Net Element(MULN) - 2025 Q2 - Quarterly Report

Revenue and Sales Performance - Revenue from vehicle sales for the three months ended March 31, 2025, was approximately $4.95 million, a significant increase of 14,750% compared to $33,335 for the same period in 2024[280] - Vehicle sales for the six months ended March 31, 2025, were $7,870,625, a significant increase of 23,511% compared to $33,335 in the same period in 2024[291] - The company recognized revenue of $3.7 million in January 2025 after a customer waived their right of return for 60 vehicles[281] Financial Losses and Impairments - The net loss attributable to common stockholders for Q1 2025 was approximately $47.1 million, or $489.24 per share, compared to a net loss of approximately $132.5 million, or $12,041,273 per share, in Q1 2024[290] - The net loss attributable to common stockholders for the six months ended March 31, 2025, was approximately $162.0 million, or $3,338.65 net loss per share, compared to a net loss of approximately $193.9 million, or $21,493.37 loss per share, in the prior year[300] - The company incurred a net loss of $172.7 million for the six months ended March 31, 2025, with an accumulated deficit of approximately $2.5 billion as of the same date[311] - The company recognized an impairment loss of $12.0 million on patents acquired in September 2022 due to unfavorable market conditions[286] - The company recognized impairment losses of $12.0 million on intangible assets during the six months ended March 31, 2025, compared to $73.4 million in the same period in 2024[296] - The company recognized an impairment loss of $12.0 million related to patents in the Bollinger segment as of March 31, 2025[330] Expenses and Cost Management - Cost of revenues for the same period was approximately $6.99 million, resulting in a gross loss of approximately $2.05 million, compared to a gross loss of $2.07 million in the prior year, reflecting a decrease of 10,388%[280] - Research and development expenses decreased by $13.7 million, or 57%, from $24.0 million in Q1 2024 to $10.4 million in Q1 2025, due to cost reduction initiatives[283] - General and administrative expenses decreased by approximately $6.5 million, or 14%, from approximately $47.9 million in Q1 2024 to approximately $41.4 million in Q1 2025[284] - Research and development expenses decreased by $18.5 million, or 46%, from $40.2 million in the six months ended March 31, 2024, to $21.6 million in the same period in 2025[294] - General and administrative expenses decreased by approximately $13.3 million, or 15%, from approximately $91.1 million in the six months ended March 31, 2024, to approximately $77.9 million in the same period in 2025[295] Financing and Debt - Other financing costs related to the initial recognition of warrants amounted to $21.1 million in Q1 2025, with no such costs in Q1 2024[287] - Other financing costs related to the initial recognition of warrants amounted to $37.2 million during the six months ended March 31, 2025[297] - Interest expense increased by $7.3 million in Q1 2025 compared to Q1 2024 due to a higher volume of debt outstanding[289] - As of March 31, 2025, the total debt amounted to $40.9 million, with $10 million due in the next six months[324] - The interest rate on remaining senior convertible notes increased from 15% to 20% due to cross-default conditions as of April 15, 2025[317] Cash Flow and Liquidity - The company has approximately $2.3 million in existing cash and restricted cash as of March 31, 2025, and used approximately $48.6 million of cash for operating activities during the same period[311] - Net cash used in operating activities was $48.6 million for the six months ended March 31, 2025, a 55% decrease from $108.5 million in the same period of 2024[320] - Net cash used in investing activities was $3.9 million for the six months ended March 31, 2025, a 69% decrease from $12.5 million in the same period of 2024[321] - Net cash provided by financing activities was $44.0 million for the six months ended March 31, 2025, compared to a net cash outflow of $4.9 million in the same period of 2024[322] - The company is pursuing strategies to address liquidity concerns, including equity or debt financing and operational restructuring, but there is substantial doubt about its ability to continue as a going concern[312] Other Financial Metrics - The net gain on revaluation of warrants was $98.2 million in Q1 2025, compared to $3.6 million in Q1 2024, reflecting significant changes in the company's stock price[288] - During the six months ended March 31, 2025, approximately $24.8 million of senior secured convertible notes and $1.5 million of accumulated interest were converted into common stock, resulting in a gain on extinguishment of $1.5 million[316] - A write-down to net realizable value of $0.8 million was recorded by the Mullen Commercial segment during the six months ended March 31, 2025[334] - Total future minimum lease payments as of March 31, 2025, are estimated at $25.4 million[323]