Shares of Mullen Automotive (NASDAQ:MULN) are in full focus after the electric vehicle (EV) company released a statement from CEO David Michery. In December, Randy Marion Isuzu, LLC, part of the Randy Marion Automotive Group (RMA), entered a purchase order for 6,000 Class 1 EV cargo vans valued at $200 million. During then, Mullen stated that deliveries would begin during Q1 of 2023. The exact timeline for the entirety of the deliveries was not disclosed. This news hasn’t boosted MULN stock, as it is still sitting near its 52-week low of $0.14 this morning.
Now, it seems that Mullen is set to fulfill that promise, as the press release noted that Mullen will make “Class 1 EV deliveries to various commercial customers before the end of March 2023.”
The company also provided updates on its cash balance and a future firm commitment boost. Let’s get into the details.
MULN Stock: Mullen Expects Deliveries by March 31
As of Feb. 28, Mullen had cash, restricted cash, and cash equivalents of $87.40 million. The company had cash, restricted cash, and cash equivalents of $107.42 million as of Dec. 31.
By June 1, Mullen plans to receive another $110 million in firm commitments. Based on the current cash balance and the expected receipt of $110 million, the company estimates it will have enough cash to operate the business over the next 12 months.
“I believe we have all the pieces in place between our product, factories, and strategic expertise to execute on our plans to deliver our Class 1 and Class 3 vehicles this year,” said Michery. “Furthermore, we continue to invest and move at a fast clip with the Mullen FIVE program, which will soon be approaching vehicle engineering freeze, allowing us to move into the next phase of the crossover program.”
So, where exactly is this $110 million coming from? Acuitas Capital is likely the provider of some, if not all, of the $110 million. Based on an agreement, Acuitas has agreed to exercise and purchase Series D preferred stock on June 1. Upon full payment of the preferred stock, Acuitas will receive warrants exercisable for 185% of shares of common stock with an exercise price equal to the closing price on May 31 of this year. That means more dilution for existing shareholders.
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.
