DEF: Nuvve Holding Corp. Seeks Shareholder Approval for Major Equity Expansion and Dilutive Capital Raise

Nuvve Holding Corp. is calling its shareholders to an Annual Meeting on August 22, 2025, to vote on key proposals including a significant increase in its equity incentive plan and the approval of share issuances from a recent private placement that could lead to substantial dilution.

Summary

• The Annual Meeting of Stockholders will be held virtually on August 22, 2025, at 1:00 p.m. Eastern Time.
• Shareholders will vote on the re-election of Class A directors Jon M. Montgomery and Laura Huang.
• A proposal seeks to amend the 2020 Equity Incentive Plan to increase the number of shares available for awards by 14,944,592, bringing the total maximum to 15,000,000 shares, subject to an evergreen provision.
• Approval is sought for the issuance of Common Stock from a December 31, 2024, private placement involving senior secured convertible notes and warrants, which exceeds the Nasdaq 19.99% share cap.
• The private placement involved a $250,000 principal amount note (purchased for $225,000) and warrants to purchase up to 85,287 shares of Common Stock.
• The note is convertible at $2.931 per share (10% discount to prior closing price) and accrues interest at 8.0% per annum, increasing to 18.0% upon default.
• Warrants are exercisable at $3.26 per share and expire five years after issuance.
• The company has an Additional Investment Right for up to $1,000,000 in additional notes and warrants, with conversion/exercise prices at 95% of the average of the five lowest daily trading prices in the ten days prior to exercise.
• Shareholders will also ratify the appointment of Deloitte & Touche LLP as the independent registered certified public accounting firm for fiscal year ending December 31, 2025.
• Audit fees for Deloitte & Touche LLP were $989,292 in 2024 and $1,256,908 in 2023, with total fees of $991,187 in 2024 and $1,258,803 in 2023.

Sentiment

Score: 4

Explanation: The document presents necessary corporate actions, but the emphasis on significant potential dilution from recent and future capital raises, coupled with the explicit statement that failure to approve could jeopardize the business plan, suggests a challenging financial position and reliance on dilutive financing. While management expresses positive intent for equity incentives, the underlying need for such large share increases and the dilutive nature of the capital raise are concerning.

Positives

• The proposed amendment to the Equity Incentive Plan aims to attract, retain, and motivate key personnel, which is vital for future performance and projected growth in a competitive labor market.
• The Board unanimously recommends voting FOR all proposals, indicating internal alignment on these strategic actions.
• The company has secured initial funding through a private placement, which provides working capital and supports general corporate purposes.
• New directors James Altucher, Laura Huang, and Brian Johnson bring diverse and relevant experience in finance, technology ventures, organizational development, and the automotive industry to the Board.

Negatives

• The proposed share issuance from the private placement and potential future issuances will have a dilutive effect on existing stockholders' voting power and economic rights.
• The conversion price of the notes and exercise price of the warrants are subject to full ratchet antidilution protection and other adjustments, which could significantly increase the number of shares issued at prices below the initial conversion/exercise prices.
• If the Issuance Proposal is not approved, the company will be prohibited from issuing additional Common Stock beyond the 19.99% cap, which could jeopardize its ability to execute its business plan and raise additional funds.
• The company explicitly states that loss of potential funds from warrant exercise (up to approximately $278,036) could adversely impact its ability to fund operations.

Risks

• Significant dilution to existing stockholders' voting power and economic rights due to the issuance of shares from convertible notes and warrants.
• Potential for further reduction in conversion and exercise prices due to anti-dilution features, leading to the issuance of a greater number of shares.
• Risk of inability to raise additional capital if the Issuance Proposal is not approved, which could force the company to curtail business plans, reduce operating expenses, dispose of assets, or seek extended terms on obligations.
• The issuance or resale of Common Stock from the private placement could cause the market price of the company's Common Stock to decline.

Future Outlook

The company's future success is highly dependent on its ability to attract, retain, and motivate key personnel through competitive equity compensation and to maximize capital raising opportunities. Failure to approve the proposed share issuance could jeopardize the company's ability to execute its business plan, potentially leading to curtailment of expansion plans, reduction of operating expenses, asset disposal, and seeking extended terms on obligations, which would adversely impact future operating results.

Management Comments

• Our Board, the compensation committee of the Board and management believe that the effective use of stock-based long-term incentive compensation is vital to our ability to achieve strong performance in the future.
• We believe that the increase in the number of shares available for issuance under the Existing Plan is essential to permit our management to continue to provide long-term, equity-based incentives to present and future key employees, consultants and directors.
• We also believe that without the ability to grant competitive amounts of equity compensation, we will not be able to hire and retain the highly-skilled, specialized and experienced employees we need to continue executing our strategy.
• While we could increase cash compensation if we are unable to grant equity awards under the Existing Plan, we believe equity-based grants are a more effective compensation vehicle than cash because they align employee and stockholder interests, while minimizing impact on current income and cash flow.
• The Board has determined that the proposed 2,087,604 increase to the share reserve under the Amended Plan is reasonable and appropriate at this time.
• If the Issuance Proposal is not approved by our stockholders, we will not be able to issue and sell these securities pursuant to the Securities Purchase Agreement, thereby preventing us from raising additional funds.
• Our ability to successfully implement our business plans and ultimately generate value for our stockholders is dependent on our ability to maximize capital raising opportunities.

Industry Context

The company operates in the electric vehicle (EV) industry, specifically focusing on V2G (Vehicle-to-Grid) technology and charging station networks. The document highlights the extremely competitive labor market for talented and skilled individuals in the EV industry, underscoring the need for competitive equity compensation to attract and retain talent. The company's formation of Deep Impact 1 LLC for EV charger operations and its investment in Dreev (a business venture with EDF Renewables) indicate its strategic positioning within the growing EV infrastructure and energy management sectors.

Management Changes

Corporate Governance

Related Party Transactions

• Intellectual Property Acquisition Agreement with the University of Delaware (a former 5% beneficial owner) on November 7, 2017, involving milestone payments up to $7,500,000 based on commercialization targets.
• Research Agreement with the University of Delaware (a former 5% beneficial owner) since September 1, 2016, requiring minimum annual payments of $400,000; $124,000 paid in 2024 and $266,667 in 2023.
• Formation of Deep Impact 1 LLC on August 16, 2024, with Nuvve CPO Inc. (51% equity) and WISE EV-LLC (49% equity), for EV charger operations.
• Issuance of promissory notes with conversion options to CEO Gregory Poilasne ($750,000 original principal) and CFO David Robson ($750,000 original principal) on August 16, 2024, to support Deep Impact project costs; $610,500 funded by Poilasne and $230,000 by Robson as of December 31, 2024.
• Issuance of promissory notes with conversion options to Gregory Poilasne and David Robson (aggregate $500,000) on August 27, 2024, which were repaid for $523,097 on January 31, 2025.
• Issuance of senior convertible notes and warrants to certain investors in October 2024, including Mr. Poilasne, who purchased a $250,000 principal note and warrants for 73,487 shares for $225,000.
• Revenue recognized from an entity that is a holder of the company's securities: $159,629 in 2024 and $192,413 in 2023.
• Investment in Dreev (5% equity ownership), a business venture with EDF Renewables, with consulting services expenses of $0 in 2024 and $43,399 in 2023.
• Indemnification agreements entered into with all directors and named executive officers.

Stakeholder Impact

• **Shareholders**: Face significant potential dilution from the proposed increase in equity incentive plan shares and the issuance of shares from convertible notes and warrants. Their voting power and economic rights could be reduced. The market price of Common Stock may decline due to future issuances or resales.
• **Employees**: The proposed increase in the equity incentive plan aims to provide competitive long-term, equity-based incentives, which could enhance attraction, retention, and motivation of key talent.
• **Management**: Executive officers' compensation includes base salary, cash bonuses, and equity awards, with new employment agreements detailing salary adjustments and performance-based incentives. They are also involved in related-party transactions and have received promissory notes and equity.
• **Creditors/Investors**: The private placement provides capital, but the anti-dilution features and potential for lower conversion/exercise prices could impact the value for certain investors. The company's ability to fund operations is tied to successful capital raising.

Next Steps

• Hold the Annual Meeting of Stockholders on August 22, 2025, to vote on the proposed resolutions.
• Elect Class A directors Jon M. Montgomery and Laura Huang.
• Implement the proposed amendment to the 2020 Equity Incentive Plan if approved by stockholders.
• Proceed with the issuance of Common Stock related to the senior secured convertible notes and warrants in excess of the 19.99% share cap, if approved by stockholders.
• Continue to use net proceeds from the private placement for working capital and general corporate purposes.
• Potentially engage in additional investments via the Additional Investment Right after the six-month anniversary of the December 31, 2024, private placement closing.
• Deloitte & Touche LLP will serve as the independent registered public accounting firm for fiscal year ending December 31, 2025, if ratified.

Key Dates

Keywords

SEC filing, Proxy Statement, Nuvve Holding Corp., NVVE, Annual Meeting, Equity Incentive Plan, Share Issuance, Dilution, Convertible Notes, Warrants, Private Placement, Nasdaq Listing Rules, Corporate Governance, Executive Compensation, Board of Directors, Auditor Ratification, V2G technology, Electric Vehicle Industry