As filed with the Securities and Exchange Commission on July 8, 2021

No. 333-255978​

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

Amendment No. 2
to

FORM S-4

REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933​

Spring Valley Acquisition Corp.*
(Exact name of registrant as specified in its charter)

2100 McKinney Ave, Suite 1675
Dallas, TX 75201
214-308-5230

(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)

Christopher Sorrells
Chief Executive Officer
2100 McKinney Ave, Suite 1675
Dallas, TX 75201
214-308-5230

(Name, address, including zip code, and telephone number, including area code, of agent for service)

Copies of all communications, including communications sent to agent for service, should be sent to:

Approximate date of commencement of proposed sale to the public: As soon as practicable after this Registration Statement becomes effective.

If the securities being registered on this Form are being offered in connection with the formation of a holding company and there is compliance with General Instruction G, check the following box. ☐

If this Form is filed to registered additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

*

Immediately prior to the consummation of the Business Combination, Spring Valley intends to effect a deregistration under the Cayman Islands Companies Act (As Revised) and a domestication under Part XII of the Delaware General Corporation Law, pursuant to which Spring Valley’s jurisdiction of incorporation will be changed from the Cayman Islands to the State of Delaware (the “Domestication”). All securities being registered will be issued by the continuing entity following the Domestication, which continuing entity will be renamed “AeroFarms, Inc.” following the Effective Time. As used herein, “New AeroFarms” refers to Spring Valley after giving effect to the Business Combination.

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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act. ☐

If applicable, place an X in the box to designate the appropriate rule provision relied upon in conducting this transaction:

Exchange Act Rule 13e-4(i) (Cross-Border Issuer Tender Offer) ☐

Exchange Act Rule 14d-l(d) (Cross-Border Third-Party Tender Offer) ☐

CALCULATION OF REGISTRATION FEE

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(1)

Represents (i) 23,000,000 Class A ordinary shares underlying units issued in the initial public offering of Spring Valley Acquisition Corp., a Cayman Islands exempted company (“Spring Valley”), (ii) 5,750,000 Class B ordinary shares held by Spring Valley’s initial shareholders, (iii) 3,333,333 shares of New AeroFarms Common Stock (as defined herein) that will be issued to holders of Convertible Notes (as defined herein) upon the automatic conversion of the principal and accrued interest due on the Convertible Notes outstanding immediately prior to the Effective Time (as defined herein) and (iv) up to 81,179,302 shares of New AeroFarms Common Stock that may be issued to the Dream Holdings Holders (as defined in the accompanying proxy statement/prospectus) in connection with the Business Combination (as defined in the proxy statement/prospectus forming part of this registration statement (the “proxy statement/prospectus”)).

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(2)

The number of warrants to acquire shares of New AeroFarms Common Stock being registered represents (i) 11,500,000 public warrants and (ii) 8,900,000 private placement warrants.

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(3)

Represents shares of New AeroFarms Common Stock to be issued upon the exercise of (i) 11,500,000 warrants to purchase Class A ordinary shares underlying units issued in Spring Valley’s initial public offering and (ii) 8,900,000 warrants to purchase Class A ordinary shares underlying units issued in a private placement simultaneously with the closing of Spring Valley’s initial public offering (“private placement warrants” and, together with the public warrants, the “Spring Valley warrants”). The Spring Valley warrants will convert into warrants to acquire shares of New AeroFarms Common Stock.

​

(4)

Pursuant to Rule 416(a) of the Securities Act of 1933, as amended (the “Securities Act”), there are also being registered an indeterminable number of additional securities as may be issued to prevent dilution resulting from stock splits, stock dividends or similar transactions.

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(5)

Estimated solely for the purpose of calculating the registration fee, based on the average of the high and low prices of the Class A ordinary shares of Spring Valley on the Nasdaq Capital Market on May 7, 2021 ($9.965 per Class A ordinary share). This calculation is in accordance with Rule 457(f)(1) of the Securities Act.

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(6)

Estimated solely for the purpose of calculating the registration fee, based on the average of the high and low prices of the Spring Valley public warrants on the Nasdaq Capital Market on May 7, 2021 ($0.88 per warrant). This calculation is in accordance with Rule 457(f)(1) of the Securities Act.

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(7)

No separate registration fee required pursuant to Rule 457(g) under the Securities Act of 1933, as amended.

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(8)

Calculated by multiplying the proposed maximum aggregate offering price of securities to be registered by 0.0001091.

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(9)

Previously paid.

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The registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until this Registration Statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.

THE INFORMATION IN THIS PRELIMINARY PROXY STATEMENT/PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. THE REGISTRANT MAY NOT SELL THE SECURITIES DESCRIBED IN THIS PRELIMINARY PROXY STATEMENT/PROSPECTUS UNTIL THE REGISTRATION STATEMENT FILED WITH THE SECURITIES AND EXCHANGE COMMISSION IS DECLARED EFFECTIVE. THIS PRELIMINARY PROXY STATEMENT/​PROSPECTUS IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT SOLICITING AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED.​

PRELIMINARY — SUBJECT TO COMPLETION, DATED JULY 8, 2021

PROXY STATEMENT FOR
EXTRAORDINARY GENERAL MEETING OF SPRING VALLEY ACQUISITION CORP.
PROSPECTUS FOR
113,262,635 SHARES OF COMMON STOCK AND 20,400,000 WARRANTS OF
SPRING VALLEY ACQUISITION CORP.
(AFTER ITS DOMESTICATION AS A PUBLIC BENEFIT CORPORATION INCORPORATED IN THE STATE OF DELAWARE, WHICH WILL BE RENAMED AEROFARMS, INC. IN CONNECTION WITH THE DOMESTICATION DESCRIBED HEREIN)

The board of directors of Spring Valley Acquisition Corp., a Cayman Islands exempted company (“Spring Valley”), has unanimously approved the transactions (collectively, the “Business Combination”) contemplated by that certain Agreement and Plan of Merger, dated as of March 25, 2021 (as it may be amended, supplemented or otherwise modified from time to time, the “Merger Agreement”), by and among Spring Valley, Spring Valley Merger Sub, Inc., a Delaware corporation and a wholly-owned direct subsidiary of Spring Valley (“Spring Valley Merger Sub”), and Dream Holdings, Inc., a Delaware public benefit corporation (“Dream Holdings”), a copy of which is attached to this proxy statement/prospectus as Annex A, including the deregistration of Spring Valley under the Cayman Islands Companies Act (As Revised) and the domestication of Spring Valley under Part XII of the Delaware General Corporation Law, pursuant to which Spring Valley’s jurisdiction of incorporation will be changed from the Cayman Islands to the State of Delaware (the “Domestication”). As described in this proxy statement/prospectus, Spring Valley’s shareholders are being asked to consider a vote upon each of the Domestication and the Business Combination, among other items. As used in this proxy statement/prospectus, “New AeroFarms” refers to Spring Valley after giving effect to the Business Combination.

This proxy statement/prospectus covers 113,262,635 shares of New AeroFarms Common Stock, which consists of (i) 23,000,000 shares of New AeroFarms Common Stock issuable upon conversion of the same number of Class A ordinary shares underlying units issued in connection with Spring Valley’s initial public offering, (ii) 5,750,000 shares of New AeroFarms Common Stock issuable upon conversion the same number of Class A ordinary shares received by the Sponsor (which holds 5,630,000 of such Class A ordinary shares) and three independent directors (together, the “Initial Shareholders”) in exchange for the same number of Class B ordinary shares pursuant to the Recapitalization (as defined herein); (iii) 20,400,000 shares of New AeroFarms Common Stock issuable upon exercise of the Spring Valley warrants; (iv) 3,333,333 shares of New AeroFarms Common Stock issuable upon the automatic conversion of the principal and accrued interest due on the Convertible Notes outstanding immediately prior to the Effective Time; and (v) 81,179,302 shares of New AeroFarms Common Stock issuable to the Dream Holdings Holders (as defined in the accompanying proxy statement/prospectus). The number of shares of New AeroFarms Common Stock that this proxy statement/prospectus covers represents the maximum number of shares that may be issued to holders of shares, warrants and equity awards of Dream Holdings in connection with the Business Combination, and the maximum number of shares that may be issuable to holders of Convertible Notes upon the automatic conversion of such Convertible Notes at the Closing (as more fully described in this proxy statement/prospectus), together with the shares issued or issuable to the existing shareholders and warrant holders of Spring Valley in connection with the Business Combination.

Spring Valley’s units, public shares and public warrants are currently listed on Nasdaq under the symbols “SVSVU,” “SV” and “SVSVW,” respectively. Spring Valley will apply for listing, to be effective at the time of the Business Combination, of New AeroFarms Common Stock and warrants on Nasdaq under the proposed symbols “ARFM” and “ARFMW,” respectively. It is a condition of the consummation of the Business Combination that Spring Valley receive confirmation from Nasdaq that New AeroFarms has been conditionally approved for listing on Nasdaq, but there can be no assurance such listing condition will be met or that Spring Valley will obtain such confirmation from Nasdaq. If such listing condition is not met or if such confirmation is not obtained, the Business Combination will not be consummated unless the Nasdaq condition set forth in the Merger Agreement is waived by the applicable parties.

The accompanying proxy statement/prospectus provides shareholders of Spring Valley with detailed information about the Business Combination and other matters to be considered at the extraordinary general meeting of Spring Valley. We encourage you to read the entire accompanying proxy statement/prospectus, including the Annexes and other documents referred to therein, carefully and in their entirety. You should also carefully consider the risk factors described in “Risk Factors” beginning on page 22 of the accompanying proxy statement/prospectus.

NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES REGULATORY AGENCY HAS APPROVED OR DISAPPROVED THE TRANSACTIONS DESCRIBED IN THE ACCOMPANYING PROXY STATEMENT/PROSPECTUS, PASSED UPON THE MERITS OR FAIRNESS OF THE BUSINESS COMBINATION OR RELATED TRANSACTIONS OR PASSED UPON THE ADEQUACY OR ACCURACY OF THE DISCLOSURE IN THE ACCOMPANYING PROXY STATEMENT/PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY CONSTITUTES A CRIMINAL OFFENSE.

The accompanying proxy statement/prospectus is dated                 , 2021, and
is first being mailed to Spring Valley’s shareholders on or about                 , 2021.

 

SPRING VALLEY ACQUISITION CORP.

2100 McKinney Ave, Suite 1675
Dallas, TX 75201

Dear Spring Valley Acquisition Corp. Shareholders:

You are cordially invited to attend the extraordinary general meeting (the “extraordinary general meeting”) of Spring Valley Acquisition Corp., a Cayman Islands exempted company (“Spring Valley”), at       Eastern Time, on           , 2021, at the offices of Kirkland & Ellis LLP located at 609 Main Street, Suite 4700, Houston, TX 77002, or at such other time, on such other date and at such other place to which the meeting may be adjourned. In the interest of public health, and due to the impact of the novel coronavirus (“COVID-19”), we are also planning for the meeting to be held virtually over the Internet at       , but the physical location of the meeting will remain at the location specified above for the purposes of our amended and restated memorandum and articles of association.

As further described in the accompanying proxy statement/prospectus, in connection with the Domestication, on the Closing Date prior to the Effective Time (as described below), among other things, (i) all of the outstanding shares of Spring Valley will be converted into common stock of a new Delaware public benefit corporation and all of the outstanding Spring Valley warrants will be converted into warrants to purchase common stock of such new Delaware public benefit corporation and (ii) the governing documents of Spring Valley will be amended and restated.

At the extraordinary general meeting, Spring Valley shareholders will be asked to consider and vote upon a proposal, which is referred to herein as the “Business Combination Proposal,” to approve and adopt the Agreement and Plan of Merger, dated as of March 25, 2021 (as may be amended, supplemented or otherwise modified from time to time, the “Merger Agreement”), by and among Spring Valley, Spring Valley Merger Sub, Inc., a Delaware corporation and a wholly-owned direct subsidiary of Spring Valley (“Spring Valley Merger Sub”), and Dream Holdings, Inc., a Delaware public benefit corporation (“Dream Holdings”), a copy of which is attached to the accompanying proxy statement/prospectus as Annex A, including the transactions contemplated thereby, and a proposal, which is referred to herein as the “Redomicile Proposal,” to approve the Domestication, and the replacement of the Existing Governing Documents with the Interim Delaware Certificate of Incorporation and the Interim Delaware Bylaws (copies of which are attached to the accompanying proxy statement/prospectus as Annex J and Annex K, respectively), including, (i) making Spring Valley’s corporate existence perpetual, and (ii) removing certain provisions related to our status as a blank check company that will no longer be applicable upon consummation of the Business Combination.

As further described in the accompanying proxy statement/prospectus, subject to the terms and conditions of the Merger Agreement, the following transactions will occur:

(a)

On the Closing Date, prior to the Effective Time, Spring Valley will change its jurisdiction of incorporation by deregistering as a Cayman Islands exempted company and continuing and domesticating as a corporation incorporated under the laws of the State of Delaware (the “Domestication”) (for further details, see “Proposal No. 2 — The Redomicile Proposal”).

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(b)

Spring Valley Merger Sub will merge with and into Dream Holdings (the “Merger”), with Dream Holdings as the surviving company in the Merger. After giving effect to the Merger, Dream Holdings shall be a wholly-owned subsidiary of New AeroFarms. In accordance with the terms and subject to the conditions of the Merger Agreement, at the Effective Time, among other things, (i) each share of common stock of Spring Valley Merger Sub issued and outstanding as of immediately prior to the Effective Time will be converted into and exchanged for one share of Dream Holdings Common Stock (as defined herein), (ii) all shares of Dream Holdings Common Stock and Dream Holdings Preferred Stock (as defined herein) held in the treasury of Dream Holdings or owned by Spring Valley or Spring Valley Merger Sub will be canceled without any conversion thereof, and no payment or distribution will be made with respect thereto, (iii) each share of Series 2 Preferred Stock (as defined in the Merger Agreement) issued and outstanding as of immediately prior to the Effective Time, other than any cancelled or dissenting shares, will receive approximately 1.0632

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shares of New AeroFarms Common Stock (as defined herein), (iv) each share of Dream Holdings Common Stock and Dream Holdings Preferred Stock issued and outstanding as of immediately prior to the Effective Time, other than any shares of Series 2 Preferred Stock, cancelled shares or dissenting shares, will receive a number of shares of New AeroFarms Common Stock (as defined herein) equal to the Common Stock Exchange Ratio (as defined in the Merger Agreement) with the Dream Holdings Preferred Stock (excluding the Series 2 Preferred Stock) receiving the consideration calculated on an as-converted basis, (v) each Dream Holdings option outstanding as of immediately prior to the Effective Time will be converted into an option to purchase a number of shares of New AeroFarms Common Stock as calculated in accordance with the Merger Agreement, (vi) each warrant of Dream Holdings issued and outstanding as of immediately prior to the Effective Time will be converted into a warrant exercisable on the terms and conditions set forth therein for the Merger Consideration (as defined in the Merger Agreement) that a holder of such warrant would have received if it had exercised such warrant immediately prior to the Effective Time (assuming such warrant was then fully vested) (for the avoidance of doubt, the maximum number of shares of New AeroFarms Common Stock to be issued to Dream Holdings Holders as Merger Consideration shall be approximately 81.1 million) and (vii) the outstanding principal and unpaid accrued interest due on the Convertible Notes outstanding immediately prior to the Effective Time will be automatically converted into a number of shares of New AeroFarms Common Stock at a purchase price of $9.00 per share, and such converted Convertible Notes will no longer be outstanding and will cease to exist.

Following consummation of the Business Combination, Spring Valley will change its name to “AeroFarms, Inc.” As used in the accompanying proxy statement/prospectus, “New AeroFarms” refers to Spring Valley after giving effect to the Business Combination.

In connection with the foregoing and concurrently with the execution of the Merger Agreement, Spring Valley entered into Subscription Agreements (the “Subscription Agreements”) with certain investors, including certain affiliates of Spring Valley (such investors, the “PIPE Investors”), pursuant to which the PIPE Investors have agreed to subscribe for and purchase, and Spring Valley has agreed to issue and sell to the PIPE Investors, an aggregate of 12,500,000 shares New AeroFarms Common Stock at a price of $10.00 per share, for aggregate gross proceeds of $125,000,000, prior to the Effective Time, on the terms and subject to the conditions set forth in the Subscription Agreements (the transactions contemplated by the Subscription Agreements, the “PIPE Financing”). The shares of New AeroFarms Common Stock to be issued pursuant to the PIPE Financing have not been registered under the Securities Act of 1933, as amended (the “Securities Act”), in reliance upon the exemption provided in Section 4(a)(2) of the Securities Act. Spring Valley has granted the PIPE Investors certain registration rights in connection with the PIPE Financing. The PIPE Financing is contingent upon, among other things, the substantially concurrent closing of the Business Combination.

In addition to the Business Combination Proposal and the Redomicile Proposal, you will also be asked to consider and vote upon (a) six (6) separate proposals to approve material differences between the Existing Governing Documents (as defined in the accompanying proxy statement/prospectus) and the proposed new amended and restated certificate of incorporation of New AeroFarms, including the conversion of Spring Valley into a public benefit corporation contemplated thereby, and the proposed new amended and restated bylaws of New AeroFarms, copies of which are attached to the accompanying proxy statement/​prospectus as Annex C and D, respectively, which are referred to herein collectively as the “Governing Documents Proposals,” ​(b) a proposal to approve, for purpose of complying with Nasdaq Listing Rule 5635, the issuance of New AeroFarms Common Stock in connection with the Business Combination and the PIPE Financing, which is referred to herein as the “Nasdaq Proposal,” ​(c) a proposal to approve and adopt the AeroFarms, Inc. 2021 Equity Incentive Plan, a copy of which is attached to the proxy statement/​prospectus as Annex H, which is referred to herein as the “Equity Incentive Plan Proposal” and (d) a proposal to adjourn the extraordinary general meeting to a later date or dates to the extent necessary, which is referred to herein as the “Adjournment Proposal.”

The Business Combination will be consummated only if the Business Combination Proposal, the Redomicile Proposal, the Governing Documents Proposals, the Nasdaq Proposal and the Equity Incentive Plan Proposal (collectively, the “Condition Precedent Proposals”) are approved at the extraordinary general

 

 

meeting. The Adjournment Proposal is not conditioned upon the approval of any other proposal. Each of these proposals is more fully described in the accompanying proxy statement/prospectus, which each shareholder is encouraged to read carefully and in its entirety.

The Adjournment Proposal provides for a vote to adjourn the extraordinary general meeting to a later date or dates (A) to the extent necessary to ensure that any required supplement or amendment to the accompanying proxy statement/prospectus is provided to Spring Valley shareholders or, if as of the time for which the extraordinary general meeting is scheduled, there are insufficient Spring Valley ordinary shares represented (either in person or by proxy) to constitute a quorum necessary to conduct business at the extraordinary general meeting, (B) in order to solicit additional proxies from Spring Valley shareholders in favor of one or more of the proposals at the extraordinary general meeting or (C) if Spring Valley shareholders redeem an amount of the public shares such that one of the conditions to consummate the Business Combination, that the aggregate cash proceeds to be received by Spring Valley from the trust account in connection with the Business Combination, plus all other cash and cash equivalents of Spring Valley, together with the aggregate gross proceeds from the PIPE Financing, equal no less than $225,000,000 (net of unpaid transaction expenses incurred or subject to reimbursement by Spring Valley), would not be satisfied at Closing (such aggregate proceeds, the “Closing Acquiror Cash,” and such condition to the consummation of the Business Combination, the “Closing Acquiror Cash Condition”).

In connection with the Business Combination, certain related agreements have been, or will be entered into on or prior to the closing of the Business Combination, including the Subscription Agreements, the Investor Rights Agreement, the Sponsor Support Agreement, the Dream Holdings Stockholder Support Agreement and the Registration Rights Agreement (each as defined in the accompanying proxy statement/​prospectus). See “Business Combination Proposal — Related Agreements” in the accompanying proxy statement/prospectus for more information.

Pursuant to the Existing Governing Documents, a holder of Spring Valley’s public shares may request that Spring Valley redeem all or a portion of such public shares for cash if the Business Combination is consummated. In order to redeem public shares underlying units, holders of units must elect to separate their units into the underlying public shares and warrants prior to exercising redemption rights with respect to such public shares. Holders that hold their units in an account at a brokerage firm or bank must notify their broker or bank that they elect to separate the units into the underlying public shares and warrants, or if a holder holds units registered in its own name, the holder must contact Continental Stock Transfer & Trust Company (“Continental”), Spring Valley’s transfer agent, directly and instruct it to do so. The redemption rights include the requirement that a holder must identify itself in writing as a beneficial holder and provide its legal name, phone number and address to Continental in order to validly redeem its shares. Public shareholders may elect to redeem their public shares even if they vote “FOR” the Business Combination Proposal. If the Business Combination is not consummated, the public shares will be returned to the respective holder, broker or bank. If the Business Combination is consummated, and if a public shareholder properly exercises its right to redeem all or a portion of the public shares that it holds and timely delivers its shares to Continental, Spring Valley will redeem such public shares for a per-share price, payable in cash, equal to the pro rata portion of the trust account established at the consummation of Spring Valley’s initial public offering, calculated as of two business days prior to the consummation of the Business Combination. For illustrative purposes, based on 21,915,393 shares subject to possible redemption as of December 31, 2020, this would have amounted to approximately $10.10 per issued and outstanding public share. If a public shareholder exercises its redemption rights in full, then it will be electing to exchange its public shares for cash and will no longer own public shares. The redemption will take place immediately prior to the Domestication. See “Extraordinary General Meeting of Spring Valley — Redemption Rights” in the accompanying proxy statement/prospectus for a detailed description of the procedures to be followed if you wish to redeem your public shares for cash.

Notwithstanding the foregoing, a public shareholder, together with any affiliate of such public shareholder or any other person with whom such public shareholder is acting in concert or as a “group” ​(as defined in Section 13(d)(3) of the Securities Exchange Act of 1934, as amended (“Exchange Act”)), will be restricted from redeeming its public shares with respect to more than an aggregate of 15% of the public shares. Accordingly, if a public shareholder, alone or acting in concert or as a group, seeks to redeem more than 15% of the public shares, then any such shares in excess of that 15% limit would not be redeemed for cash.

 

 

The Initial Shareholders have, pursuant to the Sponsor Support Agreement and the Spring Valley Letter Agreement, agreed to, among other things, vote all of their ordinary shares in favor of the proposals being presented at the extraordinary general meeting. As of the date of this proxy statement/prospectus, the Initial Shareholders own 20.0% of the issued and outstanding ordinary shares. See “Business Combination Proposal — Related Agreements — Sponsor Support Agreement” in the accompanying proxy statement/​prospectus for more information related to the Sponsor Support Agreement.

The Merger Agreement is subject to the satisfaction or waiver of certain other closing conditions as described in the accompanying proxy statement/prospectus. There can be no assurance that the parties to the Merger Agreement would waive any such provision of the Merger Agreement. In addition, in no event will Spring Valley redeem public shares in an amount that would cause New AeroFarms’ net tangible assets (as determined in accordance with Rule 3a51-1(g)(1) of the Exchange Act) to be less than $5,000,001 after giving effect to the transactions contemplated by the Merger Agreement and the PIPE Financing.

Spring Valley is providing the accompanying proxy statement/prospectus and accompanying proxy card to Spring Valley’s shareholders in connection with the solicitation of proxies to be voted at the extraordinary general meeting and at any adjournments of the extraordinary general meeting. Information about the extraordinary general meeting, the Business Combination and other related business to be considered by Spring Valley’s shareholders at the extraordinary general meeting is included in the accompanying proxy statement/prospectus. Whether or not you plan to attend the extraordinary general meeting, all of Spring Valley’s shareholders are urged to read the accompanying proxy statement/prospectus, including the Annexes and other documents referred to therein, carefully and in their entirety. You should also carefully consider the risk factors described in “Risk Factors” beginning on page 22 of the accompanying proxy statement/prospectus.

After careful consideration, the board of directors of Spring Valley has unanimously approved the Merger Agreement and the transactions contemplated thereby, including the Business Combination, and unanimously recommends that shareholders vote “FOR” the adoption of the Merger Agreement and approval of the transactions contemplated thereby, including the Business Combination, and “FOR” all other proposals presented to Spring Valley’s shareholders in the accompanying proxy statement/prospectus. When you consider the recommendation of these proposals by the board of directors of Spring Valley, you should keep in mind that Spring Valley’s directors and officers have interests in the Business Combination that may conflict with your interests as a shareholder. See the section entitled “Business Combination Proposal — Interests of Spring Valley’s Directors and Executive Officers in the Business Combination” in the accompanying proxy statement/​prospectus for a further discussion of these considerations.

The approval of the Redomicile Proposal requires a special resolution under Cayman Islands law, being the affirmative vote of the holders of a majority of at least a two-thirds (2/3rds) of the ordinary shares who, being present in person or represented by proxy at the extraordinary general meeting and entitled to vote on such matter, vote on such matter. The approval of each of the Business Combination Proposal, the Governing Documents Proposals, the Equity Incentive Plan Proposal, the Nasdaq Proposal and the Adjournment Proposal requires an ordinary resolution, being the affirmative vote of at least a majority of the votes cast by the holders of the issued ordinary shares present in person or represented by proxy at the extraordinary general meeting and entitled to vote on such matter.

Your vote is very important. Whether or not you plan to attend the extraordinary general meeting, please vote as soon as possible by following the instructions in the accompanying proxy statement/prospectus to make sure that your shares are represented at the extraordinary general meeting. If you hold your shares in “street name” through a bank, broker or other nominee, you will need to follow the instructions provided to you by your bank, broker or other nominee to ensure that your shares are represented and voted at the extraordinary general meeting. The Business Combination will be consummated only if the Condition Precedent Proposals are approved at the extraordinary general meeting. Each of the Condition Precedent Proposals is cross-conditioned on the approval of each other. The Adjournment Proposal is not conditioned on the approval of any other proposal set forth in the accompanying proxy statement/prospectus.

If you sign, date and return your proxy card without indicating how you wish to vote, your proxy will be voted FOR each of the proposals presented at the extraordinary general meeting. If you fail to return your proxy card or fail to instruct your bank, broker or other nominee how to vote, and do not attend the

 

 

extraordinary general meeting in person, the effect will be, among other things, that your shares will not be counted for purposes of determining whether a quorum is present at the extraordinary general meeting. If you are a shareholder of record and you attend the extraordinary general meeting and wish to vote in person, you may withdraw your proxy and vote in person.

TO EXERCISE YOUR REDEMPTION RIGHTS, YOU MUST DEMAND IN WRITING THAT YOUR PUBLIC SHARES ARE REDEEMED FOR A PRO RATA PORTION OF THE FUNDS HELD IN THE TRUST ACCOUNT AND TENDER YOUR SHARES TO SPRING VALLEY’S TRANSFER AGENT AT LEAST TWO BUSINESS DAYS PRIOR TO THE VOTE AT THE EXTRAORDINARY GENERAL MEETING. IN ORDER TO EXERCISE YOUR REDEMPTION RIGHT, YOU NEED TO IDENTIFY YOURSELF AS A BENEFICIAL HOLDER AND PROVIDE YOUR LEGAL NAME, PHONE NUMBER AND ADDRESS IN YOUR WRITTEN DEMAND. YOU MAY TENDER YOUR SHARES BY EITHER DELIVERING YOUR SHARE CERTIFICATE TO THE TRANSFER AGENT OR BY DELIVERING YOUR SHARES ELECTRONICALLY USING THE DEPOSITORY TRUST COMPANY’S DWAC (DEPOSIT WITHDRAWAL AT CUSTODIAN) SYSTEM. IF THE BUSINESS COMBINATION IS NOT COMPLETED, THEN THESE SHARES WILL BE RETURNED TO YOU OR YOUR ACCOUNT. IF YOU HOLD THE SHARES IN STREET NAME, YOU WILL NEED TO INSTRUCT THE ACCOUNT EXECUTIVE AT YOUR BANK OR BROKER TO WITHDRAW THE SHARES FROM YOUR ACCOUNT IN ORDER TO EXERCISE YOUR REDEMPTION RIGHTS.

On behalf of Spring Valley’s board of directors, I would like to thank you for your support and look forward to the successful completion of the Business Combination.

Sincerely,

William Quinn
Chairman of the Board of Directors

NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES REGULATORY AGENCY HAS APPROVED OR DISAPPROVED THE TRANSACTIONS DESCRIBED IN THE ACCOMPANYING PROXY STATEMENT/PROSPECTUS, PASSED UPON THE MERITS OR FAIRNESS OF THE BUSINESS COMBINATION OR RELATED TRANSACTIONS OR PASSED UPON THE ADEQUACY OR ACCURACY OF THE DISCLOSURE IN THE ACCOMPANYING PROXY STATEMENT/PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY CONSTITUTES A CRIMINAL OFFENSE.

The accompanying proxy statement/prospectus is dated           , 2021 and is first being mailed to shareholders on or about           , 2021.

 

 

SPRING VALLEY ACQUISITION CORP.

2100 McKinney Ave, Suite 1675
Dallas, TX 75201
214-308-5230

NOTICE OF EXTRAORDINARY GENERAL MEETING
TO BE HELD ON                 , 2021

TO THE SHAREHOLDERS OF SPRING VALLEY ACQUISITION CORP.:

NOTICE IS HEREBY GIVEN that an extraordinary general meeting of the shareholders (the “extraordinary general meeting”) of Spring Valley Acquisition Corp., a Cayman Islands exempted company (“Spring Valley”), will be held at                 , Eastern Time, on                 , 2021, at the offices of Kirkland & Ellis LLP located at 609 Main Street, Suite 4700, Houston, TX 77002. In the interest of public health, and due to the impact of COVID-19, the extraordinary general meeting may also be attended through a “virtual” or online method at        . You are cordially invited to attend the extraordinary general meeting, which will be held for the following purposes:

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Proposal No. 1 — The Business Combination Proposal — RESOLVED, as an ordinary resolution, that Spring Valley’s entry into the Agreement and Plan of Merger, dated as of March 25, 2021 (as may be amended, supplemented or otherwise modified from time to time, the “Merger Agreement”), by and among Spring Valley, Spring Valley Merger Sub, Inc., a Delaware corporation and a wholly-owned direct subsidiary of Spring Valley (“Spring Valley Merger Sub”), and Dream Holdings, Inc., a Delaware public benefit corporation (“Dream Holdings”), a copy of which is attached to the proxy statement/prospectus as Annex A, pursuant to which, among other things, following the de-registration of Spring Valley as an exempted company in the Cayman Islands and the continuation and domestication of Spring Valley as a public benefit corporation in the State of Delaware, (a) Spring Valley Merger Sub will merge with and into Dream Holdings, with Dream Holdings as the surviving company in the Merger, and after giving effect to the Merger, Dream Holdings will be a wholly-owned subsidiary of New AeroFarms, (b) at the Effective Time, among other things, (i) each share of common stock of Spring Valley Merger Sub issued and outstanding as of immediately prior to the Effective Time will be converted into and exchanged for one share of common stock of Dream Holdings, as the surviving corporation of the Merger, (ii) all shares of Dream Holdings Common Stock and Dream Holdings Preferred Stock held in the treasury of Dream Holdings or owned by Spring Valley or Spring Valley Merger Sub will be canceled without any conversion thereof, and no payment or distribution will be made with respect thereto, (iii) each share of Series 2 Preferred Stock issued and outstanding as of immediately prior to the Effective Time, other than any cancelled shares or dissenting shares, will be exchanged for approximately 1.0632 shares of New AeroFarms Common Stock, (iv) each share of Dream Holdings Common Stock and Dream Holdings Preferred Stock issued and outstanding as of immediately prior to the Effective Time, other than any shares of Series 2 Preferred Stock or cancelled or dissenting shares, will receive a number of shares of New AeroFarms Common Stock equal to the Common Stock Exchange Ratio with the Dream Holdings Preferred Stock (excluding the Series 2 Preferred Stock) receiving the consideration calculated on an as-converted basis, (v) each Dream Holdings option outstanding as of immediately prior to the Effective Time will be converted into an option to purchase a number of shares of New AeroFarms Common Stock as calculated in accordance with the Merger Agreement, (vi) each warrant of Dream Holdings issued and outstanding as of immediately prior to the Effective Time will be converted into a warrant exercisable on the terms and conditions set forth therein for Merger Consideration that the holder of such warrant would have received if it had exercised such warrant immediately prior to the Effective Time (assuming such warrant was then fully vested) (for the avoidance of doubt, the maximum number of shares of New AeroFarms Common Stock to be issued to Dream Holdings Holders as Merger Consideration shall be approximately 81.1 million), and (vii) the outstanding principal and unpaid accrued interest due on the Convertible Notes outstanding immediately prior to the Effective Time will be automatically converted into a number of shares of New AeroFarms Common Stock at a purchase price of $9.00 per share, and such converted Convertible Notes will no longer be outstanding and will cease to exist, and (c) certain related agreements (including the

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Subscription Agreements, the Investor Rights Agreement, the Sponsor Support Agreement, the Dream Holdings Stockholder Support Agreement, and the Registration Rights Agreement, each in the form attached to the proxy statement/prospectus as Annex E, Exhibit 10.7, Annex J, Annex G and Annex F, respectively), and the transactions contemplated thereby, be approved, ratified and confirmed in all respects.

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Proposal No. 2 — The Redomicile Proposal — RESOLVED, as a special resolution, that Spring Valley be transferred by way of continuation to Delaware pursuant to Article 47 of Spring Valley’s Articles of Association and Section 388 of the General Corporation Law of the State of Delaware and, immediately upon being de-registered in the Cayman Islands, Spring Valley be continued and domesticated as a corporation under the laws of the State of Delaware, and the amendment and restatement of the Existing Governing Documents be approved and that 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 Existing Governing Documents with the Interim Delaware Governing Documents be approved, including (i) Spring Valley’s corporate existence be made perpetual, and (ii) certain provisions related to our status as a blank check company that will no longer be applicable upon consummation of the Business Combination be removed from the Interim Delaware Governing Documents.

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Governing Documents Proposals — to consider and vote upon the following six (6) separate resolutions, which represent all material changes to the Interim Governing Documents, to approve that, following the Domestication, the Interim Delaware Governing Documents be amended and restated by the deletion in their entirety and the substitution in their place of the proposed new amended and restated certificate of incorporation, a copy of which is attached to the proxy statement/​prospectus as Annex C (the “Proposed Certificate of Incorporation”), and the proposed new amended and restated bylaws, a copy of which is attached to the proxy statement/prospectus as Annex D (the “Proposed Bylaws”), upon the Merger (such proposals, collectively, the “Governing Documents Proposals”):

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Proposal No. 3 — Governing Documents Proposal A — RESOLVED, as an ordinary resolution, that the change in the authorized share capital of Spring Valley from (i) $33,100 divided into 300,000,000 Class A ordinary shares, par value $0.0001 per share, 30,000,000 Class B ordinary shares, par value $0.0001 per share, and 1,000,000 preference shares, par value $0.0001 per share, to (ii) $44,500 divided into 435,000,000 shares of common stock, par value $0.0001 per share, of New AeroFarms and 10,000,000 shares of preferred stock, par value $0.0001 per share, of New AeroFarms be approved.

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Proposal No. 4 — Governing Documents Proposal B — RESOLVED, as an ordinary resolution, that the authorization to the New AeroFarms Board to issue any or all shares of New AeroFarms Preferred Stock in one or more classes or series, with such terms and conditions as may be expressly determined by the New AeroFarms Board and as may be permitted by the Delaware General Corporation Law be approved.

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Proposal No. 5 — Governing Documents Proposal C — RESOLVED, as an ordinary resolution, that the removal of the ability of New AeroFarms stockholders to take action by written consent in lieu of a meeting be approved.

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Proposal No. 6 — Governing Documents Proposal D — RESOLVED, as an ordinary resolution, that the conversion of Spring Valley to a public benefit corporation effective upon the Merger be approved.

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Proposal No. 7 — Governing Documents Proposal E — RESOLVED, as an ordinary resolution, that adopting Delaware as the exclusive forum for certain stockholder litigation and the federal district courts of the United States as the exclusive forum for litigation arising out of the Securities Act be approved.

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Proposal No. 8 — Governing Documents Proposal F — RESOLVED, as an ordinary resolution, that the amendment and restatement of the Interim Delaware Governing Documents be approved and that certain other immaterial changes 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, respectively (copies of which are attached to the proxy

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statement/prospectus as Annex C and Annex D, respectively), immediately following the Domestication be approved, including changing the corporate name of Spring Valley from “Spring Valley Acquisition Corp.” to “AeroFarms, Inc.”

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Proposal No. 9 — The Nasdaq Proposal — RESOLVED, as an ordinary resolution, that for the purposes of complying with the applicable provisions of Nasdaq Listing Rule 5635, the issuance of shares of New AeroFarms Common Stock be approved.

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Proposal No. 10 — The Equity Incentive Plan Proposal — RESOLVED, as an ordinary resolution, that the AeroFarms, Inc. 2021 Equity Incentive Plan, a copy of which is attached to the proxy statement/prospectus as Annex H, be adopted and approved.

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Proposal No. 11 — The Adjournment Proposal — RESOLVED, as an ordinary resolution, that the adjournment of the extraordinary general meeting to a later date or dates (A) to the extent necessary to ensure that any required supplement or amendment to the proxy statement/prospectus is provided to Spring Valley shareholders or, if as of the time for which the extraordinary general meeting is scheduled, there are insufficient Spring Valley ordinary shares represented (either in person or by proxy) to constitute a quorum necessary to conduct business at the extraordinary general meeting, (B) in order to solicit additional proxies from Spring Valley shareholders in favor of one or more of the proposals at the extraordinary general meeting or (C) if Spring Valley shareholders redeem an amount of the public shares such that one of the conditions to consummate the Business Combination that the aggregate cash proceeds to be received by Spring Valley from the trust account in connection with the Business Combination, together with the aggregate gross proceeds from the PIPE Financing, equal no less than $225,000,000 (net of unpaid transaction expenses incurred or subject to reimbursement by Spring Valley) would not be satisfied at Closing, be approved.

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Each of the Business Combination Proposal, the Redomicile Proposal, the Governing Documents Proposals, the Nasdaq Proposal and the Equity Incentive Plan Proposal is conditioned on the approval and adoption of each of the other Condition Precedent Proposals. The Adjournment Proposal is not conditioned on any other proposal.

These items of business are described in this proxy statement/prospectus, which we encourage you to read carefully and in its entirety before voting.

Only holders of record of ordinary shares at the close of business on                 , 2021 are entitled to notice of and to vote and have their votes counted at the extraordinary general meeting and any adjournment of the extraordinary general meeting.

This proxy statement/prospectus and accompanying proxy card is being provided to Spring Valley’s shareholders in connection with the solicitation of proxies to be voted at the extraordinary general meeting and at any adjournment of the extraordinary general meeting. Whether or not you plan to attend the extraordinary general meeting, all of Spring Valley’s shareholders are urged to read this proxy statement/​prospectus, including the Annexes and the documents referred to herein carefully and in their entirety. You should also carefully consider the risk factors described in “Risk Factors” beginning on page 22 of this proxy statement/​prospectus.

After careful consideration, the board of directors of Spring Valley has unanimously approved the Merger Agreement and the transactions contemplated thereby, including the Merger, and unanimously recommends that shareholders vote “FOR” the adoption of the Merger Agreement and approval of the transactions contemplated thereby, including the Merger, and “FOR” all other proposals presented to Spring Valley’s shareholders in this proxy statement/prospectus. When you consider the recommendation of these proposals by the board of directors of Spring Valley, you should keep in mind that Spring Valley’s directors and officers have interests in the Business Combination that may conflict with your interests as a shareholder. See the section entitled “Business Combination Proposal — Interests of Spring Valley’s Directors and Executive Officers in the Business Combination” in this proxy statement/prospectus for a further discussion of these considerations.

Pursuant to the Existing Governing Documents, a public shareholder may request that Spring Valley redeem all or a portion of its public shares for cash if the Business Combination is consummated. As a holder of public shares, you will be entitled to receive cash for any public shares to be redeemed only if you:

 

 

(i)

(a) hold public shares or (b) if you hold public shares through units, you elect to separate your units into the underlying public shares and warrants prior to exercising your redemption rights with respect to the public shares;

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(ii)

submit a written request to Continental, Spring Valley’s transfer agent, in which you (i) request that Spring Valley redeem all or a portion of your public shares for cash, and (ii) identify yourself as the beneficial holder of the public shares and provide your legal name, phone number and address; and

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(iii)

deliver your public shares to Continental, Spring Valley’s transfer agent, physically or electronically through The Depository Trust Company.

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Holders must complete the procedures for electing to redeem their public shares in the manner described above prior to                 , Eastern Time, on                 , 2021 (two business days before the extraordinary general meeting) in order for their shares to be redeemed.

Holders of units must elect to separate the units into the underlying public shares and warrants prior to exercising redemption rights with respect to the public shares. Public holders that hold their units in an account at a brokerage firm or bank, must notify their broker or bank that they elect to separate the units into the underlying public shares and warrants, or if a holder holds units registered in its own name, the holder must contact Continental, Spring Valley’s transfer agent, directly and instruct them to do so. The redemption rights include the requirement that a holder must identify itself in writing as a beneficial holder and provide its legal name, phone number and address to Continental in order to validly redeem its shares. Public shareholders may elect to redeem public shares regardless of if or how they vote in respect of the Business Combination Proposal. If the Business Combination is not consummated, the public shares will be returned to the respective holder, broker or bank. If the Business Combination is consummated, and if a public shareholder properly exercises its right to redeem all or a portion of the public shares that it holds and timely delivers its shares to Continental, Spring Valley’s transfer agent, New AeroFarms will redeem such public shares for a per-share price, payable in cash, equal to the pro rata portion of the trust account established at the consummation of Spring Valley’s initial public offering (the “trust account”), calculated as of two business days prior to the consummation of the Business Combination. For illustrative purposes, this would have amounted to approximately $10.10 per issued and outstanding public share, based on 21,915,393 shares subject to possible redemption as of December 31, 2020. If a public shareholder exercises its redemption rights in full, then it will be electing to exchange its public shares for cash and will no longer own public shares. The redemption will take place immediately prior to the Domestication. See “Extraordinary General Meeting of Spring Valley — Redemption Rights” in this proxy statement/prospectus for a detailed description of the procedures to be followed if you wish to redeem your public shares for cash.

Notwithstanding the foregoing, a public shareholder, together with any affiliate of such public shareholder or any other person with whom such public shareholder is acting in concert or as a “group” ​(as defined in Section 13(d)(3) of the Securities Exchange Act of 1934, as amended (“Exchange Act”)), will be restricted from redeeming its public shares with respect to more than an aggregate of 15% of the public shares. Accordingly, if a public shareholder, alone or acting in concert or as a group, seeks to redeem more than 15% of the public shares, then any such shares in excess of that 15% limit would not be redeemed for cash.

The Initial Shareholders have, pursuant to the Sponsor Support Agreement and the Spring Valley Letter Agreement, agreed to, among other things, vote all of their ordinary shares in favor of the proposals being presented at the extraordinary general meeting. As of the date of this proxy statement/prospectus, the Initial Shareholders own 20.0% of the issued and outstanding ordinary shares. See “Business Combination Proposal — Related Agreements — Sponsor Support Agreement” in the accompanying proxy statement/​prospectus for more information related to the Sponsor Support Agreement.

The Merger Agreement is subject to the satisfaction or waiver of certain other closing conditions as described in the accompanying proxy statement/prospectus. There can be no assurance that the parties to the Merger Agreement would waive any such provision of the Merger Agreement. In addition, in no event will Spring Valley redeem public shares in an amount that would cause New AeroFarms’ net tangible assets (as determined in accordance with Rule 3a51-1(g)(1) of the Exchange Act) to be less than $5,000,001 after giving effect to the transactions contemplated by the Merger Agreement and the PIPE Financing.

 

 

The approval of the Redomicile Proposal requires a special resolution under Cayman Islands law, being the affirmative vote of the holders of a majority of at least two-thirds (2/3rds) of the ordinary shares who, being present in person or represented by proxy at the extraordinary general meeting and entitled to vote on such matter, vote on such matter. The approval of each of the Business Combination Proposal, the Governing Documents Proposals, the Equity Incentive Plan Proposal, the Nasdaq Proposal and the Adjournment Proposal requires an ordinary resolution, being the affirmative vote of at least a majority of the votes cast by the holders of the issued ordinary shares present in person or represented by proxy at the extraordinary general meeting and entitled to vote on such matter.

Your vote is very important.   Whether or not you plan to attend the extraordinary general meeting, please vote as soon as possible by following the instructions in this proxy statement/prospectus to make sure that your shares are represented at the extraordinary general meeting. If you hold your shares in “street name” through a bank, broker or other nominee, you will need to follow the instructions provided to you by your bank, broker or other nominee to ensure that your shares are represented and voted at the extraordinary general meeting. The Business Combination will be consummated only if the Condition Precedent Proposals are approved at the extraordinary general meeting. Each of the Condition Precedent Proposals is cross-conditioned on the approval of each other. The Adjournment Proposal is not conditioned on the approval of any other proposal set forth in this proxy statement/prospectus.

If you sign, date and return your proxy card without indicating how you wish to vote, your proxy will be voted FOR each of the proposals presented at the extraordinary general meeting. If you fail to return your proxy card or fail to instruct your bank, broker or other nominee how to vote, and do not attend the extraordinary general meeting in person, the effect will be, among other things, that your shares will not be counted for purposes of determining whether a quorum is present at the extraordinary general meeting. If you are a shareholder of record and you attend the extraordinary general meeting and wish to vote in person, you may withdraw your proxy and vote in person.

Your attention is directed to the remainder of the proxy statement/prospectus following this notice (including the Annexes and other documents referred to herein) for a more complete description of the proposed Business Combination and related transactions and each of the proposals. You are encouraged to read this proxy statement/prospectus carefully and in its entirety, including the Annexes and other documents referred to herein. If you have any questions or need assistance voting your ordinary shares, please contact MacKenzie Partners, Inc., our proxy solicitor, by calling (800) 322-2885, or banks and brokers can call collect at (212) 929-5500, or by emailing proxy@mackenziepartners.com.

Thank you for your participation. We look forward to your continued support.

By Order of the Board of Directors of Spring Valley Acquisition Corp.,

William Quinn
Chairman of the Board of Directors

TO EXERCISE YOUR REDEMPTION RIGHTS, YOU MUST DEMAND IN WRITING THAT YOUR PUBLIC SHARES ARE REDEEMED FOR A PRO RATA PORTION OF THE FUNDS HELD IN THE TRUST ACCOUNT AND TENDER YOUR SHARES TO SPRING VALLEY’S TRANSFER AGENT AT LEAST TWO BUSINESS DAYS PRIOR TO THE VOTE AT THE EXTRAORDINARY GENERAL MEETING. IN ORDER TO EXERCISE YOUR REDEMPTION RIGHT, YOU NEED TO IDENTIFY YOURSELF AS A BENEFICIAL HOLDER AND PROVIDE YOUR LEGAL NAME, PHONE NUMBER AND ADDRESS IN YOUR WRITTEN DEMAND. YOU MAY TENDER YOUR SHARES BY EITHER DELIVERING YOUR SHARE CERTIFICATE TO THE TRANSFER AGENT OR BY DELIVERING YOUR SHARES ELECTRONICALLY USING THE DEPOSITORY TRUST COMPANY’S DWAC (DEPOSIT WITHDRAWAL AT CUSTODIAN) SYSTEM. IF THE BUSINESS COMBINATION IS NOT COMPLETED, THEN THESE SHARES WILL BE RETURNED TO YOU OR YOUR ACCOUNT. IF YOU HOLD THE SHARES IN STREET NAME, YOU WILL NEED TO INSTRUCT THE ACCOUNT EXECUTIVE AT YOUR BANK OR BROKER TO WITHDRAW THE SHARES FROM YOUR ACCOUNT IN ORDER TO EXERCISE YOUR REDEMPTION RIGHTS.

 

 

TABLE OF CONTENTS

 

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ADDITIONAL INFORMATION

You may request copies of this proxy statement/prospectus and any other publicly available information concerning Spring Valley, without charge, by written request to Spring Valley Acquisition Corp., 2100 McKinney Ave, Suite 1675. Dallas, TX 75201, or by telephone request at (214) 308-5230; or MacKenzie Partners, Inc., our proxy solicitor, by calling (800) 322-2885, or banks and brokers can call collect at (212) 929-5500, or by emailing proxy@mackenziepartners.com or from the SEC through the SEC website at http://www.sec.gov.

In order for Spring Valley’s shareholders to receive timely delivery of the documents in advance of the extraordinary general meeting of Spring Valley to be held on                 , 2021, you must request the information no later than five business days prior to the date of the extraordinary general meeting, by                 , 2021.

TRADEMARKS

This document contains references to trademarks, trade names and service marks belonging to other entities. Solely for convenience, trademarks, trade names and service marks referred to in this proxy statement/​prospectus may appear without the ® or TM symbols, but such references are not intended to indicate, in any way, that the applicable licensor will not assert, to the fullest extent under applicable law, its rights to these trademarks and trade names. We do not intend our use or display of other companies’ trade names, trademarks or service marks to imply a relationship with, or endorsement or sponsorship of us by, any other companies.

 

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SELECTED DEFINITIONS

Unless otherwise stated in this proxy statement/prospectus or the context otherwise requires, the following terms shall have the following meanings:

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“Adjusted Equity Value” means (a) $800,000,000, plus (b) the Aggregate Company Options Exercise Price (as defined in the Merger Agreement), plus (c) the Aggregate Company Warrant Exercise Price (as defined in the Merger Agreement), minus (d) the aggregate Series 2 Preferred Stock Liquidation Preference;

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“AeroFarms” means Dream Holdings and its consolidated subsidiaries prior to the Business Combination;

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“Articles of Association” means the articles of association of Spring Valley;

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“Business Combination” means the Domestication, the Merger, the PIPE Financing and other transactions contemplated by the Merger Agreement, collectively;

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“Cayman Islands Companies Act” means the Companies Act (As Revised) of the Cayman Islands, as the same may be amended from time to time;

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“Class A ordinary shares” means the Class A ordinary shares, par value $0.0001 per share, of Spring Valley, and, following the Domestication, the equivalent shares of Spring Valley Delaware common stock, which will automatically convert into a number of shares of New AeroFarms Common Stock, on a one-for-one basis, in connection with the Merger;

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“Class B ordinary shares” or “founder shares” means the 5,750,000 Class B ordinary shares, par value $0.0001 per share, of Spring Valley outstanding as of the date of this proxy statement/​prospectus that were initially issued to the Sponsor (a portion of which were subsequently transferred to the other Initial Shareholders) in a private placement prior to our initial public offering, and which, immediately prior to the Domestication, will automatically convert, on a one-for-one basis, into Class A ordinary shares (5,630,000 of which are held by the Sponsor);

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“Closing” means the closing of the Business Combination;

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“Closing Acquiror Cash” means, without duplication, an amount equal to (a) the funds contained in the trust account as of immediately prior to the Effective Time; plus (b) all other Cash and Cash Equivalents of Spring Valley; minus (c) the aggregate amount of cash proceeds that will be required to satisfy the redemption of any shares of Class A ordinary shares (to the extent not already paid); plus (d) the amount raised in the PIPE Financing; minus (e) any unpaid transaction expenses;

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“Closing Acquiror Cash Condition” means the condition to the consummation of the Business Combination that the Closing Acquiror Cash equals no less than $225,000,000 and that Spring Valley arranges for any Closing Acquiror Cash held in the trust account to be released from the trust account at the Effective Time;

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“Closing Date” means that date that is three (3) business days following the satisfaction (or, to the extent permitted by applicable law, waiver) of the conditions described under the section entitled “Business Combination Proposal — The Merger Agreement — Conditions to Closing of the Business Combination,” ​(other than those conditions that by their nature are to be satisfied at the Closing, but subject to satisfaction or waiver of such conditions) or at such other date as Spring Valley and Dream Holdings may agree in writing;

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“Common Stock Exchange Ratio” means the following ratio (rounded to four decimal places): the quotient of (a) $800,000,000, plus the Aggregate Company Options Exercise Price (as defined in the Merger Agreement), plus the Aggregate Company Warrant Exercise Price (as defined in the Merger Agreement), minus the aggregate product of $10.6324 times the number of shares of Series 2 Preferred Stock outstanding immediately prior to the Effective Time, divided by (b) the Company Fully-Diluted Shares (as defined in the Merger Agreement) (excluding shares of Series 2 Preferred Stock) divided by $10.00;

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“Common Stock Per Share Equity Value” means the quotient of (a) the Adjusted Equity Value divided by (b) the Company Fully-Diluted Shares (as defined in the Merger Agreement) (excluding shares of Series 2 Preferred Stock);

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“Condition Precedent Proposals” means the Business Combination Proposal, the Redomicile Proposal, the Governing Documents Proposals, the Nasdaq Proposal and the Equity Incentive Plan Proposal, collectively;

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“Continental” means Continental Stock Transfer & Trust Company;

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“Convertible Notes” means the Dream Holdings subordinated unsecured convertible promissory notes in aggregate principal amount of $30,000,000 issued in February 2021;

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“Domestication” means the transfer by way of deregistration of Spring Valley from the Cayman Islands and the continuation and domestication of Spring Valley as a corporation incorporated in the State of Delaware;

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“Dream Holdings” means Dream Holdings, Inc., a Delaware public benefit corporation, prior to the consummation of the Business Combination;

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“Dream Holdings Acquisition Proposal” means (a) any transaction or series of related transactions under which any person(s), directly or indirectly, (i) acquires or otherwise purchases Dream Holdings or any of its controlled affiliates or (ii) all or a material portion of assets or businesses of Dream Holdings or any of its controlled affiliates (in the case of each of clause (i) and (ii), whether by merger, consolidation, recapitalization, purchase or issuance of equity securities, tender offer or otherwise); or (b) any equity or similar investment in Dream Holdings or any of its controlled affiliates (subject to exceptions to the PIPE Financing or the issuance of the applicable class of shares of capital stock of Dream Holdings upon the exercise or conversion of any outstanding Dream Holdings equity awards);

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“Dream Holdings Common Stock” means Dream Holdings common stock, par value $0.0001 per share, which will convert into a number of shares of New AeroFarms Common Stock in connection with the Merger;

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“Dream Holdings Holders” means holders of (i) Dream Holdings Common Stock, (ii) Dream Holdings Preferred Stock, (iii) Convertible Notes and (iv) any other securities of Dream Holdings that provide the holder thereof the right to acquire shares of New AeroFarms Common Stock in connection with the Merger, including warrants and equity awards of Dream Holdings, held immediately prior to Closing;

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“Dream Holdings Preferred Stock” means (i) Dream Holdings Series 1-A preferred stock, par value $0.0001 per share, (ii) Dream Holdings Series 1-B preferred stock, par value $0.0001 per share, (iii) Dream Holdings Series 1-C1 preferred stock, par value $0.0001 per share, (iv) Dream Holdings Series 1-C2 preferred stock, par value $0.0001 per share, (v) Dream Holdings Series 1-D preferred stock, par value $0.0001 per share, and (vi) Dream Holdings Series 2 Preferred Stock, each of which will convert into New AeroFarms Common Stock in connection with the Merger;

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“Dream Holdings Stockholder Support Agreement” means those certain Support Agreements, entered into on or around March 25, 2021, by and among Spring Valley, Dream Holdings and certain stockholders of Dream Holdings party thereto;

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“Effective Time” means the time at which the Merger becomes effective;

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“Equity Incentive Plan” means the AeroFarms, Inc. 2021 Equity Incentive Plan to be considered for adoption and approval by the shareholders pursuant to the Equity Incentive Plan Proposal;

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“extraordinary general meeting” means the extraordinary general meeting of Spring Valley at
                 , Eastern Time, on                 , 2021, at the offices of Kirkland & Ellis LLP located at 609 Main Street, Suite 4700, Houston, TX 77002, and via a virtual meeting at                 , unless the extraordinary general meeting is adjourned, or at such other time, on such other date and at such other place to which the meeting may be adjourned;

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“Existing Governing Documents” means the Memorandum of Association and the Articles of Association;

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“GAAP” means the United States generally accepted accounting principles, consistently applied;

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“initial public offering” means Spring Valley’s initial public offering that was consummated on November 27, 2020;

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“Initial Shareholders” means the Sponsor and Spring Valley’s three independent directors who hold Class B ordinary shares;

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“Interim Delaware Bylaws” means the proposed bylaws of Spring Valley that will replace the Existing Governing Documents immediately upon the Domestication, a copy of which is attached to this proxy statement/prospectus as Annex J;

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“Interim Delaware Certificate of Incorporation” means the proposed certificate of incorporation of Spring Valley that will replace the Existing Governing Documents immediately upon the Domestication, a copy of which is attached to this proxy statement/prospectus as Annex K;

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“Interim Delaware Governing Documents” means, collectively, the Interim Delaware Bylaws and the Interim Delaware Certificate of Incorporation;

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“Memorandum of Association” means the memorandum of association of Spring Valley;

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“Merger” means the merger of Spring Valley Merger Sub with and into Dream Holdings pursuant to the Merger Agreement, with Dream Holdings as the surviving company in the Merger and, after giving effect to such Merger, Dream Holdings becoming a wholly-owned subsidiary of New AeroFarms;

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“Merger Agreement” means that certain Agreement and Plan of Merger, dated as of March 25, 2021 (as may be amended, supplemented or otherwise modified from time to time), by and among Spring Valley, Spring Valley Merger Sub and Dream Holdings;

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•

“Merger Consideration” means (i) each share of Series 2 Preferred Stock issued and outstanding immediately prior to the Effective Time, other than any cancelled shares and dissenting shares, shall receive approximately 1.0632 shares of duly authorized, validly issued, fully paid and non assessable Spring Valley Common Stock; provided that no fractional shares of Acquiror Common Stock shall be issued in connection therewith; and (ii) each share of Dream Holdings Common Stock and Dream Holdings Preferred Stock issued and outstanding immediately prior to the Effective Time, other than any Series 2 Preferred Stock, cancelled shares and dissenting shares, will receive such number of shares of duly authorized, validly issued, fully paid and non assessable Spring Valley Common Stock equal to the Common Stock Exchange Ratio with the Dream Holdings Preferred Stock (excluding the Series 2 Preferred Stock) receiving consideration calculated on an as-converted basis as determined in accordance with the Company Organizational Documents (as defined in the Merger Agreement); provided that no fractional shares of Spring Valley Common Stock shall be issued in connection therewith;

​

•

“Nasdaq” means the Nasdaq Capital Market;

​

•

“New AeroFarms” means Spring Valley upon and after the Effective Time;

​

•

“New AeroFarms Board” means the board of directors of New AeroFarms;

​

•

“New AeroFarms Common Stock” means (a) upon and following the Effective Time, the common stock, par value $0.0001 per share, of New AeroFarms or (b) upon and following the Domestication and prior to the Effective Time, the common stock of Spring Valley Delaware;

​

•

“ordinary shares” refer to our Class A ordinary shares and our Class B ordinary shares;

​

•

“PIPE Financing” means the transactions contemplated by the Subscription Agreements, pursuant to which the PIPE Investors have collectively committed to subscribe for an aggregate of 12,500,000 shares of New AeroFarms Common Stock for an aggregate purchase price of $125,000,000 to be consummated in connection with the Closing and prior to the Effective Time;

​

•

“PIPE Investors” means the investors who agreed to participate in the PIPE Financing and entered into the Subscription Agreements;

​

•

“private placement shares” means Class A ordinary shares of Spring Valley underlying the private placement warrants;

​

 

vi

 

•

“private placement warrants” means the 8,900,000 private placement warrants outstanding as of the date of this proxy statement/ prospectus that were issued to the Sponsor as part of the initial public offering, which are substantially identical to the public warrants sold as part of the units in the initial public offering, subject to certain limited exceptions;

​

•

“pro forma” means giving pro forma effect to the Business Combination, including the Merger and the PIPE Financing;

​

•

“Proposed Bylaws” means the proposed amended and restated bylaws of New AeroFarms that will replace the Interim Delaware Bylaws following the Domestication upon the Merger, which are attached to this proxy statement/prospectus as Annex D;

​

•

“Proposed Certificate of Incorporation” means the proposed amended and restated certificate of incorporation of New AeroFarms that will replace the Interim Delaware Certificate of Incorporation following the Domestication upon the Merger, which is attached to this proxy statement/prospectus as Annex C;

​

•

“Proposed Governing Documents” means the Proposed Certificate of Incorporation and the Proposed Bylaws;

​

•

“public shareholders” means holders of public shares, whether acquired in Spring Valley’s initial public offering or acquired in the secondary market;

​

•

“public shares” means (a) prior to the Domestication, the currently outstanding 23,000,000 Class A ordinary shares of Spring Valley, whether acquired in Spring Valley’s initial public offering or acquired in the secondary market, and (b) upon and following the Domestication and prior to the Effective Time, the equivalent shares of New AeroFarms Common Stock;

​

•

“public warrants” means (a) prior to the Domestication, the currently outstanding 11,500,000 redeemable warrants to purchase Class A ordinary shares of Spring Valley that were issued by Spring Valley in its initial public offering, and (b) upon and following the Domestication and prior to the Effective Time, the equivalent public warrants of Spring Valley Delaware;

​

•

“Recapitalization” means the conversion, on a one-for-one basis, of Class B ordinary shares into Class A ordinary shares immediately prior to the Domestication;

​

•

“Redemption” means each redemption of public shares for cash under the Existing Governing Documents;

​

•

“SEC” means the Securities and Exchange Commission;

​

•

“Securities Act” means the Securities Act of 1933, as amended;

​

•

“Series 2 Preferred Stock” means the Series 2 Preferred Stock of Dream Holdings, par value $0.0001 per share;

​

•

“Series 2 Preferred Stock Exchange Ratio” means the following ratio (rounded to four decimal places): the quotient of (a) the Adjusted Equity Value divided by (b) the Company Fully-Diluted Shares (excluding shares of Series 2 Preferred Stock), divided by $10.00, or approximately 1.0632;

​

•

“Series 2 Preferred Stock Liquidation Preference” means the product of $10.6324 times the number of shares of Series 2 Preferred Stock outstanding immediately prior to the Effective Time;

​

•

“Sponsor” means SV Acquisition Sponsor Sub, LLC, a Delaware limited liability company;

​

•

“Sponsor Parent” means Spring Valley Acquisition Sponsor, LLC, a Delaware limited liability company;

​

•

“Sponsor Letter Agreement” means that certain Sponsor Letter Agreement, dated as of March 25, 2021, by and among Sponsor, Spring Valley and Dream Holdings;

​

•

“Spring Valley,” “we,” “us” or “our” means Spring Valley Acquisition Corp., a Cayman Islands exempted company, prior to the consummation of the Domestication;

​

•

“Spring Valley Board” means Spring Valley’s board of directors;

​

 

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•

“Spring Valley Delaware” means Spring Valley Acquisition Corp., a Delaware corporation, as so continued as a Delaware public benefit corporation following the Merger;

​

•

“Spring Valley Letter Agreement” means that certain Letter Agreement, dated November 23, 2020, by and between Spring Valley, the Sponsor and each of the officers and directors of Spring Valley;

​

•

“Spring Valley Merger Sub” refers to Spring Valley Merger Sub, Inc., a Delaware corporation and a wholly-owned direct subsidiary of Spring Valley;

​

•

“Spring Valley warrant agreement” means the warrant agreement, dated November 23, 2020, between Spring Valley and Continental Stock Transfer & Trust Company, as warrant agent, which sets forth the expiration and exercise price of and procedure for exercising the warrants;

​

•

“Subscription Agreements” means the subscription agreements, entered into by Spring Valley and each of the PIPE Investors;

​

•

“transfer agent” means Continental, Spring Valley’s transfer agent;

​

•

“trust account” means the trust account established at the consummation of Spring Valley’s initial public offering that holds the proceeds of the initial public offering and is maintained by Continental, acting as trustee;

​

•

“units” means the units of Spring Valley, each unit representing one Class A ordinary share and one-half of one warrant, with such whole warrant representing the right to acquire one Class A ordinary share, that were offered and sold by Spring Valley in its initial public offering and in its concurrent private placement; and

​

•

“warrants” means the public warrants and the private placement warrants.

​

 

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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

Certain statements in this proxy statement/prospectus may constitute “forward-looking statements” for purposes of the federal securities laws. Our forward-looking statements include, but are not limited to, statements regarding our or our management team’s expectations, hopes, beliefs, intentions or strategies regarding the future, including those relating to the Business Combination. The information included in this proxy statement/prospectus in relation to Dream Holdings has been provided by Dream Holdings and its management, and forward-looking statements include statements relating to our and Dream Holdings’ respective management team’s expectations, hopes, beliefs, intentions or strategies regarding the future, including those relating to the Business Combination. In addition, any statements that refer to projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. The words “anticipate,” “believe,” “contemplate,” “continue,” “could,” “estimate,” “expect,” “intends,” “may,” “might,” “plan,” “possible,” “potential,” “predict,” “project,” “should,” “will,” “would” and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. Forward-looking statements in this proxy statement/prospectus may include, for example, statements about:

•

our ability to complete the Business Combination with Dream Holdings or, if we do not consummate such Business Combination, any other initial business combination;

​

•

satisfaction or waiver of the conditions to the Business Combination including, among others: (i) the approval by our shareholders of the Condition Precedent Proposals being obtained; (ii) the applicable waiting period under the Hart-Scott-Rodino Act of 1976, as amended (the “HSR Act”), relating to the Merger Agreement having expired or been terminated; (iii) the Closing Acquiror Cash Condition; and (iv) the approval by Nasdaq of our initial listing application in connection with the Business Combination;

​

•

the occurrence of any event, change or other circumstances, including the outcome of any legal proceedings that may be instituted against Spring Valley and Dream Holdings following the announcement of the Merger Agreement and the transactions contemplated therein, that could give rise to the termination of the Merger Agreement;

​

•

New AeroFarms’ financial and business performance following the Business Combination, including financial projections and business metrics;

​

•

the ability to obtain and/or maintain the listing of the New AeroFarms Common Stock and the warrants on Nasdaq, and the potential liquidity and trading of such securities;

​

•

the amount of redemptions made by public shareholders;

​

•

the risk that the proposed Business Combination disrupts current plans and operations of Dream Holdings as a result of the announcement and consummation of the proposed Business Combination;

​

•

the ability to recognize the anticipated benefits of the proposed Business Combination, which may be affected by, among other things, competition, the ability of the combined company to grow and manage growth profitably and retain its key employees;

​

•

costs related to the proposed Business Combination;

​

•

changes in applicable laws or regulations;

​

•

our success in retaining or recruiting, or changes required in, our officers, key employees or directors following the completion of the Business Combination, and New AeroFarms’ ability to attract and retain key personnel;

​

•

our officers and directors allocating their time to other businesses and potentially having conflicts of interest with our business or in approving the Business Combination;

​

•

forecasts regarding end-customer adoption rates and demand for New AeroFarms’ products in markets that are new and rapidly evolving;

​

•

macroeconomic conditions resulting from the novel coronavirus global pandemic (“COVID-19”);

​

•

availability of a limited number of suppliers for New AeroFarms’ products and services;

​

 

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•

increases in costs, disruption of supply, or shortage of materials;

​

•

New AeroFarms’ dependence on a small number of customers, and failure to add new customers or expand sales to New AeroFarms’ existing customers;

​

•

substantial regulations, which are evolving, and unfavorable changes or failure by New AeroFarms to comply with these regulations;

​

•

product liability claims, which could harm New AeroFarms’ financial condition and liquidity if New AeroFarms is not able to successfully defend or insure against such claims;

​

•

changes to U.S. trade policies, including new tariffs or the renegotiation or termination of existing trade agreements or treaties;

​

•

various environmental and safety laws and regulations that could impose substantial costs upon Dream Holdings and negatively impact New AeroFarms’ ability to operate New AeroFarms’ manufacturing facilities; outages and disruptions of New AeroFarms’ services if it fails to maintain adequate security and supporting infrastructure as it scales New AeroFarms’ information technology systems;

​

•

availability of additional capital to support business growth;

​

•

failure to protect New AeroFarms’ intellectual property;

​

•

intellectual property rights claims by third parties, which could be costly to defend, related significant damages and resulting limits on New AeroFarms’ ability to use certain technologies. developments and projections relating to New AeroFarms’ competitors and industry;

​

•

the anticipated growth rates and market opportunities of New AeroFarms;

​

•

the period over which New AeroFarms anticipates its existing cash and cash equivalents will be sufficient to fund its operating expenses and capital expenditure requirements;

​

•

the potential for New AeroFarms’ business development efforts to maximize the potential value of its portfolio;

​

•

New AeroFarms’ ability to attract and retain key personnel;

​

•

New AeroFarms’ estimates regarding expenses, future revenue, capital requirements and needs for additional financing;

​

•

New AeroFarms’ financial performance;

​

•

the inability to develop and maintain effective internal controls;

​

•

the diversion of management’s attention and consumption of resources as a result of potential acquisitions of other companies;

​

•

failure to maintain adequate operational and financial resources or raise additional capital or generate sufficient cash flows;

​

•

cyber-attacks and security vulnerabilities;

​

•

the effect of COVID-19 pandemic on the foregoing, including our ability to consummate the Business Combination due to the uncertainty resulting from the recent COVID-19 pandemic; and

​

•

other factors detailed under the section entitled “Risk Factors.”

​

The forward-looking statements contained in this proxy statement/prospectus are based on current expectations and beliefs concerning future developments and their potential effects on us and/or Dream Holdings. There can be no assurance that future developments affecting us and/or Dream Holdings will be those that we and/or Dream Holdings have anticipated. These forward-looking statements involve a number of risks, uncertainties (some of which are beyond our control or the control of Dream Holdings) or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements. These risks and uncertainties include, but are not limited to, those factors described under the heading “Risk Factors.” Should one or more of these risks or uncertainties

 

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materialize, or should any of our assumptions prove incorrect, actual results may vary in material respects from those projected in these forward-looking statements. Some of these risks and uncertainties may in the future be amplified by the COVID-19 outbreak and there may be additional risks that we consider immaterial or which are unknown. It is not possible to predict or identify all such risks. Neither we nor Dream Holdings undertake any obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.

Before any shareholder grants its proxy or instructs how its vote should be cast or vote on the proposals to be put to the extraordinary general meeting, such stockholder should be aware that the occurrence of the events described in the “Risk Factors” section and elsewhere in this proxy statement/prospectus may adversely affect us.

 

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QUESTIONS AND ANSWERS FOR SHAREHOLDERS OF SPRING VALLEY

The questions and answers below highlight only selected information from this document and only briefly address some commonly asked questions about the proposals to be presented at the extraordinary general meeting, including with respect to the proposed Business Combination. The following questions and answers do not include all the information that is important to Spring Valley’s shareholders. We urge shareholders to read this proxy statement/prospectus, including the Annexes and the other documents referred to herein, carefully and in their entirety to fully understand the proposed Business Combination and the voting procedures for the extraordinary general meeting, which will be held at           Eastern Time, on           , 2021, at the offices of Kirkland & Ellis LLP located at and via a virtual meeting at 609 Main Street, Suite 4700, Houston, TX 77002 and via a virtual meeting at            , unless the extraordinary general meeting is adjourned.

Q:

Why am I receiving this proxy statement/prospectus?

​

A:

Spring Valley shareholders are being asked to consider and vote upon, among other proposals, a proposal to approve and adopt the Merger Agreement and approve the transactions contemplated thereby, including the Business Combination. In accordance with the terms and subject to the conditions of the Merger Agreement, among other things, on the Closing Date at the Effective Time, (i) each share of common stock of Spring Valley Merger Sub issued and outstanding as of immediately prior to the Effective Time will be converted into and exchanged for one share of common stock of Dream Holdings, as the surviving corporation of the merger with Spring Valley Merger Sub, (ii) all shares of Dream Holdings Common Stock and Dream Holdings Preferred Stock held in the treasury of Dream Holdings or owned by Spring Valley or Spring Valley Merger Sub will be canceled without any conversion thereof and no payment or distribution will be made with respect thereto, (iii) each share of Series 2 Preferred Stock issued and outstanding as of immediately prior to the Effective Time, other than any cancelled shares and dissenting shares, will be exchanged for approximately 1.0632 shares of New AeroFarms Common Stock, (iv) each share of Dream Holdings Common Stock and Dream Holdings Preferred Stock issued and outstanding as of immediately prior to the Effective Time, other than any shares of Series 2 Preferred Stock or cancelled or dissenting shares, will receive a number of shares of New AeroFarms Common Stock equal to the Common Stock Exchange Ratio with the Dream Holdings Preferred Stock (excluding the Series 2 Preferred Stock) receiving the consideration calculated on an as-converted basis, (v) each Dream Holdings option outstanding as of immediately prior to the Effective Time will be converted into an option to purchase a number of shares of New AeroFarms Common Stock as calculated in accordance with the Merger Agreement, (vi) each warrant of Dream Holdings issued and outstanding as of immediately prior to the Effective Time will be converted into a warrant exercisable on the terms and conditions set forth therein for Merger Consideration that the holder of such warrant would have received if it had exercised such warrant immediately prior to the Effective Time (assuming such warrant was then fully vested), (for the avoidance of doubt, the maximum number of shares of New AeroFarms Common Stock to be issued to Dream Holdings Holders as Merger Consideration shall be approximately 81.1 million) and (vii) the outstanding principal and unpaid accrued interest due on the Convertible Notes outstanding immediately prior to the Effective Time will be automatically converted into a number of shares of New AeroFarms Common Stock at a purchase price of $9.00 per share, and such converted Convertible Notes will no longer be outstanding and will cease to exist. For further details, see “Business Combination Proposal — Consideration to Dream Holdings Holders in the Business Combination.”

​

A copy of the Merger Agreement is attached to this proxy statement/prospectus as Annex A and you are encouraged to read the Merger Agreement in its entirety.

The approval of each of the Business Combination Proposal, the Governing Documents Proposals, the Equity Incentive Plan Proposal, the Nasdaq Proposal and the Adjournment Proposal requires an ordinary resolution, being the affirmative vote of at least a majority of the votes cast by the holders of the issued ordinary shares present in person or represented by proxy at the extraordinary general meeting and entitled to vote on such matter, and the Redomicile Proposal which requires a special resolution under Cayman Islands law, being the affirmative vote of the holders of a majority of at least a two-thirds (2/3rds) of the ordinary shares who, being present in person or represented by proxy at the extraordinary general meeting and entitled to vote on such matter, vote on such matter.

 

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In connection with the Domestication, on the Closing Date prior to the Effective Time, (i) all issued and outstanding Class A ordinary shares will convert automatically by operation of law, on a one-for-one basis, into shares of New AeroFarms Common Stock; (ii) all issued and outstanding Class A ordinary shares of Spring Valley received by the Initial Shareholders in exchange for the same number of Class B ordinary shares pursuant to the Recapitalization will convert automatically by operation of law, on a one-for-one basis, into shares of New AeroFarms Common Stock, (iii) each issued and outstanding warrant to purchase Class A ordinary shares of Spring Valley will automatically represent the right to purchase one share of New AeroFarms Common Stock at an exercise price of $11.50 per share of New AeroFarms Common Stock on the terms and conditions set forth in the warrant agreement, and (iv) each issued and outstanding unit of Spring Valley that has not been previously separated into the underlying Class A ordinary share and underlying warrant upon the request of the holder thereof, will be cancelled and will entitle the holder thereof to one share of New AeroFarms Common Stock and one-half of one warrant of New AeroFarms Common Stock, with such whole warrant representing the right to acquire one share of New AeroFarms Common Stock at an exercise price of $11.50 per share of New AeroFarms Common Stock on the terms and conditions set forth in the Spring Valley warrant agreement. See “Redomicile Proposal.”

The provisions of the Proposed Governing Documents (which will, if approved, amend and restate the Interim Delaware Governing Documents upon the Merger) will differ in certain material respects from the Existing Governing Documents (which, if approved, will be replaced by the Interim Delaware Governing Documents following the Domestication). Please see “What amendments will be made to the Existing Governing Documents of Spring Valley?” below.

THE VOTE OF SHAREHOLDERS IS IMPORTANT. SHAREHOLDERS ARE ENCOURAGED TO VOTE AS SOON AS POSSIBLE AFTER CAREFULLY REVIEWING THIS PROXY STATEMENT/PROSPECTUS.

Q:

What proposals are shareholders of Spring Valley being asked to vote upon?

​

A:

At the extraordinary general meeting, Spring Valley is asking holders of its ordinary shares to consider and vote upon eleven (11) separate proposals:

​

•

a proposal to approve by ordinary resolution and adopt the Merger Agreement, including the Merger, and the transactions contemplated thereby;

​

•

a proposal to approve by special resolution the Domestication and to amend and restate the Existing Governing Documents and authorize all other changes necessary or, as mutually agreed in good faith by Spring Valley and Dream Holdings, desirable in connection with the replacement of Existing Governing Documents with the Interim Delaware Governing Documents as part of the Domestication;

​

•

the following six (6) separate proposals to approve by ordinary resolution the following material differences between the Existing Governing Documents and the Proposed Governing Documents:

​

•

to authorize the change in the authorized share capital of Spring Valley from (i) $33,100 divided into 300,000,000 Class A ordinary shares, par value $0.0001 per share, 30,000,000 Class B ordinary shares, par value $0.0001 per share, and 1,000,000 preference shares, par value $0.0001 per share, to (ii) $44,500 divided into 435,000,000 shares of New AeroFarms Common Stock, par value $0.0001 per share, and 10,000,000 shares of New AeroFarms Preferred Stock, par value $0.0001 per share;

​

•

to authorize the New AeroFarms Board to issue any or all shares of New AeroFarms Preferred Stock in one or more classes or series, with such terms and conditions as may be expressly determined by the New AeroFarms Board and as may be permitted by the DGCL; and

​

•

to authorize the removal of the ability of New AeroFarms stockholders to take action by written consent in lieu of a meeting;

​

•

as an ordinary resolution, that the conversion of Spring Valley to a public benefit corporation effective upon the Merger be approved;

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•

as an ordinary resolution, that adopting Delaware as the exclusive forum for certain stockholder litigation and the federal district courts of the United States as the exclusive forum for litigation arising out of the Securities Act be approved; and

​

•

as an ordinary resolution, to amend and restate the Interim Delaware Governing Documents and authorize certain other immaterial changes in connection with the replacement of the Interim Delaware Governing Documents with the Proposed Governing Documents as part of the Merger, including changing the corporate name of Spring Valley from “Spring Valley Acquisition Corp.” to “AeroFarms, Inc.”;

​

•

a proposal to approve by ordinary resolution the issuance of shares of New AeroFarms Common Stock in connection with the Business Combination in compliance with the Nasdaq Listing Rules;

​

•

a proposal to approve and adopt by ordinary resolution the Equity Incentive Plan; and

​

•

a proposal to approve by ordinary resolution the adjournment of the extraordinary general meeting to a later date or dates, if necessary, to, among other things, permit further solicitation and vote of proxies in the event that there are insufficient votes for the approval of one or more proposals at the extraordinary general meeting.

​

If our shareholders do not approve each of the Condition Precedent Proposals, then unless certain conditions in the Merger Agreement are waived by the applicable parties to the Merger Agreement, the Merger Agreement could terminate and the Business Combination may not be consummated.

For more information, please see “Business Combination Proposal,” “Redomicile Proposal,” “Governing Documents Proposals,” “Nasdaq Proposal,” “Equity Incentive Plan Proposal” and “Adjournment Proposal.”

Spring Valley will hold the extraordinary general meeting to consider and vote upon these proposals. This proxy statement/prospectus contains important information about the Business Combination and the other matters to be acted upon at the extraordinary general meeting. Shareholders of Spring Valley should read it carefully.

After careful consideration, the Spring Valley Board has determined that the Business Combination Proposal, the Redomicile Proposal, each of the Governing Documents Proposals, the Nasdaq Proposal, the Equity Incentive Plan Proposal and the Adjournment Proposal are in the best interests of Spring Valley and its shareholders and unanimously recommends that you vote or give instruction to vote “FOR” each of those proposals.

The existence of financial and personal interests of one or more of Spring Valley’s directors may result in a conflict of interest on the part of such director(s) between what he, she or they may believe is in the best interests of Spring Valley and its shareholders and what he, she or they may believe is best for himself, herself or themselves in determining to recommend that shareholders vote for the proposals. In addition, Spring Valley’s officers have interests in the Business Combination that may conflict with your interests as a shareholder. See the section entitled “Business Combination Proposal — Interests of Spring Valley’s Directors and Executive Officers in the Business Combination” for a further discussion of these considerations.

Q:

Why is Spring Valley proposing the Business Combination?

​

A:

Spring Valley is a blank check company incorporated on August 20, 2020 as a Cayman Islands exempted entity for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses or entities, which we refer to throughout this proxy statement/prospectus as our initial business combination. Based on Spring Valley’s business activities, it is a “shell company” as defined under the Exchange Act because it has no operations and nominal assets consisting almost entirely of cash.

​

Spring Valley has identified several general criteria and guidelines to evaluate prospective acquisition opportunities. Spring Valley has sought to acquire a business or company that: (i) is sustainability focused; (ii) has established businesses and recognized market leaders; (iii) will benefit from being a

 

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public company; (iv) has an experienced management team; (v) has an attractive financial profile; (vi) is a leader in technology driven transformation; (vii) consists of middle market businesses; and (viii) has strong free cash flow generation or near-term potential.

Based on its due diligence investigations of Dream Holdings and the industry in which it operates, including the financial and other information provided by Dream Holdings in the course of negotiations, the Spring Valley Board believes that Dream Holdings meets the general criteria and guidelines listed above. However, there is no assurance of this. See “Business Combination Proposal — The Spring Valley Board’s Reasons for the Business Combination.”

Although the Spring Valley Board believes that the Business Combination with Dream Holdings presents a unique business combination opportunity and is in the best interests of Spring Valley and its shareholders, the board of directors did consider certain potentially material negative factors in arriving at that conclusion. These factors are discussed in greater detail in the sections entitled “Business Combination Proposal — The Spring Valley Board’s Reasons for the Business Combination” and “Risk Factors — Risks Related to the Business Following the Business Combination.”

Q:

Did the Spring Valley Board obtain a third-party valuation or fairness opinion in determining whether or not to proceed with the Business Combination?

​

A:

No. The Spring Valley Board did not obtain a third-party valuation or fairness opinion in connection with its determination to approve the Business Combination. However, Spring Valley’s management, the members of the Spring Valley Board and other representatives of Spring Valley have substantial experience in evaluating the operating and financial merits of companies engaged in the Sustainability industry and reviewed certain financial information of Dream Holdings and compared it to certain publicly traded companies, selected based on the experience and the professional judgment of Spring Valley’s management team, which enabled them to make the necessary analyses and determinations regarding the Business Combination. Accordingly, investors will be relying solely on the judgment of Spring Valley’s management and the Spring Valley Board in valuing Dream Holdings’ business and assuming the risk that Spring Valley’s management and the Spring Valley Board may not have properly valued such business.

​

Q:

What will Dream Holdings’ equityholders receive in return for the Business Combination with Spring Valley?

​

A:

Following the consummation of the Domestication, on the Closing Date, Spring Valley Merger Sub will merge with and into Dream Holdings, with Dream Holdings as the surviving company in the Merger and, after giving effect to the Merger, Dream Holdings will be a wholly-owned subsidiary of New AeroFarms. In accordance with the terms and subject to the conditions of the Merger Agreement, at the Effective Time, among others, (i) all shares of Dream Holdings Common Stock and Dream Holdings Preferred Stock held in the treasury of Dream Holdings or owned by Spring Valley or Spring Valley Merger Sub will be canceled without any conversion thereof and no payment or distribution will be made with respect thereto, (ii) each share of Series 2 Preferred Stock issued and outstanding as of immediately prior to the Effective Time, other than any cancelled shares and dissenting shares, will be exchanged for approximately 1.0632 shares of New AeroFarms Common Stock, (iii) each share of Dream Holdings Common Stock and Dream Holdings Preferred Stock issued and outstanding as of immediately prior to the Effective Time, other than any shares of Series 2 Preferred Stock or cancelled or dissenting shares, will receive a number of shares of New AeroFarms Common Stock equal to the Common Stock Exchange Ratio with the Dream Holdings Preferred Stock (excluding the Series 2 Preferred Stock) receiving the consideration calculated on an as-converted basis, (iv) each Dream Holdings option outstanding as of immediately prior to the Effective Time will be converted into an option to purchase a number of shares of New AeroFarms Common Stock as calculated in accordance with the Merger Agreement, (v) each warrant of Dream Holdings issued and outstanding as of immediately prior to the Effective Time will be converted into a warrant exercisable on the terms and conditions set forth therein for Merger Consideration that the holder of such warrant would have received if it had exercised such warrant immediately prior to the Effective Time (assuming such warrant was then fully vested) (for the avoidance of doubt, the maximum number of shares of New AeroFarms Common Stock to be issued to Dream Holdings Holders as Merger Consideration shall be approximately 81.1 million),

​

 

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and (vi) the outstanding principal and unpaid accrued interest due on the Convertible Notes outstanding immediately prior to the Effective Time will be automatically converted into a number of shares of New AeroFarms Common Stock at a purchase price of $9.00 per share, and such converted Convertible Notes will no longer be outstanding and will cease to exist. For further details, see “Business Combination Proposal — Consideration to Dream Holdings Holders in the Business Combination.”

Q:

How will the combined company be managed following the business combination?

​

A:

Following the Closing, it is expected that the current management of Dream Holdings will become the management of New AeroFarms, and the New AeroFarms Board will consist of up to nine (9) directors, who will be divided into three (3) classes (Class I, II and III) each consisting of three directors. Pursuant to the Merger Agreement, the New AeroFarms Board will consist of (i) six (6) individuals designated by Dream Holdings, (ii) two (2) individuals designated by Spring Valley and (iii) the chief executive officer of New AeroFarms. Please see the section entitled “Management of New AeroFarms Following the Business Combination” for further information.

​

Q:

What equity stake will current Spring Valley shareholders and current equityholders of Dream Holdings hold in New AeroFarms immediately after the consummation of the Business Combination?

​

A:

As of the date of this proxy statement/prospectus, there are 28,750,000 ordinary shares issued and outstanding, which includes an aggregate of 5,750,000 Class B ordinary shares held by the Initial Shareholders, including the Sponsor. In addition, as of the date of this proxy statement/prospectus, there is outstanding an aggregate of 20,400,000 warrants to acquire ordinary shares, comprised of 8,900,000 private placement warrants held by the Sponsor and 11,500,000 public warrants. Each whole warrant entitles the holder thereof to purchase one Class A ordinary share and, following the Business Combination, will entitle the holder thereof to purchase one share of New AeroFarms Common Stock. Therefore, as of the date of this proxy statement/prospectus (without giving effect to the Business Combination and assuming that none of Spring Valley’s outstanding public shares are redeemed in connection with the Business Combination), Spring Valley’s fully diluted share capital, giving effect to the exercise of all of the private placement warrants and public warrants, would be 49,150,000 ordinary shares.

​

The following table illustrates varying ownership levels in New AeroFarms Common Stock immediately following the consummation of the Business Combination based on the varying levels of redemptions by the public shareholders and the following additional assumptions: (i) 80,000,000 shares of New AeroFarms Common Stock are issued to the Dream Holdings Holders at Closing in both a no redemption scenario and in a maximum redemption scenario; (ii) 12,500,000 shares of New AeroFarms Common Stock are issued in the PIPE Financing; (iii) no Spring Valley warrants to purchase New AeroFarms Common Stock that will be outstanding immediately following Closing have been exercised; and (iv) 3,333,333 shares of New AeroFarms Common Stock are issued in connection with the conversion of the principal balance of the Convertible Notes without taking into account the effect of accrued unpaid interest. The share totals in clause (i) of the prior sentence are calculated assuming that all outstanding warrants and vested, in-the-money equity awards are net exercised using a $10.00 per share value, based on vesting as of March 24, 2021. See “Unaudited Pro Forma Condensed Combined Financial Information” for more details. If the actual facts differ from these assumptions, the ownership percentages in Spring Valley will be different and totals may not add up to 100% due to rounding.

 

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(1)

Assumes that the number of shares of New AeroFarms Common Stock to be held by Dream Holdings Holders is 80.000.000 shares in both the no redemption scenario and in the maximum redemption scenario. The shares to be issued for outstanding warrants and vested stock options are calculated on a cashless exercise basis, based on a deemed value of $10.00 per share, and as if converted at the Closing. See “Unaudited Pro Forma Condensed Combined Financial Information” for more details. The number of vested options is calculated as of March 24, 2021.

​

(2)

Consists of 12,500,000 shares to be acquired in connection with the PIPE Financing, including 3,120,000 shares to be acquired by certain affiliates of Spring Valley.

​

(3)

Consists of 23,000,000 shares issued in connection with Spring Valley’s initial public offering, or 13,588,914 shares assuming that 9,411,086 of Spring Valley’s outstanding public shares (which assumes the maximum number of Class A ordinary shares that can be redeemed are redeemed, while still satisfying the Closing Acquiror Cash Condition) are redeemed in connection with the Business Combination.

​

(4)

Includes 4,250,000 shares of New AeroFarms Common Stock. Does not include 3,120,000 shares to be acquired by certain affiliates of Spring Valley in the PIPE Financing. Does not include 1,500,000 shares of New AeroFarms Common Stock subject to vesting.

​

(5)

Consists of 3,333,333 shares of New AeroFarms Common Stock issued upon the automatic conversion of the Convertible Notes, excluding the effect of accrued interest on the Convertible Notes.

​

For further details, see “Business Combination Proposal — Consideration to Dream Holdings Holders in the Business Combination.”

Q:

Why is Spring Valley proposing the Domestication?

​

A:

Our board of directors believes that there are significant advantages to us that will arise as a result of a change of our domicile to Delaware. Further, our board of directors believes that any direct benefit that the Delaware General Corporation Law (the “DGCL”) provides to a corporation also indirectly benefits its stockholders, who are the owners of the corporation. The board of directors believes that there are several reasons why transfer by way of continuation to Delaware is in the best interests of Spring Valley and its shareholders, including, (i) the prominence, predictability and flexibility of the DGCL, (ii) Delaware’s well-established principles of corporate governance and (iii) the increased ability for Delaware corporations to attract and retain qualified directors, each of the foregoing are discussed in greater detail in the section entitled “Redomicile Proposal — Reasons for the Domestication.”

​

To effect the Domestication, we will file an application for deregistration with the Cayman Islands Registrar of Companies, together with the necessary accompanying documents, and file a certificate of corporate domestication and a certificate of incorporation with the Secretary of State of the State of Delaware, under which we will be domesticated and continue as a Delaware corporation.

The approval of the Redomicile Proposal is a condition to closing the Business Combination under the Merger Agreement. The approval of the Redomicile Proposal requires a special resolution under Cayman Islands law, being the affirmative vote of the holders of a majority of at least two-thirds (2/3rds) of the ordinary shares who, being present in person or represented by proxy at the extraordinary general meeting and entitled to vote on such matter, vote on such matter. Abstentions and broker non-votes, while considered present for the purposes of establishing a quorum, will not count as votes cast at the extraordinary general meeting, and otherwise will have no effect on a particular proposal.

Q:

What is involved with the Domestication?

​

A:

The Domestication will require Spring Valley to file certain documents in both the Cayman Islands and the State of Delaware. At the effective time of the Domestication, which will be the Closing Date, Spring Valley will cease to be a company incorporated under the laws of the Cayman Islands and in connection with the Business Combination, Spring Valley will continue as a Delaware corporation. The Existing Governing Documents will be replaced by the Interim Delaware Certificate of Incorporation

​

 

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and Interim Delaware Bylaws and your rights as a shareholder will cease to be governed by the laws of the Cayman Islands and will be governed by Delaware law.

Q:

What amendments will be made to the Existing Governing Documents of Spring Valley?

​

A:

The consummation of the Business Combination is conditional on, among other things, the Domestication. Accordingly, in addition to voting on the Business Combination, Spring Valley’s shareholders also are being asked to consider and vote upon a proposal to approve the Domestication, and four (4) separate proposals to replace the Existing Governing Documents, in each case, under Cayman Islands law, with the Interim Delaware Governing Documents following the Domestication and the Proposed Governing Documents upon the Merger, in each case, under the DGCL, which differ from the Existing Governing Documents in the following material respects:

​

 

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xix

 

​

Q:

How will the Business Combination, including the Domestication, affect my ordinary shares, warrants and units?

​

A:

In connection with the Business Combination, including the Domestication, on the Closing Date prior to the Effective Time, (i) all issued and outstanding Class A ordinary shares will convert automatically by operation of law, on a one-for-one basis, into shares of New AeroFarms Common Stock; (ii) all issued and outstanding Class B ordinary shares of Spring Valley will convert automatically by operation of law, on a one-for-one basis, into shares of New AeroFarms Common Stock, (iii) each issued and outstanding warrant to purchase Class A ordinary shares of Spring Valley will automatically represent the right to purchase one share of New AeroFarms Common Stock at an exercise price of $11.50 per share of New AeroFarms Common Stock on the terms and conditions set forth in the warrant agreement, and (iv) each issued and outstanding unit of Spring Valley that has not been previously separated into the underlying Class A ordinary share and underlying warrant upon the request of the holder thereof, will be cancelled and will entitle the holder thereof to one share of New AeroFarms Common Stock and one-half of one warrant, with such whole warrant representing the right to acquire one share of New AeroFarms Common Stock at an exercise price of $11.50 per share of New AeroFarms Common Stock on the terms and conditions set forth in the warrant agreement. See “Redomicile Proposal.”

​

In accordance with the terms and subject to the conditions of the Merger Agreement, at the Effective Time, among others, (i) all shares of Dream Holdings Common Stock and Dream Holdings Preferred Stock held in the treasury of Dream Holdings or owned by Spring Valley or Spring Valley Merger Sub will be canceled without any conversion thereof and no payment or distribution will be made with respect thereto, (ii) each share of Dream Holdings Series 2 Preferred Stock issued and outstanding as of immediately prior to the Effective Time, other than any cancelled shares and dissenting shares, will be exchanged for approximately 1.0632 shares of New AeroFarms Common Stock, (iii) each share of Dream Holdings Common Stock and Dream Holdings Preferred Stock issued and outstanding as of immediately prior to the Effective Time, other than any shares of Series 2 Preferred Stock or cancelled or dissenting shares, will receive a number of shares of New AeroFarms Common Stock equal to the Common Stock Exchange Ratio with the Dream Holdings Preferred Stock (excluding the Series 2 Preferred Stock) receiving the consideration calculated on an as-converted basis, (iv) each Dream Holdings option outstanding as of immediately prior to the Effective Time will be converted into an option to purchase a number of shares of New AeroFarms Common Stock as calculated in accordance with the Merger Agreement, (v) each warrant of Dream Holdings issued and outstanding as of immediately prior to the Effective Time will be converted into a warrant exercisable on the terms and conditions set forth therein for Merger Consideration that the holder of such warrant would have received if it had exercised such warrant immediately prior to the Effective Time (assuming such warrant was then fully vested) (for the avoidance of doubt, the maximum number of shares of New AeroFarms Common Stock to be issued to Dream Holdings Holders as Merger Consideration shall be approximately 81.1 million), and (vi) the outstanding principal and unpaid accrued interest due on the Convertible Notes outstanding immediately prior to the Effective Time will be automatically converted into a number of shares of New AeroFarms Common Stock at a purchase price of $9.00 per share, and such converted Convertible Notes will no longer be outstanding and will cease to exist. For further details, see “Business Combination Proposal — Consideration to Dream Holdings Holders in the Business Combination.”

 

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Q:

What are the U.S. federal income tax consequences of the Domestication?

​

A:

As discussed more fully under “Material U.S. Federal Income Tax Considerations,” the Domestication should constitute a tax-deferred reorganization within the meaning of Section 368(a)(l)(F) of the U.S. Internal Revenue Code of 1986, as amended (the “Code”). However, due to the absence of direct guidance on the application of Section 368(a)(1)(F) of the Code to the facts and circumstances relating to Spring Valley, this result is not entirely clear. In the case of a transaction, such as the Domestication, that should qualify as a tax-deferred reorganization within the meaning of Section 368(a)(1)(F) of the Code, U.S. Holders (as defined in “Material U.S. Federal Income Tax Considerations — U.S. Holders” below) will be subject to Section 367(b) of the Code and, as a result of the Domestication:

​

•

a U.S. Holder that holds public shares that have a fair market value of less than $50,000 on the date of the Domestication generally will not recognize any gain or loss and will not be required to include any part of Spring Valley’s earnings in income;

​

•

a U.S. Holder that holds public shares that have a fair market value of $50,000 or more and that, on the date of the Domestication, owns (directly or constructively) less than 10% of the total combined voting power of all classes of our stock entitled to vote and less than 10% of the total value of all classes of our stock generally will recognize gain (but not loss) on the exchange of Spring Valley public shares for Spring Valley Delaware public shares pursuant to the Domestication. As an alternative to recognizing gain, such U.S. Holder may file an election to include in income as a deemed dividend the “all earnings and profits amount” ​(as defined in the U.S. Department of the Treasury regulations (“Treasury Regulations”) under Section 367(b) of the Code) attributable to its public shares provided certain other requirements are satisfied; and

​

•

a U.S. Holder that holds public shares have a fair market value of $50,000 or more and that, on the date of the Domestication, owns (directly or constructively) 10% or more of the total combined voting power of all classes of our stock entitled to vote or 10% or more of the total value of all classes of our stock generally will be required to include in income as a deemed dividend the “all earnings and profits amount” attributable to its public shares provided certain other requirements are satisfied. Any such U.S. Holder that is a corporation may, under certain circumstances, effectively be exempt from taxation on a portion or all of the deemed dividend pursuant to Section 245A of the Code (commonly referred to as the participation exemption).

​

Spring Valley does not expect to have significant cumulative earnings and profits through the date of the Domestication.

Spring Valley believes that it is likely classified as a “passive foreign investment company” ​(“PFIC”). If Spring Valley is a PFIC, a U.S. Holder of public shares may, in certain circumstances, still recognize gain (but not loss) upon the exchange of its Spring Valley public shares or public warrants for Spring Valley Delaware public warrants pursuant to the Domestication under the PFIC rules of the Code equal to the excess, if any, of the fair market value of the shares of Spring Valley Delaware public shares or public warrants received in the Domestication over the U.S. Holder’s adjusted tax basis in the corresponding Spring Valley public shares or public warrants surrendered in exchange therefor. The tax on any such gain so recognized would be imposed at the rate applicable to ordinary income and an interest charge would apply. For a more complete discussion of the potential application of the PFIC rules to U.S. Holders as a result of the Domestication, see “Material U.S. Federal Income Tax Considerations — U.S. Holders — PFIC Considerations.”

Additionally, the Domestication may cause non-U.S. Holders (as defined in “Material U.S. Federal Income Tax Considerations — Non-U.S. Holders”) to become subject to U.S. federal income withholding taxes on any dividends paid in respect of such non-U.S. Holder’s Spring Valley Delaware public shares after the Domestication.

The tax consequences of the Domestication are complex and will depend on a holder’s particular circumstances. All holders are urged to consult their tax advisor on the tax consequences to them of the Domestication, including the applicability and effect of U.S. federal, state, local and foreign income and other tax laws. For a more complete discussion of the U.S. federal income tax considerations of the Domestication, see “Material U.S. Federal Income Tax Considerations.”

 

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Q:

Do I have redemption rights?

​

A:

If you are a holder of public shares, you have the right to request that we redeem all or a portion of your public shares for cash if you follow the procedures and deadlines described elsewhere in this proxy statement/prospectus. Public shareholders may elect to redeem all or a portion of the public shares held by them regardless of if or how they vote in respect of the Business Combination Proposal. If you wish to exercise your redemption rights, please see the answer to the next question: “How do I exercise my redemption rights?”

​

Notwithstanding the foregoing, a public shareholder, together with any affiliate of such public shareholder or any other person with whom such public shareholder is acting in concert or as a “group” (as defined in Section 13(d)(3) of the Exchange Act), will be restricted from redeeming its public shares with respect to more than an aggregate of 15% of the public shares. Accordingly, if a public shareholder, alone or acting in concert or as a group, seeks to redeem more than 15% of the public shares, then any such shares in excess of that 15% limit would not be redeemed for cash and such shares would be converted into the Merger Consideration in connection with the Business Combination.

The Sponsor has agreed to waive its redemption rights with respect to all of its ordinary shares in connection with the consummation of the Business Combination. Such shares will be excluded from the pro rata calculation used to determine the per-share redemption price.

Q:

How do I exercise my redemption rights?

​

A:

In connection with the proposed Business Combination, pursuant to the Existing Governing Documents, Spring Valley’s public shareholders may request that Spring Valley redeem all or a portion of such public shares for cash if the Business Combination is consummated. If you are a public shareholder and wish to exercise your right to redeem the public shares, you must:

​

(i)

(a) hold public shares or (b) if you hold public shares through units, you elect to separate your units into the underlying public shares and public warrants prior to exercising your redemption rights with respect to the public shares;

​

(ii)

submit a written request to Continental, Spring Valley’s transfer agent, in which you (i) request that we redeem all or a portion of your public shares for cash, and (ii) identify yourself as the beneficial holder of the public shares and provide your legal name, phone number and address; and

​

(iii)

deliver your public shares to Continental, our transfer agent, physically or electronically through The Depository Trust Company (“DTC”).

​

Holders must complete the procedures for electing to redeem their public shares in the manner described above prior to           , Eastern Time, on           , 2021 (two business days before the extraordinary general meeting) in order for their shares to be redeemed.

The address of Continental, Spring Valley’s transfer agent, is listed under the question “Who can help answer my questions?” below.

Holders of units must elect to separate the units into the underlying public shares and public warrants prior to exercising redemption rights with respect to the public shares. Public holders that hold their units in an account at a brokerage firm or bank, must notify their broker or bank that they elect to separate the units into the underlying public shares and public warrants, or if a holder holds units registered in its own name, the holder must contact Continental, our transfer agent, directly and instruct them to do so.

Public shareholders will be entitled to request that their public shares be redeemed for a pro rata portion of the amount then on deposit in the trust account as of two business days prior to the consummation of the Business Combination including interest earned on the funds held in the trust account and not previously released to us (net of taxes payable). For illustrative purposes, this would have amounted to approximately $10.10 per issued and outstanding public share, based on 21,915,393 shares subject to possible redemption as of December 31, 2020. However, the proceeds deposited in the trust account could become subject to the claims of our creditors, if any, which could have priority over the claims of our public shareholders, regardless of whether such public shareholders vote or, if they do vote,

 

xxii

 

irrespective of if they vote for or against the Business Combination Proposal. Therefore, the per share distribution from the trust account in such a situation may be less than originally expected due to such claims. Whether you vote, and if you do vote irrespective of how you vote, on any proposal, including the Business Combination Proposal, will have no impact on the amount you will receive upon exercise of your redemption rights. It is expected that the funds to be distributed to public shareholders electing to redeem their public shares will be distributed promptly after the consummation of the Business Combination.

Any request for redemption, once made by a holder of public shares, may be withdrawn at any time up to the time the vote is taken with respect to the Business Combination Proposal at the extraordinary general meeting. If you deliver your shares for redemption to Continental, our transfer agent, and later decide prior to the extraordinary general meeting not to elect redemption, you may request that our transfer agent return the shares (physically or electronically) to you. You may make such request by contacting Continental, our transfer agent, at the phone number or address listed at the end of this section.

Any corrected or changed written exercise of redemption rights must be received by Continental, our transfer agent, prior to the vote taken on the Business Combination Proposal at the extraordinary general meeting. No request for redemption will be honored unless the holder’s public shares have been delivered (either physically or electronically) to Continental, our transfer agent, at least two business days prior to the vote at the extraordinary general meeting.

If a holder of public shares properly makes a request for redemption and the public shares are delivered as described above, then, if the Business Combination is consummated, we will redeem the public shares for a pro rata portion of funds deposited in the trust account, calculated as of two business days prior to the consummation of the Business Combination.

If you are a holder of public shares and you exercise your redemption rights, such exercise will not result in the loss of any warrants that you may hold.

Q:

If I am a holder of units, can I exercise redemption rights with respect to my units?

​

A:

No. Holders of issued and outstanding units must elect to separate the units into the underlying public shares and public warrants prior to exercising redemption rights with respect to the public shares. If you hold your units in an account at a brokerage firm or bank, you must notify your broker or bank that you elect to separate the units into the underlying public shares and public warrants, or if you hold units registered in your own name, you must contact Continental, our transfer agent, directly and instruct them to do so. The redemption rights include the requirement that a holder must identify itself in writing as a beneficial holder and provide its legal name, phone number and address to Continental in order to validly redeem its shares. You are requested to cause your public shares to be separated and delivered to Continental, our transfer agent, by           , Eastern Time, on           , 2021 (two business days before the extraordinary general meeting) in order to exercise your redemption rights with respect to your public shares.

​

Q:

What are the U.S. federal income tax consequences of exercising my redemption rights?

​

A:

We expect that a U.S. Holder that exercises its redemption rights to receive cash from the trust account in exchange for its public shares will generally be treated as selling such public shares, which would result in the recognition of capital gain or loss. There may be certain circumstances in which the redemption may be treated as a distribution for U.S. federal income tax purposes depending on the amount of public shares that such U.S. Holder owns or is deemed to own (including through the ownership of public warrants) prior to and following the redemption. For a more complete discussion of the U.S. federal income tax considerations of an exercise of redemption rights, see “Material U.S. Federal Income Tax Considerations.”

​

 

xxiii

 

Q:

What happens to the funds deposited in the trust account after consummation of the Business Combination?

​

A:

Following the closing of Spring Valley’s initial public offering, an amount equal to $232,300,000 ($10.10 per unit) of the net proceeds from our initial public offering and the sale of the private placement warrants was placed in the trust account. As of December 31, 2020, funds in the trust account totaled approximately $232,301,973, all of which were held in U.S. treasury securities. These funds will remain in the trust account, except for the withdrawal of interest to pay income taxes, if any, until the earliest of (i) the completion of a business combination (including the closing of the Business Combination) or (ii) the redemption of all of the public shares if we are unable to complete a business combination by May 27, 2022 (unless such date is extended in accordance with the Existing Governing Documents), subject to applicable law.

​

If our initial business combination is paid for using equity or debt securities or not all of the funds released from the trust account are used for payment of the consideration in connection with our initial business combination or used for redemptions or purchases of the public shares, we may apply the balance of the cash released to us from the trust account for general corporate purposes, including for maintenance or expansion of operations of New AeroFarms, the payment of principal or interest due on indebtedness incurred in completing our Business Combination, to fund the purchase of other companies or for working capital. See “Summary of the Proxy statement/prospectus — Sources and Uses of Funds for the Business Combination.”

Q:

What happens if a substantial number of the public shareholders vote in favor of the Business Combination Proposal and exercise their redemption rights?

​

A:

Our public shareholders are not required to vote “FOR” the Business Combination in order to exercise their redemption rights. Accordingly, the Business Combination may be consummated even though the funds available from the trust account and the number of public shareholders are reduced as a result of redemptions by public shareholders, subject to the satisfaction or waiver of the Closing Acquiror Cash Condition.

​

In no event will Spring Valley redeem public shares in an amount that would cause our net tangible assets (as determined in accordance with Rule 3a51-1(g)(1) of the Exchange Act) to be less than $5,000,001 after giving effect to the transactions contemplated by the Merger Agreement and the PIPE Financing.

Additionally, as a result of redemptions, the trading market for the New AeroFarms Common Stock may be less liquid than the market for the public shares was prior to consummation of the Business Combination and we may not be able to meet the listing standards for Nasdaq or another national securities exchange.

Q:

What conditions must be satisfied to complete the Business Combination?

​

A:

The consummation of the Business Combination is conditioned upon, among other things, (i) the approval by the Spring Valley shareholders of the Condition Precedent Proposals being obtained; (ii) the applicable waiting period under the HSR Act relating to the Business Combination having expired or been terminated; (iii) the aggregate cash proceeds from Spring Valley’s trust account, together with the proceeds from the PIPE Financing, equaling no less than $225,000,000 (after deducting any amounts paid to Spring Valley’s stockholders that exercise their redemption rights in connection with the Business Combination and net of unpaid transaction expenses incurred or subject to reimbursement by Spring Valley); (iv) the New AeroFarms Common Stock to be issued in connection with the Business Combination having been approved for listing on Nasdaq; and (v) receipt of fully executed copies of the Debt Facility Waiver (as defined in the Merger Agreement). Therefore, unless these conditions are waived by the applicable parties to the Merger Agreement, the Merger Agreement could terminate and the Business Combination may not be consummated.

​

For more information about conditions to the consummation of the Business Combination, see “Business Combination Proposal — Conditions to Closing of the Business Combination.”

 

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Q:

When do you expect the Business Combination to be completed?

​

A:

It is currently expected that the Business Combination will be consummated in the third quarter of 2021. This date depends, among other things, on the approval of the proposals to be put to Spring Valley shareholders at the extraordinary general meeting. However, such extraordinary general meeting could be adjourned if the Adjournment Proposal is adopted by our shareholders at the extraordinary general meeting and we elect to adjourn the extraordinary general meeting to a later date or dates to consider and vote upon a proposal to approve by ordinary resolution the adjournment of the extraordinary general meeting to a later date or dates (i) to the extent necessary to ensure that any required supplement or amendment to the accompanying proxy statement/prospectus is provided to Spring Valley shareholders or, if as of the time for which the extraordinary general meeting is scheduled, there are insufficient Spring Valley ordinary shares represented (either in person or by proxy) to constitute a quorum necessary to conduct business at the extraordinary general meeting, (ii) in order to solicit additional proxies from Spring Valley shareholders in favor of one or more of the proposals at the extraordinary general meeting or (iii) if Spring Valley shareholders redeem an amount of public shares such that the Closing Acquiror Cash Condition would not be satisfied. For a description of the conditions for the completion of the Business Combination, see “Business Combination Proposal — Conditions to Closing of the Business Combination.”

​

Q:

What happens if the Business Combination is not consummated?

​

A:

Spring Valley will not complete the Domestication to Delaware unless all other conditions to the consummation of the Business Combination have been satisfied or waived by the parties in accordance with the terms of the Merger Agreement. If Spring Valley is not able to consummate the Business Combination with Dream Holdings nor able to complete another business combination by May 27, 2022, in each case, as such date may be extended pursuant to our Existing Governing Documents, we 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 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 on the funds held in the trust account and not previously released to us to pay our income taxes, if any (less up to $100,000 of interest to pay dissolution expenses) divided by the number of the then-outstanding public shares, which redemption will completely extinguish public shareholders’ rights as shareholders (including the right to receive further liquidation distributions, if any); and (iii) as promptly as reasonably possible following such redemption, subject to the approval of our remaining shareholders and our board of directors, liquidate and dissolve, subject in the case of clauses (ii) and (iii), to our obligations under Cayman Islands law to provide for claims of creditors and the requirements of other applicable law.

​

Q:

Do I have appraisal rights in connection with the proposed Business Combination and the proposed Domestication?

​

A:

Neither our shareholders nor our warrant holders have appraisal rights in connection with the Business Combination or the Domestication under the Cayman Islands Companies Act or under the DGCL.

​

Q:

What do I need to do now?

​

A:

We urge you to read this proxy statement/prospectus, including the Annexes and the documents referred to herein, carefully and in their entirety and to consider how the Business Combination will affect you as a shareholder and/or warrant holder. Our shareholders should then vote as soon as possible in accordance with the instructions provided in this proxy statement/prospectus and on the enclosed proxy card.

​

Q:

How do I vote?

​

A:

If you hold your shares in “street name,” which means your shares are held of record by a broker, bank or nominee, and were a holder of record of ordinary shares on           , 2021, the record date for the extraordinary general meeting, you may vote with respect to the proposals in person or virtually at the extraordinary general meeting, or by completing, signing, dating and returning the enclosed proxy card in the postage-paid envelope provided. For the avoidance of doubt, the record date does not apply

​

 

xxv

 

to Spring Valley shareholders that hold their shares in registered form and are registered as shareholders in Spring Valley’s register of members. All holders of shares in registered form on the day of the extraordinary general meeting are entitled to vote at the extraordinary general meeting.

Q:

If my shares are held in “street name,” will my broker, bank or nominee automatically vote my shares for me?

​

A:

No. If your shares are held in a stock brokerage account or by a bank or other nominee, you are considered the “beneficial holder” of the shares held for you in what is known as “street name.” If this is the case, this proxy statement/prospectus may have been forwarded to you by your brokerage firm, bank or other nominee, or its agent. As the beneficial holder, you have the right to direct your broker, bank or other nominee as to how to vote your shares. If you do not provide voting instructions to your broker on a particular proposal on which your broker does not have discretionary authority to vote, your shares will not be voted on that proposal. This is called a “broker non-vote.” Abstentions and broker non-votes, while considered present for the purposes of establishing a quorum, will not count as votes cast at the extraordinary general meeting, and otherwise will have no effect on a particular proposal. If you decide to vote, you should provide instructions to your broker, bank or other nominee on how to vote in accordance with the information and procedures provided to you by your broker, bank or other nominee.

​

Q:

When and where will the extraordinary general meeting be held?

​

A:

The extraordinary general meeting will be held at           , Eastern Time, on           , 2021, at the offices of Kirkland & Ellis LLP located at 609 Main Street, Suite 4700, Houston, TX 77002, and via a virtual meeting at           , unless the extraordinary general meeting is adjourned. As part of our precautions regarding COVID-19, we are also planning for the meeting to be held virtually over the Internet. We will post the details for such meeting on our website that will also be filed with the SEC as proxy material. Only shareholders who held ordinary shares of Spring Valley at the close of business on the Record Date will be entitled to vote at the Shareholders Meeting. We plan to announce any such updates in a press release filed with the SEC and on our proxy website at           , and we encourage you to check this website prior to the meeting if you plan to attend.

​

Q:

What impact will the COVID-19 pandemic have on the Business Combination?

​

A:

Given the ongoing and dynamic nature of the circumstances, it is difficult to predict the impact of the COVID-19 pandemic on the business of Spring Valley and Dream Holdings, and there is no guarantee that efforts by Spring Valley and Dream Holdings to address the adverse impacts of COVID-19 will be effective. The extent of such impact will depend on future developments, which are highly uncertain and cannot be predicted, including new information which may emerge concerning the severity of COVID-19 and actions taken to contain COVID-19 or its impact, among others. If Spring Valley or Dream Holdings are unable to recover from a business disruption on a timely basis, the Business Combination and New AeroFarms’ business, financial condition and results of operations following the completion of the Business Combination would be adversely affected. The Business Combination may also be delayed and adversely affected by COVID-19 and, as a result, become more costly. Each of Spring Valley and Dream Holdings may also incur additional costs to remedy damages caused by any such disruptions, which could adversely affect its financial condition and results of operations.

​

Q:

Who is entitled to vote at the extraordinary general meeting?

​

A:

We have fixed           , 2021 as the record date for the extraordinary general meeting. If you were a shareholder of Spring Valley at the close of business on the record date, you are entitled to vote on matters that come before the extraordinary general meeting. However, a shareholder may only vote his or her shares if he or she is present in person or is represented by proxy at the extraordinary general meeting.

​

 

xxvi

 

Q:

How many votes do I have?

​

A:

Spring Valley shareholders are entitled to one vote at the extraordinary general meeting for each ordinary share held of record as of the record date. As of the close of business on the record date for the extraordinary general meeting, there were 28,750,000 ordinary shares issued and outstanding, of which 23,000,000 were issued and outstanding public shares.

​

Q:

What constitutes a quorum?

​

A:

A quorum of Spring Valley shareholders is necessary to hold a valid meeting. A quorum will be present at the extraordinary general meeting if one or more shareholders who together hold not less than a majority of the issued and outstanding ordinary shares entitled to vote at the extraordinary general meeting are represented in person or by proxy at the extraordinary general meeting. As of the record date for the extraordinary general meeting, 14,375,001 ordinary shares would be required to achieve a quorum.

​

Q:

What vote is required to approve each proposal at the extraordinary general meeting?

​

A:

The following votes are required for each proposal at the extraordinary general meeting:

​

(i)

Business Combination Proposal:   The approval of the Business Combination Proposal requires an ordinary resolution, being the affirmative vote of at least a majority of the votes cast by the holders of the issued ordinary shares present in person or represented by proxy at the extraordinary general meeting and entitled to vote on such matter.

​

(ii)

Redomicile Proposal:   The approval of the Redomicile Proposal requires a special resolution under Cayman Islands law, being the affirmative vote of the holders of a majority of at least a two-thirds (2/3rds) of the ordinary shares who, being present in person or represented by proxy at the extraordinary general meeting and entitled to vote on such matter, vote on such matter.

​

(iii)

Governing Documents Proposals:   The separate approval of each of the Governing Documents Proposals, which represent all material changes to the Interim Governing Documents, requires an ordinary resolution, being the affirmative vote of at least a majority of the votes cast by the holders of the issued ordinary shares present in person or represented by proxy at the extraordinary general meeting and entitled to vote on such matter, which requires a special resolution under Cayman Islands law, being the affirmative vote of the holders of a majority of at least a two-thirds (2/3rds) of the ordinary shares who, being present in person or represented by proxy at the extraordinary general meeting and entitled to vote on such matter, vote on such matter.

​

(iv)

Nasdaq Proposal:   The approval of the Nasdaq Proposal requires an ordinary resolution, being the affirmative vote of at least a majority of the votes cast by the holders of the issued ordinary shares present in person or represented by proxy at the extraordinary general meeting and entitled to vote on such matter.

​

(v)

Equity Incentive Plan Proposal:   The approval of the Equity Incentive Plan Proposal requires an ordinary resolution, being the affirmative vote of at least a majority of the votes cast by the holders of the issued ordinary shares present in person or represented by proxy at the extraordinary general meeting and entitled to vote on such matter.

​

(vi)

Adjournment Proposal:   The approval of the Adjournment Proposal requires an ordinary resolution, being the affirmative vote of at least a majority of the votes cast by the holders of the issued ordinary shares present in person or represented by proxy at the extraordinary general meeting and entitled to vote on such matter.

​

As of the record date, Spring Valley had 28,750,000 ordinary shares issued and outstanding. Spring Valley shareholders are entitled to one vote at the extraordinary general meeting for each ordinary share held of record as of the record date. 5,750,000 ordinary shares are subject to the Sponsor Support Agreement or Spring Valley Letter Agreement, pursuant to which the Initial Shareholders have agreed to vote all of their shares (subject to certain exceptions) in favor of the Business Combination. 23,000,000 ordinary shares are not subject to the Sponsor Support Agreement or Spring Valley Letter Agreement.

 

xxvii

 

For additional information regarding the Sponsor Support Agreement and Spring Valley Letter Agreement, see “Business Combination Proposal — Related Agreements — Transaction Support Agreements.”

Assuming all holders that are entitled to vote on such matter vote all of their ordinary shares in person or by proxy, 14,375,001 shares, of which 8,625,001 shares are not subject to the Sponsor Support Agreement, will need to be voted in favor of each of the Business Combination Proposal, the Governing Documents Proposals, the Nasdaq Proposal, the Equity Incentive Plan Proposal and the Adjournment Proposal in order to approve each of the Business Combination Proposal, the Governing Documents Proposals, the Nasdaq Proposal, the Equity Incentive Plan Proposal and the Adjournment Proposal.

Assuming all holders that are entitled to vote on such matter vote all of their ordinary shares in person or by proxy, 19,166,667 shares, of which 13,416,667 shares are not subject to the Sponsor Support Agreement, will need to be voted in favor of the Redomicile Proposal in order to approve such proposal.

Q:

What are the recommendations of the Spring Valley Board?

​

A:

The Spring Valley Board believes that the Business Combination Proposal and the other proposals to be presented at the extraordinary general meeting are in the best interest of Spring Valley and its shareholders and unanimously recommends that its shareholders vote “FOR” the Business Combination Proposal, “FOR” the Redomicile Proposal, “FOR” each of the separate Governing Documents Proposals, “FOR” the Nasdaq Proposal, “FOR” the Equity Incentive Plan Proposal and “FOR” the Adjournment Proposal, in each case, if presented to the extraordinary general meeting.

​

The existence of financial and personal interests of one or more of Spring Valley’s directors may result in a conflict of interest on the part of such director(s) between what he, she or they may believe is in the best interests of Spring Valley and its shareholders and what he, she or they may believe is best for himself, herself or themselves in determining to recommend that shareholders vote for the proposals. In addition, Spring Valley’s officers have interests in the Business Combination that may conflict with your interests as a shareholder. See the section entitled “Business Combination Proposal — Interests of Spring Valley’s Directors and Executive Officers in the Business Combination” for a further discussion of these considerations.

Q:

How do Sponsor and the other Initial Shareholders intend to vote their shares?

​

A:

Unlike some other blank check companies in which the Initial Shareholders agree to vote their shares in accordance with the majority of the votes cast by the public shareholders in connection with an initial business combination, our Initial Shareholders have agreed to vote all their shares in favor of all the proposals being presented at the extraordinary general meeting. As of the date of this proxy statement/​prospectus, our Initial Shareholders own 20.0% of the issued and outstanding ordinary shares.

​

At any time at or prior to the Business Combination, during a period when they are not then aware of any material nonpublic information regarding us or our securities, our Initial Shareholders, Dream Holdings and/or their respective directors, officers, advisors or respective affiliates may purchase public shares from institutional and other investors who vote, or indicate an intention to vote, against any of the Condition Precedent Proposals, or execute agreements to purchase such shares from such investors in the future, or they may enter into transactions with such investors and others to provide them with incentives to acquire public shares or vote their public shares in favor of the Condition Precedent Proposals. Such a purchase may include a contractual acknowledgement that such shareholder, although still the record or beneficial holder of our shares, is no longer the beneficial owner thereof and therefore agrees not to exercise its redemption rights. In the event that our Initial Shareholders, Dream Holdings and/or their directors, officers, advisors or respective affiliates who have agreed to vote in favor of this transaction purchase shares in privately negotiated transactions from public shareholders who have already elected to exercise their redemption rights, such selling shareholder would be required to revoke their prior elections to redeem their shares. The purpose of such share purchases and other transactions would be to increase the likelihood of satisfaction of the requirements that (i) the Business Combination Proposal, the Governing Documents Proposals, the Nasdaq Proposal, the Equity Incentive Plan Proposal and the Adjournment Proposal are approved by the affirmative vote of at least a majority of the votes cast by the holders of the issued ordinary shares

 

xxviii

 

present in person or represented by proxy at the extraordinary general meeting and entitled to vote on such matter (ii) the Redomicile Proposal is approved by the affirmative vote of at least a two-thirds (2/3rds) majority of the votes cast by the holders of the issued ordinary shares present in person or represented by proxy at the extraordinary general meeting and entitled to vote on such matter, (iii) otherwise limit the number of public shares electing to redeem their public shares and (iv) New AeroFarms’ net tangible assets (as determined in accordance with Rule 3a51-1(g)(1) of the Exchange Act) being at least $5,000,001 after giving effect to the transactions contemplated by the Merger Agreement and the PIPE Financing.

If such transactions are effected, the consequence could be to cause the Business Combination to be consummated in circumstances where such consummation could not otherwise occur. Purchases of shares by the persons described above would allow them to exert more influence over the approval of the proposals to be presented at the extraordinary general meeting and would likely increase the chances that such proposals would be approved. We will file or submit a Current Report on Form 8-K to disclose any material arrangements entered into or significant purchases made by any of the aforementioned persons that would affect the vote on the proposals to be put to the extraordinary general meeting or the redemption threshold.

Any such report will include descriptions of any arrangements entered into or significant purchases by any of the aforementioned persons.

Q:

What happens if I sell my Spring Valley ordinary shares before the extraordinary general meeting?

​

A:

The record date for the extraordinary general meeting is earlier than the date of the extraordinary general meeting and earlier than the date that the Business Combination is expected to be completed. If you transfer your public shares after the applicable record date, but before the extraordinary general meeting, unless you grant a proxy to the transferee, you will retain your right to vote at such general meeting.

​

Q:

May I change my vote after I have mailed my signed proxy card?

​

A:

Yes. Shareholders may send a later-dated, signed proxy card to our general counsel at our address set forth below so that it is received by our general counsel prior to the vote at the extraordinary general meeting (which is scheduled to take place on           , 2021) or attend the extraordinary general meeting in person and vote. Shareholders also may revoke their proxy by sending a notice of revocation to our general counsel, which must be received by our general counsel prior to the vote at the extraordinary general meeting. However, if your shares are held in “street name” by your broker, bank or another nominee, you must contact your broker, bank or other nominee to change your vote.

​

Q:

What happens if I fail to take any action with respect to the extraordinary general meeting?

​

A:

If you fail to vote with respect to the extraordinary general meeting and the Business Combination is approved by shareholders and the Business Combination is consummated, you will become a stockholder and/or warrant holder of New AeroFarms. If you fail to vote with respect to the extraordinary general meeting and the Business Combination is not approved, you will remain a shareholder and/or warrant holder of Spring Valley. However, if you fail to vote with respect to the extraordinary general meeting, you will nonetheless be able to elect to redeem your public shares in connection with the Business Combination.

​

Q:

What should I do if I receive more than one set of voting materials?

​

A:

Shareholders may receive more than one set of voting materials, including multiple copies of this proxy statement/prospectus and multiple proxy cards or voting instruction cards. For example, if you hold your shares in more than one brokerage account, you will receive a separate voting instruction card for each brokerage account in which you hold shares. If you are a holder of record and your shares are registered in more than one name, you will receive more than one proxy card. Please complete, sign, date and return each proxy card and voting instruction card that you receive in order to cast a vote with respect to all of your ordinary shares.

​

 

xxix

 

Q:

Who will solicit and pay the cost of soliciting proxies for the extraordinary general meeting?

​

A:

Spring Valley will pay the cost of soliciting proxies for the extraordinary general meeting. Spring Valley has engaged MacKenzie Partners, Inc., as proxy solicitor (“MacKenzie”) to assist in the solicitation of proxies for the extraordinary general meeting. Spring Valley has agreed to pay MacKenzie a fee of $12,500, plus disbursements, and will reimburse MacKenzie for its reasonable out-of-pocket expenses and indemnify MacKenzie and its affiliates against certain claims, liabilities, losses, damages and expenses. Spring Valley will also reimburse banks, brokers and other custodians, nominees and fiduciaries representing beneficial owners of Class A ordinary shares for their expenses in forwarding soliciting materials to beneficial owners of Class A ordinary shares and in obtaining voting instructions from those owners. Spring Valley’s directors and officers may also solicit proxies by telephone, by facsimile, by mail, on the Internet or in person. They will not be paid any additional amounts for soliciting proxies.

​

Q:

Where can I find the voting results of the extraordinary general meeting?

​

A:

The preliminary voting results will be announced at the extraordinary general meeting. Spring Valley will publish final voting results of the extraordinary general meeting in a Current Report on Form 8-K within four business days after the extraordinary general meeting.

​

Q:

Who can help answer my questions?

​

A:

If you have questions about the Business Combination or if you need additional copies of the proxy statement/prospectus or the enclosed proxy card you should contact:

​

MacKenzie Partners, Inc.
1407 Broadway, 27th Floor
New York, New York 10018
Individuals call toll-free: (800) 322-2885
Banks and brokers call: (212) 929-5500
Email: proxy@mackenziepartners.com

You also may obtain additional information about Spring Valley from documents filed with the SEC by following the instructions in the section entitled “Where You Can Find More Information; Incorporation by Reference.” If you are a holder of public shares and you intend to seek redemption of your public shares, you will need to deliver your public shares (either physically or electronically) to Continental, Spring Valley’s transfer agent, at the address below prior to the extraordinary general meeting. Holders must complete the procedures for electing to redeem their public shares in the manner described above prior to           , Eastern Time, on           , 2021 (two business days before the extraordinary general meeting) in order for their shares to be redeemed. If you have questions regarding the certification of your position or delivery of your stock, please contact:

Continental Stock Transfer & Trust Company
1 State Street, 30th Floor
New York, New York 10004
Attention: Mark Zimkind
E-mail: mzimkind@continentalstock.com

 

xxx

 

1

 

​

2

 

3

 

4

 

5

 

6

 

7

 

​

8

 

9

 

10

 

​

​

​

Share Ownership in New AeroFarms (Percentage of Outstanding Shares)

​

​

​

​

No redemptions

​

​

Maximum redemptions

​

Dream Holdings Holders(1)

​

​

​

​

65.0%

​

​

​

​

​

70.4%

​

​

PIPE Investors(2)

​

​

​

​

10.2%

​

​

​

​

​

11.0%

​

​

Spring Valley public shareholders(3)

​

​

​

​

18.7%

​

​

​

​

​

12.0%

​

​

Initial Shareholders(4)

​

​

​

​

3.5%

​

​

​

​

​

3.7%

​

​

Convertible Noteholders(5)

​

​

​

​

2.7%

​

​

​

​

​

2.9%

​

​

​

11

 

12

 

13

 

​

14

 

15

 

16

 

​

Source of Funds(1)

​

​

Uses(1)

​

​

Existing Cash held in trust account(2)

​

​

​

$

232,301,973

​

​

​

Shares of New AeroFarms Common Stock issued to the Dream Holdings Holders(3)

​

​

​

$

800,000,000

​

​

​

Cash and Cash Equivalents of Spring Valley

​

​

​

$

1,906,348

​

​

​

​

​

​

​

​

​

​

​

​

Shares of New AeroFarms Common Stock issued to the Dream Holdings Holders(3)

​

​

​

​

800,000,000

​

​

​

Transaction Fees and Expenses

​

​

​

​

39,156,348

​

​

​

PIPE Financing

​

​

​

​

125,000,000

​

​

​

Remaining Cash on Balance Sheet(4)

​

​

​

​

320,051,973

​

​

​

Total Sources

​

​

​

$

1,159,208,321

​

​

​

Total Uses

​

​

​

$

1,159,208,321

​

​

​

Source of Funds(1)

​

​

Uses(1)

​

​

Existing Cash held in trust account(2)

​

​

​

$

232,301,973

​

​

​

Shares of New AeroFarms Common Stock issued to the Dream Holdings Holders(3)

​

​

​

$

800,000,000

​

​

​

Cash and Cash Equivalents of Spring Valley

​

​

​

$

1,906,348

​

​

​

​

​

​

​

​

​

​

​

​

Shares of New AeroFarms Common Stock issued to the Dream Holdings Holders(3)

​

​

​

​

800,000,000

​

​

​

Transaction Fees and Expenses

​

​

​

​

39,156,348

​

​

​

​

​

​

​

​

​

​

​

​

Spring Valley public redemption(4)

​

​

​

​

95,051,973

​

​

​

PIPE Financing

​

​

​

​

125,000,000

​

​

​

Remaining Cash on Balance Sheet(5)

​

​

​

​

225,000,000

​

​

​

Total Sources

​

​

​

$

1,159,208,321

​

​

​

Total Uses

​

​

​

$

1,159,208,321

​

​

​

17

 

18

 

19

 

(in thousands, except share and per share data)

​

​

Combined Pro Forma

​

​

Assuming No Redemptions

​

​

Assuming Maximum Redemptions

​

Selected Unaudited Pro Forma Condensed Combined Statement of Operations Data Three Months Ended March 31, 2021

​

​

​

​

​

​

​

​

​

​

​

​

​

Revenue

​

​

​

$

577

​

​

​

​

$

577

​

​

Comprehensive loss attributable to New AeroFarms

​

​

​

$

112

​

​

​

​

$

112

​

​

Basic and diluted net loss per common stock

​

​

​

$

—

​

​

​

​

$

—

​

​

20

 

(in thousands, except share and per share data)

​

​

Combined Pro Forma

​

​

Assuming No Redemptions

​

​

Assuming Maximum Redemptions

​

Weighted average shares outstanding, basic and diluted

​

​

​

​

115,215,749

​

​

​

​

​

105,754,292

​

​

Selected Unaudited Pro Forma Condensed Combined Statement of Operations Data Year ended December 31, 2020

​

​

​

​

​

​

​

​

​

​

​

​

​

Revenue

​

​

​

$

2,552

​

​

​

​

$

2,552

​

​

Comprehensive loss attributable to New AeroFarms

​

​

​

$

(43,869)

​

​

​

​

$

(43,869)

​

​

Basic and diluted net loss per common stock

​

​

​

$

(0.38)

​

​

​

​

$

(0.41)

​

​

Weighted average shares outstanding, basic and diluted

​

​

​

​

115,215,749

​

​

​

​

​

105,754,292

​

​

Selected Unaudited Pro Forma Condensed Combined Balance Sheet Data As of March 31, 2021

​

​

​

​

​

​

​

​

​

​

​

​

​

Total assets

​

​

​

$

431,761

​

​

​

​

$

336,201

​

​

Total liabilities

​

​

​

$

51,630

​

​

​

​

$

51,630

​

​

Total equity

​

​

​

$

380,131

​

​

​

​

$

284,570

​

​

21

 

RISK FACTORS

Spring Valley shareholders should carefully consider the following risk factors, together with all of the other information included in this proxy statement/prospectus, before they decide whether to vote or instruct their vote to be cast to approve the relevant proposals described in this proxy statement/prospectus. These risk factors are not exhaustive and investors are encouraged to perform their own investigation with respect to our business, financial condition and prospects.

Risks Related to Dream Holdings’ Business Following the Business Combination

Unless the context otherwise requires, references to “we”, “us”, “our”, or the “Company” in this section of this proxy statement/prospectus refers to the business and operations of Dream Holdings, Inc. prior to the Business Combination and to New AeroFarms and its subsidiaries following the Business Combination.

AeroFarms is an early-stage company with low revenue and a history of losses and expects to incur continuing losses for the foreseeable future. AeroFarms’ business could be adversely affected if it fails to effectively manage its future growth.

AeroFarms generated revenue of $2.6 million and $2.3 million, and incurred net losses of $25.3 million and $22.3 million for the year ended December 31, 2020, and the year ended December 31, 2019, respectively. AeroFarms believes it will continue to incur net losses for the foreseeable future, even should revenue grow. AeroFarms is dependent upon expanding production capacity and customer base to grow its revenue. Even if AeroFarms grows its revenue, there is no guarantee when, if ever, AeroFarms will become profitable. AeroFarms expects to incur significant expenses as it:

•

operates its existing facilities;

​

•

completes the construction of its next commercial farm to be located in Danville, Virginia;

​

•

constructs and operates its research and development center in Abu Dhabi, United Arab Emirates;

​

•

identifies and invests in future growth opportunities, including expansion into new markets, development of new facilities, introduction of new products, and commercialization of new crops;

​

•

invests in creating and protecting intellectual property; and

​

•

incurs additional general administrative expenses, including increased finance, legal and accounting expenses, associated with being a public company and scaling its operations.

​

Supporting the growth of AeroFarms’ business will place significant demands on its management and operations teams and will require resources, financial and otherwise, which may not be available in a cost-effective manner. If AeroFarms does not effectively manage its growth strategy, execute on its business plan, respond to competitive pressures, take advantage of market opportunities, expand its customer base or satisfy new or existing customer requirements, there could be adverse effects on AeroFarms’ business, financial condition and results of operations.

These expenditures alternatively may not result in the growth of AeroFarms’ business, which could adversely affect AeroFarms’ financial condition and results of operations.

AeroFarms will require additional financing to achieve its goals, and a failure to obtain this necessary capital when needed on acceptable terms, or at all, may force AeroFarms to delay, limit, reduce or terminate its operations and future growth.

The controlled environment agriculture business is capital intensive and AeroFarms expects to expend significant resources to complete the buildout of its facilities, scale its production capacity, and invest in its technology platform, capabilities, and new products. These expenditures are expected to include costs of constructing and commissioning new farms, costs associated with growing plants for sale, such as electricity and packaging, working capital, cost of attracting and retaining a skilled local labor force, and costs associated with research and development in support of future commercial opportunities.

After giving effect to the closing of the Business Combination, AeroFarms expects that its existing cash will be sufficient to fund its planned operating expenses, capital expenditure requirements and any debt service

 

22

 

payments through at least the next 12 months. However, AeroFarms’ operating plan may change because of factors currently unknown to us, and AeroFarms may need to seek additional funds sooner than planned, through public or private equity, debt financings or other sources, such as strategic collaborations. Such financings may result in dilution to stockholders, issuance of securities with priority as to liquidation and dividend and other rights more favorable than common stock, imposition of debt covenants and repayment obligations, or other restrictions that may adversely affect its business. In addition, AeroFarms may seek additional capital due to favorable market conditions or strategic considerations even if it believes that it has sufficient funds for current or future operating plans. There can be no assurance that financing will be available to AeroFarms on favorable terms, or at all. The inability to obtain financing when needed may make it more difficult for AeroFarms to operate its business or implement its growth plans.

AeroFarms may be unable to successfully execute on its growth strategy.

AeroFarms may not be successful in implementing its growth strategy which includes the development of new commercial farms and the expansion of its product line and technological capabilities.

•

New Farm Expansion The Company’s strategy to develop new commercial farms has required and will continue to require substantial time and resources. AeroFarms expects to make significant investments to identify attractive markets, select and control sites, perform engineering design and local permitting, construct and commission new farms, among other activities. These facilities require sizeable, useable space for agricultural production, including site-specific requirements such as sufficient access to, reliability of, and cost of utilities and other infrastructure; the ability to obtain the appropriate permits and approvals; adequate local labor availability; road access for input supply and distribution of output for sale; among other requirements.

​

AeroFarms may be unsuccessful in identifying available future sites that support its planned growth strategy, and even if identified, AeroFarms may not be able to lease or purchase the land for any number of reasons. Because of the capital-intensive nature of these projects, AeroFarms will need to prioritize which target regions and which sites it plans to develop, and there can be no guarantee that AeroFarms will select or prioritize sites that will ultimately prove to be appropriate for construction or for operation. Further, AeroFarms may spend time and resources developing sites that may never become developed into farms, or may be developed at the expense of other appropriate sites, which may ultimately have been a better selection for reasons such as profitability, operational reliability, or market accessibility.

If AeroFarms does not align production capacity of its new commercial farms with consumer demand and efficient distribution channels, or if AeroFarms does not maintain competitive pricing, it may have underutilized assets which do not perform to expected operational results or profitability, which could adversely affect its business, financial condition and results of operations.

AeroFarms’ ability to compete successfully in new geographies depends on its ability to secure placement of its product with new customers. The Company’s current strategy for new farm development depends on securing new customers such as food retailers and food service distributors. If AeroFarms does not secure placement of its product with customers that can be supplied from new or existing farms, its business, financial condition and results of operations could be adversely affected.

Similarly, to date, AeroFarms’ products have only been available commercially in the New Jersey and New York metropolitan areas. When entering new geographies or markets, the Company may not attract consumers at the same rate, due to factors such as demographics, price, product selection, brand perception or awareness, or other reasons. If AeroFarms does not attract demand for its products in new markets, its business, financial condition and results of operations could be adversely affected.

AeroFarms’ strategy for new farm development depends on operating facilities that are at significantly larger production scale than its existing facilities. AeroFarms may encounter unexpected challenges at larger facilities, which may be related to construction, engineering and design, operations and logistics, sales and marketing, ramp-up schedule to full capacity, or otherwise.

 

23

 

If the Company is unable to execute on its growth strategy as well as develop and operate farms at a larger scale than existing farms, its business, financial condition and results of operations could be adversely affected.

•

Expansion of Leafy Greens Product Portfolio

​

AeroFarms expects to continue to develop and commercialize new varieties of leafy greens as a source of revenue growth. The Company’s research and development efforts focus on new varieties to expand product offerings, enhance farm unit economics, and create competitive advantages. If AeroFarms does not successfully commercialize new varieties of leafy greens products, the Company’s business, prospects, financial condition and results of operations could be materially and adversely affected. Alternatively, even if AeroFarms does succeed in commercializing new varieties of leafy greens products, there can be no guarantee that these products would result in overall growth of AeroFarms’ business through incremental revenue or economic benefit, which could materially and adversely affect AeroFarms’ financial condition and results of operations.

•

Expansion into Additional Markets and Verticals

​

In the future, AeroFarms may pursue new markets, new crops, and new product categories, by leveraging its technology platform to target what the Company may see as opportunities to expand its addressable market. If it chooses to pursue such opportunities, AeroFarms will need to prioritize which opportunities it plans to develop, and there can be no guarantee that AeroFarms will select or prioritize ones that ultimately prove appropriate for commercialization. Further, AeroFarms may spend time and resources developing opportunities that may never materialize into new commercial business applications, or that may be developed at the expense of other appropriate commercial opportunities, which may ultimately have been a better selection for reasons such as revenue growth, profitability, market expansion, or other financial and strategic considerations.

AeroFarms may not be able to implement its growth strategy successfully. AeroFarms’ operating results and financial condition will be adversely affected if it fails to implement its growth strategy or if it invests resources in a growth strategy that ultimately proves unsuccessful.

AeroFarms has built and plans to build vertical farms which may be subject to unexpected costs and delays due to reliance on third parties for construction, material delivery, and fluctuating input costs.

AeroFarms has built and expects to build indoor vertical farms that are dependent on various key inputs and their related costs, including materials such as steel, LED components and other supplies, as well as electricity and other local utilities. Any significant interruption or negative change in the availability or economics of the supply chain for key inputs could materially impact AeroFarms’ business, financial condition and operating results. If AeroFarms’ new facilities encounter unexpected costs, delays or other problems relating to construction and commissioning, AeroFarms’ financial position and ability to execute on its growth strategy could be negatively affected. Any inability to secure required materials and services to build such facilities, or to do so on appropriate terms, could have a materially adverse impact on AeroFarms’ business, financial condition and operating results.

The cost to procure such materials and services to build new farms may fluctuate widely based on the impact of factors beyond AeroFarms’ control including international, economic and political trends, foreign currency fluctuations, expectations of inflation, global or regional consumptive patterns, speculative activities, and increased or improved production and distribution methods.

COVID-19 continues to impact worldwide economic activity, and the governments of many countries, states, cities and other geographic regions have taken preventative or protective actions which are creating disruption in global supply chains such as closures or other restrictions on the conduct of business operations of manufacturers, suppliers and vendors. The recovery from COVID-19 also may have risks in that increased economic activity globally or regionally may result in high demand for, and constrained access to, materials and services required for AeroFarms to construct and commission new farms, which may lead to increased costs or delays that could materially and adversely affect the Company’s business.

 

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Global demand on shipping and transport services may cause AeroFarms to experience delays in the future which could impact its ability to obtain materials or build its facilities in a timely manner. These factors could otherwise disrupt AeroFarms’ operations and could negatively impact its business, financial condition and results of operations. Logistical problems, unexpected costs, and delays in facility construction, whether or not caused by the COVID-19 pandemic, which cannot be directly controlled by AeroFarms, can cause prolonged disruption to or increased costs of third-party transportation services used to ship materials, which could negatively affect AeroFarms’ facility building schedule, and more generally its business, financial condition, results of operations and prospects. If AeroFarms experiences significant unexpected delays in construction, it may have to delay or limit its production depending on the timing and extent of the delays, which could harm AeroFarms’ business, financial condition and results of operation.

AeroFarms designs and has contract manufactured its own lighting systems, and expects to continue to do so. AeroFarms expects to source specific components and luminaires for its proprietary lighting design from certain manufacturers. Procurement of such components on terms that meet the Company’s performance specifications and cost expectations is dependent on factors which cannot be directly controlled by AeroFarms, including international, economic and political trends, as well as global shipping costs and raw materials costs. If AeroFarms is unable to source lighting components to its specifications, there could be increased costs or significant delays in construction while AeroFarms finds a replacement manufacturer with commercially available substitute lighting, which also could have subsequent impact on the reliability of the Company’s farming facilities once operational.

AeroFarms’ results of operations and financial condition depend on its ability to grow product to its yield targets and quality specifications.

If AeroFarms is unable to grow product to its yield targets and quality specifications, its business, prospects, operational performance, and financial condition could be materially and adversely affected. AeroFarms faces risks including, but not limited to:

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Mechanical Failure.   AeroFarms relies on its mechanical designs and equipment to provide the physical space and structures in which plants are grown. It also provides the design and controls related to environmental conditions, nutrient delivery, lighting, conveyance, and other elements necessary to grow plants in its systems. If mechanical issues or failures occur, the yield and quality of AeroFarms’ products could be diminished for a period of time, which more generally could negatively impact AeroFarms’ farm operations and financial condition;

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Human Error.   AeroFarms relies on the know-how of its farm operations teams, their experience, and their oversight of the operations of its farms. If issues are caused by human error during the various phases of seeding, germination, growing, harvesting, or other standard operating procedures, or if AeroFarms’ employees fail to properly oversee farm operations, then the yield and quality of AeroFarms’ products could be diminished, which more generally could have material and adverse effects on AeroFarms’ business, operating results, and financial condition; and

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Seed Supply and Quality.   AeroFarms relies on certain seed supplies that may be specifically tailored to grow high-quality plants in its vertical farms. Seeds may originate from field-grown plants, where seeds are harvested, then bred to generate seed inventory. If there were a field crop failure where AeroFarms would have to rely on an alternative supply of seeds from qualified back-up suppliers, the yield or quality of production of AeroFarms’ products could be diminished for a period of time. Bad seed lots, low germination rates, and similar issues that affect growing also could result in AeroFarms’ inability to achieve proper and consistent product yields or product quality, which could materially and adversely affect farm performance, and more generally could negatively impact AeroFarms’ business, financial condition and operating results.

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AeroFarms’ results of operations and financial condition depend on its ability to operate its facilities reliably, which may be affected by factors within and beyond the Company’s control.

If AeroFarms is unable to attain reliable performance of its farms, there could be severe adverse impact on AeroFarms’ business. AeroFarms faces risks including, but not limited to:

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Production Scale.   AeroFarms’ strategy to develop new commercial farms includes the expected operation of facilities that are at meaningfully larger production scale than its existing facilities and historical facilities. AeroFarms may encounter unexpected challenges as it operates larger farms, which could cause it to be unable to operate larger farms reliably. The inability to operate larger farms would have a material negative impact on the Company’s business and financial condition.

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Channel Mix.   If AeroFarms is not correct in forecasting demand by channel to achieve its expected results, it may experience a reduced average sales price or a supply-demand imbalance, which could negatively affect its financial performance. Demand for leafy greens products may also be subject to some degree of seasonality due to consumer behavior. As a result, comparisons of AeroFarms’ sales and operating results between different periods may not necessarily be meaningful comparisons. If AeroFarms is unable to operate farms to reliably achieve the target channel mix on average, there could be material adverse effects on its business, operational results, and financial performance.

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Energy Interruption.   AeroFarms grows plants without sunlight, thus requiring LED technology and adequate power supply as primary factors of production. AeroFarms considers the reliability of utilities and related infrastructure as a key factor in its site selection criteria for farm locations. AeroFarms may use generators to maintain energy supply in the case of an outage, but there is no guarantee that power can be maintained or that generators will provide full or redundant coverage to maintain normal operations in the event of a power outage, which could result in reduced crop yield, negative effects on crop quality, or more generally adverse impact to AeroFarms’ results of operations.

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Supply of Seeds and Other Inputs.   AeroFarms uses certain seed supplies that may be specifically tailored to grow high-quality plants in its vertical farms. If there were a field crop failure where AeroFarms would have to depend on an alternative supply of seeds from qualified back-up suppliers, the reliability of production of AeroFarms’ products could be diminished for a period of time. AeroFarms also depends on consistent access of other inputs and supplies to operate its facilities reliably, including water supply, nutrients, growth media, food safety testing, sanitation supplies, packaging materials, among others. If AeroFarms does not maintain access to these inputs of production, then its ability to operate its farms could be materially and adversely affected.

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Labor.   AeroFarms depends on the know-how of its employees and farm operations teams, their experience, and their oversight of the operations of its farms. AeroFarms relies on access to competitive, local labor supply, including skilled and unskilled positions, to operate its farms consistently and reliably. Any issues affecting AeroFarms’ access to or relations with workers could negatively affect farm operations or financial condition.

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Food Safety and Quality Assurance.   AeroFarms is subject to food and safety standards set forth by its own internal practices and by regulatory authorities. AeroFarms’ ability to operate farms reliably may be interrupted for some period of time, or permanently, by any widespread food safety or quality issues involving leafy greens or other fresh produce, even if not involving AeroFarms’ facilities or products at all. Such events could erode consumer confidence in and demand for AeroFarms’ products, which could impact its ability to operate farms reliably, and could generally cause serious adverse effects to AeroFarms’ business and financial condition.

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Weather.   AeroFarms’ ability to operate farms reliably may be adversely affected by severe weather including hurricanes, tornados, lightning strikes, wind, snow, hail and rain. Such weather events could cause damage or destruction to all or part of AeroFarms’ farms, could interrupt the supply of labor or other inputs necessary to operate the farm, and could affect the farms’ customers or distribution channels. In connection with the impact of unpredictable natural disasters, AeroFarms could experience significant delays in or stoppage of production. Severe weather events or natural disasters could result in significant losses and seriously disrupt AeroFarms’ business.

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Other Factors Affecting Reliability of Farm Operations.   In general, if AeroFarms is unable to grow and harvest product to its internal yield targets and quality standards, package and distribute product, sell at competitive prices, or maintain consistent access to the supply inputs necessary to operate farms reliably, its operational performance and financial condition could be materially and negatively affected.

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Inflation Risk.   To the extent inflation results in rising interest rates, increased costs of capital equipment required to construct our farms, or rising costs of other inputs, or has other adverse effects on AeroFarms’costs of production, our combined financial condition and results of operations may be adversely affected. It is difficult to predict how inflation will influence financial market and economic conditions and if it will adversely affect our business lines. If inflation results in increases to AeroFarms’costs of production for produce that are not offset by higher prices to our customers or reduction of costs, our financial results could be materially adversely affected.

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In addition, AeroFarms may experience unexpected delays in building its farms for a variety of reasons, including limited labor due to COVID-19 or other factors, unexpected construction problems or supply chain disruptions, all of which could harm AeroFarms’ business, financial condition and results of operation.

AeroFarms’ operating costs to grow and sell its products may be higher than expected, which could impact its results and financial condition.

If AeroFarms is unable to secure access to inputs on terms consistent with expected costs, there could be material adverse impact on AeroFarms’ business. AeroFarms faces operational risks including, but not limited to:

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Utilities.   AeroFarms is subject to market prices and may experience fluctuating, rising, or volatile energy costs which could negatively affect its business, financial condition, and results of operation. AeroFarms may decide to enter into supply agreements to mitigate such risks, where such options are present on favorable terms, but there is no guarantee of cost to operate its facilities.

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Labor.   AeroFarms relies on access to local labor supply, including skilled and unskilled positions. The Company may face pressure to increase wages in order to attract and retain appropriate staffing of its farms. Increases to minimum wages or competitive wages may cause AeroFarms’ labor costs to run higher than expected, which could negatively affect its financial performance and cash flows.

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Packaging Materials.   AeroFarms packages its products in form factors consistent with comparable products in order to distribute and present on-shelf. If raw material costs increase, or if AeroFarms is unable to achieve its expected packaging materials costs for any reason, its financial performance could be adversely impacted.

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Seeds and Other Supplies.   AeroFarms relies on certain seed supplies that may be specifically tailored to grow high-quality plants in its vertical farms. If there were a field crop failure where AeroFarms would have to depend on an alternative supply of seeds from qualified back-up suppliers, the cost of seeds and its impact on production of AeroFarms’ products could be negatively impacted for a period of time. AeroFarms also depends on consistent access of other inputs and supplies to operate its facilities reliably, including water supply, nutrients, growth media, food safety testing, sanitation supplies, packaging materials, among others. If the cost of any of these inputs increases materially, then AeroFarms’ financial results could be adversely affected.

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Depreciation and Useful Life of Assets.   AeroFarms relies on making assumptions about the expected useful life of the assets used to operate its farms. If the useful life turns out to be materially shorter than expected, the Company may need to invest additional capital to replace these assets, and the corresponding depreciation expense may be greater than expected which would affect the Company’s profitability and financial condition generally. There also may be future tax implications of AeroFarms’ ability to make accurate assumptions about the expected useful life of its assets, and if AeroFarms is unable to correctly forecast such information, its financial condition could be materially and negatively impacted.

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Distribution of Finished Goods.   AeroFarms relies on third-party distribution and logistics to deliver its products. While the Company believes there to be a competitive market of supply chain service

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providers, if the cost of such services increases materially due to rising fuel costs, labor costs, or other macroeconomic factors, which may be beyond the Company’s control, then AeroFarms’ financial results could be materially and negatively impacted.

Because of our dependence on a limited number of customers, our failure to generate revenue from those customers may impair our ability achieve projected financial results.

We have, in the past, and expect for the foreseeable future, to be dependent on a small number of customers to generate a significant portion of our revenue, and these customers may change periodically. As a result, our financial results may be adversely affected if orders from new or existing customers do not meet our assumptions or, if there is a default in payment by any of our major customers. Furthermore, to the extent that any one customer accounts for a large percentage of our revenue, the loss of that customer, or changes in their buying patterns or decisions, could materially affect our financial results. If our customers experience financial difficulties or business reversals, or lose orders or anticipated orders, which may reduce or eliminate the need for the products which they ordered from us, they may be unable or unwilling to fulfill their contracts with us.

There is also a risk that our customers will attempt to impose new or additional requirements on us that reduce the profitability of the orders placed by those customers with us. Further, even if the orders are not changed, these orders may not generate margins equal to our recent historical or targeted results. If we do not book more orders with existing customers, or develop relationships with new customers, we may not be able to increase, or even maintain, our revenue, and our financial condition, results of operations, business and/or prospects may be materially adversely affected.

If AeroFarms is unable to achieve its forecast sales channel mix, financial results may be adversely affected.

AeroFarms’ projected sales channel mix includes a significant portion of its revenue from customers who both expect their orders to fulfilled on time and in full to industry standards, and who want the ability to have their orders fluctuate from period to period on short notice. In order to meet our customers’ demands, AeroFarms produces a larger quantity of product than it estimates will be ordered on average to account for order variation, with the balance of product forecast to be sold through lower revenue per unit channels. If AeroFarms’ underestimates the quantity of lower margin product required to be grown to meet its customer’s demands, or it produces insufficient product to fulfill customer orders, financial results may be materially and adversely affected.

AeroFarms could be adversely affected by a change in consumer preferences or perception, spending habits in the food industry, and failure to expand its product offerings or gain market acceptance of its products.

The market in which AeroFarms operates is subject to changes in consumer behavior. AeroFarms’ performance will depend significantly on factors that may affect the level and pattern of consumer spending in the U.S. food industry in which it operates, including consumer preference, income, confidence in and perception of the safety and quality of AeroFarms’ products and competitive products, and shifts in the perceived value for AeroFarms’ products relative to alternatives.

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Consumer Preferences.   AeroFarms’ first commercialized crop is leafy greens, including arugula, kale, watercress and other varieties and mixes of baby greens and microgreens. There is no guarantee that leafy greens will continue to be demanded by consumers, or that consumers will prefer the leafy greens grown by AeroFarms versus competitors. Consumer trends toward crops with lower yields or at lower price points may adversely affect AeroFarms’ financial performance. If AeroFarms expands its product offerings to include other produce, such as berries, or other crops, it will similarly be impacted by consumer preferences for such products.

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Safety and Quality Concerns.   Media coverage regarding the safety or quality of, or diet or health issues relating to, AeroFarms’ products or the processes involved in their manufacturing, may damage consumer confidence in AeroFarms’ products. For example, manufacturers and regulatory authorities have issued recalls of leafy greens in the past due to issues such as E. coli contamination. Any widespread safety or quality issues involving leafy greens or other fresh produce — even if not involving AeroFarms’ — could adversely affect consumer confidence in and demand for such

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leafy greens or other fresh produce. Further, controlled environment agriculture is a relatively small, new industry, and a food safety incident involving an indoor farming producer other than AeroFarms, including direct competitors, may adversely affect consumer perception of or demand for AeroFarms’ products.

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Consumer Income.   A general decline in the consumption of AeroFarms’ products could occur at any time due to changes in consumer spending habits, including unwillingness or inability to purchase AeroFarms’ products due to financial hardship or increased price sensitivity, which may be exacerbated by the effects of the COVID-19 pandemic and inflation.

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The success of AeroFarms’ products will depend on a number of factors including its ability to accurately anticipate changes in market demand and consumer preferences, its ability to differentiate the quality of AeroFarms’ products from those of its competitors, and the effectiveness of marketing and advertising campaigns for its products. AeroFarms may not be successful in identifying trends in consumer preferences and growing or developing products that respond to such trends in a timely manner. AeroFarms or its selling partners also may not be able to effectively promote AeroFarms products through marketing and advertising campaigns to establish consumer acceptance. If AeroFarms’ products fail to gain market acceptance, are restricted by regulatory requirements or have quality problems, the Company may not be able to fully recover costs and expenses incurred in its operation, and its business, financial condition or results of operations could be materially and adversely affected.

AeroFarms may not be able to compete successfully in the highly competitive fresh produce industry and AeroFarms may not be able to maintain its competitive advantage as an industry leader in vertical farming due to the increased number of competitors in the agriculture industry.

AeroFarms operates in the highly competitive fresh produce industry environment. In this market, competition is based on, among other things, product quality and taste, brand recognition and loyalty, product variety, product packaging and package design, shelf space, reputation, price, advertising, promotion and nutritional claims.

The produce industry generally does not work on long-term contracts and is dependent upon establishing consistent sales targets to be successful. AeroFarms’ ability to compete depends in part on its ability to secure placement of its product with customers; moreover, as AeroFarms enters new markets, its ability to compete will depend in part on its ability to secure placement of its products with new customers. Similarly, AeroFarms’ products historically have been available for consumers only in the New Jersey and New York metropolitan areas. When entering new geographies, the Company may not be able to secure placement of its product with new customers, or its products may not attract end consumers at the same rate, which could materially and adversely affect its results of operations and financial condition.

AeroFarms may not be able to compete against competition from traditional field farm operators, both domestic and abroad, as well as from indoor growers or high-tech agricultural startups that are focused on local production within or near major cities, which would take away potential market share from AeroFarms.

Some of these competitors have products that are well accepted in the marketplace today. Further, AeroFarms cannot be certain that it will successfully compete with competitors that may have greater resources, including financial resources, sales resources, technical resources, or other resources. Competitors also may have lower operational costs, and as a result may be able to offer comparable or substitute products to customers at a lower price. This could put pressure on AeroFarms to lower its prices, resulting in reduced profitability or causing AeroFarms to lose market share if it fails to lower prices. Retailers may also market competitive products under their own private labels, which are generally sold at lower prices, and may change the merchandising of AeroFarms’ products such that AeroFarms has less favorable placement.

The controlled environment agriculture business is generally capital intensive but has relatively low barriers to entry, and AeroFarms will not be able to prevent competitors from building and operating their own indoor farming sites.

In addition, AeroFarms’ ability to compete successfully depends, in large part, on its ability to implement its growth strategy of building additional controlled environment facilities and expanding its

 

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product line. AeroFarms’ financial condition and operating results will be adversely affected if it fails to implement its growth strategy or if AeroFarms invests resources in a growth strategy that ultimately proves unsuccessful.

If AeroFarms fails to develop and maintain its brand, its business could suffer.

The AeroFarms brand is recognized for creating clean, nutritious, locally-grown and high-quality products, which the Company believes to be differentiated and enabled by AeroFarms’ technology platform. AeroFarms’ success depends, in part, on its ability to maintain and grow the value of the AeroFarms brand. Promoting and positioning AeroFarms’ brand and reputation will depend on, among other factors, the success of its product offerings, food safety and quality assurance, its marketing and merchandising efforts, its continued focus on the environment and sustainability, and its ability to provide consistent, high-quality products to customers. Any negative publicity, regardless of its accuracy, could impair AeroFarms’ business.

Use of social and digital media by AeroFarms, its consumers and third parties increases the speed and extent that information or misinformation and opinions can be shared. Negative publicity about AeroFarms, its partners, or its products on social or digital media could seriously damage AeroFarms’ brand and reputation. Brand value is based on perceptions of subjective qualities, and any incident that erodes the confidence of AeroFarms’ consumers, customers, distributors, or other strategic partners, including adverse publicity or a governmental investigation, litigation or regulatory enforcement action, could reduce the value of AeroFarms’ brand and materially damage its business. If AeroFarms does not achieve and maintain favorable perception of its brand, AeroFarms’ business, financial condition and results of operations could be adversely affected.

If customers or consumers are unwilling to accept AeroFarms’ rebrand, which is occurring during the second quarter of 2021, there could be material adverse effects to AeroFarms’ reputation, business, operating results, and financial condition.

AeroFarms is undergoing a significant rebranding effort during the second quarter of 2021, which represents the first major relaunch of its leafy greens products as well as an update to its general corporate branding and logos.

Historically, AeroFarms has sold leafy greens products under the “Dream Greens” brand. The decision to do so dates back to the commercial launch of AeroFarms’ leafy greens products, when management believed there to be potential uncertainty regarding the consumer acceptance of branded produce that would be grown indoors in a fully-controlled environment, without sun and without soil; thus, the Dream Greens brand was created for the consumer-products aspect of AeroFarms’ business, while the AeroFarms brand was retained and developed in parallel with respect to the technology platform. While the Company believes there has been wide acceptance of the Dream Greens brand; the Company now believes that consumers place value on foods produced in fully-controlled environments, without pesticides and potentially with less likelihood of contamination. To bring the two brands closer together, Dream Greens products are being transitioned to becoming branded as AeroFarms products, expected to be completed during the second quarter of 2021, and expects to discontinue use of the Dream Greens brand.

If there is not acceptance of the new AeroFarms brand, or if its rate of acceptance takes significant time or is materially slower than or less recognizable than that of the Dream Greens brand, then there could be material adverse effects to AeroFarms’ image, reputation, market opportunities, revenues, operating results, and financial condition.

AeroFarms’ brand and reputation may be diminished due to real or perceived quality or food safety issues with its products, which could negatively impact AeroFarms’ business, reputation, operating results and financial condition.

Real or perceived quality or food safety concerns or failures to comply with applicable food regulations and requirements, whether or not ultimately based on fact and whether or not involving AeroFarms (such as incidents involving AeroFarms’ competitors), could cause negative publicity and reduced confidence in AeroFarms’ brand or products, which could in turn harm its reputation and sales, and could adversely affect its business, financial condition and operating results. Brand value is also based on perceptions of subjective

 

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qualities, such as appearance and taste, and any incident that erodes the loyalty of AeroFarms’ consumers, including changes to product appearance, taste or packaging, could significantly reduce the value of AeroFarms’ brand and significantly damage its business.

AeroFarms also has no control over its products once a third-party distributor takes possession of them. Distributors or consumers may store AeroFarms products under conditions and for periods of time inconsistent with USDA, FDA, and other governmental guidelines, which may adversely affect the quality and safety of AeroFarms’ products.

If consumers do not perceive AeroFarms’ products to be of high quality or safe, then the value of its brand would be diminished, and its business, results of operations and financial condition would be adversely affected. Any loss of confidence on the part of consumers in the quality and safety of AeroFarms’ products would be difficult and costly to overcome. Any such negative effect could be exacerbated by AeroFarms’ market positioning as a socially conscious grower of high-quality produce and may significantly reduce AeroFarms’ brand value. Issues regarding the safety of any of AeroFarms’ products, regardless of the cause, may harm its brand, reputation and operating results.

AeroFarms’ estimates of market opportunity and forecasts of market growth may prove to be inaccurate, and even if the market in which AeroFarms competes achieves the forecasted growth, AeroFarms’ business could fail to grow at similar rates, if at all.

Market opportunity estimates and growth forecasts included in this proxy statement/prospectus, including those AeroFarms has generated itself, are subject to significant uncertainty and are based on assumptions and estimates that may not prove to be accurate. The ongoing COVID-19 pandemic and related economic impact creates additional uncertainty. Variables that go into the calculation of AeroFarms’ market opportunity are subject to change over time, and there is no guarantee that any particular number or percentage of customers covered by these market opportunity estimates will purchase AeroFarms’ products at all or generate any particular level of revenue for AeroFarms. Any expansion in AeroFarms’ market depends on a number of factors, including the cost and perceived value associated with its product and those of its competitors. Even if the market in which AeroFarms competes meets the size estimates and growth forecast in this proxy statement/prospectus, AeroFarms’ business could fail to grow at the rate it anticipates, if at all. AeroFarms’ growth is subject to many factors, including success in implementing its business strategy, which is subject to many risks and uncertainties. Accordingly, the forecasts of market growth included in this proxy statement/prospectus should not be taken as indicative of AeroFarms’ future revenue or growth prospects.

If AeroFarms cannot maintain its Company culture or focus on its vision as the Company grows, its business and competitive position may be harmed.

AeroFarms’ mission is to grow the best plants possible for the betterment of humanity. The Company relies on its people, their experience, and their relationships. Any failure to preserve AeroFarms’ culture or any loss of focus on the Company’s mission could negatively affect its ability to retain and recruit personnel, which is critical to growth and pursuit of its strategic goals. As AeroFarms increases the number of employees and develops the infrastructure of a public company, it may find it difficult to maintain these important values. If AeroFarms fails to maintain its Company culture or mission, its business and competitive position may be harmed.

Food safety and foodborne illness incidents, product mislabeling incidents, or advertising incidents may materially adversely affect AeroFarms’ business by exposing the Company to lawsuits, product recalls, or regulatory enforcement actions, increasing its operating costs and reducing demand for its product offerings.

Selling food for human consumption involves inherent legal and other risks, and there is increasing governmental scrutiny of and public awareness regarding food safety. Unexpected side effects, illness, injury or death related to allergens, foodborne illnesses or other food safety incidents caused by products AeroFarms sells, or involving its suppliers, could result in the discontinuance of sales of these products or AeroFarms’ relationships with such suppliers, or otherwise result in increased operating costs, regulatory enforcement actions, or harm to AeroFarms’ reputation. Shipment of adulterated or misbranded products, even if inadvertent, can result in criminal or civil liability. Such incidents could also expose AeroFarms to

 

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product liability, negligence, or other lawsuits, including consumer class action lawsuits. Any claims brought against AeroFarms may exceed or be outside the scope of its existing or future insurance policy coverage or limits. Any judgment against AeroFarms that is more than its policy limits or not covered by its policies or not subject to insurance would have to be paid from the Company’s cash reserves, which would reduce its capital resources.

The occurrence of foodborne illnesses or other food safety incidents could also adversely affect the price and availability of affected raw materials, resulting in higher costs, disruptions in supply and a reduction in sales. Furthermore, any instances of food contamination or regulatory noncompliance, whether or not caused by AeroFarms’ actions, could compel AeroFarms, its suppliers, its distributors or its customers, depending on the circumstances, to conduct a recall in accordance with FDA regulations, and comparable state laws. Food recalls could result in significant losses due to their costs, the destruction of product inventory, lost sales due to the unavailability of the product for a period of time and potential loss of existing distributors or customers and a potential negative impact on AeroFarms’ ability to attract new customers due to negative consumer experiences or because of an adverse impact on AeroFarms’ brand and reputation. The costs of a recall could be outside the scope of AeroFarms’ existing or future insurance policy coverage or limits.

In addition, food companies have been subject to targeted, large-scale tampering as well as to opportunistic, individual product tampering, and AeroFarms, like any food company, could be a target for product tampering. Forms of tampering could include the introduction of foreign material, chemical contaminants, and pathological organisms into consumer products as well as product substitution. FDA regulations require companies like AeroFarms to analyze, prepare, and implement mitigation strategies specifically to address tampering designed to inflict widespread public health harm. If AeroFarms does not adequately address the possibility, or any actual instance, of product tampering, it could face possible seizure or recall of its products, suspension of its facilities’ registrations, and/or the imposition of civil or criminal sanctions, which could materially adversely affect AeroFarms’ business, financial condition, and operating results.

AeroFarms’ operations are subject to FDA and USDA governmental regulation and state regulation, and there is no assurance that AeroFarms will be in compliance with all regulations.

AeroFarms’ operations are regulated by the FDA, and other federal, state and local authorities. Specifically, AeroFarms is subject to the requirements of the Federal Food, Drug and Cosmetic Act and regulations promulgated thereunder by the FDA. This comprehensive regulatory program governs, among other things, the manufacturing, composition and ingredients, packaging, labeling and safety of food. Under this program the FDA requires that facilities that grow, pack, and/or process food products comply with a range of requirements, including standards for the growing, harvesting, packing and holding of produce, hazard analysis and preventative controls regulations, current good manufacturing practices, or cGMPs, and supplier verification requirements. AeroFarms’ facilities are subject to periodic inspection by federal, state and local authorities. If AeroFarms cannot successfully manufacture products that conform to its specifications and the strict regulatory requirements of the FDA or others, AeroFarms may be subject to adverse inspectional findings or enforcement actions, which could materially impact its ability to market its products, or could result in a recall of AeroFarms’ product that have already been distributed. If the FDA or a comparable foreign regulatory authority determines that AeroFarms has not complied with the applicable regulatory requirements, its business may be materially impacted.

AeroFarms seeks to comply with applicable regulations through a combination of employing internal experience and expert personnel to ensure quality-assurance compliance (i.e., assuring that products are not adulterated or misbranded) and contracting with third-party laboratories that conduct analyses of products to ensure compliance with nutrition labeling requirements and to identify any potential contaminants before distribution. Failure by AeroFarms to comply with applicable laws and regulations or maintain permits, licenses or registrations relating to AeroFarms operations could subject the Company to civil remedies or penalties, including fines, injunctions, recalls or seizures, warning letters, restrictions on the marketing or manufacturing of products, or refusals to permit the import or export of products, as well as potential criminal sanctions, which could result in increased operating costs resulting in a material effect on AeroFarms’ operating results and business.

 

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Changes in existing laws or regulations, or the adoption of new laws or regulations, may increase AeroFarms’ costs and otherwise adversely affect its business, results of operations and financial condition.

The manufacture and marketing of food products is highly regulated. AeroFarms and its suppliers are subject to a variety of laws and regulations. These laws and regulations apply to many aspects of AeroFarms’ business, including the manufacture, packaging, labeling, distribution, advertising, sale, quality, and safety of its products, as well as the health and safety of its employees and the protection of the environment.

In the United States, AeroFarms is subject to regulation by various government agencies, including the FDA, USDA, Federal Trade Commission (FTC), Occupational Health and Safety Administration (OSHA), and U.S. Environmental Protection Agency (EPA), as well as various state and local agencies. AeroFarms is also regulated outside the United States by various international regulatory bodies. In addition, depending on customer specification, AeroFarms may be subject to certain voluntary, third-party standards, such as Global Food Safety Initiative, or GFSI, standards and review by voluntary organizations, such as the Council of Better Business Bureaus’ National Advertising Division. AeroFarms could incur costs, including fines, penalties and third-party claims, because of any violations of, or liabilities under, such requirements, including any competitor or consumer challenges relating to compliance with such requirements. The loss of third-party accreditation could result in lost sales and customers, and may adversely affect AeroFarms’ business, results of operation, and financial condition. In connection with the marketing and advertisement of its products, AeroFarms could be the target of claims relating to false or deceptive advertising, including under the auspices of the FTC and the consumer protection statutes of some states.

Vertical farming is a relatively new industry lacking a deep body of specific regulations applicable to its operations. As the industry matures, AeroFarms may become subject to new regulations that may adversely affect its business.

The regulatory environment in which AeroFarms operates could change significantly and adversely in the future. Any change in manufacturing, labeling or packaging requirements for AeroFarms’ products may lead to an increase in costs or interruptions in production, either of which could adversely affect its operations and financial condition. New or revised government laws and regulations could result in additional compliance costs and, in the event of non-compliance, civil remedies, including fines, injunctions, withdrawals, recalls, or seizures and confiscations, as well as potential criminal sanctions, any of which may adversely affect AeroFarms’ business, results of operations, and financial condition.

AeroFarms’ business is expected to be dependent in part upon its international operations, particularly in the United Arab Emirates, and any disruption to those operations or changes to local laws or regulations could adversely affect AeroFarms.

AeroFarms plans to operate in the United Arab Emirates and intends to continue to expand its international presence. Laws and business practices that favor local competitors or prohibit or limit foreign ownership of certain businesses or our failure to adapt our practices, systems, processes and business models effectively to the traveler and supplier preferences (as well as the regulatory and tax landscapes) of each country into which AeroFarms expand, could slow our growth or prevent our ability to compete effectively in certain markets. For example, to compete in certain international markets we have in the past, and may in the future, adopt locally-preferred payment methods, which has increased our costs and instances of fraud. Certain international markets in which we operate have lower margins than more mature markets, which could have a negative impact on our overall margins as our revenues from these markets grow over time. Additionally, some countries have enacted or are considering enacting data localization laws that make competition by foreign companies costly or operationally difficult in those markets.

In addition to the risks outlined elsewhere in this section, our international operations are also subject to a number of other risks, including:

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Exposure to local economic or political instability and threatened or actual acts of terrorism;

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Compliance with U.S. and non-U.S. regulatory laws and requirements relating to anti-corruption, antitrust or competition, economic sanctions, data content and privacy, consumer protection, employment and labor laws, health and safety, information reporting and advertising and promotions;

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Weaker enforcement of AeroFarms’ contractual and intellectual property rights;

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Lower levels of credit card usage and increased payment and fraud risk;

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Longer payment cycles, and difficulties in collecting accounts receivable;

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Preferences by local populations for local providers;

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Restrictions on, or adverse tax and other consequences related to the repatriation of cash, the withdrawal of non-U.S. investments, cash balances and earnings, as well as restrictions on AeroFarms’ ability to invest in our operations in certain countries;

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Changes to trade policy or agreements that limit AeroFarms’ ability to offer, or adversely affect demand for, its products and services;

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AeroFarms’ ability to support technologies or marketing channels that may be prevalent in a particular international market and used by local competitors, but are not scalable for an international company offering services in many markets around the world; and

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Uncertainty regarding liability for services and content, including uncertainty as a result of local laws and lack of precedent.

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Failure by any suppliers of AeroFarms to comply with food safety, environmental or other laws and regulations, or with the specifications and requirements of AeroFarms’ products, may disrupt its supply of products and adversely affect its business.

If AeroFarms’ current or future suppliers fail to comply with food safety, environmental, or other laws and regulations, or face allegations of non-compliance, their operations may be disrupted. Additionally, downstream distribution partners are required to maintain the quality of AeroFarms’ products and to comply with AeroFarms’ standards and specifications. In the event of actual or alleged non-compliance, AeroFarms might be forced to find alternative suppliers and AeroFarms may be subject to lawsuits related to such non-compliance by such suppliers. As a result, AeroFarms’ production could be disrupted or its costs could increase, which would adversely affect AeroFarms’ business, results of operations, and financial condition. The failure of any current or future supplier to conform to AeroFarms’ standards could adversely affect AeroFarms’ reputation in the marketplace and result in product recalls, product liability claims, and economic loss. Additionally, actions AeroFarms may take to mitigate the impact of any disruption or potential disruption in its supply of produce, including increasing inventory in anticipation of a potential supply or production interruption, may adversely affect AeroFarms’ business, results of operations, and financial condition.

AeroFarms is subject to stringent environmental regulation and potentially subject to environmental litigation, proceedings, and investigations.

AeroFarms’ past and present business operations, leasehold interests of real property and operations are subject to stringent federal, state, and local environmental laws and regulations pertaining to the discharge of materials into the environment, and the handling and disposition of wastes (including solid and hazardous wastes) or otherwise relating to protection of the environment. Compliance with these laws and regulations, and the ability to comply with any modifications to these laws and regulations, is material to AeroFarms’ business. New matters or sites may be identified in the future that will require additional investigation, assessment, or expenditures. Future discovery of contamination of property underlying or in the vicinity of AeroFarms’ present properties or facilities and/or waste disposal sites could require AeroFarms to incur additional expenses. The occurrence of any of these events, the implementation of new laws and regulations, or stricter interpretation of existing laws or regulations, could adversely affect AeroFarms’ financial results.

Litigation or legal proceedings could expose AeroFarms to significant liabilities and have a negative impact on its reputation or business.

From time to time, AeroFarms may be party to various claims and litigation proceedings. AeroFarms evaluates these claims and litigation proceedings to assess the likelihood of unfavorable outcomes and to estimate, if possible, the amount of potential losses. Based on these assessments and estimates, AeroFarms may establish reserves, as appropriate. These assessments and estimates are based on the information available

 

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to management at the time and involve a significant amount of management judgment. Actual outcomes or losses may differ materially from AeroFarms’ assessments and estimates. AeroFarms is not currently party to any material litigation.

Even when not merited, the defense of these lawsuits may divert management’s attention, and AeroFarms may incur significant expenses in defending these lawsuits. The results of litigation and other legal proceedings are inherently uncertain, and adverse judgments or settlements in some of these legal disputes may result in adverse monetary damages, penalties or injunctive relief against AeroFarms, which could negatively impact its financial position, cash flows or results of operations. Any claims or litigation, even if fully indemnified or insured, could damage AeroFarms’ reputation and make it more difficult to compete effectively or to obtain adequate insurance in the future.

Furthermore, while AeroFarms maintains insurance for certain potential liabilities, such insurance does not cover all types and amounts of potential liabilities and is subject to various exclusions as well as caps on amounts recoverable. Even if AeroFarms believes a claim is covered by insurance, insurers may dispute AeroFarms’ entitlement to recovery for a variety of potential reasons, which may affect the timing and, if the insurers prevail, the amount of AeroFarms’ recovery.

AeroFarms relies on information technology systems and any inadequacy, failure, interruption or security breaches of those systems may harm AeroFarms’ ability to effectively operate its business.

AeroFarms is dependent on various information technology systems, including, but not limited to, networks, applications and outsourced services in connection with the current and planned operation of its business. A failure of these information technology systems to perform as anticipated could cause AeroFarms’ business to suffer. For example, AeroFarms’ growing operations are managed by operations software known as agSTACK. If this software does not perform as anticipated, AeroFarms’ operations may be adversely affected resulting in decreased yield or quality, mitigation expenses, waste, additional labor expenses and partial or full loss of the crop.

In addition, AeroFarms’ information technology systems may be vulnerable to damage or interruption from circumstances beyond its control, including fire, natural disasters, systems failures, viruses and security breaches. Any such damage or interruption could negatively impact AeroFarms’ business.

A cybersecurity incident or other technology disruptions could negatively impact AeroFarms’ business.

AeroFarms uses or plans to use computers, software and technology in substantially all aspects of its business operations. AeroFarms’ employees also use or plan to use mobile devices, social networking and other online activities to connect with crew members, distributors, customers and consumers. Such uses give rise to cybersecurity risks, including security breaches, espionage, system disruption, theft and inadvertent release of information. Cybersecurity incidents are increasing in their frequency, sophistication and intensity, with third-party phishing and social engineering attacks in particular increasing in connection with the COVID-19 pandemic. AeroFarms’ business involves sensitive information and intellectual property, including know-how, private information about crew members and financial and strategic information about the Company and its business partners.

While AeroFarms has implemented and plans to implement measures to prevent security breaches and cyber incidents, these preventative measures and incident response efforts may not be entirely effective. The theft, destruction, loss, misappropriation or release of sensitive information or intellectual property, or interference with AeroFarms’ information technology systems or the technology systems of third parties on which it relies, could result in business disruption, negative publicity, brand damage, violation of privacy laws, loss of customers and distributors, potential liability and competitive disadvantage all of which could negatively impact AeroFarms’ business, financial condition or results of operations.

The loss of any registered trademark or other intellectual property could enable other companies to compete more effectively with AeroFarms.

AeroFarms owns patents, trademarks and other proprietary rights that are important to its business, including its principal trademark, AeroFarms. AeroFarms’ trademarks are valuable assets that reinforce the

 

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distinctiveness of its brand to consumers, and AeroFarms’ operations utilize intellectual property that is patented. AeroFarms believes that the protection of its patents, trademarks, copyrights and domain names is important to its success. AeroFarms has also invested a significant amount of money in establishing and promoting its trademarked brand. AeroFarms also relies on unpatented proprietary expertise and copyright protection to develop and maintain its competitive position. The Company’s continued success depends, to a significant degree, upon its ability to protect and preserve its intellectual property, including patents, trademarks and copyrights.

AeroFarms relies on confidentiality agreements and patent, trademark and copyright law to protect its intellectual property rights. These confidentiality agreements with team members and certain of the Company’s consultants, contract employees, suppliers and independent contractors generally require that all information made known to them be kept strictly confidential.

AeroFarms cannot assure you that the steps it has taken to protect its intellectual property rights are adequate, that its intellectual property rights can be successfully defended and asserted in the future or that third parties will not infringe upon or misappropriate any such rights. In addition, AeroFarms’ trademark rights and related registrations may be challenged in the future and could be canceled or narrowed. Failure to protect AeroFarms’ trademark rights could prevent the Company in the future from challenging third parties who use names and logos similar to its trademarks, which may in turn cause consumer confusion or negatively affect consumers’ perception of AeroFarms’ brand and products. Moreover, intellectual property disputes and proceedings and infringement claims may result in a significant distraction for management and significant expense, which may not be recoverable regardless of whether AeroFarms is successful. Such proceedings may be protracted with no certainty of success, and an adverse outcome could subject AeroFarms to liabilities, force it to cease use of certain trademarks or other intellectual property or force the Company to enter into licenses with others. Any one of these occurrences may negatively impact AeroFarms’ business, financial condition and results of operations.

AeroFarms depends on employing a skilled and less-skilled local labor force, and failure to attract and retain qualified employees could negatively impact AeroFarms’ business, results of operations and financial condition.

AeroFarms’ operations require significant labor, and the growing season for indoor vertical farming is year-round. There is competition for skilled and less-skilled agricultural labor and even if AeroFarms is able to identify, hire and train its labor force, there is no guarantee that AeroFarms will be able to retain these employees. Any shortage of labor or lack of regular availability could restrict AeroFarms’ ability to operate its facilities profitably, or at all.

In addition, efforts by labor unions to organize AeroFarms’ employees could divert management attention away from regular day-to-day operations and increase its operating expenses. Labor unions may make attempts to organize AeroFarms’ non-unionized employees. AeroFarms is not aware of any activities relating to union organizations at its current facilities, but it cannot predict which, if any, groups of employees may seek union representation in the future or the outcome of any collective bargaining. If AeroFarms is unable to negotiate acceptable collective bargaining agreements, it may have to wait through “cooling off” periods, which are often followed by union-initiated work stoppages, including strikes. Depending on the type and duration of any work stoppage, AeroFarms’ operating expenses could increase significantly, which could negatively impact its financial condition, results of operations and cash flows.

If AeroFarms fails to retain and motivate members of its management team or other key team members, its business and future growth prospects would be harmed.

AeroFarms’ success and future growth depend largely upon the continued services of its executive officers as well as other key team members. These executives and key team members have been primarily responsible for determining the strategic direction of the business and executing AeroFarms’ growth strategy and are integral to AeroFarms’ brand, culture and reputation with distributors and others in the industry. From time to time, there may be changes in AeroFarms’ executive management team or other key team members resulting from the hiring or departure of these personnel. The loss of one or more of executive officers or key team members, or the failure by the executive team and key team members to effectively

 

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work together and lead the Company, could harm AeroFarms’ business. AeroFarms’ earlier growth stage may result in less management depth with less established succession planning than may be found in later-stage companies.

AeroFarms relies on making assumptions about the channel mix supplied by its farms in order to achieve expected results, which, if wrong, could have material negative impact to its business, operational results, and financial performance.

AeroFarms has made assumptions about the expected channel mix of its farms. Demand for AeroFarms’ products fluctuates due to changes in customer orders which typically do not work on long-term contracts in the produce industry. If AeroFarms is not correct in forecasting demand by channel to achieve its expected results, it may experience a reduced average sales price, less revenue growth than anticipated or a supply-demand imbalance, which may negatively affect its financial performance. Demand for leafy greens products may also be subject to some degree of seasonality due to consumer behavior. As a result, comparisons of AeroFarms’ sales and operating results between different periods may not necessarily be meaningful comparisons.

AeroFarms faces risks inherent in the agriculture business, including the risks of diseases and pests.

AeroFarms is subject to the risks inherent in an agricultural business, such as insects, plant and seed diseases and similar agricultural risks, which may include crop losses, for which AeroFarms may not be insured. Although AeroFarms’ products are grown in climate-controlled, indoor vertical farms, there can be no assurance that natural elements will not affect the production of these products. In particular, plant diseases or pest infestations are possible and have the potential to materially impact production.

Although AeroFarms has taken and continues to take precautions to guard against crop diseases and pests, these efforts may not be sufficient. In addition, diseases and pests can make their way AeroFarms’ farms from outside sources over which AeroFarms has limited or no control. Diseases and pests can be inadvertently brought in by employees, from seeds and propagation vendors, and from the trucks that transport supplies to the farm sites. Once a disease or pest were introduced, AeroFarms would need to quickly identify the problem and take remedial action to preserve its production. Failure to identify and remediate any diseases or pests in a timely manner could cause the loss of all or a portion of AeroFarms’ crop and result in substantial time and resources to resume operations. Crop losses as a result of these agricultural risks could negatively impact AeroFarms’ business, prospects, financial condition, results of operations and cash flows.

If AeroFarms’ estimates or judgments relating to its critical accounting policies prove to be incorrect, its results of operations could be adversely affected.

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in AeroFarms’ consolidated financial statements and related notes appearing elsewhere in this proxy statement/prospectus. AeroFarms bases its estimates on historical experience and on various other assumptions that it believes to be reasonable under the circumstances, as provided in the section titled “AeroFarms Management’s Discussion and Analysis of Financial Condition and Results of Operations — Critical Accounting Policies and Estimates.” The results of these estimates form the basis for making judgments about the carrying values of assets, liabilities and equity, and the amount of revenue and expenses that are not readily apparent from other sources. Significant estimates and judgments involve the useful lives of fixed assets, the valuation of instruments issued for financing and stock-based compensation, and income taxes, among others. AeroFarms’ results of operations may be adversely affected if its assumptions change or if actual circumstances differ from those in its assumptions, which could cause the Company’s results of operations to fall below the expectations of securities analysts and investors, resulting in a decline in the market price of its common stock after the closing of the Business Combination.

AeroFarms will incur increased costs as a result of operating as a public company, and its management will devote substantial time to new compliance initiatives.

If AeroFarms completes the Business Combination and becomes a public company, it will incur significant legal, accounting and other expenses that it did not incur as a private company, and these

 

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expenses may further increase if AeroFarms is no longer an emerging growth company, as defined in Section 2(a) of the Securities Act. As a public company, AeroFarms will be subject to the reporting requirements of the Exchange Act, the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”), the Dodd-Frank Wall Street Reform and Consumer Protection Act, as well as rules adopted, and to be adopted, by the SEC and Nasdaq. AeroFarms’ management and other personnel will need to devote a substantial amount of time to these compliance initiatives. Moreover, AeroFarms expects these rules and regulations to substantially increase its legal and financial compliance costs and to make some activities more time-consuming and costly. The increased costs may increase AeroFarms’ net loss. For example, AeroFarms expects these rules and regulations to make it more difficult and more expensive for it to obtain director and officer liability insurance and it may be forced to accept reduced policy limits or incur substantially higher costs to maintain the same or similar coverage. AeroFarms cannot predict or estimate the amount or timing of additional costs it may incur to respond to these requirements. The impact of these requirements could also make it more difficult for AeroFarms to attract and retain qualified persons to serve on its board of directors, its board committees or as executive officers.

AeroFarms’ employees and independent contractors may engage in misconduct or other improper activities, including noncompliance with regulatory standards and requirements, which could negatively impact AeroFarms’ business, prospects, financial condition and operating results.

AeroFarms is exposed to the risk that its employees and independent contractors may engage in misconduct or other illegal activity. Misconduct by these parties could include intentional, reckless or negligent conduct or other activities that violate laws and regulations, including production standards, U.S. federal and state fraud, abuse, data privacy and security laws, other similar non-U.S. laws or laws that require the true, complete and accurate reporting of financial information or data. It is not always possible to identify and deter misconduct by employees and other third parties, and the precautions AeroFarms takes to detect and prevent this activity may not be effective in controlling unknown or unmanaged risks or losses or in protecting AeroFarms from governmental investigations or other actions or lawsuits stemming from a failure to be in compliance with such laws or regulations. In addition, AeroFarms is subject to the risk that a person or government could allege such fraud or other misconduct, even if none occurred. If any such actions are instituted against AeroFarms, and AeroFarms is not successful in defending itself or asserting its rights, those actions could have a significant impact on AeroFarms’ business, prospects, financial condition and operating results, including, without limitation, the imposition of significant civil, criminal and administrative penalties, damages, monetary fines, disgorgement, integrity oversight and reporting obligations to resolve allegations of non-compliance, imprisonment, other sanctions, contractual damages, reputational harm, diminished profits and future earnings and curtailment of AeroFarms’ operations, any of which could adversely affect AeroFarms’ business, prospects, financial condition and operating results.

Changes in tax laws may materially adversely affect AeroFarms’ business, prospects, financial condition and operating results.

New income, sales, use or other tax laws, statutes, rules, regulations or ordinances could be enacted at any time, which could adversely affect AeroFarms’ business, prospects, financial condition and operating results. Further, existing tax laws, statutes, rules, regulations or ordinances could be interpreted, changed, modified or applied adversely to AeroFarms. For example, U.S. federal tax legislation enacted in 2017, informally titled the Tax Cuts and Jobs Act (the “Tax Act”), enacted many significant changes to the U.S. tax laws. Future guidance from the IRS with respect to the Tax Act may affect AeroFarms, and certain aspects of the Tax Act could be repealed or modified in future legislation. The Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) has already modified certain provisions of the Tax Act. In addition, it is uncertain if and to what extent various states will conform to the Tax Act, the CARES Act or any newly enacted federal tax legislation. New tax plans introduced by the administration of President Joseph Biden may increase payroll taxes and individual and business taxes that may have unfavorable effects to our future net income amounts and cash flows from operations, including increased costs of employment.

AeroFarms’ ability to use net operating loss carryforwards and other tax attributes may be limited in connection with the business combination or other ownership changes.

AeroFarms has incurred losses during its history and does not expect to become profitable in the near future, and may never achieve profitability. To the extent that AeroFarms continues to generate taxable losses,

 

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unused losses will carry forward to offset future taxable income, if any, until such unused losses expire, if at all. As of December 31, 2020, AeroFarms had U.S. federal net operating loss carryforwards of approximately $84.8 million.

Under the Tax Act, as modified by the CARES Act, U.S. federal net operating loss carryforwards generated in taxable periods beginning after December 31, 2017, may be carried forward indefinitely, but the deductibility of such net operating loss carryforwards in taxable years beginning after December 31, 2020, is limited to 80% of taxable income. It is uncertain if and to what extent various states will conform to the Tax Act or the CARES Act.

In addition, AeroFarms’ net operating loss carryforwards are subject to review and possible adjustment by the IRS, and state tax authorities. Under Sections 382 and 383 of the Code, AeroFarms’ federal net operating loss carryforwards and other tax attributes may become subject to an annual limitation in the event of certain cumulative changes in the ownership of AeroFarms. An “ownership change” pursuant to Section 382 of the Code generally occurs if one or more stockholders or groups of stockholders who own at least 5% of a company’s stock increase their ownership by more than 50 percentage points over their lowest ownership percentage within a rolling three-year period. AeroFarms’ ability to utilize its net operating loss carryforwards and other tax attributes to offset future taxable income or tax liabilities may be limited as a result of ownership changes, including potential changes in connection with the business combination or other transactions. Generally, if AeroFarms undergoes an ownership change, the amount of AeroFarms’ taxable income that may be offset by its net operating loss carryforwards with respect to any taxable year ending after such ownership change (such amount, the “Section 382 Limitation Amount”) is equal to (x) the value of AeroFarms’ stock immediately before the ownership change multiplied by (y) the long-term tax-exempt rate for the calendar month in which the ownership change occurs. The U.S. Internal Revenue Service publishes the applicable long-term tax-exempt rate each month. The long-term tax-exempt rate for July 2021 is 1.64%. If the fair market value of AeroFarms’ assets immediately before the ownership change exceeds the aggregate adjusted basis of such assets at such time (any such excess, “NUBIG”), the Section 382 Limitation Amount is increased by AeroFarms’ built-in gain recognized during the five-year period beginning on the date of the ownership change to the extent the amount of such increase does not exceed the amount of NUBIG.

Similar rules may apply under state tax laws. AeroFarms has not yet determined the amount of the cumulative change in its ownership resulting from the Business Combination or other transactions, or any resulting limitations on its ability to utilize its net operating loss carryforwards and other tax attributes. If AeroFarms earns taxable income, such limitations could result in increased future income tax liability to AeroFarms and its future cash flows could be adversely affected. AeroFarms has recorded a valuation allowance related to its net operating loss carryforwards and other deferred tax assets due to the uncertainty of the ultimate realization of the future benefits of those assets.

The COVID-19 pandemic could negatively impact on AeroFarms’ business, results of operations, and financial condition.

In connection with the COVID-19 pandemic, governments have implemented significant measures, including closures, quarantines, travel restrictions and other social distancing directives, intended to control the spread of the virus. Companies have also taken precautions, such as requiring employees to work remotely, imposing travel restrictions and temporarily closing businesses. To the extent that these restrictions remain in place, additional prevention and mitigation measures are implemented in the future, or there is uncertainty about the effectiveness of these or any other measures to contain or treat COVID-19, there is likely to be an adverse impact on global economic conditions and consumer confidence and spending, which could materially and adversely affect AeroFarms’ operations and demand for its products.

While AeroFarms has been able to continuously operate through the COVID-19 pandemic, the fluid nature of the COVID-19 pandemic and uncertainties regarding the related economic impact are likely to result in sustained market turmoil, which could also negatively impact the Company’s business, financial condition and cash flows. Although AeroFarms’ business is considered an “essential business,” the COVID-19 pandemic could result in labor shortages, which could result in AeroFarms’ inability to plant and harvest crops at full capacity and could result in spoilage or loss of unharvested crops. The impact of COVID-19 on any of AeroFarms’ suppliers, distributors, transportation or logistics providers may negatively affect

 

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AeroFarms’ costs of operation and its supply chain. If the disruptions caused by COVID-19, including decreased availability of labor, continue for an extended period of time, AeroFarms’ ability to meet the demands of distributors and customers may be materially impacted.

Further, COVID-19 may impact customer and consumer demand. Retail and grocery stores may be impacted if governments continue to implement regional business closures, quarantines, travel restrictions and other social distancing directives to slow the spread of the virus. There may also be significant reductions or volatility in consumer demand for AeroFarms’ products due to travel restrictions or social distancing directives, as well as the temporary inability of consumers to purchase these products due to illness, quarantine or financial hardship, shifts in demand away from one or more of AeroFarms’ products, decreased consumer confidence and spending or pantry-loading activity, any of which may negatively impact AeroFarms’ results, including as a result of an increased difficulty in planning for operations and future growing seasons.

The recovery from COVID-19 also may have risks in that increased economic activity globally or regionally may result in high demand for, and constrained access to, materials and services required for AeroFarms to expand its business, such as those needed to construct and commission new farming facilities, which may lead to increased costs or delays that could materially and adversely affect AeroFarms’ business.

The extent of COVID-19’s effect on AeroFarms’ operational and financial performance will depend on future developments, including the duration, spread and intensity of the pandemic, all of which are uncertain and difficult to predict considering the rapidly evolving landscape. As a result, it is not currently possible to ascertain the overall impact of COVID-19 on AeroFarms’ business. However, if the pandemic continues to persist as a severe worldwide health crisis, the disease could negatively impact AeroFarms’ business, financial condition results of operations and cash flows, and may also have the effect of heightening many of the other risks described in this “Risk Factors” section.

Adherence to AeroFarms’ values and its focus on long-term sustainability may negatively influence its short- or medium-term financial performance.

AeroFarms has elected to become a public benefit corporation under Delaware law, and is required to balance the financial interests of its stockholders with the best interests of those stakeholders materially affected by its conduct. AeroFarms’ was formed with the purpose of obtaining a better understanding of plant biology, applying such knowledge to solve agricultural-related issues, and growing superior plants for the betterment of humanity as set forth in the fourth amended and restated certificate of incorporation of Dream Holdings, which will be adopted upon the closing of the Business Combination. AeroFarms may take actions in furtherance of that purposes and other sustainability goals even if those actions do not maximize short- or medium-term financial results. There is no assurance that the expected positive impact from being a public benefit corporation will be realized. Accordingly, being a public benefit corporation and complying with AeroFarms related obligations could negatively impact its ability to provide the highest possible return to its stockholders.

As a public benefit corporation, AeroFarms is required to publicly disclose a report at least biennially on its overall public benefit performance and on its assessment of its success in achieving its specific public benefit purpose. If AeroFarms is not timely or are unable to provide this report, or if the report is not viewed favorably by parties doing business with AeroFarms or regulators or others reviewing AeroFarms’ credentials, its reputation and status as a public benefit corporation may be harmed.

While not required by Delaware law or the terms of AeroFarms’ third amended and restated certificate of incorporation, AeroFarms elected to have its social and environmental performance, accountability and transparency assessed against the proprietary criteria established by an independent non-profit organization. As a result of this assessment, AeroFarms has been designated as a “Certified B Corporation.” The term “Certified B Corporation” does not refer to a particular form of legal entity, but instead refers to companies that are certified by an independent non-profit organization as meeting rigorous standards of social and environmental performance, accountability and transparency. The standards for Certified B Corporation certification may change over time. These standards may not be appropriately tailored to the legal requirements of publicly traded companies or to the operational requirements of larger companies. AeroFarms’ reputation could be harmed if it loses its status as a Certified B Corporation, whether by its choice or by its failure to meet certification requirements, if that change in status were to create a perception that

 

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AeroFarms is more focused on financial performance and is no longer as committed to the values shared by Certified B Corporations. Likewise, AeroFarms’ reputation could be harmed if it publicly reported B Corporation score declines and that created a perception that it has slipped in its satisfaction of the Certified B Corporation standards. Similarly, AeroFarms’ reputation could be harmed if it takes actions that are perceived to be misaligned with its values.

As a public benefit corporation, AeroFarms’ duty to balance a variety of interests may result in actions that do not maximize stockholder value.

As a public benefit corporation, AeroFarms’ board of directors has a duty to balance (i) the pecuniary interest of its stockholders, (ii) the best interests of those materially affected by AeroFarms’ conduct and (iii) specific public benefits identified in AeroFarms’ charter documents. While AeroFarms believes that its public benefit designation and obligation will benefit its stockholders, in balancing these interests the board of directors may take actions that do not maximize stockholder value. Any benefits to stockholders resulting from AeroFarms’ public benefit purposes may not materialize within the timeframe it expects or at all and may have negative effects. For example:

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AeroFarms may choose to revise its policies in ways that it believes will be beneficial to its stakeholders, including farmers, suppliers, employees and local communities, even though the changes may be costly;

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AeroFarms may take actions, such as building state-of-the-art facilities with technology and quality control mechanisms that exceed the requirements of USDA and the FDA, even though these actions may be more costly than other alternatives;

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AeroFarms may be influenced to pursue programs and services to demonstrate its commitment to the communities to which it serves and bringing ethically produced food to the table even though there is no immediate return to AeroFarms’ stockholders; or

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In responding to a possible proposal to acquire the Company, AeroFarms’ board of directors may be influenced by the interests of its stakeholders, including farmers, employees, suppliers and local communities, whose interests may be different from the interests of its stockholders.

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AeroFarms may be unable or slow to realize the benefits it expects from actions taken to benefit its stakeholders, including farmers, employees, suppliers and local communities, which could adversely affect AeroFarms’ business, financial condition and results of operations, which in turn could cause the Company’s stock price to decline.

As a public benefit corporation, AeroFarms may be subject to increased derivative litigation concerning its duty to balance stockholder and public benefit interests, the occurrence of which may have an adverse impact on AeroFarms’ financial condition and results of operations.

Stockholders of a Delaware public benefit corporation (if they, individually or collectively, own at least 2% of its outstanding capital stock or, upon the completion of the Business Combination, the lesser of such percentage or shares of at least $2.0 million in market value) are entitled to file a derivative lawsuit claiming that its directors failed to balance stockholder and public benefit interests. This potential liability does not exist for traditional corporations. Therefore, AeroFarms may be subject to the possibility of increased derivative litigation, which would require the attention of management and, as a result, may adversely impact management’s ability to effectively execute its strategy. Any such derivative litigation may be costly and have an adverse impact on AeroFarms’ financial condition and results of operations.

Risks Related to the Business Combination and Spring Valley

Unless the context otherwise requires, any reference in this section of this proxy statement/prospectus to “Spring Valley,” “we,” “us” or “our” refers to Spring Valley prior to the Business Combination and to New AeroFarms and its subsidiaries following the Business Combination.

 

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Our Initial Shareholders have entered into letter agreements with us to vote in favor of the Business Combination, regardless of how our public shareholders vote.

Unlike some other blank check companies in which the Initial Shareholders agree to vote their shares in accordance with the majority of the votes cast by the public shareholders in connection with an initial business combination, our Initial Shareholders, pursuant to the Sponsor Support Agreement and the Spring Valley Letter Agreement, have agreed, among other things, to vote all of their public shares and Class B ordinary shares in favor of all the proposals being presented at the extraordinary general meeting, including the Business Combination Proposal and the transactions contemplated thereby (including the Merger). As of the date of this proxy statement/prospectus, our Initial Shareholders own 20.0% of the issued and outstanding ordinary shares (excluding the ordinary shares underlying the private placement warrants).

Neither the Spring Valley Board nor any committee thereof obtained a third-party valuation in determining whether or not to pursue the Business Combination.

Neither the Spring Valley Board nor any committee thereof is required to obtain an opinion from an independent investment banking or accounting firm that the price that Spring Valley is paying for Dream Holdings is fair to Spring Valley from a financial point of view. Neither the Spring Valley Board nor any committee thereof obtained a third party valuation in connection with the Business Combination. In analyzing the Business Combination, the Spring Valley Board and management conducted due diligence on Dream Holdings and researched the industry in which Dream Holdings operates. The Spring Valley Board reviewed, among other things, financial due diligence materials prepared by professional advisors, including quality of earnings reports and tax due diligence reports previously prepared in connection with Dream Holdings’ most recent issuance of preferred stock, financial and market data information on selected comparable companies, the implied purchase price multiple of Dream Holdings and the financial terms set forth in the Merger Agreement, and concluded that the Business Combination was in the best interest of its shareholders. Accordingly, investors will be relying solely on the judgment of the Spring Valley Board and management in valuing Dream Holdings, and the Spring Valley Board and management may not have properly valued Dream Holdings’ business. The lack of a third-party valuation may also lead an increased number of shareholders to vote against the Business Combination or demand redemption of their shares, which could potentially impact our ability to consummate the Business Combination.

The COVID-19 pandemic triggered an economic crisis which may delay or prevent the consummation of the Business Combination.

In December 2019, the COVID-19 outbreak was reported in China, and, in March 2020, the World Health Organization declared it a pandemic. Since being initially reported in China, COVID-19 has spread throughout the world and has resulted in unprecedented restrictions and limitations on operations of many businesses, institutions and governmental entities, including in the United States and Canada. Given the ongoing and dynamic nature of the COVID-19 pandemic, it is difficult to predict the impact on the business of Spring Valley, Dream Holdings and New AeroFarms, and there is no guarantee that efforts by Spring Valley, Dream Holdings and New AeroFarms to address the adverse impact of COVID-19 will be effective. If Spring Valley or Dream Holdings are unable to recover from a business disruption on a timely basis, the Business Combination and New AeroFarms’ business and financial conditions and results of operations following the completion of the Business Combination could be adversely affected. The Business Combination may also be delayed and adversely affected by the COVID-19 pandemic, and become more costly. Each of Spring Valley and Dream Holdings may also incur additional costs to remedy damages caused by such disruptions, which could adversely affect its financial condition and results of operations.

Since the Initial Shareholders and our executive officers have interests that are different, or in addition to (and which may conflict with), the interests of our shareholders, a conflict of interest may have existed in determining whether the Business Combination with Dream Holdings is appropriate as our initial business combination. Such interests include that the Initial Shareholders and our executive officers, will lose their entire investment in us if our business combination is not completed.

When you consider the recommendation of the Spring Valley Board in favor of approval of the Business Combination Proposal, you should keep in mind that the Initial Shareholders, including Spring

 

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Valley’s directors, have interests in such proposal that are different from, or in addition to (which may conflict with), those of Spring Valley shareholders and warrant holders generally.

These interests include, among other things, the interests listed below:

•

the fact that our Initial Shareholders have agreed not to redeem any Class A ordinary shares held by them in connection with a shareholder vote to approve a proposed initial business combination;

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the fact that the Sponsor paid an aggregate of $25,000 for 7,187,500 Class B ordinary shares, 5,750,000 of which are currently owned by the Initial Shareholders, the aggregate value of which is estimated to be approximately $57,212,500, assuming the per share value of the New AeroFarms Common Stock is the same as the $9.95 per share closing price of our Class A ordinary shares on Nasdaq as of May 3, 2021;

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the fact that Sponsor paid $8,900,000 for its private placement warrants, the aggregate value of which is estimated to be approximately $8,454,110, assuming the per warrant value of the New AeroFarms warrants is the same as the $0.9499 per warrant closing price of the Spring Valley warrants on Nasdaq as of May 3, 2021, and the private placement warrants would be worthless if a business combination is not consummated by May 27, 2022 (unless such date is extended in accordance with the Existing Governing Documents);

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the fact that the affiliates of Spring Valley have agreed to purchase 3,120,000 shares of New AeroFarms Common Stock at $10.00 per share in the PIPE Financing on the same terms and conditions as the other PIPE Investors;

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the fact that the Initial Shareholders and certain of Spring Valley’s current officers have agreed to waive their rights to liquidating distributions from the trust account with respect to any ordinary shares (other than public shares) held by them if Spring Valley fails to complete an initial business combination by May 27, 2022;

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the fact that the Registration Rights Agreement will be entered into by the Sponsor and certain other affiliates of Spring Valley;

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the fact that, at the option of the Sponsor, any amounts outstanding under any loan made by the Sponsor or any of its affiliates to Spring Valley in an aggregate amount of up to $1,500,000 may be converted into warrants to purchase Class A ordinary shares in connection with the consummation of the Business Combination;

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the continued indemnification of Spring Valley’s directors and officers and the continuation of Spring Valley’s directors’ and officers’ liability insurance after the Business Combination (i.e., a “tail policy”);

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the fact that the Sponsor and Spring Valley’s officers and directors will lose their entire investment in Spring Valley and will not be reimbursed for any out-of-pocket expenses if an initial business combination is not consummated by May 27, 2022;

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the fact that if the trust account is liquidated, including in the event Spring Valley is unable to complete an initial business combination by May 27, 2022, the Sponsor has agreed to indemnify Spring Valley to ensure that the proceeds in the trust account are not reduced below $10.00 per public share, or such lesser per public share amount as is in the trust account on the liquidation date, by the claims of prospective target businesses with which Spring Valley has entered into an acquisition agreement or claims of any third party for services rendered or products sold to Spring Valley, but only if such a vendor or target business has not executed a waiver of any and all rights to seek access to the trust account; and

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the fact that Spring Valley may be entitled to distribute or pay over funds held by Spring Valley outside the Trust Account to the Sponsor or any of its Affiliates prior to the Closing.

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See “Business Combination Proposal — Interests of Spring Valley’s Directors and Executive Officers in the Business Combination” for additional information on interests of Spring Valley’s directors and executive officers.

 

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The personal and financial interests of the Initial Shareholders as well as Spring Valley’s directors and executive officers may have influenced their motivation in identifying and selecting Dream Holdings as business combination targets, completing an initial business combination with Dream Holdings and influencing the operation of the business following the initial business combination. In considering the recommendations of the Spring Valley Board to vote for the proposals, its shareholders should consider these interests.

The exercise of Spring Valley’s directors’ and executive officers’ discretion in agreeing to changes or waivers in the terms of the Business Combination may result in a conflict of interest when determining whether such changes to the terms of the Business Combination or waivers of conditions are appropriate and in Spring Valley’s shareholders’ best interest.

In the period leading up to the closing of the Business Combination, events may occur that, pursuant to the Merger Agreement, would require Spring Valley to agree to amend the Merger Agreement, to consent to certain actions taken by Dream Holdings or to waive rights that Spring Valley is entitled to under the Merger Agreement. Such events could arise because of changes in the course of Dream Holdings’ business, a request by Dream Holdings to undertake actions that would otherwise be prohibited by the terms of the Merger Agreement or the occurrence of other events that would have a material adverse effect on Dream Holdings’ business and would entitle Spring Valley to terminate the Merger Agreement. In any of such circumstances, it would be at Spring Valley’s discretion, acting through its board of directors, to grant its consent or waive those rights. The existence of financial and personal interests of one or more of the directors or executive officers described in the preceding risk factors may result in a conflict of interest on the part of such director(s) between what he, she or they may believe is best for Spring Valley and its shareholders and what he, she or they may believe is best for himself, herself or themselves in determining whether or not to take the requested action. As of the date of this proxy statement/prospectus, Spring Valley does not believe there will be any changes or waivers that Spring Valley’s directors and executive officers would be likely to make after shareholder approval of the Business Combination Proposal has been obtained. While certain changes could be made without further shareholder approval, Spring Valley will circulate a new or amended proxy statement/prospectus and resolicit Spring Valley’s shareholders if changes to the terms of the transaction that would have a material impact on its shareholders are required prior to the vote on the Business Combination Proposal.

Subsequent to consummation of the Business Combination, we may be required to take write-downs or write-offs, restructuring and impairment or other charges that could have a significant negative effect on our financial condition, results of operations and the share price of our securities, which could cause you to lose some or all of your investment.

We cannot assure you that the due diligence conducted in relation to Dream Holdings has identified all material issues or risks associated with Dream Holdings, its business or the industry in which it competes. As a result of these factors, we may incur additional costs and expenses and we may be forced to later write-down or write-off assets, restructure our operations, or incur impairment or other charges that could result in our reporting losses. Even if our due diligence has identified certain risks, unexpected risks may arise and previously known risks may materialize in a manner not consistent with our preliminary risk analysis. If any of these risks materialize, this could have a material adverse effect on our financial condition and results of operations and could contribute to negative market perceptions about our securities or New AeroFarms. Accordingly, any shareholders of Spring Valley who choose to remain New AeroFarms stockholders following the Business Combination could suffer a reduction in the value of their shares and warrants. Such shareholders are unlikely to have a remedy for such reduction in value unless they are able to successfully claim that the reduction was due to the breach by our officers or directors of a duty of care or other fiduciary duty owed to them, or if they are able to successfully bring a private claim under securities laws that the registration statement or proxy statement/prospectus relating to the Business Combination contained an actionable material misstatement or material omission.

Our warrant agreement designates the courts of the State of New York or the United States District Court for the Southern District of New York as the sole and exclusive forum for certain types of actions and proceedings that may be initiated by holders of our warrants, which could limit the ability of warrant holders to obtain a favorable judicial forum for disputes with our company.

Our warrant agreement provides that, subject to applicable law, (i) any action, proceeding or claim against us arising out of or relating in any way to the warrant agreement, including under the Securities

 

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Act, will be brought and enforced in the courts of the State of New York or the United States District Court for the Southern District of New York, and (ii) that we irrevocably submit to such jurisdiction, which jurisdiction shall be the exclusive forum for any such action, proceeding or claim. We will waive any objection to such exclusive jurisdiction and that such courts represent an inconvenient forum.

Notwithstanding the foregoing, these provisions of the warrant agreement will not apply to suits brought to enforce any liability or duty created by the Exchange Act or any other claim for which the federal district courts of the United States of America are the sole and exclusive forum. Any person or entity purchasing or otherwise acquiring any interest in any of our warrants shall be deemed to have notice of and to have consented to the forum provisions in our warrant agreement. If any action, the subject matter of which is within the scope of the forum provisions of the warrant agreement, is filed in a court other than a court of the State of New York or the United States District Court for the Southern District of New York (a “foreign action”) in the name of any holder of our warrants, such holder shall be deemed to have consented to: (x) the personal jurisdiction of the state and federal courts located in the State of New York in connection with any action brought in any such court to enforce the forum provisions (an “enforcement action”), and (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.

This choice-of-forum provision may limit a warrant holder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with our company, which may discourage such lawsuits. Alternatively, if a court were to find this provision of our warrant agreement inapplicable or unenforceable with respect to one or more of the specified types of actions or proceedings, we may incur additional costs associated with resolving such matters in other jurisdictions, which could materially and adversely affect our business, financial condition and results of operations and result in a diversion of the time and resources of our management and board of directors.

The unaudited pro forma financial information included elsewhere in this proxy statement/prospectus may not be indicative of what New AeroFarms’ actual financial position or results of operations would have been.

Spring Valley and Dream Holdings currently operate as separate companies and have had no prior history as a combined entity, and Spring Valley’s and Dream Holdings’ operations have not previously been managed on a combined basis. The pro forma financial information included in this proxy statement/prospectus is presented for informational purposes only and is not necessarily indicative of the financial position or results of operations that would have actually occurred had the Business Combination been completed at or as of the dates indicated, nor is it indicative of the future operating results or financial position of Dream Holdings. The pro forma statement of operations does not reflect future nonrecurring charges resulting from the Business Combination. The unaudited pro forma financial information does not reflect future events that may occur after the Business Combination and does not consider potential impacts of future market conditions on revenues or expenses. The pro forma financial information included in the section entitled “Unaudited Pro Forma Condensed Combined Financial Information” has been derived from Spring Valley’s and Dream Holdings’ historical financial statements and certain adjustments and assumptions have been made regarding Dream Holdings after giving effect to the Business Combination. There may be differences between preliminary estimates in the pro forma financial information and the final acquisition accounting, which could result in material differences from the pro forma information presented in this proxy statement/​prospectus in respect of the estimated financial position and results of operations of Dream Holdings.

In addition, the assumptions used in preparing the pro forma financial information may not prove to be accurate and other factors may affect Dream Holdings’ financial condition or results of operations following the Closing. Any potential decline in Dream Holdings’ financial condition or results of operations may cause significant variations in the stock price New AeroFarms.

The ability of our public shareholders to exercise redemption rights with respect to a large number of our public shares may not allow us to complete the most desirable business combination or optimize the capital structure of New AeroFarms.

At the time of entering into the Merger Agreement, we did not know how many shareholders may exercise their redemption rights, and therefore, we needed to structure the transaction based on our expectations as to the number of shares that will be submitted for redemption. The consummation of the

 

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Business Combination is conditioned upon, among other things, (i) the approval by our shareholders of the Condition Precedent Proposals being obtained; (ii) the applicable waiting period under the HSR Act relating to the Merger Agreement having expired or been terminated; (iii) the Closing Acquiror Cash Condition; (iv) the approval by Nasdaq of our initial listing application in connection with the Business Combination; and (v) the consummation of the Domestication. Therefore, unless these conditions are waived by the applicable parties to the Merger Agreement, the Merger Agreement could terminate and the Business Combination may not be consummated. For further details, see “Business Combination Proposal — Conditions to Closing of the Business Combination.”

Our Initial Shareholders, as well as Dream Holdings, our directors, executive officers, advisors and their affiliates may elect to purchase public shares prior to the consummation of the Business Combination, which may influence the vote on the Business Combination and reduce the public “float” of our Class A ordinary shares.

At any time at or prior to the Business Combination, during a period when they are not then aware of any material nonpublic information regarding us or our securities, our Initial Shareholders, Dream Holdings and/or their directors, officers, advisors or respective affiliates may purchase public shares from institutional and other investors who vote, or indicate an intention to vote, against any of the Condition Precedent Proposals, or execute agreements to purchase such shares from such investors in the future, or they may enter into transactions with such investors and others to provide them with incentives to acquire public shares or vote their public shares in favor of the Condition Precedent Proposals. Such a purchase may include a contractual acknowledgement that such shareholder, although still the record holder of our shares, is no longer the beneficial owner thereof and therefore agrees not to exercise its redemption rights. In the event that our Initial Shareholders, Dream Holdings and/or their directors, officers, advisors or respective affiliates who have agreed to vote in favor of this transaction purchase shares in privately negotiated transactions from public shareholders who have already elected to exercise their redemption rights, such selling shareholder would be required to revoke their prior elections to redeem their shares. The purpose of such share purchases and other transactions would be to increase the likelihood of satisfaction of the requirements that (i) the Business Combination Proposal, the Governing Documents Proposals, the Nasdaq Proposal, the Equity Incentive Plan Proposal and the Adjournment Proposal are approved by the affirmative vote of at least a majority of the votes cast by the holders of the issued ordinary shares present in person or represented by proxy at the extraordinary general meeting and entitled to vote on such matter (ii) the Redomicile Proposal is approved by the affirmative vote of at least a two-thirds (2/3rds) majority of the votes cast by the holders of the issued ordinary shares present in person or represented by proxy at the extraordinary general meeting and entitled to vote on such matter, (iii) otherwise limit the number of public shares electing to redeem and (iv) New AeroFarms’ net tangible assets (as determined in accordance with Rule 3a51-1(g)(1) of the Exchange Act) being at least $5,000,001 after giving effect to the transactions contemplated by the Merger Agreement and the PIPE Financing.

If such transactions are effected, the consequence could be to cause the Business Combination to be consummated in circumstances where such consummation could not otherwise occur. Purchases of shares by the persons described above would allow them to exert more influence over the approval of the proposals to be presented at the extraordinary general meeting and would likely increase the chances that such proposals would be approved.

In addition, if such purchases are made, the public “float” of our public shares and the number of beneficial holders of our securities may be reduced, possibly making it difficult to maintain or obtain the quotation, listing or trading of our securities on a national securities exchange.

If third parties bring claims against us, the proceeds held in the trust account could be reduced and the per share redemption amount received by shareholders may be less than $10.00 per share (which was the offering price in our initial public offering).

Our placing of funds in the trust account may not protect those funds from third-party claims against us. Although we have and will continue to seek to have all vendors, service providers (other than our independent registered public accounting firm), prospective target businesses or other entities with which we do business execute agreements with us waiving any right, title, interest or claim of any kind in or to any monies held in the trust account, there is no guarantee that they will execute such agreements or even if

 

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they execute such agreements that they would be prevented from bringing claims against the trust account, including, but not limited to, fraudulent inducement, breach of fiduciary responsibility or other similar claims, as well as claims challenging the enforceability of the waiver, in each case in order to gain advantage with respect to a claim against our assets, including the funds held in the trust account. If any third party refuses to execute an agreement waiving such claims to the monies held in the trust account, our management will perform an analysis of the alternatives available to it and will only enter into an agreement with a third party that has not executed a waiver if management believes that such third party’s engagement would be significantly more beneficial to us than any alternative.

Examples of possible instances where we may engage a third party that refuses to execute a waiver include the engagement of a third party consultant whose particular expertise or skills are believed by management to be significantly superior to those of other consultants that would agree to execute a waiver or in cases where management is unable to find a service provider willing to execute a waiver. In addition, there is no guarantee that such entities will agree to waive any claims they may have in the future as a result of, or arising out of, any negotiations, contracts or agreements with us and will not seek recourse against the trust account for any reason. Upon redemption of our public shares, if we are unable to complete our business combination within the prescribed time frame, or upon the exercise of a redemption right in connection with our business combination, we will be required to provide for payment of claims of creditors that were not waived that may be brought against us within the ten years following redemption. Accordingly, the per share redemption amount received by public shareholders could be less than the $10.10 per share initially held in the trust account, due to claims of such creditors. In order to protect the amounts held in the trust account, the Sponsor has agreed to be liable to us if and to the extent any claims by a vendor for services rendered or products sold to us, or a prospective target business with which we have discussed entering into a transaction agreement, reduces the amount of funds in the trust account. This liability will not apply with respect to any claims by a third party who executed a waiver of any right, title, interest or claim of any kind in or to any monies held in the trust account or to any claims under our indemnity of the underwriters of our initial public offering against certain liabilities, including liabilities under the Securities Act. Moreover, even 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. We have not independently verified whether the Sponsor has sufficient funds to satisfy its indemnity obligations and we have not asked Sponsor to reserve for such indemnification obligations. Therefore, we cannot assure you that the Sponsor would be able to satisfy those obligations. None of our officers will indemnify us for claims by third parties including, without limitation, claims by vendors and prospective target businesses.

Additionally, if we are forced to file a bankruptcy case or an involuntary bankruptcy case is filed against us which is not dismissed, or if we otherwise enter compulsory or court supervised liquidation, the proceeds held in the trust account could be subject to applicable bankruptcy law, and may be included in our bankruptcy estate and subject to the claims of third parties with priority over the claims of our shareholders. To the extent any bankruptcy claims deplete the trust account, we may not be able to return to our public shareholders $10.00 per share (which was the offering price in our initial public offering).

In the event we distribute the proceeds in the trust account to our public shareholders and subsequently file a bankruptcy petition or an involuntary bankruptcy petition is filed against us that is not dismissed, a bankruptcy court may seek to recover such proceeds, and we and our board of directors may be exposed to claims of punitive damages.

If, after we distribute the proceeds in the trust account to our public shareholders, we file a bankruptcy petition or an involuntary bankruptcy petition is filed against us that is not dismissed, any distributions received by shareholders could be viewed under applicable debtor/creditor and/or bankruptcy laws as either a “preferential transfer” or a “fraudulent conveyance.” As a result, a bankruptcy court could seek to recover all amounts received by our shareholders. In addition, our board of directors may be viewed as having breached its fiduciary duty to our creditors and/or having acted in bad faith, thereby exposing it and us to claims of punitive damages, by paying public shareholders from the trust account prior to addressing the claims of creditors. We cannot assure you that claims will not be brought against us for these reasons.

 

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If, before distributing the proceeds in the trust account to our public shareholders, we file a bankruptcy petition or an involuntary bankruptcy petition is filed against us that is not dismissed, the claims of creditors in such proceeding may have priority over the claims of our shareholders and the per share amount that would otherwise be received by our shareholders in connection with our liquidation may be reduced.

If, before distributing the proceeds in the trust account to our public shareholders, we file a bankruptcy petition or an involuntary bankruptcy petition is filed against us that is not dismissed, the proceeds held in the trust account could be subject to applicable bankruptcy law, and may be included in our bankruptcy estate and subject to the claims of third parties with priority over the claims of our shareholders. To the extent any bankruptcy claims deplete the trust account, the per share amount that would otherwise be received by our shareholders in connection with our liquidation may be reduced.

Our shareholders may be held liable for claims by third parties against us to the extent of distributions received by them upon redemption of their shares.

If we are forced to enter into an insolvent liquidation, any distributions received by shareholders could be viewed as an unlawful payment if it was proved that immediately following the date on which the distribution was made, we were unable to pay our debts as they fall due in the ordinary course of business. As a result, a liquidator could seek to recover all amounts received by our shareholders. Furthermore, our directors may be viewed as having breached their fiduciary duties to us or our creditors and/or may have acted in bad faith, and thereby exposing themselves and our company to claims, by paying public shareholders from the trust account prior to addressing the claims of creditors. Claims may be brought against us for these reasons. We and our directors and officers who knowingly and willfully authorized or permitted any distribution to be paid out of the Trust Account while we were unable to pay our debts as they fall due in the ordinary course of business would be guilty of an offence and may be liable to a fine of approximately $18,293.00 and to imprisonment for five years in the Cayman Islands.

We are an emerging growth company and a smaller reporting company within the meaning of the Securities Act, and if we take advantage of certain exemptions from disclosure requirements available to “emerging growth companies” or “smaller reporting companies,” this could make our securities less attractive to investors and may make it more difficult to compare our performance with other public companies.

We are an “emerging growth company” within the meaning of the Securities Act, as modified by the JOBS Act, and we may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not “emerging growth companies” including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved. As a result, our shareholders may not have access to certain information they may deem important. We could be an emerging growth company for up to five years, although circumstances could cause us to lose that status earlier, including if the market value of our Class A ordinary shares or, after the Business Combination, the New AeroFarms 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 emerging growth company as of the following December 31. We cannot predict whether investors will find our securities less attractive because we will 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.

Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such an election to opt out is irrevocable. We have elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, we,

 

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as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of our financial statements with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used.

Additionally, we are a “smaller reporting company” as defined in Item 10(f)(1) of Regulation S-K. Smaller reporting companies may take advantage of certain reduced disclosure obligations, including, among other things, providing only two years of audited financial statements. We will remain a smaller reporting company until the last day of the fiscal year in which (i) the market value of our ordinary shares or, after the Business Combination, the New AeroFarms Common Stock held by non-affiliates exceeds $250,000,000 as of the prior June 30, or (ii) our annual revenues exceeded $100,000,000 during such completed fiscal year and the market value of our ordinary shares or, after the Business Combination, the New AeroFarms Common Stock held by non-affiliates exceeds $700,000,000 as of the prior June 30. To the extent we take advantage of such reduced disclosure obligations, it may also make comparison of our financial statements with other public companies difficult or impossible.

Compliance obligations under the Sarbanes-Oxley Act may make it more difficult for us to effectuate the Business Combination, require substantial financial and management resources and increase the time and costs of completing a business combination.

The fact that we are a blank check company makes compliance with the requirements of the Sarbanes-Oxley Act particularly burdensome on us as compared to other public companies. Dream Holdings is not a publicly reporting company required to comply with Section 404 of the Sarbanes-Oxley Act and New AeroFarms management may not be able to effectively and timely implement controls and procedures that adequately respond to the increased regulatory compliance and reporting requirements that will be applicable to New AeroFarms after the Business Combination. If we are not able to implement the requirements of Section 404, including any additional requirements once we are no longer an emerging growth company, in a timely manner or with adequate compliance, we may not be able to assess whether its internal control over financial reporting are effective, which may subject us to adverse regulatory consequences and could harm investor confidence and the market price of New AeroFarms Common Stock. Additionally, once we are no longer an emerging growth company, we will be required to comply with the independent registered public accounting firm attestation requirement on our internal control over financial reporting.

As a Delaware public benefit corporation, our duty to balance a variety of interests may result in actions that do not maximize stockholder value.

As a Delaware public benefit corporation, our board of directors has a duty to balance (i) the pecuniary interest of our stockholders, (ii) the best interests of those materially affected by our conduct and (iii) specific public benefits identified in our charter documents. In balancing these interests our board of directors may take actions that do not maximize stockholder value. Any benefits to stockholders resulting from our public benefit purposes may not materialize within the timeframe we expect or at all and may have negative effects. We may be unable or slow to realize the benefits we expect from actions taken to benefit our stakeholders, including farmers and local communities, which could adversely affect our business, financial condition and results of operations, which in turn could cause our stock price to decline.

As a public benefit corporation, we may be subject to increased derivative litigation concerning our duty to balance stockholder and public benefit interests, the occurrence of which may have an adverse impact on our financial condition and results of operations.

As a Delaware public benefit corporation, our stockholders (if they, individually or collectively, own at least 2% of our outstanding capital stock or shares having at least $2 million in market value (whichever is less)) are entitled to file a derivative lawsuit claiming that our directors failed to balance stockholder and public benefit interests. This potential liability does not exist for traditional corporations. Therefore, we may be subject to the possibility of increased derivative litigation, which would require the attention of management and, as a result, may adversely impact management’s ability to effectively execute our strategy. Any such derivative litigation may be costly and have an adverse impact on our financial condition and results of operations.

 

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The price of New AeroFarms Common Stock and New AeroFarms’ warrants may be volatile.

Upon consummation of the Business Combination, the price of New AeroFarms Common Stock and New AeroFarms’ warrants may fluctuate due to a variety of factors, including:

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changes in the industries in which New AeroFarms and its customers operate;

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variations in its operating performance and the performance of its competitors in general;

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material and adverse impact of the COVID-19 pandemic on the markets and the broader global economy;

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actual or anticipated fluctuations in New AeroFarms’ quarterly or annual operating results;

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the public’s reaction to New AeroFarms’ press releases, its other public announcements and its filings with the SEC;

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New AeroFarms’ failure or the failure of its competitors to meet analysts’ projections or guidance that New AeroFarms or its competitors may give to the market;

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additions and departures of key personnel;

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changes in laws and regulations affecting its business;

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commencement of, or involvement in, litigation involving New AeroFarms;

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changes in New AeroFarms’ capital structure, such as future issuances of securities or the incurrence of additional debt;

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publication of research reports by securities analysts about New AeroFarms or its competitors or its industry;

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sales of shares of New AeroFarms Common Stock by the PIPE Investors;

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the volume of shares of New AeroFarms Common Stock available for public sale, including as a result of the conversion of the Convertible Notes into shares of New AeroFarms Common Stock or termination of the post-closing lock-up pursuant to the terms thereof; and

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general economic and political conditions such as recessions, interest rates, fuel prices, foreign currency fluctuations, international tariffs, social, political and economic risks and acts of war or terrorism.

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These market and industry factors may materially reduce the market price of New AeroFarms Common Stock and New AeroFarms’ warrants regardless of the operating performance of New AeroFarms.

A significant portion of our total outstanding shares are restricted from immediate resale but may be sold into the market in the near future. This could cause the market price of New AeroFarms Common Stock to drop significantly, even if New AeroFarms’ business is doing well.

Sales of a substantial number of shares of New AeroFarms Common Stock in the public market could occur at any time. These sales, or the perception in the market that the holders of a large number of shares intend to sell shares, could reduce the market price of New AeroFarms Common Stock.

It is anticipated that, upon completion of the Business Combination, (i) the Dream Holdings Holders will own approximately 62.6% of the outstanding New AeroFarms Common Stock and (ii) our Initial Shareholders will own approximately 3.7% of the outstanding New AeroFarms Common Stock, in each case, assuming that none of Spring Valley’s outstanding public shares are redeemed in connection with the Business Combination, or approximately 68.2% and 4.0%, respectively, assuming that 9,411,086 of Spring Valley’s outstanding public shares (which assumes the maximum number of Class A ordinary shares that can be redeemed are redeemed, while still satisfying the Closing Acquiror Cash Condition) are redeemed in connection with the Business Combination. These percentages assume that (i) 80,000,000 shares of New AeroFarms Common Stock are issued to the Dream Holdings Holders at Closing; (ii) 12,500,000 shares of New AeroFarms Common Stock are issued in connection with the PIPE Financing; and (iii) no Spring Valley warrants to purchase New AeroFarms Common Stock that will be outstanding immediately following

 

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Closing have been exercised. If the actual facts are different than these assumptions, the ownership percentages in New AeroFarms will be different.

Although the Sponsor and certain of Dream Holdings’ stockholders will be subject to certain restrictions regarding the transfer of New AeroFarms Common Stock, these shares may be sold after the expiration or early termination of the respective applicable lock-ups under the Spring Valley Letter Agreement and the Dream Holdings Stockholder Support Agreement. We intend to file one or more registration statements shortly after the closing of the Business Combination to provide for the resale of such shares from time to time. As restrictions on resale end and the registration statements are available for use, the market price of New AeroFarms Common Stock could decline if the holders of currently restricted shares sell them or are perceived by the market as intending to sell them.

The public shareholders will experience immediate dilution as a consequence of the issuance of New AeroFarms Common Stock as consideration in the Business Combination and in the PIPE Financing.

In accordance with the terms and subject to the conditions of the Merger Agreement, at the Effective Time, (i) each share of Dream Holdings outstanding as of immediately prior to the Effective Time will be exchanged for a number of shares of New AeroFarms Common Stock equal to the Common Stock Exchange Ratio (as defined in the Merger Agreement), (ii) each warrant and equity award of Dream Holdings outstanding as of immediately prior to the Effective Time will be exchanged for comparable warrants or equity awards that are exercisable for          shares of New AeroFarms Common Stock, as applicable, and (iii) the outstanding principal and unpaid accrued interest due on the Convertible Notes outstanding immediately prior to the Effective Time will be automatically converted into a number of shares of New AeroFarms Common Stock at a purchase price of $9.00 per share, and such converted Convertible Notes will no longer be outstanding and will cease to exist. For further details, see “Business Combination Proposal — Consideration to Dream Holdings Holders in the Business Combination.”

The issuance of additional common stock will significantly dilute the equity interests of existing holders of Spring Valley securities, and may adversely affect prevailing market prices for the New AeroFarms Common Stock and/or the New AeroFarms warrants.

Warrants will become exercisable for New AeroFarms Common Stock, which, if exercised, would increase the number of shares eligible for future resale in the public market and result in dilution to our stockholders.

If the Business Combination is completed, outstanding warrants to purchase an aggregate of 20,400,000 shares of New AeroFarms Common Stock will become exercisable 30 days after the completion of the Business Combination in accordance with the terms of the warrant agreement governing those securities. The exercise price of these warrants will be $11.50 per share. To the extent such warrants are exercised, additional shares of New AeroFarms Common Stock will be issued, which will result in dilution to the holders of New AeroFarms 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 New AeroFarms Common Stock. However, there is no guarantee that the public warrants will ever be in the money prior to their expiration, and as such, the warrants may expire worthless. See “— Even if the Business Combination is consummated, the public warrants may never be in the money, and they may expire worthless and the terms of the warrants may be amended in a manner adverse to a holder if holders of at least 50% of the then outstanding public warrants approve of such amendment.”

Even if the Business Combination is consummated, the public warrants may never be in the money, and they may expire worthless and the terms of the warrants may be amended in a manner adverse to a holder if holders of 65% of the then outstanding public warrants approve of such amendment.

The warrants were issued in registered form under a warrant agreement between Continental Stock Transfer & Trust Company, as warrant agent, and Spring Valley. The warrant agreement provides that the terms of the warrants may be amended without the consent of any holder to cure any ambiguity or correct any defective provision or correct any mistake, but requires the approval by the holders of 65% of the then-outstanding public warrants to make any change that adversely affects the interests of the registered holders of public warrants. Accordingly, we may amend the terms of the public warrants in a manner

 

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adverse to a holder if holders of 65% of the then-outstanding public warrants approve of such amendment and, solely with respect to any amendment to the terms of the private placement warrants or any provision of the warrant agreement with respect to the private placement warrants, 65% of the number of the then outstanding private placement warrants. Although our ability to amend the terms of the public warrants with the consent of 65% of the then-outstanding public warrants is unlimited, examples of such amendments could be amendments to, among other things, increase the exercise price of the warrants, convert the warrants into cash, shorten the exercise period or decrease the number of shares of New AeroFarms Common Stock purchasable upon exercise of a warrant.

We may redeem your unexpired warrants prior to their exercise at a time that is disadvantageous to you, thereby making your warrants worthless.

We have the ability to redeem the outstanding public warrants at any time after they become exercisable and prior to their expiration, at a price of  $0.01 per warrant, provided that the closing price of our Class A ordinary shares equals or exceeds $18.00 per share (as adjusted for share subdivisions, share dividends, rights issuances, subdivisions, reorganizations, recapitalizations and the like) for any 20 trading days within a 30 trading-day period ending on the third trading day prior to proper notice of such redemption and provided that certain other conditions are met. If and when the warrants become redeemable by us, we may exercise our redemption right even if we are unable to register or qualify the underlying securities for sale under all applicable state securities laws. As a result, we may redeem the warrants as set forth above even if the holders are otherwise unable to exercise the warrants. Redemption of the outstanding warrants could force you to (i) exercise your warrants and pay the exercise price therefor at a time when it may be disadvantageous for you to do so, (ii) sell your warrants at the then-current market price when you might otherwise wish to hold your warrants or (iii) accept the nominal redemption price which, at the time the outstanding warrants are called for redemption, we expect would be substantially less than the market value of your warrants.

In addition, we have the ability to redeem the outstanding public warrants at any time after they become exercisable and prior to their expiration, at a price of  $0.10 per warrant upon a minimum of 30 days’ prior written notice of redemption provided that the closing price of our Class A ordinary shares equals or exceeds $10.00 per share (as adjusted for adjustments to the number of shares issuable upon exercise or the exercise price of a warrant as described under the heading “Description of New AeroFarms Securities — Warrants — New AeroFarms Public Warrants — Anti-Dilution Adjustments”) for any 20 trading days within a 30 trading-day period ending on the third trading day prior to proper notice of such redemption and provided that certain other conditions are met, including that holders will be able to exercise their warrants prior to redemption for a number of Class A ordinary shares determined based on the redemption date and the fair market value of our Class A ordinary shares. Please see “Description of New AeroFarms Securities — Warrants — New AeroFarms Public Warrants — Redemption of warrants when the price per Class A ordinary shares equals or exceeds $10.00” The value received upon exercise of the warrants (1) may be less than the value the holders would have received if they had exercised their warrants at a later time where the underlying share price is higher and (2) may not compensate the holders for the value of the warrants, including because the number of ordinary shares received is capped at 0.361 Class A ordinary shares per warrant (subject to adjustment) irrespective of the remaining life of the warrants.

None of the private placement warrants will be redeemable by us as (except as set forth under “Description of New AeroFarms Securities — Warrants — New AeroFarms Public Warrants — Redemption of warrants when the price per Class A ordinary shares equals or exceeds $10.00”) so long as they are held by the Sponsor or its permitted transferees.

Nasdaq may not list New AeroFarms’ securities on its exchange, which could limit investors’ ability to make transactions in New AeroFarms’ securities and subject New AeroFarms to additional trading restrictions.

An active trading market for New AeroFarms’ securities following the Business Combination may never develop or, if developed, it may not be sustained. In connection with the Business Combination, in order to continue to maintain the listing of our securities on Nasdaq, we will be required to demonstrate compliance with Nasdaq’s listing requirements. We will apply to have New AeroFarms’ securities listed on Nasdaq upon consummation of the Business Combination. We cannot assure you that we will be able to meet all listing

 

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requirements. Even if New AeroFarms’ securities are listed on Nasdaq, New AeroFarms may be unable to maintain the listing of its securities in the future.

If New AeroFarms fails to meet the listing requirements and Nasdaq does not list its securities on its exchange, Dream Holdings would not be required to consummate the Business Combination. In the event that Dream Holdings elected to waive this condition, and the Business Combination was consummated without New AeroFarms’ securities being listed on Nasdaq or on another national securities exchange, New AeroFarms could face significant material adverse consequences, including:

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a limited availability of market quotations for New AeroFarms’ securities;

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reduced liquidity for New AeroFarms’ securities;

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a determination that New AeroFarms Common Stock is a “penny stock” which will require brokers trading in New AeroFarms Common Stock to adhere to more stringent rules and possibly result in a reduced level of trading activity in the secondary trading market for New AeroFarms’ securities;

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a limited amount of news and analyst coverage; and

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a decreased ability to issue additional securities or obtain additional financing in the future.

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The National Securities Markets Improvement Act of 1996, which is a federal statute, prevents or preempts the states from regulating the sale of certain securities, which are referred to as “covered securities.” If New AeroFarms’ securities were not listed on Nasdaq, such securities would not qualify as covered securities and we would be subject to regulation in each state in which we offer our securities because states are not preempted from regulating the sale of securities that are not covered securities.

Reports published by analysts, including projections in those reports that differ from our actual results, could adversely affect the price and trading volume of our common shares.

Securities research analysts may establish and publish their own periodic projections for New AeroFarms following consummation of the Business Combination. These projections may vary widely and may not accurately predict the results we actually achieve. Our share price may decline if our actual results do not match the projections of these securities research analysts. Similarly, if one or more of the analysts who write reports on us downgrades our stock or publishes inaccurate or unfavorable research about our business, our share price could decline. If one or more of these analysts ceases coverage of us or fails to publish reports on us regularly, our share price or trading volume could decline. While we expect research analyst coverage following consummation of the Business Combination, if no analysts commence coverage of us, the market price and volume for our common shares could be adversely affected.

We are subject to, and New AeroFarms will be subject to, changing law and regulations regarding regulatory matters, corporate governance and public disclosure that have increased both Spring Valley’s costs and the risk of non-compliance and will increase both New AeroFarms’ costs and the risk of non-compliance.

We are and New AeroFarms will be subject to rules and regulations by various governing bodies, including, for example, the SEC, which are charged with the protection of investors and the oversight of companies whose securities are publicly traded, and to new and evolving regulatory measures under applicable law. Our efforts to comply with new and changing laws and regulations have resulted in and New AeroFarms’ efforts to comply likely will result in, increased general and administrative expenses and a diversion of management time and attention.

Moreover, because these laws, regulations and standards are subject to varying interpretations, their application in practice may evolve over time as new guidance becomes available. This evolution may result in continuing uncertainty regarding compliance matters and additional costs necessitated by ongoing revisions to New AeroFarms’ disclosure and governance practices. If we fail to address and comply with these regulations and any subsequent changes, we may be subject to penalty and our business may be harmed.

During the pendency of the Business Combination, Spring Valley will not be able to solicit, initiate or take any action to facilitate or encourage any inquiries or the making, submission or announcement of, or enter into a business combination with another party because of restrictions in the Merger Agreement. Furthermore, certain provisions of the Merger Agreement will discourage third parties from submitting alternative takeover proposals, including proposals that may be superior to the arrangements contemplated by the Merger Agreement.

During the pendency of the Business Combination, Spring Valley will not be able to enter into a business combination with another party because of restrictions in the Merger Agreement. Furthermore,

 

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