BOLLINGER INNOVATIONS, INC.
For the period ended Mar 31, 2025. Filed May 20, 2025.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2025 · Filed May 20, 2025
BINI$0.07-20.3%Stored close · as of Jul 8, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-12-31; filed 2025-02-19.
0001437749-25-004413
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-03-31; filed 2025-05-20.
0001437749-25-017812
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 75 previous paragraphs and 95 current paragraphs.
41 unchanged; 26 reworded; 20 added; 6 removed; 2 previous and 8 current paragraphs rearranged.
Tables are not compared: 13 previous and 12 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (20)
Current report
Impairment
Current report
Due to unfavorable market conditions and the decline of market prices of the Company’s common stock, we tested Patents acquired in September 2022 as part of the Bollinger segment (seeNote 21 - Segment information) for recoverability on March 31, 2025 and recognized impairment loss in amount of $12.0 million mainly due to the uncertainty of future fundings required to support the business and decrease of Company's market capitalization. During the three months ended March 31, 2024, impairment of the intangible assets was $73.4 million, plus impairment of goodwill amounted to $28.8 million).
Current report
Other gains and losses
Current report
Net gain on revaluation of warrants obligations was $98.2 million during the three months ended March 31, 2025 vs $3.6 million during the three months ended March 31, 2024 with the gains recorded primarily during periods when closing bid price of the Company's common stock was lower than conversion floor of the relevant warrants (after reverse stock splits). During the three months ended March 31, 2025, pursuant to the warrant exchange agreement (the “Warrant Exchange Agreement”) whereby the Company and certain investors agreed to issue new warrants in exchange for existing warrants, the Company and investors exchanged the warrants to fix conversion floor at $0.01 (not subject to reverse stock splits), which increased the fair value of warrants (calculated as number of shares issuable upon cashless exercise) and corresponding loss in amount of approximately $57.8 million was presented in the line item “Loss on exchange of warrants” of the consolidated statement of operations. For further details on accounting for warrants, seeNote 8 - Warrants and Other Derivative Liabilities and Fair Value Measurementsto the financial statements.
Current report
Comparison of the Six Months Ended March 31, 2025*** to the*** Six Months Ended March 31, 2024
Current report
Revenues
Current report
Research and Development
Current report
General and Administrative
Current report
Impairment
Current report
Due to unfavorable market conditions and the decline of market prices of the Company’s common stock, we tested Patents acquired in September 2022 as part of the Bollinger segment (seeNote 21 - Segment information) for recoverability on March 31, 2025 and recognized impairment loss in amount of $12.0 million mainly due to the uncertainty of future fundings required to support the business and decrease of Company's market capitalization. During the six months ended March 31, 2024, impairment of the intangible assets was $73.4 million, plus impairment of goodwill amounted to $28.8 million).
Current report
Other gains and losses
Current report
Net gain on revaluation of warrants obligations was $63.6 million during the six months ended March 31, 2025 vs $3.1 million loss during the six months ended March 31, 2024 with the gains recorded primarily during periods when closing bid price of the Company's common stock was lower than conversion floor of the relevant warrants (after reverse stock splits). During the six months ended March 31, 2025, pursuant to the Warrant Exchange Agreement, the Company and certain investors agreed to issue new warrants in exchange for existing warrants, the Company and investors exchanged the warrants to fix conversion floor at $0.01 (not subject to reverse stock splits), which increased the fair value of warrants (calculated as number of shares issuable upon cashless exercise) and corresponding loss in amount of approximately $57.8 million was presented in the line item “Loss on exchange of warrants” of the consolidated statement of operations. For further details on accounting for warrants, seeNote 8 - Warrants and Other Derivative Liabilities and Fair Value Measurementsto the financial statements.
Current report
Net Loss
Current report
SeeNote 4 - Segment informationfor the main financial information pertaining to the segments.
Current report
Bollinger Motors–** receivership after the balance sheet date**
Current report
After the balance sheet date, on May 7, 2025, the U.S. District Court for the Eastern District of Michigan entered an order placing Bollinger Motors, Inc., a majority-owned and material operating segment of Mullen Automotive Inc., into court-appointed receivership. This action followed a legal complaint filed on March 21, 2025, by Robert Bollinger, who alleged a breach of contract related to a $10.0 million secured promissory note executed on October 24, 2024. The court order appointed a receiver with full authority over Bollinger Motors’ operations, governance, and assets, including the ability to operate or sell the business, in whole or in part, for the benefit of creditors.
Current report
Following the appointment of the receiver, Mullen no longer retains decision-making authority or operational control over Bollinger Motors. The Company is not required to fund ongoing operations, settle liabilities, or guarantee obligations of the discontinued business. The promissory note at issue was not guaranteed by Mullen, and no current legal proceedings or court orders impose an obligation on Mullen to fund any shortfall if the assets of Bollinger Motors are insufficient to cover its liabilities.
Current report
The Company does not expect the loss of Bollinger Motors to have a material adverse impact on its liquidity or capital resources. Bollinger Motors was not generating positive cash flow and had been incurring significant operating losses. Removing this business from the consolidated results is expected to reduce ongoing losses and simplify the Company’s operating structure.
Current report
On February 14, 2025, the Company filed a Certificate of Amendment to its Second Amended and Restated Certificate of Incorporation with the Secretary of State of the State of Delaware to affect a one-for-sixty (1-for-60) reverse stock split of its common stock. The reverse stock split became effective on February 18, 2025. As further described in theNote 20 - Subsequent events, the Company also implemented a 1-for-100 reverse stock split on April 11, 2025, which was applied retroactively to these consolidated financial statements.
Current report
After the balance sheet date, the Senior convertible notes that remained unconverted on April 15, 2025 (in amount of approximately $35.1 million) and relevant accumulated interest (in amount of approximately $0.8 million) were in cross-default due to the non-payment of portion of the loan that matured. Starting from that date, the interest rate increased from 15% to 20%. As of the date these financial statements were available to be issued, none of the investors demanded immediate payment of the notes and outstanding interest in cash.
Removed paragraphs (6)
Previous report
The tables below disclose information on deliveries of vehicles, revenue recognized, and payments received from our customers over the recent period.
Previous report
Cost of Revenues
Previous report
Other costs
Previous report
Loss on revaluation of warrants obligations was $34.6 million during the three months ended December 31, 2024 vs $6.7 million during the three months ended December 31, 2023 with the change mainly attributable to a significantly higher volume of warrant liabilities outstanding during the three months ended December 31, 2024, seeNote 8 - Warrants and Other Derivative Liabilities and Fair Value Measurements to the financial statements.
Previous report
Effective February 18, 2025, the Company implemented a reverse stock split at a ratio of 1-for-60 shares in order to satisfy this requirement.
Previous report
During the three months ended December 31, 2024, a significant part of Senior secured convertible notes (that were issued previously and were in cross-default on September 30, 2024), as well as relevant accumulated interest, have been converted into shares of common stock. By the date these financial statements are available to be issued, almost full amount of the Senior convertible notes and accumulated interest, that were outstanding on September 30, 2024 and issued in October 2024, has been converted to shares of common stock.
Reworded paragraphs (26)
Previous wording
The following discussion and analysis is intended to help the reader understand Mullen’s results of operations and financial condition. You should read the following discussion and analysis of our financial condition and results of operations together with our audited financial statements and related notes included elsewhere in this Report.
Current wording
The following discussion and analysis are intended to help the reader understand Mullen’s results of operations and financial condition. You should read the following discussion and analysis of our financial condition and results of operations together with our audited financial statements and related notes included elsewhere in this Report.
Previous wording
We recognize revenue from the sale of electric vehicles upon the transfer of control to the dealer/customer. Normally, control transfers at the point of delivery when the dealer/customer has possession of the vehicle and bears the risks and rewards of ownership. However, a contract with one of our dealers includes return provision, allowing unsold vehicles to be returned after one year; and contracts with two of our dealers include return provisions, allowing unsold vehicles to be returned upon contract termination. For these arrangements, due to limited historical data on returns, we defer revenue recognition until the dealer sells the vehicles to end customers, or there is sufficient evidence to reasonably estimate the consideration to which we expect to be entitled. The $3.0 million increase in revenue is primarily due to the sale of 20 Bollinger B4's during the quarter ended December 31, 2024.
Current wording
We recognize revenue from the sale of electric vehicles upon the transfer of control to the dealer/customer. Normally, control transfers at the point of delivery when the dealer/customer has possession of the vehicle and bears the risks and rewards of ownership. However, a contract with one of our dealers includes return provision, allowing unsold vehicles to be returned after one year; and contracts with a few other dealers include provisions allowing unsold vehicles to be returned upon contract termination. For these arrangements, due to limited historical data on returns, we defer revenue recognition until the dealer sells the vehicles to end customers, or there is sufficient evidence to reasonably estimate the consideration to which we expect to be entitled. In January 2025, one of the customers waived their right of return for 60 vehicles (Mullen Commercial segment), and the Company recognized revenue in amount of $3.7 million.
Previous wording
The costs of revenues primarily include vehicle components and parts, labor costs, and other relevant costs and expenses applicable to sales and revenues. The cost of revenues exceeds revenue mainly due to increased labor and overhead variances to standard cost in the production of the B4 product, as well as due to write-down of certain raw materials to net realizable value. The higher cost per unit sold contributes to a negative gross margin for the quarter.
Current wording
The costs of revenues primarily include vehicle components and parts, labor costs, and other relevant costs and expenses applicable to sales and revenues. The cost of revenues exceeds revenue mainly due to recognition of indirect manufacturing expenses in periods when production was temporarily suspended, labor and overhead variances to standard cost, as well as due to write-down of certain raw materials to net realizable value.
Previous wording
Research and development expenses decreased by $4.9 million, or 30%, from $16.2 million through the three months ended December 31, 2023, to $11.3 million through the three months ended December 31, 2024. Research and development expenses are primarily comprised of external fees and internal costs for engineering, homologation, prototyping, and other expenses related to preparation for the production of electric vehicles and batteries. The Company recently began cost reduction initiatives, thereby reducing research and development expenses in order to continue as a going concern.
Current wording
Research and development expenses decreased by $13.7 million, or 57%, from $24.0 million through the three months ended March 31, 2024, to $10.4 million through the three months ended March 31, 2025. Research and development expenses are primarily comprised of external fees and internal costs for engineering, homologation, prototyping, and other expenses related to preparation for the production of electric vehicles and batteries. The Company recently began cost reduction initiatives, thereby reducing research and development expenses in order to continue as a going concern.
Previous wording
The Company recognized other financing costs on initial recognition of warrants during the three months ended December 31, 2024 in the amount of $16.1 million due to additional notes with detached warrants issued during the three months ended December 31, 2024 (no investments during the three months ended December 31, 2023).
Current wording
The Company recognized other financing costs on initial recognition of warrants during the three months ended March 31, 2025 in the amount of $21.1 million due to additional notes with detached warrants issued during the three months ended March 31, 2025 (no investments during the three months ended March 31, 2024).
Previous wording
Similarly, the interest expense increased by $18.4 in comparison to the three months ended December 31, 2023 due to a significantly higher volume of debt outstanding during the three months ended December 31, 2024, seeNotes 7to the financial statements.
Current wording
Similarly, the interest expense increased by $7.3 million in comparison to the three months ended March 31, 2024 due to a higher volume of debt outstanding during the three months ended March 31, 2025, seeNotes 7to the financial statements.
Previous wording
General and administrative expenses include all non-production expenses incurred in a given period. This includes professional fees, salaries, rent, repairs and maintenance, utilities and office expenses, employee benefits, depreciation and amortization, advertising and marketing, settlements and penalties, taxes, licenses, and other expenses. We expense advertising costs as incurred. General and administrative expenses decreased by approximately $6.7 million, or 16%, from approximately $43.2 million in the three months ended December 31, 2023, to approximately $36.5 million in the three months ended December 31, 2024, primarily due to reduction in employee related compensation due to reduction in force and rationalization of products, decrease of settlements and penalties and professional fees.
Current wording
General and administrative expenses include all non-production expenses incurred in a given period. This includes professional fees, salaries, rent, repairs and maintenance, utilities and office expenses, employee benefits, depreciation and amortization, advertising and marketing, settlements and penalties, taxes, licenses, and other expenses. We expense advertising costs as incurred. General and administrative expenses decreased by approximately $13.3 million, or 15%, from approximately $91.1 million in the six months ended March 31, 2024, to approximately $77.9 million in the six months ended March 31, 2025, primarily due to reduction in employee related compensation due to reduction in force, decrease of settlements and penalties, professional fees, promotion costs, etc.
Previous wording
The net loss attributable to common stockholders (after preferred dividends) was approximately $114.9 million, or $661.33 net loss per share, for the three months ended December 31, 2024, as compared to a net loss attributable to common stockholders after preferred dividends of approximately $61.4 million, or $91,940.42 loss per share, for the three months ended December 31, 2023 (giving effect to reverse stock splits, see below).
Current wording
The net loss attributable to common stockholders (after preferred dividends) was approximately $162.0 million, or $3,338.65 net loss per share, for the six months ended March 31, 2025, as compared to a net loss attributable to common stockholders after preferred dividends of approximately $193.9 million, or $21,493,370.73 loss per share, for the six months ended March 31, 2024 (giving effect to reverse stock splits, see below).
Previous wording
In addition to the reverse stock split implemented in February 2025, the Company previously effected a 1-for-25 reverse stock split on May 4, 2023, a 1-for-9 reverse stock split on August 11, 2023, and a 1-for-100 reverse stock split on December 21, 2023, and a 1-for-100 reverse stock split on September 17, 2024. The Company retroactively adjusted its historical financial statements to reflect the reverse stock splits.
Current wording
In addition to the reverse stock split referred to above, the Company previously effected a 1-for-25 reverse stock split on May 4, 2023, a 1-for-9 reverse stock split on August 11, 2023, a 1-for-100 reverse stock split on December 21, 2023, and 1-for-100 reverse stock split on September 17, 2024. The Company retroactively adjusted its historical financial statements to reflect the reverse stock splits.
Previous wording
To date, we have yet to generate any significant revenue from our business operations. We have funded our capital expenditure and working capital requirements by selling equity securities, as further discussed below. Our ability to successfully expand our business will depend on many factors, including our working capital needs, the availability of equity or debt financing, and, over time, our ability to generate cash flows from operations.
Current wording
We have only recently started to generate significant revenue from our business operations. To date, we have funded our capital expenditure and working capital requirements primarily by selling debt and equity securities, as further discussed below. Our ability to successfully expand our business will depend on many factors, including our working capital needs, the availability of equity or debt financing, and, over time, our ability to generate cash flows from operations.
Previous wording
The Company's principal source of liquidity consists of existing cash and restricted cash of approximately $2.7 million as of December 31, 2024. During the three months ended December 31, 2024, the Company used approximately $25.6 million of cash for operating activities. The net working capital deficit on December 31, 2024 amounted to approximately $186.2 million, or $41.2 million, after excluding derivative and other warrant liabilities and liabilities to issue stock, that are supposed to be settled by issuing common stock without using cash. For the three months ended December 31, 2024, the Company incurred a net loss of $118.8 million, and as of December 31, 2024, our accumulated deficit was $2.4 billion.
Current wording
The Company's principal source of liquidity consists of existing cash and restricted cash of approximately $2.3 million as of March 31, 2025. During the six months ended March 31, 2025, the Company used approximately $48.6 million of cash for operating activities. The net working capital deficit on March 31, 2025 amounted to approximately $156.1 million, or $56.7 million, after excluding derivative and other warrant liabilities and liabilities to issue stock, that are supposed to be settled by issuing common stock without using cash. For the six months ended March 31, 2025, the Company incurred a net loss of $172.7 million, and as of March 31, 2025, our accumulated deficit was approximately $2.5 billion.
Previous wording
The Company believes that its available liquidity will not be sufficient to meet its current obligations for a period of at least twelve months from the date of the filing of these unaudited interim condensed consolidated financial statements. Accordingly, the Company has concluded there is substantial doubt about its ability to continue as a going concern. During the quarter ended December 31, 2024, the Company made the decision to temporarily shut down key production facilities due to short-term liquidity constraints. This action directly impacts our ability to produce vehicles. Should this shutdown continue, our cash flows from operating activities are expected to be further negatively impacted, which would further worsen the Company’s cash position. Management is pursuing several strategies to address liquidity concerns, including equity or debt financing and cost reduction and operational restructuring. Despite these efforts, there is no assurance that these initiatives will be successful. Without additional funding, the Company may be unable to continue operations and could be required to seek bankruptcy protection within 30 days of the issuance of these financial statements.
Current wording
The Company believes that its available liquidity will not be sufficient to meet its current obligations for a period of at least twelve months from the date of the filing of these unaudited interim condensed consolidated financial statements. Accordingly, the Company has concluded there is substantial doubt about its ability to continue as a going concern. During the six months ended March 31, 2025, the Company made the decision to temporarily shut down key production facilities due to short-term liquidity constraints. This action directly impacts our ability to produce vehicles. Should this shutdown continue, our cash flows from operating activities are expected to be further negatively impacted, which would further worsen the Company’s cash position. Management is pursuing several strategies to address liquidity concerns, including equity or debt financing and cost reduction and operational restructuring. Despite these efforts, there is no assurance that these initiatives will be successful. Without additional funding, the Company may be unable to continue operations and could be required to seek bankruptcy protection within 30 days of the issuance of these financial statements.
Previous wording
During the three months ended December 31, 2024, we received $8.8 million as part of the additional investment right under a May 14, 2024 Securities Purchase Agreement, which involved issuance of senior secured convertible notes, bearing 15% interest and maturing in 4 months, and warrants with terms further described in theNote 7 andNote 8 to the condensed consolidated financial statements. Furthermore, in October 2024, the Company received $1 million proceeds in accordance with the equity line of credit (see further in theNote 9).
Current wording
To date, our current working capital and development needs have been primarily funded through the issuance of convertible indebtedness, warrants, convertible preferred stock and common stock. During the six months ended March 31, 2025, we received approximately $33 million and issued Senior secured convertible notes, bearing 15% interest and maturing in 4 months, and warrants with terms further described inNote 7 - Debt andNote 8 - Warrants and other derivative liabilities and fair value measurementsto the condensed consolidated financial statements. Furthermore, in October 2024, the Company received $1 million proceeds in accordance with the equity line of credit (see further inNote 9 - Stockholder's Equity).
Previous wording
Also, in October 2024, Bollinger Motors, Inc., a majority-owned subsidiary of Mullen Automotive Inc., received a $10 million long-term loan, providing additional capital to support the production and sale of Bollinger’s Class 4 EV truck, the B4. The note bears interest at 15% per annum, with interest-only payments starting November 29, 2024, and principal repayment due by October 30, 2026. It is secured by part of the assets of Bollinger Motors, excluding inventory and certain intellectual property.
Current wording
Also, in October 2024, Bollinger Motors, Inc., a majority-owned subsidiary of Mullen Automotive Inc., received a $10 million long-term loan, providing additional capital to support the production and sale of Bollinger’s Class 4 EV truck, the B4. The note bears interest at 15% per annum, with monthly interest-only payments, and principal repayment due by October 30, 2026. It is secured by part of the assets of Bollinger Motors, excluding inventory and certain intellectual property. See alsoNote 19 - Contingencies and claims for disclosure on a lawsuit from the lender.
Previous wording
Also, the Company reached an agreement with holders of matured notes and loan advances in amount of $2.7 million, as well as accumulated interest in amount of approximately $1.8 million, that the liabilities would be settled pursuant to Section 3(a)(9) of the Securities Act of 1933 by issuance of shares of common stock of the Company worth of $3 million. The liability was fully settled by December 2024 and the transaction resulted in recognition of gain on extinguishment of $1.5 million.
Current wording
During the six months ended March 31, 2025, a significant part of Senior secured convertible notes, as well as relevant accumulated interest (notes with a carrying amount of approximately $24.8 million and interest with a carrying amount of approximately $1.5 million), have been converted into shares of common stock. Also, the Company reached an agreement with holders of matured notes and loan advances in amount of $2.7 million, as well as accumulated interest in amount of approximately $1.8 million, that the liabilities would be settled pursuant to Section 3(a)(9) of the Securities Act by issuance of shares of common stock of the Company worth of $3 million. The liability was fully settled by December 2024, and the transaction resulted in recognition of gain on extinguishment of $1.5 million.
Previous wording
The following is a summary of our indebtedness as of December 31, 2024:
Current wording
The following is a summary of our indebtedness as of March 31, 2025 and of transactions during the six months ended March 31, 2025:
Previous wording
The following table provides a summary of our cash flow data for the three months ended December 31, 2024 and 2023:
Current wording
The following table provides a summary of our cash flow data for the six months ended March 31, 2025 and 2024:
Previous wording
Our cash flow used in operating activities to date has been primarily comprised of costs related to research and development, payroll and other general and administrative activities. Net cash used in operating activities was $25.6 million in the three months ended December 31, 2024, a 57% decrease from $59.9 million net cash used during the three months ended December 31, 2023.
Current wording
Our cash flow used in operating activities to date has been primarily comprised of costs related to research and development, payroll and other general and administrative activities. Net cash used in operating activities was $48.6 million in the six months ended March 31, 2025, a 55% decrease from $108.5 million net cash used during the six months ended March 31, 2024.
Previous wording
During the three months ended December 31, 2024 and 2023, our cash flows used in investing activities have been comprised mainly of equipment purchases. Net cash used in investing activities was $2.2 million in the three months ended December 31, 2024, an 68% decrease from $6.9 million used in investing activities during the three months ended December 31, 2023.
Current wording
During the six months ended March 31, 2025 and 2024, our cash flows used in investing activities have been comprised mainly of equipment purchases. Net cash used in investing activities was $3.9 million in the six months ended March 31, 2025, a 69% decrease from $12.5 million used in investing activities during the six months ended March 31, 2024.
Previous wording
Through December 31, 2024, we have financed our operations primarily through the issuance of convertible notes and warrants, as well as by receiving a long-term loan for production of Bollinger vehicles (for further details, see section Debt above). Net cash provided by financing activities was $19.8 million for the three months ended December 31, 2024, as compared to $0.0 million net cash obtained from financing activities for the three months ended December 31, 2023.
Current wording
Through March 31, 2025, we have financed our operations primarily through the issuance of convertible notes and warrants, as well as by receiving a long-term loan for production of Bollinger vehicles (for further details, see section Debt above). Net cash provided by financing activities was $44.0 million for the six months ended March 31, 2025, as compared to $4.9 million net cash spent on financing activities for the six months ended March 31, 2024.
Previous wording
The following are scheduled debt maturities as of December 31, 2024:
Current wording
The following are scheduled debt maturities as of March 31, 2025 (see also note Debt above):
Previous wording
Our financial statements have been prepared by U.S. GAAP. In the preparation of these financial statements, our management is required to use judgment in making estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities as of the date of the financial statements, as well as the reported expenses incurred during the reporting periods. Management considers an accounting judgment, estimate, or assumption to be critical when (1) the estimate or assumption is complex in nature or requires a high degree of judgment and (2) the use of different judgments, estimates, and assumptions could have a material impact on the consolidated financial statements. Our significant accounting policies are described inNote 3 to the condensed consolidated financial statements.
Current wording
Our financial statements have been prepared by U.S. GAAP. In the preparation of these financial statements, our management is required to use judgment in making estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities as of the date of the financial statements, as well as the reported expenses incurred during the reporting periods. Management considers an accounting judgment, estimate, or assumption to be critical when (1) the estimate or assumption is complex in nature or requires a high degree of judgment and (2) the use of different judgments, estimates, and assumptions could have a material impact on the consolidated financial statements. Our significant accounting policies are described inNote 3 – Summary of Significant accounting policiesto the condensed consolidated financial statements.
Previous wording
We identified Bollinger and Mullen Commercial (refer toNote 4 - Segment information) as our reporting units for the purposes of assessing impairments.
Current wording
We identified Bollinger and Mullen Commercial (refer to* Note 4 - Segment information*) as our reporting units for the purposes of assessing impairments.
Previous wording
We review our noncurrent asset groups for impairment whenever events or changes in circumstances indicate that the carrying amount of such asset groups may not be recoverable. Such conditions could include significant adverse changes in the business climate, current period operating or cash flow losses, significant declines in forecasted operations, or a current expectation that an asset group will be disposed of before the end of its useful life. The recoverability of noncurrent asset groups to be held and used is measured by a comparison of the carrying amount of the asset group to future undiscounted net cash flows expected to be generated by the asset group. Suppose the asset group is considered to be impaired. In that case, the impairment recognized is the amount by which the carrying amount of the asset group exceeds the fair value of the asset group.
Current wording
We review our noncurrent asset groups for impairment whenever events or changes in circumstances indicate that the carrying amount of such asset groups may not be recoverable. Such conditions could include significant adverse changes in the business climate, current period operating or cash flow losses, significant declines in forecasted operations, or a current expectation that an asset group will be disposed of before the end of its useful life. The recoverability of noncurrent asset groups to be held and used is measured by a comparison of the carrying amount of the asset group to future undiscounted net cash flows expected to be generated by the asset group. If an asset group is considered to be impaired, the impairment is recognized in amount by which the carrying amount of the asset group exceeds the fair value of the asset group.
Previous wording
Due to a prolonged decrease in our market capitalization, including a significant decline in stock price and budgeted performance targets not achieved as compared to acquisition date budgets, we assessed noncurrent assets for impairment. As a result of impairment tests performed by management as of December 31, 2024, no impairment was recognized, primarily because of significant impairment that reduced carrying amount of long-lived assets in previous periods.
Current wording
Due to a prolonged decrease in our market capitalization, including a significant decline in stock price and budgeted performance targets not achieved as compared to acquisition date budgets, we assessed noncurrent assets for impairment. As a result of impairment tests performed by management as of March 31, 2025, the Company recognized impairment loss in amount of $12.0 million in respect of Patents (Bollinger segment). No impairment in respect of other noncurrent assets was recognized, primarily because of significant impairment that reduced carrying amount of long-lived assets in previous periods.
Previous wording
As a result of the tests performed by the management as of December 31, 2024, the write-down to net realizable value in amount of $0.8 million was recorded (as of September 30, 2024, we recognized net realizable value adjustments of $15.6 million, primarily related to excess raw material and slower moving inventory of the Mullen Commercial segment). These adjustments were recorded as a component of cost of goods sold.
Current wording
As a result of the tests performed by the management during the six months ended March 31, 2025, the write-down to net realizable value in amount of $0.8 million was recorded by the Mullen Commercial segment. These adjustments were recorded as a component of cost of goods sold.
Rearranged current paragraphs (8)
Current report — wording carried from elsewhere
General and administrative expenses include all non-production expenses incurred in a given period. This includes professional fees, salaries, rent, repairs and maintenance, utilities and office expenses, employee benefits, depreciation and amortization, advertising and marketing, settlements and penalties, taxes, licenses, and other expenses. We expense advertising costs as incurred. General and administrative expenses decreased by approximately $6.5 million, or 14%, from approximately $47.9 million in the three months ended March 31, 2024, to approximately $41.4 million in the three months ended March 31, 2025, primarily due to decrease of settlements and penalties, professional fees, promotion costs, etc.
Current report — wording carried from elsewhere
The net loss attributable to common stockholders (after preferred dividends) was approximately $47.1 million, or $489.24 net loss per share, for the three months ended March 31, 2025, as compared to a net loss attributable to common stockholders after preferred dividends of approximately $132.5 million, or $12,041,273.00 loss per share, for the three months ended March 31, 2024 (giving effect to reverse stock splits, seeNote 1 - Description of Business and Basis of Presentationto the financial statements).
Current report — wording carried from elsewhere
The following table sets forth our historical operating results for the periods indicated:
Current report — wording carried from elsewhere
We recognize revenue from the sale of electric vehicles upon the transfer of control to the dealer/customer. Normally, control transfers at the point of delivery when the dealer/customer has possession of the vehicle and bears the risks and rewards of ownership. However, a contract with one of our dealers includes return provision, allowing unsold vehicles to be returned after one year; and contracts with a few other dealers include provisions allowing unsold vehicles to be returned upon contract termination. For these arrangements, due to limited historical data on returns, we defer revenue recognition until the dealer sells the vehicles to end customers, or there is sufficient evidence to reasonably estimate the consideration to which we expect to be entitled. In January 2025, one of the customers waived their right of return for 60 vehicles (Mullen Commercial segment), and the Company recognized revenue in amount of $3.7 million.
Current report — wording carried from elsewhere
The costs of revenues primarily include vehicle components and parts, labor costs, and other relevant costs and expenses applicable to sales and revenues. The cost of revenues exceeds revenue mainly due to recognition of indirect manufacturing expenses in periods when production was temporarily suspended, labor and overhead variances to standard cost, as well as due to write-down of certain raw materials to net realizable value.
Current report — wording carried from elsewhere
Research and development expenses decreased by $18.5 million, or 46%, from $40.2 million through the six months ended March 31, 2024, to $21.6 million through the six months ended March 31, 2025. Research and development expenses are primarily comprised of external fees and internal costs for engineering, homologation, prototyping, and other expenses related to preparation for the production of electric vehicles and batteries. The Company recently began cost reduction initiatives, thereby reducing research and development expenses in order to continue as a going concern.
Current report — wording carried from elsewhere
The Company recognized other financing costs on initial recognition of warrants during the six months ended March 31, 2025 in the amount of $37.2 million due to additional notes with detached warrants issued during the six months ended March 31, 2025 (no investments during the six months ended March 31, 2024).
Current report — wording carried from elsewhere
Similarly, the interest expense increased by $25.7 million in comparison to the six months ended March 31, 2024 due to a significantly higher volume of debt outstanding during the six months ended March 31, 2025, seeNotes 7to the financial statements.
Rearranged previous paragraphs (2)
Previous report — wording carried elsewhere
To date, our current working capital and development needs have been primarily funded through the issuance of convertible indebtedness, warrants, convertible preferred stock and common stock.
Previous report — wording carried elsewhere
The following is a summary of our indebtedness as of September 30, 2024: