Item 1.01. Entry into a Material Definitive
Agreement.
The Merger Agreement
On February 16, 2023,
Nubia Brand International Corp. (the “Registrant” or the “Nubia”) entered into a Merger Agreement (the
“Merger Agreement”) by and among Honeycomb Battery Company, an Ohio corporation (the “Company” or
“Honeycomb”) ), the Registrant, and Nubia Merger Sub, Inc., an Ohio corporation (“Merger Sub”) and
wholly-owned subsidiary of the Registrant, pursuant to which Merger Sub will merge with and into the Company (the
“Merger”) with the Company as the surviving corporation of the Merger and becoming a wholly-owned subsidiary of Nubia.
In connection with the Merger, Nubia will change its name to “Honeycomb Battery Company” or such other name designated
by the Company by notice to Nubia, which is referred to herein as the “Combined Company.” The board of directors of
Nubia (the “Nubia Board”) has unanimously (i) approved and declared advisable the Merger Agreement, the Merger and the
other transactions contemplated thereby (collectively, the “Transactions”) and (ii) resolved to recommend approval of
the Merger Agreement and related matters by the stockholders of the Registrant. The description of the Merger Agreement in this
Current Report on Form 8-K is qualified in its entirety by reference to the full text of the Merger Agreement, a copy of which is
filed as Exhibit 2.1 to this Current Report on Form 8-K, and incorporated herein by reference.
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 $12.50 per share (subject to any adjustment pursuant to the Merger
Agreement);
(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 $15.00 per share (subject to any adjustment pursuant to the Merger
Agreement); and
(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 $25.00 per share (subject to any adjustment pursuant to the Merger Agreement).
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 9:30:01 a.m.,
New York time, and ending at 4:00:00 p.m., New York time, as reported by Bloomberg through its “HP” function (set to weighted
average) or, if the foregoing does not apply, the dollar volume-weighted average price of such security in the over-the-counter market
on the electronic bulletin board for such security during the period beginning at 9:30:01 a.m., New York time, and ending at 4:00:00 p.m.,
New York time, as reported by Bloomberg, or, if no dollar volume-weighted average price is reported for such security by Bloomberg for
such hours, the average of the highest closing bid price and the lowest closing ask price of any of the market makers for such security
as reported by OTC Markets Group Inc. If the VWAP cannot be calculated for such security on such date(s) on any of the foregoing bases,
the VWAP of such security on such date(s) shall be the fair market value per share on such date(s) as reasonably determined by Nubia.
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.
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 $500,000 (individually or in the 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; |
| (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 by promissory notes made by Nubia as working capital advances and (2) intercompany
indebtedness; or (C) repay or satisfy any indebtedness, other than the repayment of indebtedness in accordance with the terms thereof; |
| (x) | suffer or incur any lien, except
for permitted liens, on its assets; |
| (xi) | delay, accelerate or cancel,
or waive any material right with respect to, any receivables or Indebtedness owed to it, or write off or make reserves against the same
(other than, in the case of Honeycomb, in the ordinary course of business); |
| (xii) | merge or consolidate or enter
a similar transaction with, or acquire all or substantially all of the assets or business of, any other person or entity, make any material
investment in any person or entity, or be acquired by any other person; |
| (xiii) | terminate or allow to lapse
any insurance policy protecting any of Honeycomb’s, its subsidiaries’, or Nubia’s, as applicable, assets, unless simultaneously
with such termination or lapse, a replacement policy underwritten by an insurance company of nationally recognized standing having comparable
deductions and providing coverage equal to or greater than the coverage under the terminated or lapsed policy for substantially similar
premiums or less is in full force and effect; |
| (xiv) | adopt any severance, retention,
or other employee benefit plan or fail to continue to make timely contributions to each such plan in accordance with the terms thereof; |
| (xv) | institute, settle or agree to
settle any legal action, litigation, suit, claim, hearing, proceeding or investigation before any governmental authority in excess of
$250,000 (exclusive of any amounts covered by insurance) or that imposes injunctive or other non-monetary relief on such party; |
| (xvi) | except as required by GAAP,
make any material change in its accounting principles, methods or practices or write down the value of its assets; |
| (xvii) | change its principal place of
business or jurisdiction of organization; |
| (xviii) | issue, redeem or repurchase
any capital stock, membership interests or other securities, or issue any securities exchangeable for or convertible into any shares
of its capital stock or other securities, other than any redemption by Nubia of shares of common stock held by its public stockholders
as contemplated under the Merger Agreement; |
| (xix) | (A) make, change, or revoke
any material tax election; (B) change any method of accounting other than as required under GAAP or Public Company Accounting Oversight
Board rules or requirements; (C) settle or compromise any material claim, notice, audit report or assessment in respect of taxes; (D)
enter into any tax allocation, tax sharing, tax indemnity or other closing agreement relating to any taxes; or (E) surrender or forfeit
any right to claim a tax refund; |
| (xx) | enter into any transaction with
or distribute or advance any material assets or property to any of its affiliates, other than the payment of salary and benefits in the
ordinary course; |
| (xxi) | solely
in the case of Honeycomb, other than as required by any employee benefit or compensation plans, policies, programs, arrangements or payroll
practices (each, a “Plan”), (A) increase or change the compensation or benefits of any employee or service provider, (B)
accelerate the vesting or payment of any compensation or benefits of any employee or service provider, (C) enter into, amend or terminate
any Plan (or any plan, program, agreement or arrangement that would be a Plan if in effect on the date hereof) or grant, amend or terminate
any awards thereunder, (D) fund any payments or benefits that are payable or to be provided under any Plan, (E) make any loan to any
present or former employee or other individual service provider, other than advancement of expenses in the ordinary course of business
consistent with past practices, or (F) enter into, amend or terminate any collective bargaining agreement or other agreement with a labor
union or labor organization; |
| |
(xxii) |
fail to duly observe and conform to any applicable laws and orders; |
| (xxiii) | authorize, recommend, propose,
or announce an intention to adopt, or otherwise effect, a plan of complete or partial liquidation, dissolution, restructuring, recapitalization,
reorganization, or similar transaction involving it or any subsidiary; or |
| (xxiv) | enter into any agreement or
otherwise agree or commit to take, or cause to be taken, any of the foregoing. |
Other Covenants of the Parties
The Merger Agreement contains
certain additional covenants of Nubia and Honeycomb, including covenants regarding:
| (i) | providing the other with reasonable
access to its properties and books and records; |
| (ii) | notifying the other of any occurrence
of any fact or circumstance that constitutes or results, or would reasonably be expected to constitute or result, in a material adverse
effect with respect to such party; |
| (iii) | notifying the other of any legal
action, litigation, suit, claim, hearing, proceeding or investigation before any governmental authority relating to, involving, or otherwise
affecting it, its stockholders, or their equity, assets, or business, or that relate to the consummation of the Transactions, or any
notice or other communication from any governmental authority in connection with the Transactions; |
| |
(iv) |
cooperating in the preparation of this proxy statement and in all other public announcements and filings; |
| (v) | Honeycomb’s delivery to
Nubia of financial statements and other financial information; |
| (vi) | Nubia maintaining the director and officer indemnity provisions
of Honeycomb for six years following closing; |
| (vii) | Nubia ensuring that it remains
listed as a public company on, and that its securities are listed and tradable over, Nasdaq through the Closing Date; |
| (viii) | that Nubia use its reasonable
best efforts to cause its initial listing application with Nasdaq in connection with the Transactions to be approved; |
| (ix) | Nubia calling and hold a meeting
of its stockholders to adopt the Merger Agreement and approve the Business Combination and the other matters presented to Nubia’s
stockholder for approval or adoption at the Nubia Special Meeting; and |
| (x) | Honeycomb obtaining the written
consent of the requisite voting power of its stockholders approving the Merger Agreement. |
Non-Solicitation Restrictions
Nubia and Honeycomb have each
agreed that, from the date of the Merger Agreement to the Closing Date, it will not take, nor will it permit any of its representatives
to, encourage or initiate any negotiations with, or enter into any agreement with, any party in connection with a business combination
other than with the other or take any other action intended or designed to facilitate the efforts to do so. Each of Nubia and Honeycomb
has also agreed to be responsible for any acts or omissions of any of its respective representatives that, if they were the acts or omissions
of the Nubia or Honeycomb, as applicable, would be deemed a breach of the party’s obligations with respect to these non-solicitation
restrictions.
Conditions to Closing
The consummation of the Transactions
is conditioned upon customary closing conditions including:
| (i) | no governmental authority having
enacted, issued, promulgated, enforced or entered any law or order that is then in effect that makes the Transactions illegal or otherwise
prohibits consummation of the Transactions; |
| (ii) | no legal action having been
commenced or asserted in writing (and not orally) by any governmental authority to enjoin or otherwise materially restrict the consummation
of the Closing; |
| (iii) | the approval of the Merger Agreement
by the requisite vote of the stockholders of Honeycomb; |
| (iv) | each of the proposals being
considered at the Nubia Special Meeting having been approved by Nubia’s stockholders; |
| (v) | the Combined Company’s
initial listing application filed with Nasdaq in connection with the Transactions having been approved; |
| (vi) | the proxy statement having been
cleared by the Securities and Exchange Commission (the “SEC”); |
| (vii) | each party to the Merger Agreement having performed or complied
with the provisions of the Merger Agreement applicable to it, subject to agreed-upon standards; |
| (viii) | the truth and accuracy of each
party’s representations and warranties included in the Merger Agreement, subject to agreed-upon standards; |
| (ix) | the absence of any material
adverse effect with respect to a party to the Merger Agreement; |
| (x) | the receipt by each of Nubia
and Honeycomb of a certificate, dated as of the Closing, signed by the Chief Executive Officer of the other, certifying the compliance
with various closing conditions; |
| (xi) | the execution by the relevant
party or parties of the Additional Agreements; |
| (xii) | Honeycomb having provided all
required third party consents; |
| (xiii) | the requisite stockholders of Honeycomb having entered into a Company
Lock-Up Agreement (as defined below) with respect to such holder’s shares of the Combined Company’s common
stock; |
| (xiv) | the second amended and restated
certificate of incorporation of the Combined Company having been filed with the Delaware Secretary of State and become effective; |
| (xv) | Honeycomb and Nubia will have
received a certificate, dated as of the Closing Date, from the Secretary of the other certifying certain matters; |
| (xvi) | each requisite party, as applicable,
will have executed and delivered to the other party a copy of each Additional Agreement to which they are a party; |
| (xvii) | the receipt by Honeycomb of the resignations of Nubia’s
directors; |
| (xviii) | the
shareholders of Honeycomb shall satisfy the “control” requirements of Section 368(c) of the Code in connection with
the Merger; and |
| (xix) | the post-Effective Time Combined
Company’s board of directors and the Honeycomb board of directors being in compliance with the size and composition requirements
of the Merger Agreement. |
Termination
The Merger Agreement may be
terminated under certain customary and limited circumstances at any time prior to the Closing, including, without limitation:
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(i) |
by the mutual written consent of the parties; |
| (ii) | by either Nubia or Honeycomb
if the Closing does not occur on or prior to September 15, 2023 (the “Outside Termination Date”), unless the breach of any
covenants or obligations under the Merger Agreement by the party seeking to terminate (or, in the case of Nubia, by Merger Sub) proximately
caused the failure to consummate the Transactions by the applicable date; |
| (iii) | by either Nubia or Honeycomb
if any governmental authority shall have issued an order, enacted a law, or taken any other action that has the effect of making the
Transactions illegal or permanently restraining, enjoining, or otherwise prohibiting the consummation of the Transactions and such law,
order or other action shall have become final and nonappealable, unless the failure by such party or its affiliates to comply with any
provision of the Merger Agreement was a substantial cause of, or substantially resulted in, such action by such governmental authority; |
| (iv) | by Nubia, subject to certain
exceptions, if Honeycomb has breached any of its representations, warranties, covenants, or agreements in the Merger Agreement and such
breach cannot be cured at all or within the earlier of (A) 30 days after written notice thereof and (B) the Outside Termination Date; |
| (v) | by Nubia, subject to certain
exceptions, if Honeycomb does not receive the required stockholder approval of the Merger Agreement within five business days after the
date when the proxy statement is cleared by the SEC; and |
| (vi) | by Honeycomb, subject to certain
exceptions, if Nubia or Merger Sub has breached any of its representations, warranties, covenants, or agreements in the Merger Agreement
and such breach cannot be cured at all or within the earlier of (A) 30 days after written notice thereof and (B) the Outside Termination
Date. |
If the Merger Agreement is
validly terminated, none of the parties to the Merger Agreement will have any liability or any further obligation under the Merger Agreement
other than customary confidentiality obligations, except in the case of a willful breach of any covenant or agreement under the Merger
Agreement or fraud.
Certain Related Agreements
Contribution Agreement
Honeycomb and Global Graphene
Group, Inc., a Delaware corporation and the parent of Honeycomb (“G3”), will enter into the Contribution Agreement (the “Contribution
Agreement”) pursuant to which, among other things, G3 will contribute and transfer all its right, title and interest in, to and
under certain assets and Honeycomb will assume certain liabilities as more specifically set forth thereunder. The parties intend that
such contribution will qualify as a transaction described in Section 351(a) of the Code and the Treasury Regulations promulgated
thereunder. The foregoing description of the Contribution Agreement is qualified in its entirety by reference to the full text of the
form of Contribution Agreement, a copy of which is filed as Exhibit 10.1 to this Current Report on Form 8-K, and incorporated herein by
reference.
Supply and License Agreement
Honeycomb and G3 will enter
into the Supply and License Agreement (the “Supply and License Agreement”) pursuant to which, among other things, G3 will
sell to Honeycomb certain graphene and graphite products and license certain intellectual property to Honeycomb as more specifically set
forth thereunder. The foregoing description of the Supply and License Agreement is qualified in its entirety by reference to the full
text of the form of Supply and License Agreement, a copy of which is filed as Exhibit 10.2 to this Current Report on Form 8-K, and incorporated
herein by reference.
Shared Services Agreement
Honeycomb and G3 will enter
into the Shared Services Agreement (the “Shared Services Agreement”) pursuant to which, among other things, G3 will continue
to provide Honeycomb with certain operational and other support services, including assigning certain employees to work for Honeycomb
to provide support to Honeycomb’s operations and sending its employees to Honeycomb on a short-term basis to provide support, and
sharing the use of certain equipment, administrative office space, production space, laboratory space and loading space. In exchange for
receipt of such services and uses, the Shared Services Agreement contemplates that the parties will pay fees to each other as more specifically
set forth thereunder. The foregoing description of the Shared Services Agreement is qualified in its entirety by reference to the full
text of the form of Shared Services Agreement, a copy of which is filed as Exhibit 10.3 to this Current Report on Form 8-K, and incorporated
herein by reference.
Company Support Agreement
In connection with the execution
of the Merger Agreement, G3 and Honeycomb entered into the Company Support Agreement (the “Company Support Agreement”) pursuant
to which, among other things, each of G3 and certain requisite G3 securityholders have agreed to vote in favor of the approval of the
Merger Agreement, approval of the business combination and the other transactions contemplated by the Merger Agreement. The foregoing
description of the Company Support Agreement is qualified in its entirety by reference to the full text of the Company Support Agreement,
a copy of which is filed as Exhibit 10.4 to this Current Report on Form 8-K, and incorporated herein by reference.
Parent Support Agreement
In connection with the execution
of the Merger Agreement, Mach FM Acquisitions LLC, a Delaware limited liability company (the “Sponsor”), Honeycomb and Nubia
entered into the Parent Support Agreement (the “Parent Support Agreement”) pursuant to which the Sponsor agreed (i) to
vote the shares of Nubia common stock held by them in favor of the approval and adoption of the Merger Agreement and the transactions
contemplated thereunder, (ii) to not transfer, during the term of the Parent Support Agreement, any Nubia common stock owned by them,
and (iii) to not transfer any Nubia common stock held by them in accordance with the lock-up provisions set forth in Nubia’s
final prospectus filed with the U.S. Securities and Exchange Commission on June 14, 2021. The foregoing description of the Parent
Support Agreement is qualified in its entirety by reference to the full text of the Parent Support Agreement, a copy of which is filed
as Exhibit 10.5 to this Current Report on Form 8-K, and incorporated herein by reference.
Company Lock-Up Agreement
Honeycomb and G3 will enter
into the Company Lock-Up Agreement (the “Company Lock-Up Agreement”) pursuant to which, among other things, G3 will agree
to the restriction of the sale, transfer or other disposition of certain of the shares it will received at the Closing in connection with
the business combination, subject to certain exceptions. The foregoing description of the Company Lock-Up Agreement is qualified in its
entirety by reference to the full text of the Company Lock-Up Agreement, a copy of which is filed as Exhibit 10.6 to this Current Report
on Form 8-K, and incorporated herein by reference.
The Merger Agreement and
other agreements described above have been included to provide investors with information regarding their respective terms. They are not
intended to provide any other factual information about the Registrant or the Company or the other parties thereto. In particular, the
assertions embodied in the representations and warranties in the Merger Agreement were made as of a specified date, are modified or qualified
by information in one or more confidential disclosure letters prepared in connection with the execution and delivery of the Merger Agreement,
may be subject to a contractual standard of materiality different from what might be viewed as material to investors, or may have been
used for the purpose of allocating risk between the parties. Accordingly, the representations and warranties in the Merger Agreement are
not necessarily characterizations of the actual state of facts about the Registrant, the Company or the other parties thereto at the time
they were made or otherwise and should only be read in conjunction with the other information that the Registrant makes publicly available
in reports, statements and other documents filed with the SEC. The Registrant’s and the Company’s investors and securityholders
are not third-party beneficiaries under the Merger Agreement.