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 period last year. However, the cost of revenues reached $6.6 million, resulting in a gross loss of $3.7 million. The 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 year-over-year.

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 from $79.7 million 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. The first Bollinger vehicles were sold in September 2024. Additionally, Mullen acquired assets from Electric Last Mile Solutions (ELMS) in October 2022, including a manufacturing plant in Indiana, which has enabled the production of Class 1 and Class 3 electric vehicles. Despite these acquisitions, the company has faced challenges in scaling production and achieving profitability.

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 reported a cash and restricted cash balance of $2.7 million as of December 31, 2024, down from $10.3 million at the end of the previous quarter. Mullen's management is actively pursuing additional financing options to address liquidity concerns, including potential equity or debt financing. However, the company has acknowledged that without significant funding, it may be unable to continue operations and could face bankruptcy within 30 days of the filing.

Looking ahead, Mullen's management has expressed substantial doubt about the company's ability to meet its obligations over the next twelve months. The company is exploring various strategies to improve its financial situation, including operational restructuring and cost reductions. However, the success of these initiatives remains uncertain, and the company continues to face significant risks related to market conditions, production capabilities, and financial stability.