Nxu, Inc., (NASDAQ: NXU) (“Nxu”, “the Company”), a domestic
technology company focused on energy storage and charging solutions
for the infrastructure we need to power our electrified future, and
Verde Bioresins, Inc. (“Verde”), a leader in sustainable product
innovation and full-service bioplastics production, have entered
into a merger agreement pursuant to which Nxu will acquire all of
the issued and outstanding common shares of Verde in an all-stock
transaction. Upon closing of the merger, the combined company is
expected to be renamed “Verde Bioresins, Corp.” and list its common
stock on Nasdaq under the new ticker symbol “VRDE.” The members of
the boards of directors of both companies unanimously approved, and
will recommend that shareholders of each company approve, the
proposed transaction.
Verde pioneered PolyEarthyleneTM, an innovative
and proprietary bioresin that has the potential to replace
traditional petroleum-based plastics and disrupt the plastics
industry. It is an economically feasible alternative that is
intended to be dropped into existing plastics manufacturing
processes, and Verde is one of the first scalable full-service
bio-resin market solutions intended to meet most of the
environmental, application, manufacturing, and cost requirements of
the industry. Verde’s current polyethylene and polypropylene
replacement applications are designed to address nearly half of the
approximate $600 billion total addressable global plastics
market.
“We are thrilled to merge with Nxu, a company at
the forefront of sustainable solutions in transportation,” said
Brian Gordon, Co-founder and President of Verde. “In addition to
selling our biobased, biodegradable and recyclable PolyEarthylene
resins to global brands and large plastics converters, we look
forward to developing ways to incorporate PolyEarthylene resins
into Nxu’s EV charging systems with the hopes of creating an even
more environmentally friendly offering.”
“Nxu has remained steadfast in its pursuit of a
sustainable future through clean technology, and a combination with
Verde is a creative path to that future that has the potential for
long-term value creation for our shareholders,” said Nxu Founder,
Chairman and CEO Mark Hanchett. “Verde’s PolyEarthylene resins are
making waves in the plastics market, and I’m incredibly excited
about the potential for disruption.”
Proposed Transaction
DetailsUpon the closing of the Merger, assuming Nxu’s
aggregate enterprise value is approximately $16.2 million,
pre-Merger Verde stockholders will own approximately 95% of the
combined company and pre-Merger Nxu stockholders will own
approximately 5% of the combined company, in each case, on a
fully-diluted and as-converted basis. For purposes of determining
the exchange ratio in the transaction, Verde has been ascribed an
aggregate enterprise value of approximately $306.9 million, and
Nxu’s aggregate enterprise value will be an amount equal to
approximately $16.2 million less an amount equal to the excess of
certain lease payments remaining unpaid at closing over Nxu’s cash
balance at closing.
The transaction is subject to certain closing
conditions, including approval by Nxu and Verde shareholders. Upon
closing of the Merger, the board of directors of the combined
company will consist of seven members, six of whom will be
appointed by Verde and one of whom will be appointed by Nxu; and
the Verde management team will manage the business of the combined
company.
Verde’s controlling shareholder Humanitario
Capital, LLC has signed a support agreement to vote all of its
shares of Verde common stock in favor of the transaction.
Similarly, Mark Hanchett Chairman, CEO, & Founder and Annie
Pratt, President, holding an aggregate of approximately 19% of the
total voting power of Nxu’s common stock, have entered into support
agreements to vote all of their shares of Nxu common stock in favor
of the Merger. Humanitario Capital, LLC has also entered into a
Lock-Up Agreement with an initial lock-up period of 180 days, after
which the transfer of any shares of Nxu common stock representing
more than 5% of the aggregate shares in any calendar month is
prohibited for a period of 24 months.
The proposed transaction between Verde and Nxu
is the culmination of a formal process initiated by Nxu's Board of
Directors to explore a range of possible strategic alternatives for
optimizing Nxu's assets and generating sustained shareholder value
while still managing potential risks. Since April 2024, the
Strategic Planning Committee of the Nxu Board, with the assistance
of its advisors and management, evaluated many former potential
merger and acquisition candidates as well as new ones, including
Verde. Nxu's Strategic Planning Committee made a unanimous, formal
recommendation to the Nxu Board to pursue a combination with Verde
and to proceed with the proposed transaction.
Britt Ide, co-chair of the Strategic Planning
Committee, commented, “Nxu’s Strategic Committee and senior
management team have conducted thorough due diligence on Verde, and
we have been tremendously impressed with their technology,
management team, business, and potential for growth.” Co-chair
Jessica Billingsley added, “Verde has the opportunity to be a major
player in the plastics industry, and we believe that by leveraging
the public markets they will be able to grow their market share
quickly. The proposed merger provides Nxu shareholders with the
exciting opportunity to participate in the creation of a more
sustainable future via Verde’s growth.”
AdvisorsLake Street Capital
Markets, LLC has provided a fairness opinion to the Nxu Board in
connection with the proposed transaction. Snell & Wilmer L.L.P.
is serving as legal counsel to Nxu in connection with the proposed
transaction.
Roth Capital Partners, LLC is serving as
financial advisor to Verde. Wilmer Cutler Pickering Hale and Dorr
LLP is serving as legal counsel to Verde in connection with the
proposed transaction.
Proxy Solicitor Information and
Shareholder QuestionsNxu’s shareholders who have questions
should contact info@nxuenergy.com
It is anticipated that the Nxu special
shareholder meeting will take place in the first quarter of 2025.
Nxu’s proxy solicitation will be handled by D.F. King & Co.
About VerdeVerde is addressing
the Growing Global Plastic Pollution Crisis: 85% of all plastics in
the United States end up in a landfill, taking hundreds of years or
more to decompose. Through its sustainable product innovation and
proprietary technology, Verde provides comprehensive design and
development solutions for companies seeking alternatives to
conventional plastics. Verde targets food service, consumer goods,
skincare and beauty, automotive, agricultural, and other packaging
end markets with resins for blown film, thermoform, injection
molding and blow molding applications. For additional information,
please visit verdebioresins.com
About Nxu, Inc. Nxu, Inc.
is a domestic technology company leveraging its intellectual
property and innovations to support e-Mobility and energy
storage solutions. For more information, visit
www.nxuenergy.com.
Forward-Looking Statements Certain
statements in this press release may constitute “forward-looking
statements” within the meaning of the Private Securities Litigation
Reform Act of 1995. Forward-looking statements can typically be
identified by such words as “aim”, “anticipate,” “believe,”
“continue,” “could,” “estimate,” “evolve,” “expect,” “forecast,”
“intend,” “looking ahead,” “may,” “opinion,” “plan,” “possible,”
“potential,” “project,” “should,” “will,” and variations of such
words and other similar expressions.
These forward-looking statements are only
predictions based on current expectations and assumptions and are
inherently subject to risks and uncertainties, some of which cannot
be predicted or quantified. There are important factors that could
cause actual results to differ materially from the results
expressed or implied by forward-looking statements, including the
risk factors set forth under “Risk Factors” in Part I, Item 1A of
Nxu’s Annual Report on Form 10-K for the fiscal year ended December
31, 2023, set forth in Nxu’s subsequent Quarterly Reports on Form
10-Q or set forth in Nxu’s other filings with the Securities and
Exchange Commission (“SEC”), and any of the following: (i) the
expected timing to consummate the Merger and/or the transactions
contemplated by the Merger Agreement; (ii) the satisfaction (or
waiver) of closing conditions to the consummation of the Merger
and/or the transactions contemplated by the Merger Agreement,
including obtaining stockholder approvals and any required
regulatory clearances; (iii) potential litigation relating to the
Merger and/or the transactions contemplated by the Merger Agreement
that could be instituted against Nxu, Verde or their respective
directors; (iv) risks related to Nxu’s continued listing on Nasdaq
until closing of the Merger; (v) risks related to (a) the combined
company’s satisfaction of the Nasdaq initial listing application
qualifications for the listing on the Nasdaq Capital Market and (b)
Nasdaq’s approval of the listing of the shares of Nxu common stock
to be issued in connection with the Merger; (vi) risks associated
with the possible failure to realize certain anticipated benefits
of the Merger, including with respect to future financial and
operating results; (vii) uncertainties regarding unexpected costs,
liabilities or delays in connection with the consummation of the
Merger and/or the transactions contemplated by the Merger
Agreement, and the impact such costs, liabilities or delays would
have on the anticipated cash resources of the combined company upon
closing; (viii) operating costs, customer loss and business
disruptions arising from the Merger and/or the transactions
contemplated by the Merger Agreement and the pendency or
consummation thereof (including, without limitation, difficulties
in maintaining relationships with employees, customers, clients or
suppliers), which may be greater than expected; (ix) the ability of
Nxu and Verde to protect their respective intellectual property
rights; (x) competitive responses to the proposed Merger and
changes in expected or existing competition; (xi) Nxu’s, Verde’s,
and the combined company’s limited operating history; (xii) the
combined company’s ability to manage growth; (xiii) changes in
capital requirements’ (xiv) the combined company’s ability to
obtain additional financing; (xv) other adverse economic, business,
and/or competitive factors; and (xvi) other risks to the
consummation of the Merger and the other transactions contemplated
by the Merger Agreement, including circumstances that could give
rise to the termination of the Merger Agreement and the risk that
the transactions contemplated thereby will not be consummated
within the expected time period, without undue delay, cost or
expense, or at all.
All forward-looking statements are qualified by,
and should be considered in conjunction with, these cautionary
statements. Readers are cautioned not to place undue reliance on
any forward-looking statements, which speak only as of the date on
which such statements are made. Except as required by applicable
law, neither Nxu nor Verde undertakes any obligation to update
forward-looking statements to reflect events or circumstances
arising after such date.
Important Additional Information About
the Proposed Transaction and Where to Find It
In connection with the proposed transaction, Nxu
intends to file relevant material with the SEC. including a
Registration Statement on Form S-4 (as amended, the “Registration
Statement”), that will contain a proxy statement of Nxu and that
will constitute a prospectus with respect to shares of Nxu’s common
stock to be issued in connection with the proposed transaction (the
“Proxy Statement/Prospectus”). NXU URGES ITS INVESTORS AND
STOCKHOLDERS TO READ THE REGISTRATION STATEMENT, PROXY
STATEMENT/PROSPECTUS AND ANY OTHER RELEVANT DOCUMENTS THAT MAY BE
FILED WITH THE SEC, AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO
THESE DOCUMENTS, CAREFULLY AND IN THEIR ENTIRETY IF AND WHEN THEY
BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION
ABOUT NXU, VERDE, THE PROPOSED TRANSACTION AND RELATED MATTERS.
Investors and stockholders will be able to obtain free copies of
the Registration Statement, Proxy Statement/Prospectus and other
documents filed by Nxu with the SEC (when they become available)
through the website maintained by the SEC at www.sec.gov. In
addition, investors and stockholders should note that Nxu
communicates with investors and the public using its website
(www.nxuenergy.com) and the investor relations website
(investors.nxuenergy.com), where anyone will be able to obtain free
copies of the Registration Statement, Proxy Statement/Prospectus
and other documents filed by Nxu with the SEC and investors and
stockholders are urged to read the Registration
Statement/Prospectus and the other relevant materials when they
become available before making any voting or investment decision
with respect to the proposed transaction.
No Offer or Solicitation
This press release is not intended to and does
not constitute (i) a solicitation of a proxy, consent or approval
with respect to any securities or in respect of the proposed
transaction or (ii) an offer to sell or the solicitation of an
offer to subscribe for or buy or any invitation to purchase or
subscribe for any securities pursuant to the proposed transaction
or otherwise, nor shall there be any sale, issuance or transfer of
securities in any jurisdiction in contravention of applicable law.
No offer of securities shall be made except by means of a
prospectus meeting the requirements of the Securities Act or an
exemption therefrom. Subject to certain exceptions to be approved
by the relevant regulators or certain facts to be ascertained, the
public offer will not be made directly or indirectly, in or into
any jurisdiction where to do so would constitute a violation of the
laws of such jurisdiction, or by use of the mails or by any means
or instrumentality (including without limitation, facsimile
transmission, telephone and the internet) of interstate or foreign
commerce, or any facility of a national securities exchange, of any
such jurisdiction.
NEITHER THE SEC NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THE SECURITIES OR
DETERMINED IF THIS PRESS RELEASE IS TRUTHFUL OR COMPLETE.
Participants in the
Solicitation
Nxu, Verde and their respective directors,
executive officers and other members of management may be
considered participants in the solicitation of proxies in
connection with the proposed transactions. Information about Nxu’s
directors and executive officers, consisting of Mark Hanchett,
Annie Pratt, Britt Ide, Jessica Billingsley and Sarah Wyant,
including a description of their direct or indirect interest, by
security holdings or otherwise, can be found under the captions,
“Security Ownership of Certain Beneficial Owners and Management,”
“Executive Compensation,” and “Director Compensation” contained in
the definitive proxy statement on Schedule 14A for Nxu’s 2024
annual meeting of stockholders, filed with the SEC on May 2, 2024
(the “2024 Nxu Proxy Statement”). To the extent that Nxu’s
directors and executive officers and their respective affiliates
have acquired or disposed of security holdings since the applicable
“as of” date disclosed in the 2024 Nxu Proxy Statement, such
transactions have been or will be reflected on Statements of Change
in Beneficial Ownership on Form 4 filed with the SEC. Additional
information regarding the persons who may be deemed participants in
the solicitation of proxies, including the information about the
directors and executive officers of Verde, will be included in the
Proxy Statement/Prospectus and other relevant materials relating to
the proposed transaction when it is filed with the SEC. Investors
should read the Registration Statement, Proxy Statement/Prospectus
and the other relevant materials when they become available before
making any voting or investment decision with respect to the
proposed transaction. These documents can be obtained free of
charge from the sources indicated above.
CONTACT: Nxu,
Inc. info@nxuenergy.com
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