# Bollinger Innovations, Inc.: Form 10-Q for the period ended Jun 30, 2025

- Company: [Bollinger Innovations, Inc.](/companies/bini.md) (CIK 1499961)
- Form: 10-Q
- Filed: 2025-08-14
- Accepted by EDGAR: Aug 14, 2025, 13:13 ET
- Period: 2025-06-30
- Accession: 0001437749-25-027016
- Inline XBRL: yes
- Main document: https://www.sec.gov/Archives/edgar/data/1499961/000143774925027016/muln20250630_10q.htm
- All documents and exhibits: https://www.sec.gov/Archives/edgar/data/1499961/000143774925027016/

## Figures reported in this filing

Standardized XBRL line items for the period ended 2025-06-30.

| Line item | Period | Value | XBRL concept |
| --- | --- | ---: | --- |
| Revenue | 3 months, 2025-04-01 to 2025-06-30 | $473.7k | us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax |
| Revenue | 9 months, 2024-10-01 to 2025-06-30 | $8.3m | us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax |
| Cost of revenue | 3 months, 2025-04-01 to 2025-06-30 | $10.6m | us-gaap:CostOfRevenue |
| Cost of revenue | 9 months, 2024-10-01 to 2025-06-30 | $24.2m | us-gaap:CostOfRevenue |
| Gross profit | 3 months, 2025-04-01 to 2025-06-30 | −$10.1m | us-gaap:GrossProfit |
| Gross profit | 9 months, 2024-10-01 to 2025-06-30 | −$15.8m | us-gaap:GrossProfit |
| Research and development | 3 months, 2025-04-01 to 2025-06-30 | $11.6m | us-gaap:ResearchAndDevelopmentExpense |
| Research and development | 9 months, 2024-10-01 to 2025-06-30 | $33.2m | us-gaap:ResearchAndDevelopmentExpense |
| Operating income | 3 months, 2025-04-01 to 2025-06-30 | −$58.2m | us-gaap:OperatingIncomeLoss |
| Operating income | 9 months, 2024-10-01 to 2025-06-30 | −$175.4m | us-gaap:OperatingIncomeLoss |
| Interest expense | 3 months, 2025-04-01 to 2025-06-30 | $25.7m | us-gaap:InterestExpenseNonoperating |
| Interest expense | 9 months, 2024-10-01 to 2025-06-30 | $51.9m | us-gaap:InterestExpenseNonoperating |
| Income tax | 3 months, 2025-04-01 to 2025-06-30 | $600 | us-gaap:IncomeTaxExpenseBenefit |
| Income tax | 9 months, 2024-10-01 to 2025-06-30 | $1.8k | us-gaap:IncomeTaxExpenseBenefit |
| Net income | 3 months, 2025-04-01 to 2025-06-30 | −$129.7m | us-gaap:NetIncomeLoss |
| Net income | 9 months, 2024-10-01 to 2025-06-30 | −$291.7m | us-gaap:NetIncomeLoss |
| Basic EPS | 3 months, 2025-04-01 to 2025-06-30 | −$11231.39 | us-gaap:EarningsPerShareBasic |
| Basic EPS | 9 months, 2024-10-01 to 2025-06-30 | −$74887.88 | us-gaap:EarningsPerShareBasic |
| Operating cash flow | 9 months, 2024-10-01 to 2025-06-30 | −$69.4m | us-gaap:NetCashProvidedByUsedInOperatingActivities |
| Capital expenditure | 9 months, 2024-10-01 to 2025-06-30 | $4.2m | us-gaap:PaymentsToAcquirePropertyPlantAndEquipment |
| Cash and equivalents | at 2025-06-30 | $454.7k | us-gaap:CashAndCashEquivalentsAtCarryingValue |
| Current assets | at 2025-06-30 | $42.4m | us-gaap:AssetsCurrent |
| Total assets | at 2025-06-30 | $89.2m | us-gaap:Assets |
| Current liabilities | at 2025-06-30 | $186.5m | us-gaap:LiabilitiesCurrent |
| Total liabilities | at 2025-06-30 | $196.3m | us-gaap:Liabilities |
| Shareholders' equity | at 2025-06-30 | −$107.9m | us-gaap:StockholdersEquity |

## Management's discussion and analysis

As filed, 40,803 characters.

*The following discussion and analysis are intended to help the reader understand the Company’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.*

### Cautionary Note Regarding Forward-Looking Statements

This Report includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). These forward-looking statements can be identified by the use of forward-looking terminology, including the words “believes,” “estimates,” “anticipates,” “expects,” “intends,” “plans,” “may,” “will,” “potential,” “projects,” “predicts,” “continue” or “should,” or, in each case, their negative or other variations or comparable terminology. There can be no assurance that actual results will not materially differ from expectations. The forward-looking statements contained in this Report are based on our current expectations and beliefs concerning future developments and their potential effects on us. Future developments affecting us may not be those that we have anticipated. These forward-looking statements involve a number of risks, uncertainties (some of which are beyond our control) and other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements. These risks and uncertainties include, but are not limited to: significant losses we have incurred since inception, and we expect to continue to incur for the foreseeable future; our ability to raise the substantial additional financing needed to execute our business plan on acceptable terms, or at all, which failure to do so could force us to delay, limit, reduce or terminate our production operations; our ability to continue as a going concern; our ability to maintain compliance with the continued listing requirements of the Nasdaq Capital Market; reliance on OEMs, suppliers and service providers for parts and components; the potential for our vehicles to fail to perform as expected; risks and uncertainties related to litigation, regulatory actions and government investigations and inquiries; changes in laws and regulations (domestically or internationally) that may materially adversely affect our business, prospects financial condition and operating results; and other risks and uncertainties described under the section titled “Risk Factors” herein and in our Annual Report on Form 10-K for the fiscal year ended September 30, 2024 (the “2024 Annual Report”), which was filed with the Securities and Exchange Commission on January 24, 2025. Should one or more of these risks or uncertainties materialize, or should any of our assumptions prove incorrect, actual results may vary in material respects from those projected in these forward-looking statements. We undertake no obligation (and expressly disclaim any obligation) to update or revise any forward-looking statements, whether as a result of new information, future events or other reasons, except as may be required under applicable securities laws. These risks and other factors described in this Report and 2024 Annual Report under the section titled “Risk Factors” may not be exhaustive. By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. We caution you that forward-looking statements are not guarantees of future performance and that the actual developments in the industry in which we operate and our actual results of operations, financial condition and liquidity may differ materially from those made in or suggested by the forward-looking statements contained in this Report. In addition, even if the actual developments in the industry in which we operate and our actual results of operations, financial condition liquidity are consistent with the forward-looking statements contained in this Report, those results or developments may not be indicative of results or developments in subsequent periods.

### Basis of Presentation

These interim condensed consolidated financial statements include the accounts of the Company, its wholly owned subsidiaries Ottava Automotive, Inc., a California corporation, Mullen Indiana Real Estate, LLC, a Delaware limited liability company, Mullen Investment Properties, LLC, a Mississippi limited liability company, Mullen Advanced Energy Operations, LLC, a California limited liability company and its majority-owned subsidiary Bollinger Motors, Inc., a Delaware corporation. Intercompany accounts and transactions have been eliminated, if any. The financial statements reflect the consolidated financial position and results of operations of the Company, which have been prepared in accordance with U.S. GAAP.

### Components of Results of Operations

We are an early-stage company, and our historical results may not be indicative of our future results for reasons that may be difficult to anticipate. Accordingly, the drivers of our future financial results, as well as the components of such results, may not be comparable to our historical or projected results of operations.

### Comparison of the Three Months Ended June 30, 2025 to the Three Months Ended June 30, 2024

The following table sets forth our historical operating results for the periods indicated:

*(dollar amounts, except percentages)*

|  | Three Months Ended June 30, 2025 | 2024 | $ Change | % Change |
| --- | ---: | ---: | ---: | ---: |
| Revenue from sale of vehicles | $473,686 | $65,235 | $408,451 | 626% |
| Cost of revenues | 10,565,994 | 36,008 | 10,529,986 | (29,243)% |
| **Gross loss** | **(10,092,308)** | **29,227** | **(10,121,535)** | **(34,631)%** |
| **Operating expenses:** |  |  |  |  |
| General and administrative | 36,173,327 | 47,477,377 | (11,304,050) | 24% |
| Research and development | 11,587,940 | 14,292,744 | (2,704,804) | 19% |
| Impairment of intangible assets | 326,173 | — | 326,173 | —% |
| Impairment of right-of-use assets | — | 30,060 | (30,060) | 100% |
| Impairment of goodwill | — | — | — | —% |
| **Loss from operations** | **$(58,179,748)** | **$(61,770,954)** | **$3,591,206** | **6%** |
| **Other income (expense):** |  |  |  |  |
| Other financing costs - initial recognition of warrants | (33,181,991) | (17,914,480) | (15,267,511) | (85)% |
| Gain/(loss) on warrants and derivative liability revaluation | (4,829,873) | 2,301,086 | (7,130,959) | (310)% |
| Gain on settlement | 3,761,955 | — | 3,761,955 | —% |
| Loss on settlement (GEM case) | (14,261,736) | — | (14,261,736) | —% |
| Gain/(loss) on extinguishment of debt | 250,000 | (690,346) | 940,346 | 136% |
| Loss on disposal of fixed assets | — | (103,973) | 103,973 | 100% |
| Interest expense | (25,663,583) | (8,277,802) | (17,385,781) | (210)% |
| Other financing costs - ELOC commitment fee | — | (6,000,000) | 6,000,000 | 100% |
| Other income, net | 337,152 | 829,056 | (491,904) | (59)% |
| Total other income (expense) | (73,588,076) | (29,856,459) | (43,731,617) | (146)% |
| **Net loss before income tax benefit** | **$(131,767,824)** | **$(91,627,413)** | **$(40,140,411)** | **(44)%** |
| Income tax benefit/ (provision) | (600) | (1,200) | 600 | 50% |
| **Net loss** | **(131,768,424)** | **(91,628,613)** | **(40,139,811)** | **(44)%** |
| Net loss attributable to noncontrolling interest | (2,043,608) | (4,267,796) | 2,224,188 | 52% |
| **Net loss attributable to stockholders** | **$(129,724,816)** | **$(87,360,817)** | **$(42,363,999)** | **(48)%** |
| Waived/(accrued) accumulated preferred dividends and other capital transactions with preferred stockholders | (98,767) | (8,627,095) | 8,528,328 | 99% |
| **Net loss attributable to common stockholders after preferred dividends and other capital transactions with preferred stockholders** | **$(129,823,583)** | **$(95,987,912)** | **$(33,835,671)** | **(35)%** |
| Net Loss per Share (\*) | (11,231.39) | (95,987,912) |  |  |
| Weighted average shares outstanding, basic and diluted (\*) | 11,559 | 1 |  |  |

(\*) Adjusted retroactively for reverse stock splits, see *Note 1 - Description of business and basis of presentation*

### Revenues

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 a 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 until there is sufficient evidence to reasonably estimate the consideration to which we expect to be entitled.

### Cost of Revenues

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.

### Research and Development

Research and development expenses decreased by $2.7 million, or 19%, from $14.3 million through the three months ended June 30, 2024, to $11.6 million through the three months ended June 30, 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.

### General and Administrative

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 $11.3 million, or 24%, from approximately $47.5 million in the three months ended June 30, 2024, to approximately $36.2 million in the three months ended June 30, 2025, primarily due to decrease of settlements and penalties, advertising and promotions and compensation to employees.

### Other Gains and Losses

The Company recognized other financing costs on initial recognition of warrants during the three months ended June 30, 2025 in the amount of $33.2 million due to higher value of notes with detached warrants issued during the three months ended June 30, 2025 (versus $17.9 million during the three months ended June 30, 2024). Net loss on revaluation of warrants obligations was $4.8 million during the three months ended June 30, 2025, in comparison to $2.3 million gain during the three months ended June 30, 2024.

The interest expense (mainly amortization of original issue discount (see *Notes 7 - Debt* to the financial statements) increased by $17.4 million in comparison to the three months ended June 30, 2024, due to a higher volume of debt outstanding during the three months ended June 30, 2025.

The "Loss on settlement (GEM case)" in the amount of $14.3 million represents excess of carrying values of transferred fixed assets over liabilities to GEM during settlement in May 2025 (see *Note 19 - Contingencies and claims* for further details).

### Net Loss

The net loss attributable to common stockholders (after preferred dividends) was $129.8 million, or $11,231.39 net loss per share, for the three months ended June 30, 2025, as compared to a net loss attributable to common stockholders after preferred dividends of approximately $96.0 million, or $95,987,912 loss per share, for the three months ended June 30, 2024 (giving effect to reverse stock splits, see *Note 1 - Description of business and basis of presentation* to the financial statements).

### Comparison of the Nine Months Ended June 30, 2025, to the Nine Months Ended June 30, 2024

The following table sets forth our historical operating results for the periods indicated:

*(dollar amounts, except percentages)*

|  | Nine Months Ended June 30, 2025 | 2024 | $ Change | % Change |
| --- | ---: | ---: | ---: | ---: |
| Vehicle sales | $8,344,311 | $98,570 | $8,245,741 | 8,365% |
| Cost of revenues | 24,151,863 | 49,448 | 24,102,415 | (48,743)% |
| **Gross loss** | **(15,807,552)** | **49,122** | **(15,856,674)** | **(32,280)%** |
| **Operating expenses:** |  |  |  |  |
| General and administrative | 114,030,172 | 138,615,121 | (24,584,949) | 18% |
| Research and development | 33,234,428 | 54,486,237 | (21,251,809) | 39% |
| Impairment of intangible assets | 12,332,625 | 73,447,067 | (61,114,442) | 83% |
| Impairment of right-of-use assets | — | 3,197,668 | (3,197,668) | 100% |
| Impairment of goodwill | — | 28,846,832 | (28,846,832) | 100% |
| **Loss from operations** | **$(175,404,777)** | **$(298,543,803)** | **$123,139,026** | **41%** |
| **Other income (expense):** |  |  |  |  |
| Other financing costs - initial recognition of warrants | (70,366,183) | (17,914,480) | (52,451,703) | (293)% |
| Gain/(loss) on warrants and derivative liability revaluation | 58,787,404 | (805,137) | 59,592,541 | 7,402% |
| Loss on exchange of warrants | (57,770,454) | — | (57,770,454) | —% |
| Gain on settlement | 3,761,955 | — | 3,761,955 | —% |
| Loss on settlement (GEM case) | (14,261,736) | — | (14,261,736) | —% |
| Gain/(loss) on extinguishment of debt | 1,803,771 | (655,721) | 2,459,492 | 375% |
| Loss on disposal of fixed assets | — | (477,838) | 477,838 | 100% |
| Interest expense | (51,855,494) | (8,795,525) | (43,059,969) | (490)% |
| Other financing costs - ELOC commitment fee | — | (6,000,000) | 6,000,000 | 100% |
| Other income, net | 860,131 | 2,318,164 | (1,458,033) | (63)% |
| **Total other income (expense)** | **(129,040,606)** | **(32,330,537)** | **(96,710,069)** | **(299)%** |
| **Net loss before income tax benefit** | **$(304,445,383)** | **$(330,874,340)** | **$26,428,957** | **8%** |
| Income tax benefit/ (provision) | (1,800) | 3,890,100 | (3,891,900) | (100)% |
| **Net loss** | **(304,447,183)** | **(326,984,240)** | **22,537,057** | **7%** |
| Net loss attributable to noncontrolling interest | (12,757,919) | (45,796,565) | 33,038,646 | 72% |
| **Net loss attributable to stockholders** | **$(291,689,264)** | **$(281,187,675)** | **$(10,501,589)** | **(4)%** |
| Waived/(accrued) accumulated preferred dividends and other capital transactions with preferred stockholders | (148,805) | (8,670,441) | 8,521,636 | 98% |
| **Net loss attributable to common stockholders after preferred dividends** | **$(291,838,069)** | **$(289,858,116)** | **$(1,979,953)** | **(1)%** |
| Net Loss per Share (\*) | (74,887.88) | (289,858,116) |  |  |
| Weighted average shares outstanding, basic and diluted (\*) | 3,897 | 1 |  |  |

(\*) Adjusted retroactively for reverse stock splits, see *Note 1 - Description of business and basis of presentation*

### Revenues

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 a 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 until 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 (Bollinger Commercial segment), and the Company recognized revenue in amount of $3.7 million.

### Cost of Revenues

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.

### Research and Development

Research and development expenses decreased by $21.3 million, or 39%, from $54.5 million through the nine months ended June 30, 2024, to $33.2 million through the nine months ended June 30, 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.

### General and Administrative

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 $24.6 million, or 18%, from approximately $138.6 million in the nine months ended June 30, 2024, to approximately $114.0 million in the nine months ended June 30, 2025, primarily due to reduction in employee related compensation due to reduction in force, decrease of settlements and penalties, promotion costs, etc.

### Impairment

Due to unfavorable market conditions and decline of market prices of the Company’s common stock, we test noncurrent assets for recoverability. For the nine months ended June 30, 2025, impairment of intangible assets amounted to $12.3 million (Bollinger Motors segment). During the nine months ended June 30, 2024, impairment of the intangible assets was $73.5 million (mainly Bollinger Motors segment, and $15.1 million recognized by Bollinger Commercial segment). In addition, impairment of goodwill amounted to $28.9 million (carrying value of goodwill was zero as of both June 30, 2025, and September 30, 2024). The impairment was recognized in the financial statements mainly due to the uncertainty of future fundings required to support the business and decrease of Company's market capitalization.

### Other Gains and Losses

The Company recognized other financing costs on initial recognition of warrants during the nine months ended June 30, 2025, in the amount of $70.4 million (versus $17.9 million during the nine months ended June 30, 2024) due to additional notes with warrants issued during the nine months ended June 30, 2025.

Net gain on revaluation of warrants obligations was $58.8 million during the nine months ended June 30, 2025, versus a $0.8 million loss during the nine months ended June 30, 2024. During the nine months ended June 30, 2025, pursuant to the Warrant Exchange Agreement, the Company and certain investors agreed to exchange warrants to fix the 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 as presented in the line item “Loss on exchange of warrants” of the consolidated statement of operations. For further details on accounting for warrants, see *Note 8 - Warrants and other derivative liabilities and fair value measurements* to the financial statements.

Similarly, the interest expense (mainly amortization of original issue discount (see *Note 7 - Debt* to the financial statements) increased by $43.1 million in comparison to the nine months ended June 30, 2024, due to a significantly higher volume of debt outstanding during the nine months ended June 30, 2025, (see *Note 7 - Debt* to the financial statements).

The "Loss on settlement (GEM case)" in the amount of $14.3 million represents excess of carrying values of transferred fixed assets over liabilities to GEM during settlement in May 2025 (see *Note 19 - Contingencies and claims* for further details).

### Net Loss

The net loss attributable to common stockholders (after preferred dividends) was $291.8 million, or $74,887.88 net loss per share, for the nine months ended June 30, 2025, as compared to a net loss attributable to common stockholders after preferred dividends of approximately $289.9 million, or $289,858,116 loss per share, for the nine months ended June 30, 2024 (giving effect to reverse stock splits, see below).

### Operating Segments

The Company is currently comprised of two major operating segments:

- Bollinger Motors. The Company acquired the controlling interest of Bollinger Motors Inc., in September 2022 and increased the ownership to more than 95% in May 2025. This acquisition positioned the Company into the medium duty truck classes 4-6, along with the Sport Utility and Pick Up Trucks EV segments. The first Bollinger vehicles were sold in September 2024.
- Bollinger Commercial. In November 2022, the Company acquired from ELMS a manufacturing plant and all the intellectual property needed to engineer and build Class 1 and Class 3 electric vehicles. The first vehicles were produced in Tunica, Mississippi and delivered to customers during the 12 months ended September 30, 2023.

See *Note 4 - Segment information* for the main financial information pertaining to the segments.

### Reverse Stock Splits and Nasdaq Listing Rules Compliance

Our common stock is listed on the Nasdaq Capital Market. To maintain that listing, we must satisfy minimum financial and other requirements including, without limitation, a requirement that our closing bid price be at least $1.00 per share.

On June 2, 2025, the Company effected 1-for-100 reverse stock split of its common stock, and on August 4, 2025, the Company effected a 1-for-250 reverse stock split, as further described in *Note 20 - Subsequent events*, which were applied retroactively to these consolidated financial statements.

In addition to the reverse stock splits 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, 1-for-100 reverse stock split on September 17, 2024, 1-for-60 reverse stock split on February 18, 2025, and 1-for-100 reverse stock split on April 11, 2025. The Company retroactively adjusted its historical financial statements to reflect the reverse stock splits.

The reverse stock splits did not change the authorized number of shares or the par value of the common stock nor did it modify any voting rights of the common stock. No fractional shares were issued in connection with the reverse stock splits and each fractional share resulting from the reverse stock splits was rounded up to the next whole share.

### Liquidity and Capital Resources

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.

The Company's principal source of liquidity consists of existing cash and restricted cash of approximately $0.9 million as of June 30, 2025. During the nine months ended June 30, 2025, the Company used approximately $69.4 million of cash for operating activities. The net working capital deficit on June 30, 2025 amounted to approximately $144.1 million, or $41.6 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 nine months ended June 30, 2025, the Company incurred a net loss of $304.4 million, and as of June 30, 2025, our accumulated deficit was approximately $2.6 billion.

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 nine months ended June 30, 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.

These unaudited interim condensed consolidated financial statements do not include any adjustments to the carrying amounts of assets or liabilities that may result from the outcome of these uncertainties.

### Increase in equity after the balance sheet date

Subsequent to the balance sheet date, the Company and certain investors entered the following agreements with respect to outstanding notes and warrants (as described in the *Note 20 – Subsequent events* in further detail). On July 29, 2025, the Company and investors exchanged all then-outstanding warrants (with a carrying amount of approximately $114 million) for newly designated shares of Series G Preferred stock, and secured senior convertible notes with a principal and accumulated interest in amount of approximately $25 million for newly designated shares of Series F Preferred stock. Additionally, on August 14, 2025, the Company and investors exchanged all then-outstanding warrants (with a carrying amount of approximately $5 million) for shares of Series G Preferred stock, and secured senior convertible notes with a principal and accumulated interest in amount of approximately $5 million for shares of Series F Preferred stock. On August 14, 2025, the Company and investors also agreed to amend the conversion floors in the cashless exercise formulas of the warrants issuable upon future possible exercise of additional investment rights from $0.01 to $0.07. If the price of shares of common stock decrease to or below $0.07, the Company agreed to reduce the floor of the cashless exercise formula to $0.01 and seek stockholder approval.

As a result of these transactions, the Company believes that as of August 14, 2025, the stockholders' equity of the Company exceeds $2.5 million.

### Debt

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 nine months ended June 30, 2025, we issued Senior secured convertible notes with an aggregate principal of approximately $68 million, bearing 15% interest (20% after default), and warrants with terms further described in *Note 7 - Debt* and *Note 8 - Warrants and other derivative liabilities and fair value measurements* 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 *Note 9 - Stockholder's equity).*

Also, in October 2024, Bollinger Motors, Inc., a majority-owned subsidiary of the Company, received a $10 million long-term loan, providing additional capital to support the production and sale of Bollinger’s Class 4 EV truck, the Bollinger B4. After a lawsuit from the lender upon alleged default on one of the interest payments, the note was fully repaid by the Company in May 2025 (see *Note 7 - Debt* for details).

During the nine months ended June 30, 2025, Senior secured convertible notes with a principal of approximately $26 million, as well as relevant accumulated interest with a carrying amount of approximately $1.5 million, were 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 $3 million. The liability was fully settled by December 2024, and the transaction resulted in recognition of gain on extinguishment of $1.5 million.

The following is a summary of our indebtedness as of June 30, 2025 and of transactions during the nine months ended June 30, 2025:

| Changes in debt during the 9 months ended June 30, 2025 | Matured loans and advances | Bollinger Motors loan | Senior Secured Convertible Notes | Total |
| --- | ---: | ---: | ---: | ---: |
| Principal as of October 1, 2024 | $2,717,804 | — | $20,346,283 | $23,064,087 |
| Original issue discount as of October 1, 2024 | — | — | (17,664,310) | (17,664,310) |
| **Carrying amount as of October 1, 2024** | **2,717,804** | **—** | **2,681,973** | **5,399,777** |
| Notes issued, principal | — | 11,250,000 | 67,978,891 | 79,228,891 |
| Original issue discount and debt issuance costs at inception | — | — | (67,978,891) | (67,978,891) |
| Amortization of original issue discount and debt issuance costs | — | — | 31,375,670 | 31,375,670 |
| Principal paid in cash | — | (11,000,000) | — | (11,000,000) |
| Principal converted to shares of common stock | (2,717,804) | — | (26,051,600) | (28,769,404) |
| Original issue discount related to the principal converted | — | — | 16,064,397 | 16,064,397 |
| Principal extinguished | — | (250,000) | — | (250,000) |
| Principal as of June 30, 2025 | — | — | 62,273,574 | 62,273,574 |
| Original issue discount as of June 30, 2025 | — | — | (38,203,134) | (38,203,134) |
| **Carrying amount as of June 30, 2025** | — | — | $24,070,440 | $24,070,440 |
| Including presented as current liability | — | — | 24,070,440 | 24,070,440 |
| Including presented as noncurrent liability | — | — | — | — |
| Fair value - amount | — | — | $48,445,067 | $48,445,067 |
| Fair value - leveling | — | — | Level 3 | — |
| Contractual interest rate (default rate) | — | — | 20% (cross-default) | — |
| Maturity | — | — | Due (cross-default) | — |

### Cash Flows

The following table provides a summary of our cash flow data for the nine months ended June 30, 2025 and 2024:

| Net cash provided by (used in): | Nine Months Ended June 30, 2025 | 2024 |
| --- | ---: | ---: |
| Operating activities | $(69,407,762) | $(145,182,897) |
| Investing activities | (4,239,551) | (14,053,838) |
| Financing activities | 63,750,360 | 7,504,168 |

53

#### Cash flows used in operating activities

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 $69.4 million in the nine months ended June 30, 2025, a 52% decrease from $145.2 million net cash used during the nine months ended June 30, 2024.

#### Cash flows used in investing activities

During the nine months ended June 30, 2025 and 2024, our cash flows used in investing activities have been comprised mainly of equipment purchases. Net cash used in investing activities was $4.2 million in the nine months ended June 30, 2025, a 70% decrease from $14.1 million used in investing activities during the nine months ended June 30, 2024.

#### Cash flows provided by financing activities

Through June 30, 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 Motors vehicles (for further details, see section "Debt" above). Net cash provided by financing activities was $63.8 million for the nine months ended June 30, 2025, as compared to $7.5 million net cash spent on financing activities for the nine months ended June 30, 2024.

### Contractual Obligations and Commitments

The following tables summarize our contractual obligations and other commitments for cash expenditures as of June 30, 2025, and the years in which these obligations are due:

#### Operating lease commitments

| Years Ended September 30, | Scheduled Payments |
| --- | ---: |
| 2025 (3 months) | $1,432,935 |
| 2026 | 5,006,078 |
| 2027 | 4,958,062 |
| 2028 | 4,758,748 |
| 2029 | 1,286,244 |
| Thereafter | 4,487,146 |
| **Total Future Minimum Lease Payments** | **$21,929,213** |

54

#### Scheduled debt maturities

The following are scheduled debt maturities as of June 30, 2025 (see also section "Debt" above):

|  | Year Ended September 30, 2025 (3 months) | 2026 | 2027 | 2028 | 2029 | Total |
| --- | ---: | ---: | ---: | ---: | ---: | ---: |
| **Total Debt due (excluding debt discount)** | $62,273,574 | $— | $— | $— | $— | **$62,273,574** |

### Off-Balance Sheet Arrangements

We are not a party to any off-balance sheet arrangements, as defined under SEC rules.

### Critical Accounting Policies and Estimates

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 in *Note 3 – Summary of significant accounting policies* to the condensed consolidated financial statements.

In preparation of these financial statements, management applied critical estimates and assumptions while performing impairment tests for long-lived assets and while determining net realizable value of inventory.

#### Impairment tests for other long-lived assets

We identified Bollinger Motors and Bollinger Commercial (refer to *Note 4 - Segment information*) as our reporting units for the purposes of assessing impairments.

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 the amount by which the carrying amount of the asset group exceeds the fair value of the asset group.

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 during the nine months ended June 30, 2025, the Company recognized impairment loss in the amount of $12.3 million in respect of patents (Bollinger Motors segment). No impairment in respect of other noncurrent assets was recognized, primarily because of significant impairment that reduced the carrying amount of long-lived assets in previous periods.

Estimating the fair value of the reporting units and certain assets requires us to make assumptions and estimates regarding our future plans, as well as industry, economic, and regulatory conditions. These assumptions and estimates include estimated future annual net cash flows, income tax considerations, discount rates, long-term growth rates, contributory asset charges, and other market factors. Assumptions used in impairment assessments are made at a point in time. Therefore, they are subject to change based on the facts and circumstances present at each annual and interim impairment assessment date. Fair value determinations require significant judgment and are sensitive to changes in underlying assumptions, estimates, and market factors.

#### Net realizable value of inventory

In accordance with applicable accounting standards, we value inventory at the lower of cost or net realizable value. Our assessment of net realizable value is a critical accounting estimate due to the inherent market volatility, evolving technology and competitive landscape of the EV industry.

The net realizable value of inventory is determined based on the estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation. In determining net realizable value, we consider several factors, including:

- Market Demand and Pricing Trends – The EV industry is highly competitive, with frequent price adjustments based on consumer demand, regulatory incentives, and competitor pricing strategies.
- Technological Obsolescence – As battery and vehicle technology evolves, older inventory may require discounting or write-downs to remain competitive.
- Production Costs and Cost Absorption – Given supply chain fluctuations and raw material pricing (e.g., lithium, nickel, and other battery components), production costs may exceed expected selling prices.
- Other Factors – Changes in government incentives, infrastructure development and interest rates may affect consumer adoption and, consequently, inventory valuation.

As a result of the tests performed by management during the three and nine months ended June 30, 2025, the write-down to net realizable value in amount of $8.9 million and $9.7 million, respectively (whereas $6 million was recorded by the Bollinger Commercial segment, and remaining part - by the Bollinger segment). These adjustments were recorded as a component of cost of goods sold.

The net realizable value assessment considered the current expected selling prices of Mullen One, Mullen Three, and Bollinger B4 vehicles, based on recent sales and current market demand, as well as expected additional costs required to sell the vehicles. Should actual sales prices or demand decline, or selling costs increase, additional write-downs may be required in future periods. Additionally, if the Company is unable to secure sufficient funding to continue operations as planned, inventory may need to be sold at further discounted prices, which could negatively impact future financial results.

### Recent Accounting Pronouncements

Accounting standard updates issued but not yet effective were assessed and determined to be either not applicable or not expected to have a material impact on our interim condensed consolidated financial statements.

## Market risk

As filed, 404 characters.

All outstanding Senior convertible notes and relevant accumulated interest are technically in cross-default due to the non-payment of a portion of one of the loans that matured, therefore the interest rate increased from 15% to 20%. As of the date these financial statements were available to be issued, none of the investors have demanded immediate payment of the notes and outstanding interest in cash.

## Controls and procedures

As filed, 2,261 characters.

### Evaluation of Disclosure Controls and Procedures

As of June 30, 2025, being the end of the period covered by this Quarterly Report, our management conducted an evaluation, under the supervision and with the participation of our chief executive officer and chief financial officer, of the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) and Rule 15d15(e) under the Exchange Act).

Disclosure controls and procedures are designed to provide reasonable assurance that information required to be disclosed in our reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our chief executive officer and chief financial officer, as appropriate, to allow for timely decisions regarding required disclosure.

Based on that evaluation, our chief executive officer and chief financial officer concluded that, as of June 30, 2025, our disclosure controls and procedures were not effective due to the material weaknesses in our internal control over financial reporting as discussed in Item 9A. Controls and Procedures – in the Company’s 2024 Annual Report, under the heading “Management’s Annual Report on Internal Control Over Financial Reporting”.

### Limitations on Effectiveness of Controls and Procedures

In designing and evaluating our disclosure controls and processes, as well as internal control over financial reporting, we recognize that any controls and procedures, no matter how well designed and implemented, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of controls and procedures must reflect the fact that there are resource constraints, and management must apply its judgment in evaluating the benefits of possible controls and procedures relative to their costs.

### Changes in Internal Control Over Financial Reporting

There were no changes in our internal control over financial reporting that occurred during the quarter ended June 30, 2025, that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

## Risk factors

As filed, 11,642 characters.

Risk factors are discussed in Part I, Item 1A. “*Risk Factors”* in our 2024 Annual Report, and could materially affect our business, financial condition or future results of operation. Except as set forth below, there have been no material changes or additions to our risk factors discussed in our 2024 Annual Report which could materially affect our business, financial condition or future results of operations. The risk factors set forth below should be read together with the risk factors discussed in Part I, Item 1A. “Risk Factors” in our 2024 Annual Report.

***We may not be able to maintain compliance with the continued listing requirements of the Nasdaq Capital Market.***

To maintain listing on the Nasdaq Capital Market, we must satisfy minimum financial and other requirements including, without limitation, a requirement that our closing bid price be at least $1.00 per share. Plus, if a company’s security has a closing bid price of $0.10 or less for 10 consecutive trading days, the Listing Qualifications department (the “Staff”) of The Nasdaq Stock Market LLC (“Nasdaq”) will issue a delisting determination. Since 2023, we have experienced periods during which our Common Stock has traded below $1.00.

During 2023 and 2024, we received formal notices from the Nasdaq Staff that, based upon the closing bid price for our Common Stock, for the previous 30-consecutive business day period, the Company no longer satisfied the minimum bid price requirement for continued listing on The Nasdaq Capital Market, as set forth in Nasdaq Listing Rule 5550(a)(2) (the “Bid Price Rule”). Since May 2023, the Company has effected the following eight reverse stock splits in order to maintain or regain compliance with the Bid Price Rule: a 1-for-250 reverse stock split on August 4, 2025, a 1-for-100 reverse stock split on June 2, 2025; a 1-for-100 reverse stock split on April 11, 2025; a 1-for-60 reverse stock split on February 18, 2025; a 1-for-100 reverse stock split on September 17, 2024; 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. Plus, if needed, the Company may effectuate additional reverse stock splits.

Nasdaq Listing Rule 5810(c)(3)(A)(iv) states that if any listed company fails to meet the Bid Price Rule after effecting one or more reverse stock splits over the prior two-year period with a cumulative ratio of 250 shares or more to one, then the company is not eligible for a Bid Price Rule compliance period. On September 16, 2024, in connection with a notice that the Company no longer satisfied the Bid Price Rule, the Staff further indicated that, based upon the Company’s implementation of one or more reverse stock splits within the past two years at a cumulative ratio of 250 shares or more to one in contravention of Nasdaq Listing Rule 5810(c)(3)(A)(iv). On September 17, 2024, the Company implemented a 1-for-100 reverse stock split, and on October 16, 2024, the Company announced that it had received formal notice from Nasdaq confirming the Company had regained compliance with the Bid Price Rule.

While Nasdaq rules do not impose a specific limit on the number of times a listed company may effect a reverse stock split to maintain or regain compliance with the Bid Price Rule, Nasdaq has stated that a series of reverse stock splits may undermine investor confidence in securities listed on Nasdaq. Accordingly, if in the future the Company is not in compliance with the Bid Price Rule and effectuates another reverse stock split, Nasdaq may determine that it is not in the public interest to maintain our listing, even if we regain compliance with the Bid Price Rule.

On January 15, 2025, the Company received an expected notice from the Staff stating that the Company was no longer in compliance with Nasdaq Listing Rule 5250(c)(1), which requires listed companies to timely file all required periodic financial reports with the SEC, because the Company had not yet filed its Annual Report on Form 10-K for the fiscal year ended September 30, 2024. The Company filed Form 10-K on January 24, 2025.

In addition, on February 25, 2025, we received a written notice from the Staff notifying us that for the last 30 consecutive business days prior to the date of the notice, our Market Value of Listed Securities (“MVLS”) was less than the $35.0 million minimum required for continued listing on The Nasdaq Capital Market, as required by Nasdaq Listing Rule 5550(b)(2) (the “MVLS Listing Rule”). Additionally, as of the date of the notice, we also did not meet either of the alternative Nasdaq continued listing standards under the Nasdaq Listing Rules: stockholders’ equity of at least $2.5 million or net income of $500,000 from continuing operations in the most recently completed fiscal year or in two of the three most recently completed fiscal years. The Company has until August 25, 2025 to regain compliance with the MVLS Listing Rule. In order to regain compliance with the MVLS Listing Rule, the Company’s MVLS must meet or exceed $35.0 million for a minimum of ten consecutive business days during the 180-day compliance period after which the Staff will provide us written confirmation of compliance and the matter will be closed. In the event we do not regain compliance with the MVLS Listing Rule, the Staff will provide notice that our securities will be subject to delisting, at which time, we may appeal the delisting determination to a Nasdaq hearings panel. There can be no assurance that we will regain compliance with the MVLS Listing Rule or otherwise maintain compliance with any of the other Nasdaq listing requirements.

If our common stock ceases to be listed for trading on the Nasdaq Capital Market, we would expect that our common stock would be traded on one of the three tiered marketplaces of the OTC Markets Group (the “OTC Mkts”). If Nasdaq were to delist our common stock, it would be more difficult for our stockholders to dispose of our Common Stock and more difficult to obtain accurate price quotations on our Common Stock. Our ability to issue additional securities for financing or other purposes, or otherwise to arrange for any financing we may need in the future, may also be materially and adversely affected if our common stock or warrants are not listed on a national securities exchange. The OTC Markets are generally regarded as a less efficient trading market than The Nasdaq Capital Market or Global Market or the New York Stock Exchange.

Although the OTC Mkts do not have any listing requirements, to be eligible for quotation on the OTC Mkts, issuers must remain current in their filings with the SEC or applicable regulatory authority. If we are not able to pay the expenses associated with our reporting obligations, we will not be able to apply for quotation on the OTC Board. Market makers are not permitted to begin quotation of a security whose issuer does not meet this filing requirement. If we are delisted to the OTC Mkts and no market is ever developed for our Common Stock or warrants, it will be difficult for you to sell any shares you purchase in this offering. In such a case, you may find that you are unable to achieve any benefit from your investment or liquidate your shares without considerable delay, if at all.

***During the past two years, the Company has effected several reverse stock splits and may effect additional reverse stock splits in the future, which may decrease the liquidity of the shares of our common stock and may have a dilutive effect on the ownership of existing stockholders.***

Since May 2023, the Company has effected the following eight reverse stock splits in order to maintain or regain compliance with the Bid Price Rule: a 1-for-250 reverse stock split on August 4, 2025; a 1-for-100 reverse stock split on June 2, 2025; a 1-for-100 reverse stock split on April 11, 2025; a 1-for-60 reverse stock split on February 18, 2025; a 1-for-100 reverse stock split on September 17, 2024; 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. Plus, if needed, the Company may effectuate additional reverse stock splits. The primary purpose for a future reverse stock split, should the Company choose to effect it, would be to increase the per share market price of its Common Stock to satisfy the Bid Price Rule and maintain listing The Nasdaq Capital Market.

The liquidity of the shares of our Common Stock may be affected adversely by a reverse stock split given the reduced number of shares that will be outstanding following the reverse stock split, especially if the market price of our Common Stock does not increase as a result of the reverse stock split. In addition, a reverse stock split may increase the number of shareholders who own odd lots (less than 100 shares) of our Common Stock, creating the potential for such shareholders to experience an increase in the cost of selling their shares and greater difficulty effecting such sales.

While we expect that the reduction in the number of outstanding shares of Common Stock will proportionally increase the market price of our Common Stock, we cannot assure you that a reverse stock split will increase the market price of our Common Stock by a multiple of the reverse stock split ratio, or result in any permanent or sustained increase in the market price of our Common Stock. The market price of our Common Stock will continue to be based, in part, on our performance and other factors unrelated to the number of shares outstanding. A reverse stock split will reduce the number of outstanding shares of our Common Stock without reducing the number of shares of available but unissued Common Stock, which will also have the effect of increasing the number of shares of Common Stock available for issuance. The issuance of additional shares of our Common Stock may have a dilutive effect on the ownership of existing stockholders. The current economic environment in which we operate, the debt we carry, along with otherwise volatile equity market conditions, could limit our ability to raise new equity capital in the future.

In addition, a reverse stock split will reduce the total number of outstanding shares of Common Stock, which may lead to reduced trading and a smaller number of market makers for our Common Stock, particularly if the price per share of our Common Stock does not increase as a result of a reverse stock split.

***If we are unable to successfully transition our manufacturing operations to our Tunica, Mississippi, facility, our production schedules and operating results could be adversely affected.***

If we are unable to successfully transition manufacturing operations for Bollinger Motors from our third-party outsourced manufacturer in Michigan to our Tunica, Mississippi, facility, we may not achieve desired efficiencies, and our ability to deliver products to our customers could be disrupted. We are relocating machinery, equipment, and inventory from our Michigan-based outsourced manufacturing partner to our commercial manufacturing center in Tunica, Mississippi. Bollinger Commercial products are already set up for production but are currently idle. This transition involves complex logistics, installation, and integration of manufacturing processes into the Tunica facility. If we encounter unforeseen challenges such as equipment installation delays, production ramp-up issues, or unexpected costs, our manufacturing timelines and operating results could be adversely affected.

Filed Aug 14, 2025.
Source: SEC EDGAR, the filing index for accession 0001437749-25-027016. Last ingested by Listed: Oct 24, 2026, 15:07 ET. No prices; not investment advice.