Nxu Announces Shareholder Approval of Merger with Verde Bioresins

Rhea-AI Summary

Nxu Inc (NASDAQ: NXU) shareholders have approved a merger with Verde Bioresins, a leader in sustainable bioplastics production. The merger combines Nxu's energy storage and charging solutions with Verde's innovative PolyEarthylene™ bioresin technology, which aims to replace traditional petroleum-based plastics.

The transaction values Verde at approximately $306.9 million and Nxu at $16.2 million. Post-merger ownership will be split with Verde stockholders owning approximately 95% and Nxu stockholders holding 5% of the combined company. The merger is expected to complete in March 2025, subject to Nasdaq listing approval. The combined company's board will consist of six members, with Verde appointing five directors and Nxu appointing one. Verde's management team will lead the combined entity.

Positive

• Verde's PolyEarthylene technology targets nearly half of the $600 billion global plastics market
• Verde positioned for significant growth in 2025
• Merger creates potential for long-term value creation through market disruption

Negative

• Significant dilution for existing Nxu shareholders (reduced to 5% ownership)
• Nxu loses control with only one board seat in combined company
• Verde management will take over operations, replacing current Nxu leadership

Insights

Financial Analyst

This merger represents a fundamental transformation for Nxu, effectively becoming a vehicle for Verde Bioresins to access public markets. The transaction structure, where Verde shareholders will own 95% of the combined entity, suggests a reverse merger strategy that provides Verde with a faster, potentially more cost-effective route to public trading compared to a traditional IPO.

The stark valuation differential between Verde ($306.9 million) and Nxu ($16.2 million) reflects the market's assessment of Verde's PolyEarthylene technology and its potential to disrupt the bioplastics sector. Verde's focus on drop-in replacement solutions for existing manufacturing processes addresses a critical barrier to adoption in the traditionally conservative plastics industry.

The governance structure, with Verde appointing five of six board members and assuming management control, indicates this is primarily a Verde-driven strategic initiative. For existing Nxu shareholders, while facing significant dilution, the merger offers exposure to Verde's potentially disruptive technology in the massive $600 billion global plastics market. The ability to integrate into existing manufacturing processes without significant retooling could accelerate market penetration, particularly as environmental regulations and corporate sustainability initiatives drive demand for bio-based alternatives.

However, several critical factors warrant attention: The merger's success hinges on Verde's ability to scale production, navigate regulatory requirements, and compete effectively on both performance and cost metrics. The transition from Nxu's original focus on energy storage to bioplastics represents a substantial strategic pivot that will require careful management of organizational integration and stakeholder expectations.

Combination intended to create significant shareholder value in pursuit of a sustainable future

MESA, Ariz., Feb. 12, 2025 (GLOBE NEWSWIRE) -- 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, announced the approval of the merger by Nxu stockholders after completing a stockholder vote on February 11^th, 2025.

Verde pioneered PolyEarthylene™, 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. “Verde is poised for significant growth in 2025, and the business combination with Nxu is a critical milestone toward achieving that.”

“The merger with Verde is an exciting opportunity for long-term value creation,” said Nxu Founder, Chairman and CEO Mark Hanchett. “Verde’s PolyEarthylene resins are generating interest across the plastics market, and the potential for disruption is inspiring.”

Merger Details
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 of the combined company’s common stock for listing on the Nasdaq Capital Market. Upon closing of the Merger, the board of directors of the combined company is expected to consist of six members, five 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. The Merger is currently expected to be completed in March 2025, assuming satisfaction of the closing conditions to completion of the Merger.

Advisors
Lake 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 Questions
Nxu’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 Verde
Verde 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 Nxu’s Registration Statement on Form S-4 (File No. 333-283114) (as amended and supplemented, the “Registration Statement”) and filed by Nxu 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) existing and 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 the Registration Statement that contains a proxy statement of Nxu and that constitutes a prospectus with respect to shares of Nxu’s common stock to be issued in connection with the proposed transaction (the “Proxy Statement/Prospectus”), which Proxy Statement/Prospectus was declared effective by the SEC on January 27, 2025. 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. Erin Essenmacher was elected to serve as director on the Nxu board of directors on January 13, 2025. To the extent that Ms. Essenmacher and her respective affiliates have acquired or disposed of security holdings, such transactions have been or will be reflected on Statements in Change of Beneficial Ownership 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, has been included in the Proxy Statement/Prospectus and other relevant materials relating to the proposed transaction as filed or 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

FAQ

What is the ownership structure after the Nxu-Verde merger?

After the merger, Verde stockholders will own approximately 95% of the combined company, while Nxu stockholders will own approximately 5% on a fully-diluted basis.

What is the enterprise value of Verde and Nxu in the merger?

Verde is valued at approximately $306.9 million, while Nxu's enterprise value is approximately $16.2 million, subject to certain adjustments related to lease payments and cash balance at closing.

When is the NXU-Verde merger expected to close?

The merger is expected to close in March 2025, subject to closing conditions including Nasdaq Capital Market listing approval.

How will the board composition change after the NXU-Verde merger?

The combined company will have a six-member board, with Verde appointing five directors and Nxu appointing one director.

What is Verde's market opportunity in the plastics industry?

Verde's polyethylene and polypropylene replacement applications are designed to address nearly half of the $600 billion total addressable global plastics market.