Mullen Automotive (NASDAQ:MULN) stock is accelerating higher after the electric vehicle (EV) company announced that it had received a favorable decision from the Nasdaq Hearings Panel. MULN stock will continue to trade on the Nasdaq as long as its shares close at or above $1 for 20 consecutive trading sessions on or before Jan. 22, 2024. Additionally, the company must hold an annual shareholder meeting on or before March 8, 2024.
“I am pleased Nasdaq gave the Company this opportunity to continue implementing its business plan,” said CEO David Michery. “We are diligently working to regain and maintain compliance with Nasdaq’s continued listing requirements.”
Mullen had previously held an annual meeting on Aug. 3, although the meeting did not satisfy Nasdaq’s requirement because the company did not allow shareholders to ask management questions about the business. All proposals approved at the meeting will continue to remain valid, which includes a 1-for-9 reverse stock split. To remedy this, Mullen plans on holding a combined 2023 and 2024 annual meeting to satisfy the requirement.
MULN Stock to Remain Listed on Nasdaq Pending Completion of Conditions
Another key date to keep in mind is Dec. 15, as that is the day that Mullen will hold its special meeting of stockholders. The meeting basically only has one material proposal, which is a reverse stock split in a range between 1-for-2 and 1-for-100. MULN stock shareholders as of the close of business on Oct. 30 will be entitled to cast a vote for the proposal.
On top of that, the effect of another reverse split raises questions about the extension that Mullen received. Per Nasdaq:
“If a Company’s security fails to meet the continued listing requirement for minimum bid price and the Company has effected one or more reverse stock splits over the prior two-year period with a cumulative ratio of 250 shares or more to one, then the Company shall not be eligible for any compliance period specified in this Rule 5810(c)(3)(A) and the Listing Qualifications Department shall issue a Staff Delisting Determination under Rule 5810 with respect to that security.”
Mullen has already reverse split its shares in a cumulative ratio of 1-for-225 this year. Another 1-for-2 reverse split would take the ratio to 1-for-450, which is above the cumulative ratio of 1-for-250 mentioned by Nasdaq above. Based on this, it appears that Mullen’s extension could come into question if the company chooses to reverse split its shares again.
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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.
