UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934
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| Item 1.01 | Entry into a Material Definitive Agreement. |
Settlement Agreement
On March 14, 2023, Mullen Automotive Inc. (the “Company”) entered into a Settlement Agreement (the “Settlement Agreement”) with Qiantu Motor (Suzhou) Ltd. (“Qiantu Suzhou”), and Qiantu Motor USA, Inc. (“Qiantu USA” and together with the Company and Qiantu Suzhou, the “Parties” and each a “Party”). The Settlement Agreement was entered into in full settlement of all pending litigation brought by the Company against Qiantu Suzhou and the following arbitration proceedings among the Parties (collectively the “Legal Proceedings”). The Settlement Agreement obligates the Company to promptly file a motion to dismiss with prejudice the pending lawsuit filed against Qiantu Suzhou, and the Parties to promptly file a joint stipulation of dismissal of the arbitration proceeding. The Parties shall also release all claims against each other arising from or in connection with the matters and claims that were subject to the Legal Proceedings.
Pursuant to the Settlement Agreement, (1) the Parties should enter into an IP Agreement (as defined and described below) and (2) in connection with the settlement of the Legal Proceedings and for the privilege of entering into the IP Agreement, the Company paid $6,000,000 to Qiantu Suzhou and Qiantu USA.
Intellectual Property and Distribution Agreement
In connection with the execution of the Settlement Agreement, on March 14, 2023, the Company entered into an Intellectual Property and Distribution Agreement (the “IP Agreement”) with Qiantu Suzhou, and two of Qiantu Suzhou’s affiliates (herein “Qiantu”). Pursuant to the IP Agreement, Qiantu granted the Company the exclusive license to use certain of Qiantu’s trademarks and the exclusive right to assemble, manufacture, and sell the homologated vehicles based on the Qiantu K-50 model throughout North America (including Canada, Mexico, and the United States of America) and South America for a period of five (5) years, which period does not start until the Company has successfully homologated vehicles based on terms of the IP Agreement (the “Five Year Period”). During the Five Year Period, the Company is also obligated to purchase a certain number of vehicle kits every year from Qiantu. As consideration for the Company’s entry into the IP Agreement, (1) the Company issued to Qiantu USA warrants to purchase up to 75,000,000 shares of the Company’s common stock (the “Qiantu Warrants”) as described below; (2) the Company will pay Qiantu $2,000,000 for deliverable items under the IP Agreement; and (3) the Company shall pay Qiantu a royalty fee of $1,200 for each homologated vehicle sold in North America and South America during the term of the IP Agreement.
Qiantu Warrants
The Qiantu Warrants were issued upon execution of the IP Agreement and are exercisable at Qiantu USA’s discretion commencing at any time from September 30, 2023 up to and including September 30, 2024 at 110% of the market price of the Company’s common shares at the close of trading on the earlier of (a) when the Company completes its obligations to its Series D investors; or (b) June 15, 2023.
The foregoing descriptions of the Settlement Agreement, the IP Agreement and the Qiantu Warrants contained herein do not purport to be complete and are subject to, and qualified in their entirety by reference to the Settlement Agreement, the IP Agreement and the Qiantu Warrants, copies of which will be filed as exhibits to the Company’s next quarterly report on Form 10-Q.
| Item 3.02 | Unregistered Sales of Equity Securities. |
Item 1.01 is incorporated by reference herein. As described in Item 1.01, under the terms of the IP Agreement, the Company issued warrants to Qiantu USA, which issuances are exempt from registration pursuant to Section 4(a)(2) of the Securities Act of 1933, as amended.
| Item 7.01 | Regulation FD Disclosure. |
On March 20, 2023, the Company issued a press release announcing the grant of an intellectual property and distribution right from Qiantu Motors and a program to launch Mullen GT and GTRS in North and South American markets. A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference.
The information in this Item 7.01 and Exhibits attached hereto shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, nor shall it be deemed incorporated by reference in any filing under the Securities Act, 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 | |
| 99.1 | Press Release dated March 20, 2023. | |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document). |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned hereunto duly authorized.
| MULLEN AUTOMOTIVE INC. | ||
| Date: March 20, 2023 | By: | /s/ David Michery |
| David Michery | ||
| Chief Executive Officer | ||