Mullen Reports Improved 2024 Financial Results

 Company finishes the 2024 fiscal year with growth of national dealer network, increased sales and delivery of vehicles

Fiscal year 2024 reduction of $85.4M in cash spend compared to fiscal year 2023

Successful launch of Bollinger Motors B4 production and sales

Company now has three EV production lines in the U.S. with national sales and service networks supporting Mullen Class 1 and 3 and Bollinger Class 4 commercial vehicles

Company announces further increase in operational efficiencies driving $13M annual reduction in cash spend effective Feb. 1, 2025

BREA, Calif., Jan. 24, 2025 (GLOBE NEWSWIRE) -- via IBN -- Mullen Automotive Inc. (NASDAQ: MULN) ("Mullen” or the "Company”), an electric vehicle ("EV”) manufacturer, today announces financial results for the twelve months ended Sept. 30, 2024, and a current business update.

Commenting on fiscal year 2024 ("FY2024"), and recent Company developments, CEO and chairman David Michery stated:

"2024 was a challenging year for the electric vehicle industry, including Mullen. In the retail market, the previous projections for EV growth rates have not materialized and the conclusion by many has been EVs are 'not selling.' It is true that the large OEMs have slowed their aggressive EV plans, but have certainly not stopped. However, I want to make it clear that Mullen is not in the retail market. We are in the commercial market with different market conditions, adoption criteria and customers. In the commercial market, it has only really been the last few years that OEMs have brought vehicles to customers and in some vehicle classes, there are still no entries. Consequently, adoption is still at the very early stages and is now growing.

"For all new commercial EV manufacturers, there has been a continued slowdown in available capital, high interest rates, supply chain issues, regulatory hurdles to deal with as well as the unknown impact of the new administration's potential regulatory and incentives and tax changes. Many new OEMs have not weathered the storm and, unfortunately, were forced to close. Mullen however, managed successfully to face these challenges head on and has made significant progress in many areas.

"While I am proud of the Company's accomplishments, I share investor disappointment with the performance of Mullen stock. There are many reasons I have previously expressed to shareholders why I believe the price of the Company stock does not closely reflect the value of the Company. I believe the Company's real estate assets, manufacturing capabilities and intellectual property portfolio value exceeds the current market capitalization. The Company was able to successfully achieve full certification to sell its Class 1 EV cargo van and 3 EV truck, as well as Bollinger Class 4 trucks. Our Tunica, Mississippi, facility is fully equipped and has produced hundreds of commercial EVs. I do recognize a slow start of sales and as a result, we are revising our sales forecast to reflect slower growth than previously anticipated. Commercial customers require longer lead time to evaluate our new Company, brand and product offerings, including fleet managers, who often require vehicle pilots to gain the confidence they need in confirming our EVs perform and meet their specific requirements. We are gaining meaningful traction now on the sales front, and the Company is laser focused on the sale of its commercial vehicles where we believe we have a clear competitive advantage at this time.

"Being fully aware of the extremely difficult capital-raising environment, the Company has recently initiated further significant cost-cutting measures to minimize our operating expenses for 2025. These reductions are a result of a singular focus on our commercial business and include continued elimination of operating expenses where it is not critical for the sales and growth of our Company.

"As you will note from the updates below, there are many reasons I remain positive, including the fact that we now have three vehicle lines that are currently in U.S. production, generating cash from sales and building demand for our EVs from several different customer verticals. We believe no other recently established EV company in the U.S. can say this.”

Recent Company Highlights

Mullen Commercial - Troy, Michigan

Class 1 and 3 Commercial Vehicles

• Recent sale and order activity for Mullen commercial EVs include:
  • Mullen ONE All-Electric Cargo Van to Mr. Appliance® of Owings Mills, Maryland, marking the Company's first venture into the home service vertical.
  • 10 Class 3 EV cab chassis trucks order from Associated Coffee, a San Francisco Bay Area coffee and snack distributor.
  • Two Mullen THREE, Class 3 EV trucks with vehicle upfits performed by Phenix Truck Bodies & Van Equipment ("Phenix”) order from Westland Floral.
  • The Company continues commercial EV adoption across college campuses with two new EV Class 1 orders from leading California universities in Los Angeles and the San Francisco Bay Area.
• The Company has conducted many recent ride-and-drive events to increase awareness in many verticals, including Work Truck Exchange, AltWheels Fleet Day, Zeem SeaTac EV Fleet Ride & Drive, ZEV Tour - Clean Fleet Experience, NTEA Commercial Upfitting Summit, Fleet Forward Conference and Zero Emissions Showcase.
• In November 2024, Mullen announced that Emerald Transportation Solutions, a premier commercial refrigeration ("reefer”) vehicle upfitter, is working with the Papé Group ("Papé”) to develop an advanced reefer upfit for the Mullen THREE, a Class 3 all-electric truck.

Bollinger Motors - Oak Park, Michigan

Class 4 Commercial Truck

• Bollinger Motors started production and delivered its first five B4 trucks to customers in September 2024, recognizing its first revenues of $703K in FY24. Since September, the company has delivered an additional 26 B4 trucks recognizing additional revenues of $3.6M in FY25. To date, the company has delivered a total of 31 B4 trucks and recognized revenues of $4.2M.
• Bollinger has expanded its national sales and service network to include over 50 sales and service locations including TEC Equipment, Affinity Truck Center, Anderson Motors, Bergey's Truck Centers, Broadway Ford Truck Center, Nacarato Truck Centers, and Nuss Truck and Equipment.
• As of November 2024, the Bollinger B4 Class 4 electric trucks are available for government fleets through its partnership with National Auto Fleet Group under the Sourcewell contract agreement #032824-NAF.
• In November 2024, the 2025 Bollinger B4 became eligible for New York State's New York Truck Voucher Incentive Program, an incentive for commercial electric vehicles from the New York State Energy and Research Development Authority providing up to a $100,000 cash voucher incentive on the all-electric B4 truck.
• Robert Bollinger, founder of Bollinger Motors, provided Bollinger with $10 million in non-dilutive long-term debt financing to support Bollinger's production ramp-up and sale of the B4, Class 4 EV truck.

Battery Technology - Fullerton, California

• In November 2024, the Company announced continued progress for battery production in Fullerton, California, with the addition of three battery lines installed in support of U.S.-made battery components and manufacturing. Lines include:
  • High volume standard battery chemistry line.
  • High precision, low volume standard chemistry R&D line.
  • A high precision, low volume solid-state polymer R&D line.
• On Dec. 17, 2024, Mullen Automotive submitted a modified plan to the U.S. Department of Energy ("DOE”) that incorporates its facilities in Mishawaka, Indiana, and Fullerton, California, for U.S.-based battery and pack production. In total, Mullen is seeking $55 million in matching DOE funds to support the U.S. manufacturing capabilities.

FY2024 Highlights

During the fiscal year ended Sept. 30, 2024, the Company successfully transitioned from pre-revenue product development to revenue generation for Mullen Commercial EVs and Bollinger Motors began revenue generation with the launch of the Class 4 electric truck in September of 2024.

Mullen Commercial - Troy, Michigan

Class 1 and 3 Commercial Vehicles

• Growth of vehicles invoiced grew substantially from fiscal years 2023 to 2024:
  • 443 vehicles invoiced in 2024 compared to 35 vehicles invoiced in 2023.
  • The Company invoiced $21 million for vehicles in 2024 compared to $1 million for vehicles invoiced in 2023.
• In 2024, Mullen Automotive made significant strides in expanding its dealer network across the U.S. The Company expanded dealer distribution from one dealer to seven new dealer partners, strengthening its retail presence and making Mullen vehicles more accessible to a wider commercial audience.
• In September 2024, Papé Truck placed an initial order for 43 Class 3 EV trucks and 7 Class 1 EV cargo vans. The total purchase for the 50 units had a retail sales value of $3.1 million.
• In September 2024, Mullen announced the addition of premier full-service dealer, Papé Kenworth, to its commercial EV dealer network. Based in Eugene, Oregon, Papé Kenworth became Mullen's seventh franchise dealer partner expanding fleet opportunities for the Company's full line of commercial electric vehicles. Papé Group, which includes Papé Kenworth, consists of five operating companies with over 150 locations in nine states, with 815 service bays and more than 1,500 technicians.
• In 2024, the Company continued sales momentum with leading higher education colleges and universities across the U.S. Orders include Princeton University in Princeton, New Jersey, University of Virginia in Charlottesville, Virginia, and University of North Carolina in Charlotte, North Carolina, and public California universities in Los Angeles and the San Francisco Bay Area.
• The State of Massachusetts issued MOR-EV approval, granting Mullen's Class 3 EV truck a $15,000 cash voucher per vehicle sold.
• In July 2024, Mullen's Class 1 EV cargo van received approval for the MOR-EV Program, granting a $3,500 rebate in Massachusetts. When combined with the available $7,500 federal tax credit, the net effective cost of the Mullen ONE would be approximately $23,500.
• In May 2024, Mullen announced continued Commercial EV dealer expansion in the Midwest with Ziegler Truck Group and in the Pacific Northwest with Range Truck Group.
• In May 2024, Mullen added a California-based and HVIP-approved dealer, National Auto Fleet Group with locations in Watsonville and Alhambra, California.
• In May 2024, Mullen added one of the largest U.S. commercial dealers, Pritchard EV, to its dealer network.
• In April 2024, California issued Hybrid and Zero-Emission Truck and Bus Voucher Incentive Project ("HVIP”) approval, granting Mullen's Class 3 EV trucks a $45,000 cash voucher per vehicle sold.
• In April 2024, Mullen announced new California Air Resources Board ("CARB”) approval for the 2025 model year Class 3 EV cab chassis truck.
• In January 2024, Mullen announced the completion of a new light-weight service truck body for the all-electric Mullen THREE, targeted for utility and municipality customers. The vehicles are available now and were developed in collaboration with Phenix Truck Bodies & Van Equipment and Knapheide Manufacturing.

Bollinger Motors - Oak Park, Michigan

Class 4 Commercial Vehicle

• Bollinger Motors launched production of the Bollinger B4 Class 4 electric truck on Sept. 16 at Roush Industries in Livonia, Michigan
• First deliveries of Bollinger B4 electric trucks went to Nacarato Truck Centers with a retail sales value of nearly $800,000.
• In September 2024, Bollinger achieved CARB certification, and in November, CARB approved the 2025 Bollinger B4 for HVIP. Under HVIP, the Bollinger B4 electric truck now qualifies for a rebate of up to $60,000. When combined with the available $40,000 federal tax credit, the net effective cost of the Bollinger B4 would be less than $59,000. The B4 also qualifies for substantial state-based incentives, including New York, New Jersey and Massachusetts.
• In July 2024, Bollinger Motors named former GM executive James Taylor as CEO taking over from company founder Robert Bollinger. In addition, Bollinger promoted Bryan Chambers to president and chief operating officer.
• In June 2024, Bollinger received EPA certification for Class 4 EV Commercial Trucks, which is a critical step to selling vehicles in the U.S.
• In May and June 2024, Momentum Group and Envirocharge placed B4 orders intended for Class 4 mobile EV charging truck solutions.

Battery Technology - Fullerton, California

• Mullen has made substantial investments and strategic decisions that underscore the Company's commitment to advancing U.S. manufacturing of batteries and battery systems as well as reducing supply chain risks by manufacturing packs in house for their vehicles. Investments include:
  • Strategic acquisitions, including assets from Romeo Power and Nikola for battery pack production, and key infrastructure investments designed to increase speed to market.
  • Investments and startup costs totaling $12 million to date to further battery and pack development and manufacturing.
• The Company is advancing its solid-state polymer pack program and is continuing to conduct battery and vehicle testing, which began road testing in February 2024.
• Mullen is transitioning to manufacturing and assembly of battery systems in the United States and the Company's first production units are planned to be released in late 2025.
• In November 2023, Mullen originally announced the opening of the facility in Fullerton, with the goal of scaling U.S.-made EV battery module and pack production. The Company is focused on reducing reliance on foreign battery components.

Financial Results for the Twelve Months Ended Sept. 30, 2024

Net loss and loss per share

The net loss attributable to common shareholders after preferred dividends and other capital transactions with preferred stock owners was $471.0 million, or $1,425.6 net loss per share, for the twelve months ended Sept. 30, 2024, as compared to a net loss attributable to common shareholders after preferred dividends of $964.9 million, or $157,405 loss per share, for the twelve months ended Sept. 30, 2023, (giving effect to reverse stock split made effective on Sept. 17, 2024, at a ratio of 1-for-100 shares).

The net loss for the twelve months ended Sept. 30, 2024, included non-cash impairment charges totaling $119.2 million (in the previous year - $84.6 million), recognized primarily due to future funding uncertainties and a decrease in the Company's market capitalization.

Revenue

For the twelve months ended Sept. 30, 2024, we recorded $1.1 million in revenues compared to $0.4 million for the twelve months ended Sept. 30, 2023.

For the twelve months ended Sept. 30, 2024, we invoiced for 443 commercial vehicles valued at $21 million compared to the twelve months ended Sept. 30, 2023, where we invoiced for 35 vehicles with a value of $1 million.

The difference between invoiced amounts and revenues is the Company continues to defer the revenue and accounts receivable recognition on most of Mullen commercial vehicles invoiced until invoices are paid and the return provision on the vehicles is nullified by the dealer's sale of the vehicle to the end user.

In September 2024, our Bollinger segment achieved a major milestone, launching production of the B4 commercial truck. Additionally, Bollinger completed the sale of its first five units and recognized its first revenues of $0.7M. The B4 is generating strong traction in the market, and we expect significant sales growth from Bollinger in the coming year.

Cost of Revenues

The cost of revenues for the year ended Sept. 30, 2024, totaled $16.9 million and included $1.3 million for the cost of vehicles sold and $15.6 million in non-cash, inventory adjustments to net realizable value. Included in the $1.3 million of cost of vehicles sold was $0.2 million from the Mullen Commercial segment and $1.1 million from the Bollinger segment. Bollinger expects excess cost until target production capacity is reached sometime in FY25.In addition to the cost of vehicles sold, we recognized a non-cash, inventory adjustment to net realizable value of $15.6 million from the Mullen Commercial segment, primarily due to slow moving inventory where there are excess parts and systems.

Liquidity

We had total cash (including cash equivalents and restricted cash) of $10.7 million on Sept. 30, 2024, versus $155.7 million on Sept. 30, 2023. The Company has determined that its available liquidity of approximately $10.7 million is not sufficient to meet its current obligations for at least the next twelve months. The working capital as of Sept. 30, 2024, was negative and amounted to $120.0 million, or $38.5 million if adding back derivative liabilities and other liabilities settled in common stock. This compares to a positive $58.5 million of working capital or $133.3 million of working capital on Sept. 30, 2023, if adding back derivative liabilities and other liabilities settled in common stock.

During the twelve months ended Sept. 30, 2024, we paid off a $4.9 million current note payable that was secured by a mortgage on our Tunica, Mississippi, facility. We also issued new senior secured convertible notes with warrants for cash totaling $61.7 million. Current notes payable as of Sept. 30, 2024, was $5.4 million compared to $7.5 million as of Sept. 30, 2023, (balances include debt discounts). As of today, almost all of these notes and accumulated interest have been converted into shares of the Company's common stock.

After Sept. 30, 2024, investors purchased an additional aggregate principal amount of $17.9 million, for $17.0 million in cash after deducting the 5% original issue discount.

The total cash spent (Operating and Investing cash flows) for the twelve months ended Sept. 30, 2024 and 2023 was $201.7 million and $287.1 million, respectively.

Shareholders' equity/(deficit)

Shareholders' equity/(deficit) was ($16.6) million as of Sept. 30, 2024, versus $272.8 million as of Sept. 30, 2023. The decrease in stockholders' equity for the twelve months ended Sept. 30, 2024, reflects the impairment charges of $119.2 million and other net losses of $386.6 million offset by equity issuances.

Financial statements

Following are the Consolidated Balance Sheets, Consolidated Statements of Operations and Consolidated Statements of Cash Flows for the twelve months ended Sept. 30, 2024 and 2023.

MULLEN AUTOMOTIVE INC.

CONSOLIDATED BALANCE SHEETS