MULLEN AUTOMOTIVE INC

References in this Annual Report to the “Company”, “we”, “us”, “our” or similar references, or “Mullen,” mean Mullen Automotive Inc., a Delaware corporation, and its subsidiaries Ottava Automotive, Inc., a California corporation, Mullen Indiana Real Estate, LLC., a Delaware corporation, Mullen Investment Properties LLC, a Mississippi corporation, Mullen Advanced Energy Operations LLC, a California corporation, and a majority ownership in Bollinger Motors, Incorporated in Delaware.

Background

We are a Southern California-based technology and electric vehicle company that operates in various verticals of energy technology and automotive industry. The Company was originally formed on April 20, 2010, as a developer and manufacturer of electric vehicle technology. During 2021, the Company completed a merger with Net Element, Inc., a Delaware-incorporated company. The merger was accounted for as a reverse merger transaction, in which Mullen Automotive-California is treated as the acquirer for financial accounting purposes. The Company changed its name from “Net Element, Inc.” to “Mullen Automotive Inc.” The Nasdaq Stock Market, LLC (Nasdaq Capital Market) ticker symbol for the Company’s common stock changed from “NETE” to “MULN” at the opening of trading on November 5, 2021.

The Company

Mullen Automotive is a Southern California-based technology and automotive company that is building and delivering the newest generation of Commercial Trucks.

The Company entered the Commercial Truck Business executing two opportunistic acquisitions in the later part of 2022. On September 7, 2022, the first acquisition of Bollinger Motors was announced. The purchase price was $148.6 million in cash and stock for a 60% controlling interest, which provided Mullen with majority ownership of Bollinger Motors, Inc. This provided Mullen short term entry into the medium duty truck classes 4-6, and also the possibility to enter the Sport Utility and Pick Up Truck EV segments. In accordance with the stock purchase agreement signed on July 26, 2024, the Company, as part of activities to launch production in the Bollinger segment, invested an additional $12.7 million in newly issued shares of the subsidiary ($18.7 million by January 23, 2025), increasing controlling interest of the Company to 66% on a fully diluted basis at September 30, 2024 (and to approximately 68% by January 23, 2025).

The second acquisition was in October 2022, when the U.S. Bankruptcy Court approved the Company’s acquisition of ELMS’ (Electric Last Mile Solutions) assets in an all-cash purchase of $105 million, which includes approximately of $10 million vendor payables assumed at closing. With this transaction, Mullen acquired a manufacturing plant in Mishawaka, Indiana and all the intellectual property needed to engineer and build Class 1 and Class 3 electric vehicles.

These two acquisitions gave Mullen a portfolio in the Commercial EV truck market with vehicles ranging from Class 1 to 6 where the Company believes there is very little current competition and, in some segments, no other announced entries.

The Tunica Mississippi manufacturing plant was equipped during 2023 as the Mullen Commercial Manufacturing Center. Tunica was commissioned with two lines to manufacture the Class 1 and 3 vehicles and began shipping Class 3 trucks in September 2023 and Class 1 vans in November 2023. Bollinger Motors has a contract manufacturing relationship with Roush Enterprises in Livonia, Michigan that began producing Class 4 trucks in September, 2024.

The third key strategic transaction was the purchase of the assets of Romeo Battery. This established the base for in house manufacturing of modules and packs for Mullen vehicles as well the possibility for sales to non-Mullen customers as well.

The Mullen FIVE, the Company’s first planned consumer electric crossover, has been put on hold as Mullen focuses its efforts and resources on the commercial EV market segment that we believe has more opportunities.

Company Overview

Our Strength and Strategy

Our Market Opportunity

There is a significant transformation occurring in the motor vehicle landscape. All major OEM’s have announced billions of dollars of investments to transform their vehicle portfolio from gas powered to various forms of electric propulsion. We believe that Mullen is at the forefront of this transformation leading the way in Commercial Trucks.

The Importance of Commercial and Fleet Business Segments

Fleet and Commercial segments represent a large portion of the total U.S. commercial market and includes Government, Commercial and Lease/Rental segments. Our goal is to build strong customer relationships with fleet operators to capture a significant market opportunity as the broad trend of vehicle electrification continues.

The decisions for a Fleet Customer to purchase an EV versus a gas-powered vehicle is pragmatic, a business decision relying on cost variables and company strategies, much different than the decision processes that a retail customer includes in their purchase decision. Fleets have generally well-known routes and duty cycles that allow a good match between range capabilities of the vehicles and the actual daily required range, supporting the early adoption of EV’s in the Commercial space.

Mullen Commercial Portfolio of Vehicles

Mullen Class 1 Cargo Van

Mullen THREE

Battery Technology

The Company is using Li-Ion technology for its first vehicles supplied from world leader CATL. Lithium Iron Phosphate chemistry has proven to be the best combination for Commercial vehicles when balancing cost, reliability and performance.

As part of Mullen’s strategy to increase our vertical integration of critical systems, Mullen has expanded its battery development and manufacturing capabilities by purchasing battery related assets of Romeo Power in September 2023 for $3.5 million. This purchase included battery production lines as well as testing equipment and a significant amount of inventory for pack production and the Intellectual Properties (IP) to produce the Legions and Hermes battery systems. In addition, Mullen leased a 122,000 square foot facility in Fullerton, California for battery operations including the installation of Romeo equipment purchased. The purchase of these assets and the acquisition of the battery facility in Fullerton, CA, provides Mullen with the capability to produce an in-house battery system and reduce supply chain risks in a very critical component of the vehicle by reducing reliance on external suppliers.

Production Lines in Fullerton Facility

Solid State Development

Mullen is currently in development of a semi-Solid State battery to be used initially in their Class 3 vehicle. Early vehicle testing was completed in March 2024 on the Class 1 vehicle. The Company plans to introduce this technology into the Class 3 vehicle lines after full vehicle testing and certification has been completed.

Mullen Vehicle Manufacturing

We have a 124,700 sq ft facility located in Tunica, Mississippi that was purchased during 2021. Following all plant preparations, the first fully certified Class 3 vehicles launched from the plant in September 2023. Following that, the Class 1 assembly line began production in November.

Mishawaka Manufacturing

Mullen owns a 675,000 sq ft manufacturing facility in Mishawaka, Indiana. This was the original manufacturing plant for General Motors Hummer H2, and later the Mercedes-Benz R-Class.

Bollinger Manufacturing

Bollinger Motors is producing the B4 class 4 EV truck via a contract manufacturing partnership with Roush Industries. The manufacturing work is being conducted at their Livonia, Michigan facility with 135,000 square feet of dedicated to Bollinger Motors assembly, warehouse and office space. This space will be utilized for both ongoing B4 production, and then the B5 starting in CY 2026.

This takes advantage of Roush's long history in manufacturing low volume vehicles and avoided a major capital outlay by Bollinger for a plant facility. As part of the contract, Bollinger purchased and owns the production line allowing relocation if desired at a later time.

Mullen Commercial Sales, Service and Distribution

The commercial sales and distribution plan is to form distribution partnerships with existing top performing commercial dealerships that will cover the National fleet business requirements.

On December 13, 2022, the Company announced Randy Marion Isuzu LLC as its first dealer group partner for Mullen’s commercial EV lineup.

During 2024, Mullen expanded its distribution and added six dealer partnerships providing national coverage with Mullen commercial vehicles offered at approximately 67 dealership locations.

Mullen’s Dealer Group now includes:

In August 2024, we signed a three-year purchase agreement with Volt Mobility, which subsequently assigned the contract to one of its wholly owned companies, Lessor Car Rental LLC. The agreement was for the purchase of Mullen commercial EVs at preferred wholesale pricing for distribution in the United Arab Emirates region as an exclusive representative. VoltiE Group, an independent entity, which was previously described as a subsidiary of the Company in error, agreed to provide chargers. Volt Mobility committed to purchase 3,000 Class 3 commercial EVs with an initial deposit of $3.0 million for initial orders of 300 units within 60 days of execution and the balance of 2,700 units in calendar year 2025. As of the date of this report, Mullen has fulfilled its initial commitment by providing vehicles to support homologation. However, Volt Mobility has not made the deposit nor placed the initial orders. At this time, it is not known if the Company will continue the relationship and is currently investigating alternative distributors for the region.

Government Procurement Programs

Mullen Automotive has been actively targeting government contracts. However, entering the government sector presents unique challenges at a state level, each of the fifty states has its own procurement office that releases vehicle bid specifications, which can vary significantly in requirements. On the federal level, the U.S. government, through its diverse agencies and departments, relies heavily on procurement processes managed by the General Services Administration (GSA) Automotive Branch.

The Biden administration issued an executive order in 2021 focused on revitalizing the electric-vehicle (EV) program of the U.S. government, requiring the replacement of the government’s entire fleet of about 650,000 vehicles with American-made EVs. The Company focus is establishing Mullen’s EV lineup within the overall federal fleet procurement process with a partner organization RRDS that has extensive experience in Government sales. The application for approval for sales was submitted jointly with RRDS on November 24, 2023. The company awaits the decision by the GSA which federal agencies as well as states have the option to procure vehicles through GSA contracts. Other states opt to use purchasing platforms, like Sourcewell. Mullen and Bollinger have access to use the Sourcewell platform to market and sell their product lines.

A key challenge electric vehicles could face in the federal space is the potential for changes to the current GSA EV procurement policy under the new Administration. However, some federal agencies have already invested in EV infrastructure, which strongly suggests that the GSA and federal agencies will continue to purchase electric vehicles through automotive contracts. States like California, Washington, Oregon, New York, New Jersey, part of 17 CARB-states, and even some southern states like North Carolina and Florida have established contracts requiring local governments to transition to electric vehicles by 2025. Mullen expects more states to adopt similar procurement policies, offering a broader selection of vehicles and giving individual agencies the flexibility to choose which vehicles they wish to purchase as electric commercial vehicles have proven to offer a lower total cost of ownership within their duty cycles.

After Sales Strategy

We anticipate that customers will have access to all contracted Dealers to use the Service Facilities that are part of their Dealership network. In addition, to ensure all Customers nationwide have access to fast response for required servicing of their vehicles, Mullen and Bollinger have partnered with Amerit Fleet Solutions to use both their facilities and mobile vehicles. Amerit technicians have been trained and are ready to service Customer deliveries.

Bollinger Motors Sales, Service and Distribution Approach

Bollinger Motors employs a traditional OEM-Dealer Network sales approach. By December 31, 2024, Bollinger Motors has built a network of more than 50 dealership locations, nationwide. These dealers are established, respected commercial truck dealers, including Nacarato Truck Centers, Bergey’s Truck Centers, TEC Equipment, Affinity Truck Center, Anderson Motors and Nuss Truck & Equipment. As Bollinger Motors authorized dealers, they will provide sales and service support to both prospective and current Bollinger Motors owners. Bollinger expects to grow their national network to 100-plus dealership locations in 2025.

Government Sales for Bollinger Motors are handled through the existing dealer network and a partnership with RRDS. Additionally, Bollinger Motors has access to a key government procurement portal, Sourcewell, via partnership with National Auto Fleet Group (NAFG) and their Sourcewell-approved contract (#032824-NAF), as well as the BidNet tool.

After-sales service will be primarily handled for Bollinger Motors owners via Bollinger’s national dealer network who have the parts, tooling and training on the Bollinger Motors product. For those customers outside of the service area of a network dealers, Bollinger has partnered with Amerit to provide mobile service.

Vehicle Fleet Connectivity

To assist fleets to improve their operating costs, safety and productivity, Mullen and Bollinger offer Advanced Telematics Systems which provides Driver and Fleet Manager connectivity to the vehicles with real time alerts for vehicle location, routing, maintenance alerts, and battery state of charge.

Mullen Vehicle Marketing

In 2023, we launched a comprehensive marketing strategy to promote Mullen’s commercial vehicles. Our multi-channel approach encompassed targeted Email Campaigns, engaging Social Media content, strategic Paid Advertising, Press Releases, Editorial Features, Sponsorships, and participation in 20 key regional and national trade shows. We partnered with top-tier agencies to enhance our advertising, event presence, social media engagement, and videography efforts.

In 2024, we built on this momentum with expanded commercial marketing initiatives, including increased trade show participation, a stronger online presence, event collaborations, and an expanded direct sales outreach to new markets. Beginning in April 2024, we conducted over 120 product demonstrations directly with large regional fleets, municipal customers and small businesses.

With the addition of our dealer partners, we have significantly expanded our market reach. Our efforts now include collaborative marketing and product promotion, targeting their customer bases to drive greater visibility and growth.

The Marketing team has built on the success of our launch efforts, to strengthen our web presence, expand marketing outreach, and increase participation in national trade shows. Our sales team is actively collaborating with dealer partners to attend key regional events and boost the availability of our pilot programs. Additionally, we launched a robust upfitter partnership program to showcase our vehicles at upfitter booths across local, regional, and national trade shows. Our marketing and advertising efforts also extend into industry-specific publications, while our online visibility continues to experience significant growth.

We have leveraged the combination of Mullen’s sales team and our dealer partners representation in the fleet sector to build relationships with potential national, regional and small business fleets, upfitters, fleet management companies and federal and municipal customers.

We built an aggressive demo program for fleets to test our vehicles across real world use cases and environment. These demonstrations have been critical piece to our overall go to market strategy and has provided resourceful feedback for product development, interest and sales volume.

The addition of nationally renowned, leading dealerships has significantly enhanced Mullen’s brand presence among top national fleets. Mullen has worked hand in hand with our dealer partners to grow market awareness and arm their sales teams with all of the pertinent information about our Commercial Product line enabling them to successfully market and sell our vehicles. In addition, we have worked with each of the dealerships marketing teams to develop joint marketing materials, promotional videos and social media campaigns.

Additionally, we have worked with national upfitters to continually demonstrate the versatility of Mullen’s product line across vocational sectors.

Bollinger Motors Vehicle Marketing

Bollinger takes a multi-pronged approach to marketing their products, leveraging the strength of their unique brand.

Research and Development

As an emerging automaker, we rely heavily on research and development to establish and strengthen our market position. We conduct our research and development activities in Troy, Michigan and Oak Park Michigan facilities for our Commercial Platforms and Fullerton California for the Battery Business.

During the fiscal years ended September 30, 2024 and 2023 we incurred research and development expense of approximately $74.9 million and $77.4 million, respectively. Expenses consisted primarily of personnel costs for our teams in engineering as well as contract and professional services that included the production of several demonstrator vehicles.

Intellectual Property

We place a strong emphasis on our innovative approach and proprietary designs which bring intrinsic value and uniqueness to our product portfolio. As part of our business, we seek to protect the underlying intellectual property rights of these innovations and designs such as with respect to patents, trademarks, trade secrets and other measures, including through employee and third-party nondisclosure agreements and other contractual arrangements. Our success depends in part upon our ability to protect our core technology and intellectual property. We have nondisclosure and invention assignment agreements with our consultants and employees, and we seek to control access to and distribution of our proprietary information through non-disclosure agreements with our vendors and business partners.

Trademarks and Patents

We plan to file additional applications for the registration of our trademarks and issuances of patents in the United States and foreign jurisdictions as our business expands under current and planned distribution arrangements. Protection of registered trademarks and issued patents in some jurisdictions may not be as extensive as the protection provided by the United States. There are no assurances given that pending applications will be granted or that they will, if granted, contain all of the claims currently included in the applications.* *Refer to Intellectual Property Table.

Trade Secrets

We own certain intellectual property, including trade secrets, which we seek to protect, in part, through confidentiality agreements with employees and other parties. Even where these agreements exist, there can be no assurance that these agreements will not be breached, that we would have adequate remedies for any breach, or that our trade secrets will not otherwise become known to or independently developed by competitors.

We intend to protect our legal rights concerning intellectual property by all appropriate legal action. Consequently, we may become involved from time to time in litigation to determine the enforceability, scope, and validity of any of the foregoing proprietary rights. Any patent litigation could result in substantial cost and divert the efforts of management and technical personnel.

Government Regulation and Credits

We operate in an industry that is subject to extensive environmental regulation, which has become more stringent over time. The laws and regulations to which we are subject govern, among others, water use; air emissions; use of recycled materials; energy sources; the storage, handling, treatment, transportation and disposal of hazardous materials; the protection of the environment, natural resources and endangered species; and the remediation of environmental contamination. Compliance with such laws and regulations at an international, regional, national, state and local level is an important aspect of our ability to continue our operations.

Environmental standards applicable to us are established by the laws and regulations of the countries in which we operate, including standards adopted by regulatory agencies as well as the permits and licenses required by such agencies. Each of these sources is subject to periodic modifications and we anticipate increasingly stringent requirements. Violations of these laws, regulations or permits and licenses may result in substantial civil and criminal fines, penalties, and possibly orders to cease the violating operations or to conduct or pay for corrective works. In some instances, violations may also result in the suspension or revocation of permits and licenses.

Emissions

There are vehicle emissions performance standards that may provide an opportunity for us to sell emissions credits.

The United States Environmental Protection Agency (EPA) issues emissions credits and the fleet-average evaporative emission standards. Current Model Year Passenger Cars, Light-Duty Trucks, and Medium-Duty Vehicles Regulation and are paid in relation to vehicles sold and registered in the U.S.

California has greenhouse gas emissions standards that closely follow the standards of the EPA. The registration and sale of Zero-Emission Vehicles (ZEVs) in California will earn us ZEV credits that we can sell to other Original Equipment Manufacturers (OEMs). Other states within the United States have adopted similar standards include Colorado, Connecticut, Delaware, Maine, Maryland, Massachusetts, New Jersey, New Mexico, New York, Oregon, Pennsylvania, Rhode Island, Vermont, Washington state and Washington D.C. We intend to take advantage of these regimes by registering and selling ZEVs as our vehicles are sold.

ZEV credits in California are calculated under the California Code of Regulations for 2018 through 2025 Model Year Passenger Cars, Light-Duty Trucks, and Medium-Duty Vehicles Regulation and are paid in relation to ZEVs sold and registered in California including Battery Electric Vehicles (BEVs) and Fuel Cell Electric Vehicles (FCEVs).

The ZEV program assigns ZEV credits to each vehicle manufacturer. Vehicle manufacturers are required to maintain ZEV credits equal to a set percentage of non-electric vehicles sold and registered in California.

Each vehicle sold and registered in California earns a number of credits based on the drivetrain type and the all-electric range of the vehicle under the Urban Dynamometer Driving Schedule Test Cycle. Battery electric and fuel cell vehicles receive between one and four credits per vehicle sold in California, based on range.

If a vehicle manufacturer does not produce enough EVs to meet its quota, it can choose to buy credits from other manufacturers who do or pay fines for each credit such manufacturer is short. This will provide an opportunity for us to sell credits to other manufacturers that may not have met their quota. Initial negotiations with a certain OEM's have started in this area.

EPA / CARB Emissions and Certificate of Conformity / Executive Order

The United States Clean Air Act requires that we obtain a Certificate of Conformity (CoC) issued by the EPA and a California Executive Order (EO) issued by the California Air Resources Board (CARB) concerning emissions for our vehicles. A Certificate of Conformity is required for vehicles sold in states covered by the Clean Air Act’s standards, and an Executive Order is required for vehicles sold in states that have sought and received a waiver from the EPA to utilize California standards. CARB sets the California standards for emissions control for certain regulated pollutants for new vehicles and engines sold in California. States that have adopted the California standards as approved by EPA also recognize the Executive Order for sales of vehicles. There are currently eight states (Colorado, Maryland, Massachusetts, New Jersey, New York, Oregon, Vermont and Washington state) which have adopted the California standard for heavy-duty vehicles.

The Greenhouse Gas Rule was incorporated into the Clean Air Act on August 9, 2011. Even though Mullen’s vehicles have zero-emissions, Mullen is still required to seek an EPA Certificate of Conformity for the Greenhouse Gas Rule and a CARB Executive Order for the CARB Greenhouse Gas Rule.

Mullen has received EPA Certificate of Conformity for both Class 1 and Class 3 vehicles. In addition, the California EO has been issued by the CARB for the Mullen ONE, Mullen THREE and Bollinger B4.

Vehicle Safety and Testing

Our vehicles are required to comply with, numerous regulatory requirements established by the National Highway Traffic Safety Administration (NHTSA), including applicable United States Federal Motor Vehicle Safety Standards (FMVSS). All Mullen and Bollinger Motors commercial products fully comply with all applicable FMVSS requirements.

Human Capital Resources

Talent Attraction and Capability Assessment

Where and how we source our talent evolves as conditions and opportunities change. From a capability perspective, we are leveraging best practices in assessments and talent management to current capabilities and future pipeline while reinforcing a culture of belonging, empowerment, and innovation.

Diversity and Inclusion

We strive to attract a pool of diverse and exceptional candidates and support their career growth once they become employees. In addition, we seek to hire based on talent rather than solely on educational pedigree. We also believe that our ability to retain our workforce is dependent on our ability to foster an environment that is sustainably safe, respectful, fair, and inclusive of everyone and promotes diversity, equity and inclusion inside and outside of our business.

Our Employees

As of September 30, 2024, Mullen employed 388 full-time employees including 243 Mullen and 145** **Bollinger employees. Most of our employees are engaged in automotive engineering, manufacturing, sales and marketing and finance related function. None of our employees are represented by a labor union or subject to a collective bargaining agreement.

Available Information

We are subject to the informational requirements of the Securities Exchange Act of 1934, as amended (the "Exchange Act") and file or furnish reports, proxy statements, and other information with the SEC. You can read our SEC filings over the Internet at the SEC’s website at www.sec.gov. Our filings with the SEC, including our Annual Report on Form 10‑K, Quarterly Reports on Form 10‑Q, Current Reports on Form 8‑K, and any amendments to those reports, also are available free of charge on the investors section of our website at www.mullenusa.com when such reports are available on the SEC’s website. Further corporate governance information, including our certificate of incorporation, bylaws, governance guidelines, board committee charters, and code of business conduct and ethics, is also available on the investors section of our website.

The contents of the websites referred to above are not incorporated into this filing or in any other report or document we file with the SEC, and any references to these websites are intended to be inactive textual references only.