance as of June 30, 2021, as restated (unaudited) | | 5,750,000 | | $ | 575 | | $ | — | | $ | (35,338,616) | | $ | (35,338,041) |
Net loss | | — | | | — | | | — | | | (1,926,408) | | | (1,926,408) |
Balance as of September 30, 2021 (unaudited) | | 5,750,000 | | $ | 575 | | $ | — | | $ | (37,265,024) | | $ | (37,264,449) |
(in thousands) | ||||||||||||||||||||||||||||||||||||||||||||||||||
Mezzanine | Convertible Preferred Units | Common Units | Accumulated Deficit | Total Stockholders’ Equity | ||||||||||||||||||||||||||||||||||||||||||||||
Units | Amount | Units | Amount | Units | Amount | |||||||||||||||||||||||||||||||||||||||||||||
Balances at March 31, 2021 (unaudited) | 6,000 | $ | 2,140 | 563,843 | $ | 669,628 | 5,529 | $ | 24,032 | $ | (701,793) | $ | (8,133) | |||||||||||||||||||||||||||||||||||||
Sale of convertible preferred units | — | — | 27,396 | 58,040 | — | — | — | 58,040 | ||||||||||||||||||||||||||||||||||||||||||
Issuance of convertible preferred units | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
Exercise of common unit options | — | — | — | — | 2,587 | 383 | — | 383 | ||||||||||||||||||||||||||||||||||||||||||
Issuance of treasury shares | — | — | — | — | 66 | 73 | — | 73 | ||||||||||||||||||||||||||||||||||||||||||
Equity-based compensation expense | — | — | — | — | — | 1,066 | — | 1,066 | ||||||||||||||||||||||||||||||||||||||||||
Net loss | — | — | — | — | — | — | (24,679) | (24,679) | ||||||||||||||||||||||||||||||||||||||||||
Balances at June 30, 2021 (unaudited) | 6,000 | $ | 2,140 | 591,239 | $ | 727,668 | 8,182 | $ | 25,554 | $ | (726,472) | $ | 26,750 |
(in thousands) | ||||||||||||||||||||||||||||||||||||||||||||||||||
Mezzanine | Convertible Preferred Units | Common Units | Accumulated Deficit | Total Stockholders’ Equity | ||||||||||||||||||||||||||||||||||||||||||||||
Units | Amount | Units | Amount | Units | Amount | |||||||||||||||||||||||||||||||||||||||||||||
Balances at December 31, 2020 | 6,000 | $ | 2,140 | 542,729 | $ | 629,089 | 5,492 | $ | 20,899 | $ | (679,127) | $ | (29,139) | |||||||||||||||||||||||||||||||||||||
Sale of convertible preferred units | — | — | 48,490 | 98,540 | — | — | — | 98,540 | ||||||||||||||||||||||||||||||||||||||||||
Issuance of convertible preferred units | — | — | 20 | 39 | — | — | — | 39 | ||||||||||||||||||||||||||||||||||||||||||
Exercise of common unit options | — | — | — | — | 2,624 | 394 | — | 394 | ||||||||||||||||||||||||||||||||||||||||||
Issuance of treasury shares | — | — | — | — | 66 | 73 | — | 73 | ||||||||||||||||||||||||||||||||||||||||||
Equity-based compensation expense | — | — | — | — | — | 4,188 | — | 4,188 | ||||||||||||||||||||||||||||||||||||||||||
Net loss | — | — | — | — | — | — | (47,345) | (47,345) | ||||||||||||||||||||||||||||||||||||||||||
Balances at June 30, 2021 (unaudited) | 6,000 | $ | 2,140 | 591,239 | $ | 727,668 | 8,182 | $ | 25,554 | $ | (726,472) | $ | 26,750 |
3
SPRING VALLEY ACQUISITION CORP.
CONDENSED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
FOR THE PERIOD FROM AUGUST 20, 2020 (INCEPTION) THROUGH SEPTEMBER 30, 2020
| | | | | | | | | | | | | | |
| | Ordinary Shares | | Additional | | | | | | | ||||
| | Class B | | Paid-In | | Accumulated | | Shareholders' | ||||||
|
| Shares |
| Amount |
| Capital |
| Deficit |
| Equity | ||||
Balance as of August 20, 2020 (inception) |
| 0 | | $ | 0 | | $ | 0 | | $ | 0 | | $ | 0 |
Issuance of ordinary shares to Sponsor |
| 5,750,000 | |
| 575 | |
| 24,425 | |
| — | |
| 25,000 |
Net loss |
| — | |
| — | |
| — | |
| (7,221) | |
| (7,221) |
Balance as of September 30, 2020 (unaudited) |
| 5,750,000 | | $ | 575 | | $ | 24,425 | | $ | (7,221) | | $ | 17,779 |
NuScale Power Corporation
(in thousands) | Six months ended | |||||||||||||
June 30, | ||||||||||||||
2022 | 2021 | |||||||||||||
OPERATING CASH FLOW | ||||||||||||||
Net loss | $ | (44,753) | $ | (47,345) | ||||||||||
Adjustments to reconcile net loss to operating cash flow: | ||||||||||||||
Depreciation | 1,215 | 1,014 | ||||||||||||
Amortization of intangibles | 89 | 89 | ||||||||||||
Equity-based compensation expense | 2,132 | 4,188 | ||||||||||||
Change in fair value of warrant liabilities | (6,120) | — | ||||||||||||
Net noncash change in right of use assets and lease liabilities | 803 | 754 | ||||||||||||
Changes in assets and liabilities: | ||||||||||||||
Prepaid expenses and other assets | (2,597) | 426 | ||||||||||||
Accounts receivable | (10,168) | (7,728) | ||||||||||||
Accounts payable and accrued expenses | 1,789 | (555) | ||||||||||||
Lease liability | (812) | (896) | ||||||||||||
Deferred DOE cost share | (104) | 426 | ||||||||||||
Deferred revenue | (621) | 65 | ||||||||||||
Accrued compensation | (4,905) | (1,116) | ||||||||||||
Net cash used in operating activities | (64,052) | (50,678) | ||||||||||||
INVESTING CASH FLOW | ||||||||||||||
Purchases of property, plant and equipment | (1,581) | (437) | ||||||||||||
Net cash used in investing activities | (1,581) | (437) | ||||||||||||
FINANCING CASH FLOW | ||||||||||||||
Proceeds from Transaction, net | 341,462 | — | ||||||||||||
Payments of Transaction costs | (2,401) | — | ||||||||||||
Proceeds from debt issuance | — | 27,200 | ||||||||||||
Repayment of debt | — | (47,200) | ||||||||||||
Proceeds from sale of convertible preferred units | — | 100,500 | ||||||||||||
Proceeds from exercise of common unit options | 847 | 394 | ||||||||||||
Repurchase of common units | (566) | — | ||||||||||||
Issuance of treasury units | 20 | 73 | ||||||||||||
Net cash provided by financing activities | 339,362 | 80,967 | ||||||||||||
Net increase in cash and cash equivalents | 273,729 | 29,852 | ||||||||||||
Cash and cash equivalents: | ||||||||||||||
Beginning of period | 77,094 | 4,864 | ||||||||||||
End of period | $ | 350,823 | $ | 34,716 | ||||||||||
Summary of noncash investing and financing activities: | ||||||||||||||
Assumption of Transaction warrant liabilities | 47,532 | — | ||||||||||||
Debt converted to equity | 14,181 | — | ||||||||||||
Conversion of equity options to liability award | 50 | — | ||||||||||||
Conversion of accounts payable to convertible preferred units | — | 39 | ||||||||||||
Equity issuance fees | — | 1,960 | ||||||||||||
Supplemental disclosures of cash flow information: | ||||||||||||||
Cash paid for interest | — | 1,478 |
4
SPRING VALLEY ACQUISITION CORP.
CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
| | | | | | |
| | Nine Months | | For the Period from | ||
| | Ended | | (Inception) to | ||
| | September 30, | | September 30, | ||
|
| 2021 |
| 2020 | ||
| | | | | | |
Cash Flows from Operating Activities: | | | | | |
|
Net income (loss) | | $ | 2,375,076 | | $ | (7,221) |
Adjustments to reconcile net income (loss) to net cash used in operating activities: | |
| | | | |
Change in fair value of derivative liabilities | | | (3,486,000) | | | — |
Gain on marketable securities (net), dividends and interest, held in Trust Account | |
| (14,513) | | | — |
Formation and operating cost paid through the issuance of ordinary shares to Sponsor | | | — | | | 5,000 |
Changes in operating assets and liabilities: | | | | | | |
Prepaid expenses and other assets | | | 128,719 | | | (4,442) |
Accounts payable and accrued expenses | | | 305,677 | | | — |
Net cash used in operating activities | | | (691,041) | | | (6,663) |
| | | | | | |
Cash Flows from Financing Activities: | | | | | | |
Advances from related party | | | — | | | 6,663 |
Offering costs paid | | | (25,000) | | | — |
Net cash provided by financing activities | | | (25,000) | | | 6,663 |
| | | | | | |
Net decrease in cash | |
| (716,041) | | | — |
Cash - beginning of period | |
| 1,906,348 | | | — |
Cash - end of period | | $ | 1,190,307 | | $ | — |
| | | | | | |
Supplemental disclosure of noncash investing and financing activities: | | | | | | |
Deferred offering costs included in accrued expenses | | $ | — | | $ | 59,559 |
Deferred offering costs paid through promissory note — related party | | $ | — | | $ | 113,163 |
Deferred offering costs paid through the issuance of ordinary shares to Sponsor | | $ | — | | $ | 20,000 |
The accompanying notes are an integral part of these unaudited condensed financial statements.
5
Table1.Nature of ContentsBusiness
SPRING VALLEY ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 2021
(Unaudited)
Cash | $ | 341,462 | ||||||
Warrant liabilities | (47,532) | |||||||
Total net assets | $ | 293,930 |
Shares | % | |||||||||||||
Spring Valley Class A Shareholders | 14,400,369 | 6.5 | % | |||||||||||
Spring Valley Founders (B) | 3,871,009 | 1.8 | % | |||||||||||
Total Spring Valley | 18,271,378 | 8.3 | % | |||||||||||
Legacy NuScale Equityholders | 178,396,711 | 81.0 | % | |||||||||||
PIPE Shares | 23,700,002 | 10.8 | % | |||||||||||
Total Shares at Closing (excluding shares below) | 220,368,091 | 100.0 | % | |||||||||||
Remaining NuScale Consideration Shares - upon Exercise of NuScale Corp Options | 14,742,933 | |||||||||||||
Other - Earn Out Shares (A) | 1,643,924 | |||||||||||||
Total Shares | 236,754,948 | |||||||||||||
(A) Spring Valley Founders also receive “Earn Out Shares”, should certain criteria be met. NaN percent of the Earn Out Shares vest, pursuant to the Sponsor Letter Agreement, if NuScale Corp trades at $12.00 per share or higher over any 20 trading days within a 30-day window during the 60 months following the closing and the dollar volume-weighted average price (“VWAP”) is greater than or equal to $12.00 per share. The remainder of the Earn Out Shares vest if NuScale Corp trades at $14.00 per share or higher over any 20 trading days within a 30-day window during the 60 months following the closing and the VWAP is greater than or equal to $14.00 per share. | ||||||||||||||
(B) Includes an aggregate of 120,000 Spring Valley Class B ordinary shares that were issued to Spring Valley’s independent directors. |
in the revenues and expenses of NuScale LLC. As such, all the activity of NuScale LLC has been consolidated in the accompanying condensed consolidated financial statements. All assets and liabilities included in the balance sheet are that of NuScale LLC, other than the NuScale Corp Warrants. All significant intercompany transactions have been eliminated upon consolidation.
AsPrivate Placement Warrants has been estimated using the Public Warrants’ quoted market price. See note 5 for further discussion of September 30, 2021,the pertinent terms of the Warrants and note 6 for further discussion of the methodology used to determine the value of the Warrants.
June 30, 2022 | % of Economic Interests | |||||||||||||
NuScale Corp Class A common stock | 42,028,341 | 19.1 | % | |||||||||||
NuScale LLC Class B Units (NCI) | 178,396,711 | 80.9 | % | |||||||||||
220,425,052 | 100.0 | % |
The registration statementaverage number of shares of Class A common stock outstanding during the period. Diluted loss per share is based on the average number of shares of Class A common stock used for the basic earnings per share calculation, adjusted for the dilutive effect of RSUs, Stock Options, Warrants and Earn Out Shares, if any, using the “treasury stock” method and for all other interests that convert into potential shares of Class A common stock, if any, using the “if converted” method. Net loss attributable to Class A common stockholders for diluted loss per share is adjusted for the Company’s Initial Public Offering was declared effective on November 23, 2020. On November 27, 2020,share of NuScale LLC’s net loss, net of NuScale Corp taxes, after giving effect to all other interests that convert into potential shares of Class A common stock, to the extent it is dilutive. In addition, net loss attributable to Class A common stockholders for diluted loss per share is adjusted for the after-tax impact of changes to the fair value of derivative liabilities, to the extent the Company’s Warrants are dilutive.
Three Months Ended June 30, 2022 | ||||||||
Net loss attributable to Class A common stockholders | $ | (2,593) | ||||||
Weighted-average shares for basic and diluted loss per share | 42,028,341 | |||||||
Basic and Diluted loss per share of Class A common stock | $ | (0.06) | ||||||
Anti-dilutive securities excluded from shares outstanding: | ||||||||
Class B common shares | 178,396,711 | |||||||
Stock options and RSUs | 14,742,933 | |||||||
Warrants | 20,400,000 | |||||||
Earn Out | 1,643,924 | |||||||
Total | 215,183,568 |
(in thousands) | Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||||
Warrant Liabilities: | ||||||||||||||||||||||||||
Public Warrants | $ | 23,345 | $ | — | $ | — | $ | 23,345 | ||||||||||||||||||
Private Placement Warrants | — | 18,067 | — | 18,067 | ||||||||||||||||||||||
Total Warrant Liabilities as of June 30, 2022 | $ | 23,345 | $ | 18,067 | $ | — | $ | 41,412 |
June 30, | December 31, | |||||||||||||
(in thousands) | 2022 | 2021 | ||||||||||||
Furniture and fixtures | $ | 173 | $ | 173 | ||||||||||
Office and computer equipment | 7,082 | 5,638 | ||||||||||||
Software | 16,487 | 15,227 | ||||||||||||
Test equipment | 347 | 347 | ||||||||||||
Leasehold improvements | 2,689 | 2,689 | ||||||||||||
26,778 | 24,074 | |||||||||||||
Less: Accumulated depreciation | (21,847) | (20,632) | ||||||||||||
Add: Assets under development | 394 | 1,518 | ||||||||||||
Net property, plant and equipment | $ | 5,325 | $ | 4,960 |
Simultaneouslyconjunction with the closingTransaction.
Share Options | Number of Shares | Weighted Average Exercise Price | ||||||||||||
Outstanding at December 31, 2021 | 15,393,670 | $ | 3.64 | |||||||||||
Granted | 208,013 | 9.53 | ||||||||||||
Exercised | (775,094) | 1.22 | ||||||||||||
Forfeited | (38,797) | 6.80 | ||||||||||||
Expired | (44,859) | 3.24 | ||||||||||||
Outstanding at June 30, 2022 | 14,742,933 | 3.87 | ||||||||||||
Exercisable at June 30, 2022 | 12,721,473 | 3.41 |
2022 | |||||
Risk-free interest rate | 1.44 | % | |||
Expected dividend yield | NA | ||||
Expected option life | 6.25 years | ||||
Expected price volatility | 73.98 | % |
Cash | $ | 341,462 | ||||||
Warrant liabilities | (47,532) | |||||||
Total net assets | $ | 293,930 |
Offering costsexpenses consist of compensation costs for personnel in executive, finance, accounting, human resources and other administrative functions. G&A expenses also include legal fees, professional fees paid for accounting, auditing, consulting services, insurance costs and facility costs. We expect we will incur higher G&A expenses for public company costs such as compliance with the regulations of the SEC and the NYSE.
(in thousands) | Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | |||||||||||||||||||||||
Revenue | $ | 2,749 | $ | 372 | $ | 5,194 | $ | 1,036 | ||||||||||||||||||
Cost of sales | (1,739) | (245) | (2,944) | (651) | ||||||||||||||||||||||
Gross margin | 1,010 | 127 | 2,250 | 385 | ||||||||||||||||||||||
Research and development expenses | 28,628 | 20,900 | 53,008 | 39,651 | ||||||||||||||||||||||
General and administrative expenses | 15,443 | 10,893 | 25,963 | 18,838 | ||||||||||||||||||||||
Other expenses | 9,605 | 9,280 | 19,793 | 19,301 | ||||||||||||||||||||||
Loss from operations | (52,666) | (40,946) | (96,514) | (77,405) | ||||||||||||||||||||||
Department of Energy cost share | 25,177 | 16,833 | 45,639 | 31,569 | ||||||||||||||||||||||
Change in fair value of warrant liabilities | 6,120 | — | 6,120 | — | ||||||||||||||||||||||
Other cost share (interest expense) | (11) | (566) | 2 | (1,509) | ||||||||||||||||||||||
Loss before income taxes | $ | (21,380) | $ | (24,679) | $ | (44,753) | $ | (47,345) |
Following the closing of the Initial Public Offering, an amount of $232,300,000 from the net proceeds of the Transaction will be sufficient to reach commercialization of our NPM, certain costs are not reasonably estimable at this time and we may require additional funding and our projections anticipate certain customer-sourced income that is not assured.
Six Months Ended June 30, | ||||||||||||||
(in thousands) | 2022 | 2021 | ||||||||||||
Net cash used in operating activities | $ | (64,052) | (50,678) | |||||||||||
Net cash used in investing activities | (1,581) | (437) | ||||||||||||
Net cash provided by financing activities | 339,362 | 80,967 | ||||||||||||
Net increase in cash and cash equivalents | $ | 273,729 | $ | 29,852 |
Oncurrent financial statements.
6
The Company’s management has broad discretion with respectWe may face additional risks and uncertainties that are not presently known to the specific application of the net proceeds of the Initial Public Offering and the sale of the Private Placement Warrants, although substantially all of the net proceeds are intended to be applied generally toward consummating a Business Combination. The stock exchange listing rules requireit, or that the Business Combination must be with one or more operating businesses or assets with a fair market value equal to at least 80% of the assets held in the Trust Account (as defined below) (excluding the amount of any deferred underwriting commission and taxes payable on the income earned on the Trust Account). The Company will only complete a Business Combination if the post-Business Combination company owns or acquires 50% or more of the issued and outstanding voting securities of the target or otherwise acquires a controlling interest in the target business sufficient for it not to be required to register as an investment company under the Investment Company Act. There is no assurance that the Company will be able to successfully effect a Business Combination.
The Company will provide the holders of the public shares (the “Public Shareholders”) with the opportunity to redeem all or a portion of their public shares upon the completion of the Business Combination, either (i) in connection with a general meeting called to approve the Business Combination or (ii) by means of a tender offer. The decision as to whether the Company will seek shareholder approval of a Business Combination or conduct a tender offer will be made by the Company, solely in its discretion. The Public Shareholders will be entitled to redeem their Public Shares, for an amount equal to the aggregate amount then on deposit in the Trust Account, calculated as of two business days prior to the consummation of the Business Combination, including interest (which interest shall be net of taxes payable), divided by the number of then issued and outstanding public shares, subject to certain limitations as described in the prospectus. The per-share amount to be distributed to the Public Shareholders who properly redeem their shares will not be reduced by the deferred underwriting commissions the Company will pay to the underwriters (as discussed in Note 7). There will be no redemption rights upon the completion of a Business Combination with respect to the Company’s warrants.
The Company will proceed with a Business Combination only if the Company seeks shareholder approval, it receives an ordinary resolution under Cayman Islands law approving a Business Combination,we currently deems immaterial, which requires the affirmative vote of a majority of the shareholders who attend and vote at a general meeting of the Company. If a shareholder vote is not required and the Company does not decide to hold a shareholder vote formay also impair our business or other legal reasons, the Company will, pursuant to its Amended and Restated Memorandum and Articles of Association, conduct the redemptions pursuant to the tender offer rules of the Securities and Exchange Commission (“SEC”), and file tender offer documents containing substantially the same information as would be included in a proxy statement with the SEC prior to completing a Business Combination. If the Company seeks shareholder approval in connection with a Business Combination, the Sponsor has agreed to vote its Founder Shares (as defined in Note 6) and any Public Shares purchased during or after the Initial Public Offering in favor of approving a Business Combination. Additionally, each Public Shareholder may elect to redeem their Public Shares, without voting, and if they do vote, irrespective of whether they vote for or against a proposed Business Combination.
Notwithstanding the foregoing, if the Company seeks shareholder approval of the Business Combination and the Company does not conduct redemptions pursuant to the tender offer rules, a Public Shareholder, together with any affiliate of such shareholder or any other person with whom such shareholder is acting in concert or as a “group” (as defined under Section 13 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), will be restricted from redeeming its shares with respect to more than an aggregate of 15% of the Public Shares without the Company’s prior written consent.
financial condition. The Sponsor has agreed (a) to waive its redemption rights with respect to any Founder Shares and Public Shares held by it in connection with the completion of a Business Combination and (b) not to propose an amendment to the Amended and Restated Memorandum and Articles of Association (i) to modify the substance or timing of the Company’s obligation to allow redemption in connection with the Company’s initial Business Combination or to redeem 100% of the Public Shares if the Company does not complete a Business Combination within the Combination Period (as defined below) or (ii) with respect to any other provision relating to shareholders’ rights or pre-initial business combination activity, unless the Company provides the Public Shareholders with the opportunity to redeem their Public Shares upon approval of any such amendment at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest and other income earned on the Trust account and not previously released to pay taxes, divided by the number of then issued and outstanding Public Shares.
7
The Company will initially have until May 27, 2022 to consummate a Business Combination. However, if the Company anticipates that it may not be able to consummate a Business Combination by May 27, 2022, it may, by resolution of the board of directors if requested by the Sponsor, extend the initial period of time to consummate a Business Combination one time, by an additional 6 months, subject to the Sponsor, its affiliates or permitted designees purchasing additional Private Placement Warrants. The shareholders will not be entitled to vote or redeem their Public Shares in connection with any such extension. In order to extend the initial period of time to consummate a Business Combination for such six-month period, the Sponsor, its affiliates or permitted designees, must purchase an additional 2,300,000 Private Placement Warrants at $1.00 per warrant and deposit the $2,300,000 in proceeds into the Trust Account on or prior to May 27, 2022. The Sponsor, its affiliates or permitted designees are not obligated to purchase additional Private Placement Warrants to extend the time for the Company to complete a Business Combination.
However, if the Company has not completed a Business Combination within the Combination Period, the Company will (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem 100% of the Public Shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest earned and not previously released to the Company to pay its taxes, if any (less up to $100,000 of interest to pay dissolution expenses), divided by the number of then issued and outstanding Public Shares, which redemption will completely extinguish the rights of the Public Shareholders as shareholders (including the right to receive further liquidating distributions, if any), and (iii) as promptly as reasonably possible following such redemption, subject to the approval of the Company’s remaining Public Shareholders and its Board of Directors, liquidate and dissolve, subject in each case to the Company’s obligations under Cayman Islands law to provide for claims of creditors and the requirements of other applicable law. There will be no redemption rights or liquidating distributions with respect to the Company’s warrants, which will expire worthless if the Company fails to complete a Business Combination within the Combination Period.
The Sponsor has agreed to waive its rights to liquidating distributions from the Trust Account with respect to the Founder Shares it will receive if the Company fails to complete a Business Combination within the Combination Period. However, if the Sponsor or any of its respective affiliates acquire Public Shares, such Public Shares will be entitled to liquidating distributions from the Trust Account if the Company fails to complete a Business Combination within the Combination Period. The underwriters have agreed to waive their rights to their deferred underwriting commission (see Note 7) held in the Trust Account in the event the Company does not complete a Business Combination within the Combination Period, and in such event, such amounts will be included with the other funds held in the Trust Account that will be available to fund the redemption of the Public Shares. In the event of such distribution, it is possible that the per share value of the assets remaining available for distribution will be less than the per share value deposited into the Trust Account.
In order to protect the amounts held in the Trust Account, the Sponsor has agreed that it will be liable to the Company if and to the extent any claims by a third party (other than the Company’s independent registered public accounting firm) for services rendered or products sold to the Company, or a prospective target business with which the Company has discussed entering into a transaction agreement, reduce the amount of funds in the Trust Account to below the lesser of (1) $10.10 per Public Share and (2) the actual amount per Public Share held in the Trust Account as of the date of the liquidation of the Trust Account, if less than $10.10 per Public Share, due to reductions in the value of trust assets, in each case net of the interest that may be withdrawn to pay taxes. This liability will not apply to any claims by a third party who executed a waiver of any and all rights to seek access to the Trust Account and as to any claims under the Company’s indemnity of the underwriters of the Initial Public Offering against certain liabilities, including liabilities under the Securities Act of 1933, as amended (the “Securities Act”). In the event that an executed waiver is deemed to be unenforceable against a third party, the Sponsor will not be responsible to the extent of any liability for such third-party claims. The Company will seek to reduce the possibility that the Sponsor will have to indemnify the Trust Account due to claims of creditors by endeavoring to have all vendors, service providers (other than the Company’s independent registered public accounting firm), prospective target businesses or other entities with which the Company does business, execute agreements with the Company waiving any right, title, interest or claim of any kind in or to monies held in the Trust Account.
8
Note 2— Restatement of Previously Issued Financial Statement
The Company concluded it should restate its previously issued financial statements to classify all Class A ordinary shares subject to possible redemption in temporary equity. In accordance with guidance on redeemable equity instruments in ASC Topic 480-10-S99, redemption provisions not solely within the control of the Company, require ordinary shares subject to redemption to be classified outside of permanent equity. The Company had previously classified a portion of its Class A ordinary shares in permanent equity. Although the Company did not specify a maximum redemption threshold, its charter currently provides that the Company will not redeem its Public Shares in an amount that would cause its net tangible assets to be less than $5,000,001. Previously, the Company did not consider redeemable shares classified as temporary equity as part of net tangible assets. Effective with these condensed financial statements, the Company revised this interpretation to include temporary equity in net tangible assets. In connection with the change in presentation for the Class A ordinary shares subject to possible redemption, the Company has revised its earnings per share calculation to allocate income and losses shared pro rata between the two classes of shares. This presentation contemplates a Business Combination as the most likely outcome, in which case, both classes of shares participate pro rata in the income and losses of the Company.
In accordance with SEC Staff Accounting Bulletin No. 99, “Materiality,” and SEC Staff Accounting Bulletin No. 108, “Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements,” the Company evaluated the corrections and has determined that the related impact was material to the previously filed financial statements that contained the error, reported in the Company’s Form 10-Qs for the quarterly periods ended March 31, 2021, and June 30, 2021 (the “Affected Quarterly Periods”). Therefore, the Company, in consultation with its Audit Committee, concluded that the Affected Quarterly Periods should be restated to present all Class A ordinary shares subject to possible redemption as temporary equity and to recognize accretion from the initial book value to redemption value at the time of its Initial Public Offering. As such, the Company is reporting these restatements to those periods in this quarterly report.
The impact of the restatement on the financial statements for the Affected Quarterly Periods is presented below.
The change in the carrying value of the redeemable Class A ordinary shares at March 31, 2021 resulted in a reclassification of approximately 3.6 million Class A ordinary shares from permanent equity to temporary equity. The table below presents the effect of the financial statement adjustments related to the restatement discussed above of the Company’s previously reported balance sheet as of March 31, 2021.
| | | | | | | | | |
| | As Previously | | | | | | | |
As of March 31, 2021 (unaudited) |
| Reported |
| Adjustment |
| As Restated | |||
Total assets | | $ | 234,164,226 | | $ | — | | $ | 234,164,226 |
Total liabilities | | $ | 32,769,082 | | $ | — | | $ | 32,769,082 |
Class A ordinary shares subject to possible redemption | |
| 196,395,143 | |
| 35,904,857 | |
| 232,300,000 |
Preference shares | |
| — | |
| — | |
| — |
Class A ordinary shares | |
| 355 | |
| (355) | |
| — |
Class B ordinary shares | |
| 575 | |
| — | |
| 575 |
Additional paid-in-capital | |
| 9,235,826 | |
| (9,235,826) | |
| — |
Accumulated deficit | |
| (4,236,755) | |
| (26,668,676) | |
| (30,905,431) |
Total shareholders’ equity (deficit) | | $ | 5,000,001 | | $ | (35,904,857) | | $ | (30,304,856) |
Total Liabilities, Class A Ordinary Shares Subject to Possible Redemption and Shareholders' Equity (Deficit) | | $ | 234,164,226 | | $ | — | | $ | 234,164,226 |
The Company’s statement of shareholders’ equity has been restated to reflect the changes to the impacted shareholders’ equity accounts described above.
The table below presents the effect of the financial statement adjustments related to the restatement discussed above of the Company’s previously reported statement of cash flows for the three months ended March 31, 2021.
| | | | | | | | | |
For the three months ended March 31, 2021 (unaudited) | |||||||||
|
| As Previously |
| | |
| | | |
|
| Reported | | Adjustment | | As Restated | |||
Supplemental Disclosure of Noncash Financing Activities: |
| |
|
| |
|
| |
|
Change in value of Class A ordinary shares subject to possible redemption | | $ | (8,734,582) | | $ | 8,734,582 | | $ | — |
9
The change in the carrying value of the redeemable Class A ordinary shares at June 30, 2021 resulted in a reclassification of approximately 4.0 million Class A ordinary shares from permanent equity to temporary equity. The table below presents the effect of the financial statement adjustments related to the restatement discussed above of the Company’s previously reported balance sheet as of June 30, 2021.
| | | | | | | | | |
| | As Previously | | | | | | | |
As of June 30, 2021 (unaudited) |
| Reported |
| Adjustment |
| As Restated | |||
Total assets | | $ | 233,801,679 | | | |
| $ | 233,801,679 |
Total liabilities | | $ | 36,839,721 | | | |
| $ | 36,839,721 |
Class A ordinary shares subject to possible redemption | |
| 196,961,950 | |
| 40,338,050 |
| | 232,300,000 |
Preference shares | |
| — | |
| — |
| | — |
Class A ordinary shares | |
| 399 | |
| (399) |
| | — |
Class B ordinary shares | |
| 575 | |
| — |
| | 575 |
Additional paid-in-capital | |
| 13,668,974 | |
| (13,668,974) |
| | — |
Accumulated deficit | |
| (8,669,940) | |
| (26,668,677) |
| | (35,338,617) |
Total shareholders’ equity (deficit) | | $ | 5,000,008 | | $ | (40,338,050) | | $ | (35,338,042) |
Total Liabilities, Class A Ordinary Shares Subject to Possible Redemption and Shareholders' Equity (Deficit) | | $ | 233,801,679 | | $ | — | | $ | 233,801,679 |
The Company’s statement of shareholders’ equity has been restated to reflect the changes to the impacted shareholders’ equity accounts described above.
The table below presents the effect of the financial statement adjustments related to the restatement discussed above of the Company’s previously reported statement of cash flows for the six months ended June 30, 2021.
| | | | | | | | | |
For the six months ended June 30, 2021 (unaudited) | |||||||||
|
| As Previously |
| | |
| | | |
|
| Reported | | Adjustment | | As Restated | |||
Supplemental Disclosure of Noncash Financing Activities: |
| |
|
| |
|
| |
|
Change in value of Class A ordinary shares subject to possible redemption | | $ | 4,276,476 | | $ | (4,276,476) | | $ | — |
The impact to the reported amounts of weighted average shares outstanding and basic and diluted earnings per share is presented below for the Affected Quarterly Periods.
| | | | | | | | | |
| | Earnings Per Share for Class A ordinary shares | |||||||
| | As Previously | |
| | |
| | |
|
| Reported |
| Adjustment |
| As Restated | |||
For the three months ended March 31, 2021 (unaudited) |
| |
|
| |
|
| |
|
Net income | | $ | 8,734,669 | | $ | — | | $ | 8,734,669 |
Weighted average shares outstanding - basic and diluted | |
| 23,000,000 | |
| — | |
| 232,300,000 |
Basic and diluted earnings per share | | $ | — | | $ | 0.30 | | $ | 0.300 |
For the three months ended June 30, 2021 (unaudited) | |
|
| |
|
| |
|
|
Net loss | | $ | (4,433,185) | | $ | — | | $ | (4,433,185) |
Weighted average shares outstanding - basic and diluted | |
| 23,000,000 | |
| — | |
| 23,000,000 |
Basic and diluted earnings per share | | $ | — | | $ | (0.15) | | $ | (0.15) |
For the six months ended June 30, 2021 (unaudited) | |
|
| |
|
| |
|
|
Net income | | $ | 4,301,484 | | $ | — | | $ | 4,301,484 |
Weighted average shares outstanding - basic and diluted | |
| 23,000,000 | |
| — | |
| 23,000,000 |
Basic and diluted earnings per share | | $ | — | | $ | 0.15 | | $ | 0.15 |
10
| | | | | | | | | |
| | Earnings Per Share for Class B ordinary shares | |||||||
| | As Previously | | | | | | | |
|
| Reported |
| Adjustment |
| As Restated | |||
For the three months ended March 31, 2021 (unaudited) |
| |
|
| |
|
| |
|
Net income | | $ | 8,734,669 | | $ | — | | $ | 8,734,669 |
Weighted average shares outstanding - basic and diluted | |
| 5,750,000 | |
| — | |
| 5,750,000 |
Basic and diluted earnings per share | | $ | 1.52 | | $ | (1.22) | | $ | 0.30 |
For the three months ended June 30, 2021 (unaudited) | |
|
| |
|
| |
|
|
Net loss | | $ | (4,433,185) | | $ | — | | $ | (4,433,185) |
Weighted average shares outstanding - basic and diluted | |
| 5,750,000 | |
| — | |
| 5,750,000 |
Basic and diluted earnings per share | | $ | (0.77) | | $ | 0.62 | | $ | (0.15) |
For the six months ended June 30, 2021 (unaudited) | |
|
| |
|
| |
|
|
Net income | | $ | 4,301,484 | | $ | — | | $ | 4,301,484 |
Weighted average shares outstanding - basic and diluted | |
| 5,750,000 | |
| — | |
| 5,750,000 |
Basic and diluted earnings per share | | $ | 0.75 | | $ | (0.60) | | $ | 0.15 |
Note 3 - Summary of Significant Accounting Policies
Basis of Presentation
The accompanying unaudited financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and of the Securities and Exchange Commission (the “SEC”). Certain information or footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted, pursuant to the rules and regulations of the SEC for interim financial reporting. Accordingly, they do not include all the information and footnotes necessary for a complete presentation of financial position, results of operations, or cash flows. In the opinion of management, the accompanying unaudited condensed financial statements include all adjustments, consisting of a normal recurring nature, which are necessary for a fair presentation of the financial position, operating results and cash flows for the periods presented.
The accompanying unaudited condensed financial statementsdiscussion should be read in conjunction with the Company’s Annual Report on Form 10-K/A for the period ended December 31, 2020 as filed with the SEC on May 7, 2021, which contains the audited financial statements of NuScale LLC and notes thereto. to the financial statements included in the Prospectus.
Going Concern
In connection withinitial time of such payment or, even if challenged early, such excess cash payment may be greater than the Company’s assessmentamount of going concern considerations in accordance with Financial Accounting Standard Board’s Accounting Standards Update (“ASU”) 2014-15, “Disclosuresfuture cash payments that NuScale Corp might otherwise be required to make under the terms of Uncertainties about an Entity’s Ability to Continuethe Tax Receivable Agreement and, as a Going Concern,”result, there might not be future cash payments against which to net. As a result, in certain circumstances NuScale Corp could make payments under the Company has until May 27, 2022,Tax Receivable Agreement in excess of NuScale Corp’s actual income tax savings, which could materially impair NuScale Corp’s financial condition.
11
Emerging Growth Company
The Company is an “emerging growth company,” as defined in Section 2(a)companies”; this could make our securities less attractive to investors and may make it more difficult to compare our performance with other public companies.
As a result, our stockholders may not have access to certain information they may deem important. We could be an EGC until December 31, 2025, although circumstances could cause us to lose that status earlier, including if the market value of common stock held by non-affiliates exceeds $700,000,000 as of any June 30 before that time, in which case we would no longer be an EGC as of the following December 31. We cannot predict whether investors will find our securities less attractive because we rely on these exemptions. If some investors find our securities less attractive as a result of our reliance on these exemptions, the trading prices of our securities may be lower than they otherwise would be, there may be a less active trading market for our securities and the trading prices of our securities may be more volatile.
Useconnection with NuScale LLC’s general plant design, project-specific designs and services typically performed by Fluor or its direct competitors. Similarly, we have entered into certain agreements with Doosan Heavy Industries and Construction Company, Ltd., IHI Corporation, and Sarens Nuclear & Industrial Services, LLC for certain planning, engineering, manufacturing and support activities, and JGC Holdings Corporation, an affiliate of Estimates
The preparationJapan NuScale LLC Innovation, LLC, related to the EPC and commissioning of the condensed financial statementsfirst
Making estimates requires managementNuScale LLC plants will be necessary to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the financial statements, which management considered in formulating its estimate, could changetheir competitiveness and attractiveness in the near term duemarket, particularly in the United States where the price of power is generally lower than in other countries. If we are not able to oneachieve and maintain cost-competitiveness in the United States or more future confirming events. Oneelsewhere, our business could be materially and adversely affected.
Cashpublic perception of nuclear energy can affect our customers and cash equivalents
us.
Derivative Warrant Liability
The Company accounts for the Warrants in accordance with the guidance contained in ASC 815, “Derivatives and Hedging”, under which the Warrants do not meet the criteria for equity treatment and must be recorded as liabilities. Accordingly, the Company classifies the Warrants as liabilities at their fair value and adjusts the warrants to fair value at each reporting period. This liability is subject to re-measurement at each balance sheet date until exercised, and any change in fair value is recognized in the Company’s statement of operations. The fair value of the Public Warrants has been estimated using the Public Warrants’ quoted market price. The Private Placement Warrants are valued using a Modified Black Scholes Option Pricing Model. See Note 9 for further discussion of the pertinent terms of the Warrants and Note 10 for further discussion of the methodology used to determine the value of the Warrants.
12
Class A Shares Subject to Possible Redemption
The Company accounts for its Class A ordinary shares subject to possible redemption in accordance with the guidance in Accounting Standards Codification (“ASC”) Topic 480 “Distinguishing Liabilities from Equity.” Ordinary shares subject to mandatory redemption is classified as a liability instrument and is measured at fair value. Conditionally redeemable ordinary shares (including ordinary shares that features redemption rights that is either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within the Company’s control) is classified as temporary equity. At all other times, ordinary shares are classified as shareholders’ equity. The Company’s Class A ordinary shares features certain redemption rights that are considered to be outside of the Company’s control and subject to occurrence of uncertain future events. Accordingly, at September 30, 2021 and December 31, 2020, 23,000,000 Class A ordinary shares subject to possible redemption are presented as temporary equity outside of the shareholders’ equity section of the Company’s condensed balance sheets.
Offering Costs
Offering costs consisted of legal, accounting, underwriting fees and other costs incurred through the Initial Public Offering that were directly related to the Initial Public Offering. Offering costs are allocated to the separable financial instruments issued in the Initial Public Offering based on a relative fair value basis, compared to total proceeds received. Offering costsrisks associated with warrant liabilities are expensed as incurredradioactive materials and presented as non-operating expensesthe public perception of those risks can affect our business. Opposition by third parties can delay or prevent the construction of new nuclear power plants and can limit the operation of nuclear reactors. Adverse public reaction to developments in the statement of operations. Offering costs associated with the Class A ordinary shares are charged against their carrying value upon the completion of the Initial Public Offering. Deferred underwriting commissions are classified as non-current liabilities as their liquidation is not reasonably expected to require the use of current assetsnuclear power could directly affect our customers and indirectly affect our business. In the past, adverse public reaction, increased regulatory scrutiny and litigation have contributed to extended construction periods for new nuclear reactors, sometimes delaying construction schedules by decades or require the creation of current liabilities.
Income Taxes
The Company accounts for income taxes under ASC Topic 740, “Income Taxes,” which prescribes a recognition threshold and a measurement attributemore or even shutting down operations. In addition, anti-nuclear groups in Germany successfully lobbied for the financial statement recognition and measurementadoption of tax positions takenthe Nuclear Exit Law in 2002, which requires the shutdown of all German nuclear power plants by the end of 2022. Adverse public reaction could also lead to increased regulation or expected to be taken in a tax return. For those benefits to be recognized, a tax position must belimitations on the activities of our customers, more likely than not to be sustained upon examination by taxing authorities. The Company’s management determined that the Cayman Islands is the Company’s major tax jurisdiction. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. As of September 30, 2021, there were 0 unrecognized tax benefits and 0 amounts accrued for interest and penalties. The Company is currently not aware of any issues under reviewonerous operating requirements or other conditions that could result in significant payments, accruals, orhave a material deviation from its position.
The Company is consideredadverse impact on our customers and our business.
Net Income (Loss) Per Ordinary Share
Net loss per ordinary share is computed by dividing net loss by the weighted average number of ordinary shares issued and outstanding during the period. The Company has not considered the effect of warrants sold in the Initial Public Offering and private placement to purchase Class A ordinary share in the calculation of diluted income (loss) per share, since the exercise of the warrants are contingent upon the occurrence of future events.
The Company’s statement of operations includes a presentation of income (loss) per share for shares of ordinary shares subject to possible redemption in a mannerevents similar to the two-class method of income (loss) per share. As of September 30, 2021,Three Mile Island, Chernobyl and Fukushima Daiichi nuclear accidents, or terrorist acts or other high-profile events involving radioactive materials could materially and adversely affect our customers and the Company did not have any dilutive securitiesmarkets in which we operate and other contractsincrease regulatory requirements and costs that could potentially, be exercisedmaterially and adversely affect our business.
13
A reconciliation of net loss per ordinary share is as follows:
| | | | | | |
| | For the Three |
| For the Nine | ||
| | Months Ended | | Months Ended | ||
| | September 30, | | September 30, | ||
|
| 2021 |
| 2021 | ||
Redeemable Class A Ordinary Shares |
| |
| | | |
Numerator: |
| |
| | | |
Allocation of net loss | | $ | (1,541,126) | | $ | 1,900,061 |
| | | | | | |
Denominator: | |
|
| | | |
Weighted average shares outstanding, basic and diluted | |
| 23,000,000 | |
| 23,000,000 |
Basic and diluted net loss per share | | $ | (0.07) | | $ | 0.08 |
| | | | | | |
Non-Redeemable Class B Ordinary Shares | |
|
| | | |
Numerator: Net Loss minus Redeemable Net Earnings | |
|
| | | |
Net (Loss) Income attributable to Non-Redeemable Class B Ordinary Shares | | $ | (385,282) | | $ | 475,015 |
| | | | | | |
Denominator: Weighted Average Non-Redeemable Class B Ordinary Shares | |
|
| | | |
Basic and diluted weighted average shares outstanding, Non-Redeemable Class B | |
| 5,750,000 | | | 5,750,000 |
Basic and diluted net loss per share, Non-Redeemable Class B | | $ | (0.07) | | $ | 0.08 |
Note: As of September 30, 2021, basic and diluted shares are the same as there are no non-redeemable securities that are dilutivefavorable regulatory climate needed to the Company’s shareholders.
Concentration of Credit Risk
Financial instruments that potentially subject the Company to concentrations of credit risk consist of a cash account in a financial institution, which, at times, may exceed the Federal Depository Insurance Corporation coverage limits of $250,000. The Company has not experienced losses on this account and management believes the Company is not exposed to significant risks on such account.
Fair Value of Financial Instruments
The fair value of the Company’s assets and liabilities, which qualify as financial instruments under ASC Topic 820, “Fair Value Measurement,” approximates the carrying amounts represented in the Company’s balance sheet, primarily due to their short-term nature.
The fair value of the Company’s financial assets and liabilities reflects management’s estimate of amounts that the Company would have received in connection with the sale of the assets or paid in connection with the transfer of the liabilities in an orderly transaction between market participants at the measurement date. In connection with measuring the fair value of its assets and liabilities, the Company seeks to maximize the use of observable inputs (market data obtained from independent sources) and to minimize the use of unobservable inputs (internal assumptions about how market participants would price assets and liabilities). The following fair value hierarchy is used to classify assets and liabilities based on the observable inputs and unobservable inputs used in order to value the assets and liabilities:
Level 1: Quoted prices in active markets for identical assets or liabilities. An active market for an asset or liability is a market in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis.
Level 2: Observable inputs other than Level 1 inputs. Examples of Level 2 inputs include quoted prices in active markets for similar assets or liabilities and quoted prices for identical assets or liabilities in markets that are not active.
Level 3: Unobservable inputs based on our assessment of the assumptions that market participants would use in pricing the asset or liability.
14
Recent Accounting Standards
Management does not believe that any recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on the Company’s financial statements.
Note 4 — Initial Public Offering
Pursuant to the Initial Public Offering, the Company sold 23,000,000 Units, which includes a full exercise by the underwriters of their over-allotment option in the amount of 3,000,000 Units, at a purchase price of $10.00 per Unit. Each Unit consists of 1 Class A ordinary share and one-half of 1 redeemable warrant (“Public Warrant”). Each whole Public Warrant entitles the holder to purchase 1 Class A ordinary share at an exercise price of $11.50 per whole share (see Note 8).
Note 5 - Private Placement
Simultaneously with the closing of the Initial Public Offering, the Sponsor purchased an aggregate of 8,900,000 Private Placement Warrants at a price of $1.00 per Private Placement Warrant, for an aggregate purchase price of $8,900,000. Each Private Placement Warrant is exercisable to purchase 1 Class A ordinary share at a price of $11.50 per share, subject to adjustment (see Note 8). A portion of the proceeds from the Private Placement Warrants were added to the proceeds from the Initial Public Offering held in the Trust Account. If the Company does not complete a Business Combination within the Combination Period, the proceeds from the sale of the Private Placement Warrants will be used to fund the redemption of the Public Shares (subject to the requirements of applicable law) and the Private Placement Warrants will expire worthless.
Note 6 - Related Party Transactions
Founder Shares
On August 21, 2020, the Sponsor paid $25,000 to the Company in consideration for 7,187,500 Class B ordinary shares (the “Founder Shares”). In September 2020, the Sponsor transferred 40,000 Founder Shares to each of the Company’s directors (120,000 shares in total). On October 22, 2020, the Sponsor effected a surrender of 1,437,500 Founder Shares to the Company for 0 consideration, resulting in 5,750,000 Founder Shares outstanding. The Sponsor transferredintroduce new nuclear technologies, all of the Founder Shares owned by the Sponsor to SV Acquisition Sponsor Sub, LLC, a Delaware limited liability companywhich could negatively impact our business and wholly owned subsidiary of the Sponsor (“Holdco”), prior to the closing of the Initial Public Offering. The Founder Shares included an aggregate of up to 750,000 shares that were subject to forfeiture depending on the extent to which the underwriters’ over-allotment option was exercised, so that the number of Founder Shares would equal, on an as-converted basis, approximately 20% of the Company’s issued and outstanding ordinary shares after the Initial Public Offering.prospects. As a result of the underwriters’ electionFukushima accident, some countries that were considering launching new domestic nuclear power programs delayed or cancelled the preparatory activities they were planning to fully exercise their over-allotment option, a totalundertake as part of 750,000 Founder Sharessuch programs. If accidents similar to the Fukushima disaster or other events, such as terrorist attacks involving nuclear facilities, occur, public opposition to nuclear power may increase, regulatory requirements and costs could become more onerous and customer demand for our NPMs could suffer, which could materially and adversely affect our business and operations.
The Sponsor has agreed, subject to limited exceptions, not to transfer, assign or sell anyschedule demands of the Founder Shares untilmarket, our projected sales revenues could be materially impacted.
Administrative Support Agreement
Commencing on November 23, 2020, the Company entered into an agreement to pay an affiliate of the Sponsor up to $10,000 per month for office space, secretarial and administrative services. Upon completion of a Business Combination or its liquidation, the Company will cease paying these monthly fees. For the three and nine months ended September 30, 2021, $30,000 and $90,000 has been expensed related to the agreement.
15
Promissory Note — Related Party
On August 21, 2020, the Company issued an unsecured promissory note (the “Promissory Note”) to the Sponsor, pursuant to which the Company could borrow up to an aggregate principal amount of $300,000. The Promissory Note was non-interest bearing and payable on the earlier of (i) December 31, 2020 or (ii) the completion of the Initial Public Offering. As of September 30, 2021 and December 31, 2020, there is 0 outstanding amounts under the Promissory Note, and no further borrowings are permitted.
Related Party Loans
In order to finance transaction costsincrease in connection with our ongoing activities, including developing and advancing our SMR and other products and services, obtaining NRC design certification of and SDA for our SMR and completing our manufacturing preparation and trials. We also expect to incur additional costs associated with operating as a Business Combination, the Sponsor or an affiliate of the Sponsor or certain of the Company’s directors and officers may, butpublic company. Certain costs are not obligatedreasonably estimable at this time and we may require additional funding and our projections anticipate certain customer-sourced income that is not guaranteed.
Note 7 - Commitments And Contingencies
Risks and Uncertainties
Management continues to evaluate the impact of the COVID-19 global pandemic on the industry and has concluded that while it is reasonably possible that the viruswhen needed could have a negative effectimpact on our financial condition and our ability to pursue our business strategies. If we raise additional funds by issuing equity securities, our stockholders will experience dilution. If we raise additional capital through debt financing, we may be subject to covenants that restrict our operations including limitations on our ability to incur liens or additional debt, pay dividends, repurchase our securities, make certain investments, and engage in certain merger, consolidation or asset sale transactions. Any debt financing or additional equity that we raise may contain terms that are not favorable to us or our stockholders and members. If the Company’s financial position, its results of operations and/or search for a target company, the specific impactneeded financing is not readily determinableavailable, or if the terms of financing are less desirable than we expect, we may be required to delay, scale back or terminate some or all of our research and development programs.
Registrationothers. We own and Shareholders Rights
Pursuanthave licensed rights to patents and pending patent applications, and will continue to file patent applications claiming new technologies directed to NPMs in the United States and in other jurisdictions based on factors such as commercial viability.
Underwriting Agreement
The underwriter is entitled to a deferred fee of $0.35 per Unit, or $8,050,000patent in the aggregate. The deferred fee will become payableUnited States or abroad that we consider relevant may be incorrect or inaccurate. Our failure to the underwriter from the amounts heldidentify and correctly interpret relevant patents may negatively impact our ability to develop and market NPMs.
16
Anchor Investments
Certain qualified institutional buyersChanges in tax laws or institutional accredited investors not affiliatedregulations may increase tax uncertainty and adversely affect results of our operations and our effective tax rate.
Note 8 - Shareholders’ Equity
Preference Shares — The Company is authorized to issue 1,000,000 preference shares with a par value of $0.0001 per share, with such designations, voting and other rights and preferences aslitigation, we may, be determined from time to time, bysettle disputes, even where we believe that we have meritorious claims or defenses. Because litigation is inherently unpredictable, we cannot assure you that the Company’s boardresults of directors. At September 30, 2021 and December 31, 2020, there were 0 preference shares issued or outstanding.
any of these actions will not have a material adverse effect on our business.
Class B Ordinary Shares — The Company is authorized to issue 30,000,000 Class B ordinary shares, with a par value of $0.0001 per share. HoldersChancery of the Class B ordinary shares are entitled to one voteState of Delaware as the sole and exclusive forum for each share. At September 30, 2021substantially all disputes between NuScale Corp and December 31, 2020, there were 5,750,000 Class B ordinary shares issued and outstanding.
Holdersits stockholders.
The Class B ordinary shares will automatically convert into Class A ordinary shares at the time of a Business Combination or earlier at the optionChancery of the holdersState of Delaware or, if such court does not have subject matter jurisdiction thereof, atanother state or federal court located within the State of Delaware, shall be the exclusive forum for certain actions and claims. This choice of forum provision may limit a ratio such that the number of Class A ordinary shares issuable upon conversion of all Founder Shares will equal, in the aggregate, on an as-converted basis, 20% of the sum of (i) the total number of ordinary shares issued and outstanding upon completion of the Initial Public Offering, plus (ii) the total number of Class A ordinary shares issued or deemed issued or issuable upon conversion or exercise of any equity-linked securities or rights issued or deemed issued, by the Company in connection with or in relationstockholder’s ability to the consummation ofbring a Business Combination, excluding any Class A ordinary shares or equity-linked securities exercisable for or convertible into Class A ordinary shares issued, deemed issued, or to be issued, to any sellerclaim in a Business Combination and any Private Placement Warrants issued to the Sponsor, its affiliatesjudicial forum that it finds favorable for disputes with NuScale Corp or any member of the Company’s management team upon conversion of Working Capital Loans. In no event will the Class B ordinary shares convert into Class A ordinary shares at a rate of less than one-to-one.
Note 9 - Derivative Warrant Liability
Public WarrantsNuScale Corp’s directors, officers, or other employees, which may only be exercised for a whole number of shares. No fractional shares will be issued upon exercise of the Public Warrants. The Public Warrants will become exercisable on the later of (a) 30 days after the completion of a Business Combination and (b) one year from the closing of the Initial Public Offering. The Public Warrants will expire five years from the completion of a Business Combination or earlier upon redemption or liquidation.
17
The Companydiscourage lawsuits with respect to such claims. However, stockholders will not be obligateddeemed to deliverhave waived NuScale Corp’s compliance with the federal securities laws and the rules and regulations thereunder and this provision would not apply to suits brought to enforce a duty or liability created by the Exchange Act, which provides for the exclusive jurisdiction of the federal courts with respect to all suits brought to enforce any Class A ordinary shares pursuantduty or liability created by the Exchange Act or the rules and regulations thereunder, or the Securities Act. Further, Section 22 of the Securities Act creates concurrent jurisdiction for federal and state courts over all suits brought to enforce any duty or liability created by the Securities Act or the rules and regulations thereunder. Accordingly, both state and federal courts have jurisdiction to entertain such claims. To prevent having to litigate claims in multiple jurisdictions and the threat of inconsistent or contrary rulings by different courts, among other considerations, the Organizational Documents provide that the federal district courts of the United States of America will be the exclusive forum for resolving any complaint asserting a cause of action arising under the Securities Act. Accordingly, there is uncertainty as to whether a court would enforce such provision with respect to suits brought to enforce any duty or liability created by the Securities Act or the rules and regulations thereunder. If a court were to find the choice of forum provision contained in the Organizational Documents to be inapplicable or unenforceable in an action, NuScale Corp may incur additional costs associated with resolving such action in other jurisdictions, which could harm NuScale Corp’s business, results of operations and financial condition.
The Company has agreed that as soon as practicable, but in no event later than 20 business days, after the closing of a Business Combination, it will use its commercially reasonable efforts to file with the SEC a registration statement for the registration, under the Securities Act, of the Class A ordinary shares issuable upon exercise of the warrants, and the Company will use its commercially reasonable efforts to cause the same to become effective within 60 business days after the closing of a Business Combination, and to maintain the effectiveness of such registration statement and a current prospectus relating to those Class A ordinary shares until the warrants expire or are redeemed, as specified in the warrant agreement; provided that if the Class A ordinary shares are at the time of any exercise of a warrant not listed on a national securities exchange such that they satisfy the definition of a “covered security” under Section 18(b)(1) of the Securities Act, the Company may, at its option, require holders of Public Warrants who exercise their warrants to do so on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act and, in the event the Company so elects, the Company will not be required to file or maintain in effect a registration statement, but it will use its commercially reasonable efforts to register or qualify the shares under applicable blue sky laws to the extent an exemption is not available. If a registration statement covering the Class A ordinary shares issuable upon exercise of the warrants is not effective by the 60th day after the closing of a Business Combination, warrant holders may, until such time as there is an effective registration statement and during any period when the Company will have failed to maintain an effective registration statement, exercise warrants on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act or another exemption, but the Company will use its commercially reasonable efforts to register or qualify the shares under applicable blue sky laws to the extent an exemption is not available.
Redemption of warrants when the price per Class A ordinary share equals or exceeds $18.00. Once the warrants become exercisable, the Company may redeem the outstanding warrants (except as described with respect to the Private Placement Warrants):
If and when the warrants become redeemable by the Company, the Company may exercise its redemption right even if it is unable to register or qualify the underlying securities for sale under all applicable state securities laws.
Redemption of warrants when the price per Class A ordinary share equals or exceeds $10.00. Once the warrants become exercisable, the Company may redeem the outstanding warrants:
18
If the Company calls the Public Warrants for redemption, as described above, its management will have the option to require any holder that wishes to exercise the Public Warrants to do so on a “cashless basis,” as described in the warrant agreement. The exercise price and number of ordinary shares issuable upon exercise of the Public Warrants may be adjusted in certain circumstances including in the event of a share dividend, extraordinary dividend or recapitalization, reorganization, merger, or consolidation. However, except as described below, the Public Warrants will not be adjusted for issuances of ordinary shares at a price below its exercise price. Additionally, in no event will the Company be required to net cash settle the Public Warrants. If the Company is unable to complete a Business Combination within the Combination Period and the Company liquidates the funds held in the Trust Account, holders of Public Warrants will not receive any of such funds with respect to their Public Warrants, nor will they receive any distribution from the Company’s assets held outside of the Trust Account with respect to such Public Warrants. Accordingly, the Public Warrants may expire worthless.
In addition, if (x) the Company issues additional Class A ordinary shares or equity-linked securities for capital raising purposes in connection with the closing of a Business Combination at an issue price or effective issue price of less than $9.20 per Class A ordinary share (with such issue price or effective issue price to be determined in good faith by the Company’s board of directors and, in the case of any such issuance to the Sponsor or its affiliates, without taking into account any Founder Shares held by the Sponsor or such affiliates, as applicable, prior to such issuance) (the “Newly Issued Price”), (y) the aggregate gross proceeds from such issuances represent more than 60% of the total equity proceeds, and interest thereon, available for the funding of a Business Combination on the date of the consummation of a Business Combination (net of redemptions), and (z) the volume weighted average trading price of its Class A ordinary shares during the 20 trading day period starting on the trading day prior to the day on which the Company consummates its Business Combination (such price, the “Market Value”) is below $9.20 per share, the exercise price of the warrants will be adjusted (to the nearest cent) to be equal to 115% of the higher of the Market Value and the Newly Issued Price, the $18.00 per share redemption trigger price will be adjusted (to the nearest cent) to be equal to 180% of the higher of the Market Value and the Newly Issued Price, and the $10.00 per share redemption trigger price will be adjusted (to the nearest cent) to be equal to the higher of the Market Value and the Newly Issued Price.
The Private Placement Warrants are identical to the Public Warrants underlying the Units sold in the Initial Public Offering, except that the Private Placement Warrants and the Class A ordinary shares issuable upon the exercise of the Private Placement Warrants will not be transferable, assignable, or salable until 30 days after the completion of a Business Combination, subject to certain limited exceptions. Additionally, the Private Placement Warrants will be exercisable on a cashless basis and be non-redeemable, except as described above, so long as they are held by the initial purchasers or their permitted transferees. If the Private Placement Warrants are held by someone other than the initial purchasers or their permitted transferees, the Private Placement Warrants will be redeemable by the Company and exercisable by such holders on the same basis as the Public Warrants.
Note 10 - Fair Value Measurements
The Company classifies its U.S. Treasury and equivalent securities as held-to-maturity in accordance with ASC Topic 320 “Investments - Debt and Equity Securities.” Held-to-maturity securities are those securities which the Company has the ability and intent to hold until maturity. Held-to-maturity treasury securities are recorded at amortized cost on the accompanying balance sheet and adjusted for the amortization or accretion of premiums or discounts.
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The following table presents the fair value hierarchy for assets and liabilities measured at fair value on a recurring basis as of September 30, 2021:
| | | | | | | | | | | | |
|
| Level 1 |
| Level 2 |
| Level 3 |
| | Total | |||
Assets: |
| | | | | | | | | | | |
Marketable securities held in brokerage account | | $ | 232,313,494 | | $ | — | | $ | — | | $ | 232,313,494 |
| | | | | | | | | | | | |
Liabilities: | | | | | | | | | | | | |
Public Warrants | | $ | 8,280,000 | | $ | — | | $ | — | | $ | 8,280,000 |
Private Placement Warrants | | | — | | | — | | | 21,894,000 | | | 21,894,000 |
Total liabilities | | $ | 8,280,000 | | $ | — | | $ | 21,894,000 | | $ | 30,174,000 |
The Warrants are accounted for as liabilities pursuant to ASC 815-40 and are measured at fair value as of each reporting period. Changes in the fair value of the Warrants are recorded in the statement of operations each period.
The following table presents a summary of the changes in the fair value of the Private Placement Warrants, a Level 3 liability, measured on a recurring basis.
| | | |
| | Private | |
| | Warrant | |
|
| Liability | |
Balance at, January 1, 2021 | | $ | 14,685,000 |
Recognized gain (loss) on change in fair value | | | (3,738,000) |
Fair value, March 31, 2021 | | | 10,947,000 |
Recognized gain (loss) on change in fair value | | | 1,869,000 |
Fair value, June 30, 2021 |
| | 12,816,000 |
Recognized gain on change in fair value | | | 9,078,000 |
Fair value, September 30, 2021 | | $ | 21,894,000 |
The Private Placement Warrants were valued using a Least Squares Monte Carlo Model, which is considered to be a Level 3 fair value measurement. As the path-dependent nature of the redemption provisions does not apply to the Private Placement warrants, the Company estimated the fair value using a Least Square Monte Carlo Model framework with significant assumptions including the price of the Company’s ordinary shares, risk-free rate, volatility, and term to the Company’s initial business combination. There were no transfers out of Level 3 during the three and nine months ended September 30, 2021.
The following table provides quantitative information regarding Level 3 fair value measurements inputs at their measurement dates:
| | | | | | | |
| | As of | | As of |
| ||
|
| December 31, 2020 |
| September 30, 2021 |
| ||
Exercise price | | $ | 11.50 | | $ | 11.50 | |
IPO price | | $ | 10.00 | | $ | 10.00 | |
Implied share price range (or underlying asset price at December 31, 2020) | | $ | 10.12 | | $ | 8.69 | |
Volatility | |
| 21 | % |
| 80 | % |
Term | |
| 5.7 | |
| 5.07 | |
Risk-free rate | |
| 0.46 | % |
| 0.99 | % |
Dividend yield | |
| 0 | % |
| 0 | % |
Note 11 - Subsequent Events
The Company evaluated subsequent events and transactions that occurred after the balance sheet date through the date that the condensed financial statements were issued. Based upon this review, except as noted below and other than the restatement discussed in Note 2, the Company did not identify any subsequent events that has not been disclosed in the condensed financial statements.
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Proposed Business Combination
On December 13, 2021, the Company, Spring Valley Merger Sub, LLC, an Oregon limited liability company (“Merger Sub”), and NuScale Power, LLC, an Oregon limited liability company (the “NuScale”), entered into an agreement and plan of merger (the “Merger Agreement”), pursuant to which, subject to obtaining the Acquiror Stockholder Approvals (as defined in the Merger Agreement), (i) Spring Valley shall domesticate as a corporationfederal courts located in the State of Delaware (the “Redomicile”New York in connection with any action brought in any such court to enforce the forum provisions (an “enforcement action”), and (ii) Merger Sub will be merged(y) having service of process made upon such warrant holder in any such enforcement action by service upon such warrant holder’s counsel in the foreign action as agent for such warrant holder.
Refer to the Form 8-K, as filed with the Securities and Exchange Commission on December 14, 2021 for additional information.
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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
References in this annual report on Form 10-Q (the “Annual Report”) to “we,” “us” or the “Company” refer to Spring Valley Acquisition Corp. References toadversely affect our “management” or our “management team” refer to our officers and directors, and references to the “Sponsor” refer to Spring Valley Acquisition Sponsor, LLC. The following discussion and analysis of the Company’sbusiness, financial condition and results of operations shouldand result in a diversion of the time and resources of our management and board of directors.
Special Note Regarding Forward-Looking Statements
This Quarterly Report includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”) and Section 21E of the Exchange Act that are not historical facts, and involve risks and uncertainties that could cause actual results to differ materially from those expected and projected. All statements, other than statements of historical fact included in this Form 10-Q including, without limitation, statements in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” regarding the Company’s financial position, business strategy and the plans and objectives of management for future operations, are forward-looking statements. Words such as “expect,” “believe,” “anticipate,” “intend,” “estimate,” “seek” and variations and similar words and expressions are intended to identify such forward-looking statements. Such forward-looking statements relate to future events or future performance, but reflect management’s current beliefs, based on information currently available. A number of factors could cause actual events, performance or results to differ materially from the events, performance and results discussed in the forward-looking statements. For information identifying important factors that could cause actual results to differ materially from those anticipated in the forward-looking statements, please refer to the Risk Factors section of the Company’s final prospectus for its Initial Public Offering filed with the U.S. Securities and Exchange Commission (the “SEC”). The Company’s securities filings can be accessed on the EDGAR section of the SEC’s website at www.sec.gov. Except as expressly required by applicable securities law, the Company disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise.
Overview
We are a blank check company incorporated in the Cayman Islands on August 20, 2020 formed for the purpose of effecting a merger, amalgamation, share exchange, asset acquisition, share purchase, reorganization or other similar Business Combination with one or more businesses. We intend to effectuate our Business Combination using cash derived from the proceeds of the Initial Public Offering and the sale of the Private Placement Warrants, our shares, debt or a combination of cash, shares and debt.
We expect to continue to incur significant costs in the pursuit of our acquisition plans. We cannot assure you that our plans to complete a Business Combination will be successful.
Results of Operations
We have neither engaged in any operations nor generated any operating revenues to date. Our only activities from the August 20, 2020 (inception) through September 30, 2021 were organizational activities and those necessary to prepare for the Initial Public Offering and searching for a target, described below. We do not expect to generate any operating revenues until after the completion of our initial Business Combination. We expect to generate non-operating income in the form of interest income from the proceeds from the Initial Public Offering. We expect that we will incur increased expenses as a result of being a public company (for legal, financial reporting, accounting and auditing compliance), as well as for due diligence expenses in connection with searching for, and completing, a Business Combination.
For the three months ended September 30, 2021, we had a net loss of $1,926,407, which consisted of formation and operating costs of $441,399 and changes in fair value of derivative warrant liabilities of $1,488,000, offset by interest income on marketable securities held in the Trust Account of $2,992.
For the nine months ended September 30, 2021, we had net income of $2,375,077, which consisted of interest income on marketable securities held in the Trust Account of $14,513 and changes in fair value of derivative warrant liabilities of $3,486,000, offset by formation and operation costs of $1,125,436.
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Liquidity and Capital Resources
On November 27, 2020, we consummated the Initial Public Offering of 23,000,000 Units, which included the full exercise by the underwriters of their over-allotment option in the amount of 3,000,000 Units, at a price of $10.00 per Unit, generating gross proceeds of $232,300,000. Simultaneously with the closing of the Initial Public Offering, we consummated the sale of 8,900,000 Private Placement Warrants to the Sponsor at a price of $1.00 per Private Placement Warrant generating gross proceeds of $8,900,000.
Following the Initial Public Offering and the sale of the Private Placement Warrants, a total of $232,300,000 was placed in the Trust Account. We incurred $12,467,354 in transaction costs, including $4,600,000 of underwriting fees, $8,050,000 of deferred underwriting fees and $567,354 of other costs.
For the nine months ended September 30, 2021, cash used in operating activities was $691,041. Net income of $2,375,077 was offset by change in fair value of derivative liabilities of $3,486,000, interest earned and unrealized gain on marketable securities held in the Trust Account of $14,513, and changes in operating assets and liabilities, which used $434,395 of cash.
As of September 30, 2021, we had cash held in the trust account of $232,316,486. We intend to use substantially all of the funds held in the Trust Account, including any amounts representing interest earned on the Trust Account, which interest shall be net of taxes payable and excluding deferred underwriting commissions, to complete our Business Combination. We may withdraw interest from the Trust Account to pay taxes, if any. To the extent that our share capital or debt is used, in whole or in part, as consideration to complete a Business Combination, the remaining proceeds held in the Trust Account will be used as working capital to finance the operations of the target business or businesses, make other acquisitions and pursue our growth strategies.
As of September 30, 2021, we had cash of $1,190,307. We intend to use the funds held outside the Trust Account primarily to identify and evaluate target businesses, perform business due diligence on prospective target businesses, travel to and from the offices, plants or similar locations of prospective target businesses or their representatives or owners, review corporate documents and material agreements of prospective target businesses, structure, negotiate and complete a Business Combination.
In order to fund working capital deficiencies or finance transaction costs in connection with a Business Combination, our Sponsor or an affiliate of our Sponsor or certain of our officers and directors may, but are not obligated to, loan us funds as may be required. If we complete a Business Combination, we may repay such loaned amounts out of the proceeds of the Trust Account released to us. In the event that a Business Combination does not close, we may use a portion of the working capital held outside the Trust Account to repay such loaned amounts, but no proceeds from our Trust Account would be used for such repayment. Up to $1,500,000 of such loans may be convertible into warrants, at a price of $1.00 per warrant, at the option of the lender. The warrants would be identical to the Private Placement Warrants.
We do not believe we will need to raise additional funds in order to meet the expenditures required for operating our business. However, if our estimate of the costs of identifying a target business, undertaking in-depth due diligence and negotiating a Business Combination are less than the actual amount necessary to do so, we may have insufficient funds available to operate our business prior to our initial Business Combination. Moreover, we may need to obtain additional financing either to complete our Business Combination or because we become obligated to redeem a significant number of our public shares upon completion of our Business Combination, in which case we may issue additional securities or incur debt in connection with such Business Combination.
Off-Balance Sheet Financing Arrangements
We have no obligations, assets or liabilities, which would be considered off-balance sheet arrangements as of September 30, 2021. We do not participate in transactions that create relationships with unconsolidated entities or financial partnerships, often referred to as variable interest entities, which would have been established for the purpose of facilitating off-balance sheet arrangements. We have not entered into any off-balance sheet financing arrangements, established any special purpose entities, guaranteed any debt or commitments of other entities, or purchased any non-financial assets.
Contractual Obligations
We do not have any long-term debt, capital lease obligations, operating lease obligations or long-term liabilities, other than an agreement to pay an affiliate of the Sponsor a monthly fee of $10,000 for office space, utilities and secretarial and administrative support services provided to the Company. We began incurring these fees on November 23, 2020 and will continue to incur these fees monthly until the earlier of the completion of a Business Combination and the Company’s liquidation.
23
The underwriter is entitled to a deferred fee of $0.35 per Unit, or $8,050,000 in the aggregate. The deferred fee will become payable to the underwriter from the amounts held in the Trust Account solely in the event that we complete a Business Combination, subject to the terms of the underwriting agreement.
Pursuant to a registration and shareholders rights agreement entered into on November 23, 2020, the holders of the Founder Shares, Private Placement Warrants and any warrants that may be issued upon conversion of Working Capital Loans (and any Class A ordinary shares issuable upon the exercise of the Private Placement Warrants and warrants that may be issued upon conversion of the Working Capital Loans) will be entitled to registration rights. The holders of the majority of these securities are entitled to make up to three demands, excluding short form demands, that we register such securities. In addition, the holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent to completion of a Business Combination. However, the registration and shareholder rights agreement provides that we will not permit any registration statement filed under the Securities Act to become effective until termination of the applicable lockup period. The registration and shareholder rights agreement does not contain liquidating damages or other cash settlement provisions resulting from delays in registering our securities. We will bear the expenses incurred in connection with the filing of any such registration statements.
Critical Accounting Policies
The preparation of financial statements and related disclosures in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and income and expenses during the period reported. Actual results could materially differ from those estimates. We have not identified any critical accounting policies.
Derivative Warrant Liability
We account for the Warrants as either equity-classified or liability-classified instruments based on an assessment of the specific terms and applicable authoritative guidance in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 480, Distinguishing Liabilities from Equity (“ASC 480”) and ASC 815, Derivatives and Hedging (“ASC 815”). The assessment considers whether the Warrants are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the Warrants meet all of the requirements for equity classification under ASC 815, including whether the Warrants are indexed to our own ordinary shares and whether the holders of Warrants could potentially require “net cash settlement” in a circumstance outside of our control, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of issuance of the Warrants and as of each subsequent quarterly period end date while the Warrants are outstanding. For issued or modified Warrants that meet all of the criteria for equity classification, such Warrants are required to be recorded as a component of additional paid-in capital at the time of issuance. For issued or modified Warrants that do not meet all the criteria for equity classification, such Warrants are required to be recorded as liabilities at their initial fair value on the date of issuance, and each balance sheet date thereafter. Changes in the estimated fair value of the liability-classifiedNuScale Corp Warrants are recognized as a non-cash gain or loss on the statements of operations.
We account for the Warrants in accordance with the guidance contained in ASC 815-40 under which the Warrants do not meet the criteria for equity treatment and must be recorded as liabilities.
Accordingly, we classify the Warrants as liabilities at their fair value and adjust the Warrants to fair value at each reporting period. This liability is subject to re-measurement at each balance sheet date until exercised, and any change in fair value is recognized in our unaudited condensed statement of operations. See Note 7 to our unaudited condensed financial statements included in Item 1 of Part I of this Quarterly Report for further discussion of the pertinent terms of the Warrants and Note 9 for further discussion of the methodology used to determine the value of the warrant liabilities.
Recent Accounting Standards
Management does not believe that any recently issued, but not yet effective, accounting standards, if currently adopted, wouldcould have a material effect on our financial statements.
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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
As of September 30, 2021,The NuScale Corp Warrants are currently classified as liabilities. Under this accounting treatment, we were not subjectare required to any market or interest rate risk. Followingmeasure the consummation of our Initial Public Offering, the net proceeds of our Initial Public Offering, including amounts in the Trust Account, have been invested in certain U.S. government obligations with a maturity of 185 days or less or in certain money market funds that invest solely in U.S. treasuries. Due to the short-term nature of these investments, we believe there will be no associated material exposure to interest rate risk.
ITEM 4. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we conducted an evaluationfair value of the effectiveness of our disclosure controls and procedures as ofNuScale Corp Warrants at the end of each reporting period and recognize changes in the fiscal quarter ended September 30, 2021, as such term is defined in Rules 13a-15(e) and 15d-15(e) underfair value from the Exchange Act. Based on this evaluation, our principal executive officer and principal financial officer has concluded that during theprior period covered by this report, our disclosure controls and procedures were not effective as of September 30, 2021, because of a material weakness in our internal control over financial reporting. A material weakness isoperating results for the current period. As a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatementresult of the Company’s annual or interimrecurring fair value measurement, our financial statements and results of operations may fluctuate quarterly based on factors which are outside our control. We expect that we will not be preventedrecognize non-cash gains or detected on a timely basis. Specifically,losses due to the Company’s management has concluded that our control around the interpretation and accounting for certain complex financial instruments issued by the Company was not effectively designed or maintained. This material weakness resulted in the restatementquarterly fair valuation of the Company’s interim financial statements for the quarters ended March 31, 2021 and June 30, 2021. Additionally, this material weakness could result in a misstatement of the financial instruments and related accounts and disclosures that would result in a material misstatement of the financial statements that would not be prevented or detected on a timely basis.
Disclosure controls and procedures are designed to ensure that information required to be disclosed by us in our Exchange Act reports is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms,NuScale Corp Warrants and that such informationgains or losses could be material.
Changesoptions are exercised, additional shares of Class A common stock will be issued, which will result in Internal Control Over Financial Reporting
There was no change in our internal control over financial reporting that occurred during the fiscal quarter ended September 30, 2021 covered by this Quarterly Report on Form 10-Q that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting except for the below:
Our principal executive officer and principal financial officer performed additional accounting and financial analyses and other post-closing procedures including consulting with subject matter experts relateddilution to the accountingholders of common stock and increase the number of shares eligible for resale in the public market. Sales of substantial numbers of such shares in the public market or the fact that such warrants may be exercised could adversely affect the prevailing market prices of Class A common stock.
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PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
None.
ITEM 1A. RISK FACTORS.
As of the datetarget of this Quarterly Report on Form 10-Q, there have been no material changes totype of litigation in the risk factors disclosed in our Form 10-K/A filed with the SEC on December 20, 2021, and except as set forth below, as of the date of this Quarterly Report, there have been no material changes with respect to those risk factors previously disclosed in our Registration Statement filed with the SEC. Any of these factorsfuture. Securities litigation against us could result in substantial costs and divert management’s attention from other business concerns, which could seriously harm our business.
The securities in which we invest the funds heldNuScale LLC Class B units they received in the Trust Account could bearrecapitalization of NuScale LLC, and upon the exchange of NuScale LLC Class B units for shares of NuScale Class A common stock as provided in the A&R NuScale LLC Agreement, a negative ratecorresponding number of interest, which could reduceshares of Class B common stock will be cancelled. Each share of NuScale Class B common stock represents one vote on matters submitted to the valuestockholders of NuScale and carries no economic interests. To the extent the Class B common stock constitutes a “security” that was offered and sold to Legacy NuScale Equityholders, the shares were sold in transactions not involving an underwriter and not requiring registration under Section 5 of the assets heldSecurities Act in trust such thatreliance on the per-share redemption amount receivedexemption afforded by public shareholders may be less than $10.00 per share.Section 3(a)(9) or Section 4(a)(2) thereof.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.
On November 27, 2020, we consummated our Initial Public Offering of 23,000,000 Units, inclusive of 3,000,000 Units sold to the underwriters upon the underwriters’ election to fully exercise their over-allotment option, at a price of $10.00 per Unit, generating total gross proceeds of $230,000,000. Cowen and Company, LLC and Wells Fargo Securities, LLC acted as book-running managers. Drexel Hamilton, LLC and Siebert Williams Shank and Co., LLC acted as co-managers. The securities sold in the offeringoptions were registeredexempt under Rule 701 under the Securities Act on registration statements on Form S-1 (No. 333-249067). The registration statements became effective on November 23, 2020.
Simultaneously with the consummation of the Initial Public Offering and the full exercise of the over-allotment option, we consummated a private placement of 8,900,000 Private Placement Warrants to our Sponsor at a price of $1.00 per Private Placement Warrant, generating total proceeds of $8,900,000. Such securities were issued pursuant to the exemption from registration contained in Section 4(a)(2) of theAct.
The Private Placement Warrants are identical to the Public Warrants underlying the Units sold in the Initial Public Offering, except that the Private Placement Warrants are not transferable, assignable or salable until 30 days after the completion of a Business Combination, subject to certain limited exceptions.
Of the gross proceeds received from the Initial Public Offering including the over-allotment option, and the sale of the Private Placement Warrants, $232,300,000 was placed in the Trust Account.
We paid a total of $3,850,000 in underwriting discounts, net of $750,000 reimbursements from the underwriters, and commissions and $567,354 for other offering costs related to the Initial Public Offering. In addition, the underwriters agreed to defer $8,050,000 in underwriting discounts and commissions.
For a description of the use of the proceeds generated in our Initial Public Offering, see Part I,
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ITEM 3. DEFAULTS UPON SENIOR SECURITIES.
None.
ITEM 4. MINE SAFETY DISCLOSURES.
Not applicable.
ITEM 5. OTHER INFORMATION.
None.
27
Exhibits.
ITEM 6. EXHIBITS
The following exhibits are filed as part of, or incorporated by reference into, this Quarterly Report on Form 10-Q.
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Number | Description | ||||||||||
2.1† | |||||||||||
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2.3 | |||||||||||
3.1 | |||||||||||
3.2 | |||||||||||
4.1 | |||||||||||
4.2 | |||||||||||
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10.3 | |||||||||||
10.4+ | |||||||||||
10.5 | Amended and Restated Registration Rights Agreement dated May 2, 2022, by and among NuScalePower Corporation, Spring Valley Acquisition Sponsor, LLC, SV Acquisition Sponsor Sub, LLC,and certain members of NuScale Power, LLC and shareholders of NuScale Power Corporation(incorporated by reference to Exhibit 10.10 to the Current Report on Form 8-K filed on May 5,2022) | ||||||||||
10.6 | |||||||||||
10.7 | |||||||||||
10.8+ | |||||||||||
10.9+ | |||||||||||
10.10+ | |||||||||||
10.11+ |
Exhibit Number | Description | |||||||
10.12 | ||||||||
10.13 | ||||||||
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31.1 | ||||||||
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| XBRL Instance Document | |||||||
| XBRL Taxonomy Extension Schema Document | |||||||
101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document | |||||||
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| XBRL Taxonomy Extension Definition Linkbase Document | |||||||
| XBRL Taxonomy Extension | |||||||
| XBRL Taxonomy Extension Presentation Linkbase Document | |||||||
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| Cover Page Interactive Data File (formatted as Inline |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
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| By: | /s/ | ||||||
Name: |
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Title: | Chief Executive Officer | |||||||
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| By: | /s/ | ||||||
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Title: | Chief Financial Officer | |||||||
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