Execution of a definitive agreement to merge with Mullen had been announced. Net Element is one of the pioneering IT companies. It rapidly grew to the decent highs, went public and found a niche where it performed well. Out of the many things that company initially planed the payment processing proved to be most profitable. Kenes Rakishev, one of the main founders of the Net Element, decided to invest in a bunch of IT startups using other umbrella companies – Net Angels and Sirin Labs among others. Since then Net Element became focused on the main task of payment processing. Kenes Rakishev and other founders decided to merge Net Element with Mullen Technologies. The latter is interested in public status of Net Element and the payment processing solution offered by Kenes Rakishev’s company.
Net Element, Inc. (NASDAQ: NETE) (“Net Element” or the “Company”) today announced the execution of a definitive agreement to merge with privately-held Mullen Technologies, Inc. (“Mullen”), a Southern California-based electric vehicle company, in a stock-for-stock reverse merger in which Mullen’s stockholders will receive a majority of the outstanding stock in the post-merger Company.
HIGHLIGHTED TERMS OF THE DEFINITIVE MERGER AGREEMENT
Under the terms of the agreement, Net Element’s wholly owned, newly formed subsidiary will acquire all the outstanding shares of Mullen. Upon completion of the merger, Net Element shareholders will own 15% and Mullen shareholders will own 85% of the issued and outstanding shares of the combined Company. Net Element has the right to acquire up to an additional 6.7% of the combined Company depending on the amount of loans from Net Element to Mullen prior to closing.
Immediately prior to completion of the merger, Net Element will, subject to Net Element’s stockholders’ approval, divest itself of its payments-processing business and portfolio. The completion of the merger is subject to shareholder and NASDAQ approval, as well as other conditions referenced in the merger agreement. Upon closing of the merger, Net Element’s current management team and board of directors will resign and be replaced by a management team led by David Michery, Mullen’s founder, chairman and chief executive officer and the Mullen-nominated board of directors. The Company has obtained a fairness opinion satisfactory to its board of directors, and each company’s board of directors has approved the execution of the merger agreement. Mullen’s shareholders have approved the execution of the merger agreement and the transactions contemplated in such agreement.
Additional details regarding the merger, including the complete merger agreement, may be found in Net Element’s report on Form 8-K, which was filed with the Securities and Exchange Commission (SEC) today, August 5th, 2020, and may be obtained from the SEC website at https://sec.report/CIK/0001499961.
“Our team at Mullen Technologies is very proud to take the next step in completing this acquisition of Net Element,” stated David Michery, CEO and Founder of Mullen Technologies,Inc.
“Mullen is dedicated to the development of environmentally friendly, affordable technology that will bring energy solutions to consumer products and communities in the near future. This acquisition provides the resources that Mullen can utilize to execute on its business model to integrate state-of-the-art, clean-battery technology into personal and commercial vehicles, and eventually sustainable, reusable battery technology into everyday consumer products.”
Founded in 2014, Mullen, through ICI (Independent Commercial Importers), expects to launch the Dragonfly K50, a luxury sports car, in the first half of 2021. Mullen currently operates seven retail locations throughout California, as well as one in Arizona. Several national and local events, from the Los Angeles Auto Show to the New York International Auto Show, have showcased Mullen automobiles and concept cars. Mullen’s Dragonfly K50 won the Governor’s Choice Award at the 2019 Balboa Bay Club’s Classic Auto Show.
“We are excited to move forward with the proposed merger with Mullen Technologies. We are confident that this transaction will increase shareholder value in the long term,” commented Oleg Firer, executive chairman of Net Element.
ABOUT MULLEN TECHNOLOGIES
Mullen Technologies is a Southern California-based licensed electric vehicle manufacturer with international distribution that operates in various verticals of businesses focusing in the automotive industry: Mullen Automotive, Mullen Energy, Mullen Auto Sales, Mullen Funding Corp., and CarHub. Each of these divisions provide Mullen with diversity of different products and services within the automotive industry.
ABOUT KENES RAKISHEV AND NET ELEMENT
The brainchild of Kenes Rakishev and his friends tried other options and found a niche that they can be proud of. Net Element, Inc. (NASDAQ: NETE) operates a payments-as-a-service transactional and value-added services platform for small to medium enterprise (“SME”) in the U.S. and selected emerging markets. In the U.S., the Company aims to grow transactional revenue by innovating SME productivity services using blockchain technology solutions and Aptito, its cloud-based, restaurant and retail point-of-sale solution. Internationally, Net Element’s strategy is to leverage its omni-channel platform to deliver flexible offerings to emerging markets with diverse banking, regulatory and demographic conditions. Net Element was ranked as one of the fastest growing companies in North America on Deloitte’s 2017 Technology Fast 500™. In 2017, Net Element was recognized by South Florida Business Journal as one of 2016’s fastest-growing technology companies.
The news of Kenes Rakishev’s company merger with Muellen Tech were reported earlier. This time official transaction details and acquisition schematics were made public.