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:

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.

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 right to additional purchases of preferred stock expires 12 months from the merger close date between Net Element and MAI.

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.

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 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 MTI’s common stock then outstanding, after giving effect to the issuance of common stock issuable upon exercise of the warrants.

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 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 shares of MTI’s common stock then outstanding after giving effect to the issuance of common stock issuable upon exercise of the warrants.

*Assumption and assignment of $3,300,000 in convertible debt and warrants, which included 144,016 in additional warrants.

$30M common stock purchase

On September 1, 2021, MAI (through MTI) and Esousa Holdings, LLC entered into a Securities Purchase Agreement, whereby the Esousa Holdings, LLC committed to purchase up to an aggregate of $30,000,000 common shares over a twelve-month period. The number of shares purchased is based on a set of conditions. 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 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 commences. Lastly, the agreement contains a provisions that the purchase of common stock can vary based on an adjustment of upward or downward based on closing price calculation that must be calculated each month.

$15M Note Receivable Transaction

Securities Purchase Agreement

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 common 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.

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 no 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 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.

Drawbridge Acknowledgement, Waiver and Consent

On July 16, 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 new entity. As indicated in Note 1 to the financial statements, the spin-off occurred immediately prior to the consummation of the merger with Net Element. As part of the 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 December 27, 2021, the Par 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.

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:

$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.

$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 one (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 two 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.

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:

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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.

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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 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 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 $1,000 for each additional in-person meeting beyond the four in-person meeting threshold.