Shares of Mullen Automotive (NASDAQ:MULN) stock are sinking lower after the electric vehicle (EV) company announced that its chief accounting officer (CAO), Kerri Sadler, had resigned on March 6.
On the same day, Mullen appointed Chester Bragado as its CAO. With over 20 years of experience, Bragado previously served as Mullen’s executive vice president of operations. Before that, he held financial, auditing and accounting roles at companies like Sambazon and Loop Media. Bragado has also served as an external auditor for PricewaterhouseCoopers (PwC).
“There are no arrangements or understandings between Mr. Bragado and any other person pursuant to which he was appointed to serve as Chief Accounting Officer and Mr. Bragado does not have a direct or indirect material interest in any ‘related party’ transaction required to be disclosed pursuant to Item 404(a) of Regulation S-K,” said Mullen in a Form 8-K. “There are no family relationships between Mr. Bragado and any director or executive officer of the Company.”
MULN Stock: CAO Kerri Sandler Resigns
This announcement comes on the heels of Mullen’s auditor stepping down. Last week, Daszkal Bolton disclosed that it would resign immediately following a merger with CohnReznick. Daszkal had been the company’s auditor since 2020. Mullen did not provide any other reason for the resignation besides the merger. Meanwhile, Mullen noted that it had engaged RBSM as its new public accountant.
This begs the question: What is going on with Mullen’s accounting department? For starters, its apparent that losses are rampant. The Brea, California-based company reported a net loss before accrued preferred dividends and non-controlling interest of $378.46 million for the three months ended Dec. 31. On top of that, InvestorPlace’s Tom Yeung noted a possible accounting error concerning the majority acquisition of Bollinger Motors.
During Q4, Mullen “appeared to ‘receive'” over $40 million back from its acquisition of Bollinger. Mullen had agreed to pay Bollinger $107 million cash and $41.6 million in stock, although only $29.6 million ever left Mullen.
“This is usually either an accounting error or a ’round-trip’ transaction to artificially increase asset values,” said Yeung. If true, this reflects a major oversight for the emerging EV company and could possibly explain the two departures.
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.