Blog: MULLEN AUTOMOTIVE INC. : Entry into a Material Definitive Agreement, Regulation FD Disclosure, Financial Statements and Exhibits (form 8-K) – Marketscreener.com

Item 1.01 Entry into a Material Definitive Agreement

Amended and Restated Secured Convertible Note and Security Agreement

On June 17, 2022, Mullen Automotive Inc. (the “Company”) entered into an Amended
and Restated Secured Convertible Note and Security Agreement (the “A&R Note”)
with Esousa Holdings LLC, a New York limited liability company (“Esousa”). The
A&R Note amends and restates that certain promissory note dated July 23, 2020,
entered into between the Mullen Technologies, Inc. (“Original Borrower”) and DBI
Lease Buyback Servicing LLC, a Delaware limited liability company (“DBI”) for a
principal amount of $23,831,553.98 (the “Original Note”). The Company had
previously assumed all of the obligations of the Original Borrower under the
Original Note upon the completion of its business combination with Mullen
Automotive, Inc. (“Mullen Automotive”), in accordance with the terms of the
Second Amended and Restated Agreement and Plan of Merger, dated as of July 20,
2021, as amended, by and among the Company, Mullen Acquisition, Inc., Mullen
Automotive, and the Original Borrower. Esousa purchased rights under the
Original Note from DBI immediately prior to entering into the A&R Note.

The A&R Note extends the maturity date of the Original Note by two years, from
July 23, 2022 to July 23, 2024. In addition, the A&R Note provides that Esousa
may elect to convert all or any portion of the then-outstanding principal
balance of the A&R Note into that number of shares of the common stock of the
Company, as applicable, equal to the number obtained by dividing the outstanding
principal balance of the A&R Note to be so converted at a 5% discount to the
lowest daily volume-weighted average price in the 10 trading days prior to
conversion based on the prevailing market value of shares of the common stock of
the Company as reported on Nasdaq at close on the date on which a written notice
of conversion is delivered to the Company.

The foregoing description of the A&R Note is qualified, in its entirety, by
reference to the A&R Note, a copy of which is attached as Exhibit 10.1 to this
Current Report on Form 8-K and is incorporated by reference in response to this
Item 1.01.




Letter Agreement



In connection with entering into the A&R Note, the Company also entered into a
letter agreement (the “Letter Agreement”), dated June 17, 2022, DBI and
Drawbridge Investments LLC (“Drawbridge”), pursuant to which, upon the terms and
subject to the conditions contained therein, (1) DBI and Drawbridge released the
Company from its obligations under the A&R Note and related documents, except
for such obligations under the Original Note that were assigned by DBI for the
benefit of Esousa, and (2) the Company shall grant Drawbridge (or its designee)
an option to purchase up to $25 million worth of shares of a yet to be created
Series E Preferred Stock from the Company (the “Series E Purchase Option”).

Pursuant to the terms of the Series E Purchase Option, which shall be evidenced
by way of a definitive option agreement, Drawbridge (or its designee) shall be
entitled, at its option, to purchase up to $25 million worth of shares of a yet
to be created Series E Preferred Stock from the Company. The purchase price per
share of Series E Preferred Stock will be the lower of (x) the closing market
price of the Company’s common stock on the effective date of the Option
Agreement for the Series E Preferred Stock and (y) the closing market price of
the Company’s common stock on the date shares of Series E Preferred Stock are
issued by the Company in accordance with the terms of the Option Agreement.
Shares of Series E Preferred Stock will be convertible into shares of the
Company’s common stock on a 1-to-1 basis, subject to adjustment for stock splits
and other events. Shares of Series E Preferred Stock may be purchased in one or
more transactions with a minimum of $5, 000,000 per purchase, until December 31,
2024, at which point the Series E Purchase Option shall expire. The Company is
obligated to file a registration statement for the resale of the Company’s
common stock issuable upon conversion of shares of Series E Preferred Stock and
shall use reasonable best efforts to obtain and maintain the effectiveness of
such registration statement during the term of the Option Agreement.

In connection with the exercise of the Series E Purchase Option, Drawbridge (or
its designee) will receive warrants to purchase three shares of common stock for
every share of Series E Preferred Stock purchased by Drawbridge (or its
designee), which warrants will have terms and conditions, such as registration
rights, convertibility, dividends, anti-dilution protection, similar to those
included in the purchase of the Company’s Series D Preferred Stock. The warrants
will have a term of five years from the date of grant and an exercise price
equal to the applicable purchase price for the shares of Series E Preferred
Stock. The warrants will also permit cashless exercise to be calculated as a
function of the warrant’s Black-Scholes value plus an additional $1.25 per
warrant exercised.

The foregoing description of the Letter Agreement is qualified, in its entirety,
by reference to the Letter Agreement, a copy of which is attached as Exhibit
10.2 to this Current Report on Form 8-K and is incorporated by reference in
response to this Item 1.01.


Item 7.01. Regulation FD


On November 5, 2021, the Company issued a press release announcing the entry
into the A&R Note and the Letter Agreement. A copy of the press release is
attached hereto as Exhibit 99.1 and the information therein is incorporated
herein by reference.

The information contained in this Item 7.01 and in the accompanying Exhibit 99.1
shall not be deemed filed for purposes of Section 18 of the Securities Exchange
Act of 1934, as amended (the “Exchange Act”), or incorporated by reference in
any filing under the Exchange Act or the Securities Act of 1933, as amended,
except as shall be expressly set forth by specific reference in such filing.

Item 9.01. Financial Statements and Exhibits




(d) Exhibits.



Exhibit
No.        Description
             Amended and Restated Secured Convertible Note and Security Agreement
  10.1     dated June 17, 2022
  10.2       Letter Agreement dated June 17, 2022
  99.1       Press Release dated June 21, 2022
           Cover Page Interactive Data File (embedded with the inline XBRL
104        document)

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