UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
☒
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2022
or
☐
TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission file number: 001-41323
NUBIA BRAND INTERNATIONAL CORP.
(Exact name of registrant as specified in its charter)
(Address of principal executive offices) (Zip Code)
Registrant’s telephone number, including
area code: (972)918-5120
Securities registered pursuant to Section 12(b)
of the Act:
Securities registered pursuant to Section 12(b)
of the Act:
Title of each class Trading Symbol Name of each exchange on which registered
Common Stock, par value $0.0001 per share NUBI The Nasdaq Stock Market LLC
Securities registered pursuant to Section 12(g)
of the Act: None.
Indicate by check mark if the registrant is a
well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐No☒
Indicate by check mark if the registrant is not
required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act. Yes ☐No☒
Indicate by check mark whether the registrant
(1) has filed all reports required by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or
for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for
the past 90 days. Yes☒ No ☐
Indicate by check mark whether the registrant
has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405
of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes☒ No ☐
Indicate by check mark whether the registrant
is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company.
See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company”
and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer ☐ Accelerated filer ☐
Non-accelerated filer ☒ Smaller reporting company ☒
Emerging Growth Company ☒
If an emerging growth company, indicate by check
mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting
standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant has filed a report
on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section
404(b) of the Sarbanes-Oxley Act (15 U.S.C.7262(b)) by the registered public accounting firm that prepared or issued its audit report.
☐
If securities are registered pursuant to Section
12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction
of an error to previously issued financial statements. ☐
Indicate by check mark whether any of those error
corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s
executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐
Indicate by check mark whether the registrant
is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☒ No
☐
At June 30, 2022, the last business day of
the registrant’s most recently completed second fiscal quarter, the aggregate market value of the common stock of the registrant
held by non-affiliates of the registrant was $123,006,000.
As of March 16, 2023, there were 12,473,500
shares of Class A common stock and 3,087,500 shares of Class B common of the Company issued and outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
None.
NUBIA BRAND INTERNATIONAL CORP.
ANNUAL REPORT ON FORM 10-K
FOR THE YEAR ENDED DECEMBER 31, 2022
Page
PART I 1
Item 1. Business 1
Item 1A. Risk Factors 6
Item 1B. Unresolved Staff Comments 6
Item 2. Properties 6
Item 3. Legal Proceedings 6
Item 4. Mine Safety Disclosures 6
PART II 7
Item 6. [RESERVED] 7
Item 7A. Quantitative and Qualitative Disclosures About Market Risk 11
Item 8. Financial Statements and Supplementary Data 11
Item 9A. Controls and Procedures 11
Item 9B. Other Information 11
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections 11
PART III 12
Item 10. Directors, Executive Officers and Corporate Governance 12
Item 11. Executive Compensation 19
Item 14. Principal Accounting Fees and Services 22
Item 15. Exhibits, Financial Statement Schedules 23
i
FORWARD LOOKING STATEMENTS
This Annual Report on Form 10-K contains
forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, or the Securities Act, and Section 21E
of the Securities Exchange Act of 1934, or the Exchange Act. The statements contained in this report that are not purely historical are
forward-looking statements. Our forward-looking statements include, but are not limited to, statements regarding our or our management’s
expectations, hopes, beliefs, intentions or strategies regarding the future. In addition, any statements that refer to projections, forecasts
or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. The
words “anticipates,” “believe,” “continue,” “could,” “estimate,” “expect,”
“intend,” “may,” “might,” “plan,” “possible,” “potential,” “predict,”
“project,” “should,” “would” and similar expressions may identify forward-looking statements, but
the absence of these words does not mean that a statement is not forward-looking. Forward-looking statements in this report may include,
for example, statements about our:
● ability to complete our initial business combination;
● pool of prospective target businesses;
● the potential liquidity and trading of our securities;
● financial performance following our initial public offering.
The forward-looking statements contained in this
report are based on our current expectations and beliefs concerning future developments and their potential effects on us. There can be
no assurance that future developments affecting us will be those that we have anticipated. These forward-looking statements involve a
number of risks, uncertainties (some of which are beyond our control) or other assumptions that may cause actual results or performance
to be materially different from those expressed or implied by these forward-looking statements. These risks and uncertainties include,
but are not limited to, those factors described under the heading “Risk Factors.” Should one or more of these risks or uncertainties
materialize, or should any of our assumptions prove incorrect, actual results may vary in material respects from those projected in these
forward-looking statements. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new
information, future events or otherwise, except as may be required under applicable laws.
ii
PART I
ITEM 1. BUSINESS
In this Annual Report on Form 10-K (the
“Form 10-K”), references to the “Company” and to “we,” “us,” and “our”
refer to Nubia Brand International Corp.
Overview
Nubia Brand International Corp. is a newly organized
blank check company formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization
or similar business combination with one or more businesses, which we refer to as our initial business combination throughout this prospectus.
While we may pursue an initial business combination target in any business or industry or geographic location, we intend to focus our
search on wireless telecommunications companies.
On March 15, 2022, Nubia consummated its initial
public offering of 12,350,000 units (the “Units”), including 1,350,000 units under the underwriters’ over-allotment
option, with each unit consisting of one share of Nubia’s Class A common stock and one-half of one warrant, each whole warrant
to purchase one share of Nubia’s Class A common stock. The units were sold at an offering price of $10.00 per unit, generating
gross proceeds of $123,500,000. Simultaneously with the consummation of the initial public offering, Nubia consummated the private placement
of 5,405,000 warrants at a price of $1.00 per warrant (the “Private Warrants”), generating total proceeds of $5,405,000. The
private warrants are identical to the public warrants underlying the Units being sold in the initial public offering.
Following the consummation of the initial public
offering, a total of $125,970,000 of the net proceeds from the sale of the Units in the initial public offering and the Private Warrants
was deposited into a U.S.-based trust account with Continental Stock Transfer & Trust Company acting as trustee. None of the funds
held in trust will be released from the trust account, other than interest income to pay any tax obligations, until the earlier of the
completion of an initial business combination within the required time period or our entry into liquidation if we have not completed a
business combination in the required time period. On May 2, 2022, our Class A common stock and warrants underlying the Units sold in our
IPO began to trade separately on a voluntary basis.
If the Company is unsuccessful in consummating
an initial business combination within 12 months, or March 15, 2023, (or up to 18 months, September 15, 2023, if the Company extends the
period of time to consummate a business combination) from the closing of the IPO the Company is required to cease all operations, redeem
the public shares and thereafter liquidate and dissolve.
Business Combination Agreement
On February 16, 2023, Nubia entered into a
Merger Agreement (the “Merger Agreement”) by and among Honeycomb Battery Company, an Ohio corporation (the
“Company” or “Honeycomb”), Nubia, and Nubia Merger Sub, Inc., an Ohio corporation (“Merger Sub”)
and wholly-owned subsidiary of Nubia, 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 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 Nubia.
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):
1
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.
The Business Combination will require the
approval of the shareholders of Nubia and Honeycomb and is subject to other customary closing conditions, including a proxy statement
being filed with and cleared by the U.S. Securities and Exchange Commission. The Transactions is expected to close in the second quarter
of 2023.
Initial Business Combination
General
We are not presently engaged in, and we will not
engage in, any substantive commercial business until we complete a business combination. We intend to utilize cash derived from the proceeds
of the IPO and the private placement of Private Warrants, our capital stock, debt or a combination of these in effecting our initial business
combination.
Selection of a Target Business and Structuring
of Our Initial Business Combination
Nasdaq rules require that we must complete one
or more business combinations having an aggregate fair market value of at least 80% of the value of the assets held in the trust account
(excluding the deferred underwriting commissions and taxes payable on the interest earned on the trust account) at the time of our signing
a definitive agreement in connection with our initial business combination. Our board of directors will make the determination as to the
fair market value of our initial business combination. Even though our board of directors will rely on generally accepted standards, our
board of directors will have discretion to select the standards employed. In addition, the application of the standards generally involves
a substantial degree of judgment. Accordingly, investors will be relying on the business judgment of the board of directors in evaluating
the fair market value of the target or targets. Any proxy solicitation materials or tender offer documents used by us in connection with
any proposed transaction will provide public stockholders with our analysis of our satisfaction of the 80% of fair market value test,
as well as the basis for our determinations. If our board of directors is not able to independently determine the fair market value of
our initial business combination, we will obtain an opinion from an independent investment banking firm or another independent entity
that commonly renders valuation opinions with respect to the satisfaction of such criteria. While we consider it unlikely that our board
of directors will not be able to make an independent determination of the fair market value of our initial business combination, it may
be unable to do so if it is less familiar or experienced with the business of a particular target or if there is a significant amount
of uncertainty as to the value of a target’s assets or prospects. Additionally, pursuant to Nasdaq rules, any initial business combination
must be approved by a majority of our independent directors.
2
We anticipate structuring our initial business
combination so that the post-transaction company in which our public stockholders own shares will own or acquire 100% of the equity
interests or assets of the target business or businesses. We may, however, structure our initial business combination such that the post-transaction company
owns or acquires less than 100% of such interests or assets of the target business in order to meet certain objectives of the prior owners
of the target business, the target management team or stockholders or for other reasons, but we will only complete such business combination
if the post-transaction company owns or acquires 50% or more of the outstanding voting securities of the target or otherwise acquires
a controlling interest in the target sufficient for it not to be required to register as an investment company under the Investment Company
Act of 1940, as amended (the “Investment Company Act”). Even if the post-transaction company owns or acquires 50% or
more of the voting securities of the target, our stockholders prior to the business combination may collectively own a minority interest
in the post-transaction company, depending on valuations ascribed to the target and us in the business combination transaction. For
example, we could pursue a transaction in which we issue a substantial number of new shares in exchange for all of the outstanding capital
stock, shares or other equity interests of a target. In this case, we would acquire a 100% controlling interest in the target. However,
as a result of the issuance of a substantial number of new shares, our stockholders immediately prior to our initial business combination
could own less than a majority of our issued and outstanding shares subsequent to our initial business combination. If less than 100%
of the equity interests or assets of a target business or businesses are owned or acquired by the post-transaction company, the portion
of such business or businesses that is owned or acquired is what will be valued for purposes of the 80% fair market value test. If the
business combination involves more than one target business, the 80% fair market value test will be based on the aggregate value of all
of the target businesses and we will treat the target businesses together as our initial business combination for purposes of a tender
offer or for seeking stockholder approval, as applicable.
In evaluating a prospective target business, we
expect to conduct a thorough due diligence review which will encompass, among other things, meetings with incumbent management and employees,
document reviews, inspection of facilities, as well as a review of financial, operational, legal and other information which will be made
available to us.
The time required to select and evaluate a target
business and to structure and complete our initial business combination, and the costs associated with this process, are not currently
ascertainable with any degree of certainty. Any costs incurred with respect to the identification and evaluation of a prospective target
business with which our initial business combination is not ultimately completed will result in our incurring losses and will reduce the
funds we can use to complete another business combination.
Lack of Business Diversification
For an indefinite period of time after consummation
of our initial business combination, the prospects for our success may depend entirely on the future performance of a single business.
Unlike other entities that have the resources to complete business combinations with multiple entities in one or several industries, it
is probable that we will not have the resources to diversify our operations and mitigate the risks of being in a single line of business.
By consummating our initial business combination with only a single entity, our lack of diversification may:
3
Limited Ability to Evaluate the Target Business’
Management Team
Although we scrutinized the management team of
our target business, our assessment of the target business’ management team may not prove to be correct. In addition, the future
management team may not have the necessary skills, qualifications or abilities to manage a public company. Furthermore, the future role
of our officers and directors, if any, in the target business following our initial business combination remains to be determined. While
it is possible that some of our key personnel will remain associated in senior management or advisory positions with us following our
initial business combination, it is unlikely that they will devote their full time efforts to our affairs subsequent to our initial business
combination. Moreover, they would only be able to remain with the company after the consummation of our initial business combination if
they are able to negotiate employment or consulting agreements in connection with the business combination. Such negotiations would take
place simultaneously with the negotiation of the business combination and could provide for them to receive compensation in the form of
cash payments and/or our securities for services they would render to the company after the consummation of the business combination.
While the personal and financial interests of our key personnel may influence their motivation in identifying and selecting a target business,
their ability to remain with the company after the consummation of our initial business combination will not be the determining factor
in our decision as to whether or not we will proceed with any potential business combination. Additionally, our officers and directors
may not have significant experience or knowledge relating to the operations of the particular target business.
Following our initial business combination, we
may seek to recruit additional managers to supplement the incumbent management of the target business. We may not have the ability to
recruit additional managers, or that any such additional managers we do recruit will have the requisite skills, knowledge or experience
necessary to enhance the incumbent management.
Competition
In identifying, evaluating and selecting a target
business for our initial business combination, we have encountered and will continue to encounter intense competition from other entities
having a business objective similar to ours, including other blank check companies, private equity groups and leveraged buyout funds,
and operating businesses seeking strategic acquisitions. Many of these entities are well established and have significant experience identifying
and effecting business combinations directly or through affiliates. Moreover, many of these competitors possess greater financial, technical,
human and other resources than us. Our ability to acquire larger target businesses will be limited by our available financial resources.
This inherent limitation gives others an advantage in pursuing the acquisition of a target business. Furthermore, the requirement that
we acquire a target business or businesses having a fair market value equal to at least 80% of the value of the trust account (excluding
any taxes payable) at the time of the agreement to enter into the business combination, and our obligation to pay cash in connection with
our public stockholders who exercise their redemption rights, may not be viewed favorably by certain target businesses. Any of these factors
may place us at a competitive disadvantage in successfully negotiating our initial business combination.
Facilities
Our executive offices are located at 13355 Noel
Rd., Suite 1100, Dallas, Texas, and our telephone number is (972) 918-5120.
Employees
We have two officers. These individuals are not
obligated to devote any specific number of hours to our matters, but they intend to devote as much of their time as they deem necessary,
in the exercise of their respective business judgement, to our affairs until we have completed our initial business combination. The amount
of time they will devote in any time period will vary based on whether a target business has been selected for our initial business combination
and the stage of the initial business combination process we are in. We do not intend to have any full-time employees prior to the completion
of our initial business combination. We do not have an employment agreement with any member of our management team.
Periodic Reporting and Audited Financial Statements
We have registered our units, Class A common stock
and warrants under the Exchange Act and have reporting obligations, including the requirement that we file annual, quarterly and current
reports with the SEC. In accordance with the requirements of the Exchange Act, our annual reports will contain financial statements audited
and reported on by our independent registered public accountants.
4
We will provide stockholders with audited financial
statements of the prospective target business as part of the tender offer materials or proxy solicitation materials sent to stockholders
to assist them in assessing the target business. In all likelihood, these financial statements will need to be prepared in accordance
with, or reconciled to, GAAP, or IFRS, depending on the circumstances, and the historical financial statements may be required to be audited
in accordance with the standards of the PCAOB. These financial statement requirements may limit the pool of potential targets we may conduct
an initial business combination with because some targets may be unable to provide such statements in time for us to disclose such statements
in accordance with federal proxy rules and complete our initial business combination within the prescribed time frame. We cannot assure
you that any particular target business identified by us as a potential business combination candidate will have financial statements
prepared in accordance with GAAP or that the potential target business will be able to prepare its financial statements in accordance
with the requirements outlined above. To the extent that these requirements cannot be met, we may not be able to acquire the proposed
target business. While this may limit the pool of potential business combination candidates, we do not believe that this limitation will
be material.
We will be required to evaluate our internal control
procedures for the fiscal year ending December 31, 2023 as required by the Sarbanes-Oxley Act. Only in the event we are deemed to be a
large accelerated filer or an accelerated filer, and no longer qualify as an emerging growth company, will we be required to have our
internal control procedures audited. A target company may not be in compliance with the provisions of the Sarbanes-Oxley Act regarding
adequacy of their internal controls. The development of the internal controls of any such entity to achieve compliance with the Sarbanes-Oxley
Act may increase the time and costs necessary to complete any such business combination. Prior to the date of this prospectus, we will
file a Registration Statement on Form 8-A with the SEC to voluntarily register our securities under Section 12 of the Exchange Act. As
a result, we will be subject to the rules and regulations promulgated under the Exchange Act. We have no current intention of filing a
Form 15 to suspend our reporting or other obligations under the Exchange Act prior or subsequent to the consummation of our initial business
combination.
We are an “emerging growth company,”
as defined in Section 2(a) of the Securities Act, as modified by the JOBS Act. As such, we are eligible to take advantage of certain exemptions
from various reporting requirements that are applicable to other public companies that are not “emerging growth companies”
including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley
Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from
the requirements of holding a non-binding advisory vote on executive compensation and stockholder approval of any golden parachute payments
not previously approved. If some investors find our securities less attractive as a result, there may be a less active trading market
for our securities and the prices of our securities may be more volatile.
In addition, Section 107 of the JOBS Act also
provides that an “emerging growth company” can take advantage of the extended transition period provided in Section 7(a)(2)(B)
of the Securities Act for complying with new or revised accounting standards. In other words, an “emerging growth company”
can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We intend to
take advantage of the benefits of this extended transition period.
We will remain an emerging growth company until
the earlier of (1) the last day of the fiscal year (a) following the fifth anniversary of the completion of this offering, (b) in which
we have total annual gross revenue of at least $1.235 billion, or (c) in which we are deemed to be a large accelerated filer, which means
the market value of our shares of common stock that are held by non-affiliates exceeds $700 million as of the prior June 30th, and (2)
the date on which we have issued more than $1.0 billion in non-convertible debt during the prior three-year period. References herein
to “emerging growth company” will have the meaning associated with it in the JOBS Act.
5
Additionally, we are a “smaller reporting
company” as defined in Item 10(f)(1) of Regulation S-K. Smaller reporting companies may take advantage of certain reduced disclosure
obligations, including, among other things, providing only two years of audited financial statements. We will remain a smaller reporting
company until the last day of the fiscal year in which (1) the market value of our common stock held by non-affiliates equals or exceeds
$250 million as of the end of that year’s second fiscal quarter, and (2) our annual revenues equaled or exceeded $100 million during
such completed fiscal year or the market value of our common stock held by non-affiliates exceeds $700 million as of the end of that year’s
second fiscal quarter.
Potential Conflicts
Members of our management team who directly or
indirectly own our securities may have a conflict of interest in determining whether a particular target business is an appropriate business
with which to effectuate our initial business combination. Further, each of our officers and directors may have a conflict of interest
with respect to evaluating a particular business combination if the retention or resignation of any such officers and directors was included
by a target business as a condition to any agreement with respect to our initial business combination.
Our officers and directors have agreed to present
to us all target business opportunities that have a fair market value of at least 80% of the assets held in the trust account, subject
to any fiduciary or contractual obligations they may have. As more fully discussed in “Directors, Executive Officers and Corporate
Governance — Conflicts of Interest,” if any of our officers or directors becomes aware of an initial business combination
opportunity that might be attractive to any entity to which he has fiduciary or contractual obligations, he may be required to present
such initial business combination opportunity to such entity prior to presenting such initial business combination opportunity to us.
For more information on the relevant pre-existing fiduciary duties or contractual obligations of our management team, see the section
titled “Directors, Executive Officers and Corporate Governance — Conflicts of Interest.”
Legal Proceedings
There is no material litigation, arbitration or
governmental proceeding currently pending against us or any members of our management team in their capacity as such.
ITEM 1A. RISK FACTORS
As a smaller reporting company, we are not required
to make disclosures under this Item.
ITEM 1B. UNRESOLVED STAFF COMMENTS
Not applicable.
ITEM 2. PROPERTIES
We do not own any real estate or other physical
properties materially important to our operations. We maintain our principal executive offices at 13355 Noel Rd., Suite 1100, Dallas,
Texas. We consider our current office space, combined with the other office space otherwise available to our executive officers, adequate
for our current operations.
ITEM 3. LEGAL PROCEEDINGS
We are not currently a party to any material litigation
or other legal proceedings brought against us. We are also not aware of any legal proceeding, investigation or claim, or other legal exposure
that has a more than remote possibility of having a material adverse effect on our business, financial condition or results of operations.
ITEM 4. MINE SAFETY DISCLOSURES
Not Applicable.
6
PART II
ITEM 5. MARKET FOR REGISTRANT’S
COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
Our Units began to trade on the Nasdaq Global
Market, or Nasdaq, under the symbol “NUBIU” on March 11, 2022. The Class A common stock, warrants, and rights comprising the
Units began separate trading on Nasdaq on May 2, 2022, under the symbols “NUBI” and “NUBIW” respectively.
Holders of Record
As of December 31, 2022, there were 4 holders of record of our Class
A common stock, 1 holder of record of our Class B common stock. The number of record holders was determined from the records of our transfer
agent.
Dividends
We have not paid any cash dividends on our shares
of Class A common stock to date and do not intend to pay cash dividends prior to the completion of an initial business combination. The
payment of cash dividends in the future will be dependent upon our revenues and earnings, if any, capital requirements and general financial
condition subsequent to completion of a business combination. The payment of any dividends subsequent to a business combination will be
within the discretion of our board of directors at such time. It is the present intention of our board of directors to retain all earnings,
if any, for use in our business operations and, accordingly, our board of directors does not anticipate declaring any dividends in the
foreseeable future. In addition, our board of directors is not currently contemplating and does not anticipate declaring any share dividends
in the foreseeable future. Further, if we incur any indebtedness, our ability to declare dividends may be limited by restrictive covenants
we may agree to in connection therewith.
Securities Authorized for Issuance Under Equity
Compensation Plans
None.
Recent Sales of Unregistered Securities
On March 15, 2022, simultaneously with the closing
of the IPO, we sold the Sponsor 5,405,000 warrants (the “Private Warrants”) at a price of $1.00 per Private Warrant, generating
total proceeds of $5,405,000. The Private Warrants are identical to the warrants sold in the IPO except that holders of the Private Warrants
may not transfer, assign, or sell any of the Private Warrants or underlying securities until the date that is 30 days after the date we
complete our initial business combination except to permitted transferees. Our Sponsor was granted certain demand and piggyback registration
rights in connection with the purchase of the Private Warrants.
Purchases of Equity Securities by the Issuer
and Affiliated Purchasers
None.
ITEM 6. [RESERVED]
As a smaller reporting company, we are not required
to make disclosures under this Item.
ITEM 7. MANAGEMENT’S DISCUSSION
AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion and analysis of our financial
condition and results of operations should be read in conjunction with our audited financial statements and the notes related thereto
which are included in “Item 8. Financial Statements and Supplementary Data” of this Annual Report on Form 10-K.
Certain information contained in the discussion and analysis set forth below includes forward-looking statements. Our actual results may
differ materially from those anticipated in these forward-looking statements as a result of many factors, including those set forth under
“Special Note Regarding Forward-Looking Statements” and elsewhere in this Annual Report on Form 10-K.
7
Overview
We are a blank check company incorporated as a
Delaware corporation and formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization
or similar business combination with one or more businesses (the “Initial Business Combination”).
We intend to effectuate an Initial Business Combination
using cash from the proceeds of our initial public offering (the “Public Offering”) that closed on March 15, 2022 (the “Closing
Date”) and the private placement warrants sold in a private placement (the “Private Placement Warrants”) that closed
on the Closing Date and from additional issuances, if any, of, our capital stock and our debt, or a combination of cash, stock and debt.
Our business activities from inception to December
31, 2022 consisted primarily of our preparation for our Public Offering that was completed on March 15, 2022 and, since the Closing Date,
identification and evaluation of prospective acquisition targets for an Initial Business Combination.
At December 31, 2022, we had cash of $545,655
and working capital deficit of $148,043. Further, we expect to continue to incur significant costs in the pursuit of our acquisition plans.
We cannot assure you that our plans to complete an Initial Business Combination will be successful.
Results of Operations
For the year ended December 31, 2022, we had net income of $593,905
which consisted of interest income earned in the amount of $1,818,565 on cash and funds held in the Trust Account, a gain on the over-allotment
liability of $19,432, partially offset by operating expenses totaling $904,193. In addition, the Company recorded an income tax provision
of $339,899.
For the period from June 14, 2021 (inception)
through December 31, 2021, we had a net loss of $1,430 which consisted solely of formation expenses.
Going Concern Considerations, Liquidity and Capital Resources
On March 15, 2022, we consummated the Initial
Public Offering of 11,000,000 Units at a price of $10.00 per Unit, which includes the exercise by the underwriters of the over-allotment
option to purchase an additional 1,350,000 Units, generating gross proceeds of $123,500,000. Simultaneously with the closing of the Initial
Public Offering and exercise of the over-allotment option, we consummated the sale of 5,405,000 Private Placement Warrants at a price
of $1.00 per Private Placement Warrant in a private placement to our Sponsor, generating gross proceeds of $5,405,000.
Following the Initial Public Offering, the exercise
of the over-allotment option by the underwriters’ and the sale of the Private Placement Warrants, a total of $125,970,000 was placed
in the Trust Account and as of December 31, 2022, we had $545,655 of cash held outside of the Trust Account, after payment of costs related
to the Initial Public Offering, and available for working capital purposes. Transaction costs amounted to $6,951,081 consisting of $1,235,000
of underwriting fees, $4,322,500 of deferred underwriting fees payable and $597,334 of other offering costs. In addition, the Company
recorded the fair value of $776,815 for representative shares issued upon close of the Public Offering as well as the fair value of the
remaining over-allotment option of $19,432 as offering costs.
For the year ended December 31, 2022, cash used in operating activities
was $725,102 which consisted of net income of $593,905, interest earned on marketable securities held in the Trust Account of $1,812,882,
the gain on the change in fair value of the over-allotment liability of $19,432 and changes in operating assets and liabilities provided
$513,307 of cash from operating activities.
For the year ended December 31, 2022, the Company
used cash of $125,970,000 in investing activities for the purchase of investments in the Trust Account following
the Initial Public Offering, the exercise of the over-allotment option by the underwriters’ and the sale of the Private Placement
Warrants.
For the year ended December 31, 2022, cash from
financing activities provided $127,240,757. The Company received gross proceeds of $128,905,000 from the
Initial Public Offering, the exercise of the over-allotment option by the underwriters’ and the sale of the Private Placement Warrants.
These increases were offset by payment of the underwriting fees and offering costs of $1,235,000 and $429,243, respectively.
For the period from June 14, 2021 (inception)
through December 31, 2021, cash used in operating activities was $0 which consisted of the net loss of $1,430 offset by advances from
related party of $939 and changes in operating assets and liabilities provided $491 of cash from operating activities.
As of December 31, 2022, we had investments held in the Trust Account
of $127,782,882 principally invested in U.S. government securities. Interest income on the balance in the Trust Account may be used by
us to pay taxes, and to pay up to $100,000 of any dissolution expenses. In March 2023, $200,050 was withdrawn from the Trust to pay taxes.
8
At December 31, 2022, the Company had cash outside
of trust of $545,655 and working capital deficit of $148,043. Further, the Company has incurred and expects to continue to incur significant
costs in pursuit of its financing and acquisition plans. In connection with the Company’s assessment of going concern considerations
in accordance with Accounting Standards Update (“ASU”) 2014-15, “Disclosures of Uncertainties about an Entity’s
Ability to Continue as a Going Concern,” management has determined that the Company has funds that are sufficient to fund the
working capital needs of the Company until the consummation of an initial business combination or the winding up of the Company as stipulated
in the Company’s amended and restated memorandum of association. However, management has determined that these liquidity risks,
as well as if the Company is unsuccessful in consummating an initial business combination within 15 months, or June 15, 2023 as the Company
deposited $1,235,000 into the trust account in March 2023 to fund the automatic 3-month extension, (or up to 18 months, by September 15,
2023, if the Company extends the period of time to consummate a business combination) from the closing of the IPO, the requirement that
the Company cease all operations, redeem the public shares and thereafter liquidate and dissolve raises substantial doubt about the ability
to continue as a going concern for the next twelve months from the issuance of this filing. The balance sheets do not include any adjustments
that might result from the outcome of this uncertainty. The accompanying financial statements have been prepared in conformity with
generally accepted accounting principles in the United States of America (“US GAAP”), which contemplate continuation of the
Company as a going concern.
We intend to use substantially all of the funds
held in the Trust Account, including any amounts representing interest earned on the Trust Account, excluding the deferred underwriting
commissions, to complete an initial business combination. To the extent that capital stock or debt is used, in whole or in part, as consideration
to complete an initial business combination, the remaining proceeds held in the Trust Account will be used as working capital to finance
the operations of the target business or businesses, make other acquisitions and pursue growth strategies. If an initial business combination
agreement requires us to use a portion of the cash in the Trust Account to pay the purchase price or requires us to have a minimum amount
of cash at closing, we will need to reserve a portion of the cash in the Trust Account to meet such requirements or arrange for third-party
financing.
On July 27, 2021, the Sponsor issued an unsecured
promissory note to the Company (the “Promissory Note”), pursuant to which the Company may borrow up to an aggregate principal
amount of $300,000. The Promissory Note is non-interest bearing and payable on the earlier of (i) March 31, 2022 or (ii) the consummation
of the Initial Public Offering (the “Original Maturity Date”). On May 20, 2022, the Company and the Sponsor amended and restated
the Promissory Note (the “Amended Note”) (i) to extend the Original Maturity Date to a new maturity date which shall be upon
the earlier of the closing of the Company’s initial business combination or the Company’s liquidation, and (ii) to permit
the holder of the Amended Note, in its sole discretion, to convert any or all of the unpaid principal under the Amended Note into warrants,
at a price of $1.00 per warrant, upon consummation of the Company’s initial business combination. As of December 31, 2022 and 2021,
there was $125,341 outstanding under the Promissory Note. On May 20, 2022, the Company and the Sponsor entered into the Amended Note (i)
to extend the Original Maturity Date to a new maturity date which shall be upon the earlier of the closing of the Company’s initial
business combination or the Company’s liquidation, and (ii) to permit the holder of the Amended Note, in its sole discretion, to
convert any or all of the unpaid principal under the Amended Note into Warrants, at a price of $1.00 per warrant, upon consummation of
the Company’s initial business combination.
Off-Balance Sheet Arrangements
We have no obligations, assets or liabilities
which would be considered off-balance sheet arrangements. We do not participate in transactions that create relationships with unconsolidated
entities or financial partnerships, often referred to as variable interest entities, which would have been established for the purpose
of facilitating off-balance sheet arrangements.
We have not entered into any off-balance sheet
financing arrangements, established any special purpose entities, guaranteed any debt or commitments of other entities, or entered into
any non-financial agreements involving assets.
Contractual Obligations
At December 31, 2022, we did not have any long-term
debt, capital lease obligations, operating lease obligations or long-term liabilities. In connection with the Public Offering, we entered
into an administrative support agreement pursuant to which we agreed to pay an affiliate of the Sponsor a total of $10,000 per month for
office space, utilities and secretarial, and administrative support services. Upon the earlier of the completion of the Initial Business
Combination and the Company’s liquidation, we will cease paying these monthly fees.
Pursuant to the Underwriting Agreement., upon
the consummation of our Initial Business Combination, we will pay the underwriters a cash fee in an amount equal to 3.5% of the gross
proceeds of the Public Offering (exclusive of any applicable finders’ fees which might become payable). No fee will be due if we
do not complete an Initial Business Combination.
9
Critical Accounting Policies and Significant
Estimates
The preparation of financial statements and related
disclosures in conformity with accounting principles generally accepted in the United States requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of
the financial statements, and income and expenses during the periods reported. Actual results could materially differ from those estimates.
We have identified the following as our critical accounting policies:
Net Income (Loss) per Common Share
The Company complies with accounting and disclosure
requirements of FASB ASC Topic 260, “Earnings Per Share.” Net income (loss) per share of common stock is computed by
dividing net income (loss) by the weighted average number of shares of common stock outstanding for the period. The Company applies the
two-class method in calculating earnings per share. The remeasurement adjustment associated with the redeemable shares of Class A
Common Stock is excluded from income (loss) per share as the redemption value approximates fair value.
The calculation of diluted income (loss) per share
of common stock does not consider the effect of the warrants issued in connection with the (i) Initial Public Offering and (ii) the Private
Placement since the exercise of the warrants is contingent upon the occurrence of future events. .
As of December 31, 2022, the warrants are exercisable to purchase 11,580,000 shares of Class A common stock in the aggregate. As a result,
diluted income (loss) per share of common stock is the same as basic income (loss) per common stock for the periods presented. On March
10, 2022, the Company effectuated a 1.1-for-1 share split on the Class B common stock, resulting in an aggregate of 3,162,500 founder
shares outstanding (up to 412,500 shares of which were subject to forfeiture, of which 75,000 were forfeited, resulting in 337,500 common
stock shares outstanding subsequent to March 10, 2022). Basic net income per share of common stock excludes the 337,500 shares subject
to forfeiture from weighted average shares outstanding between January 1, 2022 through March 10, 2022 due to the contingency with forfeiture.
Diluted net income per share of common stock weighted average shares outstanding considers the 337,500 shares subject to forfeiture as
outstanding during the entire year ended December 31, 2022. For the period from June 14, 2021 (inception) through December 31, 2021, the
412,500 shares subject to forfeiture were excluded from the basic and diluted weighted average shares outstanding.
Class A common stock subject to possible redemption
The Company accounts for its shares of Class A
common stock subject to possible redemption in accordance with the guidance enumerated in ASC 480 “Distinguishing Liabilities
from Equity”. Common stock subject to mandatory redemption is classified as a liability instrument and is measured at fair value.
Conditionally redeemable common stock (including common stock that feature redemption rights that are either within the control of the
holder or subject to redemption upon the occurrence of uncertain events not solely within the Company’s control) are classified
as temporary equity. At all other times, common stock is classified as stockholders’ equity. The shares of the Company’s Class
A common stock feature certain redemption rights that are considered by the Company to be outside of the Company’s control and subject
to the occurrence of uncertain future events.
Fair Value of Financial Instruments
Fair value is defined as the price that would be received for sale
of an asset or paid to transfer of a liability, in an orderly transaction between market participants at the measurement date. US GAAP
establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. The hierarchy gives the highest
priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority
to unobservable inputs (Level 3 measurements). The determination of fair value of the Representative Shares to the underwriter represent
the most significant accounting estimate related to the fair value of financial instruments. The 123,500 Representative Shares have a
grant date fair value of $6.29 per share or an aggregate of $776,815. The Company measured the fair value of the Representative Shares
on the grant date of the award utilizing a valuation model which considers certain assumptions. These assumptions include the offering
price, the marketability of the Company and the probability of initial business combination. Upon the Initial Public Offering, such amounts
were allocated to offering costs within stockholders’ equity (deficit).
Warrants
We account for warrants as either equity-classified
or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance
in ASC 480, and FASB ASC 815, “Derivatives and Hedging” (“ASC 815”). The assessment considers whether the warrants
are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the warrants
meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed to the Company’s
own common shares and whether the warrant holders could potentially require “net cash settlement” in a circumstance outside
of the Company’s control, among other conditions for equity classification. This assessment is conducted at the time warrant issuance
and as of each subsequent quarterly period end date while the warrants are outstanding.
For issued or modified warrants that meet all of the criteria for equity
classification, the warrants are required to be recorded as a component of additional paid-in capital at the time of issuance. For issued
or modified warrants that do not meet all of the criteria for equity classification, the warrants are required to be recorded at their
initial fair value on the date of issuance, and each balance sheet date thereafter. We account for our outstanding warrants as equity-classified
instruments.
10
Recent Accounting Pronouncements
Management does not believe that any recently issued, but not yet effective,
accounting standards, if currently adopted, would have a material effect on the Company’s balance sheet.
ITEM 7A. QUANTITATIVE AND QUALITATIVE
DISCLOSURES ABOUT MARKET RISK
As a smaller reporting company, we are not required
to make disclosures under this Item.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY
DATA
Our financial statements and the notes thereto
begin on page F-1 of this Annual Report.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH
ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
None.
ITEM 9A. CONTROLS AND PROCEDURES
Disclosure controls are procedures that are designed