MULN - MULN Stock: Mullen Opens the Hood on Bollinger Motors Deal

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Mullen Automotive (NASDAQ:MULN) stock is in focus after the electric vehicle (EV) company released the unaudited financial statements of Bollinger Motors for the six months ended June 30, 2022 and June 30, 2021. In September, Mullen paid $148.2 million in cash and stock to acquire 60% controlling interest in Bollinger. At the time, CEO David Michery commented:

“Combining Bollinger’s vehicles with our existing class 1 and class 2 EV cargo van programs gives us the chance to dominate the entire class 1-6 commercial light and medium duty truck segments.”

Bollinger boats the B1 and B2 trucks in its unreleased lineup. The acquisition of Electric Last Mile Solutions’ (OTCMKTS:ELMSQ) assets, notably its production facility in Mishawaka, Indiana, will help speed up the release of the two trucks by “12-plus months.” Production of the Mullen Five will also transition to the facility, with a starting date set for 2024.

MULN Stock: Mullen Releases Bollinger’s Financials

For the six months ended June 30 of this year, Bollinger reported a net loss of $6.34 million, down slightly from a net loss of $6.6 million a year ago. That was caused by research and development expenses of $3.76 million and general and administrative expenses of $2.75 million. “Other income” totaled just $181,025, up from $41,081 a year ago.

Furthermore, the value of Bollinger’s property, plant, and equipment totaled $1.12 million, down from $1.39 million year-over-year (YOY). This is a bit concerning, as one would expect an electric vehicle company’s tangible assets would increase over time as it works to produce vehicles.

As of June 30, Bollinger had just $1.13 million of cash on hand, down from $3.43 million YOY. Total assets as of then totaled $4.33 million. It’s highly likely the company would be having problems operating with its low cash balance if it wasn’t for the Mullen controlling interest acquisition.

The startup nature of Bollinger also creates several risk factors, such as securing manufacturing contracts with suppliers and failure to commercialize products. In Oct. of 2019, Bollinger started collecting $1,000 reservation fees for its B1 and B2 trucks. At the end of 2021, the company decided to postpone the development of the trucks and refund all reservation holders. As of June 30, Bollinger is still on the hook to refund $103,000.

On the date of publication, Eddie Pan did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

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