United States securities and exchange commission logo
June 4, 2021
Christopher Sorrells
Chief Executive Officer
Spring Valley Acquisition Corp.
2100 McKinney Ave, Suite 1675
Dallas, TX 75201
Re: Spring Valley
Acquisition Corp.
Registration
Statement on Form S-4
Filed May 10, 2021
File No. 333-255978
Dear Mr. Sorrells:
We have reviewed your registration statement and have the
following comments. In
some of our comments, we may ask you to provide us with information so
we may better
understand your disclosure.
Please respond to this letter by amending your registration
statement and providing the
requested information. If you do not believe our comments apply to your
facts and
circumstances or do not believe an amendment is appropriate, please tell
us why in your
response.
After reviewing any amendment to your registration statement and
the information you
provide in response to these comments, we may have additional comments.
Registration Statement on Form S-4, Filed May 10, 2021
Letter to Shareholders, page 0
1. Please prominently
quantify the Merger Consideration to be paid by Spring Valley in
relation to the
business combination both in the letter to Spring Valley Acquisition Corp.
shareholders and the
Summary of the Proxy Statement/Prospectus, rather than only
referring to the
defined term.
Summary of the Proxy Statement/Prospectus, page 1
2. Please expand the
Exclusivity bullet on page 9 to explain what this refers to.
Christopher Sorrells
FirstName LastNameChristopher
Spring Valley Acquisition Corp. Sorrells
Comapany
June 4, 2021NameSpring Valley Acquisition Corp.
June 4,
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FirstName LastName
Risk Factors
AeroFarms' ability to use net operating loss carryforwards and other tax
attributes may be
limited..., page 38
3. We note your statement that it is likely that the Business Combination
would result in an
ownership change and if an ownership change is deemed to have
occurred, New
AeroFarms' carryforwards may be limited. Please revise to explain how
the limitation on
the use of carryforwards is determined if there is an ownership
change.
Business Combination Proposal
The Merger Agreement, page 67
4. Please revise page 79 to disclose the number of shares that will be
covered by the
Registration Rights Agreement and the certain other holders
party thereto.
5. Please revise to define Series 2 Preferred Stock Exchange Ratio,
Common Stock
Exchange Ratio and Exchange Ratio. Please also state the value of such
ratios assumed in
this proxy statement/prospectus.
Background of the Business Combination, page 81
6. Please revise page 82 to provide a more detailed description of the
process used in
eliminating potential business combination candidates as you
progressed from 18
candidates with which you signed non-disclosure agreements to Dream
Holdings. Include
more specific information about the most material negotiations,
including the industry and
size of such companies and why discussions ended.
7. Please revise to provide more information about the negotiation of the
material terms of
the Merger Agreement, including any material changes from the letter
of intent, and which
party proposed which changes.
The Spring Valley Board's Reasons for the Business Combination, page 84
8. You indicate on page 174 that New AeroFarms will evaluate how to
meet the reporting
obligations required as a public benefit corporation under Delaware
law, and the
frequency with which it intends to issue such reports. To the
extent this indicates you
have not finalized your plans for your reporting obligations as a
public benefit
corporation, where you discuss New AeroFarms status as a public
benefit corporation and
certified B Corp. designation as a factor supporting the board s
decision to approve the
business combination on page 85, please acknowledge that you have not
finalized plans
for measuring the New AeroFarms public benefit performance.
9. Page 86 says Spring Valley s management team conducted a valuation
analysis of Dream
Holdings. We also note that page 69 says the parties agreed to the
Exchange Ratio
assuming a Dream Holdings equity value of approximately $800,000,000,
and
additionally, in your public statements you have referenced using
comparisons to other
Christopher Sorrells
FirstName LastNameChristopher
Spring Valley Acquisition Corp. Sorrells
Comapany
June 4, 2021NameSpring Valley Acquisition Corp.
June 4,
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FirstName LastName
sustainable high growth food companies like Beyond Meat, Fresh Pet and
AppHarvest, as
well as at high growth food and beverage. Please revise your
disclosure to summarize the
following in relation to the valuation analysis:
how the projected financial information described starting on page
87 was used, both
quantitatively and qualitatively;
in relation to the projected financial information, whether, and
if so, how, the passage
of time was considered in relation to the six-year projection
period;
any precedent transactions or comparisons to other companies
considered; and
any transaction multiples considered in relation to industry
medians, if available.
Certain Dream Holdings Projected Financial Information, page 87
10. We note your disclosure that Dream Holdings provided the Spring Valley
board with
internally-derived forecasts for each of the years in the six-year
period ending December
31, 2026. We also note that you have disclosed only the "key elements"
of
those projections on page 88. Please revise this section to disclose
all material projections
considered by the Spring Valley board, rather than limiting the
information to the "key
elements" thereof.
11. Please revise page 88 to describe when the remaining of the 16
facilities are projected to
be completed as well as any other material assumptions, such as
whether berry production
is taken into account.
Interests of Spring Valley's Directors and Executive Officers in the Business
Combination, page
89
12. We note disclosure on page 90 and elsewhere regarding conflicts of
interest in
circumstances where the founder shares become worthless without an
initial business
combination. Please disclose in quantitative and qualitative terms how
economic
incentives could result in substantial misalignment of interests in an
initial business
combination. For example, since your sponsor acquired a 20% stake for
approximately
$0.003 per share and the offering is for $10.00 a share, the insiders
could make a
substantial profit after the initial business combination even if
public investors experience
substantial losses.
Governing Documents Proposals D - Approval of Other Changes in Connection with
Adoption
of the Proposed Governing Documents, page 105
13. We note that Governing Documents Proposal D is seeking stockholder
approval of all
other changes necessary or, as mutually agreed in good faith by Spring
Valley and Dream
Holdings, desirable in connection with the replacement of the Interim
Delaware
Certificate of Incorporation and Interim Delaware Bylaws with the
Proposed Certificate of
Incorporation and the Proposed Bylaws. Additionally, on page 105
you state that certain
material changes between the Existing Governing Documents and the
Proposed
Governing Documents have been unbundled into distinct Governing
Documents
Christopher Sorrells
FirstName LastNameChristopher
Spring Valley Acquisition Corp. Sorrells
Comapany
June 4, 2021NameSpring Valley Acquisition Corp.
June 4,
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FirstName LastName
Proposals. Please ensure all material differences are presented as
separate proposals to be
voted upon. Please refer to Rule 14a-4(a)(3) of Regulation 14A and the
Compliance and
Disclosure Interpretations relating to Rule 14a-4(a)(3), which is
available on our website.
14. We note your statement on page 105 that the selection of the Court of
Chancery as the
exclusive forum for certain actions shall not preclude the filing
of claims in the federal
district courts of the United States of under the Securities Act or
under the Exchange Act.
Please reconcile this disclosure with page 216, where you state that
it is mandatory to file
such claims in federal district court: the federal district courts
of United States shall be
the sole and exclusive forum for resolving any action asserting a
claim arising under the
Securities Act. Additionally, please revise page 216 or elsewhere
to disclose any
uncertainty regarding enforceability of your exclusive forum provision
and clearly
describe any risks or other impacts on investors. Risks may include,
but are not limited to,
increased costs to bring a claim and that these provisions can
discourage claims or limit
investors ability to bring a claim in a judicial forum that they
find favorable.
Nasdaq Proposal, page 108
15. Please revise to clarify the role of Spring Valley Investors,
mentioned on page 108.
Information about Dream Holdings, Inc., page 163
16. We note your discussion on page 165 regarding the comparison of your
products to
organic products. Please revise to more explicitly state the criteria
for organic products
and why your products are not organic.
17. We note your statement on page 166: In a recent customer survey,
for example, we
received a best-in-class Net Promoter Score over 50% higher than the
vertical farming
segment average. Please revise page 166 to explain the Net Promoter
Score metric,
including the basis for the vertical farming segment average Net
Promoter Score.
18. We note your disclosure on pages 168-169 and elsewhere concerning
plant genetics.
Please revise to state whether your plants are considered genetically
modified, and if so
the implications of such designation, such as regulatory implications.
19. Your graphic on page 170 indicates that you actively participate in an
NIH trial and you
are growing an API for a separate trial, however, the disclosure on
page 171 indicates
there is only one trial that you are involved with. If you are only
involved in one trial
then please revise the graphic accordingly. Otherwise, please revise
page 171 to describe
both trials.
20. Please revise page 174 to disclose (i) the specific technologies to
which such patents
relate, (ii) how many of the 53 patents are owned, (iii) the type of
patent protection, (iv)
the patent expiration dates and (v) the jurisdictions covered.
21. Please revise your disclosure to describe the competitive business
conditions and your
competitive position in the industry and methods of competition.
Christopher Sorrells
FirstName LastNameChristopher
Spring Valley Acquisition Corp. Sorrells
Comapany
June 4, 2021NameSpring Valley Acquisition Corp.
June 4,
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FirstName LastName
Key Components of Results of Operations
Cost of Goods Sold, page 181
22. We note that depreciation of manufacturing equipment is included in
your cost of goods
sold. We also note from your disclosure on pages F-23 and F-35 that
your depreciation
and amortization expense for the years ended December 31, 2020 and
2019 was
$1,505,387 and $1,251,965, respectively. Please quantify the amount of
depreciation
expense included in your cost of goods sold and confirm that your
income statement
presentation complies with SAB Topic 11B.
Results of Operations, page 182
23. Please expand your discussion of revenue, cost of sales and gross loss
from Farm Products
and Research and Development Services to analyze the relative impact
and contribution of
these separate markets, providing quantified information where
available and useful for
understanding the business through the eyes of management. See SEC
Release 33-8350.
Dream Holdings Managements Discussion and Analysis of Financial Condition and
Results of
Operations
Commitments and Contingencies, page 186
24. We note that you have not included your notes payable or loans in your
contractual
obligations table. Please explain to us why these obligation were not
included in your
table or revise your disclosure to include these obligations.
Beneficial Ownership of Securities, page 201
25. We note footnote 2 to the beneficial ownership table on page 202.
Please revise to state
the amount of the interest Mr. Quinn holds in the Sponsor and/or
Sponsor Parent. Please
also identify the natural person or persons who have voting and/or
investment control of
the shares held by such entities. Additionally, if applicable, revise
to state whether the
amount of shares shown for Mr. Quinn includes the shares that will be
issued to Pearl in
the PIPE.
26. Please identify the natural person or persons who have voting and/or
investment control of
the shares held by GSR Greens Inc., DEVA US Inc. and AF Holding
Limited.
Proposed Conversion of New AeroFarms to a Public Benefit Corporation, page 207
27. We note your disclosure that New AeroFarms is required to publicly
disclose a report at
least biennially. The Delaware General Corporation Law governing
public benefit
corporations permits public benefit corporations to report the
assessment of their public
benefit performance more frequently than biennially if required by the
company s
certificate of incorporate or bylaws. Please discuss what
consideration you have given to
the frequency of providing this report. In addition, disclose how you
will provide these
reports to stockholders and when you expect to provide the first
report.
Christopher Sorrells
FirstName LastNameChristopher
Spring Valley Acquisition Corp. Sorrells
Comapany
June 4, 2021NameSpring Valley Acquisition Corp.
June 4,
Page 6 2021 Page 6
FirstName LastName
28. Please discuss the factors New AeroFarms will consider in determining
the objectives and
standards by which the public benefit performance will be measured.
Please also disclose
how shareholders will understand whether the company has met those
objectives and
standards and whether the company has developed any key performance
metrics to
measure success.
Comparison of Corporate Governance and Shareholder Rights, page 209
29. We note your table starting on page 209, which is a summary outlining
important
similarities and differences in the corporate governance and
stockholder/shareholder rights
associated with each of Spring Valley and New AeroFarms according to
applicable law
and/or the organizational documents of Spring Valley and New
AeroFarms. Please
consider expanding this tabular disclosure to also summarize key
differences of a
traditional Delaware corporation and a Delaware public benefit
corporation. For example,
consider describing differences in director duties, director
liability, conflicts of interest,
actions to enforce the public benefit, notices, biennially reporting
and common law
fiduciary duties in transactions for corporate control.
Note 1 - Business and basis of presentation
Segment information, page F-26
30. We note that in March 2020, you began establishing an R&D Centre in
Abu Dhabi. If
revenues or long-lived assets attributed to foreign countries are
material, revise your
disclosures to provide the entity wide information required by ASC
paragraphs 280-10-
50-38 to 50-42.
Consolidated Financial Statements of Dream Holdings, Inc. and its Subsidiaries
Note 4 - Prepaid expenses and other current assets, page F-34
31. Please describe the significant terms and conditions of your Grow NJ
tax credit sale
receivable.
Exhibits
32. Please file your Danville, New Jersey (212 Rome Street) and Abu Dhabi
leases, the
Spring Valley Letter Agreement, the Sponsor Letter Agreement and the
executive
employment agreement with David Rosenberg as exhibits.
We remind you that the company and its management are responsible for
the accuracy
and adequacy of their disclosures, notwithstanding any review, comments, action
or absence of
action by the staff.
Refer to Rules 460 and 461 regarding requests for acceleration. Please
allow adequate
time for us to review any amendment prior to the requested effective date of
the registration
statement.
Christopher Sorrells
Spring Valley Acquisition Corp.
June 4, 2021
Page 7
You may contact Eric Atallah at 202-551-3663 or Terence O'Brien at
202-551-3355 if
you have questions regarding comments on the financial statements and related
matters. Please
contact Margaret Schwartz at 202-551-7153 or Laura Crotty at 202-551-7614 with
any other
questions.
Sincerely,
FirstName LastNameChristopher Sorrells
Division of
Corporation Finance
Comapany NameSpring Valley Acquisition Corp.
Office of Life
Sciences
June 4, 2021 Page 7
cc: Matthew R. Pacey, Esq.
FirstName LastName