Mullen Automotive Reports $118.8 Million Net Loss and Financial Challenges in Latest Filing

Mullen Automotive Inc. reported significant financial challenges in its latest 10-Q filing for the quarter ending December 31, 2024. The company generated $2.9 million in revenue from vehicle sales, a notable increase from zero revenue in the same quarter of the previous year. However, the cost of revenues reached $6.6 million, resulting in a gross loss of $3.7 million. The overall net loss for the quarter was approximately $118.8 million, compared to a net loss of $64 million in the prior year, reflecting an 86% increase in losses.

The company's financial position has deteriorated, with total current assets decreasing to $59.9 million from $63.2 million at the end of the previous quarter. Current liabilities surged to $246.1 million, up from $183.2 million, primarily due to a significant increase in derivative liabilities, which rose to $137 million. Mullen's accumulated deficit now stands at $2.4 billion, raising concerns about its ability to continue as a going concern. The company has temporarily shut down key production facilities due to liquidity constraints, which directly impacts its vehicle production capabilities.

Strategically, Mullen has made efforts to expand its product offerings and operational capabilities. The company acquired a controlling interest in Bollinger Motors in September 2022, which has allowed it to enter the medium-duty truck market. Additionally, Mullen acquired assets from Electric Last Mile Solutions (ELMS) in October 2022, including a manufacturing plant in Indiana. The first Bollinger vehicles were sold in September 2024, and Mullen has plans to launch additional electric vehicle models in the coming years.

Operationally, Mullen's workforce has been reduced by 78 positions as part of cost-cutting measures, expected to save approximately $13 million annually. The company is also pursuing various strategies to address its liquidity issues, including potential equity or debt financing. However, management has expressed uncertainty about the success of these initiatives, indicating that without additional funding, Mullen may be forced to seek bankruptcy protection within 30 days of the filing date.

Looking ahead, Mullen's outlook remains precarious. The company has acknowledged substantial doubt about its ability to meet current obligations and continue operations over the next twelve months. Management is actively seeking solutions to improve liquidity and operational efficiency, but the ongoing challenges in the electric vehicle market and the company's financial instability pose significant risks to its future viability.