Tag: Mullen Automotive Reverse Stock Split (Page 1 of 2)

Mullen Now Plans To Effect A New Reverse Stock Split

Mullen Automotive announced on Thursday that it has filed a preliminary statement with the SEC to effect a new reverse stock split.

According to the filing, the ratio would range between 1-for-2 to 1-for-100.

However, shareholders would need to approve this proposal at the stockholder’s meeting on December 15, 2023.

“Mullen expects that the primary focus of the Board in determining whether or not to effectuate the Reverse Stock Split will be the ability to obtain and maintain a continued price of at least $1.00 per share of its common stock on The Nasdaq Capital Market without effecting the Reverse Stock Split.

The Reverse Stock Split will only be implemented if necessary to regain compliance with Nasdaq Listing Rule 5550(a)(2), which sets forth a minimum bid price of $1.00.

The Board will determine the final split ratio after stockholder approval and would retain the authority to abandon the Reverse Stock Split at any time or to delay or postpone it,” the press release said.

“Completion of the proposed Reverse Stock Split is subject to market and other customary conditions, including obtaining stockholder approval.

However, there are no assurances that the Reverse Stock Split will be completed, that it will result in an increased per share price or achieve its other intended effects.

The Board reserves the right to elect not to proceed with the Reverse Stock Split if it determines that implementing it is no longer in the best interests of the Company and its stockholders.”

Mullen’s CEO David Michery made no comment on the company’s new proposal to dilute shareholders.

Shares of the company are currently trading below $0.25.

MULN stock is down more than -53% in the past month and more than -99% in the past year-to-date.

Also Read: For Five Years Citadel Marked Short Sales As Long

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Market News Today - Mullen Now Plans To Effect A New Reverse Stock Split.
Market News Today – Mullen Now Plans To Effect A New Reverse Stock Split.

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Mullen Receives Big $110M Funding for This Year

Market News Daily - Mullen Receives Big $110M Funding for This Year.
Market News Daily – Mullen Receives Big $110M Funding for This Year.

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 HoldingsAcuitas CapitalDavis-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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Market News Today - Mullen Receives Big $110M Funding for This Year.
Market News Today – Mullen Receives Big $110M Funding for This Year.

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What is The Probability of MULN Stock Going to $0?

Market News Daily: Will MULN stock go to $0?
Market News Daily: Will MULN stock go to $0?

Concerned investors on social media have raised the question of MULN stock going to $0.

Mullen Automotive (NASDAQ:MULN) stock ended the week at $0.14, down -9.20% on the day and down -17% for the week.

MULN stock tested $0.44 in January and again during the first week of February, but shares have been plunging ever since.

The automotive company has had a string of positive developments, with the latest MULN stock news confirming the delivery of the $200 million purchase order.

But despite these positive developments, Mullen Automotive shares have continued to tumble with concerns in the air of MULN stock going to $0.

Some warn Mullen Automotive stock may crash to zero as bankruptcy risks rise.

But Mullen reports that as of Feb. 28, 2023, the company has $87,400,009 of cash and cash equivalents, including restricted cash, and expects to receive an additional $110 million from firm commitments by June 1, 2023.

An official statement from Mullen Automotive published on 3/16 read:

“The Company believes the combination of cash on hand and expected firm cash commitments provides it with enough capital to execute on its business plan over the next 12 months.”

Will Mullen Automotive go bankrupt?

Doesn’t seem likely by that statement.

Will MULN Stock Go to Zero?

Market News Daily: Will MULN stock go to zero?
Market News Daily: Will MULN stock go to zero?

Mullen Automotive CEO David Michery has a plan to issue a reverse stock split should the company fail to meet Nasdaq’s $1 bid per share compliance.

Will this strategy save MULN stock from going to zero?

It’s very possible, but investors are look at CEO David Michery for answers.

MULN stock chopped at $0.14 majority of the day on Friday.

If the stock is able to find a strong support here, we may begin to see it move up again if buyers flood in.

However, market makers and hedge funds are still in control of where prices are headed — we’ve seen these institutions drive companies to $0 before, mainly through naked short selling.

Mullen Automotive Avoids Getting Delisted

Market News Daily: Will MULN stock go to $0?
Market News Daily: Will MULN stock go to $0?

The company avoided getting delisted after it failed to meet its $1 per share requirement on March 6, 2023.

Nasdaq approved a 180-day extension for Mullen Automotive to meet the minimum $1 bid price per share.

On Sept. 7, 2022, Nasdaq provided notice to the Company that, based on the previous 30 consecutive business days, the Company’s listed common stock no longer met the minimum $1 bid price per share requirement as set forth in Nasdaq Listing Rule.

The Company was provided 180 calendar days, or until March 6, 2023, to regain compliance.

If Mullen stock fails to trade above $1 for a minimum of 10 consecutive business days prior to Sept. 5, 2023, the Company will implement a reverse stock split to cure the Deficiency prior to the expiration of the additional 180-day compliance period.

“Consistent with my message to our shareholders, we will use our best efforts to regain compliance to meet Nasdaq’s requirement for a $1 minimum bid price,” said David Michery, CEO and chairman of Mullen Automotive.

Related: These 3 Signs Point Towards Naked Shorting in MULN Stock

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Is a MULN Reverse Stock Split on Its Way?

MULN Reverse Stock Split
Market News Daily: MULN Reverse Stock Split Update.

Is a Mullen Automotive (NASDAQ:MULN) reverse stock split underway?

Many shareholders are anticipating MULN stock to undergo a reverse stock split, similar to what AMC Entertainment is proposing to its shareholders.

What is a reverse stock split anyway?

And how will this affect shareholders portfolios?

Let’s use AMC’s 1-for-10 reverse stock split as an example.

If an investor holds 100 shares, after a 1-for-10 reverse split they will hold 10 shares but the price of the stock will 10x.

In AMC’s case, if a reverse stock split occurs today around approximately $6.58, then the share price will go up to $65.80.

Similarly, if a shareholder holds 1,000 shares, after a reverse stock split they will hold 100 shares.

Why would Mullen Automotive issue a reverse stock split?

The company has until March 6th to meet the Nasdaq minimum bid requirement of $1 per share.

If the company is unable to meet the requirement, it will enter a grace period before getting delisted.

the company said in a statement that it intends to seek an extension from Nasdaq to meet the $1-per-share threshold.

“If such extension is granted, compliance of the minimum $1 stock share threshold requirement may be extended for a further 180 days until approximately September 6,” the company said.

Will Mullen Automotive Issue a Reverse Stock Split?

Market News: Mullen Automotive Stock Split

The company has no plans at the current time to effect a reverse split. The Company has until March 6, 2023 to meet the Nasdaq minimum bid requirement of $1.00, said the Mullen Press Release as of January 25, 2023.

However, the company also stated the following:

“If the company still falls short of the minimum bid requirement, it will effect a reverse stock split at that time to maintain its Nasdaq listing compliance.”

  1. If MULN stock is unable to meet $1 per share by March 6th, an extension will be requested.
  2. If an extension is APPROVED for a further 180 days until September 6th and shares have failed to reach $1, only then…
  3. Will MULN issue a reverse stock split to maintain the Nasdaq listing compliance.

At current prices, Mullen Automotive would need to issue a 1-for-5 reverse stock split, putting MULN shares at $1.05; $0.21 per share today.

This means shareholders with 100 shares would then own 20 shares and shareholders with 1,000 shares would own 200 shares.

But I’d love to hear your thoughts on this.

Leave a comment down below.

Related: What a Reverse Stock Split Usually Signifies About a Company

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Market News Today - MULN reverse stock split
Market News Today – MULN Reverse Stock Split News.

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