Mullen Automotive (NASDAQ:MULN) is set to receive $110 million in funding this year.
The company expects to operate business over the next 12 months upon the receipts of this funding.
MULN stock rose more than 5% on Monday.
The bullish news has investors excited to see shares rise again from this year’s low.
Mullen has agreed to issue Series D preferred stock and warrants to Esousa Holdings, Acuitas Capital, Davis-Rice Pty Limited and Ault Lending.
The warrants will “equal 110% of the shares of Series D Preferred Stock purchased,” while the Series D preferred stock can be converted into common stock.
In exchange, Mullen will receive the remaining commitment amount of $90 million, which will be paid out in two equal tranches on April 17 and May 15.
Mullen Automotive has also agreed to not enact a reverse stock split during the five days prior to each date.
Mullen to Receive an Additional $20 Million
The company’s Form 8-K also revealed that Mullen has entered into three promissory notes worth $20 million on April 3.
The notes have an annual interest rate of 15% and will increase to 20% if the interest is not paid on time.
In addition, the notes “enumerate events of default, which include, but are not limited to, failure to pay principal and interest, breach of a covenant included in the Securities Purchase Agreement, bankruptcy and delisting of the Company’s common stock.”
In March, the company noted that it expected to receive $110 million in funding by June 1.
When the company announced it would be delivering EVs to Randy Marion Automotive, it also disclosed that it had cash, restricted cash and cash equivalents of $87.4 million as of Feb. 28.
With the cash balance and expected funding, Mullen believes that it will be able to operate its business plan over the next 12 months.
Positive MULN Stock News
Mullen Automotive is testing new battery technology by Q4 of 2023.
“Solid-state battery technology will offer customers the longest range commercial EVs available today.
Mullen will begin testing solid-state polymer battery technology in test vehicles on US roads in Q4 2023,” the company said in an official press release.
Class 1 commercial EV cargo vans are going to be outfitted with Mullen’s solid-state polymer battery technology, increasing current range from 110 miles to more than 200 miles on a single charge.
We can expect to see other changes, or modifications requested at the end of the Menzies Aviation 60-day pilot program by Q4 2023 as well.
Some of which include increased seating capacity and additional windows for enhanced driver visibility.
Upon completion of these enhancements and finalization of contract terms, it is anticipated that these updated vehicles will be used by Menzies to expand its fleet globally.
Currently, the Mullen Class 1 EV cargo van features a 46-killowatt lithium-ion battery pack with a 110-mile range.
It is expected that the solid-state polymer technology will deliver more than 200 miles of range on a full charge for the Mullen Class 1 EV cargo van.
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