8-K: Mullen Automotive Resolves Bollinger Motors Lawsuit, Boosts Ownership to 95% and Eliminates Debt

Mullen Automotive Inc. announced it has settled a lawsuit related to Bollinger Motors, acquiring an additional 21% ownership to reach 95% and eliminating significant debt, which increased shareholder equity by approximately $3.5 million.

Summary

• Mullen Automotive Inc. (Mullen) entered into a Settlement and Release Agreement on May 28, 2025, with Robert Bollinger (Lender) and the receiver for Bollinger Motors, Inc. (Bollinger).
• The agreement resolves a lawsuit filed on March 21, 2025, by the Lender, alleging a breach of contract related to a $10.0 million secured promissory note executed on October 24, 2024.
• Mullen agreed to pay the Lender $11 million to dismiss the lawsuit and release Mullen and Bollinger from all claims and liabilities.
• Mullen also committed to paying all expenses of the Receiver incurred beginning on May 26, 2025.
• As part of the settlement, the Lender transferred all his shares of Bollinger to Mullen, increasing Mullen's total ownership of Bollinger to 95%.
• On June 2, 2025, the court entered an order discharging and removing the Receiver and dismissing the lawsuit with prejudice.
• This strategic transaction is reported to have increased Mullen's shareholder equity by approximately $3.5 million.
• Bollinger Motors will continue to operate as an independent majority-owned Mullen subsidiary, maintaining its brand identity and focus, with Mullen providing full financial backing for sales, service, and warranty.
• Bollinger is set to immediately ramp up sales activity and consolidate/streamline its operations, continuing its focus on the development and production of the B4 platform, an all-electric Class 4 commercial truck.

Sentiment

Score: 7

Explanation: The resolution of a significant lawsuit, elimination of substantial debt, and increased ownership in a key subsidiary are strong positive developments that remove a major overhang and provide greater strategic control, despite the $11 million payment. This indicates a positive step towards stability and future growth.

Positives

• Successfully resolved a significant lawsuit and eliminated substantial debt related to Bollinger Motors, removing a major financial and operational overhang.
• Increased Mullen's ownership of Bollinger Motors from a majority stake to 95%, gaining greater control and strategic alignment over the subsidiary.
• The transaction resulted in an approximate $3.5 million increase in Mullen's shareholder equity.
• Regained full control and strategic direction of Bollinger Motors, ensuring its continued operations without the oversight of a court-appointed receiver.
• Bollinger Motors will continue to operate as an independent majority subsidiary with full backing from Mullen for sales, service, and warranty, assuring customers of continuity.

Negatives

• Mullen was required to pay $11 million to settle the lawsuit, which stemmed from an alleged breach of a $10.0 million secured promissory note.
• The lawsuit led to a court-ordered receivership for Bollinger Motors, indicating prior financial or operational distress within the subsidiary.
• Mullen also agreed to pay all expenses of the Receiver incurred from May 26, 2025, adding to the overall cost of the settlement.

Risks

• Uncertainty regarding the outcome of sales initiatives for Bollinger vehicles.
• Whether the Bollinger B4 commercial truck will prove successful in the market.
• The duration and continued applicability of state and federal electric vehicle incentive programs.
• The ability of Bollinger Motors B4 Class trucks to qualify for incentive programs and the impact of these programs on the resultant vehicle price.
• Mullen's ability to obtain additional financing in sufficient amounts or on acceptable terms when needed.
• Mullen's ability to maintain existing, and secure additional, contracts with manufacturers, parts, and other service providers.
• Mullen's ability to successfully expand in existing markets and enter new markets.
• Mullen's ability to successfully manage and integrate any acquisitions of businesses, solutions, or technologies.
• Potential for unanticipated operating costs, transaction costs, and actual or contingent liabilities.
• The ability to attract and retain qualified employees and key personnel.
• Adverse effects of increased competition on Mullen's business.
• Changes in government licensing and regulation that may adversely affect Mullen's business.
• The risk that changes in consumer behavior could adversely affect Mullen's business.
• Mullen's ability to protect its intellectual property.
• Impact of local, industry, and general business and economic conditions.

Future Outlook

Bollinger Motors will continue to focus on the development and production of its B4 platform, leveraging Mullen's resources and expertise to accelerate progress. The integration of Bollinger's capabilities into Mullen's broader EV ecosystem is expected to create significant synergies, driving innovation and market expansion. Bollinger is also set to immediately ramp up sales activity while consolidating and streamlining operations.

Management Comments

• "This is an important moment for both Mullen Automotive and Bollinger Motors. Our investment in acquiring the vast majority of remaining shares and resolving certain significant outstanding debt demonstrates our belief in and continued commitment to Bollingers vehicle lineup and future." David Michery, CEO and chairman of Mullen Automotive and Bollinger Motors.

Industry Context

The announcement highlights Mullen's continued investment in the electric vehicle (EV) commercial truck segment, specifically Class 4 vehicles with Bollinger's B4 Chassis Cab. This aligns with the broader industry trend of electrification in commercial fleets, driven by environmental regulations and operational efficiency goals. Mullen is positioning itself to capitalize on this growing market by consolidating control over its key EV truck subsidiary.

Comparison to Industry Standards

• The document does not provide specific comparable companies, projects, or results to assess the financial or operational performance against global benchmarks.
• It mentions the Bollinger B4 Chassis Cab's specifications, including a 185-mile range, 46-foot turning radius, and 7,325 pounds payload, which are specific to its Class 4 commercial truck segment. However, no direct comparison to competitors or industry averages for these metrics is provided within the document.

Corporate Governance

Legal Proceedings

• A lawsuit was filed on March 21, 2025, in the U.S. District Court for the Eastern District of Michigan by Robert Bollinger (Lender) against Mullen Automotive Inc., alleging a breach of contract related to a $10.0 million secured promissory note.
• A receiver for Bollinger Motors, Inc. was appointed on May 7, 2025, as a result of the lawsuit.
• Mullen Automotive Inc. entered into a Settlement and Release Agreement on May 28, 2025, agreeing to pay $11 million and cover receiver expenses to resolve the lawsuit.
• On June 2, 2025, the court entered an order discharging and removing the Receiver and dismissing the lawsuit with prejudice, formally concluding the legal proceedings.

Related Party Transactions

• The Settlement and Release Agreement was entered into with Robert Bollinger, the Lender, who was the alleged counterparty to the promissory note and transferred his remaining shares of Bollinger Motors to Mullen as part of the settlement. This indicates a transaction with a party previously or currently associated with the subsidiary.

Stakeholder Impact

• Shareholders: Experienced an approximate $3.5 million increase in shareholder equity and benefited from the removal of a significant legal and financial overhang, potentially improving investor confidence.
• Customers (Bollinger): Assured continued business as usual, with full backing and comprehensive coverage on sales, service, and warranty for their Bollinger vehicles, ensuring continuity and support.
• Employees (Bollinger): Ensured continued operations of Bollinger Motors under Mullen's complete ownership and strategic direction, providing job security and stability.
• Creditors (Bollinger): The settlement addressed and eliminated significant debt and liabilities, resolving claims that led to the receivership.

Next Steps

• Bollinger Motors will continue to operate as a majority-owned Mullen subsidiary.
• Bollinger Motors will immediately ramp up sales activity.
• Bollinger Motors will consolidate and streamline operations.
• Bollinger Motors will continue to focus on the development and production of the B4 platform.

Key Dates

Keywords

Mullen Automotive, Bollinger Motors, Electric Vehicles, EV, Commercial Trucks, Class 4, B4 Chassis Cab, Lawsuit Settlement, Acquisition, Debt Elimination, Shareholder Equity, SEC Filing, Corporate Governance