Mullen Automotive (NASDAQ:MULN) has revealed that its auditor, Daszkal Bolton, will resign immediately after it completes a merger with accounting firm CohnReznick. Daszkal has been Mullen’s auditor since September 2020. Mullen did not cite any other specific reasons for the resignation besides the merger.
For the years ended Sept. 30 for 2021 and 2022 as well as for the interim period from October 2022 to March 1, 2023, Mullen stated that Daszkal certified there were no disagreements concerning “accounting principles or practices, financial statement disclosure, or auditing scope or procedures.” Daszkal also noted that there were no “reportable events,” except that it “advised the Company of material weaknesses in its internal control over financial reporting” as of September 2022 and 2021.
In a separate letter, Daszkal said that it agrees with Mullen’s statement as it pertains to itself. The firm also said that it has “no basis to agree or disagree” with the statements.
Mullen’s Auditor Resigns
CohnReznick is recognized as a reputable accounting firm in the United States. With the acquisition of Daszkal, the firm will add 25o people and three offices to its Florida coverage. The company noted:
“Daszkal Bolton is one of the most prominent and respected CPA firms in South Florida and was courted by many regional and national firms. In the end, they picked CohnReznick based on similar cultures, depth of resources, technology advancements, and tremendous growth opportunities for Daszkal Bolton’s people.”
Mullen also disclosed that Daszkal prepared the Form 10-K for the year ended Sept. 30, 2022 with the assumption that it would continue as a going concern.
On March 1, Mullen engaged RBSM as its new public accountant, with the approval of the Audit Committee. For compliance reasons, Mullen noted that it had not communicated with RBSM in regards to its financials and transactions for the years ended Sept. 30, 2021 and 2022 as well as through March 1, 2023.
Still, the resignation begs a bigger question as to why CohnReznick will drop Mullen upon its merger with Daszkal. InvestorPlace’s Thomas Yeung recently pointed out a possible accounting error related to Mullen’s acquisition of Bollinger Motors:
“In Q4 2022, the Brea, California-based firm appeared to “receive” over $40 million back from its recent acquisition of Bollinger Motors. The two companies had publicly agreed on a $107 million cash and $41.6 million stock transfer, yet only $29.6 million ever left Mullen, according to its most recent annual report.”
Yeung believes that this is either an accounting mishap or a “round-trip” transaction.
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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.
