Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Mar. 31, 2023 | May 12, 2023 | |
Document and Entity Information [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Mar. 31, 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 $0.001 per share | |
Trading Symbol | MULN | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 172,510,340 | |
Entity Central Index Key | 0001499961 | |
Current Fiscal Year End Date | --09-30 | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) | Mar. 31, 2023 | Sep. 30, 2022 |
CURRENT ASSETS | ||
Cash and cash equivalents | $ 60,337,591 | $ 54,085,685 |
Restricted cash | 26,409,672 | 30,289,400 |
Inventory | 6,958,158 | |
Prepaid expenses and other current assets | 5,230,602 | 1,958,759 |
TOTAL CURRENT ASSETS | 98,936,023 | 86,333,844 |
Property, equipment and leasehold improvements, net | 89,641,984 | 17,786,702 |
Intangible assets, net | 112,744,496 | 93,947,018 |
Deposit on ELMS purchase | 5,500,000 | |
Note receivable from related party | 1,388,405 | |
Right-of-use assets | 6,029,432 | 4,597,052 |
Goodwill | 92,834,832 | 92,834,832 |
Other assets | 1,167,056 | 1,595,032 |
TOTAL ASSETS | 402,742,228 | 302,594,479 |
CURRENT LIABILITIES | ||
Accounts payable | 14,827,682 | 6,398,425 |
Accrued expenses and other current liabilities | 6,211,840 | 7,185,881 |
Dividends payable | 361,321 | 7,762,255 |
Derivative liabilities | 30,855,261 | 84,799,179 |
Liability to issue shares | 59,267,471 | 10,710,000 |
Lease liabilities, current portion | 2,235,197 | 1,428,474 |
Notes payable, current portion | 7,588,513 | 3,856,497 |
Other current liabilities | 103,372 | 90,372 |
TOTAL CURRENT LIABILITIES | 121,450,657 | 122,231,083 |
Notes payable, net of current portion | 5,164,552 | |
Lease liabilities, net of current portion | 4,163,705 | 3,359,354 |
Deferred tax liability | 13,980,782 | 14,882,782 |
TOTAL LIABILITIES | 139,595,144 | 145,637,771 |
Commitments and contingencies (Note 17) | ||
STOCKHOLDERS' EQUITY | ||
Common stock owed but not issued; $0.001 par value; 5,930,263 and zero shares at March 31, 2023 and September 30, 2022 respectively (*) | 5,930 | |
Additional Paid-in Capital | 1,550,030,214 | 948,565,285 |
Accumulated Deficit | (1,381,096,559) | (889,907,455) |
Non-controlling interest | 94,079,643 | 98,259,819 |
TOTAL STOCKHOLDERS' EQUITY | 263,147,084 | 156,956,709 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | 402,742,228 | 302,594,479 |
Series A Preferred Stock | ||
STOCKHOLDERS' EQUITY | ||
Preferred Stock, Value | 2 | 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 |
Series AA Preferred Stock | ||
STOCKHOLDERS' EQUITY | ||
Common stock; $0.001 par value; 5,000,000,000 and 1,750,000,000 shares authorized at March 31, 2023 and September 30, 2022 respectively; 126,281,274 and 33,338,727 shares issued and outstanding at March 31, 2023 and September 30, 2022 respectively (*) | $ 126,281 | $ 33,339 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Mar. 31, 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 | |
Common Stock, shares issued | 126,281,274 | 33,338,727 |
Common Stock, shares outstanding | 126,281,274 | 33,338,727 |
Common stock owed but not issued, par value | $ 0.001 | $ 0.001 |
Common shares owed but unissued | 5,930,263 | 0 |
Series A Preferred Stock | ||
Preferred Stock, shares authorized | 200,000 | 200,000 |
Preferred Stock, shares issued | 1,425 | 1,924 |
Preferred Stock, shares outstanding | 1,425 | 1,924 |
Series B Preferred Stock | ||
Preferred Stock, shares issued | 0 | |
Preferred Stock, shares outstanding | 0 | |
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 | 363,098 | 4,359,652 |
Preferred Stock, shares outstanding | 363,098 | 4,359,562 |
Series AA Preferred Stock | ||
Preferred Stock, shares authorized | 1 | 1 |
Preferred Stock, shares issued | 0 | 0 |
Preferred Stock, shares outstanding | 0 | 0 |
Common Stock, shares authorized | 1,750,000,000 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Mar. 31, 2023 | Mar. 31, 2022 | |
OPERATING EXPENSES | ||||
General and administrative | $ 47,412,338 | $ 29,269,433 | $ 112,408,349 | $ 42,170,516 |
Research and development | 20,478,971 | 1,183,437 | 29,100,980 | 2,340,761 |
Total Operating Expense | 67,891,309 | 30,452,870 | 141,509,329 | 44,511,277 |
Loss from Operations | (67,891,309) | (30,452,870) | (141,509,329) | (44,511,277) |
Other financing costs - initial recognition of derivative liabilities | (160,364,949) | (255,960,025) | (269,344,178) | |
Loss on derivative liability revaluation | (48,439,415) | (131,670,146) | (89,221,391) | (142,288,528) |
Gain / (loss) extinguishment of debt, net | (40,000) | (6,452,170) | 74,509 | |
Gain on sale of fixed assets | 385,031 | 385,031 | ||
Interest expense | (1,745,882) | (2,120,515) | (4,573,971) | (24,559,459) |
Loan discount amortization expense | (142,287) | (142,287) | ||
Loss on debt settlement | (41,096) | |||
Other income, net | 482,405 | 1,128,286 | ||
Net loss before income tax benefit | (117,391,457) | (324,608,480) | (496,345,856) | (480,670,029) |
Income tax benefit | 482,922 | 976,576 | ||
Net loss before accrued preferred dividends and noncontrolling interest | (116,908,535) | (324,608,480) | (495,369,280) | (480,670,029) |
Net loss attributable to noncontrolling interest | (1,995,217) | (4,180,176) | ||
Net loss attributable to shareholders | (114,913,318) | (324,608,480) | (491,189,104) | (480,670,029) |
Accrued preferred dividends | 8,039,612 | (32,735,345) | 7,400,935 | (32,735,345) |
Net Loss attributable to common shareholders after preferred dividends | $ (106,873,706) | $ (357,343,825) | $ (483,788,169) | $ (513,405,374) |
Net loss per share, basic | $ (1.30) | $ (173.83) | $ (7.09) | $ (370.53) |
Net loss per share, diluted | $ (1.30) | $ (173.83) | $ (7.09) | $ (370.53) |
Weighted average shares outstanding, basic | 82,409,028 | 2,055,720 | 68,262,145 | 1,385,594 |
Weighted average shares outstanding, diluted | 82,409,028 | 2,055,720 | 68,262,145 | 1,385,594 |
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 Officers | Common Stock Board of Directors | Common Stock Consultants | Common Stock Employees [Member] | Common Stock Series C Warrants | Common Stock Series D Warrants | Common Stock | Common Stock Owed But Unissued | Paid-in Capital Officers | Paid-in Capital Board of Directors | Paid-in Capital Consultants | Paid-in Capital Employees [Member] | Paid-in Capital Series C Warrants | Paid-in Capital Series D Warrants | Paid-in Capital | Accumulated Deficit | Non-controlling Interest | Officers | Board of Directors | Consultants | Employees [Member] | Series C Warrants | Series D Warrants | Total |
Balance, beginning at Sep. 30, 2021 | $ 100 | $ 5,568 | $ 282 | $ 88,657,052 | $ (150,374,649) | $ (61,711,647) | |||||||||||||||||||||||
Balance, beginning (in shares) at Sep. 30, 2021 | 100,363 | 5,567,319 | 281,935 | ||||||||||||||||||||||||||
Common shares issued for cash | $ 308 | 10,894,351 | 10,894,659 | ||||||||||||||||||||||||||
Common shares issued for cash (in shares) | 308,163 | ||||||||||||||||||||||||||||
Common shares issued for asset | $ 4 | 140,996 | 141,000 | ||||||||||||||||||||||||||
Common shares issued for asset (in shares) | 4,376 | ||||||||||||||||||||||||||||
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 to issue | $ 85 | 704,915 | 705,000 | ||||||||||||||||||||||||||
Preferred shares issued to settle liability to issue (in shares) | 84,900 | ||||||||||||||||||||||||||||
Preferred shares issued in exchange for conversion of debt | $ 2,829 | 24,988,926 | 24,991,755 | ||||||||||||||||||||||||||
Preferred shares issued in exchange for conversion of debt (in shares) | 2,829,029 | ||||||||||||||||||||||||||||
Common shares issued to settle liability to issue | $ 5 | 1,034,807 | 1,034,812 | ||||||||||||||||||||||||||
Common shares issued to settle liability to issue (in shares) | 5,259 | ||||||||||||||||||||||||||||
Prefunded warrant issuance | 15,000,000 | 15,000,000 | |||||||||||||||||||||||||||
Issuance of common stock for conversion of preferred stock | $ (85) | $ 340 | (255) | ||||||||||||||||||||||||||
Issuance of common stock for conversion of preferred stock (in shares) | (84,996) | 339,987 | |||||||||||||||||||||||||||
Share-based compensation issued to management, directors, employees, and consultants | $ 18 | 4,425,250 | 4,425,268 | ||||||||||||||||||||||||||
Share-based compensation issued to management, directors, employees, and consultants (in shares) | 17,725 | ||||||||||||||||||||||||||||
Warrant issuances | 10,491,621 | 10,491,621 | |||||||||||||||||||||||||||
Net loss | (36,463,938) | (36,463,938) | |||||||||||||||||||||||||||
Balance, ending at Dec. 31, 2021 | $ 15 | $ 5,568 | $ 5,178 | $ 957 | 176,335,399 | (186,838,587) | (10,491,470) | ||||||||||||||||||||||
Balance, ending (in shares) at Dec. 31, 2021 | 15,367 | 5,567,319 | 5,177,899 | 957,446 | |||||||||||||||||||||||||
Balance, beginning at Sep. 30, 2021 | $ 100 | $ 5,568 | $ 282 | 88,657,052 | (150,374,649) | (61,711,647) | |||||||||||||||||||||||
Balance, beginning (in shares) at Sep. 30, 2021 | 100,363 | 5,567,319 | 281,935 | ||||||||||||||||||||||||||
Accrued preferred dividends | (32,735,345) | ||||||||||||||||||||||||||||
Balance, ending at Mar. 31, 2022 | $ 2 | $ 2,784 | $ 8,303 | $ 11,591 | 268,945,960 | (219,411,972) | 49,556,668 | ||||||||||||||||||||||
Balance, ending (in shares) at Mar. 31, 2022 | 1,934 | 2,783,659 | 8,303,323 | 11,591,364 | |||||||||||||||||||||||||
Balance, beginning at Dec. 31, 2021 | $ 15 | $ 5,568 | $ 5,178 | $ 957 | 176,335,399 | (186,838,587) | (10,491,470) | ||||||||||||||||||||||
Balance, beginning (in shares) at Dec. 31, 2021 | 15,367 | 5,567,319 | 5,177,899 | 957,446 | |||||||||||||||||||||||||
Preferred shares issued for cash | $ 4,974 | $ 2,320 | 73,592,161 | 73,599,455 | |||||||||||||||||||||||||
Preferred shares issued for cash (in shares) | 4,974,266 | 2,319,933 | |||||||||||||||||||||||||||
Cashless warrant exercise | $ 7,840 | (7,840) | 0 | ||||||||||||||||||||||||||
Cashless warrant exercise (in shares) | 7,840,214 | ||||||||||||||||||||||||||||
Issuance of common stock for conversion of preferred stock | $ (13) | $ (2,784) | $ (1,849) | $ 239 | 4,407 | ||||||||||||||||||||||||
Issuance of common stock for conversion of preferred stock (in shares) | (13,433) | (2,783,660) | (1,848,842) | 239,032 | |||||||||||||||||||||||||
Share-based compensation issued to management, directors, employees, and consultants | $ 235 | 21,541,781 | 21,542,016 | ||||||||||||||||||||||||||
Share-based compensation issued to management, directors, employees, and consultants (in shares) | 234,739 | ||||||||||||||||||||||||||||
Accrued preferred dividends | (32,735,345) | ||||||||||||||||||||||||||||
Dividends accumulated on preferred stock | (2,519,948) | (2,519,948) | |||||||||||||||||||||||||||
Net loss | (32,573,385) | (32,573,385) | |||||||||||||||||||||||||||
Balance, ending at Mar. 31, 2022 | $ 2 | $ 2,784 | $ 8,303 | $ 11,591 | 268,945,960 | (219,411,972) | 49,556,668 | ||||||||||||||||||||||
Balance, ending (in shares) at Mar. 31, 2022 | 1,934 | 2,783,659 | 8,303,323 | 11,591,364 | |||||||||||||||||||||||||
Balance, beginning at Sep. 30, 2022 | $ 2 | $ 1,360 | $ 4,359 | $ 33,339 | 948,565,285 | (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 | 33,338,727 | |||||||||||||||||||||||||
Shares issued to extinguish penalty | $ 920 | 5,519,080 | 5,520,000 | ||||||||||||||||||||||||||
Shares issued to extinguish penalty (in shares) | 920,000 | ||||||||||||||||||||||||||||
Cashless warrant exercise | $ 5,139 | $ 9,164 | $ 39,182,839 | $ 71,130,100 | $ 39,187,978 | $ 71,139,264 | |||||||||||||||||||||||
Cashless warrant exercise (in shares) | 5,138,542 | 9,163,950 | |||||||||||||||||||||||||||
Issuance of common stock for conversion of convertible notes | $ 8,833 | 59,394,043 | 59,402,876 | ||||||||||||||||||||||||||
Issuance of common stock for conversion of convertible notes (in shares) | 8,833,142 | ||||||||||||||||||||||||||||
Surplus common stock issued on cashless warrant exercise | $ 3,149 | 26,732,329 | 26,735,478 | ||||||||||||||||||||||||||
Surplus common stock issued on cashless warrant exercise (in shares) | 3,148,722 | ||||||||||||||||||||||||||||
Issuance of common stock for conversion of preferred stock | $ (150) | $ (3,996) | $ 166 | 3,981 | 1 | ||||||||||||||||||||||||
Issuance of common stock for conversion of preferred stock (in shares) | (150,265) | (3,996,554) | 165,873 | ||||||||||||||||||||||||||
Share-based compensation issued to management, directors, employees, and consultants | $ 4,555 | 30,263,104 | 30,267,659 | ||||||||||||||||||||||||||
Share-based compensation issued to management, directors, employees, and consultants (in shares) | 4,555,624 | ||||||||||||||||||||||||||||
Dividends accumulated on preferred stock | (638,677) | (638,677) | |||||||||||||||||||||||||||
Other transactions | (3,122,227) | (3,122,227) | |||||||||||||||||||||||||||
Shares issued to settle note payable | $ 2,482 | 13,733,921 | 13,736,403 | ||||||||||||||||||||||||||
Shares issued to settle note payable (in shares) | 2,481,947 | ||||||||||||||||||||||||||||
Preferred shares issued to officers | $ 1 | 25,000 | 25,000 | ||||||||||||||||||||||||||
Non-controlling interest income from Bollinger acquisition | (2,184,959) | (2,184,959) | |||||||||||||||||||||||||||
Net loss | (376,275,786) | (376,275,786) | |||||||||||||||||||||||||||
Balance, ending at Dec. 31, 2022 | $ 2 | $ 1,210 | $ 363 | $ 67,747 | 1,190,788,778 | (1,266,183,241) | 96,074,860 | 20,749,719 | |||||||||||||||||||||
Balance, ending (in shares) at Dec. 31, 2022 | 1,924 | 1,210,056 | 363,098 | 1 | 67,746,527 | ||||||||||||||||||||||||
Balance, beginning at Sep. 30, 2022 | $ 2 | $ 1,360 | $ 4,359 | $ 33,339 | 948,565,285 | (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 | 33,338,727 | |||||||||||||||||||||||||
Accrued preferred dividends | 7,400,935 | ||||||||||||||||||||||||||||
Net loss allocable to non-controlling interest | 4,180,176 | ||||||||||||||||||||||||||||
Balance, ending at Mar. 31, 2023 | $ 2 | $ 1,210 | $ 363 | $ 126,281 | $ 5,930 | 1,550,030,214 | (1,381,096,559) | 94,079,643 | 263,147,084 | ||||||||||||||||||||
Balance, ending (in shares) at Mar. 31, 2023 | 1,425 | 1,210,056 | 363,098 | 126,281,274 | 5,930,263 | ||||||||||||||||||||||||
Balance, beginning at Dec. 31, 2022 | $ 2 | $ 1,210 | $ 363 | $ 67,747 | 1,190,788,778 | (1,266,183,241) | 96,074,860 | 20,749,719 | |||||||||||||||||||||
Balance, beginning (in shares) at Dec. 31, 2022 | 1,924 | 1,210,056 | 363,098 | 1 | 67,746,527 | ||||||||||||||||||||||||
Cashless warrant exercise | $ 43,008 | $ 5,930 | 183,865,282 | 183,914,220 | |||||||||||||||||||||||||
Cashless warrant exercise (in shares) | 43,007,583 | 5,930,263 | |||||||||||||||||||||||||||
Issuance of common stock for conversion of convertible notes | $ 12,385 | 93,806,975 | 93,819,360 | ||||||||||||||||||||||||||
Issuance of common stock for conversion of convertible notes (in shares) | 12,385,394 | ||||||||||||||||||||||||||||
Issuance of common stock for conversion of preferred stock | $ 0 | $ 2 | (2) | 0 | |||||||||||||||||||||||||
Issuance of common stock for conversion of preferred stock (in shares) | (499) | 1,996 | |||||||||||||||||||||||||||
Reclassification of derivatives to equity upon authorization of sufficient number of shares | 47,818,881 | 47,818,881 | |||||||||||||||||||||||||||
Preferred shares series AA refund | (25,000) | (25,000) | |||||||||||||||||||||||||||
Preferred shares series AA refund (in shares) | (1) | ||||||||||||||||||||||||||||
Share-based compensation issued to management, directors, employees, and consultants | $ 2,262 | $ 5 | $ 866 | $ 6 | $ 18,211,472 | $ 37,495 | $ 7,407,194 | $ 79,527 | $ 18,213,734 | $ 37,500 | $ 7,408,060 | $ 79,533 | |||||||||||||||||
Share-based compensation issued to management, directors, employees, and consultants (in shares) | 2,262,345 | 5,000 | 866,066 | 6,363 | |||||||||||||||||||||||||
Accrued preferred dividends | 8,039,612 | ||||||||||||||||||||||||||||
Preferred C & D stock dividends | 8,039,612 | 8,039,612 | |||||||||||||||||||||||||||
Non-controlling interest income from Bollinger acquisition | (1,995,217) | (1,995,217) | |||||||||||||||||||||||||||
Net loss allocable to non-controlling interest | 1,995,217 | ||||||||||||||||||||||||||||
Net loss | (114,913,318) | (114,913,318) | |||||||||||||||||||||||||||
Balance, ending at Mar. 31, 2023 | $ 2 | $ 1,210 | $ 363 | $ 126,281 | $ 5,930 | $ 1,550,030,214 | $ (1,381,096,559) | $ 94,079,643 | $ 263,147,084 | ||||||||||||||||||||
Balance, ending (in shares) at Mar. 31, 2023 | 1,425 | 1,210,056 | 363,098 | 126,281,274 | 5,930,263 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 6 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Cash Flows from Operating Activities | ||
Net loss before accrued preferred dividends and noncontrolling interest | $ (495,369,280) | $ (480,670,029) |
Adjustments to reconcile net loss attributable to shareholders to net cash used in operating activities: | ||
Depreciation and amortization | 8,523,682 | 608,496 |
Officer and employee stock compensation | 47,697,024 | 3,292,987 |
Issuance of warrants to suppliers | 6,814,000 | |
Issuance of shares for services | 12,606,343 | 24,042,060 |
Revaluation of derivative liabilities | 89,221,391 | 142,288,528 |
Initial recognition of derivative liabilities | 255,960,025 | 269,344,178 |
Non-cash interest and other operating activities | (1,745,882) | 1,713,103 |
Non-cash lease expense | 916,592 | 284,879 |
Amortization of debt discount | 19,400,483 | |
Loss on asset disposal | 1,298 | |
Loss/(gain) on extinguishment of debt | 6,452,170 | (74,509) |
Loss on debt settlement | 41,096 | |
Changes in operating assets and liabilities: | ||
Other current assets | (8,908,021) | 3,330,474 |
Other assets | 636,633 | (858,692) |
Accounts payable | 8,429,257 | (1,032,810) |
Accrued expenses and other liabilities | 2,672,040 | (6,300,181) |
Deferred tax liability | (901,999) | |
Right of use asset | (1,791,434) | |
Lease liabilities | 1,220,074 | (283,141) |
Net cash used in operating activities | (67,567,385) | (24,871,780) |
Cash Flows from Investing Activities | ||
Purchase of equipment | (4,298,563) | (10,491,547) |
Purchase of intangible assets | (204,660) | (246,132) |
ELMS asset purchase | (92,916,874) | |
Net cash used in investing activities | (97,420,097) | (10,737,679) |
Cash Flows from Financing Activities | ||
Changes in net parent investment | (223,067) | |
Proceeds from issuance of notes payable | 150,000,000 | 12,142,791 |
Proceeds from issuance of common stock | 40,151,308 | |
Proceeds from issuance of preferred stock | 63,925,000 | |
Reimbursement for overissuance of shares | 17,819,660 | |
Payment of notes payable | (460,000) | (15,146,860) |
Net cash provided by financing activities | 167,359,660 | 100,849,172 |
Increase in cash | 2,372,178 | 65,239,713 |
Cash, cash equivalents and restricted cash, beginning of period | 84,375,085 | 42,174 |
Cash, cash equivalents and restricted cash, ending of period | 86,747,263 | 65,281,887 |
Supplemental disclosure of Cash Flow information: | ||
Cash paid for interest | 5,028 | 1,489,908 |
Cash paid for taxes | 800 | |
Supplemental Disclosure for Non-Cash Activities: | ||
Preferred shares issued in exchange for convertible debt | 24,991,755 | |
Convertible notes and interest - conversion to common stock | 153,222,236 | $ 23,192,500 |
Exercise of warrants recognized earlier as liabilities | 268,713,397 | |
Reclassification of derivatives to equity upon authorization of sufficient number of shares | 47,818,882 | |
Waiver of dividends by stockholders | 6,872,075 | |
Warrants issued to suppliers | 6,814,000 | |
Common stock issued to extinguish liability to issue stock | 10,500,712 | |
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 |
DESCRIPTION OF BUSINESS AND BAS
DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION | 6 Months Ended |
Mar. 31, 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 Exchange at the opening of trading on November 5, 2021. Reverse Stock Split In January 2023, the Company’s stockholders 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 Pursuant to such authority granted by the Company’s stockholders, the Board approved a reverse stock split of the Company’s common Stock at a rate of 1-for- 25 As the Reverse Stock Split occurred after the balance sheet date but before the financial statements are issued, the Company retroactively adjusted its financial statements to reflect the split. All issued and outstanding common stock and per share amounts contained in the financial statements have been retroactively adjusted to reflect this Reverse Stock Split 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. A proportionate adjustment was also made to the number of shares reserved for issuance pursuant to the Company’s equity incentive compensation plans to reflect the Reverse Stock Split. No fractional shares were issued in connection with the Reverse Stock Split. 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 Split, but their conversion ratios have been proportionally changed. There were no outstanding shares of Series B Preferred Stock as of the effective date of the Reverse Stock Split. The common stock and additional paid-in-capital line items contained in the financial statements were adjusted to account for the Reverse Stock Split for all periods presented (with $800,129 value of common stock decreased and additional paid-in-capital increased on October 1, 2022). Subsequent 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. 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 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, if any. 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 | 6 Months Ended |
Mar. 31, 2023 | |
LIQUIDITY, CAPITAL RESOURCES, AND GOING CONCERN | |
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 the Company will continue as a going concern. Our principal source of liquidity consists of existing cash and restricted cash of approximately $86.7 million as of March 31, 2023. During the six months ended March 31, 2023, the Company used $67.6 million of cash for operating activities and had net working capital deficit of approximately $22.5 million as of March 31, 2023. The Company has not generated revenue to date and has accumulated losses since inception. The Company’s ability to continue operating as a going concern is contingent upon, among other things, its ability to raise sufficient additional capital and/or obtaining the necessary financing to support ongoing and future operations and to successfully manufacture and launch its products for sale. While the Company expects to obtain the additional capital and/or financing that is needed, 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. These factors raise substantial doubt as to the Company’s ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of these uncertainties. Our management plans to raise additional capital through a combination of equity and debt financing, strategic alliances, and licensing arrangements. Under existing Securities Purchase Agreement, dated June 7, 2022 and as further amended, the Company has sold Series D Preferred Stock and common stock as well as detached warrants for $45 million (see Note 19 – Subsequent Events) and a may obtain additional investment, in the amount of $45 million under similar conditions by June 30, 2023. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 6 Months Ended |
Mar. 31, 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. The Company completed the acquisition of Bollinger Motors, Inc on September 7, 2022. 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 carve-out financial statements and the reported amounts of total expenses in the reporting periods. Estimates are used for, but not limited to, fair value of long-lived assets, fair value of financial instruments, depreciable lives of property and equipment, income taxes, contingencies, and inputs used to value stock-based compensation, valuation of common and 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. The imputed interest results in adjustments to the debt amounts reported in our condensed consolidated financial statements prepared under U.S. GAAP. Loan valuations issues can arise when trying to determine the debt attributes, such as discount rate, credit loss factors, liquidity discounts, and pricing. Management bases its estimates on historical experience and on various other assumptions believed to be reasonable, the results of which form the basis for adjustments about the 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. 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 shareholders' 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 13 and Note 14). 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 March 31, 2023 or September 30, 2022. Restricted Cash Funds that are not available for immediate use and must be used for a specific purpose. On March 31, 2023, the restricted cash balance was $26,409,672. These funds include approximately $409,672 for the refundable deposits for individuals and businesses who have made deposits for Mullen and Bollinger vehicles and approximately $26 million for cash restricted for use by Bollinger operations. The $26 million of restricted cash will be released in two tranches, $13 million on May 5, 2023 and $13 million on August 5, 2023. Customer deposits are accounted for within other liabilities. Refundable deposits are $289 thousand for the year ended September 30, 2022. On September 7, 2022, the Company deposited $30 million in an escrow account as part of the Bollinger acquisition. 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. 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 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 March 31, 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 March 31, 2023 and September 30, 2022. Intangible Assets, net Intangible assets consist of acquired and developed intellectual property and website development costs. In accordance with ASC 350, “Intangibles—Goodwill and Others,” Impairment of Long-Lived Assets The Company periodically evaluates property, plant and equipment and intangible 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 related party loans 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 non-production related 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 are expensed as incurred. Research and development expenses consist primarily of costs associated with the development of our electric vehicle product lines. Share-Based Compensation We account for share-based awards issued by the Company in accordance with ASC Subtopic 718-10, “Compensation – Share Compensation” Related Party Transactions We have related party transactions with certain of our directors, officers, and principal stockholders. These transactions are entered into in the ordinary course of business and include receiving operational loans, issuing convertible debt and warrants, providing financial support associated with the borrowing of funds. 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 March 31, 2023 and September 30, 2022 are $59.6 million and $53.3 million, respectively. Recently Issued Accounting Standards Accounting standard updates issued but not yet added were assessed and determined to be either not applicable or not expected to have a material impact on our unaudited condensed consolidated financial statements. |
PURCHASE OF ASSETS FROM ELMS
PURCHASE OF ASSETS FROM ELMS | 6 Months Ended |
Mar. 31, 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 33,577,045 Identified intangible: engineering design 22,112,791 Inventory 6,958,158 Total Identified Assets $ 105,375,032 |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS | 6 Months Ended |
Mar. 31, 2023 | |
GOODWILL AND INTANGIBLE ASSETS | |
GOODWILL AND INTANGIBLE ASSETS | NOTE 5 – GOODWILL AND INTANGIBLE ASSETS As at March 31, 2023 and September 30, 2022, goodwill was $92,834,832 and $92,834,832, respectively. The goodwill was due to the Bollinger acquisition on September 7, 2022. For the six months ended March 31, 2023, and 2022, the Company recorded intangible asset additions of $22,317,452 and $246,132, respectively. The $22.3 million is primarily due to the ELMS asset acquisition (see NOTE 4 – Purchase of Assets from ELMS). Intangible assets are stated at cost, net of accumulated amortization. The weighted average useful life of intellectual property is 9.4 years. Acquired intellectual property from the Bollinger acquisition, consisted primarily of patents and non-compete agreements have finite life. Identifiable intangible assets with definite lives are amortized over the period of estimated benefit using the straight-line method and the estimated useful lives of three years. The straight-line method of amortization represents management’s best estimate of the distribution of the economic value of the identifiable intangible assets. March 31, 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 (1,551,895) $ 1,108,496 $ 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 (2,782,994) 29,608,192 32,391,186 (204,109) 32,187,077 Engineer design - ELMS 22,112,791 (737,093) 21,375,698 — — — Other 1,820,995 (144,171) 1,676,824 1,820,994 (16,175) 1,804,819 Trademark 670,674 — 670,674 466,014 — 466,014 Total Intangible Assets $ 118,031,831 $ (5,287,335) $ 112,744,496 $ 95,714,379 $ (1,767,361) $ 93,947,018 Total future amortization expense for finite-lived intellectual property is as follows: Years Ended March 31, Future Amortization 2023 (six months) $ 3,250,538 2024 6,270,078 2025 5,604,980 2026 5,604,980 2027 5,595,580 Thereafter 27,443,054 Total Future Amortization Expense $ 53,769,210 For the three and six months ended March 31, 2023, amortization expense for the intangible assets was $763,269 and $3,519,973 and $221,699 and $445,376, for the three and six months ended March 31, 2022, |
DEBT
DEBT | 6 Months Ended |
Mar. 31, 2023 | |
DEBT | |
DEBT | NOTE 6 – 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 March 31, 2023: 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% 2019 - 2021 Promissory notes - - - NA NA Real Estate notes 5,000,000 5,000,000 - 0 - 00% 2023 - 2024 Loans and advances 111,676 111,676 - 0.00% 2016 - 2018 Less: debt discount (574,248) (574,248) - NA NA Total Debt $ 7,588,513 $ 7,588,513 $ — 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 March 31, 2023: Years Ended March 31, 2023 (6 months) 2024 Total Total Debt $ 3,162,761 $ 4,425,752 $ 7,588,513 Notes and Advances Total interest is comprised primarily of stated interest, amortization of debt discount and additional interest recognized for warrants issued with convertible notes for the excess in fair value above the face value of the notes. Stated interest was $1,785,718 and $3,920,235 for the three and six months ended March 31, 2023, and $2,120,515 and $24,559,459 for the three and six months ended March 31, 2022, respectively. 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 six months ended March 31, 2023 and 2022, was $142,287 and $150,293,417, and $188,307 and $19,400,483, respectively. During the six months ended March 31, 2023, warrants having a fair value of $244,510,164 (issuable upon conversion of the convertible notes) were recognized as a derivative liability, which exceeded the face value of the underlying convertible debt, resulting in an interest expense of $94,510,164. 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 six months ended March 31, 2023, the carrying amount of indebtedness that was settled via issuance of shares of our common stock was $153,222,236 (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 six months ended March 31, 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 March 31, 2023, the remaining unamortized debt discount was $574,248. 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 420,000 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 920,000 shares of common stock (having a fair value of $5,524,600), resulting in a loss on extinguishment of $6,452,170. The A&R Note is convertible at a 5% discount to the lowest daily volume-weighted average price in the 10 trading days prior to conversion, which resulted in interest expense of $681,364 and debt premium of $681,364. On November 1, 2022, the A&R Note payable to Esousa, having a face value of $12,945,914 (plus debt premium of $681,364) and accrued interest of $171,174, was converted into 2,481,923 shares of common stock. No gain or loss was recognized upon the conversion. Convertible Notes On November 14, 2022, the Company entered into Amendment No. 3 to the June 7, 2022 Securities Purchase Agreement (“Amendment No. 3”). 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, 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 will also permit cashless exercise (see Note 7). Consummation of the transaction is dependent on certain conditions precedent. 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; 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; 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. The debt discount was amortized over the term of the note through the date the convertible notes were mandatorily convertible. Accordingly, the entire $150,000,000 of debt discount was expensed to interest expense during the six-month period ended March 31, 2023. On November 21, 2022, principal of $59,402,877 was mandatorily converted into 8,833,142 shares of common stock, resulting in a corresponding reduction in derivatives liabilities of $10,491,265. 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. 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 12,385,394 shares of common stock. See Note 7 with regards to warrants issued upon conversion of these Notes. As of March 31, 2023, and September 30, 2022, accrued interest on outstanding notes payable was $1,193,150 (relates mainly to NuBridge Commercial Lending LLC Promissory Note, see above) and $1,374,925, respectively. |
WARRANTS AND OTHER DERIVATIVE L
WARRANTS AND OTHER DERIVATIVE LIABILITIES AND FAIR VALUE MEASUREMENTS | 6 Months Ended |
Mar. 31, 2023 | |
WARRANTS AND OTHER DERIVATIVE LIABILITIES AND FAIR VALUE MEASUREMENTS | |
WARRANTS AND OTHER DERIVATIVE LIABILITIES AND FAIR VALUE MEASUREMENTS | NOTE 7 – 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 13 - Property, Equipment and Leasehold Improvements and Note 5 – Intangible assets for further information . Financial Liabilities Measured at Fair Value on a Recurring Basis During the six months ended March 31, 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 of $8.834 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 in 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, 1,677,971 (giving effect to the Reverse Stock Split, see Note 1) Preferred C Warrants were exercised on a cashless basis resulting in the issuance of 21,328,580 shares of common stock, with a total fair market value of $554,371,539 at the date of exercise. During the quarter ending December 31, 2022, 118,931 Preferred C Warrants that remained outstanding as at September 30, 2022 have been fully exercised. Preferred D Warrants For every share of Series D Preferred Stock purchased, the investors received 185% warrants (the “Preferred D Warrants”) exercisable for shares of common stock at an exercise price equal to the lower of (i) $1.27 or (ii) the closing price of the common stock on the trading day immediately after the date on which the registration statement registering the shares of common stock issuable upon conversion of the Series D Preferred Stock becomes effective on transaction 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. During the year ended September 30, 2022, no Preferred D Warrants were exercised. On September 30, 2022, 5,914,592 Preferred D Warrants (giving effect to the Reverse Stock Split, see Note 1) remained outstanding. During the quarter ended December 31, 2022, all Preferred D Warrants were exercised on a cash-less basis for 9,163,951 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 warrants. As a result of the conversion of the convertible debt into shares of common stock in November 2022 and February 2023, 39,254,291 warrants (giving effect to the Reverse Stock Split, see Note 1) were issued. They were exercised into shares of common stock on a cash-less basis, except for 3,003,361 warrants that remained outstanding and could, on a cashless basis, be exercised for 7,731,715 shares of common stock with a fair market value of $25,186,062 at March 31, 2023. 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. The fair value of warrant obligations 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 . 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. From April 1, 2023 until June 30, 2023, certain investors under the Securities Purchase Agreement have the right, but not the obligation, at any time from time to time, in their sole and absolute discretion to purchase from the Company additional shares of Preferred Stock in an amount equal to such Buyer’s pro rata portion on the same terms and conditions as applicable to the purchase and sale of shares of Series D Preferred Stock as provided under the Securities Purchase Agreement, subject to certain conditions and modifications: a) All investors under the Securities Purchase Agreement - in amount equal to $100,000,000 (pursuant to Amendment 3 to the Securities Purchase Agreement). Along with the shares of Series D Preferred Stock the buyers shall receive Additional Warrants exercisable for 110% of shares of Common Stock under conditions similar to other warrants issued under the Securities Purchase Agreement. b) One of the investors under the Securities Purchase Agreement - in amount equal to $20,000,000 (pursuant to Settlement greement and Release entered into on January 13, 2023 to settle over-issuance of shares). Along with the shares of Series D Preferred Stock the buyer shall receive Additional Warrants exercisable for 185% of shares of Common Stock under conditions similar to other warrants issued under the Securities Purchase Agreement. c) All investors under the Securities Purchase Agreement - in amount equal to $10,000,000 (pursuant to Settlement Agreement and Release entered into on January 13, 2023 to waive possible rights of the investors upon default of the Company to maintain sufficient number of registered shares required by the Securities Purchase Agreement). Along with the shares of Series D Preferred Stock the buyer shall receive Additional Warrants exercisable for 185% of shares of Common Stock under conditions similar to other warrants issued under the Securities Purchase Agreement. 2) 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. Most of these derivative liabilities, except for Qiantu warrants (as described below), were initially recognized on November 15, 2022, when the Company had 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 stockholder of the Company on January 25, 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 3,000,000 (giving effect to the Reverse Stock Split, 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), the Qiantu Warrants were recognized at fair value on inception ($6,814,000) and on March 31, 2023 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 151% to 198% , (3) risk-free interest rate of 4.10% to 4.45% . 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 March 31, 2023 and on September 30, 2022 is presented below: March 31, Quoted Prices Significant Significant 2023 in Active Other Unobservable Markets for Observable Inputs Identical Assets Inputs (Level 3) (Level 1) (Level 2) Derivative liability $ 30,855,261 $ - $ 25,192,261 $ 5,663,000 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 $ 0 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 251,324,164 Derivative liability upon authorized shares shortfall 11,978,166 Loss / (gain) on derivative liability revaluation 89,221,391 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 Liability to issue shares upon unfinished warrant exercise on period end (55,106,287) Conversions of warrants into common shares (319,707,966) Conversions of convertible notes and accrued interest into common shares (10,491,265) Balance, March 31, 2023 $ 30,855,261 Balance, September 30, 2021 $ - Derivative liabilities recognized upon issuance of convertible instruments 269,344,178 Loss / (gain) on derivative liability revaluation 142,288,528 Reclassification of derivative liabilities to equity upon authorization of sufficient common shares - Conversions of warrants into common shares (207,677,075) Conversions of convertible notes and accrued interest into common shares - Balance, March 31, 2022 $ 203,955,631 |
STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY | 6 Months Ended |
Mar. 31, 2023 | |
STOCKHOLDERS' EQUITY | |
STOCKHOLDERS' EQUITY | NOTE 8 – STOCKHOLDERS’ EQUITY Common Stock At the reconvened special meeting of stockholder 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 March 31, 2023, the Company had 5,000,000,000 shares of common stock authorized with $0.001 par value per share. Effective May 4, 2023, the Company effectuated a 1-for- 25 The Company had 126,281,274 and 33,338,727 shares of common stock (post stock split) 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. If 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 March 31, 2023, the Company had 500,000,000 shares of Preferred Stock authorized with $0.001 par value per share, including 437,500,001 shares of Series D Preferred Stock. The Reverse Stock Split (see Note 1 above) did not affect the number of shares of Preferred Stock but the conversion ratios were proportionately adjusted to decrease the number of shares of common stock to be issued as a result of the Reverse Stock Split ratio of 1-for- 25 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 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 six months ended March 31, 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. Corresponding adjustment to the additional paid-in capital of the Company amounted to $6,872,075. 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 4 (giving effect to the Reverse Stock Split – 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 March 31, 2023 there were no shares of Series B Preferred Stock issued and outstanding 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. The "Series D Original Issue Price" for each share of the Series D Preferred Stock means the lower of (i) $1.27 or (ii) the closing price on the Trading Day immediately preceding the Purchase Notice Date. As of March 31, 2023, each share of Series D is convertible into 0.04 (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. 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 | 6 Months Ended |
Mar. 31, 2023 | |
LOSS PER SHARE | |
LOSS PER SHARE | NOTE 9 – 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, excluding unvested common shares subject to repurchase or cancellation. 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 six months ended March 31, 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: Three months ended March 31, Six months ended March 31, 2023 2022 2023 2022 Net income attributable to common stockholders $ (114,913,318) $ (324,608,480) $ (491,189,104) $ (480,670,029) Less: accumulated preferred stock dividends 8,039,612 (32,735,345) 7,400,935 (32,735,345) Net income used in computing basic net income per share of common stock $ (106,873,706) $ (357,343,825) $ (483,788,169) $ (513,405,374) Net loss per share $ (1.30) $ (173.83) $ (7.09) $ (370.53) Weighted average shares outstanding, basic and diluted 82,409,028 2,055,720 68,262,145 1,385,594 |
SHARE-BASED COMPENSATION
SHARE-BASED COMPENSATION | 6 Months Ended |
Mar. 31, 2023 | |
SHARE-BASED COMPENSATION | |
SHARE-BASED COMPENSATION | NOTE 10 – 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 recognized for share awards represents the grant date fair value of such awards, which is generally recognized as a charge to income ratably over the vesting period. The Company has adopted the CEO Award Incentive Plan, approved by the Board and by stockholder 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 March 31, 2023 the accrual for future awards is approximately $2.4 million). Consulting agreements with shares for services have a cost determined by the number of shares granted within the individual contract multiplied by the market value of the shares provided on date of grant. The number of shares specified within the individual agreements are generally negotiated by our Chief Executive Officer and approved by the Board. The consultant typically earns share-based compensation over the service period which is generally recognized as a charge to income ratably over the vesting period. The common stock provided for services are accounted for as professional fees within G&A expense and employee share issuances are part of compensation expense. For the three months ended March 31, For the six months ended March 31, Composition of Share-Based Compensation Expense 2023 2022 2023 2022 Directors, officers and employees share-based compensation $ 11,320,052 $ 1,688,694 $ 47,697,024 $ 3,292,987 Shares issued to consultants for services 8,229,905 21,546,573 12,606,343 24,042,060 Total share-based compensation expense $ 19,549,957 $ 23,235,267 $ 60,303,367 $ 27,335,047 |
ACCRUED EXPENSES AND OTHER CURR
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | 6 Months Ended |
Mar. 31, 2023 | |
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | |
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | NOTE 11 – ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES March 31, 2023 September 30, 2022 Accrued Expenses and Other Liabilities Accrued expense - other $ 3,211,783 $ 3,529,384 IRS tax liability 185,873 1,744,707 Accrued payroll 1,621,034 534,782 Accrued interest 1,193,150 1,377,008 Total $ 6,211,840 $ 7,185,881 Accrued payroll represents salaries and benefits that are owed to employees, including payroll tax liabilities. Accrued interest |
LIABILITY TO ISSUE STOCK
LIABILITY TO ISSUE STOCK | 6 Months Ended |
Mar. 31, 2023 | |
LIABILITY TO ISSUE STOCK | |
LIABILITY TO ISSUE STOCK | NOTE 12 – LIABILITY TO ISSUE STOCK Liability represents stock payable that is accrued for and issuable at a future date for certain convertible securities and warrants and was $55,106,287 as of March 31, 2023. As of March 31, 2023 consultants stock compensation was $578,582, and employees and directors stock compensation was $3,582,602. As of September 30, 2022, liability to issue stock to Esousa was $10,710,000. |
PROPERTY, EQUIPMENT AND LEASEHO
PROPERTY, EQUIPMENT AND LEASEHOLD IMPROVEMENTS, NET | 6 Months Ended |
Mar. 31, 2023 | |
PROPERTY, EQUIPMENT AND LEASEHOLD IMPROVEMENTS, NET | |
PROPERTY, EQUIPMENT AND LEASEHOLD IMPROVEMENTS, NET | NOTE 13 – PROPERTY, EQUIPMENT AND LEASEHOLD IMPROVEMENTS, NET Property, equipment, and leasehold improvements, net consists of the following: March 31, September 30, 2023 2022 Building $ 50,541,364 $ 8,306,697 Furniture and equipment 552,859 556,948 Vehicles 220,886 96,363 Show room assets 4,428,544 4,418,724 Computer hardware and software 1,316,745 1,013,308 Machinery and equipment 41,109,337 7,383,612 Construction-in-progress 1,047,583 269,778 Leasehold improvements 111,570 76,438 Subtotal 99,328,888 22,121,868 Less: accumulated depreciation (9,686,904) (4,335,166) Property, Equipment and Leasehold Improvements, net $ 89,641,984 $ 17,786,702 Property, plant and equipment assets are stated at cost, net of accumulated amortization. Depreciation expense related to property, equipment, and leasehold improvements for the three and six months ended March 31, 2023, was $2,947,555 and $5,351,737, and was $447,720 and $721,129 for the three and six months ended March 31, 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 $33.6 million in machinery additions. |
OTHER NONCURRENT ASSETS
OTHER NONCURRENT ASSETS | 6 Months Ended |
Mar. 31, 2023 | |
OTHER NONCURRENT ASSETS | |
OTHER NONCURRENT ASSETS | NOTE 14 – OTHER NONCURRENT ASSETS Other assets consist of the following: March 31, 2023 September 30, 2022 Other Assets Other assets $ 5,000 $ 81,588 Other receivables 109,184 1,232,387 Security deposits 1,052,872 281,057 Total Other Assets $ 1,167,056 $ 1,595,032 |
OPERATING EXPENSES
OPERATING EXPENSES | 6 Months Ended |
Mar. 31, 2023 | |
OPERATING EXPENSES | |
OPERATING EXPENSES | NOTE 15 – OPERATING EXPENSES General and Administrative Expenses consist of the following: Three months ended March 31, Six months ended March 31, 2023 2022 2023 2022 Professional fees $ 12,386,745 $ 21,725,222 $ 46,634,060 $ 26,864,554 Salaries 18,466,153 4,217,073 37,013,975 7,378,993 Depreciation 2,966,086 302,859 5,370,269 610,558 Amortization 850,370 — 3,607,075 — Lease 843,963 559,583 1,675,054 1,019,118 Settlements and penalties 6,244,504 589,846 6,265,349 884,832 Employee benefits 585,053 545,108 1,618,690 913,160 Utilities and office expense 905,711 111,419 1,067,103 225,913 Advertising and promotions 1,158,595 472,803 3,760,269 2,925,593 Taxes and licenses 150,323 210,697 251,881 279,488 Repairs and maintenance 201,058 60,482 382,297 79,702 Executive expenses and directors' fees 81,022 — 290,066 — Listing and regulatory fees 1,433,502 — 2,735,345 — Other 1,139,253 474,341 1,736,916 988,605 Total $ 47,412,338 $ 29,269,433 $ 112,408,349 $ 42,170,516 Within professional fees is stock based compensation for services rendered to consultants. Salaries include stock based compensation to officers and employees. The expense is recorded at fair value of the shares to be issued (see Note 10 for stock based compensation). Research and development Research and development for the three months ended March 31, 2023 and 2022 was $20,478,971 and $1,183,437, respectively. Research and development for the six months ended March 31, 2023 and 2022 was $29,100,980 and $2,340,761, respectively. Costs are expensed as incurred. Research and development expenses are primarily comprised of external fees 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 | 6 Months Ended |
Mar. 31, 2023 | |
LEASES | |
LEASES | NOTE 16 – LEASES We have entered into various operating lease agreements for certain offices, manufacturing and warehouse facilities, and corporate aircraft. Operating leases are included in right-of-use assets, and current and noncurrent portion of lease liabilities, as appropriate. These 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: March 31, 2023 September 30, 2022 Assets: Operating lease right-of-use assets $ 6,029,432 $ 4,597,052 Liabilities: Operating lease liabilities, current (2,235,197) (1,428,474) Operating lease liabilities, non-current (4,163,705) (3,359,354) Total lease liabilities $ (6,398,902) $ (4,787,828) Weighted average remaining lease terms: Operating leases 1.75 years 2.63 years Weighted average discount rate: Operating leases 28 % 28 % Operating lease costs: For the three months ended March 31, For the six months ended March 31, 2023 2022 2023 2022 Fixed lease cost $ 782,101 $ 452,789 $ 1,360,748 $ 739,271 Variable lease cost 30,828 130,752 61,822 260,357 Short-term lease cost — 29,185 — 125,777 Sublease income (45,885) (53,144) (65,629) (106,287) Total operating lease costs $ 767,044 $ 559,582 $ 1,356,941 $ 1,019,118 Operating Lease Commitments Our leases primarily consist of land, land and building, or equipment leases. 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. For financing obligations, a portion of the periodic lease payments is recognized as interest expense and the remainder reduces the obligations. For operating leases, rent is recognized on a straight-line basis over the lease term, including scheduled rent increases and rent holidays. The following table reflects maturities of operating lease liabilities at March 31, 2023: Years ending March 31, 2023 (6 months) $ 1,763,109 2024 3,062,953 2025 2,412,336 2026 599,369 2027 405,882 Thereafter 107,972 Total lease payments $ 8,351,621 Less: imputed interest (1,952,719) Present value of lease liabilities $ 6,398,902 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 6 Months Ended |
Mar. 31, 2023 | |
COMMITMENTS AND CONTINGENCIES | |
COMMITMENTS AND CONTINGENCIES | NOTE 17 – COMMITMENTS AND CONTINGENCIES ASC 450 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.” 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 it discloses 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. 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. We do not record liabilities when the likelihood is probable, but the amount cannot be reasonably estimated. DBI Lease Buyback Servicing LLC, Drawbridge Investments LLC v. Mullen Automotive Inc. In June 2022, we entered into a letter agreement with DBI Lease Buyback Servicing LLC (“DBI”) wherein we 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 against Mullen 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 plaintiff’s rights and Mullen’s obligations under the alleged agreement. Drawbridge also commenced an action by Order to Show Cause whereby plaintiffs, 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 million in authorized common stock. 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 plaintiffs in the Order to Show Cause and after reviewing Mullen’s opposition and hearing oral argument from both sides, the Court reserved decision on plaintiffs’ motion. The Company does not have an estimate of possible loss as of March 31, 2023. Mullen Technologies Inc. v. Qiantu Motor (Suzhou) Ltd. This matter arises out of a contract dispute between Mullen and Qiantu Motor (Suzhou) Ltd. (“ On March 14, 2023, the parties entered into a Settlement Agreement providing for full settlement of all pending litigation between the Company and Qiantu Suzhou. 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. In connection with the execution of the Settlement Agreement, on March 14, 2023, the Company entered into an Intellectual Property and Distribution Agreement (the “IP Agreement”) with Qiantu Suzhou, 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 (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 the Company has successfully homologated vehicles based on terms of the IP Agreement (the “Five Year Period”). During the Five Year Period, the Company 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 the Company’s assessment of feasibility and profitability of the project within 150 days as provided for by the IP Agreement. As consideration for the Company’s entry into the IP Agreement, (1) the Company issued to Qiantu USA warrants to purchase up to 3,000,000 shares of the Company’s common stock (the “Qiantu Warrants”) as described below; (2) the Company will pay Qiantu $2,000,000 for deliverable items under the IP Agreement; and (3) the Company 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 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 (for more information on the warrants, see note 7). 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, which the Company paid. 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. Federal and State Tax Liabilities During the third quarter of 2022, the Company entered into an instalment agreement with the IRS to pay $45,000 per month related to unpaid federal payroll liabilities plus accrued interest and penalties. In addition to the payment plan, the IRS also collected $725,817 when the Company sold property IRS had liened. As of March 31, 2023, we had an accrued liability of $185,873 related to IRS liabilities. 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 April, 20, 2023, at the direction of the sole arbitrator, closing arguments for the arbitration previously scheduled for April 28, 2023, were rescheduled for May 18, 2023. The Company does not have an estimated of possible loss as of March 31, 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, filed a complaint against Mullen Automotive Inc. and Mullen Technologies Inc. in the United States District Court for the Southern District of Florida. On May 18, 2022, the Company filed a Motion to Dismiss or in the Alternative, Transfer Venue, which has not yet been ruled upon. The Company does not have an estimate of possible loss as of March 31, 2023. Mullen Stockholder Litigation Margaret Schaub v. Mullen Automotive, Inc. – Securities Class Action On May 5, 2022, Margaret Schaub, a purported stockholder, filed a putative class action complaint in the United States District Court Central District of California against 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. The Company filed a motion to dismiss on November 22, 2022. On April 13, 2023, the court took the April 14, 2023 hearing off calendar after determining that oral argument was not necessary. The Company’s motion to dismiss has been taken under submission. The Company does not have an estimate of possible loss as of March 31, 2023. Jeff Witt v. Mullen Automotive, Inc.; Hany Morsy v. David Michery, et al. - C 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”). 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”). On November 8, 2022, the court consolidated the Witt Lawsuit and Morsy Lawsuit into one case. The consolidated lawsuit asserts claims for breach of fiduciary duty, unjust enrichment, abuse of control, waste of corporate assets, gross mismanagement, and violation of Section 14 of the Exchange Act primarily in connection with the issues and claims asserted in the Schaub Lawsuit. The consolidated lawsuit seeks to direct the Company to improve its corporate governance and internal procedures, monetary damages, pre-judgment and post-judgment interest, restitution, as well as an award of reasonable fees and expenses. On November 30, 2022, the court stayed this 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. 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., 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 February 3, 2023, the Court entered a stipulated order pursuant to which plaintiffs voluntarily dismissed the Stockholder Actions with prejudice as to themselves only and retained jurisdiction solely for the purpose of deciding any application of plaintiffs’ counsel for an award of attorneys’ fees and expenses. On March 3, 2023, plaintiffs’ counsel filed their motion for an award of attorneys’ fee and expenses for benefits they contend were conferred on the Company and its stockholders in connection with the Stockholder Actions (the “Fee Application”), seeking an award of attorneys’ fee and expenses in the amount of $3.0 million. The Court has scheduled a hearing to consider the Fee Application on May 25, 2023. On November 30, 2022, the court stayed this 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. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 6 Months Ended |
Mar. 31, 2023 | |
RELATED PARTY TRANSACTIONS | |
RELATED PARTY TRANSACTIONS | NOTE 18 – RELATED PARTY TRANSACTIONS Affiliate Note Receivable Prior to its corporate reorganization 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 an affiliated party. The borrower promises to pay 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 March 31, 2023, there was an additional $314,198 in related party receivable from MTI which was included in Prepaids and Other Current Assets. As of September 30, 2022, the Company incurred approximately $1.2 million of costs on behalf of MTI, within non current assets. 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 six months ended March 31, 2023, Mr. Miltner received $193,043 and $428,877, for services rendered, respectively. Mr. Miltner has been providing legal services to us since 2020. Ignacio Novoa On June 9, 2022, the Board of Directors of the Company appointed Ignacio Novoa as a director effective as of June 28, 2022. Prior to his appointment, on January 12, 2022, the Company and Mr. Novoa entered into a 1-year Consulting Agreement, whereby Mr. Novoa provided electric vehicle market research, analysis of market trends in the electric vehicle industry and other research and services. Mary Winter On October 26, 2021, the Company entered into a 1-year |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 6 Months Ended |
Mar. 31, 2023 | |
SUBSEQUENT EVENTS | |
SUBSEQUENT EVENTS | NOTE 19 – SUBSEQUENT EVENTS Company management has evaluated subsequent events through May 15, 2023, which is the date these condensed consolidated financial statements were available to be issued. Amendment No. 4 to the Securities Purchase Agreement On April 3, 2023, the Company entered into Amendment No. 4 (“Amendment No. 4”) to the existing Securities Purchase Agreement dated as of June 7, 2022 and amended on June 23, 2022, September 19, 2022 and November 15, 2022 (the “Securities Purchase Agreement”), the terms of which, including the terms of Series D Convertible Preferred Stock, par value $0.001 per share (the “Series D Preferred Stock”), were previously reported in the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on June 10, 2022. Pursuant to Amendment No. 4, the Company irrevocably committed to effect the issuance of Series D Preferred Stock and warrants upon receipt of the remaining $90 million of the Commitment Amount, which is to be paid in two equal tranches on April 17, 2023, and May 15, 2023 (each, a “Purchase Date”). The Company also agreed that it will not affect a reverse stock split of its common stock during the five In connection with this Amendment No. 4, on April 4, 2023, the Company entered into three promissory notes in the aggregate principal amount of $20 million. The principal and interest under the Promissory Notes was due on April 17, 2023, and paid on April 21, 2023 and April 24, 2023. The Promissory Notes had an interest at a rate of 15% per annum, which increases to 20% per annum if payments under the Promissory Notes are not paid when due. Agreement effective April 17, 2023, to Securities Purchase Agreement On April 17, 2023, related to the Securities Purchase Agreement, the Company committed to issuing Series D Convertible Preferred Stock and warrants upon receipt of $45,000,000. An investor paid $16,363,636.50 for the shares, but the issuance of the Shares is void ab initio 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 to partner on a device known as a Battery Life Enhancing Technology. The parties will form 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 will hold a 51% equity interest in MAEO, and EVT will hold a 49% equity interest. EVT will license the technology and intellectual property rights to MAEO and assign all rights to governmental and other contracts relating to the technology. The Company will pay Mr. Hardge an upfront payment of $50,000 and then $5.0 million upon execution of definitive agreements and completion of IP assignment. The Company will also fund up to $5.0 million for all MAEO business operations, with additional funding based on a budget reasonably approved by the parties. |
RESTATEMENT
RESTATEMENT | 6 Months Ended |
Mar. 31, 2023 | |
RESTATEMENT | |
RESTATEMENT | NOTE 20 - RESTATEMENT Prior to the initial issuance of the Company's financial statements for the year ended September 30, 2022, management determined that the warrants issued with the preferred stock did not meet the conditions for equity classification, requiring liability treatment and measured at fair value. In addition, management also discovered that it did not reflect the impact of amendments that resulted in modifications in privileges for the warrants issued with the Series C Preferred Stock, which should have been accounted for as a deemed dividend at the time of modification. The following table summarizes the impacts of these error corrections on the Company's financial statements for each of the periods presented below: Quarter ended March 31, 2022 (Unaudited) Impact of correction of error - quarter Impact of correction of error - year to date As previously reported Adjustments As restated As previously reported Adjustments As restated Loss from operations ($ 30,452,870) - ($ 30,452,870) ($ 44,511,277) - ($ 44,511,277) Other financing costs - initial recognition of warrants at fair value - (160,364,949) (160,364,949) - (269,344,178) (269,344,178) Revaluation of warrants - (131,670,146) (131,670,146) - (142,288,528) (142,288,528) Others (2,120,515) - (2,120,515) (24,526,046) - (24,526,046) Other income (expense) (2,120,515) (292,035,095) (294,155,610) (24,526,046) (411,632,706) (436,158,752) Net loss ($ 32,573,385) ($ 292,035,095) ($ 324,608,480) ($ 69,037,323) ($ 411,632,706) ($ 480,670,029) Deemed dividend on preferred stock - (32,735,345) (32,735,345) - (32,735,345) (32,735,345) Net loss attributable to common stockholders ($ 32,573,385) ($ 324,770,440) ($ 357,343,825) ($ 69,037,323) ($ 444,368,051) ($ 513,405,374) Loss per share - continuing operations (15.85) (173.83) (49.83) (370.53) Weighted average common shares outstanding 2,055,720 2,055,720 1,385,594 1,385,594 |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 6 Months Ended |
Mar. 31, 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. The Company completed the acquisition of Bollinger Motors, Inc on September 7, 2022. |
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 carve-out financial statements and the reported amounts of total expenses in the reporting periods. Estimates are used for, but not limited to, fair value of long-lived assets, fair value of financial instruments, depreciable lives of property and equipment, income taxes, contingencies, and inputs used to value stock-based compensation, valuation of common and 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. The imputed interest results in adjustments to the debt amounts reported in our condensed consolidated financial statements prepared under U.S. GAAP. Loan valuations issues can arise when trying to determine the debt attributes, such as discount rate, credit loss factors, liquidity discounts, and pricing. Management bases its estimates on historical experience and on various other assumptions believed to be reasonable, the results of which form the basis for adjustments about the 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. |
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 shareholders' 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 13 and Note 14). |
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 March 31, 2023 or September 30, 2022. |
Restricted Cash | Restricted Cash Funds that are not available for immediate use and must be used for a specific purpose. On March 31, 2023, the restricted cash balance was $26,409,672. These funds include approximately $409,672 for the refundable deposits for individuals and businesses who have made deposits for Mullen and Bollinger vehicles and approximately $26 million for cash restricted for use by Bollinger operations. The $26 million of restricted cash will be released in two tranches, $13 million on May 5, 2023 and $13 million on August 5, 2023. Customer deposits are accounted for within other liabilities. Refundable deposits are $289 thousand for the year ended September 30, 2022. On September 7, 2022, the Company deposited $30 million in an escrow account as part of the Bollinger acquisition. |
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. |
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 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 March 31, 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 March 31, 2023 and September 30, 2022. |
Intangible Assets, net | Intangible Assets, net Intangible assets consist of acquired and developed intellectual property and website development costs. In accordance with ASC 350, “Intangibles—Goodwill and Others,” Impairment of Long-Lived Assets The Company periodically evaluates property, plant and equipment and intangible 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 related party loans 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 non-production related 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 Research and development costs are expensed as incurred. Research and development expenses consist primarily of costs associated with the development of our electric vehicle product lines. |
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” |
Related Party Transactions | Related Party Transactions We have related party transactions with certain of our directors, officers, and principal stockholders. These transactions are entered into in the ordinary course of business and include receiving operational loans, issuing convertible debt and warrants, providing financial support associated with the borrowing of funds. |
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 March 31, 2023 and September 30, 2022 are $59.6 million and $53.3 million, respectively. |
Recently Issued Accounting Standards | Recently Issued Accounting Standards Accounting standard updates issued but not yet added were assessed and determined to be either not applicable or 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) | 6 Months Ended |
Mar. 31, 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 |
PURCHASE OF ASSETS FROM ELMS (T
PURCHASE OF ASSETS FROM ELMS (Tables) | 6 Months Ended |
Mar. 31, 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 33,577,045 Identified intangible: engineering design 22,112,791 Inventory 6,958,158 Total Identified Assets $ 105,375,032 |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS (Tables) | 6 Months Ended |
Mar. 31, 2023 | |
GOODWILL AND INTANGIBLE ASSETS | |
Schedule of finite lived intangible assets | March 31, 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 (1,551,895) $ 1,108,496 $ 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 (2,782,994) 29,608,192 32,391,186 (204,109) 32,187,077 Engineer design - ELMS 22,112,791 (737,093) 21,375,698 — — — Other 1,820,995 (144,171) 1,676,824 1,820,994 (16,175) 1,804,819 Trademark 670,674 — 670,674 466,014 — 466,014 Total Intangible Assets $ 118,031,831 $ (5,287,335) $ 112,744,496 $ 95,714,379 $ (1,767,361) $ 93,947,018 |
Schedule of future amortization expense for finite-lived intellectual property | Years Ended March 31, Future Amortization 2023 (six months) $ 3,250,538 2024 6,270,078 2025 5,604,980 2026 5,604,980 2027 5,595,580 Thereafter 27,443,054 Total Future Amortization Expense $ 53,769,210 |
DEBT (Tables)
DEBT (Tables) | 6 Months Ended |
Mar. 31, 2023 | |
DEBT | |
Schedule of indebtedness of short term and long term debt | The following is a summary of our indebtedness at March 31, 2023: 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% 2019 - 2021 Promissory notes - - - NA NA Real Estate notes 5,000,000 5,000,000 - 0 - 00% 2023 - 2024 Loans and advances 111,676 111,676 - 0.00% 2016 - 2018 Less: debt discount (574,248) (574,248) - NA NA Total Debt $ 7,588,513 $ 7,588,513 $ — 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 March 31, 2023: Years Ended March 31, 2023 (6 months) 2024 Total Total Debt $ 3,162,761 $ 4,425,752 $ 7,588,513 |
WARRANTS AND OTHER DERIVATIVE_2
WARRANTS AND OTHER DERIVATIVE LIABILITIES AND FAIR VALUE MEASUREMENTS (Tables) | 6 Months Ended |
Mar. 31, 2023 | |
WARRANTS AND OTHER DERIVATIVE LIABILITIES AND FAIR VALUE MEASUREMENTS | |
Schedule of fair value of derivative liability on recurring basis | March 31, Quoted Prices Significant Significant 2023 in Active Other Unobservable Markets for Observable Inputs Identical Assets Inputs (Level 3) (Level 1) (Level 2) Derivative liability $ 30,855,261 $ - $ 25,192,261 $ 5,663,000 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 $ 0 |
A summary of the changes in derivative liability | Balance, September 30, 2022 $ 84,799,179 Derivative liabilities recognized upon issuance of convertible instruments 251,324,164 Derivative liability upon authorized shares shortfall 11,978,166 Loss / (gain) on derivative liability revaluation 89,221,391 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 Liability to issue shares upon unfinished warrant exercise on period end (55,106,287) Conversions of warrants into common shares (319,707,966) Conversions of convertible notes and accrued interest into common shares (10,491,265) Balance, March 31, 2023 $ 30,855,261 Balance, September 30, 2021 $ - Derivative liabilities recognized upon issuance of convertible instruments 269,344,178 Loss / (gain) on derivative liability revaluation 142,288,528 Reclassification of derivative liabilities to equity upon authorization of sufficient common shares - Conversions of warrants into common shares (207,677,075) Conversions of convertible notes and accrued interest into common shares - Balance, March 31, 2022 $ 203,955,631 |
LOSS PER SHARE (Tables)
LOSS PER SHARE (Tables) | 6 Months Ended |
Mar. 31, 2023 | |
LOSS PER SHARE | |
Schedule of computation of basic and diluted net income per share | Three months ended March 31, Six months ended March 31, 2023 2022 2023 2022 Net income attributable to common stockholders $ (114,913,318) $ (324,608,480) $ (491,189,104) $ (480,670,029) Less: accumulated preferred stock dividends 8,039,612 (32,735,345) 7,400,935 (32,735,345) Net income used in computing basic net income per share of common stock $ (106,873,706) $ (357,343,825) $ (483,788,169) $ (513,405,374) Net loss per share $ (1.30) $ (173.83) $ (7.09) $ (370.53) Weighted average shares outstanding, basic and diluted 82,409,028 2,055,720 68,262,145 1,385,594 |
SHARE- BASED COMPENSATION (Tabl
SHARE- BASED COMPENSATION (Tables) | 6 Months Ended |
Mar. 31, 2023 | |
SHARE-BASED COMPENSATION | |
Schedule of composition of stock-based compensation expense | For the three months ended March 31, For the six months ended March 31, Composition of Share-Based Compensation Expense 2023 2022 2023 2022 Directors, officers and employees share-based compensation $ 11,320,052 $ 1,688,694 $ 47,697,024 $ 3,292,987 Shares issued to consultants for services 8,229,905 21,546,573 12,606,343 24,042,060 Total share-based compensation expense $ 19,549,957 $ 23,235,267 $ 60,303,367 $ 27,335,047 |
ACCRUED EXPENSES AND OTHER CU_2
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES (Tables) | 6 Months Ended |
Mar. 31, 2023 | |
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | |
Schedule of accrued expenses and other current liabilities | March 31, 2023 September 30, 2022 Accrued Expenses and Other Liabilities Accrued expense - other $ 3,211,783 $ 3,529,384 IRS tax liability 185,873 1,744,707 Accrued payroll 1,621,034 534,782 Accrued interest 1,193,150 1,377,008 Total $ 6,211,840 $ 7,185,881 |
PROPERTY, EQUIPMENT AND LEASE_2
PROPERTY, EQUIPMENT AND LEASEHOLD IMPROVEMENTS, NET (Tables) | 6 Months Ended |
Mar. 31, 2023 | |
PROPERTY, EQUIPMENT AND LEASEHOLD IMPROVEMENTS, NET | |
Schedule of property and equipment, net | March 31, September 30, 2023 2022 Building $ 50,541,364 $ 8,306,697 Furniture and equipment 552,859 556,948 Vehicles 220,886 96,363 Show room assets 4,428,544 4,418,724 Computer hardware and software 1,316,745 1,013,308 Machinery and equipment 41,109,337 7,383,612 Construction-in-progress 1,047,583 269,778 Leasehold improvements 111,570 76,438 Subtotal 99,328,888 22,121,868 Less: accumulated depreciation (9,686,904) (4,335,166) Property, Equipment and Leasehold Improvements, net $ 89,641,984 $ 17,786,702 |
OTHER NONCURRENT ASSETS (Tables
OTHER NONCURRENT ASSETS (Tables) | 6 Months Ended |
Mar. 31, 2023 | |
OTHER NONCURRENT ASSETS | |
Schedule of other assets | March 31, 2023 September 30, 2022 Other Assets Other assets $ 5,000 $ 81,588 Other receivables 109,184 1,232,387 Security deposits 1,052,872 281,057 Total Other Assets $ 1,167,056 $ 1,595,032 |
OPERATING EXPENSES (Tables)
OPERATING EXPENSES (Tables) | 6 Months Ended |
Mar. 31, 2023 | |
OPERATING EXPENSES | |
Schedule of Operating Expenses | General and Administrative Expenses consist of the following: Three months ended March 31, Six months ended March 31, 2023 2022 2023 2022 Professional fees $ 12,386,745 $ 21,725,222 $ 46,634,060 $ 26,864,554 Salaries 18,466,153 4,217,073 37,013,975 7,378,993 Depreciation 2,966,086 302,859 5,370,269 610,558 Amortization 850,370 — 3,607,075 — Lease 843,963 559,583 1,675,054 1,019,118 Settlements and penalties 6,244,504 589,846 6,265,349 884,832 Employee benefits 585,053 545,108 1,618,690 913,160 Utilities and office expense 905,711 111,419 1,067,103 225,913 Advertising and promotions 1,158,595 472,803 3,760,269 2,925,593 Taxes and licenses 150,323 210,697 251,881 279,488 Repairs and maintenance 201,058 60,482 382,297 79,702 Executive expenses and directors' fees 81,022 — 290,066 — Listing and regulatory fees 1,433,502 — 2,735,345 — Other 1,139,253 474,341 1,736,916 988,605 Total $ 47,412,338 $ 29,269,433 $ 112,408,349 $ 42,170,516 |
LEASES (Tables)
LEASES (Tables) | 6 Months Ended |
Mar. 31, 2023 | |
LEASES | |
Summary of lease assets and liabilities and lease costs | The table below presents information regarding our lease assets and liabilities: March 31, 2023 September 30, 2022 Assets: Operating lease right-of-use assets $ 6,029,432 $ 4,597,052 Liabilities: Operating lease liabilities, current (2,235,197) (1,428,474) Operating lease liabilities, non-current (4,163,705) (3,359,354) Total lease liabilities $ (6,398,902) $ (4,787,828) Weighted average remaining lease terms: Operating leases 1.75 years 2.63 years Weighted average discount rate: Operating leases 28 % 28 % Operating lease costs: For the three months ended March 31, For the six months ended March 31, 2023 2022 2023 2022 Fixed lease cost $ 782,101 $ 452,789 $ 1,360,748 $ 739,271 Variable lease cost 30,828 130,752 61,822 260,357 Short-term lease cost — 29,185 — 125,777 Sublease income (45,885) (53,144) (65,629) (106,287) Total operating lease costs $ 767,044 $ 559,582 $ 1,356,941 $ 1,019,118 |
Summary of maturities of operating lease liabilities | Years ending March 31, 2023 (6 months) $ 1,763,109 2024 3,062,953 2025 2,412,336 2026 599,369 2027 405,882 Thereafter 107,972 Total lease payments $ 8,351,621 Less: imputed interest (1,952,719) Present value of lease liabilities $ 6,398,902 |
RESTATEMENT (Tables)
RESTATEMENT (Tables) | 6 Months Ended |
Mar. 31, 2023 | |
RESTATEMENT | |
Schedule of impacts of error corrections | The following table summarizes the impacts of these error corrections on the Company's financial statements for each of the periods presented below: Quarter ended March 31, 2022 (Unaudited) Impact of correction of error - quarter Impact of correction of error - year to date As previously reported Adjustments As restated As previously reported Adjustments As restated Loss from operations ($ 30,452,870) - ($ 30,452,870) ($ 44,511,277) - ($ 44,511,277) Other financing costs - initial recognition of warrants at fair value - (160,364,949) (160,364,949) - (269,344,178) (269,344,178) Revaluation of warrants - (131,670,146) (131,670,146) - (142,288,528) (142,288,528) Others (2,120,515) - (2,120,515) (24,526,046) - (24,526,046) Other income (expense) (2,120,515) (292,035,095) (294,155,610) (24,526,046) (411,632,706) (436,158,752) Net loss ($ 32,573,385) ($ 292,035,095) ($ 324,608,480) ($ 69,037,323) ($ 411,632,706) ($ 480,670,029) Deemed dividend on preferred stock - (32,735,345) (32,735,345) - (32,735,345) (32,735,345) Net loss attributable to common stockholders ($ 32,573,385) ($ 324,770,440) ($ 357,343,825) ($ 69,037,323) ($ 444,368,051) ($ 513,405,374) Loss per share - continuing operations (15.85) (173.83) (49.83) (370.53) Weighted average common shares outstanding 2,055,720 2,055,720 1,385,594 1,385,594 |
DESCRIPTION OF BUSINESS AND B_2
DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION (Details) | 6 Months Ended | |||||
May 04, 2023 | Jan. 01, 2023 | Oct. 13, 2022 USD ($) | Oct. 01, 2022 USD ($) | Sep. 07, 2022 USD ($) | Mar. 31, 2023 segment shares | |
Schedule of Equity Method Investments [Line Items] | ||||||
Reverse stock ratio | 0.04 | 0.04 | ||||
Fractional shares | shares | 0 | |||||
Decrease in equity of reverse stock | $ 800,129 | |||||
Number of operating segment | segment | 1 | |||||
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 | $ 105,000,000 | |||||
Bollinger Motors, Inc | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Total consideration | $ 149,000,000 | |||||
Beneficial ownership | 60% | |||||
Amount of vendor payables assumed and paid at closing | $ 10,000,000 |
LIQUIDITY, CAPITAL RESOURCES,_2
LIQUIDITY, CAPITAL RESOURCES, AND GOING CONCERN (Details) - USD ($) | 6 Months Ended | |||||
Jun. 30, 2023 | Apr. 17, 2023 | Mar. 31, 2023 | Sep. 30, 2022 | Mar. 31, 2022 | Sep. 30, 2021 | |
Liquidity Capital Resources And Going Concern [Line Items] | ||||||
Cash and restricted cash | $ 86,747,263 | $ 84,375,085 | $ 65,281,887 | $ 42,174 | ||
Cash used in operating activities | 67,600,000 | |||||
Working capital deficit | $ 22,500,000 | |||||
Forecast | ||||||
Liquidity Capital Resources And Going Concern [Line Items] | ||||||
Proceeds from issuance of shares | $ 45,000,000 | |||||
Subsequent Event | ||||||
Liquidity Capital Resources And Going Concern [Line Items] | ||||||
Proceeds from issuance of shares | $ 45,000,000 |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Property, Equipment and Leasehold Improvements, Net (Details) | 6 Months Ended |
Mar. 31, 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 | Maximum | |
Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | 10 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) | 6 Months Ended | |||
Mar. 31, 2023 USD ($) tranche | Aug. 05, 2023 USD ($) | May 05, 2023 USD ($) | Sep. 30, 2022 USD ($) | |
Restricted cash | $ 26,409,672 | $ 30,289,400 | ||
Refundable Deposits | 289,000,000 | |||
Refundable deposits for individuals and businesses | 409,672 | |||
Subtotal | 99,328,888 | 22,121,868 | ||
Accumulated depreciation | 9,686,904 | 4,335,166 | ||
Property, equipment and leasehold improvements, net | 89,641,984 | 17,786,702 | ||
Cash equivalents | 0 | 0 | ||
Amounts in excess of insured limits | 59,600,000 | 53,300,000 | ||
Show room assets | ||||
Subtotal | 4,428,544 | 4,418,724 | ||
Previously reported | Show room assets | ||||
Subtotal | 4,418,724 | |||
Accumulated depreciation | 1,435,738 | |||
Property, equipment and leasehold improvements, net | 2,982,986 | |||
Bollinger Motors, Inc | ||||
Restricted cash | $ 26,000,000 | |||
Number of tranches | tranche | 2 | |||
Amount to be released from restricted cash | $ 13,000,000 | $ 13,000,000 | ||
Bollinger Motors, Inc | ||||
Escrow deposit | $ 30,000,000 | |||
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 | 33,577,045 |
Identified intangible: engineering design | 22,112,791 |
Inventory | 6,958,158 |
Total Identified Assets | $ 105,375,032 |
GOODWILL AND INTANGIBLE ASSET_2
GOODWILL AND INTANGIBLE ASSETS - Goodwill (Details) - USD ($) | Mar. 31, 2023 | Sep. 30, 2022 |
GOODWILL AND INTANGIBLE ASSETS | ||
Goodwill | $ 92,834,832 | $ 92,834,832 |
GOODWILL AND INTANGIBLE ASSET_3
GOODWILL AND INTANGIBLE ASSETS - Intangible assets - General information (Details) - USD ($) | 6 Months Ended | ||
Mar. 31, 2023 | Sep. 30, 2022 | Mar. 31, 2022 | |
Finite-Lived Intangible Assets [Line Items] | |||
Intangible assets recorded | $ 118,031,831 | $ 95,714,379 | |
Estimated useful lives | 3 years | ||
Engineer Design - ELMS | |||
Finite-Lived Intangible Assets [Line Items] | |||
Intangible assets recorded | $ 22,317,452 | $ 246,132 | |
Engineer Design - ELMS | ELMS | |||
Finite-Lived Intangible Assets [Line Items] | |||
Intangible assets recorded | $ 22,300,000 | ||
Intellectual Property | |||
Finite-Lived Intangible Assets [Line Items] | |||
Weighted average Useful life | 9 years 4 months 24 days |
GOODWILL AND INTANGIBLE ASSET_4
GOODWILL AND INTANGIBLE ASSETS - Intangible assets - Total (Details) - USD ($) | Mar. 31, 2023 | Sep. 30, 2022 | Mar. 31, 2022 |
Intangible Assets, Gross (Excluding Goodwill) [Abstract] | |||
Gross Carrying Amount | $ 118,031,831 | $ 95,714,379 | |
Intangible Assets, Net (Excluding Goodwill) [Abstract] | |||
Accumulated Amortization | (5,287,335) | (1,767,361) | |
Net Carrying Amount | 112,744,496 | 93,947,018 | |
Trademarks | |||
Intangible Assets, Gross (Excluding Goodwill) [Abstract] | |||
Trademark | 670,674 | 466,014 | |
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 | (1,551,895) | (1,108,496) | |
Net Carrying Amount | 1,108,496 | 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 | (2,782,994) | (204,109) | |
Net Carrying Amount | 29,608,192 | 32,187,077 | |
Engineer Design - ELMS | |||
Intangible Assets, Gross (Excluding Goodwill) [Abstract] | |||
Gross Carrying Amount, Finite-lived | 22,112,791 | ||
Gross Carrying Amount | 22,317,452 | $ 246,132 | |
Intangible Assets, Net (Excluding Goodwill) [Abstract] | |||
Accumulated Amortization | (737,093) | ||
Net Carrying Amount | 21,375,698 | ||
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 | (144,171) | (16,175) | |
Net Carrying Amount | $ 1,676,824 | $ 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 | 6 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Mar. 31, 2023 | Mar. 31, 2022 | |
Future Amortization Expense | ||||
2023 (six months) | $ 3,250,538 | $ 3,250,538 | ||
2024 | 6,270,078 | 6,270,078 | ||
2025 | 5,604,980 | 5,604,980 | ||
2026 | 5,604,980 | 5,604,980 | ||
2027 | 5,595,580 | 5,595,580 | ||
Thereafter | 27,443,054 | 27,443,054 | ||
Total Future Amortization | 53,769,210 | 53,769,210 | ||
Amortization | $ 763,269 | $ 221,699 | $ 3,519,973 | $ 445,376 |
DEBT - Summary of our indebtedn
DEBT - Summary of our indebtedness (Details) - USD ($) | Mar. 31, 2023 | Sep. 30, 2022 | Mar. 07, 2022 |
Debt Instrument [Line Items] | |||
Net Carrying Value Unpaid Principal Balance | $ 7,588,513 | $ 9,021,049 | |
Current | 7,588,513 | 3,856,497 | |
Long-term | 5,164,552 | ||
Less: debt discount | (574,248) | (932,235) | |
Less: debt discount (Current) | (574,248) | ||
Less: debt discount (Long-Term) | (932,235) | ||
Matured notes | |||
Debt Instrument [Line Items] | |||
Net Carrying Value Unpaid Principal Balance | 3,051,085 | 3,051,085 | |
Current, before debt discount | $ 3,051,085 | $ 3,051,085 | |
Matured notes | Maximum | |||
Debt Instrument [Line Items] | |||
Contractual Interest Rate | 0% | 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 | 0% | 8.99% | |
Real Estate notes | Minimum | |||
Debt Instrument [Line Items] | |||
Contractual Interest Rate | 0% | 5% | |
Loans and advances | |||
Debt Instrument [Line Items] | |||
Net Carrying Value Unpaid Principal Balance | $ 111,676 | $ 557,800 | |
Current, before debt discount | $ 111,676 | $ 557,800 | |
Contractual Interest Rate | 0% | ||
Loans and advances | Maximum | |||
Debt Instrument [Line Items] | |||
Contractual Interest Rate | 10% | ||
Loans and advances | Minimum | |||
Debt Instrument [Line Items] | |||
Contractual Interest Rate | 0% |
DEBT - Scheduled debt maturitie
DEBT - Scheduled debt maturities (Details) - USD ($) | Mar. 31, 2023 | Sep. 30, 2022 |
Debt Maturities | ||
2023 (6 months) | $ 3,162,761 | |
2024 | 4,425,752 | |
Net Carrying Value Unpaid Principal Balance | $ 7,588,513 | $ 9,021,049 |
DEBT - Notes and Advances (Deta
DEBT - Notes and Advances (Details) - Promissory notes - USD ($) | 3 Months Ended | 6 Months Ended | ||||
Mar. 07, 2022 | Mar. 31, 2023 | Mar. 31, 2022 | Mar. 31, 2023 | Mar. 31, 2022 | Sep. 30, 2022 | |
Debt Instrument [Line Items] | ||||||
Interest rate (as a percent) | 8.99% | 0.28% | ||||
Principal amount | $ 5 | |||||
Debt instrument interest expense | $ 1,785,718 | $ 2,120,515 | $ 3,920,235 | $ 24,559,459 | ||
Amortization of debt discount | $ 1,157,209 | 142,287 | $ 188,307 | 150,293,417 | 19,400,483 | |
Derivative liability | $ 244,510,164 | 244,510,164 | ||||
Additional interest expense | 94,510,164 | |||||
Carrying amount of debt settled via issuance of stock during the period | 153,222,236 | $ 23,192,500 | ||||
Remaining unamortized discount | $ 574,248 |
DEBT - Amended and Restated Sec
DEBT - Amended and Restated Secured Convertible Note and Security Agreement (Details) | 1 Months Ended | 3 Months Ended | 6 Months Ended | ||||||
Nov. 21, 2022 USD ($) shares | Nov. 01, 2022 USD ($) shares | Oct. 14, 2022 USD ($) D shares | Feb. 28, 2023 USD ($) shares | Mar. 31, 2023 USD ($) | Mar. 31, 2023 USD ($) | Mar. 31, 2022 USD ($) | Nov. 15, 2022 USD ($) | Sep. 30, 2022 USD ($) | |
Debt Instrument [Line Items] | |||||||||
Debt discount | $ 574,248 | $ 574,248 | $ 932,235 | ||||||
Shares issued for conversion of convertible debt | 1,096,787 | ||||||||
Loss on extinguishment | (40,000) | (6,452,170) | $ 74,509 | ||||||
Debt premium | $ 19,400,483 | ||||||||
Convertible note payable | |||||||||
Debt Instrument [Line Items] | |||||||||
Amount of debt converted | $ 59,402,877 | $ 90,362,418 | |||||||
Debt instrument accrued interest | $ 1,193,150 | 1,193,150 | $ 1,374,925 | ||||||
Shares issued for conversion of convertible debt ( in shares) | shares | 8,833,142 | 12,385,394 | |||||||
Debt instrument interest expense | $ 94,510,164 | $ 150,000,000 | |||||||
Face amount of debt | $ 150,000,000 | ||||||||
A&R Note | A&R Note | |||||||||
Debt Instrument [Line Items] | |||||||||
Liability to issue common shares | 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 | shares | 420,000 | ||||||||
Shares issued for conversion of convertible debt | $ 12,945,914 | ||||||||
Shares issued for conversion of convertible debt ( in shares) | shares | 920,000 | ||||||||
Shares issued fair value | $ 5,524,600 | ||||||||
Loss on extinguishment | $ 6,452,170 | ||||||||
Debt discount rate | 5% | ||||||||
Trading days | D | 10 | ||||||||
Debt instrument interest expense | $ 681,364 | ||||||||
Debt premium | $ 681,364 | ||||||||
A&R Note | Esousa Holdings, LLC | Convertible note payable | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt premium | $ 681,364 | ||||||||
Face amount of debt | $ 12,945,914 | ||||||||
Shares issuable upon conversion | shares | 2,481,923 | ||||||||
Accrued interest | $ 171,174 |
DEBT - Convertible Notes (Detai
DEBT - Convertible Notes (Details) | 1 Months Ended | 6 Months Ended | |||||
Nov. 21, 2022 USD ($) $ / shares shares | Nov. 14, 2022 USD ($) tranche $ / shares | Feb. 28, 2023 USD ($) shares | Mar. 31, 2023 USD ($) $ / shares | Jan. 13, 2023 USD ($) | Nov. 15, 2022 USD ($) | Sep. 30, 2022 USD ($) | |
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% | ||||||
Series D Preferred Stock | |||||||
Debt Instrument [Line Items] | |||||||
Closing price of the Common Stock | $ / shares | $ 1.27 | ||||||
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 | $ 150,000,000 | |||||
Debt instrument accrued interest | $ 1,193,150 | $ 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 | 8,833,142 | 12,385,394 | |||||
Amount of reduction in derivative liabilities | $ 10,491,265 | ||||||
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 | 6 Months Ended | 12 Months Ended | |||||||||
Mar. 14, 2022 USD ($) item Y shares | Feb. 10, 2022 USD ($) | Feb. 28, 2023 shares | Nov. 30, 2022 USD ($) shares | Jun. 30, 2023 USD ($) | Mar. 31, 2023 USD ($) $ / shares shares | Dec. 31, 2022 shares | Mar. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | Mar. 31, 2023 USD ($) $ / shares shares | Mar. 31, 2022 USD ($) | Sep. 30, 2022 USD ($) $ / shares shares | Nov. 21, 2022 | |
FAIR VALUE MEASUREMENTS AND FAIR VALUE OF FINANCIAL INSTRUMENTS | |||||||||||||
Debt premium | $ 19,400,483 | ||||||||||||
Amortization of financing costs | $ 142,287 | $ 142,287 | |||||||||||
Accrued preferred dividends | $ 8,039,612 | $ (32,735,345) | 7,400,935 | (32,735,345) | |||||||||
Exercised on a cash-less basis | shares | 9,163,951 | ||||||||||||
Proceeds from issuance of notes payable | $ 150,000,000 | $ 12,142,791 | |||||||||||
Common shares issued for cash | $ 10,894,659 | ||||||||||||
Convertible notes | |||||||||||||
FAIR VALUE MEASUREMENTS AND FAIR VALUE OF FINANCIAL INSTRUMENTS | |||||||||||||
Warrants term | 5 years | ||||||||||||
Proceeds from issuance of notes payable | $ 150,000,000 | ||||||||||||
Preferred C Warrants 2021 | |||||||||||||
FAIR VALUE MEASUREMENTS AND FAIR VALUE OF FINANCIAL INSTRUMENTS | |||||||||||||
Warrants exercise price | $ / shares | $ 8.834 | ||||||||||||
Preferred C Warrants 2022 | |||||||||||||
FAIR VALUE MEASUREMENTS AND FAIR VALUE OF FINANCIAL INSTRUMENTS | |||||||||||||
Warrants | shares | 118,931 | ||||||||||||
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 | shares | 1,677,971 | ||||||||||||
Warrants to acquire shares of common stock | shares | 21,328,580 | ||||||||||||
Fair value of warrants | $ 554,371,539 | ||||||||||||
Preferred D Warrants 2022 | |||||||||||||
FAIR VALUE MEASUREMENTS AND FAIR VALUE OF FINANCIAL INSTRUMENTS | |||||||||||||
Warrants | shares | 5,914,592 | ||||||||||||
Exercised on a cash-less basis | shares | 0 | ||||||||||||
Shares of common stock issuable upon conversion (as a percent) | 185% | ||||||||||||
Warrants exercise price | $ / shares | $ 1.27 | $ 1.27 | |||||||||||
Warrants term | 5 years | 5 years | |||||||||||
Preferred D Warrants 2022 | Amendment No. 3 To Securities Purchase Agreement [Member] | |||||||||||||
FAIR VALUE MEASUREMENTS AND FAIR VALUE OF FINANCIAL INSTRUMENTS | |||||||||||||
Common shares issued for cash | $ 100,000,000 | ||||||||||||
Percentage of warrants exercisable for common stock | 110% | ||||||||||||
Preferred D Warrants 2022 | Exchange Agreement | |||||||||||||
FAIR VALUE MEASUREMENTS AND FAIR VALUE OF FINANCIAL INSTRUMENTS | |||||||||||||
Common shares issued for cash | $ 20,000,000 | ||||||||||||
Percentage of warrants exercisable for common stock | 185% | ||||||||||||
Preferred D Warrants 2022 | Securities Purchase Agreement | |||||||||||||
FAIR VALUE MEASUREMENTS AND FAIR VALUE OF FINANCIAL INSTRUMENTS | |||||||||||||
Common shares issued for cash | $ 10,000,000 | ||||||||||||
Percentage of warrants exercisable for common stock | 185% | ||||||||||||
Preferred D Warrants 2022 | Convertible notes | |||||||||||||
FAIR VALUE MEASUREMENTS AND FAIR VALUE OF FINANCIAL INSTRUMENTS | |||||||||||||
Warrants | shares | 3,003,361 | 3,003,361 | |||||||||||
Exercisable on a cash-less basis | shares | 7,731,715 | ||||||||||||
Fair market value of cashless warrant exercisable | $ 25,186,062 | $ 25,186,062 | |||||||||||
Warrants issued (in shares) | shares | 39,254,291 | 39,254,291 | |||||||||||
Qiantu Warrants | |||||||||||||
FAIR VALUE MEASUREMENTS AND FAIR VALUE OF FINANCIAL INSTRUMENTS | |||||||||||||
Fair value of common stock warrants | $ 6,814,000 | $ 5,663,000 | $ 5,663,000 | ||||||||||
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 | shares | 3,000,000 |
WARRANTS AND OTHER DERIVATIVE_4
WARRANTS AND OTHER DERIVATIVE LIABILITIES AND FAIR VALUE MEASUREMENTS - Embedded Derivatives (Details) - Revaluation prior to conversion of underlying instrument | Mar. 31, 2023 USD ($) |
Volatility | Minimum | |
FAIR VALUE MEASUREMENTS AND FAIR VALUE OF FINANCIAL INSTRUMENTS | |
Embedded derivative, measurement input | 1.51 |
Volatility | Maximum | |
FAIR VALUE MEASUREMENTS AND FAIR VALUE OF FINANCIAL INSTRUMENTS | |
Embedded derivative, measurement input | 1.98 |
Dividend yield | |
FAIR VALUE MEASUREMENTS AND FAIR VALUE OF FINANCIAL INSTRUMENTS | |
Embedded derivative, measurement input | 0 |
Risk-free interest rate | Minimum | |
FAIR VALUE MEASUREMENTS AND FAIR VALUE OF FINANCIAL INSTRUMENTS | |
Embedded derivative, measurement input | 4.10 |
Risk-free interest rate | Maximum | |
FAIR VALUE MEASUREMENTS AND FAIR VALUE OF FINANCIAL INSTRUMENTS | |
Embedded derivative, measurement input | 4.45 |
WARRANTS AND OTHER DERIVATIVE_5
WARRANTS AND OTHER DERIVATIVE LIABILITIES AND FAIR VALUE MEASUREMENTS - Financial Liabilities Measured at Fair Value on a Recurring Basis (Details) - Recurring - USD ($) | Mar. 31, 2023 | Sep. 30, 2022 |
FAIR VALUE MEASUREMENTS AND FAIR VALUE OF FINANCIAL INSTRUMENTS | ||
Derivative liability | $ 30,855,261 | $ 84,799,179 |
Level 2 | ||
FAIR VALUE MEASUREMENTS AND FAIR VALUE OF FINANCIAL INSTRUMENTS | ||
Derivative liability | 25,192,261 | 84,799,179 |
Level 3 | ||
FAIR VALUE MEASUREMENTS AND FAIR VALUE OF FINANCIAL INSTRUMENTS | ||
Derivative liability | $ 5,663,000 | $ 0 |
WARRANTS AND OTHER DERIVATIVE_6
WARRANTS AND OTHER DERIVATIVE LIABILITIES AND FAIR VALUE MEASUREMENTS - Changes in derivative liability (Details) - USD ($) | 6 Months Ended | |
Mar. 31, 2023 | Mar. 31, 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 | 251,324,164 | $ 269,344,178 |
Derivative liability upon authorized shares shortfall | 11,978,166 | |
Loss / (gain) on derivative liability revaluation | 89,221,391 | 142,288,528 |
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 | |
Liability to issue shares upon unfinished warrant exercise on period end | (55,106,287) | |
Conversions of warrants into common shares | (319,707,966) | (207,677,075) |
Conversions of convertible notes and accrued interest into common shares | (10,491,265) | |
Balance, Ending | $ 30,855,261 | $ 203,955,631 |
STOCKHOLDERS' EQUITY - Common S
STOCKHOLDERS' EQUITY - Common Stock (Details) | 3 Months Ended | 6 Months Ended | |||||
May 04, 2023 | Jan. 01, 2023 | Dec. 31, 2021 USD ($) | Mar. 31, 2023 USD ($) $ / shares shares | 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 | ||||
Common Stock, par value | $ / shares | $ 0.001 | $ 0.001 | |||||
Common Stock, shares issued | 126,281,274 | 33,338,727 | |||||
Common Stock, shares outstanding | 126,281,274 | 33,338,727 | |||||
Reverse stock ratio | 0.04 | 0.04 | |||||
Voting rights | one | ||||||
Common shares issued for cash | $ | $ 10,894,659 | ||||||
Common stock dividends declared or paid | $ | $ 0 | ||||||
Series D Preferred Stock | |||||||
Class of Stock [Line Items] | |||||||
Voting rights | one |
STOCKHOLDERS' EQUITY - Preferre
STOCKHOLDERS' EQUITY - Preferred Stock, Series AA and Series D Preferred Stock (Details) | May 04, 2023 | Jan. 01, 2023 | Mar. 31, 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 | 0.04 | 0.04 | ||
Series AA Preferred Stock | ||||
Class of Stock [Line Items] | ||||
Preferred Stock, shares authorized | 1 | 1 | ||
Preferred Stock, shares issued | 0 | 0 | ||
Preferred Stock, shares outstanding | 0 | 0 | ||
Series D Preferred Stock | ||||
Class of Stock [Line Items] | ||||
Preferred Stock, shares authorized | 437,500,001 | 437,500,001 | ||
Preferred Stock, shares issued | 363,098 | 4,359,652 | ||
Preferred Stock, shares outstanding | 363,098 | 4,359,562 |
STOCKHOLDERS, EQUITY - Redempti
STOCKHOLDERS, EQUITY - Redemption Rights and Dividends (Details) | 3 Months Ended | 6 Months Ended | |||
Jan. 13, 2023 USD ($) | Mar. 31, 2023 USD ($) D | Mar. 31, 2022 USD ($) | Mar. 31, 2023 USD ($) D | Mar. 31, 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 | $ 8,039,612 | ||||
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% | |||
Adjustment to the additional paid-in capital | $ 6,872,075 | ||||
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 | $ 361,321 | $ 361,321 | |||
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 - Liquidat
STOCKHOLDERS' EQUITY - Liquidation, Conversion and Voting Rights (Details) | 6 Months Ended | ||||
May 04, 2023 | Jan. 01, 2023 | Mar. 31, 2023 USD ($) D Vote $ / shares shares | Sep. 30, 2022 shares | Mar. 08, 2022 $ / shares | |
Class of Stock [Line Items] | |||||
Reverse stock ratio | 0.04 | 0.04 | |||
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 | 1,425 | 1,924 | |||
Preferred Stock, shares issued | 1,425 | 1,924 | |||
Series B Preferred Stock | |||||
Class of Stock [Line Items] | |||||
Preferred Stock, shares outstanding | 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 | 0.04 | ||||
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 | 363,098 | 4,359,562 | |||
Preferred Stock, shares issued | 363,098 | 4,359,652 | |||
Conversion ratio | 0.04 | ||||
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 | ||||
Share price (in dollars per share) | $ / shares | $ 1.27 | ||||
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 | 6 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Mar. 31, 2023 | Mar. 31, 2022 | |
LOSS PER SHARE | ||||
Net income attributable to common stockholders | $ (114,913,318) | $ (324,608,480) | $ (491,189,104) | $ (480,670,029) |
Less: accumulated preferred stock dividends | 8,039,612 | (32,735,345) | 7,400,935 | (32,735,345) |
Net Loss attributable to common shareholders after preferred dividends | $ (106,873,706) | $ (357,343,825) | $ (483,788,169) | $ (513,405,374) |
Net loss per share, basic | $ (1.30) | $ (173.83) | $ (7.09) | $ (370.53) |
Net loss per share, diluted | $ (1.30) | $ (173.83) | $ (7.09) | $ (370.53) |
Weighted average shares outstanding, basic | 82,409,028 | 2,055,720 | 68,262,145 | 1,385,594 |
Weighted average shares outstanding, diluted | 82,409,028 | 2,055,720 | 68,262,145 | 1,385,594 |
SHARE- BASED COMPENSATION (Deta
SHARE- BASED COMPENSATION (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Mar. 31, 2023 | Mar. 31, 2022 | |
Composition of Stock-Based Compensation Expense | ||||
Directors, officers and employees share-based compensation | $ 11,320,052 | $ 1,688,694 | $ 47,697,024 | $ 3,292,987 |
Shares issued to consultants for services | 8,229,905 | 21,546,573 | 12,606,343 | 24,042,060 |
Total share-based compensation expense | 19,549,957 | $ 23,235,267 | 60,303,367 | $ 27,335,047 |
CEO Award Incentive Plan | Chief Executive Officer | ||||
Composition of Stock-Based Compensation Expense | ||||
Amount of of costs accrued for future award | $ 2,400,000 | $ 2,400,000 | ||
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 ($) | Mar. 31, 2023 | Sep. 30, 2022 |
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | ||
Accrued expense - other | $ 3,211,783 | $ 3,529,384 |
IRS tax liability | 185,873 | 1,744,707 |
Accrued payroll | 1,621,034 | 534,782 |
Accrued interest | 1,193,150 | 1,377,008 |
Total | 6,211,840 | $ 7,185,881 |
Amount payable due to insufficient shares being available for conversion | $ 1,193,150 |
LIABILITY TO ISSUE STOCK (Detai
LIABILITY TO ISSUE STOCK (Details) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Mar. 31, 2023 | Mar. 31, 2022 | Mar. 31, 2023 | Mar. 31, 2022 | Sep. 30, 2022 | |
Schedule of Liability to Issue Stock [Line items] | |||||
Liability to issue shares for convertible securities and warrants | $ 55,106,287 | $ 55,106,287 | |||
Stock based compensation | 19,549,957 | $ 23,235,267 | 60,303,367 | $ 27,335,047 | |
Liability to issue shares | $ 59,267,471 | 59,267,471 | $ 10,710,000 | ||
Esousa Holdings, LLC | |||||
Schedule of Liability to Issue Stock [Line items] | |||||
Liability to issue shares | $ 10,710,000 | ||||
Consultants | |||||
Schedule of Liability to Issue Stock [Line items] | |||||
Stock based compensation | 578,582 | ||||
Employees and Directors | |||||
Schedule of Liability to Issue Stock [Line items] | |||||
Stock based compensation | $ 3,582,602 |
PROPERTY, EQUIPMENT AND LEASE_3
PROPERTY, EQUIPMENT AND LEASEHOLD IMPROVEMENTS, NET (Details) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Mar. 31, 2023 | Mar. 31, 2022 | Mar. 31, 2023 | Mar. 31, 2022 | Sep. 30, 2022 | |
Property, Plant and Equipment [Line Items] | |||||
Subtotal | $ 99,328,888 | $ 99,328,888 | $ 22,121,868 | ||
Less: accumulated depreciation | (9,686,904) | (9,686,904) | (4,335,166) | ||
Property, Equipment and Leasehold Improvements, net | 89,641,984 | 89,641,984 | 17,786,702 | ||
Depreciation | 2,947,555 | $ 447,720 | 5,351,737 | $ 721,129 | |
Buildings | |||||
Property, Plant and Equipment [Line Items] | |||||
Subtotal | 50,541,364 | 50,541,364 | 8,306,697 | ||
Furniture and equipment | |||||
Property, Plant and Equipment [Line Items] | |||||
Subtotal | 552,859 | 552,859 | 556,948 | ||
Vehicles | |||||
Property, Plant and Equipment [Line Items] | |||||
Subtotal | 220,886 | 220,886 | 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 | 1,316,745 | 1,316,745 | 1,013,308 | ||
Machinery and equipment | |||||
Property, Plant and Equipment [Line Items] | |||||
Subtotal | 41,109,337 | 41,109,337 | 7,383,612 | ||
Construction-in-progress | |||||
Property, Plant and Equipment [Line Items] | |||||
Subtotal | 1,047,583 | 1,047,583 | 269,778 | ||
Leasehold improvements | |||||
Property, Plant and Equipment [Line Items] | |||||
Subtotal | $ 111,570 | $ 111,570 | $ 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 | $ 33,600,000 |
OTHER NONCURRENT ASSETS (Detail
OTHER NONCURRENT ASSETS (Details) - USD ($) | Mar. 31, 2023 | Sep. 30, 2022 |
OTHER NONCURRENT ASSETS | ||
Other assets | $ 5,000 | $ 81,588 |
Other receivables | 109,184 | 1,232,387 |
Security deposits | 1,052,872 | 281,057 |
Total Other Assets | $ 1,167,056 | $ 1,595,032 |
OPERATING EXPENSES (Details)
OPERATING EXPENSES (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Mar. 31, 2023 | Mar. 31, 2022 | |
OPERATING EXPENSES | ||||
Professional fees | $ 12,386,745 | $ 21,725,222 | $ 46,634,060 | $ 26,864,554 |
Salaries | 18,466,153 | 4,217,073 | 37,013,975 | 7,378,993 |
Depreciation | 2,966,086 | 302,859 | 5,370,269 | 610,558 |
Amortization | 850,370 | 3,607,075 | ||
Lease | 843,963 | 559,583 | 1,675,054 | 1,019,118 |
Settlements and penalties | 6,244,504 | 589,846 | 6,265,349 | 884,832 |
Employee benefits | 585,053 | 545,108 | 1,618,690 | 913,160 |
Utilities and office expense | 905,711 | 111,419 | 1,067,103 | 225,913 |
Advertising and promotions | 1,158,595 | 472,803 | 3,760,269 | 2,925,593 |
Taxes and licenses | 150,323 | 210,697 | 251,881 | 279,488 |
Repairs and maintenance | 201,058 | 60,482 | 382,297 | 79,702 |
Executive expenses and directors fees | 81,022 | 290,066 | ||
Listing and regulatory Fees | 1,433,502 | 2,735,345 | ||
Other | 1,139,253 | 474,341 | 1,736,916 | 988,605 |
Total | $ 47,412,338 | $ 29,269,433 | $ 112,408,349 | $ 42,170,516 |
OPERATING EXPENSES - Research a
OPERATING EXPENSES - Research and development (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Mar. 31, 2023 | Mar. 31, 2022 | |
Research & Development | ||||
Research and development | $ 20,478,971 | $ 1,183,437 | $ 29,100,980 | $ 2,340,761 |
LEASES - Lease assets and liabi
LEASES - Lease assets and liabilities (Details) - USD ($) | Mar. 31, 2023 | Sep. 30, 2022 |
Assets: | ||
Operating lease right-of-use assets | $ 6,029,432 | $ 4,597,052 |
Liabilities: | ||
Operating lease liabilities, current | (2,235,197) | (1,428,474) |
Operating lease liabilities, non-current | (4,163,705) | (3,359,354) |
Total lease liabilities | $ (6,398,902) | $ (4,787,828) |
Weighted average remaining lease terms: Operating leases | 1 year 9 months | 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 | 6 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Mar. 31, 2023 | Mar. 31, 2022 | |
Operating lease costs: | ||||
Fixed lease cost | $ 782,101 | $ 452,789 | $ 1,360,748 | $ 739,271 |
Variable lease cost | 30,828 | 130,752 | 61,822 | 260,357 |
Short-term lease cost | 29,185 | 125,777 | ||
Sublease income | (45,885) | (53,144) | (65,629) | (106,287) |
Total operating lease costs | $ 767,044 | $ 559,582 | $ 1,356,941 | $ 1,019,118 |
LEASES - Maturities of operatin
LEASES - Maturities of operating lease liabilities (Details) - USD ($) | Mar. 31, 2023 | Sep. 30, 2022 |
Year ending December 31, | ||
2023 (6 months) | $ 1,763,109 | |
2024 | 3,062,953 | |
2025 | 2,412,336 | |
2026 | 599,369 | |
2027 | 405,882 | |
Thereafter | 107,972 | |
Total lease payments | 8,351,621 | |
Less: imputed interest | (1,952,719) | |
Present value of lease liabilities | $ 6,398,902 | $ 4,787,828 |
LEASES - Additional Information
LEASES - Additional Information (Details) | 6 Months Ended |
Mar. 31, 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 ($) claim shares | Jun. 30, 2022 USD ($) | Mar. 31, 2023 USD ($) shares | Jan. 25, 2023 shares | Jan. 24, 2023 shares | Sep. 30, 2022 USD ($) | |
CONTINGENCIES AND CLAIMS | ||||||
Debt discount | $ 574,248 | $ 932,235 | ||||
Common Stock, shares authorized | shares | 5,000,000,000 | 5,000,000,000 | 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 | |||||
Minimum | DBI Lease Buyback Servicing LLC, Drawbridge Investments LLC | ||||||
CONTINGENCIES AND CLAIMS | ||||||
Damages in Drawbridge assets | $ 100,000,000 | |||||
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) - USD ($) | Mar. 14, 2023 | Mar. 14, 2022 |
Qiantu Warrants | ||
Other Commitments [Line Items] | ||
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 | 3,000,000 | |
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_4
COMMITMENTS AND CONTINGENCIES - Federal and State Tax Liabilities (Details) - USD ($) | 3 Months Ended | |
Jun. 30, 2022 | Mar. 31, 2023 | |
Payroll Tax Liability | ||
CONTINGENCIES AND CLAIMS | ||
Amount of monthly payments | $ 45,000 | |
Past due accrued liability | $ 185,873 | |
Tax Liabilities on Sale of Property | ||
CONTINGENCIES AND CLAIMS | ||
Tax paid on sale of property | $ 725,817 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details) - USD ($) | Feb. 03, 2023 | Nov. 30, 2022 |
CONTINGENCIES AND CLAIMS | ||
Litigation liability | $ 0 | |
Shareholder Derivative Action [Member] | ||
CONTINGENCIES AND CLAIMS | ||
Damages in Drawbridge assets | $ 3,000,000 |
RELATED PARTY TRANSACTIONS - Tr
RELATED PARTY TRANSACTIONS - Transactions with Affiliates (Details) - USD ($) | 6 Months Ended | 12 Months Ended |
Mar. 31, 2023 | Sep. 30, 2022 | |
Mullen Technologies, Inc. | Management and Accounting Services | ||
Related Party Transaction [Line Items] | ||
Related party transaction, expenses | $ 1,200,000 | |
Affiliated Entity | Affiliate Note Receivable | ||
Related Party Transaction [Line Items] | ||
Related Party, principal amount | $ 1,388,405 | |
Related party transaction rate | 10% | |
Stated interest rate of debt agreements | 15% | |
Prepaids and Other Current Assets | Mullen Technologies, Inc. | Affiliate Note Receivable | ||
Related Party Transaction [Line Items] | ||
Due from affiliate, current | $ 314,198 |
RELATED PARTY TRANSACTIONS - Wi
RELATED PARTY TRANSACTIONS - William Miltner (Details) - USD ($) | 3 Months Ended | 6 Months Ended |
Mar. 31, 2023 | Mar. 31, 2023 | |
Legal services provided | William Miltner | ||
Related Party Transaction [Line Items] | ||
Amount paid for legal services | $ 193,043 | $ 428,877 |
RELATED PARTY TRANSACTIONS - Ig
RELATED PARTY TRANSACTIONS - Ignacio Novoa (Details) | Jan. 12, 2022 |
Consulting agreements | Director | |
Related Party Transaction [Line Items] | |
Term of agreement | 1 year |
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) | May 15, 2023 USD ($) tranche | Apr. 17, 2023 USD ($) tranche shares | Apr. 04, 2023 USD ($) item | Apr. 03, 2023 $ / shares | Mar. 31, 2023 $ / shares | Sep. 30, 2022 $ / shares |
Subsequent Event [Line Items] | ||||||
Preferred Stock, par value | $ / shares | $ 0.001 | $ 0.001 | ||||
Subsequent event | ||||||
Subsequent Event [Line Items] | ||||||
Payments of investor shares | $ 45,000,000 | |||||
Subsequent event | Mullen Advanced Energy Operations LLC | ||||||
Subsequent Event [Line Items] | ||||||
Upfront payments | 50,000 | |||||
Amount payable upon execution of definitive agreements | 5,000,000 | |||||
Subsequent event | Mullen Advanced Energy Operations LLC | Maximum | ||||||
Subsequent Event [Line Items] | ||||||
Amount of funding to be provided for business operations | $ 5,000,000 | |||||
Subsequent event | Mullen Advanced Energy Operations LLC | ||||||
Subsequent Event [Line Items] | ||||||
Equity interest | 51% | |||||
Subsequent event | Mullen Advanced Energy Operations LLC | Lawrence Hardge, Global EV Technology, Inc., and EV Technology, LLC | ||||||
Subsequent Event [Line Items] | ||||||
Equity interest | 49% | |||||
Subsequent event | Promissory Notes Payable | ||||||
Subsequent Event [Line Items] | ||||||
Number of promissory notes | item | 3 | |||||
Face amount of debt | $ 20,000,000 | |||||
Interest rate (as a percent) | 15% | |||||
Interest rate under the debt agreement | 20% | |||||
Subsequent event | Series D Preferred Stock | ||||||
Subsequent Event [Line Items] | ||||||
Preferred Stock, par value | $ / shares | $ 0.001 | |||||
Remaining commitment amount for shares offering | $ 90,000,000 | $ 90,000,000 | ||||
Number of tranches remaining commitment | tranche | 2 | 2 | ||||
Reverse stock split trading days | 5 days | |||||
Amount receivable by company as part of commitment to issue shares | $ 45,000,000 | |||||
Payments of investor shares | $ 16,363,636.50 | |||||
Number of shares issued (in shares) | shares | 6,545,455 |
RESTATEMENT - Statement of Oper
RESTATEMENT - Statement of Operations (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Mar. 31, 2023 | Mar. 31, 2022 | |
RESTATEMENT | ||||
Loss from Operations | $ (67,891,309) | $ (30,452,870) | $ (141,509,329) | $ (44,511,277) |
Other financing costs - initial recognition of warrants at fair value | (160,364,949) | (269,344,178) | ||
Revaluation of warrants | (131,670,146) | (142,288,528) | ||
Others | (2,120,515) | (24,526,046) | ||
Other income (expense) | (294,155,610) | (436,158,752) | ||
Net loss attributable to shareholders | (114,913,318) | (324,608,480) | (491,189,104) | (480,670,029) |
Less: accumulated preferred stock dividends | 8,039,612 | (32,735,345) | 7,400,935 | (32,735,345) |
Net loss attributable to shareholders | $ (106,873,706) | $ (357,343,825) | $ (483,788,169) | $ (513,405,374) |
Loss per Share, Basic | $ (1.30) | $ (173.83) | $ (7.09) | $ (370.53) |
Weighted average shares outstanding, basic | 82,409,028 | 2,055,720 | 68,262,145 | 1,385,594 |
As Previously Reported | ||||
RESTATEMENT | ||||
Loss from Operations | $ (30,452,870) | $ (44,511,277) | ||
Others | (2,120,515) | (24,526,046) | ||
Other income (expense) | (2,120,515) | (24,526,046) | ||
Net loss attributable to shareholders | (32,573,385) | (69,037,323) | ||
Net loss attributable to shareholders | $ (32,573,385) | $ (69,037,323) | ||
Loss per Share, Basic | $ (15.85) | $ (49.83) | ||
Weighted average shares outstanding, basic | 2,055,720 | 1,385,594 | ||
Adjustments | ||||
RESTATEMENT | ||||
Other financing costs - initial recognition of warrants at fair value | $ (160,364,949) | $ (269,344,178) | ||
Revaluation of warrants | (131,670,146) | (142,288,528) | ||
Other income (expense) | (292,035,095) | (411,632,706) | ||
Net loss attributable to shareholders | (292,035,095) | (411,632,706) | ||
Less: accumulated preferred stock dividends | (32,735,345) | (32,735,345) | ||
Net loss attributable to shareholders | $ (324,770,440) | $ (444,368,051) |