Nxu, Inc.

We consider our current office and manufacturing space adequate for our current operations.

• Certain provisions of the Merger Agreement may discourage third parties from submitting competing proposals, including proposals that may be superior to the transactions contemplated by the Merger Agreement.
• The Merger may fail to qualify as a “reorganization” for U.S. federal income tax purposes, resulting in recognition of taxable gain or loss by Verde’s U.S. holders in respect of their Verde capital stock.
• Stockholder litigation could prevent or delay the consummation of the Merger or otherwise negatively impact our business, operating results and financial condition.
• The Merger will involve substantial costs and will require substantial management resources.
• Another attractive strategic transaction may not be available if the Merger is not completed.
• Risks Related to Contemplated Reverse Stock Split that was Approved by the Stockholders at our Special Meeting
• The contemplated reverse stock split may not increase the combined company’s stock price over the long-term.
• The contemplated reverse stock split may decrease the liquidity of the combined company’s common stock.
• The contemplated reverse stock split may lead to a decrease in the combined company’s overall market capitalization.
• Risks Related to Nxu’s Strategic Alternative Process and Potential Strategic Transaction
• Nxu cannot be sure if or when the Merger will be completed.
• If Nxu does not successfully consummate the Merger or another strategic transaction, Nxu’s board of directors may decide to pursue a dissolution and liquidation of Nxu. In such an event, the amount of cash available for distribution to Nxu’s stockholders will depend heavily on the costs and timing of such liquidation as well as the amount of cash that will need to be reserved for commitments and contingent liabilities, as to which Nxu can give you no assurance.
• Nxu is substantially dependent on Nxu’s remaining employees to facilitate the consummation of the Merger.
• Nxu is an early-stage company with a limited operating history that has never turned a profit and there are no assurances that Nxu will ever be profitable.
• Nxu has incurred significant losses since its inception, and Nxu expects to continue to incur losses for the foreseeable future. Accordingly, its financial condition raises substantial doubt regarding its ability to continue as a going concern.
• Nxu may not achieve its projected goals in the time frames it announces and expects due to unforeseen factors, including high interest rates and continued inflation increasing the cost to do business.
• Nxu’s limited operating history makes it difficult for Nxu to evaluate its future business prospects.
• Nxu may not be able to successfully manage growth.
• Nxu’s business is currently entirely dependent on the success of the NxuOne™ Charging Network. Nxu’s lack of business diversification could cause its stockholders to lose all or some of their investment if Nxu is unable to generate revenues from the NxuOne™ Charging Network.
• Nxu’s estimates of market opportunity and forecasts of market growth may prove to be inaccurate.
• The success of Nxu’s business depends on attracting and retaining a large number of customers. If Nxu is unable to do so, Nxu will not be able to achieve profitability.
• Nxu’s growth and success are highly correlated with and thus dependent upon the continuing rapid adoption of and demand for EVs and OEMs’ ability to supply such EVs to the market.
• Nxu generated revenue for the first time in 2023, but there is no assurance that it will be able to continue to generate revenue from the sale or deployment of the NxuOne™ Charging Network or from the sale of other proprietary products.
• Nxu has losses which it expects to continue into the future. There is no assurance its future operations will result in a profit. If Nxu cannot generate sufficient revenues to operate profitably or Nxu is unable to raise enough additional funds for operations, the stockholders will experience a decrease in value, and Nxu may have to cease operations.
• If Nxu does not successfully establish and maintain itself as a highly trusted and respected name for EV-related technology, Nxu may not be able to retain quality talent or achieve future revenue goals, which could significantly affect its business, financial condition and results of operations.
• Nxu’s ability to utilize loss carry forwards may be limited.
• Nxu’s business could be adversely affected by a downturn in the economy and/or manufacturing.
• The preparation of Nxu’s financial statements requires estimates, judgments and assumptions that are inherently uncertain.
• Failure to maintain internal controls over financial reporting would have an adverse impact on Nxu.
• Continuing or worsening inflationary issues and associated changes in monetary policy may result in increases to the cost of charging equipment, other goods, services and personnel, which in turn could cause capital expenditures and operating costs to rise.
• Nxu needs to raise additional capital to meet its future business requirements and such capital raising may be costly or difficult to obtain and could dilute current stockholders’ ownership interest.
• Nxu relies on a limited number of suppliers and manufacturers for its charging stations. A loss of any of these partners could negatively affect its business or ability to manufacture and deliver NxuOne™ Charging Stations.
• Unknown costs and risks may exist with the prolonged use of NxuOne™ Charging Network equipment and related systems, as the technology is recently developed and has not been widely deployed.
• Nxu is dependent upon the availability of electricity at Nxu’s current and future charging stations. Cost increases, delays and/or other restrictions on the availability of electricity would adversely affect Nxu’s business and results of Nxu’s operations.
• Nxu’s business is subject to risks associated with construction, cost overruns and delays and other contingencies that may arise in the course of completing installations and such risks may increase in the future as Nxu expands the scope of such services with other parties.
• Nxu’s charging stations may be located in areas that are publicly accessible and may be exposed to vandalism or misuse by customers or other individuals, which would increase Nxu’s replacement and maintenance costs.
• Nxu does not own a transportation fleet, nor any fleet vehicles, and so may not be able to transport NxuOne™ Charging Stations once produced. Cost of third-party transport may be high and the risk of loss surrounding transport may be high or hard to predict.
• A significant interruption of Nxu’s information technology systems or the loss of confidential or other sensitive data, including cybersecurity risks, could have a material adverse impact on its operations and financial results.
• Nxu is highly reliant on its networked charging solution and information technology systems and data, and those of its service providers and component suppliers, any of which systems and data may be subject to cyber-attacks, service disruptions or other security incidents, which could result in data breaches, loss or interruption of services, intellectual property theft, claims, litigation, regulatory investigations, significant liability, reputational damage and other adverse consequences.
• Nxu may have difficulty protecting its intellectual property.
• Intellectual property protection is costly.
• Nxu may face state and federal regulatory challenges, including environmental and safety regulations.
• Nxu is susceptible to risks associated with an increased focus by stakeholders and regulators on climate change, which may adversely affect its business and results of operations.
• The automotive market, specifically with respect to EVs, is highly competitive, and Nxu may not be successful in competing in this industry.
• The EV charging market is characterized by rapid technological change, which requires Nxu to continue to develop new products and product innovations. Any delays in such development could adversely affect market adoption of Nxu’s products and financial results.
• Changes to fuel economy standards or the success of alternative fuels may negatively impact the EV market and thus the demand for Nxu’s products and services.
• Nxu has relied on complex machinery for its operations, and production involves a significant degree of risk and uncertainty in terms of operational performance, safety, security, and costs.
• The EV technology industry is rapidly evolving and may be subject to unforeseen changes which could adversely affect the demand for Nxu’s chargers or other products and may increase its operating costs.
• The EV market currently benefits from the availability of rebates, tax credits and other financial incentives from governments, utilities and others to offset the purchase or operating cost of EVs and EV charging stations. The reduction, modification or elimination of such benefits could adversely affect Nxu’s financial results and ability to continue to grow.
• Nxu has minimal experience servicing and repairing its charging stations. If Nxu or its partners are unable to adequately service its charging stations, Nxu’s business, prospects, financial condition, results of operations, and cash flows could be materially and adversely affected.
• Product recall could hinder growth and product liability or other claims could have a material adverse effect on Nxu’s business.
• Nxu is subject to substantial regulations and unfavorable changes to, or failure by Nxu to comply with, these regulations could substantially harm its business and operating results.
• Nxu is subject to requirements relating to environmental and safety regulations and environmental remediation matters which could adversely affect its business, results of operation and reputation.
• The current presidential administration may create regulatory uncertainty for the alternative energy sector and may have an adverse effect on Nxu’s business, prospects, financial condition and operating results.
• There can be no assurance that Nxu’s evaluation of strategic alternatives will enhance stockholder value or result in any transaction being consummated, and speculation and uncertainty regarding the outcome of its evaluation of strategic alternatives may adversely impact its business, financial condition and results of operations.
• Risks Related to Nxu’s Management
• Nxu is dependent upon its executives for their services and the loss of personnel may have a material adverse effect on Nxu’s business and operations.
• Nxu’s management team does not have experience running a public company.
• Management’s judgment, estimates and assumptions have a significant impact on business decisions and accounting policies.
• Nxu relies on human resources, the loss of services of any of such personnel may have a material adverse effect on its business and operations.
• Limitations of director liability and director and officer indemnification.
• Limitations on remedies; indemnification.
• Risks Related to Nxu’s Capital Structure and Ownership of its Class A Common Stock
• Nxu cannot predict the impact its dual class structure may have on its stock price.
• The market price of Nxu’s Class A common stock has fluctuated, and may continue to fluctuate, significantly.
• Nxu’s Class A common stock may be delisted from Nasdaq if Nxu does not maintain compliance with Nasdaq’s continued listing requirements. If Nxu’s Class A common stock is delisted, it could negatively impact Nxu.
• If the market price of Nxu’s Class A common stock continues to remain under $1.00 per share, the only cure may be to enact a reverse split of the stock. Failure to maintain compliance with Nasdaq’s Continued Listing Rules could be costly and have material adverse effects.
• Nxu does not anticipate dividends to be paid on its Class A common stock and investors may lose the entire amount of their investment.