NEXT Renewable to Become Publicly Traded Via Combination with Industrial Tech Acquisitions II

Source: 11/21/2022, Location: North America

~ Combination creates a large-scale, renewable diesel and sustainable aviation fuel, pure-play public company and feedstock aggregator
~ Multi-prong strategy anchored on a 50,000 barrel per day renewable diesel and sustainable aviation fuel refinery in Oregon
~ First greenfield renewable diesel refinery on the West Coast in more than 40 years will be one of the largest producers of renewable diesel and sustainable aviation fuel in North America
~ Transaction is expected to close during 2023 ~

NEXT Renewable Fuels, Inc. (“NXT” or the “Company”), a next generation fuels company dedicated to sustainably producing clean, low-carbon fuels from organic feedstock, and Industrial Tech Acquisitions II, Inc. (“ITAQ”), a special purpose acquisition company, announced the signing of a business combination agreement expected to result in a newly combined company to be known as NXTCLEAN Fuels, Inc. The boards of directors of NXT and ITAQ have each approved the transaction.

“West Coast states are demanding a clean fuels conversion of the transportation and aviation industries with aggressive targets necessitating rapid increases in clean fuel supplies,” commented Christopher Efird, Chief Executive Officer and Executive Chairman of NXT. “NXT is advancing toward becoming one of the largest US-based suppliers of clean fuels for these markets and is investigating and pursuing potential vertical expansion into other clean fuels.”

ITAQ raised gross proceeds of approximately $172.5 million in its initial public offering. Its stock is traded on the Nasdaq Global Market. ITAQ’s objective is to identify and consummate an initial business combination with a target that can benefit from the investment, operating, and innovating experience of ITAQ’s management team and sponsor.

Scott Crist, Chief Executive Officer and Chairman of ITAQ, stated, “Renewable diesel and sustainable aviation fuel are the most desired liquid fuels in the world, and there is an urgent global need for more.

NXT has a multi-prong business plan and is developing a strategically positioned facility along the Columbia River in Oregon.”

NXT Investment Highlights:
• A next generation fuels company dedicated to sustainably producing clean, low-carbon fuels
• NXT’s strategic growth platform allows access to high-growth clean fuels market, leveraging advantages from the renewable diesel (RD) and sustainable aviation fuel (SAF) business to access multiple complementary markets, including renewable natural gas
• Management team has spent six years in Oregon developing deep roots and strong relationships, and has secured necessary support for the first facility, having access to more than 600 acres in and around multi-modal industrial complex at Port Westward, Oregon
• NXT has received the majority of its key permits and expects to begin construction upon completion of an Environmental Impact Statement (“EIS”) currently underway with the US Army Corp of Engineers
• Management has strategic relationships that have led to strong feedstock and product offtake agreements, including with companies such as BP and Shell, that NXT believes it will lead the way to financial stability while paving the path to growth opportunities in other decarbonization-centric markets
• United Airlines Ventures, a subsidiary of United Airlines Holdings, Inc., entered into a strategic investment agreement with NXT pursuant to which it invested in NXT and could continue to invest as much as $37.5 million, as long as NXT meets certain milestones
• Clear pathway to profitability upon commencement of RD/SAF production, which is projected for 2026; the Company expects to be EBITDA positive in its first full year of production
• NXT will be the first of its kind public investment opportunity in a large-scale, pure-play combined RD/SAF production facility serving a large, essential and well-established market.
• Led by a seasoned management team, representing more than 100 years of combined experience in finance, refining, chemical manufacturing, renewable fuels, real estate, and industrial project development

Transaction Summary
The combined company is expected to have an implied post-money pro forma enterprise value of approximately $530 million and an equity value of approximately $666 million at closing, assuming no redemptions by ITAQ public shareholders. Assuming no redemptions by ITAQ public shareholders, the transaction is expected to deliver up to approximately $176 million of cash held in ITAQ’s trust account.

The conditions to NXT’s closing include the amount remaining in the trust account after any redemptions by ITAQ’s public stockholders, plus the net proceeds of any private financing completed by ITAQ, is at least $50 million. ITAQ has retained England & Company for a private capital raise, if necessary.

In the transaction, a newly formed subsidiary of ITAQ will merge with NXT, with NXT surviving as a wholly owned subsidiary of ITAQ. Pursuant to the merger, all pre-closing stockholders and holders of convertible debt of NXT will receive common stock of ITAQ, which will continue after the closing as a publicly traded company under the name NXTCLEAN Fuels, Inc. The transaction, which has been approved by the boards of directors of both NXT and ITAQ, is expected to close late in the second quarter of 2023, subject to shareholder approvals and other customary closing conditions.

England & Company is acting as financial advisor to ITAQ. ArentFox Schiff LLP is acting as legal counsel to NXT. Ellenoff Grossman & Schole LLP is acting as legal counsel to ITAQ.

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