Mullen Automotive is the leading bidder on bankrupt commercial EV maker Electric Last Mile Solutions, its second major deal this month as it strives to deliver its own electric vehicle.
The California-based automaker placed a stalking horse bid of nearly $92 million to buy ELMS, which had been developing a commercial EV called the Urban Delivery before running out of cash amid an SEC investigation into charges of insider trading.
Mullen will pay $55 million for the company’s assets, including inventory, intellectual property rights and its plant in Mishawaka, Indiana, and assume $37 million in liabilities, according to an SEC filing. Mullen paid a $5.5 million deposit to be applied toward the purchase.
Michigan-based Electric Last Mile Solutions filed for bankruptcy in June, less than a year after it went public through a $1.4 billion SPAC deal. Meanwhile Mullen, which has yet to launch a vehicle since its 2021 SPAC merger, faces its own troubles: Nasdaq warned earlier this month that the company could be delisted because its share price traded below $1 for 30 consecutive days.
Mullen disclosed the notice from Nasdaq one day after announcing it acquired a 60% controlling interest in Bollinger Motors, a Michigan-based startup that aimed to build battery-electric commercial trucks and off-road pickups.
The $148.2 million cash and stock deal poised Mullen to expand into the “high-demand commercial EV space,” according to David Michery, CEO and chairman of Mullen Automotive.
To regain Nasdaq compliance, Mullen’s stock must trade above $1 per share for 10 consecutive business days by March 6, 2023.
The automaker didn’t respond to a request for comment on Tuesday.
The growing list of troubled EV makers underscores the difficulty in building and launching a car without the resources of a legacy automaker. Several startups that went public in high-profile reverse mergers over the past couple of years have faced bankruptcy, SEC scrutiny or cash crunches.
Mullen plans to build its first electric crossover, the Mullen Five, in 2024 in Tunica, Mississippi. The company provided a glimpse last week of the Five RS, an “ultra-high-performance EV sport crossover” with 1,000 horsepower, a top speed of 200 mph and 0-to-60 acceleration under two seconds.
“The FIVE RS is intended to be one of the fastest vehicles on the planet, competing with some of the best and most well-known and regarded automotive marquees,” Michery said in a statement.