MULLEN AUTOMOTIVE INC. [MULN] Filings

10-Q 1 muln-20230630x10q.htm 10-Q

Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2023

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ____ to ___

Commission File Number: 001-34887

MULLEN AUTOMOTIVE INC.

(Exact name of registrant as specified in its charter)

Delaware		86-3289406
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification Number)

1405 Pioneer Street
Brea, California 92821

(Address of principal executive offices)

(714) 613-1900

(Registrant’s Telephone Number, Including Area Code)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.001 per share	MULN	The Nasdaq Stock Market, LLC (Nasdaq Capital Market)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☒ Yes ☐ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large Accelerated Filer ☐	Accelerated filer ☐
Non-accelerated filer ☒	Smaller reporting company ☒
	Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☒

As of August 14, 2023, a total of 184,168,720 shares of the Registrant’s common stock, par value $0.001 per share, were issued and outstanding.

Table of Contents

MULLEN AUTOMOTIVE INC.

QUARTERLY REPORT ON FORM 10-Q

TABLE OF CONTENTS


		Page

PART I.	FINANCIAL INFORMATION

Item 1.	Financial Statements:	2

	Condensed Consolidated Balance Sheets as of June 30, 2023 (unaudited) and September 30, 2022	2

	Condensed Consolidated Statements of Operations and Comprehensive Loss for the three and nine months ended June 30, 2023 and 2022 (unaudited)	3

	Condensed Consolidated Statements of Stockholders Equity (Deficit) for the three and Nine months ended June 30, 2023 and 2022 (unaudited)	4

	Condensed Consolidated Statements of Cash Flows for the nine months ended June 30, 2023 and 2022 (unaudited)	6

	Notes to Unaudited Condensed Consolidated Financial Statements	8

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	39

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	47

Item 4.	Controls and Procedures	47

PART II.	OTHER INFORMATION

Item 1.	Legal Proceedings	48

Item 1A.	Risk Factors	48

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	48

Item 3.	Defaults Upon Senior Securities	48

Item 4.	Mine Safety Disclosures	48

Item 5.	Other Information	49

Item 6.	Exhibits	50

SIGNATURES		51

Table of Contents

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

MULLEN AUTOMOTIVE INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(unaudited)



	June 30, 2023		September 30, 2022
ASSETS
CURRENT ASSETS
Cash and cash equivalents	$	214,012,136	$	54,085,685
Restricted cash		13,419,872		30,289,400
Accounts receivable		308,000		—
Inventory		12,146,844		—
Prepaid expenses and other current assets		15,154,205		1,958,759
TOTAL CURRENT ASSETS		255,041,057		86,333,844
Property, equipment and leasehold improvements, net		91,750,519		17,786,702
Intangible assets, net		111,957,534		93,947,018
Deposit on ELMS purchase		—		5,500,000
Receivable from related party		1,876,013		1,232,387
Right-of-use assets		5,504,851		4,597,052
Goodwill		92,834,832		92,834,832
Other assets		1,010,712		362,643
TOTAL ASSETS	$	559,975,518	$	302,594,478

LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable	$	12,411,851	$	6,398,423
Accrued expenses and other current liabilities		8,385,380		7,185,881
Dividends payable		374,445		7,762,255
Derivative liabilities		150,318,473		84,799,179
Liability to issue shares		8,870,227		10,710,000
Lease liabilities, current portion		2,217,059		1,428,474
Notes payable, current portion		7,306,107		3,856,497
Other current liabilities		103,372		90,372
TOTAL CURRENT LIABILITIES		189,986,914		122,231,081
Notes payable, net of current portion		-		5,164,552
Lease liabilities, net of current portion		3,709,616		3,359,354
Deferred tax liability		14,436,974		14,882,782
TOTAL LIABILITIES	$	208,133,504	$	145,637,769
Commitments and contingencies (Note 18)

STOCKHOLDERS' EQUITY
Preferred stock; $0.001 par value, 500,000,000 preferred shares authorized
Preferred Series A; 200,000 shares authorized; 1,036 and 1,924 shares issued and outstanding at June 30, 2023 and September 30, 2022 respectively		1		2
Preferred Series C; 40,000,000 shares authorized; 1,210,056 and 1,360,321 shares issued and outstanding at June 30, 2023 and September 30, 2022 respectively		1,210		1,360
Preferred Series D; 437,500,001 shares authorized; 363,097 and 4,359,652 shares issued and outstanding at June 30, 2023 and September 30, 2022 respectively		363		4,359
Common stock; $0.001 par value; 5,000,000,000 and 1,750,000,000 shares authorized at June 30, 2023 and September 30, 2022 respectively; 86,762,748 and 3,704,303 shares issued and outstanding at June 30, 2023 and September 30, 2022 respectively (*)		86,763		3,704
Common stock owed but not issued; $0.001 par value; 17,125,589 and zero shares at June 30, 2023 and September 30, 2022 respectively (*)		17,126		—
Additional paid-in capital (*)		1,950,179,828		948,594,920
Accumulated deficit		(1,689,954,794)		(889,907,455)
Non-controlling interest		91,511,517		98,259,819
TOTAL STOCKHOLDERS' EQUITY		351,842,014		156,956,709
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	559,975,518	$	302,594,478
(*) Adjusted retroactively for reverse stock splits, see Note 1

See accompanying notes to unaudited condensed consolidated financial statements.

Table of Contents

MULLEN AUTOMOTIVE INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited)


	Three months ended June 30,				Nine months ended June 30,
	2023		2022		2023		2022
REVENUE
Vehicle sales	$	308,000	$	—	$	308,000	$	—
Cost of sales		(248,669)		—		(248,669)		—
Gross Margin		59,331		—		59,331		—

OPERATING EXPENSES
General and administrative		31,777,812		10,896,800		144,186,161		53,067,316
Research and development		22,088,011		7,324,365		51,188,991		9,665,126
Total Operating Expense		53,865,823		18,221,165		195,375,152		62,732,442
Loss from Operations		(53,806,492)		(18,221,165)		(195,315,821)		(62,732,442)

Other financing costs - initial recognition of derivative liabilities		(248,413,090)		—		(504,373,115)		(269,344,178)
Gain / (loss) on derivative liability revaluation		(241,168)		34,583,523		(89,462,559)		(107,705,006)
Gain / (loss) extinguishment of debt, net		206,081		—		(6,246,089)		33,413
Loss on financing		(8,934,892)		—		(8,934,892)		—
Gain / (loss) on sale of fixed assets		1,346		(50,574)		386,377		(50,574)
Interest expense		(608,332)		(5,346,766)		(5,414,185)		(29,906,225)
Penalty for insufficient authorized shares		—		(3,495,000)		—		(3,495,000)
Other income / (loss), net		826,378		(12,317,169)		2,044,258		(12,317,169)

Net loss before income tax benefit		(310,970,169)		(4,847,151)		(807,316,026)		(485,517,181)

Income tax benefit/ (provision)		(456,191)		—		520,385		—
Net loss before accrued preferred dividends and noncontrolling interest		(311,426,360)		(4,847,151)		(806,795,641)		(485,517,181)

Net loss attributable to noncontrolling interest		(2,568,126)		—		(6,748,302)		—
Net loss attributable to stockholders		(308,858,234)		(4,847,151)		(800,047,339)		(485,517,181)

Accrued preferred dividends		(13,125)		(2,285,792)		7,387,811		(37,541,085)

Net loss attributable to common stockholders after preferred dividends	$	(308,871,359)	$	(7,132,943)	$	(792,659,528)	$	(523,058,266)

Net loss per share	$	(11.14)	$	(4.26)	$	(55.44)	$	(694.20)

Weighted average shares outstanding, basic and diluted		27,720,475		1,674,607		14,296,659		753,474

(*) Adjusted retroactively for reverse stock splits, see Note 1

See accompanying notes to unaudited condensed consolidated financial statements.

Table of Contents

MULLEN AUTOMOTIVE INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT)

(unaudited)


	Nine Months Ended June 30, 2023
	Preferred Stock																								Deficiency in
	Series A			Series C			Series D			Series AA			Common Stock			Paid-in		Common Stock Owed but not Issued			Accumulated		Non-controlling		Stockholders'
	Shares	Amount		Shares	Amount		Shares	Amount		Shares	Amount		Shares	Amount		Capital		Shares	Amount		Deficit		Interest		Equity
*Balance, September 30, 2022 ()**	1,924	$	2	1,360,321	$	1,360	4,359,652	$	4,359	—	$	—	3,704,303	$	3,704	$	948,594,920	—	$	—	$	(889,907,455)	$	98,259,819	$	156,956,709
Cashless Warrant exercise	—		—	—		—	—		—	—		—	51,214,721		51,215		493,736,977	17,125,589		17,126		—		—		493,805,318
Issuance of preferred stock, common stock and prefunded warrants in lieu of preferred stock	—		—	—		—	273,363,635		273,364	—		—	25,373,502		25,373		196,525,116	—		—		—		—		196,823,853
Issuance of common stock for conversion of convertible notes	—		—	—		—	—		—	—		—	2,357,615		2,358		153,219,879	—		—		—		—		153,222,237
Issuance of common stock for conversion of preferred stock	(888)		(1)	(150,265)		(150)	(277,360,190)		(277,360)	—		—	1,233,775		1,234		276,277	—		—		—		—		-
Reclassification of derivatives to equity upon authorization of sufficient number of shares	—		—	—		—	—		—	—		—	-		-		47,818,882	—		—		—		—		47,818,882
Warrants exercised for receivable and financing loss	—		—	—		—	—		—	—		—	527,883		528		14,974,279	—		—		—		—		14,974,807
Shares issued to settle note payable	—		—	—		—	—		—	—		—	275,772		276		13,736,127	—		—		—		—		13,736,403
Shares issued to extinguish penalty	—		—	—		—	—		—	—		—	102,222		102		5,519,898	—		—		—		—		5,520,000
Preferred shares series AA issued to officers	—		—	—		—	—		—	1		—	-		-		25,000	—		—		—		—		25,000
Preferred shares series AA refund	—		—	—		—	—		—	(1)		—	-		-		(25,000)	—		—		—		—		(25,000)
Share-based compensation	—		—	—		—	—		—	—		—	1,972,955		1,973		68,389,665	—		—		—		—		68,391,638
Preferred stock dividends waiver													-		-		7,387,808							—		7,387,808
Noncontrolling interest													-		-		-							(6,748,302)		(6,748,302)
Net Loss	—		—	—		—	—		—	—		—	-		-		-	—		—		(800,047,339)		—		(800,047,339)
Balance, June 30, 2023	1,036		1	1,210,056		1,210	363,097		363	—		—	86,762,748		86,763		1,950,179,828	17,125,589		17,126		(1,689,954,794)		91,511,517		351,842,014

	Three Months Ended June 30, 2023
	Preferred Stock																								Deficiency in
	Series A			Series C			Series D			Series AA			Common Stock			Paid-in		Common Stock Owed but not Issued			Accumulated		Non-controlling		Stockholders'
	Shares	Amount		Shares	Amount		Shares	Amount		Shares	Amount		Shares	Amount		Capital		Shares	Amount		Deficit		Interest		Equity
*Balance, March 31, 2023 ()**	1,426	$	2	1,210,056	$	1,209	363,098	$	363	—	$	—	14,031,253	$	14,031	$	1,550,147,736	658,918	$	659	$	(1,381,096,561)	$	94,079,643	$	263,147,082
Cashless Warrant exercise	—		—	—		—	—		—	—		—	45,021,915		45,022		190,121,819	16,466,671		16,467		—		—		190,183,308
Issuance of common stock for conversion of preferred stock	(390)		(1)	—		1	(273,363,636)		(273,364)	—		—	1,215,123		1,215		272,149	—		—		—		—		-
Share-based compensation	—		—	—		—	—		—	—		—	1,120,955		1,121		13,126,134	—		—		—		—		13,127,255
Preferred stock dividends	—		—	—		—	—		—	—		—	—		—		(13,125)	—		—		—		—		(13,125)
Issuance of preferred stock, common stock and prefunded warrants in lieu of preferred stock	—		—	—		—	273,363,635		273,364	—		—	25,373,502		25,374		196,525,115	—		—		—		—		196,823,853
Noncontrolling interest	—		—	—		—	—		—	—		—	—		—		-	—		—		—		(2,568,126)		(2,568,126)
Net loss	—		—	—		—	—		—	—		—	—		—		-	—		—		(308,858,233)		—		(308,858,233)
Balance, June 30, 2023	1,036		1	1,210,056		1,210	363,097		363	—		—

MULLEN AUTOMOTIVE INC. [MULN] Filings
10-Q	[2023-08-14]
10-Q	[2023-05-15]
10-Q	[2023-02-14]
10-K	[2023-01-13]
10-Q	[2022-08-12]
10-Q	[2022-05-16]
10-Q	[2022-02-14]
10-K	[2021-12-29]
10-Q	[2021-08-16]
10-Q	[2021-05-17]
10-K	[2021-03-31]
10-Q	[2020-11-16]
10-Q	[2020-08-13]
10-Q	[2020-05-15]
10-K	[2020-03-30]
10-Q	[2019-11-14]
10-Q	[2019-08-14]
10-Q	[2019-05-15]
10-K	[2019-04-01]
10-Q	[2018-11-14]
10-Q	[2018-08-14]
10-Q	[2018-05-14]
10-K	[2018-04-02]
10-Q	[2017-11-14]
S-1	[2017-10-26]
10-Q	[2017-08-14]
10-Q	[2017-05-15]
10-K	[2017-03-31]
10-Q	[2016-11-14]
10-Q	[2016-08-15]
S-1	[2016-07-20]
10-Q	[2016-05-16]
10-K	[2016-03-30]
S-1	[2016-01-07]
10-Q	[2015-11-16]
10-Q	[2015-08-13]
10-Q	[2015-05-14]
10-K	[2015-03-30]
10-Q	[2014-11-13]
10-Q	[2014-08-14]
10-Q	[2014-05-15]
10-K	[2014-04-15]
10-Q	[2013-11-14]
10-Q	[2013-08-19]
10-Q	[2013-05-15]
10-K	[2013-04-12]
10-Q	[2012-11-14]
10-Q	[2012-08-14]
10-Q	[2012-05-15]
10-K	[2012-03-30]