Shares of Mullen Automotive (NASDAQ:MULN) stock opened in the red after the company revealed the results of its annual meeting of stockholders. Following the meeting, the company was met with heavy criticism on social media due to audio issues that prevented shareholders from hearing the preliminary results correctly.
Shareholders were primarily concerned with proposals three and four of a total of 11 proposals. Mullen has now confirmed that shareholders voted in favor of proposal three, while a quorum failed to be met for proposal four.
Proposal three sought approval for a reverse split in a ratio between 1-for-2 and 1-for-100. In total, there were 221.09 million votes “for,” 103.28 million votes “against,” and 1.41 million abstentions. Abstentions carried no effect on this proposal.
MULN Stock Holders Approve Reverse Split
Next, proposal four sought approval for a state of incorporation change to Maryland from Delaware. The common stock votes showed 190.54 million votes “for,” 69.02 million votes “against,” 62.75 million broker non-votes, and 3.47 million abstentions. However, a quorum was not reached for this proposal because “Proposal 4 required separate class votes of each of the Series A Preferred Stock, Series C Preferred Stock and Series D Preferred stock, the presence, in person or by proxy, of the holders of a majority of the outstanding shares of each such series is required to constitute a quorum entitled to take action with respect to such votes on Proposal.”
Since the reverse stock split proposal was approved, proposal four failing to reach a quorum carries less weight. That’s because companies incorporated in Maryland are able to effect a reverse split without shareholder approval as long as the ratio does not exceed 1-for-10 over any 12-month period.
Other Proposals
Other proposals voted in favor of included proposals two and seven. Proposal two sought approval for increasing shares under the 2022 Equity Incentive Stock Plan by 52 million shares, while proposal seven sought approval for CEO David Michery’s 2023 CEO Performance Stock Award (PSA) Agreement.
Under the plan, Michery is eligible to receive tens of millions of shares for specific milestones achieved. For example, he will receive 1% of total issued and outstanding common stock for each $25 million in revenue that Mullen generates, up to a maximum of $250 million in revenue and up until Dec. 31, 2025.
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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.
