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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

FORM 10-K

☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2018September 30, 2021

ORor

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ______________ to _____________

Commission file number: 001-34887

Net Element, Inc.MULLEN AUTOMOTIVE INC.

(Exact name of registrant as specified in its charter)

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Registrant’s telephone number, including area code:(305) 507-8808

(714) 613-1900

Securities registered underpursuant to Section 12(b) of the Exchange Act:

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Securities registered under Section 12(g) of the Exchange Act:

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. ☐ YES   ☒NO

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. ☐ YES   ☒NO

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒YES☐ NO

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☒YES☐ NO

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 232.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large“large accelerated filer," "accelerated” “accelerated filer," "smaller” “smaller reporting company,"” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

​ ​ Large accelerated filer ☐ Accelerated filer ☐ Non-accelerated filer ☒ Smaller reporting company ☒ Non-accelerated filer ☒ ​ Smaller reporting company ☒ Emerging growth company ☐ ​ If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐ Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☐ Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). ☐ YES ☒ NO The aggregate market value of the registrant’s common equity, other than shares held by persons who may be deemed affiliates of the registrant, as of June 30, 2018March 31, 2021 was approximately $22,904,233$47.1 million. The registrant had 3,865,46723,383,202 shares of common stock outstanding as of March 29, 2019. December 27, 2021. DOCUMENTS INCORPORATED BY REFERENCE None. ​ ​ ​ Table of Contents TABLE OF CONTENTS ​    ​ ​ ​ ​ ​ ​ Page PART I ​ ​ 6 ​ ​ Item 1. ​ Business ​ 6 Item 1A. ​ Risk Factors ​ 17 Item 1.1B. ​ Business.Unresolved Staff Comments 5​ 39 Item 2. ​ Properties ​ 39 Item 1A.3. ​ Risk Factors.Legal Proceedings 26​ 39 Item 4. ​ Mine Safety Disclosures ​ 40 Item 1B.​ ​ Unresolved Staff Comments. 34 Item 2. Properties. 34 Item 3. Legal Proceedings. 35 Item 4. Mine Safety Disclosures. 35 ​ PART II ​ ​ 41 ​ ​ ​ Item 5. Item 5.​ Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.Securities 35 ​ 41 Item 6. ​ Selected Financial Data.[Reserved] 35 ​ 42 Item 7. ​ Management’s Discussion and Analysis of Financial Condition and Results of Operations.Operations 36 ​ 42 Item 7A. ​ Quantitative and Qualitative Disclosures About Market Risk.Risk 45 ​ 49 Item 8. ​ Financial Statements and Supplementary Data.Data 45 ​ 49 Item 9. ​ Changes In and Disagreements With Accountants on Accounting and Financial Disclosure.Disclosure 45 ​ 49 Item 9A. ​ Controls and Procedures.Procedures 45 ​ 49 Item 9B. ​ Other Information.Information 46 ​ 50 Item 9C. ​ Disclosure Regarding Foreign Jurisdictions that Prevent Inspections ​ 50 ​ ​ ​ ​ ​ PART III ​ ​ 50 ​ ​ ​ Item 10. Item 10.​ Directors, Executive Officers and Corporate Governance.Governance 47 ​ 50 Item 11. ​ Executive Compensation.Compensation 50 ​ 55 Item 12. ​ Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.Matters 51 ​ 59 Item 13. ​ Certain Relationships and Related Transactions, and Director Independence.Independence 52 ​ 61 Item 14. ​ Principal Accountant Fees and Services.Services 53 ​ 62 ​ ​ ​ PART IV ​ ​ 63 ​ ​ ​ Item 15. Item 15.​ Exhibits and Financial Statement Schedules.Schedules 54 ​ Item 16. Form 10-K Summary. 63 SignaturesItem 16. 64 ​ Form 10-K Summary ​ 68 ​ ​ ​ Signatures ​ ​ ​ 72 ​ ​ ​ 1 Table of Contents NOTE REGARDING FORWARD-LOOKING STATEMENTS This Annual Report on Form 10-K (this "Report"(the “Annual Report” or “Report”) includescontains forward-looking statements that express our opinions, expectations, beliefs, plans, objectives, assumptions or projectionsregardingfutureeventsorfutureresultsinvolve substantial risks andthereforeare,ormaybedeemedtobe,“forward-lookingstatements”withinthemeaningof the federal securities laws. uncertainties. All statements contained in this Annual Report, other than statements of historical facts, contained in this Report may be forward-lookingstatements, including statements regarding our strategy, future operations, future financial position, future revenue, projected costs, prospects, plans, objectives of management and expected market growth, are forward-looking statements. These statements involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance or achievements to be materially different from any future results, of operationsperformance or achievements expressed or implied by the forward-looking statements. The words “anticipate,” “believe,” “estimate,” “expect,” “intend,” “may,” “plan,” “predict,” “project,” “target,” “potential,” “will,” “would,” “could,” “should,” “continue,” and financial position, our business strategy and plans, our objectives for future operations and any statements of a general economic or industry specific nature.Thesesimilar expressions are intended to identify forward-looking statements, can generally be identified by the use of forward-looking terminology, including the terms“believes,”“estimates,”“continues,”“anticipates,”“expects,”“seeks,”“projects,”“intends,”“plans,”“may,”“will,”“would”or“should”or, in each case, their negative or other variations or comparableterminology. By their nature,although not all forward-looking statements involve risks and uncertainties because they relatecontain these identifying words. Important factors that could cause actual results to events and depend on circumstances that may or may not occurdiffer materially from the forward-looking statements we make in the future. These factorsthis Report include but are not limited to, the following: to: • ● We have incurred significant losses since inception and expect that we will continue to incur losses for the impactforeseeable future; ● We have not yet manufactured or sold any production vehicles to customers and may never develop or manufacture any vehicles; ● Our limited operating history makes it difficult for us to evaluate our future business prospects; ● Our auditor has expressed substantial doubt about our ability to continue as a going concern; ● We require substantial additional financing to effectuate our business plan; ● Certain of our lenders and the Internal Revenue Service have liens on our assets; and ● We have not paid and does not plan to pay cash dividends on our common stock, so any newreturn on investment may be limited to the value of our common stock. ● We have a substantial amount of debt; ● We may not generate sufficient cash to service all of our debt or changes made to laws, regulations, card network rules or other industry standards affectingrefinance our business; obligations; • ● the impact of any significant chargeback liability and liability for merchant or customer fraud, which weWe may not be able to accurately anticipate and/develop, manufacture and obtain regulatory approvals for a car of sufficient quality to appeal to customers on schedule or collect; at all; • ● Our currently planned vehicles rely on lithium-ion battery cells, which have been observed to catch fire or vent smoke and flame, potentially subjecting us to litigation, recall, and redesign risks; ● The efficiency of a battery’s use will decline over time, which may negatively influence customers’ decisions whether to purchase an electric vehicle; ● We rely on our OEMs, suppliers and service providers for parts and components, any of whom could choose not to do business with us; ● We will rely on complex machinery for its operations and production, which involve a significant degree of risk and uncertainty in operational performance and costs; ● Complex software and technology systems need to be developed in coordination with vendors and suppliers, and there can be no assurance that such systems will be successfully developed; ● We may experience significant delays in the design, manufacture, regulatory approval, launch and financing of its vehicles, which could harm our business and prospects; ● The inability of our suppliers, including single or limited source suppliers, to deliver components in a timely manner or at acceptable prices or volumes could have a material adverse effect on our business and prospects; ● Financial distress of our suppliers could necessitate that we provide substantial financial support, which could increase our costs, affect our liquidity or cause production disruptions; ● We have a limited operating history and face significant challenges as a new entrant into the automotive industry; ● We have a history of losses and expect to incur significant expenses and continuing losses for the foreseeable future, casting doubt on our ability to securecontinue as a going concern; ● Our business model is untested and it may fail to commercialize our strategic plans; ● Our operating and financial results forecast relies on assumptions and analyses we developed and may prove to be incorrect; ● We may be unable to accurately estimate the supply and demand for our vehicles; 2 Table of Contents ● Increased costs or successfully migrate merchant portfoliosdisruptions in supply of raw materials or other components could occur; ● Our vehicles may fail to new bank sponsors ifperform as expected; ● Our services may not be generally accepted by our users; ● The automotive market is highly competitive; ● The automotive industry is rapidly evolving and demand for our vehicles may be adversely affected; ● We may be subject to risks associated with autonomous driving technology; ● Our distribution model is different from the predominant current sponsorshipsdistribution model for auto manufacturers; ● Our future growth is dependent on the demand for and consumers’ willingness to adopt electric vehicles; ● Government and economic incentives could become unavailable, reduced or eliminated; ● Our failure to manage our future growth effectively; ● We may establish insufficient warranty reserves to cover future warranty claims; ● We may not succeed in establishing, maintaining and strengthening our brand; ● We initially will be dependent upon revenue generated from a single model; ● Doing business internationally may expose us to operational and financial and political risks; ● We are terminated; highly dependent on the services of David Michery, our Chief Executive Officer; • ● Our business may be adversely affected by labor and union activities; ● We faces risks related to health epidemics, including the recent COVID-19 pandemic; ● Reservations for our vehicles are cancellable; ● We may face legal challenges relating to direct sales to customers; ● We face information security and privacy concerns; ● We may be forced to defend ourselves against alleged patent or trademark infringement claims and may be unable to prevent others from unauthorized use of our intellectual property; ● Our patent applications may not issue as patents, the patents may expire, our patent applications may not be granted, and our bank sponsors’ abilityrights may be contested; ● We may be subject to adhere to the standards of Visa and MasterCard payment card brand; damages resulting from trade secrets; • ● our reliance on third-party processors and service providers; •  our dependence on independent sales groups (“ISGs”) that do not serve us exclusively to introduce us to new merchant accounts; •  our ability to retain clients, many of which are small- and medium-sized businesses ("SMBs"), which can be difficult and costly to retain; •  our ability to pass along increases in interchange costs and other costs to our merchants; •  our ability to protect against unauthorized disclosure of merchant and cardholder data, whether through breach of our computer systems or otherwise; •  the effect of the loss of key personnel on our relationships with ISGs, card brands, bank sponsors and our other service providers; •  the effects of increased competition, which could adversely impact our financial performance; •  the impact of any increase in attrition due to an increase in closed merchant accounts and/or a decrease in merchant charge volume that we cannot anticipate or offset with new accounts; •  the effect of adverse business conditions on our merchants; •  our ability to adopt technology to meet changing industry and customer needs or trends; •  the impact of any decline in the use of credit cards as a payment mechanism for consumers or adverse developments with respect to the credit card industry in general; •  the impact of any adverse conditions in industries in which we obtain a substantial amount of our bankcard processing volume; •  the impact of seasonality on our operating results; •  the impact of any failure in our systems due to factors beyond our control; •  the impact of any material breaches in the security of third-party processing systems we use; •  the impact of any new and potential governmental regulations designed to protect or limit access to consumer information; •  the impact on our profitability if we are required to pay federal, state or local taxes on transaction processing; •  the impact on our growth and profitability if the markets for the services that we offer fail to expand or if such markets contract; •  significant losses we have incurred and may continue to experience in the future; •  foreign laws and regulations, whichOur vehicles are subject to changevarious safety standards and uncertain interpretation; regulations that we may fail to comply with; • ● geopolitical instabilityWe may be subject to product liability claims; ● We are or will be subject to anti-corruption, bribery, money laundering, and other conditions that may adversely affect trendsfinancial and economic laws; ● Risk of failure to improve our operational and financial systems to support expected growth; ● Risk of failure to build our financial infrastructure and improve our accounting systems and controls; ● Our management has limited experience in consumer, business and government spending; operating a public company; • ● The concentrated voting control of David Michery, Mullen’s founder; ● The priority of the Company’s ability (or inability) to obtain additional financing in sufficient amounts or on acceptable terms when needed; •  the impact on our operating results as a result of impairmentholders of our goodwill and intangible assets; • debt over the holders of our material weaknesses in internal control over financial reporting and our ability to maintain effective controls over financial reportingcommon stock in the future;event of liquidation, dissolution or winding up; ● The number of shares of common stock underlying our outstanding warrants and preferred stock is significant in relation to our currently outstanding common stock; •● the risk factors included inThe dearth of analyst coverage; and ● other risks and uncertainties, including those listed under Part I, Item 1A of this Annual Report on Form 10-K titled “Risk Factors.” AlthoughThese forward-looking statements are only predictions and webasethese may not actually achieve the plans, intentions or expectations disclosed in our forward-lookingstatements, so you should not place undue reliance onassumptionsthatwebelievearereasonablewhenmade,wecautionyouthatforward- lookingstatementsarenot guaranteesoffutureperformanceandthatouractual forward-looking statements. Actual resultsofoperations,financialconditionandliquidity,andindustry developments may or events could differ materially from statements madethe plans, intentions and expectations disclosed in one or suggested bymore of the forward-looking statements containedwe make in this Annual Report. We have based these forward-looking statements largely on our current expectations and projections about future events and trends that we believe may affect our business, financial condition and operating results. We have included important factors in the cautionary statements included in this Annual Report, on Form 10-K. If these or other risks and uncertainties (including those describedparticularly in Part I, Item 1A, titled “Risk Factors,” that could cause actual future results or events to differ materially from the forward-looking statements that we make. Our forward-looking statements in this Annual Report do not reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures or investments we may make. 3 Table of Contents You should read this Annual Report and our subsequent filingsthe documents that we have filed as exhibits to this Annual Report with the U.S. Securities and Exchange Commission (the “SEC” or the “Commission”)) materialize, or if the assumptions underlying any of these statements prove incorrect,understanding that our actual future results may be materially different from those expressed or implied by such statements. In addition, even if our results of operations, financial condition and liquidity,andindustrydevelopmentsareconsistentwiththeforward-lookingstatementscontainedinthisfiling,thoseresultsordevelopmentsmaywhat we expect. We do not be indicative of results or developments in subsequentperiods. In light of these risks and uncertainties, we caution you not to place undue reliance on these forward-looking statements. Any forward-looking statement that we make in this filing speaks only as of the date of such statement, and we undertake noassume any obligation to update any forward-looking statement or to publicly announce the resultsstatements in this Annual Report, whether as a result of any revision to any of those statements to reflectnew information, future events or developments,otherwise, except as required by applicable law. Comparisons of results for current and any prior periods are not intended to express any future trends or indications of future performance, unless specifically expressed as such, and should only be viewed as historical data. ​ 4 Table of Contents WEBSITE AND MEDIA DISCLOSURE PART I Item 1. Business. Net Element, Inc., (“Net Element”)We use our website (www.mullenusa.com) and various social media channels as a Delaware corporation, is a holdingmeans of disclosing information about the company that conducts its operations through its subsidiaries. Net Element and its subsidiaries are referredproducts to collectively asour customers, investors, and the “Company,” “Net Element,” “we,” “us,”public (e.g.,  Instagram: @mullenusa; Twitter: @mullen_usa; Facebook: @MullenUSA; LinkedIn: @mullen-technologies; and Youtube: @mullenautomotive). The information provided on social media channels is not incorporated by reference in this report or “our,” unless the context requires otherwise. Company Overview Net Element is a global technology and value-added solutions group that supports electronic payments acceptance in a multi-channel environment including point-of-sale (POS), ecommerce and mobile devices. The Company operates two business segments as a provider of North American Transaction Solutions and International Transaction Solutions. We offer a broad range of payment acceptance and transaction processing services that enable merchants of all sizes to accept and process over 100 different payment options in more than 120 currencies, including credit, debit, prepaid and alternative payments. We also provide merchants with value-added services and technologies including integrated payment technologies, POS solutions, fraud management, information solutions and analytical tools. We are differentiated by our technology-centered value-added service offerings built around our payments ecosystem and our diversified business model, which enables us to provide our varied customer base with a broad range of transaction-processing services from a single source across numerous channels and geographic markets. We believe these capabilities provide several competitive advantages that will enable us to continue to penetrate our existing customer base with complementary new services, win new customers, develop new sales channels and enter new markets. We believe these competitive advantages include: ● Our ability to provide competitive products through use of proprietary technologies; ● Our ability to provide in one package a range of services that traditionally had to be sourced from different vendors; ● Our ability to provide a single agnostic on-boarding and merchant management platform to our indirect non-bank sales force ("Sales Partners"); ● Our ability to provide management and optimization tools to our Sales Partners amongst multiple networks and platforms; ● Our ability to serve customers with disparate operations in several geographies with technology solutions that enable them to manage their business as one enterprise; and ● Our ability to capture and analyze data across the transaction processing value chain and use that data to provide value-added services that are differentiated from those offered by pure-play vendors that serve only one portion of the transaction processing value chain (such as only merchant acquiring or POS). We have operations and offices located within the United States (“U.S.”) (domestic) and outside of the U.S. (international) where sales, customer service and/or administrative personnel are based. Through U.S. based subsidiaries,any other report we generate revenues from transactional services, valued-added payment services and technologies that we provide to SMBs. Through wholly owned subsidiaries, we focus on transactional services, mobile payment transactions, online payment transactions, value-added payment services and technologies in selected international markets.  Our business is characterized by transaction related fees, multi-year contracts, and a diverse client base, which allows us to grow alongside our clients. Our multi-year contracts allow us to achieve a high level of recurring revenuesfie with the same clients. While the contracts typically do not specify fixed revenues to be realized thereunder, they do provide a framework for revenues to be generated based on volume of services provided during such contracts’ term. 5 Table of Contents Products and Services Information Our broad suite of services spans the entire transaction processing value chain of commerce enabling services and technologies and includes a range of front-end customer-facing solutions, as well as back-end support services and account reconciliation. We deliver our value-added solutions from a suite of proprietary technology products, software, cloud-based applications, processing services, fraud management offerings, and customer support programs that we configure to meet our client’s individual needs. Many of our payment solutions are technology-enabled in that they incorporate or are incorporated into innovative, technology-driven solutions, including enterprise software solutions, designed to enable merchants to better manage their businesses. Integrated and Vertical Markets. Our integrated and vertical market solutions provide advanced payments technology that is deeply integrated into business enterprise software solutions either owned by us or by our partners. We grow our business when new merchants implement our enterprise software solutions and when new or existing merchants enable payments services through enterprise software solutions sold by us or by our partners. Our primary technology-enabled solutions include integrated and vertical markets, ecommerce and multi-channel solutions, each as described below: ● Unified Payments – doing business as Unified Payments, we provide businesses of all sizes and types throughout the United States with a wide range of fully-integrated payment acceptance solutions, value-added POS and business process management services; ● PayOnline – through our subsidiary, PayOnline Systems (“PayOnline”), we provide a wide range of value-added online solutions in the selected international markets utilizing our fully-integrated, agnostic electronic commerce platform that simplifies complex enterprise online transaction processing challenges from payment acceptance and processing through risk prevention and payment security via point-to-point encryption and tokenization solutions; ● Pay-Travel – integrated payment processing solutions to the travel industry, which includes integrations with various Global Distribution Systems (“GDS”) such as Amadeus®, Galileo®, Sabre®, additional geo filters and passenger name record (PNR) through Pay-Travel service offered by PayOnline; ● Aptito POS Platform – an integrated POS platform developed on Apple’s® iOS and Android® mobile operating systems for the hospitality, retail, service and on the go industries. Our goal with Aptito is to create an easy to use POS and business management solution, which incorporates everything a small business needs to help streamline every-day management, operations and payment acceptance; ● Restoactive– utilizing Aptito POS Platform architecture, we have developed and launched Restoactive, which seamlessly plugs into a current restaurant environment through integrations with some of the biggest POS and restaurant management platforms available on the market today; ● Unified m-POS – mobile POS application makes accepting payments on the go easy and secure. Mobile application is EMV-compliant, accepts traditional and contactless transactions such as Apple Pay®. Unified m-POS application is available for download in Apple’s App Store and Google Play; ● Zero Pay – zero-fee payment acceptance program for SMB merchants in the United States. Zero Pay program saves merchants costs involved in accepting credit and debit cards using mobile POS; ● Netevia – our internally developed future-ready multi-channel payments and merchant management platform. Connecting and simplifying payments across sales channels through a single integration point, Netevia delivers end-to-end payment processing through easy-to-use APIs. The Netevia platform is the core of the company’s technology stack. 6 Table of Contents Recent Developments During 2018 and through the filing of this Report, we completed a number of transactions and other accomplishments in pursuit of our strategy of enhancing financial results, creating a strong operational foundation and competitive advantage. We believe the following transactions and actions have focused and strengthened our company and improved our capital structure and cash flow. Our primary actions and achievements during 2018, and through the filing of this Form 10K, were as follows: ● Acquired recurring cash flow portfolio from Argus Merchant Services, projected to add over $4 million in gross profits over the next 4 years ● Acquired recurring cash flow portfolio from Universal Payment Systems, projected to add over $5 million in gross profits over the next 4 years ● Ranked as one of the fastest growing companies in North America on Deloitte's 2018 Technology Fast 500™ ● Jon Najarian of CNBC "Halftime Report" and "Fast Money", and Jonathan Fichman, a fin-tech and startup executive, joined our Company's Board of Directors Recent Partnership and Achievements: ● Entered into a partnership with Payment Club for subscription-based payment processing services for small businesses projected to add over $1.5 million in gross profits over the next 4 years  ● Partnered with VIP Systems to launch seamless payments for the multi-billion-dollar hospitality industry ● Net Element was named one of the top 10 retail payment consulting/services companies of 2018 by Retail CIO Outlook magazine ● Our subsidiary, Unified Payments, is among the first companies to achieve self-regulatory certification from the Electronics Transactions Association Recently Completed Product Launches: ● Launched multi-channel payments platform, Netevia, connecting and simplying payments across sales channels through a single integration point, delivering end-to-end payment processing through easy-to-use APIs. This model complements our ability to perform in a multi-channel environment, including point-of-sale (POS), e-commerce, and mobile devices ● Launched multi-channel Blockchain-powered payments acceptance application as part of its Netevia platform ● Launched subscription-based payment processing services for small businesses which targets the multi-billion dollar subscription economy  ● Launched Netevia Light POS, a seamless and secure mobile payments acceptance software available on smart terminals by PAX Technology  ● Launched Aptito on the world’s first smart payment terminal. This comprehensive POS solution is now available for restaurants on the Poynt Smart Payment terminal  ● Launched Netevia Smart Vendor payment solutions for B2B sales which will allow our Company access to the $7.7 trillion B2B sales market  ● Launched an intelligent payments solution that addresses the needs of North America’s annual $845 billion events industry  ● Launched “Fast Pass Funding”, a same-day funding service available through our Netevia platform.   7 Table of Contents Outlook Our strategy is to ensure that our business remains successful in a rapidly changing market, creating sustainable value for all our stakeholders, including our clients, distribution partners and shareholders. We aim to achieve superior results for our clients by having a deep understanding of their payment acceptance needs, extensive market reach, strong product development and technology enablement. Planned for 2019: We will continue to focus on understanding our clients and addressing their payment acceptance needs in core market segments. ● Continue growth in all key segments and expand our network of referral partners ● Drive and improve client retention ● Expand our client base in selected markets ● Deliver value-added products to our clients to increase efficiencies and payment acceptance ● Launch new tools to reach our clients, such as digital channels, and deepening partner relations SEC. The global payments industry continued to deliver healthy growth during 2018, with underlying transaction volumes demonstrating even greater strength. We believe that new and disruptive technologies will provide us the opportunity to differentiate ourselves from our competition, continue developing and delivering innovative payment solutions in 2019 and beyond.  ● Continue to enhance Netevia, our future-ready multi-channel payments platform, enabling intelligent routing of payments for the application development community ● Continue to scale and enhance new product launches that will add value to our clients ● Extend our capabilities in next-generation POS hardware and software, and deepening our partner proposition ● Commence trials of advanced technologies around business intelligence and mobile based payments acceptance ● Continue the further development of disruptive emerging technologies such as blockchain technologies, payments enablement for Internet of Things (“IoT”), biometrics payment acceptance and artificial intelligence ● Continue research and investments in future emerging payment technologies Realize the full potential of our business model. ● Deliver stronger organic growth ● Develop additional payment network relationships to integrate with our technologies ● Monetize acquisitions completed in 2018 ● Seek acquisition or investment opportunities to deepen our technological and distribution capabilities We continue to believe that disruptive technologies such as blockchain, IoT, biometrics payments and artificial intelligence will play key roles in future commerce. These technologies will encourage innovation through development of value-added services and cater to both merchants and their customers. We believe Netevia, our future-ready payments and merchant management platform will act as a framework and core for a number of value-added services that can connect merchants and consumers directly utilizinginformation we post throughout these disruptive technologies while increasing the economic efficiency of all transactions being made within the ecosystem. Specifically, Netevia delivers end-to-end payment processing through easy-to-use APIs and complements the Company’s ability to perform in a multi-channel environment, including point-of-sale (POS), e-commerce and mobile devices and will enable the Company to perform as a hub for disruptive emerging technology solutions. 8 Table of Contents Our Mission and Vision Our mission is to power global commerce and allow our clients to conduct business globally through a centralized solution. We believe that by understanding the consumer behavior and the needs of our merchants is the most effective and, ultimately, the most profitable means to accomplish our mission and create long-term value for all stakeholders. We drive client growth through our in-depth knowledge of global transactional services and related value-added service offerings which separate us from the competition. Our vision is to set the standard for multi-channel payments acceptance and value-added service offerings with focus on the creation of an unified global transaction acceptance ecosystem. We believe in disruptive emerging technologies and, as such, we have developed Netevia, our future-ready multi-channel payments platform to support development of value-added solutions designed for everyday commerce. Moving forward, we believe exciting projects and disruptive technologies like blockchain, IoT, biometric payments and artificial intelligence will provide us the opportunity to continue developing innovative payments solutions, which will provide value to our clients. In order to achieve this vision, we seek to further develop single on-boarding, global transaction acceptance ecosystem. Manifesting this vision requires scaling our direct and indirect connectivity to multiple payment and mobile networks internationally. By implementing this vision, we believe that we will be able to provide centralized, global multi-channel transactional platform to our clients internationally. Our Strategy Our strategy is to capitalize on consumer appetite for digital payment methods, the perceived movement towards a cashless society. To continue to grow our business, our strategy is to focus on providing merchants with the ability to process a variety of electronic transactions across multiple channels. We seek to leverage the adoption of and transition to card, electronic and digital-based payments by expanding our market share through our distribution channels and services innovations. We also seek growth through strategic acquisitions to improve our offerings, scale and geography. We intend to continue to invest in and leverage our technology infrastructure and our people to increase our penetration in existing markets. Key elements of our business strategy include: ● Continued investment in our core technology and new technology offerings; ● Allocation of resources and expertise to grow in commerce and payments segments; ● Grow and control distribution by adding new merchants and partners; ● Leverage technology and operational advantages throughout our global footprint; ● Expansion of our cardholder and subscriber customer base ● Continue to develop seamless multinational solutions for our clients; ● Increase monetization while creating value for our clients; ● Focus on continued improvement and operation excellence; and ● Pursue potential domestic and international acquisitions of, investments in, and alliances with companies that have high growth potential, significant market presence or key technological capabilities. With our existing infrastructure and supplier relationships, we believe that we can accommodate expected revenue growth. We believe that our available capacity and infrastructure will allow us to take advantage of operational efficiencies and increased margin as we grow our processing volume and expand to other geographical territories. 9 Table of Contents Market Overview The financial technology and transaction processing industry is an integral part of today’s worldwide financial structure. The industry is continually evolving, driven in large part by technological advances. The benefits of card-based payments allow merchants to access a broader universe of consumers, enjoy faster settlement times and reduce transaction errors. By using credit or debit cards, consumers are able to make purchases more conveniently, whether in person, over the Internet, or by mail, fax or telephone, while gaining the benefit of loyalty programs, such as frequent flyer miles or cash back, which are increasingly being offered by credit or debit card issuers. In addition, consumers are also beginning to use card-based and other electronic payment methods for purchases at an earlier age in life, and increasingly for small dollar amount purchases. Given these advantages of card-based payment systems to merchants and consumers, favorable demographic trends, and the resulting proliferation of credit and debit card usage, we believe businesses will increasingly seek to accept card-based payment systems in order to remain competitive. We believe that cash transactions are becoming progressively obsolete. The proliferation of bankcards has made the acceptance of bankcard payments a virtual necessity for many businesses, regardless of size, in order to remain competitive. In addition, the advent and growth of e-commerce and crypto-currencies have marked a significant new trend in the way business is being conducted. E-commerce is dependent upon credit and debit cards, as well as other cashless payment processing methods. The payment processing industry continues to evolve rapidly, based on the application of new technology and changing customer needs. We intend to continue to evolve with the market to provide the necessary technological advances to meet the ever-changing needs of our market place. Traditional players in the industry must quickly adapt to the changing environment or be left behind in the competitive landscape.  Business Segments North American Transaction Solutions International Transaction Solutions Clients: Businesses and business owners of all types and sizes. Current focus on SMB merchants Online businesses, merchants requiring cross-border payment acceptance, content providers and mobile applications of all types and sizes Goals: To help business grow commerce at the retail, online and m-POS. Enable multi-channel commerce To help businesses transact online with ease and security and help digital merchants monetize their content in a mobile environment Key Solutions: ●  Integrated payments acceptance ●  Value-added services ●  Aptito POS technology ●  m-POS technology ●  Smart payment POS terminal ●  Business performance analytics ●  Marketing / loyalty ●  Integrated online and mobile billing solutions ●  Complete cross-border toolkit for online business ●  Integrated GDS transaction processing ●  Mobile content monetization and management ●  Security / risk management ●  Marketing / loyalty Segment Revenue: $59.1 million for 2018, up 16% from 2017 $6.6 million for 2018, down 27% from 2017 Dollars Volume Processed: $2.9 billion for 2018, up 27% from 2017 $354 million for 2018, down 33% from 2017 We operate two reportable business operating segments: (i) North American Transaction Solutions and (ii) International Transaction Solutions. Our segments are designed to establish lines of businesses that support our client base and further globalize our solutions. Management determines the reportable segments based on the internal reporting used by our Chief Operating Decision Maker to evaluate performance and to assess where to allocate resources. The principal revenue stream for all segments came from service and transaction related fees during 2018.  During the fourth quarter of 2017, we re-organized our segment data along geographic lines with two operating segments; North American Transaction Solutions and International Transaction Solutions. We also continue to break-out corporate overhead so that we can better see the stand-alone potential of each region. Revenues from each of our operating segments as a percentage of total revenues are displayed in the below table.     Year ended December 31,       2018     2017   Total revenues generated:             North American Transaction Solutions   90%     85%   International Transaction Solutions   10%     15%   No country outside the U.S. represents greater than 10% of our total revenues. 10 Table of Contents Comparative segment revenues and related financial information pertaining to our segments for the years ended December 31, 2018 and 2017 are presented in the tables in Note 16, Segment Information, to our consolidated financial statements (the “Consolidated Financial Statements”), which are included elsewhere in this Report. ● North American Transaction Solutions – This segment provides technology and services that businesses require to accept cashless transactions in a multi-channel environment, including retail card-present (or “swipe”), e-commerce or card-not-present mail order / telephone order (“MOTO”) transactions (referred to as “Merchant Acquiring”) as well as next-generation offerings such as mobile payment services, merchant performance analytical tools, merchant back office reporting, and our cloud-based Aptito POS platform, which includes hospitality, mobile POS (“m-POS”) and SMB retail point-of-sale applications (referred to as “Value-added Services”). ● International Transaction Solutions – This segment provides online and mobile commerce solutions for merchants including social networks, game developers, online magazines, mobile applications and digital media operators. We provide mobile users with a simple, secure and fast way to pay for purchases via mobile device, interactive device or web without a credit card or a bank account.  Our fully-integrated, processor agnostic electronic commerce platform that simplifies complex enterprise online transaction processing challenges from payment acceptance and processing through risk prevention and payment security via point-to-point encryption and tokenization solutions. Our proprietary software-as-a-service (“SaaS”) suite of solutions for electronic and mobile commerce gateway and payment processing platform is compliant at Level 1 of Payment Card Industry (“PCI”) Data Security Standards (“DSS”), streamlines the order-to-cash process, improves electronic payment acceptance and reduces the scope of burden of PCI DSS compliance. North American Transaction Solutions Segment North American Transaction Solutions Operations. Our largest segment, North American Transaction Solutions, where through our subsidiary TOT Payments, LLC, doing business as Unified Payments, we provide businesses of all sizes and types with a wide range of fully-integrated payment acceptance solutions at the point of sale, including Merchant Acquiring, e-commerce, mobile commerce, POS and other business solutions. Our largest service in this segment is Merchant Acquiring, which facilitates the acceptance of cashless transactions at the POS, whether a retail transaction at a physical business location, a mobile commerce transaction through a mobile or tablet device, which includes m-POS acceptance, Android Pay™, Apple Pay™ and Samsung Pay or an electronic commerce transaction over the web. Geographical presence for this segment is North America. Our North American Transaction Solutions segment revenues are primarily derived from processing payment acceptance transactions in a multi-channel environment for SMB merchants and includes fees for providing processing, loyalty and software services, and sales and support of POS devices. Revenues are generated from a variety of sources, including: ● Discount fees charged to a merchant for processing of a transaction. The discount fee is typically either a percentage of the purchase amount or an interchange fee plus a fixed dollar amount or percentage; ● Processing fees charged to merchants for processing of a transaction; ● Processing fees charged to our Sales Partners who have outsourced their transaction processing to us; ● Sales and support of POS devices; ● Fees from providing reporting and other services; ● Software license fees for Aptito POS platform, which includes hospitality and SMB retail point-of-sale application; ● PCI compliance fees charged to a merchant for providing PCI compliance on annual basis; and ● Business software license fees for merchant analytics and back office reporting. 11 Table of Contents We typically provide our services as part of a broader payment acceptance solution to our business clients across multiple channels, including: ● Retail Merchants – physical businesses or storefront locations, such as retailers, supermarkets, restaurants, hotels and other brink and mortar facilities, which we refer to as Retail; ● Mobile Merchants – physical businesses with remote or wireless storefront locations, such as small retail and service providers that use mobile devices with POS capabilities to accept electronic payments, which we refer to as Mobile; and ● Online – online businesses or website locations, such as retailers, digital content providers, and mobile application developers with Internet-based storefronts that can be accessed through a personal computer or a mobile device, where we refer to as e-commerce. North American Transaction Solutions Marketing. We employ a variety of go-to-market strategies in our North American Transaction Solutions segment. We mostly partner with indirect non-bank Sales Partners, such as independent sales agents, independent sales groups and referral partners that user our brand to market services (“ISG”), independent sales groups that we sponsor to Card Brands as registered Independent Sales Organizations (“ISO”) – these groups market services under their own brands, independent software vendors (“ISV”), value added resellers (“VAR”), and payment services providers (“PSP”) to sell our payment solutions to SMB merchants. We believe that this sales approach provides us with access to an experienced sales force to market our services with limited investment in sales infrastructure and management time. We believe our focus on the unique needs of SMB allows us to develop compelling offerings for our sales channels to bring to prospective merchants and provides us with a competitive advantage in our target market. Sales & Marketing Support – Among the services and capabilities we provide are rapid application response time, merchant application acceptance by a proprietary and secure on-line sales portal, superior customer service, merchant reporting and robust analytics. In addition, by controlling the underwriting process we believe we offer the ISGs more rapid and consistent review of merchant applications than may be available from other service providers. Additionally, in certain circumstances, we offer our sales organizations tailored compensation programs and unique technology applications to assist them in the sales process. We keep an open dialogue with our Sales Partners to address their concerns as quickly as possible and work with them in investigating chargebacks or potentially suspicious activity with the aim of ensuring our merchants do not unduly suffer downtime or the unnecessary withholding of funds. Sales & Marketing Compensation – As compensation for their referral of merchant accounts, we pay our Sales Partners an agreed-upon recurring commission, or percentage of the income we derive from the transactions we process from the merchants they refer to us. The amount of the recurring commissions we pay to our Sales Partners varies on a case-by-case basis and depends on several factors, including but not limited to the number and type of merchants each group refers to us. We provide additional incentives to our Sales Partners, including, from time to time, advances and merchant acquisition bonuses that are secured by income earned from the referred merchant and repayable from future compensation that may be earned by the groups in respect to the merchants they have referred to us. For the year ended December 31, 2018 and 2017, we had provided merchant acquisition incentives to Sales Partners in an aggregate amount of approximately $1.6 million and $1.8 million, respectively. Our organic growth plan calls for future incentives to be funded to our Sales Partners for referred merchants. 12 Table of Contents North American Transaction Solutions. Our solutions are designed to help SMB merchants accept cashless payments in a multi-channel payment environment, which spans across POS, e-commerce, mobile devices and smart payment terminals. Aptito POS Platform – An integrated POS platform developed on Apple’s® iOS and Android® mobile operating systems for the hospitality, retail, service and on the go industries. Our goal with Aptito is to create an easy to use POS and business management solution, which incorporates everything a small business needs to help streamline every-day management, operations and payment acceptance as well as provide efficient ways to decrease labor and operation expenses by automating routine processes through innovative technologies. ● Aptito Restaurant POS – proprietary, fully integrated cloud-based POS and restaurant management system developed on Apple’s® iOS and Android® mobile operating system is designed to be used as a stand-alone all digital POS or be extended to include: m-POS, self-ordering kiosk, digital menus, pay at the table EMV and NFC ready card readers, cash drawers, receipt and kitchen printers. The need for uptime in a hospitality environment is paramount and as such our Aptito Restaurant POS local server allows our merchants to remain online, even if the Internet connection to the cloud is lost. Our local server solution is automatically synchronized with the cloud, providing 99.99% uptime. ● Aptito Retail POS – cloud-based POS solution is available on Apple® iOS and Android® mobile operating platforms and allows retailers to focus on their business and improve the in-store experience. Retailers are able to customize Aptito Retail POS based on their environment. Peripherals for Aptito Retail POS include a fully integrated cash drawer, thermal receipt printer, barcode scanner, barcode printer and EMV-compliant point of sale acceptance terminal. This allows retailers the ability to customize their POS solution based on their unique needs. The need for uptime in a retail environment is paramount and as such our Aptito Retail POS local server allows our merchants to remain online, even if the Internet connection to the cloud is lost. Our local server solution is automatically synchronized with the cloud, providing 99.99% uptime. ● Aptito Kiosk – innovative self-order kiosk gives customers complete control over their restaurant experience. Our innovative solution is a stellar addition to any hotel, fine dining or quick service restaurant and increases profit and decreases labor cost. ● Aptito Smart Payment Terminal – Aptito & Poynt, partnered to provide restaurants with a most robust seamless POS Solution using the latest technology available. By using the Aptito POS application on Poynt’s smart payment terminal, business owners can finally accept payments anywhere and get access to Poynt value-added applications marketplace to further expand Aptito POS capabilities. ● Restoactive – utilizing Aptito POS Platform architecture, we have developed and launched Restoactive, which seamlessly plugs into a current restaurant environment through integrations with some of the biggest POS and restaurant management platforms such as: MICROS®, POSitouch®, Aloha® and Symphony®. By integrating into the leading POS and restaurant management platforms, Restoactive is now accessible by over 500,000 restaurants in the United States. We believe Restoactive to be the first of its kind integrated platform, which introduces an all-in-one digital menu, kiosk and m-POS application into an existing POS environment without the need to displace existing restaurant management platforms. ● Unified m-POS – mobile application is available on Apple® iOS and Android® mobile operating platforms and makes it easier and safer to take business on the go. Whether at the local farmer’s market or at a customer’s site, Unified m-POS accepts payments with ease and security. Mobile application is EMV-compliant, accepts traditional and contactless transactions such as Apple Pay®. Unified m-POS allows merchants to send invoices to their customers and utilize the Zero Pay program to accept credit and debit payments while saving on processing fees. Unified m-POS application is available for download in Apple’s App Store and Google Play. In addition to enhancing our ability to drive core merchant acquiring sales, Aptito POS Platform allows us to earn incremental revenue from business clients. Currently, revenue model is based on a SaaS fee, which we bill on a per station basis and additional services fee, which we bill for additional applications we offer. We also believe that Aptito POS Platform can help enhance client retention because we believe it will become core to our clients’ businesses and position us as a value-added partner. For example, business owners may use our business management tools to manage their employees’ work schedules, payroll, patron reservations, operate customer loyalty and gift card programs, manage inventory, and/or provide analytics on their business. Other POS Platforms – We act as an authorized dealer for various POS manufacturers and POS software providers and deploydeemed material. Accordingly, investors should monitor these systems where our proprietary products are not the best fit. Systems we offer are fully integrated with our payment acceptance capabilities. 13 Table of Contents Netevia Payments Platform – We believe Netevia, our future-ready payments platform will act as a framework and core for a number of value-added services that can connect merchants and consumers directly utilizing disruptive technologies while increasing the economic efficiency of all transactions being made within the ecosystem. Specifically, Netevia Payments Platform delivers end-to-end payment processing through easy-to-use APIs and complements the Company’s ability to perform in a multi-channel environment, including POS, e-commerce and mobile devices and will enable the Company to perform as a hub for disruptive emerging technology solutions. Netevia Payments Platform is the core of the Company’s technology stack. ● Netevia Payment Gateway – Netevia's online payment gateway provides a set of APIs for online sellers to integrate payment acceptance, both B2C and B2B, into their platforms. Advanced merchant hierarchy and management functions include a virtual terminal and a suite of fraud management tools. ● Netevia Light POS – the combination of Netevia Light POS application and PAX Technology’s Android-based interactive smart payment terminals offers a robust and flexible state-of-the-art solution to help merchants seamlessly transact across multiple touch points, providing a convenient way of doing day-by-day operations through a modern, self-explainable user interface and user experience. A variety of functions, such as gratuity adjustment, on-screen signature capture, invoicing and support of the Zero Pay program makes this solution ideal for many types of businesses. ● Netevia Invoicing – invoicing solution that offers an ability to track and reconcile payments while allowing customers to receive and pay invoices via a Netevia HQ. Tasks that were once manual are now streamlined and automated, providing accounts receivable teams with a clear and complete view of invoice details and statuses. ● Netevia CryptoPay – fully compliant and secure multi-channel blockchain-powered cryptocurrency payment acceptance application available across multiple touch points including face-to-face via smart payment terminals and e-commerce, as well as, via API. Merchant Management Platform – We have developed Netevia, a merchant management platform. Netevia HQ is a value-added module of Netevia Payments Platform and is designed to enhance responsiveness of our Sales Partners and improve sales efficiency. The cloud-based solution provides to both Sales Partners and merchants an integrated toolkit to more effectively manage a variety of sales, operations, reporting and accounting functions. The system is designed to improve conversion rates, technology advisory functions and to reduce deployment time for merchants. It also allows troubleshooting of merchant issues in real-time with built in underwriting and risk monitoring functions. Netevia HQ is currently one of the few cloud-based systems nationwide that allows Sales Partners to onboard and monitor merchants on multiple processing platforms through a single interface. ● Netevia HQ for Sales Partners – allows Sales Partners to onboard merchants on multiple processing platforms available in the U.S. Its merchant underwriting and boarding process is seamless and paperless. Merchant Library allows Sales Partners to safely store and retrieve any agreement, form or contract related to merchants. Sales Partners that utilize the system are equipped with flexible merchant pricing options, risk management modules and residual and sales incentive calculations, which allow easier management of most of their day-to-day operations. Sales Partners compensation and merchant profitability can be managed using multi-level, single-click, drill-down navigation to pricing, detail, and summary statement information. ● Netevia HQ On the Go – fully integrated, digital onboarding interface designed for Sales Partners and merchants, streamlines and automates merchant account sign-up process, delivers real-time decisions and paperless boarding approval from online and mobile devices. Mobile boarding capability facilitates API-driven, instant boarding to multiple payment processing platforms and provides new merchants with a modular approach for providing their personal and business information. The platform manages underwriting, risk assessment, merchant ID assignments and is compliant with banking standards such as Know Your Customer regulations. ● Netevia HQ for Merchants – integrated reporting, accounting and analytics back office solution for SMB merchants with access to value-added solutions that increase productivity. A variety of reporting tools along with easy to understand charts enables merchants to analyze sales and improve performance. The ticket system allows merchants direct communication with Company’s service and technical support designed to improve the customer service experience. ● Unified Insights – the integrated Unified Insights module is a business dashboard focused on “Big Data” that gives merchants a 360-degree view of their business in a more usable format. With Unified Insights, merchants can compare current revenue, online reputation, and social media activity to their past performance and to similar business in their area. 14 Table of Contents North American Transaction Solutions Competition. Many large and small companies compete with us in providing payment processing services and related services to a wide range of merchants. Many of our current and prospective competitors have substantially greater financial, technical and marketing resources, larger customer bases, longer operating histories, more developed infrastructures, greater name recognition and/or more established relationships in the industry than we have. Because of this our competitors may be able to adopt more aggressive pricing policies than we can, develop and expand their service offerings more rapidly, adapt to new or emerging technologies and changes in customer requirements more quickly, take advantage of acquisitions and other opportunities more readily, achieve greater economies of scale, and devote greater resources to the marketing and sale of their services. There are also many smaller transaction processors that provide various services to small and medium sized merchants. We believe that our specific focus on smaller merchants,channels, in addition to our understandingfollowing press releases, SEC filings and public conference calls and webcasts. In addition, you may automatically receive email alerts and other information about the Company when you enroll your email address and other information by visiting “Investor Resources” section of the needs and risks associated with providing payment processing services to small merchants and indirect non-bank sales forces, gives us a competitive advantage over larger competitors, which have a broader market perspective and priorities. We also believe that we have a competitive advantage over competitors of a similar or smaller size that may lack our extensive experience, value-added product offering and resources.website at www.mullenusa.com. ​ North American Transaction Solutions Industry Mix and Geography. In the United States, we have developed significant expertise in industries that we believe present relatively low risks as the customers are generally present and the products or services are generally delivered at the time the transaction is processed. These include:5 ● Restaurants ● Schools and educational services ● Brick and mortar retailers ● Convenience and liquor stores ● Professional service providers ● Hotel and lodging establishments Merchants we served in the North American Transaction Solutions segment during 2018 processed an average of $17,900 per month in cashless transactions with an average transaction value of approximately $50 per transaction. Larger payment processors have traditionally underserved these merchants. As a result, these merchants have historically paid higher transaction fees than larger merchants and have not been provided with tailored solutions and on-going services that larger merchants typically receive from larger payment processing providers. Our total North American Transaction Solutions processing volume for the year ended December 31, 2018 was approximately $2.9 billion, a 27% increase over processing during the year ended December 31, 2017.  15 Table of Contents PART I Our card-present processing volume for the year ended December 31, 2018 represented 76% of the total North American Transaction Solution volume, and card-not-present processing volume represented 24%. As of December 31, 2018, approximately 43.2% of our SMB merchants were restaurants and 17.0% were health and beauty services, 11.2% were general merchandise, and 10.0% were professional services. The high concentration in restaurants reflects the efforts of our sales team actively targeting our Aptito POS product line. The following table reflects the percentage concentration of our merchant base by category:     2018   2017 Restaurants   43.2 %   39.6 % Health / Beauty   17.0 %   22.0 % General Merchandise   11.2 %   16.0 % Professional Services   10.0 %   8.1 % Automotive   6.6 %   7.1 % Food Stores   6.8 %   5.8 % Educational Services   2.4 %   4.4 % Hotels / Motels   1.8 %   1.6 % Other   1.0 %   1.0 % In December 2018, SMB merchants located in the following states represented the following percentage of our SMB card processing volume: New York represented 24.5%, Florida represented 11.34% California represented 9.12%, New Jersey represented 6.4% and Texas represented 5.5%. No other state represented more than 5% of our total SMB card processing volume. Our geographic concentration tends to reflect states where we maintain a stronger sales force. We believe that the loss of any single SMB merchant would not have a material adverse effect on our financial condition or results of operations. ITEM 1. BUSINESS. North American Transaction Solutions Risk Management. In the United States, we focus our sales efforts on low-risk bankcard merchants and have developed systems and procedures designed to minimize our exposure to potential merchant losses. While we also board higher risk merchants which provide a higher gross margin, these accounts are closely monitored by our risk underwriting department. Effective risk management helps us minimize merchant losses for the mutual benefit of our merchants, Independent Sales Groups and ourselves. Our Underwriting and Risk Management Policy and procedures help to protect us from fraud perpetrated by our merchants. We believe our knowledge and experienceReferences in dealing with attempted fraud has resulted in our development and implementation of effective risk management and fraud prevention systems and procedures. In 2018, we experienced losses of approximately $129,000 (or .004%) of our SMB card processing volume. We employ the following systems and procedures to minimize our exposure to merchant and transaction fraud: ● Merchant Application Underwriting – there are varying degrees of risk associated with different merchant types based on their industry, the nature of the merchant’s business, processing volumes and average transaction size. As such, varying levels of scrutiny are needed to evaluate a merchant application and to underwrite a prospective merchant account. These range from basic due diligence for merchants with low risk profiles to more comprehensive review for higher risk merchants. The results of this assessment serve as the basis for decisions regarding acceptance of the merchant account, criteria for establishing reserve requirements, processing limits, average transaction amounts and pricing. Once aggregated, these factors also assist the Company in monitoring transactions for those accounts when pre-determined criteria have been exceeded. ● Merchant Monitoring – we employ several levels of merchant account monitoring to help us identify suspicious transactions and trends. Daily merchant activity is sorted into a number of customized reports by our systems. Our risk management team reviews any unusual activity highlighted by these reports, such as larger than normal transactions or credits, and monitors other parameters that are helpful in identifying suspicious activity. We have daily windows to decide if any transactions should be held for further review and this provides us time to interview a merchant or issuing bank to determine the validity of suspicious transactions. We also place merchants who require special monitoring on alert status and have engaged a third-party web crawling solution that scans all merchant websites for content and integrity. ● Investigation and Loss Prevention – if a merchant exceeds any parameters established by our underwriting and/or risk management staff or violates regulations established by the applicable bankcard network or the terms of our merchant agreement, one of our investigators will identify the incident and take appropriate action to reduce our exposure to loss and the exposure of our merchant. This action may include requesting additional transaction information, withholding or diverting funds, verifying delivery of merchandise or even deactivating the merchant account. Additionally, Relationship Managers may be instructed to retrieve equipment owned by us. In addition, to protect ourselves from unexpected losses, we maintain a reserve account with our sponsoring bank, which can be used to offset any losses incurred at a given time. As of December 31, 2018, our reserve balance was approximately $604,000. The reserve is replenished as required by funding 0.03% of bankcard processing volume. In the case of our self-designated bin, this is triggered when it falls below $25,000. This reserve is accounted for on our consolidated balance sheet under the caption “other long-term assets” and reflected as restricted cash for purposes of the statement of cash flows. ● Reserves – some of our merchants are required to post reserves (cash deposits) that are used to offset chargebacks incurred. Our sponsoring banks hold such reserves related to our merchant accounts as long as we are exposed to loss resulting from a merchant’s processing activity. In the event that a small company finds it difficult to post a cash reserve upon opening an account with us, we may build the reserve by retaining a percentage of each transaction the merchant performs until the reserve is established. This solution permits the merchant to fund our reserve requirements gradually as its business develops. As of December 31, 2018, total reserve deposits were approximately $6.4 million. We have no legal title to the cash accounts maintained at the sponsor bank in order to cover potential chargeback and related losses under the applicable merchant agreements. We also have no legal obligation to these merchants with respect to these reserve accounts. Accordingly, we do not include these accounts and the corresponding obligation to the merchants in our consolidated financial statements.  16 Table of Contents North American Transaction Solutions Sponsoring Banks and Data Processors. Because we are not a “member bank” as defined by Visa, MasterCard, American Express and Discover (“Card Brands”), in order to authorize and settle payment transactions for merchants, we must be sponsored by a financial institution that holds member bank status with the Card Brands (“Sponsorship Bank” in the case of Visa and MasterCard) and various third-party vendors (“Data Processors”) to assist us with these functions. Card Brand rules restrict us from performing funds settlement or accessing merchant settlement funds and require that these funds be in the possession of a Sponsorship Bank until the merchant is funded. Sponsoring Bank. We have agreements with several banks that sponsor us for membership in the Visa, MasterCard, American Express and Discover card brands and settle card transactions for our merchants. These agreements allow us to use the banks’ identification numbers, referred to as Bank Identification Number (“BIN”) for Visa transactions and Interbank Card Association (“ICA”) number for MasterCard transactions. The principal Sponsoring Bank through which we processed the majority of our transaction in the United States during 2018 was Citizens Bank, N.A. In addition, we process transactions through BIN sponsorship agreements with Esquire Bank, N.A. and Wells Fargo Bank, N.A. From time to time, we may enter into agreements with additional banks. Data Processor. We have agreements with several Data Processors to provide us with, on a non-exclusive basis, transaction processing and transmittal, transaction authorization and data capture, and access to various reporting tools. Our primary processing vendor in the United States is Priority Payment Systems, LLC (“Priority”), which provides us with the processing conduitthis Annual Report to the Total System Services,“Company”, “we”, “us”, “our” or similar references, or “Mullen,” mean Mullen Automotive Inc. (“TSYS”), a Delaware corporation, and First Data Corporation (“FDC”) authorizationits subsidiary/ies Ottava Automotive, Inc., a California corporation, and settlement network. We have entered into several service agreements with Priority. Each of the Priority service agreements may be terminated by Priority if, among other things, (i) certain insolvency events occur with respect to us or (ii) we fail to maintain our good standing with Card Brands. We may terminate each of the agreements if, among other things, (i) certain insolvency events occur with respect to Priority, (ii) Priority materially breaches any of the terms, covenants or conditions of the agreements and fails to cure such breach within 30 days following receipt of written notice thereof, or (iii) under certain circumstances, Priority is unable to perform services described in the agreement. In addition, we maintain direct processing agreements with TSYS and FDC. As an example of processing an electronic payment, the below diagram illustrates the participants involved in a payment transaction. There are four main participants, the Merchant, the Service Provider (Unified Payments), the Sponsoring Bank and the Data Processor. Merchants are primarily business owners that accept credit card payment in exchange for their merchandise and services. International Transaction Solutions Segment International Transaction Solutions Operations. Through our subsidiary, PayOnline, we provide a wide range of value-added online and mobile solutions utilizing our fully-integrated, platform agnostic electronic commerce offering that simplifies complex enterprise online transaction processing challenges from payment acceptance and processing through risk prevention and payment security via point-to-point encryption and tokenization solutions. Our proprietary SaaS suite of solutions for electronic and mobile commerce gateway and payment processing platform is compliant at Level 1 of PCI DSS, streamlines the order-to-cash process, improves electronic payment acceptance and reduces the scope of burden of PCI DSS compliance. PayOnline holds a leadership position in the Russian Federation as one of the largest independent Internet Payment Services Provider (“IPSP”)Mullen Investment Properties LLC . During 2017, we combined our online and mobile payments business into a single International Transaction Solutions segment. Our online payment solutions company, PayOnline, now provides all operational support for our mobile payments business. Our mobile payments business is transitioning to a joint venture business model and we are in discussions with several potential partners regarding joint business development. 17 Table of Contents Our International Transaction Solutions segment revenues are primarily derived from processing cashless transactions for online merchants and includes fees for providing processing, loyalty and software services. Revenues are generated from a variety of sources, including: ● Discount fees charged to a merchant for processing of a transaction. The discount fee is typically a percentage of the purchase amount; ● Processing fees charged to merchants for processing of a transaction; ● Processing fees charged to our sales partners who have outsourced their transaction processing to us; ● Fees from providing reporting and other services; ● Software license fees for white-label platform; ● Payment gateway transaction fees; ● Business software license fees for merchant analytics, back office reporting; and monetarization; ● Big Data monetization through upsell on payment confirmation page to the end consumer. International Transaction Solutions Marketing. The vast majority of International Transaction Solutions sales are direct sales, through our marketing efforts and fully automated leads management system. The marketing department of International Transaction Solutions segment consists of 4 specialists, responsible for product pricing, company branding and positioning, monitoring of competitors and technological developments, public relations and web marketing activities. Our marketing mix includes, but not limited to: ● Search Engine Optimization – PayOnline is in the top 10 results with most frequently used keywords in Google.ru and Yandex search engines. ● Social Media – PayOnline social media channels include Facebook, Vkontakte, Twitter, and YouTube. ● Corporate Blog – Our corporate blog featured on popular developer communities like HabraHabr and GeekTimes is consistently in the Top 10. ● Industry Research – Every year PayOnline specialists prepare and publish over 120+ research papers on popular e-commerce and IT development forums. ● RUNET – PayOnline is a payment processing provider for RUNET-ID (Russia’s largest Internet professionals’ social platform), Russian Internet Forum and Russian Interactive Week. ● Conferences – Every year our experts participate in 30+ trade shows and professional conferences. ● Education – Our senior managers are frequently invited by top Russian Federation universities and business schools as lecturers. Merchants we served during 2018 in the International Transaction Solutions segment processed an average of $49,000 per month in cashless transactions with an average transaction value of approximately $13 per transaction. Banks and traditional processors have traditionally underserved these merchants due to multi-national and cross-border requirements for these merchants. Our total International Transaction Solutions processing volume for the year ended December 31, 2018 was approximately $354 million, a 33% decrease over processing during the year ended December 31, 2017.  During 2018, our sales department consisted of 3 specialists who are responsible for managing the leads, execution of the client agreements, client boarding, customization of the solutions, implementation of the payment acceptance solutions and post-sale client relationship International Transaction Solutions. Our solutions combine payment processing, mobile commerce, online shopping cart tools, web site design, web hosting and web related services which enable businesses to establish a presence and commercial capability on the Internet in a quick and simple fashion. PayOnline Platform – We have developed the PayOnline Platform, a proprietary technology platform serving large and fast-growing internet-led multinationals with complex payment needs, supported by our vertical expertise. Our reliable and secure proprietary technology platform enables merchants to accept a vast array of payment types, across multiple channels, anywhere in the world. Utilizing PayOnline Platform, we have built universal flexible payment solution adapted for websites and mobile applications. The solution includes: ● Personal Client Area: web-interface for clients to control and manage payments. ● Adaptive payment form with the possibility of customization. ● Simple payment process: binding card to account, moment payments, recurrent payments, temporary blocking of payment, reserving of payments, invoicing by e-mail. ● Customization of protocol 3-D Secure for client's business needs. ● Ability to customize the default settings of anti-fraud system. ● Integrations with various Global Distribution Systems (“GDS”) such as Amadeus®, Galileo®, Sabre®, additional geo filters and passenger name record (PNR). ● Integrations with Apple iOS, Android and Microsoft mobile platforms for mobile application. 18 Table of Contents Payments from Start to Finish. PayOnline Platform reduces the payment integration time for merchants, banks and SaaS providers to just a few minutes with its PayOnline Application Program Interface (“API”) service. Easy, easier, easiest: PayOnline integration service simplifies complex payment integration when using APIs and makes the laborious task of adapting payment processes obsolete. Complete Toolkit for Online Business. More than 20 integration modules for the world's most popular CMS (Content Management System) are available for clients with sites created on basis of CMS. A complete, modular system of web-based services gives our merchants the flexibility to add more options as and when required - without costly or lengthy IT projects. International Transaction Solutions Competition. International Transaction Solutions segment primarily competes with other companies operating in the online payment processing market in emerging markets. In our key geographical market – Russian Federation, we compete primarily with the acquiring banks and payment processors (including payment aggregators). We cannot compete with acquiring banks or payment processors on pricing. Our major advantages relate to our robust, payment processor agnostic solution that simplifies complex enterprise online payment processing challenges from payment acceptance and processing through to risk prevention and payment security via tokenization solutions. Our competitive advantages include: ● Suite of individually tailored e-commerce solutions ● Payment conversion management ● Seamless client payment acceptance implementation ● Quick development and implementation of custom payment acceptance solutions ● Multiple integrated payment acceptance methods ● Wide geography of payment acceptance with a single integration ● More than 120 currencies accepted worldwide ● Proprietary Anti-Fraud System International Transaction Solutions Industry Mix. We have developed significant expertise in industries that we believe present opportunities for growth. These include: ● Internet stores ● Professional service providers ● Travel services ● Telecommunications ● Social media networks ● Financial services ● Utilities and government services ● Digital content providers Background The following table reflects the percentage concentration of our merchant base by class:     2018     2017   Internet Stores   46.0 %   36.8 % Professional Service   10.0 %   23.0 % Travel Services   6.0 %   17.2 % Telecommunications   13.0 %   12.0 % Social Media Networks   - %   3.3 % Financial Services   - %   1.1 % Utilities and Government Services   - %   0.4 % Digital content providers   3.0 %   3.4 % Other   22.0 %   2.8 % 19 Table of Contents International Transaction Solutions Risk Management. In the emerging markets, we focus our sales efforts on electronic commerce merchants and have developed systems and procedures designed to minimize our exposure to potential merchant losses and provide our merchants with cross-border payment acceptance. Effective risk management helps us minimize merchant losses for the mutual benefit of our merchants and ourselves. Our Anti-Fraud System allows us to identify and prevent up to 99.9% of potential fraud related to bankcard processing in the electronic commerce environment. Our Underwriting and Risk Management Policy and procedures help to protect us from fraud perpetrated by our merchants. 150 different fraud filters allow our clients to maintain high level or payment conversion, averaging at 99.2%, while maintaining chargeback related losses as low as .0002 (or 0.023%). Our risk management is conducted in both manual and automatic modes. Manual Risk Management involves specialists of our Underwriting and Risk Management Department, who are responsible for the following: ● Analysis of risks and underwriting of our partners, i.e. acquiring banks, financial companies and payment processors ● Analysis of potential risks and underwriting of our potential clients, i.e. merchants accepting payments over internet ● Manual validation of disputed payments ● Advising of our potential and current clients on how to correctly setup up fraud monitoring methods and tools ● Future development of our fraud monitoring and prevention systems, based on the client needs and recent trends in e-commerce and m-commerce marketplace and regulations PayOnline Anti-Fraud System is our proprietary Fully Automated Risk Management system. The system is based on the latest know-how of the informational and financial security aspects of the payment processing industry, as well as rules and recommendations of Visa and MasterCard on fraud prevention in electronic commerce. Major components of PayOnline Anti-Fraud System include but are not limited to: ● Advance monitoring of the bank card transaction in automated mode, using 150 filters, individually tuned for each client, where each transaction is evaluated by key parameters, such as country where bank card is issued, country from where the payment is requested, amount of payment, amount of all payments by this card in the past 24 hours/month, IP address, etc. ● Additional validation of the bankcard by using 3-D Secure protocol or validation by charging random amount on the card. ● Monitoring of the transactions by specialists of the Underwriting and Risk Management Department. Online Solutions Licensing and Certifications. In order to perform services at the highest level of safety and quality of service, PayOnline holds various industry certifications and licenses. ● PCI DSS Level 1 – PayOnline is certified to Payment Card Industry Data Security Standard (“PCI DSS”) Level 1 standard version 3.2 PCI DSS. Certificate received by PayOnline March 2, 2018, allows the company to process online payment transactions. During 2018, PayOnline was certified to PCI DSS Level 1 version 3.1, as of March 8, 2018. ● SDP / CISP – PayOnline has passed international certification by Visa and MasterCard and is involved in MasterCard Site Data Protection (“SDP”) program and the Visa Cardholder Information Security Program (“CISP”). ● MasterCard – Since 2009, PayOnline is accredited as the official international Service Provider of MasterCard Worldwide, participates in the MasterCard SDP program and, in addition, has the status of MasterCard DataStorage Entity. ● Visa –Since 2009, PayOnline is accredited as the official Service Provider of Visa International payment system, participates in the Visa CISP program and holds the status of Visa Third Party Processor (“TPP”). ● Cryptographic Transport Layer Security (“TLS”) Protocol – Data exchange between the enterprise e-commerce and PayOnline is made via secure channels, using the HTTPS protocol. TLS cryptographic protocol uses asymmetric cryptography for authentication, symmetric encryption for confidentiality and authenticity of the message codes to preserve the integrity of messages. ● Qualys – PayOnline regularly passes ASV-scan procedure (automated external security audit) provided by Qualys in accordance with the requirements of international payment systems to companies with certified PCI DSS. Approximately 50 companies from the Forbes Global 100 list use Qualys to secure their business. 20 Table of Contents International Transaction Solutions Sponsoring Banks and Data Processors. Because we are not a “member bank” or a licensed financial services institution as defined by Visa, MasterCard, American Express and Discover (“Card Brands”), in order to authorize and settle payment transactions for merchants, we must be partner with a financial institution that holds member bank status with the Card Brands (“Partner Bank”) and various third-party vendors (“Data Processors”) to assist us with these functions. Card Brand rules restrict us from performing funds settlement or accessing merchant settlement funds and require that these funds be in the possession of a Partner Bank until the merchant is funded. Partner Banks. Since 2008, PayOnline has been working to increase the number of partnership agreements and platform integrations with different banks, financial institutions and payment processors. Our worldwide expansion requires a broader range of regions and currencies covered by such partnership agreements, enabling us to provide international payment processing. Our key partnerships and integrations in the Russian Federation include: ● Bank of Moscow ● QIWI Bank ● VTB Bank ● WebMoney ● Round Bank ● Absolutbank ● Raiffesenbank ● Yandex.Money ● SDM Bank Our key international partnerships and integrations include: ● Latvijas Pasta Banka ● Kyrgyzkommertsbank ● Rietumu Bank ● Paysafe ● Wirecard Bank ● Authorize.net ● Kazkommertsbank ● Skrill ● Kazkommertsbank Tajikistan ● PayPal  ● Poynt ● Paya ● TSYS ● Esquire Bank ● Experian ● Docusign ● Clover ● Cardflight ● HP ● Pax As an example of processing an electronic payment, the below diagram illustrates the participants involved in a payment transaction. There are four main participants, the Merchant, the Service Provider (PayOnline), the Partner Bank and the Data Processor (PayOnline). Merchants are primarily business owners that accept credit card payment in exchange for their merchandise and services. 21 Table of Contents Research and Development We recognize the importance of having access to the leading technology in order to develop advanced products for our customers, independent sales agents, consumers and for our own internal use. To this end, development of our products is conducted in-house. We are maintaining three development centers and four development teams of IT architects, quality assurance professionals and software developers. We support mobile platforms including Apple® iOS, Android®, and Windows®. We also support server-side software development for Java, ASP.NET, and PHP platforms. We also provide user experience (UX) and user interface (UI) engineering and system administration dedicated to financial services and value-added technology businesses. Our IT development center is headquartered in North Miami Beach, Florida (U.S.), where we employ a Chief Technology Officer (“CTO”) and POS products Testing & Development Engineer. Our Moscow (Russia) IT development center employs two technical directors, managing the PayOnline platform development teams. Our representative office in Yekaterinburg (Russia) employs two team leaders managing Netevia and our value-added services development teams. Intellectual Property We have several trademarks and service marks, which are important to our business. The following trademarks and service marks are the subject of trademark registrations and are used in our financial services business: ● Net Element ● Restoactive ● Unified Payments ● TOT ● PayOnline ● Netevia ● Payonline.ru ● Aptito ● Digital Provider ●  Team Unified We regard our software as proprietary and attempt to protect it, where applicable, with copyrights, trade secret measures and non-disclosure agreements. Despite these protections, it may be possible for competition or users to copy aspects of our intellectual property or to obtain information that we regard as trade secrets. Existing copyright laws afford only limited practical protection for computer software. The laws of foreign countries generally do not protect our proprietary rights in our products to the same extent as the laws of the United States. In addition, we may experience more difficulty in enforcing our proprietary rights in certain foreign jurisdictions. Employees Our total number of staff as of December 31, 2018 was 88 full-time employees. The staff North American Transaction Solutions segment includes 71 employees, of which 27 work for Net Element Software located in Yekaterinburg, Russia and for International Transaction Solutions, Moscow, Russia we had 17 employees. Corporate History Our Company was originally formed inon April 20, 2010 andas a blank check company incorporated as a Cayman Islands exempted company with limited liability undercompany. On October 2, 2012, the name Cazador Acquisition Corporation Ltd. (“Cazador”). Cazador was a blank check company incorporated for the purpose of effecting a merger; share capital exchange; asset acquisition; share purchase; reorganization or similar business combination with one or more operating businesses or assets. In 2012, CazadorCompany completed a merger (the “Merger”) with Net Element, Inc. changing its jurisdiction of incorporation to Delaware. On November 5, 2021, we closed a merger (as described below) with Mullen Technologies, which was formed in 2018. We are a Southern California-based electric vehicle company that operates in various verticals of businesses focused within the automotive industry. On November 5, 2021, we closed a merger pursuant to a Second Amended and Restated Agreement and Plan of Merger dated July 20, 2021, and as amended by a First Amendment dated August 18, 2021 (together, the “Merger Agreement”), with Mullen Technologies, Inc., a DelawareCalifornia corporation (“Mullen Technologies”), Mullen Acquisition, Inc., a California corporation and wholly-owned subsidiary of the Company (“Merger Sub”), and Mullen Automotive, Inc., a California corporation (“Mullen Automotive-California”) and a wholly-owned subsidiary of Mullen Technologies, providing for the merger of Merger Sub with and into the Mullen Automotive (the “Merger”), with Mullen Automotive-California, which waschanged its name to “Ottava Automotive Inc.”,  surviving the Merger as a company with businesses inwholly-owned subsidiary of the online mediaCompany. The Company also changed its name from “Net Element, Inc.” to “Mullen Automotive Inc.” and mobile commerce payment processing markets. Immediately priorThe Nasdaq Stock Market, LLC (Nasdaq Capital Market) ticker symbol for the Company’s Common Stock changed from “NETE” to “MULN” at the effectivenessopening of trading on November 5, 2021. The new CUSIP number of the Common Stock is 62526P 109. Pursuant to the Merger, the Company (then knownissued, or reserved for future issuance pursuant to outstanding warrants, an aggregate of 43,971,895 shares, which represented 85% of the combined company. The Merger was accounted for as Cazador)a reverse merger transaction, in which Mullen Automotive-California is treated as the acquirer for financial accounting purposes.   For more information on the Merger, see “The Merger and Related Transactions” on page 15 of this Annual Report. In connection with the Merger Agreement, and as disclosed in our Current Report on Form 8-K filed with the Securities and Exchange Commission (the “SEC”)  on November 12, 2021, our fiscal year end has changed its jurisdictionfrom December 31 to September 30, effective for our fiscal year ended September 30, 2021. As a result, and unless otherwise indicated, references to our fiscal year 2021 and prior years mean the fiscal year ended on September 30 of incorporation by discontinuing as an exemptedsuch year. The Company Mullen Automotive Inc. operates a Southern California-based electric vehicle company that operates in various verticals of businesses focused within the automotive industry. The Company has two electric vehicles under development, one of which we expect to begin delivery of in the Cayman Islandssecond quarter of 2024. Mullen has several divisions that operate synergistic businesses, being: CarHub, a digital platform that leverages artificial intelligence to offer an interactive solution for buying, selling and continuingowning a car, and domesticating asMullen Energy, a corporation incorporateddivision focused on advancing battery technology and emergency point-of-care solutions. Company Overview Our Strength and Strategy ● Experienced and proven team in the Electric Vehicle (“EV”) space. Our executive team has extensive experience in the automotive original equipment manufacturing ("OEM") space. They have a detailed understanding of the product development cycle from blank sheet to post launch activities in both the high and low volume segments – knowing the different economies of scale which is vital to creating a high-quality 6 Table of Contents profitable product. The team brings expertise in studio design, engineering, manufacturing, energy storage systems, market analysis, corporate development, strategic planning and investment strategies. ● Design. Our platform architecture creates the opportunity for vehicles with unique aspect ratios - low roof line, wide track width, svelte body, and a long wheelbase. The vehicle will be a top safety plus pick and will have a five-star crash rating. To achieve this target, we will use next generation ultra-high strength steel alloys. The entire structure will use mixed materials. ● Unique plan. Our approach is speed-to-market with lower capital investment requirements compared to other startup EV companies. Our plan includes launch the Mullen FIVE Crossover in 36 months from program start (with start of production in Q4 of 2024), while keeping expenditures low by utilizing strategic partnerships in engineering and manufacturing, while implementing rigorous spending controls and traceability to mitigate extraneous spending. For our initial launch we will use state-of-the-art Li-Ion technology, but we believe that our future battery technology will eventually allow us to deliver our high voltage batteries under $100 per kWh at over two times the lawsenergy density of current commercially available lithium batteries. We anticipate the batteries used in our cars will be able to withstand extreme abuse testing, which we believe should make them safer than other commercially available lithium batteries. We plan to utilize a more environmentally sustainable chemistry that does not have a high content of rare precious materials. Our Market Opportunity Sustainable vehicles are the future of transportation In the last few years, we have observed a significant transformation in the motor vehicle landscape. Electric cars, which were once only a fringe element in a market dominated by major global automakers, are quickly becoming mainstream. Along with Tesla, which has been public since 2010, many major automakers are transitioning towards electric models. Joining them, our company and several other start-ups are developing EV offerings. In our view, this trend is driven by several factors. A rising environmental consciousness is encouraging customers to weigh their emission footprint. As a zero-emission alternative to traditional internal combustion engine (“ICE”) options, an EV that can match or exceed an ICE in performance is a natural choice. Assisting with that choice, local and national governments are offering various forms of rebates and credits for the purchase of an EV and have otherwise begun to support the rise of e-mobility by accelerating the push for zero emission vehicles due to increased awareness of the Stateimpacts of Delaware. Effective upon consummationglobal warming. As EV sales grow, parts volume is expected to grow in tandem, allowing automakers to purchase parts at a lower cost and further accelerating the switch to EVs. Lastly, the continuing improvement in battery technology, 7 Table of Contents continuing build-out of electric charging infrastructure, and the growing comfort with EV range capabilities could ease “range anxiety” and facilitate adoption. Source: Derived from data in Bloomberg Electric Vehicle Outlook 2020 The rise of the Merger, (i) Net Element, Inc. was merged withSports Utility Vehicle When designing our first EV offering, our team elected to develop a Sport Utility Vehicle (“SUV”) because of the recognized growth in SUV sales. According to market research, today’s customers increasingly prefer SUVs to traditional sedans or crossovers. According to JATO, an automotive market research firm, 2018 SUV sales globally, in the United States and the European Union were 29.8 million, 7.8 million and 5.4 million vehicles, respectively. According to Research Nester, a strategic market research and consulting firm, the global SUV market is forecasted to be 53.2 million SUVs in 2027. Our Vehicles Our initial entry into the Company, resulting in Net Element ceasing to existEV and the Company continuing as the surviving company in the Merger,Crossover market will be designed, engineered, and (ii) the Company changed its name to Net Element International, Inc. In 2013, the Company divested its non-core entertainment assets. In December 2013, the Company changed its name to Net Element, Inc. We entered the mobile payments business through the launch of Tot Money (renamed Digital Provider in 2015) in Russia in 2012. We entered the financial technology and value-added transactional service business through the acquisitions of Unified Payments in April 2013 and Aptito in June 2013. We entered the online payment business with our acquisition of PayOnline in May 2015. During 2017, Digital Provider's operations were combined into PayOnline.   Our principal office is located at 3363 NE 163 rd Street, Suite 705, North Miami Beach, Florida 33160, and our main telephone number is (305) 507-8808. 22 Table of Contents Regulations Various aspects of our business are subject to U.S. and non-U.S. federal, state and local regulation. The operations of PayOnline, are subject to regulation in non-U.S. markets it operates in and may become subject to the laws and regulations of additional foreign jurisdictions as and when its business expands into additional markets. Many domestic and foreign laws and regulations that affect companies conducting business on the Internet and companies transmitting user information and payments via text message or other electronic means are still evolving and the interpretation of such laws and regulations are often uncertain. Failure to comply with applicable laws and regulations may result in the suspension or revocation of licenses or registrations, the limitation, suspension or termination of services and/or the imposition of civil and criminal penalties and/or fines. The services of PayOnline to mobile phone carriers also are subject to certain of the rules and policies of such carriers and ongoing contractual covenants with such carriers, the violation of which may result in penalties and/or fines and possible termination of PayOnline's services. Certain of our services are also subject to rules set by various payment networks, such as Visa and MasterCard, as more fully described below under "Association and Network Rules". Association and Network Rules. While not legal or governmental regulation, we are subject to the network rules of Visa, MasterCard and other payment networks. In order to provide processing services, a number of our subsidiaries are registered with Visa and/or MasterCard as service providers for member institutions. Various subsidiaries of ours are also processor level members of numerous networks or are otherwise subject to various network rules in connection with processing services and other services we provide. As such, we are subject to applicable card association, networks and national scheme rules that could subject us to fines or penalties. The payment networks routinely update and modify their requirements. On occasion, we receive notices of non-compliance and fines, which might be related to excessive chargebacks by a merchant or data security failures. Our failure to comply with the networks' requirements or to pay the fines they impose could cause the termination of our registration and require us to stop providing payment services. Dodd-Frank Act. In July 2010, the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 was signed into lawmanufactured in the United States. The Dodd-Frank Act has resultedOur business model for entry into the EV market consists of core tenets that include speed-to-market (36 months), efficient use of funds and investments, experienced leadership and engineering, designed to US market needs, and complemented with a portfolio of competitively priced vehicles (multiple vehicles on one platforms) in significant structuralthe fast-growing ESUV segment. We expect our products and other changesservices will include the following: ● Mullen FIVE: The Mullen FIVE represents Mullen Automotive’s entry into the full-electric, mid-size luxury SUV market. The Mullen FIVE is competitively priced starting at $55,000 - for the United States market before federal and state incentives are applied. Offering at least two optional packages, with a price range from a base price of $55,000 to $75,000 (for additional features), will allow customers to purchase a vehicle with options that best fit their budgetary and performance needs. Product validation is expected to begin in the 4th quarter of 2023 with the first sellable vehicles available in the fourth quarter of 2024. ● The Mullen FIVE is expected to deliver an electric range up to 325 miles. We intend to focus more on efficiency rather than extreme performance. We expect to achieve this by optimizing battery capacity, vehicle aerodynamics, rolling inertia, and software controls. 8 Table of Contents Our Growth Strategy We intend to leverage the regulationfollowing growth strategies to drive stakeholder value: ● Continue to develop the Mullen FIVE. We intend to continue to invest in research and development and work on establishing partnerships that would enable us to commence customer deliveries of the vehicle model named the Mullen FIVE as early as fourth quarter of 2024. As part of this plan, we expect to begin building prototype Mullen FIVEs in 2022. ● Develop additional high value, sustainable EV models. We believe the combination of our design expertise, along with the expected power and versatility of a new platform, will enable us to efficiently achieve our goal of providing a fleet of high value, sustainable EVs. We intend to utilize one or more platforms over time to develop additional vehicles to complement the Mullen FIVE. Our Manufacturing Approach We have recently purchased a 124,700 sq ft facility located in Tunica, Mississippi. This property will be the site for both advanced manufacturing engineering center and vehicle production. This location will allow the development team to prove out our flexible manufacturing technologies and product design capability (e.g., strategic use of off-the-shelf components combined with in house developed critical components and software), while affording us the opportunity to customize and innovate our manufacturing processes and optimize our product design with simultaneous engineering efforts, thereby serving as Mullen’s Advanced Manufacturing Engineering Center (“AMEC”). In support of the financial services industry. Among other things,speed-to-market strategy, building a full-scale production facility is a significant milestone for our vehicle development and manufacturing teams. Building a production facility includes expansion of the Dodd-Frank Act established the Consumer Financial Protection Bureau, or CFPB, to regulate consumer financial services, including many offeredexisting 124,700 sq ft by our clients. The Dodd-Frank Act provided two self-executing statutory provisions limiting the ability of payment card networks to impose certain restrictions that became effective in July 2010. The first provision allows merchants to set minimum dollar amounts (not to exceed $10)an additional 1.2M sq ft; designing assembly lines (Body, Paint, General, and Offline); and preparing for the acceptancecomplexities of the manufacturing processes, while ensuring flexibility for critical changes. This plan includes utilizing existing assets that are currently in place for initial validation, and in parallel, begin efforts to design, develop, build, and equip the facility to support our planned production for Mullen FIVE and all other upcoming vehicles. We are currently in negotiations with several manufacturing integration companies that will assist in all aspects of design and development of the facility with completion by Q1 of 2024. The final constructed facility will be the location for testing functional vehicle prototypes as well a credit card (and allows federal governmental entitieshigh-volume production assembly plant. 9 Table of Contents Marketing and institutionsBrand Awareness We plan to hire several key agencies to draw, solidify and execute our marketing plan, coexisting and succeeding across different consumer verticals: Social, Influencer, Search, Online, Podcast, TV, Print and Radio. We will also utilize strategic regional and national tradeshows, sporting and automotive events to showcase our vehicles in person and generate further interest, reservations and vehicle orders. We also intend to increase our online focus in 2023 to include online vehicle ordering, allowing customers full online vehicle purchase, with trade-in quote, financing and insurance options. Customer delivery is planned to be scheduled for “Mullen At Home” delivery or delivered to closest Mullen Lounge Point location, as described below. Extended Warranty and Insurance We intend to use a combination of higher educationthird-party extended warranty, insurance and self-warranty and self-insurance mechanisms, potentially including (if financially feasible and in compliance with regulatory requirements) a wholly owned captive insurance subsidiary to set maximum amountsprovide for the acceptanceinsurance against certain risks, including auto liability and physical damage, general liability and products liability. We are also planning to offer both financing and insurance of credit cards). The second provision allows merchantsour vehicles. We believe we can reduce the total cost of ownership (“TCO”) for our customers and potentially generate additional sources of revenue by providing both financing and insurance for our vehicles. We plan to provide discountskeep introducing new customer programs and services to further define the Mullen customer experience. As described elsewhere in this Annual Report, we also plan to keep our lean sales, lease, and service model in order to be able to continue to offer great value to our customers regardless of the segment Mullen enters. Direct Sales and Service We are planning on launching with a direct sales model where we are the direct seller and servicer of our vehicles to consumers. This model is planned to be applied in states where direct sales models are legal and not challenged by typical franchise laws written for automotive franchise dealers. Mullen Lounge Point Lounge Point is expected to be the retail center experience for our retail sales network in North America and is planned to feature full vehicle sales interaction: including test drives, reservations, orders, trade-in, finance, insurance and delivery. 10 Table of Contents Our approach is planned to be focused on superior consumer experience, in an easily accessible retail environment with a no pressure sales approach. Our focus will be on delivering a premium vehicle experience while fitting nicely into everyday consumer life. Overall, the intention is to build vehicle sales opportunities upon awareness and involvement in customer communities. It is expected that our initial set of retail Lounge Points will be established in high foot traffic centers where consumers visit daily and not off on a distance dealer row. This could be Main Street, outdoor based malls, entertainment complexes, commuter hubs and weekend leisure destinations. Mullen Service Point and Mobile Service It’s envisioned that Mullen Service Points will be established in close proximity to our planned retail sales Lounge Points, but not directly in the same location. Our sales and service locations are expected to serve different customer opportunities, and require drastically different layouts and square footage requirements. Establishing Service Points away from sales lowers our square footage cost and is expected to allow us to focus entirely on the customer in front of us. It is expected that Mullen Service Points will be outfitted with the latest tools and repair service technology to efficiently service our vehicles. We also envisions offering vehicle collision repair and detailing services. We also envision operating a mobile fleet of service vehicles that will be available on demand for offsite vehicle repair and service. It is expected that our mobile service technicians will be able to address and resolve most vehicle repairs while at the customer home or incentivesplace of work. It is expected that over-the-air (“OTA”) software updates and repairs will be made available to entice consumersour vehicles via Wi-Fi or cellular connection. We believe we will be able to payaddress specific vehicle alerts, allowing us to diagnosis and possibly fix the vehicle remotely, depending on the problem. It is also expected that general software updates will be conducted OTA as well. In general, OTA repairs and updates require less service visits for customers and better overall customer experience. Research and Development As an emerging automaker, we will rely heavily on research and development to establish and strengthen our market position. We will primarily conduct our research and development activities at our headquarters in Brea, California, and at our partners’ facilities with cash, checks, debit cards or credit cards,the majority of the activities focused on the research and development of our EVs and software technology platforms. During the fiscal year ended September 30, 2021, we incurred research and development 11 Table of Contents expense of $3.0 million, which includes the development of 2 Mullen Five show cars that were debuted at the Los Angeles Auto Show in November 2021. We will strive to undertake significant testing and validation of our products in order to ensure that we meet the demands of our customers. Intellectual Property Our success depends in part upon our ability to protect our core technology and intellectual property. We attempt to protect our intellectual property rights, both in the United States and abroad, through a combination of patent, trademark, copyright and trade secret laws, as well as nondisclosure and invention assignment agreements with our consultants and employees, and we seek to control access to and distribution of our proprietary information through non-disclosure agreements with our vendors and business partners. Trademarks We have developed and use trademarks in our business, particularly relating to our corporate and product names. We own 7 trademarks that are registered with the merchant prefers.United States Patent and Trademark Office, plus 42 trademarks registered across the foreign jurisdictions of China, the EU, Hong Kong, Israel, Mexico, South Korea, and Singapore. Separately,We plan to file additional applications for the so-called Durbin Amendment to the Dodd-Frank Act provided that interchange fees that a card issuer or payment network receives or charges for debit transactions will now be regulated by the Federal Reserveregistration of our trademarks in foreign jurisdictions as our business expands under current and must be "reasonable and proportional" to the cost incurred by the card issuerplanned distribution arrangements. Protection of registered trademarks in authorizing, clearing and settling the transaction. Payment network fees, such as switch feessome jurisdictions may not be used directlyas extensive as the protection provided by registration in the United States. The following tables summarize information regarding our patents and patent applications. There are no assurances given that the pending applications will be granted or indirectly to compensate card issuers in circumventionthat they will, if granted, contain all of the interchange transaction fee restrictions. In July 2011,claims currently included in the Federal Reserve publishedapplications. Patents. We have 5 patents issued in the final rules governing debit interchange fees. EffectiveUnited States, and 7 patents pending. At foreign patent offices, we have 7 patents issued and 117 patents pending. Trade Secrets. We own certain intellectual property, including trade secrets, which we seek to protect, in October 2011, debit interchange ratespart, through confidentiality agreements with employees and other parties. Even where these agreements exist, there can be no assurance that these agreements will not be breached, that we would have adequate remedies for card issuing financial institutions with more than $10 billionany breach, or that our trade secrets will not otherwise become known to or independently developed by competitors. We intend to protect our legal rights concerning intellectual property by all appropriate legal action. Consequently, we may become involved from time to time in litigation to determine the enforceability, scope, and validity of assets are capped at $0.21 per transaction with an additional component of five basis pointsany of the transaction's value to reflect a portion of the issuer's fraud losses plus, for qualifying issuing financial institutions, an additional $0.01 per transaction in debit interchange for fraud prevention costs. The debit interchange fee would be $0.24 per transaction on a $38 debit card transaction, the average transaction size for debit card transactions. In July 2013, the U.S. District Court for the District of Columbia determined that the Federal Reserve's regulations implementing the Durbin Amendment were invalid. The U.S. Court of Appeals for the District of Columbia, or D.C. Circuit, reversed this decision on March 21, 2014, generally upholding the Federal Reserve's interpretation of the Durbin Amendment and the Federal Reserve's rules implementing it. On August 18, 2014, the plaintiffs in thisforegoing proprietary rights. Any patent litigation filed a petition for a writ of certiorari asking the U.S. Supreme Court to review the D.C. Circuit's decision with respect to the interchange fee cap. We continue to monitor developments in the litigation surrounding these rules. Regardless of the outcome of the litigation, the cap on interchange fees is not expected to have a material direct impact on our results of operations. In addition, the new rules contain prohibitions on network exclusivity and merchant routing restrictions. Beginning in October 2011, (i) a card payment network may not prohibit a card issuer from contracting with any other card payment network for the processing of electronic debit transactions involving the issuer's debit cards and (ii) card issuing financial institutions and card payment networks may not inhibit the ability of merchants to direct the routing of debit card transactions over any card payment networks that can process the transactions. Since April 2012, most debit card issuers have been required to enable at least two unaffiliated card payment networks on each debit card. We do not expect the prohibition on network exclusivity to impact our ability to pass on network fees and other costs to our clients. These regulatory changes create both opportunities and challenges for us. Increased regulation may add to the complexity of operating a payment processing business, creating an opportunity for larger competitors to differentiate themselves both in product capabilities and service delivery. Federal Trade Commission Act and Other Laws Impacting our Customers' Business. All persons engaged in commerce, including, but not limited to, us and our merchant and financial institution customers are subject to Section 5 of the Federal Trade Commission Act prohibiting unfair or deceptive acts or practices, or UDAP. In addition, there are other laws, rules and or regulations, including the Telemarketing Sales Act, that may directly impact the activities of our merchant customers and in some cases may subject us, as the merchant's payment processor, to investigations, fees, fines and disgorgement of funds in the event we are deemed to have aided and abetted or otherwise provided the means and instrumentalities to facilitate the illegal activities of the merchant through our payment processing services. Various federal and state regulatory enforcement agencies including the Federal Trade Commission, or FTC, and the states' attorney general have authority to take action against nonbanks that engage in UDAP or violate other laws, rules and regulations and to the extent we are processing payments for a merchant that may be in violation of laws, rules and regulations, we may be subject to enforcement actions and as a result may incur losses and liabilities that may impact our business. Anti-Money Laundering and Counter Terrorist Regulation. We are also subject to U.S. federal anti-money laundering laws and regulations, including the Bank Secrecy Act, as amended by the USA PATRIOT Act of 2001 (collectively, the BSA). The BSA requires, among other things, that money services businesses to develop and implement risk-based anti-money laundering programs, report large cash transactions and suspicious activity and maintain transaction records 23 Table of Contents We are additionally subject to economic and trade sanctions programs administered by the Treasury Department’s Office of Foreign Assets Control, or OFAC. These programs prohibit or restrict transactions to or from or dealings with specified countries, their governments and, in certain circumstances, their nationals, narcotics traffickers, and terrorists or terrorist organizations. We are also subject to other countries’ laws, where applicable, regarding anti-money laundering, counter terrorist financing and proceeds of crime. Privacy. Our financial institution clients are required to comply with privacy regulations imposed under the Gramm-Leach-Bliley Act. These regulations place restrictions on the use of non-public personal information. All financial institutions must disclose detailed privacy policies to their customers and offer them the opportunity to direct the financial institution not to share information with third parties. The regulations, however, permit financial institutions to share information with non-affiliated parties who perform services for the financial institutions. We believe that our company’s present activities fall under exceptions to the consumer notice and opt-out requirements in this law for third-party service providers to financial institutions. However, the laws governing privacy generally remain unsettled. We will update our policies and procedures, where relevant, should it be determined that our activities do not fall within exceptions to Gramm-Leach-Bliley Act requirements. Our businesses operating outside of the U.S. may be subject to other legal requirements concerning the use and protection of certain customer information. Anti-Corruption. We are subject to applicable anti-corruption laws, such as the U.S. Foreign Corrupt Practices Act, in the jurisdictions in which we operate. Anti-corruption laws generally prohibit offering, promising, giving, or authorizing others to give anything of value, either directly or indirectly, to a government official or private party in order to influence official action or otherwise gain an unfair business advantage Anti-Boycott. We are required to comply with U.S. anti-boycott regulations. U.S. law prohibits cooperation with any “illegal boycott request,” which includes a request from a third party to take certain actions against countries friendly to the U.S. These prohibited actions include, but are not limited to, refusal to do business with or in countries friendly to the U.S., or with other persons or entities that do business in or with countries friendly to the U.S.; furnishing information about business relationships with or in countries friendly to the U.S.; and executing business documents such as contracts, letters of credit, warranties that contain illegal boycott requests. Other Laws and Regulations Since we collect certain information from members and users on our platform, we will be subject to current and future government regulations regarding the collection, use and safeguarding of consumer information over the Internet and mobile communication devices. These regulations and laws may involve taxation, tariffs, user privacy, rights of publicity, data protection, content, intellectual property, distribution, electronic contracts and other communications, consumer protection and electronic payment services. In many cases, it may be unclear how existing laws governing issues such as property ownership, sales and other taxes, libel and personal privacy apply to the Internet or mobile communication services as the vast majority of these laws were adopted prior to the advent of these technologies and do not contemplate or address the unique issues raised by the Internet and e-commerce. There are a number of legislative proposals that are anticipated or pending before the U.S. Congress, various state legislative bodies, and foreign governments concerning data protection which could affect us. Many states, for example, have already passed laws requiring notification to subscribers when there is a security breach of personal data. It is possible that these laws may be interpreted and applied in a manner that is inconsistent with our data practices. If so, in addition to the possibility of fines, this could result in an order requiring that we change our data practices, which could have an adverse effect on our business. In addition, some states are interpreting their own statutes differently than federal law. This may create additional compliance burdens.substantial cost and divert the efforts of management and technical personnel. Government Regulation and Credits We areoperate in an industry that is subject to foreign laws and regulations that affect the electronic payments industry in each of the foreign countries inextensive environmental regulation, which we operate. Some of these countries, such as the Russian Federation and the United Kingdom, have undergone significant political, economic and social change in recent years. In these countries, there is a greater risk of new, unforeseen changes that could result from, among other things, instability or changes in a country’s or region’s economic conditions; changes in laws or regulations or in the interpretation of existing laws or regulations, whether caused by a change in government or otherwise; increased difficulty of conducting business in a country or region due to actual or potential political or military conflict; or action by the European Union or the United States, Canada or other governments that may restrict our ability to transact business in a foreign country or with certain foreign individuals or entities, such as sanctions by or against the Russian Federation. Legislation could be passed that limits our ability to use or store information about our users.has become more stringent over time. The Federal Trade Commission (the "FTC") and various states have established regulatory guidelines issued under the Federal Trade Commission Act and various state acts, respectively, that govern the collection, use and storage of consumer information, establishing principles relating to notice, consent, access and data integrity and security. Our practices are designed to comply with these guidelines. For example, we disclose that we collect a range of information about our users, such as their names, email addresses, search histories and activity on our platform. We also use and store such information primarily to personalize the experience on our platforms, provide customer support and display relevant advertising. While we do not sell or share personally identifiable information with third parties for direct marketing purposes, we do have relationships with third parties that may allow them access to user information for other purposes. The foregoing list of laws and regulations to which we are subject is not exhaustive,govern, among others, water use; air emissions; use of recycled materials; energy sources; the storage, handling, treatment, transportation and disposal of hazardous materials; the protection of the environment, natural resources and endangered species; and the regulatory framework governing our operations changes continuously. Enactmentremediation of newenvironmental contamination. Compliance with such laws and regulations may affectat an international, regional, national, provincial and local level is an important aspect of our operations, and could potentially result in increased regulatory compliance costs, litigation expense, adverse publicity, and/or loss of revenue. We believeability to continue our policies and practices comply withoperations. Environmental standards applicable to us are established by the FTC privacy guidelines and other applicable laws and regulations. However, if our belief proves incorrect, or if these guidelines, laws or regulations or their interpretations change or new legislation or regulations are enacted, we may be compelled to provide additional disclosures to our users, obtain additional consents from our users before collecting or using their information or implement new safeguards to help our users manage our (or others') use of their information, among other changes. 24 Table of Contents Rules and Policies of and Contractual Covenants with Mobile Phone Carriers. While not governmental regulation, PayOnline is subject to certain of the rules and policies of mobile phone carriers tocountries in which PayOnline provides payment processing services and ongoing contractual covenants with such mobile phone carriers. The mobile phone carriers may from time to time update or otherwise modify or supplement their rules and policies. PayOnline periodically is subject to the imposition of fines or penalties as a result of failure to comply with such rules, policies and/or contractual covenants. PayOnline’s failure to comply with the mobile phone carriers’ respective requirements or to pay the fines or penalties they impose could result in the termination of PayOnline’s services. Telematics Laws and Regulations in the Russian Federation. The relationships between PayOnline and telecommunications carriers in Russia are governedwe operate, including standards adopted by the general rules of civil law for the provision of services (Chapter 39 of the Civil Code of the Russian Federation). In addition, because the “information and entertainment services” (content services) provided by PayOnline are inextricably linked with the networks of telecommunications carriers, these services are subject to the requirements of the Rules of Mobile Communications Services Provision, approved by the Decree of the Russian Federation Government dated May 25, 2005 No. 328. These Rules govern the relationship between a customer using mobile communication services and a telecommunications carrier in respect of mobile radio communications services, mobile radiotelephone services and/or mobile satellite radio services in the public network. Although PayOnline is not a telecommunications carrier, many requirements of such Rules are present in PayOnline’s contracts with telecommunications carriers, and such contracts impose responsibility and liability on PayOnline for violations. PayOnline has a license for the provision of telematics services in Russia. PayOnline is considered an operator of telematics services in Russia because it has a direct connection to equipment of telecommunications carriers and it affects electronic communications (i.e., receiving, processing and/or transmitting electronic messages). Operators of telematics services in Russia are regulated by the Federal Law “On Communication” dated July 2, 2003 No. 126-FZ. This Federal Law provides the legal basis for activity in the field of communications in the Russian Federation and territories under the Russian Federation jurisdiction, defines the powers of public authorities in the field of communications,regulatory agencies as well as the rightspermits and responsibilitieslicenses required by such agencies. Each of persons involved in such activities or using communication services. PayOnline alsothese sources is subject to periodic modifications and we anticipate increasingly stringent requirements. Violations of these laws, regulations or permits and licenses may result in substantial civil and criminal fines, penalties, and possibly orders 12 Table of Contents to cease the Rulesviolating operations or to conduct or pay for corrective works. In some instances, violations may also result in the suspension or revocation of Telematics Services Provision approved bypermits and licenses. Emissions In the DecreeUnites States, Europe and China, there are vehicle emissions performance standards that may provide an opportunity for us to sell emissions credits. United States California has greenhouse gas emissions standards that closely follow the standards of the Russian Federation Government dated September 10, 2007 No. 575. These Rules governUnited States Environmental Protection Agency (the "EPA"). The registration and sale of Zero Emission Vehicles (“ZEVs”) in California will earn us ZEV credits that we can sell to other OEMs. Other states within the relationship between a customer or a user, onUnited States have adopted similar standards including Colorado, Connecticut, Maine, Maryland, Massachusetts, New Jersey, New York, Oregon, Rhode Island and Vermont. We intend to take advantage of these regimes by registering and selling ZEVs in these other states. ZEV credits in California are calculated under the one hand,ZEV Regulation and a telecommunications carrier providing telematics communication services, on the other hand,are paid in the provision of telematics communication services. relation to ZEVs sold and registered in California including Battery Electric Vehicles (“BEVs”) and Fuel Cell Electric Vehicles (“FCEVs”). The activityZEV program assigns ZEV credits to each vehicle manufacturer. Vehicle manufacturers are required to maintain ZEV credits equal to a set percentage of PayOnline to some extent is regulated by the Federal Law “On Operationalnon-electric vehicles sold and Investigative Activities” dated August 12, 1995 No. 144-FZ. This Federal Law determines the contentregistered in California. Each vehicle sold and registered in California earns a number of the operational and investigative activities in the Russian Federation, and provides for a system of guarantees in the process of operational and investigative operations. Operational and investigative activities include activities carried out openly and secretly by operational branches of certain government bodies in order to protect life, health, rights and freedoms of the person and the citizen, property, security of the society and the state from criminal attacks. In carrying out activities on the Internet in Russia, PayOnline is subject to the Federal Law “On Advertising” dated March 13, 2006 No. 38-FZ. The objectives of this Federal Law are the development of markets for goods and servicescredits based on the principles of fair competition, ensuringdrivetrain type and the common economic space in the Russian Federation, the realizationall-electric range (“AER”) of the rightsvehicle under the Urban Dynamometer Driving Schedule Test Cycle. Plug-in hybrid vehicles (“PHEVs”) receive between 0.4 and 1.3 credits per vehicle sold and registered in California. Battery electric and fuel cell vehicles receive between one and four credits per vehicle sold in California, based on range. The credit requirement was 7% in 2019 which required about 3% of consumerssales to receive fairbe ZEVs. The credit requirement will rise to 22% in 2025, which will require about 8% of sales to be ZEVs. If a vehicle manufacturer does not produce enough EVs to meet our quota, it can choose to buy credits from other manufacturers who do, or pay a $5,000 fine for each credit such manufacturer is short. This should provide an opportunity for us to sell credits to other manufacturers that may not have met their quota. EPA Emissions and accurate advertising, creating favorable conditionsCertificate of Conformity The United States Clean Air Act requires that we obtain a Certificate of Conformity issued by the EPA and a California Executive Order issued by the California Air Resources Board (“CARB”) concerning emissions for our vehicles. A Certificate of Conformity is required for vehicles sold in states covered by the Clean Air Act’s standards and an Executive Order is required for vehicles sold in states that have sought and received a waiver from the EPA to utilize California standards. CARB sets the California standards for emissions control for certain regulated pollutants for new vehicles and engines sold in California. States that have adopted the California standards as approved by EPA also recognize the Executive Order for sales of vehicles. There are currently four states which have adopted the California standard for heavy-duty vehicles. The Greenhouse Gas Rule was incorporated into the Clean Air Act on August 9, 2011. Even though Mullen’s vehicles have zero-emissions, Mullen is still required to seek an EPA Certificate of Conformity for the productionGreenhouse Gas Rule and distributiona CARB Executive Order for the CARB Greenhouse Gas Rule. Vehicle Safety and Testing Our vehicles will be subject to, and will be required to comply with, numerous regulatory requirements established by the National Highway Traffic Safety Administration (“NHTSA”), including applicable United States federal motor vehicle safety standards (“FMVSS”). We intend that the Mullen FIVE will fully comply with all applicable FMVSSs without the 13 Table of public service announcements, preventions of violations of the Russian Federation on advertising,Contents need for any exemptions and expect our future vehicles to either fully comply or comply with limited exemptions related to new technologies. Additionally, there are regulatory changes being considered for several FMVSS, and while we anticipate compliance, there is no assurance until final regulation changes are enacted. As a manufacturer, we must self-certify that our vehicles meet all applicable FMVSSs, as well as the suppressionNHTSA bumper standard, or otherwise are exempt, before the vehicles can be imported or sold in the U.S. Numerous FMVSSs will apply to our vehicles, such as crash-worthiness requirements, crash avoidance requirements and EV requirements. We will also be required to comply with other federal laws administered by the NHTSA, including the Corporate Average Fuel Economy (“CAFE") standards, Theft Prevention Act requirements, consumer information labeling requirements, Early Warning Reporting requirements regarding warranty claims, field reports, death and injury reports and foreign recalls and owner’s manual requirements. The Automobile Information and Disclosure Act requires manufacturers of improper advertising. PayOnline’s activities onmotor vehicles to disclose certain information regarding the Internet in Russia alsomanufacturer’s suggested retail price, optional equipment and pricing. In addition, this law allows inclusion of city and highway fuel economy ratings, as determined by the EPA, as well as crash test ratings as determined by the NHTSA if such tests are conducted. Our vehicles that may be sold outside of the United States are subject to similar foreign safety, environmental and other regulations. Many of those regulations are different from those applicable in the Federal Law “On ProtectionUnited States and may require redesign and/or retesting. The European Union has established new rules regarding additional compliance oversight that were scheduled to commence in 2020, and there is also regulatory uncertainty related to the United Kingdom’s withdrawal from the European Union. These changes could impact the rollout of Childrennew vehicle features in Europe. In addition to the various territorial legal requirements Mullen is obligated to meet, we plan to engineer the Mullen 5 to deliver 5-star performance in the two main voluntary vehicle safety performance assessment programs, United States New Car Assessment Program (“NCAP”) and Euro NCAP. Five-star is the maximum attainable score. These independent organizations have introduced a number of additional safety related tests aimed at improving the safety of passenger vehicles, both for occupants and pedestrians involved in collisions with vehicles. Some of these tests are derived from Information Harmfulthe legal tests, such as side impact, but have higher performance requirements. Others are unique to Health” datedthe program. Areas covered by these tests in 2020 include: ● Mobile Progressive Deformable Barrier ● Full Width Rigid Barrier ● Mobile Side Impact Barrier ● Side Pole ● Far Side Impact ● Whiplash ● Vulnerable Road Users (Pedestrians and Cyclists) ● Safety Assist ● Rescue and Extrication We intend that the Mullen FIVE will also be equipped with certain advanced driving assistance features which may allow us to garner further Euro NCAP awards for features which are not yet a formal part of the 5 Star rating. This will help promote the advanced societal benefits of the Mullen FIVE. 14 Table of Contents Exercise of Warrants by ESOUSA Holdings, LLC As previously reported, on December 29, 2010 No. 436-FZ. This Federal Law provides regulations protecting children2017, the Company entered into, and consummated the transactions contemplated by a Unit Purchase Agreement (the “Purchase Agreement”) with ESOUSA Holdings, LLC, a New York limited liability company (“ESOUSA”). Pursuant to the Purchase Agreement, on December 29, 2017, the Company sold to ESOUSA, among other securities, 404,676 five-year warrants to purchase shares of Common Stock (the “Purchase Warrants”) at a purchase price of $0.125 per share and exercise price of $11.12 per share. On November 3, 2021, the Company and ESOUSA agreed to reduce the exercise price of the Purchase Warrants from information harmful$11.12 to $6.796 per share (the “Reduced Exercise Price”) in consideration for the exercise in full of all, but not less than all, Purchase Warrants by ESOUSA to acquire shares of the Company’s Common stock. The Company entered into an exercise price reduction offer letter agreement (the “Letter Agreement”) with ESOUSA to purchase a total of 404,676 shares of the Company’s Common Stock. Pursuant to the Letter Agreement, ESOUSA and the Company agreed that ESOUSA would exercise its Purchase Warrants with respect to all of the shares of the Company Common Stock underlying such Purchase Warrants for the Reduced Exercise Price. The Company expects to receive aggregate gross proceeds of approximately $2,750,178 from the exercise of the Purchase Warrants by ESOUSA. After the full exercise of the Purchase Warrants by ESOUSA, no Purchase Warrants will be outstanding. Entry into Master Exchange Agreement with ESOUSA Holdings, LLC On July 9, 2021, the Company entered into a new Master Exchange Agreement, (the “New ESOUSA Agreement”) with ESOUSA. Prior to entering into the New ESOUSA Agreement, ESOUSA agreed to acquire the existing promissory notes that had been previously issued by the Company, of up to $15,000,000 in principal amount outstanding plus interest due to RBL Capital Group, LLC ("RBL"). Pursuant to the New ESOUSA Agreement, the Company has the right, at any time prior to July 8, 2022, to request ESOUSA, and ESOUSA agreed upon each such request, to exchange such promissory notes in tranches on the dates when the Company instructs ESOUSA, for such number of shares of Common Stock as determined under the New ESOUSA Agreement based upon the number of shares of Common Stock (already in ESOUSA’s possession) that ESOUSA sold in order to finance its purchase of such tranche of the promissory note from RBL. ESOUSA will purchase each tranche of the promissory note equal to 88% of the gross proceeds from the shares of Common Stock sold by ESOUSA to finance the purchase of such exchange amount from RBL, with each such tranche to be in an amount equal to $100,000 unless otherwise agreed to in writing by the Company and ESOUSA. The Merger and Related Transactions On August 4, 2020, the Company, as Net Element, Inc., entered into the Merger Agreement with Mullen Technologies, Merger Sub, and Mullen Automotive-California, providing for the Merger, with Mullen Automotive-California surviving the Merger as a wholly-owned subsidiary of the Company. On November 3, 2021, the Company filed an amendment to our Amended and Restated Certificate of Incorporation with the Delaware Secretary of State, pursuant to which the Company’s name was changed from “Net Element, Inc.” to “Mullen Automotive Inc.”  In connection with the Name Change, The Nasdaq Stock Market, LLC (“Nasdaq Capital Market”) ticker symbol for the Company’s Common Stock changed from “NETE” to “MULN.” On November 5, 2021 (the “Closing Date”), pursuant to the terms of the Merger Agreement, the Company closed the Merger whereby Merger Sub merged with and into the Mullen Automotive-California, with Mullen Automotive-California surviving as a wholly-owned subsidiary of the Company and changed its name to “Ottava Automotive Inc.” At the effective time of the Merger, each share of Mullen Automotive-California common stock, Mullen Automotive-California Series A Preferred Stock, Mullen Automotive-California Series B Preferred Stock and Mullen Automotive-California Series C Preferred Stock issued and outstanding immediately prior to the Merger, other than dissenting shares, were canceled and converted automatically into the right to receive a number of shares of Company Common Stock, Company Series A Preferred Stock, par value $0.001 ("Series A Preferred"), Series B Preferred Stock, par value $0.001 ("Series B Preferred"), and Series C Preferred Stock, par value $0.001 ("Series C Preferred"), as the case may be, determined in accordance with the Merger Agreement and as provided in Schedule A to the Merger Agreement. As a result, the Company issued an aggregate of 15,647,321 shares of Common Stock, 15,367 shares of Series A Preferred (which converts into 15 Table of Contents 1,536,692 shares of Common Stock), 5,567,319 shares of Series B Preferred, and 4,973,093 shares of Series C Preferred. Pursuant to the Merger, an aggregate of 43,971,895 shares, which represented 85% of the combined company, were allocated to holders of Common Stock, Preferred Stock and reserved for issuance under outstanding warrants. On the Closing Date, the board of directors of the Company (the “Board of Directors”) approved a change in the Company’s fiscal year end from December 31 to September 30, the fiscal year end of Mullen Automotive-California. Also on the Closing Date, the Company filed a Second Amended and Restated Certificate of Incorporation (the “Second Amended and Restated Certificate of Incorporation”) with the Delaware Secretary of State of the State to effectuate the following changes, which were approved at a special meeting of the Company’s stockholders held on August 26, 2021 (the “Special Meeting”): ● change the par value of and increase the number of authorized shares of Common Stock from 100,000,000 shares, par value $0.0001, to 500,000,000 shares, par value $0.001; ● to change the par value and increase the number of authorized shares of preferred stock from 1,000,000, par value $0.01, to 58,000,000 shares, par value $0.001; (b) to authorize the issuance of up to 200,000 shares of Series A Preferred, which series carries 1,000 votes per share and converts into Common Stock on a 100-for-1 basis; (c) to authorize the issuance of up to 12,000,000 shares of Series B Preferred, which series carries one vote per share and converts into Common Stock on a 1-for-1 basis; and (d) to authorize the issuance of up to 40,000,000 shares of Series C Preferred, which series carries one vote per share and converts into Common Stock on a 1-for-1 basis; ● classify the Board of Directors; and ● other changes, including removal of the restriction on the right for stockholders to act by written consent. Also on the Closing Date, and as contemplated by the terms of the Merger Agreement, Oleg Firer, John Roland, Jon Najarian, and Todd Raarup each resigned as a director of the Company (including any committee of the Board of Directors) and Jeffrey Ginsberg, Andrey Krotov, Vlad Sadovskiy, and Steven Wolberg resigned as officers of the Company. At such time, as approved at the Special Meeting, David Michery, Jerry Alban, Mary Winter, Kent Puckett, Mark Betor, William Miltner and Jonathan New became directors of the Company to serve until the annual meeting of the year designated to their health and/or development.respective Director Class and until their respective successors are duly elected and qualified. Furthermore, David Michery was appointed as Chief Executive Officer of the Company, Kerri Sadler was appointed as Chief Financial Officer of the Company, Jerry Alban was appointed as Chief Operating Officer of the Company, and Mary Winter was appointed as Secretary of the Company. Concerning relations with Federal communication service providers, PayOnline can be involved in regulationThe foregoing description of personal data of subscribers. In case of transferring by Federal communication service providers’ information which includes personal data PayOnline has to take measures to protect such data as the operator of personal data must take. The list of such measures is described in Federal Law “On Personal Data” dated 27.07.2006 No 152. This Federal LawMerger and Federal Law “On Communication” establish rules of usage of personal data of subscribers. Taking into account that this regulation isrelated transactions does not purport to be applied onlycomplete and is subject to, and qualified in caseits entirety by, the full text of transferring informationthe Merger Agreement dated July 20, 2021, as amended August 18, 2021, copies of which are filed as Exhibits to the Company’s Current Reports on Form 8-K filed with personal data from Federal communication service providers itthe SEC on July 21, 2021 and August 19, 2021. Human Capital Resources Talent Attraction and Capability Assessment In an environment where many employees are no longer bound to physical locations, where and how we source our talent is importantevolving. From a capability perspective, we are leveraging best practices in assessments and talent management to clarifycurrent capabilities and future pipeline while reinforcing a culture of belonging, empowerment, and innovation. Diversity and Inclusion We strive to attract a pool of diverse and exceptional candidates and support their career growth once they become employees. In addition, we seek to hire based on talent rather than solely on educational pedigree. We also believe that common execution 16 Table of contracts with these providers do not stipulate transferringContents our ability to retain our workforce is dependent on our ability to foster an environment that is sustainably safe, respectful, fair, and inclusive of personal data.everyone and promotes diversity, equity and inclusion inside and outside of our business. Our Employees Seasonality Historically,As of September 30, 2021, we employed 44 full-time employees based primarily in our headquarters and engineering offices, in Brea and Anaheim, California, respectively. A majority of our employees are engaged in automotive, finance, and engineering related functions. To date, we have not experienced seasonal fluctuationsany work stoppages and consider our relationship with our employees to be in good standing. None of our revenues asemployees are represented by a result of consumer spending patterns, especially in the restaurant business. Revenues have been weaker during the first quarter of the calendar year and stronger during the second, third and fourth quarters. We expect our businesslabor union or subject to continue experiencing seasonal fluctuations consistent with this historical pattern. a collective bargaining agreement. Available Information We are subject to the informational requirements of the Securities Exchange Act of 1934, as amended ('the (the "Exchange Act"Act") and file or furnish reports, proxy statements, and other information with the SEC. You can read our SEC filings over the Internet at the SEC’s website at www.sec.gov. Our filings with the SEC, including our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and any amendments to those reports, also are available free of charge on the investors section of our website at http://investor.netelement.com/en/irwww.mullenusa.com when such reports are available on the SEC’s website. Further corporate governance information, including our certificate of incorporation, bylaws, governance guidelines, board committee charters, and code of business conduct and ethics, is also available on the investors section of our website. The contents of the websites referred to above are not incorporated into this filing or in any other report or document we file with the SEC, and any references to these websites are intended to be inactive textual references only. 25 Table of Contents Item ITEM 1A. Risk Factors. RISK FACTORS. Investing in our securities involves a high degree of risk. You should carefully consider the risks and uncertainties described below, together with all of the other information in this Report, including “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our consolidated financial statements and related notes, as well as the preceding “Business” section of this Report, before engaging in any transaction in our securities. Any of the following risks could materially and adversely affect our business, financial condition, results of operations and/or prospects, and cause the value of our securities to decline, which could cause you to lose all or part of your investment. Summary Risks Related to Mullen’s Capital Requirements and Financial Condition ● We have incurred significant losses since inception and we expect that we will continue to incur losses for the foreseeable future; ● We will require substantial additional financing to effectuate our business plan; ● We have not yet manufactured or sold any production vehicles to customers and may never develop or manufacture any vehicles; ● Our limited operating history makes it difficult for us to evaluate our future business prospects; ● Our auditor has expressed substantial doubt about our ability to continue as a going concern; ● Certain of our lenders and the Internal Revenue Service have liens on our assets; ● We have not paid, and do not plan to pay, cash dividends on our Common Stock, so any return on investment may be limited to the value of our Common Stock; ● We have a substantial amount of debt; and ● We may not generate sufficient cash to service all of our debt or refinance our obligations. 17 Table of Contents Risks Related to Mullen’s Business and Operations ● We may not be able to develop, manufacture and obtain regulatory approvals for a car of sufficient quality to appeal to customers on schedule or at all; ● Our currently planned vehicles rely on lithium-ion battery cells, which have been observed to catch fire or vent smoke and flame, potentially subjecting us to litigation, recall, and redesign risks; ● The efficiency of a battery’s use will decline over time, which may negatively influence customers’ decisions whether to purchase an electric vehicle; ● We rely on our original equipment manufacturers, suppliers and service providers for parts and components, any of whom could choose not to do business with us; ● We will rely on complex machinery for our operations and production, which involve a significant degree of risk and uncertainty in operational performance and costs; ● Complex software and technology systems need to be developed in coordination with vendors and suppliers, and there can be no assurance that such systems will be successfully developed; ● We may experience significant delays in the design, manufacture, regulatory approval, launch and financing of our vehicles, which could harm our business and prospects; ● The inability of our suppliers, including single or limited source suppliers, to deliver components in a timely manner or at acceptable prices or volumes could have a material adverse effect on our business and prospects; ● Financial distress of our suppliers could necessitate that we provide substantial financial support, which could increase our costs, affect our liquidity or cause production disruptions; ● We have a limited operating history and face significant challenges as a new entrant into the automotive industry; ● We have a history of losses and expect to incur significant expenses and continuing losses for the foreseeable future, casting doubt on our ability to continue as a going concern; ● Our business model is untested and we may fail to commercialize our strategic plans; ● Our operating and financial results forecast relies on assumptions and analyses developed by us and may prove to be incorrect; ● We may be unable to accurately estimate the supply and demand for our vehicles; ● Increased costs or disruptions in supply of raw materials or other components could occur; ● Our vehicles may fail to perform as expected; ● Our services may not be generally accepted by our users; ● The automotive market is highly competitive; ● The automotive industry is rapidly evolving and demand for our vehicles may be adversely affected; ● We may be subject to risks associated with autonomous driving technology; ● Our distribution model is different from the predominant current distribution model for auto manufacturers; ● Our future growth is dependent on the demand for and consumers’ willingness to adopt electric vehicles; ● Government and economic incentives could become unavailable, reduced or eliminated; ● Our failure to manage our future growth effectively; ● Our failure to establish warranty reserves sufficient to cover future warranty claims; ● We may not succeed in establishing, maintaining and strengthening the Mullen brand; ● We will initially depend on revenue generated from a single model; ● Doing business internationally creates operational and financial risks; ● We are highly dependent on the services of David Michery, our Chief Executive Officer; ● Our business may be adversely affected by labor and union activities; ● We face risks related to health epidemics, including the recent COVID-19 pandemic; ● Reservations for our vehicles are cancellable; ● We may face legal challenges relating to direct sales to customers; ● We face information security and privacy concerns; ● We may be forced to defend ourselves against patent or trademark infringement claims and may be unable to prevent others from unauthorized use of our intellectual property; ● Our patent applications may not issue as patents, the patents may expire, our patent applications may not be granted, and our rights may be contested; 18 Table of Contents ● We may be subject to damages resulting from unintended disclosure of trade secrets; ● Our vehicles are subject to various safety standards and regulations that we may fail to comply with; ● We may be subject to product liability claims; ● We are, or may be subject to, anti-corruption, bribery, money laundering, and financial and economic laws; ● Risk of failure to improve our operational and financial systems to support expected growth; ● Risk of failure to build our financial infrastructure and improve our accounting systems and controls; ● Our management has limited experience in operating a public company; ● The concentrated voting control of David Michery, Mullen’s founder; ● The priority of our debt over our Common Stock in the event of liquidation, dissolution or winding up; ● The number of shares of Common Stock underlying our outstanding warrants and Preferred Stock is significant in relation to our currently outstanding Common Stock; and ● The dearth of analyst coverage on Mullen. Risk Factors Risks Related to our Capital Requirements and Financial Condition We have incurred significant losses since inception and we expect that we will continue to incur losses for the foreseeable future, which makes it difficult to assess our future viability. We have not been profitable since operations commenced, and we may continue to experience losses in the future. Since our inception,never achieve or sustain profitability. In addition, we have not yet demonstrated an ability to successfully overcome many of the risks and uncertainties frequently encountered by companies in new and rapidly evolving fields such as the electric vehicle (“EV”) industry. Development and deployment of EV technology and vehicles is a highly speculative undertaking and involves a substantial degree of risk. We have not yet commercialized any of our proposed EV products or generated any revenue from sales of such products. We have devoted significant resources to research and development and other expenses related to our ongoing operations. We will require significant additional capital to continue operations and to execute on our current business strategy. Mullen cannot estimate with reasonable certainty the actual amounts necessary to successfully complete the development and commercialization of our proposed products and there is no certainty that we will be able to raise the necessary capital on reasonable terms or at all. We will require substantial additional financing to effectuate our business plan, and a failure to obtain this necessary capital when needed on acceptable terms, or at all, could force us to delay, limit, reduce or terminate our product development efforts or other operations. For the years ended September 30, 2021 and 2020, we incurred significantnet losses of $44.2 million and $30.2 million, respectively, and net cash used in operating losses. We sustained a net loss of approximately $5activities was $17.5 million for the year ended December 31, 2018 and $10.8 million, respectively. At September 30, 2021, we had an accumulated deficit of approximately $172.2$150.4 million at December 31, 2018. We hadand a negative working capital deficit of approximately $1.3 million at December 31, 2018. Our current assets at December 31, 2018 included approximately $1.6 million in cash, $6.3 million of accounts receivable$64.4 million. We will need significant capital to, among other things, conduct research and $1.7 million in prepaid expenses. Our current liabilities included approximately $8.9 million in accounts payabledevelopment, increase our production capacity and accrued expenses, $1.5 million in deferred revenueexpand our sales and $433,000 in current notes payable. As of the filing date of this Report with the SEC, management expects that our cash balance, cash flows from operations, and accessservice network. We expect to our credit facilities, if required, will be sufficient to fund our $3.3 million projected operating cash flow shortfall over the next twelve months. We may continue to incur substantial operating losses for the next several years as we advance our product development and commercialization efforts. No substantial revenue from operations will likely be available until, and unless, such efforts are successful. We expect our capital expenditures to continue to be significant in the foreseeable future as we expand our business, and that once our cars are in production our level of capital expenditures will be significantly affected by user demand for our products and services. The fact that we have a limited operating history means we have limited historical data on the demand for our products and services. As a result, our future capital requirements may never generate revenues sufficient to become profitable or to sustain profitability. The Company is continuing with its plan to further fund, growbe uncertain and expand its payment processing operations through organic growth and acquisition of profitable residual buyouts. To fund our operating cash needs,actual capital requirements may be different from those we maycurrently anticipate. We will likely need to borrow additional capital from our current credit facilitiesseek equity or additional sales of equity securities. The Company continuesdebt financing to investigate the capital markets for sources of funding, which could take the form of additional debt, the restructuringfinance a portion of our current debt,capital expenditures. Such financing might not be available to us in a timely manner, or additional equity financings. The Company has been successful in restructuring its current debt facilities with commercially acceptableon terms that ensuresare acceptable to us, or at all. 19 Table of Contents Our ability to obtain the continued operationnecessary financing to carry out our business plan is subject to a number of itsfactors, including general market conditions and investor acceptance of our business forplan. These factors may make the foreseeable future. Astiming, amount, terms and conditions of December 31, 2018,such financing unattractive or unavailable to us. In particular, recent disruptions in the Company had approximately $10.8 million in available credit facilities. Continuing losses may impairfinancial markets and volatile economic conditions could affect our ability to raise capital. If we raise additional capital through marketing and distribution arrangements or other collaborations, strategic alliances or licensing arrangements with third parties, we may have to relinquish certain valuable rights to our product candidates, technologies, future revenue streams or research programs or grant licenses on terms that may not be favorable. If we raise additional capital through public or private equity offerings, the ownership interest of our stockholders will be diluted, and the terms of any new equity securities may have preferential rights over our Common Stock and further may restrict our ability to obtain additional financing even if needed to continue operations. Further, the ability to fund our needs through equity issuances, warrants or convertible debt is or may be limited by covenants in certain of our existing and future funding or other agreements. If we raise additional capital through debt financing, we would have increased debt service obligations and may be subject to covenants limiting or restricting our ability to take specific actions, such as incurring additional debt or making capital expenditures, or subject to specified financial ratios, any of which could restrict our ability to develop and commercialize our product candidates or operate as a business. Additional capital may not be available when we need it, on terms that are acceptable to us, or at all. If adequate funds are not available to us on a timely basis, we may be required to continuedelay, limit, reduce or terminate our establishment of sales and expandmarketing, manufacturing or distribution capabilities, development activities or other activities that may be necessary to commercialize our proposed products or other development activities. We might not be able to obtain any funding, and we might not have sufficient resources to conduct our business as projected, both of which could mean that we would be forced to curtail or discontinue our operations. Additional funds for We have not yet manufactured or sold any production vehicles to customers and may never develop or manufacture any vehicles. We have no experience as an organization in high volume manufacturing of the continued expansionplanned electric vehicles and we cannot assure you that us or our partners will be able to develop efficient, automated, cost-efficient manufacturing capability and processes, and reliable sources of component supplies that will enable us to meet the quality, price, engineering, design and production standards, as well as the production volumes, required to successfully mass market our EVs. Even if we are able to successfully develop and sell or lease our vehicles, there can be no assurance that we will be commercially successful and achieve or sustain profitability. As a new entrant into our industry, we will face significant risks and challenges to our business and prospects, including, among other things, with respect to our ability to: ● design and produce safe, reliable and quality vehicles on an ongoing basis; ● obtain the necessary regulatory approvals in a timely manner; ● build a well-recognized and respected brand; ● establish and expand our customer base; ● successfully market our vehicles and the other services we intend to provide; ● properly price our services, including our charging solutions, financing and lease options, and successfully anticipate the take-rate and usage of such services by users; ● successfully service our vehicles after sales and maintain a good flow of spare parts and customer goodwill; ● establish and maintain our operational efficiency; ● predict our future revenues and appropriately budget for our expenses; 20 Table of Contents ● attract, retain and motivate talented employees; ● anticipate trends that may emerge and affect our business; and ● anticipate and adapt to changing market conditions, including technological developments and changes in the competitive landscape. If we fails to adequately address any or all of these risks and challenges, our business may be raised through debt financing and/or the issuance of equity securities, there being no assurance that any type of financing on terms satisfactory to us will be available or otherwise occur. Debt financing must be repaid regardless of whether we generate revenues or cash flows from operationsmaterially and may be secured by substantially all of our assets. Any equity financing or debt financing that requires the issuance of equity securities or warrants to the lender would cause the percentage ownership by our current stockholders to be diluted, which dilution may be substantial. Also, any additional equity securities issued may have rights, preferences or privileges senior to those of existing stockholders. If such financings are not available when required or are not available on acceptable terms, we may be unable to implement our business plans or take advantage of business opportunities, any of which could have a material adverse effect on our business, financial condition, results of operations and/or prospects and may ultimately require us to suspend or cease operations, which could cause investors to lose the entire amount of their investment.adversely affected. To fund ourOur limited operating cash needs, we may need to raise additional capital through loans or additional sales of equity securities. The Company continues to investigate the capital markets for sources of funding, which could take the form of additional debt, the restructuring of our current debt, or additional equity financings. The Company has been successful in restructuring its current debt facilities with commercially acceptable terms that ensures the continued operation of its business for the foreseeable future. 26 Table of Contents Global economic, political, and other conditions may adversely affect trends in consumer, business, and government spending, which may adversely impact the demand for our services and our revenue and profitability. Financial services, payments, and technology industries in which we operate depend heavily upon the overall level of consumer, business, and government spending. A sustained deterioration in the general economic conditions (including distress in financial markets, turmoil in specific economies around the world, and additional government intervention), particularly in the United States or Europe, or increases in interest rates in key countries in which we operate may adversely affect our financial performance by reducing the number or average purchase amount of transactions involving payment cards. A reduction in the amount of consumer spending could result in a decrease of our revenue and profits. The current threats to global economic growth include geopolitical instability in Russia, Ukraine, the Middle East and other oil producing countries. Instability in these regions could affect economic conditions in Europe and the United States. Adverse economic trends may accelerate the timing, or increase the impact of, risks to our financial performance. Such trends may include, but are not limited to, the following: ● Declining economies, foreign currency fluctuations, and the pace of economic recovery can change consumer spending behaviors on which a significant portion of our revenues are dependent. ● Low levels of consumer and business confidence typically associated with recessionary environments, and those markets experiencing relatively high unemployment, may cause decreased spending by cardholders. ● Budgetary concerns in the United States and other countries around the world could affect the United States and other specific sovereign credit ratings, impact consumer confidence and spending, and increase the risks of operating in those countries. ● Emerging market economies tend to be more volatile than the more established markets we serve in the United States and Europe, and adverse economic trends may be more pronounced in such emerging markets. ● Financial institutions may restrict credit lines to cardholders or limit the issuance of new cards to mitigate cardholder defaults. ● Uncertainty and volatility in the performance of our clients' businesses may make estimates of our revenues, rebates, incentives, and realization of prepaid assets less predictable. ● Our clients may decrease spending for value-added services. ● Government intervention, including the effect of laws, regulations, and /or government investments in our clients, may have potential negative effects on our business and our relationships with our clients or otherwise alter their strategic direction away from our products. A weakening in the economy could also force some retailers to close, resulting in exposure to potential credit losses and declines in transactions, and reduced earnings on transactions due to a potential shift to large discount merchants. Additionally, credit card issuers may reduce credit limits and become more selective in their card issuance practices. Changes in economic conditions could adversely impact our future revenues and profits and result in a downgrade of our corporate capacity to borrow, which may lead to termination or modification of certain contracts and makehistory makes it more difficult for us to obtain newevaluate our future business prospects. As we attempt to transition from research and development activities to commercial production and sales, it is difficult, if not impossible, to forecast our future results, and we have limited insight into trends that may emerge and affect our business. AnyThe estimated costs and timelines that we have developed to reach full scale commercial production are subject to inherent risks and uncertainties involved in the transition from a start-up company focused on research and development activities to the large-scale manufacture and sale of these developmentsvehicles. There can be no assurance that our estimates related to the costs and timing necessary to complete design and engineering of our EVs and to tool our facilities will prove accurate. These are complex processes that may be subject to delays, cost overruns and other unforeseen issues. For example, the tooling required within our facilities may be more expensive to produce than predicted, or have a shorter lifespan, resulting in additional replacement and maintenance costs, which could have a material adverse impact on our overall business and results of operations. Ouroperations and financial condition. Similarly, we may experience higher raw material waste in the composite process than we expect, resulting in higher operating costs and hampering our ability to anticipatebe profitable. In addition, market conditions, many of which are outside of our control and respondsubject to changing industry trendschange, including general economic conditions, the availability and terms of financing, the impacts and ongoing uncertainties created by the COVID-19 pandemic, fuel and energy prices, regulatory requirements and incentives, competition and the needspace and preferencesextent of our clients and consumers may affect our competitiveness orvehicle electrification generally, will impact demand for our products, which mayelectric vehicles, and ultimately our success. Our auditor has expressed substantial doubt about our ability to continue as a going concern. The audit report on our financial statements for the years ended September 30, 2021 and 2020 includes an explanatory paragraph related to our recurring losses from operations and dependence on additional financing to continue as a going concern. In view of these matters, our ability to continue as a going concern is dependent upon our ability to raise additional debt or equity financings or enter into strategic partnerships. Since our inception, we have financed our operations through convertible debt financings. We intend to continue to finance our operations through debt or equity financing and/or strategic partnerships. The failure to obtain sufficient financing or strategic partnerships could adversely affect our operating results.ability to achieve our business objectives and continue as a going concern. Financial services, payments,Our senior lender has a security interest on all our assets and technology industries are subjectthe Internal Revenue Service has liens on our assets, and if these lienholders foreclose, that would be detrimental to rapid technological advancements, new productsour business, our financial condition and services, including mobile payment applications, evolving competitive landscape, developing industry standards, and changing client and consumer needs and preferences. We expect that new services and technologies applicable to the financial services, payments, and technology industries will continue to emerge. These changes in technology may limit the competitiveness of and demand for our services. Also, our clients and their customers continue to adopt new technology for business and personal uses. We must anticipate and respond to these changes in order to remain competitive within our relative markets. For example, our ability to provide innovative POS technologiescontinue as a going concern. Our senior lender has a security interest on all of our assets. In addition, the Internal Revenue Service (the “IRS”) has liens of $3.8 million on our assets. We are in default on such loan. Should either our senior lender or the IRS foreclose, each could secure judgments against our assets. This would be materially detrimental to our merchant clients could have an impact onbusiness, our North American Transaction Solutions segment. Failure to develop value-added services that meet the needsfinancial condition and preferences of our clients could have an adverse effect on our ability to compete effectivelyoperate as a going concern. We have not paid cash dividends on our Common Stock in the past and do not expect to pay dividends on our industry. Furthermore, clients'Common Stock in the future. Any return on investment may be limited to the value of our Common Stock. We have never paid cash dividends on our Common Stock and their customers' potential negative reaction todo not anticipate paying cash dividends in the near future. The payment of dividends on our productsCommon Stock will depend on earnings, financial condition and services can spread quickly through social mediaother business and damage our reputation before we have 21 Table of Contents economic factors affecting us at such time as the opportunity to respond.Board of Directors may consider relevant. If we are unable to anticipate or respond to technological changes or evolving industry standardsdo not pay dividends, our Common Stock may be less valuable because a return on your investment will only occur if our stock price appreciates. We have a timely basis,substantial amount of debt which is considered significant for a company of our size and which could adversely affect our financial condition and our ability to remain competitive could be materially adversely affected.react to changes in our business. 27 TableAs of Contents SubstantialSeptember 30, 2021, we had an aggregate principal amount of debt outstanding of approximately $39.5 million. We believe that this is a substantial amount of indebtedness, which is considered significant for a company of our size and increasingly intense competition worldwide in the financial services, payments, and technology industries may materially and adversely affect our overall business andcurrent level of operations. Financial services, payments, and technology industries are highly competitive and our payment solutions compete against all forms of financial services and payment systems, including cash and checks, and electronic, mobile, and e-commerce payment platforms. If we are unable to differentiate ourselves from our competitors, drive value for our clients and/or effectively align our resources with our goals and objectives, we may not be able to compete effectively. Our competitors may introduce their own value-added or other services or solutions more effectively than we do, which could adversely impact our growth. We also compete against new entrants that have developed alternative payment systems, e-commerce payment systems, and payment systems for mobile devices. Failure to compete effectively against any of these competitive threatssubstantial debt could have a material adverse effect onimportant consequences to us. In addition, the highly competitive nature of our industry could lead to increased pricing pressure which could have a material impact on our overall business and results of operations. Potential changes in the competitive landscape, including disintermediation from other participants in the payments value chain, could harm our business. We expect that the competitive landscape will continue to change, including: For example, it could: ● Rapid and significant changes in technology,make it more difficult for us to satisfy our obligations to the holders of our outstanding debt, resulting in newpossible defaults on and innovative payment methodsacceleration of such indebtedness; ● require us to dedicate a substantial portion of any future cash flows from operations and programs that could from the issuance of equity or debt securities to make payments on our debt, which would reduce the availability of our cash flows to fund working capital, and capital expenditures or other general corporate purposes; ● increase our vulnerability to general adverse economic and industry conditions, including interest rate fluctuations; ● place us at a competitive disadvantage and that could reduce the use ofto our products. ● Competitors, clients, governments, and other industry participants may develop products that competecompetitors with or replace our value-added products and services. ● Participants in the financial services, payments, and technology industries may merge, create joint ventures, or form other business combinations that may strengthen their existing business services or create new payment services that compete with our services. ● New services and technologies that we develop may be impacted by industry-wide solutions and standards related to migration to EMV chip technology, tokenization, or other safety and security technologies. Failure to compete effectively against any of these competitive threats could have a material adverse effect on us. The market for our electronic commerce services is evolving and may not continue to develop or grow rapidly enough for us to develop and increase our profitability. If the number of electronic commerce transactions does not continue to grow or if consumers or businesses do not continue to adopt our services, it could have a material adverse effect on the profitability of our business, financial condition, and results of operations. We believe future growth in the electronic commerce market will be driven by the cost, ease-of-use, and quality of products and services offered to consumers and businesses. In order to consistently increase and maintain our profitability, consumers and businesses must continue to adopt our services, including our merchant suite, Aptito and PayOnline solutions. If we cannot compete effectively, we will lose business. We believe our mobile payment processing business is positioned to be competitive in our target markets. We cannot guarantee that we will be able to maintain or increase revenues from our existing operations, or that our proposed future operations will be implemented successfully. Our principal competitive considerations include: ● financial resources to allocate to proper marketing and sales efforts; ● the ability to develop and maintain our operations, applications and technologies; ● the ability to effectively implement our business plans and strategies; ● establishing our brand name; ● financial resources to support working capital needs and required capital investments; and ● effects of sanctions on our business. 28 Table of Contents We rely on third-party processors and service providers; if they fail or no longer agree to provide their services, our merchant relationships could be adversely affected and we could lose business. We rely on agreements with several large payment processing organizations to enable us to provide card authorization, data capture, settlement and merchant accounting services and access to various reporting tools for the merchants we serve. We also outsource other services including reorganizing and accumulating daily transaction data on a merchant-by-merchant and card issuer-by-card issuer basis and forwarding the accumulated data to the relevant Payment Card Brands. Many of these organizations and service providers are our competitors, and we do not have long-term contracts with most of them. Typically, our contracts with these third parties are for one-year and are subject to cancellation upon limited notice by either party. The termination by our service providers of their arrangements with us or their failure to perform their services efficiently and effectively may adversely affect our relationships with the merchants whose accounts we serve and may cause those merchants to terminate their processing agreements with us. We rely on bank sponsors, which have substantial discretion with respect to certain elements of our business practices, in order to process bankcard transactions. If these sponsorships are terminated and we are not able to secure or successfully migrate merchant portfolios to new bank sponsors, we will not be able to conduct our business. Because we are not a bank, we are unable to belong to and attain direct membership to Visa and MasterCard. Visa and MasterCard operating regulations require us to be sponsored by a bank in order to process bankcard transactions. We are currently registered with Visa and MasterCard through the sponsorship from banks that are members of the card brands. The principal sponsoring bank through which we process the significant majority of our transactions is BMO Harris Bank. If our sponsorships are terminated and we are not able to secure or successfully migrate merchant portfolios to new bank sponsors, we will not be able to conduct our business. If we or our bank sponsors fail to adhere to the standards of Visa and MasterCard, our registrations with these organizations could be terminated, and we could be required to stop providing payment processing services for Visa and MasterCard. Substantially all of the transactions we process involve Visa or MasterCard. If we or our bank sponsors fail to comply with the applicable requirements of the Visa or MasterCard payment card brands, Visa or MasterCard could suspend or terminate our registration. The termination of our registration or any changes in the Visa or MasterCard rules that would impair our registration could prevent us from providing transactional processing services. If PayOnline fails to maintain its key partnerships with banks, financial institutions or payment processors, our financial results could be adversely affected. PayOnline’s business relies on partnering with different banks, financial institutions and payment processors to expand globally in order to enable it to provide international payment processing. To the extent PayOnline fails to maintain key partnerships with such banks, financial institutions or payment processors, our financial results could be adversely affected. Such failure to maintain partnerships may be due to mergers and/or consolidations of banks, financial institutions and payment processors, which may result in potential changes in their business processes that could negatively affect PayOnline operations, in particular in emerging markets, such as Kazakhstan. We periodically experience increases in interchange and other related costs, and if we cannot pass these increases along to our merchants, our profit margins will decline. We pay interchange fees and assessments to issuing banks through the card brands for each transaction we process using their credit and debit cards. From time to time, the card brands increase the interchange fees that they charge processors and the sponsoring banks. At their sole discretion, our sponsoring banks have the right to pass any increases in interchange fees on to us. In addition, our sponsoring banks may seek to increase their Visa and MasterCard sponsorship fees to us, all of which are based upon the dollar amount of the payment transactions we process. If we are not able to pass these fee increases along to merchants through corresponding increases in merchant discount, our profit margins will decline. To acquire and retain merchant accounts, we depend on independent non-bank sales groups that do not serve us exclusively. We rely on the efforts of ISGs to market our services to merchants seeking to establish a credit card processing relationship. ISGs are companies that seek to introduce to us, as well as our competitors, newly established and existing small merchants, including retailers, restaurants and other service providers. Generally, our agreements with ISGs are not exclusive and they have the right to refer merchants to other providers of transaction payment processing services. Our failure to maintain our relationships with our existing ISGs and to recruit and establish new relationships with other ISGs could adversely affect our revenues and internal growth and increase our merchant attrition. Unauthorized disclosure of data, whether through cybersecurity breaches, computer viruses or otherwise, could expose us to liability, protracted and costly litigation and could damage our reputation. We process, store and/or transmit sensitive data, such as names, addresses, credit or debit card numbers and bank account numbers, and we may have liability if we fail to protect this data in accordance with applicable laws and our clients’ specifications. The loss of data could result in significant fines and sanctions by our clients or governmental bodies, which could have a material adverse effect on our business, financial condition and results of operations. These concerns about security are increased when we transmit information over the Internet. Computer viruses can be distributed and spread rapidly over the Internet and could infiltrate our systems, which might disrupt our services and make them unavailable. In addition, a significant cybersecurity breach could result in payment networks prohibiting us from processing transactions on their networks or the loss of clients. We have been in the past and could be in the future, subject to breaches of security by hackers. It is possible that our encryption of data and other protective measures may not prevent unauthorized access. Although we have not to date incurred material losses or liabilities as a result of those breaches, a future breach of our system may subject us to material losses or liability, including payment of fines and claims for unauthorized purchases with misappropriated credit or debit card or bank account information or other similar fraud claims. A misuse of such data or a cybersecurity breach could harm our reputation and deter clients from using electronic payments generally and our services specifically, increase our operating expenses in order to correct the breaches or failures, expose us to uninsured liability, increase our risk of regulatory scrutiny, subject us to lawsuits and/or result in the imposition of material penalties and fines under applicable laws or by our clients. 29 Table of Contents Our operating results are subject to seasonality, and, if our revenues are below our seasonal norms during our historically stronger quarters, our financial results could be adversely affected. We have experienced in the past, and expect to continue to experience, seasonal fluctuations in our revenues as a result of consumer spending patterns. Historically, revenues have been weaker during the first quarter of the calendar year and stronger during the second, third and fourth quarters. If, for any reason, our revenues are below seasonal norms during the second, third or fourth quarter, our business, financial condition and results of operations could be materially adversely affected. New and potential governmental regulations designed to protect or limit access to consumer information could adversely affect our ability to provide, or impair the value of, the services we currently provide to our merchants. Due to the increasing public concern over consumer privacy rights, governmental bodies in the United States and abroad have adopted, and are considering adopting, additional laws and regulations restricting the purchase, sale and sharing of personal information about customers. For example, the Gramm-Leach-Bliley Act requires non-affiliated third-party service providers to financial institutions to take certain steps to ensure the privacy and security of consumer financial information. We believe our present activities fall under exceptions to the consumer notice and opt-out requirements contained in this law for third-party service providers to financial institutions. However, the laws governing privacy generally remain unsettled. Even in areas where there has been some legislative action, such as the Gramm-Leach-Bliley Act and other consumer statutes, it is difficult to determine whether and how existing and proposed privacy laws or changes to existing privacy laws will apply to our business. Limitations on our ability to access and use customer information could adversely affect our ability to provide the services we currently offer to our merchants or impair the value of these services.  Several states have proposed legislation that would limit the use of personal information gathered using the Internet. Some proposals would require proprietary online service providers and website owners to establish privacy policies. The California Consumer Privacy Act will go into effect on January 1, 2020. It will impose significant requirements on covered businesses, including mandatory disclosure of customers’ data when requested, customer data erasure in some contexts, and notification that customers can object to sale of their data, among numerous other provisions. It is foreseeable that other states may follow with similar legislation. Congress has also considered privacy legislation that could further regulate the use of consumer information obtained over the Internet or in other ways. Our compliance with these privacy laws and related regulations could materially affect our operations. Changes to existing laws or the passage of new laws could: ● create uncertainty in the marketplace that could reduce demandproportionately less debt for our services; size; ● restrict or limit our ability to sell certain productsrefinance our existing indebtedness or borrow additional funds in the future; ● limit our flexibility in planning for, or reacting to, changing conditions in our business; and services to certain customers; ● limit our ability to collect andreact to use merchant and cardholder data;competitive pressures or ● increase the cost of doing business as a result of litigation costs make it difficult for us to carry out capital spending that is necessary or increased operating costs; important to our growth strategy. Any changes to existing laws orof the passageforegoing impacts of new laws that have effects such as those described aboveour substantial indebtedness could have a material adverse effect on our business, financial condition and results of operations. We may not be able to generate sufficient cash to service all of our debt or refinance our obligations and we may be forced to take other actions to satisfy our obligations under such indebtedness, which may not be successful. Our ability to make scheduled payments on our indebtedness or to refinance our obligations under our debt agreements, will depend on our financial and operating performance, which, in turn, will be subject to prevailing economic and competitive conditions and to the financial and business risk factors we face as described in this section, many of which may be beyond our control. We may not be able to achieve or maintain a level of cash flows from operating activities sufficient to permit us to pay the principal, premium, if any, and interest on our indebtedness. If our cash flows and capital resources are insufficient to fund our debt service obligations, we may be forced to reduce or delay capital expenditures or planned growth objectives, seek to obtain additional equity capital or restructure our indebtedness. In the future, our cash flows and capital resources may not be sufficient for payments of interest on and principal of our debt, and such alternative measures may not be successful and may not permit us to meet scheduled debt service obligations. In addition, the recent worldwide credit crisis could make it more difficult for us to refinance our indebtedness on favorable terms, or at all. In the absence of such operating results and resources, we may be required to dispose of material assets to meet our debt service obligations. We may not be able to consummate those sales, or, if we do, we will not control the timing of the sales or whether the proceeds that we realizes will be adequate to meet debt service obligations when due. 22 Table of Contents Risks Related to our Business and Operations We may be unable to develop, manufacture and obtain required regulatory approvals for a car of sufficient quality to appeal to customers on schedule or at all, or may be unable to do so on a large scale. Our business depends in large part on our ability to develop, manufacture, market and sell or lease our EVs. Our ability to effectively compete in the EV market will depend in large part on our entry into the ESUV market through the offering of competitively priced vehicles to a wider variety of potential buyers. We initially plan to manufacture vehicles in collaboration with one or more automotive component and engineering services suppliers, including large OEMs or tier-one automotive suppliers. We have not yet executed definitive supply or manufacturing agreements with any OEM or tier-one automotive supplier for the supply of parts for production of our initial proposed ESUVs or any of our other future vehicle offerings. If we are unable to negotiate and finalize such supply and manufacturing agreements with an OEM or a tier-one automotive supplier, we will not be able to produce any ESUVs and will not be able to generate significant revenue, or the vehicles may become more expensive to deliver with a higher bill of materials, which would have a material adverse effect on our business, prospects, operating results and financial condition. The continued development and the ability to start manufacturing our vehicles are and will be subject to risks, including with respect to: ● our ability to secure necessary funding; ● our ability to accurately manufacture vehicles within specified design tolerances; ● obtaining required regulatory approvals and certifications; ● compliance with environmental, safety, and similar regulations; ● securing necessary components, services, or licenses on acceptable terms and in a timely manner; ● delays by we in delivering final component designs to our suppliers; ● our ability to attract, recruit, hire, retain and train skilled employees; ● quality controls that prove to be ineffective or inefficient; ● delays or disruptions in our supply chain including raw material supplies; ● our ability to maintain arrangements on reasonable terms with our manufacturing partners and suppliers, engineering service providers, delivery partners, and after sales service providers; and ● other delays, backlog in manufacturing and research and development of new models, and cost overruns. Our ability to develop, manufacture and obtain required regulatory approvals for a vehicle of sufficient quality to appeal to customers on schedule and on a large scale is unproven, and the business plan is still evolving. We may be required to pay federal, stateintroduce new vehicle models and enhanced versions of existing models. To date, we have limited experience, as a company, designing, testing, manufacturing, marketing and selling or local taxesleasing our electric vehicles and therefore cannot assure you that we will be able to meet customer expectations. Any failure to develop such manufacturing processes and capabilities within our projected costs and timelines would have a material adverse effect on transaction processing, itour business, prospects, operating results and financial condition. 23 Table of Contents Our vehicles will make use of lithium-ion battery cells, which have been observed to catch fire or vent smoke and flame, and, if such results occur, bodily injury or death could result and could subject us to lawsuit, product recalls, or redesign efforts. The battery packs within our proposed vehicles will make use of lithium-ion cells. On rare occasions, lithium-ion cells can rapidly release the energy they contain by venting smoke and flames in a manner that can ignite nearby materials as well as other lithium-ion cells. While the battery pack is designed to contain any single cell’s release of energy without spreading to neighboring cells, once our vehicles are commercially available, a field or testing failure of battery packs in our vehicles could occur, which could result in bodily injury or death and could subject us to lawsuit, product recalls, or redesign efforts, all of which would be time consuming and expensive and could harm our brand image. Also, negative public perceptions regarding the suitability of lithium-ion cells for automotive applications, the social and environmental impacts of cobalt mining, or any future incident involving lithium-ion cells, such as a vehicle or other fire, could seriously harm our business and reputation. The efficiency of a battery’s use over time when driving electric vehicles will decline over time, which may negatively impactinfluence potential customers’ decisions whether to purchase an electric vehicle. The cells used in EV battery modules degrade over time, influenced primarily by the age of the cells and the total energy throughput over the life of the EV. This cell degradation results in a corresponding reduction in the vehicle’s range. Although common to all EVs, cell degradation, and the related decrease in range, may negatively influence potential customer’s EV purchase decisions. We are substantially reliant on our profit margins.relationships with OEMs, suppliers and service providers for the parts and components in our vehicles, as well as for the manufacture of our initial vehicles. If any of these OEMs, suppliers or service partners choose to not do business with us, then we would have significant difficulty in procuring and producing our vehicles and our business prospects would be significantly harmed. Transaction processing companies may becomeCollaboration with third parties for the manufacturing of vehicles is subject to federal, staterisks with respect to operations that are outside our control. We could experience delays to the extent our current or local taxation of certain portions of their fees chargedfuture partners do not continue doing business with us or fail to merchants for their services. Application of these taxes is an emerging issue in our industry and taxing jurisdictions have not yet adopted uniform positions on this topic. If we are required to pay such taxes andmeet agreed upon timelines, experience capacity constraints or otherwise are unable to pass this tax expense throughdeliver components or manufacture vehicles as expected. There is risk of potential disputes with partners, and we could be affected by adverse publicity related to our merchant clients,partners whether or are unablenot such publicity is related to producetheir collaboration with us. In addition, although we intend to be involved in material decisions in the supply chain process, given that we also rely on our partners to meet our quality standards, there can be no assurance that we will be able to maintain high quality standards. We may in the future enter into strategic alliances, including joint ventures or minority equity investments, with various third parties to further our business purpose. These alliances could subject us to a number of risks, including risks associated with sharing proprietary information, non-performance by the third party, and increased cash flow to offset such taxes, these taxes would negatively impact our profit margins. The volumeexpenses in establishing new strategic alliances, any of which may materially and amounts of the accounts receivable suitable for assignment to the lenders under our current factoring lines of credit as of the time we choose to draw under such facilities may vary, thus potentially reducing the amounts of such draws.  Any such reductions may adversely affect our abilitybusiness. We will rely on complex machinery for our operations and production involves a significant degree of risk and uncertainty in terms of operational performance and costs. We will rely heavily on complex machinery for our operations and our production will involve a significant degree of uncertainty and risk in terms of operational performance and costs. It is expected that our manufacturing plant will consist of large-scale machinery combining many components. The manufacturing plant components are likely to satisfy our working capital and other liquidity needs. Our credit facilities are currently structured as factoring lines of credit.  Pursuant to these credit facilities, we assign certain (but not all) of our trade receivables from mobile operators to our lenders.  The amounts of our draws under such facilitiessuffer unexpected malfunctions from time to time and will depend on the amountsrepairs and spare parts to resume operations, which may not be available when needed. Unexpected malfunctions of the accounts receivable suitablemanufacturing plant components may significantly affect the intended operational efficiency. Operational performance and costs can be difficult to predict and are often influenced by factors outside of our control, such as, but not limited to, scarcity of natural resources, environmental hazards and remediation, costs associated with decommissioning of machines, labor disputes and strikes, difficulty or delays in obtaining governmental permits, damages or defects in electronic systems, industrial accidents, fire, and seismic activity and natural disasters. Should operational risks materialize, they may result in the lenders underpersonal injury to or death of workers, the loss of production equipment, damage to manufacturing facilities, monetary losses, delays and unanticipated 24 Table of Contents fluctuations in production, environmental damage, administrative fines, increased insurance costs and potential legal liabilities, all which could have a material adverse effect on our business, results of operations, cash flows, financial condition or prospects. There are complex software and technology systems that need to be developed in coordination with vendors and suppliers in order to reach production for our EVs, and there can be no assurance such credit facilitiessystems will be successfully developed. Our vehicles will use a substantial amount of third-party and in-house software codes and complex hardware to operate. The development of such advanced technologies is inherently complex, and we will need to coordinate with our vendors and suppliers in order to reach production for such assignment asour EVs. Defects and errors may be revealed over time and our control over the performance of third-party services and systems may be limited. Thus, our potential inability to develop the time we choosenecessary software and technology systems may harm our competitive position. We are relying on third-party suppliers to draw under such facility.  If we require access to immediate liquiditydevelop a number of emerging technologies for use in our products, including solid-state polymer battery technology. These technologies are not today, and may not ever be, commercially viable. There can be no assurances that our suppliers will be able to meet the technological requirements, production timing, and volume requirements to support our working capital requirements,business plan. In addition, the technology may not comply with the cost, performance useful life and warranty characteristics we anticipate in our draws underbusiness plan. As a result, our credit facilities to satisfy those needsbusiness plan could be potentially reduced (depending on the amounts of the accounts receivable suitable to the lenders as of the time of any such draw),significantly impacted, and we may incur significant liabilities under warranty claims which could adversely affect our business, prospects, and results of operations. We may experience significant delays in the design, manufacture, regulatory approval, launch and financing of our vehicles, which could harm our business and prospects. Any delay in the financing, design, manufacture, regulatory approval or launch of our vehicles, including entering into agreements for platform sharing, supply of component parts, and manufacturing, could materially damage our brand, business, prospects, financial condition and operating results and could cause liquidity constraints. Vehicle manufacturers often experience delays in the design, manufacture and commercial release of new products. To the extent we delay the launch of our vehicles, our growth prospects could be adversely affected as we may fail to establish or grow our market share. We rely on third-party suppliers for the provision and development of the key components and materials used in our vehicles. To the extent our suppliers experience any delays in providing us with or developing necessary components, we could experience delays in delivering on our timelines. We will be dependent on our suppliers, a significant number of which are single or limited source suppliers, and the inability of these suppliers to deliver necessary components of our vehicles in a timely manner and at prices and volumes acceptable to us could have a material adverse effect on our business, prospects and operating results. While we plan to obtain components from multiple sources whenever possible, many of the components used in our vehicles will be purchased by us from a single source. While we believe that we may be able to establish alternate supply relationships and can obtain or engineer replacement components for our single source components, we may be unable to do so in the short term (or at all) at prices or quality levels that are acceptable to us. In addition, we could experience delays if our suppliers do not meet agreed upon timelines or experience capacity constraints. Any disruption in the supply of components, whether or not from a single source supplier, could temporarily disrupt production of our vehicles until an alternative supplier is able to supply the required material. Changes in business conditions, unforeseen circumstances, governmental changes, and other factors beyond our control or which we do not presently anticipate, could also affect our suppliers’ ability to satisfydeliver components to us on a timely basis. Any of the foregoing could materially and adversely affect our working capitalresults of operations, financial condition and prospects. 25 Table of Contents If any of our suppliers become economically distressed or goes bankrupt, we may be required to provide substantial financial support or take other measures to ensure supplies of components or materials, which could increase our costs, affect our liquidity needs.or cause production disruptions. We expect to purchase various types of equipment, raw materials and manufactured component parts from our suppliers. If these suppliers experience substantial financial difficulties, cease operations, or otherwise face business disruptions, we may be required to provide substantial financial support to ensure supply continuity or would have to take other measures to ensure components and materials remain available. Any disruption could affect’s our ability to deliver vehicles and could increase our costs and negatively affect our liquidity and financial performance. We have a limited operating history and face significant challenges as a new entrant into the automotive industry, our vehicles are subjectin development, and we do not expect our first vehicle to foreign lawsbe produced until the second quarter of 2024, at the earliest, if at all. We have a short operating history in the automobile industry, which is continuously evolving. We have no experience as an organization in high volume manufacturing of the planned EVs. We cannot assure you that us or our partners will be able to develop efficient, automated, cost-efficient manufacturing capability and regulations, which are subjectprocesses, and reliable sources of component supplies that will enable us to changemeet the quality, price, engineering, design and uncertain interpretation.production standards, as well as the production volumes, required to successfully mass-market future vehicles. You should consider our business and prospects in light of the risks and significant challenges we face as a new entrant into our industry, including, among other things, with respect to our ability to: ● design and produce safe, reliable and quality vehicles on an ongoing basis; ● obtain the necessary regulatory approvals in a timely manner; ● build a well-recognized and respected brand; ● establish and expand our customer base; ● properly price our services, including our charging solutions, financing and lease options, and successfully anticipate the take-rate and usage of such services by users; ● successfully service our vehicles after sales and maintain a good flow of spare parts and customer goodwill; ● improve and maintain our operational efficiency; ● maintain a reliable, secure, high-performance and scalable technology infrastructure; ● predict our future revenues and appropriately budget for our expenses; ● attract, retain and motivate talented employees; ● anticipate trends that may emerge and affect our business; ● anticipate and adapt to changing market conditions, including technological developments and changes in competitive landscape; and ● navigate an evolving and complex regulatory environment. If we fail to adequately address any or all of these risks and challenges, our business may be materially and adversely affected. 26 Table of Contents We are subjectan early-stage company with a history of losses and expects to foreign lawsincur significant expenses and regulationscontinuing losses for the foreseeable future. There is substantial doubt about our ability to continue as a going concern. We have incurred a net loss since our inception. We believe that affectwe will continue to incur operating and net losses each quarter until at least the electronic payments industrytime we begin significant deliveries of our vehicles. Even if we are able to successfully develop, manufacture, and sell or lease our vehicles, there can be no assurance that they will be commercially successful. We expect the rate at which we will incur losses to be significantly higher in eachfuture periods as we, among other things: design, develop and manufacture our vehicles; build up inventories of parts and components for our vehicles; increase our sales and marketing activities, including opening new Mullen Experience Centers; develop our distribution infrastructure; and, increase our general and administrative functions to support our growing operations. We may find that these efforts are more expensive than we currently anticipate or that these efforts may not result in revenues, which would further increase our losses. Our independent registered public accounting firm has included an emphasis of matter paragraph regarding our ability to continue as a going concern in its opinion on our September 30, 2021 consolidated financial statements due to insufficient capital for us to fund our operations. Our business model has yet to be tested and any failure to commercialize our strategic plans would have an adverse effect on our operating results and business, harm our reputation and could result in substantial liabilities that exceed our resources. Investors should be aware of the foreign countriesdifficulties normally encountered by a new enterprise, many of which are beyond our control, including substantial risks and expenses while establishing or entering new markets, setting up operations and undertaking marketing activities. The likelihood of our success must be considered in light of these risks, expenses, complications, delays, and the competitive environment in which we operate. SomeThere is, therefore, nothing at this time upon which to base an assumption that our business model will prove successful, and we may not be able to generate significant revenue, raise additional capital or operate profitably. We will continue to encounter risks and difficulties frequently experienced by early commercial stage companies, including scaling up our infrastructure and headcount, and may encounter unforeseen expenses, difficulties or delays in connection with our growth. In addition, as a result of these countries,the capital-intensive nature of our business, we can be expected to continue to sustain substantial operating expenses without generating sufficient revenues to cover expenditures. Any investment in our company is therefore highly speculative and could result in the loss of your entire investment. We may not be able to accurately estimate the supply and demand for our vehicles, which could result in a variety of inefficiencies in our business and hinder our ability to generate revenue. If we fail to accurately predict our manufacturing requirements, we could incur additional costs or experience delays. It is difficult to predict our future revenues and appropriately budget for our expenses, and we may have limited insight into trends that may emerge and affect our business. We will be required to provide forecasts of our demand to our suppliers several months prior to the scheduled delivery of products to our prospective customers. Currently, there is no historical basis for making judgments on the demand for our vehicles or our ability to develop, manufacture, and deliver vehicles, or our profitability in the future. If we overestimate our requirements, our suppliers may have excess inventory, which indirectly would increase our costs. If we underestimate our requirements, our suppliers may have inadequate inventory, which could interrupt manufacturing of our products and result in delays in shipments and revenues. In addition, lead times for materials and components that our suppliers order may vary significantly and depend on factors such as the Russian Federation, have undergonespecific supplier, contract terms and demand for each component at a given time. If we fail to order sufficient quantities of product components in a timely manner, the delivery of vehicles to our customers could be delayed, which would harm our business, financial condition and operating results. 27 Table of Contents We could experience cost increases or disruptions in supply of raw materials or other components used in our vehicles. If we are unable to establish an arrangement for the sustainable supply of batteries for our vehicles, our business would be materially and adversely harmed. We may be unable to adequately control the costs associated with our operations. We expect to incur significant costs related to procuring raw materials required to manufacture and assemble our vehicles. The prices for these raw materials fluctuate depending on factors beyond our control. Our business also depends on the continued supply of battery cells for our vehicles. We are exposed to multiple risks relating to availability and pricing of quality solid-state polymer battery cells and lithium-ion battery cells. Furthermore, currency fluctuations, tariffs or shortages in petroleum and other economic or political economicconditions may result in significant increases in freight charges and social changeraw material costs. Substantial increases in recent years.the prices for our raw materials or components would increase our operating costs and could reduce our margins. In these countries, there isaddition, a greater riskgrowth in popularity of new, unforeseen changes thatelectric vehicles without a significant expansion in battery cell production capacity could result from, among other things, instabilityin shortages, which would result in increased costs in raw materials to us or changes in a country’s or region’s economic conditions; changes in laws or regulations or in the interpretation of existing laws or regulations, whether caused by a change in government or otherwise; increased difficulty of conducting business in a country or region dueimpact our prospects. If our vehicles fail to actual or potential political or military conflict; or action by the European Union, the United States or other governments that may restrictperform as expected, our ability to transactdevelop, market, and sell or lease our electric vehicles could be harmed. Once production commences, our vehicles may contain defects in design and manufacture that may cause them not to perform as expected or that may require repair, recalls, and design changes. Our vehicles will use a substantial amount of software code to operate and software products are inherently complex and often contain defects and errors when first introduced. We have a limited frame of reference by which to evaluate the long-term performance of our systems and vehicles. There can be no assurance that we will be able to detect and fix any defects in the vehicles prior to their sale to consumers. If any of our vehicles fail to perform as expected, we may need to delay deliveries or initiate product recalls, which could adversely affect our brand in our target markets and could adversely affect our business, prospects, and results of operations. Our services may not be generally accepted by our users. If we are unable to provide quality customer service, our business and reputation may be materially and adversely affected. Our servicing may primarily be carried out through third parties certified by us. Although such servicing partners may have experience in servicing other vehicles, they will initially have limited experience in servicing our vehicles. There can be no assurance that our service arrangements will adequately address the service requirements of our customers to their satisfaction, or that us or any of our proposed service partners will have sufficient resources to meet these service requirements in a foreign country ortimely manner as the volume of vehicles we deliver increases. The automotive market is highly competitive, and we may not be successful in competing in this industry. Both the automobile industry generally, and the electric vehicle segment, in particular, is highly competitive, and we will be competing for sales with certain foreign individuals or entities, such as sanctions by or againstboth internal combustion engine (“ICE”) vehicles and other EVs. Many of our current and potential competitors have significantly greater financial, technical, manufacturing, marketing and other resources than we do and may be able to devote greater resources to the Russian Federation. Proposed foreign legislationdesign, development, manufacturing, distribution, promotion, sale and regulations could also affect our business. For example,support of their products, including their electric vehicles. We expect competition for electric vehicles to intensify due to increased demand and a regulatory push for alternative fuel vehicles, continuing globalization, and consolidation in the Russian Federal Tax Service is interestedworldwide automotive industry. Factors affecting competition include product quality and features, innovation and development time, pricing, reliability, safety, fuel economy, customer service, and financing terms. Increased competition may lead to lower vehicle unit sales and increased inventory, which may result in all betting sites that render services to Russian citizens and wants to have these sites operate their business within the Russian Federation. Some believe that Russian regulators will lobby for a ban on payments for betting sites operating outside of Russia. If such a bill is adopted, then betting sites not registered in Russia could be limited in their ability to process payments, which could harm our customersdownward price pressure and adversely affect our payment processing business.business, financial condition, operating results, and prospects. 28 30 Table of Contents The automotive industry and our technology are rapidly evolving and may be subject to unforeseen changes. Developments in alternative technologies, including but not limited to hydrogen, may adversely affect the demand for our electric vehicles. Our management has identified continued material weaknessesWe may be unable to keep up with changes in EV technology or alternatives to electricity as a fuel source and, as a result, our controls and procedurescompetitiveness may suffer. Developments in alternative technologies, such as of December 31, 2018, which, if not properly remedied, could resultadvanced diesel, ethanol, fuel cells, or compressed natural gas, or improvements in material misstatements in our financial statements. Asthe fuel economy of the endICE, may materially and adversely affect our business and prospects in ways we do not currently anticipate. Any failure by us to successfully react to changes in existing technologies could materially harm our competitive position and growth prospects. We may be subject to risks associated with autonomous driving technology. It is expected that our proposed vehicles will be designed with connectivity for future installation of an autonomous hardware suite and we plan to partner with a third-party software provider in the future to implement autonomous capabilities. However, we cannot guarantee that we will be able to identify a third party to provide the necessary hardware and software to enable autonomous capabilities in an acceptable timeframe, on terms satisfactory to us, or at all. Autonomous driving technologies are subject to risks and there have been accidents and fatalities associated with such technologies. The safety of such technologies depends in part on drive interactions, and drivers may not be accustomed to using or adapting to such technologies. To the extent accidents associated with our autonomous driving systems occur, we could be subject to liability, negative publicity, government scrutiny, and further regulation. Any of the period covered by this Report,foregoing could materially and adversely affect our management conducted an evaluation, underresults of operations, financial condition, and growth prospects. Our distribution model is different from the supervisionpredominant current distribution model for automobile manufacturers, which makes evaluating our business, operating results and future prospects difficult. Our distribution model is different from the predominant current distribution model for automobile manufacturers, which makes evaluating our business, operating results and future prospects difficult. Our distribution model is not common in the automotive industry today. We plan to conduct vehicle sales directly to users rather than through dealerships. This model of vehicle distribution is relatively new and, with the participationlimited exceptions, unproven, and subjects us to substantial risk. For example, we will not be able to utilize long established sales channels developed through a franchise system to increase sales volume. Moreover, we will be competing with companies with well established distribution channels. Our success will depend in large part on our ability to effectively develop our own sales channels and marketing strategies. If we are unable to achieve this, it could have a material adverse effect on our business, prospects, financial results and results of our Chief Executive Officer and Chief Financial Officer, of the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) and Rule 15d-15(e) under the Exchange Act). Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were not effective because there are a limited number of personnel employed and we cannotoperations. We have an adequate segregation of duties, and due to theidentified material weaknesses in our internal control over financial reporting as discussed in “Management’s Report on Internal Control Over Financial Reporting” in Part II, Item 9A of this Report. Accordingly, management cannot provide reasonable assurance of achieving the desiredreporting. Failure to achieve and maintain effective internal control objective. Management works to mitigate these risks by being personally involved in all substantive transactions and attempts to obtain verification of transactions and accounting policies and treatments involving our operations, including those overseas. We are in the process of reviewing and, where necessary, modifying controls and procedures throughout the Company and we plan to address deficiencies identified over the next 9 to 12 months. Acquisition activitiesfinancial reporting could result in our failure to accurately or timely report our financial condition or results of operations, which could have a material adverse effect on our business and stock price. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our financial statements will not be prevented or detected on a timely basis. Management is working to remediate our current material weaknesses and prevent potential future material weaknesses by hiring additional qualified accounting and financial reporting personnel, and further reviewing and enhancing our accounting processes. We may not be able to fully remediate any future material weaknesses until these steps have been completed and have been operating difficulties, dilutioneffectively for a sufficient period of time. If we are not able to maintain effective internal control over financial reporting, our stockholdersfinancial statements and related disclosures may be inaccurate, which could have a material adverse effect on our business and our stock price. Our future growth is dependent on the demand for, and upon consumers’ willingness to adopt, electric vehicles. Our future growth is dependent on the demand for, and upon consumers’ willingness to adopt electric vehicles, and even if electric vehicles become more mainstream, consumers choosing us over other EV manufacturers. Demand for electric vehicles may be affected by factors directly impacting automobile prices or the cost of purchasing and operating automobiles such as sales and financing incentives, prices of raw materials and parts and components, cost of fuel and 29 Table of Contents governmental regulations, including tariffs, import regulation and other harmful consequences, and wetaxes. Volatility in demand may not achieve the anticipated benefits of the acquisitions. We have built our current business primarily through acquisitions of intellectual property and other assets in connection with acquiring businesses, such as Unified Payments, Aptito and PayOnline, and we intendlead to selectively pursue strategic acquisitions in the future. Future acquisitions could divert management’s time and focus from operating our business. In addition, integrating an acquired company, business or technology is risky andlower vehicle unit sales, which may result in unforeseen operating difficultiesdownward price pressure and expenditures. Foreign acquisitions also involve unique risks related to integration of operations across different cultures and languages, currency risks and the particular economic, political and regulatory risks associated with specific countries. We may not accurately assess the value or prospects of acquisition candidates, and the anticipated benefits from our future or even past acquisitions may not materialize. In addition, future acquisitions or dispositions could result in potentially dilutive issuances of our equity securities, including our common stock, the incurrence of significant amounts of debt, contingent liabilities or amortization expenses, or write-offs of goodwill, any of which could negatively affect our financial condition. We are dependent upon certain key relationships. If any of our key relationships were to deteriorate, our business prospects, financial condition and results of operations could be materially adversely affected. Our success, particularly the success of our payment processing business, is dependent, in part, upon industry relationships of our Chief Executive Officer, Oleg Firer. If we were to lose the services of Mr. Firer, or if the industry relationships of Mr. Firer on which we rely were to deteriorate, our business prospects, financial condition and results of operations could be materially adversely affected. To our knowledge, Mr. Firer currently has no plans to retire or leave us in the near future, and we are not aware of any material adverse developments in his industry relationships. We do not have “key person” insurance on the life of Mr. Firer or any other member of our management team. If we fail to adequately protect or enforce our intellectual property rights, competitors may create and market products and services similar to ours. In addition, we may be subject to intellectual property litigation and infringement claims by third parties. Our ability to compete effectively is dependent in part upon the proprietary nature of our technologies and software platforms. We generally rely on a combination of trade secret, copyright, trademark and patent law to protect our proprietary rights in our intellectual properties. Although we attempt to protect our proprietary technologies through trade secrets, trademarks, patents and license and other agreements, these may be insufficient. In addition, if we license our software in non-U.S. countries, because of differences in foreign laws concerning proprietary rights, our intellectual properties may not receive the same degree of protection in non-U.S. countries as they would in the United States. We may not always be able to successfully protect or enforce our proprietary information and assets against competitors, which may materially adversely affect our business, prospects, financial condition, and results of operations. operating results. In addition, there can be no assurancethe demand for our vehicles and services will highly depend upon the adoption by consumers of new energy vehicles in general and electric vehicles in particular. The market for new energy vehicles is still rapidly evolving, characterized by rapidly changing technologies, competitive pricing and competitive factors, evolving government regulation and industry standards, and changing consumer demands and behaviors. Other factors that may influence the adoption of alternative fuel vehicles, and specifically electric vehicles, include: ● perceptions about EV quality, safety, design, performance and cost, especially if adverse events or accidents occur that are linked to the quality or safety of electric vehicles, whether or not such vehicles are produced by us or other manufacturers; ● range anxiety; ● the availability of new energy vehicles, including plug-in hybrid EVs; ● the availability of service and charging stations for EVs; ● the environmental consciousness of consumers, and their adoption of EVs; ● perceptions about and the actual cost of alternative fuel; and ● macroeconomic factors. Any of the factors described above may cause current or potential customers not to purchase EVs in general, and our competitors willEVs in particular. If the market for EVs does not independently utilize existing technologies to develop products that are substantially equivalentas we expect or superior to ours, which also could materially adversely affectdevelops more slowly than we expect, our business, prospects, financial condition and operating results will be affected. The unavailability, reduction or elimination of operations. Although we do not believe that our intellectual properties infringe the rights of others,government and while to date we have not been subject to such claims, we may be exposed to, or threatened with, future litigation by other parties alleging that our technologies infringe their intellectual property rights. Any intellectual property claims, regardless of their merit, could be time consuming, expensive to litigate or settle and could divert management resources and attention. An adverse determination in any intellectual property claim could require us to pay damages and/or stop using our technologies and other material found to be in violation of another party’s rights and could prevent us from licensing our technologies to others. In order to avoid these restrictions, we may have to seek a license. Such a license may not be available on reasonable terms, could require us to pay significant license fees and may significantly increase our operating expenses. A license also may not be available to us at all. As a result, we may be required to use and/or develop non-infringing alternatives, which could require significant effort and expense. If we cannot obtain a license or develop alternatives for any infringing aspects of our business, we may be forced to limit our technologies and may be unable to compete effectively. Any of these adverse consequenceseconomic incentives could have a material adverse effect on our business, prospects, financial condition and resultsoperating results. Any reduction, elimination, or discriminatory application of operations.government subsidies and economic incentives because of policy changes, or the reduced need for such subsidies and incentives due to the perceived success of the electric vehicle or for other reasons, may result in the diminished competitiveness of the alternative fuel and electric vehicle industry generally or our electric vehicles in particular. This could materially and adversely affect the growth of the alternative fuel automobile markets and our business, prospects, financial condition and operating results. While certain tax credits and other incentives for alternative energy production, alternative fuel and electric vehicles have been available in the past, there is no guarantee these programs will be available in the future. If current tax incentives are not available in the future, our financial position could be harmed. Further, from time to timeIn addition, we may be engaged in disputes regardingapply for federal and state grants, loans and tax incentives under government programs designed to stimulate the licensingeconomy and support the production of alternative fuel and electric vehicles and related technologies, and our ability to obtain funds or incentives from government sources is subject to the availability of funds under applicable government programs and approval of our intellectual property rights, including matters relatedapplications to participate in such programs. The application process for these funds and other incentives will likely be highly competitive. We cannot assure you that we will be successful in obtaining any of these additional grants, loans and other incentives. If we are not successful in obtaining any of these additional incentives and we are unable to find alternative sources of funding to meet our planned capital needs, our business and prospects could be materially adversely affected. 30 Table of Contents If we fail to manage our future growth effectively, we may not be able to develop, manufacture, market and sell or lease our vehicles successfully. We intend to expand our operations significantly, which will require hiring, retaining and training new personnel, controlling expenses, establishing facilities and experience centers, and implementing administrative infrastructure, systems and processes. In addition, because our electric vehicles are based on a different technology platform than traditional ICE vehicles, individuals with sufficient training in electric vehicles may not be available to be hired, and we will need to expend significant time and expense training employees we hire. We also require sufficient talent in additional areas such as software development. Furthermore, as we are a relatively young company, our ability to train and integrate new employees into our operations may not meet the termsgrowing demands of our licensing arrangements. These typesbusiness which may affect our ability to grow. Any failure to effectively manage our growth could materially and adversely affect our business, prospects, operating results and financial condition. For example, to manage the expected growth of disputes canour operations and increasing complexity, we will need to improve our operational and financial systems, procedures, and controls and continue to increase systems automation to reduce reliance on manual operations. Any inability to do so will affect our billing and reporting. Our current and planned systems, procedures and controls may not be asserted byadequate to support our licenseescomplex arrangements and the rules governing revenue and expense recognition for our future operations and expected growth. Delays or prospective licenseesproblems associated with any improvement or by other third parties as partexpansion of negotiationsour operational and financial systems and controls could adversely affect our relationships with us or in private actions seeking monetary damages or injunctive relief or in regulatory actions. Requests for monetaryour customers, cause harm to our reputation and injunctive remedies asserted in claims like these could be materialbrand and could have a significant impact onalso result in errors in our business prospects. Any disputes with our licensees, potential licensees orfinancial and other third partiesreporting. Insufficient warranty reserves to cover future warranty claims could materially adversely affect our business, prospects, financial condition and results of operations. 31 Table of Contents Fluctuations in foreign currency exchange rates could negatively affect our financial results. We earn revenues and interest income, pay expenses, own assets and incur liabilities in countries using currencies other than the U.S. dollar. In the year ended December 31, 2018, we used one functional currency - the Russian ruble - in addition to the U.S. dollar, and derived approximately 10% of our total net revenues from operations outside the United States in Russia and CIS. As of December 31, 2018, the foreign exchange rate for the Russian ruble has decreased by approximately 20% as compared to the Daily rate at December 31, 2017. Because our consolidated financial statements are presented in U.S. dollars, we must translate net revenues, interest income and expenses, as well as assets and liabilities, into U.S. dollars at exchange rates in effect during or at the end of each reporting period. Therefore, increases or decreases in the value of the U.S. dollar against other major currencies will affect the amounts of our net revenues, interest income, operating expenses and the value of balance sheet items, including intercompany assets and obligations. Because we have operations in Russia, our exchange rate risk is highly sensitive to the prevailing value of the U.S. dollar relative to the Russian ruble, which exchange rates have fluctuated significantly in recent months as a result, in part, of the continuing instability in Ukraine and Syria as well as continued sanctions against Russia. Fluctuations in foreign currency exchange rates, particularly the U.S. dollar against the Russian ruble, may materially adversely affect our financial results. Our business is subjectOnce our cars are in production, we will need to complex and evolving U.S. and foreign laws and regulations regarding privacy, data protection and other matters. Many of these laws and regulationsmaintain warranty reserves to cover warranty-related claims. If our warranty reserves are subjectinadequate to change and uncertain interpretations, and could result incover future warranty claims changes toon our business practices, increased cost of operations or declines in user growth or engagement, or otherwise harm our business. We are subject to a number of foreign and domestic laws and regulations that affect companies conducting business on the Internet and companies transmitting user information and payments via text message or other electronic means, many of which are still evolving and the interpretation of which are often uncertain. Failure to comply with applicable laws and regulations may result in the suspension or revocation of licenses or registrations, the limitation, suspension or termination of services and/or the imposition of civil and criminal penalties and/or fines. The services of PayOnline to mobile phone carriers also are subject to certain of the rules and policies of such carriers and ongoing contractual covenants with such carriers, the violation of which may result in penalties and/or fines and possible termination of PayOnline’s services. For additional information, see “Business Description - Regulation” in Part I, Item 1 of this Report. Poor perception of our brand, business or industry could harm our reputation and adversely affectvehicles, our business, prospects, financial condition and operating results could be materially and adversely affected. We may become subject to significant and unexpected warranty expenses. There can be no assurances that then-existing warranty reserves will be sufficient to cover all claims. We may not succeed in establishing, maintaining and strengthening the Mullen brand, which would materially and adversely affect customer acceptance of operations.our vehicles and components and our business, revenues and prospects. TheOnce our cars are in production, our business and prospects will heavily depend on our ability to develop, maintain and strengthen the Mullen brand. If we are not able to establish, maintain and strengthen our brand, we may lose the opportunity to build a critical mass of customers. Our ability to develop, maintain and strengthen the Mullen brand will depend heavily on the success of our business dependsmarketing efforts. The automobile industry is intensely competitive, and we may not be successful in part onbuilding, maintaining and strengthening our reputation withinbrand. Many of our industriescurrent and with our clientspotential competitors, particularly automobile manufacturers headquartered in the United States, Japan, the European Union and consumers. We may be the subject of unflattering reports in blogs, video blogsChina, have greater name recognition, broader customer relationships and the media aboutsubstantially greater marketing resources than we do. If we do not develop and maintain a strong brand, our business, prospects, financial condition and operating results will be materially and adversely impacted. We will initially depend on revenue generated from a single model and in the foreseeable future will be significantly dependent on a limited number of models. We will initially depend on revenue generated from a single vehicle model and in the foreseeable future will be significantly dependent on a limited number of models. Historically, automobile customers have come to expect a variety of vehicle models offered in a manufacturer’s fleet and new and improved vehicle models to be introduced frequently. Given that for the foreseeable future our business model. Any damagewill depend on a single or limited number of models, to the extent a particular model is not well-received by the market, our reputationsales volume, business, prospects, financial condition, and operating results could harmbe materially and adversely affected. 31 Table of Contents Doing business internationally creates operational and financial risks for our abilitybusiness. Our business plan includes eventual expansion into other international markets. Conducting and launching operations on an international scale requires close coordination of activities across multiple jurisdictions and time zones and consumes significant management resources. If we fail to obtaincoordinate and retain contracts with mobile phone carriers, content providers, advertisers and other customers, which could materially adversely affectmanage these activities effectively, our business, financial condition or results of operations financial conditioncould be adversely affected. International sales entail a variety of risks, including currency exchange fluctuations, challenges in staffing and business.managing foreign operations, tariffs and other trade barriers, unexpected changes in legislative or regulatory requirements of foreign countries into which we sell our products and services, difficulties in obtaining export licenses or in overcoming other trade barriers, laws and business practices favoring local companies, political and economic instability, difficulties protecting or procuring intellectual property rights, and restrictions resulting in delivery delays and significant taxes or other burdens of complying with a variety of foreign laws. We are highly dependent on the services of David Michery, our Chief Executive Officer. We are highly dependent on the services of David Michery, our founder and Chief Executive Officer. Mr. Michery is the source of many, if not most, of the ideas and execution driving us. If Mr. Michery were to discontinue his service to us due to death, disability or any other reason, we would be significantly disadvantaged. Our business may be adversely affected by labor and union activities. Although none of our employees are currently represented by a labor union, it is subjectcommon throughout the automobile industry generally for many employees at automobile companies to the risksbelong to a union, which can result in higher employee costs and increased risk of hurricanes, floods, fireswork stoppages. We may also directly and indirectly depend upon other natural catastrophic events and to interruption by man-made problemscompanies with unionized work forces, such as computer virusesparts suppliers and trucking and freight companies, and work stoppages or terrorism. Our systems and operations are vulnerable to damage or interruption from hurricanes, floods, fires, power losses, telecommunications outages, terrorist attacks, acts of war, human errors, break-ins and similar events. Our U.S. corporate offices are located in Miami, Florida, which is an area that is at high risk of hurricane and flood damage. In addition, acts of terrorism, which may be targeted at metropolitan areas that have higher population density than rural areas, could cause disruptions in our business or the economy as a whole. The servers that we use through various third-party service providers are not located in Miami, Florida but may also be vulnerable to computer viruses, break-ins and similar disruptions from unauthorized tampering with our computer systems, which could lead to interruptions, delays, loss of critical data or the unauthorized disclosure of confidential information. Such service providers may not have sufficient protection or recovery plans in certain circumstances, and our insurance may not be sufficient to compensate us for losses that may occur. As we rely heavily on our servers, computer and communications systems and the Internet to conduct our business,strikes organized by such disruptions could negatively impact our ability to run our business and either directly or indirectly disrupt our customers’ respective businesses, whichunions could have ana material adverse effectimpact on our business, prospects,financial condition or operating results and financial condition.results. We incur increased costs as a result of being a public company. As a public company, we currently incur significant legal, accounting and other expenses not incurred by private companies. It may be time consuming, difficult and costly for usface risks related to develop, implement and maintainhealth epidemics, including the additional internal controls, processes and reporting procedures required by federal statutes, SEC rules, other government regulations affecting public companies and/or stock exchange compliance requirements. We may need to hire additional financial reporting, internal auditing and other finance staff in order to develop, implement and maintain appropriate internal controls, processes and reporting procedures, which will increase our expenses and adversely affect our operating results and financial condition. We are the subject of various legal proceedingsrecent COVID-19 pandemic, which could have a material adverse effect on our business and results of operations. We face various risks related to public health issues, including epidemics, pandemics, and other outbreaks, including the recent pandemic of respiratory illness caused by a novel coronavirus known as COVID-19. The impact of COVID-19, including changes in consumer and business behavior, pandemic fears and market downturns, and restrictions on business and individual activities, has created significant volatility in the global economy and led to reduced economic activity. The spread of COVID-19 has also created a disruption in the manufacturing, delivery and overall supply chain of vehicle manufacturers and suppliers and has led to a global decrease in vehicle sales in markets around the world. The pandemic has resulted in government authorities implementing numerous measures to try to contain the virus, such as travel bans and restrictions, quarantines, stay-at-home or shelter-in-place orders, and business shutdowns. These measures may adversely impact our employees and operations and the operations of our customers, suppliers, vendors and business partners, and may negatively impact our sales and marketing activities. In addition, various aspects of our business cannot be conducted remotely. These measures by government authorities may remain in place for a significant period of time and they are likely to continue to adversely affect our manufacturing plans, sales and marketing activities, business and results of operations. The spread of COVID-19 has caused us to modify our business practices (including employee travel, recommending that all non-essential personnel work from home and cancellation or reduction of physical participation in sales activities, meetings, events and conferences), and we may take further actions as may be required by government authorities or that we determine are in the best interests of our employees, customers, suppliers, vendors and business partners. The reduction of economic activity also disrupted some contractual obligations due to work stoppage requirements. Some employees chose the option to work from home rather than come to the office. As a result, there were some reductions in employee productivity, employee layoffs and employee salaries. The extent to which the COVID-19 pandemic impacts our business, prospects and results of operations will depend on future developments, which are highly uncertain and cannot be predicted, including the duration and spread of the 32 Table of Contents pandemic, our severity, the actions to contain the virus or treat our impact, and how quickly and to what extent normal economic and operating activities can resume. Even after the COVID-19 pandemic has subsided, we may continue to experience an adverse impact to our business as a result of our global economic impact, including any recession that has occurred or may occur in the future. Specifically, difficult macroeconomic conditions, such as decreases in per capita income and level of disposable income, increased and prolonged unemployment, or a decline in consumer confidence as a result of the COVID-19 pandemic could have a material adverse effect on the demand for our vehicles. Under difficult economic conditions, potential customers may seek to reduce spending by forgoing our vehicles for other traditional options or may choose to keep their existing vehicles and cancel reservations. There are no comparable recent events that may provide guidance as to the effect of the spread of COVID-19 and a pandemic, and, as a result, the ultimate impact of the COVID-19 pandemic or a similar health epidemic is highly uncertain. Reservations for our vehicles are cancellable. The potentially long wait from the time a reservation is made until the time the vehicle is delivered, and any delays beyond expected wait times, could impact user decisions on whether to ultimately make a purchase. Any cancellations could harm our financial condition, business, prospects, and operating results. We may face legal challenges in one or more states attempting to sell directly to customers which could materially adversely affect our costs. Our business plan includes the direct sale of vehicles to business customers, and potentially, to individual customers. Most, if not all, states require a license to sell vehicles within the state. Many states prohibit manufacturers from directly selling vehicles to customers. In other states, manufacturers must operate a physical dealership within the state to deliver vehicles to customers. As a result, we may not be able to sell directly to customers in each state in the United States. For customers residing in states in which we will not be allowed to sell or deliver vehicles, we may have to arrange alternate methods of delivery of vehicles. This could include delivering vehicles to adjacent or nearby states in which we are allowed to directly sell and ship vehicles and arranging for the customer to transport the vehicles to their home states. These workarounds could add significant complexity, and as a result, costs, to our business. Failure of information security and privacy concerns could subject us to penalties, damage our reputation and brand, and harm our business and results of operations. We expect to face significant challenges with respect to information security and privacy, including the storage, transmission and sharing of confidential information. We will transmit and store confidential and private information of our customers, such as personal information, including names, accounts, user IDs and passwords, and payment or transaction related information. We have adopted information security policies and deployed measures to implement the policies, including, among others, encryption technologies, and plans to continue to deploy additional measurers as we grow. However, advances in technology, an increased level of sophistication and diversity of our products and services, an increased level of expertise of hackers, new discoveries in the field of cryptography or other factors can still result in a compromise or breach of the measures that we use. If we are unable to protect our systems, and hence the information stored in our systems, from unauthorized access, use, disclosure, disruption, modification or destruction, such problems or security breaches could cause a loss, give rise to our liabilities to the owners of confidential information or even subject us to fines and penalties. In addition, complying with various laws and regulations could cause us to incur substantial costs or require us to change our business practices, including our data practices, in a manner adverse to our business. In addition, we will need to comply with increasingly complex and rigorous regulatory standards enacted to protect business and personal data in the United States, Europe and elsewhere. For example, the European Union adopted the General Data Protection Regulation (“GDPR”), which became effective on May 25, 2018 and the State of California 33 Table of Contents adopted the California Consumer Privacy Act of 2018 (“CCPA”). Both the GDPR and the CCPA impose additional obligations on companies regarding the handling of personal data and provides certain individual privacy rights to persons whose data is stored. Compliance with existing, proposed and recently enacted laws (including implementation of the privacy and process enhancements called for under the GDPR) and regulations can be costly; any failure to comply with these regulatory standards could subject us to legal and reputational risks. Compliance with any additional laws and regulations could be expensive and may place restrictions on the conduct of our business and the manner in which we interact with our customers. Any failure to comply with applicable regulations could also result in regulatory enforcement actions against us, and misuse of or failure to secure personal information could also result in violation of data privacy laws and regulations, proceedings against us by governmental entities or others, and damage to our reputation and credibility, and could have a negative impact on revenues and profits. Significant capital and other resources may be required to protect against information security breaches or to alleviate problems caused by such breaches or to comply with our privacy policies or privacy-related legal obligations. The resources required may increase over time as the methods used by hackers and others engaged in online criminal activities are increasingly sophisticated and constantly evolving. Any failure or perceived failure by us to prevent information security breaches or to comply with privacy policies or privacy-related legal obligations, or any compromise of security that results in the unauthorized release or transfer of personally identifiable information or other customer data, could cause our customers to lose trust in us and could expose us to legal claims. Any perception by the public that online transactions or the privacy of user information are becoming increasingly unsafe or vulnerable to attacks could inhibit the growth of online retail and other online services generally, which may reduce the number of orders we receive. We may need to defend ourselves against patent or trademark infringement claims, and we may not be able to prevent others from unauthorized use of our intellectual property, which may be time-consuming and would cause us to incur substantial costs and harm our business and competitive position. Companies, organizations, or individuals, including our competitors, may hold or obtain patents, trademarks or other proprietary rights that would prevent, limit or interfere with our ability to make, use, develop, sell, lease or market our vehicles or components, which could make it more difficult for us to operate our business. From time to time, we may receive communications from holders of patents or trademarks regarding their proprietary rights. Companies holding patents or other intellectual property rights may bring suits alleging infringement of such rights or otherwise assert their rights and urge us to take licenses. Our applications and uses of trademarks relating to our design, software or artificial intelligence technologies could be found to infringe upon existing trademark ownership and rights. In addition, if we are determined to have infringed upon a third party’s intellectual property rights, we may be required to do one or more of the following: ● cease selling or leasing, incorporating certain components into, or using vehicles or offering goods or services that incorporate or use the challenged intellectual property; ● pay substantial damages; ● seek a license from the holder of the infringed intellectual property right, which license may not be available on reasonable terms, or at all; ● redesign our vehicles or other goods or services; or ● establish and maintain alternative branding for our products and services. In the event of a successful claim of infringement against us and our failure or inability to obtain a license to the infringed technology or other intellectual property right, our business, prospects, operating results and financial condition could be materially and adversely affected. In addition, any litigation or claims, whether or not valid, could result in substantial costs, negative publicity and diversion of resources and management attention. 34 Table of Contents Further, we may not be able to prevent others from unauthorized use of our intellectual property, which could harm our business and competitive position. We rely or will rely on a combination of patents, trade secrets (including know-how), employee and third-party nondisclosure agreements, copyrights, trademarks, intellectual property licenses, and other contractual rights to establish and protect our rights in our technology. Despite our efforts to protect our proprietary rights, third parties may attempt to copy or otherwise obtain and use our intellectual property or seek court declarations that they do not infringe upon our intellectual property rights. Monitoring unauthorized use of our intellectual property is difficult and costly, and the steps we have taken or will take may not prevent misappropriation. From time to time, we may have to resort to litigation to enforce our intellectual property rights, which could result in substantial costs and diversion of our resources. Patent, trademark, and trade secret laws vary significantly throughout the world. A number of foreign countries do not protect intellectual property rights to the same extent as do the laws of the United States. Therefore, our intellectual property rights may not be as strong or as easily enforced outside of the United States. Failure to adequately protect our intellectual property rights could result in our competitors offering similar products, potentially resulting in the loss of some of our competitive advantage and a decrease in our revenue which, would adversely affect our business, prospects, financial condition and operating results. Patent applications that we may file may not issue as patents and any patents that may be granted to us may expire and may not be extended, our rights may be contested, circumvented, invalidated or limited in scope, or our rights may not protect us effectively, all of which may have a material adverse effect on our ability to prevent others from commercially exploiting products similar to theirs. We cannot be certain that we are the first inventor of the subject matter to which we may file a particular patent application, or if we are the first party to file such a patent application. If another party has filed a patent application for the same subject matter as we have, we may not be entitled to the protection sought by the patent application. Further, the scope of protection of issued patent claims is often difficult to determine. As a result, we cannot be certain that the patent applications that we file will issue, or that our issued patents will afford protection against competitors with similar technology. In addition, our competitors may design around our issued patents, which may adversely affect our business, prospects, financial condition or operating results. We cannot assure you that we will be granted patents pursuant to any applications that we may file. Even if we file patent applications and we are involvedissued patents in various litigation matters. accordance with them, it is still uncertain whether these patents will be contested, circumvented or invalidated in the future. In addition, the rights granted under any issued patents may not provide we with meaningful protection or competitive advantages. The claims under any patents that issue from our patent applications may not be broad enough to prevent others from developing technologies that are similar or that achieve results similar to ours. The intellectual property rights of others could also bar us from licensing and exploiting any patents that issue from our applications. Numerous patents and pending patent applications owned by others exist in the fields in which we have developed and is developing our technology. These patents and patent applications might have priority over our patent applications and could subject our patent applications to invalidation. Finally, in addition to those who may claim priority, any of our patents may also be challenged by others on the basis that they are otherwise invalid or unenforceable. We may be subject to damages resulting from timeclaims that we or our employees have wrongfully used or disclosed alleged trade secrets of our employees’ former employers. Many of our employees were previously employed by other automotive companies or by suppliers to time, alsoautomotive companies. We may be involved insubject to claims that us or these employees have inadvertently or otherwise used or disclosed trade secrets or other proprietary information of their former employers. Litigation may be the subject of governmental or regulatory agency inquiries or investigations.necessary to defend against these claims. If we are unsuccessfulfail in our defensedefending such claims, in the litigation matters, or any other legal proceeding,addition to paying monetary damages, we may be forcedlose valuable intellectual property rights or personnel. A loss of key personnel or their work product could hamper or prevent our ability to pay damagescommercialize our products, which could severely harm our business. Even if we are successful in defending against these claims, litigation could result in substantial costs and demand on management resources. 35 Table of Contents Our vehicles are subject to motor vehicle standards and substantial regulation, and the failure to satisfy such mandated safety standards or fines and/regulations, or change our business practices, any of which couldunfavorable changes to such regulations, would have a material adverse effect on our business financial condition and resultsoperating results. All vehicles sold must comply with international, federal, and state motor vehicle safety standards. In the United States, vehicles that meet or exceed all federally mandated safety standards are certified under the federal regulations. Rigorous testing and the use of operations. For more information about our legal proceedings, see “Legal Proceedings” in Part I, Item 3 of this Report. Our merchants may be unable to satisfy obligationsapproved materials and equipment are among the requirements for which we may also be liable. We are subject to the risk of our merchants being unable to satisfy obligations for which we may also be liable. For example, we and our merchant acquiring alliances may be subject to contingent liability for transactions originally acquiredachieving federal certification. Failure by us that are disputed by the cardholder and charged back to the merchants. If we or the alliance is unable to collect this amount from the merchant because of the merchant’s insolvency or other reasons, we or the alliance will bear the loss for the amount of the refund paid to the cardholder. We have an active program to manage our credit risk and often mitigate our risk by obtaining collateral. It is possible, however, that a default on such obligations by one or more of our merchants could have a material adverse effect on our business. 32 Table of Contents Fraud by merchants or others couldfuture model electric vehicle satisfy motor vehicle standards would have a material adverse effect on our business and operating results. Additionally, our electric vehicles, and the sale of motor vehicles in general, are subject to substantial regulation under international, federal, state, and local laws. We expect to incur significant costs in complying with these regulations. Regulations related to the electric vehicle industry and alternative energy are currently evolving and we face risks associated with changes to these regulations. To the extent the laws change, our vehicles may not comply with applicable international, federal, state or local laws, which would have an adverse effect on our business. Compliance with changing regulations could be burdensome, time consuming, and expensive. To the extent compliance with new regulations is cost prohibitive, our business, prospects, financial condition and operating results would be adversely affected. Internationally, there may be laws in jurisdictions we have not yet entered or laws we are unaware of in jurisdictions we have entered that may restrict our sales or other business practices. Even for those jurisdictions we have analyzed, the laws in this area can be complex, difficult to interpret and may change over time. Continued regulatory limitations and other obstacles interfering with our ability to sell or lease vehicles directly to consumers could have a negative and material impact on our business, prospects, financial condition and results of operations. We may bebecome subject to potentialproduct liability for fraudulent electronic payment transactionsclaims, which could harm our financial condition and liquidity if we are not able to successfully defend or credits initiated by merchants or others. Examplesinsure against such claims. We may become subject to product liability claims, even those without merit, which could harm our business, prospects, operating results, and financial condition. The automobile industry experiences significant product liability claims and we face inherent risk of merchant fraud include when a merchant or other party knowingly uses a stolen or counterfeit credit, debit or prepaid card, card number, or other credentialsexposure to record a false sales transaction, processes an invalid card, or intentionally fails to deliver the merchandise or services sold in an otherwise valid transaction. Criminals are using increasingly sophisticated methods to engage in illegal activities such as counterfeiting and fraud. It is possible that incidents of fraud could increaseclaims in the future. Failureevent our vehicles do not perform as expected or malfunction resulting in personal injury or death. Our risks in this area are particularly pronounced given we have limited field experience for our vehicles. A successful product liability claim against us could require us to effectively manage riskpay a substantial monetary award. Moreover, a product liability claim could generate substantial negative publicity about our vehicles and business and inhibit or prevent fraudcommercialization of other future vehicle candidates, which would increasehave material adverse effect on our chargebackbrand, business, prospects and operating results. Any insurance coverage might not be sufficient to cover all potential product liability claims. Any lawsuit seeking significant monetary damages either in excess of our coverage, or other liability. Increases in chargebacks or other liability couldoutside of our coverage, may have a material adverse effect on our reputation, business and financial condition, and results of operations. Risks Relating to Blockchain Technology We may not be successful in developing our blockchain technology solutions, and even if such platform is developed, there are a number of risks that may prevent its widespread adoption. We are continuing the development of a decentralized crypto-based ecosystem that will act as a framework for a number of value-added services that can connect merchants and consumers directly utilizing blockchain technology while increasing the economic efficiency of all transactions being made within the ecosystem. However, blockchain technology is new and its uses are constantly evolving. Accordingly, we may not be successful in completing and fully-implementing our blockchain technology solutions in a timely manner or at all. In addition, even if we are able to fully implement our blockchain platform, such technology is subject to a number of risks that may prevent its widespread adoption, including: ● Risks of unfavorable regulatory action in one or more jurisdictions. Blockchain technologies and cryptocurrencies have been the subject of scrutiny by various regulatory bodies around the world. We could be impacted by one or more regulatory inquiries or actions, including but not limited to restrictions on the use of blockchain technology, which could impede or limit the development of our anticipated blockchain technology solutions. ● Risks relating to competition and alternative platforms. Blockchain industry is highly competitive and competition should intensify in the future. There are many platforms that enable the use of blockchain technologies in the payments ecosystem. Additional competitors are likely to enter the industry in the future. There is also competition from the traditional payment networks, all of which could potentially negatively impact us. ● Risks associated with unauthorized access. Third parties that gains access to a user’s login credentials or private keys may be able to transfer the user’s value. To minimize this risk, the users should guard against unauthorized access to their electronic devices. ● Risks that our anticipated blockchain technology solutions, as developed, will not meet the expectations of its target audience. Our anticipated blockchain technology solutions are presently under development and may undergo significant changes before beta and/or final release. Any expectations regarding the form and functionality of our anticipated blockchain technology solutions may not be met upon release, for any number of reasons including change in the design and implementation plans and execution. ● Risks of theft and hacking. Hackers or other groups or organizations may attempt to interfere with the blockchain technology or the availability of our anticipated blockchain technology solutions in any number of ways, including without limitation denial of service attacks, Sybil attacks, spoofing, smurfing, malware attacks, or consensus based attacks. We expect to spend significant resources to consistently penetrate test and monitor its technology to prevent any such threats. ● Risk of security weaknesses in the core infrastructure and software. Some parts of the core software may be based on open-source software. There is a risk that the development team or other third parties may intentionally or unintentionally introduce weaknesses or bugs into the core infrastructure elements of our anticipated blockchain technology solutions, which may materially interfere with its use. ● Risk of weaknesses or exploitable breakthroughs in the field of cryptography. Advances in cryptography, or technical advances such as the development of quantum computers, could present risks to cryptocurrencies and network, which could result in theft or loss. ● Unanticipated risks. Blockchain technology, cryptocurrency and cryptographic tokens are new and untested technologies. In addition to the risks set forth here, there are risks that we cannot anticipate. Risks may further materialize as unanticipated combinations or variations from the risks set forth here. condition. We may not be able to develop newsecure additional product liability insurance coverage on commercially acceptable terms or at reasonable costs when needed, particularly if we do face liability for our products and are forced to make a claim under our policy. We are or enhance the capabilities relatedwill be subject to blockchain technology that is being developed byanti-corruption, anti-bribery, anti-money laundering, financial and economic sanctions and similar laws, and non-compliance with such laws can subject us to administrative, civil and criminal fines and penalties, collateral consequences, remedial measures and legal expenses, all of which could adversely affect our business, results of operations, financial condition and reputation. We are or will be subject to anti-corruption, anti-bribery, anti-money laundering, financial and economic sanctions and similar laws and regulations in various jurisdictions in which we conduct or in the future may conduct activities, including the U.S. Foreign Corrupt Practices Act (“FCPA”), the U.K. Bribery Act 2010, and other anti-corruption laws and regulations. The FCPA and the U.K. Bribery Act 2010 prohibit us and our officers, directors, employees and business partners acting on our behalf, including agents, from corruptly offering, promising, authorizing or providing anything of value to a “foreign official” for the purposes of influencing official decisions or obtaining or retaining business or otherwise obtaining favorable treatment. The FCPA also requires companies to make and keep pacebooks, records and accounts that 36 Table of Contents accurately reflect transactions and dispositions of assets and to maintain a system of adequate internal accounting controls. The U.K. Bribery Act also prohibit non-governmental “commercial” bribery and soliciting or accepting bribes. A violation of these laws or regulations could adversely affect our business, results of operations, financial condition and reputation. Our policies and procedures designed to ensure compliance with these regulations may not be sufficient and our directors, officers, employees, representatives, consultants, agents, and business partners could engage in improper conduct for which we may be held responsible. Non-compliance with anti-corruption, anti-bribery, anti-money laundering or financial and economic sanctions laws could subject us to whistleblower complaints, adverse media coverage, investigations, and severe administrative, civil and criminal sanctions, collateral consequences, remedial measures and legal expenses, all of which could materially and adversely affect our business, results of operations, financial condition and reputation. In addition, changes in economic sanctions laws in the future could adversely impact our business and investments in our shares. Failure to improve our operational and financial systems to support our expected growth, increasingly complex business arrangements and rules governing revenue and expense recognition and any inability to do so will adversely affect our billing and reporting. To manage the expected growth and increasing complexity of our operations, we will need to improve our operational and financial systems, procedures, and controls and continue to increase systems automation to reduce reliance on manual operations. Any inability to do so will affect our billing and reporting. Our current and planned systems, procedures and controls may not be adequate to support our complex arrangements and the rules governing revenue and expense reco0gntion for our future operations and expected growth. Delays or problems associated with any improvement or expansion of our operational and financial systems and controls could adversely affect our relationships with our industry’s rapidly changing technologycustomers, cause harm to our reputation and customer requirements.brand and could also result in errors in our financial and other reporting. The industry for blockchain technology is characterized by rapid technological changes, new product introductions, enhancements,Failure to build our finance infrastructure and evolving industry standards. Our business prospects depend onimprove our accounting systems and controls could impair our ability to develop new productscomply with the financial reporting and applicationsinternal controls requirements for publicly traded companies. As a public company, we will operate in an increasingly demanding regulatory environment, which requires us to comply with the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”), the regulations of the Nasdaq CM, the rules and regulations of the SEC, expanded disclosure requirements, accelerated reporting requirements and more complex accounting rules. Company responsibilities required by the Sarbanes-Oxley Act include establishing corporate oversight and adequate internal control over financial reporting and disclosure controls and procedures. Effective internal controls are necessary for us to produce reliable financial reports and are important to help prevent financial fraud. Commencing with our technologyfiscal year ending the year in new marketswhich the Merger Agreement is completed, we must perform system and process evaluation and testing of our internal controls over financial reporting to allow management to report on the effectiveness of our internal controls over financial reporting in our Form 10-K filing for that developyear, as required by Section 404 of the Sarbanes-Oxley Act. Prior to the Closing, we have never been required to test our internal controls within a specified period and, as a result, we may experience difficulty in meeting these reporting requirements in a timely manner. We anticipate that the process of technologicalbuilding our accounting and scientific advances, while improving performancefinancial functions and cost-effectiveness. New technologies, techniques or products could emerge that might offer better combinations of priceinfrastructure will require significant additional professional fees, internal costs and performance than the blockchain technology solutions that are being developed by us. It is importantmanagement efforts. We expect that we anticipate changeswill need to implement a new internal system to combine and streamline the management of our financial, accounting, human resources and other functions. However, such a system would likely require us to complete many processes and procedures for the effective use of the system or to run our business using the system, which may result in technologysubstantial costs. Any disruptions or difficulties in implementing or using such a system could adversely affect our controls and market demand. harm our business. Moreover, such disruption or difficulties could result in unanticipated costs and diversion of management’s attention. In addition, we may discover additional weaknesses in our system of internal financial and accounting controls and procedures that could result in a material misstatement of our financial statements. Our internal control over financial reporting will not prevent or detect all errors and all fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control system’s objectives will be met. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud will be detected. 37 Table of Contents If we doare not successfully innovateable to comply with the requirements of Section 404 of the Sarbanes-Oxley Act in a timely manner, or if we are unable to maintain proper and introduce new technology intoeffective internal controls, we may not be able to produce timely and accurate financial statements. If we cannot provide reliable financial reports or prevent fraud, our anticipated technology solutions or effectively manage the transitions of our technology to new product offerings, our business financial condition and results of operations could be harmed.harmed, investors could lose confidence in our reported financial information and we could be subject to sanctions or investigations by the Nasdaq CM, the SEC or other regulatory authorities. Our management has limited experience in operating a public company. 33 Table Our executive officers have limited experience in the management of Contents a publicly traded company. Our management team may not successfully or effectively manage our transition to a public company that will be subject to significant regulatory oversight and reporting obligations under federal securities laws. Their limited experience in dealing with the increasingly complex laws pertaining to public companies could be a significant disadvantage in that it is likely that an increasing amount of their time may be devoted to these activities which will result in less time being devoted to the management and growth of the combined company. We may not have adequate personnel with the appropriate level of knowledge, experience, and training in the accounting policies, practices or internal controls over financial reporting required of public companies in the United States. The development and implementation of the standards and controls necessary for the combined company to achieve the level of accounting standards required of a public company in the United States may require costs greater than expected. It is possible that we will be required to expand our employee base and hire additional employees to support our operations, which will increase our operating costs in future periods. Risks RelatedThe voting structure of our Preferred Stock has the effect of concentrating voting control with David Michery, our founder. Until the voting rights of the Series A Preferred Stock are reduced, this will limit or preclude stockholders’ ability to Ourinfluence corporate matters, including the outcome of important transactions, including a change in control. Shares of our Series A Preferred currently have 1,000 votes per share and convert into our Common Stock Our officers, directors and their affiliates own on a large portion100-for-1 basis, while shares of our common stock. Future sales or distributionsSeries B and Series C Preferred and Common Stock have one vote per share. David Michery, our founder and Chief Executive Officer, holds substantially all of the issued and outstanding shares of our commonSeries A Preferred and currently holds voting power over the Series B and Series C Preferred. Accordingly, Mr. Michery holds approximately 73% of the voting power of our capital stock. As such, Mr. Michery is able to control or exert significant influence over matters submitted to our stockholders for approval, including the election of directors, amendments of our organizational documents and any merger, consolidation, sale of all or substantially all of our assets or other major corporate transactions. Mr. Michery may have interests that differ from yours and may vote in a way with which you disagree, and which may be adverse to your interests. This concentrated control may have the effect of delaying, preventing or deterring a change in control of our company, could deprive our stockholders of an opportunity to receive a premium for their capital stock as part of a sale of our company, and might ultimately affect the market price of shares of our Common Stock. All of our debt obligations and our senior equity securities will have priority over our Common Stock with respect to payment in the public market byevent of liquidation, dissolution or winding up, and our outstanding senior securities restrict our ability to pay dividends on our Common Stock. If we were to liquidate, dissolve or wind up, our Common Stock would rank below all debt claims against us and claims of all of our outstanding shares of preferred stock. As a result, holders of Common Stock of the combined company will not be entitled to receive any payment or other distribution of assets upon the liquidation, dissolution or winding up of the combined company until after all our officers, directorsobligations to our debt holders have been satisfied and their affiliates couldholders of senior equity securities have received any payment or distribution due to them. In addition, our Certificate of Incorporation currently requires us to pay substantial monthly dividends on our Series C Preferred in cash or in stock. Although we can pay such amount in shares of our Common Stock, the issuance of additional shares may dilute the company’s equity and adversely affect the trading price of our common stock. At April 1, 2019, our officers, directors and their affiliates beneficially owned approximately 10.55% of our common stock. Sales or distributions of a substantial number of shares of our common stock byCommon Stock. 38 Table of Contents If securities or industry analysts do not publish research or reports about our officers, directors and their affiliates in the public market,business or the perception that these sales or distributions might occur, may cause the market price ofpublish negative reports about our common stock to decline. In addition, we may sell equity securities in the future to obtain funds for general corporate, working capital, acquisitions or other purposes. We may sell these securities at a discount to the then market price. Any future sales of equity securities will dilute the holdings of existing stockholders, possibly reducing the value of their investment. In addition, we may sell equity securities in the future to obtain funds for general corporate, working capital, acquisitions or other purposes. We may sell these securities at a discount to the then market price. Any future sales of equity securities will dilute the holdings of existing stockholders, possibly reducing the value of their investment. The marketbusiness, our share price and trading volume could decline. The trading market for our Common Stock will depend on the research and reports that securities or industry analysts publish about us or our business. Currently, we do not have any analyst coverage and may not obtain analyst coverage in the future. In the event we obtain analyst coverage, we will not have any control over such analysts. If one or more of the analysts who cover us downgrade our shares or change their opinion of our common stock may be volatile, which could result in rapid and substantial losses forshares, our stockholders. You should consider an investment in our common stock to be risky, and you should invest in our common stock only if you can withstand a significant loss and wide fluctuations in the market value of your investment. Many factors could cause the marketshare price of our common stock to rise and fall, including the following:would likely decline. ● our announcements or our competitors’ announcements regarding new products or services, enhancements, significant contracts, acquisitions or strategic investments; ● changes in earnings estimates or recommendations by securities analysts, if any, who cover our common stock; ● results of operations that are below our announced guidance or below securities analysts’ or consensus estimates or expectations; ● fluctuations in our quarterly financial results or the quarterly financial results of companies perceived to be similar to us; ● changes in our capital structure, such as future issuances of securities, sales of large blocks of common stock by our stockholders or our incurrence of additional debt; ● investors’ general perception of us and our industry; ● changes in general economic and market conditions; ● changes in industry conditions; and ● changes in regulatory and other dynamics. In addition, if the market for stocks in our industry, or the stock market in general, experiences a loss of investor confidence, the trading price of our common stock could decline for reasons unrelated to our business, financial condition or results of operations. If any of the foregoing occurs, it could cause our stock price to fall and may expose us to lawsuits that, even if successfully defended, could be costly to defend and a distraction to management. We are a “smaller reporting company,” and we cannot be certain if the reduced disclosure requirements applicable to smaller reporting companies will make our common stock less attractive to investors. We are a “smaller reporting company,” as defined in Rule 12b-2 of the Exchange Act. As a smaller reporting company, we have relied on exemptions from certain disclosure requirements that are applicable to other public companies that are not smaller reporting companies. These exemptions include reduced financial disclosure and reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements. We may continue to rely on such exemptions for so long as we remain a smaller reporting company under applicable SEC rules and regulations. Accordingly, we cannot predict if investors will find our common stock less attractive because we rely on these exemptions. If some investors find our common stock less attractive as a result of our reduced disclosures, there may be less active trading in our common stock and our stock price may be more volatile. Item ITEM 1B. Unresolved Staff Comments. UNRESOLVED STAFF COMMENTS. Not applicable. ITEM 2. PROPERTIES. Item 2.  Properties. North American Transaction Solutions During May 2013,Our corporate headquarters is located in Brea, California, where we entered into a lease agreement, foroccupy facilities totaling approximately 4,10124,730 rentable square feet under a sublease that expires in March 2026 with lease payments of office space located at 3363 N.E. 163rd Street, Suites 705 through 707, North Miami Beach, Florida 33160. The term of the lease agreement was from May 1, 2013 through December 31, 2016, with monthly rent increasing from $16,800$33,136 per month at inception to $19,448 per month (or $233,377 per year)month. We use these facilities primarily for the period from January 1, 2016 through December 31, 2016.  The lease was extended for a period of five years commencing August 1, 2017 and expiring July 31, 2022 with equal monthly base rent installments of $14,354 ($172,248 per year) plusour management, technology, product design, sales tax.  Net Element Software, our subsidiary, currently leases 1,654 square feet of office space in Yekaterinburg, Russia, where we develop value added services, mobile applications, smart terminals applications, sales central ERP system development and marketing, activities, at an annual rent of approximately $24,300. The leasefinance, legal, human resources, general administrative and information technology teams. We own a manufacturing facility located in Tunica, Mississippi, which was renewed on same terms and the lease term expires on June 1, 2019. 34 Table of Contents International Transaction Solutions PayOnline leased approximately 4,675 square feet of office spacepurchased in Moscow, Russia at an annual rent of $84,457 which expired on September 30, 2018.  This space was reducedNovember 2021. Further manufacturing facilities must be acquired or developed in order to 3,385 square feet and renewed at an annual rent of $56,000 expiring on August 31, 2019.  meet our anticipated manufacturing needs. It is currently anticipated that such facilities will also be located in Tunica, MS. We believe that our current facilities are suitable and adequate for our present purposes, and we anticipate that we will be able to extend our existing leases on terms satisfactory to us or moverelocate to new facilities on acceptable terms. Item ITEM 3. Legal Proceedings.LEGAL PROCEEDINGS. Mullen Technologies, Inc. v. Qiantu Motor (Suzhou) Ltd. For a discussionThis claim was filed in the United States District Court for the Southern District of legal proceedings, see “Litigation” in Note 10California (Case No. 3:19-cv-01979-W-DEB) on October 11, 2019. This matter arises out of contract dispute between Mullen and Qiantu related to the Consolidated Financial Statements, whichengineering, design, support, and homologation of Qiantu’s K50 vehicle by Mullen. On July 1, 2020, the court ordered this matter to arbitration. It was submitted to the American Arbitration Association on February 9, 2020, for arbitration in Denver, Colorado. Mullen filed its Demand for Arbitration on February 16, 2021. Arbitration proceedings were then stayed for 90 days to accommodate settlement discussions. On November 3, 2021, Qiantu filed an Arbitration Answering Statement and Counterclaim or Joinder/Consolidation Request. Mullen is incorporatedin the process of preparing a response. This matter is set for hearing on August 1, 2022. 4Wall Entertainment, Inc. v. Mullen Technologies, Inc. This claim was filed in the Orange County Superior Court (Case No. 30-2021-01191251-CU-BC-CJC) on March 23, 2021. The matter arises out of the alleged breach of an equipment lease. Mullen filed its Answer to the Complaint on May 6, 2021. It is set for jury trial on October 11, 2022. Mullen Technologies, Inc., et al. v. Scott LaRue, et al. This claim was filed in the Orange County Superior Court (Case No. 30-2021-01200080-CU-MC-CJC) on May 5, 2021. The matter arises out of an alleged breached contract. This matter has been settled and is expected to be dismissed by reference herein.the court shortly. There is a Case Management Conference and Order to Show Cause re: Dismissal hearing set for January 3, 2022. 39 Table of Contents The GEM Group This claim arises out an alleged breached Securities Purchase Agreement dated November 13, 2020. On November 9, 2021, the parties appointed an arbitrator. There are currently no future hearings or appearances scheduled for this matter. IBM v. Mullen Technologies, Inc. This claim was filed in the Supreme Court of the State of New York, County of Westchester (Index No. 57306/2019) on May 7, 2019. The matter arises out of an alleged breach of contract and an account unstated. On September 24, 2019, IBM filed a Motion for Summary Judgment. The court granted IBM’s Motion for Summary Judgment as it relates to liability, but denied as to damages on April 21, 2020. The court conducted inquest proceedings on the issue of damages on April 21, 2021. The court entered its judgment on December 1, 2021. Mullen filed a Notice of Appeal on December 2, 2021. There are currently no future hearings or appearances scheduled for this matter. Item ITEM 4. Mine Safety Disclosures. MINE SAFETY DISCLOSURES. Not applicable. ​ 40 Table of Contents PART II Item ITEM 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES. Market Information Our common stockCommon Stock began trading on The NASDAQ Capital Market under the symbol “NETE” on October 3, 2012. In connection with the Name Change, the ticker symbol for the Company’s Common Stock changed from “NETE” to “MULN” at the opening of trading on November 5, 2021. Holders As of December 31, 2018,September 30, 2021, our common stockCommon Stock was held by 2081,067 registered shareholders of record. The number of record holders was determined from the records of our transfer agent and does not include beneficial owners of common stockCommon Stock whose shares are held in the names of various securities brokers, dealers and registered clearing agencies. Our transfer agent is Continental Stock Transfer & Trust Company. Dividends We have not historically declared any dividends during the two most recent fiscal years.dividends. We have no present intention of paying any cash dividends on our common stockCommon Stock in the foreseeable future, as any earnings will be used to help generate growth. The decision on the payment of dividends in the future rests within the discretion of the Board of Directors and will depend upon, among other things, our earnings, capital requirements and financial condition, as well as other relevant factors. There are no restrictions in our certificate of incorporation or bylaws that restrict us from declaring dividends. Securities Authorized for Issuance Under Equity Compensation Plans The information included under Item 12 of Part III of this Report is hereby incorporated by reference into this Item 5 of Part II of this Report. Recent Sales of Unregistered Securities Sale of Unregistered Securities The Company did not sell anyInformation required by Item 701 of Regulation S-K as to other unregistered equity securities we sold during the fiscal year ended December 31, 2018period covered by this Report that were not registered under the Securities Act of 1933, as amended, and that have nothas been previously been includedreported in a Quarterlythe Company’s Current Reports on Form 8-K filed with the Commission, in addition to the following: As previously disclosed in our Annual Report on Form 10-Q 10-K for the year ended December 31, 2020 filed with the SEC on March 31, 2021, in January 2021, we issued 200,000 shares of our Common Stock in exchange for a tranche of $1,960,000 aggregate amount, less any fees, of certain RBL promissory notes purchased by ESOUSA pursuant to the ESOUSA Agreement. Such shares of Common Stock were issued to ESOUSA under an exemption from the registration requirements of the Securities Act in reliance upon Section 3(a)(9) of the Securities Act. See Note 8 to the condensed consolidated financial statements for additional information. On November 4, 2021, we received debt financing through MTI entering into an unsecured $1.1 million convertible note agreement with JADR Consulting Group PTY Limited. The convertible note is issued at OID of 10% ($0.1 million); carries an interest rate of 15% and has a maturity date of one year. The convertible note is unsecured and includes detached warrants to acquire up to 417,375 shares of MAI common stock.  The warrant exercise price is $8.84 per common share and expires five years from the date of issuance. The number of shares issuable upon conversion of the conversion amount (principal and accrued interest) is determined according to the formula:  Conversion Amount/Conversion Price ($8.83), subject to certain adjustments.  However, upon conversion, JADR Consulting Group PTY Limited (together with its affiliates) is limited to a 9.9% ownership cap in shares of MTI’s common stock then outstanding, after giving effect to the 41 Table of Contents issuance of common stock issuable upon exercise of the warrants.   The convertible note and warrants were issued pursuant to and in accordance with the exemption from registration under the Securities Act under Section 4(a)(2) and/or Regulation D promulgated under the Securities Act. On November 4, 2021, the Company received debt financing through MTI entering into an unsecured $110K convertible note agreement with Michael Friedlander. The convertible note is issued with OID of 10% or $10K; carries an interest rate of 15% and has a maturity date of one year. The convertible note is unsecured and includes detached warrants to acquire up to 30,872 shares of MAI common stock.  The warrant exercise price is $8.84 per common share and expires five years from the date of issuance. The number of conversions shares issuable upon conversion of the conversion amount (principal and accrued interest) shall be determined according to the formula:  Conversion Amount/Conversion Price ($8.83), subject to certain adjustments. However, upon conversion, Michael Friedlander (together with his affiliates) is limited to a 9.9% ownership cap in a Current Report on Form 8-K. shares of MTI’s common stock then outstanding after giving effect to the issuance of common stock issuable upon exercise of the warrants.  The convertible note and warrants were issued pursuant to and in accordance with the exemption from registration under the Securities Act under Section 4(a)(2) and/or Regulation D promulgated under the Securities Act. Issuer Purchases of Equity Securities For the yearsthree months ended December 31, 2018 and 2017,September 30, 2021, we did not repurchase any shares of our common stock.Common Stock. ItemITEM 6. Selected Financial Data.[RESERVED] ​ Not Applicable.​ 35 Table of Contents Item ITEM 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.  MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. You should read the following discussion and analysis of our financial condition and results of operations together with our audited financial statements and related notes included elsewhere in this Report. This discussion and analysis contains forward-looking statements that involve risks, uncertainties and assumptions. Our actual results may differ materially from those anticipated in these forward- looking statements as a result of many factors, including but not limited to those under the heading “Risk Factors” in Part I, Item 1A of this Report. Certain amounts in this section may not foot due to rounding. In connection with the Merger Agreement (as defined below), and as disclosed in our Current Report on Form 8-K filed with the SEC on November 12, 2021, our fiscal year end has changed from December 31 to September 30, effective for our fiscal year ended September 30, 2021. As a result, and unless otherwise indicated, references to our fiscal year 2021 and prior years mean the fiscal year ended on September 30 of such year. OverviewBasis of Presentation We areAs a financial technology-driven group specializing in payment acceptancepre-revenue company with no commercial operations, our activities to date have been limited and value-added solutions across multiple channelswere conducted primarily in the United States and selected international markets. Weour historical results are differentiated by our proprietary technology which enables us to provide a broad suite of payment products, end-to-end transaction processing services and superior client support. We are able to deliver our services across multiple points of access, or “multi-channel,” including brick and mortar locations, software integration, e-commerce, mobile operator billing, mobile and tablet-based solutions. In the United States, via our U.S. based subsidiaries, we generate revenues from transactional services and value-added payment technologies for small and medium-sized businesses. Through PayOnline, we provide transactional services, mobile payment transactions, online payment transactions and other payment technologies in selected international markets, the Russian Federation, Eurasian Economic Community (“EAEC”), Europe and Asia. Our transactional services business enables merchants to accept credit cards as well as other forms of payment, including debit cards, checks, gift cards, loyalty programs and alternative payment methods in traditional card-present or swipe transactions, as well as card-not-present transactions, such as those conducted over the phone or through the Internet or a mobile device. We market and sell our services through both independent sales groups (“ISGs”), which are non-employee, external sales organizations and other third-party resellers of our products and services, and directly to merchants through electronic media, telemarketing and other programs, including utilizing partnerships with other companies that market products and services to local and international merchants. We have agreements with several banks that sponsor us for membership in the Visa ®, MasterCard ®, American Express ® and Discover ® card brands and settle card transactions for our merchants. These agreements allow us to use the banks’ identification numbers, referred to as Bank Identification Numbers (BIN) for Visa® transactions and Interbank Card Association (ICA) number for MasterCard® transactions. The principal sponsoring banks through which we process the majority of our transactionreported under accounting principles generally accepted in the United States include Citizens Bank, Esquire Bank, N.A.("GAAP" or "U.S. GAAP") and Wells Fargo Bank, N.A. From timein United States ("U.S.") dollars. Upon commencement of commercial operations, we expect to time, we may enterexpand our operations substantially into agreements with additional banks. We perform core functions for merchants such as application processing, underwriting, number account set-up, risk management, fraud detection, merchant assistancethe European Union ("E.U.") and, support, equipment deployment, chargeback services and offer our own dedicated BIN and ICA for various types of specialty merchants. Netevia, our future-ready payments and merchant management platform acts as a frameworkresult, we expect our future results to be sensitive to foreign currency transaction and core for a number of value-added services that connect merchants and consumers directly utilizing disruptive emerging technologies while increasing the economic efficiency of all transactions being made within the ecosystem. Specifically, Netevia delivers end-to-end payment processing through easy-to-use APIs and complements the Company’s ability to perform in a multi-channel environment, including point-of-sale (POS), e-commerce and mobile devices and will enable the Company to perform as a hub for disruptive emerging technology solutions. Our mobile payments business, previously provided through Digital Provider, has been combined with PayOnline to provide contracts with mobile operators that give us the ability to offer our clients in-app, premium SMS (short message services, which is a text messaging service), Wireless Application Protocol (WAP)-click, one clicktranslation risks and other carrier billing services. We have substantially reorganized this business, and currently wefinancial risks that are not generating revenues from new mobile content. reflected in our historical financial statements. As a result, we expect that the financial results our reports for periods after we begin commercial operations will not be comparable to the financial results included in this Annual Report. Components of Results of Operations We are an early-stage company, and our historical results may not be indicative of our future results for reasons that may be difficult to anticipate. Accordingly, the drivers of our future financial results, as well as the components of such results, may not be comparable to our historical or projected results of operations. 42 Table of Contents Revenues We have not yet been ablebegun commercial operations and do not currently generate any revenue. Once we commence production and commercialization of our vehicles, we expect that the significant majority of our revenue will be initially derived from direct sales of Sport Utility Vehicles ("SUVs") and, subsequently, from flexible leases of our electric vehicles ("EVs"). Cost of Goods Sold To date, we have not recorded cost of goods sold, as we have not recorded commercial revenue. Once we commence the commercial production and sale of our EVs, we expect cost of goods sold to find or solidifyinclude mainly vehicle components and parts, including batteries, direct labor costs, amortized tooling costs, and reserves for estimated warranty expenses. General and Administrative Expense General and administrative (“G&A”) expenses include all non-production expenses incurred by us in any given period. This includes expenses such as professional fees, salaries, rent, repairs and maintenance, utilities and office expense, employee benefits, depreciation and amortization, advertising and marketing, settlements and penalties, taxes, licenses and other expenses. Advertising costs are expensed as incurred and are included in G&A expenses. We expense advertising costs as incurred in accordance with ASC 720-35, “Other Expenses – Advertising Cost.” Research and Development Expense To date, our research and development expenses have consisted primarily of external engineering services in connection with the design of our initial EV and development of the first prototype. As we ramp up for commercial operations, we anticipate that research and development expenses will increase for the foreseeable future as we expand our hiring of engineers and designers and continues to invest in new vehicle model design and development of technology. Income Tax Expense / Benefit Our income tax provision consists of an acceptable joint venture partner or other arrangement that provides sufficient profit potentialestimate for U.S. federal and operating benefitstate income taxes based on enacted rates, as adjusted for our mobile payments operations. PayOnline provides flexible, high-tech payment solutions to companies doing business on the Internet orallowable credits, deductions, uncertain tax positions, changes in deferred tax assets and liabilities, and changes in the mobile environment. PayOnline specializes in integrationtax law. We maintain a valuation allowance against the full value of our U.S. and customizationstate net deferred tax assets because we believe the recoverability of payment solutions for websites and mobile apps. In particular, PayOnline arranges payment on the websitetax assets is not more likely than not. 43 Table of any commercial organization, which increasesContents Results of Operations Comparison of the convenience of using the website and helps maximize the number of successful transactions. In addition, PayOnline is focused on providing online and mobile payment acceptance servicesYear Ended September 30, 2021 to the travel industry through direct integration with leading Global Distribution Systems (“GDS”), which include Amadeus® and Sabre®. Key geographic regions that PayOnline serves include Eastern Europe, Central Asia, Western Europe, North America and Asia major sub regions. PayOnline offices are located in Moscow, Russia.Year Ended September 30, 2020 Aptito is a proprietary, cloud-based payments platformThe following table sets forth our historical operating results for the hospitality industry, which creates an online consumer experienceperiods indicated: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended  ​ ​ ​ ​ ​   ​ ​ September 30, ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ % ​ ​      2021      2020      $Change       Change   ​      (dollar amounts in thousands, except percentages)   Operating costs and expenses: ​    ​ ​    ​ ​    ​ ​      General and administrative ​ $ 19,394 ​ $ 10,427 ​ $ 8,846   84.84 % Research & development ​   3,009 ​   1,667 ​   1,342   80.50 % Total operating costs and expenses ​   22,403 ​   12,094 ​   10,188   84.24 % Loss from operations ​   (22,403) ​   (12,094) ​   (10,188)   84.24 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Other income (expense): ​      ​      ​           ​ Interest expense ​   (22,728) ​   (18,094) ​   (4,634)   25.61 % Gain on extinguishment of debt ​   891 ​   — ​   891   100.00 % Loss on disposal of fixed assets ​   — ​   — ​   —      % Other income (expense), net ​   — ​   10 ​   (10)   100.00 % Total other income (expense) ​   (21,838) ​   (18,084) ​   (3,753)   20.75 % Net loss ​ $ (44,241) ​ $ (30,178) ​ $ (13,940)   46.20 % ​ General and Administrative General and administrative expenses increased by $8.8 million or 84.8% from $10.4 million in offline commerce environments via tablet, mobilethe twelve months ended September 30, 2021 to $19.4 million in the twelve months ended September 30, 2021, primarily due to increases in professional services, marketing, and all other cloud-connected devices. Aptito’s easypayroll related expenses with the growth of personnel and resources. Research and Development Research and development expenses increased by $1.3 million or 80.5% from $1.7 million through the twelve months ended September 30, 2020 to use point-of-sale (“POS”) system makes things easier by providing a comprehensive solution to$3.0 million through the hospitality industry to help streamline management and operations. Orders placed tableside by customers directly speed up the ordering process and improve overall efficiency. Aptito’s mobile POS system provides portability to the staff while performing all the same functions as a traditional POS system. Recent Developments twelve months ended September 30, 2021. During the year, there was minimal activity due to the COVID-19 pandemic. Research and Development costs are expensed as incurred. Research and development expenses primarily consist of the Mullen FIVE EV show car development and are primarily comprised of personnel-related costs for employees and consultants. Interest Expense Interest expense increased by $4.6 million or 25.6% from $18.1 million through the twelve months ended December 31, 2018 we acquiredSeptember 30, 2020 to $22.7 million through the following recurring cash flow portfolios. There were no recurring cash flow portfolios acquired during the yeartwelve months ended 2017. Acquisitions of Recurring Cash Flow Portfolios From timeSeptember 30, 2021, primarily due to time, the Company acquires future recurring revenue streams from sales agents in exchange for an upfront cash payment. This results in an increase in net cash flow toconvertible debt. Gain on extinguishment of debt During November 2020, the Company. The acquisitionsU.S. Small Business Administration (“SBA”) approved the CARES Act loan forgiveness amount of recurring cash flows are treated as asset acquisitions, resulting$875,426 in recording a recurring cash flow portfolio intangible asset, at cost,principal and accrued interest on November 20, 2020. Net Loss Net loss was $44.2 million for the twelve months ended September 30, 2021, an increase of $14 million or 46.2% from $30.2 million in the twelve months ended September 30, 2020, mainly for the reasons discussed above. 44 Table of Contents Liquidity and Capital Resources As of the date of acquisition. These assets are amortizedthis Annual Report, we have yet to generate any revenue from our business operations. To date, we have funded our capital expenditure and working capital requirements through equity and debt capital, as further discussed below. Our ability to successfully commence commercial operations and expand our business will depend on many factors, including our working capital needs, the availability of equity or debt financing and, over a straight-line periodtime, our ability to generate cash flows from operations. As of approximately four yearsSeptember 30, 2021, our cash and cash equivalents amounted to $0.04 million and our total debt amounted to $39.5 million, of which $3.8 million is included in intangible assets on the accompanying consolidated balance sheets (See Note 6 - item labeled “Portfolio and Clients Lists”, on the accompanying consolidated audited financial statements). 36 Table of Contents Universal Partners, LLC On July 30, 2018, our subsidiary, Unified Portfolio Acquisitions, LLC (the “Purchaser”), entered into an Advance and Residual Purchase Agreement (the “Agreement”) with Universal Partners, LLC (“Universal”). Pursuantowed to the Agreement, the Purchaser acquired certain transactional services portfolios (“cash flow assets”) from UniversalIRS and Payment Club, LLC (togetherother tax jurisdictions related to payroll taxes and sales and use taxes. We agreed to sell $20 million of Series C Preferred with Universal, the “Seller”) for $2,700,000 (the “Advance Amount”). The cash flow assets consist of residuals (the “Residuals”) that the Sellers are entitledwarrants to receive pursuant to certain agreements (the “Combined Marketing Agreements”) with TOT Payments, LLC (doing business as Unified Payments), our subsidiary, or any other agreements pursuant to which the Seller is entitled to residuals. The Advance Amount is to be repaidan unaffiliated investor immediately prior to the Purchaser whereby each and every month, commencing from July 1, 2018 (the “Effective Date”) and for a period of 24 months thereafter, terminating on June 30, 2020 (the “Advance Period”), the Purchaser is entitled to a certain amountEffective Time of the Residuals. Such Residuals dueMerger at a per share exercise price of $0.6877, subject to adjustment in accordance with the Purchaser are secured by certainterms of the Seller’s property as collateral. At the end of the Advance Period (the “Transfer Date”), the PurchaserMerger Agreement. Mullen and the Seller have agreedinvestor are negotiating an amendment to create a new static portfolio poolsuch agreement whereby such amount may be increased to an aggregate of mutually agreed residual income from Seller portfolios comprising merchant accounts boarded$60 million by the Seller under the Combined Marketing Agreements that on the Transfer are generating at least $120,000 per month in net cash flow income (the “Portfolio Residuals”). From and after the Transfer Date, the Purchaser and Seller will share/split the Portfolio Residuals with the Purchaser owning an 80% interest in the Portfolio Residualsmutual agreement of Mullen and the Seller owning a 20% interest in the Portfolio Residuals. Argus Merchant Services, LLC On December 26, 2018, Unified Portfolio Acquisitions, LLC (the “Purchaser”), a subsidiary of Net Element, Inc. (the “Company”), entered into an Advance and Residual Purchase Agreement (the “Agreement”) with Argus Merchant Services, LLC ("Argus") and Treasury Payments, LLC ("Treasury"); Argus and Treasury are collectively referred to herein as the (“Seller”). Pursuant to the Agreement, the Purchaser acquired certain transactional services portfolios (“cash flow assets”) from the Seller for a total purchase consideration of $1,426,000. The cash flow assets consist of residuals (the “Residuals”) that the Seller is entitled to receive pursuant to certain agreements (including any amendments of such agreements, the “Combined Marketing Agreements”) with TOT Payments, LLC (doing business as Unified Payments, a subsidiary of the Company). On December 27, 2018, the Purchaser paid to Seller $1,150,000 (the “Advance Amount”). The Advance Amount and the balance of the purchase consideration is to be repaid to the Purchaser from Residuals due to the Seller, whereby each and every month, commencing from January 2019 (the “Effective Date”) and for a period of 24 months (the “Advance Period”), the Purchaser will be entitled to a certain amount of the Seller’s Residuals. Such Residuals due to the Purchaser are secured by certain of the Seller’s property as collateral. At the end of the Advance Period (the “Transfer Date”), the Purchaser will receive an ownership interest in a portfolio of cash flow assets by creating with the Seller, a new static portfolio pool of mutually agreed residual income from Seller portfolios comprising merchant accounts boarded by the Seller under the Combined Marketing Agreements. Also, we entered into a memorandum of understanding during the third quarter of 2018 with Bank Sputnik (“Sputnik”), located in Russia, to launch a technology platform expected to provide a suite of frictionless payment acceptance services for financial institutions and value-added providers. This new payment processing center would integrate Sputnik’s expertise in enabling secure globally inter-operable financial transactions with our expertise in developing frictionless value-added payment acceptance services.investor. In addition, this payment processing center was expected to accelerate the delivery of payment acceptance services in this market, combining banking services and bill payments in a multi-channel environment. This joint venture with Sputnik was subject to approval of the shareholders of Sputnik and the regulators in Russia. Sputnik’s shareholders approved the transaction; however Sputnik, did not obtain regulatory approval, as they declined below the required paid in capital reserves. PayOnline continues to be committed to the payment processing center business plan. Accordingly, PayOnlinewe entered into an agreement with eachESOUSA to provide us with a $30.0 million equity line of MOBI.Money CJSC (“MOBI.Money”),credit on September 1, 2021 and VTB Bank, botha $15 million note receivable with CEOcast, Inc. on October 8, 2021. We received $7.4 million in net proceeds from the Net Element merger transaction. We also received an additional $10.6 million in convertible notes from TDR Capital and JADR Consulting Group Pty Limited. As part of our agreement with NASDAQ, the Company must complete a qualified offering within six months after regulatory approval. Additionally, the Company has committed to file a registration statement for the Series B and Series C shares, which are expected to result in the increase of common shares outstanding and enhance market capitalization. We expect our capital expenditures and working capital requirements to increase substantially in the near term, as we seek to produce our initial EVs, develop our customer support and marketing infrastructure and expand our research and development efforts. We may need additional cash resources due to changed business conditions or other developments, including unanticipated delays in negotiations with OEMs and tier-one automotive suppliers or other suppliers, supply chain challenges, disruptions due to COVID-19, competitive pressures, and regulatory developments, among other developments. To the extent that our current resources are insufficient to satisfy our cash requirements, we may need to seek additional equity or debt financing. If the financing is not available, or if the terms of financing are less desirable than we expect, we may be forced to decrease our level of investment in product development or scale back our operations, which could have an adverse impact on our business and financial institutions,prospects. See Note 1 to the audited consolidated financial statements included elsewhere in this Annual Report. Debt To date, our current working capital and development needs have been primarily funded through the issuance of convertible indebtedness and Common Stock. Short-term debt comprises a significant component of our funding needs. Short-term debt is generally defined as sponsoringdebt with principal maturities of one-year or less. Long-term debt is defined as principal maturities of one year of more. Short and transaction clearing banks. This new arrangement received regulatory approvalLong-Term Debt The short-term debt classification primarily is based upon loans due within twelve-months from the balance sheet date, in Russia. Duringaddition to loans that have matured and remain unpaid. Management plans to renegotiate matured loans with creditors for favorable terms, such as reduce interest rate, extend maturities, or both; however, there is no guarantee favorable terms will be reached. Until negotiations with creditors are resolved, these matured loans remain outstanding and will be classified within short-term debt on the first quarterbalance sheet. Interest and fees on loans are being accounted for within accrued interest. The loans are secured by substantially all the Company’s assets. Several principal shareholders have provided loans to and hold convertible debt of 2019, PayOnlinethe Company and are related parties. 45 Table of Contents The following is a summary of our debt as of September 30, 2021: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net Carrying Value ​ ​ ​ ​ ​ ​ ​ ​      Unpaid Principal       ​ ​      Long-Term      Contractual       Contractual  Type of Debt ​ Balance ​ Current ​ ​ ​ Interest Rate ​ Maturity Matured Notes ​ $ 5,838,591 ​ $ 5,838,591 ​ $ —   0.00% - 15.00 %   2016 - 2021 Promissory Notes ​   23,831,912 ​   23,831,912 ​   —   28.00 %   2021 – 2022 Demand Note ​   500,000 ​   500,000 ​   —   27.00 %   2020 Convertible Unsecured Notes ​   15,932,500 ​   15,932,500 ​   —   15.00%-20.00 %   2021 - 2022 Real Estate Note ​   283,881 ​   36,269 ​   247,612   5.00 %   2023 Loan Advances ​   1,122,253 ​   1,122,253 ​   —   0.00% - 10.00 %   2019 – 2020 Less: Debt Discount ​   (8,060,555) ​   (8,060,555) ​   —   NA   NA Total Debt ​ $ 39,448,582 ​ $ 39,200,970 ​ $ 247,612   NA   NA ​ The following is a summary of our debt as of September 30, 2020: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net Carrying Value ​ ​ ​ ​ ​ ​ ​ ​      Unpaid Principal       ​ ​      Long-Term      Contractual       Contractual  Type of Debt ​ Balance ​ Current ​ ​ ​ Interest Rate ​ Maturity Matured Notes ​ $ 4,828,450 ​ $ 4,828,450 ​ $ —   0.00% - 15.00 %   2016 - 2019 Promissory Notes ​   25,288,063 ​   25,288,063 ​   —   0.00% - 28.00 %   2021 – 2022 Demand Note ​   500,000 ​   500,000 ​   —   27.00 %   2020 Convertible Unsecured Notes ​   1,867,500 ​   1,867,500 ​   —   20.00 %   2021-2022 Real Estate Note ​   318,384 ​   34,503 ​   283,881   5.00 %   2023 Loan Advances ​   1,931,017 ​   1,931,017 ​   —   0.00% - 10.00 %   2019 – 2020 Less: Debt Discount ​   (1,401,062) ​   (1,401,062) ​   —   NA   NA Total Debt ​ $ 33,332,352 ​ $ 33,048,471 ​ $ 283,881   NA   NA ​ Cash Flows The following table provides a summary of Mullen’s cash flow data for the years ended September 30, 2021 and 2020: ​ ​ ​ ​ ​ ​ ​ ​ ​ Years Ended September 30, ​      2021      2020 ​      (dollar amounts in thousands) Net cash used in operating activities ​ $ (17,522) ​ $ (10,781) Net cash used in investing activities ​   (162) ​   (567) Net cash provided by financing activities ​   17,693 ​   9,160 ​ Cash Flows used in Operating Activities Our cash flow used in operating activities to date has entered intobeen primarily comprised of costs related to research and development, payroll and other general and administrative activities. As we continue to ramp up hiring ahead of starting commercial operations, we expect our cash used in operating activities to increase significantly before we starts to generate any material cash flow from our business. Net cash used in operating activities was $17.5 million in the twelve months ended September 30, 2021, an increase from $10.8 million net cash used in the twelve months ended September 30, 2020. Cash Flows used in Investing Activities Our cash flows used in investing activities, to date, have been comprised mainly of purchases of equipment and have not been material. We expect these costs to increase substantially in the near future as we ramp up activity ahead of commencing commercial operations. 46 Table of Contents Net cash used in investing activities was $0.2 million in the year ended September 30, 2021, a financial servicesdecrease from $0.6 million used in investing activities the year ended September 30, 2020. Cash Flows provided by Financing Activities Through September 30, 2021, we have financed our operations primarily through the issuance of convertible notes and equity securities. Net cash provided by financing activities was $17.7 million for the year ended September 30, 2021 primarily due to issuance of notes payable, as compared to $9.2 million net cash provided by financing activities for the year ended September 30, 2020, which included (i) $12.8 million net proceeds from issuance of notes payable; (ii) $4.8 million in net proceeds from issuance of Common Stock which was partially offset by $.6 million of payments of notes payable; (iii) $.7 million in proceeds to issue preferred C shares. Contractual Obligations and Commitments The following tables summarizes our contractual obligations and other commitments for cash expenditures as of September 30, 2021, and the years in which these obligations are due: Operating Lease Commitments ​ ​ ​ ​ ​      Scheduled  Years Ended September 30, ​ Payments 2022 ​ $ 1,213,728 2023 ​   1,157,693 2024 ​   824,287 2025 ​   436,155 2026 ​   222,787 2027 and Thereafter ​   — Total Future Minimum Lease Payments ​ $ 3,854,650 ​ We currently lease our headquarters space in the Los Angeles area under a single lease classified as an operating lease expiring in March 2026. We have not executed any binding agreement for transaction clearing services with MOBI.Money and amended its agreement with VTB Bank, allowing for greater scalability and sponsorshipleases beyond 2026. Scheduled Debt Maturities The following are scheduled debt maturities as of PayOnlineSeptember 30, 2021: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years Ended December 31, ​      2021      2022      2023      2024      2025      2026      Thereafter      Total Total Debt ​ $ 39,200,970 ​ $ — ​ $ 247,612 ​ $ — ​ $ — ​ $ — ​ $ — ​ $ 39,448,582 ​ Off-Balance Sheet Arrangements We are not a party to Card Brands. Card Brands have initiated projects for registration of PayOnlineany off-balance sheet arrangements, as a third-party payment processor, following successful registration, PayOnline plans to further implement direct integrations with international payment networks (“IPNs”). In order to achieve its business plan, PayOnline has identified several investors for financing a proposed venture. The executive team continues to work diligently to select the most capable financial partner for this venture. Operating Segments Prior to the fourth quarter of 2017, we had three reportable business segments: (i) North American Transaction Solutions, (ii) Mobile Solutions and (iii) Online Solutions. Management determines the reportable segments based on the internal reporting information necessary to evaluate performance and to assess where to allocate resources. In addition, management considers certain other factors, such as, the increased growth in our North American Transactions Solutions segment and the consolidation of our mobile solutions business with our online solutions business, which has changed how management evaluates performance and allocates resources. We now have two reportable business segments (i) North American Transaction Solutions and (ii) International Transaction Solutions. Our reportable segments are business units that offer different products and services in different geographies. The reportable segments are each managed separately because they offer distinct products, in distinct geographic locations, with different delivery and service processes.  North American Transaction Solutions Our North American Transaction Solutions business segment consists of the former Unified Payments business and Aptito. This segment operates primarily in North America. In March 2013, we acquired all of the business assets of Unified Payments, a provider of comprehensive turnkey, payment processing solutions to small and medium size business owners (merchants) and independent sales organizations across the United States. In April 2013, we acquired 80% of Aptito, a cloud-based Software-as-a-Service (“SaaS”) restaurant management solution, which provides integrated POS, mPOS, Kiosk, Digital Menus functionality to drive consumer engagement via Apple® iPad®-based POS, kiosk and all other cloud-connected devices. International Transaction Solutions Our International Transaction Solutions segment consists of PayOnline, which also now includes our mobile payments operations, primarily located in Russia. PayOnline provides a secure online payment processing system to accept bank card payments for goods and services. 37 Table of Contents defined under SEC rules. Critical Accounting Policies and Estimates Our significant accounting policies are described more fullyfinancial statements have been prepared in Note 3 ofaccordance with U.S. GAAP. In the accompanying notes to our audited consolidated financial statements. The preparation of these consolidated financial statements, requires the Companyour managemnet is required to makeuse judgment in making estimates and assumptions that affect the reported amounts of assets and liabilities and disclosuresthe disclosure of contingent assets and liabilities atas of the date of the consolidated financial statements, and the reported amounts of revenues and expenses for the reporting period. Such estimates include, but are not limited to, the value of purchase consideration paid and identifiable assets acquired and assumed in acquisitions, goodwill and asset impairment review, valuation reserves for accounts receivable, valuation of acquired or current merchant portfolios, incurred but not reported claims, revenue recognition for multiple element arrangements, loss reserves, assumptions used in the calculation of equity-based compensation and in the calculation of income taxes, and certain tax assets and liabilities, as well as the related valuation allowances. Actual resultsreported expenses incurred during the reporting periods. Management considers an accounting judgment, estimate or assumption to be critical when (1) the estimate or assumption is complex in nature or requires a high 47 Table of Contents degree of judgment and (2) the use of different judgments, estimates and assumptions could differ from those estimates.have a material impact on the consolidated financial statements. Below isOur significant accounting policies are described in Note 3 to the audited consolidated financial statements included elsewhere in this Annual Report. Because we are a summary of the Company’spre-revenue company without commercial operations, management believes it does not currently have any critical accounting policies or estimates. Management believes that the accounting policies most likely to become critical in the near future are those described below. Stock-Based Compensation and estimates for which the nature of management’s assumptions are material due to the levels of subjectivity and judgment necessary to account for highly uncertain matters or the susceptibility of such matters to change, and for which the impact of the estimates and assumptions on financial condition or operating performance is material. Revenue Common Stock Valuation We recognize revenue when allthe cost of share-based awards granted to employees and directors based on the estimated grant-date fair value of the following criteria are met: (1) the parties to the contract have approved the contract and are committed to perform their respective obligations, (2) we can identify each party’s rights regarding the goods or services to be transferred, (3) we can identify the payment terms for the goods or services to be transferred, (4) the contract has commercial substance, and (5) itawards. Cost is probable that we will collect substantially all of the consideration to which we will be entitled in exchange for the goods or services that will be transferred to the customer. The Company considers persuasive evidence of a sales arrangement to be the receipt of a billable transaction from aggregators, signed contract or the processing of a credit card transaction. Collectability is assessed basedrecognized on a number of factors, including transaction history withstraight-line basis over the customer and the credit worthiness of the customer. If it is determined that the collection is not reasonably assured, revenue is not recognized until collection becomes reasonably assured,service period, which is generally upon receiptthe vesting period of cash. We record cash receivedthe award. Our management reverses previously recognized costs for unvested options in advance of revenue recognition as deferred revenue. Revenue consists primarily of fees generated through the electronic processing of payment transactions and related services and is recognized as revenue during the period the transactions are processed or when the related services are performed. The majority of our revenues is derived from volume-based payment processing fees ("discount fees”) and other related fixed transaction or service fees. Discount fees represent a percentage of the dollar amount of each credit or debit transaction processed. Discount fees are recognized at the time the merchants’ transactions are processed. Generally, where we have control over merchant pricing, merchant portability, credit risk and ultimate responsibility for the merchant relationship, revenues are reported at the time of sale on a gross basis equal to the full amount of the discount charged to the merchant. This amount includes interchange fees paid to card issuing banks and assessments paid to payment card networks pursuant to which such parties receive payments based primarily on processing volume for particular groups of merchants. Revenues generated from merchant portfolios where we do not have control over merchant pricing, liability for merchant losses or credit risk or rights of portability are reported net of interchange and other fees. Revenues are also derived from a variety of fixed transaction or service fees, including authorization fees, convenience fees, statement fees, annual fees, and fees for other miscellaneous services, such as handling chargebacks. Revenues derived from service fees are recognized at the time the services are performed and there are no further performance obligations. Revenue from the sale of equipment is recognized upon transfer of ownership and delivery to the customer, after which there are no further performance obligations. We primarily report revenues gross as a principal versus net as an agent. Although some of our processing agreements vary with respect to specific terms, the transactional processing service fees collected from merchants generally are recognized as revenue on a gross basis as we are the principal in the delivery of the managed payments solutions to the sellers. The gross fees we collect are intended to cover the interchange, assessments and other processing and non-processing fees which are included and are part of our gross margin. 38 Table of Contents Accounts Receivable and Credit Policies Accounts receivable consist primarily of uncollateralized credit card processing residual payments due from processing banks requiring payment within thirty days following the end of each month. Accounts receivable also include amounts due from the sales of our technology solutions to our customers. The carrying amount of accounts receivable is reduced by an allowance for doubtful accounts, if necessary, which reflects management’s best estimate of the amounts that will not be collected. The allowance is estimated based on management’s knowledge of its customers, historical loss experience and existing economic conditions. Accounts receivable and the allowance are written-off when, in management’s opinion, all collection efforts have been exhausted. Goodwill Our goodwill represents the excess of the purchase price overforfeitures occur. Mullen determines the fair value of stock options using the net identifiable assets acquired in business combinations. Black-Scholes option pricing model, which is impacted by the following assumptions: ● Expected Term—We use the simplified method when calculating the expected term due to insufficient historical exercise data. ● Expected Volatility—As our shares were not actively traded during the periods presented, the volatility is based on a benchmark of comparable companies within the automotive and energy storage industries. ● Expected Dividend Yield—The dividend rate used is zero as we have never paid any cash dividends on Common Stock and does not anticipate doing so in the foreseeable future. ● Risk-Free Interest Rate—The interest rates used are based on the implied yield available on U.S. Treasury zero-coupon issues with an equivalent remaining term equal to the expected life of the award. Common Stock Valuations The goodwill generated fromgrant date fair value of our Common Stock (pre-merger with Net Element) was typically be determined by our board of directors with the business combinations is primarily relatedassistance of management and a third-party valuation specialist. Given our pre-revenue stage of development, management believed that an Option Pricing Model (“OPM”) was the most appropriate method for allocating enterprise value to determine the estimated fair value placed onof our Common Stock. Application of the employee workforceOPM involved the use of estimates, judgment, and expected synergies. Judgment is involved in determining if an indicator or change in circumstances relating to impairment has occurred. Such changes may include, among others, a significant decline inassumptions that are highly complex and subjective, such as those regarding our expected future revenue, expenses, and cash flows, a significant adverse change indiscount rates, market multiples, the business climate,selection of comparable companies, and unforeseen competition. We have the optionprobability of performing a qualitative assessmentfuture events. Once Mullen’s stock became publicly traded, the Board of impairmentDirectors elected to determine whether any further quantitative testing for impairment is necessary. The option of whether or not to perform a qualitative assessment is made annually and may vary by reporting unit. Factors we consider in the qualitative assessment include general macroeconomic conditions, industry and market conditions, cost factors, overall financial performance of our reporting units, events or changes affecting the composition or carrying amount of the net assets of its reporting units, sustained decrease in its share price, and other relevant entity specific events. If we determine on the basis of qualitative factors that the fair value of our post-merger Common Stock based on the closing market price the day before the date of grant. Recent Accounting Pronouncements In May 2021, the FASB issued ASU No. 2021-04, Earnings Per Share (Topic 260), Debt – Modifications and Extinguishments (Subtopic 470-50), Compensation – Stock Compensation (Topic 718) and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815-40). The ASU will be effective for fiscal years beginning after December 15, 2021, (December 15, 2023 for smaller reporting unitcompanies). We have issued debt and equity instruments, the accounting for which could be impacted by this update. Company management is more likely thanevaluating the impact this guidance on our financial condition and results of operations. In July 2021, the FASB issued ASU No. 2021-05, Lessors – Certain Leases with Variable Lease Payments (Topic 842). The amendments in this update affect lessors with lease contracts that have (1) have variable lease payments that do not less thandepend on a reference index or a rate, and (2) would have resulted in the carrying value, then we perform a quantitative test for that reporting unit. The fair value of each reporting unit is compared to the reporting unit’s carrying value, including goodwill. Subsequent to the adoption on January 1, 2017 of Accounting Standards Update (“ASU”) No. 2017-04, Intangibles—Goodwill and Other: Simplifying the Test for Goodwill Impairment, if the fair valuerecognition of a reporting unitselling loss at lease commencement if classified a sales-type or direct financing. The ASU will be effective for fiscal years beginning after 48 Table of Contents December 15, 2021. Company management is less than its carrying value, we recognize an impairment equal toevaluating the excess carrying value, not to exceed the total amount of goodwill allocated to that reporting unit. At December 31, 2018, our management determined that an impairment charge of approximately $636,000 was necessary to reduce the goodwill relating to the acquisition of PayOnline. The impairment charge was primarily related to a decrease in projected sales for 2019, which is the base year utilized for determining the future discounted cash flows. How We Assess Our Business Technology Enabling Payment Solutions Our technology provides comprehensive payment solutions to small and medium size businesses and organizations. Our merchant services includes third-party integrated payment solutions as well as traditional payment services across our strategic vertical markets. Proprietary Software and Payments Our proprietary software and payments services, Aptito, delivers embedded payment solutions to our clients through company-owned software and we also provide the traditional merchant processing model. Corporate Expenses and Eliminations Ourcorporate expenses and eliminations category includes corporate overhead expenses, when presenting reportable segment information. For additional informationimpact this guidance will have on our segments, see Note 15 of our accompanying audited consolidated financial statements. Key Operating Metrics We evaluate our performance through key operating metrics, including: the dollar volume of payments our clients process through us (“payment volume”); the portion of our payment volume that is produced by integrated transactions; and period-to-period payment volume attrition. Our payment volume for the years ended December 31, 2018 and 2017 was $3.3 billionand $2.8 billion, respectively, representing a period- to-period growth rate of 18%. We focus on volume, because it reflects the scale and economic activity of our client base and because a significant part of our revenue is derived as a percentage of our clients’ dollar volume receipts. Payment volume reflects the addition of new clients and same store payment volume growth of existing clients, partially offset by client attrition during the period. Total transactions processed during 2018 were 143 million compared to 154 million for 2017.  Our International Transaction Solutions segment saw a decrease during 2018 due to the loss of a material contract and reorganization and combination of the mobile solutions business. Growth in the North American Transactions Solutions segment during 2018 was primarily organic. 39 Table of Contents Results of Operations for the Year Ended December 31, 2018 Compared to the Year Ended December 31, 2017 We reported a net loss attributable to common stockholders of approximately $4.9 million or ($1.28) loss per share for the year ended December 31, 2018 as compared to a net loss of approximately $9.9 million or ($5.04) loss per share for the year ended December 31, 2017. This resulted in a decrease in net loss attributable to stockholders of approximately 50% primarily due to an increase in revenues and other income, combined with selling, general and administrative expenses, and non-cash compensation, which was partially offset by an increase in bad debt expense. The following table sets forth our sources of revenues, cost of revenues and gross margins for the years ended December 31, 2018 and 2017. Gross Margin Analysis:     Twelve             Twelve                       Months Ended             Months Ended             Increase /   Source of Revenues   December 31, 2018     Mix     December 31, 2017     Mix     (Decrease)                                             North American Transaction Solutions   $ 59,138,552       89.9 %   $ 51,138,327       85.1 %   $ 8,000,225   International Transaction Solutions     6,648,265       10.1 %     8,926,497       14.9 %     (2,278,232 ) Total   $ 65,786,817       100.0 %   $ 60,064,824       100.0 %   $ 5,721,993       Twelve             Twelve                       Months Ended     % of     Months Ended     % of     Increase /   Cost of Revenues   December 31, 2018     revenues     December 31, 2017     revenues     (Decrease)                                             North American Transaction Solutions   $ 50,545,759       85.5 %   $ 44,265,264       86.6 %   $ 6,280,495   International Transaction Solutions     5,071,412       76.3 %     6,971,948       78.1 %     (1,900,536 ) Total   $ 55,617,171       84.5 %   $ 51,237,212       85.3 %   $ 4,379,959       Twelve             Twelve                       Months Ended     % of     Months Ended     % of     Increase /   Gross Margin   December 31, 2018     revenues     December 31, 2017     revenues     (Decrease)                                             North American Transaction Solutions   $ 8,592,793       14.5 %   $ 6,873,063       13.4 %   $ 1,719,730   International Transaction Solutions     1,576,853       23.7 %     1,954,549       21.9 %     (377,696 ) Total   $ 10,169,646       15.5 %   $ 8,827,612       14.7 %   $ 1,342,034   Net revenues consist primarily of service fees from transaction processing. Net revenues were approximately $65.8 million for the year ended December 31, 2018 as compared to approximately $60.1 million for the year ended December 31, 2017. The increase in net revenues is primarily due to continued organic growth of North American merchants with emphasis on value-added offerings and the acquisition of a recurring cash flow portfolio in July 2018. The net increase also is reflective of the following factors which consisted of a $2 million decrease in net revenues from our International Transaction Solutions segment as we experienced increased competition, and reorganizing assignments from our International Transaction Solutions segment and approximately $1.9 million reduction in gross revenues, due to the adoption of ASC 606. For the year ended December 31, 2017, approximately $2.2 million was included in gross revenues that would have been excluded under ASC 606. Cost of revenues represents direct costs of generating revenues, including commissions, mobile operator fees, interchange expense, processing and non-processing fees. Cost of revenues for the year ended December 31, 2018 were approximately $55.6 million as compared to approximately $51.2 million for the year ended December 31, 2017. The increase in cost of revenues in 2018 as compared to 2017 of approximately $4.4 million was primarily driven by the increase in North American Transaction Solutions revenues and expenses associated with new Sponsoring Bank relationships. Approximately $1.9 million reduction in cost of revenues was due to the adoption of ASC 606 for the year ended December 31, 2018. For the year ended December 31, 2017, approximately $2.2 million was included in costs of revenues that would have been excluded under ASC 606. Gross Margin for the year ended December 31, 2018 was approximately $10.2 million, or 15.5% of net revenue, as compared to approximately $8.8 million, or 14.7% of net revenue, for the year ended December 31, 2017. The primary reason for the increase in the gross margin percentage was the result of North American Transaction Solutions segment processing of transactions utilizing our self-designated BIN/ICA and further acceptance of value-added services by the merchants.  Operating Expenses Analysis: Total operating expenses were approximately $14.5 million for the year ended December 31, 2018, as compared to total operating expenses of approximately $17.4 million for the year ended December 31, 2017. Total operating expenses for the year ended December 31, 2018 consisted of selling, general and administrative expenses of approximately $9.8 million, non-cash compensation of approximately $142,000, bad debt expense of approximately $2.1 million, and depreciation and amortization expense of approximately $2.5 million. For the year ended December 31, 2017, total operating expenses consisted of general and administrative expenses of approximately $10.6 million, non-cash compensation of approximately $2.9 million, bad debt expense of approximately $1.3 million, and depreciation and amortization expense of approximately $2.5 million. 40 Table of Contents The components of our selling, general and administrative expenses are reflected in the table below. Selling, general and administrative expenses for the years ended December 31, 2018 and 2017 consisted of operating expenses not otherwise delineated in the accompanying audited consolidated statements of operations and comprehensive loss, as follows: Twelve months ended December 31, 2018                                                                   Category   North American Transaction Solutions     International Transaction Solutions     Corporate Expenses & Eliminations     Total   Salaries, benefits, taxes and contractor payments   $ 1,431,806     $ 1,205,885     $ 2,760,334     $ 5,398,025   Professional fees     350,100       346,084       1,556,497       2,252,681   Rent     -       90,456       204,143       294,599   Business development     134,862       4,636       14,961       154,459   Travel expense     151,098       12,789       138,316       302,203   Filing fees     -       -       49,339       49,339   Transaction (gains) losses     -       94,573       -       94,573   Office expenses     307,593       35,646       51,997       395,236   Communications expenses     112,510       162,444       107,475       382,429   Insurance expense     -       -       136,643       136,643   Other expenses     2,842       18,244       277,415       298,501   Total   $ 2,490,811     $ 1,970,757     $ 5,297,120     $ 9,758,688   Twelve months ended December 31, 2017                                                                   Category   North American Transaction Solutions     International Transaction Solutions     Corporate Expenses & Eliminations     Total   Salaries, benefits, taxes and contractor payments   $ 1,970,860     $ 1,696,245     $ 2,082,294     $ 5,749,399   Professional fees     505,383       819,184       1,312,271       2,636,838   Rent     -       245,539       245,186       490,725   Business development     53,011       32,072       3,569       88,652   Travel expense     331,299       32,397       130,198       493,894   Filing fees     -       -       72,035       72,035   Transaction (gains) losses     742       (41,200 )     1,642       (38,816 ) Office expenses     303,586       98,961       120,103       522,650   Communications expenses     47,878       130,046       79,288       257,212   Insurance expense     -       5,401       135,386       140,787   Other expenses     38,788       14,715       162,894       216,397   Total   $ 3,251,547     $ 3,033,360     $ 4,344,866     $ 10,629,773   Variance                                                                   Category   North American Transaction Solutions     International Transaction Solutions     Corporate Expenses & Eliminations     Total   Salaries, benefits, taxes and contractor payments   $ (539,054 )   $ (490,360 )   $ 678,040     $ (351,374 ) Professional fees     (155,283 )     (473,100 )     244,226       (384,157 ) Rent     -       (155,083 )     (41,043 )     (196,126 ) Business development     81,851       (27,436 )     11,392       65,807   Travel expense     (180,201 )     (19,608 )     8,118       (191,691 ) Filing fees     -       -       (22,696 )     (22,696 ) Transaction (gains) losses     (742 )     135,773       (1,642 )     133,389   Office expenses     4,007       (63,315 )     (68,106 )     (127,414 ) Communications expenses     64,632       32,398       28,187       125,217   Insurance expense     -       (5,401 )     1,257       (4,144 ) Other expenses     (35,946 )     3,529       114,521       82,104   Total   $ (760,736 )   $ (1,062,603 )   $ 952,254     $ (871,085 ) The total decrease of approximately $0.9 million in selling, general and administrative expenses for the year ended December 31, 2018 as compared to the prior year was primarily due to the Company’s continued monitoring of operations and the labor costs necessary to maintain or increase revenues, and the reorganization of assignments in the International Transaction Solutions segment, which resulted in a decrease of approximately $351,000. These objectives were also responsible for the decrease of approximately $384,000 in professional fees associated with operations. 41 Table of Contents The following table represents salaries, benefits, taxes and contractor payments by operating segment and the category corporate expenses and eliminations for the years ended December 31, 2018 and 2017. Segment   Salaries and benefits for the twelve months ended December 31, 2018     Salaries and benefits for the twelve months ended December 31, 2017     Increase / (Decrease)   North American Transaction Solutions   $ 1,431,806     $ 1,970,860     $ (539,054 ) International Transaction Solutions     1,205,885       1,696,245       (490,360 ) Corporate Expenses & Eliminations     2,760,334       2,082,294       678,040   Total   $ 5,398,025     $ 5,749,399     $ (351,374 ) The following table represents professional fees by operating segment and the category corporate expenses and eliminations for the years ended December 31, 2018 and 2017. Twelve months ended December 31, 2018                                                                   Professional Fees   North American Transaction Solutions     International Transaction Solutions     Corporate Expenses & Eliminations     Total   General Legal   $ 12,553     $ 39,503     $ 206,684     $ 258,740   SEC Compliance Legal Fees     -       -       152,168       152,168   Accounting and Auditing     -       7,815       390,000       397,815   Tax Compliance and Planning     -       -       25,500       25,500   Consulting     337,547       298,766       782,145       1,418,458   Total   $ 350,100     $ 346,084     $ 1,556,497     $ 2,252,681   Twelve months ended December 31, 2017                                                                   Professional Fees   North American Transaction Solutions     International Transaction Solutions     Corporate Expenses & Eliminations     Total   General Legal   $ 33,480     $ 38,386     $ 80,724     $ 152,590   SEC Compliance Legal Fees     -       -       275,112       275,112   Accounting and Auditing     -       15,433       412,943       428,376   Tax Compliance and Planning     -       -       55,400       55,400   Consulting     471,903       765,365       488,092       1,725,360   Total   $ 505,383     $ 819,184     $ 1,312,271     $ 2,636,838   Variance                                                                   Professional Fees   North American Transaction Solutions     International Transaction Solutions     Corporate Expenses & Eliminations     Increase / (Decrease)   General Legal   $ (20,927 )   $ 1,117     $ 125,960     $ 106,150   SEC Compliance Legal Fees     -       -       (122,944 )     (122,944 ) Accounting and Auditing     -       (7,618 )     (22,943 )     (30,561 ) Tax Compliance and Planning     -       -       (29,900 )     (29,900 ) Consulting     (134,356 )     (466,599 )     294,053       (306,902 ) Total   $ (155,283 )   $ (473,100 )   $ 244,226     $ (384,157 ) 42 Table of Contents Other Income and Expenses Delineated in the Condensed Consolidated Statements of Operations and Comprehensive Loss: Non-cash Compensation Analysis: Non-cash compensation expense was $142,000 for the year ended December 31, 2018 as compared to approximately $2.9 million for the year ended December 31, 2017. A summary of 2018 and 2017 non-cash compensation activity follows: 2018 Non-Cash Compensation Activity:             # of Shares     # of Options       Amount     Issued     Issued   Board of Directors and Employee stock and Options   $ 142,017       9,919       -   Stock issued for consulting     -       -       -   Stock issued for acquisitions     -       -       -   Total for 2018   $ 142,017       9,919       -   2017 Non-Cash Compensation Activity:             # of Shares     # of Options       Amount     Issued     Issued   Board of Directors and Employee stock and Options   $ 2,827,200       242,324       45,106   Stock issued for consulting     7,258       896       -   Stock issued for acquisitions     105,966       13,082       -   Total for 2017   $ 2,940,424       256,302       45,106   Bad Debt Expense: We reflected a bad debt expense on the accompanying consolidated statements of operations, which represents uncollected fees of approximately $2.1 million for the year ended December 31, 2018, compared to bad debt expense, representing uncollected fees of approximately $1.3 million for the year ended December 31, 2017. The increase of approximately $800,000 from the prior year primarily resulted from an increase of approximately 15.6% in gross revenues from our North American Transaction Solutions segment, which in the normal course of business, resulted in an increase in net ACH rejects and uncollectible non-processing fees. For the year ended December 31, 2018, total gross ACH reject were approximately $4 million of which $1.9 million were subsequently collected. We were able to pass through to independent sales organizations (“ISO's), via a reduction in commissions, $949,000 from the total gross ACH rejects. For the year ended December 31, 2017, total gross ACH rejects were approximately $3.7 million of which $2.4 million were subsequently collected. We were able to pass through to ISO's, via a reduction in commissions, $603,000 from the total gross ACH rejects.  During the year ended December 31, 2018, approximately $300,000 of the $4 million in gross ACH rejects was attributable to merchant processing losses, while the remaining $3.7 million was related to non-processing fees billed to merchants.  Approximately $200,000 of the merchant processing losses were passed on to ISOs. This resulted in net processing losses of $100,000 or .004% of total volume.  During the year ended December 31, 2017, approximately $400,000 of the $3.7 million in gross ACH rejects is attributable to merchant processing losses, while the remaining $3.3 million was related to non-processing fees billed to merchants.  Approximately $323,000 of merchant processing losses were passed on to ISOs.This resulted in net processing losses of $101,000 or .004% of total volume. Depreciation and Amortization Expense: Depreciation and amortization expense consists primarily of the amortization of merchant portfolios in connection with residual buyout arrangements, depreciation expense on equipment, client acquisition costs, capitalized software expenses, trademarks, domain names and employee non-compete agreements. Depreciation and amortization expense was approximately $2.5 million for each of the years ended December 31, 2018 and, 2017.  Interest Expense: Interest expense was approximately $847,000 for the year ended December 31, 2018 as compared to approximately $1.2 million for the year ended December 31, 2017, representing a decrease of approximately $340,000 primarily due to payoffs to the MBF and RBL notes in the normal course of business. Funding Source   Twelve months ended December 31, 2018     Twelve months ended December 31, 2017     Increase / (Decrease)   MBF Notes   $ 10,359     $ 76,591     $ (66,232 ) RBL Notes     597,440       772,777       (175,337 ) PPS Note     169,501       168,233       1,268   Other     69,879       172,021       (102,142 ) Total   $ 847,179     $ 1,189,622     $ (342,443 ) 43 Table of Contents Other Income (Expenses): Other income for the year ended December 31, 2018 of approximately $792,000 consisted primarily of a gain recorded on the transfer of Digital Provider's net assets to PayOnline (approximately $198,000), net gain in connection with the review and analysis of accounts receivable and accounts payable aging (approximately $856,000), gain on the write-off of TOT Group Russia (approximately $312,000), gain on the reversal of stock price guarantees in connection with the purchase of PayOnline that expired (approximately $313,000), partially offset by costs associated with common stock purchase agreement with ESOUSA Holdings, LLC (approximately $(227,000)), and approximately $(332,000) in miscellaneous other expenses. Other income and expenses for the year ended December 31, 2017 consisted primarily of approximately $117,000 of foreign taxes and other expenses attributed to our International Transaction Solutions segment, as well as approximately $48,000 in miscellaneous other expenses in the North American Transaction Solutions segment. Net Loss Attributable to the Non-Controlling Interest: The net loss attributable to non-controlling interests amounted to approximately $87,000 and $110,000 for the years ended December 31, 2018 and 2017, respectively. The loss was attributed to our North American Transaction Solutions segment which represents their 20% non-controlling interest in Aptito. The non-controlling interest reflects the results of operations of subsidiaries that are allocable to minority equity owners. Liquidity and Capital Resources Total assets at December 31, 2018 were approximately $25.8 million compared to approximately $32.3 million at December 31, 2017. The primary reasons for the net decrease in total assets was the result of cash utilized to fund operations, complete acquisitions, and pay down notes payable, which was partially offset by an increase in intangible assets in connection with the portfolio acquisitions which occurred during the year. At December 31, 2018 we had total current assets of approximately $9.7 million as compared to approximately $19.0 million at December 31, 2017. The primary reason for the decrease in current assets was the utilization of cash on hand to fund operations, pay expenses in the normal course of business and for the purchase of recurring cash flow portfolios and client acquisition costs. We currently believe that we will require an additional $3.3 million to finance continuing operations, as currently conducted over the next 12 months, although we may need additional capital in order to fund business expansion or future acquisitions. To fund our operating cash needs, we may need to borrow additional capital from our current credit facilities or additional sales of equity securities. The Company continues to investigate the capital markets for sources of funding, which could take the form of additional debt, the restructuring of our current debt, or additional equity financings. The Company has been successful in restructuring its current debt facilities with commercially acceptable terms that ensures the continued operation of its business for the foreseeable future. As of December 31, 2018 the Company had approximately $10.8 million in available credit facilities. Additional funds may be raised through debt financing and/or the issuance of equity securities, there being no assurance that any type of financing on terms satisfactory to us will be available or otherwise occur. Debt financing must be repaid regardless of whether we generate revenues or cash flows from operations and may be secured by substantially all of our assets. Any equity financing or debt financing that requires the issuance of equity securities or warrants to the lender would cause the percentage ownership by our current stockholders to be diluted, which dilution may be substantial. Also, any additional equity securities issued may have rights, preferences or privileges senior to those of existing stockholders. If such financings are not available when required or are not available on acceptable terms, we may be unable to implement our business plans or take advantage of business opportunities, any of which could have a material adverse effect on our business, financial condition, results of operations and/or prospects. Since our inception, we have incurred significant operating losses. We incurred net losses approximating $5 million and $10 million for the years ended December 31, 2018 and 2017, respectively. We have negative working capital of approximately $1.5 million and an accumulated deficit of $172 million at December 31, 2018. We have a cash balance at December 31, 2018 of approximately $1.7 million. We estimate we will need $3.3 million to cover our anticipated cash flow shortfall over the next 12 months.  Although we do not have adequate cash balances to support our cash flow requirements, we do have the available credit facilities in place to provide adequate funding to support our cash needs for this period. We may raise additional funds through debt financing and/or the issuance of equity securities, there being no assurance that any type of financing on terms satisfactory to us will be available or otherwise occur. Debt financing or re-financing is another possibility in the future and debt must be repaid regardless of whether we generate revenues or cash flows from operations and may be secured by substantially all of our assets. Any equity financing or debt financing that requires the issuance of equity securities or warrants to the lender would cause the percentage ownership by our current stockholders to be diluted, which dilution may be substantial. Also, any additional equity securities issued may have rights, preferences or privileges senior to those of existing stockholders. Operating activities used approximately $3.3 million of cash for the twelve months ended December 31, 2018 as compared to approximately $5.0 million of cash for the twelve months ended December 31, 2017. Negative operating cash flow for the twelve months ended December 31, 2018 was primarily due supporting the company’s loss and an increase in the company’s payables, offset by an increase accounts payable and accrued expenses.  Investing activities used approximately $5.5 million of cash for the year ended December 31, 2017 as compared to approximately $1.8 million of cash for the year ended December 31, 2017. The increase in cash used by investing activities for the year ended December 31, 2017 was primarily attributable to the $3.6 million increase in portfolio purchases as we continue to acquire recurring cash flows and improve margins.  For the year ended December 31, 2018 we did not have any equity financing activities and approximately $2.1 million was proceeds from borrowings.  For the year ended December 31, 2017, financing activities provided cash of approximately $17.6 million, primarily from approximately $14.9 million from equity financing and approximately $3.7 million was proceeds from borrowings. 44 Table of Contents Off-balance sheet arrangements At December 31, 2018, we did not have any off-balance sheet arrangements as defined in Item 303(a) (4) of Regulation S-K. Recently Issued Accounting Pronouncements The information contained in Note 3 to our Consolidated Financial Statements concerning a description of recent accounting pronouncements, including our expected dates of adoption and the estimated effects on our results of operations and financial condition, is incorporated by reference herein. Item ITEM 7A. Quantitative and Qualitative Disclosures About Market Risk. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK. Not Applicable. Item ITEM 8. Financial Statements and Supplementary Data. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA. The Consolidated Financial Statementsconsolidated financial statements and notes thereto and the reports of the independent registered public accounting firm set forth on pages F-2 through F-24 are filed as part of this Report and incorporated herein by reference. Item ITEM 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE. None. Item ITEM 9A. Controls and Procedures. CONTROLS AND PROCEDURES. Evaluation of Disclosure Controls and Procedures We maintain disclosureDisclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) that are designed to ensureprovide reasonable assurance that information required to be disclosed in theour reports that we filefiled or submitsubmitted under the Exchange Act is recorded, processed, summarized and reported within the time periodperiods specified in the SEC'sCommission’s rules and forms, and that such information is accumulated and communicated to our management, including to our Chief Executive Officerchief executive officer and Chief Financial Officer,chief financial officer, as appropriate, to allow for timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management is required to apply its judgment in evaluating the cost benefit relationship of possible controls and procedures. Management has designed disclosure controls and procedures that reasonably enable the management including the CEO and CFO to deliberate and take timely decisions regarding required disclosure. As required by Rule 13a-15the SEC Rules 13a-15(b) and 15d-15(b), we are obligated to carry out an evaluation under the Exchange Act,supervision and with the participation of our management, including our Chief Executive Officerprincipal executive officer and Chief Financial Officer, evaluatedprincipal financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures as of December 31, 2018. Based on that evaluation,the end of the period covered by this report. Management has not been in a position to make its assessment regarding internal control over financial reporting due to the circumstances described in detail below. Accordingly, our Chief Executive Officerprincipal executive officer and Chief Financial Officerprincipal financial officer concluded that as of December 31, 2018, our disclosure controls and procedures were not effectiveeffective. Management’s Report on Internal Control over Financial Reporting This Annual Report on Form 10-K does not include a report of management’s assessment regarding internal control over financial reporting or an attestation report of our independent registered public accounting firm as we determined that the Company is currently similarly situated to a newly public company due to the relatively recent closing of the Merger, which was accounted for as a reverse merger transaction, in which Mullen Automotive-California is treated as the acquirer for financial accounting purposes. In making this determination, we have considered the timing and effects of the Merger, which closed on November 5, 2021, and after which, there was a complete change in the business, operations, accounting, board of directors and executive management of the Company and all of the business of the Company was that of Mullen Automotive-California. As a result, the internal controls and related material weaknesses previously reported related to the Company’s prior business and no longer exist with respect to the Company’s current business. Management was not in a position to conduct an assessment because of the impending reverse merger transaction which was at an advanced stage at year end. We plan to file our first assessment regarding internal control over financial reporting in the Annual Report on Form 10-K for the year ending September 30, 2022. 49 Table of Contents Changes in Internal Control over Financial Reporting Other than what has been described above, there were no changes in our internal control over financial reporting discussed below. Management's Report on Internal Control Over Financial Reporting The management ofthat occurred during the Company is responsible for establishing and maintaining adequateyear ended September 30, 2021, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. The Company's internal control Inherent Limitations of Disclosure Controls and Internal Control over financial reporting is a process designed to provide reasonable, but not absolute, assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. Financial Reporting Because of itstheir inherent limitations, our disclosure controls and procedures and our internal control over financial reporting may not prevent material errors or detect misstatements. Also, projectionsfraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of any evaluationthe control system are met. The effectiveness of effectiveness to future periods areour disclosure controls and procedures and our internal control over financial reporting is subject to risks, including that the risk that controls may become inadequate because of changes in conditions or that the degree of compliance with theour policies or procedures may deteriorate. ITEM 9B. OTHER INFORMATION A material weakness isOn July 23, 2021, we entered into a deficiency, orFirst Amendment to Agreement for Purchase and Sale of Real Property and Joint Escrow Instructions dated March 9, 2021 and to Lease dated April 28, 2021 with Saleen Motors International, LLC  (collectively, the Purchase Agreement”). Pursuant to the Purchase Agreement, we agreed to purchase an EV car manufacturing facility in Tunica, Mississippi for a combinationpurchase price of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement$12.0 million. The purchase of the Company's annual or interim financial statements will not be prevented or detectedmanufacturing facility closed on November 12, 2021. On September 17, 2021, we entered into a timely basis. The managementone-year Consulting Agreement with Preferred Management Partners Inc. (“PMP”) pursuant to which PMP has agreed to resume negotiations with Quiantu Motor Cars to enable us to procure the complete intellectual property ownership rights related to the K-50 automobile. As compensation for these services, we agreed to issue 750,000 shares of the Company assessed the effectivenessCommon Stock to PMP, with a conditional issuance of the Company's internal control over financial reporting asan additional 750,000 shares of December 31, 2018, and this assessment identified the following material weaknesses in the Company's internal control over financial reporting. We identified a material weaknessCommon Stock if PMP is successful in our risk assessment process, which we determined was not operating adequately to identify and addressobtaining the risks to our business and to establish appropriate control objectives given the environment in which we operate and the decentralized structure used to manage our operating activities in connection with our international operations. This material weakness in our risk assessment process was a factor contributing to the other material weaknesses which we have further described below.intellectual property rights. ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS 45 Table of Contents We have identified a material weakness in our review of key accounting policies and procedures as of December 31, 2018. We have determined that although such policies and procedures exist, they are generally not formalized. Additionally, management has assessed certain policies and procedures as inadequate regarding their design adequacy, including a lack of formalized evidence of their effective operation. We have identified a material weakness in that due to the lack of formalized documentation as to the adequacy of design and effective operation of both preventative and detective controls, management’s ability to monitor the effective operation of these internal controls is limited. Accordingly, management’s ability to timely detect, prevent and remediate deficiencies and potential fraud risks has been assessed as inadequate. In making its assessment of internal control over financial reporting, management used the criteria issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control—Integrated Framework (2013). Because of the material weaknesses described in the preceding paragraphs, management concluded that, as of December 31, 2018, the Company's internal control over financial reporting was not effective based on those criteria. This annual report does not include an attestation report of the Company's registered public accounting firm regarding internal control over financial reporting. Management's report was not subject to attestation by the Company's registered public accounting firm pursuant to rules of the SEC that permit the Company to provide only management's report in this annual report. Remediation Plan As of December 31, 2018, the material weaknesses disclosed in previous years have not yet been fully remediated; however, significant progress has been made during 2018 in remediating certain material weaknesses. Several steps taken in improving and remediating internal controls over financial reporting have included retaining a financial reporting manager, the formation of a disclosure committee, as well as, formal education and training of our Board members. Remediation activities for our material weaknesses include: ● Risk Assessment.  We are in the process of designing and implementing an improved enterprise wide risk management process that follows the COSO 2013 framework and one aspect of this process will focus on identifying and mitigating risks to our business that could have an impact on our internal control over financial reporting. Our process includes periodic updates of the enterprise risk universe through the consideration of current and historical risks, periodic input from executive management, and our domestic and international segment local management. Each time a new risk is identified, we will evaluate if any additional controls are required to mitigate risks to our internal control over financial reporting. Additionally, management is planning on sending a team to Russia during the next quarter in an effort to fully understand, implement, train, and eventually test the internal controls relating to that segment’s internal control over financial reporting. We expect to remediate the material weaknesses noted above, and allocate appropriate resources to department heads in the course of the next nine to twelve months. We expect to maintain continuous monitoring and implement changes to existing controls, as deemed necessary, to mitigate or remediate the material control weaknesses, whereNot applicable. Changes in Internal Control Over Financial Reporting Except as specifically described above in this Item 9A, there was no change in our internal control over financial reporting during our fourth fiscal quarter of 2018 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.  Item 9B. Other Information None. 46 Table of Contents PART III Item ITEM 10. Directors, Executive Officers and Corporate Governance. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE. The directors and executive officers of the Company and their respective ages, and positions with the Company and certain business experience as of the date of this Report are set forth below. There are no family relationships among any of the directors or executive officers. 50 Table of Contents There are no material legal proceedings to which any director or executive officer of the Company, or any associate of any director or executive officer of the Company, is a party adverse to the Company or any of its subsidiaries or has a material interest adverse to the Company or any of its subsidiaries. ​ ​ Name      Age      Position Director Class Oleg FirerDavid Michery ​ 4155 ​ Executive Chairman and Chief Executive Officer, President and Chairman of the Board ​ Class I Steven WolbergKerri Sadler ​ 57 ​ Chief Financial Officer ​ ​ Jerry Alban ​ 65 ​ Chief Operating Officer and Director ​ Class I Calin Popa ​ 59 ​ President—Ottava Automotive ​ ​ Mary Winter ​ 30 ​ Secretary and Director ​ Class I Kent Puckett ​ 58 ​ Director ​ Class II Mark Betor ​ 65 ​ Director ​ Class II William Miltner   59   Chief Legal Officer and SecretaryDirector ​ Class III Jeffrey Ginsberg 53 Chief Financial Officer Drew FreemanJonathan New   61   Director Howard Ash​ 60 Director Jon Najarian 61 Director Jonathan Fichman 48 DirectorClass III ​ EachOn November 5, 2021, upon the filing of the Second Amended and Restated Certificate of Incorporation, the Company’s Board of Directors was classified into three classes with staggered three-year terms (with the exception of the expiration of the initial terms of the Class I and Class II directors). Pursuant to this amendment to our directors will hold office untilCharter, our nextBoard is now classified into three classes with staggered three-year terms (with the exception of the initial Class I and Class II directors), designated as follows: ● Class I - David Michery, Jerry Alban, and Mary Winter, whose terms will expire at our first annual meeting of stockholders to be held after consummation of the Merger; ● Class II - Kent Puckett and Mark Betor, whose terms will expire at our second annual meeting of stockholders to be held after consummation of the Merger; and ● Class III - William Miltner and Jonathan New whose terms will expire at our third annual meeting of stockholders to be held after consummation of the Merger. At each annual meeting of shareholders at whichstockholders to be held after the initial classification, the successors to directors arewhose terms expire will be elected orto serve from the time of election and qualification until his successor isthe third annual meeting following their election and until the successors are duly elected and qualified. Executive officers serveThis classification of the Board may have the effect of delaying or preventing changes in Mullen’s control of management. These directors may be removed for cause by the affirmative vote of the holders of at the discretionleast two-thirds (2/3) of our Board of Directors.Mullen’s voting stock. Oleg Firer, Executive Chairman and Chief Executive Officer. Mr. Firer David Michery has served as Executivethe Chairman since November 27, 2018of the Board, President and Chief Executive Officer and a director of the Company since April 16, 2013. Previously,the closing of the Merger and held those same positions at Mullen Technologies since its inception in 2018. His automotive experience began with the acquisition of Mullen Motor Company in 2012. Mr. Firer servedMichery brings over 25 years within executive management, marketing, distressed assets, and business restructuring. He acquired the assets of Coda Automotive, formerly an independent EV manufacturer, through bankruptcy as Executive Chairmanan entryway into the EV business. We believe that Mr. Michery is qualified to serve as a director because of Unified Payments, LLChis operational and historical expertise gained from January 2011 until its acquisition by the Company’s subsidiary, TOT Group, Inc., on April 16, 2013 and has servedserving as the Executive Chairman since November 2018. From July 2004 until December 2012, Mr. Firer served as President,our Chief Executive Officer, and Secretary (and from May 2006 until December 2012 as Treasurer and from May 2008 until December 2012 ashis experience within various businesses, including automotive. 51 Table of Contents Kerri Sadler was appointed Chief Financial Officer)Officer of Acies Corporation, a provider of payment processing solutions to small and medium size merchants across the United States. Mr. Firer also served as a director of Acies Corporation from May 2005 until December 2012. Mr. FirerMullen Technologies Inc. in October 2021.  Previously, she served as the Presidentinternal consultant and interim CFO while leading the finance and accounting team through annual audits, financial reviews. Ms. Sadler has domestic and international experience, which spans commercial and investment banking, automotive, and trading/treasury activities.  From 2016 to present, she has worked with emerging growth companies in developing their finance and accounting departments, the list of GM Merchant Solution, Inc. (from August 2002)clients include Apollo Global Management, Faraday Future, and Managing Partner of GMS Worldwide, LLC (from August 2003) until their assets were acquired by AciesMullen Technologies.  Within middle and senior manager roles, Ms. Sadler has worked for KPMG Consulting, Credit Suisse, and Toyota Financial Services.  Her career began with the Federal Deposit Insurance Corporation in June 2004. From November 2002 to December 2003, Mr. Firer(FDIC) as a bank examiner/regulator. Jerry Alban has served as the Chief Operating Officer of Digital Wireless Universe, Inc. From December 2001the Company since the closing of the Merger and held the same position at Mullen Technologies since June 2021. Prior to November 2002, Mr. Firerthat position, he served as the Managing Partner of CELLCELLCELL, LLC. From March 1998 to December 2001,Chief Financial Officer at Mullen Technologies from April 2018 until November 2021. Mr. FirerAlban also served as Vice Presidentan internal consultant for the Company since January 2018. He brings 35 years of SpeedUS Corp.experience within private and public accounting, with the last 20 years serving in senior and executive management roles that spans controlling, processes, financial reporting and M&A activity. Mr. Firer studied Computer Science at New York Technical CollegeAlban has two undergraduate degrees, B.S. in Accounting from 1993 to 1995. Mr. Firer currently serves as a member of Star Capital Management, LLCCentral Washington University and Star Equities, LLC, Florida-based investment group. In addition, Mr. Firer serves as a Chairman of the Supervisory Board of the Eastern Caribbean Blockchain Association, a board member of Progressive Care, Inc. and Star Development Ltd as well as a member of the Advisory Board of the E2Exchange, the Institute of Entrepreneurs and several non-for-profit organizations. Advisory Board member of CoinBoost, Inc. and several other private technology companies. Mr. Firer supports the initiatives of the Firer Family Charitable Foundation, the charitable family fund focused on helping families and childrenB.S. in need. In addition, Mr. Firer serves on various committees of Electronic Transaction Association (ETA). Mr. Firer holds a diplomatic rank of the Extraordinary and Plenipotentiary Ambassador. The Company believesForestry from Washington State University. We believe that Mr. Firer’s leadership roles in various payment processing companies make himAlban is qualified to serve as a director because of the Company. Steven Wolberg,his experience gained from serving as Chief LegalFinancial Officer, and Secretary. Mr. Wolberghis finance and accounting expertise. Calin Popa has served as Chief Legal OfficerPresident of the Automotive Electric Vehicles Division of Mullen Technologies since 2017. He has 34 years of experience within the automotive industry. Previously, Mr. Popa was Vice President of Manufacturing Engineering at Karma Automotive, LLC, f/k/a Fisker Automotive, from 2010 to 2017. Mr. Popa has held senior positions within product development, vehicle launch and manufacturing at well-known companies, including MAN, Ford, and Chrysler. Mary Winter has served as director of the Company since the closing of the Merger and has been a director of Mullen Technologies since 2018. Ms. Winter has been an integral part of Mullen since inception. She currently serves as the Secretary of the Company and Board of Directors. Formerly, she was the Vice President of Operations for Mullen Technologies since April 16, 2013. Previously, Mr. Wolberg served in various capacities with Acies Corporation from approximately January 2009 until December 2012, including as a consultant from approximately January 2009 until October 2009,2014. We believe that Ms. Winter is qualified to serve as a director from October 30, 2009 until December 2012because of her business and operational knowledge of Mullen Technologies. Kent Puckett has served on Mullen Technologies’ Board of Directors since 2018, serving as Chief Strategy Officer from March 1, 2010 until December 2012. Mr. Wolberg currently operates a solo law practice in Newton, Massachusetts, Attorney Steven Wolberg, whichthe Audit Committee Chair during that time. Previously, he has operated since January 1997. Mr. Wolberg served as the Chief CounselFinancial Officer of Mullen Technologies from 2012 to 2018. Mr. Puckett has many years of experience as a CFO with a proven track record of establishing cross-functional partnerships to deliver stellar results. He has led many companies in their audit and Vice Presidentdisclosure requirements, creating operations, marketing, and sales division budgets of Corporate Developmentmulti-million dollars, and being accountable for Mascot Networksthe allocation of resources to exceed profit and sales goals. Mr. Puckett has a B.S. in Cambridge, MassachusettsBusiness Administration from January 2000Pensacola Christian College, and Advanced Studies in Management, Finance, Compliance, Insurance, Financial Consulting, Taxation and Financial Reporting, with an emphasis on Public Companies reporting and audit requirements. We believe that Mr. Puckett is qualified to September 2001. Since September 1996, Mr. Wolbergserve as a director because of his finance and accounting background and experience. Mark Betor has served as presidenta director of Oakland Properties, Inc.,the Company since the closing of the Merger and a director of Mullen Technologies since 2018, serving on on the Compensation Committee. Mr. Betor is a retired businessman and law enforcement officer. Since retirement, he has been involved with real estate development company. From February 1993investments and private business. We believe that Mr. Betor is qualified to December 1994, Mr. Wolbergserve as a director because of his vast experience within investments and private businesses. William Miltner has served as ana director of the Company since the closing of the Merger. He has served as a litigation attorney for over 30 years. He is the co-founder of Miltner & Menck, APC, a full-service law firm, in the real estateSan Diego, CA. Mr. Miltner successfully co-founded and corporate divisions of Brown and Rudnick in Boston, Massachusetts. From March 1988 to November 1991, Mr. Wolberg was a partner withco-managed the law firm of JordaanPerkins & Miltner, LLP, a respected San Diego litigation firm for 13 years. In 2006, when co-founder David Perkins left the practice of law, Miltner Law Group, APC, was founded. Mr. Miltner has represented many publicly traded and Wolbergprivate companies including residential developers, construction contractors, title insurance companies and banking and lending institutions. His substantial experience includes representing and defending clients in Johannesburg, South Africa. From January 1986 to February 1988,complex real property, general business, construction, title insurance and lender litigation and transactional matters. Mr. Wolberg was employed as an attorney with Goodman and North in Johannesburg, South Africa. Mr. Wolberg also currently owns and serves as the Managing Member of Prime Portfolios, LLC, which holds a private investment portfolio of merchants, receiving payment processing services. Mr. Wolberg received his Bachelor of Arts from the University of Witwatersrand in Johannesburg, South Africa, his Bachelors of Laws from the University of Witwatersrand, in Johannesburg, South Africa, and his Juris Doctorate from the New England School of Law in Boston, Massachusetts. Mr. WolbergMiltner is a member of the MassachusettsAmerican and San Diego County Bar Associations and American Business Trial Lawyers Association. He was admitted to The State Bar of California in 1988. We believe 52 Table of Contents that Mr. Miltner is qualified to serve as a director because of his knowledge and experience within law practice areas and litigation matters. Jeffrey Ginsberg, Chief Financial Officer. Mr. GinsbergJonathan New has served as a director of the Company since the closing of the Merger. He has served as the Chief Financial Officer of the CompanyMotorsport Games, Inc. since July 9, 2018. Previously, Mr. Ginsberg served as the Vice President of Finance and Controller of the Company since April 16, 2013, responsible for financial operations management, maintenance of accounting records and maintenance of consolidated financial statements for the Company and its subsidiaries.January 2020. Prior to his employment withjoining the Company, Mr. GinsbergNew was a Vice PresidentChief Financial Officer of Finance and Controller of Unified PaymentsBlink Charging Co (NASDAQ: BLNK) from June 2011 until acquisition by the Company in April 2013.July 2018 to January 2020. Prior to Unified Payments,Blink Charging Co, Mr. GinsbergNew was Chief Financial Officer of Net Element, Inc. (NASDAQ: NETE) from 2008 to July 2018. Mr. New is an experienced, driven and creative chief financial officer with over 30 years of corporate finance and accounting experience. He has a Partner at Strombeck Consulting CPA from December 2009 to April 2013. Hecareer of leading rapidly growing businesses through levels of increasing success. Mr. New is a graduate of Queens College with a Bachelors of Arts degree in Accounting. He isFlorida Certified Public Accountant and a member of the American Institute of Certified Public Accountants. 47 Table of Contents Drew J. Freeman, Director . Mr. Freeman has been a director of the Company since May 21, 2014. Mr. Freeman is an accomplished industry veteran with more than 30 years of electronic payments industry experience. Since June 2007, Mr. Freeman has served as the President of Freeman Consulting, Inc., a payments consulting firm that works with private equity and ISOs. Concurrent and prior to that, Mr. Freeman served as President of Merchant Data Systems from 2009 to 2013, Group Executive at Chase Paymentech from 2006 to 2007, and Executive Vice President at JP Morgan Chase-First Data JV (Chase Merchant Services) from 2000 to 2006. Mr. Freeman earned a business degree from the University of Miami in 1980. We believe that Mr. Freeman’s extensive knowledge in the payments industry qualifies him to serve as a director of the Company. Howard Ash, Director . Mr. Ash has been a director of the Company since June 13, 2016. Mr. AshNew is an accomplished executive who served as CEO, COO and CFO to a variety of high profile, international companies. Mr. Ash currently serves as Chairman of Claridge Management since 2000. Mr. Ash served as Chief Operating Officer of BioCard Corporation from 1997 to 2007. Mr. Ash served as Chief Operating Officer of CITA Americas, Inc. from 1996 to 1997. Mr. Ash served as Chief Executive Officer of IEDC Marketing, Inc. from 1992 to 1996. Mr. Ash held a CFO/Financial Planning/Investment position at Abrams, Ash & Associates from 1990 to 1992. Mr. Ash currently serves on the Star Telemed Board, functioning initially as the Liaison to the Cuban Government through the Government of Grenada. Mr. Ash currently serves on the Advisory Board of the E2Exchange, the Institute of Entrepreneurs, in the United Kingdom as the only non-UK citizen. Mr. Ash continues to serve since 2009 in a senior development and strategic capacity for One Laptop Per Child, a global NGO created to provide educational opportunities for the world's poorest children by providing each child with a rugged, low-cost, low-power, internet connected laptop with content and software. Prior Chairmanships include the 2009 through 2012 term for the Sturge Weber Foundation, a non-profit organization dedicated to curing this rare but fatal syndrome that affects children. Previously, Mr. Ash was an Advisory Board Member to Edge Global Investment Limited which forged a strategic partnership with the Africa Forum, consisting of 37 former Heads of State and Government to pave the way for a new approach on nutrition and food supplements as part of a comprehensive strategy to fight the HIV and AIDS pandemic. Mr. Ash started an interest-free micro-loan society in 1987 that has provided more than $15 million in micro-loans throughout the United States and Israel. In 1999, Mr. Ash founded the Circle of Life Resource Center, Inc., a food bank in Miami, Florida that feeds several hundred families per week. Mr. Ash earned a Bachelor of Commerce degree, with Honors in Accounting and Law from the University of Witwatersrand (South Africa) in 1980. We believe that Mr. Ash’s extensive experience as a business and finance executive and member of multiple oversight bodies, provides him with the necessary skills to be qualified to serve as a director because of the Company. 48 Table of Contents Jon Najarian, Director. Mr. Najarian has been a director of the Company since March 8, 2018. Mr. Najarian is an accomplished financial industry veteran with more than 37 years of financialhis in-depth experience within finance, accounting, and capital markets industry experience. Mr. Najarian is also well-versed in cryptocurrency and blockchain technologies. Mr. Najarian is a professional investor, money manager and media analyst. He is a co-founder of Investitue, LLC, the industry leading options education firm, which recently launched “Crypto Basics,” a new educational course that covers the basics of cryptocurrency, blockchain technology, altcoins and Initial Coin Offerings (ICOs). He is also a host of the International ICO Channel, a part of CoinBoost, whose goal is to bridge the divide between blockchain and mainstream media by offering distribution to traditional financial media outlets. In 2016, Mr. Najarian and his brother Pete co-founded Najarian Advisors, a company advising institutional investors on options strategies. The brothers invest in and work with start-ups via Rebellion Partners, a venture consulting firm they launched in 2015. Mr. Najarian is a cast member of CNBC’s “Halftime Report” and the “Fast Money” show. He is also the feature of the “DRJ Report” on CBOE-TV popular webcast. Mr. Najarian was a linebacker for the Chicago Bears before he focused his attention to trading on the Chicago Board Options Exchange (“CBOE”). He became a member of the CBOE, NYSE, CME and CBOT and worked as a floor trader for 25 years. In 1990, he founded Mercury Trading, a market-making firm at the CBOE, which he sold in 2004 to Citadel, one of the world’s largest hedge funds. In 2005, Mr. Najarian co-founded optionMONSTER and tradeMONSTER and negotiated a partnership with General Atlantic Partners in 2014 resulting ultimately in a sale to E*Trade for $750 million in September of 2016. Mr. Najarian developed and patented trading applications and algorithms used to identify unusual activity in stock, options, futures and cryptocurrencypublic markets. optionMONSTER, an options news and education site, was described by Securities Industry News as “content king of the options business.” Mr. Najarian is a graduate of Gustavus Adolphus College with a BA degree. We believe that Mr. Najarian’s experience in the financial and capital markets industry provides him with the necessary skills to be qualified to serve as a director of the Company. Jonathan Fichman, Director. Mr. Fichman has been a director of the Company since March 23, 2018. Mr. Fichman is an accomplished financial industry veteran with more than 20 years of domestic and international finance experience. His experience includes FinTech, payments, blockchain, wealth management and banking. Mr. Fichman holds a Six Sigma Black Belt accreditation and serves on multiple for profit and nonprofit boards. Since 2013, Mr. Fichman has served as a managing director of C-Anax Ventures & Advisory, where he assists early-stage companies with corporate strategy, streamlining operations, and financial analysis. Mr. Fichman is also an adjunct professor at the Florida International University where he teaches in the Business School with a focus on international management and entrepreneurship. From 2005 to 2015, Mr. Fichman served as a senior vice president of International Business Strategy & Initiatives at Bank of America Merrill Lynch. From 2003 to 2004, he served as a director of Operations, Procurement and Insurance at the Township of Cherry Hill, New Jersey. From 1999 to 2003, Mr. Fichman was a vice president of Strategic Initiatives at Actrade Financial Technologies, where he helped create B2B banking products that were at the forefront of commercial payments. From 1997 to 1999, he was a senior analyst consultant with Carson Group. Mr. Fichman received his MBA in Finance and Management from the University of Miami School of Business and Bachelor of Arts in Criminal Justice from the George Washington University. We believe that Mr. Fichman’s experience in the financial and capital markets industry provides him with the necessary skills to be qualified to serve as a director of the Company. Section 16(a) Beneficial Ownership Reporting Compliance Section 16(a) of the Exchange Act requires our directors and officers and persons who beneficially own more than ten percent of a registered class of our equity securities to file with the Commission initial reports of ownership and reports of change in ownership of common stock and other equity securities of the Company. Directors, officers and greater than ten percent stockholders are required by Commission regulations to furnish us with copies of all Section 16(a) forms they file. To our knowledge, the following persons have failed to file on a timely basis the identified reports required by Section 16(a) of the Exchange Act during the most recent fiscal year: Name and Relationship   Number of late reports     Transactions not timely reported     Known failures to file a required form   James Caan, former Director   1     1     -   Kenges Rakishev, former Director   1     1     -   Howard Ash, Director   1     1     -   Drew Freeman, Director   1     1     -   Jonathan Fichman, Director   1     1     -   Jon Najarian, Director   2     2     -   Code of Ethics We have adopted a Code of Ethics and Business Conduct that applies to all of our directors, officers and employees, including our principal executive officer and our principal financial and accounting officer. A copy of our Code of Ethics and Business Conduct has been posted to the "Investors—Corporate "Investor Relations—Governance" section of our Internet website at http://www.netelement.com.www.mullensua.com. We will provide a copy of our Code of Ethics and Business Conduct to any person without charge, upon written request to our Secretary at 3363 NE 163rd1405 Pioneer Street, Suite 705, North Miami Beach, Florida 33160, fax number (305) 508-5497,Brea, California 92821, phone (714) 613-1900, e-mail address investors@netelement.com.InvestorRelations@mullenusa.com. Committees of the Board of Directors The Board of Directors currently has an Audit Committee, a Compensation Committee and a Nominating and Corporate Governance Committee. Audit Committee OurThe Audit Committee of the Board of Directors has a separately-designated standing audit committee established in accordance with Section 3(a)(58)(A)consists of Kent Puckett and Jonathan New, Chair. The primary functions of the Audit Committee include, among other things: ● reviewing and approving the engagement of the independent registered public accounting firm to perform audit services and any permissible non-audit services for the Company; ● evaluating the performance of the Company’s independent registered public accounting firm and deciding whether to retain their services; ● monitoring the rotation of partners on the engagement team of the Company’s independent registered public accounting firm; ● reviewing the Company’s annual and quarterly financial statements and reports and discussing the statements and reports with the Company’s independent registered public accounting firm and management, including a review of disclosures under “Management’s Discussion and Analysis of Financial Condition and Results of Operations;” ● considering and approving or disapproving all related party transactions for the Company; ● reviewing, with the Company’s independent registered public accounting firm and management, significant issues that may arise regarding accounting principles and financial statement presentation, as well as matters concerning the scope, adequacy and effectiveness of the Company’s financial controls; ● conducting an annual assessment of the performance of the Audit Committee and its members, and the adequacy of its charter; and 53 Table of Contents ● establishing procedures for the receipt, retention and treatment of complaints received by the Company regarding financial controls, accounting or auditing matters. Each member of the Audit Committee satisfies the independence requirements under Nasdaq Capital Market listing standards and Rule 10A-3(b)(1) of the Exchange Act whichand is currently comprised of Howard Ash (audit committee chairman), Jonathan Fichman and Jon Najarian. Oura person who the Board of Directors has determined has the requisite financial expertise required under the applicable requirements of Nasdaq Capital Market. In arriving at this determination, the Board of Directors examined each Audit Committee member’s scope of experience and the nature of their employment in the corporate finance sector. The Board of Directors has also determined that Howard Ash is financially sophisticated as described in NASDAQ Listing Rule 5605(c)(2) andJonathan New qualifies as an "audit“audit committee financial expert"expert,” as defined in Item 407(d)(5) of Regulation S-K. We believe that the audit committee's current member composition satisfies the rules of NASDAQ that govern audit committee composition, including the requirement that audit committee members all be "independent directors" as that term is defined by NASDAQ Listing Rule 5605(a)(2).applicable SEC rules. 49 Table of Contents Item 11. ExecutiveCompensation. Summary Compensation Table Committee The following table sets forth information for the fiscal years ended December 31, 2018 and 2017 with respect to all compensation paid to or earned by each of our “named executive officers” (as defined by Item 402(m)(2) of the Regulation S-K).                         Stock     Option     All Other           Name and Principal Position   Year   Salary ($)     Bonus ($)     Awards ($)(1)     Awards ($)(1)     Compensation ($)     Total ($)   Oleg Firer, Chairman and Chief Executive Officer of Net Element   2018     300,000       600,000       -       -       55,868 (3)     955,868       2017     300,000       600,000       1,144,899       -       25,849       2,070,748   Steven Wolberg, Chief Legal Officer and Secretary of Net Element   2018     230,000       -       -       -       11,734       241,734       2017     230,000       -       194,997       85,050       33,287       543,334   Jeffrey Ginsberg, Chief Financial Officer of Net Element (2)   2018     123,500       -       -       -       7,589       131,089   (1) The amounts disclosed generally reflect the grant date fair value computed in accordance with FASB ASC Topic 718. Grant date fair value for each award was determined based on the date approved by the Compensation Committee of the Board of Directors consists of Kent Puckett, Chair, Jonathan New, and Mark Betor. The functions of the Compensation Committee include, among other things: ● determining the compensation and other terms of employment of the Company’s chief executive officer and our other executive officers and reviewing and approving corporate performance goals and objectives relevant to such compensation; ● reviewing and recommending to the full Board of Directors the compensation of the Board of Directors; ● evaluating and administering the equity incentive plans, compensation plans and similar programs advisable for the Company, as well as reviewing and recommending to the Board of Directors the adoption, modification or termination of the Company’s plans and programs; ● establishing policies with respect to equity compensation arrangements; ● if required, reviewing with management the Company’s disclosures under the caption “Compensation Discussion and Analysis” and recommending to the full Board of Directors its inclusion in the Company’s periodic reports to be filed with the SEC; and ● reviewing and evaluating, at least annually, the performance of the Compensation Committee and the adequacy of its charter. The Board of Directors has determined that each member of the Compensation Committee is independent under Nasdaq Capital Market listing standards, a “non-employee director” as defined in Rule 16b-3 promulgated under the Exchange Act and an “outside director” as that term is defined in Section 162(m) of the Code. Nominating and Corporate Governance Committee The Nominating and Governance Committee of the Board of Directors currently consists William Miltner, Chair, and Mark Betor. The functions of the Nominating and Corporate Governance Committee include, among other things, the following: ● reviewing periodically and evaluating director performance on the Board of Directors and its applicable committees, and recommending to the Board of Directors and management areas for improvement; ● interviewing, evaluating, nominating and recommending individuals for membership on the Board of Directors; ● reviewing and recommending to our board of directors any amendments to the Company corporate governance policies; and 54 Table of Contents ● reviewing and assessing, at least annually, the performance of the Nominating and Corporate Governance committee and the adequacy of its charter. The Board of Directors has determined that each member of the Nominating and Corporate Governance Committee is independent under Nasdaq Capital Market listing standards. Compensation Committee Interlocks and Insider Composition of the Compensation Committee for the combined company has been determined. Each member appointed to the Compensation Committee is an “outside” director as that term is defined in Section 162(m) of the Internal Revenue Code, a “non-employee” director within the meaning of Rule 16b-3 of the rules promulgated under the Exchange Act and independent within the meaning of the independent director guidelines of the Nasdaq Capital Market. None of the Company’s executive officers serve as a member of the board of directors or compensation committee of any entity that has one or more executive officers who is serves on the Company’s Board of Directors or Compensation Committee following the merger. Director Independence: Controlled Company Exemption The Board determined that each of the directors on the Board other than the directors who are considered employees and/or insiders, qualify as independent directors, as defined under the listing rules of the Nasdaq, and the Board consists of a majority of “independent directors” as defined under the rules of the SEC and Nasdaq listing requirements. In addition, we are subject to the rules of the SEC and Nasdaq relating to the membership, qualifications, and operations of the audit, as discussed below. David Michery controls a majority of the voting power of our outstanding capital stock. As a result, we are a “controlled company” under Nasdaq rules. As a controlled company, we are exempt from certain corporate governance requirements, including those that would otherwise require our Board of Directors to have a majority of independent directors and require that we either establish compensation and nominating and corporate governance committees, each comprised entirely of independent directors, or otherwise ensure that the compensation of our executive officers and nominees of directors are determined or recommended to the Board of Directors by independent members of the Board of Directors. While we do not currently intend to rely on any of these exemptions, we will be entitled to do so for as long as we are considered a “controlled company,” and to the extent we rely on one or more of these exemptions, holders of our capital stock will not have the same protections afforded to stockholders of companies that are subject to all of the Nasdaq corporate governance requirements. Item 11. Executive Compensation. Summary Compensation Table The following table sets forth certain information about the compensation paid or accrued during the years ended September 30, 2021 and 2020 to our Chief Executive Officer and each of our two most highly compensated executive officers other than our Chief Executive Officer who were serving as executive officers at September 30, 2021, and whose 55 Table of Contents annual compensation exceeded $100,000 during such year or would have exceeded $100,000 during such year if the executive officer were employed by the closing stock priceCompany for the entire fiscal year (collectively the “named executive officers”). ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​      ​         ​         ​      Stock Awards ($) ​    ​ ​ ​ ​ ​ ​ Salary ​ ​ Bonus ​ ​ Common ​ ​ Preferred ​ ​ ​ Name and Principal Position ​ Year ​ ​ ($)(1) ​ ​ ($) ​ ​ Shares (2) ​ ​ Shares ​ ​ Total ($) David Michery ​ 2021 ​ $ 409,485 ​ $ — ​ $ 1,972,603 ​ $ — ​ $ 2,514,993 Chief Executive Officer   2020 ​ $ 263,014 ​ $ 25,000 ​ $ 2,500,000 ​ $ 30,451,000 (3) $ 33,239,014 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Jerry Alban   2021 ​ $ 283,835 ​   — ​ $ 25,000 ​   —   $ 308,835 Chief Operating Officer   2020 ​ $ 240,000 ​   10,000 ​   87,500 ​   — ​ $ 337,500 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Calin Popa   2021 ​ $ 296,969 ​   — ​ $ 87,500 ​   — ​ $ 384,469 President - Ottava Automotive   2020 ​ $ 304,000 ​   — ​   87,500 ​   — ​ $ 391,500 (1) Effective as of April 10, 2020, Mullen implemented a reduction in salary for the CEO in response to the COVID-19 pandemic. During such time, Mullen reduced the bi-weekly salary payments of Mr. Michery from April 2020 to February 2021. Amounts in this column reflect the temporary reductions of Mr. Michery during this fiscal year. (2) Represents share-based compensation based on the grant date fair value estimated value of Common Stock at issuance in accordance with FASB ASC Topic 718. For the years ended September 30, 2021 and 2020, Mr. Michery received 789,041 and 1,000,000 shares of Common Stock, respectively, Mr. Alban received 10,000 and 35,000 shares of Common Stock, respectively, and Mr. Popa received 35,000 and 35,000 shares of Common Stock, respectively. (3) Represents the grant date fair value of 370,000 in Series A Preferred Shares issued to Mr. Michery for his personal guarantee of $50.0 million in Company debt in 2020. The primary elements of compensation for the Company’s named executive officers are base salary, bonus and equity-based compensation awards. The named executive officers also participate in employee benefit plans and programs that we offer to our other full-time employees on such date.the same basis. Base Salary (2) Mr. Ginsberg began servingThe base salary payable to our named executive officers is intended to provide a fixed component of compensation that reflects the executive’s skill set, experience, role and responsibilities. Bonus Although we does not have a written bonus plan, the Board may, in its discretion, award bonuses to our executive officers on a case-by-case basis. These awards are structured to reward named executive officers for the successful performance of Mullen as a whole and of each participating named executive officer as an individual. The bonus amounts awarded in 2020 were on an entirely discretionary basis. In addition, as described under the Company's Chief Financial Officer effective July 9, 2018. heading “Employment and Severance Agreements,” each of the named executive officers is eligible under the terms of their respective employment agreements to receive set bonus amounts based on Mullen’s achievement of certain financial milestones. Share-based Compensation (3) This amount is primarily for automobile reimbursement expense in connectionWe do not have a formal policy with his employment agreement. respect to the grant of equity incentive awards to our executive officers or any formal equity ownership guidelines applicable to them. 56 Table of Contents Outstanding Equity Awards at Fiscal Year End 2021 The following table sets forth information with respect to outstanding equity awards at the end of the Company’s fiscal year 20182021 for the “named executive officers”: ​ ​ ​ ​ ​ ​ ​      Stock Awards ​ ​ Number of shares ​ Market value of ​ ​ or units of stock ​ shares of units of ​ ​ that have not ​ stock that have not Name ​ vested (#) ​ vested ($) (1) David Michery, Chief Executive Officer ​ 750,000 ​ $ 1,875,000 Calin Popa, President—Ottava Automotive ​ 75,000 ​ $ 187,500 Jerry Alban, Chief Operating Officer ​ 225,000 ​ $ 562,500 (1) Values were calculated based on the closing price of shares of common stock on September 30, 2021, which was $8.24.     OPTION AWARDS                               SHARE AWARDS                           Name   Number of securities underlying unexercised options(#) exercisable     Number of securities underlying unexercised options (#) unexercisable (1)     Equity incentive plan awards: Number of securities underlying unexercised unearned options (#)     Option exercise price ($)   Option Expiration Date   Number of shares or units of stock that have not vested(#)     Market value of shares of units of stock that have not vested($)     Equity incentive plan awards: Number of unearned shares, units or other rights that have not vested (#)     Equity incentive plan awards: Market or payout value of unearned shares, units or other rights that have not vested ($)   Steven Wolberg     2,000       -       -       24.00   October 3, 2025     -       -       -       -   Steven Wolberg     13,714       -       -       21.20   June 13, 2026     -       -       -       -   Steven Wolberg     10,500       1,500       -       8.10   February 28, 2027     -       -       -       -   Jeffrey Ginsberg     483       44       439       13.40   December 10, 2024     -       -       -       -   Jeffrey Ginsberg     503       -       503       21.20   June 13, 2026     -       -       -       -   Jeffrey Ginsberg     2,000       -       2000       24.00   December 3, 2025     -       -       -       -   Employment and Severance Agreements (1) TheseWe have entered into employment agreements with each of our named executive officers described below. Chairman of the Board, President and Chief Executive Effective July 1, 2021, the Compensation Committee approved a new employment contract for David Michery. He will receive an annual salary of $750,000 plus incentive compensation and 1,000,000 shares of Common Stock each year. He is entitled to reimbursement compensation for all reasonable expenses up to $500,000 per year. The agreement contains non-competition and non-solicitation covenants. For one year after voluntary separation from the Company, Mr. Michery cannot engage in competitive business activity within the Company territory; prevents him from participating in any transaction that occurred within 24-month period preceding from incident in questions; and prevents him from contacting employees for any business and employment opportunities. No other employees have severance agreements with the Company. Employment agreements with other executive officers and key employees are standard terms (“employment at will”) offered to all employees. Chief Financial Officer On October 25, 2021, the Company entered into an employment agreement with Kerri Sadler for a term of two years with the option by the Company to renew for up to 60 months. Ms. Sadler will receive an annual salary of $350,000 and 300,000 restricted shares of Common Stock. The annual salary will increase by 3.5% per year. Ms. Sadler also received a one-time signing bonus of 100,000 shares of Common Stock. If Ms. Sadler is terminated without cause, or if the Company subjects her to a diminution in her title(s), responsibilities, or her then-current annual compensation, fails to provide the compensation as set forth in the agreement, locates place of employment outside the United States, or engages in any material and intentional breach of the Company’s principal obligations under the agreement which is not remedied within 15 business days,  then the Company will pay Ms. Sadler an amount equal to her annual compensation at the time of such termination. If Ms. Sadler is terminated for cause, then the Company pays her annual compensation and any legal benefit up until the termination date. “Cause” means gross negligence in the performance of the material responsibilities, willful misconduct in the performance and discharge of the material duties or that is otherwise materially injurious to the Company’s business, conviction of or a plea of no contest to a felony or incapacity due to alcoholism or substance abuse, or a material and intentional breach of principal obligations that are not remedied within 15 business days. In the event of disability, the Company will pay for three months of salary from the date that the disability is certified plus any prorated amount of incentive compensation. 57 Table of Contents Chief Operating Officer Effective April 15, 2021, the Compensation Committee approved a new employment contract for Jerry Alban for a term of one year. He will receive an annual salary of $350,000 per year and a share-based compensation of 300,000 shares of Common Stock each year. Mr. Alban received a one-time signing bonus of 100,000 restricted shares of Common Stock. If Mr. Alban is terminated without cause, or if the Company subjects him to a diminution in his title(s), responsibilities, or his then-current annual compensation, fails to provide the compensation as set forth in the agreement, locates place of employment outside the United States, or engages in any material and intentional breach of the Company’s principal obligations under the agreement which is not remedied within 15 business days, then the Company will pay Mr. Alban an amount equal to her annual compensation at the time of such termination multiplied by a number of years equal to five and an amount equal to 1 % of the Company’s market capitalization at such time. If Mr. Alban is terminated for cause, then the Company pays his annual compensation and any legal benefit up until the termination date. The meaning of “cause” is the same as described above for Ms. Sadler’s employment agreement. In the event of disability, the Company will pay for one year of salary from the date that the disability is certified plus any prorated amount of incentive compensation. Upon a change of control of the Company, which includes receipt of a tender offer, a reorganization, such as a merger or stock optionsacquisition, and sale of all or substantially all of the company’s assets, Mr. Alban may terminate his employment and receive payments as though it is a termination without cause by the Company (as described above) Consulting Agreement On October 26, 2021, the Company and Mary Winter entered into a Consulting Agreement whereby the Company has agreed to pay Ms. Winter $60,000 for the period from October 1, 2021 to September 30, 2022 for her services as corporate secretary and director. Potential Payments Upon Termination of Employment or Change in Control Upon termination from the Company other than for cause, Mr. Wolberg and Mr. Ginsberg are fully vested.Michery is entitled to severance from the Company as follows: ● An amount equal to his annual compensation multiplied by a number of years equal to 10 minus the number of complete years since hereof (“Salary Termination Payment”). Currently, the annual salary is $750,000. ● An amount equal to 10% of the Company’s market capitalization at such time (“Equity Termination Payment"). ● For example, if 2.5 years have passed the date hereof, the Company’s market capitalization rate is $500,000,000, then the Salary Termination Payment is $500,000 x 8 and an Equity Termination Payment equal to $50,000,000. ● Salary termination payment must be paid no later than 90 days after termination, and the Equity Termination Payment no later than 180 days after termination. ● If Mr. Michery is fully vested in any retirement plan offered by the Company, the Company shall obtain and pay the premium for an annuity policy to provide Mr. Michery with benefits as though he had been fully vested on date of termination. ● If there is a Change in Control of the Company, Mr. Michery may terminate employment at his option. In this situation, the Termination by the Company for Other Than Cause applies. ● Upon Termination on Account of Employee’s Death, the Salary Termination Payment and Equity Termination Payment will be paid to beneficiaries named by Mr. Michery or to his estate if he fails to make such designation. 58 Table of Contents ● For disability, Mr. Michery would receive full compensation for his salary for the one-year period next succeeding the date upon which disability was certified, as well as a prorated amount of incentive compensation. Non-Employee Director Compensation The following table further summarizesBeginning in November 2021, in connection with the compensation paid toclosing of the Company'sMerger, our non-employee directors receive compensation for service on our board of directors and committees of our board of directors as afollows: ● Each non-employee director is entitled to receive $25,000 annually as a cash retainer for their board service, with additional annual cash retainers of (i) $2,000 for each member of our compensation committee or nominating and governance committee; (ii) $5,000 for the chairman of our compensation committee or nominating and governance committee; (iii) $8,000 for each member of our audit committee; and (iv) $45,000 for the chairman of our audit committee. All cash retainers are paid quarterly in arrears. ● Additionally, each non-employee director shall receive an annual stock option award under the Company’s equity plan to purchase such number of shares of our Common Stock that will equal $75,000 divided by the closing trading price of our Common Stock on the date of each such grant, which will vest one year from the date of grant. Upon the occurrence of certain corporate events, including a change of control of the Company, all such stock option awards will immediately vest. The initial annual stock option award will be awarded to each of our non-employee directors in connection with this offering. Our non-employee directors are entitled to reimbursement of ordinary, necessary and reasonable out-of-pocket travel expenses incurred in connection with attending in-person meetings of our board of directors or committees thereof. In the event our non-employee directors are required to attend greater than four in-person meetings or 12 telephonic meetings during 2018:     Fees earned or                   Director Name   paid in cash ($)     Stock awards ($)     Total ($)   Kenes Rakishev, former Chairman      -       11,797       11,797   Howard Ash     47,500       15,549       63,049   Drew Freeman     22,500       15,549       38,049   James Caan, former Director     -       11,797       11,797   Jonathan Fichman     10,000       15,549       25,549   Jon Najarian     10,000       15,549       25,549   50 Tableany fiscal year, such non-employee directors will be entitled to additional compensation in the amount of Contents $500 for each additional telephonic meeting beyond the 12 telephonic meeting threshold, and $1,000 for each additional in-person meeting beyond the four in-person meeting threshold. Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters. The table below contains information regarding the beneficial ownership of our Common Stock as of March 29, 2019December 27, 2021 by (i) each person who is known to us to beneficially own more than 5% of our Common Stock, (ii) each of our directors, (iii) each of our named executive officers and (iv) all of our directors and executive officers as a group. Except Each stockholder’s percentage of ownership in the following table is based upon, as applicable, 23,383,202 shares of Common Stock, 15,367 shares of Series A Preferred Stock, 5,567,319 shares of Series B Preferred Stock, and 4,973,093 shares of Series C Preferred Stock outstanding as of December 27, 2021. Each share of Series A Preferred Stock converts into 100 shares of Common Stock. The Series B Preferred Stock and the Series C Preferred are convertible at any time by the holder into shares of Common Stock on a share-for-share basis.  Beneficial ownership is determined in accordance with SEC rules and regulations. In computing the number of shares of our Common Stock beneficially owned by a person and the percentage of beneficial ownership of that person, shares of Common Stock underlying notes, options or shares of Series A Preferred Stock, Series B Preferred Stock and Series C Preferred Stock held by that person that are convertible or exercisable, as the case may be, within 60 days of December 27, 2021 are included. Those shares, however, are not deemed outstanding for the purpose of computing the percentage ownership of any other person To our knowledge, except as otherwise noted below and subject to applicable community property laws, each person or entity named in the following table has the sole voting and investment power with respect to all shares of our Common Stock that he, she or it 59 Table of Contents beneficially owns. Unless otherwise indicated, the address of each beneficial owner listed below is c/o Net Element,Mullen Automotive Inc., 3363 NE 163rd 1405 Pioneer Street, Suite 705, North Miami Beach FL 33160.Brea, CA 92821. Name and address of beneficial owner   Amount and nature of beneficial ownership (number of shares of Common Stock beneficially owned)   Percent of class (1)   Oleg Firer c/o Net Element, Inc. 3363 NE 163rd Street, Suite 705, North Miami Beach, Florida 33160     339,747 (2)     8.7 % Steven Wolberg c/o Net Element, Inc. 3363 NE 163rd Street, Suite 705, North Miami Beach, Florida 33160     71,133 (3)     1.83 % Jeffrey Ginsberg c/o Net Element, Inc. 3363 NE 163rd Street, Suite 705, North Miami Beach, Florida 33160     8,355 (4)     0.22 % Howard Ash c/o Net Element, Inc. 3363 NE 163rd Street, Suite 705, North Miami Beach, Florida 33160     1,313       0.03 % Drew Freeman c/o Net Element, Inc. 3363 NE 163rd Street, Suite 705, North Miami Beach, Florida 33160     7,800       0.20 % Jon Najarian c/o Net Element, Inc. 3363 NE 163rd Street, Suite 705, North Miami Beach, Florida 33160     2,403       0.06 % Jonathan Fichman c/o Net Element, Inc. 3363 NE 163rd Street, Suite 705, North Miami Beach, Florida 33160     2,403       0.06 % All directors and executive officers as a group (7 persons)     433,354       10.55 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Series A ​ ​ ​ ​ ​ Series C ​ Total ​ ​ ​ ​ ​ ​ ​ Preferred ​ Series B ​ Preferred ​ Voting ​ ​      Common Stock      Stock      Preferred Stock      Stock      Power (1)      Name of Beneficial Owners      Shares      %        Shares      %        Shares      %        Shares      %        %      Named Executive Officers and Directors ​    ​    ​    ​    ​    ​    ​    ​    ​    ​ David Michery (2) ​ 10,097,616 ​ 43.2 %   14,289 ​ 93.0 %   5,567,319 ​ 100 %   4,973,093 ​ 100 %   70.1 %   Jerry Alban   12,075 ​ *   —   —   —   ​   —        *   Kent Pucket   18,400 ​ *   —   —   —   ​   —        *   Mark Betor   60,950 ​ *   —   —   —   ​   —        *   Mary Winter   18,400 ​ *   —   —   —   ​   —        *   William Miltner   — ​ —   —   —   —   ​   —        *   Jonathan New   — ​ —   —   —   —   ​   —        *   ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Directors and Executive Officers as a Group (7 Persons)   10,097,616 ​ 62.7 %   14,289   93.0 %   5,567,319   100 %   4,973,093   100 %   71.1 %   ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 5% Beneficial Owners:      ​                                         Drawbridge Investments, LLC 211 Boulevard of the Americas, Suite 205, Lakewood, NJ 08701   2,383,155 (3) 9.25 %   34 ​ * ​ 5,567,319 ​ 100 %   — ​ — %   15.4 % Tiffany Drohan c/o Drohan 2772 Howard Hughes Parkway, Suite 500S, Las Vegas, NV 89169   1,288,437 (4) 5.5 %   245 (5) 1.6 %   —   — %   —   — %   2.7 % Acuitas Group Holdings, LLC 2120 Colorado Avenue, #230 Santa Monica, CA 90404   14,645,673 (5) 38.5 %   — ​ —   —   —   3,898,913   78.4 %   29.0 %   TDR Capital Pty Limited 4 Murchison Street Mittagong, New South Wales 2575, Australia   2,765,594 (6) 10.6 %   — ​ —   —   —   736,276   14.8 %   6.7 ​ Ault Global Holdings, Inc. (7) 11411 Southern Highlands Parkway, Suite 240 Las Vegas, NV 89141   1,376,542 ​ 5.6 %��  —   —   —   —   1,195,377   20.7 %   5.0 %   (1)* Applicable percentage ownership is based on 3,865,467Less than 1%. (1) Percentage total voting power represents voting power with respect to all outstanding shares of Common Stock, outstanding as of March 29, 2019 together with securities exercisable or convertible into shares ofSeries A Preferred, Series B Preferred and Series C Preferred. The Common Stock, within 60 daysSeries A Preferred, Series B Preferred and Series C Preferred vote together as a single class on all matters submitted to a vote of March 29, 2019 for each shareholder. Beneficial ownership is determined in accordance withstockholders, except as may otherwise be required by the rulesterms of the CommissionAmended and generally includes voting or investment power with respect to securities. The shares issuable pursuant to the exercise or conversionRestated Certificate of such securities are deemed outstanding for the purpose of computing the percentage of ownershipIncorporation of the securityCompany or as may be required by law. Each holder but are not treated as outstanding forof Series A Preferred is entitled to 1,000 votes per share and each share of the purposeSeries B Preferred Stock and the Series C Preferred Stock is entitled to one vote per share. (2) Consists of computing the percentage of ownership of any other person. (2) Mr. Firer is deemed to have beneficial ownership of 339,747 shares of Common Stock consisting of (1) 243,863 restricted(i) 7,421,120 shares of Common Stock held directly by Mr. Firer, and (2) as the sole member of Star Equities, LLC, Mr. Firer can be deemed to beneficially own 95,883 restrictedMichery, (ii) 2,676,496 shares of Common Stock over which Mr. Michery has voting power, and (iii)  1,536,692 shares of Common Stock underlying 15,367 shares of Series A Preferred Stock on an as-converted basis, 5,567,319 shares of Series B Preferred Stock and 4,973,093 shares of Series C Preferred Stock, all of which Mr. Michery has voting power. Effective as of the Closing Date of the Merger, Mr. Michery entered into voting agreements with the holders of all of the outstanding shares of Series A Preferred Stock, Series B Preferred Stock, and Series C Preferred Stock of the Company, some of who own an aggregate of 2,676,496 shares of Common Stock (the “Voting Agreements”).  Pursuant to the Voting Agreements, such stockholders agreed to vote as directed by Mr. Michery, and also granted Mr. Michery an irrevocable proxy, at an annual or special meeting of stockholders or through the solicitation of a written consent of stockholders on any election of directors of the Company or any proposal to approve a change of control of the Company, which includes a merger, sale or other disposition of the securities of the Company or all or substantially all of its assets. The Voting Agreements have a term of three years. (3) Consists of 2,383,155 shares of Common Stock issuable upon conversion of a convertible note. (4) Consists of shares of Common Stock owned by entities controlled by Keith Drohan, the spouse of Ms. Drohan, as well as 115 shares of Series A Preferred shares owned by an entity controlled by Mr. Drohan, over all of which Ms. Drohan disclaims beneficial ownership. 60 Table of Contents (5) Consists of 14,645,673 shares of Common Stock issuable upon exercise in full of warrants. (6) Consists of 2,765,594 shares of Common Stock issuable upon exercise in full of warrants. (7) Based on a Schedule 13G filed with the SEC on November 17, 2021. Represents (i) 398,459 shares of Common Stock issuable upon conversion of 398,459 shares of Series C Preferred Stock, (ii) 1,086,459 shares of Common Stock issuable upon exercise of the certain options of Common Stock beneficially owned by Star Equities, LLC. Mr. Firer has (a) sole voting power and sole dispositive power with respect to 243,863 restrictedwarrants, (iii) 796,918 shares of Common Stock issuable upon conversion of 796,918 shares of Series C Preferred Stock convertible until November 5, 2022, and (b) shared voting power and shared dispositive power with respect to the above-described shares beneficially owned by Star Equities. The restricted shares beneficially owned by Star Equities, LLC include 28,572 restricted(iv) 290,083 shares of Common Stock issuable upon exercise of the amended option to pursuant to the Letter Agreement dated as of September 11, 2015, as modified by that certain Additional Letter Agreement dated as of October 7, 2015, as amended, with the Company. (3) The shares held directly by Steven Wolbergwarrants exercisable until November 5, 2022. Does not include 32,286an additional 1,882,835 shares of Common Stock issuable upon exercise of certain optionswarrants exercisable until November 5, 2022, as the warrants may not be exercised to purchase shares of Common Stock, including (i) 28,714 shares issuable uponthe extent that such exercise ofwould cause the options granted as partreporting person and its affiliates to beneficially own more than 9.9% of the Company’s incentive compensation awards and (ii) 3,572 restricted sharesthen outstanding Common Stock. Digital Power Lending, LLC, which acquired the securities, is a wholly-owned subsidiary of Common Stock issuable pursuant to amended option pursuant to the Letter Agreement dated as of September 11, 2015, as modified by that certain Additional Letter Agreement dated as of October 7, 2015, as amended, with the Company.   Ault Global Holdings, Inc. (4) Comprised of 8,355 shares of Common Stock issuable upon exercise of the options granted as part of the Company’s incentive compensation awards. 51 Table of Contents Equity Compensation Plan Table The following table summarizes our equity compensation plan information as of December 31, 2018.September 30, 2021. Information is included for equity compensation plans approved by our stockholders and equity compensation plans not approved by our stockholders ​ ​ ​ ​ ​ ​ ​ ​ ​      ​      ​ ​      (c) ​ ​ (a) ​ ​ (b) ​ Number of securities ​ ​ Number of securities ​ ​ Weighted-average ​ remaining available ​ ​ to be issued upon ​ ​ exercise price per ​ for future issuance ​ ​ exercise of outstanding options, ​ ​ share of outstanding options, ​ under equity compensation Plan Category ​ warrants and rights ​ ​ warrants and rights ​ plans (excluding securities Equity compensation plans approved by stockholders ​ 154,005 ​ $ 10.73 ​ 209,693 Equity compensation plans not approved by stockholders   — ​ $ —   — Total   154,005 ​   10.73   209,693 Plan Category   (a) Number of securities to be issued upon exercise of outstanding options, warrants and rights     (b) Weighted-average exercise price per share of outstanding options, warrants and rights     (c) Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a))   Equity compensation plans approved by stockholders     74,004     $ 15.50       225,234   Equity compensation plans not approved by stockholders     -       -       -   Total     74,004     $ 15.50       225,234   ​ ​ Item 13. Certain Relationships and Related Transactions, and Director Independence. Certain Relationships and Related Transactions SinceFrom time to time, David Michery, the beginning of fiscal 2017,Company’s Chief Executive Officer, provides loans to the Company did not have any transactions to which it has been a participantwith interests at 4% -10% per annum. The outstanding balances for these loans as of September 30, 2021 and 2020 are $389,452 and $172,791, respectively. Director Independence The Board determined that involved amounts that exceeded or will exceed the lesser of (i) $120,000 or (ii) one percenteach of the averagedirectors on the Board other than the directors who are considered employees and/or insiders, qualify as independent directors, as defined under the listing rules of the Company’s total assets at year-end forNasdaq, and the last two completed fiscal years, and in which anyBoard consists of a majority of “independent directors” as defined under the rules of the Company’s directors, executive officers or any other “related person”SEC and Nasdaq listing requirements. In addition, we are subject to the rules of the SEC and Nasdaq relating to the membership, qualifications, and operations of the audit, as defined in Item 404(a)discussed below. David Michery controls a majority of Regulation S-K had or will havethe voting power of our outstanding capital stock. As a direct or indirect material interest, other than: We issued the following notes payable to MBF Merchant Capital, LLC (“MBF”), which is owned by William Healy,result, we are a former member of“controlled company” under Nasdaq rules. As a controlled company, we are exempt from certain corporate governance requirements, including those that would otherwise require our Board of Directors. ● Effective March 28, 2016, we entered into a $75,000 promissory loan note with MBF. The loan provided for interest only payments at 14% through May 28, 2016. From June 28, 2016 through March 28, 2017, we were obligated to make interest and principal payments of $7,990. The loan also provided a 6% backend fee due at the final payment of the loan. This loan was paid off in March 2017. ● Effective April 19, 2016, we entered into a $300,000 promissory loan note with MBF. The loan provided for interest only payments at 15.5% through May 28, 2016. From June 28, 2016 through May 28, 2018, we were obligated to make interest and principal payments of $14,617. The loan also provided a 6% back end fee due at the final payment of the loan. This loan was paid off in 2018. ● Effective July 1, 2016, our subsidiary, TOT Group, Inc., entered into a $353,500 promissory loan note with MBF. The loan provided for interest only payments at 15.5% through June 28, 2016. From July 28, 2016 through June 28, 2018, we were obligated to make interest and principal payments of $17,224. The loan also provided a 1% front end fee and a 6.6% back end fee due at the final payment of the loan. This loan was paid off in 2018. ● On August 29, 2017, our subsidiary, TOT Group, Inc., entered into a $275,000 promissory note with MBF. The principal amount of the loan carried an interest rate 13.95% per annum, with ten monthly interest and principal payments of $29,289. The promissory note required payment of a 2% front-end fee at issuance and a 4% back-end fee due at final payment. This loan was paid off in 2018. On March 1, 2017,Directors to have a majority of independent directors and require that we entered into a promissory note with Star Equities, LLC, an entity whicheither establish compensation and nominating and corporate governance committees, each comprised entirely of independent directors, or otherwise ensure that the compensation of our CEO is the managing member, in the principal amountexecutive officers and nominees of $348,083 (the “Star Equities Note”). The Star Equities Note provided for 18 monthly interest payments of $3,481 through September 30, 2018 followed by one interest and principle payment on October 1, 2018 at the rate of 12% per annum. On October 20, 2017, the Company entered into and consummated a letter agreement with Star Equities, LLC (the “Exchange Agreement”). Pursuantdirectors are determined or recommended to the Exchange Agreement, the entire outstanding amount (including the principal amount of $348,083 and accrued and unpaid interest) of $374,253 under the Star Equities Note was exchanged into 67,312 restricted shares of common stock of the Company based on such shares’ consolidated closing bid price on The NASDAQ Stock Market on the date of the Exchange Agreement. At December 31, 2018 and 2017, we had accrued expenses of approximately $388,000 and $462,000, respectively, which consisted primarily of various travel, professional fees, and other expenses paid and charged for by our CEO on his personal credit cards. This is reflected as due to related party on the accompanying consolidated balance sheets. 52 Table of Contents Director Independence Our Board of Directors currently includes four non-employeeby independent members: Drew Freeman, Howard Ash, Jon Najarian and Jonathan Fichman. Each of Messrs. Freeman, Ash, Najarian and Fichman is an "independent director" as defined under NASDAQ Listing Rule 5605(a)(2). A majority of our Board members are independent directors, as four out of the five members of the Board qualifyof Directors. While we do not currently intend to rely on any of these exemptions, we will be entitled to do so for as independent underlong as we are considered a “controlled company,” and to the NASDAQ listing standards andextent we rely on one or more of these exemptions, holders of our capital stock will not have the rulessame protections afforded to stockholders of companies that are subject to all of the Commission. No director is considered independent unless our BoardNasdaq corporate governance requirements. 61 Table of Directors affirmatively determines that the director has no relationship with us (directly, or as a partner, shareholder or officer of an organization that has a relationship with us) that would interfere with the exercise of independent judgment in carrying out the responsibilities of a director. Also, all members of our Board of Director’s audit committee, compensation committee and nominating and governance committee are independent directors under applicable NASDAQ and SEC rules and regulations.Contents Item 14. Principal Accountant Fees and Services. Audit Fees.Fees. The aggregate fees, including expenses, billed by our principal accountant for the audit of our annual financial statements and review of financial statements included in our quarterly reports on Form 10-Q and other services that are normally provided in connection with statutory and regulatory filings or engagements during each of the fiscal years ended DecemberSeptember 31, 20182021 and 20172020 were $390,000.$170,000 and $128,000, respectively. Audit-Related Fees.Fees. The aggregate fees, including expenses, billed by our principal accountant for assurance and related services that are reasonably related to the performance of the audit or review of our financial statements not reported under “Audit Fees” above during the fiscal years ended DecemberSeptember 31, 20182021 and 20172020 were $ 0.$50,000 and $-0-, respectively. Tax Fees.Fees. The aggregate fees, including expenses, billed by our principal accountant for services rendered for tax compliance, tax advice and tax planning during the fiscal years ended DecemberSeptember 31, 20182021 and 20172020 were $25,500$0 and $55,400,$0, respectively. All Other Fees.Fees. The aggregate fees, including expenses, billed for all other products and services provided by our principal accountant during the fiscal years ended DecemberSeptember 31, 20182021 and 20172020 were $0. $0 and $0, respectively. Audit Committee Pre-Approval Policy Our audit committee is responsible for approving in advance the engagement of our principal accountant for all audit services and non-audit services, based on independence, qualifications and, if applicable, performance, and approving the fees and other terms of any such engagement. The audit committee may in the future establish pre-approval policies and procedures pursuant to which our principal accountant may provide certain audit and non-audit services to us without first obtaining the audit committee’s approval, provided that such policies and procedures (i) are detailed as to particular services, (ii) do not involve delegation to management of the audit committee’s responsibilities described in this paragraph and (iii) provide that, at its next scheduled meeting, the audit committee is informed as to each such service for which the principal accountant is engaged pursuant to such policies and procedures. In addition, the audit committee may in the future delegate to one or more members of the audit committee the authority to grant pre-approvals for such services, provided that the decisions of such member(s) to grant any such pre-approval must be presented to the audit committee at its next scheduled meeting. All audit and audit-related services performed by our principal accountant during the fiscal years ended DecemberSeptember 31, 20182021 and 20172020 were pre-approved by our Board of Directors, then acting in the capacity of an audit committee. ​ 62 53 Table of Contents PART IV Item 15. Exhibits and Financial Statement Schedules. (a) The following documents are filed as a part of this Annual Report on Form 10-K: 1. Financial Statements. DocumentsThe consolidated financial statements of Mullen Technologies, Inc. and notes thereto and the reports of the independent registered public accounting firms thereon are set forth beginning on page F-1 and filed as part of this Report. 1. 2. The following consolidated financial statements of Net Element, Inc. and subsidiaries and notes thereto and the reports of the independent registered public accounting firms thereon are set forth on pages F-2 through F-24 and are filed as part of this Report: Exhibits. Reports of Independent Registered Public Accounting Firms Audited Consolidated Balance Sheets at December 31, 2018 and 2017 Audited Consolidated Statements of Operations and Comprehensive Loss for the years ended December 31, 2018 and 2017, Audited Consolidated Statements of Changes in Stockholders’ Equity for the years ended December 31, 2018 and 2017, and Audited Consolidated Statements of Cash Flows for the years ended December 31, 2018 and 2017 Notes to Consolidated Financial Statements 2. Exhibits. A list of theThe exhibits filed or furnished as a part of this Annual Report is set forth on Form 10-K are those listed in the following Exhibit Index that immediately precedes the signature pages to this Report and is incorporated herein by reference. Index. EXHIBIT INDEX ​ ​ ​ ​ Exhibit No. Description of Exhibit 2.1​ ​ ​ 2.1(a) ​ Second Amended and Restated Agreement and Plan of Merger, dated as of June 12, 2012, byJuly 20, 2021, among Net Element, Inc., Mullen Technologies, Inc., Mullen Acquisition, Inc. and between Cazador Acquisition Corporation Ltd. and Net Element,Mullen Automotive Inc. (incorporated by reference to Exhibit 2.1 to the Company’s Current Report on Form 8-K filed with the CommissionSEC on June 12, 2012)July 21, 2021) ​ ​ ​ 2.22.1(b) ​ ContributionFirst Amendment, dated as of August 18, 2021, to Second Amended and Restated Agreement and Plan of Merger, dated Aprilas of July 16, 2013,2021, among Net Element, International, Inc., Unified Payments, LLC, TOT Group,Mullen Technologies, Inc., Oleg Firer, and Georgia Notes 18 LLC (incorporated by reference to Exhibit 2.1 to the Company’s Current Report on Form 8-K filed with the Commission on April 17, 2013. 2.3 Term Sheet, dated May 20, 2013, among TOT Group, Inc., Net Element International,Mullen Acquisition, Inc. and Aptito.com,Mullen Automotive Inc. (incorporated by reference to Exhibit 2.1 to the Company’s Current Report on Form 8-K filed with the CommissionSEC on May 22, 2013)August 19, 2021) ​ ​ ​ 2.42.1(c)* ​ Asset Purchase Agreement of Merger between Mullen Automotive Inc., Mullen Acquisition, Inc. and Net Element, Inc. dated June 18, 2013, between Aptito, LLC and Aptito.com, Inc. (incorporated by reference to Exhibit 2.1 to the Company’s Current Report on Form 8-K filed with the Commission on June 24, 2013)November 3, 2021 ​ ​ 2.5 Contribution Agreement, dated September 25, 2013, among T1T Lab, LLC, Net Element International, Inc. and T1T Group, LLC (incorporated by reference to Exhibit 2.1 to the Company’s Current Report on Form 8-K filed with the Commission on September 25, 2013) 2.6 Assignment of Membership Interest, dated February 11, 2014, among T1T Group, LLC, Net Element, Inc., and T1T LAB, LLC (incorporated by reference to Exhibit 2.7 to the Company’s Annual Report on Form 10-K filed with the Commission on April 15, 2014) 2.7 Binding Offer Letter, dated March 16, 2015, among TOT Group Europe Ltd., Maglenta Enterprises Inc. and Champfremont Holding Ltd.  (incorporated by reference to Exhibit 2.1 to Net Element’s Current Report on Form 8-K/A filed with the Commission on March 20, 2015) ​ 3.1 ​ Certificate of Corporate Domestication of Cazador, filed with the Secretary of State of the State of Delaware on October 2, 2012 (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed with the CommissionSEC on October 5, 2012) ​ ​ ​ 3.23.1(a) ​ Certificate of Merger, filed with the Secretary of State of the State of Delaware on October 2, 2012 (incorporated by reference to Exhibit 3.4 to the Company’s Current Report on Form 8-K filed with the SEC on October 5, 2012) ​ ​ ​ 3.1(b) ​ Amended and Restated Certificate of Incorporation of Net Element International, Inc., a Delaware corporation, filed with the Secretary of State of the State of Delaware on October 2, 2012 (incorporated by reference to Exhibit 3.2 to the Company’s Current Report on Form 8-K filed with the CommissionSEC on October 5, 2012) ​ ​ ​ 3.33.1(c) ​ Amended and Restated Bylaws of Net Element International, Inc., a Delaware corporation (incorporated by reference to Exhibit 3.3 to the Company’s Current Report on Form 8-K filed with the Commission on October 5, 2012) 3.4 Certificate of Merger, filed with the Secretary of State of the State of Delaware on October 2, 2012 (incorporated by reference to Exhibit 3.4 to the Company’s Current Report on Form 8-K filed with the Commission on October 5, 2012) 3.5 Certificate of Amendment to Amended and Restated Certificate of Incorporation, dated December 5, 2013, changing the Company’s name from Net Element International, Inc. to Net Element, Inc. (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed with the CommissionSEC on December 6, 2013) ​ ​ ​ 63 54 Table of Contents 3.63.1(d) ​ Certificate of Amendment to Amended and Restated Certificate of Incorporation, to increase authorized common stock to 200 million shares (incorporated by reference to Exhibit 3.1 of the Company’s Current Report on Form 8-K filed with the CommissionSEC on December 17, 2014) ​ ​ ​ 3.73.1(e) ​ Certificate of Designations, Preferences and Rights of Series A Convertible Preferred Stock (incorporated by reference to Exhibit 3.1 of the Company’s Current Report on Form 8-K filed with the CommissionSEC on May 1, 2015) ​ ​ ​ 3.83.1(f) ​ Certificate of Amendment to Amended and Restated Certificate of Incorporation, dated June 15, 2015, to increase authorized common stock to 300 million shares (incorporated by reference to Exhibit 3.1 of the Company’s Current Report on Form 8-K filed with the CommissionSEC on June 16, 2015) ​ ​ ​ 3.93.1(g) ​ Certificate of Amendment to Amended and Restated Certificate of Incorporation (incorporated by reference to Exhibit 3.1 to the Company’s second Current Report on Form 8-K filed with the SEC on May 24, 2016) ​ ​ ​ 3.1(h) ​ Certificate of Amendment to Amended and Restated Certificate of Incorporation dated June 15, 2016 (incorporated by reference to Exhibit 3.1 of the Company’s Current Report on Form 8-K filed with the SEC on June 16, 2016) ​ ​ ​ 3.1(i) ​ Certificate of Amendment to Amended and Restated Certificate of Incorporation (incorporated by reference to Exhibit 3.1 of the Company’s Current Report on Form 8-K filed with the SEC on October 4, 2017) ​ ​ ​ 3.1(j) ​ Certificate of Amendment to the Amended and Restated Certificate of Incorporation, dated November 3, 2021, changing name to Mullen Automotive Inc. (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K, filed with the SEC on November 12, 2021). ​ ​ ​ 3.1(k) ​ Second Amended and Restated Certificate of Incorporation of Mullen Automotive Inc., dated November 5, 2021 (incorporated by reference to Exhibit 3.2 to the Company’s Current Report on Form 8-K, filed with the SEC on November 12, 2021). ​ ​ ​ 3.2 ​ Amended and Restated Bylaws (incorporated by reference to Exhibit 3.3 to the Company’s Current Report on Form 8-K filed with the SEC on October 5, 2012) ​ ​ ​ 3.2(a) ​ Amendment No. 1 to the Bylaws, of the Company, dated June 15, 2015 (incorporated by reference to Exhibit 3.2 of the Company’s Current Report on Form 8-K filed with the CommissionSEC on June 16, 2015) ​ ​ ​ 3.103.3(b) ​ Amendment No. 2 to the Bylaws, of the Company, dated July 10, 2015 (incorporated by reference to Exhibit 3.1 of the Company’s Current Report on Form 8-K filed with the CommissionSEC on July 10, 2015) 3.11​ ​ ​ 4.1 ​ CertificateForm of Amendment to Amended and Restated CertificateWarrant with an exercise price of Incorporation, as amended, of the Company$0.6877 per share. ​ ​ ​ 10.1(a)# ​ 2013 Equity Incentive Plan approved on December 5, 2013 (incorporated by reference to Exhibit 3.1Appendix “A” to the Company’s second Current ReportDefinitive Proxy Statement on Form 8-KSchedule 14A filed with the Commission on May 24, 2016)November 4, 2013) 10.1(b)# ​ Amendment to 2013 Equity Incentive Plan approved on December 9, 2014 (incorporated by reference to Appendix “B” to the Company’s Definitive Proxy Statement on Schedule 14A filed with the Commission on October 31, 2014) 3.12​ ​ ​ 10.1(c)# ​ Certificate of Amendment to Amended and Restated Certificate of Incorporation of the Company, dated2013 Equity Incentive Plan approved on June 15, 2016 (incorporated by reference to Exhibit 3.1 ofAppendix “B” to the Company’s Current ReportDefinitive Proxy Statement on Form 8-KSchedule 14A filed with the Commission on June 16,April 25, 2016) ​ ​ ​ 64 Table of Contents 3.1310.1(d)# ​ Certificate of Amendment to Amended and Restated Certificate of Incorporation, as amended, of Net Element, Inc.2013 Equity Incentive Plan approved on October 23, 2019 (incorporated by reference to Exhibit 3.1 ofAppendix “A” to the Company’s Current ReportDefinitive Proxy Statement on Form 8-KSchedule 14A filed with the Commission on September 4, 2019) ​ ​ ​ 10.1(e)# ​ Amendment to 2013 Equity Incentive Plan approved on December 1, 2020 (incorporated by reference to Appendix “A” to the Company’s Definitive Proxy Statement on Schedule 14A filed with the Commission on October 4, 2017)13, 2020) ​ ​ ​ 4.110.1(f)# ​ Specimen Common Stock Certificate of Net Element International, Inc.Amendment to 2013 Equity Incentive Plan approved on August 26, 2021 (incorporated by reference to Exhibit 4.2Annex “C” to the RegistrationCompany’s Definitive Proxy Statement on Form S-4Schedule 14A filed by the Company with the CommissionSEC on August 31, 2012)July 27, 2021) ​ ​ ​ 4.210.1(g)# ​ Warrant Certificate of Cazador Acquisition Corporation Ltd. (incorporated by reference to Exhibit 4.3 to the Registration Statement on Form F-1 filed by the Company with the Commission on September 3, 2010) 4.3 Registration Rights Agreement by and between Cazador Acquisition Corporation Ltd., Cazador Sub Holdings Ltd. and Others (incorporated by reference to Exhibit 10.5 to the Registration Statement, as amended, on Form F-1/A filed by the Company with the Commission on October 6, 2010) 4.4 Warrant Agreement by and between Cazador Acquisition Corporation Ltd. and Continental Stock Transfer & Trust Company (incorporated by reference to Exhibit 4.4 to the Registration Statement, as amended, on Form F-1/A filed by the Company with the Commission on October 6, 2010) 4.5 Secured Convertible Senior Promissory Note dated April 21, 2014 between the Company and Cayman Invest, S.A. (incorporated by reference to Exhibit 4.1 to Net Element’s Current Report on Form 8-K filed with the Commission on April 22, 2014) 4.6 Form of Amended and Restated Restricted Options to Purchase Shares of Restricted CommonNon-Qualified Stock (incorporated by reference to Exhibit 4.1 to Net Element’s Current Report on Form 8-K filed withOption Award Agreement Under the Commission on October 7, 2015) 4.7 Form of Option to Kenges Rakishev to Purchase Shares of Restricted Common Stock (incorporated by reference to Exhibit 4.1 to Net Element’s Current Report on Form 8-K filed with the Commission on January 22, 2016) 55 Table of Contents 4.8 Registration Rights Agreement, dated as of July 6, 2016, between Net Element, Inc. and ESOUSA Holdings, LLC (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed with the Commission on July 12, 2016) 4.9 Registration Rights Agreement, dated as of July 5, 2017, between the Company and Cobblestone Capital Partners LLC (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed with the Commission on July 7, 2017) 4.10 Registration Rights Agreement, dated as of December 29, 2017, between the Company and Esousa Holdings LLC (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed with the Commission on January 2, 2018) 4.11 Form of Warrant to Purchase Common Stock issued to Esousa Holdings LLC (incorporated by reference to Exhibit A-1 to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the Commission on January 2, 2018) 4.12 Form of Pre-Funded Warrant to Purchase Common Stock issued to Esousa Holdings LLC (incorporated by reference to Exhibit A-2 to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the Commission on January 2, 2018) 10.1 Form of Indemnification Agreement (incorporated by reference to Exhibit 10.9 to the Registration Statement on Form F-1 filed by the Company with the Commission on September 3, 2010) 10.2 Memorandum of Understanding, dated March 23, 2012, by and between Cazador Acquisition Corporation Ltd. and Cazador Sub-Holdings Ltd. (incorporated by reference to Exhibit 10.10 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2011, filed with the Commission on March 30, 2012) 10.3 Membership Interest Purchase Agreement (Motorsport) dated as of February 1, 2011 between Enerfund, LLC and the Company (incorporated by reference to Exhibit 10.29 to the Company’s Transition Report on Form 10-KT/A filed with the Commission on February 3, 2011) 10.4 Joint Venture Agreement, dated April 6, 2012, between Net Element, Inc. and Igor Yakovlevich Krutoy (incorporated by reference to Exhibit 10.1 to Net Element’s Current Report on Form 8-K filed with the Commission on April 12, 2012) 10.5 Loan Agreement, dated July 4, 2012, between OOO Sat-Moscow and OOO Net Element Russia (incorporated by reference to Exhibit 10.1 to Net Element’s Current Report on Form 8-K filed with the Commission on July 10, 2012) 10.6 Credit Agreement, dated August 17, 2012, between Alpha-Bank and OOO Digital Provider (formerly OOO TOT Money) (incorporated by reference to Exhibit 10.1 to Net Element’s Current Report on Form 8-K filed with the Commission on August 23, 2012) 10.7 Agreement of Property Rights Pledge, dated August 17, 2012, between Alpha-Bank and OOO Digital Provider (formerly OOO TOT Money) (incorporated by reference to Exhibit 10.2 to Net Element’s Current Report on Form 8-K filed with the Commission on August 23, 2012) 10.8 General Agreement No. TR-0672 on General Conditions of Financing against Assignment of Monetary Claim (Factoring) within Russia, dated September 19, 2012, between Alpha-Bank and OOO Digital Provider (formerly OOO TOT Money) (including related supplementary agreements) (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the Commission on October 10, 2012) 10.9 Supplemental Agreements dated September 19, 2012, which amend the General Agreement No. TR-0672 on General Conditions of Financing against Assignment of Monetary Claim (Factoring) within Russia, dated September 19, 2012, between Alpha-Bank and OOO Digital Provider (formerly OOO TOT Money) (incorporated by reference to Exhibit 10.22 to the Company’s Annual Report on Form 10-K filed with the Commission on April 12, 2013) 56 Table of Contents 10.10# Management and Consulting Services Agreement, dated October 24, 2012, between Bond Street Management LLC and Net Element International Inc. (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the Commission on October 30, 2012) 10.11 Agreement on transfer of rights and obligations, dated July 1, 2012, among Mobile Telesystems OJSC, OOO RM-Invest and OOO Digital Provider (formerly OOO TOT Money), with respect to Contract No. D0811373, dated July 1, 2008, between Mobile Telesystems OJSC and OOO RM-Invest (Net Element International, Inc. is requesting confidential treatment of certain information which has been omitted from this Agreement.  The omitted information has been separately filed with the SEC.) (incorporated by reference to Exhibit 10.33 to the Company’s Current Report on Form 8-K filed with the Commission on November 19, 2012) 10.12 Contract No. D0811373, dated July 1, 2008, between Mobile Telesystems OJSC and OOO RM-Invest (including material supplementary agreements related thereto) (Net Element International, Inc. is requesting confidential treatment of certain information which has been omitted from Contract No. D0811373 and certain of the material supplementary agreements related thereto.  The omitted information has been separately filed with the SEC.) (incorporated by reference to Exhibit 10.34 to the Company’s Current Report on Form 8-K filed with the Commission on November 19, 2012) 10.13 Contract No. CPA-86, dated September 1, 2012, between OJSC Megafon and OOO Digital Provider (formerly OOO TOT Money) (Net Element International, Inc. is requesting confidential treatment of certain information which has been omitted from Contract No. CPA-86.  The omitted information has been separately filed with the SEC.) (incorporated by reference to Exhibit 10.35 to the Company’s Current Report on Form 8-K filed with the Commission on November 19, 2012) 10.14 Contract No. 0382, dated September 20, 2012, between OJSC VimpelCom and OOO Digital Provider (formerly OOO TOT Money) (including Supplementary Agreement No. 1 thereto) (Net Element International, Inc. is requesting confidential treatment of certain information which has been omitted from Contract No. 0382 and Supplementary Agreement No. 1 thereto.  The omitted information has been separately filed with the SEC.) (incorporated by reference to Exhibit 10.36 to the Company’s Current Report on Form 8-K filed with the Commission on November 19, 2012) 10.15 Loan Agreement, dated November 26, 2012, between Net Element International, Inc. and Infratont Equities Inc. (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the Commission on November 30, 2012) 10.16 Term Sheet, dated March 8, 2013 between Unified Payments, LLC and Net Element International, Inc. (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the Commission on March 12, 2013) 10.17 Loan Agreement, dated March 8, 2013, among Net Element International, Inc., Unified Payments, LLC, Oleg Firer and Georgia Notes 18 LLC (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed with the Commission on March 12, 2013) 10.18 Form of Secured Revolving Note made by Unified Payments, LLC and payable to Net Element International, Inc. (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K filed with the Commission on March 12, 2013) 10.19 Non-Recourse Guaranty, dated March 8, 2013, by Oleg Firer and Georgia Notes 18 LLC for the benefit of Net Element International, Inc. (incorporated by reference to Exhibit 10.4 to the Company’s Current Report on Form 8-K filed with the Commission on March 12, 2013) 10.20 Pledge Agreement, dated March 8, 2013, among Oleg Firer, Georgia Notes 18 LLC and Net Element International, Inc. (incorporated by reference to Exhibit 10.5 to the Company’s Current Report on Form 8-K filed with the Commission on March 12, 2013) 57 Table of Contents 10.21 Loan Agreement, dated July 12, 2012, between OOO Digital Provider (formerly OOO TOT Money) and OOO RM Invest, as amended on July 30, 2012, August 17, 2012 and February 25, 2013Equity Incentive Plan (incorporated by reference to Exhibit 10.34 to the Company’s Annual Report on Form 10-K filed with the Commission on April 12, 2013) 10.22 Termination Agreement for Management and Consulting Agreement, dated April 15, 2013, between Net Element International, Inc. and Bond Street Management LLC (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the Commission on April 17, 2013)March 30, 2015) ​ ​ ​ 10.2310.1(h)# ​ Form of Indemnification Agreement for executive officers, entered into between Net Element International, Inc. and each of Jonathan New, Dmitry Kozko, and Francesco Piovanetti (incorporated by reference to Exhibit 10.8 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2013, filed with the Commission on May 15, 2013) 10.24 Contract No. CPA/ML-17, dated March 1, 2013, between ZAO MegaLabs and OOO Digital Provider (formerly OOO TOT Money) (incorporated by reference to Exhibit 10.9 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2013, filed with the Commission on May 15, 2013) (Net Element, Inc. is requesting confidential treatment of certain information which has been omitted from Contract No. CPA/ML-17. The omitted information has been separately filed with the Commission.) 10.25 Commercial Lease, dated May 1, 2013, between BGC LLC and Net Element International, Inc. (incorporated by reference to Exhibit 10.4 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2013, filed with the Commission on August 19, 2013) 10.26 Promissory Note, dated May 13, 2013, in the original principal amount of $2 million made by Net Element International, Inc. and payable to K1 Holding Limited (incorporated by reference to Exhibit 10.7 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2013, filed with the Commission on August 19, 2013) 10.27 Letter Agreement, dated January 14, 2013, among OOO Digital Provider (formerly OOO TOT Money), Tcahai Hairullaevich Katcaev and Varwood Holdings Limited (incorporated by reference to Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2013, filed with the Commission on August 19, 2013) 10.28 Letter Agreement, dated July 1, 2013, among OOO Digital Provider (formerly OOO TOT Money), OOO NETE, Net Element International, Inc. and Tcahai Hairullaevich Katcaev (incorporated by reference to Exhibit 10.3 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2013, filed with the Commission on August 19, 2013) 10.29 Settlement, Separation Agreement and General Release, dated May 10, 2013, between Net Element International, Inc. and Curtis Wolfe (incorporated by reference to Exhibit 10.6 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2013, filed with the Commission on August 19, 2013) 10.30 Letter Agreement, dated August 28, 2013, among Net Element International, Inc., Oleg Firer, Steven Wolberg, Vladimir Sadovskiy, Georgia Notes 18, LLC, Kenges Rakishev and Mike Zoi (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the Commission on September 10, 2013) 10.31 Services Agreement, dated December 5, 2013, between Net Element International, Inc. an K 1 Holding Limited (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the Commission on December 6, 2013) 10.32 Letter Agreement, dated December 5, 2013, among TGR Capital, LLC, Net Element International, Inc. and K 1 Holding Limited (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed with the Commission on December 6, 2013) 58 Table of Contents 10.33# Form of Incentive Stock Option Award Agreement Under the Net Element, Inc. 2013 Equity Incentive Plan (incorporated by reference to Exhibit 10.33 to the Company’s Annual Report on Form 10-K filed with the Commission on March 30, 2015) ​ ​ ​ 10.34#10.1(i)# ​ Form of Non-Qualified Stock Option Award Agreement Under the Net Element, Inc. 2013 Equity Incentive Plan (incorporated by reference to Exhibit 10.34 to the Company’s Annual Report on Form 10-K filed with the Commission on March 30, 2015) 10.35# Form of Restricted Share Award Agreement Under the Net Element, Inc. 2013 Equity Incentive Plan (incorporated by reference to Exhibit 10.35 to the Company’s Annual Report on Form 10-K filed with the Commission on March 30, 2015) ​ ​ ​ 10.3610.2 ​ Assignment of Membership Interest, dated February 11, 2014, between Net Element, Inc. and T1T Group, LLC (incorporated by reference to Exhibit 10.1 to Net Element’s Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2014, filed with the Commission on May 15, 2014) 10.37 Loan and Security Agreement, dated June 30, 2014, among RBL Capital Group, LLC, as lender, and TOT Group, Inc., TOT Payments, LLC, TOT BPS, LLC, TOT FBS, LLC, Process Pink, LLC, TOT HPS, LLC and TOT New Edge, LLC, as co-borrowers (incorporated by reference to Exhibit 10.1 to Net Element’s Current Report on Form 8-K filed with the Commission on July 2, 2014) 10.38 Amendment No. 1 effective June 30, 2014 between the Company and Oleg Firer, Steven Wolberg, Georgia Notes 18, LLC and Vladimir Sadovskiy (incorporated by reference to Exhibit 10.2 to Net Element’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2014, filed with the Commission on August 14, 2014) 10.39 Master Exchange Agreement, dated as of September 15, 2014 between the Company and Crede CG III, Ltd. (incorporated by reference to Exhibit 10.1 to Net Element’s Current Report on Form 8-K filed with the Commission on September 15, 2014) 10.40 Supplement Agreement No. 14, dated May 21, 2014 (but executed by OOO Digital Provider (formerly OOO TOT Money) on September 17, 2014), to the General Agreement No. TR-0672 on General Conditions of Financing against Assignment of Receivables (Factoring) within Russia, dated September 19, 2012, between JSC Alpha-Bank and OOO Digital Provider (formerly OOO TOT Money) (incorporated by reference to Exhibit 10.1 to Net Element’s Current Report on Form 8-K filed with the Commission on September 24, 2014) 10.41 Supplement Agreement No. 15, dated September 17, 2014, to the General Agreement No. TR-0672 on General Conditions of Financing against Assignment of Receivables (Factoring) within Russia, dated September 19, 2012, between JSC Alpha-Bank and OOO Digital Provider (formerly OOO TOT Money) (incorporated by reference to Exhibit 10.2 to Net Element’s Current Report on Form 8-K filed with the Commission on September 24, 2014) 10.42 General Agreement No. 09969-HP on General Conditions of Factoring Services under “Liquidity” Program, dated as of November 5, 2014, between Bank Otkritie Financial Corporation and Digital Provider Limited Liability Company (incorporated by reference to Exhibit 10.1 to Net Element’s Current Report on Form 8-K filed with the Commission on November 19, 2014) 10.43 Additional Agreement on Factoring Services under “Finance” Program to General Agreement on General Conditions of Factoring Services under “Liquidity” Program No. 09969-HP as of November 5, 2014 (incorporated by reference to Exhibit 10.2 to Net Element’s Current Report on Form 8-K filed with the Commission on November 19, 2014) 10.44 Equity Distribution Agreement between the Company and Revere Securities, LLC (incorporated by reference to Exhibit 10.1 to Net Element’s Current Report on Form 8-K filed with the Commission on January 28, 2015) 10.45 Securities Purchase Agreement (Series A Preferred Stock) among the Company and the investors party thereto (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the Commission on May 1, 2015) 59 Table of Contents 10.46 Voting Agreement (related to Series A Preferred Stock sale) among the Company and the stockholders party thereto (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed with the Commission on May 1, 2015) 10.47 Form of Lock-Up Agreement (related to Series A Preferred Stock transaction) (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K filed with the Commission on May 1, 2015) 10.48 Securities Purchase Agreement (Senior Convertible Notes and Warrants) among the Company and the investors party thereto (incorporated by reference to Exhibit 10.4 to the Company’s Current Report on Form 8-K/A filed with the Commission on July 17, 2015) 10.49 Registration Rights Agreement among the Company and the investors party thereto (incorporated by reference to Exhibit 10.5 to the Company’s Current Report on Form 8-K filed with the Commission on May 1, 2015) 10.50 Form of Lock-Up Agreement (related to Senior Convertible Notes and Warrants transaction) (incorporated by reference to Exhibit 10.6 to the Company’s Current Report on Form 8-K filed with the Commission on May 1, 2015) 10.51 Form of Voting Agreement (related to Senior Convertible Notes and Warrants transaction) among the Company and the stockholders thereto (incorporated by reference to Exhibit 10.7 to the Company’s Current Report on Form 8-K filed with the Commission on May 1, 2015) 10.52 Acquisition Agreement, dated May 20, 2015, among TOT Group Europe Ltd., “OT Group Russia LLC, Maglenta Enterprises Inc. and Champfremont Holding Ltd., Polimore Capital Limited, Brosword Holding Limited and other Target Companies listed in Exhibit B thereto (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the Commission on May 27, 2015) 10.53 Escrow Agreement, dated May 20, 2015, among TOT Group Europe Ltd., “OT Group Russia LLC, Maglenta Enterprises Inc., Champfremont Holding Ltd. and Reznick Law, PLLC (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed with the Commission on May 27, 2015) 10.54 Guaranty, dated May 20, 2015, among Net Element, Inc., Maglenta Enterprises Inc. and Champfremont Holding Ltd. (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K filed with the Commission on May 27, 2015) 10.55 Guaranty, dated May 20, 2015, by Lacerta Management Ltd in favor of TOT Group Europe Ltd., and “OT Group Russia LLC (incorporated by reference to Exhibit 10.4 to the Company’s Current Report on Form 8-Kfiled with the Commission on May 27, 2015) 10.56 Letter Agreement, dated August 4, 2014, by and among the Company and the investors listed on the signature pages attached thereto (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the Commission on August 4, 2015) 10.57 Letter Agreement, dated August 4, 2015, by and among the Company and the investors listed on the signature pages attached thereto (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed with the Commission on August 4, 2015) 10.58 Letter Agreement, dated as of September 11, 2015, among the Company and the investors listed on the signature pages attached thereto (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the Commission on September 16, 2015) 10.59 Additional Letter Agreement among the Company and the investors listed on the signature pages attached thereto (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the Commission on October 7, 2015) 60 Table of Contents 10.60 Amendment to Letter Agreement dated August 4, 2015, dated December 1, 2015, by and among the Company and the investors listed on the signature pages attached thereto (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the Commission on December 2, 2015) 10.61 Amendment to Letter Agreement dated August 4, 2015, dated December 1, 2015, by and among the Company and the investors listed on the signature pages attached thereto (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed with the Commission on December 2, 2015) 10.62 Second Additional Letter Agreement, dated as of January 21, 2016, between the Company and Kenges Rakishev (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the Commission on January 22, 2016) 10.63 Amendment No. 1, dated as of April 14, 2016, to Second Additional Letter Agreement, dated as of January 21, 2016, between the Company and Kenges Rakishev (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the Commission on April 15, 2016) 10.64 Letter agreement, dated as of April 28, 2016 between the Company and RBL Capital Group, LLC (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the Commission on April 28, 2016) 10.65 Master Exchange Agreement, dated as of May 2, 2016 between the Company and Crede CG III, Ltd. (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the Commission on May 3, 2016) 10.66 Amendment to the Master Exchange Agreement, dated as of May 2, 2016 between the Company and Crede CG III, Ltd. (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the Commission on March 8, 2017) 10.67 Amendment No. 1, dated as of May 2, 2016, to the Loan and Security Agreement among TOT Group, Inc., TOT Payments, LLC, TOT BPS, LLC, TOT FBS, LLC, Process Pink, LLC, TOT HPS, LLC, TOT New Edge, LLC and RBL Capital Group, LLC. (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the Commission on May 4, 2016) 10.68# 2013 Equity Incentive Plan approved on December 5, 2013 (incorporated by reference to Appendix “A” to the Company’s Definitive Proxy Statement on Schedule 14A filed with the Commission on November 4, 2013) 10.69# Amendment to 2013 Equity Incentive Plan approved on December 9, 2014 (incorporated by reference to Appendix “B” to the Company’s Definitive Proxy Statement on Schedule 14A filed with the Commission on October 31, 2014) 10.70# Amendment to 2013 Equity Incentive Plan approved on June 15, 2016 (incorporated by reference to Appendix “B” to the Company’s Definitive Proxy Statement on Schedule 14A filed with the Commission on April 25, 2016) 10.71 Common Stock Purchase Agreement, dated as of July 6, 2016, between the Company and ESOUSA Holdings, LLC (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the Commission on July 12, 2016) ​ ​ ​ 10.7210.2(a) ​ Master Exchange Agreement, dated as of March 27, 2020 between the Company and ESOUSA Holdings, LLC, (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the Commission on March 27, 2020) ​ ​ ​ 10.2(b) ​ Amendment, dated as of April 23, 2020, to Master Exchange Agreement, dated as of March 27, 2020 between the Company and ESOUSA Holdings, LLC (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the Commission on April 24, 2020) ​ ​ ​ 10.2(c) ​ Second Amendment to Master Exchange Agreement, dated as of August 3, 2020, to Master Exchange Agreement, dated as of March 27, 2020, as amended on April 23, 2020, between the Company and ESOUSA Holdings, LLC (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the Commission on August 5, 2020) ​ ​ ​ 10.3# ​ Employment Agreement, dated as of February 25, 2020, between Net Element, Inc. and Steven Wolberg (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the Commission on March 2, 2020) ​ ​ ​ 10.4 ​ Binding Letter of Intent, dated June 12, 2020, between the Company and Mullen Technologies, Inc. (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the Commission on June 15, 2020) ​ ​ ​ 10.4(a) ​ Amendment No. 1, dated as of July 21, 2016, among10, 2020, to the Binding Letter of Intent, dated June 12, 2020, between the Company PayStar, Inc. and Nexcharge,Mullen Technologies, Inc. (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the Commission on July 21, 2016)13, 2020) ​ ​ ​ 65 Table of Contents 10.7310.5 ​ Settlement Agreement Amendment amongPromissory Note, dated as of August 11, 2020, between Net Element, Inc., TOT Group Europe, Ltd., “OT Group Russia LLC, Maglenta Enterprises and Mullen Technologies, Inc. and Champfremont Holding Ltd. (incorporated by reference to Exhibit 10.1 of10.4 to the Company’s CurrentQuarterly Report on Form 8-K10-Q for the quarterly period ended June 30, 2020 filed with the Commission on October 31, 2016) 61 Table of Contents 10.74 Amendment to the Acquisition Agreement among Net Element, Inc., TOT Group Europe, Ltd., “OT Group Russia LLC, Maglenta Enterprises Inc., Champfremont Holding Ltd. and the Target Companies parties thereto (incorporated by reference to Exhibit 10.2 of the Company’s Current Report on Form 8-K filed with the Commission on October 31, 2016)August 8, 2020) ​ ​ ​ 10.7510.6 ​ Second Amendment to the AcquisitionDivestiture Agreement, amongdated as of July 20, 2021, between RBL Capital Group, LLC and Net Element, Inc., TOT Group Europe, Ltd., “OT Group Russia LLC, Maglenta Enterprises Inc., Champfremont Holding Ltd. and the Target Companies parties thereto (incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K filed with the Commission on March 17, 2017) 10.76 Promissory Note, dated March 1, 2017, in the original principal amount of $348,083.32 made by the Company and payable to Star Equities LLC (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the CommissionSEC on March 3, 2017)July 21. 2021) ​ ​ ​ 10.7710.7 ​ Amendment to Commercial Lease, dated September 12, 2016, between BGC LLC and Net Element International, Inc. (incorporated by reference to Exhibit 10.77 of the Company’s Annual Report on Form 10-K filed with the Commission on March 31, 2017) 10.78 Second Amendment to Commercial Lease, dated November 16, 2016, between BGC LLC and Net Element International, Inc. (incorporated by reference to Exhibit 10.78 of the Company’s Annual Report on Form 10-K filed with the Commission on March 31, 2017) 10.79 Corporate Guaranty, dated March 23, 2017, by Net Element, Inc. in favor of Cynergy Data, LLC (incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K filed with the Commission on March 24, 2017) 10.80 Amendment to Master Exchange Agreement, dated as of March 3, 2017, between the Company and Crede CG III, Ltd. (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the Commission on March 8, 2017) 10.81 Loan Agreement, dated as of May 18, 2017, among Priority Payment Systems LLC, as lender, and TOT Payments, LLC, TOT New Edge, LLC, Process Pink, LLC and TOT FBS, LLC, as co-borrowers (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the Commission on May 23, 2017) 10.82 Promissory Note, dated May 18, 2017, by TOT Payments, LLC, TOT New Edge, LLC, Process Pink, LLC and TOT FBS, LLC in favor of Priority Payment Systems LLC (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed with the Commission on May 23, 2017) 10.83 Security Agreement, dated as of May 18, 2017, by TOT Payments, LLC, TOT New Edge, LLC, Process Pink, LLC and TOT FBS, LLC in favor of Priority Payment Systems LLC, as secured party (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K filed with the Commission on May 23, 2017) 10.84 Corporate Guaranty, dated March 17, 2017, by Net Element, Inc. in favor of Priority Payment Systems LLC (incorporated by reference to Exhibit 10.4 to the Company’s Current Report on Form 8-K filed with the Commission on May 23, 2017) 10.85 Amendment of Settlement Agreement among Net Element, Inc., Maglenta Enterprises Inc. and Champfremont Holding Ltd. (accepted and agreed to by TOT Group Europe, Ltd., TOT Group Russia LLC) (incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K filed with the Commission on May 25, 2017) 10.86 Amendment to Loan Agreement, dated as of June 27, 2017, among Priority Payment Systems LLC, as lender, and TOT Payments, LLC, TOT New Edge, LLC, Process Pink, LLC and TOT FBS, LLC, as co-borrowers (incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K filed with the Commission on July 3, 2017) 62 Table of Contents 10.87 Common Stock Purchase Agreement, dated as of July 5, 2017, between the Company and Cobblestone Capital Partners LLC (incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K filed with the Commission on July 7, 2017) 10.88# Amendment to 2013 Equity Incentive Plan approved on June 15, 2016 (incorporated by reference to Appendix “B” to the Company’s Definitive Proxy Statement on Schedule 14A filed with the Commission on August 10, 2017) 10.89 Lease, effective August 9, 2017, between the Company and Golden Star Investments Corp. (incorporated by reference to Exhibit 10.8 of the Company’s Quarterly Report on Form 10-Q filed with the Commission on August 14, 2017) 10.90 Promissory Note, dated August 29, 2017, by TOT Group, Inc. in favor of MBF Merchant Capital, LLC (incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K filed with the Commission on September 1, 2017) 10.91 Letter Agreement, dated as of October 20, 2017,2021, between Net Element, Inc. and Star Equities LLC (incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K filed with the Commission on October 20, 2017) 10.92 Unit Purchase Agreement, dated as of December 29, 2017, between the Company and EsousaESOUSA Holdings, LLC (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the CommissionSEC on January 2, 2018)July 12, 2021) ​ ​ ​ 10.93* 10.8 ​ AdvanceSecured Convertible Promissory Note and Residual PurchaseSecurity Agreement, dated July 30, 2018,23, 2020, by and between Unified Portfolio Acquisitions,among Mullen Technologies, Inc. and DBI Lease Buyback Servicing LLC and Universal Partners, LLC 10.94*# Amendment to 2013 Equity Incentive Plan approved on November 27, 2018 (incorporated by reference to Appendix “A”Exhibit 10.4 to the Company’s Definitive ProxyAmendment No. 1 to the Registration Statement on Schedule 14AForm S-4, filed with the CommissionSEC on October 10, 2018)July 22, 2021). ​ ​ ​ 10.95 10.9 ​ AdvanceSettlement, Termination, Release and ResidualEquity Purchase and Loan Agreement, dated as of July 23, 2020, by and between Mullen Technologies, Inc., Drawbridge Investments, LLC, and DBI Lease Buyback Servicing LLC (incorporated by reference to Exhibit 10.5 to the Company’s Amendment No. 1 to the Registration Statement on Form S-4, filed with the SEC on July 22, 2021). ​ ​ ​ 10.9(a) ​ Amendment No. 1, dated as of August 12, 2020, to Settlement, Termination, Release and Equity Purchase and Loan Agreement, dated as of July 23, 2020, by and among Mullen Technologies, Inc., Drawbridge Investments, LLC, and DBI Lease Buyback Servicing LLC (incorporated by reference to Exhibit 10.16 to the Company’s Amendment No. 1 to the Registration Statement on Form S-4, filed with the SEC on July 22, 2021). ​ ​ ​ 10.10 ​ Securities Purchase Agreement, dated December 26, 2018,as of May 7, 2021, between Mullen Technologies, Inc. and Acuitas Capital, LLC (incorporated by reference to Exhibit 10.6 to the Company’s Amendment No. 1 to the Registration Statement on Form S-4, filed with the SEC on July 22, 2021). ​ ​ ​ 10.10(a) ​ Exchange Agreement, dated as of May 7, 2021, by and among Unified Portfolio Acquisitions, LLC, Argus MerchantMullen Technologies, Inc. and the Holders (incorporated by reference to Exhibit 10.8 to the Company’s Amendment No. 1 to the Registration Statement on Form S-4, filed with the SEC on July 22, 2021) ​ ​ ​ 10.10(b) ​ Amendment No. 1, dated as of May 20, 2021, to the Exchange Agreement, dated as of May 7, 2021, by and among Mullen Technologies, Inc. and the Holders (incorporated by reference to Exhibit 10.9 to the Company’s Amendment No. 1 to the Registration Statement on Form S-4, filed with the SEC on July 22, 2021). ​ ​ ​ 10.11 ​ Securities Purchase Agreement, dated as of May 16, 2021, between Mullen Technologies, Inc. and TDR Capital Pty Limited (incorporated by reference to Exhibit 10.7 to the Company’s Amendment No. 1 to the Registration Statement on Form S-4, filed with the SEC on July 22, 2021). ​ ​ ​ 10.12 ​ Form of prior securities purchase agreement, convertible note and warrant (substantially the same in all material respects as the securities purchase agreement, convertible note and warrant filed as Exhibit 10.7 except for dates, investment amounts, warrant numbers, and investors, all of which are generally identified in Schedule 1 to the Exchange Agreement filed as Exhibit 10.8 and Amendment No. 1 thereto filed as Exhibit 10.9, and for other differences that have been superseded by such Exchange Agreement) (incorporated by reference to Exhibit 10.17 to the Company’s Amendment No. 1 to the Registration Statement on Form S-4, filed with the SEC on July 22, 2021). ​ ​ ​ 66 Table of Contents 10.13# ​ Amended and Restated Employment Agreement, dated as of June 1, 2021, by and between David Michery and Mullen Technologies, Inc. (incorporated by reference to Exhibit 10.10 to the Company’s Amendment No. 1 to the Registration Statement on Form S-4, filed with the SEC on July 22, 2021). ​ ​ ​ 10.14 ​ Contribution and Spin-Off Agreement, dated as of May 12, 2021, by and among Mullen Technologies, Inc. and Mullen Automotive Inc. (incorporated by reference to Exhibit 10.11 to the Company’s Amendment No. 1 to the Registration Statement on Form S-4, filed with the SEC on July 22, 2021). ​ ​ ​ 10.15 ​ Master Distribution Agreement, dated as of May 12, 2021, by and between Mullen Technologies, Inc. and Mullen Automotive Inc. (incorporated by reference to Exhibit 10.12 to the Company’s Amendment No. 1 to the Registration Statement on Form S-4, filed with the SEC on July 22, 2021). ​ ​ ​ 10.16 ​ Separation Agreement, dated as of May 12, 2021, by and between Mullen Technologies, Inc. and Mullen Automotive Inc. (incorporated by reference to Exhibit 10.13 to the Company’s Amendment No. 1 to the Registration Statement on Form S-4, filed with the SEC on July 22, 2021). ​ ​ ​ 10.17 ​ Transition Services LLCAgreement, dated as of May 12, 2021, by and Treasury Payments,between Mullen Technologies, Inc. and Mullen Automotive Inc. (incorporated by reference to Exhibit 10.14 to the Company’s Amendment No. 1 to the Registration Statement on Form S-4, filed with the SEC on July 22, 2021). ​ ​ ​ 10.18 ​ Tax Sharing Agreement, dated May 12, 2021, by and among Mullen Technologies, Inc. and Mullen Automotive Inc. (incorporated by reference to Exhibit 10.15 to the Company’s Amendment No. 1 to the Registration Statement on Form S-4, filed with the SEC on July 22, 2021). ​ ​ ​ 10.19 ​ Form of Share Escrow Agreement (incorporated by reference to Exhibit 10.18 to the Company’s Amendment No. 1 to the Registration Statement on Form S-4, filed with the SEC on July 22, 2021). ​ ​ ​ 10.20 ​ Letter Agreement, dated as of November 3, 2021 between the Company and ESOUSA Holdings, LLC (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K, filed with the CommissionSEC on December 28, 2018)November 4, 2021). ​ ​ ​ 10.21#* ​ Employment Agreement dated October 25, 2021 between the Company and Kerri Sadler ​ ​ ​ 10.22#* ​ Employment Agreement dated April 15, 2021 between the Company and Jerry Alban ​ ​ ​ 10.23* ​ Form of Voting and Support Agreement dated as of October 26, 2021 regarding approval of an amendment to certificate of incorporation to reflect a three-year sunset provision pertaining to the voting rights associated with the Series A Preferred Stock ​ ​ ​ 10.24* ​ Agreement for Purchase and Sale of Real Property and Joint Escrow Instructions between Mullen Technologies, inc. and Saleen Motors International, LLC, dated as of March 9, 2021, and First Amendment dated as of July 23, 2021 ​ ​ ​ 10.25* ​ Consultant Agreement dated October 26, 2021 between the Company and Mary Winter ​ ​ ​ 10.26* ​ Consulting Agreement dated September 17, 2021 between the Company and Preferred Management Partners, Inc. ​ ​ ​ 10.27* ​ Securities Purchase Agreement dated November 4, 2021 between the Company and Michael Friedlander ​ ​ ​ 10.27(a)* ​ Convertible Note dated November 4, 2021 in the Original Principal Amount of $110,000 payable to Michal Friedlander ​ ​ ​ 10.27(b)* ​ Warrant dated November 4, 2021 issued to Michael Friedlander 67 Table of Contents ​ ​ ​ 21.1* ​ List of Subsidiaries ​ ​ ​ 23.1* ​ Consent of Independent Registered Public Accounting Firm (Daszkal Bolton LLP) ​ ​ ​ 31.1* ​ Certification of Chief Executive Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) under the Securities Exchange Act of 1934 ​ ​ ​ 31.2* ​ Certification of Chief Financial Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) under the Securities Exchange Act of 1934 ​ ​ ​ 32.1* ​ Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. § 1350 ​ ​ ​ 101*101.INS* ​ The following financial information from the Annual Report on Form 10-K for the fiscal year ended December 31, 2018,September 30, 2021, formatted in Inline XBRL (eXtensible Business Reporting Language), is filed electronically herewith: (i) Consolidated Balance Sheets as of December 31, 2018 and 2017;Sheets; (ii) Consolidated Statements of Operations and Comprehensive Loss for the Years Ended December 31, 2018 and 2017;Loss; (iii) Consolidated Statement of Changes in Stockholders’ Equity (Deficit) for the Years Ended December 31, 2018 and 2017; (iv) Consolidated Statements of Cash Flows for the Years Ended December 31, 2018 and 2017;Flows; and (v) Notes to Consolidated Financial Statements, tagged as blocks of text and including detailed tags. ​ ​ ​ 104* ​ Cover Page Interactive Data File (Embedded within the Inline XBRL document and included in Exhibit 101). # Indicates management contract or compensatory plan or arrangement. * Filed herewith (furnished herewith with respect to Exhibit 32.1). Item 16. Form 10-K Summary. None. ​ ​ 68 63 Table of Contents SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. Net Element, Inc. April 1, 2019 By: /s/ Oleg Firer Oleg Firer Executive Chairman and Chief Executive Officer Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. April 1, 2019 By: /s/ Oleg Firer Oleg Firer Executive Chairman and Chief Executive Officer (Principal Executive Officer) April 1, 2019 By: /s/ Jeffrey Ginsberg Jeffrey Ginsberg Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer) April 1, 2019 By: /s/ Drew Freeman Drew Freeman Director April 1, 2019 By: /s/ Howard Ash Howard Ash Director April 1, 2019 By: /s/ Jon Najarian Jon Najarian Director April 1, 2019 By: /s/ Jonathan Fichman Jonathan Fichman Director 64 Table of Contents Item 8. Financial Statements and Supplementary Data NET ELEMENT,MULLEN AUTOMOTIVE, INC. INDEX TO CONSOLIDATED FINANCIAL STATEMENTS MULLEN AUTOMOTIVE, INC. FINANCIAL STATEMENTS September 30, 2021 and 2020 ​ ​ ​ ​ ​     Page Report of Independent Registered Public Accounting Firm ​ F-2 ​ ​ ​ Consolidated Financial Statements: ​ ​ ​ ​ ​ Consolidated Balance Sheets at December 31, 2018September 30, 2021 and 20172020 F-3 Consolidated Statements of Operations and Comprehensive Loss for the Years Ended December 31, 2018 and 2017​ F-4 ​ ​ ​ Consolidated Statements of ChangesOperations for the Years Ended September 30, 2021 and 2020 ​ F-5 ​ ​ ​ Consolidated Statements of Deficiency in Stockholders’ Equity for the Years Ended December 31, 2018September 30, 2021 and 20172020 F-5​ F-6 ​ ​ ​ Consolidated Statements of Cash Flows for the Years Ended December 31, 2018September 30, 2021 and 20172020 F-6​ F-7 ​ ​ ​ Notes to Consolidated Financial Statements F-7​ F-8 ​ ​ ​ F-1 F-1 Table of Contents Report of Independent Registered Public Accounting Firm To the Board of Directors and Stockholders of Net Element,Mullen Automotive Inc. Miami, FloridaBrea, California Opinion on the Consolidated Financial Statements We have audited the accompanying consolidated balance sheets of Net Element,the Mullen Automotive Inc. (the “Company”) at December 31, 2018September 30, 2021 and 2017,2020, and the related consolidated statements of operations, changesdeficiency in stockholders’ equity, and cash flows for each of the years in the two-year period ended December 31, 2018,September 30, 2021, and the related notes (collectively referred to as the financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at September 30, 2021 and subsidiaries at December 31, 2018 and 2017,2020, and the results of theirits operations and theirits cash flows for each of the years in the two-year period ended December 31, 2018,September 30, 2021, in conformity with accounting principles generally accepted in the United States of America. Going Concern Uncertainty The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As described in Note 2 to the financial statements, the Company has sustained net losses, has indebtedness in default, and has liabilities in excess of assets of approximately $42.5 million at September 30, 2021, which raise substantial doubt about its ability to continue as a going concern. Management’s plans in regard to these matters are described in Note 2. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. Our opinion is not modified with respect to this matter. Financial Statements As discussed in Note 1, until the consummation of its merger with Net Element, Inc. on November 5, 2021, the Company operated as a component of Mullen Technologies, Inc. and was not a stand-alone entity. The consolidated financial statements of the Company reflect the assets, liabilities and expenses directly attributable to the Company, as well as allocations deemed reasonable by management, to present the financial position, results of operations, and cash flows of Mullen Automotive Inc. on a stand-alone basis, and do not necessarily reflect the financial position, results of operations, and cash flows of Mullen Automotive Inc. in the future or what they would have been had the Company been a separate, stand-alone entity during the periods presented. Basis for Opinion These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion. F-2 Table of Contents Critical Audit Matter The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matter does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing separate opinions on the critical audit matter or on the accounts or disclosures to which it relates. FINANCIAL STATEMENT PRESENTATION – ALLOCATION OF SHARED COSTS Critical Audit Matter Description As discussed in Note 1 and Note 3 to the financial statements, The historical costs and expenses reflected in these financial statements include an allocation for certain corporate and shared service functions historically provided by Mullen Technologies, Inc., former Parent, including, but not limited to, executive oversight, accounting, treasury, tax, legal, human resources, occupancy, procurement, information technology, and other shared services. These expenses have been allocated to us on the basis of direct usage when identifiable, with the remainder allocated on a pro rata basis of consolidated headcount, tangible assets or other measures considered to be a reasonable reflection of the historical utilization levels of these services. We identified the auditing of management’s assumptions regarding the allocation of general corporate expenses from Mullen Technologies, Inc., as a critical audit matter. Auditing management’s allocation of shared costs was especially challenging and highly judgmental because of the assumptions of costs that would have been incurred had Mullen Automotive, Inc. operated as a standalone company would depend on multiple factors, including organizational structure and strategic decisions made in various areas, including information technology and infrastructure. Inherent estimation uncertainty was primarily attributed to assumptions used by management in its cost allocation model which involved a high degree of subjectivity. How We Addressed the Matter in Our Audit The primary procedures we performed to address this critical audit matter included: ● Obtaining an understanding and evaluating the design over the determination of direct and shared costs ● Reviewing contracts for identification of shared costs ● Testing the completeness of the underlying data used in management’s cost allocation ● Evaluating the reasonableness of management’s assumptions by performing a retrospective review of the prior year assumptions ● Evaluating the appropriateness and consistency of management’s methods and assumptions used in developing cost allocation /s/ Daszkal Bolton LLP We have served as the Company’s auditor since 2015. 2020. Fort Lauderdale, Florida April 1, 2019December 29, 2021 ​ ​ ​ F-3 F-2 Table of Contents NET ELEMENT, MULLEN AUTOMOTIVE, INC. CONSOLIDATED BALANCE SHEETS ​ ​ ​ ​ ​ ​ ​ ​ ​      September 30,    ​      2021      2020   ASSETS   ​      ​    ​ CURRENT ASSETS   ​      ​    ​ Cash and cash equivalents ​ $ 42,174 ​ $ 33,368 ​ Materials and supplies ​   55,753 ​   43,083 ​ Deferred advertising ​   261,550 ​   15,054,000 ​ Prepaid Expenses ​   6,201,247 ​   — ​ Other current assets ​   250,331 ​   201,067 ​ TOTAL CURRENT ASSETS ​   6,811,055 ​   15,331,518 ​ Property, equipment and leasehold improvements, net ​   1,181,477 ​   1,541,996 ​ Intangibles assets, net ​   2,495,259 ​   2,622,796 ​ Right-of-use assets ​   2,350,929 ​   1,729,112 ​ Other assets ​   4,333,774 ​   762,010 ​ TOTAL ASSETS ​   17,172,494 ​   21,987,432 ​ ​ ​ ​ ​ ​ ​ ​ ​ LIABILITIES AND SHAREHOLDERS' EQUITY ​      ​      ​ CURRENT LIABILITIES ​      ​      ​ Accounts payable ​   5,206,310 ​   2,688,176 ​ Accrued expenses and other current liabilities ​   19,126,765 ​   22,151,589 ​ Liability to issue shares ​   7,027,500 ​   — ​ Lease liabilities, current portion ​   599,898 ​   336,765 ​ Notes payable, current portion ​   39,200,970 ​   33,048,471 ​ TOTAL CURRENT LIABILITIES ​   71,161,443 ​   58,225,001 ​ Notes payable, net of current portion ​   247,612 ​   283,881 ​ Lease liabilities, net of current portion ​   1,857,894 ​   1,482,569 ​ Other liabilities ​   5,617,192 ​   4,500,000 ​ TOTAL LIABILITIES ​   78,884,141 ​   64,491,451 ​ Commitments and Contingencies (Note 16) ​      ​      ​ ​ ​ ​ ​ ​ ​ ​ ​ DEFICIENCY IN STOCKHOLDERS' EQUITY ​      ​      ​ Preferred Stock; $0.001 par value; 58,000,000 shares authorized; 5,667,683 and 5,684,108 shares issued and outstanding at September 30, 2021 and 2020 respectively. ​   5,668 ​   5,684 ​ Common Stock; $0.001 par value; 500,000,000 shares authorized; 7,048,386 and 5,086,225 issued and outstanding at September 30, 2021 and 2020 respectively. ​   7,048 ​   5,086 ​ Additional Paid-in Capital ​   88,650,286 ​   63,619,280 ​ Accumulated Deficit ​   (150,374,649) ​   (106,134,069) ​ TOTAL DEFICIENCY IN STOCKHOLDERS' EQUITY ​   (61,711,647) ​   (42,504,019) ​ TOTAL LIABILITIES AND DEFICIENCY IN STOCKHOLDERS' EQUITY ​ $ 17,172,494 ​ $ 21,987,432 ​     December 31, 2018     December 31, 2017   ASSETS                 Current assets:                 Cash   $ 1,645,481     $ 11,285,669   Accounts receivable, net     6,290,412       5,472,856   Prepaid expenses and other assets     1,749,221       2,282,614   Total current assets, net     9,685,114       19,041,139   Equipment, net     25,335       58,268   Intangible assets, net     6,441,743       3,127,760   Goodwill     9,007,752       9,643,752   Other long term assets     604,070       460,511   Total assets   $ 25,764,014     $ 32,331,430                     LIABILITIES AND STOCKHOLDERS' EQUITY                 Current liabilities:                 Accounts payable   $ 6,368,444     $ 6,785,459   Accrued expenses     2,535,947       3,212,438   Deferred revenue     1,495,849       1,712,591   Notes payable (current portion)     433,448       2,493,973   Due to related party     387,814       461,992   Total current liabilities     11,221,502       14,666,453   Notes payable (net of current portion)     5,946,046       4,521,449   Total liabilities     17,167,548       19,187,902                     STOCKHOLDERS' EQUITY                 Series A Convertible Preferred stock ($.0001 par value, 1,000,000 shares authorized, no shares issued and outstanding at December 31, 2018 and December 31, 2017)     -       -   Common stock ($.0001 par value, 100,000,000 shares authorized and 3,863,019 and 3,853,100 shares issued and outstanding at December 31, 2018 and December 31, 2017, respectively)     386       385   Paid in capital     183,246,232       183,119,222   Accumulated other comprehensive loss     (2,232,163 )     (2,530,238 ) Accumulated deficit     (172,292,252 )     (167,356,070 ) Stock subscriptions receivable     -       (50,585 ) Non-controlling interest     (125,737 )     (39,186 ) Total stockholders' equity     8,596,466       13,143,528   Total liabilities and stockholders' equity   $ 25,764,014     $ 32,331,430   ​ See Notes to the Consolidated Financial Statements​ ​ F-4 F-3 Table of Contents NET ELEMENT, MULLEN AUTOMOTIVE, INC. CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended September 30, ​      2021      2020 OPERATING EXPENSES   ​      ​    General and administrative ​ $ 19,393,941 ​ $ 10,427,141 Research and development ​   3,009,027 ​   1,667,077 Total Operating Expense ​   22,402,968 ​   12,094,218 Loss from Operations ​   (22,402,968) ​   (12,094,218) ​ ​ ​ ​ ​ ​ ​ Interest expense ​   (21,168,232) ​   (18,094,234) Other financing costs ​   (1,559,961) ​   — Gain on extinguishment of indebtedness, net ​   890,581 ​   — Other income (expense), net ​   — ​   10,490 Net Loss ​ $ (44,240,580) ​ $ (30,177,962) ​ ​ ​ ​ ​ ​ ​ Net Loss per Share ​ $ (8.56) ​ $ (5.23) ​ ​ ​ ​ ​ ​ ​ Weighted average shares outstanding, basic and diluted ​   5,171,144 ​   5,765,148 ​     Twelve Months Ended December 31,       2018     2017                     Net revenues                 Service fees   $ 65,786,817     $ 58,723,928   Branded content     -       1,340,896   Total Revenues     65,786,817       60,064,824                     Costs and expenses:                 Cost of service fees     55,617,171       49,934,371   Cost of branded content     -       1,302,841   Selling, general and administrative     9,758,688       10,629,773   Non-cash compensation     142,017       2,940,424   Bad debt expense     2,145,425       1,320,848   Depreciation and amortization     2,454,637       2,533,985   Total costs and operating expenses     70,117,938       68,662,242   Loss from operations     (4,331,121 )     (8,597,418 ) Interest expense     (847,179 )     (1,189,622 ) Other income (expense)     791,567       (236,009 )    Impairment charge relating to goodwill     (636,000 )     -   Net loss from continuing operations before income taxes     (5,022,733 )     (10,023,049 ) Income taxes     -       -   Net loss from continuing operations     (5,022,733 )     (10,023,049 ) Net loss attributable to the non-controlling interest     86,551       109,564   Net loss attributable to Net Element, Inc. stockholders     (4,936,182 )     (9,913,485 ) Foreign currency translation     298,075       (43,623 ) Comprehensive loss attributable to common stockholders   $ (4,638,107 )   $ (9,957,108 )                   Loss per share - basic and diluted   $ (1.28 )   $ (5.04 )                   Weighted average number of common shares outstanding - basic and diluted     3,868,324       1,967,676   ​ See Notes to the Consolidated Financial Statements​ F-5 F-4 Table of Contents NET ELEMENT, MULLEN AUTOMOTIVE, INC. CONSOLIDATED STATEMENTS OF CHANGESDEFICIENCY IN STOCKHOLDERS’ EQUITY ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​      Preferred Stock                     ​           ​           ​      Deficiency in ​ ​ Series A ​ Series B ​ Common Stock ​ Paid-in ​ Accumulated ​ Stockholders' ​ ​ Shares      Amount      Shares      Amount      Shares      Amount      Capital      Deficit      Equity ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance, October 1, 2019   116,789 ​ $ 116   — ​ $ —   6,444,072 ​ $ 6,444 ​ $ 42,073,841 ​ $ (75,956,107) ​ $ (33,875,706) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Shares issued for cash   — ​   —   — ​   —   30,897 ​   31 ​   1,628,335 ​   — ​   1,628,366 Warrant issuances   — ​   —   — ​   —   — ​   — ​   2,092,600 ​   — ​   2,092,600 Shares issued for conversion of debt   — ​   —   3,492,707 ​   3,493   523,129 ​   523 ​   12,797,024 ​   — ​   12,801,040 Stock-based compensation   — ​   —   — ​   —   162,739 ​   163 ​   3,966,121 ​   — ​   3,966,284 Issuance of preferred stock for conversion of common stock   — ​   —   2,074,612 ​   2,075   (2,074,612) ​   (2,075) ​   — ​   — ​   — Beneficial conversion feature of convertible debt   — ​   —   — ​   —   — ​   — ​   1,061,359 ​   — ​   1,061,359 Net loss   — ​   —   — ​   —   — ​   — ​   — ​   (30,177,962) ​   (30,177,962) Balance, September 30, 2020   116,789 ​   116   5,567,319 ​   5,568   5,086,225 ​   5,086 ​   63,619,280 ​   (106,134,069) ​   (42,504,019) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Shares issued for cash   — ​   —   — ​   —   126,119 ​   126 ​   4,799,948 ​   4,800,074 ​      Shares issued for legal settlement   — ​   —   — ​   —   39,235 ​   39 ​   1,259,961 ​   1,260,000 ​      Warrant issuances   — ​   —   — ​   —   — ​   — ​   14,007,258 ​   14,007,258 ​      Issuance of common stock for conversion of preferred stock   (16,426) ​   (16)   — ​   —   1,642,563 ​   1,643 ​   (1,627) ​   — ​   — Stock-based compensation   — ​   —   — ​   —   154,245 ​   154 ​   4,965,466 ​   — ​   4,965,620 Net loss   — ​   —   — ​   —   — ​   — ​   — ​   (44,240,580) ​   (44,240,580) Balance, September 30, 2021   100,363 ​ $ 100   5,567,319 ​ $ 5,568   7,048,387 ​ $ 7,048 ​ $ 88,650,286 ​ $ (150,374,649) ​ $ (61,711,647)     Common Stock     Paid in     Stock     Comprehensive     Non-controlling     Accumulated     Equity (Deficiency)       Shares     Amount     Capital     Subscription     Income     interest     Deficit     in Assets   Balance December 31, 2016     1,535,350     $ 154.00     $ 163,920,066     $ -     $ (2,486,616 )   $ 70,378     $ (157,442,585 )   $ 4,061,397   Shares issued in connection with reverse stock split     3,117       0.31       1       -       -       -       -       1   Share based compensation     242,324       24.00       2,850,155       -       -       -       -       2,850,179   Shares issued for acquisitions     13,082       1.00       105,965       -       -       -       -       105,966   Shares issued to settle merchant liabilities     30,759       3.00       252,220       -       -       -       -       252,223   Shares issued for consulting services     19,896       2.00       228,416       (50,585 )     -       -       -       177,833   Shares issued in connection with debt restructuring     127,406       13.00       758,181       -       -       -       -       758,194   Shares issued under ESOUSA/Cobblestone agreements     1,881,165       188.00       15,004,217       -       -       -       -       15,004,405   Net loss     -       -       -       -       -       (109,564 )     (9,913,485 )     (10,023,049 ) Comprehensive loss - foreign currency translation     -       -       -       -       (43,622 )     -       -       (43,622 ) Balance December 31, 2017     3,853,100     $ 385.31     $ 183,119,222     $ (50,585 )   $ (2,530,238 )   $ (39,186 )   $ (167,356,070 )   $ 13,143,528   Share based compensation     9,919       0.99       127,010       -       -       -       -       127,011   Shares issued for consulting services     -       -       -       50,585       -       -       -       50,585   Net loss     -       -       -       -       -       (86,551 )     (4,936,182 )     (5,022,733 ) Comprehensive gain - foreign currency translation     -       -       -       -       298,075       -       -       298,075   Balance December 31, 2018     3,863,019     $ 386.30     $ 183,246,232     $ -     $ (2,232,163 )   $ (125,737 )   $ (172,292,252 )   $ 8,596,466   ​ See Notes to the Consolidated Financial Statements​ F-6 F-5 Table of Contents NET ELEMENT, MULLEN AUTOMOTIVE, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended September 30, ​      2021      2020 ​ ​ ​ ​ ​ ​ ​ Cash Flows from Operating Activities   ​      ​    Net Loss ​ $ (44,240,580) ​ $ (30,177,962) Adjustments to reconcile net loss to net cash used in operating ​      ​      activities: ​      ​      Depreciation and amortization ​   720,805 ​   725,796 Impairment charge - materials ​   74,495 ​   93,244 Employee stock compensation ​   2,505,091 ​   1,037,105 Issuance of shares for services ​   2,460,530 ​   2,929,179 Issuance of stock for legal settlement ​   1,260,000 ​   — Non-cash interest and other operating activities ​   12,956,583 ​   2,019,642 Non-cash lease expense ​   507,189 ​   270,854 Amortization of debt discount ​   8,211,648 ​   16,008,454 Gain on extinguishment of debt ​   (890,581) ​   — ​ ​ ​ ​ ​ ​ ​ Changes in operating assets and liabilities: ​      ​      Material and supplies ​   (87,165) ​   (11,545) Other current assets ​   (49,265) ​   (9,701) Other assets ​   (3,571,768) ​   215,336 Accounts payable ​   5,666,261 ​   741,215 Accrued expenses and other liabilities ​   (2,554,813) ​   (4,378,816) Lease liabilities ​   (490,545) ​   (244,257) Net cash used in operating activities ​   (17,522,115) ​   (10,781,456) ​ ​ ​ ​ ​ ​ ​ Cash Flows from Investing Activities ​      ​      Purchase of equipment ​   (43,893) ​   (270,501) Purchase of intangible assets ​   (117,890) ​   (296,511) Net cash used in investing activities ​   (161,783) ​   (567,012) ​ ​ ​ ​ ​ ​ ​ Cash Flows from Financing Activities ​      ​      Proceeds from shares issued for cash ​   4,800,074 ​   1,628,366 Proceeds from issuance of notes payable ​   12,768,500 ​   12,118,309 Proceeds from liability to issue preferred C shares ​   705,000 ​   — Payment of notes payable ​   (580,870) ​   (4,586,663) Net cash provided by financing activities ​   17,692,704 ​   9,160,012 ​ ​ ​ ​ ​ ​ ​ Increase (decrease) in cash ​   8,806 ​   (2,188,456) ​ ​ ​ ​ ​ ​ ​ Cash, beginning of year ​   33,368 ​   2,221,824 Cash, ending of year ​ $ 42,174 ​ $ 33,368 ​ ​ ​ ​ ​ ​ ​ Supplemental disclosure of Cash Flow information: ​      ​      Cash paid for interest ​ $ 15,136 ​ $ 800,423 Cash paid for taxes ​ $ — ​ $ — Supplemental disclosure for non-cash activities: ​      ​      Refinance of existing debt ​ $ — ​ $ 43,923,042 Issuance of shares to settle debt ​ $ — ​ $ 12,801,040 Liability to issue shares in exchange for prepaid expenses ​ $ 6,322,500 ​ $ — Initial recognition of right-of-use assets and lease liabilities ​ $ — ​ $ 1,383,447 Right-of-use assets obtained in exchange of operating lease liabilities ​ $ 1,129,003 ​ $ 680,144 Indebtedness settled via issuance of stock ​ $ 1,300,000 ​ $ 38,912,640 Release of deferred advertising ​ $ 15,054,000 ​ ​ ​     Twelve Months Ended December 31,       2018     2017   Cash flows from operating activities:                 Net loss attributable to Net Element, Inc. stockholders   $ (4,936,182 )   $ (9,913,485 ) Adjustments to reconcile net loss to net cash used in operating activities:                 Non-controlling interest     (86,551 )     (109,564 ) Share based compensation     142,017       2,940,424   Deferred revenue     (216,742 )     356,619          Net Non cash items in other income     (1,202,201 )     -          Impairment for Goodwill     636,000       -      Provision for bad debt     16,238       -   Depreciation and amortization     2,454,637       2,533,985   Non cash interest     73,442       114,802   Changes in assets and liabilities:                        Accounts receivable     (1,503,755 )     3,002,425   Prepaid expenses and other assets     384,403       (1,047,811 ) Accounts payable and accrued expenses     971,202       (2,943,154 )   Net cash used in operating activities     (3,267,492 )     (5,065,759 )                   Cash flows from investing activities:                                   Purchase of portfolios and client acquisition costs     (5,413,264 )     (1,885,098 ) Receipt of excess deposits     -       149,826   Purchase of equipment and changes in other assets     (114,931 )     (103,341 ) Net cash used in investing activities     (5,528,195 )     (1,838,613 )                   Cash flows from financing activities:                 Proceeds from sale of common stock     -       14,884,435   Proceeds from indebtedness     2,131,500       3,678,824   Repayment of indebtedness     (2,785,134 )     (998,780 )     Net cash (used in) provided by financing activities     (653,634 )     17,564,479                     Effect of exchange rate changes on cash     (34,399 )     (20,899 )     Net (decrease) increase in cash     (9,483,720 )     10,639,208                     Cash and restricted cash at beginning of year     11,733,271       1,094,063   Cash and restricted cash at end of year   $ 2,249,551     $ 11,733,271                     Supplemental disclosure of cash flow information                 Cash paid during the period for:                 Interest   $ 773,737     $ 1,074,820   Taxes   $ 61,871     $ 86,942   Shares issued for redemption of indebtedness   $ -     $ 379,874   Shares issued in settlement of related party debt   $ -     $ 378,253   ​ See accompanying notes to the consolidated financial statements​ ​ F-7 F-6 Table of Contents NET ELEMENT, INC. MULLEN AUTOMOTIVE, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTE 1. ORGANIZATION1 –DESCRIPTION OF BUSINESS AND OPERATIONSBASIS OF PRESENTATION Description of Business Net Element,Mullen Automotive, Inc. (collectively with its subsidiaries, “Net Element”(“MAI”, “Mullen”, “we”, “us”, “our” or the “Company”) is a development-stage electronic vehicle (EV) manufacturer. The Company operated as the EV division of Mullen Technologies, Inc. (“MTI”) until November 5, 2021, at which time the Company underwent a capitalization and corporate reorganization by way of a spin-off by MTI to its shareholders, followed by a reverse merger with and into Net Element, Inc. (“NETE”). Basis of Presentation and Principles of Consolidation The consolidated financial technology-driven group specializingstatements include the accounts of the Company and its wholly-owned subsidiary, Mullen Investment Properties, LLC. Intercompany accounts and transactions have been eliminated, if any. As of September 30, 2021, Mullen Investment Properties, LLC is only a shell entity. The financial statements reflect the financial position and results of operations of Mullen, which have been prepared in payment acceptance and value-added solutions across multiple channelsaccordance with Generally Accepted Accounting Principles in the United States (“U.S. GAAP”). As MTI has not historically prepared financial statements for Mullen, and selected international markets. We are differentiatedMullen did not exist as a legal entity prior to November 5, 2021, these financial statements have been prepared from the financial records of MTI on a carve-out basis. The consolidated balance sheets include all of the MAI Assets. The consolidated Statements of operations for each of the years ended September 30, 2021 and 2020, reflect all expenses and activities directly attributable to MAI, and an allocation of MTI’s general and administrative expenses incurred in each of those years, as these expenditures were shared by our proprietary technology which enables usMAI. In some instances, certain expenses were not allocated as they would have related directly to provideMAI. All inter-entity balances and transactions have been eliminated. The equity capital presented in the financial statements reflect the retrospective application of the November 5, 2021 capitalization and corporate reorganization arising from the merger transaction with NETE. These financial statements have been prepared based upon the historical cost amounts recorded by MTI. These financial statements may not be indicative of MAI financial performance and do not necessarily reflect what its financial position, results of operations, and cash flows would have been had Mullen operated as an independent entity during the years presented. NOTE 2 – LIQUIDITY, CAPITAL RESOURCES, AND GOING CONCERN The accompanying financial statements have been prepared on the basis that the Company will continue as a broad suitegoing concern. Our principal sources of payment products and end-to-end transaction processing services. Our transactional services business enables merchants to accept credit cards as well as other formsliquidity at September 30, 2021, consists of payment, including debit cards, checks, gift cards, loyalty programs and alternative payment methods in traditional card-present or swipe transactions, as well as card-not-present transactions, such as those conducted over the phone or through the Internet or a mobile device. Forexisting cash of approximately $42,000. During the year ended December 31, 2018, we operatedSeptember 30, 2021, the Company used $19.4 million of cash for operating activities and had a deficiency in two reportable business operating segments: (i) North American Transaction Solutions, and (ii) International Transaction Solutions. Duringworking capital of approximately $14.7 million. Subsequent to September 30, 2021, the fourth quarter of 2017, we combined our online and mobile payments operations into one segment, International Transaction Solutions. Prior to that we had operated in three segments. We are able to deliver our services across multiple points of access, or “multi-channel,” including brick and mortar locations, software integration, e-commerce, mobile operator billing, mobile and tablet-based solutions. In the United States, via our U.S. based subsidiaries, we generate revenues from transactional services and other payment technologies for small and medium-sized businesses. Through PayOnline, we provide transactional services, mobile payment transactions, online payment transactions and other payment technologies in emerging countriesCompany obtained additional financing in the Russian Federation, Eurasian Economic Community ("EAEC"), Europeamount of $79.6 million in unsecured convertible notes and Asia.equity commitments (See Note 18 – Subsequent Events). Our transactional services business enables merchantsThe Coronavirus (“COVID-19”) continues to accept credit cards as well as other forms of payment, including debit cards, checks, gift cards, loyalty programsimpact countries, communities, supply chains and alternative payment methodsmarkets, global financial markets, and various industries. To date, COVID-19 has had a material and disruptive impact on our strategy in traditional card-present or swipe transactions, as well as card-not-present transactions, such as those conducted over the phone or through the Internet or a mobile device. We marketEV product development and sell our services through both independent sales groups (“ISGs”), which are non-employee, external sales organizations and other third-party resellers of our products and services, and directly to merchants through electronic media, telemarketing and other programs, including utilizing partnerships with other companies that market products and services to local and international merchants. We have agreements with several banks that sponsor us for membership in the Visa ® , MasterCard ® , American Express ® and Discover ® card associations and settle card transactions for our merchants. These sponsoring banks include Citizens Bank, Esquire Bank, N.A. and Wells Fargo Bank, N.A. From time to time, we may enter into agreements with additional banks. We perform core functions for merchants such as application processing, underwriting, account set-up, risk management, fraud detection, merchant assistance and support, equipment deployment and chargeback services. Our Mobile Solutions business, PayOnline, provides relationships and contracts with mobile operators that gives us the ability to offerobtain external financing to fund its development activities. Company management is unable to predict whether the global pandemic will continue to have a material impact on our clients in-app, premium SMS (short message services,future financial condition and results of operations. F-8 Table of Contents MULLEN AUTOMOTIVE, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Going Concern As an early-stage development company, our ability to access capital is critical. Our management plans to raise additional capital through a combination of equity and debt financings, strategic alliances and licensing arrangements. Company management has evaluated whether there are any conditions and events, considered in aggregate, which is a text messaging service), Wireless Application Protocol (WAP)-click, one click and other carrier billing services. We also had marketed our own branded contentraise substantial doubt about its ability to continue as a separate line of business for our mobile commerce business from offices in Russia and Kazakhstan. In August 2017, we substantially reorganized this business, and combined its operations into PayOnline and TOT Group Russia.  We currently are not generating revenues from new mobile content and we continue to explore partnership opportunities that can monetize our relationships and contracts with mobile operators. PayOnline provides flexible high-tech payment solutions to companies doing business on the Internet or in the mobile environment. PayOnline specializes in integration and customization of payment solutions for websites and mobile apps. In particular, PayOnline arranges payment on the website of any commercial organization, which increases the convenience of using the website and helps maximize the number of successful transactions. In addition, PayOnline is focused on providing online and mobile payment acceptance services to the travel industry through direct integration with leading Global Distribution Systems (“GDS”), which include Amadeus® and Sabre®. Key geographic regions that PayOnline serves include Eastern Europe, Central Asia, Western Europe, North America and Asia major sub regions. PayOnline offices are located in Russia, Kazakhstan and in the Republic of Cyprus. Also part of our transactional services business, Aptito is a proprietary, cloud-based payments platform for the hospitality industry, which creates an online consumer experience in offline commerce environments via tablet, mobile and all other cloud-connected devices. Aptito’s easy to use point-of-sale (“POS”) system makes things easier by providing a comprehensive solution to the hospitality industry to help streamline management and operations. Orders placed tableside by customers directly speed up the ordering process and improve overall efficiency. Aptito's mobile POS system provides portability to the staff while performing all the same functions as a traditional POS system. NOTE 2. LIQUIDITY We expect to fund our operating cash needs forgoing concern over the next twelve months including debt service requirements,from the date of filing this report. Since inception, we have incurred significant accumulated losses of approximately $150.1 million, and management expects to continue to incur operating losses over the near future. Proceeds from the business combination with Net Element, the exercise of warrants, and a qualified public offering, should they materialize, are expected to provide Mullen with sufficient liquidity and capital resources to fund its operating expenses inand capital requirements for at least the normal course of business, capital expenditures, and possible future acquisitions, with cash flownext 12 months from its operating activities, potential sales of equity securities, and current and potential future borrowings. The Company is continuing with its plan to further fund, grow and expand its payment processing operations through organic growth and acquisition of profitable residual buyoutsissuance (See Note 4)18 - Subsequent Events). The financial statements do not include any adjustments that might result from the outcome of this uncertainty. To fund our operating cash needs, we may need to borrow additional capital from our current credit facilities or additional sales of equity securities. Further, we continue to investigate the capital markets for sources of funding, which could take the form of additional debt, the restructuring of our current debt, or additional equity financings. Historically, we have been successful to date in restructuring our current debt facilities with commercially acceptable terms that supports the continued operation of our business for the foreseeable future. However, we cannot be sure that any additional financing will be available when needed, or that, if available, financing will be obtained on terms favorable to us or our stockholders. As of December 31, 2018 we have approximately $10.8 million in available credit facilities for use in funding general working needs and potential acquisitions. F-7 Table of Contents NOTE 3. 3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Significant accounting policies are defined as those that are reflective of significant judgments and uncertainties, and potentially result in materially different results under different assumptions and conditions. Push-Down Accounting The Company’s significant accounting policies are described below. Basis of Presentation The accompanying consolidatedcarve-out financial statements reflect costs and expenses incurred by MTI on behalf of MAI, including interest costs. As a result, share-based compensation and other equity transactions (such as issuances of warrants and stock conversion rights embedded in issuances of indebtedness) are reflected in these carve-out financial statements. Accordingly, the classification of debt and equity issuances by MTI have been preparedpushed down and reflected with similar classification in accordancethese carve-out financial statements. In addition, certain right-of-use assets and related lease liabilities of MTI have been pushed down to MAI. Reverse Merger and Recapitalization The November 2021 Business Combination with Net Element was accounted for as a reverse merger and recapitalization, with Net Element treated as the “acquired” company for accounting principles generally accepted inpurposes. The Business Combination was accounted as the United Statesequivalent of America (“GAAP”) and pursuant toMullen Automotive, Inc. issuing stock for the reporting and disclosure rules and regulations of the Securities and Exchange Commission (“SEC”). Principles of Consolidation These consolidated financial statements include the accountsnet assets of Net Element, Incaccompanied by a recapitalization. Accordingly, these financial statements reflect the share capital and our subsidiary companies. All significant intercompany accountsweighted average shares outstanding via a retrospective recapitalization as shares representing the exchange ratio established in the Business Combination. Use of Estimates The preparation of carve-out financial statements in conformity with U.S. GAAP requires management to make estimates and transactionsassumptions that affect the reported amounts of assets and liabilities at the dates of the carve-out financial statements and the reported amounts of total expenses in the reporting periods. Estimates are used for, but not limited to, fair value of long-lived assets, fair value of financial instruments, depreciable lives of property and equipment, income taxes, contingencies, and inputs used to value stock-based compensation, valuation of common and preferred stock issued by MTI. Additionally, the rates of interest on several debt agreements have been eliminatedimputed where there was no stated interest rate within the original agreement. The imputed interest results in consolidation. Reclassifications Certain reclassifications of prior year amounts have been made to conformadjustments to the 2018 presentation. These reclassifications had no effectdebt amounts reported in our condensed carve-out financial statements prepared under U.S. GAAP. Loan valuations issues can arise when trying to determine the debt attributes, such as discount rate, credit loss factors, liquidity discounts, and pricing. F-9 Table of Contents MULLEN AUTOMOTIVE, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Management bases its estimates on net loss or loss per share as previously reported.historical experience and on various other assumptions believed to be reasonable, the results of which form the basis for adjustments about the carrying values of assets and liabilities and the recording of costs and expenses that are not readily apparent from other sources. The actual results may differ materially from these estimates. Cash Risks and Uncertainties We maintain our U.S. dollar-denominated cash in several non-interest bearing bank deposit accounts. All U.S. non-interest bearing transaction accounts are insured upoperate within an industry that is subject to a maximum of $250,000 at FDIC insured institutions. The bank balances exceeded FDIC limits by approximately $0.6 millionrapid technological change, intense competition, and $10.6 million at December 31, 2018 and December 31, 2017, respectively. The higher balance which exceeded FDIC limits at December 31, 2017 was the result of proceeds received from the issuance of common stock. We maintained approximately $74,000 and $186,000 in uninsured bank accounts in Russia and the Cayman Islands at December 31, 2018 and 2017, respectively. Restricted Cash Restricted cash represents funds held-on-deposit with processing banks pursuant to agreements to cover potential merchant losses.serves an industry that has significant government regulations. It is presentedsubject to significant risks and uncertainties, including competitive, financial, developmental, operational, technological, required knowledge of industry governmental regulations, and other risks associated with an emerging business. Any one or combination of these or other risks could have a substantial influence on our future operations and prospects for commercial success. Cash and Cash Equivalents Company management considers all short-term investments with an original maturity of three months or less when purchased to be cash equivalents. We did not have any cash equivalents at September 30, 2021 or September 30, 2020. Deferred Advertising At September 30, 2021, deferred advertising consists of upfront costs paid related to auto shows occur during November 2021 and January 2022. At September 30, 2020, deferred advertising represented a marketing campaign, financed by a third party that was carried as other long-term assetsa deferred charge on the accompanying consolidated balance sheets since the related agreements extend beyond the next twelve months. Following the adoption of ASU 2016-18, StatementofCashFlows:RestrictedCash(Topic 230), the Company includes restricted cash along with the cash balance for presentation in the consolidated statements of cash flows. The reconciliation between the consolidated balance sheet until the launch of the marketing campaign. These deferred advertising charges of $15 million were associated with the AirSign advertising contract and the consolidated statementRedRock Outdoor Advertising Display advertising contract. The marketing campaigns were not launched, and we received a release of cash flows is as follows:liability from both AirSign, Inc. and RedRock Outdoor Advertising, Inc. Both liabilities, along with the associated deferred advertising were derecognized in January 2021.     December 31, 2018     December 31, 2017   Cash on consolidated balance sheet   $ 1,645,481     $ 11,285,669   Restricted cash     604,070       447,602       $ 2,249,551     $ 11,733,271   Prepaid Expenses and Other Current Assets Accounts Receivable and Credit Policies Accounts receivable consist primarily of uncollateralized credit card processing residual payments due from processing banks requiring payment within thirty days following the end of each month. Accounts receivable also include amounts due from the sales of our technology solutions to its customers. The carrying amount of accounts receivable is reduced by an allowance for doubtful accounts, if necessary, which reflects management’s best estimate of the amounts that will not be collected. The allowance is estimated based on management’s knowledge of its customers, historical loss experience and existing economic conditions. Accounts receivable and the allowance are written-off when, in management’s opinion, all collection efforts have been exhausted. F-8 Table of Contents Inventories InventoriesPrepaid expenses consist of point-of-salevarious advance payments made for goods or services to be received in the future. These prepaid expenses include insurance and other contracted services requiring up-front payments. Property, Equipment and Leasehold Improvements, Net Property, equipment which we use to service both merchants and independent sales agents ("ISG"). Often, we will provideleasehold improvements are stated at cost less accumulated depreciation. Depreciation is calculated using the equipment as an incentive for merchants and independent sales agents to enter into a merchant contracts with us. The term of these contracts has an average length of three years and the cost of the equipment plus any setup fees will be amortizedstraight-line method over the contract period. If the merchants terminate their contract with us early, they are obligated to either return the equipment or pay for it. We have approximately $526,000 and $507,000 in terminals, iPads ® and related equipment at December 31, 2018 and 2017, respectively, and are included within prepaid expenses and other current assets on the accompanying consolidated balance sheets. Approximately $727,000 and $501,000 had been placed with merchants at December 31, 2018 and 2017, respectively. Amortization expense for the equipment placed in service for the years ended December 31, 2018 and 2017 was approximately $296,000 and $189,000, respectively Intangible Assets Intangible assets acquired, either individually or with a group of other assets (but not those acquired in a business combination), are initially recognized and measured based on fair value. Goodwill acquired in business combinations is initially computed as the amount paid in excess of the fair value of the net assets acquired. We did not acquire any businesses during the years ended December 31, 2018 and 2017. The cost of internally developing, maintaining and restoring intangible assets (including goodwill) that are not specifically identifiable, that have indeterminate lives, or that are inherent in a continuing business and related to an entity are recognized as an expense when incurred. Intangible assets include acquired merchant relationships, recurring cash flow portfolios, referral agreements, trademarks, tradenames, website development costs and non-compete agreements. Merchant relationships represent the fair value of customer relationships purchased by us. Recurring cash flow portfolios give us the right to retain a greater share of the cash flow, in the form of paying less commissions to an independent sales agent, related to certain future transactions with the agent referred sales partners. Referral agreements represent the right to exclusively obtain referrals from a partner for their customers' credit card processing services. We amortize definite lived identifiable intangible assets using a method that reflects the pattern in which theestimated economic benefits of the intangible asset are expected to be consumed or otherwise utilized. The estimated useful lives of our customer-related intangible assets approximate the expected distribution of cash flows on a straight-line basis from each asset. Theassets. Repairs and maintenance expenditures that do not extend the useful lives of contract-based intangiblerelated assets are equalexpensed as incurred. Estimated Useful Lives ​ ​ Description Life Buildings ​ 30 Years Furniture and Equipment ​ 5 Years Computer and Software ​ 1 - 3 years Machinery and Equipment ​ 5 Years Leasehold Improvements ​ Shorter of the estimated useful life or the underlying lease term Vehicles ​ 5 Years F-10 Table of Contents MULLEN AUTOMOTIVE, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS ​ Expenditures for major improvements are capitalized, while minor replacements, maintenance and repairs, which do not extend the asset lives, are charged to operations as incurred. Upon sale or disposition, the terms ofcost and related accumulated depreciation are removed from the agreement. Management evaluates the remaining useful livesaccounts and carrying values of long-lived assets, including definite lived intangible assets, at least annually,any gain or whenloss is included in operations. Company management continually monitors events and changes in circumstances warrantthat could indicate that the carrying balances of its property, equipment and leasehold improvements may not be recoverable in accordance with the provisions of ASC 360, “Property, Plant, and Equipment.” When such a review, to determine whether significant events or changes in circumstances indicate that a change inare present, we assesses the useful life or impairment in value may have occurred. There were no impairment charges duringrecoverability of long-lived assets by determining whether the years ended December 31, 2018 and 2017. Goodwill In accordance with ASC 350, Intangibles—GoodwillandOther, we test goodwill for impairment for each reporting unit on an annual basis, or when events or circumstances indicate the faircarrying value of a reporting unitsuch assets will be recovered through undiscounted expected future cash flows. If the total of the future cash flows is below itsless than the carrying value. Our goodwill representsamount of those assets, we recognize an impairment loss based on the excess of the purchase pricecarrying amount over the fair value of the net identifiable assets acquired in business combinations. The goodwill generated from the business combinations is primarily relatedassets. Income Taxes Prior to the value placed on the employee workforceMullen’s capitalization and expected synergies. Judgment is involved in determining if an indicator or change in circumstances relating to impairment has occurred. Such changes may include, among others, a significant decline in expected future cash flows, a significant adverse changecorporate reorganization, our operations were included in the business climate,tax filings of MTI. The cash and unforeseen competition. We have the option of performing a qualitative assessment of impairment to determine whether any further quantitative testing for impairment is necessary. The option of whether or not to perform a qualitative assessment is made annuallydeferred tax positions between us and may vary by reporting unit. Factors we consider in the qualitative assessment include general macroeconomic conditions, industryMTI and market conditions, cost factors, overall financial performance of our reporting units, events or changes affecting the composition or carrying amount of the net assets of its reporting units, sustained decrease in its share price, and other relevant entity specific events. If the management determines on the basis of qualitative factors that the fair value of the reporting unit is more likely than not less than the carrying value, then we perform a quantitative test for that reporting unit. The fair value of each reporting unit is compared to the reporting unit’s carrying value, including goodwill. Subsequent to the adoption on January 1, 2017 of Accounting Standards Update (“ASU”) No. 2017-04, Intangibles—Goodwill and Other: Simplifying the Test for Goodwill Impairment, if the fair value of a reporting unit is less than its carrying value, we recognize an impairment equal to the excess carrying value, not to exceed the total amount of goodwill allocated to that reporting unit. At December 31, 2018, our management determined that an impairment charge of approximately $636,000 was necessary to reduce the goodwill relating to the acquisition of PayOnline. The impairment charge was primarily related to a decrease in projected sales for 2019, which is the base year utilized for determining the discounted cash flows. For a discussion of the estimate methodology and the significance of various inputs, please see the subheading below titled “Use of Estimates.” We have determined that we have two reporting units, North American Transaction Solutions and International Transaction Solutions. For each of the years ended December 31, 2018 and 2017  we performed a quantitative assessment for each of its reporting units. The Company determined that none of the reporting units were impaired. F-9 Table of Contents Capitalized Customer Acquisition Costs, Net Capitalized customer acquisition costs consist of up-front cash payments made to ISG’s for the establishment of new merchant relationships. Capitalized customer acquisition costs represent incremental, direct customer acquisition costs that are recoverable through gross margins associated with merchant contracts. The up-front cash payment to the ISG is based on the estimated gross margin for the first year of the merchant contract. The deferred customer acquisition cost asset is recorded at the time amounts are receivable but not yet earned and the capitalized acquisition costs are amortized on a straight-line basis over a period of approximately four years. These capitalized costs, net of amortization expense, are included in intangible assets on the accompanying consolidated balance sheets (See Note 6 – item labeled “Client Acquisition Costs”). Accrued Residual Commissions We record commissions as a cost of revenues in the accompanying consolidated statement of operations and comprehensive loss. We pay agent commissions to ISGs and independent sales agents based on the processing volume of the merchants enrolled. The commission obligations are based on varying percentages of the volume processed by us on behalf of the merchants. Percentages vary based on the program type and transaction volume of each merchant. Fair Value Measurements Our financial instruments consist primarily of cash, accounts receivables, accounts payables. The carrying values of these financial instruments are considered to be representative of their fair values due to the short-term nature of these instruments. The carrying amount of the long-term debt of approximately $6.4 million and $7.0 million at December 31, 2018 and 2017, respectively, approximates fair value because current borrowing rate does not materially differ from market rates for similar bank borrowings. The long-term debt is classified as a Level 2 item within the fair value hierarchy. We measure certain nonfinancial assets and liabilities at fair value on a nonrecurring basis. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. We use a three-level fair value hierarchy to prioritize the inputs used to measure fair value and maximizes the use of observable inputs and minimizes the use of unobservable inputs. The three levels of inputs used to measure fair value are as follows: Level 1 — Quoted market prices in active markets for identical assets or liabilities as of the reporting date Level 2 — Observable market based inputs or unobservable inputs that are corroborated by market data Level 3 — Unobservable inputs that are not corroborated by market data These non-financial assets and liabilities include intangible assets and liabilities acquiredformalized in a business combination as well as impairment calculations, when necessary. The fair value of the assets acquired and liabilities assumed in connection with the PayOnline acquisition, were measured at fair value by us at the acquisition date. The fair values of our merchant portfoliostax sharing agreement. Income taxes are primarily based on Level 3 inputs and are generally estimated based upon independent appraisals that include discounted cash flow analyses based on our most recent cash flow projections, and, for years beyond the projection period, estimates based on assumed growth rates. Assumptions are also made regarding appropriate discount rates, perpetual growth rates, and capital expenditures, among others. In certain circumstances, the discounted cash flow analyses are corroborated by a market-based approach that utilizes comparable company public trading values, and, where available, values observed in private market transactions. The inputs used by management for the fair value measurements include significant unobservable inputs, and therefore, the fair value measurements employed are classified as Level 3. Goodwill impairment is primarily based on observable inputs using company specific information and is classified as Level 3. Revenue Recognition and Deferred Revenue We recognize revenue when all of the following criteria are met: (1) the parties to the contract have approved the contract and are committed to perform their respective obligations, (2) we can identify each party’s rights regarding the goods or services to be transferred, (3) we can identify the payment terms for the goods or services to be transferred, (4) the contract has commercial substance, and (5) it is probable that we will collect substantially all of the consideration to which we will be entitled in exchange for the goods or services that will be transferred to the customer. We consider persuasive evidence of a sales arrangement to be the receipt of a billable transaction from aggregators, signed contract or the processing of a credit card transaction. Collectability is assessed based on a number of factors, including transaction history with the customer and the credit worthiness of the customer. If it is determined that the collection is not reasonably assured, revenue is not recognized until collection becomes reasonably assured, which is generally upon receipt of cash. We record cash received in advance of revenue recognition as deferred revenue. Revenue consists primarily of fees generated through the electronic processing of payment transactions and related services and is recognized as revenue during the period the transactions are processed or when the related services are performed. Our transactional processing fees are generated primarily from TOT Payments doing business as Unified Payments, which is our North American Transaction Solutions segment, PayOnline, which is our Russian online transaction processing company, and Aptito, which is our point of sale solution for restaurants. F-10 Table of Contents We work directly with payment card networks and banks so that our merchants do not need to manage the complex systems, rules, and requirements of the payments industry. We satisfy our performance obligations and therefore recognize the transactional processing service fees as revenue upon authorization of a transaction by the merchant’s customer’s bank. The majority of our revenues is derived from volume-based payment processing fees ("discount fees”) and other related fixed transaction or service fees. Discount fees represent a percentage of the dollar amount of each credit or debit transaction processed. Discount fees are recognized at the time the merchants’ transactions are processed. Generally, where we have control over merchant pricing, merchant portability, credit risk and ultimate responsibility for the merchant relationship, revenues are reported at the time of sale on a gross basis equal to the full amount of the discount charged to the merchant. This amount includes interchange fees paid to card issuing banks and assessments paid to payment card networks pursuant to which such parties receive payments based primarily on processing volume for particular groups of merchants. Revenues generated from merchant portfolios where we do not have control over merchant pricing, liability for merchant losses or credit risk or rights of portability are reported net of interchange and other fees. Revenues are also derived from a variety of fixed transaction or service fees, including authorization fees, convenience fees, statement fees, annual fees, and fees for other miscellaneous services, such as handling chargebacks. Revenues derived from service fees are recognized at the time the services are performed and there are no further performance obligations. Revenue from the sale of equipment is recognized upon transfer of ownership and delivery to the customer, after which there are no further performance obligations. We primarily report revenues gross as a principal versus net as an agent. Although some of our processing agreements vary with respect to specific terms, the transactional processing service fees collected from merchants generally are recognized as revenue on a gross basis as we are the principal in the delivery of the managed payments solutions to the sellers. The gross fees we collect are intended to cover the interchange, assessments and other processing and non-processing fees which are included and are part of our gross margin. We have primary responsibility for providing end-to-end payment processing services for our clients. Our clients contract us for all credit card processing services, including transaction authorization, settlement, dispute resolution, data/transmission security, risk management, reporting, technical support and other value-added services. We have concluded that we are the principal because we control the services before delivery to the merchant, and are primarily responsible for the delivery of the services, have discretion in setting prices charged to merchants, and responsible for losses. We also have pricing latitude and can provide services using several different network options. Adoption of ASC 606, Revenue from Contracts with Customers On January 1, 2018, we adopted ASC 606 using the modified retrospective method applied to those contracts which were not completed as of January 1, 2018. Results for reporting periods beginning January 1, 2018 are presented under ASC 606, while prior period amounts are not adjusted and continue to be reportedrecorded in accordance with our historic revenue recognition methodology under ASC 605-45 Revenue Recognition-Principal Agent Considerations in determining its merchant processing services. The cumulative impact of adopting ASC 606 resulted in no changes to retained earnings at January 1, 2018. The impact of adoption of ASC 606 on our consolidated statement of operations was as follows:     With     Before               Implementation     Implementation     Effect of       of ASC 606     of ASC 606     Implementation   Revenue   $ 65,786,817     $ 67,726,298     $ (1,939,481 ) Costs     (55,617,171 )     (57,556,652 )   $ 1,939,481   Net effect of ASC 606 implementation                   $ -   There was no impact on our consolidated balance sheets. Net Loss per Share Basic net loss per common share is computed by dividing net loss applicable to common stockholders by the weighted-average number of common shares outstanding during the period. Diluted net loss per common share is determined using the weighted-average number of common shares outstanding during the period, adjusted for the dilutive effect of common stock equivalents, consisting of shares issuable upon exercise of common stock options or warrants. In periods when losses are reported, the weighted-average number of common shares outstanding excludes common stock equivalents because their inclusion would have an anti-dilutive effect. F-11 Table of Contents 740, Income Taxes We account (“ASC 740”), which provides for incomedeferred taxes under theusing an asset and liability method, which requires the recognition ofapproach. We recognize deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the consolidated financial statements. Under this method, deferredstatements or tax returns. Deferred tax assets and liabilities are determined based on the basis of the differencesdifference between the consolidated financial statementsstatement and tax basisbases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date. We recognize net deferred tax assets to the extent that we believe these assetsValuation allowances are more likely than not to be realized. In making such a determination, we consider all available positive and negative evidence, including future reversals of existing taxable temporary differences,projected future taxable income, tax-planning strategies, and results of recent operations. If we determine that we would be able to realize our deferred tax assets in the future in excess of their net recorded amount, we would make an adjustment to the deferred tax asset valuation allowance, which would reduce the provision for income taxes. We account for uncertainty in income taxes using a two-step approach to recognizing and measuring uncertain tax positions. The first step is to evaluate the tax position for recognition by determiningprovided, if based upon the weight of available evidence, indicates that it is more likely than not that some or all of the positiondeferred tax assets will not be sustainedrealized. There are transactions that occur during the ordinary course of business for which the ultimate tax determination may be uncertain. At September 30, 2021 and 2020, there were no material changes to either the nature or the amounts of the uncertain tax positions. The Company’s income tax provision consists of an estimate for U.S. federal and state income taxes based on audit, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefitenacted rates, as the largest amount that is more than 50% likely of being realized upon settlement. We classify the liabilityadjusted for unrecognized tax benefits as current to the extent we anticipate payment (or receipt) of cash within one year. Interest and penalties related toallowable credits, deductions, uncertain tax positions, are recognizedchanges in deferred tax assets and recorded as necessaryliabilities, and changes in the provision for income taxes. Our evaluationtax law. We maintain a full valuation allowance against the value of uncertainour U.S. and state net deferred tax positions was performed forassets because management does not believe the recoverability of the tax years ended December 31, 2012assets meets the “more likely than not” likelihood at September 30, 2021 and forward, the tax years which remain2020. Intangible Assets Intangible assets consist of acquired and developed intellectual property and website development costs. In accordance with ASC 350, “Intangibles—Goodwill and Others,” goodwill and other intangible assets with indefinite lives are no longer subject to examination at December 31, 2018. Interchange, Network Fees and Other Cost of Services Interchange and network fees consist primarily of feesamortization but are tested for impairment annually or whenever events or changes in circumstances indicate that the asset might be impaired. Intangible assets with determinate lives are directly related to discount fee revenue. These include interchange fees paid to issuers and assessment fees payable to card associations, which are a percentage ofevaluated for impairment whenever events or changes in circumstances indicate that the processing volume we generate from Visa and Mastercard, AMEX, and Discover, as well as fees charged by card-issuing banks. Other costs of services include costs directly attributable to processing and bank sponsorship costs, whichcarrying amount may not be based on a percentage of volume. These costs also include related costs such as residual payments to sales groups, whichrecoverable. Amortizable intangible assets generally are based on a percentage of the net revenues generated from merchant referrals. In certain merchant processing bank relationships we are liable for chargebacks against a merchant equal to the volume of the transaction. Losses resulting from chargebacks against a merchant are included in other cost of services or as a bad debt expense, determined on the timing and nature of the specific transaction, on the accompanying consolidated statement of operations. We evaluate the risk for such transactions and our potential loss from chargebacks based primarily on historical experience and other relevant factors. Advertising and Promotion Costs Advertising and promotion costs are expensed as incurred. Advertising expense was approximately $154,000 and $89,000 for the years ended December 31, 2018 and 2017, respectively, and is included in selling, general and administrative expenses in the accompanying consolidated statements of operations and comprehensive loss. Equity-based Compensation We account for grants of equity awards to employees in accordance with ASC 718, Compensation—StockCompensation. This standard requires compensation expense to be measured based on the estimated fair value of the share-based awards on the date of grant and recognized as expenseamortized on a straight-line basis over periods up to 36 months. The costs to periodically renew our intangible assets are expensed as incurred. Other Assets Other assets are comprised primarily of Coda electric vehicles, related parts and security deposits related to the requisite service period,Company’s property leases related to the EV business only. F-11 Table of Contents MULLEN AUTOMOTIVE, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Extinguishment of Liabilities The Company derecognizes financial liabilities when the Company’s obligations are discharged, cancelled, or expired. Leases In February 2016, the FASB issued Accounting Standards Update (ASU) No. 2016-02, “Leases” (ASU 2016-02). The core principle of ASU 2016-02 is that lessees should recognize on its balance sheet, assets and liabilities arising from a lease. In accordance with that principle, ASU 2016-02 requires that a lessee recognize a liability to make lease payments (the lease liability) and a right-of-use asset representing its right to use the underlying leased asset for the lease term. Lessees shall classify all leases as finance or operating leases. The Company adopted ASU 2016-02, on October 1, 2019, which is generallyresulted in the vestingrecognition of the right-of-use assets and related obligations on its carve-out financial statements. Accrued Expenses Accrued expenses are expenses that have been incurred but not yet paid and are classified within current liabilities on the consolidated balance sheets. General and Administrative Expenses General and administrative (“G&A”) expenses include all non-production related expenses incurred by us in any given period. This includes expenses such as professional fees, salaries, rent, repairs and maintenance, utilities and office expense, employee benefits, depreciation and amortization, advertising and marketing, settlements and penalties, taxes, and licenses. Advertising costs are expensed as incurred and are included in G&A expenses. Other than trade show expenses which are deferred until occurrence of the future event, we expense advertising costs as incurred in accordance with ASC 720-35, “Other Expenses – Advertising Cost.” Research and Development Costs Equity-based compensation was approximately $100,000Research and $2.9 milliondevelopment costs are expensed as incurred and includes impairment charges in the amounts of $74,495 and $93,244 for the years ended December 31, 2018September 30, 2021 and 2017, respectively,2020, respectively. Research and is reflecteddevelopment expenses primarily consist of costs associated with the development of our Mullen Five show car. Share-Based Compensation We account for share-based awards issued by MTI in accordance with ASC Subtopic 718-10, “Compensation – Share Compensation”, which requires fair value measurement on the accompanying consolidated statementsgrant date and recognition of operationscompensation expense for all common shares of MTI issued to employees, non-employees and comprehensive loss. Foreign Currency Transactions We are subjectdirectors. The fair value of non-marketable share-based awards has been estimated based on an independent valuation. The MTI common and preferred share valuations have been appraised by an independent financial valuation advisor, based on assumptions management believes to exchange rate riskbe reasonable. Key assumptions and approaches to value used in our foreign operations in Russia, the functional currency of whichestimating fair value, includes economic and industry data; business valuation; prior transactions; option value method and other cost, income and market value approaches. Share-based compensation is the Russian ruble, where we generate service fee revenues, interest income or expense, incur product development, engineering, website development, and selling,included within general and administrative costsexpenses. Beginning on July 1, 2021, share based compensation awards have been valued based on valuation of the trading price of Net Element common stock, as adjusted for the share exchange ratio in the merger. See Note 9 for the amount of share-based compensation expense that is included within General and expenses. Our Russian subsidiaries payAdministrative expenses for the years ended September 30, 2021 and 2020. F-12 Table of Contents MULLEN AUTOMOTIVE, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Other Financing Costs Pursuant to the terms of the First Amendment to the Company’s Agreement and Plan of Merger with Net Element, we incurred a majoritydaily $13,333 penalty for delays in the consummation of their operating expensesthe merger transaction. We recorded a charge of approximately $1,560,000 associated with these delays, which is included in their local currencies, exposing us to exchange rate risk.the consolidated statement of operations for the fiscal year ended September 30, 2021 and included in accounts payable in the consolidated balance sheet at September 30, 2021. Related Party Transactions UseWe have related party transactions with certain of Estimatesour directors, officers, and principal shareholders. These transactions, which are primarily long-term in nature, include operational loans, convertible debt, and warrants for financial support associated with the borrowing of funds and are entered into in the ordinary course of business. Fair Value of Financial Instruments The preparation of these consolidatedWe apply fair value accounting for all financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingentnon-financial assets and liabilities that are recognized or disclosed at fair value on a recurring basis. Fair value is defined as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the date of the consolidated financial statements and the reported amounts of revenues and expenses for the reporting period. Such estimates include, but are not limited to, the value of purchase consideration paid and identifiable assets acquired and assumed in acquisitions, goodwill and asset impairment review, valuation reserves for accounts receivable, valuation of acquired or current merchant portfolios, incurred but not reported claims, revenue recognition for multiple element arrangements, loss reserves, assumptions used in the calculation of equity-based compensation and in the calculation of income taxes, and certain tax assets and liabilities, as well as, the related valuation allowances. Actual results could differ from those estimates. F-12 Table of Contents Below is a summary of the Company’s critical accounting estimates for which the nature of management’s assumptions are material due to the levels of subjectivity and judgment necessary to account for highly uncertain matters or the susceptibility of such matters to change, and for which the impact of the estimates and assumptions on financial condition or operating performance is material. Goodwill The Company tests goodwill for impairment using a fair value approach at least annually, absent some triggering event that would require an interim impairment assessment. Significant estimates and assumptions are used in our goodwill impairment review and include the identification of reporting units, assigning assets and liabilities to reporting units, assigning goodwill to reporting units andmeasurement date. When determining the fair value measurements for assets and liabilities that are required to be recorded at fair value, Company management considers the principal or most advantageous market in which we would transact and the market-based risk measurements or assumptions that market participants would use in pricing the asset or liability, such as risks inherent in valuation techniques, transfer restrictions and credit risk. Fair value is estimated by applying the following hierarchy, which prioritizes the inputs used to measure fair value into three levels and bases the categorization within the hierarchy upon the lowest level of each reporting unit. Our assessment of qualitative factors involvesinput that is available and significant judgments about expected future business performance, general market conditions, and regulatory changes. In a quantitative assessment,to the fair value measurement: Level 1 – Quoted prices in active markets for identical assets or liabilities. Level 2 – Observable inputs other than quoted prices in active markets for identical assets and liabilities, quoted prices for identical or similar assets or liabilities in inactive markets, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of each reporting unit is determined based largelythe assets or liabilities. Level 3 – Inputs that are generally unobservable and typically reflect management’s estimate of assumptions that market participants would use in pricing the asset or liability. Concentrations of Business and Credit Risk We maintains cash balances in several financial institutions that are insured by either the Federal Deposit Insurance Corporation or the National Credit Union Association up to certain federal limitations, generally $250,000. At times, our cash balance may exceed these federal limitations and maintains significant cash on the present valuehand at certain of projected future cash flows, growth assumptions regarding discount rates, estimated growth ratesits locations. However, we have not experienced any losses in such accounts and our future long-term business plans. Changesmanagement believes we are not exposed to any significant credit risk on these accounts. There were no amounts in anyexcess of these estimates or assumptions could materially affect the determination of fair valueinsured limitations at September 30, 2021 and the associated goodwill impairment charge for each reporting unit.2020. RecentlyRecently Issued and Adopted Accounting Pronouncements Standards In January 2017, the FinancialFASB issued Accounting Standards Board ("FASB") issued ASUUpdate No. 2017-04 (ASU 2017-04) (Topic 350), “Intangibles - Goodwill and Other (Topic 350): Simplifying the TestOthers.” ASU 2017-04 simplifies how an entity is required to test goodwill for Goodwill Impairment”. This update simplifies the subsequent measurement of goodwillimpairment by eliminating Step 2 from the goodwill impairment test. Under this updated standard, an entity should recognize anStep 2 measures a goodwill impairment charge forloss by comparing the amount by which the carrying amount exceeds theimplied fair value F-13 Table of Contents MULLEN AUTOMOTIVE, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS of a reporting unit’s fair value, but the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. An entity also should consider income tax effects from any tax-deductible goodwill onwith the carrying amount of the reporting unit when measuring the goodwill impairment loss, if any. This guidancethat goodwill. ASU 2017-04 is effective prospectively and is effective for interim and annual periods beginning after December 15, 2019 with early adoption permitted.including interim periods within those periods. We doadopted ASU 2017-04, on October 1, 2020, which did not expect the adoption of this guidance to have a material impact on our consolidated financial statements balance sheets. In June 2016,September 2018, the FASB issued Accounting Standards Update No. 2018-07 (ASU 2018-07) ASU 2016-13, “Financial Instruments - Credit LossesNo. 2018-07 (Topic 326): Measurement of Credit Losses on Financial Instruments.718), “Compensation—Stock Compensation: Improvements to Nonemployee Share-Based Payment Accounting.” The amendments in this update changed how companies measure and recognize credit impairment for many financial assets. The new expected credit loss model will require companies to immediately recognize an estimate of credit losses expected to occur over the remaining life of the financial assets (including trade receivables) that are withinASU 2018-07 expands the scope of the update.Topic 718 to include share-based payment transactions for acquiring goods and services from nonemployees. The updateamendments also made amendmentsclarify that Topic 718 does not apply to share-based payments used to effectively provide (1) financing to the current impairment modelissuer or (2) awards granted in conjunction with selling goods or services to customers as part of a contract accounted for held-to-maturity and available-for-sale debt securities and certain guarantees. The guidance will become effective for usunder Topic 606. We adopted ASU 2018-07, on JanuaryOctober 1, 2020. Early adoption is permitted for periods beginning on or after January 1, 2019. We do2020, which did not expect the adoption of this guidance to have a material impact on our consolidated financial statements. statements of operations. In February 2016,August 2020, the FASB issued ASU 2016-02, “Leases” which,No. 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for operating leases, requires a lessee to recognize a right-of-use assetConvertible Instruments and a lease liability, initially measured atContracts in an Entity’s Own Equity. This ASU amends the present value ofguidance on convertible instruments and the lease payments,derivatives scope exception for contracts in its balance sheet. The standardan entity’s own equity, and also requires a lessee to recognize a single lease cost, calculated so thatimproves and amends the cost of the lease is allocated over the lease term, on a generally straight-line basis.related earnings per share guidance for both Subtopics. The ASU iswill be effective for public companies for fiscal years beginning after December 15, 2018,2023, including interim periods within those fiscal years. Earlyyears and early adoption is permitted. Company management is evaluating the future impact this guidance on our consolidated financial statements. In May 2021, the FASB issued ASU No. 2021-04, Earnings Per Share (Topic 260), Debt – Modifications and Extinguishments (Subtopic 470-50), Compensation – Stock Compensation (Topic 718) and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815-40). The ASU will be effective for fiscal years beginning after December 15, 2021, (December 15, 2023 for smaller reporting companies). We arehave issued debt and equity instruments, the accounting for which could be impacted by this update. Company management is evaluating the impact this guidance on our financial condition and results of operations. In July 2021, the FASB issued ASU No. 2021-05, Lessors – Certain Leases with Variable Lease Payments (Topic 842). The amendments in the process of collecting datathis update affect lessors with lease contracts that have (1) have variable lease payments that do not depend on a reference index or a rate, and designing processes and controls to account for our leases in accordance with the new guidance. We expect that the adoption of ASU 2016-02 will result(2) would have resulted in the recognition of right of use assets and related obligationsa selling loss at lease commencement if classified a sales-type or direct financing. The ASU will be effective for fiscal years beginning after December 15, 2021. Company management is evaluating the impact this guidance will have on our consolidated financial statements. NOTE 4 – INTANGIBLE ASSETS Note 4. ACQUISITIONS DuringFor the yearyears ended December 31, 2018September 30, 2021 and 2020, we acquiredincurred website development and trademark costs of $117,890 and $296,511, respectively. These costs historically have been capitalized, as the following residual buyout arrangements. There were no residual buyout arrangements acquiredwebsite is in the development stage, resulting in improved functionality. Amortization of the website commenced when the website was placed in service for its intended use during the year ended 2017.fourth quarter of 2021. Legal fees incurred for registration of trademarks account for all of the costs of trademark at September 30, 2021. Amortization of these costs will commence when the trademark application and registration process has been completed. AcquisitionsThe weighted average useful life of Recurring Cash Flow Portfolios From time to time, the Company acquires future recurring revenue streams from sales agents in exchange for an upfront cash payment. This results in an increase in net cash flow to the Company. The acquisitions of recurring cash flows are treated as asset acquisitions, resulting in recording a recurring cash flow portfoliointellectual property is 3.0 years. Identifiable intangible asset, at cost, on the date of acquisition. These assets with definite lives are amortized over a straight-linethe period of approximately four yearsestimated benefit using the straight-line method and is included in intangible assets on the accompanying consolidated balance sheets (See Note 6 - item labeled “Portfolio and Clients Lists”, on the accompanying consolidated audited financial statements).estimated useful lives of F-14 Table of Contents Universal Partners, LLCMULLEN AUTOMOTIVE, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS On July 30, 2018, our subsidiary, Unified Portfolio Acquisitions, LLC, entered into an Advance and Residual Purchase Agreement (the “Agreement”) with Universal Partners, LLC (“Universal”). Pursuant to the Agreement, we acquired certain transactional services portfolios (“cash flow assets”) from Universal and Payment Club, LLC (together with Universal, the “Seller”) for $2,700,000 (the “Advance Amount”).three years. The cash flow assets consiststraight-line method of residuals (the “Residuals”) that the Sellers were entitled to receive pursuant to certain agreements (the “Combined Marketing Agreements”) with TOT Payments, LLC (doing business as Unified Payments), our subsidiary, or any other agreements pursuant to which the Seller was entitled to residuals. The Advance Amount is to be repaid to us whereby each and every month, commencing from July 1, 2018 (the “Effective Date”) and for a period of 24 months thereafter, terminating on June 30, 2020 (the “Advance Period”), we are entitled to a certain amountamortization represents management’s best estimate of the Residuals. Such Residuals due to the Purchaser are secured by certaindistribution of the Seller’s property as collateral. F-13 Table of Contents At the endeconomic value of the Advance Period (the “Transfer Date”), we and the Seller have agreed to create a new static portfolio pool of mutually agreed residual income from Seller portfolios comprising merchant accounts boarded by the Seller under the Combined Marketing Agreements that on the Transfer are generating at least $120,000 per month in net residual income (the “Portfolio Residuals”). From and after the Transfer Date, we and Seller will share/split the Portfolio Residuals with us owning an 80% interest in the Portfolio Residuals and the Seller owning a 20% interest in the Portfolio Residuals.identifiable intangible assets. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​      September 30, 2021      September 30, 2020 ​   Gross   ​ ​   Net   Gross   ​ ​   Net ​   Carrying      Accumulated      Carrying      Carrying      Accumulated      Carrying Finite-Lived Intangible Assets   Amount ​ Amortization   Amount   Amount ​ Amortization   Amount Website design and development ​ $ 2,660,391 ​ $ (221,699) ​ $ 2,438,692 ​ $ 2,597,091 ​ $ — ​ $ 2,597,091 Intellectual property ​   71,182 ​   (69,205) ​   1,977 ​   71,182 ​   (45,477) ​   25,705 Trademark ​   54,590 ​   — ​   54,590 ​   — ​   — ​   — Total Finite-Lived Intangible Assets ​ $ 2,786,163 ​ $ (290,904) ​ $ 2,495,259 ​ $ 2,668,273 ​ $ (45,477) ​ $ 2,622,796 ​ During 2018, cash paid in connectionTotal future amortization expense for this Agreement approximated $2.5 million.finite-lived intellectual property is as follows: ​ ​ ​ ​ ​ Years Ended September 30, 2021      Future Amortization 2022 ​ $ 888,774 2023 ​   886,797 2024 ​   719,688 Total Future Amortization Expense ​ $ 2,495,259 ​ Argus Merchant Services, LLC On December 26, 2018, our subsidiary, Unified Portfolio Acquisitions, LLC, entered into an Advance and Residual Purchase Agreement (the “Agreement”) with Argus Merchant Services, LLC ("Argus") and Treasury Payments, LLC ("Treasury"); Argus and Treasury are collectively referred to herein as the (“Seller”). Pursuant to the Agreement, we acquired certain transactional services portfolios (“cash flow assets”) from the Seller for a total purchase consideration of $1,426,000. The cash flow assets consist of residuals (the “Residuals”) that the Seller is entitled to receive pursuant to certain agreements (including any amendments of such agreements, the “Combined Marketing Agreements”) with TOT Payments, LLC (doing business as Unified Payments, our subsidiary). On December 27, 2018, we paid to Seller $1,150,000 (the “Advance Amount”). The Advance Amount and the balance of the purchase consideration is to be repaid to us from Residuals due to the Seller, whereby each and every month, commencing from January 2019 (the “Effective Date”) and for a period of 24 months (the “Advance Period”), we will be entitled to a certain amount of the Seller’s Residuals. Such Residuals due us are secured by certain of the Seller’s property as collateral. At the end of the Advance Period (the “Transfer Date”), we will receive an ownership interest in a portfolio of cash flow assets by creating with the Seller, a new static portfolio pool of mutually agreed residual income from Seller portfolios comprising merchant accounts boarded by the Seller under the Combined Marketing Agreements. During the 2018, cash paid in connection with this residual buyout agreement approximated $1.2 million. Referral Agreements From time to time, we enter into referral agreements with ISG’s or other organizations (“referral partner”). Under these agreements, the referral partner exclusively refers its customers to us for credit card processing services. Consideration paid for these agreements forFor the years ended December 31, 2018September 30, 2021 and 2017 was approximately $1.6 million and $1.8 million, respectively, all of which was settled with cash on hand. Because we pay an up-front fee to compensate the referral partner, the amount is treated as an asset acquisition in which we have acquired an intangible stream of referrals. This asset is amortized over a straight-line period of approximately four years and is included in intangible assets on the accompanying consolidated balance sheets (See Note 6 – item labeled “Client Acquisition Costs”). NOTE 5. ACCOUNTS RECEIVABLE Accounts receivable, net of allowance for doubtful accounts, consist of amounts due from merchant service providers and to a lesser extent Russian mobile operator intermediaries. Net accounts receivable amounted to approximately $6.3 million and $5.5 million at December 31, 2018 and 2017, respectively. Net accounts receivable consisted primarily of $6.2 million and $5.4 million for North American Transaction Solutions and $74,000 and $58,000, attributed to International Transaction Solutions for credit card processing receivables at December 31, 2018 and 2017, respectively. Our allowance for doubtful accounts was approximately $214,000 and $257,000 as of December 31, 2018 and 2017, respectively. Actual write-offs may exceed estimated amounts. F-14 Table of Contents NOTE 6. INTANGIBLE ASSETS The Company had approximately $6.4 and $3.1 million in intangible assets, net of2020, amortization at December 31, 2018 and 2017, respectively. Shown below are the details of the components that represent these balances. Intangible assets consisted of the following as of December 31, 2018     Cost     Accumulated Amortization     Carrying Value   Amortization Life and Method                             IP Software   $ 2,309,291     $ (2,139,891 )   $ 169,400   3 years - straight-line Portfolios and Client Lists     7,576,665       (4,333,866 )     3,242,799   4 years - straight-line Client Acquisition Costs     6,370,124       (3,340,581 )     3,029,544   4 years - straight-line PCI Certification     449,000       (449,000 )     -   3 years - straight-line Trademarks     703,586       (703,586 )     -   3 years - straight-line Domain Names     437,810       (437,810 )     -   3 years - straight-line     $ 17,846,476     $ (11,404,732 )   $ 6,441,743     Intangible assets consisted of the following as of December 31, 2017     Cost     Accumulated Amortization     Carrying Value   Amortization Life and Method                             IP Software   $ 2,274,693     $ (2,171,803 )   $ 102,890   3 years - straight-line Portfolios and Client Lists     5,213,911       (4,939,857 )     274,054   3 years - straight-line Client Acquisition Costs     4,812,474       (2,377,139 )     2,435,335   3 years - straight-line PCI Certification     449,000       (361,694 )     87,306   3 years - straight-line Trademarks     702,192       (570,383 )     131,809   3 years - straight-line Domain Names     435,956       (339,590 )     96,366   3 years - straight-line     $ 13,888,226     $ (10,760,466 )   $ 3,127,760     During the year ended December 31, 2018, we removed fully amortized portfolio and client lists, approximating $1.4 million, relating to our PayOnline acquisition. Amortization expense for the intangible assets was approximately $2.1$245,427 and $23,728 respectively. NOTE 5 – DEBT Short-term debt comprises a significant component of the Company’s funding needs. Short-term debt is generally defined as debt with principal maturities of one-year or less. Long-term debt is defined as principal maturities of one year or more. Short and Long-Term Debt The following is a summary of our indebtedness at September 30, 2021: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net Carrying Value ​ ​ ​ ​ ​      Unpaid Principal       ​ ​      ​ ​      Contractual      Contractual  Type of Debt      Balance      Current      Long-Term       Interest Rate      Maturity Matured Notes ​ $ 5,838,591 ​ $ 5,838,591 ​ $ —   0.00% - 15.00 %   2016 - 2021 Promissory Notes ​   23,831,912 ​   23,831,912 ​   —   28.00 %   2021 – 2022 Demand Note ​   500,000 ​   500,000 ​   —   27.00 %   2020 Convertible Unsecured Notes ​   15,932,500 ​   15,932,500 ​   —   15.00%-20.00 %   2021 - 2022 Real Estate Note ​   283,881 ​   36,269 ​   247,612   5.00 %   2023 Loan Advances ​   1,122,253 ​   1,122,253 ​   —   0.00% - 10.00 %   2019 – 2020 Less: Debt Discount ​   (8,060,555) ​   (8,060,555) ​   —   NA   NA Total Debt ​ $ 39,448,582 ​ $ 39,200,970 ​ $ 247,612   NA   NA ​ F-15 Table of Contents MULLEN AUTOMOTIVE, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Scheduled Debt Maturities The following scheduled debt maturities at September 30, 2021: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​   Years Ended September 30, ​      2021      2022      2023      Total Total Debt ​ $ 39,200,970 ​ $ — ​ $ 247,612 ​ $ 39,448,582 ​ The following is a summary of our indebtedness at September 30, 2020: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net Carrying Value ​ ​ ​ ​ ​      Unpaid Principal       ​ ​      ​ ​      Contractual      Contractual  Type of Debt   Balance ​ Current ​ Long-Term    Interest Rate   Maturity Matured Notes ​ $ 4,828,450 ​ $ 4,828,450 ​ $ —   0.00% - 15.00 %   2016 - 2019 Promissory Notes ​   25,288,063 ​   25,288,063 ​   —   0.00% - 28.00 %   2021 – 2022 Demand Note ​   500,000 ​   500,000 ​   —   27.00 %   2020 Convertible Unsecured Notes ​   1,867,500 ​   1,867,500 ​   —   20.00 %   2021 Real Estate Note ​   318,384 ​   34,503 ​   283,881   5.00 %   2023 Loan Advances ​   1,931,017 ​   1,931,017 ​   —   0.00% - 10.00 %   2019 – 2020 Less: Unamortized Debt Discount ​   (1,401,062) ​   (1,401,062) ​   —   NA   NA Total Debt ​ $ 33,332,352 ​ $ 33,048,471 ​ $ 283,881   NA   NA ​ Notes and Advances We enter into promissory notes with third parties and company officers to support our operations. Promissory notes typically are for less than three years maturity and carry interest rates from 0% to 28.0%. For many of the notes listed above, the scheduled maturity date has passed, and we currently are in default of the matured loan. Company management is working with the creditors to remediate the $5,960,574 in promissory notes and loan advances that are in default. Promissory notes and loan advances that are in default still accrue interest after their scheduled maturity date. There are no financial covenants associated with the promissory notes and loan advances, and there are no compliance waivers that have been received from creditors. We record imputed interest on promissory notes and advances which are deemed to be below the market interest rate. For the years ended September 30, 2021 and 2020, we recorded interest expense of $21,168,232 and $18,094,234, respectively. In some instances, MTI issues shares of common stock or warrants along with the issuance of promissory notes, resulting in the recognition of a debt discount which is amortized to interest expense over the term of the promissory note. Debt discount amortization for the fiscal year ended September 30, 2021, and 2020, was $8,211,648 and $16,008,454, respectively. During 2021, MTI issued shares of stock to certain creditors in satisfaction of debt payments or in settlement of indebtedness. These agreements essentially exchanged a predetermined amount of stock to settle debt. For the fiscal year ended September 30, 2021 and 2020, the carrying amount of indebtedness that was settled via issuance of MTI shares was $1,300,000 and $38,912,640, respectively. F-16 Table of Contents MULLEN AUTOMOTIVE, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Convertible Debt Issuances and Warrants TDR Relationship On May 16, 2021, we received debt financing through MTI entering into an unsecured $4.4 million convertible note agreement with TDR Capital. The convertible note is issued with OID of 10% ($0.4 million); carries an interest rate of 15% and $2.3has a maturity date of one year. The convertible note is unsecured and includes detached warrants to acquire up to 17,446,000 shares of MTI common stock (1,358,112 MAI warrants). The MTI warrant exercise price is $0.6877 (MAI exercise price is $8.84) per common share and expires five years from the date of issuance. The value ascribed to the warrants was $24,358,875, resulting in an additional debt discount of $3,726,816 and a beneficial conversion discount of $673,184. These discounts are being amortized over the 12-month term of the debt. The number of shares issuable upon conversion are determined according to the formula:  Conversion Amount/Conversion Price, subject to certain adjustments. However, , ownership in our TDR Capital (together with their affiliates) upon conversion is limited to a 9.9% ownership cap in shares of MTI’s common stock then outstanding after giving effect to the issuance of common stock issuable upon exercise of the warrants. Convertible Debt Issuances and Warrants, continued On July 26, 2021, we received debt financing through MTI entering into an unsecured $1.1 million convertible note agreement with TDR Capital. The convertible note is issued with OID of 10% or $0.1 million; carries an interest rate of 15% and has a maturity date of one year. The convertible note is unsecured and includes detached warrants to acquire up to 4,361,500 shares of MTI common stock (339,528 MAI warrants). The MTI warrant exercise price is $0.6877(MAI exercise price is $8.84) per common share and expires five years from the date of issuance. The number of conversion shares issuable upon conversion is determined according to the formula:  Conversion Amount/Conversion Price, subject to certain adjustments. However, upon conversion, ownership by TDR Capital (together with their affiliates) is limited to a 9.9% ownership cap in shares of MTI’s (MAI’s) common stock then outstanding after giving effect to the issuance of common stock issuable upon exercise of the warrants. On September 3, 2021, we received debt financing through MTI entering into an unsecured $6.6 million convertible note agreement with TDR Capital. The initial sale and purchase is $550,000 principal and detached warrants to acquire up to 2,180,750 shares of MTI stock (169,764 MAI warrants). The second sale and purchase is $6,050,000 principal and detached warrants to acquire up to 23,988,500 shares of MTI stock (1,867,423 MAI warrants). The combined convertible notes are issued with OID of 10% ($0.66 million); carries an interest rate of 15% and has a maturity date of one year. The MTI warrant exercise price is $0.6877 (MAI exercise price is $8.84) per common share and expires five years from the date of issuance. The number of conversion shares issuable upon conversion is determined according to the formula:  Conversion Amount/Conversion Price of $0.6877, subject to certain adjustments. However, upon conversion, ownership by TDR Capital (together with their affiliates) is limited to a 9.9% ownership cap in shares of MTI’s (MAI’s) common stock then outstanding after giving effect to the issuance of common stock issuable upon exercise of the warrants. As of September 30, 2021, only $550,000 was received from TDR Capital for this convertible debt issuance. Refer to Commitments and Contingencies, Note 17 and Subsequent Events, Note 19. Digital Power Lending, LLC On July 22, 2021, the Company received debt financing through MTI entering into an unsecured $2.42 million convertible note agreement with Digital Power Lending, LLC. The convertible note is issued with OID of 10% or $0.242 million; carries an interest rate of 15% and has a maturity date of one year. The convertible note is unsecured and includes detached warrants to acquire up to 9,595,300 shares of MTI common stock (746,961 MAI warrants). The MTI warrant exercise price is $0.6877 (MAI exercise price is $8.84) per common share and expires five years from the date of issuance. The number of conversion shares issuable upon conversion of the conversion amount shall be determined according to the F-17 Table of Contents MULLEN AUTOMOTIVE, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS formula:  Conversion Amount/Conversion Price, subject to certain adjustments. However, upon conversion, Digital Power Lending, LLC (together with their affiliates) is limited to a 9.9% ownership cap in shares of MTI’s common stock then outstanding after giving effect to the issuance of common stock issuable upon exercise of the warrants. On August 19, 2021, the Company received debt financing through MTI entering into an unsecured $1.1 million convertible note agreement with Digital Power Lending, LLC. The convertible note is issued with OID of 10% or $0.1 million; carries an interest rate of 15% and has a maturity date of one year. The convertible note is unsecured and includes detached warrants to acquire up to 4,361,500 shares of MTI common stock (339,528 MAI warrants). The MTI warrant exercise price is $0.6877 (MAI exercise price is $8.84) per common share and expires five years from the date of issuance. The number of conversion shares issuable upon conversion of the conversion amount shall be determined according to the formula:  Conversion Amount/Conversion Price, subject to certain adjustments. However, upon conversion, Digital Power Lending, LLC. (together with their affiliates) is limited to a 9.9% ownership cap in shares of MTI’s common stock then outstanding after giving effect to the issuance of common stock issuable upon exercise of the warrants. Convertible Debt to Equity Conversion (Exchange Agreements) On May 7, 2021, and amended on May 20, 2021, MTI executed an exchange agreement with its existing convertible debt investors who hold $10,762,500 in MTI convertible debt. Upon consummation of the then proposed merger with Net Element, we and the investors agreed to exchange the convertible debt for shares of MAI’s Series C Preferred Stock, par value $0.001 per share. The right to additional purchases of preferred stock expires 12 months from the merger close date between Net Element and MAI. MTI originally issued 42,759,290 (3,717,898 MAI warrants).in detached warrants to purchase shares of MTI common stock as part of the convertible debt agreements with investors. Refer to Note 18, Subsequent Events for Amendment No. 6 and Joinder to the Exchange Agreement. On July 22, 2021, the Exchange Agreement was amended to include the $2,420,000 debt financing and associated warrants with Digital Power Lending, LLC. The agreement represents Amendment No. 2 and Joinder to the Exchange Agreement that was signed on May 7, 2021 and amended on May 20, 2021. Upon consummation of the then proposed merger with Net Element, we and the investors agreed to exchange the convertible debt for shares of MAI’s Series C Preferred Stock, par value $0.001 per share. On July 26, 2021, the Exchange Agreement was amended to include the $1,100,000 debt financing and associated warrants with TDR Capital. The agreement represents Amendment No. 3 and Joinder to the Exchange Agreement that was signed on May 7, 2021 and amended on May 20, 2021. Upon consummation of the then proposed merger with Net Element, we and the investors agreed to exchange the convertible debt for shares of MAI’s Series C Preferred Stock, par value $0.001 per share. On August 19, 2021, the Exchange Agreement was amended to include the $1,100,000 debt financing and associated warrants with Digital Power Lending, LLC. The agreement represents Amendment No. 4 and Joinder to the Exchange Agreement that was signed on May 7, 2021 and amended on May 20, 2021. Upon consummation of the then proposed merger with Net Element, we and the investors agreed to exchange the convertible debt for shares of MAI’s Series C Preferred Stock, par value $0.001 per share. Convertible Debt to Equity Conversion (Exchange Agreements), continued On September 3, 2021, the Exchange Agreement was amended to include the $6,600,000 debt financing and associated warrants with TDR Capital. The agreement represents Amendment No. 5 and Joinder to the Exchange Agreement that was signed on May 7, 2021 and amended on May 20, 2021. Upon consummation of the then proposed merger with Net Element, we and the investors agreed to exchange the convertible debt for shares of MAI’s Series C Preferred Stock, par value $0.001 per share. F-18 Table of Contents MULLEN AUTOMOTIVE, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Drawbridge Relationship During July 2020, Drawbridge-DBI and MTI entered into a settlement agreement (the “Agreement”) to restructure the aggregate obligations owed to Drawbridge-DBI and the other DBI-affiliated entities. In connection with the Agreement, (a) the Sale-Leaseback obligation in the amount of $49,500,000 was replaced by a new note with a face value of $23,831,554, (b) the other indebtedness and advances from DBI-affiliated entities with a net book value of $9,935,086 were extinguished, and (c) MTI issued 71,516,534 MAI – 5,567,319)  Series B Preferred Shares to Drawbridge-DBI. The amounts owed to Drawbridge-DBI is $33,296,648 and $25,092,994 as of September 30, 2021, and September 30, 2020 respectively, and are in default (See Note 18 – Subsequent Events). The amounts owed to other DBI-affiliated entities is $982,500 and $1,082,500, as of September 30, 2021, and September 30, 2020, respectively. The 2020 Drawbridge loan is currently recognized within the current portion of debt on the consolidated balance sheet. SBA Loans On April 14, 2020, MTI entered a promissory note (the “Note”) evidencing an unsecured loan (the “Loan”) in the amount of $885,426 made under the Paycheck Protection Program (the “PPP”). The Note matures on April 14, 2022 and bears interest at a rate of 1% per annum. Pursuant to the terms of the Coronavirus, Aid, Relief and Economic Security Act (“CARES Act”) and the PPP, the Company applied to the Lender for forgiveness for the amount due on the Loan. The amount eligible for forgiveness is based on the amount of Loan proceeds used (during the eight-week period after the Lender makes the first disbursement of Loan proceeds) for the payment of certain covered costs, including payroll costs (including benefits), interest on mortgage obligations, rent and utilities, subject to certain limitations and reductions in accordance with the CARES Act and the PPP. During November 2020, the SBA approved the loan forgiveness amount of $875,426 in principal and $5,155 in interest on November 20, 2020. The loan forgiveness is accounted for as a gain on debt extinguishment of $890,581 in the Consolidated Statement of Operations. In September 2020, MTI entered a promissory note (the "Note") in the amount of $10,000 by the SBA under the EIDL program. Monthly installment payments on the Note will begin twelve months from the date of the Note, with the balance of any accrued principal and interest at 3.75% annually, payable thirty years from the date of the Note. An application was submitted to the Lender for loan forgiveness, which was approved for the full amount on February 18, 2021. Convertible Notes As of September 30, 2021, MTI issued unsecured convertible notes totaling $10,762,500, of which $6,418,500 were issued between January 2021 and September 2021. The new issuances bear interest at 15% and mature in one year and included with warrants to acquire shares of common stock based on a specified formula. Interest is accrued in arrears until the last business day of each calendar year quarter. The default rate on the note increases to 20% when quarterly interest payments are not timely made by MTI. Convertible Notes ​ F-19 Table of Contents MULLEN AUTOMOTIVE, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​      Convertible      Interest      Default       Maturity       Warrants       Exercise       Exercise  Date of Issuance ​  Note ($) ​  Rate ​ Interest Rate ​ Date ​ (#) ​ Date ​ Price ($) 8/26/2020 ​ $ 1,000,000 ​ 15 %   20 %   8/26/2021 ​ 226,397 ​ 8/26/2025 ​ $ 8.84 8/26/2020   ​ 200,000   15 %   20 %   8/26/2021   45,279   8/26/2025 ​ $ 8.84 8/26/2020   ​ 200,000   15 %   20 %   8/26/2021   45,279   8/26/2025 ​ $ 8.84 8/26/2020   ​ 100,000   15 %   20 %   8/26/2021   22,640   8/26/2025 ​ $ 8.84 9/25/2020   ​ 105,000   15 %   20 %   9/25/2021   29,715   9/25/2025 ​ $ 8.84 9/25/2020   ​ 157,500   15 %   20 %   9/25/2021   44,572   9/25/2025 ​ $ 8.84 9/25/2020   ​ 105,000   15 %   20 %   9/25/2021   29,715   9/25/2025 ​ $ 8.84 10/12/2020   ​ 660,000   15 %   20 %   10/12/2021   203,757   10/12/2025 ​ $ 8.84 10/12/2020   ​ 33,000   15 %   20 %   10/12/2021   10,188   10/12/2025 ​ $ 8.84 10/12/2020   ​ 27,500   15 %   20 %   10/12/2021   8,490   10/12/2025 ​ $ 8.84 11/9/2020   ​ 660,000   15 %   20 %   11/9/2021   203,757   11/9/2025 ​ $ 8.84 11/9/2020   ​ 33,000   15 %   20 %   11/9/2021   10,188   11/9/2025 ​ $ 8.84 11/9/2020   ​ 27,500   15 %   20 %   11/9/2021   8,490   11/9/2025 ​ $ 8.84 12/7/2020   ​ 660,000   15 %   20 %   12/7/2021   203,756   12/7/2025 ​ $ 8.84 12/7/2020   ​ 33,000   15 %   20 %   12/7/2021   10,188   12/7/2025 ​ $ 8.84 12/7/2020   ​ 27,500   15 %   20 %   12/7/2021   8,490   12/7/2025 ​ $ 8.84 12/15/2020   ​ 157,500   15 %   20 %   12/15/2021   44,572   12/15/2025 ​ $ 8.84 12/15/2020   ​ 157,500   15 %   20 %   12/15/2021   44,572   12/15/2025 ​ $ 8.84 1/7/2021   ​ 660,000   15 %   —   1/7/2022   203,757   1/7/2026 ​ $ 8.84 1/7/2021   ​ 33,000   15 %   —   1/7/2022   10,188   1/7/2026 ​ $ 8.84 1/7/2021   ​ 27,500   15 %   —   1/7/2022   8,490   1/7/2026 ​ $ 8.84 1/7/2021   ​ —   —   —   —   2,038*   1/7/2026 ​ $ 8.84 1/7/2021   ​ 192,500   15 %   —   1/7/2022   59,429   1/7/2026 ​ $ 8.84 1/7/2021   ​ 82,500   15 %   —   1/7/2022   25,470   1/7/2026 ​ $ 8.84 1/7/2021   ​ 192,500   15 %   —   1/7/2022   59,429   1/7/2026 ​ $ 8.84 1/7/2021   ​ 110,000   15 %   —   1/7/2022   33,960   1/7/2026 ​ $ 8.84 3/10/2021   ​ 660,000   15 %   —   3/10/2022   203,757   3/10/2026 ​ $ 8.84 3/10/2021   ​ 33,000   15 %   —   3/10/2022   10,188   3/10/2026 ​ $ 8.84 3/10/2021   ​ 27,500   15 %   —   3/10/2022   8,490   3/10/2026 ​ $ 8.84 5/7/2021   ​ —   —   —   —   82,326**   5/7/2026 ​ $ 8.84 5/7/2021   ​ —   —   —   —   33,316**   5/7/2026 ​ $ 8.84 5/7/2021   ​ —   —   —   —   10,504**   5/7/2026 ​ $ 8.84 5/7/2021   ​ —   —   —   —   19,167**   5/7/2026 ​ $ 8.84 5/16/2021   ​ 4,400,000   15 %   20 %   5/16/2022   1,358,112   5/16/2026 ​ $ 8.84 7/22/2021   ​ 2,420,000   15 %   20 %   7/22/22   746,961   7/22/2026 ​ $ 8.84 7/26/2021   ​ 1,100,000   15 %   20 %   7/26/22   339,528   7/26/2026 ​ $ 8.84 8/19/2021   ​ 1,100,000   15 %   20 %   8/19/22   339,528   8/19/2026 ​ $ 8.84 9/3/2021   ​ 550,000   15 %   20 %   9/3/22   169,764   9/3/2026 ​ $ 8.84 Total ​ $ 15,932,500   —   —   —   4,924,447   — ​   — * As part of placement agent, Cambria received five-year warrants to purchase 6% of the MTI common shares issuable under convertible notes sold in the Regulation D offering to investors introduced by the firm. ** On May 7, 2021, additional warrants of 1,866,665 were added to the Exchange Agreement for no additional consideration to acquire additional common shares of common stock to 4 convertible debt holders given changes in the exchange share calculation, which will be consistent with the exchange share calculation of other convertible debt holders. The Exchange Agreement supersedes the original agreements that were issued by MTI and allows the F-20 Table of Contents MULLEN AUTOMOTIVE, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS convertible debt holder to exchange their debt for the newly created Series C Preferred Stock, par value of $0.001. The new series of preferred stock will be created upon the merger effectiveness date between Net Element and MAI. Convertible Notes Because the market price for MTI common stock on the date of the notes exceeded the notes’ conversion price of $0.6877 per share, a beneficial conversion feature in the amount of $10,613,630 was recorded as a discount on the notes. The discount is being amortized as additional interest over the life of the notes. At September 30, 2021, the balance of the unamortized discount is $8,060,555. Company management evaluated the conversion features embedded in the convertible notes for classification and accounting under the provisions of ASC 815-40 and determined the conversion features met treatment as equity. NOTE 6 – FAIR VALUE MEASUREMENTS AND FAIR VALUE OF FINANCIAL INSTRUMENTS Non-Financial Assets Measured at Fair Value on a Non-Recurring Basis Non-financial assets, such as property, equipment and leasehold improvements is required to be measured at fair value only when acquired or when an impairment loss is recognized. See “Note 12 - Property, Equipment and Leasehold Improvements, Net” for further information on impairment of fixed assets. Financial instruments for which carrying value approximates fair value Certain financial instruments that are not carried at fair value on the consolidated balance sheets are carried at amounts that approximate fair value, due to their short-term nature and credit risk. These instruments include cash and cash equivalents, accounts payable, accrued liabilities, and debt. We believe that the carrying value of term debt approximates fair value due to the variable rates associated with these obligations. Accounts payable are short-term in nature and generally terms are due upon receipt or within 30 to 90 days. NOTE 7 – DEFICIENCY IN STOCKHOLDERS’ EQUITY The accompanying financial statements include a retrospective recapitalization to reflect the composition of stockholder’s equity, as if they had existed for the periods presented. Preferred Stock On November 5, 2021, we filed an Amended and Restated Articles of Incorporation which included the rights and privileges of Preferred Stock Series A and Series B.  Under the terms of our Articles of Incorporation, the Board of Directors may determine the rights, preferences and terms of our authorized but unissued shares of preferred stock. Dividends The holders of Preferred Stock are entitled to non-cumulative dividends if declared by the Board of Directors. The holders of the Preferred Stock Series A and Series B shall participate on a pro rata basis (on an “as converted” basis to common stock) in any cash dividend paid on common stock. NaN dividends have been declared or paid during the years ended September 30, 2021 and 2020. F-21 Table of Contents MULLEN AUTOMOTIVE, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Liquidation Holders of Preferred Stock are entitled to receive a liquidation preference prior to any distribution to holders of Common Stock. Upon occurrence of a liquidation transaction, the Preferred Stock would be redeemed by the issuer for the applicable original issue price. However, if the holders of Preferred Stock would receive a greater amount of consideration had the Preferred Stock been converted immediately prior to such transaction, the Preferred Stock shall be deemed to have been converted for the purposes of the redemption amount. Conversion Preferred Stock Series A is convertible at any time at the option of the holder into Common Stock at a conversion rate of one for one hundred basis with common shares of at any time after the date of issuance of such shares into such number of fully paid and non-accessible shares of Common Stock. Preferred Stock Series B is convertible at any time at the option of the holder into Common Stock at a conversion rate of 1 for one basis with common shares at any time after the date of issuance of such shares into such number of fully paid and non-accessible shares of Common Stock. Additionally, all outstanding shares of the Preferred Stock shall automatically convert into shares of the underlying Common Stock upon the Company’s sale of its Common Stock in a firm commitment underwritten public offering pursuant to a registration statement under the Securities Act, the public offering price of which results in aggregate cash proceeds to the Company of not less than $50 million, net of underwriting discounts and commissions (a “Qualified IPO”). Voting Rights Holders of Preferred Stock are entitled to the same voting rights as the holders of common stock and to notice of shareholders’ meetings. The holders of Common Stock and Preferred Stock shall vote together as a single class (on an as-converted basis) on all matters. Each holder of Preferred Stock is entitled to the number of votes equal to the number of shares of Common Stock into which such shares of Preferred Stock could be converted. Common Stock We have 500,000,000 shares of common stock authorized with $0.001 par value per share. There were 7,048,386 and 5,086,225 shares of common stock issued and outstanding at September 30, 2021 and 2020, respectively. The holders of Common Stock are entitled to 1 vote for each share of Common Stock held at all meetings of shareholders. In the event of a liquidation, dissolution or winding up of the Company, whether voluntary or involuntary, the common shareholders are entitled to receive the remaining assets following distribution of liquidation preferences, if any, to the holders of our preferred stock. The holders of common stock are not entitled to receive dividends unless declared by our Board of Directors. To date, 0 dividends were declared or paid to the holders of common stock. F-22 Table of Contents MULLEN AUTOMOTIVE, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Warrants The following table summarizes warrant activity for the years ended December 31, 2018September 30, 2021 and 2017, respectively.2020: ​ ​ ​ ​ ​ ​ ​      ​      Weighted Average  ​ ​ MAI shares ​ Exercise Price Warrants outstanding at September 30, 2019   97,308 ​ $ 8.84 Warrants exercised   — ​ $ — Warrants granted   420,242 ​ $ 8.84 Warrants expired   — ​ $ — Warrants outstanding at September 30, 2020   540,905 ​ $ 8.84 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted Average ​ ​ MAI shares      Exercise Price Warrants outstanding at September 30, 2020 ​ 540,905 ​ $ 8.84 Warrants exercised ​ — ​ $ — Warrants granted ​ 4,480,855 ​ $ 8.84 Warrants expired ​ (97,308) ​ $ 8.84 Warrants outstanding at September 30, 2021 ​ 4,924,447 ​ $ 8.84 ​ 2020-2021 Warrants The following table presentswarrants are exercisable for a five-year period commencing upon issuance . The estimated fair value of the estimated aggregate future amortizationMAI warrants issued and outstanding is $8,166,441 using the Black-Scholes option valuation model. The assumptions used that represent management’s best estimates of the fair value of the Company’s warrants issued and outstanding were as follows: ​ ​ ​ ​ ​ ​ ​      September 30, 2021   Expected term (in years)   ​ 5.0 ​ Volatility   ​ 63.9 % Dividend yield   ​ 0.00 % Risk-free interest rate   ​ 0.34%-0.82 % Common stock price   $ 5.43 ​ ​ The allocation of the fair value of these warrants was included as a debt discount on the consolidated balance sheet and amortized to interest expense over the scheduled maturity dates of intangible assets:the various promissory notes. NOTE 8 – LOSS PER SHARE 2019   $ 1,561,829   2020     1,561,829   2021     1,561,829   2022     1,505,362   2023     250,894   Balance December 31, 2018   $ 6,441,743   Earnings per common share (“EPS”) is computed by dividing net income allocated to common shareholders by the weighted-average common shares outstanding, excluding unvested common shares subject to repurchase or cancellation. Diluted EPS is computed by dividing income allocated to common shareholders plus dividends on dilutive convertible preferred stock and preferred stock that can be tendered to exercise warrants, by the weighted-average common shares outstanding plus amounts representing the dilutive effect of outstanding warrants and the dilution resulting from the conversion of convertible preferred stock, if applicable. For 2021 and 2020, the Series A Preferred Stock were excluded from the diluted share count because the result would have been antidilutive under the “if-converted method.” The warrants to purchases common shares of stock also were excluded from the computation because the result would have been antidilutive. F-23 F-15 Table of Contents MULLEN AUTOMOTIVE, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTE 7.9 – MTI SHARE- BASED COMPENSATION MTI has a share incentive plan as part of its annual discretionary share-based compensation programs. The plan includes consultants and employees, including directors and officers. For employees, they are notified of company share incentives during the onboarding process. The employee’s offer letter briefly describes the plan. Subject to the approval of MTI’s Board of Directors or its Compensation Committee and following the adoption of an equity incentive plan, employees are issued a specified number of shares of the MTI Common Shares. Employees are vested in 100% of the MTI shares after 12 months of continuous service. Additional MTI shares may be issued to employees over the next two years at anniversary date. Any disruption or separation of service results in the forfeiture of common shares. The total expense recognized for share awards represents the grant date fair value of such awards, which is generally recognized as a charge to income ratably over the vesting period. Consulting agreements or MTI shares for services are determined by the number of MTI shares granted within the individual contracts, as well as the services provided by the consultant. The MTI shares specified within the individual agreements are negotiated and approved by our Chief Executive Officer. The consultant earns the MTI shares over the service period. The MTI shares are accounted for as professional fees within G&A expenses. Employee share issuances are part of Salaries expense. The expense recognized for share awards represents the grant date fair value of such awards, which is generally recognized as a charge to income ratably over the vesting period. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the fiscal year ended  ​ ​ September 30,  Composition of Stock-Based Compensation Expense      ​ 2021      ​ 2020 Employee MTI share issuance ​ $ 2,505,091 ​ $ 1,037,102 MTI shares for services ​   2,460,529 ​   2,929,179 MTI Share-Based compensation expense ​ $ 4,965,620 ​ $ 3,966,281 ​ ​ NOTE 10 – ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES ​ ​ ​ ​ ​ ​ ​ ​ ​      September 30, 2021      September 30, 2020 Accrued Expenses and Other Liabilities   ​      ​    Accrued expense - other ​ $ 2,051,696 ​ $ 16,021,442 Accrued payroll ​   4,586,057 ​   3,771,874 Accrued interest ​   12,489,012 ​   2,358,273 Total ​ $ 19,126,765 ​ $ 22,151,589 ​ At December 31, 2018 and December 31, 2017, accrued expenses amounted to approximately $2.5 and $3.2 million, respectively. Accrued expenses represent expenses– other at September 30, 2020 includes obligations arising from the $13.6 million AirSign advertising contract and the $1.4 million RedRock Outdoor Advertising, Inc. contract. The Company entered into these agreements to promote its electric vehicle capabilities with various national sporting events and within the New York market. However, the marketing campaigns never materialized. During 2021, the Company received a release of liability from both AirSign, Inc. and RedRock Outdoor Advertising, Inc. Both liabilities, along with the associated deferred advertising, were derecognized during January 2021. Accrued payroll represents salaries and benefits that are owed to employees. More importantly, the payroll tax liabilities are reported within this account. Delinquent IRS and state tax liabilities on September 30, 2021, and September 30, 2020, are $3,904,720 and $3,987,596, respectively. These tax liabilities have priority liens over MTI assets due to nonpayment of tax debt. The lien protects the government’s interest in all MTI property, including real estate, personal property and financial assets. Refer to Note 17, Contingencies and Claims. F-24 Table of Contents MULLEN AUTOMOTIVE, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Accrued interest relates to finance charges on debt financing and represents interest on loans, and convertible notes payable throughout 2021. Refer to Note 5, Debt. NOTE 11 -LIABILITY TO ISSUE STOCK Liability represents stock payable that is accrued for and issuable at the enda future date for Preferred Management Partners and Cambria Investment Banking Services. Refer to Note 17. NOTE 12 – PROPERTY, EQUIPMENT AND LEASEHOLD IMPROVEMENTS, NET Property, equipment, and leasehold improvements, net consists of the period or are estimates of services provided that have not been billed byfollowing: ​ ​ ​ ​ ​ ​ ​ ​ ​      September 30,       September 30,  ​ ​ 2021 ​ 2020 Building ​ $ 804,654 ​ $ 807,154 Furniture and Equipment ​   111,102 ​   114,879 Vehicles ​   45,887 ​   45,887 Computer Hardware and Software ​   139,742 ​   129,967 Machinery and Equipment ​   2,597,654 ​   2,615,311 Leasehold Improvements ​   66,379 ​   76,675 Subtotal ​   3,765,418 ​   3,789,873 Less: Accumulated Depreciation ​   (2,583,941) ​   (2,247,877) Property, Equipment and Leasehold Improvements, Net ​ $ 1,181,477 ​ $ 1,541,996 ​ Depreciation expense related to property, equipment and leasehold improvements for the provider or vendor. The following table reflect the balances outstanding as of December 31, 2018years ended September 30, 2021, and December 31, 2017.     December 31, 2018     December 31, 2017   Accrued professional fees   $ 174,915     $ 241,281   PayOnline accrual     1,126,273       1,438,900   Accrued interest     108,202       145,264   Accrued bonus     1,157,556       1,249,852   Accrued foreign taxes     (45,952 )     137,141   Other accrued expenses     14,953       -       $ 2,535,947     $ 3,212,438   On October 25, 2016, we entered into an amendment to the PayOnline acquisition agreement with the sellers, in which we agreed to assume $1,433,475 of certain refundable merchant deposit reserves,2020 was $354,125 and accordingly, recorded the liability. During the year the ended December 31, 2017, we repaid $252,223 of this liability. The accrual for PayOnline at December 31, 2018 and 2017, respectively, consists of approximately $1.1 million obligation for refundable merchant reserves assumed pursuant to this amendment to the PayOnline acquisition agreement.$702,068, respectively. Included in accrued bonus are non-discretionary compensation due to our Chairman and CEO, approximating $866,000 and $1.0 million at December 31, 2018 and 2017, respectively, and approximately $291,000 and $244,000 at December 31, 2018 and 2017 for discretionary performance bonuses due to certain employees. NOTE 8. NOTES PAYABLE13 – OTHER ASSETS Notes payableOther assets consist of the following: ​     December 31, 2018     December 31, 2017                     RBL Capital Group, LLC   $ 6,512,268     $ 4,544,087   Priority Payments Systems LLC     -       2,238,511   MBF Merchant Capital, LLC     -       341,804   Subtotal     6,512,268       7,124,402   Less: deferred loan costs     (132,774 )     (108,980 ) Subtotal     6,379,494       7,015,422   Less: current portion     (433,448 )     (2,493,973 ) Long term debt   $ 5,946,046     $ 4,521,449   ​ ​ ​ ​ ​ ​ ​ ​      September 30, 2021      September 30, 2020 Other Assets   ​      ​    Coda Materials ​ $ 76,587 ​ $ 207,000 Advance Payments on long-lived assets ​   — ​   51,806 Notes Receivable ​   90,552 ​   79,939 Show Room Cars ​   2,739,995 ​   210,483 Security Deposits ​   186,640 ​   212,782 Deposit on Property (See Note 15) ​   1,240,000 ​   — Total Other Assets ​ $ 4,333,774 ​ $ 762,010 ​ ​ F-25 Table of Contents RBL Capital Group, LLCMULLEN AUTOMOTIVE, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTE 14 – OPERATING EXPENSES Effective JuneGeneral and Administrative Expenses consists of the following: ​ ​ ​ ​ ​ ​ ​ ​ ​ Year ended September 30, ​ ​ 2021 ​ 2020 Professional fees      $ 6,991,246      $ 5,260,142 Salaries ​   6,091,520 ​   2,437,934 Depreciation and amortization ​   720,805 ​   725,796 Lease ​   1,776,198 ​   905,231 Settlements and penalties ​   1,532,378 ​   219,655 Employee benefits ​   368,563 ​   216,349 Utilities and office expense ​   345,766 ​   213,361 Advertising and promotions ​   413,771 ​   156,241 Taxes and licenses ​   73,527 ​   67,607 Repairs and maintenance ​   244,868 ​   55,050 Other ​   835,299 ​   169,775 Total ​ $ 19,393,941 ​ $ 10,427,141 ​ Within professional fees is MTI shares for services, which is the issuance of MTI shares for services rendered to consultants and professional service firms. The expense is recorded at fair value of MTI shares issued (see Note 13, Other Assets). For the fiscal year ended September 30, 2014, TOT Group,2021 and 2020, the Company recorded $2,460,529 and $2,929,179, respectively, for shares for services. Research and development consist of the following: ​ ​ ​ ​ ​ ​ ​ ​ ​ For the fiscal year ended ​ ​ September 30,  ​      2021      2020 Research & Development ​ ​ ​ ​ ​ ​ Professional fees ​ $ 3,009,027 ​ $ 1,667,077 Total ​ $ 3,009,027 ​ $ 1,667,077 ​ Research and development costs are expensed as incurred. Research and development expenses primarily consist of Mullen Five EV show car development and are primarily comprised of personnel-related costs for employees and consultants. In December 2020, the Company entered into an agreement with Thurner, Inc. to design and its subsidiaries as co-borrowers, TOT Payments, LLC, TOT BPS, LLC, TOT FBS, LLC, Process Pink, LLC, TOT HPS, LLC and TOT New Edge, LLC (collectively, the “co-borrowers”),develop two show electric vehicles. The planned finalization is expected to occur in 2021. The total cost for Phase 1 is $483,254. In December 2020, MTI entered into a LoanStatement of Work with Phiaro, Inc. for its show car development for approximately $1.6 million. The show car project program started in December 2020 and Security Agreement (“Credit Facility”) with RBL Capital Group, LLC (“RBL”),is anticipated to be finished November 2021. The program is for the initial show car development of the Mullen Five, which is a mid-size electric SUV. The program start began in January 2021. The initial show cars in development consist of two mid-size electric SUVs. NOTE 15 – LEASES MTI has entered into various operating lease agreements for certain of its offices, manufacturing and warehouse facilities, and corporate jet. We have implemented the provisions of ASC 842, on October 1, 2019. Operating leases are included in right-of-use assets, and current and noncurrent portion of lease liabilities, as lender (the “RBL Loan Agreement”).appropriate. These right-of-use assets also F-26 Table of Contents MULLEN AUTOMOTIVE, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS includes any lease payments made and initial direct costs incurred at lease commencement and excludes lease incentives. The originallease terms provided us withmay include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Lease expense for lease payments is recognized on a straight-line basis over the lease term. We have lease agreements which require payments for both lease and non-lease components and has elected to account for these as a single lease component. Certain leases provide for annual increases to lease payment based on an 18-month, $10 million credit facility with interestindex or rate. We calculate the present value of future lease payments based on the index or at the higherlease commencement date for new leases. The table below presents information regarding our lease assets and liabilities. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​      September 30, 2021      September 30, 2020   Assets:   ​      ​    ​ Operating lease right-of-use assets ​ $ 2,350,927 ​ $ 1,729,112 ​ Liabilities: ​      ​      ​ Operating lease liabilities, current ​   (599,898) ​   (336,765) ​ Operating lease liabilities, non-current ​   (1,857,894) ​   (1,482,569) ​ Total lease liabilities ​ $ (2,457,792) ​ $ (1,819,334) ​ Weighted average remaining lease terms: ​      ​      ​ Operating leases ​   3.34 years ​   4.51 years ​ Weighted average discount rate: ​      ​      ​ Operating leases ​   28 %     28 % Cash paid for amounts included in the measurement of lease liabilities for the fiscal year ended September 30, 2021, and 2020 ​ $ 1,057,438 ​ $ 1,096,054 ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating lease costs: ​ For the fiscal year ended September 30, ​      2021      2020 Fixed lease cost ​ $ 1,185,576 ​ $ 430,886 Variable lease cost ​   448,983 ​   454,422 Short-term lease cost ​   401,526 ​   101,916 Sublease income ​   (84,473) ​   (81,993) Total operating lease costs ​ $ 1,951,612 ​ $ 905,231 ​ Operating Lease Commitments Our leases primarily consist of 13.90%land, land and building, or equipment leases. Our lease obligations are based upon contractual minimum rates. Most leases provide that we pay taxes, maintenance, insurance and operating expenses applicable to the premises. The initial term for most real property leases is typically 1 to 3 years, with renewal options of 1 to 5 years, and may include rent escalation clauses. For financing obligations, a portion of the periodic lease payments is recognized as interest expense and the remainder reduces the obligations. For operating leases, rent is recognized on a straight-line basis over the lease term, including scheduled rent increases and rent holidays. On April 27, 2021, MTI entered into a 4-month lease agreement to lease a 127,400 square-foot manufacturing plant on 100 acres located at One Greentech Drive, Robinsonville (Tunica County), MS from May 1, 2021 through July 31, 2021 for $50,000 per annummonth. MTI also has an option to purchase the property for $12.0 million. The lease agreement will terminate on the earlier of the (a) closing of the purchase of the property or (b) MTI’s termination of the prime rate plus 10.65%. Interest on drawn amounts outstanding after November 30, 2015 carry interest atlease. On March 12, 2021, MTI paid $240,000 into escrow for the asset purchase. Consummation of the purchase is contingent upon completion of satisfactory inspection, review of environmental report, etc. Furniture, fixtures, equipment and other assets are included as part of the purchase. On July 23, 2021, the parties entered into a first amendment to the agreement, whereby the lease is extended for an additional three percent per annum until repaid in full, with other amounts, obligations or payments due carrying an annual default rate not to exceed the lesser of (i) the prime rate plus 13% per annum and (ii) 18.635% per annum.six months. On May 2, 2016, we renewed our Credit Facility with RBL, increasing the facility from $10 million to $15 million and extending the term through February 2019.  At December 31, 2018, we had approximately $10.5 million available under the Credit Facility.  This Credit Facility is for general working capital purposes or to support the growth of the co-borrowers, subject to the terms and conditions, as defined. The co-borrowers’ obligations to RBLJuly 26, 2021, MTI paid $1,000,000 (“extension payment”) pursuant to the RBL Loan Agreement are secured by a first priority security interest in allamendment to the lease agreement (payments will remain at $50,000 per month through January 31, 2022). The source of the co-borrowers’ tangible and intangible assets, including but not limitedfunds to their merchants, merchant contracts andmake the extension payment came from proceeds thereof, and all right title and interest in co-borrowers’ processing contracts, contract rights, and portfolio cash flows received from the issuance of a convertible note F-27 Table of Contents MULLEN AUTOMOTIVE, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS with all processorsTDR Capital Pty Limited. The extension payment deposited into escrow will be credited to the purchase price upon closing. As of 11/12/2021, the property was purchased from Saleen Motors International, LLC for $12,000,000. The lease was cancelled on the purchase date of the co-borrowers.aforesaid property. Refer to Note 19, Subsequent Events. F-16 TableThe following table reflects maturities of Contents operating lease liabilities at September 30, 2021: Borrowings from the Credit Facility in the amounts of $3,315,000, $400,000 and $250,000 were previously converted into RBL term notes.  Effective March 20, 2018,​ ​ ​ ​ ​ Years ending      ​      September 30, ​ ​ ​ 2022 ​ $ 1,213,728 2023 ​   1,157,693 2024 ​   824,287 2025 ​   436,155 2026 ​   222,787 Thereafter ​   — Total lease payments ​ $ 3,854,650 Less: Imputed interest ​   (1,396,858) Present value of lease liabilities ​ $ 2,457,792 ​ ​ NOTE 16 – INCOME TAXES On December 2, 2019, we entered into a single notetax sharing agreement with Mullen Technologies Inc. Although our results are included in the Mullen Technologies consolidated tax return for U.S. federal income tax purposes, our tax provision is calculated primarily as though MAI was a principal balance of $4,544,087 with RBL to effectively refinance all previously issued outstanding RBL notes, includingseparate taxpayer. However, under certain additional term notes entered into with RBL through August 2017. The refinancedcircumstances, transactions between us and combined note provides for four (4) interest-only payments at 14.19%, with monthly interest and principal payments of $85,634 from August 2018 through July 2021, with a balloonMullen Technology are assessed using consolidated tax return rules. Tax sharing agreement governs the payment of $3,170,967 in July 2021. The back-end fees from prior notestax liabilities and entitlement to refunds thereof, allocate responsibility for, and cooperation in, the amountfiling of $133,600 have been rolled into this notetax returns, and also are due in July 2021.provide for certain other matters relating to taxes On December 28, 2018, in connection with an addendum to that certain term loan made by TOT Group, Inc.in favor of RBL,For the Credit Facility referred to above, we received funding of $2,131,500, bearing interest at an annual rate of 14%. On December 20, 2019 we are required to make one (1) payment of interest only for $18,804, followed by eleven (11) payments of interest only for $24,867. Effective January 20,years ended September 30, 2021 and 2020, we had income tax NOL carryforwards of approximately $193 million for Federal and $192 million for California, which will expire as follows: ​ ​ ​ ​ ​ NOL Carryforward         ​ ​      2021 Federal   ​    2034-2037 ​ $ 29,838,716 Indefinite ​ $ 162,818,819 ​ ​ ​ ​ Total Federal ​ $ 192,657,535 ​ ​ ​ ​ California ​      2034-2040 ​ $ 191,722,566 ​ ​ ​ ​ Total California ​ $ 191,722,566 ​ F-28 Table of Contents MULLEN AUTOMOTIVE, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS ​ ​ ​ ​ ​ ​ ​ ​      2021 - $    2021 - % ​ ​ ​ ​ ​ ​ ​ ​ Income tax benefit at statutory rate ​ $ (9,247,200)   21.00 % State income taxes ​   800   0.00 % Permanent Differences ​   158,166   (0.36) % Valuation Allowance ​   9,091,163   (20.65) % Other ​   (2,129)   0.00 % Total (benefit) provision for income taxes ​ $ 800   0.00 % ​ We record deferred income taxes using enacted tax laws and rates for the years in which the taxes are requiredexpected to make thirty-six (36) monthly payments,be paid. Deferred income tax assets and liabilities are recorded based on the differences between the financial reporting and income tax bases of assets and liabilities. Significant components of the Company’s net deferred tax assets as of September 30, 2021, are as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​      2021      2020 Deferred tax assets:   ​      ​    Net Operating loss carryforwards   ​ 38,676,405   ​ 31,413,378 Charitable Contributions   ​ 894   ​ 1,176 Accrued Expenses   ​ 315,555   ​ 104,164 Impairment Other   ​ —   ​ 83,845 Other Assets   ​ 364,419   ​ 261,842 163(j) Limitation   ​ 14,491,332   ​ 4,178,291 ​ ​ ​ ​ ​ ​ ​ Total gross deferred tax assets   ​ 53,848,604   ​ 36,042,696 ​ ​ ​ ​ ​ ​ ​ Less valuation allowance   ​ (53,416,875)   ​ (35,747,087) ​ ​ ​ ​ ​ ​ ​ Total net deferred tax assets   ​ 431,729   ​ 295,609 ​ ​ ​ ​ ​ ​ ​ Deferred tax liabilities:   ​      ​    ​ ​ ​ ​ ​ ​ ​ Intangibles   ​ (146,639)   ​ (157,641) Fixed Assets   ​ (284,922)   ​ (137,632) Other   ​ (168)   ​ (336) ​ ​ ​ ​ ​ ​ ​ Total deferred tax liabilities   ​ (431,729)   ​ (295,609) ​ ​ ​ ​ ​ ​ ​ Net deferred tax assets ​ $ 0 ​ $ — ​ For the years ended September 30, 2021 and 2020, we recorded a full valuation allowance against the deferred tax assets because we do not believe that the deferred tax assets recorded in 2021 and 2020 are more likely than not to be realizable. We follow the guidance for accounting for uncertainty in income taxes in accordance with FASB ASC 740, which includes principalclarifies uncertainty in income taxes recognized in an enterprise’s financial statements. The standard also prescribes a recognition threshold and measurement standard for the financial statement recognition and measurement of an income tax position taken, or expected to be taken, in an income tax return. Only tax positions that meet the more likely than not recognition threshold may be recognized. In addition, the standard provides guidance on derecognition, classification, interest for $72,850, until December 20, 2022 the date this term loan matures.and F-29 Table of Contents MULLEN AUTOMOTIVE, INC. The Credit Facility that was renewed on May 2, 2016, allowsNOTES TO CONSOLIDATED FINANCIAL STATEMENTS penalties, accounting in interim periods, and disclosure. As of September 30, 2021, the Company to have access to approximately $8.3 million for general working capital purposes. MBF Merchant Capital, LLC We issued the following note payable to MBF, an entity owned by William Healy, a former member of our Board of Directors. On August 29, 2017, our subsidiary, TOT Group, Inc., entered into a $275,000 promissory note with MBF. The principal amount of the loan carries an interest rate 13.95% per annum, with ten monthly interest and principal payments of $29,289. The promissory note required payment of a 2% front-end fee at issuance and a 4% back-end fee due at final payment. This note was paid-off in 2018. Priority Payment Systems LLC Effective May 18, 2017, we entered into a loan agreement and security agreement with Priority Payment Systems LLC (“PPS”) and issued a promissory note dated May 18, 2017. Pursuant to the loan agreement and the note, we borrowed $2,000,000. Prior to maturity of the loan, the principal amount of the loan will carry a floating interest rate of prime rate plus 6% per annum. The interest rate was 10.25% at December 31, 2018 and 2017, respectively. We may prepay the loan in whole or in part at any time. The loan is repayable in monthly installments consisting of principal plus interest. The loan matures and becomes due and payable in full on May 20, 2019 to the extent not repaid earlier. Pursuant to the security agreement, the loan is secured by collateral consisting of accounts, cash or cash equivalents, residualshas recorded $15.2M related to unrecognized tax benefits. Tax years for 2014 through 2021 are subject to examination by the merchants originated by ustax authorities. Tax Reform. The Tax Cuts and processed by PPS. The loan agreement,Jobs Act of 2017 (the “TJCA”) was enacted on December 22, 2017, and among other changes, reduced the note and the security agreement contain customary representations, warranties, events of default, remedies and affirmative and negative covenants,federal statutory tax rate from 35.0% to 21.0%. In accordance with U.S. GAAP for income taxes, as well as SEC Staff Accounting Bulletin No. 1187 (“SAB”), the rightCompany made a reasonable estimate of first refusalthe impacts of the TJCA and the right related to the merchants. Effective May 17, 2017, we entered into a corporate guarantyrecorded this estimate in favor of PPS, pursuant to which we unconditionally guaranteed the full and prompt payment of each present and future liability, debt and obligation under the loan agreement, the note, the security agreement and other related documents. On June 27, 2017, we entered into an amendment to the loan agreement with PPS pursuant to which: (i) The original term loan was modified into a multi - draw loan with an increase of the borrowing limit to $2,500,000 and; (ii) The loan maturity was extended to May 20, 2021. The draw-down period was extended to coincide with the loan maturity date of May 20, 2021. Scheduled Notes Payable Principal Repayment at December 31, 2018 is as follows: 2019   $ 433,448   2020     1,113,323   2021     4,154,137   2022     811,360   2023     -   Balance December 31, 2018   $ 6,512,268   NOTE 9. CONCENTRATIONS Credit card processing revenues are from merchant customer transactions, which were processed primarily by one third-party processor (greater than 5%) and our own dedicated bank identification number ("BIN")/Interbank Card Association ("ICA") number during the years ended December 31, 2018 and 2017.  ForCompany results for the year ended December 31, 2018, we processed 61%September 30, 2021. SAB 118 allows for a measurement period of up to one year, from the date of enactment, to complete the accounting for the impact of TJCA. As of September 20, 2021, our total revenue with Priority Payment Systems,analysis of under SAB 118 was completed and 20% from our own dedicated BIN/ICA with Esquire Bank. Forresulted in no material adjustments to the year ended December 31, 2017, we processed 77%provisional amounts recorded as of our total revenue with Priority Payment Systems and 5.2% from our own dedicated BIN/ICA with Esquire Bank. F-17 Table of Contents September 30, 2021. NOTE 10. COMMITMENTS17 – CONTINGENCIES AND CONTINGENCIESCLAIMS Minimum Processing Commitments We have non-exclusive agreements with several processorsASC 450 governs the disclosure and recognition of loss contingencies, including potential losses from litigation, regulatory, tax and other matters. The accounting standard defines a “loss contingency” as “an existing condition, situation, or set of circumstances involving uncertainty as to provide services relatedpossible loss to transaction processing and transmittal, transaction authorization and data capture, and accessan entity that will ultimately be resolved when one or more future events occur or fail to various reporting tools. Certain of these agreements require us to submit a minimum monthly number of transactions for processing. If we submit a number of transactions that is lower than the minimum, we are required to pay to the processor the fees it would have received if we had submitted the required minimum number of transactions. As of December 31, 2018, such minimum fee commitments were as follows: 2019   $ 558,700   2020     614,300   2021     670,730   2022     60,000   2023     70,000   Thereafter     80,000   Total   $ 2,053,730   Leases North American Transaction Solutions During May 2013, we entered into a lease agreement, for approximately 4,101 square feet of office space located at 3363 N.E. 163rd Street, Suites 705 through 707, North Miami Beach, Florida 33160. The term of the lease agreement was from May 1, 2013 through December 31, 2016, with monthly rent increasing from $16,800 per month at inception to $19,448 per month (or $233,377 per year) for the period from January 1, 2016 through December 31, 2016.  The lease was extendedoccur.”  ASC 450 requires accrual for a periodloss contingency when it is “probable that one or more future events will occur confirming the fact of five years commencing August 1, 2017loss” and expiring July 31, 2022 with equal monthly base rent installments of $14,354 ($172,248 per year) plus sales tax.  Net Element Software, our subsidiary, currently leases 1,654 square feet of office space in Yekaterinburg, Russia, where we develop value added services, mobile applications, smart terminals applications, sales central ERP system development and marketing activities, at an annual rent of approximately $24,300. The lease was renewed on same terms and the lease term expires on June 1, 2019. International Transaction Solutions PayOnline leased approximately 4,675 square feet of office space in Moscow, Russia at an annual rent of $84,457 which expired on September 30, 2018.  This space was reduced to 3,385 square feet and renewed at an annual rent of $56,000 expiring on August 31, 2019.  We believe that our current facilities are suitable and adequate for our present purposes, and we anticipate that we will be able to extend our existing leases on terms satisfactory to us or move to new facilities on acceptable terms. Future maturities of lease agreements are as follow: 2019   $ 238,548   2020     172,248   2021     172,248   2022     100,478   Total   $ 683,522   Litigation, Claims, and Assessments With respect to all legal, regulatory and governmental proceedings, and in accordance with ASC 450-20, Contingencies—LossContingencies, we consider the likelihood of a negative outcome. If we determine the likelihood of a negative outcome with respect to any such matter is probable and the“the amount of the loss can be reasonably estimated, we record an accrual for the estimated amount of loss for the expected outcome of the matter. If the likelihood of a negative outcome with respectestimated.” From time to material matters is reasonably possible andtime, we are ablesubject to determine an estimate of the amount of possible loss or a range of loss, whether in excess of a related accrued liability or where there is no accrued liability, we disclose the estimate of the amount of possible loss or range of loss. However, management in some instances may be unable to estimate an amount of possible loss or range of loss based on the significant uncertainties involved in, or the preliminary nature of, the matter,asserted and in these instances we will disclose the nature of the contingencyactual claims and describe why we are unable to determine an estimate of possible loss or range of loss. F-18 Table of Contents In addition, we are involved in ordinary course legal proceedings, which include all claims, lawsuits investigations and proceedings, including unasserted claims, which are probable of being asserted, arising in the ordinary course of business and otherwise not described below. We have considered allbusiness. Company management reviews any such ordinary course legal proceedings and claims on an ongoing basis and follows appropriate accounting guidance when making accrual and disclosure decisions. We establish accruals for those contingencies where the incurrence of a loss is probable and can be reasonably estimated, and it discloses the amount accrued and the amount of a reasonably possible loss in formulatingexcess of the amount accrued, if such disclosure is necessary for our disclosuresconsolidated financial statements to not be misleading. To estimate whether a loss contingency should be accrued by a charge to income, management evaluates, among other factors, the degree of probability of an unfavorable outcome and assessments.the ability to make a reasonable estimate of the amount of the loss. We do not record liabilities when the likelihood is probable, but the amount cannot be reasonably estimated. Aptito.com,Preferred Management Partners, Inc.  – Consulting Agreement On August 6, 2014, our subsidiary (Aptito, LLC) filed a lawsuit against Aptito.com, Inc. and the shareholders of Aptito.com, Inc., in state court in the 11th Judicial Circuit in and for Miami-Dade County. This is an interpleader action in regards to 125,000 shares of our stock. Aptito, LLC acquired Aptito.com, Inc. in exchange for, among other things, 125,000 shares (prior to adjustment for two one-for-ten reverse stock splits) of our stock. There has been disagreements among the Aptito.com, Inc. shareholders as to proper distribution of the 125,000 shares (prior to adjustment for two one-for-ten reverse stock splits). To avoid any liability in regards to improper distribution, Aptito, LLC filed the interpleader action so as to allow the Defendants to litigate amongst themselves as to how the shares (prior to adjustment for two one-for-ten reverse stock splits) should be distributed. Aptito.com, Inc. opposed the motion to interplead and filed counterclaims relative to Aptito, LLC for non-delivery of the 125,000 shares (prior to adjustment for two one-for-ten reverse stock splits) . On July 18, 2017, the Court granted Aptito LLC’s motion to interplead and also indicated that Aptito, LLC could not be held liable for any alleged damages relative to the purported non-delivery of the 125,000 shares after the interpleader action was filed on August 6, 2014. In March 2018, a new Judge in the case ruled that Aptito.com, Inc. was entitled to receive 125,000 newly issued shares of our common stock, but indicated that he was not ruling that we were required to issue such shares. We plan to appeal this ruling, and our legal counsel is addressing the counterclaims filed by Aptito.com, Inc. in this matter. In July 2018, our counsel was disqualified due to a conflict of interest. We engaged a new law firm to represent our ongoing interests in this case. Since that time, there have been multiple Motions and claims brought by Aptito.com, Inc., including the request for rescission of the asset purchase agreement that gave rise to the share issuance obligation. All of these Motions and claims are being vigorously defended. There is a court ordered mediation conference that will be held sometime in April 2019. Gene Zell In June 2014, we, as plaintiff, commenced an action in the Miami-Dade Circuit Court, Florida against Gene Zell for defamation of our Company and CEO and tortious interference with our business relationships. In October 2014, the court granted a temporary injunction against Zell enjoining him from posting any information about our Company and CEO on any website and enjoining him from contacting our business partners or investors. Zell violated the Court Order and the Court granted a Motion imposing sanctions against Zell. We continue to seek enforcement of the Court Order. On April 13, 2015, Zell filed a Motion to set aside the Court Order alleging he was unaware of the Court Proceedings. The Court, on August 26, 2015, dismissed Zell’s Motion to dissolve the injunction. In March 2017 the Court dismissed another Motion brought by Zell to dissolve the injunction. Accordingly, the injunction order prohibiting Zell from making further defamatory posts remains in place. In 2018, the Company filed a motion to enforce the injunction and contempt orders against Zell. The court upheld the injunction and the Company continues to vigorously protect its interests. OVHA Patent Claim On January 15, 2019, OVHA, Inc. filed a lawsuit against Unified Payments, LLC, a previous subsidiary of the Company that is no longer operating. The lawsuit which is most likely intended against our subsidiary TOT Payments, LLC dba Unified Payments (“Unified”) alleges that Unified’s Mobile POS infringes upon a patent held by OVHA. The alleged infringing part of the POS equipment is produced by a 3rd party vendor. We have engaged Intellectual Property counsel to protect our interests in this matter. Other Legal Matters During December 2017, weSeptember 23, 2021, MAI entered into a letter of intentconsulting arrangement with Bunker Capital (“Bunker”)Preferred Management Partners, Inc. The Company hereby engages Preferred Management, Inc. to resume negotiations between MAI and Qiantu Motor Cars to enable the Company to procure the intellectual property ownership rights related to the K-50 automobile. As compensation for the development of block-chain technology-based solutions, and we made a prepayment of 19,000 shares of our common stock. On February 26, 2018, we terminated the relationship with Bunker as the parties did not reach a definitiveentering into this agreement and as part of such termination, we asked Bunkerproviding services to return such shares of our common stock. The value of these shares were recorded as other expense for approximately $221,000 duringMAI, the first quarter of 2018. During the fourth quarter of 2018, we reached a settlement in-full satisfaction with Bunker, whereby we received a cash payment of $50,000. NOTE 11. RELATED PARTY TRANSACTIONS We and our subsidiary, TOT Group, Inc., previously entered into certain term loan notes with MBF, Merchant Capital, LLC ("MBF"), which were paid off during the year ended December 31, 2018 (See Note 8).  MBF is a company owned by William Healy, a former member of our Board of Directors.  On March 1, 2017, we entered into a promissory note with Star Equities, LLC, an entity which our Chairman and CEO is the managing member, in the principal amount of $348,083 (the “Star Equities Note”). The Star Equities Note provides for 18 monthly interest payments (bearing interest at 12% annually) of $3,481 through September 30, 2018 followed by one interest and principle payment on October 1, 2018. On October 20, 2017, the Company entered into and consummated a letter agreement with Star Equities, LLC (the “Exchange Agreement”). Pursuant to the Exchange Agreement, the entire outstanding amount including accrued and unpaid interest totaling $374,253 was exchanged into 67,312 restrictedconsultant will receive 750,000 unrestricted publicly traded shares of the Company’s common stock registered on Form S-8 registration statement. If the consultant is successful, the Company will pay the consultant an additional 750,000 unrestricted shares of common stock registered on Form S-8 registration statement. As of this date, the Form S-8 registration statement has not been filed; however, the transaction is properly accounted for within the prepaid account and the liability for to issue future shares on the balance sheet. Debt Financing On September 3, 2021, the Company received debt financing through MTI entering into an unsecured $6.6 million convertible note agreement with TDR Capital. The initial sale and purchase was comprised of a $550,000 convertible note and detached warrants to acquire up to 2,180,750 shares in MTI stock (169,764 MAI warrants). The second sale and purchase was comprised of a $6,050,000 convertible note and detached warrants to acquire up to 23,988,500 shares in MTI stock (1,867,423 MAI warrants). The series of funding began October 5, 2021 and ended on 11/5/2021, the aggregate F-30 Table of Contents MULLEN AUTOMOTIVE, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS funds received was $5.44 million, net of OID of 10% or $0.61 million. Refer to Note 5, Debt and Note 19, Subsequent Events. Equity Financing On May 7, 2021, MTI executed a $20,000,000 equity purchase agreement with the Acuitas Group Holdings, who committed to purchase shares of the MAI Series C Preferred Stock at a price of $8.84 per share. Upon NASDAQ uplifting and trading volume of stock, this equity will commence funding. On November 4, 2021, Acuitas Group Holdings wired $20,000,000 to MTI before the merger effective date with Net Element that occurred on November 5, 2021. As part of the transaction, Acuitas Group Holdings received 5,915,639 warrants with an adjusted exercise price of $8.83 and matures in five years. Cambria – Investment Banking Services Agreement On July 16, 2021 and September 8, 2021, MTI agreed to a proposal with Cambria a placement agent services for investment offerings up to $3,000,000. As a result of the agreement, MTI is obligated to pay a financing fee of 6.0% of aggregate gross proceeds and warrants equal to 6.0% of the offering. To date, Cambria has raised $750,000 in equity financing. The equity purchases of Series C Preferred Stock have detached warrants with strike price of $8.84. The warrants have a five-year maturity. Since the Series C Preferred Stock has not been issued to the investor due to pending merger between MAI and Net Element, the transaction is being accounted for within the prepaid account and the liability for to issue shares on the balance sheet. Table below represents the post-merger shares for equity capitalization. As of September 30, 2021, there was no issuances of Series C preferred Stock and associated warrants. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Date      Series C Preferred Stock      Warrants      Additional Warrants      Maturity Date      Exercise Price 7/23/2021 ​ $ 75,000 ​ 1,983 ​ — ​ 7/23/2026 ​ $ 8.84 7/23/2021 ​ ​ 50,000 ​ 1,322 ​ — ​ 7/23/2026 ​ $ 8.84 7/23/2021   ​ 100,000   2,644   —   7/23/2026 ​ $ 8.84 7/23/2021   ​ 75,000   1,983   —   7/23/2026 ​ $ 8.84 7/23/2021   ​ —   1,528 * 3,056 * 7/23/2026 ​ $ 8.84 9/8/2021   ​ 175,000   4,626   —   9/8/2026 ​ $ 8.84 9/8/2021   ​ 175,000   4,626   —   9/8/2026 ​ $ 8.84 9/8/2021   ​ 100,000   2,644   —   9/8/2026 ​ $ 8.84 Total ​ $ 750,000   21,356   3,056   — ​   — ● Represents placement agent fees to Cambria. Drawbridge Acknowledgement, Waiver and Consent On July 16, 2021, MTI and Drawbridge entered into an agreement whereby Drawbridge acknowledged, waived, and consented to the contribution and spin-off of Mullen’s EV assets into a new entity. As indicated in Note 1 to the financial statements, the spin-off occurred occur immediately prior to the merger with Net Element. As part of the agreement, Drawbridge was paid $10,000,000 that was applied towards the outstanding principal balance and includes a waiver of default. The principal reduction to the indebtedness to Drawbridge occurred on November 15, 2021. F-31 Table of Contents MULLEN AUTOMOTIVE, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS International Business Machines (“IBM”) We previously recorded a $4.5 million liability associated with a lawsuit with IBM, in which IBM contended that we had not fulfilled our obligations pursuant to a contract entered into during 2017. On April 28, 2020, the Supreme Court of the State of New York granted summary judgment in favor of IBM’s claim for breach of contract. The Court, however, found that a trial (inquest) was required to determine the damages to which IBM is entitled. We proposed an offer in settlement to resolve the matter, with the parties proceeding under the Joint Development and Technology License Agreement and all rights restored to us under the Trademark License Agreement. On December 1, 2021, the Supreme Court of the State of New York entered a judgment of $5.6 million to IBM. On December 2, 2021, we filed a Notice of Appeal. As a result, we recorded an additional charge, increasing the liability to the adjudicated amount. Federal and State Tax Liabilities We have recorded a $3.8 million liability at September 30, 2021 associated with past due amounts owed to the Internal Revenue Service (“IRS”) and the Employment Development Department of California (“EDD”) for failing to remit payroll taxes associated with MTI and the Company’s employees. The IRS has filed a lien on substantially all of our assets. On April 28, 2021, MTI entered into an installment agreement with the EDD to pay $10,000 per month related to unpaid state payroll tax liabilities of $388,352 plus accrued interest. Monthly payments of $10,000 are being made and will continue until paid in full. Raymond James and Associates (“RJA”) – Investment Banking Services Agreement On May 5, 2020, MTI entered into an agreement with Raymond James & Associates for public offering and placement agent services. The agreement called for payment of a cash retainer of $50,000, which remains unpaid. Upon the closing of any public offering, regardless of whether RJA procured the agreement regarding the offering, we are obligated to pay a financing fee of equal to the greater of a) 6.0% of aggregate gross proceeds and b) $3,000,000. Linghang Boao Group, LTD In November 2019, we entered into a three-year Strategic Cooperation Agreement (“SCA”) with Linghang Boao Group LTD to co-develop a Solid- State Battery Management system with a 480 - 720-mile Driving Range. The Company’s total financial commitment under the SCA is $2,196,000. On December 3, 2019, we paid the first installment of $390,000. The remaining installments are payable upon the earlier of certain dates or the achievement of defined milestones. The contractual target dates and milestones have been severely disrupted due to the occurrence COVID-19. As a result, our management believes the COVID-19 pandemic represents a Force Majeure event (that is, the pandemic has impacted our and Linghang Boao Group LTD’s ability to meet their respective contractual obligations due to restriction in movement, stoppage of production, increase in costs due to scarcity of raw materials components, labor shortages, shortage of funds, disruption in the supply chains, U.S. governmental closures of ports/borders and travel restrictions). Based on the foregoing, we believe there is no breach of contract due to our failure of performance. Unfortunately, we have sustained a loss of $390,000 at September 30, 2020 due to contract nonperformance and force majeure. There are 0 accrued liabilities recorded for any remaining milestone payments at September 30, 2021. Our management has notified Linghang Boao Group of the decision to invoke the force majeure provision of the Strategic Cooperation Agreement due to the inability of the parties to perform caused by the global Pandemic. F-32 Table of Contents MULLEN AUTOMOTIVE, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS ASC GEM Equity Line Financing On January 4, 2021, MTI entered into a $350,000,000 equity line financing agreement with GEM Global Yield LLC (“Purchaser”) and GEM Yield Bahamas Limited (“GEM”). MAI plans to issue and sell common shares to GEM up to the number of common shares having an aggregate value of $350,000,000. The Purchaser will buy MAI shares based on such shares’ consolidated closing bidthe operational needs and/or drawdowns of the Company. If the aggregate limit has been reached, the Purchaser will increase the aggregate limit in an amount up to $150,000,000. The commitment fee, equal to 2% of the Aggregate Limit, will be charged for each draw-down. The fee may be paid in cash or freely tradeable common shares of the Company. The commitment begins when we effect the public listing of MAI common stock for trading on a U.S. national securities exchange. The agreement matures in 36 months after the public listing of MAI common shares. Pursuant to the GEM Agreement, the commitment began on the “Public Listing Date”, defined as the date that we effected (i) a “Reverse Merger Transaction” (defined in the GEM Agreement as a reverse merger of a similar transaction between MAI and a special purpose acquisition company whose securities are publicly traded) or (ii) the direct listing of the Company’s common stock on a public market. Further to the GEM Agreement, we are obligated to issue warrants providing GEM the right to purchase up to 6.6% of our common shares outstanding on the Public Listing Date. As the Company is not effecting a Reverse Merger Transaction (that is, Net Element is not a special purpose acquisition company) nor is the Company effecting a direct listing of its common shares, the Company does not believe it is obligated under the GEM Agreement to pay fees nor issue warrants to GEM. In addition, the Company has agreed with a lender of its convertible promissory notes that the Company would not initiate utilization of the GEM Agreement. [HELP ME UNDERSTAND THIS – THE REVERSE MERGER INTO NET ELEMENT DID OCCUR. SO, IS THIS AGREEMENT STILL VALID?  NEED TO DISCLOSE THE PROPER RIGHTS AND OBLIGATIONS] Litigation On May 28, 2021, a Net Element shareholder filed a complaint against Net Element and Mullen Acquisition, Inc. and certain named individuals regarding the proposed merger transaction. The complaint alleges, among other things, a potential dilution of the value of Net Elements stock and a failure to act in with a fiduciary duty to its stakeholders. On September 3, 2021, a Net Element shareholder filed a lawsuit against Net Element, Mullen Technologies, Inc. and Mullen Acquisition, Inc. and certain individuals regarding the proposed merger agreement. The lawsuit alleges material omissions regarding the merger transaction and seeks to prevent the consummation of the merger agreement, as well as certain other equitable relief. Based upon information presently known to management, the Company believes that the potential liability from the May 2021 complaint and September 2021 lawsuit, if any, will not have a material adverse effect on its financial condition, cash flows or results of operations. Therefore, 0 liability has been reflected on the financial statements. Odyssey Group Settlement On August 13, 2021, MTI and Odyssey Group reached a settlement concerning disputes and differences that arose from collections on invoices and liens pending pursuant to Odyssey’s Client Account and the Odyssey Group Consulting Agreement. Odyssey alleged that the MTI owed $503,637 at March 31, 2021. The parties agreed that Odyssey would receive $50,000 and 500,000 shares of MTI common stock (pre-merger). Additionally, Odyssey will receive an equivalent of $10,000 in cash or common stock from Mullen. The obligation to pay Odyssey may be terminated by either party upon 30-days’ notice by either party. A release of liability for the amounts owed on the Consulting arrangement was signed and executed on the settlement date. The Company has issued Odyssey the 500,000 common shares worth $1.25 million and paid $50,000 in cash and common stock. The $10,000 in cash or common stock provision has not been terminated by either party. F-33 Table of Contents MULLEN AUTOMOTIVE, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTE 18 – RELATED PARTY TRANSACTIONS At September 30, 2021 and September 30, 2020, respectively, the Drawbridge Investments, LLC relationship comprised various loans and advances, common shares, and preferred shares. The Drawbridge loans are currently in default. The Common and Preferred Shares presented are shares in MTI that have been issued by MTI. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Drawbridge Related Transactions ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (Cumulative) ​ September 30, 2021 ​ September 30, 2020 Description      Loan Principal      # of Shares      FV of Shares      Loan Principal      # of Shares      FV of Shares Various Notes ​ $ 23,831,554   — ​ $ — ​ $ 23,831,554   — ​ $ — Common Shares ​   —   1,378,274 ​   14,730,560 ​   —   1,378,274 ​   14,730,560 Preferred Shares - Series A ​   —   2,335 ​   2,496,000 ​   —   2,335 ​   2,496,000 Preferred Shares - Series B ​   —   5,567,319 ​   59,501,756 ​   —   5,567,319 ​   59,501,756 Total Related Party Transactions ​ $ 23,831,554   6,947,929 ​ $ 76,728,316 ​ $ 23,831,554   6,947,929 ​ $ 76,728,316 *Shares are MTI common and preferred shares. The default interest rate on the Drawbridge loans is 28% per annum, and accrued interest is $9,465,094 at September 30, 2021. Chief Executive Officer Loans to MTI From time to time, the Company’s CEO provides loans to the Company. The outstanding balances for these loans at September 30, 2021, and September 30, 2020, are $479,914 and $236,565, respectively. Subsequent to September 30, 2021, the Company repaid their outstanding loan balance. William Miltner William Miltner is a litigation attorney who provides legal services to Mullen Technologies and its subsidiaries. Mr. Miltner also is an elected Director for MAI, beginning his term in August 2021. For the fiscal year ending September 30, 2021, Mr. Miltner received $901,398 for services rendered to us. Net billings were $890,484. Mr. Miltner has been providing legal services to us since 2020. Equity Warrants (EXCHANGE AGREEMENT and EQUITY WARRANTS) During 2020 and 2021, as part of the planned merger with Net Element, we entered into an Exchange Agreement and subsequent amendments with certain holders of convertible debt as an incentive to convert their convertible debt into shares of our series C preferred stock. In connection with this agreement, the Company issued warrants to these investors, which represents a share-based equity incentive (“Series Preferred C Investors”). Series C Preferred Investors also purchased Series Preferred C Stock with detached warrants. The warrants have a fixed and determinable price of $8.84 per common share. The fair value of the MAI warrants is $13.7 million as of September 30, 2021. F-34 Table of Contents MULLEN AUTOMOTIVE, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTE 19 – SUBSEQUENT EVENTS Company management has evaluated subsequent events through December [XX], 2021, which is the date these financial statements were available to be issued. Except as discussed below, management has determined that there were no subsequent events which required recognition, adjustment to or disclosure in the carve-out financial statements: Business Combination and Recapitalization On November 5, 2021, the Company consummated the merger with Net Element. At the effective time of the Merger, the common and preferred equity interests held by our then investors were cancelled, and the investors received their respective shares of Common Stock, Series A Preferred Stock, Series B Preferred Stock and Series C Preferred Stock in Net Element, Inc. (which was renamed Mullen Automotive, Inc.) Prior to the Merger, Net Element, Inc. transferred its assets and liabilities to RBL Capital Group LLC (“RBL”) in full satisfaction of the outstanding loan balance owed to RBL by Net Element and its subsidiary or affiliated entities pursuant to a Divestiture Agreement, dated July 20, 2021, which was filed with the Registration Statement. Pursuant to ASC 805, for financial accounting and reporting purposes, Mullen Automotive, Inc. was deemed the accounting acquirer and Net Element was treated as the accounting acquiree, and the Business Combination was accounted for as a reverse merger transaction. Debt and Equity Financing Exchange Agreement (Convertible Debt to Equity Conversion) On October 25, 2021, MTI amended the exchange agreement to include the $1,100,000 debt financing and detached warrants with JADR Consulting Group PTY Limited. The agreement represents Amendment No. 6 and Joinder to the Exchange Agreement that was originally signed on May 7, 2021 and amended on May 20, 2021. Upon consummation of the proposed merger with Net Element, the investors agreed to exchange the convertible debt for shares of MAI’s Series C Preferred Stock, par value $0.001 per share. The NASDAQ Stock Market onright to additional purchases of preferred stock expires 12 months from the merger close date between Net Element and MAI. Assignment and Assumption of Rights On October��25, 2021, JADR Consulting Group PTY Limited and TDR Capital entered into agreement of Assignment and Assumption of Rights. On September 3, 2021, the Assignor (“TDR Capital”) agreed to purchase $6,600,000 in convertible debt and warrants to acquire 2,037,164 shares of MAI common stock. The Assignor has agreed with the Assignee (“JADR Consulting Group PTY Limited”) to assign al rights, title and interest in the aggregate original amount of $3,300,000 and warrants to acquire 1,201,521 shares of MTI common stock for the aggregate purchase price of $3,000,000. The funding would occur between October 27, 2021 and November 4, 2021. On October 27, 2021, Amendment No. 6 and Joinder to the Exchange Agreement was modified to reflect the changes of the Assignment and Assumption of Rights document. Convertible Debt Issuances and Warrants On November 4, 2021, we received debt financing through MTI entering into an unsecured $1.1 million convertible note agreement with JADR Consulting Group PTY Limited. The convertible note is issued at OID of 10% ($0.1 million); carries an interest rate of 15% and has a maturity date of one year. The convertible note is unsecured and includes detached warrants to acquire up to 417,375 shares of MAI common stock. The warrant exercise price is $8.84 per common share F-35 Table of Contents MULLEN AUTOMOTIVE, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS and expires five years from the date of issuance. The number of shares issuable upon conversion of the Exchange Agreement (See Note 12). F-19 Tableconversion amount is determined according to the formula:  Conversion Amount/Conversion Price, subject to certain adjustments. However, upon conversion, JADR Consulting Group PTY Limited (together with its affiliates) is limited to a 9.9% ownership cap in shares of Contents DuringMTI’s common stock then outstanding, after giving effect to the years ended December 31, 2018 and 2017, agent commissions resulting from merchant processingissuance of approximately $72,000 and $98,000, respectively, were paid to Prime Portfolios, LLC, an entity owned by Oleg Firer, our Chairman and CEO, and Steven Wolberg, our Chief Legal Officer. In addition, key memberscommon stock issuable upon exercise of management owned companies received similar commissions and/or reimbursement for equipment purchased on the company’s behalf, amounted to approximately $739,000 and $346,000 for the years ended December 31, 2018 and 2017, respectively.  At December 31, 2018 and 2017, we had accrued expenses of approximately $388,000 and $462,000, respectively, which consisted primarily of various travel, professional fees, and other expenses paid and charged for by our CEO on his personal credit cards. This is reflected as due to related party on the accompanying consolidated balance sheets. NOTE 12. STOCKHOLDERS’ EQUITY warrants. On October 5, 2017, we effectedNovember 4, 2021, the Company received debt financing through MTI entering into an one-for-ten reverse stock splitunsecured $110K convertible note agreement with Michael Friedlander. The convertible note is issued with OID of our10% or $10K; carries an interest rate of 15% and has a maturity date of one year. The convertible note is unsecured and includes detached warrants to acquire up to 30,872 shares of MAI common stock. Our condensed consolidated financial statementsThe warrant exercise price is $8.84 per common share and disclosures reflect these changesexpires five years from the date of issuance. The number of conversions shares issuable upon conversion of the conversion amount shall be determined according to the formula:  Conversion Amount/Conversion Price , subject to certain adjustments. However, upon conversion, Michael Friedlander (together with his affiliates) is limited to a 9.9% ownership cap in capital structure for all periods presented.shares of MTI’s common stock then outstanding after giving effect to the issuance of common stock issuable upon exercise of the warrants. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​      ​ ​ ​      Default      ​      ​      ​      ​      ​ ​ Date of ​ Convertible ​ Interest ​ Interest ​ Maturity ​ Warrants ​ Additional ​ Exercise ​ Exercise Issuance ​ Note ($) ​ Rate ​ Rate ​ Date ​ (#) ​ Warrants ​ Date ​ Price ($) 10/27/2021 ​ $ 550,000 * 15 %   20 %   10/27/2022   208,687   27,246   10/27/2026 ​ $ 8.84 10/27/2021 ​   —   —   —   —   —   116,770   10/27/2026 ​ $ 8.84 10/27/2021 ​   1,100,000   15 %   20 %   10/27/2022   417,375   —   10/27/2026 ​ $ 8.84 11/4/2021 ​   2,750,000 * 15 %   20 %   11/4/2022   848,818   —   11/4/2021 ​ $ 8.84 11/4/2021 ​   110,000   15 %   20 %   11/4/2022   30,872   —   11/4/2026 ​ $ 8.84 Total ​ $ 4,510,000   —   —   —   1,478,752   144,016   — ​   — *Assumption and assignment of $3,300,000 in convertible debt and warrants, which included 144,016 in additional warrants. $30M common stock purchase On June 12, 2015September 1, 2021, MAI (through MTI) and June 13, 2016, our shareholders approved 100,000,000 increases in our authorized common stock to 300,000,000 and 400,000,000, respectively. On October 2, 2017, our shareholders approved a 300,000,000 decrease in our authorized common stock to 100,000,000. Agreement with Cobblestone On July 5, 2017, the CompanyEsousa Holdings, LLC entered into a common stock purchase agreement (the “CobblestoneSecurities Purchase Agreement”) with Cobblestone Capital PartnersAgreement, whereby the Esousa Holdings, LLC (“Cobblestone Capital”) which provided that, upon the terms and subject to the conditions and limitations set forth therein, Cobblestone Capital was committed to purchase up to an aggregate of $10 million of$30,000,000 common shares of our common stock over the 30-month term of the Cobblestone Purchase Agreement. In consideration for entering into the Cobblestone Purchase Agreement, we were obligated to issue to Cobblestone Capital such number of shares of common stock that would have a value equivalent to $200,000 calculated using the average of volume weighted average price for the common stock during the 3 trading days period immediately preceding the date of issuance of such shares. Accordingly, on August 3, 2017, we issued to Cobblestone Capital 45,676 shares of common stock based on a price of $4.38 per share. In connection with this Cobblestone Purchase Agreement, we issued approximately 1.3 million shares of our common stock during 2017 for an approximate amount of $6.2 million, at an average price of $4.71 per share. Equity Incentive Plan Activity On December 5, 2013, our shareholders approved the Net Element International, Inc. 2013 Equity Incentive Plan (as amended to date, the “2013 Plan”). Awards under the 2013 Plan may be granted in any one or all of the following forms: (i) incentive stock options meeting the requirements of Section 422 of the Internal Revenue Code of 1986, as amended; (ii) non-qualified stock options (unless otherwise indicated, references to “Options” include both Incentive Stock Options and Non-Qualified Stock Options); (iii) stock appreciation rights, which may be awarded either in tandem with Options or on a stand-alone basis; (iv) shares of common stock that are restricted; (v) units representing shares of common stock; (vi) units that do not represent shares of common stock but which may be paid in the form of common stock; and (vii) shares of common stock that are not subject to any conditions to vesting. On November 27, 2018, our shareholders approved an amendment to the 2013 Plan to increase the number of shares of the Company’s common stock available for issuance by 178,900 shares resulting in the aggregate of 773,000 shares authorized for issuance under the 2013 Plan, which represents in the aggregate approximately 20% of our issued and outstanding stock as of December 31, 2018. The maximum aggregate number of shares of common stock available for award under the 2013 Plan at December 31, 2018 and 2017 was 323,498 and 168,374, respectively. The 2013 Plan is administered by the compensation committee. 2013 Equity Incentive Plan - Unrestricted Shares and Stock Options During the years ended December 31, 2018 and 2017, we issued common stock pursuant to the 2013 Plan to the members of our Board of Directors and recorded a compensation charge of $85,786 and $130,499, respectively. At December 31, 2018 and 2017, we had 74,004 incentive stock options outstanding with a weighted average exercise price of $15.52 and a weighted average remaining contract term of 7.77 years and 8.77 years, respectively. All of the stock options were anti-dilutive at December 31, 2018 and 2017. On February 28, 2017, the Compensation Committee of our Board of Directors approved and authorized grants of the following equity awards to our employees and consultants of the Company pursuant to the 2013 Plan: (i) 45,105 qualified options to acquire shares of our common stock (50% of such options vesting immediately and the balance 50% of such options vesting in 4 equal proportions quarterly after the grant date) and (ii) 62,668 restricted shares of our common stock (50% of such shares vesting immediately and the balance 50% of such shares vesting in 4 equal proportions quarterly after the grant date). On December 28, 2017, the Compensation Committee of our Board of Directors approved and authorized grants for 134,161 fully vested, incentive equity awards to our employees, directors and consultants pursuant to the 2013 Plan. F-20 Table of Contents Agreement with Crede CG III, Ltd. On May 2, 2016, we entered into a Master Exchange Agreement with Crede (the “Master Exchange Agreement”), an entity that purchased a portion our previously issued notes held by RBL. Pursuant to the Master Exchange Agreement, we have the right to request that Crede exchange up to $3,965,000 of the RBL promissory notes for shares of our common stock. On March 3, 2017, we entered into an Amendment to Master Exchange Agreement with Crede, which extended the expiration date of the Master Exchange Agreement from December 31, 2016 to August 31, 2017. Accordingly, this extended the time to which we had the right to request Crede to exchange previously issued RBL promissory notes for shares of the Company’s common stock on the terms and conditions as set forth in the Master Exchange Agreement. For the year ended December 31, 2017, we exchanged 60,944 shares of our common stock with Crede for an aggregate of $330,969 of the original $3,315,000 RBL promissory note partially purchased by Crede, based on an average per share exchange price of $6.83. The exchange included a non-cash exchange premium $52,972. Agreements with ESOUSA Holdings On July 6, 2016, we entered into a common stock purchase agreement (“Purchase Agreement”), with ESOUSA Holdings, LLC, a New York limited liability company (“ESOUSA”), which provides that ESOUSA is committed to purchase up to an aggregate of $10 million of our shares of common stock over the 30-month term of the Purchase Agreement. In consideration for entering into the Purchase Agreement, we issued shares of our common stock with a value equivalent to $200,000, as a commitment fee to ESOUSA.twelve-month period. The number of shares waspurchased is based on a set of conditions. The number of common shares is calculated usingby multiplying 125% by $2,500,000 and then dividing by the average of volume weighted averageclosing sale price for ourthe trading day immediately after the last closing trade price for MAI securities reported on the principal securities exchange or trading market is listed or trading. The initial closing date is based on the close of the reverse merger transaction with Net Element, which occurred on November 5, 2021. The Company must file a SEC registration statement covering the sale of the Registrable securities by MAI and be declared effective before the purchases of common stock duringcommences. Lastly, the 3 trading day period immediately precedingagreement contains a provisions that the datepurchase of issuancecommon stock can vary based on an adjustment of such shares.upward or downward based on closing price calculation that must be calculated each month. $15M Note Receivable Transaction In connection with the aforementioned ESOUSASecurities Purchase Agreement we issued the 168,266 On October 8, 2021, MAI (through MTI) and CEOcast, Inc. entered into an agreement, whereby CEOCast, Inc. irrevocably committed to purchase, and MAI irrevocably committed to sell $15 million in warrants to acquire shares of our common stock at an average per share price of $8.45 to ESOUSA during the year ended December 31, 2017. There were no shares issued in connection with this Purchase Agreement for the year ended December 31, 2018. On December 29, 2017, we entered into, and consummated a unit purchase agreement with ESOUSA. Pursuant to the unit purchase agreement, we sold to ESOUSA (i) 350,553 shares of our common stock, par value $0.0001, at a purchase price of $11.12 per share (i.e., a price equal to the our consolidated closing bid price per share as reported by the Nasdaq); (ii) an aggregate of 404,676 five-year warrants to purchase shares of our common stock at a purchase price of $0.125 per share and exercise price of $11.12 per share; and (iii) an aggregate of 323,907 five-year pre-paid warrants to purchase shares of our common stock with exercise price of $0.01 per share.stock. The aggregate purchase price will be paid to MTI at closing by means of a full recourse promissory note. MAI will issue warrants that are registered in the name of CEOcast, Inc. F-36 Table of Contents MULLEN AUTOMOTIVE, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Promissory Note On October 8, 2021, CEOcast, Inc. committed to pay to MAI (through MTI) in the principal amount of $15 million. The note receivable bears 0 interest, and the payment of principal will be made in 6 equal monthly installments beginning on the first business day of the calendar month after warrants. Pre-Funded Common Stock Warrants (Penny Warrants) On October 8, 2021, CEOcast, Inc. is entitled to receive warrants (this “Warrant”) issued by the Company in connection with the note receivable transaction contemplated within the Securities Purchase Agreement. The warrant structure is pre-funded, meaning that it allows MTI to receive the exercise price of a not pre-funded warrant, except for the nominal exercise price, at the time of warrant issuance rather than the time of exercise. The aggregate exercise price of the warrant is $0.001 per warrant share. The number of common shares is calculated by multiplying 125% by $2,500,000 and then dividing by the closing sale price for the trading day immediately after the sale price for the trading day immediately after the last closing trade price for MAI securities reported on the principal securities exchange or trading market is listed or trading. The initial closing date is based on the close of the reverse merger transaction with Net Element, which occurred on November 5, 2021. We are obligated to file a registration statement with the SEC covering the sale of the Registrable securities by MAI, which would be declared effective before commencement of the purchases of common stock. Equity Swap Agreement On October 8, 2021, the agreement was approximately $7.6 million.entered into between CEOcast, Inc. and MAI (through MTI) for the purposes of adjusting the number of warrant shares initially issued to CEOcast, Inc. The readjustment of shares will coincide with the schedule outlined within the Equity Swap Agreement. The schedule is to perform the warrant share calculation on the first business day of each month for the next six months beginning after the effective date of the reverse merger and the registration of common shares. Other Stock Issuances Drawbridge Acknowledgement, Waiver and Consent On July 19, 2017, we issued 30,759 shares for16, 2021, the Company and Drawbridge entered into an agreement whereby Drawbridge acknowledged, waived, and consented to the contribution and spin-off of Mullen’s EV assets into a $252,223 partial settlementnew entity. As indicated in Note 1 to the financial statements, the spin-off occurred immediately prior to the consummation of our $1.4 million reserve liability assumedthe merger with Net Element. As part of the PayOnline acquisition (See Note 7).agreement, Drawbridge was paid $10,000,000, to be applied towards the outstanding principal balance and includes a waiver of default. The principal pay down to Drawbridge occurred on November 15, 2021. Release of Liability, Debt Paydowns and Payoffs On February 28, 2017,December 27, 2021, the Compensation CommitteePar Funding/CBSG debt of $78,904 has been satisfied and is longer a viable debt and should be removed from the books as a liability. The determination was made by Daniel Stermer, authorized agent for the United States Trustee. On November 29, 2021, MAI (through MTI) repaid the $140,000 loan from the NY Group, which had matured on January 24, 2021. On November 29, 2021, MAI (through MTI) repaid the $25,000 loan from MABM Holdings loan, which matured on January 13, 2021. F-37 Table of Contents MULLEN AUTOMOTIVE, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS On November 11, 2021, the Company executed a release of liability for the EXIM relationship. MAI (through MTI) paid $1,750,000 to EXIM USA to dismiss or release any and all claims, causes of action, lawsuits or other demands upon MTI. The loan matured on October 31, 2019, and the then current balance on the loan was $700,000 plus interest. On November 9, 2021, the Company executed a release of liability for the Elegant Funding relationship. The lending relationship covered two transactions: 1. $458,000 loan dated May 23, 2018, which had matured on November 23, 2018. The current principal balance was $438,000, and the payoff amount was $604,770. 2. $185,000 dated September 29, 2018, which had matured on March 29, 2019. The current principal balance is $185,000, and the payoff amount is $222,426. On November 9, 2021, MAI (through MTI) repaid a loan from John Gordon, which had matured on May 7, 2019. In consideration for the payoff, MAI (through MTI) received the title to 1 (1) Qiantu Dragonfly K50 EV car. Tunica, MS Production Facility – Purchase On November 12, 2021, Mullen completed the $12,000,000 purchase of the Tunica County, MS property (“Advanced Manufacturing and Engineering Center” or “AMEC”). The property is approximately 127,400sf EV manufacturing facility and a small shed for storage. The property is located at 1 Greentech Drive, in the City of Robinsonville, MS. AMEC will be used to class 1 and class 2 EV cargo vans and the Mullen FIVE Crossover. The facility currently occupies 124,000 square feet of manufacturing space. The total available land on the property is over 100 acres. On the expanded site, Mullen plans to build a body shop, fully automated paint shop and a general assembly shop. Show Car Development On November 17, 2021, MAI debuted the Mullen FIVE Crossover at the LA Auto Show and was awarded Top SUV Zero Emission Vehicle. Mullen had 2 variants of the FIVE model on display while also showcasing powertrain, battery and charging technology. The cost of the two cars was approximately $4.1 million. Employment Agreements On November 5, 2021, MAI assumed liabilities, including employment agreements, from MTI as part of the reverse merger transaction with Net Element. On November 15, 2021, MTI entered into an employment agreement with Shawn Hughes as the President of OEM Franchising of MAI. According to the employment agreement, he will receive an annual salary of $240,000 and 100,000 shares per year. On October 25, 2021, MTI entered into an employment agreement with Kerri Sadler as the Chief Financial Officer of MAI. According to the employment agreement, she will receive an annual salary of $350,000 and 300,000 shares per year. On September 14, 2021, MTI entered into an employment agreement with Jillian Green as the Vice President of Business and Legal Affairs of MAI. According to the employment agreement, she will receive an annual salary of $300,000 and 30,000 shares per year. On July 1, 2021, MTI entered into an employment agreement with Jerry Alban as the Chief Operating Officer of MAI. According to the employment agreement, he will receive an annual salary of $350,000 and 300,000 shares per year. F-38 Table of Contents MULLEN AUTOMOTIVE, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Consulting Agreements On October 26, 2021, MAI entered into a consulting agreement with Mary Winters, Corporate Secretary and Director, to compensate for Corporate Secretary Services and director responsibilities for the period of October 1, 2021, for one fiscal year ending September 30, 2022, in the amount of $60,000 annually or $5,000 per month. On January 1, 2021, MAI entered into a consulting agreement with Connection Management to perform services in the following areas: creation and implementation of a marketing plan to the independent auto dealer community, consult in the areas of auto finance, and aftermarket product development, target marketing promotions within the auto reseller community. The agreement was signed by the Company and Shawn Hughes, who is the principal for Connection Management. The consulting contract was terminated on November 15, 2021, when Mr. Hughes became an employee of MAI. Director Fees Our board of directors adopted a non-employee director compensation policy, which we expect will became effective in August 2021. Under the non-employee director compensation policy, our non-employee directors are expected to be eligible to receive compensation for service on our board of directors and committees of our board of directors as follows: ● Each non-employee director is entitled to receive $25,000 annually as a cash retainer for their board service, with additional annual cash retainers of (i) $2,000 for each member of our compensation committee or nominating and governance committee; (ii) $5,000 for the chairman of our compensation committee or nominating and governance committee; (iii) $8,000 for each member of our audit committee; and (iv) $45,000 for the chairman of our audit committee. All cash retainers are paid quarterly in arrears. ● Additionally, each non-employee director shall receive an annual stock option award under the 2021 Plan to purchase such number of shares of our Class A common stock that will equal $75,000 divided by the closing trading price of our Class A common stock on the date of each such grant, which will vest one year from the date of grant. Upon the occurrence of certain corporate events, including a change of control of the Company, all such stock option awards will immediately vest. The initial annual stock option award will be awarded to each of our non-employee directors in connection with the S-8 registration statement which will be filed in December 2021. Our non-employee directors are entitled to Oleg Firer, our Chairmanreimbursement of ordinary, necessary and Chief Executive Officer, 47,139 restricted sharesreasonable out-of-pocket travel expenses incurred in connection with attending in-person meetings of our common stock as a performance bonus, which shareholders approved October 2017. The share award was made outsideboard of directors or committees thereof. In the 2013 Planevent our non-employee directors are required to attend greater than 4 in-person meetings or 12 telephonic meetings during any fiscal year, such non-employee directors shall be entitled to additional compensation in the amount of $500 for each additional telephonic meeting beyond the 12 telephonic meeting thresholds, and these shares were issued in October 2017. In addition,$1,000 for each additional in-person meeting beyond the Compensation Committee approved a $300,000 discretionary cash performance bonus to Oleg Firer which was paid in March, 2018.four in-person meeting threshold. ​ On October 20, 2017, the Company entered into and consummated the Exchange Agreement with Star Equities, LLC relating to the Star Equities Note (see Note 11). ​ F-39 Table of Contents SIGNATURES Pursuant to the Exchange Agreement, the entire outstanding amountrequirements of Section 13 or 15(d) of the Star Equities Note including accruedSecurities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. ​ ​ ​ ​ Mullen Automotive Inc. ​ ​ ​ December 29, 2021 ​ By: /s/ David Michery ​ ​ David Michery ​ ​ Chief Executive Officer, President and Chairman of the Board ​ ​ POWER OF ATTORNEY KNOW ALL PERSONS BY THESE PRESENTS, that each of Mullen Automotive Inc., a Delaware corporation (the “Company”), and unpaid interest totaling $374,253 was exchanged into 67,312 restricted sharesthe undersigned Directors and Officers of Mullen Automotive Inc. hereby constitute and appoint David Michery and Kerri Sadler as the Company’s or such Director’s or Officer’s true and lawful attorneys-in-fact and agents, for the Company or such Director or Officer and in the Company’s or such Director’s or Officer’s name, place and stead, in any and all capacities, with full power to act alone, to sign any and all amendments to this report, and to file each such amendment to this report, with all exhibits thereto, and any and all documents in connection therewith, with the Securities and Exchange Commission, hereby granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform any and all acts and things requisite and necessary to be done in connection therewith, as fully to all intents and purposes as the Company or such Director or Officer might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them may lawfully do or cause to be done by virtue hereof. Pursuant to the requirements of the Company’s common stock, basedSecurities Exchange Act of 1934, this report has been signed below by the following persons on such shares’ consolidated closing bid price on The NASDAQ Stock Marketbehalf of the registrant and in the capacities and on the date of the Exchange Agreement.dates indicated. ​ ​ ​ ​ ​ Signature ​ Title ​ Date ​ ​ ​ ​ ​ /s/ David Michery ​ Chief Executive Officer, President and ​ December 29, 2021 David Michery ​ ​ Chairman of the Board (Principal Executive Officer) ​ ​ ​ ​ ​ ​ /s/ Kerri Sadler ​ Chief Financial Officer ​ December 29, 2021 Kerri Sadler ​ (Principal Financial and Accounting Officer) ​ ​ ​ /s/ Jerry Alban ​ Chief Operating Officer and Director ​ December 29, 2021 Jerry Alban ​ ​ ​ ​ ​ ​ ​ ​ ​ /s/ Mary Winter ​ Secretary and Director ​ December 29, 2021 Mary Winter ​ ​ ​ ​ ​ ​ ​ ​ /s/ Kent Puckett ​ Director ​ December 29, 2021 Kent Puckett ​ ​ ​ ​ ​ ​ ​ ​ /s/ Mark Betor ​ Director ​ December 29, 2021 Mark Betor ​ ​ ​ ​ ​ ​ ​ ​ ​ /s/ William Miltner ​ Director ​ December 29, 2021 William Miltner ​ ​ ​ ​ ​ ​ ​ ​ ​ /s/ Jonathan New ​ Director ​ December 29, 2021 Jonathan New ​ ​ ​ ​ ​ ​ NOTE 13. WARRANTS AND OPTIONS​ 72 Options In February 28, 2017, we granted options to acquire 45,106 shares of common stock at an exercise price of $8.10 per share over a 10-year term. At December 31, 2018 and 2017, we had fully vested options outstanding to purchase 234,218 shares of common stock, net of 4,497 options which have expired, at exercise prices ranging from $8.10 to $134.00 per share. The remaining contractual life of these options range from 8.17 to 1.70 years as of December 31, 2018. Due to the high level of volatility in the stock price of our common stock, our management determined the grant date fair value of the options granted during the year ended December 31, 2017 using the then quoted stock price at the grant date. There were no options granted during 2018. Warrants In 2013, our predecessor entity (then known as Cazador Acquisition Corporation Ltd.) issued warrants to purchase 89,400 shares (reverse split adjusted) of common stock in connection with its private placement and initial public offering (the “Prior Warrants”). These Prior Warrants expired on October 1, 2017. In connection with the aforementioned unit purchase agreement with ESOUSA, on December 29, 2017 we issued (i) an aggregate of 404,676 five-year warrants to purchase shares of Company common stock at a purchase price of $0.125 per share and exercise price of $11.12 per share; and (ii) an aggregate of 323,907 five-year pre-paid warrants to purchase shares of Company common stock with an exercise price of $0.01 per share. At December 31, 2018 and 2017, we had warrants outstanding to purchase 728,583 shares of common stock, net of 89,389 warrants that have expired. At December 31, 2018, these warrants had a weighted average exercise price of $6.18 per share purchased and a weighted average remaining contractual term of 4 years. There were no warrants granted during 2018. F-21 Table of Contents ​ 73 Non-Incentive Plan Options At December 31, 2018 and 2017, we had 323,498 non-incentive options outstanding with a weighted-average exercise price of $21.84. The non-incentive options have a remaining contract term of 1.92 years at December 31, 2018. These options were out of the money at December 31, 2018 and 2017 and had no intrinsic value. NOTE 14. INCOME TAXES The components of income (loss) before income tax provision are as follows:     December 31,     December 31,       2018     2017   United States   $ (11,214,581 )   $ (7,865,421 ) Foreign     7,206,912       (2,157,628 )     $ (4,007,669 )   $ (10,023,049 ) There was no current U.S. income tax or deferred income tax provision for years ended December 31, 2018 and December 31, 2017. There were current foreign tax provisions of $67,002 and $70,033 for the years ended December 31, 2018 and December 31, 2017, respectively, which are included as part of accrued expenses. The following is a reconciliation of the effective income tax rate with the U.S. federal statutory income tax rate at:     December 31,     December 31,       2018     2017   U. S. Federal statutory income tax rate     21.00 %     34.00 % State income tax, net of federal tax benefit     5.10 %     4.10 % Currency translation adjustment     5.20 %     (2.20 %) Foreign income tax     1.70 %     (0.90 %) Difference in foreign tax rates     (2.10 %)     5.20 % Change in valuation allowance     (29.20 %)     (28.90 %) Change in tax rates     -       (12.20 %) Effective income tax rate     1.7 %     (0.90 %) The effective tax rate on operations of 1.7% at December 31, 2018 varied from the statutory rate of 21%, primarily due to the permanent difference related to difference in foreign tax rates and the increase in our valuation allowance. The effective rate on operations of -0.9% at December 31, 2017 varied from the statutory rate of 34% primarily due to the permanent difference related to difference in foreign tax rates and the increase in our valuation allowance. On December 22, 2017, President Trump signed into law the “Tax Cuts and Jobs Act” (TCJA) that significantly reformed the Internal Revenue Code of 1986, as amended. The TCJA, among other things, reduces the corporate tax rate to 21 percent beginning with years starting January 1, 2018. Because a change in tax law is accounted for in the period of enactment, the deferred tax assets and liabilities have been adjusted to the newly enacted U.S. corporate rate, and the related impact to the tax expense has been recognized in the current year. A new federal tax on Global Intangible Low – Taxed Income (GILTI) was enacted for the tax year beginning after December 31, 2017. The GILTI rules require US corporations to include in taxable income current year net earnings of their foreign subsidiaries that are controlled foreign corporations.  Significant components of our deferred tax assets and liabilities are as follows:     December 31,     December 31,       2018     2017   Deferred tax assets:                 Net operating loss carry forwards   $ 15,657,776     $ 14,800,451   Stock based compensation     (356,049 )     741,275   Basis difference in goodwill     1,161,577       1,471,976   Basis difference in fixed assets     -       8,792   Basis difference in intangible assets     1,564,483       1,313,547   Allowance for bad debt (US)     -       -   Stock price guarantee adjustment     -       -   Valuation allowance for deferred tax assets     (18,027,787 )     (18,336,041 ) Total deferred tax assets     -       -                     Deferred tax liabilities:                 Basis difference in goodwill     -       -   Basis difference in fixed assets     -       -   Basis difference in intangible assets     -       -   Total deferred tax liabilities     -       -                     Net deferred taxes   $ -     $ -   F-22 Table of Contents Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts of assets and liabilities used for income tax purposes. According to the GILTI rules, the income from foreign corporations reduce the net operating losses (‘NOLs”). At December 31, 2018, we had cumulative federal and state NOLs carry forwards of approximately $67.3 million. At December 31, 2017, we had cumulative federal and state NOLs carry forwards of approximately $56.8 million. We also have $6.8 million and $14.0 million in foreign NOLs as of December 31, 2018 and 2017, respectively. The valuation allowance was increased by $0.3 million in fiscal year 2018. The fiscal 2018 increase was primarily related to additional operating loss incurred, and difference in tax and book basis of goodwill and other intangible assets. We have considered all the evidence, both positive and negative, that the NOLs and other deferred tax assets may not be realized and have recorded a valuation allowance for $17.8 million. The NOLs arising in the tax year beginning before January 1, 2018 can be carried back two years and forward twenty years. The NOLs arising in the tax year beginning after December 31, 2017 can only offset 80% of taxable income in any given tax year, but the remaining can be carried forward indefinitely. The timing and manner in which we will be able to utilize some of its NOLs is limited by Section 382 of the Internal Revenue Code of 1986, as amended (IRC). IRC Section 382 imposes limitations on a corporation’s ability to use its NOLs when it undergoes an “ownership change.” Generally, an ownership change occurs if one or more shareholders, each of whom owns 5% or more in value of a corporation’s stock, increase their percentage ownership, in the aggregate, by more than 50% over the lowest percentage of stock owned by such shareholders at any time during the preceding three-year period. Because on June 10, 2014, we underwent an ownership change as defined by IRC Section 382, the limitation applies to us. The losses generated prior to the ownership change date (pre-change losses) are subject to the Section 382 limitation. The pre-change losses may only become available to be utilized by the Company at the rate of $2.4 million per year. Any unused losses can be carried forward, subject to their original carryforward limitation periods. In the year 2018, approximately $2.4 million in the pre-change losses was released from the Section 382 loss limitation. Since the ownership change, the cumulative amount of NOLs released from Section 382 was approximately 10.9 million. The Company can still fully utilize the NOLs generated after the change of the ownership, which was approximately $20.6 million. Thus, the total of approximately $31.5 million as of December 31, 2018 is available to offset future income. The open United States tax years subject to examination with respect to our operations are 2015, 2016 and 2017. NOTE 15. OTHER INCOME Included in net other income for the year ended December 31, 2018, in the accompanying statement of operations and comprehensive loss, is approximately $675,000 for a reversal of an accounts payable recorded by the Company in a previous year not deemed to be payable, per statutory requirements. NOTE 16. SEGMENT INFORMATION Prior to the fourth quarter of 2017, we had three reportable business segments: (i) North American Transaction Solutions, for electronic commerce (ii) Mobile Solutions (Russia Federation and CIS) and (iii) Online Solutions. Management determines the reportable segments based on the internal reporting information necessary to evaluate performance and to assess where to allocate resources.  In addition, management considers certain other factors, such as, the increased growth in our North American Transactions Solutions segment and the consolidation of our mobile solutions business with our online solutions business, which has changed how management evaluates performance and allocates resources. We now have two reportable business segments (i) North American Transaction Solutions and (ii) International Transaction Solutions. Our reportable segments are business units that offer different products and services in different geographies. The reportable segments are each managed separately because they offer distinct products, in distinct geographic locations, with different delivery and service processes. North America Transaction Solutions Our North American Transaction Solutions business segment consists of the former Unified Payments business and Aptito. This segment operates primarily in North America. In March 2013, we acquired all of the business assets of Unified Payments, a provider of comprehensive turnkey, payment processing solutions to small and medium size business owners (merchants) and independent sales organizations across the United States. In April 2013, we purchased 80% of Aptito, a cloud-based Software-as-a-Service (“SaaS”) restaurant management solution, which provides integrated POS, mPOS, Kiosk, Digital Menus functionality to drive consumer engagement via Apple® iPad®-based POS, kiosk and all other cloud-connected devices.  International Transaction Solutions Our International Transaction Solutions segment consists of PayOnline, which includes our mobile payments operations, primarily located in Russia. PayOnline provides a secure online payment processing system to accept bank card payments for goods and services. In June 2012, we formed our subsidiary, OOO TOT Money to develop a business in mobile commerce payment processing. TOT Money launched its initial operations in Russia as a payment facilitator using SMS (short message services, which is a text messaging service) and MMS (multimedia message services) for mobile phone subscribers in Russia. During 2015, we changed or business model, rebranded our name to Digital Provider, and began to offer branded content to subscribers. During 2017 we combined Digital Provider into PayOnline. There was no branded content provided during the year ended 2018. F-23 Table of Contents Segment Summary Information Geographic Summary Information     2018 Revenues     2018 Long- Lived Assets     2017 Revenues     2017 Long- Lived Assets   North America   $ 59,138,552     $ 13,672,169     $ 51,138,327     $ 9,778,888   Russia and CIS     6,648,265       2,406,732       8,926,497       3,511,403   The following tables present financial information of our reportable segments at and for the years ended December 31, 2018 and 2017. The “corporate and eliminations” column includes corporate expenses and intercompany eliminations for consolidated purposes. Twelve months ended December 31, 2018   North American Transaction Solutions     International Transaction Solutions     Corp Exp & Eliminations     Total   Net revenues   $ 59,138,552     $ 6,648,265     $ -     $ 65,786,817   Cost of revenues     50,545,759       5,071,412       -       55,617,171   Gross Margin     8,592,793       1,576,853       -       10,169,646   Gross margin %     15 %     24 %     -       15 % General and administrative     2,490,811       1,970,757       5,297,120       9,758,688   Non-cash compensation     -       -       142,017       142,017   Provision for bad debt     2,121,131       24,294       -       2,145,425   Depreciation and amortization     1,898,784       555,853       -       2,454,637   Interest expense (income), net     833,494       (33,944 )     47,629       847,179   Impairment charge relating to goodwill     -       636,000       -       636,000   Other (income) expense     (647,040 )     (8,248,059 )     8,103,532       (791,567 ) Net (loss) income for segment   $ 1,895,613     $ 6,671,952     $ (13,590,298 )   $ (5,022,733 ) Goodwill     6,671,750       2,336,002       -       9,007,752   Other segment assets     16,431,351       324,910       -       16,756,261   Total segment assets   $ 23,103,101     $ 2,660,912     $ -     $ 25,764,013   Twelve months ended December 31, 2017   North American Transaction Solutions     International Transaction Solutions     Corp Exp & Eliminations     Total   Net revenues   $ 51,138,327     $ 8,926,497     $ -     $ 60,064,824   Cost of revenues     44,265,264       6,971,948       -       51,237,212   Gross Margin     6,873,063       1,954,549       -       8,827,612   Gross margin %     13 %     22 %     -       15 % General and administrative     3,251,547       3,033,360       4,344,866       10,629,773   Non-cash compensation     -       -       2,940,424       2,940,424   Provision for bad debt     1,408,908       (89,260 )     1,200       1,320,848   Depreciation and amortization     1,480,603       1,053,382       -       2,533,985   Interest expense (income), net     997,429       (34,776 )     226,969       1,189,622   Other income     48,549       178,576       8,884       236,009   Net loss for segment   $ (313,973 )   $ (2,186,733 )   $ (7,522,343 )   $ (10,023,049 ) Goodwill     6,671,750       2,972,002       -       9,643,752   Other segment assets     21,563,571       1,124,107       -       22,687,678   Total segment assets   $ 28,235,321     $ 4,096,109     $ -     $ 32,331,430   F-24