Item 8.01 Other Events
On November 25, 2022, Mullen Automotive Inc. (the "Company") filed a definitive
proxy statement with the Securities and Exchange Commission (the "Commission")
in connection with a Special Meeting of Stockholders (the "Special Meeting"),
and on December 16, 2022 and January 13, 2023, the Company filed amendment no.1
and amendment no.2 to the definitive proxy statement with the Commission
(together the "Proxy Statement").
The Proxy Statement discloses that, as of the close of business on November 21,
2022 (the "Special Meeting Record Date"), there were 1,659,097,754 shares of
Common Stock outstanding, 1,925 shares of Series A Preferred Stock outstanding,
one share of Series AA Preferred Stock outstanding, zero shares of Series B
Preferred Stock outstanding, and 1,211,757 shares of Series C Preferred Stock
outstanding. The Company's Series D Preferred Stock par value $0.001 per share
(the "Series D Preferred Stock") have no voting rights except in a liquidation
event, issuance of equity security having a preference over the Series D
Preferred Stock, amendment of the Company's Certificate of Incorporation or
bylaws that adversely affect the rights of the Series D Preferred Stock,
corporate dissolution or bankruptcy, as set forth in Section 8 of the
Certificate of Designation for Series D Preferred Stock, and therefore the
Series D Preferred Stock was not counted in connection to the Special Meeting.
Of these shares outstanding on the Special Meeting Record Date, 1,159,803,273
shares of Common Stock, and one share of Series AA Preferred Stock
(collectively, the "New Shares") were issued by the Company following the
enactment of an amendment to the Company's Certificate of Incorporation (the
"2022 Certificate Amendment") on July 26, 2022. The 2022 Certificate Amendment
was approved at the Company's July 26, 2022 annual meeting of stockholders (the
"2022 Annual Meeting"). The 2022 Certificate Amendment increased the number of
shares of Common Stock authorized for issuance from 500,000,000 to a total of
1,750,000,000 shares of Common Stock, and increased the number of shares of
Preferred Stock authorized for issuance from 58,000,000 to a total of
500,000,000 shares of Preferred Stock, with a corresponding increase in our
total authorized capital stock, which includes Common Stock and Preferred Stock,
from 558,000,000 shares to 2,250,000,000 shares. The 2022 Certificate Amendment
became effective when it was filed with the Office of the Secretary of State of
the State of Delaware on July 26, 2022.
On December 7, 2022, a putative stockholder class action was filed in the Court
of Chancery of the State of Delaware, styled as Robbins v. Michery, et al., C.A.
No. 2022-1131-LWW (the "Robbins Action"). On December 13, 2022, a second
putative stockholder class action was filed in the Court of Chancery of the
State of Delaware, styled as Foley v. Michery, et al., C.A. No. 2022-1147-LWW
(the "Foley Action" and, together with the Robbins Action, the "Stockholder
Actions"). The plaintiffs in the Stockholder Actions filed complaints alleging,
among other things, that the number of shares of Common Stock issued and
outstanding as of the Annual Meeting Record Date (the "Annual Meeting Record
Date") was 477,510,822 and that, based on this eligible share total, a majority
of shares of Common Stock, when considered separately as a class, did not vote
in favor of the increase in authorized shares at the 2022 Annual Meeting.
The Company does not believe that the filing and effectiveness of the 2022
Certificate Amendment is either invalid or ineffective. However, to resolve any
uncertainty, the Company is pursuing actions to ratify the 2022 Certificate
Amendment through the filing of a validation proceeding with the Delaware Court
of Chancery (the "Court of Chancery") pursuant to Section 205 of the Delaware
General Corporation Law ("Section 205"). Section 205 permits the Court of
Chancery, in its discretion, to ratify and validate potentially defective acts.
The Court of Chancery has scheduled a hearing to consider the Company's Section
205 petition on January 23, 2023, at 9:15 a.m. Eastern Time.
The Company intends to proceed with the as-adjourned Special Meeting on January
19, 2022 at 11:00 a.m., Pacific Standard Time. However, the Company will not
proceed to file the amendment to the Company's Certificate of Incorporation
contemplated by certain matters to be voted on at the Special Meeting pending
further order of the Court of Chancery.
The Company's description of its capital structure in the Proxy Statement
assumes that the 2022 Certificate Amendment was validly effectuated. The
accuracy of the Company's description of its capital structure will be confirmed
if the Court of Chancery ratifies and validates the 2022 Certificate Amendment.
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