All eyes are on Mullen Automotive (NASDAQ:MULN) stock as the electric vehicle (EV) company will soon hold its special meeting of stockholders on Dec. 23. Shareholders will vote on several proposals at the meeting, most notably a reverse stock split in a range between 1-for-2 and 1-for-25.
Mullen noted that it will not file the reverse split amendment, or Proposal No. 1, “prior to the later of March 6, 2023 and 180 days after such date.” March 6 marks the deadline by which MULN stock must trade at a minimum closing bid price of at least $1 for 10 consecutive days in order to remain compliant with Nasdaq guidelines. Nasdaq may provide a 180-calendar-day extension if Mullen does not meet this requirement.
The information highlighted above will only go into effect if Mullen does not enact a reverse split before May 1. The month of May holds significance, as that is when the Russell 2000 and Russell 3000 indices hold their rank day to determine eligibility continuation. On that day, each stock must have a minimum inclusion price of $1. MULN stock was added to the indices this past June.
Dear MULN Stock Fans, Mark Your Calendars for Dec. 23
So, what else do MULN stock investors have to watch for in the upcoming special meeting?
Proposal No. 2 seeks to increase authorized common stock to 5 billion from 1.75 billion, marking an increase of 185%. This doesn’t mean that shares outstanding will increase to 5 billion, at least right away. Instead, it means that the board will have the authorization to issue up to 5 billion shares. As of Nov. 17, there were a total of 1.43 billion shares of outstanding common stock.
Mullen said it could enact a reverse split “at any time” if shareholders do not approve Proposal No. 2. The company has imposed a deadline of Dec. 1, 2023 to enact the reverse split by in that case.
Next, Proposal No. 3 seeks to change Mullen’s state of incorporation to Maryland from Delaware. However, a recently filed U.S. Securities and Exchange Commission (SEC) form shows that Mullen will not proceed with the proposal.
Proposal No. 4 asks shareholders to vote on the issuance of $150 million in notes and up to $190 million in Series D preferred stock. These asset classes will be “convertible into shares of Common Stock and warrants exercisable into shares of Common Stock.”
Finally, Proposal No. 5 highlights an adjournment of the meeting if Proposals No. 1 through No. 4 do not receive sufficient votes.
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On the date of publication, Eddie Pan did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
