Mullen Automotive (NASDAQ:MULN) has filed its Form 10-K, revealing its financial results for the year ended Sept. 30. Front and center was a massive net loss of $1 billion, which increased from the loss of $740.32 million a year ago. MULN stock has lost 99% of its value since 2023.
The net loss equated to a loss per share of $1,574.14 compared to a loss per share of $63,085.26 for the year ended Sept. 30, 2022. Net loss per share decreased due to the company’s weighted average shares outstanding increasing by 4,857% year-over-year (YOY). This means that profitability did not actually improve. In fact, it got worse.
Of the $1 billion in losses, $820.4 million was attributed to non-cash expenses.
“It was a year of significant headwinds in the equity market for electric vehicle manufactures with a majority seeing a significant decrease in market values during 2023,” said CFO Jonathan New. “Mullen was no exception, and the decreased market value was the primary cause of NON-CASH write-downs of certain assets.”
MULN Stock: Mullen Reports $1 Billion Net Loss for Year Ended Sept. 30
A non-cash expense doesn’t mean the money was lost out of thin air. These expenses are still absorbed somehow, and in many cases, it falls on the shareholders. For starters, stock-based compensation (SBC) added $85.44 million to the figure, up from $43.71 million a year ago. With SBC, shares are granted to insiders, which has a dilutive effect on shareholders. CEO David Michery received $48.87 million in stock awards during the year. Meanwhile, MULN declined by over 99% in 2023.
Furthermore, Mullen subsidiary Bollinger incurred a $63.98 million goodwill impairment due to “unfavorable market conditions and the decline of market price of the Company’s common stock,” according to New. A goodwill impairment appears on a company’s balance sheet when it acquires another company. Mullen was also on the hook for a $14.77 million impairment to plant, property and equipment and a $5.87 million impairment to its intangible assets.
Finally, the revaluation of derivative liabilities and initial recognition of derivative liabilities added a combined $629.30 million to Mullen’s non-cash expenses. These expenses are connected to Mullen’s dilutive agreements with its lenders and other prior agreements.
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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.
