NUBA BRANPAR Item 1.01. Entry into a Material Definitive Agreement.
The Merger Agreement
On
Merger Consideration
The Merger Agreement provides for Nubia to issue to the Honeycomb shareholders aggregate consideration of 70,000,000 shares of the Combined Company's common stock (the "Closing Merger Consideration Shares") at the effective time of the Merger Agreement (the "Effective Time"), plus up to an additional 22,500,000 shares of the Combined Company's common stock (the "Earnout Shares") upon the occurrence of the following events (or earlier upon a change of control of Nubia but subject to (and only to the extent that) the valuation of Nubia common stock implied by such change of control transaction meeting the respective VWAP (as defined below) thresholds set forth below):
(i) 5,000,000 Earnout Shares if, over any ten (10) trading days within any
thirty (30) trading day period from and after the date that is thirty (30) days
following the closing date of the Transactions (the "Closing Date") until the
second anniversary of the Closing Date, the VWAP of the shares of Nubia's Class
A common stock is greater than or equal to
(ii) 7,500,000 Earnout Shares if, over any ten (10) trading days within any
thirty (30) trading day period from and after the date that is one hundred
eighty (180) days following the Closing Date until the date that is forty-two
(42) months following the Closing Date, the VWAP of the shares of Nubia's Class
A common stock is greater than or equal to
(iii) 10,000,000 Earnout Shares if over any ten (10) trading days within any
thirty (30) trading day period from and after the date that is one hundred
eighty (180) days following the Closing Date until the fourth anniversary of the
Closing Date, the VWAP of the shares of Nubia's Class A common stock is greater
than or equal to
For purposes of the foregoing, "VWAP" means, for any security as of any
date(s), the dollar volume-weighted average price for such security on the
principal securities exchange or securities market on which such security is
then traded during the period beginning at
In accordance with the terms and subject to the conditions of the Merger Agreement, each share of Honeycomb's common stock outstanding immediately prior to the Effective Time will be converted into the right to receive its allocable portion of the Closing Merger Consideration Shares and the Earnout Shares, if any.
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Representations and Warranties
The Merger Agreement contains customary representations and warranties of the parties thereto with respect to, among other things, (i) entity organization, good standing and qualification, (ii) capital structure, (iii) authorization to enter into the Merger Agreement, (iv) compliance with laws and permits, (v) taxes, (vi) financial statements and internal control over financial reporting, (vii) real and personal property, (viii) material contracts, (ix) environmental matters, (x) absence of changes, (xi) employee matters, (xii) litigation, and (xiii) brokers and finders.
Covenants
Conduct of Business Pending the Business Combination
Each of Honeycomb and Nubia have agreed that, except as expressly contemplated by the Merger Agreement or the other agreements related thereto (the "Additional Agreements"), as required by law, or as consented to in writing by the other (which consent shall not be unreasonably conditioned, withheld, or delayed), from the date of the Merger Agreement until the earlier of the Closing Date and the termination of the Merger Agreement in accordance with its terms, each party must:
(i) conduct its business only in the ordinary course (including the payment of
accounts payable and the collection of accounts receivable), consistent with
past practices,
(ii) duly and timely file all tax returns required to be filed (or obtain a
permitted extension with respect thereto) and pay any and all taxes due and
payable during such time period,
(iii) duly observe and comply with all applicable laws, and
(iv) use its commercially reasonable efforts to preserve intact in all material
respects its business organization, assets, permits (with respect to
Honeycomb only), properties, and material business relationships with
employees, clients, suppliers, contract manufacturing organizations,
contract research organizations and other third parties.
In addition, except as expressly contemplated by the Merger Agreement or the Additional Agreements, as required by applicable law, or as previously disclosed, from the date of the Merger Agreement until the earlier of the Closing Date and the termination of the Merger Agreement in accordance with its terms, without the other's prior written consent (which shall not be unreasonably conditioned, withheld or delayed), neither Honeycomb nor Nubia shall, or permit its subsidiaries to, among other things:
(i) amend, modify, or supplement its governing documents;
(ii) amend, waive any provision of, terminate prior to its scheduled expiration
date, or otherwise compromise in any way or relinquish any material right
under any material contract;
(iii) other than in the ordinary course of business, modify, amend, or enter into
any contract, agreement, lease, license, or commitment, including for
capital expenditures, that extends for a term of one year or more or
obligates the payment by Honeycomb or Nubia, as applicable, of more than
$200,000 (individually or in the aggregate);
(iv) make any capital expenditures in excess of
aggregate);
(v) sell, lease, license or otherwise dispose of any of its material assets,
except pursuant to existing contracts or commitments disclosed in the Merger
Agreement or in the ordinary course of business;
(vi) solely in the case of Honeycomb, sell, exclusively license, abandon, permit
to lapse, assign, transfer, or otherwise dispose of any intellectual
property owned by Honeycomb;
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(vii) solely in the case of Honeycomb, permit any material registered owned
intellectual property to go abandoned or expire for failure to make an
annuity or maintenance fee payment, or file any necessary paper or action
to maintain such rights;
(viii) (A) pay, declare, or set aside any dividends, distributions or other
amounts with respect to its capital stock or other equity securities; (B)
pay, declare or promise to pay any other amount to any stockholder or
other equity holder in its capacity as such; or (C) amend any term, right
or obligation with respect to any outstanding shares of its capital stock
or other equity securities;
(ix) (A) make any loan, advance or capital contribution to, or guarantee for the
benefit of, any person or entity; (B) incur any indebtedness including
drawings under the lines of credit, if any, other than (1) loans evidenced . . .
Item 7.01 Regulation FD Disclosure.
On
The information in this Item 7.01 and Exhibit 99.1, attached hereto will not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or otherwise subject to the liabilities of that section, nor will it be deemed incorporated by reference in any filing under the Securities Act or the Exchange Act, except as expressly set forth by specific reference in such filing.
Forward-Looking Statements
This Current Report on Form 8-K contains certain statements that are not historical facts and are forward-looking statements within the meaning of the federal securities laws with respect to the proposed Transactions between Nubia and Honeycomb. These forward-looking statements generally are identified by the words "believe," "project," "expect," "anticipate," "estimate," "intend," "think," "strategy," "future," "opportunity," "potential," "plan," "seeks," "may," "should," "will," "would," "will be," "will continue," "will likely result," and similar expressions, but the absence of these words does not mean that a statement is not forward-looking. Forward-looking statements are predictions, projections and other statements about future events that are based on current expectations and assumptions and, as a result, are subject to risks and uncertainties.
These forward-looking statements are provided for illustrative purposes only and
are not intended to serve as, and must not be relied on as, a guarantee, an
assurance, a prediction or a definitive statement of fact or probability. Actual
events and circumstances are difficult or impossible to predict and will differ
from assumptions. Many factors could cause actual future events to differ
materially from the forward-looking statements in this communication, including
but not limited to: (i) changes in domestic and foreign business, market,
financial, political and legal conditions; (ii) the inability of the parties to
successfully or timely consummate the proposed Transactions, including the risk
that any required regulatory approvals are not obtained, are delayed or are
subject to unanticipated conditions that could adversely affect the Combined
Company or the expected benefits of the proposed Transactions or that the
approval of the shareholders of Nubia or Honeycomb is not obtained; (iii) the
outcome of any legal proceedings that may be instituted against Honeycomb or
Nubia following announcement of the proposed Transactions; (iv) failure to
realize the anticipated benefits of the proposed Transactions; (v) risks
relating to the uncertainty of the projected financial information with respect
to Honeycomb; (vi) risks related to the performance of Honeycomb's batteries;
(vii) the extent to which original equipment manufacturers may elect to pursue
other battery cell technologies; (viii) risks related to the safety of
Honeycomb's high-capacity anode and high-energy solid-state battery technology,
for which only preliminary safety testing has occurred and for which additional
and extensive safety testing will need to occur prior to being installed in
electric vehicles; (ix) risks related to any substantial increases in the prices
for Honeycomb's raw materials and components, some of which are obtained from a
limited number of sources where demand may exceed supply; (x) consumers'
willingness to adopt electric vehicles; (xi) risks related to Honeycomb being an
early-stage company with a history of financial losses that expects to incur
significant expenses and continuing losses for the foreseeable future; (xii) the
possibility that Honeycomb may require additional capital to support business
growth, and that this capital might not be available on commercially reasonable
terms or at all; (xiii) Honeycomb's heavy reliance on owned intellectual
property, which includes patent rights, trade secrets, copyright, trademarks,
and know-how, and its ability to protect and maintain access to these
intellectual property rights; (xiv) risks related to the intentional disruption,
security breaches and other security incidents, or alleged violations of laws,
regulations, or other obligations relating to data handling of Honeycomb's
technology and its website, systems, and data it maintains; (xv) the amount of
redemption requests made by Nubia's public stockholders; (xvi) the ability of
Nubia or the Combined Company to issue equity or equity-linked securities in
connection with the proposed transactions or in the future; (xvii) the outcome
of any potential litigation, government and regulatory proceedings,
investigations and inquiries; (xviii) the impact of the global COVID-19 pandemic
on Honeycomb, Nubia, the Combined Company's projected results of operations,
financial performance or other financial metrics, or on any of the foregoing
risks; and (xix) those factors discussed in Nubia's filings with the
The foregoing list of factors is not exhaustive. You should carefully consider
the foregoing factors and the other risks and uncertainties that will be
described in the "Risk Factors" section of the preliminary proxy statement and
the amendments thereto, the definitive proxy statement, and other documents to
be filed by Nubia from time to time with the
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Important Information for Investors and Stockholders
This document relates to a proposed transaction between the Registrant and the
Company. This document does not constitute an offer to sell or exchange, or the
solicitation of an offer to buy or exchange, any securities, nor will there be
any sale of securities in any jurisdiction in which such offer, sale or exchange
would be unlawful prior to registration or qualification under the securities
laws of any such jurisdiction. The Registrant intends to file relevant materials
with the
Participants in the Solicitation
Nubia and its directors and executive officers may be deemed participants in the
solicitation of proxies from Nubia's stockholders with respect to the business
combination. Information about Nubia's directors and executive officers and a
description of their interests in Nubia will be included in the proxy statement
for the proposed transaction and be available at the
The Company and its directors and executive officers also may be deemed to be participants in the solicitation of proxies from the stockholders of Nubia in connection with the proposed business combination. Information about the Company's directors and executive officers and information regarding their interests in the proposed transaction will be included in the proxy statement for the proposed transaction.
No Offer or Solicitation
This communication does not constitute an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any vote or approval, nor will there be any sale of any securities in any state or jurisdiction in which such offer, solicitation, or sale would be unlawful prior to registration or qualification under the securities laws of such other jurisdiction.
Item 9.01. Financial Statements and Exhibits.
Exhibit No. Description 2.1* Merger Agreement, datedFebruary 16, 2023 , by and amongNubia Brand International Corp. ,Honeycomb Battery Company , andNubia Merger Sub, Inc. 10.1 Form of Contribution Agreement 10.2 Form of Supply and License Agreement 10.3 Form of Shared Services Agreement 10.4 Company Support Agreement, datedFebruary 16, 2023 , by and betweenGlobal Graphene Group, Inc. andHoneycomb Battery Company . 10.5 Parent Support Agreement, datedFebruary 16, 2023 , by and betweenMach FM Acquisitions LLC ,Honeycomb Battery Company andNubia Brand International Corp. 10.6 Company Lock-Up Agreement, datedFebruary 16, 2023 , by and betweenGlobal Graphene Group, Inc. andHoneycomb Battery Company 99.1 Press Release datedFebruary 16, 2023 104 Cover page interactive data file (inbeddded within the Inline XBRL document)
* Certain of the exhibits and schedules to this Exhibit have been omitted in
accordance with Regulation S-K Item 601(b)(2). The Registrant agrees to furnish
a copy of all omitted exhibits and schedules to the Securities and Exchange
Commission upon its request.
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