David Michery Set to Receive 30 Million Shares of Mullen (MULN) Stock

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Mullen Automotive (NASDAQ:MULN) stock is in focus after the electric vehicle (EV) company filed a Form S-8 showing that it would register 82 million shares as part of its 2022 Equity Incentive Plan and 2022 and 2023 Performance Stock Award Agreement (PSAA).

52 million of the shares are registered towards the equity incentive plan, which was approved at the company’s last annual meeting of stockholders. The remaining 30 million shares are registered to CEO David Michery for satisfying certain milestones in his 2022 and 2023 PSAA. Mullen did not disclose which specific milestones were met. These awarded shares come despite MULN stock’s 99% drop so far this year.

Michery’s 2022 and 2023 PSAA is extremely important to him, as it rewards him with shares for satisfying milestones like producing a drivable prototype of the Mullen 5 for customers to test by the end of October 2023 and receiving full U.S. certification and homologation for Mullen’s Class 3 van by the end of December 2023. These milestones could influence Michery to work harder to satisfy them before the deadlines. At the same time, meeting milestones also results in dilution for shareholders who have already suffered heavy losses.

David Michery Set to Receive 30 Million Shares of MULN Stock

Meanwhile, Michery recently disclosed an insider purchase for 102,040 shares of MULN stock worth over $100,000. However, this doesn’t appear to be a spontaneous purchase. As the footnote in the filing reads:

“The Reporting Person’s purchase of common stock reported herein may be matchable under Section 16(b) of the Securities Exchange Act of 1934, as amended, to the extent of 102,040 shares, with the Reporting Person’s transfer on June 15, 2023 of 232,331 shares of common stock (reflects 1:9 reverse stock split effective August 11, 2023). The Reporting Person has agreed to pay to the Issuer the full amount of the profit realized in connection with the short-swing transaction.”

Michery transferred 232,331 shares to an unknown entity on June 15. He has transferred shares to an unknown entity on several occasions. As a result, it appears that the recent purchase was made to correct a previous U.S. Securities and Exchange Commission (SEC) short-swing violation. Mullen has not issued any additional clarification on the purchase.

Furthermore, MULN stock is trading well below $1, which is in violation with Nasdaq’s minimum price requirement of $1. Mullen had attempted to boost the price above $1 with its $25 million buyback plan, but that doesn’t appear to be working. The company has a deadline of Sept. 5 for its shares to close above $1 for at least 10 consecutive business days.

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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.

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.

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