Newborn Acquisition Corporation
PROPOSED BUSINESS COMBINATION: Nuvve Corporation
ENTERPRISE VALUE: $132 million
ANTICIPATED SYMBOL: NVVE
Green energy technology company Nuvve Corporation and Newborn Acquisition Corp. today announced the signing of a definitive merger agreement to take Nuvve public. The companies today also announced the signing of definitive purchase agreements with institutional investors for the investment of approximately $18 million in the combined company through a PIPE and bridge financing. Upon closing of the business combination, the combined company will be named Nuvve Holding Corp. (“Nuvve Holding”) and is expected to remain listed on Nasdaq under the ticker symbol “NVVE”.
Nuvve’s proprietary V2G technology enables it to link multiple electric vehicle (EV) batteries into a virtual power plant (VPP) to provide bi-directional services to the electrical grid in a qualified and secure manner. The VPP can generate revenue by selling excess power to utility companies or utilizing the saved power to reduce building energy peak consumption.
Nuvve holds a global portfolio of key V2G technology patents covering bi-directional capabilities and grid services with aggregated electric vehicles and has continued to build on its intellectual property portfolio by advancing V2G technology with commercial EV fleet deployments with both light-duty and heavy-duty vehicles.
Nuvve’s most established commercial operation is in Denmark, where it has provided V2G services for more than 4 years with daily bidding on energy markets. Following recent announcements with leading OEMs in the North American electric school bus segment, Nuvve is further developing its offerings by combining its turnkey V2G solutions with finance packages to customers, including equipment financing, V2G services, infrastructure and maintenance operations. Independent industry analysts have projected the global V2G technology market to be worth over $17 billion by 2027.
TRANSACTION
Newborn is combining with Nuvve at a transaction value of approximately $102 million, subject to closing adjustments. As consideration for the business combination, 10.17 million shares will be issued or reserved for issuance to existing Nuvve stockholders and option holders, based on a value of $10.00 per share.
Upon the closing of the transactions, assuming no redemptions by Newborn shareholders, the resulting pro forma equity value of the combined company will be approximately $202 million. Pro forma net cash available to Nuvve at closing after estimated fees and expenses is expected to be approximately $70 million, made up of approximately $57.5 million in Newborn’s trust account (assuming no redemptions), net proceeds of $18 million PIPE and bridge financing, and cash on Nuvve’s balance sheet. Assuming no debt outstanding, the combined company’s pro forma enterprise value is expected to be approximately $132 million. Proceeds from the transaction will be used for general working capital, growth purposes and retirement of 0.6 million shares from legacy Nuvve shareholders.
In connection with the business combination, Newborn will reincorporate to Delaware from the Cayman Islands.
The boards of directors of both Newborn and Nuvve have unanimously approved the proposed business combination. The closing is subject to the approval of the stockholders of both Newborn and Nuvve and is subject to other customary closing conditions, including the receipt of certain regulatory approvals. It is currently anticipated that the business combination will close in the first quarter of 2021.
ADDITIONAL FINANCING
PIPE
- In connection with the business combination, Newborn has signed definitive agreements for the sale of approximately $14 million in equity to institutional investors in a PIPE. The PIPE investors will acquire Nuvve Holding shares at $10.00 per share. For each share bought, the PIPE investors will receive 1.9 warrants; each whole warrant is exercisable for ½ of a Nuvve Holding share. The warrants are exercisable at $11.50 per whole share and have terms identical to the warrants that were sold as part of Newborn’s IPO
Bridge Loan
- Nuvve also completed a $4 million bridge financing with an institutional investor in connection with the business combination. The investor in the bridge financing received a senior secured convertible debenture that will convert into equity immediately prior to the closing of the business combination
EARN OUT
- Existing Shareholders may be entitled to receive up to 4.0 million earn-out shares if, for the fiscal year ending December 31, 2021, the Purchaser’s revenue equals or exceeds $30,000,000. Existing Shareholders will be entitled to a portion of the earn-out shares only if they continue to hold their shares of Purchaser Common Stock received in the Acquisition Merger through the earn-out payment date
NOTABLE CONDITIONS TO CLOSING
- Purchaser Parties having no less than $15,000,000 in cash and cash equivalents available to them immediately after the Closing, including the net proceeds from the Trust Fund and the net proceeds from the PIPE Transaction
NOTABLE CONDITIONS TO TERMINATION
- Either Newborn or Nuvve can terminate, if the closing has not occurred by July 1, 2021, provided that no material breach of the Agreement by the party seeking to terminate the Agreement shall have occurred or have been made
LOCK UP
- Existing shareholders of Nuvve restricted from selling for one year
- One-half of the shares may be released prior to the one-year anniversary if the volume weighted average price of Purchaser’s Common Stock is at or above $12.50 for 20 out of any 30 consecutive trading days commencing six months after the merger close
ADVISORS
- Craig-Hallum Capital Group is acting as sole placement agent and M&A advisor on the transactions
- Roth Capital Partners is acting as capital markets advisor to Newborn
- Graubard Miller is serving as legal counsel for Nuvve
- Loeb & Loeb LLP is serving as legal advisor to Newborn
MANAGEMENT & BOARD
Executive Officers
Wenhui Xiong, 39
Chairman & Chief Executive Officer
Mr. Xiong has over eight years of experience in equity investment management and thirteen years of experience in financial management. Mr. Xiong has extensive experience in equity investment, corporate strategy development, finance and acquisition, business operations and financial management. Mr. Xiong has served as Chief Executive Officer of Shanghai Jiusongshanhe Equity Investment Fund Management Co., Ltd., since May 2016. Mr. Xiong served as a fund manager at Ningsheng Financial Information Service (Shanghai) Co. Ltd. from December 2015 to April 2016, and as a deputy general manager at Shanghai Longde Equity Investment Fund Management Co. Ltd. from November 2013 to November 2014. From November 2014 to December 2015, Mr. Xiong served as Chief Executive Officer of Shanghai Juncheng Equity Investment Fund Management Co., Ltd. From November 2012 to November 2013, he served as Vice President of Shanghai Yirong Equity Investment Fund Management Co., Ltd. From June 2012 to November 2012, Mr. Xiong served as Investment Director of Shanghai Guodu Equity Investment Fund Management Co., Ltd. From June 2011 to June 2012, Mr. Xiong served as Investment Director of Xiaolei Precise Instrument Shanghai Co., Ltd. From June 1998 to July 2011, Mr. Xiong served as Financial Controller of Shanghai Chuanqi Foods Co., Ltd. Mr. Xiong studied business administration at East China University of Science and Technology and graduated in 2007.
Jianjun Nie
Chief Financial Officer & Director
Mr. Nie’s experience includes financial management, strategy implementation, business operation, sales and customer relationship maintenance. Mr. Nie has served as Chief Financial Officer of Shanghai Jiusongshanhe Equity Investment Fund Management Co., Ltd. since October 2017. From February 2005 to October 2017, Mr. Nie served as Regional Sales Manager of Northeast Region of China of Changsha Zoomlian Firefighting Equipment Co., Ltd, a national firefighting equipment manufacturer and distributor in China.
Board of Directors
H. David Sherman, 71
Independent Director
Professor Sherman has been a professor at Northeastern University since 1985, specializing in, among other areas, financial and management accounting, global financial statement analysis and contemporary accounting issues. Professor Sherman has served as Trustee and Chair of Finance Committee for American Academy of Dramatic Arts, the oldest English language acting school in the world, since January 2014, and as Board member and Treasurer for D-Tree International, a non-profit organization that develops and supports electronic clinical protocols to enable health care workers worldwide to deliver high quality care since July 2010. Professor Sherman served on the board and as audit committee chair for Dunxin Financial Holdings Ltd. (AMEX:DXF) from January 2018 to August 2019, Kingold Jewelry Inc. (NASDAQ: KGJI) from February 2011 to May 2016, China HGS Real Estate Inc. (NASDAQ: HGSH) from January 2010 to August 2012, Agfeed Corporation from January 2012 to November 2014, and China Growth Alliance, Ltd., a business acquisition company formed to acquire an operating business in China, from 2007 through 2008. Professor Sherman was previously on the faculty of the Sloan School of Management at Massachusetts Institute of Technology (MIT) and also, among other academic appointments, held an adjunct professorship at Tufts Medical School and was a visiting professor at Harvard Business School (2015). From 2004 to 2005, Professor Sherman was an Academic Fellow at the U.S. Securities and Exchange Commission in the Division of Corporate Finance’s Office of Chief Accountant. Professor Sherman received his A.B. in Economics from Brandeis University and both an MBA and doctoral degrees from Harvard Business School. He is a Certified Public Accountant and previously practiced with Coopers & Lybrand. Professor Sherman’s research has been published in management and academic journals including Harvard Business Review, Sloan Management Review, Accounting Review and European Journal of Operations Research.
Jianzhong Lu, 65
Independent Director
Mr. Lu has served as certified public accountant in Dahua Certified Public Accountants Co., Ltd. since October 2016. From June 2014 to September 2016, Mr. Lu was a Partner of Zhongxinghua Accounting Firm. From October 2013 to May 2014, Mr. Lu served as Marketing Director of Shanghai branch of Daxin Accounting Firm. From July 2012 to September 2013, Mr. Lu served as Partner of Shanghai De’an Accounting Firm. From September 1997 to June 2012, Mr. Lu served as a Partner in the Audit Department of Pricewaterhousecoopers Zhongtian Accounting Firm. From September 1986 to August 1997, Mr. Lu served as a Lecturer and Associate Professor in the Finance and Accounting Department of Shanghai Maritime University. From December 1982 to August 1986, Mr. Lu worked as Accountant of financial department of Shanghai Daily Hardware Industry Company. Mr. Lu was an external expert of Asset Securitization Research Group of the Development Research Center of the State Council of PRC from August 2016 to October 2017, and a member of the expert group of the Evaluation and Assessment of Economic Indicators of State-owned Enterprises at the Ministry of Finance of PRC from October 2014 to May 2015. Mr. Lu has extensive experience working with listed companies, including auditing, internal control, risk management and budget management. Mr. Lu is a Certified Public Account of China. Mr. Lu received his bachelor’s degree in accounting from Shanghai University of Finance and Economics in 1982.
Li Wan, 51
Independent Director
Ms. Wan has over twenty years of working experiences in various industries, including the private equity investment, corporate financial management and professional accounting firm. Since January 2016, Ms. Wan has been Partner of Shenzhen Zhuoyuan Capital Co., Ltd., a Shenzhen-based independent private equity investment firm focused on capital investments in companies in various industries with significant operations in Greater China. From August 2014 until June 2015, Ms. Wan was the Chief Financial Officer and Corporate Secretary of Deyu Agriculture Corp., a vertically integrated producer, processor, marketer and distributor of organic and other agricultural products made from corn and grains operating in Shanxi Province in China. From July 2011 through August 2014, Ms. Wan served as the Financial Controller for Deyu Agriculture Corp. Prior thereto, Ms. Wan worked as an Associate Director at KTO Corporate Finance Co. Ltd., during which time she participated in a number of cross-border transactions. From October 2004 to June 2009, Ms. Wan worked for Deloitte & Touche Financial Advisory Services Limited as an M&A Transaction Service Manager. From January 1992 until September 2004, Ms. Wan worked at three accounting firms, most recently as an Audit Senior Associate at Deloitte Touche Tohmatsu CPA Ltd Shenzhen Branch. Ms. Wan studied mechanical manufacture & equipment design at Wuhan Broadcasting and Television University, China from and graduated in 1989. She also studied for the course of the Association of Chartered Certified Accountants at Emile Woolf Colleges, London, United Kingdom from 2000 to 2003. She is a fellow of Association of Chartered Certified Accountants and passed all the examinations of Certified Public Accountants of China.