Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Jun. 30, 2023 | Aug. 14, 2023 | |
Document and Entity Information [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Jun. 30, 2023 | |
Entity File Number | 001-34887 | |
Entity Registrant Name | MULLEN AUTOMOTIVE INC. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 86-3289406 | |
Entity Address, Address Line One | 1405 Pioneer Street | |
Entity Address, City or Town | Brea | |
Entity Address State Or Province | CA | |
Entity Address, Postal Zip Code | 92821 | |
City Area Code | 714 | |
Local Phone Number | 613-1900 | |
Title of 12(b) Security | Common Stock, par value $0.001 per share | |
Trading Symbol | MULN | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 184,168,720 | |
Entity Central Index Key | 0001499961 | |
Current Fiscal Year End Date | --09-30 | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) | Jun. 30, 2023 | Sep. 30, 2022 |
CURRENT ASSETS | ||
Cash and cash equivalents | $ 214,012,136 | $ 54,085,685 |
Restricted cash | 13,419,872 | 30,289,400 |
Accounts receivable | 308,000 | |
Inventory | 12,146,844 | |
Prepaid expenses and other current assets | 15,154,205 | 1,958,759 |
TOTAL CURRENT ASSETS | 255,041,057 | 86,333,844 |
Property, equipment and leasehold improvements, net | 91,750,519 | 17,786,702 |
Intangible assets, net | 111,957,534 | 93,947,018 |
Deposit on ELMS purchase | 5,500,000 | |
Receivable from related party | $ 1,876,013 | $ 1,232,387 |
Financing Receivable, after Allowance for Credit Loss, Noncurrent, Related Party, Type [Extensible Enumeration] | Related Party | Related Party |
Right-of-use assets | $ 5,504,851 | $ 4,597,052 |
Goodwill | 92,834,832 | 92,834,832 |
Other assets | 1,010,712 | 362,643 |
TOTAL ASSETS | 559,975,518 | 302,594,478 |
CURRENT LIABILITIES | ||
Accounts payable | 12,411,851 | 6,398,423 |
Accrued expenses and other current liabilities | 8,385,380 | 7,185,881 |
Dividends payable | 374,445 | 7,762,255 |
Derivative liabilities | 150,318,473 | 84,799,179 |
Liability to issue shares | 8,870,227 | 10,710,000 |
Lease liabilities, current portion | 2,217,059 | 1,428,474 |
Notes payable, current portion | 7,306,107 | 3,856,497 |
Other current liabilities | 103,372 | 90,372 |
TOTAL CURRENT LIABILITIES | 189,986,914 | 122,231,081 |
Notes payable, net of current portion | 5,164,552 | |
Lease liabilities, net of current portion | 3,709,616 | 3,359,354 |
Deferred tax liability | 14,436,974 | 14,882,782 |
TOTAL LIABILITIES | 208,133,504 | 145,637,769 |
Commitments and contingencies (Note 18) | ||
STOCKHOLDERS' EQUITY | ||
Common stock; $0.001 par value; 5,000,000,000 and 1,750,000,000 shares authorized at June 30, 2023 and September 30, 2022 respectively; 780,864,732 and 33,338,727 shares issued and outstanding at June 30, 2023 and September 30, 2022 respectively (*) | 86,763 | 3,704 |
Common stock owed but not issued; $0.001 par value; 6,165,212 and zero shares at June 30, 2023 and September 30, 2022 respectively (*) | 17,126 | |
Additional paid-in capital (*) | 1,950,179,828 | 948,594,920 |
Accumulated deficit | (1,689,954,794) | (889,907,455) |
Non-controlling interest | 91,511,517 | 98,259,819 |
TOTAL STOCKHOLDERS' EQUITY | 351,842,014 | 156,956,709 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | 559,975,518 | 302,594,478 |
Series A Preferred Stock | ||
STOCKHOLDERS' EQUITY | ||
Preferred Stock, Value | 1 | 2 |
Series C Preferred Stock | ||
STOCKHOLDERS' EQUITY | ||
Preferred Stock, Value | 1,210 | 1,360 |
Series D Preferred Stock | ||
STOCKHOLDERS' EQUITY | ||
Preferred Stock, Value | $ 363 | $ 4,359 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Jun. 30, 2023 | Sep. 30, 2022 |
Preferred Stock, par value | $ 0.001 | $ 0.001 |
Preferred Stock, shares authorized | 500,000,000 | 500,000,000 |
Common Stock, par value | $ 0.001 | $ 0.001 |
Common Stock, shares authorized | 5,000,000,000 | 1,750,000,000 |
Common Stock, shares issued | 86,762,748 | 3,704,303 |
Common Stock, shares outstanding | 86,762,748 | 3,704,303 |
Common stock owed but not issued, par value | $ 0.001 | $ 0.001 |
Common shares owed but unissued | 17,125,589 | 0 |
Series A Preferred Stock | ||
Preferred Stock, shares authorized | 200,000 | 200,000 |
Preferred Stock, shares issued | 1,036 | 1,924 |
Preferred Stock, shares outstanding | 1,036 | 1,924 |
Series C Preferred Stock | ||
Preferred Stock, shares authorized | 40,000,000 | 40,000,000 |
Preferred Stock, shares issued | 1,210,056 | 1,360,321 |
Preferred Stock, shares outstanding | 1,210,056 | 1,360,321 |
Series D Preferred Stock | ||
Preferred Stock, shares authorized | 437,500,001 | 437,500,001 |
Preferred Stock, shares issued | 363,097 | 4,359,652 |
Preferred Stock, shares outstanding | 363,097 | 4,359,652 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
REVENUE | ||||
Vehicle sales | $ 308,000 | $ 308,000 | ||
Revenue from Contract with Customer, Product and Service [Extensible Enumeration] | us-gaap:ProductMember | us-gaap:ProductMember | us-gaap:ProductMember | us-gaap:ProductMember |
Cost of sales | $ (248,669) | $ (248,669) | ||
Cost, Product and Service [Extensible Enumeration] | us-gaap:ProductMember | us-gaap:ProductMember | us-gaap:ProductMember | us-gaap:ProductMember |
Gross Margin | $ 59,331 | $ 59,331 | ||
OPERATING EXPENSES | ||||
General and administrative | 31,777,812 | $ 10,896,800 | 144,186,161 | $ 53,067,316 |
Research and development | 22,088,011 | 7,324,365 | 51,188,991 | 9,665,126 |
Total Operating Expense | 53,865,823 | 18,221,165 | 195,375,152 | 62,732,442 |
Loss from Operations | (53,806,492) | (18,221,165) | (195,315,821) | (62,732,442) |
Other financing costs - initial recognition of derivative liabilities | (248,413,090) | (504,373,115) | (269,344,178) | |
Gain / (loss) on derivative liability revaluation | (241,168) | 34,583,523 | (89,462,559) | (107,705,006) |
Gain / (loss) extinguishment of debt, net | 206,081 | (6,246,089) | 33,413 | |
Loss on financing | (8,934,892) | (8,934,892) | ||
Gain / (loss) on sale of fixed assets | 1,346 | (50,574) | 386,377 | (50,574) |
Interest expense | (608,332) | (5,346,766) | (5,414,185) | (29,906,225) |
Penalty for insufficient authorized shares | (3,495,000) | (3,495,000) | ||
Other income / (loss), net | 826,378 | (12,317,169) | 2,044,258 | (12,317,169) |
Net loss before income tax benefit | (310,970,169) | (4,847,151) | (807,316,026) | (485,517,181) |
Income tax benefit/ (provision) | (456,191) | 520,385 | ||
Net loss before accrued preferred dividends and noncontrolling interest | (311,426,360) | (4,847,151) | (806,795,641) | (485,517,181) |
Net loss attributable to noncontrolling interest | (2,568,126) | (6,748,302) | ||
Net loss attributable to stockholders | (308,858,234) | (4,847,151) | (800,047,339) | (485,517,181) |
Accrued preferred dividends | (13,125) | (2,285,792) | 7,387,811 | (37,541,085) |
Net Loss attributable to common stockholders after preferred dividends | $ (308,871,359) | $ (7,132,943) | $ (792,659,528) | $ (523,058,266) |
Net loss per share, basic | $ (11.14) | $ (4.26) | $ (55.44) | $ (694.20) |
Net loss per share, diluted | $ (11.14) | $ (4.26) | $ (55.44) | $ (694.20) |
Weighted average shares outstanding, basic | 27,720,475 | 1,674,607 | 14,296,659 | 753,474 |
Weighted average shares outstanding, diluted | 27,720,475 | 1,674,607 | 14,296,659 | 753,474 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT) - USD ($) | Preferred Stock Series A Preferred Stock | Preferred Stock Series B Preferred Stock | Preferred Stock Series C Preferred Stock | Preferred Stock Series D Preferred Stock | Preferred Stock Series AA Preferred Stock | Common Stock | Common Stock Owed But Unissued | Paid-in Capital | Accumulated Deficit | Non-controlling Interest | Total |
Balance, beginning at Sep. 30, 2021 | $ 100 | $ 5,568 | $ 31 | $ 88,664,069 | $ (150,374,649) | $ (61,704,881) | |||||
Balance, beginning (in shares) at Sep. 30, 2021 | 100,363 | 5,567,319 | 31,326 | ||||||||
Cashless warrant exercise | $ 1,628 | 373,966,197 | 373,967,825 | ||||||||
Cashless warrant exercise (in shares) | 1,627,718 | ||||||||||
Issuance of common stock for conversion of preferred stock | $ (98) | $ (5,568) | $ (3,988) | $ 86 | 15,878 | 6,310 | |||||
Issuance of common stock for conversion of preferred stock (in shares) | (98,429) | (5,567,319) | (3,988,385) | 86,216 | |||||||
Common shares issued for cash | $ 4,974 | $ 292 | 84,496,245 | 84,501,511 | |||||||
Common shares issued for cash (in shares) | 4,974,266 | 292,011 | |||||||||
Common shares issued for asset | $ 0 | 141,105 | 141,105 | ||||||||
Common shares issued for asset (in shares) | 486 | ||||||||||
Preferred shares issued for cash | $ 2,264 | 19,997,736 | 20,000,000 | ||||||||
Preferred shares issued for cash (in shares) | 2,263,970 | ||||||||||
Preferred shares issued to settle liability | $ 2,914 | 25,670,863 | 25,673,777 | ||||||||
Preferred shares issued to settle liability (in shares) | 2,913,929 | ||||||||||
Warrant issuances | 25,491,621 | 25,491,621 | |||||||||
Common shares issued to settle liability | $ 78 | 27,296,713 | 27,296,791 | ||||||||
Common shares issued to settle liability (in shares) | 78,362 | ||||||||||
Common shares issued for note receivable | $ 64 | (64) | 0 | ||||||||
Common shares issued for note receivable (in shares) | 63,749 | ||||||||||
Share-based compensation | $ 37 | 31,070,408 | 31,070,445 | ||||||||
Share-based compensation (in shares) | 36,552 | ||||||||||
Preferred stock dividends | (4,805,740) | (4,805,740) | |||||||||
Reclassification of convertible security to derivative liability | $ (2) | $ (6,164) | (6,166) | ||||||||
Reclassification of convertible security to derivative liability (in shares) | (1,934) | (6,163,780) | |||||||||
Net loss | (485,517,181) | (485,517,181) | |||||||||
Balance, ending at Jun. 30, 2022 | $ 0 | $ 0 | $ 0 | $ 2,216 | 672,005,031 | (635,891,830) | 36,115,417 | ||||
Balance, ending (in shares) at Jun. 30, 2022 | 2,216,420 | ||||||||||
Balance, beginning at Mar. 31, 2022 | $ 2 | $ 2,785 | $ 8,303 | $ 1,288 | 476,633,341 | (631,044,679) | (154,398,960) | ||||
Balance, beginning (in shares) at Mar. 31, 2022 | 1,934 | 2,783,659 | 8,303,323 | 1,287,929 | |||||||
Cashless warrant exercise | $ 756 | 166,289,993 | 166,290,749 | ||||||||
Cashless warrant exercise (in shares) | 756,583 | ||||||||||
Issuance of common stock for conversion of preferred stock | $ (2,785) | $ (2,139) | $ 22 | 3,052 | (1,850) | ||||||
Issuance of common stock for conversion of preferred stock (in shares) | (2,783,659) | (2,139,543) | 21,881 | ||||||||
Common shares issued to settle liability | $ 78 | 26,261,775 | 26,261,853 | ||||||||
Common shares issued to settle liability (in shares) | 77,778 | ||||||||||
Common shares issued for note receivable | $ 64 | (64) | 0 | ||||||||
Common shares issued for note receivable (in shares) | 63,749 | ||||||||||
Share-based compensation | $ 8 | 5,102,726 | 5,102,734 | ||||||||
Share-based compensation (in shares) | 8,500 | ||||||||||
Preferred stock dividends | (2,285,792) | (2,285,792) | |||||||||
Reclassification of convertible security to derivative liability | $ (2) | $ (6,164) | (6,166) | ||||||||
Reclassification of convertible security to derivative liability (in shares) | (1,934) | (6,163,780) | |||||||||
Net loss | (4,847,151) | (4,847,151) | |||||||||
Balance, ending at Jun. 30, 2022 | $ 0 | $ 0 | $ 0 | $ 2,216 | 672,005,031 | (635,891,830) | 36,115,417 | ||||
Balance, ending (in shares) at Jun. 30, 2022 | 2,216,420 | ||||||||||
Balance, beginning at Sep. 30, 2022 | $ 2 | $ 1,360 | $ 4,359 | $ 3,704 | 948,594,920 | (889,907,455) | $ 98,259,819 | 156,956,709 | |||
Balance, beginning (in shares) at Sep. 30, 2022 | 1,924 | 1,360,321 | 4,359,652 | 3,704,303 | |||||||
Cashless warrant exercise | $ 51,215 | $ 17,126 | 493,736,977 | 493,805,318 | |||||||
Cashless warrant exercise (in shares) | 51,214,721 | 17,125,589 | |||||||||
Issuance of preferred stock, common stock and prefunded warrants in lieu of preferred stock | $ 273,364 | $ 25,373 | 196,525,116 | 196,823,853 | |||||||
Issuance of preferred stock, common stock and prefunded warrants in lieu of preferred stock (in shares) | 273,363,635 | 25,373,502 | |||||||||
Issuance of common stock for conversion of convertible notes | $ 2,358 | 153,219,879 | 153,222,237 | ||||||||
Issuance of common stock for conversion of convertible notes (in shares) | 2,357,615 | ||||||||||
Issuance of common stock for conversion of preferred stock | $ (1) | $ (150) | $ (277,360) | $ 1,234 | 276,277 | ||||||
Issuance of common stock for conversion of preferred stock (in shares) | (888) | (150,265) | (277,360,190) | 1,233,775 | |||||||
Reclassification of derivatives to equity upon authorization of sufficient number of shares | 47,818,882 | 47,818,882 | |||||||||
Warrants exercised for receivable and financing loss | $ 528 | 14,974,279 | 14,974,807 | ||||||||
Warrants exercised for receivable and financing loss (in shares) | 527,883 | ||||||||||
Shares issued to settle note payable | $ 276 | 13,736,127 | 13,736,403 | ||||||||
Shares issued to settle note payable (in shares) | 275,772 | ||||||||||
Shares issued to extinguish penalty | $ 102 | 5,519,898 | 5,520,000 | ||||||||
Shares issued to extinguish penalty (in shares) | 102,222 | ||||||||||
Preferred shares issued to officers | 25,000 | 25,000 | |||||||||
Preferred shares issued to officers (in shares) | 1 | ||||||||||
Preferred shares series AA refund | (25,000) | (25,000) | |||||||||
Preferred shares series AA refund (in shares) | (1) | ||||||||||
Share-based compensation | $ 1,973 | 68,389,665 | 68,391,638 | ||||||||
Share-based compensation (in shares) | 1,972,955 | ||||||||||
Preferred stock dividends waiver | 7,387,808 | 7,387,808 | |||||||||
Noncontrolling interest | (6,748,302) | (6,748,302) | |||||||||
Net loss | (800,047,339) | (800,047,339) | |||||||||
Balance, ending at Jun. 30, 2023 | $ 1 | $ 1,210 | $ 363 | $ 86,763 | $ 17,126 | 1,950,179,828 | (1,689,954,794) | 91,511,517 | 351,842,014 | ||
Balance, ending (in shares) at Jun. 30, 2023 | 1,036 | 1,210,056 | 363,097 | 86,762,748 | 17,125,589 | ||||||
Balance, beginning at Mar. 31, 2023 | $ 2 | $ 1,209 | $ 363 | $ 14,031 | $ 659 | 1,550,147,736 | (1,381,096,561) | 94,079,643 | 263,147,082 | ||
Balance, beginning (in shares) at Mar. 31, 2023 | 1,426 | 1,210,056 | 363,098 | 14,031,253 | 658,918 | ||||||
Cashless warrant exercise | $ 45,022 | $ 16,467 | 190,121,819 | 190,183,308 | |||||||
Cashless warrant exercise (in shares) | 45,021,915 | 16,466,671 | |||||||||
Issuance of preferred stock, common stock and prefunded warrants in lieu of preferred stock | $ 273,364 | $ 25,374 | 196,525,115 | 196,823,853 | |||||||
Issuance of preferred stock, common stock and prefunded warrants in lieu of preferred stock (in shares) | 273,363,635 | 25,373,502 | |||||||||
Issuance of common stock for conversion of preferred stock | $ (1) | $ 1 | $ (273,364) | $ 1,215 | 272,149 | ||||||
Issuance of common stock for conversion of preferred stock (in shares) | (390) | (273,363,636) | 1,215,123 | ||||||||
Share-based compensation | $ 1,121 | 13,126,134 | 13,127,255 | ||||||||
Share-based compensation (in shares) | 1,120,955 | ||||||||||
Preferred stock dividends | (13,125) | (13,125) | |||||||||
Noncontrolling interest | (2,568,126) | (2,568,126) | |||||||||
Net loss | (308,858,233) | (308,858,233) | |||||||||
Balance, ending at Jun. 30, 2023 | $ 1 | $ 1,210 | $ 363 | $ 86,763 | $ 17,126 | $ 1,950,179,828 | $ (1,689,954,794) | $ 91,511,517 | $ 351,842,014 | ||
Balance, ending (in shares) at Jun. 30, 2023 | 1,036 | 1,210,056 | 363,097 | 86,762,748 | 17,125,589 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 9 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Cash Flows from Operating Activities | ||
Net loss before accrued preferred dividends and noncontrolling interest | $ (806,795,641) | $ (485,517,181) |
Adjustments to reconcile net loss attributable to shareholders to net cash used in operating activities: | ||
Depreciation and amortization | 10,991,239 | 918,855 |
Stock-based compensation | 71,015,371 | 32,479,710 |
Issuance of warrants to suppliers | 6,814,000 | |
Non-cash financing loss on over-exercise of warrants | 8,934,892 | |
Revaluation of derivative liabilities | 89,462,559 | 124,868,232 |
Initial recognition of derivative liabilities | 504,373,115 | 269,344,178 |
Non-cash interest and other operating activities | (1,656,288) | 3,879,496 |
Amortization of debt discount | 442,091 | 19,584,041 |
Loss on asset disposal | 50,574 | |
Loss/(gain) on extinguishment of debt | 6,246,089 | (33,413) |
Changes in operating assets and liabilities: | ||
Other current assets | (15,319,813) | 5,446,031 |
Other assets | 1,230,337 | (1,960,058) |
Accounts payable | 6,013,276 | (2,129,901) |
Accrued expenses and other liabilities | 4,835,588 | (10,119,169) |
Deferred tax liability | (445,808) | |
Right of use assets and lease liabilities | 231,048 | (31,989) |
Net cash used in operating activities | (113,627,945) | (43,220,594) |
Cash Flows from Investing Activities | ||
Purchase of equipment | (14,328,228) | (10,968,389) |
Purchase of intangible assets | (204,660) | (305,043) |
ELMS assets purchase | (92,916,874) | |
Net cash used in investing activities | (107,449,762) | (11,273,432) |
Cash Flows from Financing Activities | ||
Proceeds from issuance of notes payable | 170,000,000 | 12,142,791 |
Proceeds from issuance of common stock and prefunded warrants | 196,999,970 | 40,151,308 |
Proceeds from issuance of preferred stock | 63,925,000 | |
Reimbursement for over-issuance of shares | 17,819,660 | |
Proceeds from note receivable | 15,000,000 | |
Payment of notes payable | (20,685,000) | (15,655,983) |
Net cash provided by financing activities | 364,134,630 | 115,563,116 |
Increase in cash | 143,056,923 | 61,069,090 |
Cash, cash equivalents and restricted cash, beginning of period | 84,375,085 | 42,174 |
Cash, cash equivalents and restricted cash, ending of period | 227,432,008 | 61,111,264 |
Supplemental disclosure of Cash Flow information: | ||
Cash paid for interest | 122,500 | 1,500,106 |
Supplemental Disclosure for Non-Cash Activities: | ||
Refinance of indebtedness | 28,867,187 | |
Preferred shares issued in exchange for convertible debt | 23,192,500 | |
Convertible notes and interest - conversion to common stock | 153,222,236 | 17,356,500 |
Exercise of warrants recognized earlier as liabilities | 391,057,576 | $ 420,626,121 |
Reclassification of derivatives to equity upon authorization of sufficient number of shares | 47,818,882 | |
Waiver of dividends by stockholders | 7,387,810 | |
Warrants issued to suppliers | 6,814,000 | |
Common stock issued to extinguish liability to issue stock | 66,752,533 | |
Extinguishment of financial liabilities by sale of property | 231,958 | |
Extinguishment of operational liabilities by sale of property | 767,626 | |
Debt conversion to common stock | 1,096,787 | |
Prepaid stock-based compensation | 3,909,404 | |
Preferred stock converted to common stock | 273,364 | |
Prefunded warrants converted to common stock | $ 250,466 |
DESCRIPTION OF BUSINESS AND BAS
DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION | 9 Months Ended |
Jun. 30, 2023 | |
DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION | |
DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION | NOTE 1. DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION Description of Business Mullen Automotive Inc., a Delaware corporation (“MAI”, “Mullen”, “we” or the “Company”), is a Southern California-based development-stage electric vehicle company that operates in various verticals of businesses focused within the automotive industry. Mullen Automotive Inc., a California corporation (“Previous Mullen”), was originally formed on April 20 2010, as a developer and manufacturer of electric vehicle technology and operated as the Electric Vehicle (“EV”) division of Mullen Technologies, Inc. (“MTI”) until November 5, 2021, at which time Previous Mullen underwent a capitalization and corporate reorganization by way of a spin-off to its shareholders, followed by a reverse merger with and into Net Element, Inc., which was accounted for as a reverse merger transaction, in which Previous Mullen was treated as the acquirer for financial accounting purposes. (the “Merger”). The Company changed its name from “Net Element, Inc.” to “Mullen Automotive Inc” and the Nasdaq ticker symbol for the Company’s common stock changed from “NETE” to “MULN” on the Nasdaq Capital Market at the opening of trading on November 5, 2021. Reverse Stock Splits In January 2023, the Company’s stockholders, in an effort for the Company to regain compliance with NASDAQ listing rules, approved a proposal to authorize the board of directors of the Company (the “Board”) to implement a reverse stock split of the outstanding shares of the Company’s common stock at a ratio up to 1-for- 25 25 In August 2023, the Company’s stockholders approved a proposal to authorize the Board to implement a second reverse stock split of the outstanding shares of the Company’s common stock at a ratio up to 1-for- 100 9 The Company retroactively adjusted its historical financial statements to reflect the splits (See Note 10 for reverse stock split effect on loss per share). All issued and outstanding common stock and per share amounts contained in the financial statements have been adjusted to reflect the Reverse Stock Splits for all periods presented. In addition, a proportionate adjustment was made to the per share exercise price and the number of shares issuable upon the exercise and/or vesting of all warrants to purchase shares of common stock. No proportionate adjustment was made to the number of shares reserved for issuance pursuant to the Company’s 2022 Equity Incentive Plan (the “Plan”) to reflect the Reverse Stock Split as on August 3, 2023, stockholders approved an amendment to the Plan, increasing the maximum aggregate number of shares of common stock and stock equivalents available for the grant of awards under the 2022 Plan by an additional 52,000,000 shares, which amount is not subject to any decrease or increase in the number shares of common stock resulting from a stock spilt, reverse stock split, recapitalization, combination, reclassification, the payment of a stock dividend on the common stock or any other decrease in the number of such shares of common stock effected without receipt of consideration by the Company.. No fractional shares were issued in connection with the Reverse Stock Splits. All fractional shares were rounded up to the nearest whole share. The number and par value of Series A Preferred Stock, Series C Preferred Stock and Series D Preferred Stock were not affected by the Reverse Stock Splits, but their conversion ratios have been proportionally adjusted. There were no outstanding shares of Series B Preferred Stock as of the effective date of the Reverse Stock Splits. The common stock and additional paid-in-capital line items of the financial statements were adjusted to account for the Reverse Stock Splits for all periods presented (with $829,764 value of common stock decreased and additional paid-in-capital increased on October 1, 2022). Business Acquisition and Asset Purchase On September 7, 2022, the Company completed the acquisition of Bollinger Motors, Inc. which provides the Company with a medium duty truck classes 4-6, along with the B1 Sport Utility and B2 Pick Up Trucks. The purchase price was approximately $149 million in cash and stock for 60% majority controlling interest. On October 13, 2022, the U.S. Bankruptcy Court approved the acquisition of assets from electric vehicle company ELMS (Electric Last Mile Solutions) in an all-cash purchase by the Company. In the Chapter 7 approved transaction, Mullen acquired ELMS’ manufacturing plant in Mishawaka Indiana, all inventory, and intellectual property for their Class 1 and Class 3 vehicles for a total of $105 million, which includes the affirmation of approximately $10 million in vendor payables assumed and paid at closing. Indiana Segment Information Our CEO and Chairman of the Board, as the chief operating decision maker, makes decisions about resources to be acquired, allocated and utilized and assesses the performance of the Company as one operating segment. The Company’s long-lived assets are located in the United States of America. All revenue presented in these financial statements relates to contracts with customers located in the United States of America. Basis of Presentation and Principles of Consolidation The accompanying unaudited condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the "Commission"). Certain information and note disclosures normally included in the annual financial statements prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) have been condensed or omitted pursuant to those rules and regulations, but we believe the disclosures made are adequate to make the information presented not misleading. In the opinion of management, all adjustments, consisting of normal and recurring adjustments, necessary for a fair presentation have been included in the condensed consolidated financial statements included herein. These statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in our Annual Report on Form 10-K/A for the year ended September 30, 2022, filed with the Commission on January 30, 2023 (the “2023 10-K”) . The consolidated financial statements include the accounts of the Company and its subsidiaries, Mullen Investment Properties LLC, a Mississippi corporation, Ottava Automotive, Inc., a California corporation, Mullen Real Estate, LLC, a Delaware corporation, and Bollinger Motors Inc., a Delaware corporation. Intercompany accounts and transactions have been eliminated. The financial statements reflect the consolidated financial position and results of operations of Mullen, which have been prepared in accordance with U.S. GAAP. |
LIQUIDITY, CAPITAL RESOURCES, A
LIQUIDITY, CAPITAL RESOURCES, AND GOING CONCERN CONSIDERATION | 9 Months Ended |
Jun. 30, 2023 | |
LIQUIDITY, CAPITAL RESOURCES, AND GOING CONCERN CONSIDERATION | |
LIQUIDITY, CAPITAL RESOURCES, AND GOING CONCERN CONSIDERATION | NOTE 2 – LIQUIDITY, CAPITAL RESOURCES, AND GOING CONCERN CONSIDERATION Going Concern The accompanying unaudited condensed consolidated financial statements have been prepared on the basis that assumes the Company will continue as a going concern which contemplates the realization of assets and satisfaction of liabilities and commitments in the ordinary course of business. The Company's principal source of liquidity consists of existing cash and restricted cash of approximately $227.4 million as of June 30, 2023. During the nine months ended June 30, 2023, the Company used approximately $113.6 million of cash for operating activities. The net working capital on June 30, 2023 was positive and amounted to approximately $65.1 million, or approximately $224.2 million after excluding derivative liabilities and liabilities to issue stock that are supposed to be settled by issuing common stock without using cash. Management believes we have sufficient liquidity and working capital from operating cash up to June 2024. We will need additional capital beyond June 2024, to sustain operations. The Company may need to seek additional equity or debt financing. While the Company expects to obtain the additional capital and/or financing that may be required, there is no assurance that the Company will be successful in obtaining the necessary funds to bring its product and service offerings to market and support future operations. If the financing is not available, or if the terms of financing are less desirable than the Company expects, the Company may be forced to decrease its planned level of investment in product development or scale back its operations, which could have an adverse impact on its business and financial prospects. These factors, considered in the aggregate, raise substantial doubt as to the Company’s ability to continue as a going concern. The accompanying unaudited condensed consolidated financial statements do not include any adjustments that might result from the outcome of these uncertainties. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended |
Jun. 30, 2023 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Significant accounting policies are defined as those that are reflective of significant judgments and uncertainties, and potentially result in materially different results under different assumptions and conditions. Business Combination Business acquisitions are accounted for in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 805 “Business Combinations”. FASB ASC 805 requires the reporting entity to identify the acquirer, determine the acquisition date, recognize and measure the identifiable tangible and intangible assets acquired, the liabilities assumed and any non-controlling interest in the acquired entity, and recognize and measure goodwill or a gain from the purchase. The acquiree’s results are included in the Company’s consolidated financial statements from the date of acquisition. Assets acquired and liabilities assumed are recorded at their fair values and the excess of the purchase price over the amounts assigned is recorded as goodwill. Adjustments to fair value assessments are recorded to goodwill over the measurement period (not longer than twelve months). The acquisition method also requires that acquisition-related transaction and post-acquisition restructuring costs be charged to expense. Use of Estimates The preparation of our financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the dates of the condensed consolidated financial statements and the reported amounts of total expenses in the reporting periods. Estimates are used for, but not limited to, cash flow projections and discount rate for calculation of goodwill impairment, fair value and impairment of long-lived assets, fair value of financial instruments, depreciable lives of property and equipment, income taxes, contingencies, valuation of preferred stock and warrants. Additionally, the rates of interest on several debt agreements have been imputed where there was no stated interest rate within the original agreement. Management bases its estimates on historical experience and on various other assumptions believed to be reasonable, the results of which form the basis for carrying values of assets and liabilities and the recording of costs and expenses that are not readily apparent from other sources. The actual results may differ materially from these estimates. Risks and Uncertainties The Company operates within an industry that is subject to rapid technological change, intense competition, and serves an industry that has significant government regulations. It is subject to significant risks and uncertainties, including competitive, financial, developmental, operational, technological, required knowledge of industry governmental regulations, and other risks associated with an emerging business. Any one or combination of these or other risks could have a substantial influence on our future operations and prospects for commercial success. Please see further Risk Factors discussed in detail in our 2022 10-K. Reclassification from Other Noncurrent Assets to Property, Equipment and Leasehold Improvements, net Certain prior period amounts related to Show Room Assets in the condensed consolidated financial statements and notes thereto have been reclassified to conform to the current period presentation. These reclassifications had no impact on previously reported net income or stockholders' equity. In the Condensed Consolidated Balance Sheet as of September 30, 2022, $2,982,986, the net Show Room asset ($4,418,724 Show Room and $1,435,738 of accumulated depreciation) previously reported under Other Noncurrent Assets, has been reclassified to Property, Equipment and Leasehold Improvements, net. This reclassification is reflected in all periods presented and all comparative references in the notes to the consolidated financial statements are to the reclassified amounts (See Note 14 and Note 15). Cash and Cash Equivalents Company management considers all short-term investments with an original maturity of three months or less when purchased to be cash equivalents. There were no cash equivalents at June 30, 2023 or September 30, 2022. Restricted Cash Restricted cash is funds that are not available for immediate use and must be used for a specific purpose. On June 30, 2023, the restricted cash balance was $13,419,872 includes approximately $419,872 for the refundable deposits for individuals and businesses who have made deposits for Mullen and Bollinger vehicles. Customer deposits are accounted for within other liabilities. Refundable deposits were $289,000 for the year ended September 30, 2022. Prepaid Expenses and Other Current Assets Prepaid expenses consist of various advance payments made for goods or services to be received in the future. These prepaid expenses include insurance and other contracted services requiring up-front payments. Inventory Cost of inventories is determined using the standard cost method, which approximates actual cost on a first-in first-out basis. This method includes direct materials, direct labor, and a proportionate share of manufacturing overhead costs based on normal capacity. Regular reviews are performed to identify and account for variances between the standard costs and actual costs. Any variances identified are recognized in the cost of goods sold during the period in which they occur. On a quarterly basis, the Company reviews its inventory for excess quantities and obsolescence. This analysis takes into account factors such as demand forecasts, product life cycles, product development plans, and current market conditions. Provisions are made to reduce the carrying value of the inventories to their net realizable value. Once inventory is written down, a new, lower-cost basis is established, and the inventory is not subsequently written up if market conditions improve. All such inventory write-downs are included as a component of cost of goods sold in the period in which the write-down occurs. Adjustments to these estimates and assumptions could impact our financial position and results of operations. Property, Equipment and Leasehold Improvements, Net Property, equipment, and leasehold improvements are stated at cost less accumulated depreciation. Depreciation is calculated using the straight-line method over the estimated economic useful lives of the assets. Repairs and maintenance expenditures that do not extend the useful lives of related assets are expensed as incurred. Estimated Useful Lives Description Life Buildings 30 Years Furniture and Equipment 3 to 7 Years Computer and Software 1 to 5 Years Machinery and Equipment 3 Leasehold Improvements Shorter of the estimated useful life or the underlying lease term Vehicles 5 Years Intangibles 5 Years Expenditures for major improvements are capitalized, while minor replacements, maintenance and repairs, which do not extend the asset lives, are charged to operations as incurred. Upon sale or disposition, the cost and related accumulated depreciation are removed from the accounts and any gain or loss is included in operations. Company management continually monitors events and changes in circumstances that could indicate that the carrying balances of its property, equipment and leasehold improvements may not be recoverable in accordance with the provisions of ASC 360, “Property, Plant, and Equipment.” Income Taxes Income taxes are recorded in accordance with ASC 740 , Income Taxes There are transactions that occur during the ordinary course of business for which the ultimate tax determination may be uncertain. At June 30, 2023 and September 30, 2022, there were no material changes to either the nature or the amounts of the uncertain tax positions. The Company’s income tax provision consists of an estimate for U.S. federal and state income taxes based on enacted rates, as adjusted for allowable credits, deductions, uncertain tax positions, changes in deferred tax assets and liabilities, and changes in the tax law. We maintain a full valuation allowance against the value of our U.S. and state net deferred tax assets because management does not believe the recoverability of the tax assets meets the “more likely than not” likelihood at June 30, 2023 and September 30, 2022. Intangible Assets, net Intangible assets consist of acquired and developed intellectual property. In accordance with ASC 350, “Intangibles—Goodwill and Others,” impaired. Intangible assets with determinate lives are evaluated for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. Amortizable intangible assets generally are amortized on a straight-line basis over periods up to 120 months. The costs to periodically renew our intangible assets are expensed as incurred. Impairment of Long-Lived Assets The Company periodically evaluates long-lived assets for impairment whenever events or changes in circumstances indicate that a potential impairment may have occurred. If such events or changes in circumstances arise, the Company compares the carrying amount of the long-lived assets to the estimated future undiscounted cash flows expected to be generated by the long-lived assets. If the estimated aggregate undiscounted cash flows are less than the carrying amount of the long-lived assets, an impairment charge, calculated as the amount by which the carrying amount of the assets exceeds the fair value of the assets, is recorded. The fair value of the long-lived assets is determined based on the estimated discounted cash flows expected to be generated from the long-lived assets. Other Assets Other assets are comprised primarily of prepayments and security deposits for property leases. Extinguishment of Liabilities The Company derecognizes financial liabilities when the Company’s obligations are discharged, cancelled, or expired. Leases The Company follows the provisions of ASC 842, “Leases” Accrued Expenses Accrued expenses are expenses that have been incurred but not yet paid and are classified within current liabilities on the consolidated balance sheets. General and Administrative Expenses General and administrative (“G&A”) expenses include all other expenses incurred by us in any given period. This includes expenses such as professional fees, salaries, rent, repairs and maintenance, utilities and office expense, employee benefits, depreciation and amortization, advertising and marketing, settlements and penalties, taxes, and licenses. Advertising costs are expensed as incurred and are included in G&A expenses- other than trade show expenses which are deferred until occurrence of the future event, we expense advertising costs as incurred in accordance with ASC 720-35, “Other Expenses – Advertising Cost.” Research and Development Costs Per the Accounting Standards Codification (ASC) 730 "Research and Development," the Company recognizes in the statement of operations all associated costs as they occur. These include expenses related to the design, development, testing, and improvement of our electric vehicles and corresponding technologies. Assets with alternative future uses are capitalized and depreciated over their useful lives, with the depreciation expense reported under research and development (R&D) costs. Share-Based Compensation We account for share-based awards issued by the Company in accordance with ASC Subtopic 718-10, “Compensation – Share Compensation” Fair Value of Financial Instruments We apply fair value accounting for all financial assets and liabilities and non-financial assets and liabilities that are recognized or disclosed at fair value on a recurring basis. Fair value is defined as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities that are required to be recorded at fair value, Company management considers the principal or most advantageous market in which we would transact and the market-based risk measurements or assumptions that market participants would use in pricing the asset or liability, such as risks inherent in valuation techniques, transfer restrictions and credit risk. Fair value is estimated by applying the hierarchy as per requirements of ASC 820, “Fair value measurements” Concentrations of Business and Credit Risk We maintain cash balances in several financial institutions that are insured by either the Federal Deposit Insurance Corporation or the National Credit Union Association up to certain federal limitations, generally $250,000. At times, our cash balance may exceed these federal limitations and maintains significant cash on hand at certain of its locations. However, we have not experienced any losses in such accounts and management believes we are not exposed to any significant credit risk on these accounts. The amounts in excess of insured limits as of June 30, 2023 and September 30, 2022 are $226.4 million and $83.4 million, respectively. Recently Issued Accounting Standards Accounting standard updates issued but not yet applied were assessed and are not expected to have a material impact on our unaudited condensed consolidated financial statements. |
PURCHASE OF ASSETS FROM ELMS
PURCHASE OF ASSETS FROM ELMS | 9 Months Ended |
Jun. 30, 2023 | |
PURCHASE OF ASSETS FROM ELMS | |
PURCHASE OF ASSETS FROM ELMS | NOTE 4 – PURCHASE OF ASSETS FROM ELMS On October 13, 2022, the United States Bankruptcy Court for the District of Delaware issued an order approving the sale for approximately $105 million to Mullen Automotive Inc. of certain assets and assumption and assignment of contracts and related liabilities of Electric Last Mile, Inc. and Electric Last Mile Solutions, Inc. (collectively, “ELMS”) pursuant to the terms and conditions of the Asset Purchase Agreement dated September 16, 2022. The ELMS asset acquisition closed on November 30, 2022, and is expected to accelerate the market introduction of our cargo van program and provide us with critical manufacturing capacity at a much lower investment than previously expected to supply the rest of our product portfolio. ELMS assets include: ● The factory in Mishawaka, Indiana, providing Mullen with the capability to produce up to 50,000 vehicles per year; ● All Intellectual Property, including all manufacturing data that is required for the assembly of the Class 1 van and Class 3 Cab Chassis; ● All inventory including finished and unfinished vehicles, part modules, component parts, raw materials, and tooling; and ● All property including equipment, machinery, supplies, computer hardware, software, communication equipment, data networks and all other data storage. The following details the allocation of purchase price by asset category for the ELMS asset purchase: Asset Category Fair Value Allocation Land $ 1,440,000 Buildings and site improvements 41,287,038 Equipment 27,336,511 Intangible assets: engineering design 22,112,791 Inventory 13,198,692 Total Purchased Assets $ 105,375,032 |
INVENTORY
INVENTORY | 9 Months Ended |
Jun. 30, 2023 | |
INVENTORY | |
INVENTORY | NOTE 5 - INVENTORY The Company's inventories are stated at the lower of cost or market and consist of the following: June 30, 2023 Inventory Work in process 6,109,105 Raw materials 5,804,743 Supplies 232,996 Total Inventory $ 12,146,844 The cost of inventories is determined using a standard cost method, which approximates the first-in, first-out (FIFO) method. This includes direct materials, direct labor, and a share of manufacturing overhead costs. Variances between standard and actual costs are recognized in the cost of goods sold during the period in which they occur. The Company regularly reviews its inventories for excess and obsolete items by assessing their net realizable value (NRV). The NRV is the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. During the quarter ended June 30, 2023, $809,778 of the Company's inventories was consumed for R&D activities, which was recognized as part of research and development expense in the consolidated statement of operations. In addition, cost of goods sold of $242,069 and warranty reserve of $6,600 was incurred for the inventories sold. |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS | 9 Months Ended |
Jun. 30, 2023 | |
GOODWILL AND INTANGIBLE ASSETS | |
GOODWILL AND INTANGIBLE ASSETS | NOTE 6 – GOODWILL AND INTANGIBLE ASSETS As at June 30, 2023 and September 30, 2022, goodwill was $92,834,832 and $92,834,832, respectively. The goodwill pertains to the Bollinger acquisition on September 7, 2022. Goodwill is not amortized and is tested for impairment annually, or more frequently if there are indicators of impairment. Every reporting period the Company assesses qualitative factors (such as macroeconomic conditions, industry and market considerations, financial performance of the Company, entity-specific events etc.) to determine whether it is necessary to perform the quantitative goodwill impairment test. Upon the quantitative goodwill impairment test, impairment may arise to the extent carrying amount of a reporting unit that includes goodwill (i.e. Bollinger production unit) exceeds its fair value. The market capitalization of the Company on June 30, 2023 was significantly lower than stockholder's equity reported on the Company's consolidated balance sheets that include Bollinger reporting unit as one of components - which could be viewed as an indicator of impairment. However, the Company believes that the significant decline in the Company’s stock price does not represent real financial position of the Company on June 30, 2023 because it is mostly determined by expected dilution of the common shares from exercise of warrants (recognized as liabilities in the consolidated balance sheets). Moreover, the Company believes it may have been the target of a market manipulation scheme involving illegal naked short selling of its common stock and has retained an independent professional firm to investigate and expose any potential wrongdoing. Furthermore, the net working capital of the Company on June 30, 2023 was positive and amounted to approximately $224 million after excluding liabilities that are supposed to be settled by own common stock and is comprised mostly of cash available for use - significantly in excess of the market capitalization. The quantitative goodwill impairment test shall be performed next quarter when the Company, as prescribed by ASC 350 and ASC 805, expects to finish valuation of fair value of identifiable assets and liabilities purchased in September 2022 as part of the Bollinger acquisition. Intangible assets are stated at cost, net of accumulated amortization. Patents and other identifiable intellectual property purchased as part of the Bollinger acquisition in September 2022 have been initially recognized at fair value. Intangible assets with indefinite useful lives are not amortized but instead tested for impairment. Intangible assets with finite useful lives are amortized over the period of estimated benefit using the straight-line method. The weighted average useful life of intangible assets is 9.14 years. The straight-line method of amortization represents management’s best estimate of the distribution of the economic value of the intangible assets. For the nine months ended June 30, 2023, and 2022, the Company recorded intangible asset additions of $22,443,551 (acquisitions of ELMS assets, see Note 4) and $352,601, respectively. June 30, 2023 September 30, 2022 Gross Net Gross Net Carrying Accumulated Carrying Carrying Accumulated Carrying Finite-Lived Intangible Assets Amount Amortization Amount Amount Amortization Amount Website design and development $ 2,660,391 (1,773,594) $ 886,797 $ 2,660,391 $ (1,108,496) $ 1,551,895 Intellectual property 58,375,794 (71,182) 58,304,612 58,375,794 (438,581) 57,937,213 Patents 32,391,186 (2,857,539) 29,533,647 32,391,186 (204,109) 32,187,077 Engineer design - ELMS 22,112,791 (1,289,913) 20,822,878 — — — Other 1,820,995 (208,168) 1,612,827 1,820,994 (16,175) 1,804,819 Trademark 796,773 - 796,773 466,014 — 466,014 Total Intangible Assets $ 118,157,930 $ (6,200,396) $ 111,957,534 $ 95,714,379 $ (1,767,361) $ 93,947,018 Total future amortization expense for finite-lived intangible assets is as follows: Years Ended June 30, Future Amortization 2023 (three months) $ 1,424,909 2024 6,372,189 2025 5,707,092 2026 5,707,092 2027 5,707,092 Thereafter 27,937,775 Total Future Amortization Expense $ 52,856,149 The future amortization expense does not include the net carrying amount intellectual property of $58,304,612 and trademark of $796,773, as these are not amortized. For the three and nine months ended June 30, 2023, amortization expense for the intangible assets was $913,061 and $4,433,035 and $221,699 and $667,075, for the three and nine months ended June 30, 2022, |
DEBT
DEBT | 9 Months Ended |
Jun. 30, 2023 | |
DEBT | |
DEBT | NOTE 7 – DEBT Short and Long-Term Debt Short-term debt is generally defined as debt with principal maturities of one-year or less. Long-term debt is defined as principal maturities of one year or more. The following is a summary of our indebtedness at June 30, 2023: Net Carrying Value Unpaid Principal Contractual Contractual Type of Debt Balance Current Long-Term Interest Rate Maturity Matured notes $ 2,398,881 $ 2,398,881 $ - 0.00 - 10.00% 2019 - 2021 Promissory notes - - - NA NA Real Estate notes 5,000,000 5,000,000 - 8.99% 2023 - 2024 Loans and advances 332,800 332,800 - 0.00 - 10.00% 2016 - 2018 Less: debt discount (425,574) (425,574) - NA NA Total Debt $ 7,306,107 $ 7,306,107 $ — The following is a summary of our indebtedness at September 30, 2022: Net Carrying Value Unpaid Principal Contractual Contractual Type of Debt Balance Current Long-Term Interest Rate Maturity Matured notes $ 3,051,085 $ 3,051,085 $ — 0.00 - 10.00% 2019 - 2021 Promissory notes 1,096,787 — 1,096,787 28.00% 2024 Real Estate note 5,247,612 247,612 5,000,000 5.0 - 8.99% 2023 - 2024 Loan advances 557,800 557,800 — 0.00 - 10.00% 2016 – 2018 Less: debt discount (932,235) — (932,235) NA NA Total Debt $ 9,021,049 $ 3,856,497 $ 5,164,552 Scheduled Debt Maturities The following table represents scheduled debt maturities at June 30, 2023: Years Ended June 30, 2023 (3 months) 2024 Total Total Debt $ 2,717,804 $ 4,588,303 $ 7,306,107 Notes and Advances In some instances, we issued convertible instruments with detachable warrants, resulting in the recognition of a debt discount, which is amortized to interest expense over the term of the relevant instrument. Debt discount amortization for the three and nine months ended June 30, 2023 and 2022, was $148,674 and $150,442,091, and $183,558 and $19,584,041, respectively. Debt discount on convertible notes with detachable warrants in amount of $150,000,000 (see below) was presented in the statement of operations as "Other financing costs - initial recognition of derivative liabilities" and in the cash flow statement – in the line item “Initial recognition of derivative liabilities”. The Company issued shares of common stock to certain creditors for the conversion of convertible notes, satisfaction of debt payments, and in settlement of indebtedness. For the nine months ended June 30, 2023, the carrying amount of indebtedness that was settled via issuance of shares of our common stock was $153,222,237 (this relates to convertible notes issued in lieu of preferred stock and relevant interest, see below). The carrying amount of indebtedness that was settled via issuance of common stock for the nine months ended June 30, 2022 was $23,192,500. NuBridge Commercial Lending LLC Promissory Note On March 7, 2022, the Company’s wholly owned subsidiary, Mullen Investment Properties, LLC entered into a Promissory Note (the “Promissory Note”) with NuBridge Commercial Lending LLC for a principal amount of $5 million. The Promissory Note bears interest at a fixed rate of 8.99% per annum and the principal amount is due March 1, 2024. Collateral for the loan includes the title to the Company’s property at 1 Greentech Drive, Tunica, MS. Under the Promissory Note, prepaid interest and issuance costs of $1,157,209 were withheld from the principal and recorded as debt discount, which is being amortized over the term of the note. As of June 30, 2023, the remaining unamortized debt discount was $425,574. Drawbridge and Amended A&R Note with Esousa On October 14, 2022, the Company entered into an Amended and Restated Secured Convertible Note and Security Agreement (the “A&R Note”) with Esousa Holdings LLC (“Esousa”), including principal of $1,032,217 (net of debt discount of $64,570) and accrued interest of $316,127 along with the liability to issue 46,667 shares of common stock (having a then carrying value of $10,710,000) and an obligation to compensate for the losses from market value decline of shares were exchanged for a new convertible note payable with a face value of $12,945,914 and 102,222 shares of common stock (having a fair value of $5,524,600), resulting in a loss on extinguishment of $6,452,170. On November 1, 2022, the A&R Note payable to Esousa, inclusive of any accrued interest, was converted into 275,769 shares of common stock. Convertible Notes On November 14, 2022, the Company entered into Amendment No. 3 (“Amendment No. 3”) to the June 7, 2022, Securities Purchase Agreement (as amended, the “Series D SPA”). The investors paid $150 million and in lieu of receiving shares of Series D Preferred Stock and Warrants, the investors received notes convertible into shares of the Company’s common stock (“Notes”) and Warrants. Amendment No. 3 further provided that the remaining $90 million of the commitment amount will be paid in the first half of 2023 in two tranches. The purchase price per share of Series D Preferred Stock will be the lower of (i) $1.27 (to be adjusted to stock splits), the closing price of the Company’s stock on the date the Securities Purchase Agreement was executed, or (ii) the closing price of the common stock on the trading day immediately preceding the respective purchase date, subject to a floor price of $0.10 per share. For no additional consideration, for every share of Series D Preferred Stock purchased, investors will receive warrants to purchase shares of common stock equal to 185% of the number of shares of Series D Preferred Stock purchased by the investors at an exercise price equal to the purchase price for shares of Series D Preferred Stock (the warrants also permit cashless exercise). The Company exercised its right and received these investments in April and June 2023, see Note 8. On November 15, 2022, the Company issued the unsecured convertible Notes aggregating $150,000,000 in lieu of Series D Preferred Stock. The Notes bear interest at 15% and are convertible into shares of common stock either: (A) at the option of the noteholder at the lower of: (i) $0.303 (to be adjusted to stock splits); or (ii) the closing price of our common stock on January 3, 2023; or (B) mandatorily on November 21, 2022 at the lower of: (i) $0.303 (to be adjusted to stock splits); or (ii) the closing price of our common stock on November 18, 2022, provided adequate unissued authorized shares were available. For each share issued upon conversion, the holders are entitled to 1.85 times as many five-year As a result, and since the Company had an insufficient number of authorized shares available to settle potential future warrant exercises, the Company recognized a derivative liability of $244,510,164 for the warrants with a corresponding increase in debt discount of $150,000,000 and interest expense of $94,510,164 (presented combined in the Statement of operations as "Other financing costs - initial recognition of derivative liabilities"). The debt discount was amortized over the term of the note through the date the convertible notes were mandatorily convertible. Accordingly, the entire amount was expensed during the nine-month period ended June 30, 2023. On November 21, 2022, principal of $59,402,877 was mandatorily converted into 981,460 shares of common stock. On December 23, 2022, the Company defaulted on the Notes by not having sufficient authorized shares to allow for both the Notes to be fully converted and the warrants to be exercised. On January 13, 2023, the Company entered into a Settlement Agreement and Release in which investors waived the default prior to February 1, 2023. In exchange, the Company granted the investors the right to purchase additional shares of Series D Preferred Stock and warrants in an amount equal to such investor’s pro rata portion of $10 million. This right expired on June 30, 2023. During February 2023, the remaining balance of the Notes (with the principal of $90,362,418) and accrued interests (in amount of $3,456,941) were converted by the holders into 1,376,155 shares of common stock. See Note 8 with regards to warrants issued upon conversion of these Notes. As of June 30, 2023, and September 30, 2022, accrued interest on outstanding notes payable was $1,479,688 and $1,374,925, respectively (relates mainly to NuBridge Commercial Lending LLC Promissory Note, see above). |
WARRANTS AND OTHER DERIVATIVE L
WARRANTS AND OTHER DERIVATIVE LIABILITIES AND FAIR VALUE MEASUREMENTS | 9 Months Ended |
Jun. 30, 2023 | |
WARRANTS AND OTHER DERIVATIVE LIABILITIES AND FAIR VALUE MEASUREMENTS | |
WARRANTS AND OTHER DERIVATIVE LIABILITIES AND FAIR VALUE MEASUREMENTS | NOTE 8 – WARRANTS AND OTHER DERIVATIVE LIABILITIES AND FAIR VALUE MEASUREMENTS ASC 825-10 defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required or permitted to be recorded at fair value, the Company considers the principal or most advantageous market in which it would transact and considers assumptions that market participants would use when pricing the asset or liability, such as inherent risk, transfer restrictions, and risk of non-performance. ASC 825-10 establishes a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 825-10 establishes three levels of inputs that may be used to measure fair value: ● Level 1 – Quoted prices in active markets for identical assets or liabilities. ● Level 2 – Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which all significant inputs are observable or can be derived principally from or corroborated by observable market data for substantially the full term of the assets or liabilities. ● Level 3 – Unobservable inputs to the valuation methodology that are significant to the measurement of fair value of assets or liabilities. To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the level in the fair value hierarchy within which the fair value measurement is disclosed and is determined based on the lowest level input that is significant to the fair value measurement. Financial Instruments at Carrying Value That Approximated Fair Value Certain financial instruments that are not carried at fair value on the condensed consolidated balance sheets are carried at amounts that approximate fair value, due to their short-term nature and credit risk. These instruments include cash and cash equivalents, accounts payable, accrued liabilities, and debt. Accounts payable are short-term in nature and generally terms are due upon receipt or within 30 to 90 days. Non-Financial Assets Measured at Fair Value on a Non-Recurring Basis Non-financial assets are only required to be measured at fair value when acquired as a part of business combination or when an impairment loss is recognized. See Note 14 - Property, Equipment and Leasehold Improvements and Note 6 – Intangible assets for further information. All these valuations are based on Level 3 – Unobservable inputs to the valuation methodology that are significant to the measurement of fair value of assets or liabilities . Financial Liabilities Measured at Fair Value on a Recurring Basis During the nine months ended June 30, 2023, the Company had two main types of financial liabilities measured at fair value on a recurring basis: 1) Warrant liabilities (that relate to sales of Series C Preferred Stock and Series D Preferred Stock issued pursuant to Securities Purchase Agreements) recognized as liabilities due to requirements of ASC 480 as the variable number of shares to be issued upon cashless exercise is based predominantly on monetary value. Preferred C Warrants The warrants, which were exercisable for common stock, issued in connection with the sale of Series C Preferred Stock (the “Preferred C Warrants”) in accordance with the November 2021 Merger Agreement and further amendments had an exercise price per share of $8.834 (after the reverse stock splits - $1,988) and a cashless exercise option based on certain formula established by relevant contracts. The initial financial costs recorded upon the issuance of the Preferred C Warrants during the year ended September 30, 2022 was $429,883,573. This amount is comprised of $137,090,205 preferred stock discount (amortized immediately as the preferred stock does not have a stated term of life) and $292,793,368 finance costs (calculated as the difference between fair value of warrant liabilities recognized and the preferred stock discount). At each warrant exercise date and each accounting period end the warrant liability for the remaining unexercised warrants was marked-to-market value and the resulting gain or loss was recorded. On February 10, 2022, the terms of the Prior SPA Warrants were amended, resulting in a change to the calculated derived dollar amount. The effect of these changes in the amount of $32,735,345 has been accounted for as deemed dividends on preferred stock and decreased additional paid-in capital of the Company. During the year ended September 30, 2022, 186,441 (giving effect to the Reverse Stock Splits, see Note 1) Preferred C Warrants were exercised on a cashless basis resulting in the issuance of 2,369,842 shares of common stock, with a total fair market value of $554,371,539 at the date of exercise. During the quarter ended December 31, 2022, 13,215 Preferred C Warrants that remained outstanding as at September 30, 2022 were fully exercised. Preferred D Warrants In accordance with Series D Securities Purchase Agreement for every share of Series D Preferred Stock purchased, the investors received 185% (for the final voluntary $100 million investment right expiring June 30, 2023 - 110%) warrants (the “Preferred D Warrants”) exercisable for shares of common stock at an exercise price per share equal to the lower of (i) $1.27 (after the Reverse Stock Splits - $286) or (ii) the market price of common stock on the trading day immediately preceding the purchase notice date. The Preferred D Warrants are exercisable during a five-year period commencing upon issuance. The contracts for the Preferred D Warrants contain cashless exercise provisions similar to Preferred C Warrants described above. Therefore, management applied similar accounting treatment to recognition, measurement, and presentation of the warrant liabilities. In September 2022 the Company received an initial investment in amount of $35 million (exercise price per share was $0.4379, or $98.5275 after the Reverse Stock Splits) and issued to investors 79,926,925 shares of Series D preferred stock, and 26,287 Preferred D warrants (hereinafter warrants and shares of common stock are presented giving effect to the Reverse Stock Splits, see Note 1). By September 30, 2022 no Preferred D Warrants were exercised and all Preferred D Warrants remained outstanding with the fair value on September 30, 2022 in an amount of $55,398,551. During the quarter ended December 31, 2022, all initial Preferred D Warrants were exercised on a cashless basis for 1,018,217 shares of common stock. In November 2022, the Company received $150,000,000 and issued, in lieu of Series D Preferred Stock, notes convertible into shares of common stock and Preferred D warrants. As a result of the conversion of the convertible debt into shares of common stock in November 2022 and February 2023, 4,361,588 Preferred D warrants were issued. By June 30, 2023 all these Preferred D Warrants were exercised on a cashless basis for 9,366,447 shares of common stock. During April 2023 we exercised our investment rights under Series D SPA and requested an additional $45 million (exercise price per share was $0.1 or $22.5 after Reverse Stock Splits) issuing to investors: 273,363,635 Series D Preferred Stock (converted to 1,214,949 shares of common stock), 785,051 shares of common stock (in lieu of Series D Preferred Stock), and 3,700,000 Preferred D warrants (post reverse stock split). The warrant liability recognized initially amounted to $73,260,454. By June 30, 2023 all these Preferred D Warrants were exercised on a cashless basis for 14,767,200 shares of common stock (post reverse stock split). In June 2023 we exercised the second half of our investment right for $45 million (exercise price was $0.432 or $3.888 after reverse stock splits) and, in lieu of Series D Preferred Stock, investors received: 6,077,835 shares of common stock and 5,496,238 prefunded warrants exercisable for one share of common stock each, as well as 21,412,036 Preferred D Warrants. In June 2023 one of the investors exercised their investment rights and invested $7 million (exercise price per share was $0.52 or $4.68 after Reverse Stock Splits). The Company issued, in lieu of Series D Preferred Stock, 1,495,726 shares of common stock and 2,767,094 Preferred D Warrants. Final voluntary investment rights under the Series D SPA were exercised by the pool of investors in June 2023 and the Company received $100 million (exercise price per share was $0.1601, or $1.4409 after Reverse Stock Splits, for all but one of the investors, and $0.1696, or $1.5264 after Reverse Stock Splits, for one investor), issuing to investors, in lieu of Series D Preferred Stock: 18,373,082 shares of common stock and 50,815,919 prefunded warrants exercisable for one share of common stock each, as well as 76,107,900 Preferred D Warrants. The warrant liability recognized in June 2023 upon initial accounting of these investments amounted to $254,962,776. By June 30, 2023 a part of these prefunded warrants and Preferred D Warrants was exercised on a cashless basis for 46,828,038 shares of common stock (post Reverse Stock Splits). As of June 30, 2023 28,482,585 prefunded warrants (recognized in equity) exercisable into the same number of shares of common stock, as well as 89,052,573 Preferred D Warrants (recognized as liabilities) exercisable into 155,414,904 shares of common stock (recognized as liability in the consolidated balance sheets) with fair value of $150,084,173 remained outstanding and their exercise (on a cash or cashless basis) is available to investors for a period of approximately 5 years. The fair value of warrant obligations is calculated based on the number and market value of shares that can be issued upon exercise of the warrants. The number of shares to be issued in accordance with relevant agreements is variable and depends on (i) lowest closing market price of shares for 2 days before the exercise, and (i) multiplicator calculated based on Black Scholes formula where all elements, except for risk-free rate, are fixed on the investment date. Accordingly, the fair value of warrants on recognition date and on subsequent dates was estimated as a maximum of (i) Black Scholes value for cash exercise of relevant warrants and (ii) current market value of the number of shares the Company would be required to issue upon cashless warrant exercise on a relevant date in accordance with warrant contract requirements. The latter valuation, based on observable inputs (level 2), has been higher and reflects the pattern of the warrants exercise since the inception of the Series D SPA. At each warrant exercise date and each accounting period end the warrant liability for the remaining unexercised warrants was marked-to-market value and the resulting gain or loss was recorded in consolidated statement of operations as a “Gain / (loss) on derivative liability revaluation”. All the warrants mentioned in this section provide that if the Company issues or sells, enters into a definitive, binding agreement pursuant to which he Company is required to issue or sell or is deemed, pursuant to the provisions of the Warrants, to have issued or sold, any shares of common stock for a price per share lower than the exercise price then in effect, subject to certain limited exceptions, then the exercise price of the warrants shall be reduced to such lower price per share. In addition, the exercise price and the number of shares of common stock issuable upon exercise of the warrants are subject to adjustment in connection with stock splits, dividends or distributions or other similar transactions. Other derivative liabilities Other derivative liabilities recognized and remeasured subsequently at fair value correspond to convertible debentures, warrants, and preferred stock, that failed equity presentation when the Company had insufficient number of authorized shares available to settle all potential future conversion transactions. These derivative liabilities were initially recognized on November 15, 2022, when the Company entered into Amendment No. 3 to the Series D SPA (see Note 7) having an insufficient number of authorized shares of common stock available for issuance upon conversion of preferred stock and convertible notes payable and the exercise of outstanding warrants. They have been reclassified to equity upon authorization of increase of common stock available for issuance by stockholders of the Company in January, 2023. Qiantu Warrants On March 14, 2023, the Company entered into an Intellectual Property and Distribution Agreement (the “IP Agreement”) with Qiantu Motor (Suzhou) Ltd., and two of Qiantu Suzhou’s affiliates (herein “Qiantu”). Pursuant to the IP Agreement, Qiantu granted the Company the exclusive license to use certain of Qiantu’s trademarks and the exclusive right to assemble, manufacture, and sell the homologated vehicles based on the Qiantu K-50 model throughout North America and South America for a period of five years As a part of consideration for the Company’s entry into the IP Agreement, the Company issued to Qiantu USA warrants to purchase up to 333,333 (giving effect to the Reverse Stock Splits, see Note 1) shares of the Company’s common stock (the “Qiantu Warrants”). The warrants are exercisable at Qiantu USA’s discretion commencing at any time from September 30, 2023 up to and including September 30, 2024 at 110% of the market price of the Company’s common stock at the close of trading on the earlier of (a) when the Company completes its obligations to its Series D Preferred Stock investors; or (b) June 15, 2023. The Qiantu Warrants have anti-dilution provisions similar to those described above, but they provide for exemption for Series D Preferred Stock transactions rights and obligations that existed on the date the Qiantu Warrants were issued. As it was expected that the Company may not have a sufficient number of authorized shares of common stock available for issuance during the term of the contract (up to September 2024) and the shares to be issued upon possible exercise of warrants have not been registered yet, the Qiantu Warrants were recognized at fair value on inception ($6,814,000) and on each subsequent period end. Fair value on June 30, 2023 amounted to $234,300. The difference has been recognized within gains (losses) on derivative liabilities revaluation in the consolidated statements of operations. Upon issuance of the instruments underlying the derivative liabilities and upon revaluation (immediately prior to conversion of the underlying instrument and on the balance sheet date), the Company estimated the fair value of these derivatives using the Black-Scholes Pricing Model and binomial option valuation techniques based on the following assumptions: (1) dividend yield of 0% , (2) expected annualized volatility of approximately 198% , (3) risk-free interest rate of 4.3% to 4.7% . These liabilities are classified as having significant unobservable input (level 3) in the table below. Breakdown of items recorded at fair value on a recurring basis in condensed consolidated balance sheets by levels of observable and unobservable inputs as of June 30, 2023 and on September 30, 2022 is presented below: June 30, Quoted Prices Significant Significant 2023 in Active Other Unobservable Markets for Observable Inputs Identical Assets Inputs (Level 3) (Level 1) (Level 2) Derivative liability $ 150,318,473 $ - $ 150,084,173 $ 234,300 September 30, Quoted Prices Significant Significant 2022 in Active Other Unobservable Markets for Observable Inputs Identical Assets Inputs (Level 3) (Level 1) (Level 2) Derivative liability $ 84,799,179 $ - $ 84,799,179 $ - A summary of all changes in warrants and other derivative liabilities is presented below: Balance, September 30, 2022 $ 84,799,179 Derivative liabilities recognized upon issuance of convertible instruments 499,737,254 Derivative liability recognized upon authorized shares shortfall 11,978,166 Loss / (gain) on derivative liability revaluation 89,462,559 Reclassification of derivative liabilities to equity upon authorization of sufficient common shares (47,818,882) Financing loss upon over-issuance of shares from warrants 8,934,892 Receivables upon over-issuance of shares from warrants 17,721,868 Reclassification to liability to issue shares upon unfinished warrant exercise on period end (5,378,806) Conversions of warrants into common shares (509,117,758) Balance, June 30, 2023 $ 150,318,473 Balance, September 30, 2021 $ - Derivative liabilities recognized upon issuance of convertible instruments 269,344,178 Loss / (gain) on derivative liability revaluation 124,672,956 Conversions of warrants into common shares (420,626,121) Change in agreement with warrant holders (recognized as deemed dividends) 32,735,345 Balance, June 30, 2022 $ 6,126,358 |
STOCKHOLDERS' EQUITY (DEFICIT)
STOCKHOLDERS' EQUITY (DEFICIT) | 9 Months Ended |
Jun. 30, 2023 | |
STOCKHOLDERS' EQUITY (DEFICIT) | |
STOCKHOLDERS' EQUITY (DEFICIT) | NOTE 9 – STOCKHOLDERS’ EQUITY (DEFICIT) Common Stock At a special meeting on January 25, 2023, stockholders approved the proposal to increase the Company’s authorized common stock capital from 1.75 billion to 5 billion shares. At June 30, 2023, the Company had 5,000,000,000 shares of common stock authorized with $0.001 par value per share. In accordance with stockholder approval, on May 4, 2023, the Company effectuated a 1-for- 25 9 The Company had 86,762,748 and 3,704,303 shares of common stock (post Reverse Stock Splits) issued outstanding The holders of common stock are entitled to one vote for each share of common stock held at all meetings of stockholders. In the event of a liquidation, dissolution or winding up of the Company, whether voluntary or involuntary, the common stockholders are entitled to receive the remaining assets following distribution of liquidation preferences, if any, to the holders of our preferred stock. The holders of common stock are not entitled to receive dividends unless declared by our Board. To date, no dividends were declared or paid to the holders of common stock. When the Company receives a warrant exercise notice or preferred stock conversion notice close to the balance sheet date, and issues relevant order to a transfer agent which is effectively exercised only after the balance sheet date, relevant shares of common stock are presented in the balance sheet as common stock owed but not issued. Preferred Stock Under the terms of our Certificate of Incorporation, the Board may determine the rights, preferences, and terms of our authorized but unissued shares of Preferred Stock. On June 30, 2023, the Company had 500,000,000 shares of Preferred Stock authorized with $0.001 par value per share. The Reverse Stock Splits (see Note 1 above) did not affect the number of shares of Preferred Stock authorized and outstanding but the conversion ratios were proportionately adjusted to decrease the number of shares of common stock to be issued as a result. Redemption Rights The shares of Preferred Stock are not subject to Mandatory Redemption. The Series C and Series D Preferred Stock are voluntarily redeemable by the Company in accordance with the following schedule, provided that the issuance of shares of common stock issuable upon conversion has been registered and the registration statement remains effective: Year 1: No Redemption Year 2: Redemption at 120% of Year 3: Redemption at 115% of Year 4: Redemption at 110% of Year 5: Redemption at 105% of Year 6 and thereafter: Redemption at 100% of The Series C and Series D Preferred Stock is also redeemable at any time for a price per share equal to the Issue Price, plus all unpaid accrued and accumulated dividends on such share (whether or not declared), provided: (A) the Preferred Stock has been issued and outstanding for a period of at least one year, (B) the issuance of the shares of common stock underlying the Preferred Stock has been registered pursuant to the Securities Act and such registration remains effective, and (C) the trading price for the common stock is less than the Conversion Price for 20 trading days in any period of 30 consecutive trading days on the Nasdaq Capital Market. Dividends The holders of Series A and Series B Preferred Stock are entitled to non-cumulative dividends if declared by the Board of Directors. The holders of the Series A Preferred Stock and Series B Preferred Stock participate on a pro rata basis (on an “as converted” basis to common stock) in any cash dividend paid on common stock. No dividends have been declared or paid during the three and nine months ended June 30, 2023, and 2022 The Series C Preferred Stock originally provided for a cumulative 15.0% per annum fixed dividend on the Series C Original Issue Price plus unpaid accrued and accumulated dividends. On January 13, 2023, the Company and holders of Series C Preferred Stock entered into a waiver agreement pursuant to which such holders irrevocably waived their right to receive any and all cumulative 15.0% per annum fixed dividends on such Preferred Stock, including all unpaid accrued and accumulated dividends. An The Series D Preferred Stock bears a 15.0% per annum fixed dividend accumulated and compounded monthly, payable no later than the 5 th The Company may elect to pay dividends for any month with a payment-in-kind (“PIK”) election if (i) the shares issuable further to the PIK are subject to an effective registration statement, (ii) the Company is then in compliance with all listing requirements of NASDAQ and (iii) the average daily trading dollar volume of the Company’s common stock for 10 trading days in any period of 20 consecutive trading days on the NASDAQ is equal to or greater than $27.5 million. Liquidation, Dissolution, and Winding Up Upon the completion of a distribution pursuant to a Liquidation Event to the Series B Preferred Stock and Series C Preferred Stock, the holders of Series A Preferred Stock are entitled to receive, prior and in preference to any distribution of any proceeds to the holders of the common stock, by reason of their ownership thereof, $1.29 per share of each share of the Series A Preferred Stock (as adjusted for any stock splits, stock dividends, combinations, recapitalizations or the like with respect to the Series A Preferred Stock), plus declared but unpaid dividends on such share. “Liquidation Event” is as defined in the Certificate of Incorporation and, subject to certain exceptions, includes a sale or other disposition of all or substantially all of the Company’s assets, certain mergers, consolidations and transfers of securities, and any liquidation, dissolution or winding up of the Company. In the event of any Liquidation Event, the holders of the Series B Preferred Stock will be entitled to receive, prior and in preference to any distribution of the proceeds to the holders of the other series of Preferred Stock or the common stock by reason of their ownership thereof, an amount per share equal to the Series B Original Issue Price plus declared but unpaid dividends. Upon the completion of a distribution pursuant to a Liquidation Event prior to the Series B Preferred Stock, the holders of the Series C Preferred Stock will be entitled to receive, prior and in preference to any distribution of the proceeds to the holders of the Series A Preferred Stock or the common stock by reason of their ownership thereof, an amount per share equal to the Series C Original Issue Price plus declared but unpaid dividends. In the event of any Liquidation Event, the holders of the Series D Preferred Stock will be entitled to receive, prior and in preference to any distribution of the proceeds to the holders of the other series of Preferred Stock or the common stock by reason of their ownership thereof, an amount per share equal to the Series D Original Issue Price plus declared but unpaid dividends. Conversion Each share of Series A Preferred Stock is convertible at any time at the option of the holder into 0.444 (giving effect to the Reverse Stock Splits – see Note 1) shares of fully paid and non-assessable shares of common stock (rounding up to the nearest share). Each share of Series B Preferred Stock and each share of Series C Preferred Stock are convertible at the option of the holder at any time into such number of shares of common stock as is determined by dividing the Issue Price by the relevant Conversion Price (in each case, subject to adjustment). As of June 30, 2023, there were no shares of Series B Preferred Stock issued and outstanding. As of June 30, 2023, each share of Series C Preferred Stock is convertible into 0.004 (giving effect to the Reverse Stock Split – see Note 1) shares of fully paid and nonassessable shares of common stock (rounding up to the nearest share). Each share of Series C Preferred Stock will automatically be converted into shares of common stock at the applicable conversion rate at the time in effect immediately upon (A) the issuance of shares of common stock underlying the Series C Preferred Stock being registered pursuant to the Securities Act of 1933 and such registration remaining effective, (B) the trading price for the Company’s common stock being more than two times the Series C Conversion Price for 20 trading days in any period of 30 consecutive trading days on the Nasdaq Capital Market, and (C) the average daily trading dollar volume of the Company’s common stock during such 20 trading days is equal to or greater than $4.0 million. The Series D Preferred Stock is convertible at the option of each holder at any time into the number of shares of common stock determined by dividing the Series D Original Issue Price (plus all unpaid accrued and accumulated dividends thereon, as applicable, whether or not declared), by the Series D Conversion Price, subject to adjustment as set in the Certificate of Designation. As of June 30, 2023, each share of Series D is convertible into 0.004 (giving effect to the Reverse Stock Split – see Note 1) shares of fully paid and nonassessable shares of common stock (rounding up to the nearest share). Each share of Series D Preferred Stock will automatically be converted into shares of common stock at the applicable Conversion Rate at the time in effect immediately upon (A) the issuance of shares of Common Stock underlying the Series D Preferred Stock being registered pursuant to the Securities Act and such registration remaining effective, (B) the trading price for the Company’s common stock being more than two times the Series D Conversion Price for 20 trading days in any period of 30 consecutive trading days on the Nasdaq Capital Market, and (C) the average daily trading dollar volume of the Company’s common stock during such 20 trading days is equal to or greater than $27,500,000. Voting Rights The holders of shares of common stock and Series A, Series B and Series C Preferred Stock at all times vote together as a single class on all matters (including the election of directors) submitted to a vote of the stockholders; provided, however, that, any proposal which adversely affects the rights, preferences and privileges of the Series A Preferred Stock, Series B Preferred Stock, or Series C Preferred Stock, as applicable, must be approved by a majority in interest of the affected series of Preferred Stock, as the case may be. Each holder of common stock, Series B Preferred and Series C Preferred has right to one vote for each share of Common Stock into which such Series B Preferred Stock and/or Series C Preferred Stock, as applicable, could be converted. Each holder of Series A Preferred has the right to 1,000 votes per share held of record by such holder (this right will terminate on November 5, 2024). The holders of Series D Preferred Stock have no voting rights except for protective voting rights (one vote for each share of common stock into which such Series D Preferred Stock could be converted) in such cases as approval of a liquidation event, authorization of issue of securities having a preference over or parity with the Series D Preferred Stock with respect to dividends, liquidation, redemption or voting, entering a merger or consolidation, etc. |
LOSS PER SHARE
LOSS PER SHARE | 9 Months Ended |
Jun. 30, 2023 | |
LOSS PER SHARE | |
LOSS PER SHARE | NOTE 10 – LOSS PER SHARE Earnings per common share (“EPS”) is computed by dividing net income allocated to common stockholders by the weighted-average common shares outstanding. Diluted EPS is computed by dividing income allocated to common stockholders plus dividends on dilutive convertible preferred stock and preferred stock that can be tendered to exercise warrants, by the weighted-average common shares outstanding plus amounts representing the dilutive effect of outstanding warrants and the dilution resulting from the conversion of convertible preferred stock, if applicable. For the three and nine months ended June 30, 2023 and 2022, the convertible debt and shares of Preferred Stock were excluded from the diluted share count because the result would have been antidilutive under the “if-converted method.” The warrants to purchases shares of common stock also were excluded from the computation because the result would have been antidilutive. The following table presents the reconciliation of net income attributable to common stockholders to net income used in computing basic and diluted net income per share of common stock (giving effect to the Reverse Stock Splits – see Note 1): Three months ended June 30, Nine months ended June 30, 2023 2022 2023 2022 Net income attributable to common stockholders $ (308,858,234) $ (4,847,151) $ (800,047,339) $ (485,517,181) Less: accumulated preferred stock dividends (13,125) (2,285,792) 7,387,811 (37,541,085) Net income used in computing basic net income per share of common stock $ (308,871,359) $ (7,132,943) $ (792,659,528) $ (523,058,266) Net loss per share (11.14) $ (4.26) $ (55.44) $ (694.20) Weighted average shares outstanding, basic and diluted 27,720,475 1,674,607 14,296,659 753,474 Weighted average shares outstanding, basic and diluted, before reverse stock splits, see Note 1 6,237,106,875 376,786,685 3,216,748,275 169,531,688 Net loss per share before reverse stock splits $ (0.05) $ (0.02) $ (0.25) $ (3.09) |
SHARE-BASED COMPENSATION
SHARE-BASED COMPENSATION | 9 Months Ended |
Jun. 30, 2023 | |
SHARE-BASED COMPENSATION | |
SHARE-BASED COMPENSATION | NOTE 11 – SHARE-BASED COMPENSATION The Company has a share incentive plan that is part of its annual discretionary share-based compensation program. The plan includes consultants and employees, including directors and officers. For employees, they are notified of company share incentives during the onboarding process. The employee’s offer letter briefly describes the plan. Subject to the approval of our Board of Directors Compensation Committee, employees are issued a specified number of shares of the Company’s common stock. The total expense of share awards to employees represents the grant date fair value of relevant number of shares to be issued and is recognized, along with additional paid-in capital, ratably over the vesting period. The Company has also adopted the CEO Award Incentive Plan, approved by the Board and by stockholders on July 26, 2022 at the 2022 Annual Meeting of Stockholders. Under this plan, the Chief Executive Officer is entitled to share-based awards generally calculated as 1-2% of then outstanding number of shares of common stock, issuable upon achievement of specific financial and operational targets (milestones) that are supposed to significantly increase value of the Company. The compensation is accrued over the service term when it is probable that the milestone will be achieved. As at June 30, 2023 the accrual for future awards is approximately $3.4 million. From time to time the Company also issues share-based compensation to external consultants providing consulting, marketing, R&D, legal and other services. The number of shares specified within the individual agreements is generally negotiated by our Chief Executive Officer and approved by the Board. A part of these share-based awards is classified as equity, similar to stock-based compensation to employees. Another part of the Company’s share-based awards to consultants is classified as liabilities: e.g. if a number of shares consultant is entitled to is predominantly based on monetary value fixed in the contract. A vested part of liability in this case is revaluated each period based on market price of the common shares of the Company, until sufficient number of shares is issued. The common stock provided for services to consultants is accounted for as professional fees within G&A and R&D expenses and employee, director and management share issuances are a part of compensation expense. For the three months ended June 30, For the nine months ended June 30, Composition of Share-Based Compensation Expense 2023 2022 2023 2022 Directors, officers and employees share-based compensation $ 3,678,278 $ 96,495 $ 51,329,014 $ 20,049,336 Share-based compensation to consultants (equity-classified) 903,264 4,928,824 7,367,107 12,288,735 Share-based compensation to consultants (liability-classified) 6,130,462 119,344 12,319,250 141,639 Total share-based compensation expense $ 10,712,004 $ 5,144,663 $ 71,015,371 $ 32,479,710 |
ACCRUED EXPENSES AND OTHER CURR
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | 9 Months Ended |
Jun. 30, 2023 | |
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | |
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | NOTE 12 – ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES June 30, 2023 September 30, 2022 Accrued Expenses and Other Liabilities Accrued expense - other $ 5,135,333 $ 3,529,384 IRS tax liability 187,303 1,744,707 Accrued payroll 1,583,056 534,782 Accrued interest 1,479,688 1,377,008 Total $ 8,385,380 $ 7,185,881 |
LIABILITY TO ISSUE STOCK
LIABILITY TO ISSUE STOCK | 9 Months Ended |
Jun. 30, 2023 | |
LIABILITY TO ISSUE STOCK | |
LIABILITY TO ISSUE STOCK | NOTE 13 – LIABILITY TO ISSUE STOCK Liability to issue stock represents common stock that is accrued for and issuable at a future date for certain convertible securities and warrants and was $5,378,806 as of June 30, 2023. As of June 30, 2023 CEO share-based award liability amounted to $3,491,421. As of September 30, 2022, liability to issue common stock to Esousa was $10,710,000. |
PROPERTY, EQUIPMENT AND LEASEHO
PROPERTY, EQUIPMENT AND LEASEHOLD IMPROVEMENTS, NET | 9 Months Ended |
Jun. 30, 2023 | |
PROPERTY, EQUIPMENT AND LEASEHOLD IMPROVEMENTS, NET | |
PROPERTY, EQUIPMENT AND LEASEHOLD IMPROVEMENTS, NET | NOTE 14 – PROPERTY, EQUIPMENT AND LEASEHOLD IMPROVEMENTS, NET Property, equipment, and leasehold improvements, net consists of the following: June 30, September 30, 2023 2022 Buildings $ 48,120,753 $ 7,659,121 Land 3,040,303 647,576 Furniture and equipment 682,798 556,948 Vehicles 335,183 96,363 Show room assets 4,428,544 4,418,724 Computer hardware and software 2,016,046 1,013,308 Machinery and equipment 32,070,385 7,383,612 Construction-in-progress 12,237,665 269,778 Leasehold improvements 186,341 76,438 Subtotal 103,118,018 22,121,868 Less: accumulated depreciation (11,367,499) (4,335,166) Property, Equipment and Leasehold Improvements, net $ 91,750,519 $ 17,786,702 Property, plant and equipment assets are stated at cost, net of accumulated depreciation. Depreciation expense related to property, equipment, and leasehold improvements for the three and nine months ended June 30, 2023, was $1,680,595 and $7,050,864, and was $86,598 and $251,780 for the three and nine months ended June 30, 2022, respectively. The ELMS asset acquisition closed on November 30, 2022 (See Note 4 – Purchase of assets from ELMS), and include property, plant, and equipment additions of: ● The Mishawaka, Indiana factory, which consisted of land and building of $1.44 million and $41.29 million, respectively; and ● All property including equipment, machinery, supplies, computer hardware, software, communication equipment, data networks and all other data storage, that totaled $27.3 million in machinery additions. |
OTHER NONCURRENT ASSETS
OTHER NONCURRENT ASSETS | 9 Months Ended |
Jun. 30, 2023 | |
OTHER NONCURRENT ASSETS | |
OTHER NONCURRENT ASSETS | NOTE 15 – OTHER NONCURRENT ASSETS Other assets consist of the following: June 30, 2023 September 30, 2022 Other Assets Other assets $ — $ 81,587 Security deposits 1,010,712 281,056 Total Other Assets $ 1,010,712 $ 362,643 |
OPERATING EXPENSES
OPERATING EXPENSES | 9 Months Ended |
Jun. 30, 2023 | |
OPERATING EXPENSES | |
OPERATING EXPENSES | NOTE 16 – OPERATING EXPENSES General and Administrative Expenses Three months ended June 30, Nine months ended June 30, 2023 2022 2023 2022 Professional fees $ 5,250,063 $ 4,908,855 $ 51,884,123 $ 31,773,409 Compensation to employees and management 15,133,141 3,177,790 52,147,116 10,556,783 Depreciation 1,680,595 86,598 7,050,864 251,780 Amortization 913,061 221,699 4,433,035 667,075 Lease 273,234 474,032 1,948,288 1,493,150 Settlements and penalties 2,327,286 169,607 8,592,635 1,054,439 Employee benefits 1,140,917 639,779 2,759,607 1,552,939 Utilities and office expense 996,997 202,652 2,064,100 428,565 Advertising and promotions 985,763 644,423 4,746,032 3,570,016 Taxes and licenses 120,500 8,805 372,381 25,926 Repairs and maintenance 302,623 167,173 684,920 246,875 Executive expenses and directors' fees 73,759 — 363,825 — Listing and regulatory fees 1,415,003 — 4,150,348 — Other 1,164,870 195,387 2,988,887 1,446,359 Total $ 31,777,812 $ 10,896,800 $ 144,186,161 $ 53,067,316 Research and development Research and development for the three months ended June 30, 2023, and 2022 was $22,088,011 and $7,324,365, respectively. Research and development for the nine months ended June 30, 2023, and 2022 was $51,188,991 and $9,665,126, respectively. Costs are expensed as incurred. Research and development expenses are primarily comprised of external fees and internal costs for engineering, homologation, prototyping costs and other expenses related to preparation to mass-production of electric vehicles such as Mullen Five EV, Mullen One EV cargo van, etc. |
LEASES
LEASES | 9 Months Ended |
Jun. 30, 2023 | |
LEASES | |
LEASES | NOTE 17 – LEASES We have entered into various operating lease agreements for certain offices, manufacturing and warehouse facilities, and corporate aircraft. Operating leases led to recognition of right-of-use assets, and current and noncurrent portion of lease liabilities, as appropriate. The right-of-use assets also include any lease payments made and initial direct costs incurred at lease commencement and exclude lease incentives. The lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Lease expense for lease payments is recognized on a straight-line basis over the lease term. We have lease agreements which require payments for both lease and non-lease components and have elected to account for these as a single lease component. Certain leases provide for annual increases to lease payment based on an index or rate. We calculate the present value of future lease payments based on the index or at the lease commencement date for new leases. The table below presents information regarding our lease assets and liabilities: June 30, 2023 September 30, 2022 Assets: Operating lease right-of-use assets $ 5,504,851 $ 4,597,052 Liabilities: Operating lease liabilities, current (2,217,059) (1,428,474) Operating lease liabilities, non-current (3,709,616) (3,359,354) Total lease liabilities $ (5,926,675) $ (4,787,828) Weighted average remaining lease terms: Operating leases 2.66 years 2.63 years Weighted average discount rate: Operating leases 28 % 28 % Operating lease costs: For the three months ended June 30, For the nine months ended June 30, 2023 2022 2023 2022 Fixed lease cost $ 330,175 $ 327,409 $ 887,294 $ 1,066,680 Variable lease cost 85,298 158,399 147,120 418,999 Short-term lease cost — 34,473 — 160,250 Sublease income (108,127) (46,144) (201,875) (152,431) Total operating lease costs $ 307,346 $ 474,137 $ 832,539 $ 1,493,498 Operating Lease Commitments Our lease obligations are based upon contractual minimum rates. Most leases provide that we pay taxes, maintenance, insurance and operating expenses applicable to the premises. The initial term for most real property leases is typically 1 to 3 years, with renewal options of 1 to 5 years, and may include rent escalation clauses. The following table reflects maturities of operating lease liabilities at June 30, 2023: Years ending June 30, 2023 (3 months) $ 874,278 2024 3,074,497 2025 2,423,880 2026 610,913 2027 417,425 Thereafter 115,668 Total lease payments $ 7,516,661 Less: imputed interest (1,589,986) Present value of lease liabilities $ 5,926,675 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 9 Months Ended |
Jun. 30, 2023 | |
COMMITMENTS AND CONTINGENCIES | |
COMMITMENTS AND CONTINGENCIES | NOTE 18 – COMMITMENTS AND CONTINGENCIES ASC 450.20 governs the disclosure and recognition of loss contingencies, including potential losses from litigation, regulation, tax and other matters. The accounting standard defines a “loss contingency” as “an existing condition, situation, or set of circumstances involving uncertainty as to possible loss to an entity that will ultimately be resolved when one or more future events occur or fail to occur.” ASC 450 requires accrual for a loss contingency when it is probable that one or more future events will occur confirming the fact of loss and the amount of the loss can be reasonably estimated. Under this standard an event is probable when it is likely to occur. From time to time, we are subject to asserted and actual claims and lawsuits arising in the ordinary course of business. Company management reviews any such legal proceedings and claims on an ongoing basis and follows appropriate accounting guidance when making accrual and disclosure decisions. We establish accruals for those contingencies where the incurrence of a loss is probable and can be reasonably estimated, and disclose the amount accrued and the amount of a reasonably possible loss in excess of the amount accrued, if such disclosure is necessary for our consolidated financial statements to not be misleading. As required by ASC 450 we do not record liabilities when the likelihood is probable, but the amount cannot be reasonably estimated. To estimate whether a loss contingency should be accrued by a charge to income, management evaluates, among other factors, the degree of probability of an unfavorable outcome and the ability to make a reasonable estimate of the amount of the loss. DBI Lease Buyback Servicing LLC, Drawbridge Investments LLC v. Mullen Automotive Inc. In June 2022, Mullen entered into a letter agreement with DBI Lease Buyback Servicing LLC (“DBI”) wherein it agreed to provide DBI with a right to purchase up to $25 million worth of a to-be-issued Series E Convertible Preferred Stock and warrants. The option and its terms have not been finalized. On March 2, 2023, DBI and Drawbridge Investments LLC (collectively, “Drawbridge”) filed a complaint in the Commercial Division of the Supreme Court of the State of New York, County of New York against Mullen. The complaint asserts three claims arising out of an alleged Series E option agreement by which Drawbridge allegedly would be able to purchase to-be-created Series E preferred shares and obtain warrants for Mullen’s common stock in exchange for, inter alia, a $3.5 million discount on a promissory note held by Drawbridge. Specifically, Drawbridge asserts claims for: (1) specific performance of the alleged agreement; (2) money damages (in an amount exceeding $100 million) arising out of Mullen’s alleged breach of the alleged agreement; and (3) declaratory judgment setting forth Drawbridge’s rights and Mullen’s obligations under the alleged agreement. Drawbridge also commenced an action by Order to Show Cause (“OSC”) whereby it, inter alia, sought a temporary restraining order (“TRO”) (a) enjoining Mullen from (i) increasing the number of designated shares for any outstanding stock and (ii) issuing new preferred stock; and (b) requiring Mullen to maintain at least 500,000,000 in authorized common stock (post reverse splits). On March 14, 2023, the Court vacated the TRO and entered an Order on March 15, 2023 whereby the TRO was vacated and denied. At the April 18, 2023 hearing for the preliminary injunctive relief sought by Drawbridge in the OSC and after reviewing Mullen’s opposition and hearing oral argument from both sides, the Court reserved decision on Drawbridge’s motion. Mullen moved to dismiss the complaint, with prejudice, on May 9, 2023. The Motion to Dismiss (“MTD”) was fully submitted on or about June 27, 2023. The Court has not scheduled oral argument on Mullen’s MTD and it is currently sub judice. The Company does not have a reasonable estimate of possible loss (if any) as of June 30, 2023. Mullen Technologies Inc. v. Qiantu Motor (Suzhou) Ltd. This matter arises out of a contract dispute between Mullen and Qiantu Motor (Suzhou) Ltd. (“Qiantu”) related to the engineering, design, support, and homologation of Qiantu’s K50 vehicle by Mullen. On March 14, 2023, the parties entered into a Settlement Agreement providing for full settlement of all pending litigation between Mullen and Qiantu. The parties also released all claims against each other arising from or in connection with the matters and claims that were subject to the legal proceedings. Pursuant to the Settlement Agreement, (1) the parties agreed to enter into an IP Agreement (as defined and described below) and (2) in connection with the settlement of the Legal Proceedings and for the privilege of entering into the IP Agreement, the Mullen paid $6 million to Qiantu. In connection with the execution of the Settlement Agreement, on March 14, 2023, Mullen entered into an Intellectual Property and Distribution Agreement ( “IP Agreement”) with Qiantu, and two of Qiantu’s affiliates (collectively “Qiantu”). Pursuant to the IP Agreement, Qiantu granted Mullen the exclusive license to use certain of Qiantu’s trademarks and the exclusive right to assemble, manufacture, and sell the homologated vehicles based on the Qiantu K-50 model throughout North America (including Canada, Mexico, and the United States of America) and South America for a period of five (5) years, which period does not start until Mullen has successfully homologated vehicles based on terms of the IP Agreement ( “Five Year Period”). During the Five-Year Period, Mullen is also obligated to purchase a certain number of vehicle kits every year from Qiantu. These rights shall be obtained and the commitment shall only be effective upon Mullen’s assessment of feasibility and profitability of the project within 150 days as provided for by the IP Agreement. As consideration for Mullen’s entry into the IP Agreement, (1) Mullen issued to Qiantu USA warrants to purchase up to 333,333 shares of Mullen’s common stock (the “Qiantu Warrants”) as described below; (2) Mullen additionally paid Qiantu $2,000,000 for deliverable items under the IP Agreement; and (3) in exchange, Mullen will pay Qiantu a royalty fee of $1,200 for each homologated vehicle sold in North America and South America during the term of the IP Agreement. The Qiantu Warrants were issued upon execution of the IP Agreement and are exercisable at Qiantu USA’s discretion commencing at any time from September 30, 2023 up to and including September 30, 2024 at 110% of the market price of Mullen’s common stock at the close of trading on the earlier of (a) when Mullen completes its obligations to its Series D Preferred Stock investors; or (b) June 15, 2023 (for more information on the warrants, see note 8). As Mullen continues analysis of the homologation costs, Mullen believes it would be in its best interest to also acquire licensing rights in additional territories. In that regard, the Mullen is currently in negotiations with Qiantu for the licensing rights to the European territory. International Business Machines (“IBM”) This claim was filed in the Supreme Court of the State of New York on May 7, 2019. This matter arises out of a contract dispute between Mullen and IBM related to a joint development and technology license agreement, patent license agreement, and a logo trademark agreement. On November 9, 2021, the court, pursuant to an inquest order, awarded damages in favor of IBM and on December 1, 2021, the court entered a judgment in favor of IBM in the amount of $5,617,192. On February 2, 2022, IBM filed a Motion to Amend the Judgment it had obtained to add Mullen Automotive and Ottava as Judgment Debtors. Mullen filed an Appeal on April 8, 2022. A settlement was reached in which Mullen paid the full amount of the Judgment with interest, for a total of approximately $5.9 million, but maintained its Appeal rights. IBM then filed a Motion to Dismiss the Appeal based on Mullen’s payment of the Judgment. Mullen filed an Opposition to the same on July 18, 2022, and the hearing of the matter was set for July 25, 2022. The Court took the same under submission, and a decision has still not been issued. The Appeal remains pending. The GEM Group On September 21, 2021, the GEM Group filed an arbitration demand and statement of claim against Mullen seeking declaratory relief and damages. This matter arises out of an alleged breach of a securities purchase agreement dated November 13, 2020. On June 7, 2023, the arbitrator held oral argument on issues related to liability. The arbitrator has not yet issued his decision on issues related to liability. Briefing and oral argument on issues of damages, if necessary, will be schedule after the arbitrator issues its decision on liability. On June 13, 2023, the GEM Group requested a procedural order seeking “Interim Measures” based on its belief that Mullen may not be able to satisfy its obligations should the Arbitrator rule in the GEM Group’s favor. The arbitrator, despite Mullen’s objections, authorized the GEM Group to file an application. On July 12, 2023, the GEM Group filed an Application for Interim Award Relief. Mullen filed its response on July 19, 2023. On August 3, 2023, the arbitrator issued his Decision and Order on Application for Interim Measures requiring Mullen to deposit $7,000,000 into an interest-bearing escrow account with a commercial bank or brokerage firm within 30 days of his Decision and Order. All interest earned on the escrow account shall become the property of the party determined by the arbitration to be the principal and the amounts held in escrow shall only be released upon further order of the arbitrator, a court of competent jurisdiction, or by agreement of the parties. The Company does not have a reasonable estimate of possible loss (if any) as of June 30, 2023. TOA Trading LLC Litigation This claim arises out of an alleged breach of contract related to an unpaid finder’s fee. On April 11, 2022, TOA Trading LLC and Munshibari LLC (“Plaintiffs”), filed a complaint against Mullen in the United States District Court for the Southern District of Florida. On May 18, 2022, Mullen filed a Motion to Dismiss or in the Alternative, Transfer Venue. Plaintiffs filed their opposition on June 1, 2022 and Mullen filed its reply on June 8, 2022. The court took the Motion to Dismiss or in the Alternative, Transfer Venue under submission. Plaintiffs filed a Notification of Ninety Days Expiring on February 1, 2023 notifying the court that Mullen’s Motion to Dismiss or in the Alternative, Transfer Venue had been fully briefed for a period of time exceeding 90 days. On March 22, 2023, the Court issued a ruling denying Mullen’s Motion to Dismiss or in the Alternative, Transfer Venue. Accordingly, Mullen filed its Answer to Plaintiffs’ complaint on April 7, 2023. The Parties have engaged in written and oral discovery. Mediation is scheduled for September 7, 2023. Trial is set for February 12, 2024. The Company does not have a reasonable estimate of possible loss as of June 30, 2023. Mullen Stockholder Litigation Margaret Schaub v. Mullen Automotive, Inc. – Securities Class Action On May 5, 2022, Plaintiff Margaret Schaub, a purported stockholder, filed a putative class action complaint in the United States District Court Central District of California against Mullen Automotive, Inc. (the “Company”), as well as its Chief Executive Officer, David Michery, and the Chief Executive Officer of a predecessor entity, Oleg Firer (the “Schaub Lawsuit”). This lawsuit was brought by Schaub both individually and on behalf of a putative class of the Company’s shareholders, claiming false or misleading statements regarding the Company’s business partnerships, technology, and manufacturing capabilities, and alleging violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 (“Exchange Act”) and Rule 10b-5 promulgated thereunder. The Schaub Lawsuit seeks to certify a putative class of shareholders, and seeks monetary damages, as well as an award of reasonable fees and expenses. On August 4, 2022, the Court issued an order consolidating the Schaub Lawsuit with the later-filed Gru Lawsuit (discussed below), and appointing lead plaintiff and lead counsel. On September 23, 2022, Lead Plaintiff filed her Consolidated Amended Class Action Complaint (“Amended Complaint”) against the Company, Mr. Michery, and the Company’s predecessor, Mullen Technologies, Inc., premised on the same purported violations of the Exchange Act and Rule 10b-5, seeking to certify a putative class of shareholders, and seeking an award of monetary damages, as well as reasonable fees and expenses. Defendants filed their motion to dismiss the Amended Complaint on November 22, 2022. Based upon information presently known to management, the Company believes that the potential liability from this claim, if any, will not have a material adverse effect on its financial condition, cash flows or results of operations. Therefore, no liability has been reflected on the condensed consolidated financial statements. David Gru v. Mullen Automotive, Inc. On May 12, 2022, David Gru, a purported stockholder, filed a putative class action lawsuit in the United States District Court for the Central District of California against the Company, Mr. Michery, and Mr. Firer (the “Gru Lawsuit”). This lawsuit was brought by Gru both individually and on behalf of a putative class of the Company’s shareholders, claiming false or misleading statements regarding the Company’s business partnerships, technology, and manufacturing capabilities, and alleging violations of Sections 10(b) and 20(a) of the Exchange Act and Rule 10b-5. The Gru Lawsuit sought to declare the action to be a class action, and sought monetary damages, pre-judgment and post-judgment interest, as well as an award of reasonable fees and expenses. On August 4, 2022, the Court consolidated this action into the Schaub Lawsuit, and ordered this action administratively closed. Jeff Witt v. Mullen Automotive, Inc. On August 1, 2022, Jeff Witt and Joseph Birbigalia, purported stockholders, filed a derivative action in the United States District Court for the Central District of California against the Company as a nominal defendant, Mr. Michery, Mr. Firer, and current or former Company directors Ignacio Novoa, Mary Winter, Kent Puckett, Mark Betor, William Miltner and Jonathan New (the “Witt Lawsuit”). The Witt lawsuit asserts claims for breach of fiduciary duty, unjust enrichment, abuse of control, waste of corporate assets, and violation of Section 14 of the Exchange Act primarily in connection with the issues and claims asserted in the Schaub Lawsuit. The Witt Lawsuit seeks monetary damages, as well as an award of reasonable fees and expenses. On November 8, 2022, the Court consolidated this matter and the Morsy Lawsuit (see below) into one case, and on November 30, 2022 stayed the consolidated derivative action pending (1) dismissal of the consolidated securities class action (the Schaub Lawsuit discussed above), or (2) the filing of an answer in the consolidated securities class action and notice by any party that they no longer consent to the voluntary stay of this consolidated derivative action. The case currently remains stayed. Based upon information presently known to management, the Company believes that the potential liability from this claim, if any, will not have a material adverse effect on its financial condition, cash flows or results of operations. Therefore, no liability has been reflected on the condensed consolidated financial statements. Hany Morsy v. David Michery, et al. On September 30, 2022, Hany Morsy, a purported stockholder, filed a derivative action in the United States District Court for the Central District of California against the Company as a nominal defendant, Mr. Michery, Mr. Firer, former Company officer and director, Jerry Alban, and Company directors Mr. Novoa, Ms. Winter, Mr. Puckett, Mr. Betor, Mr. Miltner, and Mr. New (the “Morsy Lawsuit”). This lawsuit asserts claims for breach of fiduciary duty, abuse of control, gross mismanagement, waste of corporate assets, and violation of Section 14 of the Exchange Act primarily in connection with the issues and claims asserted in the Schaub Lawsuit. The Morsy Lawsuit seeks to direct the Company to improve its corporate governance and internal procedures, and seeks monetary damages, pre-judgment and post-judgment interest, restitution, and an award of reasonable fees and expenses. On November 8, 2022, the Court consolidated this matter and the Witt Lawsuit (see above) into one case, and stayed the consolidated action (as discussed above). Based upon information presently known to management, the Company believes that the potential liability from this claim, if any, will not have a material adverse effect on its financial condition, cash flows or results of operations. Therefore, no liability has been reflected on the condensed consolidated financial statements . Thomas Robbins v. David Michery, et al.; Patrick V.P. Foley, Jr. and Jeffrey Pudlinski v. David Michery, et al. On December 7, 2022, Thomas Robbins, a purported stockholder, filed a putative stockholder class action complaint for declaratory and injunctive relief in the Court of Chancery of the State of Delaware against the Company, Mr. Michery, and current or former Company directors Mr. Novoa, Ms. Winter, Mr. Betor, Mr. Anderson, Mr. Miltner, Mr. Puckett, and Mr. New (the “Robbins Lawsuit”). On December 13, 2022, a second putative stockholder class action was filed in the Court of Chancery, styled as Foley v. Michery, et al., (the “Foley Lawsuit” and, together with the Robbins Lawsuit, the “Stockholder Actions”). The Stockholder Actions seek declaratory and injunctive relief related to the vote on a series of proposal at a special meeting of Company stockholders that was held on December 23, 2022, and asserts claims for breach of fiduciary duty against all Company directors (except Mr. New). The consolidated lawsuit also seeks an award of fees and costs related to this action. On December 16, 2022, the Court entered a limited status quo order in the Robbins Lawsuit (the “Status Quo Order”), with respect to the vote of shares at the Company’s December 23, 2022, special meeting (or any adjournment thereof), pending final disposition of this action. On January 5, 2023, the Court consolidated the Robbins Lawsuit with the Foley Lawsuit, appointing lead plaintiffs and lead counsel. On February 3, 2023, the Court entered an order dismissing the consolidated action as moot and retaining jurisdiction to adjudicate any application for attorneys’ fees and expenses by lead plaintiffs, as well as the form of notice to stockholders relating to any fee application or agreed-upon fee. On March 10, 2023, lead plaintiffs moved for an award of attorneys’ fees and expenses. On June 1, 2023, the Court entered an order awarding lead plaintiffs $1,004,731 in attorneys’ fees and expenses. The Company satisfied the award on June 30, 2023. Chosten Caris v. David Michery On April 27, 2023, Chosten Caris, a purported stockholder, filed a complaint against Mr. Michery in the Eighth Judicial Circuit In and For Alachua County, Florida (the “Caris Lawsuit”). This lawsuit purports to seek damages for claims arising under Section 10(b) of the Exchange Act and Rule 10b-5 promulgated thereunder. The Caris Lawsuit also seeks punitive damages. On May 17, 2023, Mr. Michery removed the Caris Lawsuit to the United States District Court for the Northern District of Florida. Mr. Michery filed a Motion to Dismiss (“MTD”) the Caris Lawsuit on June 20, 2023. On July 21, 2023, Plaintiff filed a document entitled “Conclusion” and another entitled “Memorandum Summary.” The court, on July 25, 2023, entered an order in response to Plaintiff’s “Conclusion” advising that the document did not constitute a sufficient filing because it was not in the proper format, did not include a certificate of service, was not signed, and was not responsive to the MTD. The court additionally, expanded Plaintiff’s deadline to respond to the MTD from July 21, 2023 to August 8, 2023 and deferred its ruling on the MTD as a result of the extended filing deadline. On July 26, 2023, Plaintiff filed a document entitled “Plaintiff’s Demand” requesting certain relief from the court. The court, on July 28, 2023, issued an order denying “Plaintiff’s Demand”, advising that no action will be taken on Plaintiff’s July 21, 2023 “Memorandum Summary”, and further deferring a ruling on the MTD. Plaintiff filed his response to the MTD on August 3, 2023. No reply is permitted in this court. To date, the court has not issued an order with respect to the MTD. Based upon information presently known to management, the Company believes that the potential liability from this claim, if any, will not have a material adverse effect on its financial condition, cash flows or results of operations. Therefore, no liability has been reflected on the condensed consolidated financial statements. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 9 Months Ended |
Jun. 30, 2023 | |
RELATED PARTY TRANSACTIONS | |
RELATED PARTY TRANSACTIONS | NOTE 19 – RELATED PARTY TRANSACTIONS Related Party Note Receivable Prior to its Merger on November 5, 2021, Previous Mullen operated as a division of Mullen Technologies, Inc. (“MTI”). Subsequent to the corporate reorganization, the Company has provided management and accounting services to MTI. On March 31, 2023, the Company entered a note receivable with the related party for the principal amount of $1,388,405 plus all accrued interest to the noteholder on March 31, 2025. The borrower may prepay the loan without any penalty or premium. The loan carries an annual interest rate of 10%, which may increase to 15% if the borrower defaults on any payment. As of June 30, 2023, the principal amount is $1,834,496 and the accrued interest is $41,516. These receivables are presented in non-current assets under receivable from related party in these condensed consolidated balance sheets. Director Provided Services William Miltner William Miltner is a litigation attorney who provides legal services to Mullen Automotive and its subsidiaries. Mr. Miltner also is an elected Director for the Company, beginning his term in August 2021. For the three and nine months ended June 30, 2023, Mr. Miltner received $161,687 and $864,343, for services rendered, respectively. For the three and nine months ended June 30, 2022, for services rendered, $178,640 and $804,120, respectively. Mr. Miltner has been providing legal services to us since 2020. Mary Winter On October 26, 2021, the Company entered into a 1-year |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 9 Months Ended |
Jun. 30, 2023 | |
SUBSEQUENT EVENTS | |
SUBSEQUENT EVENTS | NOTE 20 – SUBSEQUENT EVENTS Company management has evaluated subsequent events through August 14, 2023, which is the date these condensed consolidated financial statements were available to be issued. Results of Annual Stockholders Meeting An annual meeting of stockholders was convened on August 3, 2023, with several key decisions being ratified (except for Proposal 4): ● Two Class II Directors were elected for a three-year term concluding in 2026 (Proposal 1). ● Amendments to the 2022 Equity Incentive Stock Plan were approved, resulting in an increase of the authorized issuance by 52,000,000 shares (not subject to adjustment for any decrease or increase in the number shares of common stock resulting from a stock spilt, reverse stock split, recapitalization, combination, reclassification, the payment of a stock dividend on the common stock or any other decrease in the number of such shares of common stock effected without receipt of consideration by the Company) (Proposal 2). ● An amendment to the Company’s Certificate of Incorporation to effect a reverse stock split at a ratio ranging from 1 -for-2 to 1 -for-100 was approved (Proposal 3). ● The conversion of Mullen Automotive Inc. from a Delaware Corporation to a Maryland Corporation was not approved (at a ratio ranging from 1 -for-2 to 1 -for-100). ● On an advisory basis, the compensation of named executive officers was approved (Proposal 5). ● On an advisory basis, the frequency for future votes on the compensation of named executive officers was approved for every three years (Proposal 6). ● The issuance of shares of common stock to our Chief Executive Officer, Mr. Michery, under the 2023 Performance Stock Award Agreement, was approved, subject to the achievement of certain milestones, in compliance with Nasdaq Listing Rule 5635(d), (see below) (Proposal 7). ● Amendments were approved, in compliance with Nasdaq Listing Rule 5635(d) to a securities purchase agreement, enabling the issuance of $7 million in additional shares and warrants, exercisable into shares of Common Stock, and any future adjustments of the exercise price of the warrants (Proposal 8). ● The appointment of RBSM LLP as the independent registered public accounting firm for the fiscal year ending September 30, 2023 was ratified (Proposal 9). 2023 Performance Stock Award to the CEO The new 2023 Performance Stock Award (PSA) Agreement approved by the Board and stockholders of the Company, provides the Company's CEO, Mr. Michery (the “CEO”), with an opportunity to earn equity awards subject to achievement of specific milestones: ● Vehicle Completion Milestones: The CEO is eligible for awards when he procures full USA certification and homologation for the Class Three Van by December 2023, the Bollinger B1 SUV by June 2025, and the Bollinger B2 Pick Up Truck by June 2025. Each achievement corresponds to 3% of Mullen’s current total issued and outstanding shares. ● Revenue Benchmark Milestones: These are tied to every $25 million of revenue recognized by the Company, up to a total of $250 million. Each revenue benchmark reached corresponds to 1% of Mullen’s current total issued and outstanding shares. ● Battery Development Milestones: These are triggered by the development of new and advanced battery cells and their scaling to the vehicle pack level for specific vehicles by December 2024. Each achievement corresponds to 2% of Mullen’s current total issued and outstanding shares. ● JV-Acquisition Milestones: The CEO is awarded upon the Company's acquisition of a majority interest in an enterprise that manufactures or provides beneficial products to the Company. Each acquisition corresponds to 3% of Mullen’s current total issued and outstanding shares. ● Accelerated Development Milestone: This is triggered by the acquisition of a facility with existing equipment that expedites the scaling of battery pack production in the USA, corresponding to 2% of Mullen’s current total issued and outstanding shares. The Company believes these equity incentives align the CEO’s interests with those of the stockholders and promote the Company's business plans. The CEO also has outstanding potential awards from the 2022 PSA Agreement, contingent on meeting the milestones specified in that plan (see Note 11). Compensation for Non-employee Directors Effective July 1, 2023, the Company’s Board of Directors approved the following compensation for non-employee directors for service on the Board and its committees: ● Each non-employee director will receive $50,000 annually as a cash retainer for their Board service, with additional annual cash retainers of (i) $5,000 for each member of the Company’s Compensation Committee or Nominating and Corporate Governance Committee; (ii) $7,500 for the Chairman of the Compensation Committee or Nominating and Corporate Governance Committee; (iii) $10,000 for each member of the Audit Committee; (iv) $45,000 for the chair of the Audit Committee; and (v) $25,000 to the Lead Independent Director. All cash retainers are paid quarterly in arrears. ● Additionally, each non-employee director shall receive an annual stock award under the Company’s equity plan equal to $100,000 divided by the closing trading price of the Company’s Common Stock on the date of each such grant. ● The non-employee directors are entitled to reimbursement of ordinary, necessary, and reasonable out-of-pocket travel expenses incurred in connection with attending in-person meetings of the Board or committees thereof. In the event non-employee directors are required to attend greater than four in-person meetings or 15 telephonic meetings during any fiscal year, such non-employee directors will be entitled to additional compensation in the amount of $500 for each additional telephonic meeting beyond the 15 telephonic meeting threshold, and $1,000 for each additional in-person meeting beyond the four in-person meeting threshold. Change in Control Agreements On August 11, 2023, the Board of Directors approved, and the Company entered, Change in Control Agreements with each non-employee director and David Michery, its Chief Executive Officer. Pursuant to the Change in Control Agreements with each non-employee director, upon a change in control of the Company, any unvested equity compensation will immediately vest in full and such non-employee director will receive $5 million. Pursuant to the Agreement with Mr. Michery, upon a change in control of the Company, any unvested equity compensation will immediately vest in full and Mr. Michery will receive an aggregate percentage of the transaction proceeds as follows: 10% of the transaction proceeds that are up to and including $1 billion; plus an additional 5% of transaction proceeds that are more than $1 billion and up to $1.5 billion; and an additional 5% of transaction proceeds that are more than $1.5 billion. A change in control, as defined in the agreements occurs upon (i) any person becoming the beneficial owner of 50% or more of the total voting power of the Company’s then outstanding voting securities, (ii) a change in the composition of the Board, as a result of which fewer than a majority of the directors are Incumbent Directors (as defined in the Change in Control Agreements), or (iii) the consummation of a merger or consolidation of the Company (except when the total voting power of the Company continues to represent at least 50% of the surviving entity), any liquidation, or the sale or disposition by the Company of all or substantially all of its assets. $25 Million Stock Buyback Program On July 6, 2023, the Board of Directors (the "Board") of the Company authorized a stock buyback program, pursuant to which the Company may, until Dec. 31, 2023, purchase up to $25 million in shares of its outstanding common stock. The shares may be repurchased, from time to time, in the open market or in privately negotiated transactions depending upon market conditions and other factors, and in accordance with applicable regulations of the Securities and Exchange Commission (the “SEC”). The authorization of the stock buyback program does not obligate the Company to purchase any shares and may be terminated or amended by the Board at any time prior to its expiration date. The purchases under the stock buyback program have not commenced by these consolidated financial statements release date. Reverse Stock Split On August 11, 2023, the Company effected a 1 Exercise of Warrants After the balance sheet date, the Company issued 97,405,972 shares of common stock due to the exercise of prefunded warrants and Preferred D Warrants (see Note 8). Mullen Advanced Energy Operations LLC On April 17, 2023, the Company entered into a binding Letter of Agreement with Lawrence Hardge, Global EV Technology, Inc., and EV Technology, LLC (collectively, “EVT”) to partner on a device known as a Battery Life Enhancing Technology. The parties formed a new corporation called Mullen Advanced Energy Operations to develop, manufacture, market, sell, lease, distribute, and service all products resulting from the technology. The Company holds a 51% equity interest in MAEO, and EVT holds a 49% equity interest. EVT was supposed to license the technology and intellectual property rights to MAEO and assign all rights to governmental and other contracts relating to the technology. The Company paid Mr. Hardge an upfront payment of $50,000 and an additional $5.0 million payment was due upon execution of definitive agreements and completion of IP assignment. On July 10, 2023, the Company issued a notice terminating the Agreement dated April 17, 2023. The termination notice, which was sent after numerous attempts by the Company to obtain adherence by EVT to the terms of the Agreement, references several breaches by EVT including (1) failing to execute documents evidencing an irrevocable, royalty free, worldwide exclusive license to the Technology and IP, in perpetuity, to MAEO, (2) refusing to conduct any tests of the Technology at a Mullen approved facility after the LOA, (3) repeatedly refusing to honor the terms of the Mutual Non-Disclosure Agreement signed April 14, 2023, and (4) failing to disclose all claims or threatened legal actions by any third parties related to the Technology. |
RESTATEMENT
RESTATEMENT | 9 Months Ended |
Jun. 30, 2023 | |
RESTATEMENT | |
RESTATEMENT | NOTE 21 - RESTATEMENT Prior to the initial issuance of the Company's financial statements for the year ended September 30, 2022, management determined that the warrants issued with the preferred stock did not meet the conditions for equity classification, requiring liability treatment and measured at fair value. In addition, management also discovered that it did not reflect the impact of amendments that resulted in modifications in privileges for the warrants issued with the Series C Preferred Stock, which should have been accounted for as a deemed dividend at the time of modification. Further, management prematurely recorded the option to issue shares of Series E Preferred Stock. The following table summarizes the impacts of these error corrections on the Company's financial statements for the three and nine months ended June 30, 2022, respectively, presented below: ii. Statement of operations Impact of correction of error - quarter Impact of correction of error - year to date Quarter ended June 30, 2022 (Unaudited) As previously Adjustments As restated As previously Adjustments As restated reported reported Loss from operations (18,221,165) - (18,221,165) (62,732,442) - (62,732,442) Other financing costs - initial recognition of warrants at fair value - - - - (269,344,177) (269,344,177) Gain / (loss) on derivative liability revaluation 3,045,000 31,538,523 34,583,523 3,045,000 (110,750,006) (107,705,006) Incentive fee to creditor for transfer of note payable (23,085,886) 23,085,886 - (23,085,886) 23,085,886 - Others (21,209,509) - (21,209,509) (45,735,556) - (45,735,556) Other income (expense) (41,250,395) 54,624,409 13,374,014 (65,776,442) (357,008,297) (422,784,739) Net loss (59,471,560) 54,624,409 (4,847,151) (128,508,884) (357,008,297) (485,517,181) Deemed dividend on preferred stock (2,285,792) - (2,285,792) (4,805,740) (32,735,345) (37,541,085) Net loss attributable to common stockholders (61,757,352) 54,624,409 (7,132,943) (133,314,624) (389,743,642) (523,058,266) Loss per share (36.88) (4.26) (176.93) (694.20) Weighted average common shares outstanding (after reverse stock splits, see Note 1) 1,674,607 1,674,607 753,474 753,474 |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended |
Jun. 30, 2023 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Business Combination | Business Combination Business acquisitions are accounted for in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 805 “Business Combinations”. FASB ASC 805 requires the reporting entity to identify the acquirer, determine the acquisition date, recognize and measure the identifiable tangible and intangible assets acquired, the liabilities assumed and any non-controlling interest in the acquired entity, and recognize and measure goodwill or a gain from the purchase. The acquiree’s results are included in the Company’s consolidated financial statements from the date of acquisition. Assets acquired and liabilities assumed are recorded at their fair values and the excess of the purchase price over the amounts assigned is recorded as goodwill. Adjustments to fair value assessments are recorded to goodwill over the measurement period (not longer than twelve months). The acquisition method also requires that acquisition-related transaction and post-acquisition restructuring costs be charged to expense. |
Use of Estimates | Use of Estimates The preparation of our financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the dates of the condensed consolidated financial statements and the reported amounts of total expenses in the reporting periods. Estimates are used for, but not limited to, cash flow projections and discount rate for calculation of goodwill impairment, fair value and impairment of long-lived assets, fair value of financial instruments, depreciable lives of property and equipment, income taxes, contingencies, valuation of preferred stock and warrants. Additionally, the rates of interest on several debt agreements have been imputed where there was no stated interest rate within the original agreement. Management bases its estimates on historical experience and on various other assumptions believed to be reasonable, the results of which form the basis for carrying values of assets and liabilities and the recording of costs and expenses that are not readily apparent from other sources. The actual results may differ materially from these estimates. |
Risks and Uncertainties | Risks and Uncertainties The Company operates within an industry that is subject to rapid technological change, intense competition, and serves an industry that has significant government regulations. It is subject to significant risks and uncertainties, including competitive, financial, developmental, operational, technological, required knowledge of industry governmental regulations, and other risks associated with an emerging business. Any one or combination of these or other risks could have a substantial influence on our future operations and prospects for commercial success. Please see further Risk Factors discussed in detail in our 2022 10-K. |
Reclassification from Other Noncurrent Assets to Property, Equipment and Leasehold Improvements, net | Reclassification from Other Noncurrent Assets to Property, Equipment and Leasehold Improvements, net Certain prior period amounts related to Show Room Assets in the condensed consolidated financial statements and notes thereto have been reclassified to conform to the current period presentation. These reclassifications had no impact on previously reported net income or stockholders' equity. In the Condensed Consolidated Balance Sheet as of September 30, 2022, $2,982,986, the net Show Room asset ($4,418,724 Show Room and $1,435,738 of accumulated depreciation) previously reported under Other Noncurrent Assets, has been reclassified to Property, Equipment and Leasehold Improvements, net. This reclassification is reflected in all periods presented and all comparative references in the notes to the consolidated financial statements are to the reclassified amounts (See Note 14 and Note 15). |
Cash and Cash Equivalents | Cash and Cash Equivalents Company management considers all short-term investments with an original maturity of three months or less when purchased to be cash equivalents. There were no cash equivalents at June 30, 2023 or September 30, 2022. |
Restricted Cash | Restricted Cash Restricted cash is funds that are not available for immediate use and must be used for a specific purpose. On June 30, 2023, the restricted cash balance was $13,419,872 includes approximately $419,872 for the refundable deposits for individuals and businesses who have made deposits for Mullen and Bollinger vehicles. Customer deposits are accounted for within other liabilities. Refundable deposits were $289,000 for the year ended September 30, 2022. |
Prepaid Expenses and Other Current Assets | Prepaid Expenses and Other Current Assets Prepaid expenses consist of various advance payments made for goods or services to be received in the future. These prepaid expenses include insurance and other contracted services requiring up-front payments. |
Inventory | Inventory Cost of inventories is determined using the standard cost method, which approximates actual cost on a first-in first-out basis. This method includes direct materials, direct labor, and a proportionate share of manufacturing overhead costs based on normal capacity. Regular reviews are performed to identify and account for variances between the standard costs and actual costs. Any variances identified are recognized in the cost of goods sold during the period in which they occur. On a quarterly basis, the Company reviews its inventory for excess quantities and obsolescence. This analysis takes into account factors such as demand forecasts, product life cycles, product development plans, and current market conditions. Provisions are made to reduce the carrying value of the inventories to their net realizable value. Once inventory is written down, a new, lower-cost basis is established, and the inventory is not subsequently written up if market conditions improve. All such inventory write-downs are included as a component of cost of goods sold in the period in which the write-down occurs. Adjustments to these estimates and assumptions could impact our financial position and results of operations. |
Property, Equipment and Leasehold Improvements, Net | Property, Equipment and Leasehold Improvements, Net Property, equipment, and leasehold improvements are stated at cost less accumulated depreciation. Depreciation is calculated using the straight-line method over the estimated economic useful lives of the assets. Repairs and maintenance expenditures that do not extend the useful lives of related assets are expensed as incurred. Estimated Useful Lives Description Life Buildings 30 Years Furniture and Equipment 3 to 7 Years Computer and Software 1 to 5 Years Machinery and Equipment 3 Leasehold Improvements Shorter of the estimated useful life or the underlying lease term Vehicles 5 Years Intangibles 5 Years Expenditures for major improvements are capitalized, while minor replacements, maintenance and repairs, which do not extend the asset lives, are charged to operations as incurred. Upon sale or disposition, the cost and related accumulated depreciation are removed from the accounts and any gain or loss is included in operations. Company management continually monitors events and changes in circumstances that could indicate that the carrying balances of its property, equipment and leasehold improvements may not be recoverable in accordance with the provisions of ASC 360, “Property, Plant, and Equipment.” |
Income Taxes | Income Taxes Income taxes are recorded in accordance with ASC 740 , Income Taxes There are transactions that occur during the ordinary course of business for which the ultimate tax determination may be uncertain. At June 30, 2023 and September 30, 2022, there were no material changes to either the nature or the amounts of the uncertain tax positions. The Company’s income tax provision consists of an estimate for U.S. federal and state income taxes based on enacted rates, as adjusted for allowable credits, deductions, uncertain tax positions, changes in deferred tax assets and liabilities, and changes in the tax law. We maintain a full valuation allowance against the value of our U.S. and state net deferred tax assets because management does not believe the recoverability of the tax assets meets the “more likely than not” likelihood at June 30, 2023 and September 30, 2022. |
Intangible Assets, net | Intangible Assets, net Intangible assets consist of acquired and developed intellectual property. In accordance with ASC 350, “Intangibles—Goodwill and Others,” impaired. Intangible assets with determinate lives are evaluated for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. Amortizable intangible assets generally are amortized on a straight-line basis over periods up to 120 months. The costs to periodically renew our intangible assets are expensed as incurred. Impairment of Long-Lived Assets The Company periodically evaluates long-lived assets for impairment whenever events or changes in circumstances indicate that a potential impairment may have occurred. If such events or changes in circumstances arise, the Company compares the carrying amount of the long-lived assets to the estimated future undiscounted cash flows expected to be generated by the long-lived assets. If the estimated aggregate undiscounted cash flows are less than the carrying amount of the long-lived assets, an impairment charge, calculated as the amount by which the carrying amount of the assets exceeds the fair value of the assets, is recorded. The fair value of the long-lived assets is determined based on the estimated discounted cash flows expected to be generated from the long-lived assets. |
Other Assets | Other Assets Other assets are comprised primarily of prepayments and security deposits for property leases. |
Extinguishment of Liabilities | Extinguishment of Liabilities The Company derecognizes financial liabilities when the Company’s obligations are discharged, cancelled, or expired. |
Leases | Leases The Company follows the provisions of ASC 842, “Leases” |
Accrued Expenses | Accrued Expenses Accrued expenses are expenses that have been incurred but not yet paid and are classified within current liabilities on the consolidated balance sheets. |
General and Administrative Expenses | General and Administrative Expenses General and administrative (“G&A”) expenses include all other expenses incurred by us in any given period. This includes expenses such as professional fees, salaries, rent, repairs and maintenance, utilities and office expense, employee benefits, depreciation and amortization, advertising and marketing, settlements and penalties, taxes, and licenses. Advertising costs are expensed as incurred and are included in G&A expenses- other than trade show expenses which are deferred until occurrence of the future event, we expense advertising costs as incurred in accordance with ASC 720-35, “Other Expenses – Advertising Cost.” |
Research and Development Costs | Research and Development Costs Per the Accounting Standards Codification (ASC) 730 "Research and Development," the Company recognizes in the statement of operations all associated costs as they occur. These include expenses related to the design, development, testing, and improvement of our electric vehicles and corresponding technologies. Assets with alternative future uses are capitalized and depreciated over their useful lives, with the depreciation expense reported under research and development (R&D) costs. |
Share-Based Compensation | Share-Based Compensation We account for share-based awards issued by the Company in accordance with ASC Subtopic 718-10, “Compensation – Share Compensation” |
Fair Value of Financial Instruments | Fair Value of Financial Instruments We apply fair value accounting for all financial assets and liabilities and non-financial assets and liabilities that are recognized or disclosed at fair value on a recurring basis. Fair value is defined as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities that are required to be recorded at fair value, Company management considers the principal or most advantageous market in which we would transact and the market-based risk measurements or assumptions that market participants would use in pricing the asset or liability, such as risks inherent in valuation techniques, transfer restrictions and credit risk. Fair value is estimated by applying the hierarchy as per requirements of ASC 820, “Fair value measurements” |
Concentrations of Business and Credit Risk | Concentrations of Business and Credit Risk We maintain cash balances in several financial institutions that are insured by either the Federal Deposit Insurance Corporation or the National Credit Union Association up to certain federal limitations, generally $250,000. At times, our cash balance may exceed these federal limitations and maintains significant cash on hand at certain of its locations. However, we have not experienced any losses in such accounts and management believes we are not exposed to any significant credit risk on these accounts. The amounts in excess of insured limits as of June 30, 2023 and September 30, 2022 are $226.4 million and $83.4 million, respectively. |
Recently Issued Accounting Standards | Recently Issued Accounting Standards Accounting standard updates issued but not yet applied were assessed and are not expected to have a material impact on our unaudited condensed consolidated financial statements. |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 9 Months Ended |
Jun. 30, 2023 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Schedule of Property, Equipment and Leasehold Improvements, Net Useful Lives | Description Life Buildings 30 Years Furniture and Equipment 3 to 7 Years Computer and Software 1 to 5 Years Machinery and Equipment 3 Leasehold Improvements Shorter of the estimated useful life or the underlying lease term Vehicles 5 Years Intangibles 5 Years |
PURCHASE OF ASSETS FROM ELMS (T
PURCHASE OF ASSETS FROM ELMS (Tables) | 9 Months Ended |
Jun. 30, 2023 | |
PURCHASE OF ASSETS FROM ELMS | |
Schedule of allocation of purchase price by asset category | Asset Category Fair Value Allocation Land $ 1,440,000 Buildings and site improvements 41,287,038 Equipment 27,336,511 Intangible assets: engineering design 22,112,791 Inventory 13,198,692 Total Purchased Assets $ 105,375,032 |
INVENTORY (Tables)
INVENTORY (Tables) | 9 Months Ended |
Jun. 30, 2023 | |
INVENTORY | |
Schedule Of inventories | June 30, 2023 Inventory Work in process 6,109,105 Raw materials 5,804,743 Supplies 232,996 Total Inventory $ 12,146,844 |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS (Tables) | 9 Months Ended |
Jun. 30, 2023 | |
GOODWILL AND INTANGIBLE ASSETS | |
Schedule of finite lived intangible assets | June 30, 2023 September 30, 2022 Gross Net Gross Net Carrying Accumulated Carrying Carrying Accumulated Carrying Finite-Lived Intangible Assets Amount Amortization Amount Amount Amortization Amount Website design and development $ 2,660,391 (1,773,594) $ 886,797 $ 2,660,391 $ (1,108,496) $ 1,551,895 Intellectual property 58,375,794 (71,182) 58,304,612 58,375,794 (438,581) 57,937,213 Patents 32,391,186 (2,857,539) 29,533,647 32,391,186 (204,109) 32,187,077 Engineer design - ELMS 22,112,791 (1,289,913) 20,822,878 — — — Other 1,820,995 (208,168) 1,612,827 1,820,994 (16,175) 1,804,819 Trademark 796,773 - 796,773 466,014 — 466,014 Total Intangible Assets $ 118,157,930 $ (6,200,396) $ 111,957,534 $ 95,714,379 $ (1,767,361) $ 93,947,018 |
Schedule of future amortization expense for finite-lived intellectual property | Years Ended June 30, Future Amortization 2023 (three months) $ 1,424,909 2024 6,372,189 2025 5,707,092 2026 5,707,092 2027 5,707,092 Thereafter 27,937,775 Total Future Amortization Expense $ 52,856,149 |
DEBT (Tables)
DEBT (Tables) | 9 Months Ended |
Jun. 30, 2023 | |
DEBT | |
Schedule of indebtedness of short term and long term debt | The following is a summary of our indebtedness at June 30, 2023: Net Carrying Value Unpaid Principal Contractual Contractual Type of Debt Balance Current Long-Term Interest Rate Maturity Matured notes $ 2,398,881 $ 2,398,881 $ - 0.00 - 10.00% 2019 - 2021 Promissory notes - - - NA NA Real Estate notes 5,000,000 5,000,000 - 8.99% 2023 - 2024 Loans and advances 332,800 332,800 - 0.00 - 10.00% 2016 - 2018 Less: debt discount (425,574) (425,574) - NA NA Total Debt $ 7,306,107 $ 7,306,107 $ — The following is a summary of our indebtedness at September 30, 2022: Net Carrying Value Unpaid Principal Contractual Contractual Type of Debt Balance Current Long-Term Interest Rate Maturity Matured notes $ 3,051,085 $ 3,051,085 $ — 0.00 - 10.00% 2019 - 2021 Promissory notes 1,096,787 — 1,096,787 28.00% 2024 Real Estate note 5,247,612 247,612 5,000,000 5.0 - 8.99% 2023 - 2024 Loan advances 557,800 557,800 — 0.00 - 10.00% 2016 – 2018 Less: debt discount (932,235) — (932,235) NA NA Total Debt $ 9,021,049 $ 3,856,497 $ 5,164,552 |
Scheduled Debt Maturities | The following table represents scheduled debt maturities at June 30, 2023: Years Ended June 30, 2023 (3 months) 2024 Total Total Debt $ 2,717,804 $ 4,588,303 $ 7,306,107 |
WARRANTS AND OTHER DERIVATIVE_2
WARRANTS AND OTHER DERIVATIVE LIABILITIES AND FAIR VALUE MEASUREMENTS (Tables) | 9 Months Ended |
Jun. 30, 2023 | |
WARRANTS AND OTHER DERIVATIVE LIABILITIES AND FAIR VALUE MEASUREMENTS | |
Schedule of fair value of derivative liability on recurring basis | June 30, Quoted Prices Significant Significant 2023 in Active Other Unobservable Markets for Observable Inputs Identical Assets Inputs (Level 3) (Level 1) (Level 2) Derivative liability $ 150,318,473 $ - $ 150,084,173 $ 234,300 September 30, Quoted Prices Significant Significant 2022 in Active Other Unobservable Markets for Observable Inputs Identical Assets Inputs (Level 3) (Level 1) (Level 2) Derivative liability $ 84,799,179 $ - $ 84,799,179 $ - |
A summary of the changes in derivative liability | Balance, September 30, 2022 $ 84,799,179 Derivative liabilities recognized upon issuance of convertible instruments 499,737,254 Derivative liability recognized upon authorized shares shortfall 11,978,166 Loss / (gain) on derivative liability revaluation 89,462,559 Reclassification of derivative liabilities to equity upon authorization of sufficient common shares (47,818,882) Financing loss upon over-issuance of shares from warrants 8,934,892 Receivables upon over-issuance of shares from warrants 17,721,868 Reclassification to liability to issue shares upon unfinished warrant exercise on period end (5,378,806) Conversions of warrants into common shares (509,117,758) Balance, June 30, 2023 $ 150,318,473 Balance, September 30, 2021 $ - Derivative liabilities recognized upon issuance of convertible instruments 269,344,178 Loss / (gain) on derivative liability revaluation 124,672,956 Conversions of warrants into common shares (420,626,121) Change in agreement with warrant holders (recognized as deemed dividends) 32,735,345 Balance, June 30, 2022 $ 6,126,358 |
LOSS PER SHARE (Tables)
LOSS PER SHARE (Tables) | 9 Months Ended |
Jun. 30, 2023 | |
LOSS PER SHARE | |
Schedule of computation of basic and diluted net income per share | Three months ended June 30, Nine months ended June 30, 2023 2022 2023 2022 Net income attributable to common stockholders $ (308,858,234) $ (4,847,151) $ (800,047,339) $ (485,517,181) Less: accumulated preferred stock dividends (13,125) (2,285,792) 7,387,811 (37,541,085) Net income used in computing basic net income per share of common stock $ (308,871,359) $ (7,132,943) $ (792,659,528) $ (523,058,266) Net loss per share (11.14) $ (4.26) $ (55.44) $ (694.20) Weighted average shares outstanding, basic and diluted 27,720,475 1,674,607 14,296,659 753,474 Weighted average shares outstanding, basic and diluted, before reverse stock splits, see Note 1 6,237,106,875 376,786,685 3,216,748,275 169,531,688 Net loss per share before reverse stock splits $ (0.05) $ (0.02) $ (0.25) $ (3.09) |
SHARE-BASED COMPENSATION (Table
SHARE-BASED COMPENSATION (Tables) | 9 Months Ended |
Jun. 30, 2023 | |
SHARE-BASED COMPENSATION | |
Schedule of composition of stock-based compensation expense | For the three months ended June 30, For the nine months ended June 30, Composition of Share-Based Compensation Expense 2023 2022 2023 2022 Directors, officers and employees share-based compensation $ 3,678,278 $ 96,495 $ 51,329,014 $ 20,049,336 Share-based compensation to consultants (equity-classified) 903,264 4,928,824 7,367,107 12,288,735 Share-based compensation to consultants (liability-classified) 6,130,462 119,344 12,319,250 141,639 Total share-based compensation expense $ 10,712,004 $ 5,144,663 $ 71,015,371 $ 32,479,710 |
ACCRUED EXPENSES AND OTHER CU_2
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES (Tables) | 9 Months Ended |
Jun. 30, 2023 | |
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | |
Schedule of accrued expenses and other current liabilities | June 30, 2023 September 30, 2022 Accrued Expenses and Other Liabilities Accrued expense - other $ 5,135,333 $ 3,529,384 IRS tax liability 187,303 1,744,707 Accrued payroll 1,583,056 534,782 Accrued interest 1,479,688 1,377,008 Total $ 8,385,380 $ 7,185,881 |
PROPERTY, EQUIPMENT AND LEASE_2
PROPERTY, EQUIPMENT AND LEASEHOLD IMPROVEMENTS, NET (Tables) | 9 Months Ended |
Jun. 30, 2023 | |
PROPERTY, EQUIPMENT AND LEASEHOLD IMPROVEMENTS, NET | |
Schedule of property and equipment, net | June 30, September 30, 2023 2022 Buildings $ 48,120,753 $ 7,659,121 Land 3,040,303 647,576 Furniture and equipment 682,798 556,948 Vehicles 335,183 96,363 Show room assets 4,428,544 4,418,724 Computer hardware and software 2,016,046 1,013,308 Machinery and equipment 32,070,385 7,383,612 Construction-in-progress 12,237,665 269,778 Leasehold improvements 186,341 76,438 Subtotal 103,118,018 22,121,868 Less: accumulated depreciation (11,367,499) (4,335,166) Property, Equipment and Leasehold Improvements, net $ 91,750,519 $ 17,786,702 |
OTHER NONCURRENT ASSETS (Tables
OTHER NONCURRENT ASSETS (Tables) | 9 Months Ended |
Jun. 30, 2023 | |
OTHER NONCURRENT ASSETS | |
Schedule of other assets | June 30, 2023 September 30, 2022 Other Assets Other assets $ — $ 81,587 Security deposits 1,010,712 281,056 Total Other Assets $ 1,010,712 $ 362,643 |
OPERATING EXPENSES (Tables)
OPERATING EXPENSES (Tables) | 9 Months Ended |
Jun. 30, 2023 | |
OPERATING EXPENSES | |
Schedule of Operating Expenses | General and Administrative Expenses Three months ended June 30, Nine months ended June 30, 2023 2022 2023 2022 Professional fees $ 5,250,063 $ 4,908,855 $ 51,884,123 $ 31,773,409 Compensation to employees and management 15,133,141 3,177,790 52,147,116 10,556,783 Depreciation 1,680,595 86,598 7,050,864 251,780 Amortization 913,061 221,699 4,433,035 667,075 Lease 273,234 474,032 1,948,288 1,493,150 Settlements and penalties 2,327,286 169,607 8,592,635 1,054,439 Employee benefits 1,140,917 639,779 2,759,607 1,552,939 Utilities and office expense 996,997 202,652 2,064,100 428,565 Advertising and promotions 985,763 644,423 4,746,032 3,570,016 Taxes and licenses 120,500 8,805 372,381 25,926 Repairs and maintenance 302,623 167,173 684,920 246,875 Executive expenses and directors' fees 73,759 — 363,825 — Listing and regulatory fees 1,415,003 — 4,150,348 — Other 1,164,870 195,387 2,988,887 1,446,359 Total $ 31,777,812 $ 10,896,800 $ 144,186,161 $ 53,067,316 |
LEASES (Tables)
LEASES (Tables) | 9 Months Ended |
Jun. 30, 2023 | |
LEASES | |
Summary of lease assets and liabilities and lease costs | The table below presents information regarding our lease assets and liabilities: June 30, 2023 September 30, 2022 Assets: Operating lease right-of-use assets $ 5,504,851 $ 4,597,052 Liabilities: Operating lease liabilities, current (2,217,059) (1,428,474) Operating lease liabilities, non-current (3,709,616) (3,359,354) Total lease liabilities $ (5,926,675) $ (4,787,828) Weighted average remaining lease terms: Operating leases 2.66 years 2.63 years Weighted average discount rate: Operating leases 28 % 28 % Operating lease costs: For the three months ended June 30, For the nine months ended June 30, 2023 2022 2023 2022 Fixed lease cost $ 330,175 $ 327,409 $ 887,294 $ 1,066,680 Variable lease cost 85,298 158,399 147,120 418,999 Short-term lease cost — 34,473 — 160,250 Sublease income (108,127) (46,144) (201,875) (152,431) Total operating lease costs $ 307,346 $ 474,137 $ 832,539 $ 1,493,498 |
Summary of maturities of operating lease liabilities | Years ending June 30, 2023 (3 months) $ 874,278 2024 3,074,497 2025 2,423,880 2026 610,913 2027 417,425 Thereafter 115,668 Total lease payments $ 7,516,661 Less: imputed interest (1,589,986) Present value of lease liabilities $ 5,926,675 |
RESTATEMENT (Tables)
RESTATEMENT (Tables) | 9 Months Ended |
Jun. 30, 2023 | |
RESTATEMENT | |
Schedule of impacts of error corrections | ii. Statement of operations Impact of correction of error - quarter Impact of correction of error - year to date Quarter ended June 30, 2022 (Unaudited) As previously Adjustments As restated As previously Adjustments As restated reported reported Loss from operations (18,221,165) - (18,221,165) (62,732,442) - (62,732,442) Other financing costs - initial recognition of warrants at fair value - - - - (269,344,177) (269,344,177) Gain / (loss) on derivative liability revaluation 3,045,000 31,538,523 34,583,523 3,045,000 (110,750,006) (107,705,006) Incentive fee to creditor for transfer of note payable (23,085,886) 23,085,886 - (23,085,886) 23,085,886 - Others (21,209,509) - (21,209,509) (45,735,556) - (45,735,556) Other income (expense) (41,250,395) 54,624,409 13,374,014 (65,776,442) (357,008,297) (422,784,739) Net loss (59,471,560) 54,624,409 (4,847,151) (128,508,884) (357,008,297) (485,517,181) Deemed dividend on preferred stock (2,285,792) - (2,285,792) (4,805,740) (32,735,345) (37,541,085) Net loss attributable to common stockholders (61,757,352) 54,624,409 (7,132,943) (133,314,624) (389,743,642) (523,058,266) Loss per share (36.88) (4.26) (176.93) (694.20) Weighted average common shares outstanding (after reverse stock splits, see Note 1) 1,674,607 1,674,607 753,474 753,474 |
DESCRIPTION OF BUSINESS AND B_2
DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION (Details) $ in Millions | 1 Months Ended | 9 Months Ended | ||||||
Aug. 14, 2023 | May 04, 2023 | Oct. 13, 2022 USD ($) | Oct. 01, 2022 shares | Sep. 07, 2022 USD ($) | Aug. 31, 2023 | Jan. 31, 2023 shares | Jun. 30, 2023 segment shares | |
Schedule of Equity Method Investments [Line Items] | ||||||||
Reverse stock ratio | 0.11 | 0.04 | 0.10 | 0.04 | 0.11 | |||
Reverse stock split | 829,764 | |||||||
Fractional shares | 0 | |||||||
Number of operating segment | segment | 1 | |||||||
Series B Preferred Stock | ||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||
Preferred Stock, shares outstanding | 0 | 0 | ||||||
Equity Incentive Plan, 2022 | ||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||
Additional shares authorized | 52,000,000 | |||||||
ELMS' manufacturing plant in Mishawaka Indiana, all inventory, and intellectual property for their Class 1 and Class 3 vehicles | ||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||
Acquisition of assets | $ | $ 105 | |||||||
Bollinger Motors, Inc | ||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||
Total consideration | $ | $ 149 | |||||||
Beneficial ownership | 60% | |||||||
Amount of vendor payables assumed and paid at closing | $ | $ 10 |
LIQUIDITY, CAPITAL RESOURCES,_2
LIQUIDITY, CAPITAL RESOURCES, AND GOING CONCERN CONSIDERATION (Details) - USD ($) | 9 Months Ended | |||
Jun. 30, 2023 | Sep. 30, 2022 | Jun. 30, 2022 | Sep. 30, 2021 | |
LIQUIDITY, CAPITAL RESOURCES, AND GOING CONCERN CONSIDERATION | ||||
Cash and restricted cash | $ 227,432,008 | $ 84,375,085 | $ 61,111,264 | $ 42,174 |
Cash used in operating activities | (113,600,000) | |||
Net working capital | 65,100,000 | |||
Working capital excluding derivative liabilities | $ 224,200,000 |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Property, Equipment and Leasehold Improvements, Net (Details) | Jun. 30, 2023 |
Buildings | |
Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | 30 years |
Furniture and equipment | Maximum | |
Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | 7 years |
Furniture and equipment | Minimum | |
Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | 3 years |
Computer hardware and software | Maximum | |
Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | 5 years |
Computer hardware and software | Minimum | |
Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | 1 year |
Machinery and equipment | Maximum | |
Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | 7 years |
Machinery and equipment | Minimum | |
Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | 3 years |
Vehicles | |
Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | 5 years |
Intangibles | Minimum | |
Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | 5 years |
SUMMARY OF SIGNIFICANT ACCOUN_5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Additional Information (Details) - USD ($) | Jun. 30, 2023 | Sep. 30, 2022 |
Restricted cash | $ 13,419,872 | $ 30,289,400 |
Refundable Deposits | 289,000 | |
Refundable deposits for individuals and businesses | 419,872 | |
Property, equipment and leasehold improvements, gross | 103,118,018 | 22,121,868 |
Accumulated depreciation | 11,367,499 | 4,335,166 |
Property, equipment and leasehold improvements, net | 91,750,519 | 17,786,702 |
Cash equivalents | 0 | 0 |
Amounts in excess of insured limits | 226,400,000 | 83,400,000 |
Show room assets | ||
Property, equipment and leasehold improvements, gross | $ 4,428,544 | 4,418,724 |
Previously reported | Show room assets | ||
Property, equipment and leasehold improvements, gross | 4,418,724 | |
Accumulated depreciation | 1,435,738 | |
Property, equipment and leasehold improvements, net | $ 2,982,986 | |
Maximum | ||
Amortization period | 120 months |
PURCHASE OF ASSETS FROM ELMS -
PURCHASE OF ASSETS FROM ELMS - Purchase price allocation (Details) - ELMS $ in Millions | Nov. 30, 2022 item | Oct. 13, 2022 USD ($) |
Asset Acquisition [Line Items] | ||
Approximate sale consideration approved | $ | $ 105 | |
Maximum number of vehicles capable to produce per year | item | 50,000 |
PURCHASE OF ASSETS FROM ELMS _2
PURCHASE OF ASSETS FROM ELMS - Fair value allocation (Details) - ELMS | Nov. 30, 2022 USD ($) |
Asset acquisition | |
Land | $ 1,440,000 |
Buildings and site improvements | 41,287,038 |
Equipment | 27,336,511 |
Intangible assets: engineering design | 22,112,791 |
Inventory | 13,198,692 |
Total Purchased Assets | $ 105,375,032 |
INVENTORY - Components (Details
INVENTORY - Components (Details) | Jun. 30, 2023 USD ($) |
INVENTORY | |
Work in process | $ 6,109,105 |
Raw materials | 5,804,743 |
Supplies | 232,996 |
Total Inventories | $ 12,146,844 |
INVENTORY - Additional informat
INVENTORY - Additional information (Details) | 3 Months Ended |
Jun. 30, 2023 USD ($) | |
INVENTORY | |
Inventories consumed for R&D activities | $ 809,778 |
Cost of goods sold | 242,069 |
Warranty reserve | $ 6,600 |
GOODWILL AND INTANGIBLE ASSET_2
GOODWILL AND INTANGIBLE ASSETS - Goodwill (Details) - USD ($) | Jun. 30, 2023 | Sep. 30, 2022 |
GOODWILL AND INTANGIBLE ASSETS | ||
Goodwill | $ 92,834,832 | $ 92,834,832 |
Net working capital | $ 224,000,000 |
GOODWILL AND INTANGIBLE ASSET_3
GOODWILL AND INTANGIBLE ASSETS - Intangible assets - General information (Details) - USD ($) | 9 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Finite-Lived Intangible Assets [Line Items] | ||
Intangible asset additions | $ 22,443,551 | $ 352,601 |
Intellectual Property | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted average Useful life | 9 years 1 month 20 days |
GOODWILL AND INTANGIBLE ASSET_4
GOODWILL AND INTANGIBLE ASSETS - Intangible assets - Total (Details) - USD ($) | Jun. 30, 2023 | Sep. 30, 2022 |
Intangible Assets, Gross (Excluding Goodwill) [Abstract] | ||
Gross Carrying Amount | $ 118,157,930 | $ 95,714,379 |
Intangible Assets, Net (Excluding Goodwill) [Abstract] | ||
Accumulated Amortization | (6,200,396) | (1,767,361) |
Net Carrying Amount | 111,957,534 | 93,947,018 |
Trademarks | ||
Intangible Assets, Gross (Excluding Goodwill) [Abstract] | ||
Trademark | 796,773 | 466,014 |
Intangible Assets, Net (Excluding Goodwill) [Abstract] | ||
Net Carrying Amount | 796,773 | |
Website design and development | ||
Intangible Assets, Gross (Excluding Goodwill) [Abstract] | ||
Gross Carrying Amount, Finite-lived | 2,660,391 | 2,660,391 |
Intangible Assets, Net (Excluding Goodwill) [Abstract] | ||
Accumulated Amortization | (1,773,594) | (1,108,496) |
Net Carrying Amount | 886,797 | 1,551,895 |
Intellectual property | ||
Intangible Assets, Gross (Excluding Goodwill) [Abstract] | ||
Gross Carrying Amount, Finite-lived | 58,375,794 | 58,375,794 |
Intangible Assets, Net (Excluding Goodwill) [Abstract] | ||
Accumulated Amortization | (71,182) | (438,581) |
Net Carrying Amount | 58,304,612 | 57,937,213 |
Patents | ||
Intangible Assets, Gross (Excluding Goodwill) [Abstract] | ||
Gross Carrying Amount, Finite-lived | 32,391,186 | 32,391,186 |
Intangible Assets, Net (Excluding Goodwill) [Abstract] | ||
Accumulated Amortization | (2,857,539) | (204,109) |
Net Carrying Amount | 29,533,647 | 32,187,077 |
Engineer Design - ELMS | ||
Intangible Assets, Gross (Excluding Goodwill) [Abstract] | ||
Gross Carrying Amount, Finite-lived | 22,112,791 | |
Intangible Assets, Net (Excluding Goodwill) [Abstract] | ||
Accumulated Amortization | (1,289,913) | |
Net Carrying Amount | 20,822,878 | |
Other | ||
Intangible Assets, Gross (Excluding Goodwill) [Abstract] | ||
Gross Carrying Amount, Finite-lived | 1,820,995 | 1,820,994 |
Intangible Assets, Net (Excluding Goodwill) [Abstract] | ||
Accumulated Amortization | (208,168) | (16,175) |
Net Carrying Amount | $ 1,612,827 | $ 1,804,819 |
GOODWILL AND INTANGIBLE ASSET_5
GOODWILL AND INTANGIBLE ASSETS - Schedule of total future amortization expense for finite-lived intellectual property (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Future Amortization Expense | ||||
2023 (three months) | $ 1,424,909 | $ 1,424,909 | ||
2024 | 6,372,189 | 6,372,189 | ||
2025 | 5,707,092 | 5,707,092 | ||
2026 | 5,707,092 | 5,707,092 | ||
2027 | 5,707,092 | 5,707,092 | ||
Thereafter | 27,937,775 | 27,937,775 | ||
Total Future Amortization | 52,856,149 | 52,856,149 | ||
Amortization | $ 913,061 | $ 221,699 | $ 4,433,035 | $ 667,075 |
DEBT - Summary of our indebtedn
DEBT - Summary of our indebtedness (Details) - USD ($) | Jun. 30, 2023 | Sep. 30, 2022 | Mar. 07, 2022 |
Debt Instrument [Line Items] | |||
Net Carrying Value Unpaid Principal Balance | $ 7,306,107 | $ 9,021,049 | |
Current | 7,306,107 | 3,856,497 | |
Long-term | 5,164,552 | ||
Less: debt discount | (425,574) | (932,235) | |
Less: debt discount (Current) | (425,574) | ||
Less: debt discount (Long-Term) | (932,235) | ||
Matured notes | |||
Debt Instrument [Line Items] | |||
Net Carrying Value Unpaid Principal Balance | 2,398,881 | 3,051,085 | |
Current, before debt discount | $ 2,398,881 | $ 3,051,085 | |
Matured notes | Maximum | |||
Debt Instrument [Line Items] | |||
Contractual Interest Rate | 10% | 0.10% | |
Matured notes | Minimum | |||
Debt Instrument [Line Items] | |||
Contractual Interest Rate | 0% | 0% | |
Promissory notes | |||
Debt Instrument [Line Items] | |||
Net Carrying Value Unpaid Principal Balance | $ 1,096,787 | ||
Long-term, before debt discount | $ 1,096,787 | ||
Contractual Interest Rate | 0.28% | 8.99% | |
Real Estate notes | |||
Debt Instrument [Line Items] | |||
Net Carrying Value Unpaid Principal Balance | $ 5,000,000 | $ 5,247,612 | |
Current, before debt discount | $ 5,000,000 | 247,612 | |
Long-term, before debt discount | $ 5,000,000 | ||
Real Estate notes | Maximum | |||
Debt Instrument [Line Items] | |||
Contractual Interest Rate | 8.99% | ||
Real Estate notes | Minimum | |||
Debt Instrument [Line Items] | |||
Contractual Interest Rate | 8.99% | 5% | |
Loans and advances | |||
Debt Instrument [Line Items] | |||
Net Carrying Value Unpaid Principal Balance | $ 332,800 | $ 557,800 | |
Current, before debt discount | $ 332,800 | $ 557,800 | |
Loans and advances | Maximum | |||
Debt Instrument [Line Items] | |||
Contractual Interest Rate | 10% | 10% | |
Loans and advances | Minimum | |||
Debt Instrument [Line Items] | |||
Contractual Interest Rate | 0% | 0% |
DEBT - Scheduled debt maturitie
DEBT - Scheduled debt maturities (Details) - USD ($) | Jun. 30, 2023 | Sep. 30, 2022 |
Debt Maturities | ||
2023 (3 months) | $ 2,717,804 | |
2024 | 4,588,303 | |
Net Carrying Value Unpaid Principal Balance | $ 7,306,107 | $ 9,021,049 |
DEBT - Notes and Advances (Deta
DEBT - Notes and Advances (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||||||
Nov. 21, 2022 | Mar. 07, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | Nov. 15, 2022 | Sep. 30, 2022 | |
Promissory notes | ||||||||
Debt Instrument [Line Items] | ||||||||
Interest rate (as a percent) | 8.99% | 0.28% | ||||||
Principal amount | $ 5 | |||||||
Amortization of debt discount | $ 1,157,209 | $ 148,674 | $ 183,558 | $ 150,442,091 | $ 19,584,041 | |||
Carrying amount of debt settled via issuance of stock during the period | 153,222,237 | $ 23,192,500 | ||||||
Remaining unamortized discount | 425,574 | |||||||
Convertible notes | ||||||||
Debt Instrument [Line Items] | ||||||||
Interest rate (as a percent) | 15% | |||||||
Principal amount | $ 150,000,000 | |||||||
Debt instrument interest expense | $ 94,510,164 | |||||||
Debt discount on convertible notes | $ 150,000,000 | |||||||
Derivative liability | $ 244,510,164 |
DEBT - Amended and Restated Sec
DEBT - Amended and Restated Secured Convertible Note and Security Agreement (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||||||
Nov. 21, 2022 | Nov. 01, 2022 | Oct. 14, 2022 | Feb. 28, 2023 | Jun. 30, 2023 | Jun. 30, 2023 | Jun. 30, 2022 | Nov. 15, 2022 | Sep. 30, 2022 | |
Debt Instrument [Line Items] | |||||||||
Debt discount | $ 425,574 | $ 425,574 | $ 932,235 | ||||||
Shares issued for conversion of convertible debt | 1,096,787 | ||||||||
Loss on extinguishment | 206,081 | (6,246,089) | $ 33,413 | ||||||
Debt premium | 442,091 | $ 19,584,041 | |||||||
Convertible note payable | |||||||||
Debt Instrument [Line Items] | |||||||||
Amount of debt converted | $ 59,402,877 | $ 90,362,418 | |||||||
Debt instrument accrued interest | $ 1,479,688 | $ 1,479,688 | $ 1,374,925 | ||||||
Shares issued for conversion of convertible debt ( in shares) | 981,460 | 1,376,155 | |||||||
Debt instrument interest expense | $ 94,510,164 | ||||||||
Face amount of debt | $ 150,000,000 | ||||||||
A&R Note | A&R Note | |||||||||
Debt Instrument [Line Items] | |||||||||
Liability to issue common shares | 10,710,000 | ||||||||
A&R Note | Esousa Holdings, LLC | A&R Note | |||||||||
Debt Instrument [Line Items] | |||||||||
Amount of debt converted | $ 1,032,217 | ||||||||
Debt discount | 64,570 | ||||||||
Debt instrument accrued interest | $ 316,127 | ||||||||
Liability to issue common shares | 46,667 | ||||||||
Shares issued for conversion of convertible debt | $ 12,945,914 | ||||||||
Shares issued for conversion of convertible debt ( in shares) | 102,222 | ||||||||
Shares issued fair value | $ 5,524,600 | ||||||||
Loss on extinguishment | $ 6,452,170 | ||||||||
A&R Note | Esousa Holdings, LLC | Convertible note payable | |||||||||
Debt Instrument [Line Items] | |||||||||
Shares issuable upon conversion | 275,769 |
DEBT - Convertible Notes (Detai
DEBT - Convertible Notes (Details) | 1 Months Ended | ||||||
Nov. 21, 2022 USD ($) $ / shares shares | Nov. 14, 2022 USD ($) tranche $ / shares | Feb. 28, 2023 USD ($) shares | Jun. 30, 2023 USD ($) $ / shares | Jan. 13, 2023 USD ($) | Nov. 15, 2022 USD ($) | Sep. 30, 2022 USD ($) $ / shares | |
Debt Instrument [Line Items] | |||||||
Warrants exercise price | $ / shares | $ 0.4379 | ||||||
Amendment No. 3 to Securities Purchase Agreement | |||||||
Debt Instrument [Line Items] | |||||||
Proceeds from investors in exchange for notes convertible into shares of the Company's Common Stock | $ 150,000,000 | ||||||
Remaining Commitment Amount, Number of tranches | tranche | 2 | ||||||
Share Purchase Price, Floor price (in dollars per share) | $ / shares | $ 0.10 | ||||||
Additional consideration for issuance of warrants | $ 0 | ||||||
Percentage of Preferred Stock exercisable for warrants | 185% | ||||||
Securities Purchase Agreement | |||||||
Debt Instrument [Line Items] | |||||||
Warrants exercise price | $ / shares | $ 0.432 | ||||||
Series D Preferred Stock | Amendment No. 3 to Securities Purchase Agreement | |||||||
Debt Instrument [Line Items] | |||||||
Remaining Commitment Amount | $ 90,000,000 | ||||||
Closing price of the Common Stock | $ / shares | $ 1.27 | ||||||
Series D Preferred Stock | Securities Purchase Agreement | |||||||
Debt Instrument [Line Items] | |||||||
Value of right to purchase additional shares and warrants | $ 10,000,000 | ||||||
Convertible notes | |||||||
Debt Instrument [Line Items] | |||||||
Principal amount | $ 150,000,000 | ||||||
Interest rate (as a percent) | 15% | ||||||
Conversion ratio | 1.85 | ||||||
Warrants term | 5 years | ||||||
Derivative liability | $ 244,510,164 | ||||||
Increase in debt discount | 150,000,000 | ||||||
Debt instrument interest expense | 94,510,164 | ||||||
Debt instrument accrued interest | $ 1,479,688 | $ 1,374,925 | |||||
Amount of debt converted | $ 59,402,877 | $ 90,362,418 | |||||
Accrued interests | $ 3,456,941 | ||||||
Shares issued for conversion of convertible debt ( in shares) | shares | 981,460 | 1,376,155 | |||||
Convertible notes | Share conversion price lower of (i) $0.303; or (ii) the closing price on November 18, 2022 | |||||||
Debt Instrument [Line Items] | |||||||
Original issue price | $ / shares | $ 0.303 |
WARRANTS AND OTHER DERIVATIVE_3
WARRANTS AND OTHER DERIVATIVE LIABILITIES AND FAIR VALUE MEASUREMENTS - (Details) | 1 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||||||||
Mar. 14, 2023 USD ($) Y item shares | Feb. 10, 2022 USD ($) | Jun. 30, 2023 USD ($) $ / shares shares | Apr. 30, 2023 USD ($) $ / shares shares | Feb. 28, 2023 shares | Nov. 30, 2022 USD ($) shares | Sep. 30, 2022 USD ($) $ / shares shares | Jun. 30, 2023 USD ($) $ / shares shares | Dec. 31, 2022 shares | Jun. 30, 2022 USD ($) | Jun. 30, 2023 USD ($) $ / shares shares | Jun. 30, 2022 USD ($) shares | Sep. 30, 2022 USD ($) $ / shares shares | Nov. 21, 2022 | |
FAIR VALUE MEASUREMENTS AND FAIR VALUE OF FINANCIAL INSTRUMENTS | ||||||||||||||
Debt premium | $ | $ 442,091 | $ 19,584,041 | ||||||||||||
Accrued preferred dividends | $ | $ (13,125) | $ (2,285,792) | 7,387,811 | (37,541,085) | ||||||||||
Exercisable on a cash-less basis | 0 | |||||||||||||
Warrants exercise price | $ / shares | $ 0.4379 | $ 0.4379 | ||||||||||||
Warrants exercise price, after reverse stock splits | $ / shares | $ 98.5275 | 98.5275 | ||||||||||||
Proceeds from issuance of shares and warrants | $ | $ 35,000,000 | |||||||||||||
Proceeds from issuance of notes payable | $ | $ 170,000,000 | $ 12,142,791 | ||||||||||||
Securities Purchase Agreement | ||||||||||||||
FAIR VALUE MEASUREMENTS AND FAIR VALUE OF FINANCIAL INSTRUMENTS | ||||||||||||||
Warrants exercise price | $ / shares | $ 0.432 | $ 0.432 | $ 0.432 | |||||||||||
Warrants exercise price, after reverse stock splits | $ / shares | $ 3.888 | 3.888 | $ 3.888 | |||||||||||
Proceeds from issuance of shares and warrants | $ | $ 45,000,000 | |||||||||||||
Warrants issued (in shares) | 21,412,036 | |||||||||||||
Securities Purchase Agreement | Scenario one | ||||||||||||||
FAIR VALUE MEASUREMENTS AND FAIR VALUE OF FINANCIAL INSTRUMENTS | ||||||||||||||
Warrants exercise price | $ / shares | $ 0.52 | 0.52 | $ 0.52 | |||||||||||
Warrants exercise price, after reverse stock splits | $ / shares | 4.68 | 4.68 | $ 4.68 | |||||||||||
Proceeds from issuance of shares and warrants | $ | $ 7,000,000 | |||||||||||||
Securities Purchase Agreement | Scenario two | ||||||||||||||
FAIR VALUE MEASUREMENTS AND FAIR VALUE OF FINANCIAL INSTRUMENTS | ||||||||||||||
Warrants exercise price | $ / shares | 0.1601 | 0.1601 | $ 0.1601 | |||||||||||
Warrants exercise price, after reverse stock splits | $ / shares | $ 1.4409 | $ 1.4409 | $ 1.4409 | |||||||||||
Proceeds from issuance of shares and warrants | $ | $ 100,000,000 | |||||||||||||
Number of shares issued (in shares) | 18,373,082 | |||||||||||||
Warrants issued (in shares) | 76,107,900 | |||||||||||||
Warrants exercisable | 50,815,919 | |||||||||||||
Warrants to purchase to common stock | 1 | 1 | 1 | |||||||||||
Securities Purchase Agreement | Scenario two | One Investor | ||||||||||||||
FAIR VALUE MEASUREMENTS AND FAIR VALUE OF FINANCIAL INSTRUMENTS | ||||||||||||||
Warrants exercise price | $ / shares | $ 0.1696 | $ 0.1696 | $ 0.1696 | |||||||||||
Warrants exercise price, after reverse stock splits | $ / shares | $ 1.5264 | $ 1.5264 | $ 1.5264 | |||||||||||
Securities Purchase Agreement | Scenario three | ||||||||||||||
FAIR VALUE MEASUREMENTS AND FAIR VALUE OF FINANCIAL INSTRUMENTS | ||||||||||||||
Fair value of common stock warrants | $ | $ 150,084,173 | $ 150,084,173 | $ 150,084,173 | |||||||||||
Warrants term | 5 years | 5 years | 5 years | |||||||||||
Proceeds from issuance of shares and warrants | $ | $ 254,962,776 | |||||||||||||
Convertible notes | ||||||||||||||
FAIR VALUE MEASUREMENTS AND FAIR VALUE OF FINANCIAL INSTRUMENTS | ||||||||||||||
Warrants term | 5 years | |||||||||||||
Proceeds from issuance of notes payable | $ | $ 150,000,000 | |||||||||||||
Prefunded Warrants | Securities Purchase Agreement | ||||||||||||||
FAIR VALUE MEASUREMENTS AND FAIR VALUE OF FINANCIAL INSTRUMENTS | ||||||||||||||
Warrants exercisable | 5,496,238 | |||||||||||||
Warrants to purchase to common stock | 1 | 1 | 1 | |||||||||||
Prefunded Warrants | Securities Purchase Agreement | Scenario three | ||||||||||||||
FAIR VALUE MEASUREMENTS AND FAIR VALUE OF FINANCIAL INSTRUMENTS | ||||||||||||||
Exercisable on a cash-less basis | 28,482,585 | |||||||||||||
Preferred C Warrants 2021 | ||||||||||||||
FAIR VALUE MEASUREMENTS AND FAIR VALUE OF FINANCIAL INSTRUMENTS | ||||||||||||||
Warrants exercise price | $ / shares | $ 8.834 | 8.834 | ||||||||||||
Warrants exercise price, after reverse stock splits | $ / shares | $ 1,988 | $ 1,988 | ||||||||||||
Preferred C Warrants 2022 | ||||||||||||||
FAIR VALUE MEASUREMENTS AND FAIR VALUE OF FINANCIAL INSTRUMENTS | ||||||||||||||
Warrants | 13,215 | |||||||||||||
Initial expense upon issuance of warrants | $ | $ 429,883,573 | |||||||||||||
Debt premium | $ | 137,090,205 | |||||||||||||
Amortization of financing costs | $ | $ 292,793,368 | |||||||||||||
Accrued preferred dividends | $ | $ (32,735,345) | |||||||||||||
Exercised on a cash-less basis | 186,441 | |||||||||||||
Warrants to acquire shares of common stock | 2,369,842 | 2,369,842 | ||||||||||||
Fair value of warrants | $ | $ 554,371,539 | $ 554,371,539 | ||||||||||||
Preferred D Warrants 2022 | ||||||||||||||
FAIR VALUE MEASUREMENTS AND FAIR VALUE OF FINANCIAL INSTRUMENTS | ||||||||||||||
Fair value of common stock warrants | $ | $ 55,398,551 | $ 55,398,551 | ||||||||||||
Exercised on a cash-less basis | 1,018,217 | |||||||||||||
Shares of common stock issuable upon conversion (as a percent) | 185% | |||||||||||||
Warrants exercisable for shares of common stock (as percentage) | 110% | |||||||||||||
Warrants exercise price | $ / shares | $ 1.27 | $ 1.27 | $ 1.27 | |||||||||||
Warrants exercise price, after reverse stock splits | $ / shares | $ 286 | $ 286 | $ 286 | |||||||||||
Warrants term | 5 years | 5 years | 5 years | |||||||||||
Warrants issued (in shares) | 26,287 | |||||||||||||
Preferred D Warrants 2022 | Securities Purchase Agreement | ||||||||||||||
FAIR VALUE MEASUREMENTS AND FAIR VALUE OF FINANCIAL INSTRUMENTS | ||||||||||||||
Fair value of common stock warrants | $ | $ 73,260,454 | |||||||||||||
Exercised on a cash-less basis | 14,767,200 | |||||||||||||
Warrants exercise price | $ / shares | $ 0.1 | |||||||||||||
Warrants exercise price, after reverse stock splits | $ / shares | $ 22.5 | |||||||||||||
Proceeds from issuance of shares and warrants | $ | $ 45,000,000 | |||||||||||||
Warrants issued (in shares) | 3,700,000 | |||||||||||||
Preferred D Warrants 2022 | Securities Purchase Agreement | Scenario one | ||||||||||||||
FAIR VALUE MEASUREMENTS AND FAIR VALUE OF FINANCIAL INSTRUMENTS | ||||||||||||||
Warrants issued (in shares) | 2,767,094 | |||||||||||||
Preferred D Warrants 2022 | Securities Purchase Agreement | Scenario three | ||||||||||||||
FAIR VALUE MEASUREMENTS AND FAIR VALUE OF FINANCIAL INSTRUMENTS | ||||||||||||||
Exercised on a cash-less basis | 46,828,038 | |||||||||||||
Exercisable on a cash-less basis | 89,052,573 | |||||||||||||
Preferred D Warrants 2022 | Convertible notes | ||||||||||||||
FAIR VALUE MEASUREMENTS AND FAIR VALUE OF FINANCIAL INSTRUMENTS | ||||||||||||||
Exercisable on a cash-less basis | 9,366,447 | |||||||||||||
Warrants issued (in shares) | 4,361,588 | 4,361,588 | ||||||||||||
Qiantu Warrants | ||||||||||||||
FAIR VALUE MEASUREMENTS AND FAIR VALUE OF FINANCIAL INSTRUMENTS | ||||||||||||||
Fair value of common stock warrants | $ | $ 6,814,000 | $ 234,300 | $ 234,300 | $ 234,300 | ||||||||||
Market price of the Company's common shares | 110% | |||||||||||||
Number of intellectual property agreement | item | 2 | |||||||||||||
Period to use the license under intellectual property agreement | Y | 5 | |||||||||||||
Qiantu Warrants | Maximum | ||||||||||||||
FAIR VALUE MEASUREMENTS AND FAIR VALUE OF FINANCIAL INSTRUMENTS | ||||||||||||||
Warrants to acquire shares of common stock | 333,333 | |||||||||||||
Series D Preferred Stock | ||||||||||||||
FAIR VALUE MEASUREMENTS AND FAIR VALUE OF FINANCIAL INSTRUMENTS | ||||||||||||||
Investment right amount | $ | $ 100,000,000 | $ 100,000,000 | $ 100,000,000 | |||||||||||
Number of shares issued (in shares) | 79,926,925 | |||||||||||||
Series D Preferred Stock | Securities Purchase Agreement | ||||||||||||||
FAIR VALUE MEASUREMENTS AND FAIR VALUE OF FINANCIAL INSTRUMENTS | ||||||||||||||
Number of shares issued (in shares) | 273,363,635 | |||||||||||||
Common Stock | ||||||||||||||
FAIR VALUE MEASUREMENTS AND FAIR VALUE OF FINANCIAL INSTRUMENTS | ||||||||||||||
Number of shares issued (in shares) | 292,011 | |||||||||||||
Common Stock | Securities Purchase Agreement | ||||||||||||||
FAIR VALUE MEASUREMENTS AND FAIR VALUE OF FINANCIAL INSTRUMENTS | ||||||||||||||
Number of shares issued (in shares) | 785,051 | 6,077,835 | ||||||||||||
Common Stock | Securities Purchase Agreement | Scenario one | ||||||||||||||
FAIR VALUE MEASUREMENTS AND FAIR VALUE OF FINANCIAL INSTRUMENTS | ||||||||||||||
Number of shares issued (in shares) | 1,495,726 | |||||||||||||
Common Stock | Securities Purchase Agreement | Scenario three | ||||||||||||||
FAIR VALUE MEASUREMENTS AND FAIR VALUE OF FINANCIAL INSTRUMENTS | ||||||||||||||
Warrants to acquire shares of common stock | 155,414,904 | 155,414,904 | 155,414,904 | |||||||||||
Common Stock | Series D Preferred Stock | Securities Purchase Agreement | ||||||||||||||
FAIR VALUE MEASUREMENTS AND FAIR VALUE OF FINANCIAL INSTRUMENTS | ||||||||||||||
Conversion of stock, shares issued | 1,214,949 |
WARRANTS AND OTHER DERIVATIVE_4
WARRANTS AND OTHER DERIVATIVE LIABILITIES AND FAIR VALUE MEASUREMENTS - Embedded Derivatives (Details) - Revaluation prior to conversion of underlying instrument | Jun. 30, 2023 USD ($) |
Volatility | |
FAIR VALUE MEASUREMENTS AND FAIR VALUE OF FINANCIAL INSTRUMENTS | |
Embedded derivative, measurement input | 1.98 |
Dividend yield | |
FAIR VALUE MEASUREMENTS AND FAIR VALUE OF FINANCIAL INSTRUMENTS | |
Embedded derivative, measurement input | 0 |
Risk-free interest rate | Minimum | |
FAIR VALUE MEASUREMENTS AND FAIR VALUE OF FINANCIAL INSTRUMENTS | |
Embedded derivative, measurement input | 0.043 |
Risk-free interest rate | Maximum | |
FAIR VALUE MEASUREMENTS AND FAIR VALUE OF FINANCIAL INSTRUMENTS | |
Embedded derivative, measurement input | 0.047 |
WARRANTS AND OTHER DERIVATIVE_5
WARRANTS AND OTHER DERIVATIVE LIABILITIES AND FAIR VALUE MEASUREMENTS - Financial Liabilities Measured at Fair Value on a Recurring Basis (Details) - Recurring - USD ($) | Jun. 30, 2023 | Sep. 30, 2022 |
FAIR VALUE MEASUREMENTS AND FAIR VALUE OF FINANCIAL INSTRUMENTS | ||
Derivative liability | $ 150,318,473 | $ 84,799,179 |
Level 2 | ||
FAIR VALUE MEASUREMENTS AND FAIR VALUE OF FINANCIAL INSTRUMENTS | ||
Derivative liability | 150,084,173 | $ 84,799,179 |
Level 3 | ||
FAIR VALUE MEASUREMENTS AND FAIR VALUE OF FINANCIAL INSTRUMENTS | ||
Derivative liability | $ 234,300 |
WARRANTS AND OTHER DERIVATIVE_6
WARRANTS AND OTHER DERIVATIVE LIABILITIES AND FAIR VALUE MEASUREMENTS - Changes in derivative liability (Details) - USD ($) | 9 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
CHANGES IN DERIVATIVE LIABILITY | ||
Fair Value, Liability, Recurring Basis, Unobservable Input Reconciliation, Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration] | Derivative, Gain (Loss) on Derivative, Net | Derivative, Gain (Loss) on Derivative, Net |
Derivative Financial Instruments, Liabilities [Member] | ||
CHANGES IN DERIVATIVE LIABILITY | ||
Balance, Beginning | $ 84,799,179 | |
Derivative liabilities recognized upon issuance of convertible instruments | 499,737,254 | $ 269,344,178 |
Derivative liability recognized upon authorized shares shortfall | 11,978,166 | |
Loss / (gain) on derivative liability revaluation | (89,462,559) | 124,672,956 |
Reclassification of derivative liabilities to equity upon authorization of sufficient common shares | (47,818,882) | |
Financing loss upon over-issuance of shares from warrants | 8,934,892 | |
Receivables upon over-issuance of shares from warrants | (17,721,868) | |
Reclassification to liability to issue shares upon unfinished warrant exercise on period end | (5,378,806) | |
Conversions of warrants into common shares | (509,117,758) | (420,626,121) |
Change in agreement with warrant holders (recognized as deemed dividends | 32,735,345 | |
Balance, Ending | $ (150,318,473) | $ 6,126,358 |
STOCKHOLDERS' EQUITY (DEFICIT)
STOCKHOLDERS' EQUITY (DEFICIT) - Common Stock (Details) | 1 Months Ended | 9 Months Ended | |||||||
Aug. 14, 2023 | May 04, 2023 | Aug. 31, 2023 | Jan. 31, 2023 | Jun. 30, 2023 USD ($) $ / shares shares | Jun. 30, 2022 USD ($) | Jan. 25, 2023 shares | Jan. 24, 2023 shares | Sep. 30, 2022 $ / shares shares | |
Class of Stock [Line Items] | |||||||||
Common Stock, shares authorized | 5,000,000,000 | 5,000,000,000 | 1,750,000,000 | 1,750,000,000 | |||||
Common Stock, par value | $ / shares | $ 0.001 | $ 0.001 | |||||||
Common Stock, shares issued | 86,762,748 | 3,704,303 | |||||||
Common Stock, shares outstanding | 86,762,748 | 3,704,303 | |||||||
Voting rights | one | ||||||||
Common shares issued for cash | $ | $ 84,501,511 | ||||||||
Reverse stock ratio | 0.11 | 0.04 | 0.10 | 0.04 | 0.11 | ||||
Common stock dividends declared or paid | $ | $ 0 | ||||||||
Series D Preferred Stock | |||||||||
Class of Stock [Line Items] | |||||||||
Voting rights | one |
STOCKHOLDERS' EQUITY (DEFICIT_2
STOCKHOLDERS' EQUITY (DEFICIT) - Preferred Stock, Series AA and Series D Preferred Stock (Details) | 1 Months Ended | 9 Months Ended | ||||
Aug. 14, 2023 | May 04, 2023 | Aug. 31, 2023 | Jan. 31, 2023 | Jun. 30, 2023 $ / shares shares | Sep. 30, 2022 $ / shares shares | |
Class of Stock [Line Items] | ||||||
Preferred Stock, shares authorized | 500,000,000 | 500,000,000 | ||||
Preferred Stock, par value | $ / shares | $ 0.001 | $ 0.001 | ||||
Reverse stock ratio | 0.11 | 0.04 | 0.10 | 0.04 | 0.11 | |
Series D Preferred Stock | ||||||
Class of Stock [Line Items] | ||||||
Preferred Stock, shares authorized | 437,500,001 | 437,500,001 | ||||
Preferred Stock, shares issued | 363,097 | 4,359,652 | ||||
Preferred Stock, shares outstanding | 363,097 | 4,359,652 |
STOCKHOLDERS' EQUITY (DEFICIT_3
STOCKHOLDERS' EQUITY (DEFICIT) - Redemption Rights and Dividends (Details) | 3 Months Ended | 9 Months Ended | |||
Jan. 13, 2023 | Jun. 30, 2023 USD ($) D | Jun. 30, 2022 USD ($) | Jun. 30, 2023 USD ($) D | Jun. 30, 2022 USD ($) | |
Class of Stock [Line Items] | |||||
Minimum Term of Shares Issued and Outstanding | 1 year | ||||
Preferred stock redemption, number of trading days | D | 20 | 20 | |||
Preferred stock redemption, number of consecutive trading days | D | 30 | 30 | |||
Adjustment to the additional paid-in capital | $ 7,387,808 | ||||
Series A Preferred Stock | |||||
Class of Stock [Line Items] | |||||
Preferred stock dividends declared or paid | $ 0 | $ 0 | 0 | $ 0 | |
Series B Preferred Stock | |||||
Class of Stock [Line Items] | |||||
Preferred stock dividends declared or paid | 0 | $ 0 | $ 0 | $ 0 | |
Series C Preferred Stock | |||||
Class of Stock [Line Items] | |||||
Percentage of redemption price in first year | 0% | ||||
Percentage of redemption price in second year | 120% | ||||
Percentage of redemption price in third year | 115% | ||||
Percentage of redemption price in fourth year | 110% | ||||
Percentage of redemption price in fifth year | 105% | ||||
Percentage of redemption price in sixth year and thereafter | 100% | ||||
Preferred stock dividends rate, percentage | 15% | 15% | |||
Series D Preferred Stock | |||||
Class of Stock [Line Items] | |||||
Percentage of redemption price in first year | 0% | ||||
Percentage of redemption price in second year | 120% | ||||
Percentage of redemption price in third year | 115% | ||||
Percentage of redemption price in fourth year | 110% | ||||
Percentage of redemption price in fifth year | 105% | ||||
Percentage of redemption price in sixth year and thereafter | 100% | ||||
Preferred stock dividends rate, percentage | 15% | ||||
Accrued dividend | $ 374,445 | $ 374,445 | |||
Number of Trading Days | D | 10 | 10 | |||
Number of Consecutive Trading Days | D | 20 | ||||
Average Daily Trading Volume of Common Stock | $ 27,500,000 |
STOCKHOLDERS' EQUITY (DEFICIT_4
STOCKHOLDERS' EQUITY (DEFICIT) - Liquidation, Conversion and Voting Rights (Details) | 1 Months Ended | 9 Months Ended | |||||
Aug. 14, 2023 | May 04, 2023 | Aug. 31, 2023 | Jan. 31, 2023 shares | Jun. 30, 2023 USD ($) D Vote shares | Sep. 30, 2022 shares | Mar. 08, 2022 $ / shares | |
Class of Stock [Line Items] | |||||||
Reverse stock ratio | 0.11 | 0.04 | 0.10 | 0.04 | 0.11 | ||
Voting rights | one | ||||||
Number of votes per share | Vote | 1,000 | ||||||
Series A Preferred Stock | |||||||
Class of Stock [Line Items] | |||||||
Price per share in purchase agreement (USD per share) | $ / shares | $ 1.29 | ||||||
Preferred Stock, shares outstanding | 1,036 | 1,924 | |||||
Preferred Stock, shares issued | 1,036 | 1,924 | |||||
Conversion ratio | 0.444 | ||||||
Series B Preferred Stock | |||||||
Class of Stock [Line Items] | |||||||
Preferred Stock, shares outstanding | 0 | 0 | |||||
Preferred Stock, shares issued | 0 | ||||||
Series C Preferred Stock | |||||||
Class of Stock [Line Items] | |||||||
Preferred Stock, shares outstanding | 1,210,056 | 1,360,321 | |||||
Preferred Stock, shares issued | 1,210,056 | 1,360,321 | |||||
Conversion ratio | 0.004 | ||||||
Ratio of Trading Price to Conversion Price | 2 | ||||||
Trading days | D | 20 | ||||||
Consecutive trading days | D | 30 | ||||||
Value of average daily trading dollar volume | $ | $ 4,000,000 | ||||||
Series D Preferred Stock | |||||||
Class of Stock [Line Items] | |||||||
Preferred Stock, shares outstanding | 363,097 | 4,359,652 | |||||
Preferred Stock, shares issued | 363,097 | 4,359,652 | |||||
Conversion ratio | 0.004 | ||||||
Ratio of Trading Price to Conversion Price | 2 | ||||||
Trading days | D | 20 | ||||||
Consecutive trading days | D | 30 | ||||||
Value of average daily trading dollar volume | $ | $ 27,500,000 | ||||||
Voting rights | one | ||||||
Series B And C Preferred Stock | |||||||
Class of Stock [Line Items] | |||||||
Voting rights | one |
LOSS PER SHARE (Details)
LOSS PER SHARE (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
LOSS PER SHARE | ||||
Net income attributable to common stockholders | $ (308,858,234) | $ (4,847,151) | $ (800,047,339) | $ (485,517,181) |
Deemed dividend on preferred stock | (13,125) | (2,285,792) | 7,387,811 | (37,541,085) |
Net Loss attributable to common stockholders after preferred dividends | $ (308,871,359) | $ (7,132,943) | $ (792,659,528) | $ (523,058,266) |
Net loss per share, basic | $ (11.14) | $ (4.26) | $ (55.44) | $ (694.20) |
Net loss per share, diluted | $ (11.14) | $ (4.26) | $ (55.44) | $ (694.20) |
Weighted average shares outstanding, basic | 27,720,475 | 1,674,607 | 14,296,659 | 753,474 |
Weighted average shares outstanding, diluted | 27,720,475 | 1,674,607 | 14,296,659 | 753,474 |
Weighted average shares outstanding, basic, before reverse stock splits, see Note 1 | 6,237,106,875 | 376,786,685 | 3,216,748,275 | 169,531,688 |
Weighted average shares outstanding, diluted, before reverse stock splits, see Note 1 | 6,237,106,875 | 376,786,685 | 3,216,748,275 | 169,531,688 |
Net loss per share, basic before reverse stock splits | $ (0.05) | $ (0.02) | $ (0.25) | $ (3.09) |
Net loss per share, diluted before reverse stock splits | $ (0.05) | $ (0.02) | $ (0.25) | $ (3.09) |
SHARE-BASED COMPENSATION (Detai
SHARE-BASED COMPENSATION (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Composition of Stock-Based Compensation Expense | ||||
Directors, officers and employees share-based compensation | $ 3,678,278 | $ 96,495 | $ 51,329,014 | $ 20,049,336 |
Share-based compensation to consultants (equity-classified) | 903,264 | 4,928,824 | 7,367,107 | 12,288,735 |
Share-based compensation to consultants (liability-classified) | 6,130,462 | 119,344 | 12,319,250 | 141,639 |
Total share-based compensation expense | 10,712,004 | $ 5,144,663 | 71,015,371 | $ 32,479,710 |
Chief Executive Officer | ||||
Composition of Stock-Based Compensation Expense | ||||
Total share-based compensation expense | 3,491,421 | |||
CEO Award Incentive Plan | Chief Executive Officer | ||||
Composition of Stock-Based Compensation Expense | ||||
Amount of of costs accrued for future award | $ 3,400,000 | $ 3,400,000 | ||
CEO Award Incentive Plan | Minimum | Chief Executive Officer | ||||
Composition of Stock-Based Compensation Expense | ||||
Percentage of awards to be issued | 1% | |||
CEO Award Incentive Plan | Maximum | Chief Executive Officer | ||||
Composition of Stock-Based Compensation Expense | ||||
Percentage of awards to be issued | 2% |
ACCRUED EXPENSES AND OTHER CU_3
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES (Details) - USD ($) | Jun. 30, 2023 | Sep. 30, 2022 |
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | ||
Accrued expense - other | $ 5,135,333 | $ 3,529,384 |
IRS tax liability | 187,303 | 1,744,707 |
Accrued payroll | 1,583,056 | 534,782 |
Accrued interest | 1,479,688 | 1,377,008 |
Total | $ 8,385,380 | $ 7,185,881 |
LIABILITY TO ISSUE STOCK (Detai
LIABILITY TO ISSUE STOCK (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | Sep. 30, 2022 | |
Schedule of Liability to Issue Stock [Line items] | |||||
Liability to issue shares for convertible securities and warrants | $ 5,378,806 | $ 5,378,806 | |||
Stock based compensation | 10,712,004 | $ 5,144,663 | 71,015,371 | $ 32,479,710 | |
Liability to issue shares | $ 8,870,227 | 8,870,227 | $ 10,710,000 | ||
Esousa Holdings, LLC | |||||
Schedule of Liability to Issue Stock [Line items] | |||||
Liability to issue shares | $ 10,710,000 | ||||
CEO | |||||
Schedule of Liability to Issue Stock [Line items] | |||||
Stock based compensation | $ 3,491,421 |
PROPERTY, EQUIPMENT AND LEASE_3
PROPERTY, EQUIPMENT AND LEASEHOLD IMPROVEMENTS, NET (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | Sep. 30, 2022 | |
Property, Plant and Equipment [Line Items] | |||||
Subtotal | $ 103,118,018 | $ 103,118,018 | $ 22,121,868 | ||
Less: accumulated depreciation | (11,367,499) | (11,367,499) | (4,335,166) | ||
Property, Equipment and Leasehold Improvements, net | 91,750,519 | 91,750,519 | 17,786,702 | ||
Depreciation | 1,680,595 | $ 86,598 | 7,050,864 | $ 251,780 | |
Buildings | |||||
Property, Plant and Equipment [Line Items] | |||||
Subtotal | 48,120,753 | 48,120,753 | 7,659,121 | ||
Land | |||||
Property, Plant and Equipment [Line Items] | |||||
Subtotal | 3,040,303 | 3,040,303 | 647,576 | ||
Furniture and equipment | |||||
Property, Plant and Equipment [Line Items] | |||||
Subtotal | 682,798 | 682,798 | 556,948 | ||
Vehicles | |||||
Property, Plant and Equipment [Line Items] | |||||
Subtotal | 335,183 | 335,183 | 96,363 | ||
Show room assets | |||||
Property, Plant and Equipment [Line Items] | |||||
Subtotal | 4,428,544 | 4,428,544 | 4,418,724 | ||
Computer hardware and software | |||||
Property, Plant and Equipment [Line Items] | |||||
Subtotal | 2,016,046 | 2,016,046 | 1,013,308 | ||
Machinery and equipment | |||||
Property, Plant and Equipment [Line Items] | |||||
Subtotal | 32,070,385 | 32,070,385 | 7,383,612 | ||
Construction-in-progress | |||||
Property, Plant and Equipment [Line Items] | |||||
Subtotal | 12,237,665 | 12,237,665 | 269,778 | ||
Leasehold improvements | |||||
Property, Plant and Equipment [Line Items] | |||||
Subtotal | $ 186,341 | $ 186,341 | $ 76,438 |
PROPERTY, EQUIPMENT AND LEASE_4
PROPERTY, EQUIPMENT AND LEASEHOLD IMPROVEMENTS, NET - ELMS asset acquisition (Details) - ELMS | Nov. 30, 2022 USD ($) |
Asset acquisition | |
Land | $ 1,440,000 |
Buildings and site improvements | 41,287,038 |
Personal property subtotal | $ 27,300,000 |
OTHER NONCURRENT ASSETS (Detail
OTHER NONCURRENT ASSETS (Details) - USD ($) | Jun. 30, 2023 | Sep. 30, 2022 |
OTHER NONCURRENT ASSETS | ||
Other assets | $ 81,587 | |
Security deposits | $ 1,010,712 | 281,056 |
Total Other Assets | $ 1,010,712 | $ 362,643 |
OPERATING EXPENSES (Details)
OPERATING EXPENSES (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
OPERATING EXPENSES | ||||
Professional fees | $ 5,250,063 | $ 4,908,855 | $ 51,884,123 | $ 31,773,409 |
Compensation to employees and management | 15,133,141 | 3,177,790 | 52,147,116 | 10,556,783 |
Depreciation | 1,680,595 | 86,598 | 7,050,864 | 251,780 |
Amortization | 913,061 | 221,699 | 4,433,035 | 667,075 |
Lease | 273,234 | 474,032 | 1,948,288 | 1,493,150 |
Settlements and penalties | 2,327,286 | 169,607 | 8,592,635 | 1,054,439 |
Employee benefits | 1,140,917 | 639,779 | 2,759,607 | 1,552,939 |
Utilities and office expense | 996,997 | 202,652 | 2,064,100 | 428,565 |
Advertising and promotions | 985,763 | 644,423 | 4,746,032 | 3,570,016 |
Taxes and licenses | 120,500 | 8,805 | 372,381 | 25,926 |
Repairs and maintenance | 302,623 | 167,173 | 684,920 | 246,875 |
Executive expenses and directors fees | 73,759 | 363,825 | ||
Listing and regulatory Fees | 1,415,003 | 4,150,348 | ||
Other | 1,164,870 | 195,387 | 2,988,887 | 1,446,359 |
Total | $ 31,777,812 | $ 10,896,800 | $ 144,186,161 | $ 53,067,316 |
OPERATING EXPENSES - Research a
OPERATING EXPENSES - Research and development (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Research & Development | ||||
Research and development | $ 22,088,011 | $ 7,324,365 | $ 51,188,991 | $ 9,665,126 |
LEASES - Lease assets and liabi
LEASES - Lease assets and liabilities (Details) - USD ($) | Jun. 30, 2023 | Sep. 30, 2022 |
Assets: | ||
Operating lease right-of-use assets | $ 5,504,851 | $ 4,597,052 |
Liabilities: | ||
Operating lease liabilities, current | (2,217,059) | (1,428,474) |
Operating lease liabilities, non-current | (3,709,616) | (3,359,354) |
Total lease liabilities | $ (5,926,675) | $ (4,787,828) |
Weighted average remaining lease terms: Operating leases | 2 years 7 months 28 days | 2 years 7 months 17 days |
Weighted average discount rate: Operating leases | 28% | 28% |
LEASES - Operating lease costs
LEASES - Operating lease costs (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Operating lease costs: | ||||
Fixed lease cost | $ 330,175 | $ 327,409 | $ 887,294 | $ 1,066,680 |
Variable lease cost | 85,298 | 158,399 | 147,120 | 418,999 |
Short-term lease cost | 34,473 | 160,250 | ||
Sublease income | (108,127) | (46,144) | (201,875) | (152,431) |
Total operating lease costs | $ 307,346 | $ 474,137 | $ 832,539 | $ 1,493,498 |
LEASES - Maturities of operatin
LEASES - Maturities of operating lease liabilities (Details) - USD ($) | Jun. 30, 2023 | Sep. 30, 2022 |
Year ending December 31, | ||
2023 (3 months) | $ 874,278 | |
2024 | 3,074,497 | |
2025 | 2,423,880 | |
2026 | 610,913 | |
2027 | 417,425 | |
Thereafter | 115,668 | |
Total lease payments | 7,516,661 | |
Less: imputed interest | (1,589,986) | |
Present value of lease liabilities | $ 5,926,675 | $ 4,787,828 |
LEASES - Additional Information
LEASES - Additional Information (Details) | 9 Months Ended |
Jun. 30, 2023 | |
Lessee, Lease, Description [Line Items] | |
Option to extend | true |
Option to terminate | true |
Minimum | |
Lessee, Lease, Description [Line Items] | |
Operating lease term | 1 year |
Renewal term | 1 year |
Maximum | |
Lessee, Lease, Description [Line Items] | |
Operating lease term | 3 years |
Renewal term | 5 years |
COMMITMENTS AND CONTINGENCIES -
COMMITMENTS AND CONTINGENCIES - DBI Lease Buyback Servicing LLC, Drawbridge Investments LLC v. Mullen Automotive Inc (Details) | 1 Months Ended | |||||
Mar. 02, 2023 USD ($) claim shares | Jun. 30, 2022 USD ($) | Jun. 30, 2023 USD ($) shares | Jan. 25, 2023 shares | Jan. 24, 2023 shares | Sep. 30, 2022 USD ($) shares | |
CONTINGENCIES AND CLAIMS | ||||||
Debt discount | $ 425,574 | $ 932,235 | ||||
Common Stock, shares authorized | shares | 5,000,000,000 | 5,000,000,000 | 1,750,000,000 | 1,750,000,000 | ||
DBI Lease Buyback Servicing LLC, Drawbridge Investments LLC | ||||||
CONTINGENCIES AND CLAIMS | ||||||
Number of Claims | claim | 3 | |||||
Debt discount | $ 3,500,000 | |||||
Damages in Drawbridge assets | $ 100,000,000 | |||||
Minimum | DBI Lease Buyback Servicing LLC, Drawbridge Investments LLC | ||||||
CONTINGENCIES AND CLAIMS | ||||||
Common Stock, shares authorized | shares | 500,000,000 | |||||
Series E Preferred Stock Purchase Option | Series E Preferred Stock | DBI Lease Buyback Servicing LLC, Drawbridge Investments LLC | ||||||
CONTINGENCIES AND CLAIMS | ||||||
Option to purchase maximum value of stock and warrants. | $ 25,000,000 |
COMMITMENTS AND CONTINGENCIES_2
COMMITMENTS AND CONTINGENCIES - Mullen Technologies Inc. v. Qiantu Motor (Suzhou) Ltd. (Details) | Mar. 14, 2023 USD ($) Y item shares |
Qiantu Warrants | |
Other Commitments [Line Items] | |
Number of intellectual property agreement | item | 2 |
Period to use the license under intellectual property agreement | Y | 5 |
Market price of the Company's common shares | 110% |
Mullen Technologies Inc. v. Qiantu Motor (Suzhou) Ltd Litigation Case [Member] | |
Other Commitments [Line Items] | |
Litigation owed | $ 6,000,000 |
Period for assessment of feasibility and profitability | 150 days |
Amount payable for deliverable items | $ 2,000,000 |
Amount of royalty fee payable | $ 1,200 |
Mullen Technologies Inc. v. Qiantu Motor (Suzhou) Ltd Litigation Case [Member] | Qiantu Warrants | |
Other Commitments [Line Items] | |
Warrants to acquire shares of common stock | shares | 333,333 |
Market price of the Company's common shares | 110% |
COMMITMENTS AND CONTINGENCIES_3
COMMITMENTS AND CONTINGENCIES - International Business Machines (Details) - Lawsuit with IBM - USD ($) | Feb. 02, 2022 | Dec. 01, 2021 |
CONTINGENCIES AND CLAIMS | ||
Amount of judgment | $ 5,617,192 | |
Cash transferred to surety bonds to cover legal liability | $ 5,900,000 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details) - USD ($) | Jun. 30, 2023 | Aug. 03, 2022 |
GEM Group | Pending Litigation | ||
CONTINGENCIES AND CLAIMS | ||
Escrow Deposit | $ 7,000,000 | |
Schaub Lawsuit | Pending Litigation | ||
CONTINGENCIES AND CLAIMS | ||
Litigation liability | $ 0 | |
Jeff Witt v. Mullen Automotive, Inc. | Pending Litigation | ||
CONTINGENCIES AND CLAIMS | ||
Litigation liability | 0 | |
Hany Morsy v. David Michery, et al. | Pending Litigation | ||
CONTINGENCIES AND CLAIMS | ||
Litigation liability | 0 | |
Chosten Caris V David Michery | Pending Litigation | ||
CONTINGENCIES AND CLAIMS | ||
Litigation liability | 0 | |
Robbins Lawsuit | Settled Litigation | ||
CONTINGENCIES AND CLAIMS | ||
Litigation settlement expense | $ 1,004,731 |
RELATED PARTY TRANSACTIONS - Tr
RELATED PARTY TRANSACTIONS - Transactions with Related Party Note Receivable (Details) - Related Party - Related Party Note Receivable - Mullen Technologies, Inc. - USD ($) | 6 Months Ended | |
Mar. 31, 2023 | Jun. 30, 2023 | |
Related Party Transaction [Line Items] | ||
Related Party, principal amount | $ 1,388,405 | |
Related party transaction rate | 10% | |
Stated interest rate of debt agreements | 15% | |
Related party receivable | $ 1,834,496 | |
Accrued interest | $ 41,516 |
RELATED PARTY TRANSACTIONS - Wi
RELATED PARTY TRANSACTIONS - William Miltner (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Related Party | William Miltner | ||||
Related Party Transaction [Line Items] | ||||
Amount paid for legal services | $ 161,687 | $ 178,640 | $ 864,343 | $ 804,120 |
RELATED PARTY TRANSACTIONS - Ma
RELATED PARTY TRANSACTIONS - Mary Winter (Details) - Consulting agreements - Mary Winters, Corporate Secretary and Director | Oct. 26, 2021 USD ($) |
Related Party Transaction [Line Items] | |
Term of agreement | 1 year |
Annual salary under agreement | $ 60,000 |
Monthly salary under agreement | $ 5,000 |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) | 1 Months Ended | 9 Months Ended | |||||||||
Aug. 14, 2023 | Aug. 11, 2023 USD ($) D $ / shares shares | Aug. 03, 2023 USD ($) item shares | Jul. 01, 2023 USD ($) item | May 04, 2023 | Apr. 17, 2023 USD ($) | Aug. 31, 2023 | Jan. 31, 2023 | Sep. 30, 2022 shares | Jun. 30, 2023 | Jul. 06, 2023 USD ($) | |
Subsequent Event [Line Items] | |||||||||||
Reverse stock ratio | 0.11 | 0.04 | 0.10 | 0.04 | 0.11 | ||||||
Mullen Advanced Energy Operations LLC | |||||||||||
Subsequent Event [Line Items] | |||||||||||
Upfront payments | $ 50,000 | ||||||||||
Amount payable upon execution of definitive agreements | $ 5,000,000 | ||||||||||
Mullen Advanced Energy Operations LLC | |||||||||||
Subsequent Event [Line Items] | |||||||||||
Equity interest | 51% | ||||||||||
Mullen Advanced Energy Operations LLC | Lawrence Hardge, Global EV Technology, Inc., and EV Technology, LLC | |||||||||||
Subsequent Event [Line Items] | |||||||||||
Equity interest | 49% | ||||||||||
Series D Preferred Stock | |||||||||||
Subsequent Event [Line Items] | |||||||||||
Number of shares issued (in shares) | shares | 79,926,925 | ||||||||||
Subsequent event | |||||||||||
Subsequent Event [Line Items] | |||||||||||
Number of class II directors elected | item | 2 | ||||||||||
Term of class II directors elected | 3 years | ||||||||||
Reverse stock ratio | 0.11 | ||||||||||
Frequency of future votes for the compensation of executive officers | 3 years | ||||||||||
Minimum bid price | $ / shares | $ 1 | ||||||||||
Compliance days | D | 20 | ||||||||||
Subsequent event | Series D Warrants | |||||||||||
Subsequent Event [Line Items] | |||||||||||
Cashless warrant exercise (in shares) | shares | 97,405,972 | ||||||||||
Subsequent event | Non-employee director | |||||||||||
Subsequent Event [Line Items] | |||||||||||
Fees As Cash Retainer For Board Service | $ 50,000 | ||||||||||
Additional Annual Cash Retainers For Each Member Of Compensation Committee Or Nominating And Governance Committee | 5,000 | ||||||||||
Additional Annual Cash Retainers For The Chairman Of Compensation Committee Or Nominating And Governance Committee | 7,500 | ||||||||||
Additional Annual Cash Retainers For Each Member Of Audit Committee | 10,000 | ||||||||||
Additional Annual Cash Retainers For The Chairman Of Audit Committee | 45,000 | ||||||||||
Additional annual cash retainers to the lead independent director | 25,000 | ||||||||||
Value Of Stock Option To Purchase Shares Of Common Stock | $ 100,000 | ||||||||||
Threshold number of in-person meetings to be entitled to additional compensation | item | 4 | ||||||||||
Threshold number of telephonic meetings to be entitled to additional compensation | item | 15 | ||||||||||
Additional compensation in the event directors are required to attend additional telephonic meeting beyond the 12 telephonic meeting thresholds | $ 500 | ||||||||||
Additional compensation in the event directors are required to attend additional in-person meeting beyond the four in-person meeting threshold | $ 1,000 | ||||||||||
Amount to be received upon change in control | $ 5,000,000 | ||||||||||
Threshold Minimum Beneficial Ownership Percentage | 50% | ||||||||||
Subsequent event | Proceeds that are up to and including $1 billion | Non-employee director | |||||||||||
Subsequent Event [Line Items] | |||||||||||
Aggregate percentage of the transaction proceeds to be received upon change in control | 10% | ||||||||||
Threshold proceeds for compensation upon change in control | $ 1,000,000 | ||||||||||
Subsequent event | Proceeds that are more than $1 billion and up to $1.5 billion | Non-employee director | |||||||||||
Subsequent Event [Line Items] | |||||||||||
Aggregate percentage of the transaction proceeds to be received upon change in control | 5% | ||||||||||
Subsequent event | Proceeds that are more than $1.5 billion | Non-employee director | |||||||||||
Subsequent Event [Line Items] | |||||||||||
Aggregate percentage of the transaction proceeds to be received upon change in control | 5% | ||||||||||
Threshold proceeds for compensation upon change in control | $ 1,500,000 | ||||||||||
Subsequent event | Performance Shares | CEO | Achievement of Vehicle Completion Milestones | |||||||||||
Subsequent Event [Line Items] | |||||||||||
Percentage of awards to be issued | 3% | ||||||||||
Subsequent event | Performance Shares | CEO | Achievement of Revenue Benchmark Milestones | |||||||||||
Subsequent Event [Line Items] | |||||||||||
Percentage of awards to be issued | 1% | ||||||||||
Revenue recognized | $ 25,000,000 | ||||||||||
Threshold Revenue | $ 250,000,000 | ||||||||||
Subsequent event | Performance Shares | CEO | Achievement of Battery Development Milestones | |||||||||||
Subsequent Event [Line Items] | |||||||||||
Percentage of awards to be issued | 2% | ||||||||||
Subsequent event | Performance Shares | CEO | Achievement of JV-Acquisition Milestones | |||||||||||
Subsequent Event [Line Items] | |||||||||||
Percentage of awards to be issued | 3% | ||||||||||
Subsequent event | Performance Shares | CEO | Achievement of Accelerated Development Milestone | |||||||||||
Subsequent Event [Line Items] | |||||||||||
Percentage of awards to be issued | 2% | ||||||||||
Subsequent event | Amendment To Securities Purchase Agreement | |||||||||||
Subsequent Event [Line Items] | |||||||||||
Remaining shares reserved for the plan | shares | 7,000,000 | ||||||||||
Subsequent event | Amended Equity Incentive Stock Plan 2022 | |||||||||||
Subsequent Event [Line Items] | |||||||||||
Additional shares registered | shares | 52,000,000 | ||||||||||
Subsequent event | Dollar 25 Million Stock Buyback Program | |||||||||||
Subsequent Event [Line Items] | |||||||||||
Shares repurchased | $ 25,000,000 | ||||||||||
Subsequent event | Minimum | |||||||||||
Subsequent Event [Line Items] | |||||||||||
Reverse stock ratio | 0.50 | ||||||||||
Subsequent event | Minimum | Proceeds that are up to and including $1 billion | Non-employee director | |||||||||||
Subsequent Event [Line Items] | |||||||||||
Threshold proceeds for compensation upon change in control | 1,000,000 | ||||||||||
Subsequent event | Maximum | |||||||||||
Subsequent Event [Line Items] | |||||||||||
Reverse stock ratio | 0.01 | ||||||||||
Subsequent event | Maximum | Proceeds that are more than $1 billion and up to $1.5 billion | Non-employee director | |||||||||||
Subsequent Event [Line Items] | |||||||||||
Threshold proceeds for compensation upon change in control | $ 1,500,000 |
RESTATEMENT - Statement of Oper
RESTATEMENT - Statement of Operations (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
RESTATEMENT | ||||
Loss from Operations | $ (53,806,492) | $ (18,221,165) | $ (195,315,821) | $ (62,732,442) |
Other financing costs - initial recognition of derivative liabilities | (248,413,090) | (504,373,115) | (269,344,178) | |
Gain / (loss) on derivative liability revaluation | (241,168) | 34,583,523 | (89,462,559) | (107,705,006) |
Others | (21,209,509) | (45,735,556) | ||
Other income (expense) | 13,374,014 | (422,784,739) | ||
Net loss attributable to stockholders | (308,858,234) | (4,847,151) | (800,047,339) | (485,517,181) |
Deemed dividend on preferred stock | (13,125) | (2,285,792) | 7,387,811 | (37,541,085) |
Net income attributable to common stockholders | $ (308,871,359) | $ (7,132,943) | $ (792,659,528) | $ (523,058,266) |
Loss per share, basic | $ (11.14) | $ (4.26) | $ (55.44) | $ (694.20) |
Weighted average common shares outstanding, basic (after reverse stock splits, see Note 1) | 27,720,475 | 1,674,607 | 14,296,659 | 753,474 |
As Previously Reported | ||||
RESTATEMENT | ||||
Loss from Operations | $ (18,221,165) | $ (62,732,442) | ||
Gain / (loss) on derivative liability revaluation | 3,045,000 | 3,045,000 | ||
Incentive fee to creditor for transfer of note payable | (23,085,886) | (23,085,886) | ||
Others | (21,209,509) | (45,735,556) | ||
Other income (expense) | (41,250,395) | (65,776,442) | ||
Net loss attributable to stockholders | (59,471,560) | (128,508,884) | ||
Deemed dividend on preferred stock | (2,285,792) | (4,805,740) | ||
Net income attributable to common stockholders | $ (61,757,352) | $ (133,314,624) | ||
Loss per share, basic | $ (36.88) | $ (176.93) | ||
Weighted average common shares outstanding, basic (after reverse stock splits, see Note 1) | 1,674,607 | 753,474 | ||
Adjustments | ||||
RESTATEMENT | ||||
Other financing costs - initial recognition of derivative liabilities | $ (269,344,178) | |||
Gain / (loss) on derivative liability revaluation | $ 31,538,523 | (110,750,006) | ||
Incentive fee to creditor for transfer of note payable | 23,085,886 | 23,085,886 | ||
Other income (expense) | 54,624,409 | (357,008,297) | ||
Net loss attributable to stockholders | 54,624,409 | (357,008,297) | ||
Deemed dividend on preferred stock | (32,735,345) | |||
Net income attributable to common stockholders | $ 54,624,409 | $ (389,743,642) |