Spring Valley Acquisition Corp. II(SVIIU) - 2024 Q4 - Annual Report

PART I Item 1. Business Spring Valley Acquisition Corp. II is a blank check company (SPAC) focused on sustainability industry acquisitions, with a 36-month deadline from its October 2022 IPO and a trust account holding $25.55 million as of December 31, 2024 - The company is a blank check company, or SPAC, formed to effect a merger, share exchange, asset acquisition, or similar business combination[21] - The primary focus for an initial business combination is the sustainability industry, targeting sectors like renewable energy, energy storage, resource optimization, environmental services, and grid infrastructure[22] - The company must complete its initial business combination within 36 months from the closing of its Initial Public Offering (IPO), or it will cease operations and liquidate the trust account[121][122] - The initial business combination must have an aggregate fair market value of at least 80% of the assets held in the trust account at the time of the agreement[56] - Public shareholders have redemption rights, allowing them to redeem their Class A ordinary shares for a pro-rata portion of the trust account upon completion of a business combination[100] Financial Position as of December 31, 2024 | Metric | Value | | :--- | :--- | | Funds held in trust account | $25,554,084 | Item 1A. Risk Factors The company faces significant risks as a SPAC, including the challenge of completing a business combination within the deadline, potential delisting, conflicts of interest, and a 'going concern' doubt from its auditor - The company has no operating history or revenues, providing no basis for investors to evaluate its ability to achieve its business objective[153] - The independent registered public accounting firm's report expresses substantial doubt about the company's ability to continue as a 'going concern' if a business combination is not completed by the deadline of October 17, 2025[154][277] - The requirement to consummate a business combination within 36 months may give potential targets leverage in negotiations and limit due diligence time, especially as the deadline approaches[167][168] - Intense competition from other SPACs and private equity funds for attractive targets could increase acquisition costs or result in the inability to find a suitable business combination[178][201] - The Sponsor and management have conflicts of interest, as they will lose their entire investment in founder shares and private placement warrants if a business combination is not completed, potentially incentivizing them to approve a riskier deal[264][260] - If the company is deemed an investment company under the Investment Company Act of 1940, it could be forced to liquidate, particularly since it did not enter a definitive agreement within 18 months or consummate a deal within 24 months of its IPO[187][192] Item 1B. Unresolved Staff Comments The company reports no unresolved staff comments - None[346] Item 1C. Cybersecurity As a blank check company, it has no direct operational cybersecurity threats but relies on third-party technologies, with board oversight and no incidents since IPO - The company has no business operations and therefore no direct operational cybersecurity threats[347] - The company relies on third-party digital technologies and their associated security processes, with the board of directors responsible for overseeing these risks[347] - No cybersecurity incidents have occurred since the Initial Public Offering[347] Item 2. Properties The company's executive offices are in Dallas, TX, provided by a Sponsor affiliate for a monthly fee of $10,000 covering space and administrative support - The company's executive offices are located in Dallas, TX, with the use of this space part of a $10,000 per month administrative services agreement with an affiliate of the Sponsor[348] Item 3. Legal Proceedings Management is unaware of any material litigation, arbitration, or governmental proceedings against the company or its officers and directors - There is no material litigation pending against the company[349] Item 4. Mine Safety Disclosures This item is not applicable to the company - None[350] PART II Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities The company's securities trade on Nasdaq, has not paid dividends, and experienced significant shareholder redemptions in 2024, reducing outstanding shares and trust account balance - The company's securities trade on Nasdaq under the symbols SVIIU (Units), SVII (Class A Shares), SVIIR (Rights), and SVIIW (Warrants)[353] - No cash dividends have been paid to date, and none are intended prior to the completion of an initial business combination[355] Shareholder Redemptions in 2024 | Date | Shares Redeemed | Redemption Price/Share | Aggregate Redemption | Trust Account Balance (Post) | Class A Shares Outstanding (Post) | | :--- | :--- | :--- | :--- | :--- | :--- | | Jan 10, 2024 | 8,362,234 | ~$10.85 | ~$90.7M | ~$158.8M | 14,637,766 | | Nov 13, 2024 | 12,424,337 | ~$11.43 | ~$142.1M | ~$25.1M | 9,880,095 | Item 6. [Reserved] This item is reserved Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations As a non-operating SPAC, the company generates interest income from its Trust Account, reported approximately $6.8 million net income in 2024, extended its business combination deadline to October 2025, and faces a 'going concern' risk due to reduced trust funds and a working capital deficit - The company is a pre-business combination SPAC, with all activity related to its formation, IPO, and search for an acquisition target, generating non-operating interest income from its trust account[369][370] - The deadline to consummate a business combination was extended to October 17, 2025, following shareholder approval[377] - Management has determined that there is substantial doubt about the Company's ability to continue as a going concern due to its liquidity condition and the mandatory liquidation requirement if a business combination is not completed by the deadline[393][394] - In 2024, both underwriters of the IPO, Citigroup Global Markets Inc. and Guggenheim Securities, waived their rights to receive their portions of the deferred underwriting commission, totaling approximately $8.0 million[404][405] Results of Operations (Year Ended Dec 31) | Metric | 2024 | 2023 | | :--- | :--- | :--- | | Income from Investments in Trust Account | ~$7.6M | ~$11.85M | | General & Administrative Expenses | $842,565 | $820,457 | | Net Income | ~$6.8M | ~$10.97M | Item 7A. Quantitative and Qualitative Disclosures About Market Risk As a smaller reporting company, the company is not required to provide the information for this item - The company is a smaller reporting company and is not required to provide this information[429] Item 8. Financial Statements and Supplementary Data The company's financial statements and supplementary data are included following Item 15 of the report - Financial statements are included in the report, starting on page F-1[430][537] Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure The company reports no changes in or disagreements with its accountants on accounting and financial disclosure - None[431] Item 9A. Controls and Procedures Management concluded that disclosure controls and internal control over financial reporting were effective as of December 31, 2024, with no material changes reported - Management concluded that the company's disclosure controls and procedures were effective as of December 31, 2024[432] - Management determined that the company maintained effective internal control over financial reporting as of December 31, 2024, based on the COSO 2013 framework[436] - As an emerging growth company, this report does not include an attestation report from the independent registered public accounting firm regarding internal controls[437] Item 9B. Other Information No director or officer adopted, modified, or terminated any Rule 10b5-1 or non-Rule 10b5-1 trading arrangement during the fourth quarter of 2024 - No director or officer engaged in any new or modified trading arrangements under Rule 10b5-1 during the quarter[439] Item 9C. Disclosure Regarding Foreign Jurisdictions That Prevent Inspections This item is not applicable - Not applicable[440] PART III Item 10. Directors, Executive Officers and Corporate Governance This section details the company's executive officers and seven-member board, including four independent directors, established committees, and discloses potential conflicts of interest arising from other obligations - The board of directors is divided into three classes with staggered three-year terms[450] - The board has determined that directors David Buzby, Richard Thompson, David Levinson, and Sharon Youngblood are independent under Nasdaq listing standards[454] - The company has established an Audit Committee, Nominating Committee, and Compensation Committee, each composed of independent directors[455] - Potential conflicts of interest exist as executive officers and directors have fiduciary or contractual obligations to other entities, which may require them to present business opportunities to those entities before the company[471][475] Officers and Directors | Name | Position | | :--- | :--- | | Christopher Sorrells | Chief Executive Officer and Chairman | | Robert Kaplan | Chief Financial Officer and VP of Business Development | | David Buzby | Director | | Richard Thompson | Director | | David Levinson | Director | | Kevin Pohler | Director | | Sharon Youngblood | Director | Item 11. Executive Compensation No cash compensation has been paid to executive officers or directors, but an affiliate of the Sponsor receives $10,000 monthly for administrative services, and a clawback policy for incentive compensation was adopted in March 2024 - No cash compensation has been paid to executive officers or directors for services rendered[489] - An affiliate of the Sponsor is reimbursed $10,000 per month for office space and administrative support[489] - On March 27, 2024, the board adopted a clawback policy to recover incentive-based compensation from current and former executive officers in the event of a required accounting restatement[493] Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters As of April 9, 2025, the Sponsor is the largest beneficial owner with approximately 76.4% of ordinary shares, followed by Millennium Management LLC and The Goldman Sachs Group, Inc Beneficial Ownership as of April 9, 2025 | Holder | Approximate Percentage of Ownership | | :--- | :--- | | Spring Valley Acquisition Sponsor II, LLC | 76.4% | | Millennium Management LLC | 10.5% | | The Goldman Sachs Group, Inc. | 7.3% | | All officers and directors as a group (7 people) | * (less than 1%) | Item 13. Certain Relationships and Related Transactions, and Director Independence This section outlines related party transactions, including the Sponsor's purchase of founder shares and private placement warrants, monthly contributions to the trust account for extension, and administrative service fees, all reviewed by the audit committee - The Sponsor purchased 7,666,667 founder shares (post-capitalization) for an aggregate price of $25,000[501] - The Sponsor purchased 13,350,000 private placement warrants at $1.00 per warrant, for a total of $13,350,000, simultaneously with the IPO[505] - To support the extension of the combination period, the Sponsor agreed to contribute $150,000 per month to the Trust Account, up to a maximum of $3,150,000; as of Dec 31, 2024, $1,500,000 had been contributed[506] - The company pays an affiliate of the Sponsor $10,000 per month for office space and administrative services[511] - The audit committee has adopted a charter for reviewing and approving all related party transactions[517] Item 14. Principal Accountant Fees and Services The company's independent registered public accounting firm is WithumSmith+Brown, PC, with audit fees of approximately $71,500 for 2024 and $100,880 from inception through 2023 Accountant Fees | Period | Audit Fees | | :--- | :--- | | Year ended Dec 31, 2024 | ~$71,500 | | Inception through Dec 31, 2023 | ~$100,880 | PART IV Item 15. Exhibit and Financial Statement Schedules This section lists the financial statements and all exhibits filed as part of the Annual Report on Form 10-K, with financial statements indexed on page F-1 - This section contains the index of exhibits filed with the report, including governing documents, warrant agreements, and various contracts with the Sponsor[527][529] Item 16. Form 10–K Summary This item is not applicable - None[532] Financial Statements Report of Independent Registered Public Accounting Firm The independent auditor, WithumSmith+Brown, PC, issued a fair presentation opinion but included a 'Going Concern' paragraph due to the mandatory liquidation deadline of October 17, 2025 - The auditor's opinion states that the financial statements are fairly presented in all material respects[540] - A 'Going Concern' paragraph was included, citing substantial doubt about the company's ability to continue operations if a business combination is not completed by October 17, 2025[541] Financial Statements Tables The financial statements show a significant decrease in Trust Account investments from $249.3 million to $25.6 million due to redemptions, with net income of $6.8 million for 2024 and a working capital deficit of approximately $1.2 million Balance Sheet Summary (as of Dec 31) | Account | 2024 | 2023 | | :--- | :--- | :--- | | Cash | $495,352 | $1,240,671 | | Investments held in Trust Account | $25,554,084 | $249,254,022 | | Total Assets | $26,110,797 | $250,575,588 | | Total Liabilities | $1,708,768 | $8,224,062 | | Class A ordinary shares subject to possible redemption | $25,554,084 | $249,254,022 | | Total Shareholders' Deficit | ($1,152,055) | ($6,902,496) | Statement of Operations Summary (Year Ended Dec 31) | Account | 2024 | 2023 | | :--- | :--- | :--- | | Loss from operations | ($842,565) | ($875,462) | | Income from investments held in Trust Account | $7,611,956 | $11,815,666 | | Net Income | $6,812,395 | $10,971,101 | Notes to Financial Statements The notes detail the business combination deadline extension to October 2025, approximately $232.8 million in 2024 shareholder redemptions, Sponsor contributions to the trust account, and the waiver of approximately $8.1 million in deferred underwriting fees - The deadline to complete a Business Combination was extended to October 17, 2025[572] - In 2024, shareholders redeemed a total of 20,786,571 Class A shares for an aggregate amount of approximately $232.8 million[575][580] - The Sponsor has agreed to make monthly contributions of $150,000 to the Trust Account to support the extension, with $1,500,000 contributed as of December 31, 2024[576][656] - The company's independent directors and Sponsor converted a total of 7,666,666 Class B founder shares into Class A shares not subject to redemption[575][644] - The IPO underwriters waived their rights to the entire deferred underwriting commission of approximately $8.1 million in 2024[660][661][662]