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Shares of Mullen Automotive (NASDAQ:MULN) are in full focus after the electric vehicle (EV) company filed a Form 8-K, or current update report. The 8-K disclosed that Mullen’s reception of $45 million in connection with an existing securities purchase agreement (SPA) would be pushed back from May 15 to June 12.
Mullen had previously agreed to issue Series D preferred stock and warrants to the entities named in the SPA, such as Esousa Holdings and Acuitas Capital, in exchange for $90 million. The Series D preferred stock is convertible into common stock. The warrants are equal to 185% of the Series D preferred stock purchased. $45 million of that $90 million was received on April 17.
Mullen did not provide a reason for the delay, other than that Mullen and each of the buyers in the SPA had agreed to delay the issuance of Series D preferred stock and warrants until Mullen receives the $45 million.
With Mullen on the verge of production, the company needs capital to get the ball rolling. Last week, Mullen reaffirmed that production for its Class 3 vehicle would begin in July. Meanwhile, deliveries and revenue collection would begin in August.
Back in March, CEO David Michery released a statement that the $90 million from the SPA and an additional $20 million from promissory notes would be enough to fund Mullen for the next 12 months. The full $110 million was expected to arrive by June 1. However, it looks like the last $45 million will now be received about 11 days late. The impact to Mullen based on the late funding is unknown, although an 11-day delay shouldn’t be overly substantial.
As noted in its last earnings report, Mullen had cash and cash equivalents of $60.3 million as of March 31. That was up from $54.08 million a year ago. It also had $26.4 million in restricted cash.
Still, shareholders are responding negatively to the news. MULN stock is down by more than 5% today, and at the time of writing, is hovering near the pivotal $1 threshold. Mullen recently announced that it traded above $1 for 10 consecutive business days. It is not yet clear if Mullen has regained Nasdaq compliance.
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.
Eddie Pan specializes in institutional investments and insider activity. He writes for InvestorPlace’s Today’s Market team, which centers on the latest news involving popular stocks.