NET ELEMENT Item 1.01 Entry into a Material Definitive Agreement.
A. On
Pursuant to, and on the terms and subject to the conditions of, the Restated Merger Agreement, Merger Sub will be merged with and into Mullen (the "Merger"), with Mullen continuing as the surviving corporation in the Merger.
Prior to the Merger effective time, (i) Mullen Technologies is contemplating to assign and transfer to Mullen of its electric vehicle business related asset, business and operations, and Mullen is contemplating to assume certain debt and liabilities of Mullen Technologies and (ii) Mullen Technologies is contemplating a spin off, via share dividend, of all of the capital stock of Mullen to the stockholders of Mullen Technologies as of the effective date of such spin off. After such spin off and immediately prior to the effective time of the Merger, the capital structure (including its issued and outstanding common and preferred stock) of Mullen shall mirror the capital structure of Mullen Technologies.
The Restated Merger Agreement amends, restates and replaces in its entirety the
Amended and Restated Agreement and Plan of Merger, dated as of
Pursuant to the Restated Merger Agreement:
Subject to the Company's stockholders' approval, at the Merger effective time,
the Company will amend its certificate of incorporation to authorize a
sufficient number of shares of three series of preferred stock of the Company
with identical rights, preferences and privileges currently afforded holders of
Series A preferred stock, Series B preferred stock and Series C preferred Stock
of Mullen and change its name to "
Subject to the Company's stockholders' approval, at the Merger effective time:
? except for the shares of Mullen held by dissenting shareholders (the
"Dissenting Shares"), each share of Mullen common stock, Mullen Series A
preferred stock and Mullen Series B preferred stock (all issued and
outstanding shares of Mullen common stock, Series A preferred stock, Series B
preferred stock and Series C preferred stock, being hereinafter collectively
referred to as the "Mullen Shares") issued and outstanding immediately prior
to the Merger effective time (other than any Mullen Shares to be canceled
pursuant to the provisions of the Restated Merger Agreement and any Dissenting
Shares) will be canceled and converted automatically into the right to receive
that number of shares of the Company common stock, the Company newly
designated Series A preferred stock, the Company newly designated Series B
preferred stock and the Company newly designated Series C preferred stock, as
the case may be (collectively the "Parent Shares"), as described on Schedule A
to the Restated Merger Agreement; and
? a total of shares of the Company common stock as set forth and further
described on Schedule B to the Restated Merger Agreement will be deposited
into an escrow account to be released.
The Parties to the Restated Merger Agreement intend that the number of shares of the Company common stock outstanding immediately after the Merger effective time on a fully diluted and fully converted basis will not exceed 75,000,000, with 15% of such common stock outstanding immediately after the Merger effective time on a fully diluted and fully converted basis to be allocated to the persons that hold shares of the Company common stock immediately prior to the Merger effective time (the "Parent Pre-Merger Stockholders") (subject to upward adjustment described below).
Any
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The Parties to the Restated Merger Agreement intend that, at the Merger effective time, (i) all current directors of the Company will resign, and the individuals nominated by Mullen will become the directors of the Company from and after the Merger effective time; and (ii) all current officers of the Company will resign and the individuals nominated by Mullen will become the officers of the Company from and after the Merger effective time.
As soon as practicable following the Merger, the Company will cause its current ticker symbol "NETE" to be changed to such ticker symbol as Mullen will select after the date hereof upon Nasdaq's approval of the Company's listing application.
The Parties to the Restated Merger Agreement intend that, prior to the Merger effective time but, subject to and after the Company's stockholders' approval, the Company will divest itself of its existing business operations to another party, and will cause such party to assume all liabilities of the Company directly related to its operations of its existing business immediately prior to the closing of such divestiture (the "Divestiture").
The consummation of the Merger is subject to (i) the Merger and the shares of
Company common stock to be issued in connection with the Merger and other
transactions contemplated by the Restated Merger Agreement being approved and
authorized for the listing on Nasdaq and (ii) the Company's and its subsidiaries
aggregate cash and cash equivalents plus amounts lent by the Company to Mullen
pursuant to the Restated Merger Agreement less accounts payable and debt
(exclusive of unfunded warrant proceeds) is
The Company and Mullen may agree that the Company may raise additional capital beyond the Net Cash Position. In such event, Mullen and its pre-Merger shareholders shall solely absorb all of the dilution from such additional capital raise beyond the Net Cash Position for purposes of allocating ownership between the Company pre-Merger stockholders, on the one hand, and all other parties, on the other hand. By way of example, if there would have been 75,000,000 shares of the Company common stock outstanding on a fully-diluted and converted basis prior to the additional capital raised beyond the Net Cash Position, and the Company issues 3,000,000 shares of the Company common stock to raise additional capital over and above the Net Cash Position, the Company pre-Merger stockholders would own 15% of such 75,000,000 shares of the Company common stock and plus 3,000,000 shares of the Company common stock, or 14,250,000 shares of the Company common stock immediately after the effective time of the Merger, and the number of outstanding shares of the Company common stock would increase from 75,000,000 to 78,000,000 on a fully-diluted and converted basis immediately after the effective time of the Merger.
After Mullen's completion and delivery to the Company, of the audited financial
statements for Mullen and its subsidiaries and affiliates required to be
included in a registration statement, the Company intends to prepare and file
with the
The Parties to the Restated Merger Agreement intend that the proxy statement will be sent to the stockholders of the Company relating to the special meeting of the Company stockholders to be held to consider, among other things, approval and adoption, as applicable, of (1) the Restated Merger Agreement, the Merger . . .
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
The disclosure provided in part A of Item 1.01 of this report is hereby incorporated by reference into this Item 2.03.
Item 9.01 Financial Statements and Exhibits
(d) Exhibits
2.1 Second Amended and Restated Agreement and Plan of Merger, dated as of July
20, 2021, among Net Element, Inc. , Mullen Technologies, Inc. , Mullen
Acquisition, Inc. and Mullen Automotive, Inc. *
10.1 Divestiture Agreement, dated as of
RBL Capital Group LLC
*Certain schedules (or similar attachments) to the Second Amended and Restated
Agreement and Plan of Merger have been omitted pursuant to Item 601(b)(2) of
Regulation S-K. The registrant agrees to furnish copies of any such schedules
(or similar attachments) to the
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