Written by Cláudio Afonso | info@claudio-afonso.com | LinkedIn | Twitter
Only two days after the last interview — which drove the shares 13.38% down to $1.23 per share — Mullen’s CEO David Michery will now talk on Benzinga’s All Access Series on Friday, at 11 a.m. Eastern time.
Mullen investors and enthusiasts are now seeing this upcoming interview as a second chance to get more details about themes like Van production timeline or the Fortune 500 company that has already ordered Mullen’s vans. Follow here the live updates:
Transcript of the Interview
Host
Thank you so much for joining us so early in the morning! The first thing I want to start with is the news on the battery. Explain that and what that means.
David Michery, Mullen’s CEO
We got very favourable test results, we wanted to re-test our battery. We hired one of the most reputable groups in the U.S. and they tested our solid-state polymer battery and it exceeded in amperage, voltage as stated previously.
It’s a good feeling to know that our battery has exceeded any expectations that we had for that cells so we’re very excited.
Host
What does this mean for the actual technology here?
David Michery, Mullen’s CEO
It means we can start to scale it and that’s exactly what we are doing. We announced, not to long ago, that we were gonna take it to the vehicle pack level and we’re doing that.
Host
David, one of the most frequently asked questions in the chat this morning was about the Fortune 500. When you were on with me, i think it was in March, you said you had that order from a Fortune 500 company. What else can you say about that order? Can you say how big it is?
David Michery, Mullen’s CEO
As I stated in our previous conversation, it’s a pilot program and I can say that we initiated that program — meaning we made the delivery — on May 12 and the customer put the van in its pilot program and reported to us that they were pleased with the performance to date and we expect to share details of the pilot program with our investors in the coming weeks so we’re excited about it. Everything has been going exactly as planned.
Host
I didn’t expect that answer, I’ll be honest wit you. Ok, so we’re going to find out one of these days or one of these weeks who is this mystery company and the nature of the order?
David Michery, Mullen’s CEO
Absolutely, we’re actually working with the PR [Press Release] with them as we speak.
Host
Will that announcement have details about the size of the order and the order vs delivery timeline?
David Michery, Mullen’s CEO
Everything will be in that PR. [Press Release] We are pretty exciting about it, we’ve been working on this for over a year. So that’s not something that transpired overnight. This has a very long time in the making. We want to do this right and we have their corroboration, they’re very excited. We started officially the pilot program on May 12th.
Host
How many vehicles did you deliver?
David Michery, Mullen’s CEO
I can tell you that we started the pilot program on May 12th and the results back from them are very good.
Host
Are we talking of end of the month here? Are we talking about next week? What’s the timeline here?
David Michery, Mullen’s CEO
We made a statement that we would announce this by the end…within the completion of the second quarter and we fully intend to do that.
Host
Second quarter is coming to a close soon, so….
David Michery, Mullen’s CEO
Absolutely right!
Host
I took a red to the calendar, David! [Laughs]
I think that’s kind of the elephant in the room so I think we’re just gonna have to wait and see about that… Are they any other orders you can talk about for the van? I’m having a lot of questions on that…
David Michery, Mullen’s CEO
I do wanna add one thing but I think is…very important about things that happened recently because of our amazing test results on the battery. Earlier this week, we started negotiations with a couple of major OEMs regarding our battery technology and we commenced preliminary discussions with these parties, so… I thought this was a good piece of information that we could share.
Host
What about the status of this ATMV Mullen? I believe you had applied in late April. Has that been approved?
David Michery, Mullen’s CEO
It’s a process, I don’t expect to hear from them until August.
Host
I take it that you expect to be approved for the loan…
David Michery, Mullen’s CEO
I don’t have a crystal ball, there’s a lot of factors… there’s a process that you got to go through. You submit your application, you hope to get to what they call “substantially complete” and then to the “conditional commitment” and usually it can take from 12 to 18 months. And that’s the process.
Host
Going to be back to the battery for a second, what conversations have been or is it possible for Mullen to sell your battery technology to other manufacturers down the line?
David Michery, Mullen’s CEO
A couple of minutes ago, because of our impressive test results, we are now in discussions with a couple of major OEMs.
Host
You did say that, you’re right.. [laughs]
David Michery, Mullen’s CEO
Oh that’s ok! Look I’m tired myself, I’ve been working for the last 24 hours and I made significant transaction. However, we don’t comment on rumours or speculation at this point. I can tell you that… very impressive is coming down the pipe. We can’t guarantee that the transaction will occur but a lot of good things are happening and all at the same time. We’ve been very active and I’m very tired.
Host
I do want to ask you, David, about the inside activity here… when I look out to the insider transactions from Mullen, I don’t see a lot of buying… I see some selling of you recently, can you just speak a little bit about the full process there.
David Michery, Mullen’s CEO
Just decided to sell some stock, nothing more and nothing less.
Host
Are they any other plans to sell more?
David Michery, Mullen’s CEO
Every officer or director has an opportunity to sell based on the 1% rule per quarter and they choose to do it they do, if they don’t they don’t. I chose periodically to be able to take advantage of what I am allowed to do under SEC rules.
Host
Was that part of a pre-planned sell to 5b1?
(The SEC’s Rule 10b5-1 allows stock trades to be set up in advance by public companies’ officers or directors to avoid accusations of insider trading.)
David Michery, Mullen’s CEO
No.
Host
Ok I just wanted to address that because there were a lot of questions on that through the chat. Looking at the recent activity with the company and the stock, you did just dilution and raised money that way. Are you comfortable with the balance sheets as it is right now? The cash position? You’ll have to re-invest a lot of cash here, are you comfortable there?
David Michery, Mullen’s CEO
I’m comfortable that we have enough cash to get us through 2022 as previously stated. Our plan does call to a $1.3B spent which is half as much as mos of these guys will spend to start the production.
We believe that our plan is the most efficient, we have a facility already and if we obviously, like the most companies in our position today, raise capital is through the sale of their security. And that’s the reason for being public. We will raise additional capital, we have to like everybody else has to, like Tesla and they are a $800b market cap company.
As time goes on and as your stock strengthens you can make better deals and each deal to be better than the next deal but that’s a part of being able to execute your plan. One of the concerns that a lot of the investors had in the past looking at their balance sheet was how do they’re going to fund this plan? Obviously now there’s a solution for us as we get more activity, as the company deliveries product and as the company expands its operations so the ability to raise additional capital for favourable rates to execute on its plan. Ultimately, our plan is the most efficient plan out there.
Host
How do you explain to the outside out here your ability to spend at such a reduced rate compared to QuantumScape ($QS) or other EV manufacturers of the world? How is that possible to spend a fractional from what everyone else is spending?
David Michery, Mullen’s CEO
It’s been like that for us since the inception of the company, meaning you can only spend what you have. So, you try to be frugal… we pride ourselves for being fiscally responsible, we don’t overspend.
Everyone here does multiple tasks, we have top rated people that come from start-up backgrounds like John Taylor who’s one of the first 50 guys that came over from Detroit with Elon Musk to Fremont and built the entire architecture and the architecture for the Model S. And these guys had to be efficient, they had a small crew and look what they were able to accomplish.
One of the things you learn is to be fiscally responsible, don’t waste money and stretch every dollar. Not a mile, you stretch a hundred miles. You try to maximize as much efficiency as it is possible and that includes how you approach your bill and your spend.
So, for my perspective, it doesn’t matter if we have $100b or $100 million, we’re gonna take the same attitude and be fiscally responsible.
Host
I was not planning to question you this but how do you view your investors? What does it mean for you when someone invest in Mullen stock?
David Michery, Mullen’s CEO
There’s no mystery that we are highly held by the retail community out there. I think we are in the top-4 of Retail-held stocks out there, their opinion matters. I periodically look to see what these retail investors look at and what do they want to see and we try to address as much as we can within the convenience of the law.
There’s insider rules, there’s information that, as a CEO of a public traded company, we have to be careful and sometimes maybe something that was not portrayed correctly by a third party and you’d love to jump in and address them but you can’t because you don’t want to subject yourself to a potential SEC violation. Some people find it very difficult to do but you have to close that mouth. And you don’t want to create a situation for you and your shareholders.
The idea here is to build value for the shareholders, spend efficiently, execute on the plan, deliver when you said you’re gonna deliver and hope that the market reward you by showing value and appreciation on your market cap, volume and stock price. These are the things that a public company should shoot for.
Host
I want to ask you about the macro-environment… the headline today is about Elon Musk saying that he wants to cut about 10% of Tesla workers. Obviously they’re concerned about global supply chain and money is getting more expensive to borrow… several macro headwinds that everyone is facing and that affects you as well.
How is the impact from this macro-environment? Does that concern you at all?
David Michery, Mullen’s CEO
Can’t impact us more than it already has. We operate on a fine line, we always think out of the box and “what if” so we’re always addressing supply chains issues to ensure that we’re not gonna have any stoppages. As far as the employees are not really worried about that… We’re a small company, we have less than a couple hundred people working for us but they do the job of a thousand. We got people, as I stated earlier, that do multiple tasks. No one gets employed here unless they’re willing to work as much as I work.
Host
Does the battery update translates to greater mileage or a faster charging time?
David Michery, Mullen’s CEO
Both. The amount of cells that we would put into a pack to get a 150kwh equivalent and the amount of time to charge that cell. For us, it’s about the efficiency and in every corner we’re trying to reduce cost and increase the efficiency. If we can accomplish that, than I think we are on our away to our battery successful undertaking.
Host
What about other applications for the battery? I’m talking about phones…
David Michery, Mullen’s CEO
A cell can scale up or down. We’re gonna scale up to the vehicle pack level… We plan on sharing our technology with everybody and cellphones are not out of the question, powertools, … Anybody that needs a good reliable and safe cell, we’re your man!
Host
Regarding Hindenburg Report from a couple months ago, do you have the response to the claims made? What do you say?
David Michery, Mullen’s CEO
Results will speak for themselves. We will continue with our plan and the results that we publish I believe should address anyone’s concerns.
Host
Did you see an inaccuracy in that report?
David Michery, Mullen’s CEO
I don’t comment stuff that it is not relevant to me. If I did that I’d spend the rest of my life answering every person’s question that it isn’t intelligent enough to understand what we’re doing or it is malicious. I focus on the plan, we’re gonna execute the plan and put out the information either it corroborate what we’re doing or not.
Host
Why do you suspect your company has people so wild up on the bullish side and on the bearish side too. Why do you think that happens?
David Michery, Mullen’s CEO
Mullen is a disruptive e company. From the inception of the company it has always been different, you got to remember that we didn’t wake up a year ago and decided we’re gonna take a crayon, piece of paper to draw a car and go get a SPAC to become public. We took the hard way out. We developed our brand, we have expertees being able to service and sell the vehicles. We know what takes to hand recalls, people forget that. We have a fully homologated DOT certified vehicle, the sedan that we took over. We had that car in circulation, we sold cars and we still offer support services for over a thousand cars that are on the road.
You let the talkers talk and the doers do. At the end of the day we will see who’s at the finish line.
Host
We talked earlier about the F500 company announcement, you said end of Q2 for that..what other details can you give us about timelines for announcements in general?
David Michery, Mullen’s CEO
Plenty. We will share that information in a public form and we plan on having many releases and we’re excited. We’re engaging with everybody. Pretty big OEMs are very impressed with the battery results… I’m talking at the CEO levels that want to sit down and talk about deals, and we’re open to it. We want to share technology like Bluetooth, license the technology for everybody.
Host
I would presume that the sales cycles at these OEMs is like a year as long thing…you know the words will probably be “a while”
David Michery, Mullen’s CEO
I wouldn’t say that. I’ve been working hard on this and along with the major transaction that is happening at the same time, there’s so much stuff going on. When I told you I’m working 20 hours a day, I’m working 20 hours a day. A lot of good stuff happening, more so than ever in the history of this company and I think you’re looking at a… (…) we came out a small market cap, people kind of ignored us, we systematically have progressed forward and in a short window, we’re now larger than some of the guys that had a market cap of $2-3b range and now these guys are down in a $300-400 million range. Look at us!
It’s not where you start, it’s where you finish. And we plan to be on that finish line and see who else can join us there.
Host
Have a good weekend and goof luck! Thank you!
Mullen Automotive shares rose 44.90% after revealing the solid-state polymer battery test results being followed by an interview for Risk On Live Podcast with Todd Auto. Check here the transcript of the interview.
Vanguard Total Stock Market Index Fund filed on Tuesday a NPORT-P form disclosing ownership of 958,351 shares of Mullen Automotive by the end of the first quarter. The fund had closed 2021 owning 117,454 shares (as filed on March 1st) which represents an increase of 715,94 percent quarter over quarter.
Written by Cláudio Afonso | info@claudio-afonso.com | LinkedIn | Twitter