Houston-based Next Renewable Fuels is searching for new financing avenues for its planned biofuels projects after the collapse of an anticipated merger with a special purpose acquisition company, also called a blank-check company.
Documents filed with the Securities and Exchange Commission showed that Industrial Tech Acquisitions II was delisted from the Nasdaq Capital Market on Nov. 13. The delisting followed a Nov. 1 announcement from Next confirming that its merger, first announced in November 2022, was officially off.
Because ITAQ could not complete a merger within the time frame specified by its certificate of incorporation, it will dissolve and liquidate, a Form 8-K filed by ITAQ on Nov. 1 also confirmed. ITAQ expects to redeem its remaining 1.3 million shares of Class A common stock at a price of $11 per share before tax.
A Next spokesperson confirmed that the company did not have an update on its plans to go to market or for other forms of financing since Nov. 1 but provided a statement to Houston Inno stating the collapsed deal would not impact planned developments in Oregon.
“The timeline in which ITAQ was required to consummate a merger became compressed, and during this period of adverse market conditions we agreed to terminate the business combination agreement,” the statement said. “The SPAC concept was a financial tool to explore, but the termination does not impact our development activities in Oregon — Port Westward or our Lakeview facility — nor does it impact our intent to pursue creative financing opportunities as we move forward.”
When the merger was announced, the resulting public company — which would have been known as NXTCLEAN Fuels Inc. — was expected to be valued at $666 million at closing.
ITAQ raised around $172.5 million in an initial public offering in January 2022 prior to announcing its deal with Next. The SPAC was the second blank-check company chaired by Scott Crist, the CEO of Houston-based technology company Osperity and a managing partner at Houston-based venture capital firm Texas Ventures. Crist's first SPAC — Industrial Tech Acquisitions — merged with the Israeli radar technology company Arbe Robotics in 2021, retaining the Arbe name and trading on the Nasdaq Stock Exchange under the ticker symbol "ARBE."
Next continues Oregon biofuels operations
Before the merger was called off, Next continued to make acquisitions and investments in Oregon. Shortly before the deal’s announcement, the company had cleared a regulatory hurdle on its planned $2 billion biofuels project in Port Westward.
CEO Christopher Efird previously said that Next funded the early stages of project development largely itself, but going forward with a final investment decision and construction would require commercial financing.
Next still needs a permit for dredging and filling at the Port Westward site from the Army Corps of Engineers. The Corps said in 2021 that an environmental impact statement would be finished in “early 2023,” but now it’s not likely to be delivered until early next year, Efird said in April. The project is now expected to break ground in the first quarter of 2024.
In August, Next announced an agreement with Japan-based Sojitz Corp. for continued development of the facility, including using Sojitz’s network to transport Next's sustainable aviation fuel to Japanese airlines.
Also in 2023, Next made another investment in Oregon with the purchase of the Red Rock Biofuels project out of foreclosure. Next plans to revamp the plant, which was initially tailored to turn wood into SAF, so that it can produce renewable natural gas.
The company recently moved into a roughly 4,500-square-foot office space at 11767 Katy Freeway in the Energy Corridor. While the company's marketing, permitting and regulatory functions are based in Oregon, Next has employees in engineering, finance and accounting, and other fields in Houston.
SPACs have been on a downturn following nationwide highs in 2020 and 2021. One recently formed blank-check company is Nabors Energy Transition Corp. II, affiliated with the drilling company Nabors Industries (NYSE: NBR). NETC II closed a $305 million IPO in July and is looking to combine with companies specializing in reducing carbon and greenhouse gas emissions.
