Westlake Village-based Energy Vault first disclosed details of its financial performance in an Oct. 18 filing with the U.S. Securities and Exchange Commission, ahead of its share takeover bid and its ongoing merger with a special purpose acquisition company.
Energy Vault, a green energy storage company, has agreed to go public through a merger with Novus Capital Corp. in a deal announced on September 9 and valued up to $ 388 million. Once the deal is done, the combined company will have an enterprise value of around $ 1.1 billion, according to a Sept. 9 press release from Energy Vault.
Norvus is a SPAC that trades on the New York Stock Exchange under the ticker symbol NXU. Once the merger is complete, which is expected to take place in the first quarter of 2022, Energy Vault will begin trading on the NYSE under the symbol GWHR.
In 2020 and 2021, PSPC transactions have become almost as common as traditional IPOs. Russell Terry, a lawyer at Reicker Pfay, Pyle, & McRoy in Santa Barbara with expertise in PSPC, told the Business Times that there are various reasons why companies choose to go public through a PSPC.
“Some people think they are more profitable, in many cases they are faster, and you can have safer prices than a traditional IPO because it is a privately traded transaction,” said Terry. “There are also benefits for investors, because in an SPAC, investors basically have the right to get their money back if they are not happy with the transaction. “
PSPC investors get their money back if a deal between Novus and Energy Vault or other business entity is not reached by February 8, 2023.
Novus Corp. currently holds $ 288 million from its own IPO which was completed on February 8. This total could decrease if investors decide to pull out, although none have yet.
An additional $ 100 million was raised through a PIPE, or private investment in a public entity, with 10 million shares sold at $ 10 per share. These funds will be paid to the combined company once the transaction is completed, according to the record.
The combination of a PSPC merger and a PIPE “is like a double IPO,” Terry said. “The PSPC IPO is itself the first IPO and it raises funds from the public. PIPE is closer to the second IPO, where the shell knows the target company… and it negotiates a PIPE to raise additional funds for the company in case some of the original stock investors demand their redemption.
If none of the public shareholders exercise their repurchase rights, Energy Vault shareholders will own 108.9 million shares of the combined company, representing about 70.7% of the total.
According to the record, 28.75 million shares of the combined companies will be made available to the public, representing 18.6% of the total shares outstanding.
PIPE subscribers will own 6.5% of the shares while the original shareholders will own 3.8% of the shares.
The record also indicates that Energy Vault CEO Robert Piconi will own 9.9% of the combined company, which equates to around 15.2 million shares.
Novus shares closed at $ 9.90 on October 19. At that price, Piconi’s shares would be worth at least $ 150 million, although that total will likely increase once the combined company begins trading.
Henry Elkus, CEO of Helena – who invested $ 20 million in Energy Vault in July – will own 6.5% of the combined company. Andrea Pedretti, co-founder of Energy Vault alongside Piconi and CTO, will own 2.3%.
SoftBank Vision Fund, an investor in Energy Vault’s $ 100 million Series C fundraiser in August, will own 10% of the combined company. IdeaLab X, an incubator where Piconi said Energy Vault was founded, will also own more than 10% of the company.
According to the SEC filing from Oct. 18, Piconi earned $ 377,968 as CEO of Energy Vault in 2020, of which around $ 42,000 came from bonuses. Pedretti earned $ 283,655 in 2020 while product manager Marco Terruzzin earned $ 322,985.
Trruzzin earned $ 100,000 in bonus salary and received 20,000 Energy Vault common shares.
Energy Vault develops gravity energy storage systems that the company claims are more durable and efficient than other methods of energy storage, such as batteries. The system uses cranes that lift heavy bricks to store renewable energy, then lower them to release it.
Energy Vault recently achieved its first major commercial success, having connected its first energy storage system to the Swiss national grid in 2021.
But the business has yet to be profitable. In 2020, its losses exceeded $ 24 million, more than double its losses in 2019. In the first half of 2021, the company recorded a net loss of $ 12.4 million.
Energy Vault has not disclosed its revenue figures for any year, including until 2021.
Its new SEC filing indicates that the company expects to incur significant expenses and continued losses for the foreseeable future. Its systems have significant upfront costs and it relies on renewables to become more popular than it is today.
“Even if we achieve profitability, we may be unable to maintain or increase our profitability in the future,” the record says.
As of June 30, Energy Vault had total assets of $ 33 million, including $ 17.6 million in cash and cash equivalents, and debt totaling $ 6.4 million.