Nxu Inc., Verde Bioresins enter merger agreement for all-stock transaction

Nxu and Verde Bioresins 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 PolyEarthylene, an innovative and proprietary bioresin that has the potential to replace traditional petroleum-based plastics and disrupt the plastics industry. Upon 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 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.