Mullen has announced several new proposals to be voted on in 3 days.
Mullen Automotive (NASDAQ:MULN) stock is in focus after the company announced several new proposals to be voted on at its special meeting of stockholders. Notably, the first proposal asks shareholders to approve a reverse stock split in the range of between 1-for-2 shares and 1-for-25 shares. In addition, since MULN stock is included in the Russell 2000 index, it must have a minimum closing price of $1 during the “rank day” in May. Nov. 21 is the record date for the vote. The final decision of the vote will be disclosed on Dec. 23.
On Sept. 9, Nasdaq notified the electric vehicle (EV) company that it had failed to comply with the $1 minimum bid price requirement. Mullen has 180 calendar days after Sept. 9, or until March 6 next year, to meet the minimum price. If Mullen is unable to meet the $1 mark for 10 consecutive days before the deadline, it can request another 180-calendar-day extension. However, the company will have to then notify Nasdaq of its plans to achieve the minimum bid price.
Here’s what investors should know about MULN stock moving forward.
MULN Stock: Mullen Asks Shareholders to Vote on Reverse Stock Split
If shareholders approve the reverse split proposal, Mullen’s board is authorized to enact the split. However, if Proposal No. 2 is rejected, the board can still enact a reverse split at its discretion before Dec. 1, 2023.
Proposal No. 2 seeks to increase the shares of common stock authorized to 5 billion from the current 1.75 billion. That marks an increase of 185% and would severely dilute existing shareholders. Meanwhile, Proposal No. 3 seeks to change Mullen’s state of incorporation from Delaware to Maryland. The filing does not give any reason for this change.
Next, Proposal No. 4 seeks to satisfy a securities purchase agreement. The proposal is for issuing $150 million in notes and $190 million in Series D preferred stock. Each are “convertible into shares of Common Stock and warrants exercisable into shares of Common Stock.”
As of the record date, 1.3 billion shares of common stock will be outstanding, with each share receiving one vote. On top of that, Series B and C shares carry one vote as well. Meanwhile, Series A shares carry 1,000 votes each.
Following the company’s announcement of many new proposals to be voted on at its special meeting of stockholders, Mullen Automotive (NASDAQ:MULN) stock is in the spotlight. Notably, the first proposal asks shareholders to consent to a reverse stock split that ranges from 1 share for every 2 to 1 share for every 25. Additionally, because MULN stock is a component of the Russell 2000 index, it is required to have a minimum closing price of $1 on May’s “rank day.” The record date for the election is November 21. On December 23, the final outcome of the vote will be made public.
The electric vehicle (EV) business was informed by Nasdaq on September 9 that it had violated the $1 minimum bid price regulation. After September 9, Mullen has 180 calendar days or until the minimum price is met on March 6 of the following year. Mullen may ask for another 180-calendar-day extension if it fails to reach the $1 threshold for 10 days in a row prior to the deadline. The business must then inform Nasdaq of its plans to reach the minimum bid price.
The following information about the MULN stock is pertinent going forward.
Mullen seeks shareholder approval for a reverse stock split for MULN stock.
Mullen’s board is empowered to implement the reverse split if shareholders approve the proposal. However, if Proposal No. 2 is not approved, the board may still decide to implement a reverse split before December 1, 2023.
With proposal number two, the permitted number of shares of common stock would rise from the existing 1.75 billion to 5 billion. That is an increase of 185%, which would significantly dilute current owners. Proposal No. 3 would instead have Maryland as Mullen’s state of incorporation, rather than Delaware. No explanation for this modification is provided in the application.
The fourth proposal aims to fulfill a securities purchase agreement after that. The plan is to issue $190 million in Series D preferred shares and $150 million in notes. “Convertible into shares of Common Stock and warrants exercisable into shares of Common Stock,” is the definition of each.
There will be outstanding, with respect to the record date, 1.3 billion shares of Common Stock, each of which shall be entitled to one vote. Additionally, Series B and C shares have one vote each. Series A shares, however, each have 1,000 votes.