This directly from the contract between Mullin and RMA from Dec 2022:
3. Payment Terms; Passage of Title. All Vehicles shall be shipped FOB MULLEN' factory. Payment for each Vehicle is due in full upon delivery. Title to each Vehicle shall pass from MULLEN to Buyer, or to the financial institution designated by Buyer, upon MULLEN' s receipt of payment for said Vehicle. Buyer will provide to MULLEN any resale exemption certificate, direct pay permit or any other exemption information related to Buyer's purchase of Vehicles as may be reasonably requested by MULLEN. Buyer will be solely responsible for the collection and remittance of any and all applicable taxes arising from its sale or lease of Vehicles and other tangible items, to any customer of Buyer.
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Whether or not these are real operating vehicles, Mullen can invoice units when shipped (Dec 2023). RMA must pay Mullen at the time vehicles are delivered to lots Jan 2024).
Repurchase of Vehicles. DEALER will endeavor, to the extent practicable considering all relevant factors, to sale and deliver all MULLEN Products and services that are ordered by the DEALER. At Dealer’s discretion, any new products (less than 500 miles) not sold by Dealer after a period of twelve months can be returned to MULLEN at original pricing.
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Which means RMA has the right to send vehicles back to Mullen after 12 months (that may be end of 2024, but Mullen won’t reflect receipt until beginning of 2025).
Think about these dates from a 10-Q filing perspective. The shareholders will always be about 45-60 days behind the actual news cycle on stuff Mullen chooses not to PR.
1.Will RMA actually pay Mullen hard cash upon delivery?
2. Will Mullen actually assign title to RMA upon payment? If RMA doesn’t pay, what happens to vehicles? Do they sit in the lot until sold or returned? Do they get titled only if they are sold to end customer?
These are things to look for. Unfortunately you need boots on the ground to see what happens to these vehicles.
