In a move to address its financial obligations, Mullen Automotive Inc. (NASDAQ:MULN) has issued shares of its common stock to settle approximately $4.5 million in secured promissory notes. On Wednesday, the company entered into a settlement agreement with a note holder, issuing 340,000 shares valued at $3.0 million based on the closing price of the stock the day before the issuance.
The transaction, which was part of a broader settlement agreement dated October 21, 2024, allowed the company to satisfy and cancel all obligations related to the notes. The agreement also includes a provision that the number of shares issued to the holder will not exceed an ownership limit of 9.99%. Mullen Automotive retains the option to pay any remaining balance of the settlement amount in cash.
Mullen Automotive, which is listed on The Nasdaq Stock Market under the ticker symbol NASDAQ:MULN, is a Delaware-incorporated company specializing in the manufacturing of motor vehicles and passenger car bodies. The company's decision to use its stock to settle debt reflects a strategic approach to managing its financial liabilities.
This transaction is disclosed in a Form 8-K filed with the U.S. Securities and Exchange Commission, which provides investors and the public with information about significant events that may affect its securities or financial condition. The information in this article is based on the statements provided in the press release.
In other recent news, Mullen Automotive Inc. has made significant strides in its operations. The electric vehicle manufacturer announced a substantial 6791% surge in quarterly revenue, totaling approximately $4.5 million for the quarter ended September 2024. The company also successfully regained compliance with Nasdaq's minimum bid price requirement, as confirmed by a formal notice from The Nasdaq Stock Market LLC.
Mullen Automotive has also launched Mullen Credit Corporation, a subsidiary aimed at supporting its dealership network. The company's financial position has been bolstered, projecting $75 million in GAAP revenue over the next six months and reducing monthly spending by $5.5 million.
Adding to the company's recent achievements, Mullen Automotive's commercial EV lineup, including the Mullen ONE and Mullen THREE, have received certifications from the EPA and California Air Resources Board. The company's dealer network has expanded with the addition of Papé Kenworth and others, providing sales and service across key U.S. markets.
In terms of financial developments, Mullen issued convertible notes and warrants, raising approximately $12.5 million. The company also secured significant orders from Papé Kenworth and Volt Mobility, totaling $3.2 million and $210 million respectively.
Finally, Mullen Automotive's subsidiary, Bollinger Motors, completed its first delivery of the Bollinger B4 electric trucks to Nacarato Truck Centers, marking an $800,000 revenue boost.
InvestingPro Insights
Mullen Automotive's recent move to settle debt through stock issuance aligns with several key financial indicators highlighted by InvestingPro. The company's financial health appears precarious, as evidenced by InvestingPro Tips suggesting that MULN "may have trouble making interest payments on debt" and is "quickly burning through cash." These insights provide context for the company's decision to use equity to settle its financial obligations.
The company's market capitalization stands at a mere $4.84 million, reflecting the significant challenges it faces. This is further underscored by the stark revenue decline, with InvestingPro Data showing a revenue growth of -49.17% over the last twelve months as of Q3 2024. Additionally, the company's operating income margin is deeply negative at -185,781.29%, indicating severe operational inefficiencies.
InvestingPro Tips also point out that MULN is "trading at a low Price / Book multiple" of 0.14, which could be interpreted as the market's pessimistic view of the company's future prospects. This aligns with the company's strategy to use its stock for debt settlement, potentially taking advantage of any perceived undervaluation.
For investors seeking a more comprehensive analysis, InvestingPro offers 17 additional tips for MULN, providing a deeper understanding of the company's financial position and market performance.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.