Mullen Automotive (NASDAQ:MULN) has received a new $20 million cash boost.
The company received $20 million from Acuitas Capital on June 1.
In return, Mullen will provide Acuitas with 19.43 million shares of common stock and pre-funded warrants and warrants exercisable for 59.07 million shares.
Mullen Automotive announced that it had entered into a letter of agreement (LOA) with Acuitas Capital in connection with an existing securities purchase agreement (SPA).
The LOA stated that Acuitas provided Mullen with $20 million of capital on June 1.
The remaining $45 million of the SPA will be paid out on June 12.
However, instead of issuing and providing Acuitas with 27.56 million shares of Series D preferred stock as originally agreed upon, Mullen will instead provide Acuitas with 19.43 million shares of issued common stock and pre-funded warrants exercisable for 8.07 million shares of common stock.
“These warrants have an exercised price of $0.001 and are immediately exercisable.
Mullen also provided to Acuitas warrants exercisable for 50.99 million shares of common stock.
These warrants have an exercise price of 72.55 cents per share,” per IP.
MULN stock is currently trading at $0.60 and is down more than -92% this year-to-date.
MULN Stock: What to Watch Out for
Despite Mullen Automotive announcing several positive developments, MULN stock continues to tumble.
See, Mullen Automotive has huge short seller institutional shareholders.
This is a big problem because as we’ve seen all year, big selloffs combined with heavy dark pool trading is suppressing the stock from rising.
The three largest selling stockholders are Acuitas Capital, the Michael Wachs 2022 Dynasty Trust, and Davis-Rice Pty Limited.
Acuitas is eligible to resell 161.17 million shares.
Meanwhile, the Wachs Trust can resell 53.22 million shares, and Davis-Rice can resell 22.89 million shares.
“As warned by Mullen, this resale means that millions of shares of MULN stock will likely hit the market, which can have dilutive effects on shareholders,” says IP.
Mullen Automotive announced it was going to investigate the possibility of illegal short selling back in late April, but shareholders have not received an update since.
In March, the company saw as many as 55 million FTDs in one single day; an indication of naked short selling.
“Mullen Automotive announced today that it is taking certain affirmative steps in light of the extraordinary trading volume and evidence of unusually high levels of failure to deliver on short sales as reported to the U.S. Securities and Exchange Commission.
These steps include retaining outside counsel, which is working with Shareholder Intelligence Services LLC (“ShareIntel”) to undertake a comprehensive analysis of data derived from broker-dealers, clearing firms and other sources to provide actionable intelligence on potential market manipulation and illegal short selling,” the company said.
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