Shares of Mullen Automotive (NASDAQ:MULN) stock hit a new 52-week low of 13.5 cents after the company announced that its Series D investors had exercised their final option, which expires on June 30, for $100 million. As a result, the electric vehicle (EV) company has received $100 million in additional funding. This brings its cash and cash equivalents figure to over $235 million. In addition, all of Mullen’s property and assets are unencumbered, or free of claims, with the exception of $7.3 million in outstanding debt.
“We are in the best financial position in our Company’s history and remain fully committed and highly focused on producing, selling and delivering our vehicles to our customers prior to the end of 2023,” said CEO David Michery.
Shareholders don’t seem to agree with Michery’s statement, as MULN stock is down by over 20% today.
MULN Stock: Mullen Discloses Over $235 Million of Cash and Cash Equivalents
Mullen has also disclosed that its $235 million cash position should be able to support operating capital for approximately two years. This comes after the company “expended $253 million-plus” for some of Electric Last Mile Solution’s assets and for a majority stake in Bollinger Motors.
However, Mullen’s $100 million in funding didn’t materialize from thin air. To receive this sum, Mullen has agreed to issue hundreds of millions of shares and shares issuable upon the conversion of warrants. For example, Mullen agreed to issue 165.35 million shares, warrants exercisable for 684.97 million shares, and pre-funded warrants exercisable for 457.34 million shares upon the buyer option exercise relating to an existing securities purchase agreement (SPA). The issuance of stock, warrants, and pre-funded warrants replaced Mullen’s obligation to issue 622.70 million shares of Series D preferred stock.
Following the delivery of these shares and warrants, it appears that the buyers would like to unload their position on the market, as evidenced by an up to 2.33 billion share resale filing submitted yesterday. In the filing, Esousa Holdings is eligible to resell 868.77 million shares, Acuitas Capital is eligible to resell 851.73 million shares, and Davis-Rice Pty Limited is eligible to resell 425.87 million shares, among others. Each of mentioned sellers owns warrants exercisable into over 100 million shares of common stock.
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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.
