# EDGAR Filing Document

**Accession Number:** 0001499961
**File Stem:** 0001437749-25-027081
**Filing Date:** 2025-8
**Character Count:** 347002
**Document Hash:** ab97d9b2d8a7d9c0b445da15b798a715
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001437749-25-027081.hdr.sgml**: 20250815

**ACCESSION NUMBER**: 0001437749-25-027081

**CONFORMED SUBMISSION TYPE**: 10-Q/A

**PUBLIC DOCUMENT COUNT**: 100

**CONFORMED PERIOD OF REPORT**: 20250630

**FILED AS OF DATE**: 20250815

**DATE AS OF CHANGE**: 20250815

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** BOLLINGER INNOVATIONS, INC.
- **CENTRAL INDEX KEY:** 0001499961
- **STANDARD INDUSTRIAL CLASSIFICATION:** MOTOR VEHICLES & PASSENGER CAR BODIES [3711]
- **ORGANIZATION NAME:** 04 Manufacturing
- **EIN:** 901025599
- **STATE OF INCORPORATION:** DE
- **FISCAL YEAR END:** 0930

**FILING VALUES:**
- **FORM TYPE:** 10-Q/A
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 001-34887
- **FILM NUMBER:** 251222665

**BUSINESS ADDRESS:**
- **STREET 1:** 1405 PIONEER STREET
- **CITY:** BREA
- **STATE:** CA
- **ZIP:** 92821
- **BUSINESS PHONE:** 7146131900

**MAIL ADDRESS:**
- **STREET 1:** 1405 PIONEER STREET
- **CITY:** BREA
- **STATE:** CA
- **ZIP:** 92821

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** MULLEN AUTOMOTIVE INC.
- **DATE OF NAME CHANGE:** 20211108

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** Net Element, Inc.
- **DATE OF NAME CHANGE:** 20131206

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** Net Element International, Inc.
- **DATE OF NAME CHANGE:** 20121002

?xml version='1.0' encoding='ASCII'? muln20250630c_10qa.htm

[**Table of Contents**](#toc)

------

**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**Washington, D.C. 20549**

**FORM 10-Q/A**

**Amendment No. 1**

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2025

or

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ____ to ___

Commission file number: 001-34887

**BOLLINGER INNOVATIONS, INC.**

(Exact name of registrant as specified in its charter)

---

| | |
|:---|:---|
| **Delaware** | **86-3289406** |
| (State or other jurisdiction of<br> incorporation or organization) | (I.R.S. Employer<br> Identification No.) |

---

---

| |
|:---|
| **1405 Pioneer Street** <br> **Brea, California 92821** |
| (Address of principal executive offices) |

---

Registrant's telephone number, including area code: (714) 613-1900

---

| |
|:---|
| Mullen Automotive Inc.&nbsp;&nbsp;&nbsp;&nbsp; |
| (Former name, former address and former fiscal year, if changed since last report) |

---

Securities registered pursuant to Section 12(b) of the Act:

---

| | | |
|:---|:---|:---|
| **Title of each class** | **Trading symbol(s)** | **Name of each exchange on which registered** |
| Common Stock, par value $0.001 | BINI | The Nasdaq Stock Market, LLC (Nasdaq Capital Market) |
| Rights to Purchase Series A-1 Junior Participating Preferred Stock |  | The Nasdaq Stock Market, LLC (Nasdaq Capital Market) |

---

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒ Yes ☐ NO

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☒ Yes ☐ NO

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

---

| | |
|:---|:---|
| Large accelerated filer ☐ | Accelerated filer ☐ |
| Non-accelerated filer ☒ | Smaller reporting company ☒ |
|  | Emerging growth company ☐ |

---

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). ☐ YES ☒ NO

As of August 11, 2025, a total of 4,604,935 shares of the Registrant's common stock, par value $0.001 per share, were issued and outstanding.

------

[**Table of Contents**](#toc)

**EXPLANATORY NOTE**

This Amendment No. 1 to the Quarterly Report on Form 10-Q of Bollinger Innovations, Inc. (the "Company") for the quarter ended June 30, 2025, originally filed on August 14, 2025 (the "Original Filing"), is being filed solely to correct a technical error in the table entitled "Segment reporting for the three and nine months ended June 30, 2025" under Note 4 – Segment Information in the Notes to Condensed Consolidated Financial Statements. The net loss before impairment and income taxes for the three months ended June 30, 2025 for the Bollinger Motors segment was corrected from ($23,802,951) to ($11,796,499).

Except as described above, this Form 10-Q/A does not modify or update disclosure in, or exhibits to, the Original Filing. Furthermore, this Form 10-Q/A does not change any previously reported financial results, and it does not reflect events occurring after the date of the Original Form 10-Q. Information not affected by this Form 10-Q/A remains unchanged and reflects the disclosures made at the time the Original Form 10-Q was filed. Accordingly, this Form 10-Q/A should be read in conjunction with the Original Form 10-Q and our other filings with the Securities and Exchange Commission.

------

[**Table of Contents**](#toc)

**TABLE OF CONTENTS**

---

| | | |
|:---|:---|:---|
|  |  | Page |
| [**PART I.**](#part1) | [**FINANCIAL INFORMATION**](#part1) |  |
| &nbsp;&nbsp;&nbsp;&nbsp; [Item 1.](#part1) | [Financial Statements:](#part1) | [3](#part1) |
|  | [Condensed Consolidated Balance Sheets as of June 30, 2025 (unaudited) and September 30, 2024](#bs) | [3](#bs) |
|  | [Condensed Consolidated](#bs) [Statements of Operations and Comprehensive Loss for the three and nine months ended June 30, 2025 and 2024 (unaudited)](#ops) | [4](#ops) |
|  | [Condensed Consolidated](#bs) [Statements of Stockholders Equity for the three and nine months ended June 30, 2025 and 2024 (unaudited)](#equity) | [5](#equity) |
|  | [Condensed Consolidated](#bs) [Statements of Cash Flows for the nine months ended June 30, 2025 and 2024 (unaudited)](#cf) | [7](#cf) |
|  | [Notes to Unaudited](#n1)[Condensed](#bs)[Consolidated Financial Statements](#n1) | [8](#n1) |
| &nbsp;&nbsp;&nbsp;&nbsp; [Item 2.](#mda) | [Management's Discussion and Analysis of Financial Condition and Results of Operations](#mda) | [45](#mda) |
| &nbsp;&nbsp;&nbsp;&nbsp; [Item 3.](#qqd) | [Quantitative and Qualitative Disclosures About Market Risk](#qqd) | [57](#qqd) |
| &nbsp;&nbsp;&nbsp;&nbsp; [Item 4.](#controls) | [Controls and Procedures](#controls) | [57](#controls) |
| [**PART II.**](#part2) | [**OTHER INFORMATION**](#part2) |  |
| &nbsp;&nbsp;&nbsp;&nbsp; [Item 1.](#legal) | [Legal Proceedings](#legal) | [58](#legal) |
| &nbsp;&nbsp;&nbsp;&nbsp; [Item 1A.](#risk) | [Risk Factors](#risk) | [58](#risk) |
| &nbsp;&nbsp;&nbsp;&nbsp; [Item 2.](#unregistered) | [Unregistered Sales of Equity Securities and Use of Proceeds](#unregistered) | [60](#unregistered) |
| &nbsp;&nbsp;&nbsp;&nbsp; [Item 3.](#defaults) | [Defaults Upon Senior Securities](#defaults) | [60](#defaults) |
| &nbsp;&nbsp;&nbsp;&nbsp; [Item 4.](#mine) | [Mine Safety Disclosures](#mine) | [60](#mine) |
| &nbsp;&nbsp;&nbsp;&nbsp; [Item 5.](#i5otherinfo) | [Other Information](#i5otherinfo) | [61](#i5otherinfo) |
| &nbsp;&nbsp;&nbsp;&nbsp; [Item 6.](#exhibits) | [Exhibits](#exhibits) | [63](#exhibits) |
| [**SIGNATURES**](#sigs) | [**SIGNATURES**](#sigs) | [64](#sigs) |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 2

------

[**Table of Contents**](#toc)

**PART I. FINANCIAL INFORMATION**

**Item 1. Financial Statements**

**BOLLINGER INNOVATIONS, INC.**

**CONDENSED CONSOLIDATED BALANCE SHEETS**

---

| | | |
|:---|:---|:---|
|  | ***June 30, 2025*** | ***September 30, 2024*** |
|  | (unaudited) |  |
| **ASSETS** |  |  |
| **CURRENT ASSETS** |  |  |
| Cash and cash equivalents | $454658 | $10321827 |
| Restricted cash | 397067 | 426851 |
| Inventory | 28148500 | 37503112 |
| Prepaid expenses and other current assets | 13386759 | 14798553 |
| Accounts receivable |  | 124295 |
| **TOTAL CURRENT ASSETS** | **42386984** | **63174638** |
| Property, plant, and equipment, net | 30187343 | 82180266 |
| Intangible assets, net | 12505550 | 27056030 |
| Right-of-use assets | 2481312 | 3041485 |
| Other noncurrent assets | 1667917 | 3178870 |
| **TOTAL ASSETS** | $**89229106** | $**178631289** |
| **LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)** |  |  |
| **CURRENT LIABILITIES** |  |  |
| Accounts payable | $42396488 | $41335509 |
| Accrued expenses and other current liabilities | 14855109 | 51612166 |
| Derivative liabilities | 101060811 | 79742180 |
| Liability to issue shares | 1458863 | 1771025 |
| Lease liabilities, current portion | 2237694 | 2893967 |
| Notes payable, current portion | 24070440 | 5399777 |
| Refundable deposits | 404072 | 417674 |
| **TOTAL CURRENT LIABILITIES** | **186483477** | **183172298** |
| Liability to issue shares, net of current portion | 66674 | 356206 |
| Lease liabilities, net of current portion | 9733098 | 11648662 |
| **TOTAL LIABILITIES** | $**196283249** | $**195177166** |
| Contingencies and claims (Note 19) |  |  |
| **STOCKHOLDERS' EQUITY (DEFICIT)** |  |  |
| Preferred stock; $0.001 par value; 626,263,159 and 126,263,159 shares of preferred stock authorized at June 30, 2025 and September 30, 2024, respectively |  |  |
| Preferred Series D; 84,572,538 shares authorized; 363,097 shares issued and outstanding at June 30, 2025 and September 30, 2024 (preference in liquidation of $159,000 at June 30, 2025 and September 30, 2024) | 363 | 363 |
| Preferred Series C; 24,874,079 shares authorized; 458 shares issued and outstanding at June 30, 2025 and September 30, 2024 (preference in liquidation of $4,049 at June 30, 2025 and September 30, 2024) |  |  |
| Preferred Series A; 83,859 shares authorized; 648 shares issued and outstanding at June 30, 2025 and September 30, 2024 (preference in liquidation of $836 at June 30, 2025 and September 30, 2024) | 1 | 1 |
| Common stock; $0.001 par value; 5,000,000,000 shares authorized at June 30, 2025 and September 30, 2024; 99,568 and 1 shares issued and outstanding at June 30, 2025 and September 30, 2024 respectively (\*) | 100 |  |
| Additional paid-in capital (\*) | 2503004697 | 2290664548 |
| Accumulated deficit | (2610910202) | (2319220938) |
| **TOTAL STOCKHOLDERS' EQUITY (DEFICIT) ATTRIBUTABLE TO THE COMPANY'S STOCKHOLDERS** | **(107905041)** | **(28556026)** |
| Noncontrolling interest | 850898 | 12010149 |
| **TOTAL STOCKHOLDERS' EQUITY (DEFICIT)** | **(107054143)** | **(16545877)** |
| **TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)** | $**89229106** | $**178631289** |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (\*) Adjusted retroactively for reverse stock splits, see *Note 1 - Description of Business and Basis of Presentation*

See accompanying notes to these unaudited condensed consolidated financial statements.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 3

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[**Table of Contents**](#toc)

**BOLLINGER INNOVATIONS, INC.**

**CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS**

(unaudited)

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | ***Three months ended June 30,*** | ***Three months ended June 30,*** | ***Nine months ended June 30,*** | ***Nine months ended June 30,*** |
|  | ***2025*** | ***2024*** | ***2025*** | ***2024*** |
| Revenue from sale of vehicles | $473686 | $65235 | $8344311 | $98570 |
| Cost of revenues | 10565994 | 36008 | 24151863 | 49448 |
| **Gross loss** | **(10092308)** | **29227** | **(15807552)** | **49122** |
| **Operating expenses:** |  |  |  |  |
| General and administrative | $36173327 | $47477377 | $114030172 | $138615121 |
| Research and development | 11587940 | 14292744 | 33234428 | 54486237 |
| Impairment of intangible assets | 326173 |  | 12332625 | 73447067 |
| Impairment of right-of - use assets |  | 30060 |  | 3197668 |
| Impairment of goodwill |  |  |  | 28846832 |
| **Loss from operations** | **(58179748)** | **(61770954)** | **(175404777)** | **(298543803)** |
| **Other income (expense):** |  |  |  |  |
| Other financing costs - initial recognition of warrants | (33181991) | (17914480) | (70366183) | (17914480) |
| Loss on exchange of warrants |  |  | (57770454) |  |
| Gain/(loss) on warrants and derivative liability revaluation | (4829873) | 2301086 | 58787404 | (805137) |
| Gain on settlement | 3761955 |  | 3761955 |  |
| Loss on settlement (GEM case) | (14261736) |  | (14261736) |  |
| Gain/(loss) on extinguishment of debt | 250000 | (690346) | 1803771 | (655721) |
| Loss on disposal of fixed assets |  | (103973) |  | (477838) |
| Interest expense | (25663583) | (8277802) | (51855494) | (8795525) |
| Other financing costs - ELOC commitment fee |  | (6000000) |  | (6000000) |
| Other income, net | 337152 | 829056 | 860131 | 2318164 |
| **Total other income (expense)** | **(73588076**) | **(29856459**) | **(129040606)** | **(32330537)** |
| **Net loss before income tax benefit** | $**(131767824)** | $**(91627413)** | $**(304445383)** | $**(330874340)** |
| Income tax benefit/ (provision) | (600) | (1200) | (1800) | 3890100 |
| **Net loss** | **(131768424)** | **(91628613)** | **(304447183)** | **(326984240)** |
| Net loss attributable to noncontrolling interest | (2043608) | (4267796) | (12757919) | (45796565) |
| **Net loss attributable to stockholders** | $**(129724816)** | $**(87360817)** | $**(291689264)** | $**(281187675)** |
| Waived/(accrued) accumulated preferred dividends and other capital transactions with preferred stockholders | (98767) | (8627095) | (148805) | (8670441) |
| **Net loss attributable to common stockholders after preferred dividends and other capital transactions with preferred stockholders** | $**(129823583)** | $**(95987912)** | $**(291838069)** | $**(289858116)** |
| Net Loss per Share (\*) | $(11231.39) | $(95987912) | $(74887.88) | $(289858116) |
| Weighted average shares outstanding, basic and diluted (\*) | 11559 | 1 | 3897 | 1 |

---

(\*) Adjusted retroactively for reverse stock splits, see *Note 1 - Description of business and basis of presentation.*

See accompanying notes to these unaudited condensed consolidated financial statements.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 4

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[**Table of Contents**](#toc)

**BOLLINGER INNOVATIONS, INC.**

**CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS**' **EQUITY (DEFICIT)**

for the three and nine months ended June 30, 2025

(unaudited)

---

| | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Preferred Stock, total** | **Preferred Stock, total** |  |  |  |  |  |  |  |
|  | **(see Note 9 for details)** | **(see Note 9 for details)** | **Common Stock** | **Common Stock** | **Paid-in** | **Accumulated** | **Equity** | **Noncontrolling** | **Stockholders'** |
|  | **Shares** | **Amount** | **Shares** | **Amount** | **Capital** | **Deficit** | **attributable to** | **Interest** | **Equity** |
|  |  |  |  |  |  |  | **the reporting entity** |  | **(Deficit)** |
| **Balance, October 1, 2024 (\*)** | **364203** | $**364** | **1** | $— | $**2290664548** | $**(2319220938)** | $**(28556026)** | $**12010149** | $**(16545877)** |
| Cashless Warrant exercise |  |  | 80911 | 81 | 112386508 |  | 112386589 |  | 112386589 |
| Issuance of common stock for conversion of convertible notes and interest |  |  | 2561 | 3 | 27579422 |  | 27579425 |  | 27579425 |
| Common stock issued to settle matured loans and advances |  |  |  |  | 3000001 |  | 3000001 |  | 3000001 |
| Common stock issued under equity line of credit |  |  |  |  | 1017135 |  | 1017135 |  | 1017135 |
| Share-based compensation |  |  | 16089 | 16 | 70032574 | *—* | 70032590 |  | 70032590 |
| Preferred stock dividends | *—* |  | *—* |  | (76823) |  | (76823) |  | (76823) |
| Common stock issued to avoid fractional shares on reverse stock split |  | *—* | 6 | *—* | *—* | *—* | *—* | *—* | *—* |
| Noncontrolling interest - change from additional investments into subsidiary | *—* |  | *—* |  | (1598668) |  | (1598668) | 1598668 |  |
| Noncontrolling interest - decrease from current losses | *—* |  | *—* |  |  |  |  | (12757919) | (12757919) |
| Net Loss | *—* |  | *—* |  |  | (291689264) | (291689264) |  | (291689264) |
| **Balance, June 30, 2025** | **364203** | $**364** | **99568** | $**100** | $**2503004697** | $**(2610910202)** | $**(107905041)** | $**850898** | $**(107054143)** |
| **Balance, April 1, 2025 (\*)** | **364203** | $**364** | **41** | $— | $**2408230419** | $**(2481185386)** | $**(72954603)** | $**3414074** | $**(69540529)** |
| Cashless Warrant exercise |  |  | 80876 | 81 | 66396437 |  | 66396518 |  | 66396518 |
| Issuance of common stock for conversion of convertible notes and interest |  |  | 2561 | 3 | 1287999 |  | 1288002 |  | 1288002 |
| Share-based compensation |  |  | 16084 | 16 | 26597059 |  | 26597075 |  | 26597075 |
| Preferred stock dividends | *—* |  | *—* |  | (26785) |  | (26785) |  | (26785) |
| Common stock issued to avoid fractional shares on reverse stock split |  | *—* | 6 | *—* | *—* | *—* | *—* | *—* | *—* |
| Noncontrolling interest - change from additional investments into subsidiary | *—* |  | *—* |  | 519568 |  | 519568 | (519568) |  |
| Noncontrolling interest - decrease from current losses | *—* |  | *—* |  |  |  |  | (2043608) | (2043608) |
| Net Loss | *—* |  | *—* |  |  | (129724816) | (129724816) |  | (129724816) |
| **Balance, June 30, 2025** | **364203** | $**364** | **99568** | $**100** | $**2503004697** | $**(2610910202)** | $**(107905041)** | $**850898** | $**(107054143)** |

---

(\*) Adjusted retroactively for reverse stock splits, see *Note 1 - Description of Business and Basis of Presentation*

See accompanying notes to these unaudited condensed consolidated financial statements.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 5

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[**Table of Contents**](#toc)

**BOLLINGER INNOVATIONS, INC.**

**CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS**' **EQUITY**

for the three and nine months ended June 30, 2024

(unaudited)

---

| | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Preferred Stock, total** | **Preferred Stock, total** |  |  |  |  |  |  |  |
|  | **(see Note 9 for details)** | **(see Note 9 for details)** | **Common Stock** | **Common Stock** | **Paid-in** | **Accumulated** | **Equity** | **Noncontrolling** | **Stockholders'** |
|  | **Shares** | **Amount** | **Shares** | **Amount** | **Capital** | **Deficit** | **attributable to** | **Interest** | **Equity** |
|  |  |  |  |  |  |  | **the reporting entity** |  | **(Deficit)** |
| **Balance, September 30, 2023 (\*)** | **1575502** | $**1576** | **1** | $— | $**2071112998** | $**(1862162037)** | $**208952537** | $**63855573** | $**272808110** |
| Cashless Warrant exercise |  |  |  |  | 67832434 |  | 67832434 |  | 67832434 |
| Issuance of common stock for conversion of convertible notes and interest |  |  |  |  | 8826351 |  | 8826351 |  | 8826351 |
| Common stock issued to settle other derivative liability |  |  |  |  | 3269180 |  | 3269180 |  | 3269180 |
| Common stock issued to settle legal commitment |  |  |  |  | 639256 |  | 639256 |  | 639256 |
| Share-based compensation |  |  |  |  | 35275712 | *—* | 35275712 |  | 35275712 |
| Preferred stock dividends | *—* |  | *—* |  | (66412) |  | (66412) |  | (66412) |
| Extinguishment of Series C P/S by issuance of Series E P/S | (1211299) | (1212) |  |  |  |  | (1212) |  | (1212) |
| Financial result from exchange of Series C P/S for Series E P/S | *—* |  | *—* |  | (8604029) |  | (8604029) |  | (8604029) |
| Noncontrolling interest | *—* |  | *—* |  |  |  |  | (45796565) | (45796565) |
| Net Loss | *—* |  | *—* |  |  | (281187675) | (281187675) |  | (281187675) |
| **Balance, June 30, 2024 (\*)** | **364203** | **364** | **1** |  | **2178285490** | **(2143349712)** | **34936142** | **18059008** | **52995150** |
| **Balance, April 1, 2024 (\*)** | **1575502** | $**1576** | **1** | $— | $**2151075158** | $**(2055988895)** | $**95087839** | $**22326804** | $**117414643** |
| Cashless Warrant exercise |  |  |  |  | 8667399 |  | 8667399 |  | 8667399 |
| Issuance of common stock for conversion of convertible notes and interest |  |  |  |  | 8826351 |  | 8826351 |  | 8826351 |
| Common stock issued to settle other derivative liability |  |  |  |  | 3269180 |  | 3269180 |  | 3269180 |
| Common stock issued to settle legal commitment |  |  |  |  | 639256 |  | 639256 |  | 639256 |
| Share-based compensation | *—* |  | *—* |  | 14435242 |  | 14435242 |  | 14435242 |
| Preferred stock dividends | *—* |  | *—* |  | (23067) |  | (23067) |  | (23067) |
| Extinguishment of Series C P/S by issuance of Series E P/S | (1211299) | (1212) |  |  |  |  | (1212) |  | (1212) |
| Financial result from exchange of Series C P/S for Series E P/S | *—* |  | *—* |  | (8604029) |  | (8604029) |  | (8604029) |
| Noncontrolling interest | *—* |  | *—* |  |  |  |  | (4267796) | (4267796) |
| Net Loss | *—* |  | *—* |  |  | (87360817) | (87360817) |  | (87360817) |
| **Balance, June 30, 2024 (\*)** | **364203** | **364** | **1** |  | **2178285490** | **(2143349712)** | **34936142** | **18059008** | **52995150** |

---

(\*) Adjusted retroactively for reverse stock splits, see *Note 1 - Description of business and basis of presentation*

See accompanying notes to these unaudited condensed consolidated financial statements.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 6

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[**Table of Contents**](#toc)

**BOLLINGER INNOVATIONS, INC.**

**CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS**

(unaudited)

---

| | | |
|:---|:---|:---|
|  | ***Nine Months Ended June 30,*** | ***Nine Months Ended June 30,*** |
|  | ***2025*** | ***2024*** |
| **Cash Flows from Operating Activities** |  |  |
| Net loss | $**(304447183)** | $**(326984240)** |
| Adjustments to reconcile net loss to net cash used in operating activities: |  |  |
| Stock-based compensation | 67016811 | 29174038 |
| Revaluation of warrants and derivative liabilities | (58787404) | 805137 |
| Loss on exchange of warrants | 57770454 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Other financing costs - initial recognition of warrants | 70366183 | 17914480 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Amortization of debt discount and other non-cash interest expense | 47440071 | 8366613 |
| Depreciation and amortization | 12551141 | 17768083 |
| (Gain)/loss on extinguishment of debt | (1803771) | 655721 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Write-down of inventory to net realizable value | 9724757 |  |
| Gain on settlement | (3761955) |  |
| Loss on settlement (GEM case) | 14261736 |  |
| Impairment of intangible assets | 12332625 | 73447067 |
| Impairment of goodwill |  | 28846832 |
| Impairment of right-of - use assets | *—* | 3197668 |
| Other financing costs - ELOC commitment fee |  | 6000000 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Deferred income taxes |  | (3890100) |
| Loss/(gain) on assets disposal |  | 477838 |
| Changes in operating assets and liabilities: |  |  |
| Accounts receivable | 124295 | 671750 |
| Inventories | (685798) | (21027871) |
| Prepaids and other assets | 5362872 | (279024) |
| Accounts payable | 3383278 | 18788174 |
| Accrued expenses and other liabilities | 1755790 | 1757670 |
| Right-of-use assets and lease liabilities | (2011664) | (872733) |
| **Net cash used in operating activities** | $**(69407762)** | $**(145182897)** |
| **Cash Flows from Investing Activities** |  |  |
| Purchase of equipment | (4239551) | (14053838) |
| **Net cash used in investing activities** | **(4239551)** | **(14053838)** |
| **Cash Flows from Financing Activities** |  |  |
| Proceeds from issuance of convertible notes payable with detachable warrants | 62483225 | 12450000 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Proceeds from issuance of notes payable by subsidiary | 11250000 |  |
| Payment of notes payable by subsidiary | (11000000) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Payment of notes payable |  | (4945832) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Issuance of stock under equity line of credit | 1017135 |  |
| **Net cash provided by financing activities** | $**63750360** | $**7504168** |
| **Change in cash** | **(9896953)** | **(151732567**) |
| Cash and restricted cash (in amount of $426,851), beginning of period | 10748678 | 155696470 |
| Cash and restricted cash (in amount of $397,067), ending of period | $**851725** | $**3963903** |
| **Supplemental disclosure of Cash Flow information:** |  |  |
| Cash paid for interest | $625000 | $37458 |
| **Supplemental Disclosure for Non-Cash Activities:** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Exercise of warrants recognized earlier as liabilities | 112386589 | 67826884 |
| &nbsp;&nbsp;&nbsp;&nbsp; Settlement of a liability by noncurrent assets (GEM case) | 45989264 |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Convertible notes and interest - conversion to common stock | 27579425 | 8136004 |
| &nbsp;&nbsp;&nbsp;&nbsp; Extinguishment of debt and interest (in exchange for own common stock) | 4553771 |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Change in noncontrolling interest upon additional investments into subsidiary | 1598668 |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Right-of-use assets obtained in exchange of operating lease liabilities |  | 11867625 |
| Extinguishment of accounts payable with recognition of derivatives |  | 4623655 |
| Common stock issued to settle other derivative liability |  | 3293965 |
| Common stock issued to extinguish other liabilities |  | 639146 |

---

See accompanying notes to these unaudited condensed consolidated financial statements.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 7

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; BOLLINGER INNOVATIONS, INC.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

**NOTE *1*** – **DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION**

***<u>Description of Business</u>***

Bollinger Innovations, Inc., a Delaware corporation ("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. Effective *July 28, 2025,* the Company changed its name from "Mullen Automotive Inc." to "Bollinger Innovations, Inc." The Company's Nasdaq stock symbol also changed to "BINI", effective as the market open on the same date.

The Company controls the following wholly owned subsidiaries: Ottava Automotive, Inc., a California corporation, Mullen Indiana Real Estate, LLC, a Delaware limited liability company, Mullen Investment Properties LLC, a Mississippi limited liability company, and Mullen Advanced Energy Operations, LLC, a California limited liability company. The Company also holds a majority ownership in Bollinger Motors, Inc., a Delaware corporation.

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, par value $0.001 (the "common stock"), changed from "NETE" to "MULN" on the Nasdaq Capital Market (the "Nasdaq" or the "Nasdaq Capital Market") at the opening of trading on *November 5, 2021.*

The Company is building and delivering the newest generation of commercial trucks.

The Company's acquisition of a controlling interest in Bollinger Motors, Inc. in *September 2022* positioned the Company into the medium duty truck classes *4*-*6,* along with the Sport Utility and Pick Up Trucks EV segments. The *first* Bollinger vehicles were sold in *September 2024.*

***<u>Basis of Presentation and Principles of Consolidation</u>***

These unaudited interim condensed consolidated financial statements have been prepared in accordance with Generally Accepted Accounting Principles in the United States ("U.S. GAAP"). The financial statements reflect the consolidated financial position and results of operations, which include the accounts of the Company and its subsidiaries. Intercompany accounts and transactions have been eliminated, if any. Certain prior-period amounts have been reclassified in the accompanying condensed consolidated financial statements and notes thereto in order to conform to the current period presentation. Noncontrolling interest presented in these condensed consolidated financial statements relates to the portion of equity (net assets) in subsidiaries *not* attributable, directly or indirectly, to the Company. Net income or loss are allocated to noncontrolling interests by multiplying the relative ownership interest of the noncontrolling interest holders for the period by the net income or loss of the entity to which the noncontrolling interest relates.

These unaudited interim condensed consolidated financial statements and the accompanying notes have been prepared on the same basis as the annual consolidated financial statements and, in the opinion of management, reflect all normal recurring adjustments, necessary for a fair statement of the results of operations for the periods presented. The consolidated financial statements for any interim period are *not* necessarily indicative of the results to be expected for the full year or for any other future years or interim periods. Comprehensive loss is *not* separately presented as the amounts are equal to net loss for the *nine* months ended *June 30, 2025* and *2024.* These interim condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in our Annual Report on Form *10*-K for the year ended *September 30, 2024 (*the *"2024* Annual Report").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *8*

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; BOLLINGER INNOVATIONS, INC.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

***<u>Reverse Stock Splits</u>***

Our common stock is listed on the Nasdaq Capital Market. To maintain that listing, we must satisfy minimum financial and other requirements including, without limitation, a requirement that our closing bid price be at least $1.00 per share.

On *June 2, 2025,* the Company effected *1*-for-100 reverse stock split of its common stock, and on *August 4, 2025,* the Company effected a *1*-for-250 reverse stock split, as further described in *Note *20* - Subsequent events,* which were applied retroactively to these consolidated financial statements.

In addition to the reverse stock splits referred to above, the Company previously effected an *1*-for-25 reverse stock split on *May 4, 2023,* a *1*-for-9 reverse stock split on *August 11, 2023,* a *1*-for-100 reverse stock split on *December 21, 2023,* a *1*-for-100 reverse stock split on *September 17, 2024, a1*-for-60 reverse stock split on *February 18, 2025,* and a *1*-for-100 reverse stock split on *April 11, 2025.* The Company retroactively adjusted its historical financial statements to reflect the reverse stock splits.

As a result of these reverse stock splits, the number of shares of common stock that can be issued upon exercise of warrants, preferred stock and other convertible securities, as well as any commitments to issue securities that provide for adjustments in the event of a reverse stock split, were appropriately adjusted under their applicable terms for the reverse stock splits. If applicable, the conversion price for each outstanding share of preferred stock and the exercise price for each outstanding warrant was increased, pursuant to their terms, in inverse proportion to the split ratio such that upon conversion or exercise, the aggregate conversion price for conversion of preferred stock and the aggregate exercise price payable by the warrant holder to the Company for shares of common stock subject to such warrant will remain approximately the same as the aggregate conversion or exercise price, as applicable, prior to the reverse stock splits. *No* fractional shares were issued in connection with the reverse stock splits. All fractional shares were rounded up to the nearest whole share.

The reverse stock splits have *not* changed the authorized number of shares or the par value of the common stock, nor modified any voting rights of the common stock. The number and par value of Series A Preferred Stock, Series C Preferred Stock, Series D Preferred Stock, Series F Preferred Stock and Series G Preferred Stock were *not* affected by the reverse stock splits. Still, their conversion ratios have been proportionally adjusted. There were *no* outstanding shares of Series B Preferred Stock and Series E Preferred Stock as of the effective date of the reverse stock splits.

The Company retroactively adjusted its historical financial statements to reflect the reverse stock splits (see *Note *10* - Loss per share* for the reverse stock splits effect on loss per share). All issued and outstanding common stock and per share amounts contained in the financial statements have been retroactively adjusted to reflect the reverse stock splits for all periods presented. The common stock and additional paid-in-capital line items of the financial statements were retroactively adjusted to account for the reverse stock splits for all periods presented.

The retroactive impact of the latest reverse stock splits on the shares of common stock previously reported for the fiscal year ended *September 30, 2024,* was as follows. Appropriate retroactive adjustments (at par value of $0.001) were made to the common stock and additional paid-in capital in the consolidated balance sheets and consolidated statement of stockholders' deficit.

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| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | ***Reported in*** | ***Adjustment to*** | ***Adjustment to*** | ***Adjustment to*** | ***Adjustment to*** | ***Total*** |
|  | ***10-K 2024*** | ***RSS 1:60 (February 2025)*** | ***RSS 1:100 (April 2025)*** | ***RSS 1:100 (June 2025)*** | ***RSS 1:250 (August 2025)*** | ***after RSSs*** |
| **Balance, September 30, 2023, number of shares of common stock** | 28718 | (28239) | (474) | (4) |  | 1 |
| Increase of common stock during fiscal year 2024 | 4548589 | (4472780) | (75051) | (750) | (8) |  |
| **Balance, September 30, 2024, number of shares of common stock** | **4577307** | **(4501019)** | **(75525)** | **(754)** | **(8)** | **1** |

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *9*

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; BOLLINGER INNOVATIONS, INC.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

**NOTE *2*** – **LIQUIDITY, CAPITAL RESOURCES, AND GOING CONCERN**

These unaudited interim condensed consolidated financial statements have been prepared on the basis that the Company will continue as a going concern which contemplates the realization of assets and satisfaction of liabilities and commitments in the ordinary course of business.

The Company evaluated whether there are any conditions and events, considered in the aggregate, that raise substantial doubt about its ability to continue as a going concern over the next *twelve* months from the date of filing this report. The Company's principal source of liquidity consists of existing cash and restricted cash of approximately $0.9 million as of *June 30, 2025.* During the *nine* months ended *June 30, 2025,* the Company used approximately $69.4 million of cash for operating activities. The net working capital deficit on *June 30, 2025* amounted to approximately $144.1 million, or $41.6 million after excluding derivative and warrant liabilities and liabilities to issue stock that are supposed to be settled by issuing common stock without using cash. For the *nine* months ended *June 30, 2025,* the Company incurred a net loss of approximately $304.4 million, and as of *June 30, 2025,* our accumulated deficit was approximately $2.6 billion.

The Company believes that its available liquidity will *not* be sufficient to meet its current obligations for a period of at least *twelve* months from the date of the filing of these unaudited interim condensed consolidated financial statements. Accordingly, the Company has concluded there is substantial doubt about its ability to continue as a going concern. During the *nine* months ended *June 30, 2025,* the Company decided to temporarily shut down key production facilities due to short-term liquidity constraints. This action directly impacts our ability to produce vehicles. Should this shutdown continue, our cash flows from operating activities are expected to be further negatively affected, which would further worsen the Company's cash position. Management is pursuing several strategies to address liquidity concerns, including equity or debt financing and cost reduction and operational restructuring. Despite these efforts, there is *no* assurance that these initiatives will be successful. Without additional funding, the Company *may* be unable to continue operations and could be required to seek bankruptcy protection within *30* days of the issuance of these financial statements.

These unaudited interim condensed consolidated financial statements do *not* include any adjustments to the carrying amounts of assets or liabilities that *may* result from the outcome of these uncertainties.

**NOTE *3*** – **SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES**

Significant accounting policies are defined as those that reflect significant judgments and uncertainties and potentially result in materially different results under different assumptions and conditions. See our *2024* Annual Report for a detailed discussion of our accounting policies.

***<u>Use of Estimates</u>***

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 consolidated financial statements and the reported amounts of total expenses in the reporting periods. Estimates are used for, but *not* limited to, cash flow projections and discount rate for calculation of goodwill impairment, fair value and impairment of long-lived assets, including intangible assets, inventory valuation, and fair value of financial instruments. Management bases its estimates on historical experience and on various other assumptions believed to be reasonable, the results of which form the basis for carrying values of assets and liabilities and the recording of costs and expenses that are *not* readily apparent from other sources. The actual results *may* differ materially from these estimates.

*10*

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; BOLLINGER INNOVATIONS, INC.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

***<u>Risks and Uncertainties</u>***

We operate within an industry that is subject to rapid technological change, intense competition, and significant government regulation. It is subject to significant risks and uncertainties, including competitive, financial, developmental, operational, technological and regulatory risks associated with an emerging business. The Company is dependent on its suppliers, including single-source suppliers. It depends on the ability of these suppliers to deliver the necessary components of our products in a timely manner at prices, quality levels and volumes acceptable to us. Any *one* or combination of these or other risks could have a substantial impact on our future operations and prospects for commercial success.

***<u>Restricted Cash</u>***

Cash obtained from customer deposits is held by the Company and is deemed restricted from use to fund operations.

***<u>Accounts Receivable</u>***

Accounts receivable consist of receivables from our customers for the sale of vehicles. The Company provides an allowance against accounts receivable for any expected credit losses. The Company recorded no allowance as of *June 30, 2025* and *September 30, 2024.*

***<u>Inventory</u>***

Inventories are stated at the lower of cost or net realizable value and consist of raw materials, work in progress, and finished goods. The net realizable value is the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. Cost of inventories is determined using the standard cost method, which approximates actual cost on a *first*-in, *first*-out basis. Cost includes direct materials, direct labor and a proportionate share of manufacturing overhead costs based on normal capacity. Regular reviews are performed to identify and account for variances between the standard costs and actual costs. The Company regularly reviews its inventory for excess quantities and obsolescence. This analysis takes into account factors such as demand forecasts, product life cycles, product development plans and current market conditions. The Company records inventory write-downs for excess or obsolete inventories based upon assumptions about current and future demand forecasts. If inventory on hand is in excess of the future demand forecast, the excess amounts are written-off. Once inventory is written down to a net realizable value, a new, lower-cost basis is established, and the inventory is *not* subsequently written up if market conditions improve. All such inventory write-downs are included as a component of cost of revenues in the period in which the write-down occurs. The Company records inventory write-downs for excess or obsolete inventories based upon assumptions about current and future demand forecasts. If inventory on-hand is in excess of the future demand forecast, the excess amounts are written-off.

***<u>Property, Plant and Equipment, Net</u>***

Property, plant and equipment 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.

***<u>Estimated Useful Lives</u>***

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| | |
|:---|:---|
| **Description** | **Estimated useful lives** |
| Buildings | 20 to 30 years |
| Furniture and equipment | 3 to 7 years |
| Computer and software | 1 to 5 years |
| Machinery, shop and testing equipment | 3 to 7 years |
| Leasehold improvements | *Shorter of the estimated useful life or the underlying lease term* |
| Vehicles | 5 years |
| Intangibles | 5 to 10 years |

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *11*

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; BOLLINGER INNOVATIONS, INC.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Expenditures for improvements are capitalized, while minor replacements, maintenance and repairs, which do *not* extend the asset's life, 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, plant and equipment *may not* be recoverable per the provisions of ASC *360,* "*Property, Plant and Equipment.*" When such events or changes in circumstances are present, we assess the recoverability of long-lived assets by determining whether the carrying value of such assets will be recovered through undiscounted expected future cash flows. If the total of the future cash flows is less than the carrying amount of those assets, we recognize an impairment loss based on the excess of the carrying amount over the fair value of the assets.

***<u>Income Taxes</u>***

The Company and its less than *100%* owned subsidiaries are filing separate tax returns, and we calculate the provision for income taxes by using a "separate" return method. Section *174* capitalization and R&D credits are calculated using consolidated tax return rules and allocated among the Company's members. 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.

Income taxes are recorded in accordance with ASC *740, "Income Taxes*,*"* which provides for deferred taxes using an asset and liability approach. We record deferred income taxes using enacted tax laws and rates for the years in which the taxes are expected to be paid. We recognize deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the consolidated financial statements or tax returns. Deferred tax assets and liabilities are determined based on the difference between the consolidated financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. Valuation allowances are provided if, based upon the weight of available evidence, it is more likely than *not* that some or all of the deferred tax assets will *not* be realized. We maintain a full valuation allowance against the value of our U.S. and state net deferred tax assets because the recoverability of the tax assets does *not* meet the "more likely than *not"* requirement as of *June 30, 2025* and *September 30, 2024*

Uncertain tax positions taken or expected to be taken in a tax return are accounted for using the "more likely than *not"* threshold for financial statement recognition and measurement. There are transactions that occur during the ordinary course of business for which the ultimate tax determination *may* be uncertain. As of *June 30, 2025,* and *September 30, 2024,* there were *no* material changes to either the nature or the amounts of the uncertain tax positions.

***<u>Intangible Assets, Net</u>***

Intangible assets consist of acquired and developed intellectual property. Under ASC *350,* "*Intangibles*—*Goodwill and Others,*" goodwill and other intangible assets with indefinite lives (including in-process research and development assets acquired in a business combination) are *not* subject to amortization but are tested for impairment annually or whenever events or changes in circumstances indicate that the asset might be impaired.

Intangible assets with determinate lives are evaluated for impairment whenever events or changes in circumstances indicate that the carrying amount *may not* be recoverable. Amortizable intangible assets generally are amortized on a straight-line basis over periods up to *120* months. The costs to periodically renew our intangible assets are expensed as incurred.

***<u>Impairment of Long-Lived Assets</u>***

The Company periodically evaluates long-lived assets (intangible assets, right-of-use assets and property, plant and equipment) 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 asset unless another method provides a more reliable estimate. If an impairment loss is recognized, the adjusted carrying amount of a long-lived asset is recognized as a new cost basis of the impaired asset. Impairment loss is *not* reversed even if the fair value exceeds the carrying amount in subsequent periods.

*12*

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; BOLLINGER INNOVATIONS, INC.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

***<u>Contingencies and Commitments</u>***

The Company follows ASC *440* and ASC *450* to account for contingencies and commitments, respectively. Certain conditions, as a result of past events, *may* exist as of the balance sheet date, which *may* result in a loss to the Company, but which will only be resolved when *one* or more future events occur or fail to occur. The Company assesses such contingent liabilities, and such assessment inherently involves an exercise of judgment. In assessing loss contingencies related to legal proceedings that are pending against the Company or unasserted claims that *may* result in such proceedings, the Company evaluates the perceived merits of any legal proceedings or unasserted claims as well as the perceived merits of the amount of relief sought or expected to be sought therein.

If the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability can be reasonably estimated, then the estimated liability is accrued in the Company's financial statements. If the assessment indicates that a potentially material loss contingency is *not* probable but is reasonably possible or is probable but cannot be reasonably estimated, then the nature of the contingent liability and an estimate of the range of possible losses, if determinable and material, would be disclosed. Legal costs associated with such loss contingencies are expensed as incurred. Loss contingencies considered remote are generally *not* disclosed unless they involve guarantees, in which case the guarantees would be disclosed.

***<u>Revenue Recognition</u>***

The Company's revenue includes revenue from the sale of electric vehicles and is accounted for per ASC *606,* "*Revenue from Contracts with Customers.*" The Company applies a *five*-step analysis to: (i) identify the contract with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when, or as, the Company satisfies a performance obligation. Payments for electric vehicle sales are generally received at or shortly after delivery. Sales tax, if any, is excluded from the measurement of the transaction price. The revenue from the sale of electric vehicles is recognized when control of the vehicle is transferred to the customer. In general, the control is transferred at the point of delivery to the customer, signifying the fulfillment of our primary performance obligation under ASC *606.* A contract with *one* of our dealers includes a return provision allowing unsold vehicles to be returned after *one* year, and contracts with *two* of our dealers include return provisions, allowing unsold vehicles to be returned upon contract termination. Since the Company does *not* have sufficient relevant statistics of returns yet, we defer revenue recognition until the vehicles have been sold by such dealer (when the dealer has a right of return) or until there is sufficient evidence to justify a reasonable estimate for the consideration to which the Company expects to be entitled. Relevant vehicles transferred to the dealer are presented as "Finished goods delivered to dealer for distribution" in the consolidated balance sheets at initial cost, less any expected costs to recover those products (including potential decreases in the value to the entity of returned products). At the end of each reporting period, the Company updates the measurement of these assets and refund liabilities.

***<u>Cost of Revenues</u>***

The costs of goods sold primarily include vehicle components and parts, labor costs, amortized tooling costs and other relevant costs associated with the production of these vehicles. Other inventory costs and expenses primarily include write-downs of inventory to net realizable value, provisions for estimated warranty expenses and other similar costs.

***<u>General and Administrative Expenses</u>***

General and administrative ("G&A") expenses include expenses *not* related to production, such as salaries and employee benefits, professional fees, rent, repairs and maintenance, utilities and office expenses, depreciation and amortization, advertising, marketing and other selling expenses, settlements and penalties, taxes, licenses, etc. 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 in accordance with ASC *720-35,* "*Other Expenses* – *Advertising Cost.*" Advertising costs for the *three* and *nine* months ended *June 30, 2025* were approximately $0.4 million and $1.2 million, respectively (for the *three* and *nine* months ended *June 30, 2024,* $2.6 million and $16.2 million, respectively).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *13*

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; BOLLINGER INNOVATIONS, INC.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

***<u>Research and Development Costs</u>***

Research and development expenses are primarily comprised of external fees and internal costs for engineering, homologation, prototyping costs, and other expenses related to preparation for mass production of electric vehicles such as Mullen Three EV, Mullen One EV cargo van, Bollinger *B4* truck, etc. These include expenses related to the design, development, testing and improvement of our electric vehicles and corresponding technologies. Per ASC *730, "Research and Development,"* the Company recognizes all research and development costs in the statement of operations as they occur. Assets with alternative future uses are capitalized and depreciated over their useful lives, with the depreciation expense reported under research and development costs.

***<u>Share-Based Compensation</u>***

The share-based awards issued by the Company are accounted for per ASC Subtopic *718*-*10,* "*Compensation* – *Share Compensation*," which requires fair value measurement on the grant date and recognition of compensation expense for all shares of common stock of the Company issued to employees, non-employees and directors. The grant date is the date at which a grantor and a grantee reach a mutual understanding of the key terms and conditions of a share-based payment award. It is the date that a grantee begins to benefit from, or be adversely affected by, subsequent changes in the price of the grantor's equity shares (e.g., the date when the Board of Directors has authorized share-based compensation to be issued from reserves approved by shareholders). Generally, the fair value of awards is estimated based on the market price of the shares of common stock of the Company on the day immediately preceding the grant date. The fair value of non-marketable share-based awards (granted to employees before the Company became public) was estimated based on an independent valuation. The Company recognizes forfeitures of awards in the periods they occur.

The overwhelming part of share-based awards to employees as per employment contracts and a certain part of contracts with non-employees (consultants) are classified as equity with costs and additional paid-in capital recognized ratably over the service period. A significant part of the Company's share-based awards to consultants is liability-classified, mainly if the number of shares the consultant is entitled to depends on a certain monetary value fixed in the contract. An accrued part of the liability, in this case, is revalued each period based on an earned portion of the grant and changes in the market price of the shares of common stock of the Company until a sufficient number of shares is issued.

The Company has also adopted incentive plans that entitle the Chief Executive Officer to share-based awards generally calculated as 1-3% of the outstanding number of shares of common stock, issuable upon achievement of specific financial and operational targets (milestones). This share-based compensation is accrued over the service term when it is probable that the milestone will be achieved. The liability to issue stock (presented within non-current liabilities if the achievement is expected later than *12* months after the balance sheet date) is revalued on every balance sheet date based on the length of the service period, the current market price of the common stock and the number of shares of common stock outstanding until the shares have been issued or until fulfilling the milestone requirements becomes unlikely.

***<u>Derivative Financial Instruments</u>***

The Company does *not* use derivative instruments to hedge exposures to interest rate, market or foreign currency risks. The Company evaluates all of its financial instruments, including notes payable and warrants, to determine if such instruments are derivatives or contain features that qualify as embedded derivatives. The Company applies significant judgment to identify and evaluate complex terms and conditions in its contracts and agreements to determine whether embedded derivatives exist. Embedded derivatives must be separately measured from the host contract if all the requirements for bifurcation are met. The assessment of the conditions surrounding the bifurcation of embedded derivatives depends on the nature of the host contract. Bifurcated embedded derivatives are recognized at fair value, with changes in fair value recognized in the statement of operations each period. Bifurcated embedded derivatives are classified with the related host contract on the Company's balance sheet.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *14*

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; BOLLINGER INNOVATIONS, INC.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

A freestanding instrument that is a derivative is evaluated by the Company to determine if it qualifies for an exception to derivative accounting. The Company determines whether the equity-linked feature is indexed to the Company's common stock and whether the settlement provision in the contract is consistent with a fixed-for-fixed equity instrument. To qualify for classification in stockholders' equity, the Company evaluates whether the contract requires physical settlement, net share settlement, or a combination thereof and, when the Company has a choice of net cash settlement or settlement in the Company's shares, additional criteria are evaluated to determine whether equity classification is appropriate. Refer to Notes *7* and *8* for additional information regarding the accounting for the convertible notes and warrants.

***<u>Fair Value of Financial Instruments</u>***

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 (fewer 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.

***<u>Concentrations of Credit Risk</u>***

The Company maintains 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. 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 due to the high credit rating of relevant financial institutions. The amounts in excess of insured limits as of *June 30, 2025,* and *September 30, 2024,* are $0.1 million and $10.0 million, respectively.

***<u>Accounting Pronouncements</u>***

The Company has implemented all applicable accounting pronouncements that are in effect. The following pronouncements were adopted recently:

ASU *No. 2020*-*06, Debt*—*Debt with Conversion and Other Options* (Subtopic *470*-*20*), and Derivatives and Hedging - Contracts in an Entity's Own Equity (Subtopic *815*-*40*): *Accounting for Convertible Instruments and Contracts in an Entity*'*s Own Equity*. The amendments in ASU *2020*-*06* simplify the complexity associated with applying GAAP for certain financial instruments with characteristics of liabilities and equity. More specifically, the amendments focus on the guidance for convertible instruments and derivative scope exceptions for contracts in an entity's own equity.

The Company applied ASU *2020*-*06* on a modified retrospective basis to financial instruments outstanding as of the beginning of the fiscal year of adoption (i.e. on *October 1, 2024).* There has been *no* effect of the change on retained earnings or other components of equity in the statement of financial position as of the beginning of the *first* period of adoption.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *15*

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; BOLLINGER INNOVATIONS, INC.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The following are accounting pronouncements that have been issued but are *not* yet effective for the Company's condensed consolidated financial statements:

In *November 2023,* the FASB issued Accounting Standards Update *2023*-*07—Segment Reporting (Topic *280*): Improvements to Reportable Segment Disclosures.* It requires all annual disclosures currently required by ASC *280* to be included in interim periods. It requires disclosure of significant segment expenses regularly provided to the chief operating decision maker ("CODM"), a description of other segment items by reportable segment, and applicable additional measures of segment profit or loss used by the CODM when allocating resources and assessing business performance. The amendments are effective for fiscal years beginning after *December 15, 2023,* and interim periods within fiscal years beginning after *December 15, 2024.* The Company expects to enhance segment reporting disclosures based on new requirements.

In *December 2023,* the FASB issued ASU *No. 2023*-*09,* "*Income Taxes (Topic *740*):* Improvements to Income Tax Disclosures." ASU *No. 2023*-*09,* which enhances the transparency, effectiveness, and comparability of income tax disclosures by requiring consistent categories and greater disaggregation of information related to income tax rate reconciliations and the jurisdictions in which income taxes are paid. The guidance is effective for public business entities for fiscal years beginning after *December 15, 2024,* with early adoption permitted. The Company expects to enhance income tax disclosures based on new requirements.

In *November 2024,* the FASB issued Accounting Standards Update *2024*-*03* "*Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic *220*-*40*)*" which requires that at each interim and annual reporting period an entity:

*1.* Disclose the amounts of (a) purchases of inventory, (b) employee compensation, (c) depreciation, (d) intangible asset amortization, and (e) depreciation, depletion, and amortization included in each relevant expense caption. A relevant expense caption is an expense caption presented on the face of the income statement within continuing operations that contains any of the listed expense categories.

*2.* Include certain amounts that are already required to be disclosed under current generally accepted accounting principles (GAAP) in the same disclosure as the other disaggregation requirements.

*3.* Disclosure of a qualitative description of the amounts remaining in relevant expense captions that are *not* separately disaggregated quantitatively.

*4.* Disclose the total amount of selling expenses and, in annual reporting periods, an entity's definition of selling expenses.

These amendments are effective for annual reporting periods beginning after *December 15, 2026,* and interim reporting periods beginning after *December 15, 2027:* either (*1*) prospectively to financial statements issued for reporting periods after the effective date of this Update or (*2*) retrospectively to any or all prior periods presented in the financial statements. The Company expects to enhance disclosures of expenses based on new requirements.

In *November 2024,* the FASB also issued Accounting Standards Update *2024*-*04 "Debt - Debt with Conversion and Other Options (Subtopic *470*-*20*)* "*Induced Conversions of Convertible Debt Instruments*" to clarify the requirements for determining whether certain settlements of convertible debt instruments should be accounted for as an induced conversion. Under the amendments, to account for a settlement of a convertible debt instrument as an induced conversion, an inducement offer is required to provide the debt holder with, at a minimum, the consideration (in form and amount) issuable under the conversion privileges provided in the terms of the instrument. An entity should assess whether this criterion is satisfied as of the date the inducement offer is accepted by the holder. If, when applying this criterion, the convertible debt instrument had been exchanged or modified (without being deemed substantially different) within the *one*-year period leading up to the offer acceptance date, an entity should compare the terms provided in the inducement offer with the terms that existed *one* year before the offer acceptance date. The amendments in this Update also clarify that the induced conversion guidance applies to a convertible debt instrument that is *not* currently convertible as long as it had a substantive conversion feature as of both its issuance date and the date the inducement offer is accepted. The amendments are effective for all entities for annual reporting periods beginning after *December 15, 2025,* and interim reporting periods within those annual reporting periods. The Company is examining the impact this pronouncement *may* have on the Company's consolidated financial statements.

Other accounting pronouncements issued but *not* yet effective are *not* believed by management to be relevant or to have a material impact on the Company's present or future consolidated financial statements.

*16*

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; BOLLINGER INNOVATIONS, INC.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

**NOTE *4*** – **SEGMENT INFORMATION**

Operating segments are defined as components of an entity for which separate financial information is available and that is regularly reviewed by the CODM in deciding how to allocate resources to an individual segment and in assessing performance. Our CEO and Chairman of the Board of Directors (the "Board of Directors" or the "Board"), as the CODM, makes decisions about resources to be acquired, allocated and utilized to each operating segment. The Company is currently comprised of two major operating segments:

● Bollinger Motors. The Company acquired the controlling interest of Bollinger Motors Inc. in *September 2022* and increased the ownership to more than 95% in *May 2025.* This acquisition positioned the Company into the medium duty truck classes *4*-*6,* along with the Sport Utility and Pick Up Trucks EV segments. The *first* Bollinger vehicles were sold in *September 2024.*

● Bollinger Commercial. In *November 2022,* the Company acquired from Electric Last Mile Solutions ("ELMS") a manufacturing plant and all the intellectual property needed to engineer and build Class *1* and Class *3* electric vehicles. The *first* vehicles were produced in Tunica, Mississippi, and were delivered to customers during the *12 months ended September 30, 2023.*

All long-lived assets of the Company are located in the United States of America. All revenue presented in these condensed consolidated financial statements relates to contracts with customers located in the United States of America.

The table below represents the main financial information pertaining to the segments (there were *no* material differences from the last annual report regarding segmentation or measuring segment profit or loss).

---

| | | | |
|:---|:---|:---|:---|
| **Segment reporting for the three and nine months ended June 30, 2025** |  |  |  |
|  | ***Bollinger Motors*** | ***Bollinger Commercial*** | ***Total*** |
| Revenue for the three months ended June 30, 2025 | $266281 | $207405 | $473686 |
| Revenue for the nine months ended June 30, 2025 | 4044590 | 4299721 | 8344311 |
| Segment's net loss before impairment and income taxes for the three months ended June 30, 2025 | (11796499) | (119645152) | (131441651) |
| Segment's net loss before impairment and income taxes for the nine months ended June 30, 2025 | (36686465) | (255426293) | (292112758) |
| Segment's net loss before income taxes for the three months ended June 30, 2025 | (23802951) | (107964873) | (131767824) |
| Segment's net loss before income taxes for the nine months ended June 30, 2025 | (49019090) | (255426293) | (304445383) |
| Total segment assets | 41755371 | 47473735 | 89229106 |

---

---

| | | | |
|:---|:---|:---|:---|
| **Segment reporting for the three and nine months ended June 30, 2024** |  |  |  |
|  | ***Bollinger Motors*** | ***Bollinger Commercial*** | ***Total*** |
| Revenue for the three months ended June 30, 2024 | $— | $65235 | $65235 |
| Revenue for the nine months ended June 30, 2024 |  | 98570 | 98570 |
| Segment's net loss before impairment and income taxes for the three months ended June 30, 2024 | (10669490) | (80927863) | (91597353) |
| Segment's net loss before impairment and income taxes for the nine months ended June 30, 2024 | (29877457) | (195505316) | (225382773) |
| Segment's net loss before income taxes for the three months ended June 30, 2024 | (10669490) | (80957923) | (91627413) |
| Segment's net loss before income taxes for the nine months ended June 30, 2024 | (118383314) | (212491026) | (330874340) |
| Total segment assets | 51366330 | 140963436 | 192329766 |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *17*

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; BOLLINGER INNOVATIONS, INC.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

**NOTE *5*** – **INVENTORY**

The cost of inventories is determined using a standard cost method, which approximates the *first*-in, *first*-out (FIFO) method. This includes direct materials, direct labor, and relevant manufacturing overhead costs. Variances between standard and actual costs are recognized in the cost of goods sold during the period in which they occur.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The Company's inventories are stated at the lower of cost or net realizable value and consist of the following:

---

| | | |
|:---|:---|:---|
|  | ***June 30, 2025*** | ***September 30, 2024*** |
| **Inventory** |  |  |
| Raw materials | $9734305 | $12658123 |
| Work in process | 711727 | 4360565 |
| Finished goods | 7995935 | 3857427 |
| Finished goods delivered to dealer for distribution | 9706533 | 16626997 |
| **Total Inventory** | $**28148500** | $**37503112** |

---

During the *three* and *nine* months ended *June 30, 2025,* approximately $0.9 million and $2.0 million, respectively, of the Company's inventories were consumed in R&D activities (approximately $0.1 million and $0.9 million during the *three* and *nine* months ended *June 30, 2024,* respectively), which was recognized as part of research and development expenses in the consolidated statement of operations.

The Company regularly reviews its inventories for excess and obsolete items by assessing their net realizable value. The net realizable value is the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation. During the *three* and *nine* months ended *June 30, 2025,* we recorded a loss of $8.9 million and $9.7 million, respectively ($0.0 during the *three* and *nine* months ended *June 30, 2024),* to write the inventories down to net realizable value (Bollinger Commercial segment), mainly due to excess raw materials and slower-moving inventory.

The net realizable value assessment considered the current expected selling prices of Mullen One, Mullen Three, and Bollinger *B4* vehicles, based on recent sales and current market demand, as well as expected additional costs required to sell the vehicles. Should actual sales prices or demand decline, or selling costs increase, additional write-downs *may* be required in future periods. Additionally, if the Company is unable to secure sufficient funding to continue operations as planned, inventory *may* need to be sold at further discounted prices, which could negatively impact future financial results. As of *June 30, 2025,* production activities in Bollinger Commercial and Bollinger Motors segments were temporarily suspended due to short-term liquidity constraints. The Company has initiated a transition of its commercial vehicle production from a *third*-party outsourced manufacturer to its owned facility in Tunica, Mississippi. This move is expected to improve operational control and cost efficiency once production resumes, subject to available funding. The transition is ongoing, and production volumes remain limited as of the filing date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *18*

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; BOLLINGER INNOVATIONS, INC.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

**NOTE *6*** – **INTANGIBLE ASSETS**

Intangible assets with finite useful lives are amortized over the period of estimated benefit using the straight-line method. The weighted average remaining useful life of intangible assets is 7.3 years. The straight-line method of amortization represents management's best estimate of the distribution of the economic value of the intangible assets.

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | ***June 30, 2025*** | ***June 30, 2025*** | ***June 30, 2025*** | ***September 30, 2024*** | ***September 30, 2024*** | ***September 30, 2024*** |
|  |  |  | ***Net*** |  |  | ***Net*** |
|  | ***Cost*** | ***Accumulated*** | ***Carrying*** | ***Cost*** | ***Accumulated*** | ***Carrying*** |
|  | ***Basis*** | ***Amortization*** | ***Amount*** | ***Basis*** | ***Amortization*** | ***Amount*** |
| **Finite-Lived Intangible Assets** |  |  |  |  |  |  |
| Patents | $12123749 | $(406389) | $11717360 | $32447460 | $(6699330) | $25748130 |
| Non-compete agreements |  |  |  | 745947 | (308188) | 437759 |
| Trademarks | 1095693 | (307503) | 788190 | 1095693 | (225552) | 870141 |
| Total finite-lived intangible assets | 13219442 | (713892) | 12505550 | 34289100 | (7233070) | 27056030 |
| **Total Intangible Assets** | $**13219442** | $**(713892)** | $**12505550** | $**34289100** | $**(7233070)** | $**27056030** |

---

Total future amortization expense for finite-lived intangible assets is as follows:

&nbsp;&nbsp;&nbsp;&nbsp;

---

| | |
|:---|:---|
| **Years Ended September 30,** | ***Future Amortization*** |
| 2025 (3 months) | $438592 |
| 2026 | 1740066 |
| 2027 | 1740066 |
| 2028 | 1744834 |
| 2029 | 1740066 |
| Thereafter | 5101926 |
| **Total Future Amortization** | $**12505550** |

---

For the *three* and *nine* months ended *June 30, 2025,* amortization of the intangible assets was $0.5 million and $2.2 million, respectively (during the *three* and *nine* months ended *June 30, 2024,* $0.9 million and $3.5 million, respectively).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *19*

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; BOLLINGER INNOVATIONS, INC.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Due to unfavorable market conditions and decline of market prices of the Company's common stock, we test intangible assets for recoverability. For the *three* and *nine* months ended *June 30, 2025,* impairment of the intangible assets amounted to $0.3 million and $12.3 million, respectively (Bollinger Motors segment; see *Note *21* - Segment information*). During the *three* and *nine* months ended *June 30, 2024,* impairment of the intangible assets was $0.0 million and $73.5 million, respectively (mainly Bollinger Motors segment, and $15.1 million recognized by Bollinger Commercial segment). Also, impairment of goodwill in the Bollinger Motors segment amounted to $28.9 million (carrying value of goodwill was zero as of both *June 30, 2025* and *September 30, 2024).* The impairment was recognized in the financial statements mainly due to the uncertainty of future fundings required to support the business and decrease of Company's market capitalization.

**NOTE *7*** – **DEBT**

***<u>Short- and Long-Term Debt</u>***

The following is a summary of our indebtedness as of *June 30, 2025* and of transactions during the *nine* months ended *June 30, 2025:*

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Changes in debt during the 9 months ended June 30, 2025** | ***Matured loans and advances*** | ***Bollinger Motors loan*** | ***Senior Secured Convertible Notes*** | ***Senior Secured Convertible Notes*** | ***Total*** |
| Principal as of October 1, 2024 | $2717804 |  | $| 20346283 | $23064087 |
| Original issue discount as of October 1, 2024 |  |  |  | (17664310) | (17664310) |
| **Carrying amount as of October 1, 2024** | **2717804** | **—** |  | **2681973** | **5399777** |
| Notes issued, principal |  | 11250000 |  | 67978891 | 79228891 |
| Original issue discount and debt issuance costs at inception |  |  |  | (67978891) | (67978891) |
| Amortization of original issue discount and debt issuance costs |  |  |  | 31375670 | 31375670 |
| Principal paid in cash |  | (11000000) |  |  | (11000000) |
| Principal converted to shares of common stock | (2717804) |  |  | (26051600) | (28769404) |
| Original issue discount related to the principal converted |  |  |  | 16064397 | 16064397 |
| Principal extinguished |  | (250000) |  |  | (250000) |
| Principal as of June 30, 2025 |  |  |  | 62273574 | 62273574 |
| Original issue discount as of June 30, 2025 |  |  |  | (38203134) | (38203134) |
| **Carrying amount as of June 30, 2025** |  |  | $| **24070440** | $**24070440** |
| Including presented as current liability |  |  |  | 24070440 | 24070440 |
| Including presented as noncurrent liability |  |  |  |  |  |
| Fair value - amount |  |  | $| 48445067 | $48445067 |
| Fair value - leveling | *—* | *—* | *Level 3* | *Level 3* | *—* |
| Contractual interest rate (default rate) |  |  | 20% (cross-default) | 20% (cross-default) |  |
| Maturity | *—* | *—* | *Due (cross-default)* | *Due (cross-default)* | *—* |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *20*

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; BOLLINGER INNOVATIONS, INC.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The following is a summary of our indebtedness as of *September 30, 2024:*

---

| | | | |
|:---|:---|:---|:---|
| **Debt outstanding as of September 30, 2024** | ***Matured loans and advances*** | ***Senior convertible notes*** | ***Total*** |
| Issued | *Before 2022* | *May 2024 - September 2024* | *—* |
| Principal amount | $2717804 | $20346283 | $23064087 |
| Unamortized debt discount and issuance costs |  | (17664310) | (17664310) |
| Net carrying amount, current liability | 2717804 | 2681973 | 5399777 |
| Net carrying amount, noncurrent liability |  |  |  |
| **Total net carrying amount** | $**2717804** | $**2681973** | $**5399777** |
| Fair value - amount | $1805000 | $17700000 | $19505000 |
| Fair value - leveling | *Level 3* | *Level 3* | *—* |
| Interest Rate | 10% | 20% (default) | *—* |
| Maturity | *Due* | *Due* | *—* |
| Conversion price floor (not subject to reverse stock splits) | *n/a* | $1.16 | *—* |

---

***<u>Scheduled Debt Maturities</u>***

The following are scheduled debt maturities as of *June 30, 2025:*

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | ***Year Ended September 30,*** | ***Year Ended September 30,*** | ***Year Ended September 30,*** | ***Year Ended September 30,*** | ***Year Ended September 30,*** | ***Year Ended September 30,*** |
|  | ***2025 (3 months)*** | ***2026*** | ***2027*** | ***2028*** | ***2029*** | ***Total*** |
| Total Debt due (excluding debt discount) | $62273574 | $— | $— | $— | $— | $**62273574** |

---

<u>***Accrued Interest***</u>

As of *June 30, 2025,* and *September 30, 2024,* outstanding accrued interest on notes payable was $2.7 million and $2.4 million, respectively. During the *three* and *nine* months ended *June 30, 2025,* accumulated interest in the amount of $0.1 million and $1.5 million, respectively, was converted into shares of common stock (see section "Senior secured convertible notes" below), and interest for the Bollinger Motors loan was paid in cash. The weighted average interest rate on short term borrowings outstanding as of *June 30, 2025,* was 20% (default interest rate, see below). The weighted average interest rate on short-term borrowings outstanding as of *September 30, 2024,* was 18.8%. As the warrants issued along with the Senior secured convertible notes created a 100% original issue discount (see relevant section below), the Company recognized initial carrying amount of the notes at nominal value and applied an effective interest rate of 8.06% per day, in order to fully amortize the original issue discount under effective interest rate during the *4* months until maturity of the Senior secured convertible notes (unless converted earlier). Amortization of the debt discounts and issuance costs during the *three* and *nine* months ended *June 30, 2025,* amounted to $23.4 million and $47.4 million, respectively (during the *three* and *nine* months ended *June 30, 2024,* $8.2 million, and $8.4 million, respectively).

<u>***Matured Notes and Advances***</u> 

In *October 2024,* the Company reached an agreement with holders of matured notes and loan advances in an amount of $2.7 million, as well as accumulated interest in an amount of approximately $1.8 million, that the liabilities would be settled pursuant to Section *3*(a)(*9*) of the Securities Act of *1933,* as amended (the "Securities Act") by issuance of shares of common stock of the Company worth of $3 million. The transaction resulted in recognition of gain on extinguishment of $1.5 million.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *21*

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; BOLLINGER INNOVATIONS, INC.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

<u>***Bollinger Motors Loan***</u>

In *October 2024,* Bollinger Motors, Inc., a majority-owned subsidiary of the Company, issued an Amended and Restated Secured Promissory Note for $10.0 million to Robert Bollinger, obtaining additional capital to support the production and sale of Bollinger's Class *4* EV truck, the Bollinger *B4.* The note bore interest at 15% per annum, with interest-only payments starting *November 29, 2024,* and principal repayment due by *October 30, 2026 (*or earlier, upon Event of Default). It was secured by part of the assets of Bollinger Motors (then owned or hereafter acquired), excluding inventory and certain intellectual property that does *not* relate to commercial vehicles. On *March 21, 2025,* Robert Bollinger filed a complaint against Bollinger Motors in the U.S. District Court for the Eastern District of Michigan. In the complaint, Mr. Bollinger alleged breach of contract in connection with failure by Bollinger Motors to make a payment under the Amended and Restated Secured Promissory Note for *$10.0* million entered into on *October 24, 2024 (*the "Bollinger Note"). Mr. Bollinger was seeking $10.5 million plus interest, attorney's fees, costs and other damages arising from the breach and the appointment of a receiver over Bollinger Motors. On *March 24, 2025,* Mr. Bollinger filed an emergency motion to appoint a receiver of Bollinger Motors and on *May 7, 2025,* the court entered an order placing Bollinger Motors into receivership and appointing a receiver to manage its affairs. During *May 2025,* Mr. Bollinger loaned an additional $1.25 million to the entity. On *May 28, 2025,* the parties signed a Settlement and Release Agreement resolving all claims.

<u>***Senior Secured Convertible Notes***</u>

*Initial *May 2024* Senior secured convertible notes*

On *May 14, 2024,* the Company entered into a securities purchase agreement (the *"May 2024* Securities Purchase Agreement") with certain accredited investors for the sale of Senior secured convertible notes (*"May 2024* Senior Convertible Notes") and five-year warrants exercisable for 200% of shares of common stock (the *"May 2024* Warrants" - see further details in the *Note *8* - Warrants and other derivative liabilities and fair value measurements*).

 *May 2024* Senior Convertible Notes accrue interest at 15% per annum and mature in *four* months from the date of issuance. Upon any event of default, the interest rate automatically increases to 20% per annum. The outstanding principal and accrued but unpaid interest on the *May 2024* Senior Convertible Notes *may* be converted by the holder into shares of common stock at the lower of (i) 95% of closing sale price of common stock at execution date, (ii) 95% of the closing sale price of the common stock on the date that the Company's Registration Statement on Form S-*1* is declared effective, or (iii) *95%* of the lowest daily volume weighted average price in the *five* (5) trading days prior to such conversion date, provided that the conversion price will *not* be less than $1.16 per share (*not* subject to adjustment for reverse stock splits).

As security for payment of the amounts due and payable under the *May 2024* Senior Convertible Notes, the Company collaterally assigned and granted to the holders a continuing security interest in all of the Company's right, title and interest in, to and under the property of the Company, whether then or hereafter owned, existing, acquired or arising and wherever then or hereafter located (subject to certain exceptions). *May 2024* Senior Convertible Notes are senior in right of payment to all other current and future notes to which the Company is a party. The *May 2024* Senior Convertible Notes also impose restrictions on the Company, limiting additional debt, asset liens, stock repurchases, outstanding debt repayment, dividend distributions and affiliate transactions, except for specified exceptions.

The *May 2024* Senior Convertible Notes and *May 2024* Warrants are *not* convertible by a holder to the extent that the holder or any of its affiliates would beneficially own in excess of 9.9% of the Company's common stock.

In connection with this securities purchase agreement and the additional securities purchase agreements described below, the Company also entered into registration rights agreements with the investors, pursuant to which the Company agreed to prepare and file *one* or more registration statements with the SEC covering the resale of all registrable securities (issuable upon conversion of the Senior secured convertible notes described here in *Note *7* - Debt* and upon exercise of related warrants, described further in *Note *8* - Warrants and other derivative liabilities and fair value measurements*). The Company also agreed to provide certain piggyback registration rights to the investors. In addition, pursuant to the registration rights agreements, the Company is required to use its reasonable best efforts to keep the registration statements continuously effective from the date on which the SEC declares the registration statements to be effective until such date that all registrable securities covered by the registration statements have been sold pursuant to a registration statement under the Securities Act or under Rule *144* as promulgated by the SEC, or have otherwise ceased to be registrable securities. With certain exceptions, the Company *may not* file another registration statement that does *not* relate to the registrable securities until the *30* day anniversary of the *first* date on which the resale by the investors is covered by *one* or more registration statement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *22*

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; BOLLINGER INNOVATIONS, INC.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; In the event that (i) the Company fails to file a registration statement by the Filing Deadline, (ii) a registration statement is *not* declared effective on or prior to the Effectiveness Deadline, (iii) sales cannot be made pursuant to the registration statement or the prospectus contained therein is *not* properly available for any reason for more than *five* consecutive calendar days or more than an aggregate of *10* calendar days during any *12*-month period, or (iv) a registration statement is *not* effective for any reason or the prospectus contained therein is *not* properly available for use for any reason, and the Company fails to file with the SEC any required reports under the Securities Exchange Act of *1934* (the "Exchange Act"), then the Company has agreed (unless the registrable securities are freely tradable pursuant to Rule *144*) to make payments to each investor as liquidated damages in an amount equal to 1.5% of such investor's total committed purchase price for the registrable securities affected by such failure and an additional 1.5% on every *30* day anniversary, with a maximum of *12* payments (except with respect to clause (iv)). Such payments will bear interest at the rate of 10% per month (prorated for partial months) until paid in full and *may* be paid in shares of common stock at the option of the Company. Other than described above, the terms of the arrangement provide for *no* limitation to the maximum potential consideration (including shares) issuable by the Company. The Company has *not* recognized a contingent liability under the registration payment arrangement as of *June 30, 2025,* as the transfer of consideration is neither probable nor can be reasonably estimated.

The exercise price and number of shares issuable upon conversion of the Senior Convertible Notes or exercise of the *May 2024* Warrants, as applicable, will further be adjusted upon the occurrence of certain events, and holders will be allowed to participate in certain issuances and distributions (subject to certain limitations and restrictions), including certain stock dividends and splits, dilutive issuances of additional common stock, and dilutive issuances of, or changes in option price or rate of conversion of, options or convertible securities, as well as the issuance of purchase rights or distributions of assets during the period commencing on the purchase date and ending on the earlier of (i) the date immediately following the *90th* day after a registration statement registering for the securities has been declared effective by the SEC and (ii) the *90th* day after the securities purchased are saleable under Rule *144* without the requirement for current public information and without volume or manner of sale limitations.

 *May 2024* Senior Convertible Notes and *2024 May 2024* Warrants also provide for certain purchase rights whereby if the Company grants, issues, or sells any options, convertible securities, or rights to purchase stock, warrants, securities or other property pro rata to the record holders of any class of common stock, then the holder will be entitled to acquire such purchase rights which the holder could have acquired if the holder had held the number of shares of common stock acquirable upon complete exercise of the *May 2024* Warrants.

For a period beginning on the investment date, and ending on the *one*-year anniversary from the later of (i) the date registration statements registering the shares issuable upon conversion of all of the *May 2024* Senior Convertible Notes and exercise of all the *May 2024* Warrants is declared effective or (ii) the date the Company has obtained stockholder approval for the transaction, the investors were given the right, but *not* the obligation, to purchase an additional $52.6 million of 5% the *May 2024* Senior Convertible Notes and related *May 2024Warrants* on the same terms and conditions as provided in the *May 2024* Securities Purchase Agreement.

Initially, in *May* to *July 2024,* the investors purchased an aggregate principal amount of $52.6 million, or $50 million including the 5% original issue discount. Subsequently, by *September 30, 2024,* investors purchased an aggregate principal amount of $12.5 million, or $11.9 million including the 5% original issue discount, of Senior Convertible Notes and *May 2024* Warrants pursuant to the *May 2024* Securities Purchase Agreement.

*New investments*

During the *nine* months ended *June 30, 2025,* the Company issued an additional aggregate principal amount of approximately $68 million of Senior secured convertible notes (and warrants – see *Note *8* - Warrants and other derivative liabilities and fair value measurements* below) under the additional investment rights granted pursuant to the *May 2024* Securities Purchase Agreement (including the Additional Investment Right Agreement dated *December 31, 2024)* and Securities Purchase Agreements entered into on *January 23, 2025, February 5, 2025, March 6, 2025, May 16, 2025* and *May 29, 2025 (*including the Additional Investment Right Agreements), with similar terms. Summary of the subsequent Senior secured convertible notes issued pursuant to the *May 2024* Securities Purchase Agreement and the subsequent securities purchase agreements, and their primary differences from the terms and conditions described in detail in the section "Initial *May 2024* Senior secured convertible notes", are presented in the table below.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *23*

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; BOLLINGER INNOVATIONS, INC.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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| | | | | |
|:---|:---|:---|:---|:---|
| **Investments** | ***Principal issued, USD*** | ***Maturity date*** | ***Conversion price floor, USD*** | ***Remaining principal on June 30, 2025*** |
| Securities Purchase Agreement dated May 14, 2024 | $621053 | Cross-default (initially - February 2025) | $1.16 | $2620 |
| Investments #1 pursuant to May 2024 Securities Purchase Agreement | 4629711 | Cross-default (initially - April 2025) | 1.16 | 794273 |
| Investments #2 pursuant to May 2024 Securities Purchase Agreement | 4210526 | Cross-default (initially - April 2025) | 0.21 | 4210526 |
| Investments #3 pursuant to May 2024 Securities Purchase Agreement | 5263158 | Cross-default (initially - April 2025) | 1.16 | 4011712 |
| Securities Purchase Agreement dated January 23, 2025 | 6315789 | Cross-default (initially - May 2025) | 0.08 | 6315789 |
| Securities Purchase Agreement dated February 5, 2025 | 3147368 | Cross-default (initially - June 2025) | 0.05 | 3147368 |
| Investments #4 pursuant to May 2024 Securities Purchase Agreement | 1578947 | Cross-default (initially - June 2025) | 1.03 | 1578947 |
| Investments #1 pursuant to January 2025 Securities Purchase Agreement | 526316 | Cross-default (initially - June 2025) | 0.08 | 526316 |
| Securities Purchase Agreement dated March 6, 2025 | 4000000 | Cross-default (initially - July 2025) | 0.37 | 4000000 |
| Investments #5 pursuant to May 2024 Securities Purchase Agreement | 1578947 | Cross-default (initially - July 2025) | 0.07 | 1578947 |
| Investments #1 pursuant to March 2025 Securities Purchase Agreement | 1168421 | Cross-default (initially - July 2025) | 0.37 | 1168421 |
| Investments #1 pursuant to February 2025 Securities Purchase Agreement | 726316 | Cross-default (initially - July 2025) | 0.05 | 726316 |
| Investments #6 pursuant to May 2024 Securities Purchase Agreement | 1578950 | Cross-default (initially - July 2025) | 0.03 | 1578950 |
| Investments #7 pursuant to May 2024 Securities Purchase Agreement | 526316 | Cross-default (initially - August 2025) | 0.02 | 526316 |
| Investments #2 pursuant to January 2025 Securities Purchase Agreement | 4210526 | Cross-default (initially - August 2025) | 0.08 | 4210526 |
| Investments #2 pursuant to February 2025 Securities Purchase Agreement | 2421053 | Cross-default (initially - August 2025) | 0.05 | 2421053 |
| Investments #2 pursuant to March 2025 Securities Purchase Agreement | 1789474 | Cross-default (initially - August 2025) | 0.37 | 1789474 |
| Securities Purchase Agreement dated May 16, 2025 | 1578947 | Cross-default (initially - September 2025) | 0.03 | 1578947 |
| Investments #1 pursuant to May 16, 2025 Securities Purchase Agreement | 2128127 | Cross-default (initially - September 2025) | 0.03 | 2128127 |
| Securities Purchase Agreement dated May 29, 2025 ($2.7 million) | 2715789 | Cross-default (initially - September 2025) | 0.03 | 2715789 |
| Securities Purchase Agreement dated May 29, 2025 ($11.6 million) | 11578947 | Cross-default (initially - September 2025) | 0.03 | 11578947 |
| Investments #2 pursuant to May 16, 2025 Securities Purchase Agreement | 1578947 | Cross-default (initially - October 2025) | 0.03 | 1578947 |
| Investments #1 pursuant to May 29, 2025 ($2.7 million) Securities Purchase Agreement | 947368 | Cross-default (initially - October 2025) | 0.03 | 947368 |
| Investments #3 pursuant to March 2025 Securities Purchase Agreement | 684211 | Cross-default (initially - October 2025) | 0.37 | 684211 |
| Investments #3 pursuant to May 16, 2025 Securities Purchase Agreement | 894737 | Cross-default (initially - October 2025) | 0.03 | 894737 |
| Investments #1 pursuant to May 29, 2025 ($11 million) Securities Purchase Agreement | 1578947 | Cross-default (initially - October 2025) | 0.03 | 1578947 |
| **Total** | $**67978891** |  |  | $**62273574** |

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Upon initial recognition of all Senior secured convertible notes, the fair value of issued warrants exceeded the amount of proceeds (see *Note *8* - Warrants and other derivative liabilities and fair value measurements*). The resulting discount to the carrying amount of the Senior secured convertible notes is amortized over the life of the note and recognized as interest expense under the effective interest method until the earliest of conversion date and end of the *4* months period after the date of the relevant tranche.

*Conversions*

During the *nine* months ending *June 30, 2025,* Senior secured convertible notes with a carrying amount of approximately $26.1 million and interest with a carrying amount of approximately $1.5 million were converted to 2,561 shares of common stock (giving retroactive effect to reverse stock splits, see *Note *1* - Description of business and basis of presentation*).

*Remaining notes*

As of *June 30, 2025,* the outstanding senior secured convertible notes with a principal of $62.3 million and unamortized original issue discount of approximately $38.2 million were potentially convertible (hereinafter, without giving effect to the 9.9% blocker described above) into 409,697 shares of common stock, having a fair value of approximately $44.2 million. See also *Note *20* - Subsequent events* for disclosure on default after the balance sheet date.

Conversion of the notes depends on the lowest daily volume weighted average price of the Company's common stock ("VWAP") with a floor from $0.02 to $1.16 depending on the investment (the floor is *not* subject to adjustment for reverse stock splits), and by *June 30, 2025,* the applicable lowest weighted average price was lower than the floor in respect of approximately *10%* of outstanding notes. If the *August 2025* 1:250 reverse stock split was made effective before *June 30, 2025,* the notes would have been theoretically convertible into 430,519 shares of common stock. The maximum number of shares that could theoretically be issued upon conversion of these notes (calculated as if the lowest daily VWAP in the *five* trading days prior to conversion date decreased to or below relevant conversion floors), was approximately 1,215 million. If the lowest daily VWAP in the *five* trading days prior to *June 30, 2025,* was $1 less (and if the *August 2025* 1:250 reverse stock split was made effective before *June 30, 2025),* the Company, upon full conversion of outstanding notes, would theoretically be liable to issue approximately 2,870 shares more. If the lowest daily VWAP in the *five* trading days prior to *June 30, 2025,* was *$1* higher (and if the *August 2025* 1:250 reverse stock split was made effective before *June 30, 2025),* the Company, upon full conversion of outstanding notes, would theoretically be liable to issue approximately 2,832 shares less.

*Cross-default on Senior secured convertible notes*

All outstanding Senior secured convertible notes and relevant accumulated interest are technically in cross-default due to the non-payment of a portion of *one* of the loans that matured; therefore the interest rate increased from 15% to 20%. During the *three* and *nine* months ended *June 30, 2025,* and as of the date these financial statements were available to be issued, *none* of the investors demanded immediate payment of the notes and outstanding interest in cash.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *24*

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; BOLLINGER INNOVATIONS, INC.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

**NOTE *8*** – **WARRANTS AND OTHER DERIVATIVE LIABILITIES AND FAIR VALUE MEASUREMENTS**

ASC *825*-*10* defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. 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 determined is based on the lowest level input that is significant to the fair value measurement.

<u>***Financial Instruments at Carrying Value That Approximated Fair Value***</u>

Certain financial instruments that are *not* carried at fair value on the 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 and accounts payable. Accounts payable are short-term in nature and generally are due upon receipt or within *30* to *90* days.

*<u>**Non-Financial Assets Measured at Fair Value on a Non-Recurring Basis**</u>*

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. All these valuations are based on Level *3* – Unobservable inputs to the valuation methodology that are significant to the measurement of fair value of these assets or liabilities*.*

<u>***Financial Liabilities Other than Measured at Fair Value on a Recurring Basis***</u>

Fair value of financial liabilities of the Company, other than those measured at fair value on a recurring basis, is disclosed in *Note *7* - Debt*.

*<u>**Financial Liabilities Measured at Fair Value on a Recurring Basis**</u>*

During the *nine* months ended *June 30, 2025,* the Company had the following financial liabilities measured at fair value on a recurring basis:

*<u>Warrants issued with the Senior secured convertible notes</u>*

*Description of the warrants and accounting treatment*

As described in *Note *7* - Debt*, in connection with the issuance of the Senior secured convertible notes (under the securities purchase agreements described above and pursuant to subsequent financings), the investors also received 5-year warrants (the "Warrants") exercisable for 200% of the shares of common stock underlying such Senior secured convertible notes at an exercise price equal to 105% of the closing sale price of the common stock on the execution date (subject to further adjustment, e.g., for reverse stock splits).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *25*

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; BOLLINGER INNOVATIONS, INC.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The Warrants can also be exercised on a cashless basis pursuant to which the holder, without paying the exercise price, can receive number of shares of common stock determined according to the following formula:

Net Number = (A *x* B) / C, where:

A= The total number of shares with respect to which the Warrant is being exercised.

B= The Black Scholes Value (as described below).

C= The lower of the *two* Closing Bid Prices of the common stock in the *two* days prior the time of such exercise (as such Closing Bid Price is defined therein), subject to a certain floor, see below.

For purposes of the cashless exercise, "Black Scholes Value" means the Black Scholes value of an option for *one* share of common stock at the date of the applicable cashless exercise. As such, the Black Scholes value is determined and calculated using the Black Scholes Option Pricing Model obtained from the "OV" function on Bloomberg utilizing (i) an underlying price per share equal to the Exercise Price (in certain cases adjusted due to the reverse stock splits, see below), (ii) a risk-free interest rate corresponding to the U.S. Treasury rate, (iii) a strike price equal to the warrant exercise price in effect at the time of the applicable cashless exercise (i.e., the same as in prong (i)), (iv) expected volatility equal to 135% and (v) a deemed remaining term of the Warrant of five years (regardless of the actual remaining term of the Warrant).

The Warrants are convertible by a holder only to the extent that the holder or any of its affiliates would *not* beneficially own in excess of 9.9% of the common stock.

The Warrants' contracts provide that if the Company issues, sells, enters into a definitive binding agreement pursuant to which the 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, distributions or other similar transactions. See also the other terms and conditions of the contracts described in *Note *7** – *Debt*.

The Company will have the option to require the holders to exercise the Warrants for cash if the following conditions are met: (i) the registration statement covering the securities has been declared effective is effective and available for the resale of the securities and *no* stop-order has been issued nor has the SEC suspended or withdrawn the effectiveness of the registration statement; (ii) the Company is *not* in violation of any of the rules, regulations or requirements of, and has *no* knowledge of any facts or circumstances that could reasonably lead to suspension in the foreseeable future on, the principal market; and (iii) the VWAP for each trading day during the *10*-trading-day period immediately preceding the date on which the Company elects to exercise this option is 250% above the exercise price.

Approximately 72% of the Warrants issued as part of consideration for the funds provided under the *May 2024* Senior Convertible Notes and additional investment right remained unexercised as of *September 30, 2024,* with a carrying value of $79.7 million.

These Warrants were recognized as liabilities due to the requirements of ASC *480* because the variable number of shares to be issued upon cashless exercise (deemed the predominant exercise option) are based predominantly on a fixed monetary value. The warrant liabilities were classified as derivative liabilities when requirements of ASC *815* were met. The warrant liabilities for the remaining unexercised Warrants are carried forward subsequently at fair value and the gain or loss from revaluation is recorded within the line item "Gain/(loss) on warrants and derivative liability revaluation" at each warrant exercise date and each accounting period end.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *26*

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; BOLLINGER INNOVATIONS, INC.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Upon initial recognition, the fair value of these Warrants exceeded the amount of proceeds. The resulting discount to the carrying amount of the Senior secured convertible notes is amortized over the lives of the notes and recognized as interest expense under the effective interest method. Excess of initial fair value of warrant liabilities over the cash proceeds is recognized immediately and is presented in the consolidated statement of operations as "Other financing costs - initial recognition of warrants".

*Exchange of warrants*

In *February 2025,* the Company and certain investors entered into a Warrant Exchange Agreement (subsequently approved by stockholders) whereby the Company agreed to issue new warrants in exchange for outstanding warrants. The new warrants have the same terms and conditions as the original warrants (described above), including the number of shares issuable upon cash exercise and a term of five years from the date of original issuance, except that the exercise price floor in the formula for the cashless exercise of the new warrants was $0.01, *not* subject to adjustment for stock dividends, subdivisions or combinations (including reverse stock splits). The transaction increased the fair value of warrants (calculated as number of shares issuable upon cashless exercise) and corresponding loss in amount of approximately $57.8 million was presented in the line item "Loss on exchange of warrants" of the consolidated statement of operations.

*New investments*

During the *nine* months ended *June 30, 2025,* the Company received investments in cash in amount of approximately $62.5 million and, along with the Senior secured convertible notes (see *Note *7* - Debt* above), issued warrants with a fair value of approximately $134.7 million, recording a loss of approximately $70.4 million in the statement of operations (under "Other financing costs - initial recognition of warrants").

*Exercises*

During the *nine* months ended *June 30, 2025,* warrants with a fair value of approximately $112.4 million were exercised and the Company issued 80,911 shares of common stock (giving retroactive effect to reverse stock splits, see *Note *1* - Description of business and basis of presentation*).

*Remaining warrants*

Outstanding warrants in the amount of 12,934.3443 (hereinafter - giving effect to the reverse stock splits, including the *August 2025* 1:250 reverse stock split, described in *Note *1* - Description of business and basis of presentation*), with carrying value of $101.1 million as of *June 30, 2025,* were potentially exercisable (under cashless basis and disregarding other limitations such as the 9.9% ownership blocker described above) for 936,399 shares of common stock.

As described above, the number of shares issuable upon cashless exercise of warrants depends on closing bid price in the previous *2* trading days, subject to a floor of *$0.01* (*not* adjusted to reverse stock splits). The table below discloses the sensitivity of the number of shares theoretically issuable upon exercise (on *June 30, 2025)* of warrants to the changes in the lowest closing bid price in the last *2* days prior to *June 30, 2025 (*disregarding other limitations such as 9.9% ownership blocker described above).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *27*

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; BOLLINGER INNOVATIONS, INC.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
| **Number of remaining warrants (after reverse stock splits)** | ***Exercise price (after reverse stock splits)*** | ***Floor in a cashless exercise formula, after the Warrant exchange*** | ***Convertible into, shares, theoretically*** | ***Fair value of shares, million*** | ***Change in shares if closing bid price was $1 lower*** | ***Change in shares if closing bid price was $1 higher*** | ***Theoretical maximum number of shares to be issued, million*** |
| 0.0004 | $91050000000 | $0.01 | 196189 | $21.2 | 1534 | (1138) | 2887 |
| 0.0400 | 168000000 | 0.01 | 40242 | 4.3 | 276 | (272) | 592 |
| 0.3575 | 64500000 | 0.01 | 138136 | 14.9 | 946 | (933) | 2031 |
| 0.3357 | 40500000 | 0.01 | 81459 | 8.8 | 558 | (550) | 1197 |
| 0.2588 | 13500000 | 0.01 | 20935 | 2.3 | 144 | (141) | 308 |
| 3.4746 | 4850000 | 0.01 | 100963 | 10.9 | 691 | (682) | 1484 |
| 3.9474 | 900000 | 0.01 | 21284 | 2.3 | 146 | (143) | 313 |
| 11.4833 | 300000 | 0.01 | 20639 | 2.2 | 142 | (139) | 303 |
| 6.0150 | 200000 | 0.01 | 7207 | 0.8 | 50 | (48) | 106 |
| 12908.4316 | 4000 | 0.01 | 309345 | 33.4 | 2119 | (2090) | 4547 |
| **12934.3443** |  |  | ***936399*** | $**101.1** | **6605** | **(6138)** | **13768** |

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*Fair values*

The Company estimated the fair value of warrant liabilities, as based on observable inputs ("Level *2"* under ASC *815*-*10*), on that warrant's recognition date and on subsequent dates, as the then-current market value (both on the day prior to the transaction and at the end of the relevant period) of the number of shares the Company would be required to issue upon that warrant's cashless exercise. The Company determined the predominant exercise option to be cashless exercise due to such exercise providing greater economic benefits to investors, and because holders have a pattern of selecting the cashless exercise option for their warrants since the inception of the contracts giving rise to those warrants.

A summary of items recorded at fair value on a recurring basis in consolidated balance sheets by levels of observable and unobservable inputs as of *June 30, 2025,* and on *September 30, 2024,* is presented below:

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| | | | | |
|:---|:---|:---|:---|:---|
|  |  | ***Quoted Prices*** | ***Significant*** |  |
|  |  | ***in Active*** | ***Other*** | ***Significant*** |
|  |  | ***Markets for*** | ***Observable*** | ***Unobservable*** |
|  | ***June 30,*** | ***Identical Assets*** | ***Inputs*** | ***Inputs*** |
|  | ***2025*** | ***(Level 1)*** | ***(Level 2)*** | ***(Level 3)*** |
| Liabilities recorded at fair value on a recurring basis | $101060811 | $— | $101060811 | $— |

---

---

| | | | | |
|:---|:---|:---|:---|:---|
|  |  | ***Quoted Prices*** | ***Significant*** |  |
|  |  | ***in Active*** | ***Other*** | ***Significant*** |
|  |  | ***Markets for*** | ***Observable*** | ***Unobservable*** |
|  | ***September 30,*** | ***Identical Assets*** | ***Inputs*** | ***Inputs*** |
|  | ***2024*** | ***(Level 1)*** | ***(Level 2)*** | ***(Level 3)*** |
| Liabilities recorded at fair value on a recurring basis | $79742180 | $— | $79742180 | $— |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *28*

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; BOLLINGER INNOVATIONS, INC.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; A summary of all changes in liabilities recorded at fair value on a recurring basis is presented below:

---

| | |
|:---|:---|
| **Balance, September 30, 2024** | $**79742180** |
| Warrants recognized upon issuance of convertible instruments | 134722170 |
| Loss / (gain) on revaluation | (58787404) |
| Loss / (gain) on exchange of warrants | 57770454 |
| Conversions of derivatives into common shares | (112386589) |
| **Balance, June 30, 2025** | $**101060811** |
| **Balance, September 30, 2023** | $**64863309** |
| Warrants recognized upon issuance of convertible instruments | 28002395 |
| Loss / (gain) on derivative liability revaluation | 805135 |
| Derivatives issued upon extinguishment of accounts payable | 6985740 |
| Conversions of warrants into common shares | (71126401) |
| **Balance, June 30, 2024** | $**29530178** |

---

**NOTE *9*** – **STOCKHOLDERS**' **EQUITY** 

<u>***Common Stock***</u>

On *June 30, 2025,* the Company had 5 billion shares of common stock authorized with $0.001 par value per share.

As described in detail in *Note *1* - Description of business and basis of presentation*, the Company has effectuated several reverse stock splits. All stock splits resulted in the reduction of shares of common stock issued and outstanding and did *not* affect authorized common stock or preferred stock.

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 the 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 have been declared or paid to the holders of common stock.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *29*

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; BOLLINGER INNOVATIONS, INC.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

*<u>**Change in Control Agreements**</u>*

On *August 11, 2023,* the Board of Directors approved, and the Company entered into, Change in Control Agreements with each non-employee director and the Chief Executive Officer. Pursuant to the Change in Control Agreements with each non-employee director, upon a change in control of the Company, any unvested equity compensation will immediately vest in full and such non-employee director will receive $5 million. Pursuant to the Change in Control Agreement with the CEO, upon a change in control of the Company, any unvested equity compensation will immediately vest in full and the CEO will receive an aggregate percentage of the transaction proceeds as follows: 10% of the transaction proceeds that are up to and including $1 billion; plus, an additional 5% of transaction proceeds that are more than $1 billion and up to $1.5 billion; and an additional 5% of transaction proceeds that are more than $1.5 billion. A change in control, as defined in the agreements occurs upon, (i) any person becoming the beneficial owner of 50% or more of the total voting power of the Company's then-outstanding voting securities, (ii) a change in the composition of the Board, as a result of which fewer than a majority of the directors are Incumbent Directors (as defined in the Change in Control Agreements), or (iii) the consummation of a merger or consolidation of the Company (except when the total voting power of the Company continues to represent at least 50% of the surviving entity), any liquidation, or the sale or disposition by the Company of all or substantially all of its assets.

<u>***Stockholder Rights Agreement and Series A-*1* Junior Participating Preferred Stock***</u>

On *May 1, 2024,* the Company entered into a Rights Agreement with Continental Stock Transfer & Trust Company as the rights agent. The Board of Directors declared a dividend of one preferred share purchase right (a "Right") for each share of common stock and each outstanding share of preferred stock payable to holders of record as of the close of business on *May 13, 2024.* Each Right entitles the registered holder to purchase one ten-thousandth of a share of Series A-*1* Junior Participating Preferred Stock ("A-*1* Preferred Stock") of the Company at a price of $30.00 per *one ten*-thousandth of a share of A-*1* Preferred Stock, subject to adjustment (the "Exercise Price"). The Rights are *not* exercisable until the Distribution Date (as defined below). The description and terms of the Rights are set forth in the Rights Agreement, as amended.

The Rights will *not* be exercisable until the earlier of *ten* days after a public announcement by us that a person or group has acquired *10%* or more of the shares of common stock (an "Acquiring Person") or *ten* business days (or a later date determined by our board of directors) after a person or group begins a tender or an exchange offer that, if completed, would result in that person or group becoming an Acquiring Person (the earlier of such dates being herein referred to as the "Distribution Date"). At any time after a person becomes an Acquiring Person, the Board of Directors *may,* at its option, exchange all or any part of the then-outstanding and exercisable Rights for shares of common stock at an exchange ratio of *one* share of common stock for each Right, subject to adjustment as specified in the Rights Agreement. Notwithstanding the foregoing, the Board of Directors generally will *not* be empowered to effect such an exchange at any time after any person becomes the beneficial owner of 50% or more of the common stock of the Company. The Rights will expire on *May 1, 2026,* unless previously redeemed or exchanged by the Company. The Rights Agreement is designed to enable all Company stockholders to realize the long-term value of their investment and is intended to protect the Company and its stockholders from efforts by a single stockholder or group to obtain control of the Company without paying a control premium (see below for further details). The Rights have certain anti-takeover effects, including potentially discouraging a takeover that stockholders *may* consider favorable. Certain exemptions *may* apply to an Acquiring Person. The Rights will cause substantial dilution to a person or group that attempts to acquire us on terms *not* approved by the Board of Directors.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *30*

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; BOLLINGER INNOVATIONS, INC.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

*<u>**Preferred Stock**</u>*

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. Pursuant to the terms of its Second Amended and Restated Certificate of Incorporation, as amended, upon conversion of shares of preferred stock, such shares so converted are cancelled and *not* issuable. As of *July 26, 2022,* as a result of an amendment to its Certificate of Incorporation increasing its authorized preferred stock, the Company had 500,000,000 shares of preferred stock authorized with $0.001 par value per share, and as of *June 30, 2025,* pursuant to its terms of preferred stock conversion, the Company had remaining 126,263,159 shares of preferred stock authorized. The reverse stock splits (see *Note *1* - *Description of business and basis of presentation* above) did *not* affect the number of shares of preferred stock authorized and outstanding, but the conversion ratios were proportionately adjusted to decrease the number of shares of common stock to be issued as a result.

The Company has designated Series A Preferred Stock, Series B Preferred Stock, Series C Preferred Stock, and Series D Preferred Stock (see description below), Series E Preferred Stock (see a separate section below), Series AA Preferred Stock (cancelled, see below), Series A-*1* Junior Participating Preferred Stock (see *Stockholder Rights Agreement* above).

There were *no* transactions with preferred stock during the *three* and *nine* months ended *June 30, 2025,* and during the *three* and *nine* months ended *June 30, 2024,* as presented in the table below.

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Preferred Stock** | **Preferred Stock** | **Preferred Stock** | **Preferred Stock** | **Preferred Stock** | **Preferred Stock** | **Preferred Stock** | **Preferred Stock** |
|  | **Series A** | **Series A** | **Series C** | **Series C** | **Series D** | **Series D** | **Total** | **Total** |
|  | **Shares** | **Amount** | **Shares** | **Amount** | **Shares** | **Amount** | **Shares** | **Amount** |
| Balance, October 1, 2024 | 648 | $1 | 458 | $— | 363097 | $363 | 364203 | $364 |
| **Balance, June 30, 2025** | **648** | $**1** | **458** | $— | **363097** | $**363** | **364203** | $**364** |
| Balance, April 1, 2025 | 648 | $1 | 458 | $— | 363097 | $363 | 364203 | $364 |
| **Balance, June 30, 2025** | **648** | $**1** | **458** | $— | **363097** | $**363** | **364203** | $**364** |
| Balance, October 1, 2023 | 648 | $1 | 1211757 | $1212 | 363097 | $363 | 1575502 | $1576 |
| Extinguishment of Series C P/S by issuance of Series E P/S |  |  | (1211299) | (1212) |  |  | (1211299) | (1212) |
| **Balance, June 30, 2024** | **648** | $**1** | **458** | $— | **363097** | $**363** | **364203** | $**364** |
| Balance, April 1, 2024 | 648 | $1 | 1211757 | $1212 | 363097 | $363 | 1575502 | $1576 |
| Extinguishment of Series C P/S by issuance of Series E P/S |  |  | (1211299) | (1212) |  |  | (1211299) | (1212) |
| **Balance, June 30, 2024** | **648** | $**1** | **458** | $— | **363097** | $**363** | **364203** | $**364** |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *31*

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; BOLLINGER INNOVATIONS, INC.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

*<u>**Redemption Rights**</u>*

The shares of preferred stock (other than Series E Preferred Stock) are *not* subject to mandatory redemption.

The Series C Preferred Stock 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 the Redemption Price

Year *3:* Redemption at 115% of the Redemption Price

Year *4:* Redemption at 110% of the Redemption Price

Year *5:* Redemption at 105% of the Redemption Price

Year *6* and thereafter: Redemption at 100% of the Redemption Price

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The Series C Preferred Stock and Series D Preferred Stock are redeemable by the Company for a redemption price per share equal to their respective Issue Price ($8.84 for Series C Preferred Stock and $0.4379 for the remaining Series D Preferred Stock), 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.

<u>***Dividends***</u>

The holders of Series A Preferred Stock 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 since issuance of these shares.

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 most 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.

The Series D Preferred Stock bears a 15.0% per annum fixed dividend accumulated and compounded monthly, payable *no* later than the *5th* day after the end of each month on the Series D Original Issue Price plus unpaid accrued and accumulated dividends. Dividends on the Series D Preferred Stock are payable prior to any dividends on any other series of preferred stock or the common stock. The amount of Series D Preferred Stock dividends accumulated as of *June 30, 2025,* was approximately $0.5 million.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *32*

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; BOLLINGER INNOVATIONS, INC.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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 Nasdaq listing requirements 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.

*<u>**Liquidation, Dissolution and Winding Up**</u>*

In the event of any Liquidation Event (as defined hereafter), 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 ($0.4379 per share in respect of the outstanding Series D Preferred Stock) plus declared but unpaid dividends. There were no such declared but unpaid dividends as of *June 30, 2025.*

In the event of any Liquidation Event, the holders of the Series B Preferred Stock will be entitled to receive, after full execution of rights of the Series D Preferred Stockholders, and 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. There were no such declared but unpaid dividends as of *June 30, 2025).*

Upon the completion of a distribution pursuant to a Liquidation Event to the Series D Preferred Stock and 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 ($8.84 per share) plus declared but unpaid dividends. There were no such declared but unpaid dividends as of *June 30, 2025.*

Upon the completion of a distribution pursuant to a Liquidation Event to the Series D Preferred Stock, 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, plus declared but unpaid dividends on such share (there were no such declared but unpaid dividends as of *June 30, 2025).* "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, or any liquidation, dissolution or winding up of the Company.

*<u>**Conversion**</u>*

The details on conversion rights of preferred stock are presented in the following table:

---

| | | | | |
|:---|:---|:---|:---|:---|
| **Class** | ***Number of Shares*** | ***As converted to common stock*** | ***Votes/Share*** | ***Number of Votes*** |
| Series A Preferred Stock | 648 | 4 | *One/share* | 648 |
| Series B Preferred Stock | 0 | 0 | *One/share on an as-converted to common basis* | 0 |
| Series C Preferred Stock | 458 | 1 | *One/share on an as-converted to common basis* | 1 |
| Series D Preferred Stock | 363097 | 1 | *One/share, only protective voting* | 363097 |
| Series E Preferred Stock | 0 | 0 | *One/share on an as-converted to common basis* | 0 |

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *33*

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; BOLLINGER INNOVATIONS, INC.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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 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 being equal to or greater than $4.0 million.

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 being equal to or greater than $27.5 million.

<u>***Voting Rights***</u>

The holders of shares of common stock and Series A, Series B, Series C and Series E 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, Series C Preferred Stock, or Series E 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 A Preferred Stock, Series B Preferred Stock, Series C Preferred Stock, and Series E Preferred Stock has the right to *one* vote per share, and in the case of the Series B Preferred Stock and Series C Preferred Stock, for each share of common stock into which such Series B Preferred Stock or Series C Preferred Stock, as applicable, could be converted.

The holders of Series D Preferred Stock have *no* voting rights except for protective voting rights (*one* vote for each share) in cases such as approval of a liquidation event, authorization of the 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.

*<u>**Equity Line of Credit and ELOC Commitment Fees**</u>*

On *May 21, 2024,* the Company entered into the Equity Line of Credit ("ELOC") Purchase Agreement with Esousa LLC (the "Investor"), pursuant to which the Investor agreed to purchase from the Company, at the Company's direction from time to time, in its sole discretion, from and after *July 5, 2024,* and until the earlier of (i) the *36*-month anniversary of the Commencement Date of *July 16, 2024,* or (ii) the termination of the ELOC Purchase Agreement in accordance with the terms thereof, shares of common stock, having a total maximum aggregate purchase price of $150 million, upon the terms and subject to the conditions and limitations set forth below. In connection with the ELOC Purchase Agreement, the Company also entered into a Registration Rights Agreement, pursuant to which the Company agreed to file a registration statement and any additional registration statements, with the SEC covering the resale of the shares of the Company's common stock issued to Investor pursuant to the ELOC Purchase Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *34*

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; BOLLINGER INNOVATIONS, INC.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; After *July 16, 2024,* on any business day selected by the Company, the Company *may,* from time to time and at its sole discretion, direct the Investor to purchase a number of shares of common stock that does *not* exceed 20% of the trading volume on the Nasdaq on the applicable purchase date at a purchase price per share equal to *94%* of the lower of (i) the lowest daily VWAP of any trading day during the *15* trading days before, and including, the purchase date; and (ii) the closing price of the common stock on the applicable purchase date.

The Company will control the timing and amount of any sales of its common stock to the Investor, and the Investor has *no* right to require the Company to sell any shares to it under the Purchase Agreement. Actual sales of shares of common stock to the Investor under the ELOC Purchase Agreement will depend on a variety of factors determined by the Company from time to time, including (among others) market conditions, the trading price of its common stock, and determinations by the Company as to available and appropriate sources of funding for the Company and its operations. The Investor *may not* assign or transfer its rights and obligations under the ELOC Purchase Agreement. The Company's right to direct the Investor to purchase shares is subject to certain conditions precedent, including continued listing on Nasdaq or another major stock exchange.

The ELOC Purchase Agreement prohibits the Company from directing the Investor to purchase any shares of common stock if those shares, when aggregated with all other shares of common stock, then beneficially owned by the Investor and its affiliates, would result in the Investor and its affiliates beneficially owning more than 9.99% of the then total outstanding shares of the Company's common stock.

The ELOC Purchase Agreement *may* be terminated by the Company at any time, at its sole discretion, without any cost or penalty. From and after the date of the ELOC Purchase Agreement until its termination, the Company agreed *not* to effect or enter into an agreement to effect any issuance by the Company or any of its subsidiaries of common stock or common stock equivalents (or a combination of units thereof), involving a Variable Rate Transaction (as defined in the ELOC Purchase Agreement), other than in connection with an exempt issuance as described in the ELOC Purchase Agreement. The Investor has agreed *not* to cause or engage in any manner whatsoever any direct or indirect short selling or hedging of the Company's common stock. As consideration for its commitment to purchase the Company's common stock under the ELOC Purchase Agreement, the Company agreed to issue shares of common stock equivalent to $6.0 million. In *August* and *September 2024,* the Company fully settled the commitment fee by issuing shares of common stock. In *October 2024,* the Company received approximately $1 million proceeds in accordance with the ELOC Purchase Agreement.

<u>***Noncontrolling Interest***</u>

See *Note *16* - Noncontrolling interest.*

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *35*

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; BOLLINGER INNOVATIONS, INC.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

**NOTE *10*** – **LOSS PER SHARE**

Earnings (loss) per common share is computed by dividing net income allocated to common stockholders by the weighted average shares of common stock outstanding. Diluted (loss) per common share is computed by dividing income allocated to common stockholders plus dividends on dilutive convertible preferred stock by the weighted-average shares of common stock outstanding plus amounts representing the dilutive effect of outstanding warrants and the dilution resulting from the conversion of convertible preferred stock, if applicable. For the *three* and *nine* months ended *June 30, 2025,* and the comparative periods ending *June 30, 2024,* outstanding warrants, 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 following table presents the reconciliation of net loss attributable to common stockholders to net loss used in computing basic and diluted net income per share of common stock (giving effect to the reverse stock splits – see *Note *1* - Description of business and basis of presentation*):

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | ***Three months ended June 30,*** | ***Three months ended June 30,*** | ***Nine months ended June 30,*** | ***Nine months ended June 30,*** |
|  | ***2025*** | ***2024*** | ***2025*** | ***2024*** |
| Net loss attributable to common stockholders | $(129724816) | $(87360817) | $(291689264) | $(281187675) |
| Less: preferred stock dividends accrued | (26785) | (23066) | (76823) | (66412) |
| Less: financial result from exchange of Series C P/S for Series E P/S |  | (8604029) |  | (8604029) |
| *Less: fair value of common stock issued to avoid fractional shares on reverse stock split (see Note 1 - Description of business and basis of presentation)* | (71982) |  | (71982) |  |
| **Net loss used in computing basic net loss per share of common stock** | $**(129823583)** | $**(95987912)** | $**(291838069)** | $**(289858116)** |
| Net loss per share | $(11231.39) | $(95987912) | $(74887.88) | $(289858116) |
| Weighted average shares outstanding, basic and diluted | 11559 | 1 | 3897 | 1 |
| *Net loss per share, reported previously, before adjusting to reverse stock splits effectuated in September 2024, February, April, June, and August 2025, see Note 1 - Description of business and basis of presentation* | *N/A* | $(19.39) | *N/A* | $(35.83) |
| *Weighted average shares outstanding, basic and diluted, reported previously, before adjusting to reverse stock splits effectuated in September 2024, February, April, June, and August 2025, see Note 1 - Description of business and basis of presentation* | *N/A* | 12134899 | *N/A* | 7644049 |

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**NOTE *11*** – **SHARE-BASED COMPENSATION**

The Company has an equity incentive plan that is a part of annual discretionary share-based compensation program for consultants, employees, directors and officers. The Company has been issuing new shares of common stock under the share-based compensation programs, and cash has *not* been used to settle equity instruments granted under share-based payment arrangements. The remaining number of shares reserved for awards equity instruments under the Equity Incentives Plan to both employees and consultants on *June 30, 2025,* was approximately 18.6 million shares of common stock (*not* subject to reverse stock splits).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *36*

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; BOLLINGER INNOVATIONS, INC.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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| | | | | |
|:---|:---|:---|:---|:---|
|  | ***For the three months ended June 30,*** | ***For the three months ended June 30,*** | ***For the nine months ended June 30,*** | ***For the nine months ended June 30,*** |
| **Composition of Share-Based Compensation Expense** | ***2025*** | ***2024*** | ***2025*** | ***2024*** |
| CEO share based performance award liability revaluation and stock issuances | $330763 | $1415059 | $(212691) | $(4650599) |
| Share-based compensation to employees and directors | 7733896 | 4868990 | 24457277 | 10342631 |
| Share-based compensation to consultants (equity-classified) |  | 1681508 | 4347207 | 2954081 |
| Share-based compensation to consultants (liability-classified) | 16680133 | 5599205 | 38425018 | 20527925 |
| **Total share-based compensation expense** | $**24744792** | $**13564762** | $**67016811** | $**29174038** |

---

<u>***Employees of the Company***</u>

Employees of the Company, including officers, are entitled to a number of shares of common stock specified in relevant offer letters and employment contracts and subject to the approval of our Board of Directors Compensation Committee. The total expense of share awards to employees represents the grant date fair value of the relevant number of shares to be issued. It is recognized in correspondence with additional paid-in capital over the service period (normally, in general and administrative expenses). The majority of awards to employees are equity classified. The liability related to liability classified stock-based compensation contracts with employees amounts to $0.2 million on *June 30, 2025.* The Company has also accrued a liability (presented within "Accrued expenses and other current liabilities" in the consolidated balance sheets) in an amount of $0.2 million to compensate employees for delay with the issuance of common stock per relevant offer letters and employment contracts.

<u>***Consultants***</u>

From time to time, the Company also issues share-based compensation to external consultants providing consulting, marketing, R&D, legal or other services. The number of shares specified within individual agreements, or the monetary value of those shares, if applicable, is usually negotiated by our Chief Executive Officer and approved by the Compensation Committee of the Board of Directors. These costs are generally presented as professional fees within general and administrative expenses, and certain qualifying costs *may* be presented as part of research and development expenses ($6.1 million and $9.2 million over the *three* and *nine* months ended *June 30, 2025,* respectively).

A part of these share-based awards is classified as equity and accounted for similar to stock-based compensation to employees. Another part of the Company's share-based awards for consultants is classified as liabilities, mainly if the number of shares a consultant is entitled to is predominantly based on monetary value fixed in the contract. An accrued part of liability, in this case, is revalued each period based on the part of the services performed and the market price of the shares of common stock of the Company until a sufficient number of shares is issued. The liability to consultants as of *June 30, 2025,* amounted to $0 million. The Company generally practices prepayment for future services of the consultants by unrestricted shares of common stock. In this case, a prepaid asset is recognized on the balance sheet and is amortized over the period the consultant is delivering their services to the Company. These prepaid costs amounted to $5.0 million as of *June 30, 2025.*

<u>***CEO Award Incentive Plans***</u>

The Company entered into a CEO Performance Stock Award Agreement, approved by stockholders in *2022* (*"2022* PSA Agreement") and a CEO Performance Stock Award Agreement, approved in *2023* (*"2023* PSA Agreement"). Under these plans, the Chief Executive Officer is entitled to share-based awards generally calculated as 1-3% of the outstanding number of shares of common stock, issuable upon the achievement of specific financial and operational targets (milestones).

In *March 2025,* stockholders approved amendments to the *2022* PSA Agreement (extending the deadlines for the Capital Benchmark Milestone for *2* years) and amendments to the *2023* PSA Agreement (extending the deadlines for the Vehicle Completion for *1* year, Revenue Benchmark for *2* years, Battery Development for *1* year, and JV Acquisition Milestone for *1* year).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *37*

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; BOLLINGER INNOVATIONS, INC.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The losses/(income) recognized within the line item "CEO share based performance award liability revaluation and stock issuance" in the table above represent both actual issuances of common stock under PSA Agreements ($0.2 million during the *three* and *nine* months ended *June 30, 2025)* and revaluation of these provisions for future probable awards. This share-based compensation is accrued as part of general and administrative expenses over the service term when it is probable that the milestone will be achieved. Decline of the provision (and relevant income) was mainly attributable to decrease in the market capitalization of the relevant period.

The liability to issue stock (presented within non-current liabilities if the achievement is expected later than *12* months after the balance sheet date) is revalued on every balance sheet date based on the length of the service period, the current market price of the common stock and on the number of shares of common stock outstanding, until the shares have been issued or until the fulfillment of the milestone requirements is *no* longer probable. As of *June 30, 2025,* the accrual for future awards under *2022* and *2023* PSA Agreements amounted to approximately $1.2 million, with a long-term part of the provision presented as "Liability to issue shares, net of current portion".

**NOTE *12*** – **ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES**

---

| | | |
|:---|:---|:---|
|  | ***June 30, 2025*** | ***September 30, 2024*** |
| Provision for settlement expenses and legal fees | $2685502 | $37913255 |
| Tax payables | 5758293 | 5493558 |
| Accrued payroll | 2019340 | 2447372 |
| Accrued interest | 2746054 | 2395190 |
| Refund liability | 794900 | 763160 |
| Accrued expense - other | 851020 | 2599631 |
| **Total** | $**14855109** | $**51612166** |

---

**NOTE *13* - LIABILITY TO ISSUE STOCK**

The liability to issue stock on *June 30, 2025,* in total amount of $1.5 million represents mainly CEO incentive award provision (see *Note *11* - Share-based compensation*) to be settled in shares of common stock upon the achievement of specific targets (current liability in the amount of $1.1 million and noncurrent liability in amount of $0.1 million), as well as certain liability-classified contracts with other parties.

**NOTE *14*** – **PROPERTY, PLANT, AND EQUIPMENT, NET**

Property, plant and equipment consist of the following:

---

| | | |
|:---|:---|:---|
|  | ***June 30,*** | ***September 30,*** |
|  | ***2025*** | ***2024*** |
| Buildings | $8513177 | $50007998 |
| Machinery and equipment | 22868835 | 41968053 |
| Construction-in-progress | 3075654 | 3183451 |
| Land | 1600303 | 3065757 |
| Other fixed assets | 7997436 | 6380587 |
| **Total cost of assets excluding accumulated impairment** | **44055405** | **104605846** |
| Less: accumulated depreciation | (13868062) | (22425580) |
| **Property, Plant, and Equipment, net** | $**30187343** | $**82180266** |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *38*

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; BOLLINGER INNOVATIONS, INC.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Depreciation expenses related to property, plant and equipment for the *three* and *nine* months ended *June 30, 2025* was $2.6 million and $10.3 million, respectively ($2.6 million and $14.3 million for the *three* and *nine* months ended *June 30, 2024,* respectively).

As further disclosed in *Note *19* - Contingencies and claims*, the Company entered into a legal settlement agreement with GEM to resolve outstanding legal claims. In full satisfaction of the related liability, the Company transferred ownership of its Mishawaka facility: mainly, a building with a carrying amount of $36.4 million, personal property with a carrying amount of $7.4 million, and land with a carrying amount of $1.4 million. The transaction does *not* qualify as a discontinued operation under ASC *205*-*20,* as it does *not* represent a strategic shift in the Company's operations nor was the asset a separate reportable segment. The excess of the carrying values of transferred assets over liabilities to GEM in amount of $14.3 million was presented in the consolidated statements of operations as "Loss on settlement (GEM case)".

**NOTE *15*** – **PREPAID EXPENSES AND OTHER CURRENT ASSETS**

---

| | | |
|:---|:---|:---|
|  | ***June 30, 2025*** | ***September 30, 2024*** |
| **Prepaid expenses and other current assets** |  |  |
| Services prepaid by common stock | $5732817 | $3330382 |
| Prepaid expense | 2766012 | 2973305 |
| Prepaid services | 352762 | 670338 |
| Prepaid inventory | 286955 | 3449904 |
| Customs surety bond paid | 2600000 | 2600000 |
| Prepaid trade shows | 129342 | 213368 |
| Other prepayments | 1518871 | 1561256 |
| **Total prepaid expenses and other current assets** | $**13386759** | $**14798553** |

---

**NOTE *16*** – **NONCONTROLLING INTEREST**

In accordance with a stock purchase agreement signed on *July 26, 2024,* with Bollinger Motors, Inc, our majority owned subsidiary, the Company, as part of activities to launch production in the Bollinger Motors segment, invested an additional $27.5 million in newly issued shares of Bollinger Motors, Inc., during the *nine* months ended *June 30, 2025.* This investment has been eliminated in the consolidated statement of cash flows but impacted additional paid-in capital and noncontrolling interest in the consolidated balance sheets.

---

| | |
|:---|:---|
| Noncontrolling interest as of September 30, 2024 | 12010149 |
| Changes due to net losses of the subsidiary | (12757919) |
| Changes due to additional investments of the Company | 1598668 |
| **Noncontrolling interest as of June 30, 2025** | **850898** |

---

As further described in *Note *19* - Contingencies and claims*, on *May 7, 2025,* the United States District Court for the Eastern District of Michigan issued an order appointing a receiver over the Company's majority-owned subsidiary Bollinger Motors in response to litigation initiated by Robert Bollinger regarding untimely payment of interest on a long-term loan. The parties executed a settlement agreement resolving all outstanding claims and, on *June 2, 2025,* the Court entered a stipulated order discharging and removing the receiver and dismissing the case with prejudice. Upon the settlement agreement, the Company has obtained more than 95% of common stock of the subsidiary.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *39*

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; BOLLINGER INNOVATIONS, INC.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

**NOTE *17*** – **LEASES**

We have entered into various operating lease agreements for certain offices, manufacturing and warehouse facilities, and land. Operating leases led to recognition of right-of-use assets, and of current and noncurrent portions of lease liabilities. 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 that 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 payments based on an index or rate.

The following table presents information regarding our lease assets and liabilities:

---

| | | |
|:---|:---|:---|
|  | ***June 30, 2025*** | ***September 30, 2024*** |
| **Assets:** |  |  |
| Operating lease right-of-use assets, net of impairment | $2481312 | $3041485 |
| **Liabilities:** |  |  |
| Operating lease liabilities, current | (2237694) | (2893967) |
| Operating lease liabilities, noncurrent | (9733098) | (11648662) |
| Total lease liabilities | $(11970792) | $(14542629) |
| **Weighted average remaining lease terms:** |  |  |
| Operating leases (in years) | 4.51 | 5.10 |
| **Weighted average discount rate:** |  |  |
| Operating leases | 28% | 28% |
| Cash paid for amounts included in the measurement of lease liabilities for the three months ended June 30, 2025 and 2024 | 1754199 | 784770 |
| Cash paid for amounts included in the measurement of lease liabilities for the nine months ended June 30, 2025 and 2024 | 4995369 | 2365678 |

---

---

| | | | | |
|:---|:---|:---|:---|:---|
| **Operating lease costs:** | ***For the Three Months Ended June 30,*** | ***For the Three Months Ended June 30,*** | ***For the Nine Months Ended June 30,*** | ***For the Nine Months Ended June 30,*** |
|  | ***2025*** | ***2024*** | ***2025*** | ***2024*** |
| Fixed lease cost | $994960 | $1355952 | $3120425 | $4292916 |
| Variable and short-term lease cost | 31279 | 100210 | 170855 | 350533 |
| Sublease income |  | (150413) |  | (462363) |
| **Total operating lease costs** | $**1026239** | $**1305749** | $**3291280** | $**4181086** |

---

The following table reflects the maturities of operating lease liabilities on *June 30, 2025:*

---

| | |
|:---|:---|
| **Years ending September 30,** |  |
| 2025 (3 months) | $1432935 |
| 2026 | 5006078 |
| 2027 | 4958062 |
| 2028 | 4758748 |
| 2029 | 1286244 |
| Thereafter | 4487146 |
| **Total lease payments** | $**21929213** |
| Less: imputed interest | (9958421) |
| **Carrying amount of lease liabilities** | $**11970792** |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *40*

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; BOLLINGER INNOVATIONS, INC.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

**NOTE *18*** – **RELATED PARTY TRANSACTIONS**

*<u>**Director Provided Services**</u>*

For the *nine* months ended *June 30, 2025,* our non-employee directors have earned compensation for service on our Board of Directors and associated committees in an amount equal to $319 thousand in cash and $601 thousand in shares of common stock ($331 thousand in cash and $563 thousand for the *nine* months ended *June 30, 2024*).

In addition, the following non-employee directors were engaged in certain other consulting contracts with the Company:

*<u>William Miltner</u>*

William Miltner is a litigation attorney who provides legal services to the Company. Mr. Miltner is also an elected Director of the Company. For the *three* and *nine* months ended *June 30, 2025,* Mr. Miltner was entitled to $172 thousand and $511 thousand in legal fees, respectively ($249 thousand and $955 thousand for the *three* and *nine* months ended *June 30, 2024,* respectively).

*<u>Mary Winter</u>*

Mary Winter, Corporate Secretary and Director, is compensated for Corporate Secretary responsibilities at $5 thousand per month. For the *three* and *nine* months ended *June 30, 2025,* Ms. Winter was entitled to $15 thousand and $45 thousand in consulting fees, respectively (same amounts for the *three* and *nine* months ended *June 30, 2024*).

&nbsp;&nbsp;&nbsp;&nbsp;

**NOTE *19*** – **CONTINGENCIES AND CLAIMS**

Occasionally, 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. As required by ASC *450,* we recognize accruals for contingencies when incurrence of a loss is probable (likely to occur) and can be reasonably estimated, and disclose the amount accrued and the amount of a reasonably possible loss over the amount accrued if such disclosure is necessary for our consolidated financial statements. When the likelihood is *not* probable or when the likelihood is probable, but the amount cannot be reasonably estimated, liabilities are *not* recognized. To estimate whether a loss contingency should be accrued, 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.

The outcomes of our legal proceedings and other contingencies are inherently unpredictable and subject to significant uncertainties. They could be material to our operating results and cash flows for a particular period. At least quarterly, we evaluate developments in our legal proceedings and other contingencies that could affect the amount of liability, including amounts over any previous accruals and reasonably possible losses disclosed, and make adjustments and changes to our accruals and disclosures as appropriate. For the matters disclosed below without an estimate of the amount of loss or range of losses, such an estimate is *not* possible or is immaterial, and we *may* be unable to estimate the possible loss or range of losses that could potentially result from the application of non-monetary remedies. Until the final resolution of such matters, if any of our estimates and assumptions change or prove to have been incorrect, we *may* experience losses over the amounts recorded, which could have a material effect on our business, consolidated financial position, results of operations, or cash flows.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *41*

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; BOLLINGER INNOVATIONS, INC.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

*<u>**The GEM Group**</u>*

On *September 21, 2021,* the GEM Group ("GEM") filed an arbitration demand and statement of claim against the Company seeking declaratory relief and damages. This matter arises out of an alleged breach of a securities purchase agreement dated *November 13, 2020.* On *November 17, 2023,* the arbitrator issued the Partial Final Award on Liability finding that the Company and Mullen Technologies, Inc. ("MTI") had repudiated and breached the securities purchase agreement and a related agreement (the "GEM Agreements"). On *January 29, 2024,* the parties completed the briefing on the issues of damages and allocation. On *May 10, 2024,* the arbitrator issued his final award, awarding the GEM Group $26.8 million in damages for breach of the relevant agreements, and $3.8 million in attorney fees and certain administrative costs. The unpaid amount also generates interest at 9% per annum.

On *August 3, 2023,* the Arbitrator ordered the Company to deposit $7.0 million into an interest-bearing escrow account with a commercial bank or brokerage firm. That amount has been released to GEM. On *January 24, 2024,* the arbitrator ordered the Company to deposit an additional $24.1 million into escrow on or before *March 9, 2024.* GEM has moved in the United States District Court to confirm that *second* interim order. On *June 11, 2024,* the United States District Court confirmed that order.

On *December 28, 2023,* the Company and MTI filed a complaint against GEM and Christopher F. Brown in the United States District Court for the Southern District of New York alleging, among other things, that the GEM Group and Mr. Brown engaged in an unlawful securities transaction under the federal securities laws by entering into the GEM Agreements while GEM was operating as an unregistered dealer. The complaint seeks an order declaring, among other things, that the GEM Agreements are void ab initio. On *April 8, 2024,* the District Court stayed that action.

On or about *July 10, 2024,* the Company moved in the United States District Court for the Southern District of New York for an order vacating the arbitration awards and denying GEM's anticipated motion to confirm those awards. On or about *August 7, 2024,* GEM filed an opposition to the Company's motion to vacate and cross-moved to confirm the arbitration awards. On or about *August 21, 2024,* the Company filed a reply to GEM's opposition. On *February 6, 2025,* the District Court affirmed the arbitration award and denied the Company's motion to vacate the award, ordering that the award be satisfied *no* later than *May 7, 2025.* The GEM Group issued a restraining notice on or about *April 25, 2025,* to the Company and MTI pursuant to Rule *69* of the Federal Rules of Civil Procedure and Section *5222*(b) of the New York Civil Practice Law and Rules.

On *May 9, 2025,* the Company and GEM executed a settlement agreement (the "Agreement") in an effort to resolve all outstanding legal disputes between the parties fully. Under the terms of the Agreement, GEM had a *55*-day due diligence period, subject to extension by GEM, to evaluate the transfer to GEM of the manufacturing plant located in Mishawaka, Indiana, and related assets in complete satisfaction of the aforementioned award. On *May 13, 2025,* GEM withdrew the restraining notices that it issued to the Company on *April 25, 2025.* The transfer of the manufacturing plant and related assets in full settlement of the GEM case was completed in *June 2025.*

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *42*

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; BOLLINGER INNOVATIONS, INC.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

***Bollinger Motors***

<u>Robert Bollinger v. Bollinger Motors, Inc.</u>

On *March 21, 2025,* Robert Bollinger filed a complaint against Bollinger Motors, Inc. ("Bollinger Motors"), a majority-owned subsidiary of the Company, in the U.S. District Court for the Eastern District of Michigan. In the complaint, Mr. Bollinger alleged breach of contract in connection with failure by Bollinger Motors to make a payment under the Amended and Restated Secured Promissory Note for $10.0 million entered into on *October 24, 2024 (*the "Bollinger Note"). Mr. Bollinger was seeking $10.5 million plus interest, attorney's fees and costs and other damages arising from the breach, and the appointment of a receiver over Bollinger Motors. On *March 24, 2025,* Mr. Bollinger filed an emergency motion to appoint a receiver of Bollinger Motors and on *May 7, 2025,* the court entered an order placing Bollinger Motors into receivership and appointing a receiver to manage its affairs. On *May 20, 2025,* the Company filed an emergency motion to intervene and request to file an emergency motion for reconsideration of the receiver order.

On My 28, *2025,* the parties executed a settlement agreement resolving all outstanding claims Pursuant to the settlement agreement, the Company paid $11 million in connection with the dismissal of the lawsuit and release of the Company and Bollinger Motors of all claims and liabilities. The Company also agreed to pay all expenses of the receiver incurred beginning on *May 26, 2025.* Furthermore, Mr. Bollinger agreed to transfer to the Company all shares he owns of Bollinger Motors, which increased the Company's ownership of Bollinger to approximately 95%. On *June 2, 2025,* the Court entered a stipulated order discharging and removing the receiver and dismissing the case with prejudice.

<u>Creditor Litigation</u>

Eight legal proceedings have been filed, and are pending, against the Company's majority-owned subsidiary, Bollinger Motors, Inc., seeking to collect an aggregate of approximately $9.4 million in damages, ranging from approximately $75,000 to $2.0 million, for damages for amounts alleged to be owed for various goods, equipment or services, as well as pre-judgment and post-judgment interest and attorney's fees. These proceedings largely involve creditor lawsuits and are filed in Michigan Circuit Court for the County of Oakland or Ohio Court of Common Pleas, Cuyahoga County. While Bollinger Motors, Inc. *may* have defenses to these matters, the outcomes are inherently uncertain.

<u>***Stockholder Litigation***</u>

<u>In re Mullen Automotive Inc. Securities Litigation.</u>

On *May 5, 2022,* Plaintiff Margaret Schaub, a purported stockholder, filed a putative class action complaint in the United States District Court for the 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"). The Schaub Lawsuit was brought by Schaub both individually and on behalf of a putative class of purchasers of the Company's securities, claiming false or misleading statements regarding the Company's business partnerships, technology and manufacturing capabilities, and alleging violations of Sections *10*(b) and *20*(a) of the Exchange Act and Rule *10b*-*5* promulgated thereunder.

On *September 23, 2022,* a court-appointed lead plaintiff filed a Consolidated Amended Class Action Complaint against the Company, Mr. Michery, and the Company's predecessor, Mullen Technologies, Inc., premised on the same purported violations of the Exchange Act and Rule *10b*-*5,* seeking to certify a putative class of shareholders, and seeking an award of monetary damages, as well as reasonable fees and expenses. On *August 14, 2024,* the parties entered a Stipulation and Agreement of Settlement to settle the securities class action matter subject to payment of $5.4 million by the Company and $1.8 million by the Company's D&O insurers. The court granted final approval of the settlement on *June 20, 2025,* and entered final judgment.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *43*

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; BOLLINGER INNOVATIONS, INC.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

<u>Chosten Caris v. David Michery.</u>

On *April 27, 2023,* Chosten Caris, a purported stockholder, filed a complaint against Mr. Michery in the Eighth Judicial Circuit in and for Alachua County, Florida (the "Caris Lawsuit"). On *May 17, 2023,* Mr. Michery removed the Caris Lawsuit to the United States District Court for the Northern District of Florida. This lawsuit purports to seek damages for claims arising under Sections *10*(b) and *20*(a) of the Exchange Act and Rule *10b*-*5* promulgated thereunder. The Caris Lawsuit is currently stayed.

No loss contingencies have been accrued in connection with this matter as of *June 30, 2025,* because the Company cannot reasonably estimate either the probability of a loss or its magnitude (if any) based on all information currently available to management.

<u>Trinon Coleman v. David Michery et al.</u>

On *December 8, 2023,* Trinon Coleman, a purported stockholder, filed a derivative action in the Court of Chancery for the State of Delaware against the Company as a nominal defendant, Mr. Michery, and Company directors Mr. Puckett, Ms. Winter, Mr. Betor, Mr. Miltner, and Mr. New (the "Coleman Lawsuit"). This lawsuit asserts claims for breach of fiduciary duty, insider trading, and unjust enrichment primarily in connection with the issues and claims asserted in the Schaub Lawsuit. The Coleman Lawsuit seeks to direct the Company to improve its corporate governance and internal procedures and seeks monetary damages and an award of reasonable fees and expenses. Given the settlement of the substantially similar derivative claims in *In re Mullen Automotive Inc.* Derivative Litigation, discussed above, a stipulation of dismissal with prejudice was granted on *April 17, 2025.*

*No* loss contingencies have been accrued in connection with this matter as of *June 30, 2025,* because the Company cannot reasonably estimate either the probability of a loss or its magnitude (if any) based on all information currently available to management.

<u>Jennifer Maloney v. Mullen Automotive Inc., et al.</u>

On *February 12, 2025,* Plaintiff Jennifer Maloney, a purported stockholder, filed a putative class action complaint in the United States District Court for the Central District of California against the Company, as well as its Chief Executive Officer, David Michery, and its Chief Financial Officer, Jonathan New (the "Maloney Lawsuit"). The Maloney Lawsuit was brought by Maloney both individually and on behalf of a putative class of purchasers of the Company's securities, claiming false or misleading statements regarding the Company's business partnerships, technology, and financing, and alleging violations of Sections *10*(b) and *20*(a) of the Exchange Act and Rule *10b*-*5* promulgated thereunder.

*No* loss contingencies have been accrued in connection with this matter as of *June 30, 2025,* because the Company cannot reasonably estimate either the probability of a loss or its magnitude (if any) based on all information currently available to management.

<u>Cayden Crume v. Mullen Automotive Inc., et al.</u>

On *March 26, 2025,* Plaintiffs Cayden Crume, James LeGrand, and Todd Holton; purported stockholders, filed a putative class action complaint in the United States District Court for the Central District of California against the Company, as well as Mr. New, and Mr. Firer (the "Crume Lawsuit"). The Crume Lawsuit was brought by Plaintiffs both individually and on behalf of a putative class of purchasers of the Company's securities, alleging unjust enrichment and violations of Sections *10*(b) and *20*(a) of the Exchange Act and Rule *10b*-*5* promulgated thereunder. This action was consolidated with the Maloney action on *May 15, 2025,* and administratively closed.

*No* loss contingencies have been accrued in connection with this matter as of *June 30, 2025,* because the Company cannot reasonably estimate either the probability of a loss or its magnitude (if any) based on all information currently available to management.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *44*

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; BOLLINGER INNOVATIONS, INC.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

<u>In re Mullen Automotive Inc. Morga Derivative Litigation.</u>

On *April 8, 2025,* Gary Morga, 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, and current or former Company directors Mr. New, Mr. Andersen, Mr. Betor, Mr. Miltner, Mr. Novoa, and Ms. Winter (the "Witt Lawsuit"). The Morga lawsuit asserts claims for breach of fiduciary duty, unjust enrichment, abuse of control, gross mismanagement, and waste of corporate assets. It asserts *one* claim for violations of Section *10*(b) and *21D* of the Exchange Act against Mr. Michery and Mr. New. On *July 11, 2025,* Plaintiff voluntarily dismissed this action without prejudice.

No loss contingencies have been accrued in connection with this matter as of *June 30, 2025,* because the Company cannot reasonably estimate either the probability of a loss or its magnitude (if any) based on all information currently available to management.

**NOTE *20*** – **SUBSEQUENT EVENTS** 

Company management has evaluated subsequent events through *August 14, 2025,* which is the date these financial statements were available to be issued. Except as discussed below, management has determined that there were *no* material subsequent events which required recognition, adjustment to or disclosure in the financial statements:

<u>***Stock Issuances After the Balance Sheet Date***</u>

After the balance sheet date and by *August 11, 2025,* the Company issued 4,505,367 shares of common stock, mainly upon exercise of warrants described in the *Note *8* - Warrants and other derivative liabilities and fair value measurements* above, and in accordance with contracts with consultants (see *Note *11* – Share-based compensation*).

<u>***Additional investments after the balance sheet date***</u>

After the balance sheet date, pursuant to additional investment rights set forth in existing securities purchase agreements and in connection with entering into a securities purchase agreement, the Company, in a series of transactions, issued to certain investors convertible notes and five-year warrants: senior secured convertible notes with a principal of $10.5 million (with a conversion price floor of $0.03 per share, *not* subject to adjustments) and *5,986* warrants with exercise price of $4,000 and a floor in cashless exercise of warrants of $0.01 (*not* subject to adjustments). Other terms and conditions of these notes and warrants are similar to those described in *Note *7* - Debt* and *Note *8* - Warrants and other derivative liabilities and fair value measurements* above.

<u>***Amendment to *2022* Equity Incentive Plan***</u>

On *July 22, 2025,* at a Special Meeting, the Company's stockholders approved an amendment to the Company's *2022* Equity Incentive Plan, as amended (the *"2022* Plan"), providing for a 10% automatic quarterly increase on each of *January 1, April 1, July 1,* and *October 1,* commencing on *October 1, 2025,* until the *2022* Plan's expiration in *July 2032,* in the total number of shares of common stock available for issuance under the 2022 Plan based upon the total number of shares of common stock outstanding, on a fully-diluted basis, on *December 31, March 31, June 30* and *September 30* of the preceding fiscal quarter, respectively, provided that the Company's Board of Directors *may* decide that the increase for such fiscal quarter will be a lesser number of shares than otherwise provided under the automatic quarterly increase provision or that there will be *no* increase for such fiscal quarter.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 45

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; BOLLINGER INNOVATIONS, INC.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

<u>***Exchange of warrants and part of convertible notes***</u>

On *July 29, 2025,* the Company entered into an Amendment and Exchange Agreement (the "Exchange Agreement") with certain investors, pursuant to which the Company agreed to exchange certain outstanding senior secured convertible notes (the "Exchange Notes", see *Note *7* - Debt*) and warrants (the "Exchange Warrants", see *Note *8* - Warrants and other derivative liabilities and fair value measurements*) previously issued pursuant to the Securities Purchase Agreements, as *may* have been amended from time to time, dated *May 14, 2024, January 23, 2025, February 5, 2025, March 6, 2025, May 16, 2025* and *May 29, 2025.* The Exchange Agreement provides for the exchange of the Exchange Notes and Exchange Warrants issued pursuant to the Securities Purchase Agreements for newly authorized shares of Series F Convertible Preferred Stock, par value *$0.001* per share and Series G Convertible Preferred Stock, par value $0.001 per share, respectively.

Pursuant to the Exchange Agreement, the Holders agreed to exchange (i) the Exchange Notes, with an aggregate principal and accrued interest of approximately *$25.5* million for approximately *25,521* shares of Series F Preferred Stock and (ii) the Exchange Warrants with a carrying amount of approximately $114 million for approximately 109,219 shares of Series G Preferred Stock. Upon closing of the transactions contemplated by the Exchange Agreement, the Exchange Notes and Exchange Warrants were cancelled and the Holders relinquished all rights, title and interest in such securities.

The Exchange Agreement includes certain covenants, including, among others, that (i) the Company will use commercially reasonable efforts to maintain the listing of its Common Stock on a stock exchange, (ii) while Preferred Shares remain outstanding, (A) during a certain *90* day period, the Company will *not,* with certain exceptions, offer or issue any equity or related securities, and (B) the Company will *not,* without approval from Holders of a majority of the outstanding Preferred Shares, issue any equity security having a preference over or party with the Preferred Shares with respect to dividends, liquidation or redemption or having a preference over the Common Stock with respect to dividends, liquidation or redemption, and the Company and its subsidiaries will *not* incur any indebtedness. The Company also agreed *not* to enter into any fundamental transaction, such as a merger, sale of more than *50%* of the outstanding voting shares, sale of substantially all assets, or business combination, unless such transaction complies with the terms of the Certificates of Designations. The Exchange Agreement contains customary representations and warranties between the Company and the Holders.

Pursuant to the terms of the Exchange Agreement, on *July 29, 2025,* the Company filed with the Secretary of State of the State of Delaware a Certificate of Designations designating 25,600 shares of Series F Preferred Stock and a Certificate of Designations designating 110,000 shares of Series G Preferred Stock. The Certificates of Designations set forth the rights, preferences, privileges and restrictions of the shares of Series F Preferred Stock and Series G Preferred Stock.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *46*

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; BOLLINGER INNOVATIONS, INC.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

*<u>Series F Preferred Stock</u>*

The following is a summary of the terms of the Series F Preferred Stock.

*Serial Designations and Number of Shares*. The Series F Preferred Stock consists of the following serial designations, which are identical in all respects to every other share of Series F Preferred Stock, except as set forth in the Series F Certificate of Designations: 560 shares of F-*1* Preferred Stock; 1,700 shares of F-*2* Preferred Stock; 4,200 shares of F-*3* Preferred Stock; 1,700 shares of F-*4* Preferred Stock; 6,900 shares of F-*5* Preferred Stock; 2,325 shares of F-*6* Preferred Stock; 2,150 shares of F-*7* Preferred Stock; 1,715 shares of F-*8* Preferred Stock; and 4,350 shares of F-*9* Preferred Stock.

*Ranking*. The Series F Preferred Stock, with respect to the payment of dividends, distributions and payments upon the liquidation, dissolution and winding up of the Company, ranks senior to all capital stock of the Company, unless at least a majority of the outstanding Series F Preferred Shares consent to the creation of other capital stock of the Company that is senior or equal in rank to the Series F Preferred Stock.

*Conversion and Exchange*. Each share of Series F Preferred Stock is convertible at the option of a Holder at any time into shares of Common Stock by dividing the conversion amount by the lower of (a) the applicable Conversion Fixed Price for the relevant series ("Conversion Fixed Price" means (*1*) for the F-*1* Preferred Shares, $775, (*2*) for the F-*2* Preferred Shares, $1,150, (*3*) for the F-*3* Preferred Shares, $156,060, (*4*) for the F-*4* Preferred Shares, $3,401, (*5*) for the F-*5* Preferred Shares, $248,000, (*6*) for the F-*6* Preferred Shares, $642,000, (*7*) for the F-*7* Preferred Shares, $18,500, (*8*) for the F-*8* Preferred Shares, $51,400, and (*9*) for the F-*9* Preferred Shares, $346,800,000), (b) 95% of the closing sale price of the Common Stock on the date the initial registration statement for such series is declared effective by the SEC, or (c) 95% of the lowest daily volume-weighted average price (VWAP) in the *five* trading days prior to the conversion date, but in *no* event less than the applicable Conversion Floor Price ("Conversion Floor Price" means (*1*) for the F-*1* Preferred Shares, $0.02, (*2*) for the F-*2* Preferred Shares, $0.03, (*3*) for the F-*3* Preferred Shares, $0.05, (*4*) for the F-*4* Preferred Shares, $0.07, (*5*) for the F-*5* Preferred Shares, $0.08, (*6*) for the F-*6* Preferred Shares, $0.21, (*7*) for the F-*7* Preferred Shares, $0.37, (*8*) for the F-*8* Preferred Shares, $1.03, and (*9*) for the F-*9* Preferred Shares, $1.16, which amounts are *not* subject to adjustment for stock dividends, subdivisions, or combinations). The conversion price and shares are subject to adjustment, pursuant to Section *6* of the Certificate of Designations, in the event of stock dividends and stock splits, and subsequent equity sales.

If, upon conversion of Series F Preferred Shares, the Company fails to timely issue the shares of Common Stock, then, at the sole discretion of the Holder, the Company will pay in cash to such Holder on each trading day after the delivery date an amount equal to *1%* of the product of the number of shares of Common Stock *not* so delivered multiplied by the closing sale price of the Common Stock on the trading day immediately preceding such delivery date.

If any shares of Series F Preferred Stock are converted, redeemed or reacquired by the Company, such shares *may not* be reissued and will automatically be retired and cancelled and resume the status of authorized but unissued shares of preferred stock. The Series F Preferred Stock will *not* be convertible by a Holder to the extent that such Holder or any of its affiliates would beneficially own in excess of 9.9% of the Common Stock, as further described in the Series F Preferred Certificate of Designations.

*Voting Rights*. Except as provided by law, the Holders of Series F Preferred Stock have *no* voting rights except that approval from a majority of the outstanding shares of Series F Preferred Stock, voting as a single class, is required to (i) alter or change the powers, preferences, or rights of the Series F Preferred Stock so as to affect them adversely, (ii) amend the Certificate of Incorporation or bylaws in a manner adverse to the Holders of Series F Preferred Stock, (iii) increase or decrease (other than by conversion) the authorized number of Series F Preferred Stock, (iv) create or authorize any new class or series of stock senior to or on parity with the Series F Preferred Stock, (v) pay dividends or make distributions on any junior stock, (vi) issue additional Series F Preferred Stock (except as contemplated), or (vii) circumvent the rights of the Series F Preferred Stock.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *47*

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; BOLLINGER INNOVATIONS, INC.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

*Dividends*. Holders of Series F Preferred Stock are entitled to receive cumulative dividends at an annual rate of 20% of the $1,000 stated value per share of Series F Preferred Stock, accruing daily, whether or *not* declared and whether or *not* there are funds legally available for payment. Dividends are payable in cash quarterly in arrears on the *first* trading day of each fiscal quarter beginning on *October 1, 2025.* At the option of each Holder, dividends *may* be paid at any time in shares of Common Stock pursuant to the conversion terms described above.

*Company Optional Redemption*. At any time, the Company has the right to redeem in cash all, but *not* less than all, the shares of Series F Preferred Stock then outstanding equal to the sum of (*1*) the stated value plus (*2*) all accrued dividends.

*Covenants*. The Company and its subsidiaries are subject to certain customary affirmative and negative covenants regarding the rank of the Series F Preferred Stock, the incurrence of indebtedness, the existence of liens, the repayment of indebtedness when a Triggering Event has occurred, the payment of cash in respect of dividends, distributions or redemptions, and the transfer of assets, among other customary matters. A "Triggering Event" includes, but is *not* limited to: (i) failure to maintain sufficient reserves of authorized Common Stock; (ii) the Company's failure to deliver shares of Common Stock upon conversion, or notice of the Company's intention *not* to comply with a request for conversion of any Series F Preferred Stock; (iii) failure to declare or pay any dividend when due; (iv) the occurrence of any default under, redemption of or acceleration prior to maturity in an aggregate amount in excess of $300,000 of indebtedness (as described in the Series F Certificate of Designations) of the Company or any subsidiary; (v) failure to maintain the listing of its Common Stock on a stock exchange; (vi) failure to file annual or quarterly reports within the required periods; (vii) bankruptcy or insolvency of the Company; and (viii) breach of any representation or warranty when made, or any covenant or other term or condition of any Transaction Document. Furthermore, any amounts due under the Transaction Documents which is *not* paid when due will result in a late charge in an amount equal to interest on such amount at the rate of 15% per month until paid in full.

*Purchase Rights, Distribution of Assets and Fundamental Transactions*. Holders of Series F Preferred Stock *may* receive and participate in purchase rights and distribution of assets. The Company *may not* enter into any fundamental transaction unless the successor entity issues in exchange securities with similar rights.

*Liquidation, Dissolution and Winding Up*. In the event of any Liquidation Event (as defined in the Series F Certificate of Designation), the Holders of Series F Preferred Shares will be entitled to receive prior and in preference to any distribution of the proceeds to the holders of the Common Stock, an amount per share equal to the Conversion Fixed Price plus declared but unpaid dividends on such shares.

*<u>Series G Preferred Stock</u>*

The following is a summary of the terms of the Series G Preferred Stock.

*Ranking*. The Series G Preferred Stock, with respect to the payment of dividends, distributions and payments upon the liquidation, dissolution and winding up of the Company, ranks senior to all capital stock of the Company, unless at least a majority of the outstanding Series G Preferred Shares consent to the creation of other capital stock of the Company that is senior or equal in rank to the Series G Preferred Stock.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *48*

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; BOLLINGER INNOVATIONS, INC.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

*Conversion and Exchange*. Each shares of Series G Preferred Stock is convertible at the option of a Holder at any time prior to the applicable conversion maturity date (as set forth in the Holder Schedule attached to the Exchange Agreement) into shares of Common Stock, determined by dividing the stated value of $1,000 per share of Series G Preferred Stock (subject to adjustment for stock splits, stock dividends, recapitalizations, reorganizations, reclassifications, combinations, subdivisions or other similar events with respect to the Series G Preferred Stock) by the lower of the *two* closing bid prices of the Common Stock in the *two* days prior to the date of such conversion, but in any event *not* less than $0.10 per share. If, upon conversion of Series G Preferred Shares, the Company fails to timely issue the shares of Common Stock, then, at the sole discretion of the Holder, the Company will pay in cash to such Holder on each trading day after the delivery date an amount equal to *1%* of the product of the number of shares of Common Stock *not* so delivered multiplied by the closing sale price of the Common Stock on the trading day immediately preceding such delivery date.

If any shares of Series G Preferred Stock are converted, redeemed or reacquired by the Company, such shares *may not* be reissued and will automatically be retired and cancelled and resume the status of authorized but unissued shares of preferred stock. The Series G Preferred Stock will *not* be convertible by a Holder to the extent that such Holder or any of its affiliates would beneficially own in excess of 9.9% of the Common Stock, as further described in the Series G Preferred Certificate of Designations.

*Voting Rights*. Except as provided by law, the Holders of Series G Preferred Stock shall have *no* voting rights except that approval from a majority of the outstanding shares of Series G Preferred Stock, voting as a single class, is required to (i) alter or change the powers, preferences, or rights of the Series G Preferred Stock so as to affect them adversely, (ii) amend the Certificate of Incorporation or bylaws in a manner adverse to the Holders of Series G Preferred Stock, (iii) increase or decrease (other than by conversion) the authorized number of Series G Preferred Stock, (iv) create or authorize any new class or series of stock senior to or on parity with the Series G Preferred Stock, (v) pay dividends or make distributions on any junior stock, (vi) issue additional Series G Preferred Stock (except as contemplated), or (vii) circumvent the rights of the Series G Preferred Stock.

*Purchase Rights, Distribution of Assets and Fundamental Transactions*. Holders of Series G Preferred Stock *may* receive and participate in purchase rights and distribution of assets. The Company *may not* enter into any fundamental transaction unless the successor entity issues in exchange securities with similar rights.

*Company Optional Redemption*. At any time after the applicable conversion maturity date, the Company has the right to redeem in cash all, but *not* less than all, of the shares of Series G Preferred Stock then outstanding equal to $0.001 per share.

*Dividends and Liquidation, Dissolution and Winding Up*. Holders of Series G Preferred Stock are *not* entitled to receive any dividends and do *not* have any right to receive any distribution of assets upon a Liquidation Event (as defined within the Series G Preferred Certificate of Designations).

Additionally, on *August 14, 2025,* the Company and investors exchanged all then-outstanding warrants (with a carrying amount of approximately $5 million) to 6,361.27934 shares of newly designated shares of Series G Preferred stock (with terms identical to those disclosed above), and secured senior convertible notes with a principal and accumulated interest in amount of approximately $5 million to 734.73330 shares of Series F-*9* Preferred stock, 572.36842 shares of Series F-*5* Preferred stock and 3,421.88596 shares of Series F-*7* Preferred stock (with terms identical to those disclosed above). The Company and investors also agreed to amend the conversion floors in the cashless exercise formulas of the warrants issuable upon future possible exercise of additional investment rights from $0.01 to $0.07. If the price of shares of common stock decrease to or below $0.07, the Company agreed to reduce the floor of the cashless exercise formula to $0.01 and seek stockholder approval.

As a result of these transactions, the Company believes that as of *August 14, 2025,* the stockholders' equity of the Company exceeds $2.5 million.

<u>***Reverse stock split***</u>

On *August 1, 2025,* the Company filed a Certificate of Amendment to its Second Amended and Restated Certificate of Incorporation with the Secretary of State of the State of Delaware to effect a *one*-for-*two hundred fifty* (*1*-for-250) reverse stock split of its common stock, par value $0.001 per share (the "Reverse Stock Split").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *49*

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; BOLLINGER INNOVATIONS, INC.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Previously, at the Special Meeting of Stockholders held on *July 22, 2025,* the Company's stockholders approved a proposal to authorize a reverse stock split of the Common Stock at a ratio within the range of *1*-for-2 to *1*-for-250, as determined by the Board of Directors of the Company. The Reverse Stock Split became effective on *August 4, 2025* at *12:01* am Eastern Time (the "Effective Time"). As a result of the Reverse Stock Split, at the Effective Time, every 250 shares of the Company's pre-Reverse Stock Split Common Stock combined and automatically became *one* share of Common Stock. The Company's Common Stock began trading on a split-adjusted basis when the Nasdaq Stock Market opened for trading on *August 4, 2025.* After the Effective Time, the number of outstanding shares of Common Stock of the Company was reduced from 433,528,681 to 1,735,225.

Also, at the Effective Time, the number of shares of Common Stock issuable upon conversion or exercise of notes, warrants, preferred stock, and other convertible securities, as well as any commitments to issue securities, that provide for adjustments in the event of a reverse stock split will be appropriately adjusted pursuant to their applicable terms for the Reverse Stock Split. If applicable, the conversion price for each outstanding note and for each outstanding share of preferred stock and the exercise price for each outstanding warrant will be increased, pursuant to their terms, in inverse proportion to the *1*-for-250 split ratio such that upon conversion or exercise, the aggregate conversion price for conversion of each note or preferred stock and the aggregate exercise price payable by the warrant holder to the Company for shares of Common Stock subject to such warrant will remain approximately the same as the aggregate conversion or exercise price, as applicable, prior to the Reverse Stock Split. Furthermore, pursuant to the terms of the Company's *2022* Equity Incentive Plan, as amended, shares of Common Stock reserved and available for issuance are *not* subject to adjustment as a result of the Reverse Stock Split. However, outstanding options will be appropriately adjusted pursuant to their applicable terms for the Reverse Stock Split.

The Reverse Stock Split was applied retroactively in these consolidated financial statements (see *Note *1* - Description of business and basis of presentation*).

<u>***Name change of the Company***</u>

On *July 25, 2025,* Mullen Automotive Inc. filed a Certificate of Amendment to its Second Amended and Restated Certificate of Incorporation, as amended, with the Secretary of State of the State of Delaware to change its name to Bollinger Innovations, Inc. The Name Change and Amendment became effective on *July 28, 2025,* at *12:01* a.m. Eastern Time. In connection with the Name Change, effective as of market open on *July 28, 2025,* the Company's common stock, par value $0.001 per share began trading under the Company's new ticker symbol "BINI" on The Nasdaq Capital Market. The CUSIP of the Common Stock did *not* change in connection with the ticker symbol change.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *50*

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; BOLLINGER INNOVATIONS, INC.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

**Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.** 

*The following discussion and analysis are intended to help the reader understand the Company*'*s results of operations and financial condition. You should read the following discussion and analysis of our financial condition and results of operations together with our audited financial statements and related notes included elsewhere in this Report.* 

**Cautionary Note Regarding Forward-Looking Statements**

This Report includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). These forward-looking statements can be identified by the use of forward-looking terminology, including the words "believes," "estimates," "anticipates," "expects," "intends," "plans," "may," "will," "potential," "projects," "predicts," "continue" or "should," or, in each case, their negative or other variations or comparable terminology. There can be no assurance that actual results will not materially differ from expectations. The forward-looking statements contained in this Report are based on our current expectations and beliefs concerning future developments and their potential effects on us. Future developments affecting us may not be those that we have anticipated. These forward-looking statements involve a number of risks, uncertainties (some of which are beyond our control) and other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements. These risks and uncertainties include, but are not limited to: significant losses we have incurred since inception, and we expect to continue to incur for the foreseeable future; our ability to raise the substantial additional financing needed to execute our business plan on acceptable terms, or at all, which failure to do so could force us to delay, limit, reduce or terminate our production operations; our ability to continue as a going concern; our ability to maintain compliance with the continued listing requirements of the Nasdaq Capital Market; reliance on OEMs, suppliers and service providers for parts and components; the potential for our vehicles to fail to perform as expected; risks and uncertainties related to litigation, regulatory actions and government investigations and inquiries; changes in laws and regulations (domestically or internationally) that may materially adversely affect our business, prospects financial condition and operating results; and other risks and uncertainties described under the section titled "Risk Factors" herein and in our Annual Report on Form 10-K for the fiscal year ended September 30, 2024 (the "2024 Annual Report"), which was filed with the Securities and Exchange Commission on January 24, 2025. Should one or more of these risks or uncertainties materialize, or should any of our assumptions prove incorrect, actual results may vary in material respects from those projected in these forward-looking statements. We undertake no obligation (and expressly disclaim any obligation) to update or revise any forward-looking statements, whether as a result of new information, future events or other reasons, except as may be required under applicable securities laws. These risks and other factors described in this Report and 2024 Annual Report under the section titled "Risk Factors" may not be exhaustive. By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. We caution you that forward-looking statements are not guarantees of future performance and that the actual developments in the industry in which we operate and our actual results of operations, financial condition and liquidity may differ materially from those made in or suggested by the forward-looking statements contained in this Report. In addition, even if the actual developments in the industry in which we operate and our actual results of operations, financial condition liquidity are consistent with the forward-looking statements contained in this Report, those results or developments may not be indicative of results or developments in subsequent periods.

**Basis of Presentation**

These interim condensed consolidated financial statements include the accounts of the Company, its wholly owned subsidiaries Ottava Automotive, Inc., a California corporation, Mullen Indiana Real Estate, LLC, a Delaware limited liability company, Mullen Investment Properties, LLC, a Mississippi limited liability company, Mullen Advanced Energy Operations, LLC, a California limited liability company and its majority-owned subsidiary 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 the Company, which have been prepared in accordance with U.S. GAAP.

**Components of Results of Operations**

We are an early-stage company, and our historical results may not be indicative of our future results for reasons that may be difficult to anticipate. Accordingly, the drivers of our future financial results, as well as the components of such results, may not be comparable to our historical or projected results of operations.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 45

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***<u>Comparison of the</u> <u>Three Months Ended June 30, 2025</u> <u>to the</u> <u>Three Months Ended June 30, 2024</u>***

The following table sets forth our historical operating results for the periods indicated:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Three Months Ended** | **Three Months Ended** |  |  |
|  | **June 30,** | **June 30,** |  |  |
|  | **2025** | **2024** | **$ Change** | **% Change** |
|  | (dollar amounts, except percentages) | (dollar amounts, except percentages) | (dollar amounts, except percentages) | (dollar amounts, except percentages) |
| Revenue from sale of vehicles | $473686 | $65235 | $408451 | 626% |
| Cost of revenues | 10565994 | 36008 | 10529986 | (29243)% |
| **Gross loss** | **(10092308)** | **29227** | **(10121535)** | **(34631)%** |
| **Operating expenses:** |  |  |  |  |
| General and administrative | 36173327 | 47477377 | (11304050) | 24% |
| Research and development | 11587940 | 14292744 | (2704804) | 19% |
| Impairment of intangible assets | 326173 |  | 326173 | —% |
| Impairment of right-of-use assets |  | 30060 | (30060) | 100% |
| Impairment of goodwill |  |  |  | —% |
| **Loss from operations** | $**(58179748)** | $**(61770954)** | $**3591206** | **6%** |
| **Other income (expense):** |  |  |  |  |
| Other financing costs - initial recognition of warrants | (33181991) | (17914480) | (15267511) | (85)% |
| Gain/(loss) on warrants and derivative liability revaluation | (4829873) | 2301086 | (7130959) | (310)% |
| Gain on settlement | 3761955 |  | 3761955 | —% |
| Loss on settlement (GEM case) | (14261736) |  | (14261736) | —% |
| Gain/(loss) on extinguishment of debt | 250000 | (690346) | 940346 | 136% |
| Loss on disposal of fixed assets |  | (103973) | 103973 | 100% |
| Interest expense | (25663583) | (8277802) | (17385781) | (210)% |
| Other financing costs - ELOC commitment fee |  | (6000000) | 6000000 | 100% |
| Other income, net | 337152 | 829056 | (491904) | (59)% |
| Total other income (expense) | (73588076) | (29856459) | (43731617) | (146)% |
| **Net loss before income tax benefit** | $**(131767824)** | $**(91627413)** | $**(40140411)** | **(44)%** |
| Income tax benefit/ (provision) | (600) | (1200) | 600 | 50% |
| **Net loss** | **(131768424)** | **(91628613)** | **(40139811)** | **(44)%** |
| Net loss attributable to noncontrolling interest | (2043608) | (4267796) | 2224188 | 52% |
| **Net loss attributable to stockholders** | $**(129724816)** | $**(87360817)** | $**(42363999)** | **(48)%** |
| Waived/(accrued) accumulated preferred dividends and other capital transactions with preferred stockholders | (98767) | (8627095) | 8528328 | 99% |
| **Net loss attributable to common stockholders after preferred dividends and other capital transactions with preferred stockholders** | $**(129823583)** | $**(95987912)** | $**(33835671)** | **(35)%** |
| Net Loss per Share (\*) | (11231.39) | (95987912) |  |  |
| Weighted average shares outstanding, basic and diluted (\*) | 11559 | 1 |  |  |

---

(\*) Adjusted retroactively for reverse stock splits, see *Note 1 - Description of business and basis of presentation*

***Revenues***

We recognize revenue from the sale of electric vehicles upon the transfer of control to the dealer/customer. Normally, control transfers at the point of delivery when the dealer/customer has possession of the vehicle and bears the risks and rewards of ownership. However, a contract with one of our dealers includes a return provision, allowing unsold vehicles to be returned after one year, and contracts with a few other dealers include provisions allowing unsold vehicles to be returned upon contract termination. For these arrangements, due to limited historical data on returns, we defer revenue recognition until the dealer sells the vehicles to end customers or until there is sufficient evidence to reasonably estimate the consideration to which we expect to be entitled.

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***Cost of Revenues***

The costs of revenues primarily include vehicle components and parts, labor costs, and other relevant costs and expenses applicable to sales and revenues. The cost of revenues exceeds revenue mainly due to recognition of indirect manufacturing expenses in periods when production was temporarily suspended, labor and overhead variances to standard cost, as well as due to write-down of certain raw materials to net realizable value.

***Research and Development***

Research and development expenses decreased by $2.7 million, or 19%, from $14.3 million through the three months ended June 30, 2024, to $11.6 million through the three months ended June 30, 2025. Research and development expenses are primarily comprised of external fees and internal costs for engineering, homologation, prototyping and other expenses related to preparation for the production of electric vehicles and batteries. The Company recently began cost reduction initiatives, thereby reducing research and development expenses in order to continue as a going concern.

***General and Administrative***

General and administrative expenses include all non-production expenses incurred in a given period. This includes professional fees, salaries, rent, repairs and maintenance, utilities and office expenses, employee benefits, depreciation and amortization, advertising and marketing, settlements and penalties, taxes, licenses and other expenses. We expense advertising costs as incurred. General and administrative expenses decreased by approximately $11.3 million, or 24%, from approximately $47.5 million in the three months ended June 30, 2024, to approximately $36.2 million in the three months ended June 30, 2025, primarily due to decrease of settlements and penalties, advertising and promotions and compensation to employees.

***Other Gains and Losses***

The Company recognized other financing costs on initial recognition of warrants during the three months ended June 30, 2025 in the amount of $33.2 million due to higher value of notes with detached warrants issued during the three months ended June 30, 2025 (versus $17.9 million during the three months ended June 30, 2024). Net loss on revaluation of warrants obligations was $4.8 million during the three months ended June 30, 2025, in comparison to $2.3 million gain during the three months ended June 30, 2024.

The interest expense (mainly amortization of original issue discount (see *Notes 7 - Debt* to the financial statements) increased by $17.4 million in comparison to the three months ended June 30, 2024, due to a higher volume of debt outstanding during the three months ended June 30, 2025.

The "Loss on settlement (GEM case)" in the amount of $14.3 million represents excess of carrying values of transferred fixed assets over liabilities to GEM during settlement in May 2025 (see *Note 19 - Contingencies and claims* for further details).

***Net Loss***

The net loss attributable to common stockholders (after preferred dividends) was $129.8 million, or $11,231.39 net loss per share, for the three months ended June 30, 2025, as compared to a net loss attributable to common stockholders after preferred dividends of approximately $96.0 million, or $95,987,912 loss per share, for the three months ended June 30, 2024 (giving effect to reverse stock splits, see *Note 1 - Description of business and basis of presentation* to the financial statements).

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***<u>Comparison of the</u> <u>Nine Months Ended June 30, 2025</u><u>, to the</u> <u>Nine Months Ended June 30, 2024</u>***

The following table sets forth our historical operating results for the periods indicated:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Nine Months Ended** | **Nine Months Ended** |  |  |
|  | **June 30,** | **June 30,** |  |  |
|  | **2025** | **2024** | **$ Change** | **% Change** |
|  | (dollar amounts, except percentages) | (dollar amounts, except percentages) | (dollar amounts, except percentages) | (dollar amounts, except percentages) |
| Vehicle sales | $8344311 | $98570 | $8245741 | 8365% |
| Cost of revenues | 24151863 | 49448 | 24102415 | (48743)% |
| **Gross loss** | **(15807552)** | **49122** | **(15856674)** | **(32280)%** |
| **Operating expenses:** |  |  |  |  |
| General and administrative | 114030172 | 138615121 | (24584949) | 18% |
| Research and development | 33234428 | 54486237 | (21251809) | 39% |
| Impairment of intangible assets | 12332625 | 73447067 | (61114442) | 83% |
| Impairment of right-of-use assets |  | 3197668 | (3197668) | 100% |
| Impairment of goodwill |  | 28846832 | (28846832) | 100% |
| **Loss from operations** | $**(175404777)** | $**(298543803)** | $**123139026** | **41%** |
| **Other income (expense):** |  |  |  |  |
| Other financing costs - initial recognition of warrants | (70366183) | (17914480) | (52451703) | (293)% |
| Gain/(loss) on warrants and derivative liability revaluation | 58787404 | (805137) | 59592541 | 7402% |
| Loss on exchange of warrants | (57770454) |  | (57770454) | —% |
| Gain on settlement | 3761955 |  | 3761955 | —% |
| Loss on settlement (GEM case) | (14261736) |  | (14261736) | —% |
| Gain/(loss) on extinguishment of debt | 1803771 | (655721) | 2459492 | 375% |
| Loss on disposal of fixed assets |  | (477838) | 477838 | 100% |
| Interest expense | (51855494) | (8795525) | (43059969) | (490)% |
| Other financing costs - ELOC commitment fee |  | (6000000) | 6000000 | 100% |
| Other income, net | 860131 | 2318164 | (1458033) | (63)% |
| **Total other income (expense)** | **(129040606)** | **(32330537)** | **(96710069)** | **(299)%** |
| **Net loss before income tax benefit** | $**(304445383)** | $**(330874340)** | $**26428957** | **8%** |
| Income tax benefit/ (provision) | (1800) | 3890100 | (3891900) | (100)% |
| **Net loss** | **(304447183)** | **(326984240)** | **22537057** | **7%** |
| Net loss attributable to noncontrolling interest | (12757919) | (45796565) | 33038646 | 72% |
| **Net loss attributable to stockholders** | $**(291689264)** | $**(281187675)** | $**(10501589)** | **(4)%** |
| Waived/(accrued) accumulated preferred dividends and other capital transactions with preferred stockholders | (148805) | (8670441) | 8521636 | 98% |
| **Net loss attributable to common stockholders after preferred dividends** | $**(291838069)** | $**(289858116)** | $**(1979953)** | **(1)%** |
| Net Loss per Share (\*) | (74887.88) | (289858116) |  |  |
| Weighted average shares outstanding, basic and diluted (\*) | 3897 | 1 |  |  |

---

(\*) Adjusted retroactively for reverse stock splits, see *Note 1 - Description of business and basis of presentation*

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***Revenues***

We recognize revenue from the sale of electric vehicles upon the transfer of control to the dealer/customer. Normally, control transfers at the point of delivery when the dealer/customer has possession of the vehicle and bears the risks and rewards of ownership. However, a contract with one of our dealers includes a return provision, allowing unsold vehicles to be returned after one year, and contracts with a few other dealers include provisions allowing unsold vehicles to be returned upon contract termination. For these arrangements, due to limited historical data on returns, we defer revenue recognition until the dealer sells the vehicles to end customers or until there is sufficient evidence to reasonably estimate the consideration to which we expect to be entitled. In January 2025, one of the customers waived their right of return for 60 vehicles (Bollinger Commercial segment), and the Company recognized revenue in amount of $3.7 million.

***Cost of Revenues***

The costs of revenues primarily include vehicle components and parts, labor costs, and other relevant costs and expenses applicable to sales and revenues. The cost of revenues exceeds revenue mainly due to recognition of indirect manufacturing expenses in periods when production was temporarily suspended, labor and overhead variances to standard cost, as well as due to write-down of certain raw materials to net realizable value.

***Research and Development***

Research and development expenses decreased by $21.3 million, or 39%, from $54.5 million through the nine months ended June 30, 2024, to $33.2 million through the nine months ended June 30, 2025. Research and development expenses are primarily comprised of external fees and internal costs for engineering, homologation, prototyping and other expenses related to preparation for the production of electric vehicles and batteries. The Company recently began cost reduction initiatives, thereby reducing research and development expenses in order to continue as a going concern.

***General and Administrative***

General and administrative expenses include all non-production expenses incurred in a given period. This includes professional fees, salaries, rent, repairs and maintenance, utilities and office expenses, employee benefits, depreciation and amortization, advertising and marketing, settlements and penalties, taxes, licenses and other expenses. We expense advertising costs as incurred. General and administrative expenses decreased by approximately $24.6 million, or 18%, from approximately $138.6 million in the nine months ended June 30, 2024, to approximately $114.0 million in the nine months ended June 30, 2025, primarily due to reduction in employee related compensation due to reduction in force, decrease of settlements and penalties, promotion costs, etc.

***Impairment***

Due to unfavorable market conditions and decline of market prices of the Company's common stock, we test noncurrent assets for recoverability. For the nine months ended June 30, 2025, impairment of intangible assets amounted to $12.3 million (Bollinger Motors segment). During the nine months ended June 30, 2024, impairment of the intangible assets was $73.5 million (mainly Bollinger Motors segment, and $15.1 million recognized by Bollinger Commercial segment). In addition, impairment of goodwill amounted to $28.9 million (carrying value of goodwill was zero as of both June 30, 2025, and September 30, 2024). The impairment was recognized in the financial statements mainly due to the uncertainty of future fundings required to support the business and decrease of Company's market capitalization.

***Other Gains and Losses***

The Company recognized other financing costs on initial recognition of warrants during the nine months ended June 30, 2025, in the amount of $70.4 million (versus $17.9 million during the nine months ended June 30, 2024) due to additional notes with warrants issued during the nine months ended June 30, 2025.

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Net gain on revaluation of warrants obligations was $58.8 million during the nine months ended June 30, 2025, versus a $0.8 million loss during the nine months ended June 30, 2024. During the nine months ended June 30, 2025, pursuant to the Warrant Exchange Agreement, the Company and certain investors agreed to exchange warrants to fix the conversion floor at $0.01 (not subject to reverse stock splits), which increased the fair value of warrants (calculated as number of shares issuable upon cashless exercise) and corresponding loss in amount of approximately $57.8 million as presented in the line item "Loss on exchange of warrants" of the consolidated statement of operations. For further details on accounting for warrants, see *Note 8 - Warrants and other derivative liabilities and fair value measurements* to the financial statements.

Similarly, the interest expense (mainly amortization of original issue discount (see *Note 7 - Debt* to the financial statements) increased by $43.1 million in comparison to the nine months ended June 30, 2024, due to a significantly higher volume of debt outstanding during the nine months ended June 30, 2025, (see *Note 7 - Debt* to the financial statements).

The "Loss on settlement (GEM case)" in the amount of $14.3 million represents excess of carrying values of transferred fixed assets over liabilities to GEM during settlement in May 2025 (see *Note 19 - Contingencies and claims* for further details).

***Net Loss***

The net loss attributable to common stockholders (after preferred dividends) was $291.8 million, or $74,887.88 net loss per share, for the nine months ended June 30, 2025, as compared to a net loss attributable to common stockholders after preferred dividends of approximately $289.9 million, or $289,858,116 loss per share, for the nine months ended June 30, 2024 (giving effect to reverse stock splits, see below).

**Operating Segments**

The Company is currently comprised of two major operating segments:

● Bollinger Motors. The Company acquired the controlling interest of Bollinger Motors Inc., in September 2022 and increased the ownership to more than 95% in May 2025. This acquisition positioned the Company into the medium duty truck classes 4-6, along with the Sport Utility and Pick Up Trucks EV segments. The first Bollinger vehicles were sold in September 2024.

● Bollinger Commercial. In November 2022, the Company acquired from ELMS a manufacturing plant and all the intellectual property needed to engineer and build Class 1 and Class 3 electric vehicles. The first vehicles were produced in Tunica, Mississippi and delivered to customers during the 12 months ended September 30, 2023.

See *Note 4 - Segment information* for the main financial information pertaining to the segments.

**Reverse Stock Splits and Nasdaq Listing Rules Compliance**

Our common stock is listed on the Nasdaq Capital Market. To maintain that listing, we must satisfy minimum financial and other requirements including, without limitation, a requirement that our closing bid price be at least $1.00 per share.

On June 2, 2025, the Company effected 1-for-100 reverse stock split of its common stock, and on August 4, 2025, the Company effected a 1-for-250 reverse stock split, as further described in *Note 20 - Subsequent events*, which were applied retroactively to these consolidated financial statements.

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In addition to the reverse stock splits referred to above, the Company previously effected a 1-for-25 reverse stock split on May 4, 2023, a 1-for-9 reverse stock split on August 11, 2023, a 1-for-100 reverse stock split on December 21, 2023, 1-for-100 reverse stock split on September 17, 2024, 1-for-60 reverse stock split on February 18, 2025, and 1-for-100 reverse stock split on April 11, 2025. The Company retroactively adjusted its historical financial statements to reflect the reverse stock splits.

The reverse stock splits did not change the authorized number of shares or the par value of the common stock nor did it modify any voting rights of the common stock. No fractional shares were issued in connection with the reverse stock splits and each fractional share resulting from the reverse stock splits was rounded up to the next whole share.

**Liquidity and Capital Resources**

We have only recently started to generate significant revenue from our business operations. To date, we have funded our capital expenditure and working capital requirements primarily by selling debt and equity securities, as further discussed below. Our ability to successfully expand our business will depend on many factors, including our working capital needs, the availability of equity or debt financing, and, over time, our ability to generate cash flows from operations.

The Company's principal source of liquidity consists of existing cash and restricted cash of approximately $0.9 million as of June 30, 2025. During the nine months ended June 30, 2025, the Company used approximately $69.4 million of cash for operating activities. The net working capital deficit on June 30, 2025 amounted to approximately $144.1 million, or $41.6 million after excluding derivative and other warrant liabilities and liabilities to issue stock, that are supposed to be settled by issuing common stock without using cash. For the nine months ended June 30, 2025, the Company incurred a net loss of $304.4 million, and as of June 30, 2025, our accumulated deficit was approximately $2.6 billion.

The Company believes that its available liquidity will not be sufficient to meet its current obligations for a period of at least twelve months from the date of the filing of these unaudited interim condensed consolidated financial statements. Accordingly, the Company has concluded there is substantial doubt about its ability to continue as a going concern. During the nine months ended June 30, 2025, the Company made the decision to temporarily shut down key production facilities due to short-term liquidity constraints. This action directly impacts our ability to produce vehicles. Should this shutdown continue, our cash flows from operating activities are expected to be further negatively impacted, which would further worsen the Company's cash position. Management is pursuing several strategies to address liquidity concerns, including equity or debt financing and cost reduction and operational restructuring. Despite these efforts, there is no assurance that these initiatives will be successful. Without additional funding, the Company may be unable to continue operations and could be required to seek bankruptcy protection within 30 days of the issuance of these financial statements.

These unaudited interim condensed consolidated financial statements do not include any adjustments to the carrying amounts of assets or liabilities that may result from the outcome of these uncertainties.

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***Increase in equity after the balance sheet date***

Subsequent to the balance sheet date, the Company and certain investors entered the following agreements with respect to outstanding notes and warrants (as described in the *Note 20* – *Subsequent events* in further detail). On July 29, 2025, the Company and investors exchanged all then-outstanding warrants (with a carrying amount of approximately $114 million) for newly designated shares of Series G Preferred stock, and secured senior convertible notes with a principal and accumulated interest in amount of approximately $25 million for newly designated shares of Series F Preferred stock. Additionally, on August 14, 2025, the Company and investors exchanged all then-outstanding warrants (with a carrying amount of approximately $5 million) for shares of Series G Preferred stock, and secured senior convertible notes with a principal and accumulated interest in amount of approximately $5 million for shares of Series F Preferred stock. On August 14, 2025, the Company and investors also agreed to amend the conversion floors in the cashless exercise formulas of the warrants issuable upon future possible exercise of additional investment rights from $0.01 to $0.07. If the price of shares of common stock decrease to or below $0.07, the Company agreed to reduce the floor of the cashless exercise formula to $0.01 and seek stockholder approval.

As a result of these transactions, the Company believes that as of August 14, 2025, the stockholders' equity of the Company exceeds $2.5 million.

***Debt***

To date, our current working capital and development needs have been primarily funded through the issuance of convertible indebtedness, warrants, convertible preferred stock and common stock. During the nine months ended June 30, 2025, we issued Senior secured convertible notes with an aggregate principal of approximately $68 million, bearing 15% interest (20% after default), and warrants with terms further described in *Note 7 - Debt* and *Note 8 - Warrants and other derivative liabilities and fair value measurements* to the condensed consolidated financial statements. Furthermore, in October 2024, the Company received $1 million proceeds in accordance with the equity line of credit (see further in *Note 9 - Stockholder's equity*).

Also, in October 2024, Bollinger Motors, Inc., a majority-owned subsidiary of the Company, received a $10 million long-term loan, providing additional capital to support the production and sale of Bollinger's Class 4 EV truck, the Bollinger B4. After a lawsuit from the lender upon alleged default on one of the interest payments, the note was fully repaid by the Company in May 2025 (see *Note 7 - Debt* for details).

During the nine months ended June 30, 2025, Senior secured convertible notes with a principal of approximately $26 million, as well as relevant accumulated interest with a carrying amount of approximately $1.5 million, were converted into shares of common stock. Also, the Company reached an agreement with holders of matured notes and loan advances in amount of $2.7 million, as well as accumulated interest in amount of approximately $1.8 million, that the liabilities would be settled pursuant to Section 3(a)(9) of the Securities Act by issuance of shares of common stock of the Company worth $3 million. The liability was fully settled by December 2024, and the transaction resulted in recognition of gain on extinguishment of $1.5 million.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The following is a summary of our indebtedness as of June 30, 2025 and of transactions during the nine months ended June 30, 2025:

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Changes in debt during the 9 months ended June 30, 2025** | **Matured loans and advances** | **Bollinger Motors loan** | **Senior Secured Convertible Notes** | **Senior Secured Convertible Notes** | **Total** |
| Principal as of October 1, 2024 | $2717804 |  | $| 20346283 | $23064087 |
| Original issue discount as of October 1, 2024 |  |  |  | (17664310) | (17664310) |
| **Carrying amount as of October 1, 2024** | **2717804** | **—** |  | **2681973** | **5399777** |
| Notes issued, principal |  | 11250000 |  | 67978891 | 79228891 |
| Original issue discount and debt issuance costs at inception |  |  |  | (67978891) | (67978891) |
| Amortization of original issue discount and debt issuance costs |  |  |  | 31375670 | 31375670 |
| Principal paid in cash |  | (11000000) |  |  | (11000000) |
| Principal converted to shares of common stock | (2717804) |  |  | (26051600) | (28769404) |
| Original issue discount related to the principal converted |  |  |  | 16064397 | 16064397 |
| Principal extinguished |  | (250000) |  |  | (250000) |
| Principal as of June 30, 2025 |  |  |  | 62273574 | 62273574 |
| Original issue discount as of June 30, 2025 |  |  |  | (38203134) | (38203134) |
| **Carrying amount as of June 30, 2025** |  |  | $| **24070440** | $**24070440** |
| Including presented as current liability |  |  |  | 24070440 | 24070440 |
| Including presented as noncurrent liability |  |  |  |  |  |
| Fair value - amount |  |  | $| 48445067 | $48445067 |
| Fair value - leveling |  |  | Level 3 | Level 3 |  |
| Contractual interest rate (default rate) |  |  | 20% (cross-default) | 20% (cross-default) |  |
| Maturity |  |  | Due (cross-default) | Due (cross-default) |  |

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***Cash Flows***

The following table provides a summary of our cash flow data for the nine months ended June 30, 2025 and 2024:

---

| | | |
|:---|:---|:---|
|  | **Nine Months Ended June 30,** | **Nine Months Ended June 30,** |
| **Net cash provided by (used in):** | **2025** | **2024** |
| Operating activities | $(69407762) | $(145182897) |
| Investing activities | (4239551) | (14053838) |
| Financing activities | 63750360 | 7504168 |

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*<u>Cash flows used in operating activities</u>*

Our cash flow used in operating activities to date has been primarily comprised of costs related to research and development, payroll and other general and administrative activities. Net cash used in operating activities was $69.4 million in the nine months ended June 30, 2025, a 52% decrease from $145.2 million net cash used during the nine months ended June 30, 2024.

*<u>Cash flows used in investing activities</u>*

During the nine months ended June 30, 2025 and 2024, our cash flows used in investing activities have been comprised mainly of equipment purchases. Net cash used in investing activities was $4.2 million in the nine months ended June 30, 2025, a 70% decrease from $14.1 million used in investing activities during the nine months ended June 30, 2024.

*<u>Cash flows provided by financing activities</u>*

Through June 30, 2025, we have financed our operations primarily through the issuance of convertible notes and warrants, as well as by receiving a long-term loan for production of Bollinger Motors vehicles (for further details, see section "Debt" above). Net cash provided by financing activities was $63.8 million for the nine months ended June 30, 2025, as compared to $7.5 million net cash spent on financing activities for the nine months ended June 30, 2024.

***Contractual Obligations and Commitments***

The following tables summarize our contractual obligations and other commitments for cash expenditures as of June 30, 2025, and the years in which these obligations are due:

*Operating lease commitments*

---

| | |
|:---|:---|
|  | **Scheduled** |
| **Years Ended September 30,** | **Payments** |
| 2025 (3 months) | $1432935 |
| 2026 | 5006078 |
| 2027 | 4958062 |
| 2028 | 4758748 |
| 2029 | 1286244 |
| Thereafter | 4487146 |
| **Total Future Minimum Lease Payments** | $**21929213** |

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*Scheduled debt maturities*

The following are scheduled debt maturities as of June 30, 2025 (see also section "Debt" above):

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **Year Ended September 30,** | **Year Ended September 30,** | **Year Ended September 30,** | **Year Ended September 30,** | **Year Ended September 30,** | **Year Ended September 30,** |
|  | **2025 (3 months)** | **2026** | **2027** | **2028** | **2029** | **Total** |
| **Total Debt due (excluding debt discount)** | $62273574 | $— | $— | $— | $— | $**62273574** |

---

**Off-Balance Sheet Arrangements**

We are not a party to any off-balance sheet arrangements, as defined under SEC rules.

**Critical Accounting Policies and Estimates**

Our financial statements have been prepared by U.S. GAAP. In the preparation of these financial statements, our management is required to use judgment in making estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities as of the date of the financial statements, as well as the reported expenses incurred during the reporting periods. Management considers an accounting judgment, estimate, or assumption to be critical when (1) the estimate or assumption is complex in nature or requires a high degree of judgment and (2) the use of different judgments, estimates, and assumptions could have a material impact on the consolidated financial statements. Our significant accounting policies are described in *Note 3 – Summary of significant accounting policies* to the condensed consolidated financial statements.

In preparation of these financial statements, management applied critical estimates and assumptions while performing impairment tests for long-lived assets and while determining net realizable value of inventory.

*Impairment tests for other long-lived assets*

We identified Bollinger Motors and Bollinger Commercial (refer to *Note 4 - Segment information*) as our reporting units for the purposes of assessing impairments.

We review our noncurrent asset groups for impairment whenever events or changes in circumstances indicate that the carrying amount of such asset groups may not be recoverable. Such conditions could include significant adverse changes in the business climate, current period operating or cash flow losses, significant declines in forecasted operations or a current expectation that an asset group will be disposed of before the end of its useful life. The recoverability of noncurrent asset groups to be held and used is measured by a comparison of the carrying amount of the asset group to future undiscounted net cash flows expected to be generated by the asset group. If an asset group is considered to be impaired, the impairment is recognized in the amount by which the carrying amount of the asset group exceeds the fair value of the asset group.

Due to a prolonged decrease in our market capitalization, including a significant decline in stock price and budgeted performance targets not achieved as compared to acquisition date budgets, we assessed noncurrent assets for impairment. As a result of impairment tests performed by management during the nine months ended June 30, 2025, the Company recognized impairment loss in the amount of $12.3 million in respect of patents (Bollinger Motors segment). No impairment in respect of other noncurrent assets was recognized, primarily because of significant impairment that reduced the carrying amount of long-lived assets in previous periods.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Estimating the fair value of the reporting units and certain assets requires us to make assumptions and estimates regarding our future plans, as well as industry, economic, and regulatory conditions. These assumptions and estimates include estimated future annual net cash flows, income tax considerations, discount rates, long-term growth rates, contributory asset charges, and other market factors. Assumptions used in impairment assessments are made at a point in time. Therefore, they are subject to change based on the facts and circumstances present at each annual and interim impairment assessment date. Fair value determinations require significant judgment and are sensitive to changes in underlying assumptions, estimates, and market factors.

*Net realizable value of inventory*

In accordance with applicable accounting standards, we value inventory at the lower of cost or net realizable value. Our assessment of net realizable value is a critical accounting estimate due to the inherent market volatility, evolving technology and competitive landscape of the EV industry.

The net realizable value of inventory is determined based on the estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation. In determining net realizable value, we consider several factors, including:

● Market Demand and Pricing Trends – The EV industry is highly competitive, with frequent price adjustments based on consumer demand, regulatory incentives, and competitor pricing strategies.

● Technological Obsolescence – As battery and vehicle technology evolves, older inventory may require discounting or write-downs to remain competitive.

● Production Costs and Cost Absorption – Given supply chain fluctuations and raw material pricing (e.g., lithium, nickel, and other battery components), production costs may exceed expected selling prices.

● Other Factors – Changes in government incentives, infrastructure development and interest rates may affect consumer adoption and, consequently, inventory valuation.

As a result of the tests performed by management during the three and nine months ended June 30, 2025, the write-down to net realizable value in amount of $8.9 million and $9.7 million, respectively (whereas $6 million was recorded by the Bollinger Commercial segment, and remaining part - by the Bollinger segment). These adjustments were recorded as a component of cost of goods sold.

The net realizable value assessment considered the current expected selling prices of Mullen One, Mullen Three, and Bollinger B4 vehicles, based on recent sales and current market demand, as well as expected additional costs required to sell the vehicles. Should actual sales prices or demand decline, or selling costs increase, additional write-downs may be required in future periods. Additionally, if the Company is unable to secure sufficient funding to continue operations as planned, inventory may need to be sold at further discounted prices, which could negatively impact future financial results.

**Recent Accounting Pronouncements**

Accounting standard updates issued but not yet effective were assessed and determined to be either not applicable or not expected to have a material impact on our interim condensed consolidated financial statements.

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**Item 3. Quantitative and Qualitative Disclosures about Market Risk**

Not Applicable.

**Item 4. Controls and Procedures**

**Evaluation of Disclosure Controls and Procedures**

As of June 30, 2025, being the end of the period covered by this Quarterly Report, our management conducted an evaluation, under the supervision and with the participation of our chief executive officer and chief financial officer, of the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) and Rule 15d15(e) under the Exchange Act).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Disclosure controls and procedures are designed to provide reasonable assurance that information required to be disclosed in our reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the periods specified in the SEC's rules and forms, and that such information is accumulated and communicated to our management, including our chief executive officer and chief financial officer, as appropriate, to allow for timely decisions regarding required disclosure.

Based on that evaluation, our chief executive officer and chief financial officer concluded that, as of June 30, 2025, our disclosure controls and procedures were not effective due to the material weaknesses in our internal control over financial reporting as discussed in Item 9A. Controls and Procedures – in the Company's 2024 Annual Report, under the heading "Management's Annual Report on Internal Control Over Financial Reporting".

**Limitations on Effectiveness of Controls and Procedures**

In designing and evaluating our disclosure controls and processes, as well as internal control over financial reporting, we recognize that any controls and procedures, no matter how well designed and implemented, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of controls and procedures must reflect the fact that there are resource constraints, and management must apply its judgment in evaluating the benefits of possible controls and procedures relative to their costs.

**Changes in Internal Control Over Financial Reporting**

There were no changes in our internal control over financial reporting that occurred during the quarter ended June 30, 2025, that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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**PART II. OTHER INFORMATION**

**Item 1. Legal Proceedings**

Material pending legal proceedings, other than ordinary routine litigation incidental to the business, to which the Company or any of its subsidiaries is a party or of which any of their property is the subject are described in *Note 19 - Contingencies and claims* of the notes to the consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q and incorporated herein by reference.

**Item 1A. Risk Factors**

Risk factors are discussed in Part I, Item 1A. "*Risk Factors*" in our 2024 Annual Report, and could materially affect our business, financial condition or future results of operation. Except as set forth below, there have been no material changes or additions to our risk factors discussed in our 2024 Annual Report which could materially affect our business, financial condition or future results of operations. The risk factors set forth below should be read together with the risk factors discussed in Part I, Item 1A. "Risk Factors" in our 2024 Annual Report.

***We may not be able to maintain compliance with the continued listing requirements of the Nasdaq Capital Market.***

To maintain listing on the Nasdaq Capital Market, we must satisfy minimum financial and other requirements including, without limitation, a requirement that our closing bid price be at least $1.00 per share. Plus, if a company's security has a closing bid price of $0.10 or less for 10 consecutive trading days, the Listing Qualifications department (the "Staff") of The Nasdaq Stock Market LLC ("Nasdaq") will issue a delisting determination. Since 2023, we have experienced periods during which our Common Stock has traded below $1.00.

During 2023 and 2024, we received formal notices from the Nasdaq Staff that, based upon the closing bid price for our Common Stock, for the previous 30-consecutive business day period, the Company no longer satisfied the minimum bid price requirement for continued listing on The Nasdaq Capital Market, as set forth in Nasdaq Listing Rule 5550(a)(2) (the "Bid Price Rule"). Since May 2023, the Company has effected the following eight reverse stock splits in order to maintain or regain compliance with the Bid Price Rule: a 1-for-250 reverse stock split on August 4, 2025, a 1-for-100 reverse stock split on June 2, 2025; a 1-for-100 reverse stock split on April 11, 2025; a 1-for-60 reverse stock split on February 18, 2025; a 1-for-100 reverse stock split on September 17, 2024; a 1-for-25 reverse stock split on May 4, 2023; a 1-for-9 reverse stock split on August 11, 2023 and a 1-for-100 reverse stock split on December 21, 2023. Plus, if needed, the Company may effectuate additional reverse stock splits.

Nasdaq Listing Rule 5810(c)(3)(A)(iv) states that if any listed company fails to meet the Bid Price Rule after effecting one or more reverse stock splits over the prior two-year period with a cumulative ratio of 250 shares or more to one, then the company is not eligible for a Bid Price Rule compliance period. On September 16, 2024, in connection with a notice that the Company no longer satisfied the Bid Price Rule, the Staff further indicated that, based upon the Company's implementation of one or more reverse stock splits within the past two years at a cumulative ratio of 250 shares or more to one in contravention of Nasdaq Listing Rule 5810(c)(3)(A)(iv). On September 17, 2024, the Company implemented a 1-for-100 reverse stock split, and on October 16, 2024, the Company announced that it had received formal notice from Nasdaq confirming the Company had regained compliance with the Bid Price Rule.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; While Nasdaq rules do not impose a specific limit on the number of times a listed company may effect a reverse stock split to maintain or regain compliance with the Bid Price Rule, Nasdaq has stated that a series of reverse stock splits may undermine investor confidence in securities listed on Nasdaq. Accordingly, if in the future the Company is not in compliance with the Bid Price Rule and effectuates another reverse stock split, Nasdaq may determine that it is not in the public interest to maintain our listing, even if we regain compliance with the Bid Price Rule.

On January 15, 2025, the Company received an expected notice from the Staff stating that the Company was no longer in compliance with Nasdaq Listing Rule 5250(c)(1), which requires listed companies to timely file all required periodic financial reports with the SEC, because the Company had not yet filed its Annual Report on Form 10-K for the fiscal year ended September 30, 2024. The Company filed Form 10-K on January 24, 2025.

In addition, on February 25, 2025, we received a written notice from the Staff notifying us that for the last 30 consecutive business days prior to the date of the notice, our Market Value of Listed Securities ("MVLS") was less than the $35.0 million minimum required for continued listing on The Nasdaq Capital Market, as required by Nasdaq Listing Rule 5550(b)(2) (the "MVLS Listing Rule"). Additionally, as of the date of the notice, we also did not meet either of the alternative Nasdaq continued listing standards under the Nasdaq Listing Rules: stockholders' equity of at least $2.5 million or net income of $500,000 from continuing operations in the most recently completed fiscal year or in two of the three most recently completed fiscal years. The Company has until August 25, 2025 to regain compliance with the MVLS Listing Rule. In order to regain compliance with the MVLS Listing Rule, the Company's MVLS must meet or exceed $35.0 million for a minimum of ten consecutive business days during the 180-day compliance period after which the Staff will provide us written confirmation of compliance and the matter will be closed. In the event we do not regain compliance with the MVLS Listing Rule, the Staff will provide notice that our securities will be subject to delisting, at which time, we may appeal the delisting determination to a Nasdaq hearings panel. There can be no assurance that we will regain compliance with the MVLS Listing Rule or otherwise maintain compliance with any of the other Nasdaq listing requirements.

If our common stock ceases to be listed for trading on the Nasdaq Capital Market, we would expect that our common stock would be traded on one of the three tiered marketplaces of the OTC Markets Group (the "OTC Mkts"). If Nasdaq were to delist our common stock, it would be more difficult for our stockholders to dispose of our Common Stock and more difficult to obtain accurate price quotations on our Common Stock. Our ability to issue additional securities for financing or other purposes, or otherwise to arrange for any financing we may need in the future, may also be materially and adversely affected if our common stock or warrants are not listed on a national securities exchange. The OTC Markets are generally regarded as a less efficient trading market than The Nasdaq Capital Market or Global Market or the New York Stock Exchange.

Although the OTC Mkts do not have any listing requirements, to be eligible for quotation on the OTC Mkts, issuers must remain current in their filings with the SEC or applicable regulatory authority. If we are not able to pay the expenses associated with our reporting obligations, we will not be able to apply for quotation on the OTC Board. Market makers are not permitted to begin quotation of a security whose issuer does not meet this filing requirement. If we are delisted to the OTC Mkts and no market is ever developed for our Common Stock or warrants, it will be difficult for you to sell any shares you purchase in this offering. In such a case, you may find that you are unable to achieve any benefit from your investment or liquidate your shares without considerable delay, if at all.

***During the past two years, the Company has effected several reverse stock splits and may effect additional reverse stock splits in the future, which may decrease the liquidity of the shares of our common stock and may have a dilutive effect on the ownership of existing stockholders.***

Since May 2023, the Company has effected the following eight reverse stock splits in order to maintain or regain compliance with the Bid Price Rule: a 1-for-250 reverse stock split on August 4, 2025; a 1-for-100 reverse stock split on June 2, 2025; a 1-for-100 reverse stock split on April 11, 2025; a 1-for-60 reverse stock split on February 18, 2025; a 1-for-100 reverse stock split on September 17, 2024; a 1-for-25 reverse stock split on May 4, 2023; a 1-for-9 reverse stock split on August 11, 2023 and a 1-for-100 reverse stock split on December 21, 2023. Plus, if needed, the Company may effectuate additional reverse stock splits. The primary purpose for a future reverse stock split, should the Company choose to effect it, would be to increase the per share market price of its Common Stock to satisfy the Bid Price Rule and maintain listing The Nasdaq Capital Market.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The liquidity of the shares of our Common Stock may be affected adversely by a reverse stock split given the reduced number of shares that will be outstanding following the reverse stock split, especially if the market price of our Common Stock does not increase as a result of the reverse stock split. In addition, a reverse stock split may increase the number of shareholders who own odd lots (less than 100 shares) of our Common Stock, creating the potential for such shareholders to experience an increase in the cost of selling their shares and greater difficulty effecting such sales.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; While we expect that the reduction in the number of outstanding shares of Common Stock will proportionally increase the market price of our Common Stock, we cannot assure you that a reverse stock split will increase the market price of our Common Stock by a multiple of the reverse stock split ratio, or result in any permanent or sustained increase in the market price of our Common Stock. The market price of our Common Stock will continue to be based, in part, on our performance and other factors unrelated to the number of shares outstanding. A reverse stock split will reduce the number of outstanding shares of our Common Stock without reducing the number of shares of available but unissued Common Stock, which will also have the effect of increasing the number of shares of Common Stock available for issuance. The issuance of additional shares of our Common Stock may have a dilutive effect on the ownership of existing stockholders. The current economic environment in which we operate, the debt we carry, along with otherwise volatile equity market conditions, could limit our ability to raise new equity capital in the future.

In addition, a reverse stock split will reduce the total number of outstanding shares of Common Stock, which may lead to reduced trading and a smaller number of market makers for our Common Stock, particularly if the price per share of our Common Stock does not increase as a result of a reverse stock split.

***If we are unable to successfully transition our manufacturing operations to our Tunica, Mississippi, facility, our production schedules and operating results could be adversely affected.***

If we are unable to successfully transition manufacturing operations for Bollinger Motors from our third-party outsourced manufacturer in Michigan to our Tunica, Mississippi, facility, we may not achieve desired efficiencies, and our ability to deliver products to our customers could be disrupted. We are relocating machinery, equipment, and inventory from our Michigan-based outsourced manufacturing partner to our commercial manufacturing center in Tunica, Mississippi. Bollinger Commercial products are already set up for production but are currently idle. This transition involves complex logistics, installation, and integration of manufacturing processes into the Tunica facility. If we encounter unforeseen challenges such as equipment installation delays, production ramp-up issues, or unexpected costs, our manufacturing timelines and operating results could be adversely affected.

**Item 2. Unregistered Sales of Equity Securities and Use of Proceeds** 

None.

**Item 3. Defaults Upon Senior Securities**

All outstanding Senior convertible notes and relevant accumulated interest are technically in cross-default due to the non-payment of a portion of one of the loans that matured, therefore the interest rate increased from 15% to 20%. As of the date these financial statements were available to be issued, none of the investors have demanded immediate payment of the notes and outstanding interest in cash.

**Item 4. Mine Safety Disclosures**

Not Applicable.

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**Item *5.* Other Information**

***Director and Officer Trading Arrangements***

None of the Company's directors or executive officers adopted, modified or terminated a Rule *10b5*-*1* trading arrangement or a non-Rule *10b5*-*1* trading arrangement during the Company's quarter ended *June 30, 2025.*

***Exchange of Warrants and Convertible Notes***

On *August 14, 2025,* the Company entered into an Amendment and Exchange Agreement (the "***August 2025* Exchange Agreement**") with certain investors (each individually an "**Investor**" and collectively, the "**Investors**"), pursuant to which the Company agreed to exchange (i) certain outstanding senior secured convertible notes with an aggregate principal and accrued interest of approximately *$5* million (the "***August 2025* Exchange Notes**") for the issuance of approximately *4,730* shares of Series F Preferred Stock, par value *$0.001* per share ("**Series F Preferred Stock**") and (ii) warrants issued during *August 2025 (*the "***August 2025* Exchange Warrants**") for the issuance of approximately *6,362* shares of Series G Preferred Stock, par value *$0.001* per share ("**Series G Preferred Stock**," and together with the Series F Preferred Stock, the "**Preferred Stock**"), previously issued pursuant to the Securities Purchase Agreements, as *may* have been amended from time to time, dated *May 14, 2024, January 23, 2025* and *March 6, 2025.* Upon closing of the transactions contemplated by the *August 2025* Exchange Agreement, the *August 2025* Exchange Notes and *August 2025* Exchange Warrants were cancelled and the Investors relinquished all rights, title and interest in such securities.

The *August 2025* Exchange Agreement includes certain covenants, including, among others, that (i) the Company will use commercially reasonable efforts to maintain the listing of its common stock on a stock exchange, (ii) while Preferred Stock remains outstanding, (A) during a certain *90* day period, the Company will *not,* with certain exceptions, offer or issue any equity or related securities, and (B) the Company will *not,* without approval from the Investors holding a majority of the outstanding Preferred Stock, issue any equity security having a preference over or party with the Preferred Stock with respect to dividends, liquidation or redemption or having a preference over the common stock with respect to dividends, liquidation or redemption, and the Company and its subsidiaries will *not* incur any indebtedness. The Company also agreed *not* to enter into any fundamental transaction, such as a merger, sale of more than *50%* of the outstanding voting shares, sale of substantially all assets, or business combination, unless such transaction complies with the terms of the Series F Preferred Stock Certificate of Designations and the Series G Certificate of Designations, as amended. The *August 2025* Exchange Agreement contains customary representations and warranties between the Company and the Investors.

If, upon conversion of the Preferred Stock, the Company fails to timely issue the shares of common stock, then, at the sole discretion of the Investor, the Company will pay in cash to such Investor on each trading day after the delivery date an amount equal to *1%* of the product of the number of shares of common stock *not* so delivered multiplied by the closing sale price of the common stock on the trading day immediately preceding such delivery date.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The issuance of shares of Series F Preferred Stock and Series G Preferred Stock pursuant to the *August 2025* Exchange Agreement, and the common stock issuable upon conversion thereof, was made in reliance on the exemption from registration provided by Section *3*(a)(*9*) of the Securities Act because it involves an exchange with the Company's exchange security holders exclusively where *no* commission or other remuneration is paid or given directly or indirectly for soliciting such exchange and Rule *506*(b) Regulation D ("Regulation D") as promulgated by the SEC, because, among other things, the transaction did *not* involve a public offering and the investors represented that they are accredited investors.

***Amendment to Series F Preferred Stock and Series G Preferred Stock Certificates of Designations***

On *August 14, 2025,* the Company filed Certificates of Amendment with the Delaware Secretary of State (each a "**Certificate of Amendment**" and together, the "**Certificates of Amendment**") to each of the Series F Preferred Stock Certificate of Designations (the "**Series F Certificate of Designations**") and the Series G Preferred Stock Certificate of Designations (the "**Series G Certificate of Designations**" and together with the Series F Certificate of Designations, the "**Certificates of Designations**"), which were originally filed with the Delaware Secretary of State on *July 29, 2025.* The Certificates of Amendment became effective upon filing.

The Certificate of Amendment to the Series F Certificate of Designations increased the number of authorized shares of Series F Preferred Stock from *25,600* to *30,335* and revised the definition of "Exchange Agreement" to include both the Exchange Agreement and the *August 2025* Exchange Agreement. The Certificate of Amendment to the Series G Preferred Stock Certificate of Designations increased the number of authorized shares of Series G Preferred Stock from *110,000* to *116,365* and revised the definition of "Exchange Agreement" to include the *August 2025* Exchange Agreement. *No* other changes were made to the Certificates of Designations,

***Amendments to Securities Purchase Agreements***

On *August 14, 2025,* the Company and the investors thereto entered into an amendment (the "**SPA Amendment**") that amended each of the Securities Purchase Agreements, dated *May 14, 2024, January 23, 2025, February 5, 2025, March 6, 2025, May 16, 2025* and *May 29, 2025 (*the "**Securities Purchase Agreements**"), the terms of which were previously reported in the Company's Form *10*-Q filed on *May 14, 2024,* and the Current Reports on Form *8*-K as filed with the SEC on each of *January 27, 2025, February 11, 2025, March 7, 2025, May 22, 2025* and *June 3, 2025.* Pursuant to the SPA Amendment, the cashless exercise formula of the Additional Warrants (as defined in the Securities Purchase Agreements) issued pursuant to the Additional Purchases (as defined in the Securities Purchase Agreements) was amended in that the floor in the formula was changed from *$0.01* to *$0.07* per share that is *not* subject to adjustment for stock dividends, subdivisions, or combinations. The SPA Amendment also provides that in the event that the Company's stock price falls at or below *$0.07* per share, then the Company will be required to hold a meeting of stockholders to approve a reduced floor price of *$0.01* for the Additional Warrants and to increase the authorized number of shares to facilitate the cashless exercise of the Additional Warrants at the floor of *$0.01,* if necessary. All other terms and conditions of the Securities Purchase Agreements remain unchanged and in full force and effect.

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**Item 6. Exhibits** 

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| | |
|:---|:---|
| **Exhibit No.** | **Description** |
| 3.1 | [Certificate of Amendment to the Second Amended and Restated Certificate of Incorporation filed on April 10, 2025 (incorporated by reference to Exhibit 3.1 to the Company's Current Report on Form 8-K, filed with the SEC on April 11, 2025)](http://www.sec.gov/Archives/edgar/data/1499961/000182912625002594/mullenautomotive_ex3-1.htm) |
| 3.2 | [Certificate of Amendment to the Second Amended and Restated Certificate of Incorporation filed on May 30, 2025 (incorporated by reference to Exhibit 3.1 to the Company's Current Report on Form 8-K, filed with the SEC on June 2, 2025)](http://www.sec.gov/Archives/edgar/data/1499961/000182912625004146/mullenautomotive_ex3-1.htm) |
| 4.1 | [Second Amendment, dated April 29, 2025, to Rights Agreement, dated as of May 1, 2024, by and between the Company and Continental Stock Transfer & Trust Company, as rights agent (incorporated by reference to Exhibit 4.1 to the Company's Current Report on Form 8-K, filed with the SEC on May 2, 2025)](http://www.sec.gov/Archives/edgar/data/1499961/000182912625003333/mullenautomotive_ex4-1.htm) |
| 10.1 | [Securities Purchase Agreement dated May 16, 2025 (incorporated by reference to Exhibit 10.2 to the Company's Current Report on Form 8-K, filed with the SEC on May 22, 2025)](http://www.sec.gov/Archives/edgar/data/1499961/000182912625003900/mullenautomotive_ex10-2.htm) |
| 10.1(a) | [Form of Convertible Note (incorporated by reference to Exhibit 10.2(a) to the Company's Current Report on Form 8-K, filed with the SEC on May 22, 2025)](http://www.sec.gov/Archives/edgar/data/1499961/000182912625003900/mullenautomotive_ex10-2a.htm) |
| 10.1(b) | [Form of Warrant (incorporated by reference to Exhibit 10.2(b) to the Company's Current Report on Form 8-K, filed with the SEC on May 22, 2025)](http://www.sec.gov/Archives/edgar/data/1499961/000182912625003900/mullenautomotive_ex10-2b.htm) |
| 10.1(c) | [Registration Rights Agreement, dated May 16, 2025 (incorporated by reference to Exhibit 10.2(c) to the Company's Current Report on Form 8-K, filed with the SEC on May 22, 2025)](http://www.sec.gov/Archives/edgar/data/1499961/000182912625003900/mullenautomotive_ex10-2c.htm) |
| 10.2# | [Amendment to 2022 Equity Incentive Plan, dated May 21, 2025 – Share Increase Amendment (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K, filed with the SEC on May 22, 2025)](http://www.sec.gov/Archives/edgar/data/1499961/000182912625003900/mullenautomotive_ex10-1.htm) |
| 10.3 | [Securities Purchase Agreement dated May 29, 2025 ($11M SPA) (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K, filed with the SEC on June 4, 2025)](http://www.sec.gov/Archives/edgar/data/1499961/000182912625004199/mullenautomotive_ex10-1.htm) |
| 10.3(a) | [Form of Convertible Note (incorporated by reference to Exhibit 10.1(a) to the Company's Current Report on Form 8-K, filed with the SEC on June 4, 2025)](http://www.sec.gov/Archives/edgar/data/1499961/000182912625004199/mullenautomotive_ex10-1a.htm) |
| 10.3(b) | [Form of Warrant (incorporated by reference to Exhibit 10.1(b) to the Company's Current Report on Form 8-K, filed with the SEC on June 4, 2025)](http://www.sec.gov/Archives/edgar/data/1499961/000182912625004199/mullenautomotive_ex10-1b.htm) |
| 10.3(c) | [Registration Rights Agreement, dated May 29, 2025 (incorporated by reference to Exhibit 10.1(c) to the Company's Current Report on Form 8-K, filed with the SEC on June 4, 2025)](http://www.sec.gov/Archives/edgar/data/1499961/000182912625004199/mullenautomotive_ex10-1c.htm) |
| 10.4 | [Securities Purchase Agreement, dated May 29, 2025 ($2.8M SPA) (incorporated by reference to Exhibit 10.2 to the Company's Current Report on Form 8-K, filed with the SEC on June 4, 2025)](http://www.sec.gov/Archives/edgar/data/1499961/000182912625004199/mullenautomotive_ex10-2.htm) |
| 10.4(a) | [Form of Convertible Note (incorporated by reference to Exhibit 10.2(a) to the Company's Current Report on Form 8-K, filed with the SEC on June 4, 2025)](http://www.sec.gov/Archives/edgar/data/1499961/000182912625004199/mullenautomotive_ex10-2a.htm) |
| 10.4(b) | [Form of Warrant (incorporated by reference to Exhibit 10.2(b) to the Company's Current Report on Form 8-K, filed with the SEC on June 4, 2025)](http://www.sec.gov/Archives/edgar/data/1499961/000182912625004199/mullenautomotive_ex10-2b.htm) |
| 10.4(c) | [Registration Rights Agreement, dated May 29, 2025 (incorporated by reference to Exhibit 10.2(c) to the Company's Current Report on Form 8-K, filed with the SEC on June 4, 2025)](http://www.sec.gov/Archives/edgar/data/1499961/000182912625004199/mullenautomotive_ex10-2c.htm) |
| 10.5\* | [Settlement Agreement and Release, dated May 9, 2025, between the Company, GEM Yield Bahamas Limited and GEM Global Yield LLC SCS.](ex_853813.htm) |
| 10.6\* | [Settlement and Release Agreement, dated May 28, 2025, between the Company, Robert Bollinger and the Receiver for Bollinger Motors, Inc.](ex_853814.htm) |
| 31.1\* | [Certification of Chief Executive Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) under the Securities Exchange Act of 1934](ex_853815.htm) |
| 31.2\* | [Certification of Chief Financial Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) under the Securities Exchange Act of 1934](ex_853816.htm) |
| 32.1\* | [Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. § 1350](ex_853817.htm) |
| 101.INS | Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document |
| 101.SCH | Inline XBRL Taxonomy Extension Schema Document |
| 101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document |
| 101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document |
| 101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document |
| 101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL and contained in Exhibit 101) |

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\* Filed herewith (furnished herewith with respect to Exhibit 32.1).

# Indicates management compensatory plan, contract or arrangement.

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**SIGNATURES**

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

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| | | |
|:---|:---|:---|
|  | Bollinger Innovations, Inc. | Bollinger Innovations, Inc. |
| August 15, 2025 | By: | /s/ David Michery |
|  |  | David Michery |
|  |  | Chief Executive Officer, President, and Chairman of the Board<br> *(Principal Executive Officer and duly authorized officer)* |
|  |  | /s/ Jonathan New |
|  |  | Jonathan New<br> Chief Financial Officer<br> *(Principal Financial Officer)* |

---

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## Exhibit 10.5

**Exhibit 10.5**

**UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK**

GEM YIELD BAHAMAS LIMITED and<br> GEM GLOBAL YIELD LLC SCS, Petitioners, vs. MULLEN TECHNOLOGIES, INC. and<br> MULLEN AUTOMOTIVE, INC., Respondents. Case No. 1:24-cv-01120-KPF

**<u>SETTLEMENT AGREEMENT AND RELEASE</u>**

This Settlement Agreement and Release ("Agreement") is made and entered into by and between GEM Yield Bahamas Limited and GEM Global Yield LLC SCS (together "GEM"), on the one hand, and Mullen Technologies, Inc. ("MTI") and Mullen Automotive, Inc. ("MAI") (together "Mullen") on the other hand. For ease of reference, GEM and Mullen collectively are referred to as the "Parties" and individually as a "Party." The "Effective Date" of this Agreement is the last Signature Date affixed hereto.

**<u>RECITALS</u>**

**WHEREAS**, on or about January 4, 2021, GEM and MTI entered into a Share Purchase Agreement ("SPA"), Registration Rights Agreement ("RRA") and a Warrant to Purchase Common Shares of MTI (the "Warrant") (collectively the "GEM Agreements");

**WHEREAS**, in May 2021, MTI and Mullen Auto, a subsidiary of MTI, entered into a Contribution and Spin-off Agreement, through which MTI transferred to Mullen Auto MTI's electric vehicle assets;

**WHEREAS**, in November 2021, Mullen Auto completed a reverse merger transaction (the "Reverse Merger") with Net Element, Inc. After the merger closed, the combined company maintained the name Mullen Automotive, Inc., and began trading on the Nasdaq Stock Market under the ticker symbol "MULN";

**WHEREAS**, in September 2021, GEM initiated an arbitration (the "Arbitration") against MTI for breach of the GEM Agreements by filing an Arbitration Demand and Statement to Claim with the American Arbitration Association ("AAA") and in January 2022, filed an Amended Statement of Claim, which added MAI as a party to the Arbitration;

**WHEREAS**, on December 28, 2023, Mullen initiated a related case, captioned *Mullen Technologies, Inc. and Mullen Automotive. Inc. v. GEM Yield Bahamas Limited and GEM Global Yield LLC SCS,* No. 23 Civ. 11268 (the "Rescission Action") seeking rescission of the Warrant;

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**WHEREAS**, on February 15, 2024, GEM initiated the above captioned action (the "Action") in the District Court for the Southern District of New York (the "Court") seeking to confirm the Interim Measures Award issued in Arbitration. The Rescission Action was designated as a related case, and both cases were assigned to the Honorable Katherine Polk Failla.

**WHEREAS**, on May 10, 2024, a Final Award (the "Final Award") was issued in the Arbitration awarding GEM $6,369,326.00 in Commitment Fee Breach Damages under the SPA, $20,383,301.00 in Warrant Breach Damages, legal fees in the amount of $3,522,954.45, legal costs of $272,550.86, and ordering the Parties to split the administration fees and expenses of the Arbitration;

**WHEREAS**, on July 10, 2024, Mullen filed a motion for summary judgment to vacate the awards;

**WHEREAS**, on August 7, 2024, GEM filed its response to Mullen's motion for summary judgment and cross moved for summary judgment to confirm the Partial and Final Awards;

**WHEREAS**, on February 6, 2025, the Court denied Mullen's motion for summary judgment and granted GEM's cross-motion for summary judgment confirming the Partial and Final Awards. The Court also awarded GEM post-award, prejudgment interest at an annual rate of nine percent (9%) and post-judgment interest at the statutory rate.

**WHEREAS**, on February 13, 2025, pursuant to the February 6, 2024 Order, the Court entered a judgment in GEM's favor against Mullen (the "Judgment") ordering Mullen to, by May 7, 2025, pay GEM $31,013,898.82 comprised of: (i) post-award, prejudgment interest on the original aggregate damages figure of $26,752,627.00 at a rate of nine percent (9%) per annum for the period from November 5, 2021, through May 23, 2024, (ii) post-award, prejudgment interest on the remaining balance of $19,752,627.00 at a rate of nine percent (9%) per annum for the period from May 24, 2024, through the date of entry of this Judgment, and(iii) the sum of $23,583,570.26, representing the outstanding balance of the Final Award before interest (collectively the "Total Judgment Amount"). The Court also ordered Mullen to pay GEM post-judgment interest on the Total Judgment Amount, at the statutory rate pursuant to 28 U.S.C. § 1961, from the date of the Judgment through date of satisfaction of the Judgment.

**WHEREAS**, on March 6, 2025, Mullen filed a notice of appeal to the United States Court of Appeal for the Second Circuit (the "Appeal") appealing the Court's order confirming the Partial and Final Awards and the Judgment.

**NOW**, **THEREFORE**, in consideration of the foregoing and of the covenants and agreements set forth herein and for other good and valuable consideration, the receipt, adequacy, and sufficiency of which are hereby acknowledged, and intending to be legally bound, the Parties hereby agree as follows:

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**<u>TERMS AND RELEASES</u>**

1. The above Recitals are hereby incorporated by reference within this Agreement.

2. <u>Settlement Consideration</u>. In consideration for GEM's Agreement not to seek enforcement of the Judgment in this Action and the Mutual Releases described in Section 13 of this Agreement, Mullen agrees to provide the following settlement consideration:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. <u>Transfer of Property</u>: Mullen shall cause Mullen Indiana Real Estate, LLC, a Delaware limited liability company ("Mullen Indiana") to transfer to GEM (or its nominee or designee), by special warranty deed (the "Deed") and Bill of Sale Assignment and Assumption (the "Bill of Sale"), full and complete ownership of and title to the Property (as hereinafter defined). The "Property" shall mean, collectively, (i) the Land (as hereinafter defined), (ii) the Appurtenances (as hereinafter defined), (iii) the Improvements (as hereinafter defined), (iv) the Personal Property (as hereinafter defined), and (v) the Intangible Property (as hereinafter defined). The "Land" shall mean the real property located at 12900 McKinley Highway, Mishawaka, IN 46545 and legally described on Exhibit A attached hereto and incorporated herein. The "Appurtenances" shall mean, as to the Land or the Improvements, all easements or licenses benefitting the Land or the Improvements; all streets, alleys and rights of way, open or proposed, in front of or adjoining or servicing all or any part of the Land or the Improvements; all strips and gores in front of or adjoining all or any part of the Land or the Improvements; all development rights, air rights, wind rights, water, water rights, riparian rights, and water stock relating to the Land or the Improvements; and all other rights, benefits, licenses, interests, privileges, easements, tenements and hereditaments appurtenant to the Land or the Improvements or used in connection with the beneficial use and enjoyment of the Land or the Improvements, including, but not limited to, the easements described on Exhibit A attached hereto. The "Improvements" shall mean all buildings and improvements, fixed infrastructure, structures, and fixtures located upon the Land. The "Personal Property" shall mean as to the Land and Improvements, tangible personal property owned by Mullen and/or Mullen Indiana and located on, and/or used in connection with, the Land and Improvements including all building materials, equipment, machinery and operational systems, supplies, hardware, carpeting and other inventory located on or in the Land or Improvements and maintained in connection with the ownership and operation thereof, but excluding, personal property explicitly set forth in Schedule A to this Agreement. Schedule A must be provided by Mullen and confirmed by the Parties prior to execution of this Agreement. Any ambiguities in Schedule A will be interpreted against Mullen and in favor of inclusion of the property in the transfer. "Intangible Property" shall mean, as to the Land, the Improvements and the Personal Property, all leases of any portion of the Land or Improvements, all service contracts, governmental permits, entitlements, licenses and approvals, warranties and guarantees received in connection with any work or services performed with respect thereto, or equipment installed therein, tenant lists, and telephone exchange numbers.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. <u>Lender Lien</u>: Beginning as of the Effective Date and continuing until the earlier of (i) six (6) months from the Effective Date or (ii) unless and until GEM terminates the settlement, Esousa Group Holdings LLC, a New York limited liability company ("Lender") hereby agrees, by acknowledgement in the attached joinder to this Agreement, that Lender shall not foreclose on its interest under that certain Fee and Leasehold Mortgage, Assignment of Leases and Rents, Security Agreement, and Fixture Filing dated August 12, 2024, and recorded with the St. Joseph County Recorder on August 14, 2024 as document number 2024-18726 (the "Mortgage"). On or before Closing, Mullen and Lender shall take all steps necessary to ensure that the Mortgage is released, and that the Property is conveyed, and the Ground Lease is assigned pursuant to this Agreement free and clear of the Mortgage. The Mortgage release (the "Lien Release") must be executed and provided to Escrow Agent within seven (7) days of the Effective Date to be held by Escrow Agent in accordance with paragraph 7(a) of this Agreement. Mullen further agrees not to place any new mortgage or encumbrance on the Property or Leasehold Estate unless or until this Agreement is terminated by GEM.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c. <u>Title Insurance</u>: On or before the date which Closing occurs (the "Transfer Date"), Mullen shall cause First American Title Insurance Company or another reputable national title insurance company approved by GEM (the "Title Company"), in GEM's sole and absolute discretion and expense, to issue a title insurance policy covering the Land and Improvements and the insurance portions of the Leasehold Estate. The title insurance policy, including any endorsements reasonably required by GEM, must be in a form and substance reasonably approved by GEM. This title insurance policy shall name GEM (or its nominee or designee) as the policyholder and beneficiary of the policy.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d. <u>Assignment of Ground Lease</u>: Mullen shall effectuate an assignment (the "Lease Assignment") of the Ground Lease (as defined in Exhibit A) and the leasehold estate created thereby, including, but not limited to any Appurtenances, Improvements, Personal Property, and Intangible Property, in each case as they relate to such leasehold estate (and the definitions therefor shall be deemed to be modified accordingly) (collectively, the "Leasehold Estate") from Mullen Indiana Real Estate, LLC to GEM (or its nominee or designee) and request the consent of the St. Joseph County, Indiana, Department of Redevelopment, acting by and through the St. Joseph County Redevelopment Commission (the "Ground Lessor") to such assignment to the extent required by the Ground Lessor, and deliver an estoppel certificate substantially in the form found at Exhibit B, prior to the Transfer Date, executed by the Ground Lessor confirming, among other things, that the Ground Lease remains in full force and effect and there exist no defaults thereunder, and that any rents have been fully paid through the Transfer Date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;e. <u>Payment of Property Taxes</u>: Mullen shall pay any 2024 property taxes currently due or owed on the Property on the Effective Date, estimated to be $7,805.62, and any 2025 taxes that accrue with respect to the Property and Leasehold Estate prior to the Transfer Date if such transfer occurs prior to November 10, 2025. GEM will be responsible for the payment of any property tax obligations accruing, and attributable to the Property and Leasehold Estate for the period from and after November 10, 2025, but in no event will GEM be responsible for any such payments if this Agreement is terminated. The obligations set forth in this Section 2(e) shall survive the termination of this Agreement indefinitely.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;f. <u>Transfer Taxes</u>: Mullen will pay any and all transfer, documentary, sales use, stamp, registration, value and other such taxes and fees (including any penalties and interest) imposed in connection with each of the transfer of the Property and the Assignment of Ground Lease, if any.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;g. <u>Successor Liability</u>: Mullen will pay all tax liabilities determined to be due pursuant to any applicable state tax bulk sales laws, if any, as a result of this Agreement, if any.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;h. <u>Tax Recapture</u>: Mullen will pay all tax liabilities associated with any provision of law requiring tax or tax benefit (for example, and not by way of limitation, tax exemptions, tax credits, or tax abatements) recapture, rollback, claw-back, or any similar provision of law, if any, that accrue prior to the Transfer Date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;i. <u>Environmental Reports</u>: On or prior to the date of this Agreement, Mullen has delivered to GEM the existing Phase I Environmental Site Assessment and Limited Environmental Compliance Review dated March 2017, prepared by Ramboll Environ as Project No. 21-42938A (the "Environmental Report") of the Land. In addition, Mullen shall reasonably cooperate with GEM for GEM to obtain at GEM's sole cost and expense a current Phase I environmental report ("New Phase I"), and if recommended by a New Phase I and desired by GEM, at its sole cost and expense, Mullen shall reasonably cooperate with GEM in connection with GEM obtaining a Phase II environmental report in form and substance approved by GEM in its sole and absolute discretion. If any environmental risks and/or violations are reflected in the New Phase I or any Phase II environmental reports conducted at the request of GEM, GEM reserves the right, in its sole discretion, to require Mullen to request a "No Further Action Letter" from the Indiana Department of Environmental Management or other regulatory and/or enforcement body ("NFR").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;j. <u>Filings</u>: Mullen will cooperate with GEM in the preparation and filing of any materials necessary to effectuate transfer of the Property.

3. <u>Escrow Agreement</u>: Mullen and GEM agree to execute the Escrow Agreement attached hereto as Exhibit C, subject only to such changes thereto as may be required by Title Company. Mullen and GEM shall execute the Escrow Agreement within two (2) business days of execution of the Escrow Agreement by the Title Company.

4. <u>GEM Legal Fees</u>: Mullen agrees to reimburse GEM for all attorneys' fees incurred and paid by GEM in connection with negotiating, structuring, and preparing this Agreement, as well as all attorneys' fees incurred and paid by GEM in connection with effectuating the transfer of the Property and Assignment of Ground Lease as set forth in this Agreement, up to a total amount of $250,000. Mullen shall reimburse GEM for applicable fees within 30 days of receipt of invoice(s).

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5. <u>Due Diligence</u>: GEM is entitled to conduct whatever due diligence it deems appropriate concerning the Property and Leasehold Estate prior to transfer, and to terminate the settlement in its sole and absolute discretion based on the results of that due diligence. The Due Diligence Period shall commence upon the signing of this Settlement Agreement and shall conclude fifty-five (55) days thereafter (the "Due Diligence Period"). Such due diligence may include, without limitation, examination, review and inspection of all toxic, soils, engineering and environmental reports, all leases, license agreements and service contracts, surveys, sewer/water conditions, utilities service information, zoning information, access information, assessments and city fees, developmental conditions and approvals, operating expenses and legal, physical, environmental and compliance matters and conditions respecting the Property and Leasehold Estate. Mullen will provide all necessary and reasonable cooperation with GEM's review during the Due Diligence Period and shall deliver to GEM any material requested that is in Mullen's possession, custody, or control, within a prompt and commercially-reasonable time of such demand from GEM. The Due Diligence Period may be extended by GEM, in its sole and absolute discretion (the "Extended Due Diligence Period").

6. <u>Public Statement</u>: The Parties agree to issue a joint public statement within 3 business days following the Transfer Date (the "Joint Statement"), announcing the settlement and the discontinuation of the Action substantially in the form of the draft release attached hereto as Exhibit D. The substance and timing of the Joint Statement is a material inducement for GEM to enter into the settlement and a material term of this Agreement.

7. <u>Timing</u>: The Transfer Date shall be the earlier of (i) two (2) business days from the issuance of the Closing Notice by GEM to the Escrow Agent or (ii) five days after the expiration of the Due Diligence Period or Extended Due Diligence Period.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. Within seven (7) days of the Effective Date, the Deed, Bill of Sale, Title Affidavit(s), Lien Release, Lease Assignment, and any required transfer tax declaration forms (collectively the "Transfer Documents") must be executed and/or issued and placed into escrow with Title Company (the "Escrow Agent") by Mullen until the Transfer is effectuated and the settlement is effective. Mullen must also place any property or transfer taxes due and owing with respect to the Property and the Estoppel Certificate into escrow prior to the Transfer Date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. GEM in its sole and absolute discretion may terminate the Agreement at any time prior to the Transfer Date if any title defects, unresolved liens, tax delinquencies, defects, condition defects or material misrepresentations concerning the Property are identified through GEM's due diligence or otherwise.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c. Within 2 days of GEM's completion of due diligence to its satisfaction, placement of all Transfer Documents into escrow, and issuance of an acceptable Title Insurance Policy by the Escrow Agent, GEM will issue a closing notice (the "Closing Notice") indicating its approval to proceed with transfer of the Property and Ground Lease Assignment.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d. The settlement will become effective only upon GEM's acceptance of full and unconditional delivery of title and transfer documents, free and clear of all liens and encumbrances, the satisfaction of the other conditions set forth in Section 7(a) above, including but not limited to delivery of all documents and materials by the Escrow Agent pursuant to the Escrow Agreement (the "Closing").

8. <u>Representations</u>: Mullen represents that: (1) it is not aware of any existing violations of state or federal environmental regulations related to the Property or Leasehold Estate and/or any threatened or pending environmental enforcement actions with respect to the Property or Leasehold Estate; (2) it is not aware of any liens on the Property or Leasehold Estate aside from those released pursuant to Section 2(b) of the Agreement; (3) it is not aware of any pending or threatened legal actions related to the Property or Leasehold Estate; (4) there are no tenants, subtenants, licensees, or third parties in possession of or with rights to occupy any portion of the Property or Leasehold Estate; (5) there are no brokers or finders owed fees with respect to the Property or Leasehold Estate and/or the transfer of the Property or Leasehold Estate as part of this settlement; and (6) the Property and Improvements are, to Mullen's knowledge, in food operating condition and free from material defect. These representations are material inducements for GEM to enter into this settlement.

9. <u>Withdraw of Liens and Restraining Notices</u>: Within 3 business days of the Effective Date and in exchange for the Settlement Consideration and other conditions set forth in Section 2(b), above, GEM agrees to withdraw the retraining notices issued to Mullen on April 25, 2025 (the "Restraining Notices"). Within 3 business days of the Transfer Date GEM will withdraw any and all liens it has secured against Mullen property (the "GEM Liens") in connection with enforcement of the Judgment. Should the settlement terminate and/or otherwise not become effective, GEM expressly reserves the right to reissue the Restraining Notices.

10. <u>Bankruptcy or Non-Payment Contingency</u>. The Parties expressly agree and acknowledge that, to the fullest extent of the law, the liabilities owed to GEM by Mullen under this Agreement, the GEM Agreements, and the Judgment (the "Claim") shall: (i) constitute a valid, binding, enforceable, liquidated debt obligation of Mullen, and (ii) not be recharacterized, treated, or construed as an equity interest, contribution to capital, or as an equity investment in Mullen. The Parties further expressly agree and acknowledge that the transfer of the Property is in satisfaction of a final federal court judgment and irrevocable by Mullen, or its successors, following the Closing.

11. <u>Security Interest and Reinstatement of Judgment</u>. As security for the full and timely performance of all obligations under this Agreement (the "Obligations"), Mullen hereby grants a continuing security interest in, and lien on, all of Mullen's right, title, and interest in and to the following collateral (the "Collateral"): all accounts, receivables, contract rights, payment intangibles, and general intangibles; all cash, deposit accounts, securities accounts, and investment property; all equipment, inventory, goods, and fixtures; all documents, instruments, and chattel paper; all books, records, and supporting obligations related to any of the foregoing; and all proceeds and products of the foregoing, whether now owned or hereafter acquired. Mullen shall execute any documents, filings, or instruments reasonably requested by GEM to perfect, continue, or enforce its security interest, including the filing of UCC-1 financing statements. Upon either the termination of this Agreement or consummation of Closing contemplated by this Agreement, the rights of GEM to the Collateral shall immediately terminate and GEM shall withdraw and/or terminate any documents filed perfecting its interest in the Collateral.

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12. <u>Reinstatement of Judgment</u>. If Mullen fails to fully and timely perform any Obligations under this Agreement, or if this Agreement is otherwise voided, or if GEM (in its sole and absolute discretion) elects not to issue the Closing Notice, the Judgment Amount plus all accrued post-default interest, costs, fees, and penalties as provided herein, less any payments previously made under this Agreement shall be reinstated and be fully due. Upon such default, the security interest granted herein shall automatically extend to secure the full reinstated Judgment Amount, and GEM shall have all rights and remedies available under this Agreement, the Judgment, and applicable law, including but not limited to the rights of a secured party under the Uniform Commercial Code, subject to any applicable bankruptcy laws. Mullen expressly waives any defenses to such reinstatement and enforcement. Upon full satisfaction of all Obligations, GEM shall release its security interest and file any necessary terminations of financing statements.

13. <u>Release of All Claims</u>. For and in consideration of the releases and Settlement Consideration set forth in this Agreement, the Parties for themselves and each of their present and former parent companies, subsidiaries, affiliates, partners, officers, directors, managers, members, employees, contractors, owners, agents, representatives, guarantors, sureties, family members, spouses, attorneys, insurers, heirs, executors, administrators, predecessors, successors, assigns, and all those who claim through or under them or could claim through or under them. unconditionally and irrevocably **RELEASE**, **DISCHARGE**, **AND ACQUIT** each other from and against any and all claims, counterclaims, actions, defenses, causes of action, liens, costs, losses, controversies, agreements, promises and demands, or liabilities, of whatever kind or character, direct or indirect, known, arising at law or in equity, by right of action or otherwise, that the Parties have had or now have related to, or arising from, GEM Agreements, the Action, the Rescission Action, and the Appeal (the "Released Claims"). Excluded from the Released Claims are any claims for fraud and misrepresentation. Nothing herein shall be construed to prohibit or otherwise limit GEM from making or submitting any claims to any entity that has issued to Mullen a Directors and Officers (D&O) liability policy. The Parties expressly and knowingly waive and relinquish any and all rights that they have or might have relating to the Released Claims under California Civil Code§ 1542 (and under other statutes or common law principles of similar effect) which provides: "A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS THAT THE CREDITOR OR RELEASING PARTY DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE AND THAT, IF KNOWN BY HIM OR HER, WOULD HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR OR RELEASED PARTY." The Parties acknowledge they may hereafter discover facts different from, or in addition to, those which they now believe to be true with respect the Released Claims. The Parties agree that the foregoing release and waiver shall be and remain effective in all respects notwithstanding such different or additional facts or their discovery of those facts, and that this Agreement contemplates the extinguishment of all such Released Claims. By executing this Agreement, the Parties acknowledge: (i) they are represented by counsel, (ii) they have read and fully understand the provisions of California Civil Code § 1542, and (iii) they have been specifically advised by her/his counsel of the consequences of the above waiver and this Agreement generally.

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14. <u>Non-Disparagement</u>. At no time following the Effective Date shall either Party make any statements, written or oral, or take any other actions whatsoever, to disparage, defame, sully or compromise the goodwill, name, brand or reputation of either Party, as well as its management, employees, products and services through any form of communication, including but not limited to communication with the press, public, media, and communications posted on any publicly-accessible websites, social media platforms, message boards, group chats, public groups and forums; or (ii) commit any other action, or encourage others to commit any other action, that could likely injure, hinder or interfere with the business, business relationships, commercial interests or goodwill of the Parties, as well as its management, employees, products and services.

15. <u>Pending Litigation</u>. No later than 5 business days from the Effective Date, the parties will submit a joint letter to the Court in the Action notifying the Court of the fact of the settlement agreement. No later than May 31, 2025, Mullen will file a motion to hold in abeyance the Appeal. GEM agrees not to oppose this motion. Mullen will dismiss the Appeal within 3 business days of the Closing.

16. <u>Confidentiality</u>. Except for information contained in the Public Statement set forth in Section 6, above, this Agreement, its terms and conditions, the amount and form of the Settlement Consideration, any related negotiations between and among the Parties, and the facts and circumstances concerning the disputes between the Parties before the Effective Date ("Confidential Information") shall be kept strictly confidential and shall not be disclosed to any third parties, unless and to the extent: (i) required by law or by order of a court having authority to require disclosure, (ii) required in connection with any proceeding brought by any Party to enforce this Agreement, (iii) required by the Parties' employees, attorneys, financial advisors, accountants, insurers, auditors, and other professional advisors who have access to this type of information in order to perform their duties, provided that such persons are already bound by confidentiality obligations no less strict than those contained in this Agreement. Before complying with any request or order for the disclosure of the Confidential Information, the Parties shall, to the extent permitted by the applicable laws, each give reasonable notice to each other through their respective counsel.

In the event that either Party breaches Sections 14 and/or 16 of this Agreement, the Parties acknowledge that said breach shall cause serious and irreparable damage to the other Party will be entitled to both preliminary and permanent injunctive relief to restrain any continuing or future violations of Sections 14 and/or 16 based solely upon a showing of breach, and without any further requirement for the posting of a bond or showing of other equitable or legal factors. The Confidentiality provisions in Section 16 is a material inducement for GEM to enter into this Agreement. The Parties have agreed that, upon a showing of breach of Sections 14 and/or 16, the breaching Party will pay the non-breaching Party's attorneys' fees and costs incurred in enforcing the injunctive relief provisions referred to in this Section.

17. <u>Notices</u>. All notices required or allowed under this Agreement shall be deemed to have been effectively made on the date of email to the following:

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If to GEM, addressed to:<br>Frank Nolan<br> Eversheds Sutherland<br> 1114 Avenue of the Americas<br> New York, NY 10019, USA<br> 1.212.389.5083<br> frank.nolan@eversheds-sutherland.com

If to Mullen, addressed to:<br>David Momborquette<br> McDermott Will & Emery<br> One Vanderbilt Avenue<br> New York, NY 10017-3852, USA<br> 1.212.547.5490<br> dmomborquette@mwe.com

18. <u>Assurances</u>. Each Party agrees to take all reasonable steps necessary to effectuate the terms of this Agreement.

19. <u>Governing law and Dispute Resolution</u>. The Parties expressly agree that this Agreement shall be enforced and interpreted according to the laws of the State of New York. Any action or proceeding brought to enforce or interpret this Agreement or otherwise arising out this Agreement shall be brought in the U.S. District Court for the Southern District of New York. The Parties agree that the prevailing party in any action to enforce this Agreement shall be awarded its reasonable attorneys' fees and costs incurred in connection with such action.

20. <u>Interpretation of the Agreement</u>. This Agreement shall not be construed against any Party. The headings within this Agreement are for reference only and are not intended to modify the provisions following them or contained in any other provision of this Agreement.

21. <u>Severability</u>. If any provision of this Agreement is held invalid by a court, the Parties agree that such a determination will not affect other provisions of the Agreement. In such circumstances, the offending provision will be severed, and the remaining provisions will continue in full force.

22. <u>Counterparts</u>. This Agreement may be executed electronically in one or more counterparts, including through DocuSign or a similar electronic signing service. All such counterparts shall constitute one and the same agreement. The Parties expressly agree that any counterparts signed and delivered by email shall be deemed original documents and shall legally bind the Parties to the same extent as originals.

23. <u>Entire Agreement</u>. This Agreement constitutes the entire agreement between the Parties and fully supersedes any and all prior understandings, representations, warranties, oral or written statements between the Parties relating to the subject matter herein.

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24. <u>No Other Representations</u>. The Parties expressly and fully disclaim liability and responsibility for any alleged extra-contractual representation of any sort, whether oral or written, not expressly recited in this Agreement, and the Parties further stipulate that they have not relied on any such extra-contractual representation as inducement to enter this Agreement. Further, the consideration contained in this Agreement is the sole, complete, and entire consideration for the mutual releases. There is no other agreement, oral or written, express or implied, whereby any Party is to receive any further consideration relating to the matters contained herein.

25. <u>Amendments to the Agreement</u>. This Agreement may not be modified in any manner, nor may any rights provided for herein be waived, except in a written instrument signed by each and all Parties.

26. <u>Assignments</u>. Neither Party may assign this Agreement, in whole or in part, without the prior, written permission of the other Party. Any purported assignment in derogation of the foregoing shall be without any effect whatsoever.

27. <u>Negotiations</u>. The Parties acknowledge that they have read this Agreement in its entirety and understand its terms. The Parties represent that they have entered into this Agreement voluntarily, without duress, and with full knowledge of its legal significance.

28. <u>Authority</u>. The Parties affirm that they are fully capable of executing this Agreement and understand its contents. The Parties warrant that the persons executing this Agreement have the authority to sign this Agreement.

29. <u>Successors</u>. This Agreement shall inure to the benefit of the Parties' respective heirs, successors, and assigns.

30. <u>Attorneys</u><u>'</u> <u>Fees</u>. Except as provided by Sections 4 and 16, each of the Parties shall bear their own attorneys' fees, cost, and expenses in connection with this Agreement and in any dispute arising from or relating to this Agreement.

31. <u>Representation by Counsel</u>. The Parties represent and warrant that they were represented by legal counsel in connection with the execution of this Agreement, that they signed this Agreement of their own free will and without duress, that they had a reasonable amount of time to evaluate whether to execute the Agreement, and that they had an opportunity review and edit the Agreement. Because this Agreement was prepared through the joint efforts of all Parties, the Agreement will not be considered drafted by any particular Party and it will not be construed in favor of or against any particular Party.

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**IN WITNESS WHEREOF,** the Parties have caused this Agreement to be executed, effective as of the last Signature Date identified below.

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| | |
|:---|:---|
| **GEM YIELD BAHAMAS LIMITED and**<br> **GEM GLOBAL YIELD LLC SCS**<br>Signature: *<u>/s/ Chris Brown</u>*<u> </u><br>Name: Chris Brown<br>Signature Date: | **MULLEN TECHNOLOGIES INC. and**<br> **MULLEN AUTOMOTIVE INC.**<br>Signature: *<u>/s/ David Michery</u>* <u> </u><br>Name: David Michery<br>Signature Date: May 8, 2025 |

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**JOINDER BY LENDER**

The undersigned hereby acknowledges that it received this Settlement Agreement executed by Parties hereto as of the day and year first written above, and, solely as to Lender Lien as set forth in Section 2(b), affirms its obligations as Lender under this Agreement.

**ESOUSA GROUP HOLDINGS LLC**,<br> a New York limited liability company<br>By: *<u>/s/ Michael Wachs</u>*<u> </u><br> Name: Michael Wachs<br> Title: Managing Member

## Exhibit 10.6

**Exhibit 10.6**

**CONFIDENTIAL SETTLEMENT AND RELEASE AGREEMENT**

This Confidential Settlement and Release Agreement is made effective this 28th day of May, 2025 (the "Effective Date"), by and between Robert Bollinger, a Pennsylvania resident ("Lender"), Gene Kohut in his capacity as the Receiver for Bollinger Motors, Inc., a Delaware corporation with its principal place of business in Michigan ("Borrower"), and Mullen Automotive, Inc., a Delaware corporation with its principal place of business in California ("Mullen"), which is the largest shareholder of Bollinger Motors, Inc. Lender, Borrower, and Mullen are each a "Party", and collectively shall be referred to herein as the "Parties".

**<u>RECITALS</u>**

WHEREAS, on October 24, 2024, Lender lent $10,000,000 to Bollinger Motors, Inc. pursuant to an Amended and Restated Secured Promissory Note (the "Note");

WHEREAS, on March 5, 2025, Lender maintains that an Event of Default occurred under the terms of the Note for failing to make payment when due;

WHEREAS, Lender accelerated all amounts due under the Note due to the alleged Event of Default;

WHEREAS, on March 21, 2025, Lender initiated a lawsuit in the United States District Court for the Eastern District of Michigan against Bollinger Motors, Inc. for breach of the Note and seeking the appointment of a receiver over Bollinger Motors, Inc.'s assets, which was assigned case number 25-cv-10790 (the "Lawsuit");

WHEREAS, on May 7, 2025, the Court appointed the Receiver with full authority over Bollinger Motors, Inc. (the "Receiver");

WHEREAS, Lender has lent to Borrower an additional $1,000,000 pursuant to a Secured Promissory Note dated May 15, 2025 (the "Second Note");

WHEREAS, Borrower's largest shareholder, Mullen, has resolved the restraining orders against it in the lawsuit pending in the United States District Court for the Southern District of New York brought by GEM Yield Bahamas Limited, which the Court referenced as a ground warranting appointment of the Receiver;

WHEREAS, Mullen has agreed to repay Lender the principal amount owed under the Note and the Second Note;

WHEREAS, starting on May 26, 2025, Mullen commits to pay all the expenses of the Receiver, his counsel, and Bollinger Motors, Inc., including Borrower's payroll, to which Mullen and the Receiver may agree consistent with the Order Appointing Receiver entered in the Lawsuit;

WHEREAS, both Lender and Borrower believe that all intellectual property required for the production of Borrower's vehicles remain assets of Borrower; however, to the extent Lender holds or owns any intellectual property for the production of Borrower's vehicles, Lender agrees to transfer such intellectual property to Borrower, including the execution of any necessary documents; and neither Lender nor Borrower have taken any action to transfer any intellectual property of Borrower;

------

WHEREAS, the Parties desire to settle fully and finally all actual and potential claims, demands, causes of action and grievances, and all matters and claims known and unknown between them; and

WHEREAS, the Parties have agreed to resolve their disputes and now desire to formalize their settlement.

**<u>AGREEMENT</u>**

NOW, THEREFORE, pursuant to the foregoing recitals, in consideration of the mutual promises contained herein, and for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Parties, intending to be legally bound, hereby stipulate and agree as follows:

1. <u>Incorporation of Recitals</u>. The Recitals set forth above are incorporated herein and shall become part of this Agreement.

2. <u>Payment to Lender</u>. In consideration for entering into this Agreement, Mullen agrees to pay Lender Eleven Million Dollars ($11,000,000) (the "Settlement Amount") within twenty-four (24) hours of the dismissal of the Lawsuit and removal of the Receiver. Payment of the Settlement Amount shall be made via wire transfer in United States dollars. By the end of the day on May 29, 2025, the funds for the Settlement Amount will be delivered from Mullen's third-party funders to the trust account for its counsel, Dykema, and shall be held there until distributed to Lender. In the event, the Court does not enter an Order dismissing this Lawsuit and removing the Receiver, this Agreement shall be rendered void, and Dykema will return the funds to the third party funders, less any amounts due to the Receiver pursuant to Paragraph 3, which will be paid from Dykema to the Receiver. Payment of the Settlement Amount shall be deemed to be reimbursement of Lender's principal amounts due and owing under the Note and the Second Note, which were secured by property valued in excess of the Settlement Amount. Payment of the Settlement Amount shall also be deemed a purchase of shares under the Common Stock Purchase Agreement between Mullen and the Borrower, dated July 26, 2024.

3. <u>Mullen to Fund Borrower</u>. Starting on May 26, 2025, Mullen agrees to pay all the expenses of the Receiver, his counsel, and Bollinger Motors, Inc., including Borrower's payroll, to which Mullen and the Receiver may agree consistent with the Order Appointing Receiver entered in the Lawsuit. Mullen's obligations under this section of the Agreement shall continue until the Receiver is removed, or until the Court rules that it will not enter an Order dismissing this Lawsuit and removing the Receiver. Mullen agrees that the provisions of this section are material to Lender's entry into this Agreement. Mullen's failure to fund Borrower, without cure following three (3) days' prior written notice, shall render this Agreement void, and Dykema will return the funds to Mullen, less any amounts due under this Paragraph, which will be paid from Dykema to the Receiver. Mullen's payments pursuant to Paragraph 3 shall also be deemed a purchase of shares under the Common Stock Purchase Agreement between Mullen and the Borrower, dated July 26, 2024.

------

5. <u>Lender</u><u>'</u><u>s Assignment of Stock and Release of Rights Under Amended and Restated Stockholder</u><u>'</u><u>s Agreement</u>. Upon receipt of the Settlement Amount by Lender, Lender shall have been deemed to transfer to Mullen, for the amount of One Dollar ($1.00), which shall have been deemed to have been paid, all shares he owns in Bollinger Motors, Inc. Upon such transfer of shares from Lender to Mullen, Lender agrees that he shall not have any rights under Bollinger Motors, Inc.'s Amended and Restated Stockholders Agreement, including any right to appoint anyone to the Board of Directors of Bollinger Motors, Inc. or to receive any financial reporting regarding the condition of Bollinger Motors, Inc. Lender further agrees that all of his options to purchase shares of Bollinger Motors, Inc. shall be terminated.

6. <u>Lender</u><u>'</u><u>s Non-Competition with Bollinger Motors, Inc</u>. Lender agrees that he will not engage in any business or activity that directly competes with Bollinger Motors, Inc. or Mullen's business within Michigan for three years after execution of this Agreement. Lender further agrees that he will not interfere with or attempt to influence or direct the operations of Bollinger Motors, Inc. in any manner, including but not limited to soliciting its customers or contacting its employees for any reason related to its or Mullen's business.

------

9. <u>Revival of Liability</u>. If any payments or proceeds received by Lender under this Agreement are subsequently invalidated, declared to be fraudulent, voidable, or preferential, set aside, or required to be repaid to a trustee, to any obligor directly as a debtor-in-possession, to a receiver, or any other person, whether directly or indirectly, under any bankruptcy law, state or federal law, common law, or equitable cause, then Bollinger Motors, Inc.'s obligation to make all such payments under the Note and Second Note shall be revived and continue in full force and effect as if such payment or proceeds had never been received by Lender, and Lender may proceed with recording any security interests authorized by the Note or the Second Note.

10. <u>Assignment</u>. The Parties represent and warrant that, prior to the date hereof, no Party has assigned any claims or any other right of any type that would be the subject of the released claims under this Agreement but for such assignment.

11. <u>Discharge and Removal of Receiver; Dismissal of Lawsuit</u>. The Parties agree that, upon execution of this Agreement, Lender's counsel shall file with the Court the Stipulation for Discharge and Removal of Receiver and Dismissal of Case with Prejudice, attached hereto as **Exhibit A**. The Parties agree to cooperate to ensure the Stipulation for Discharge and Removal of Receiver and Dismissal of Case with Prejudice is approved by the Court.

12. <u>Authority to Execute this Agreement</u>. The Parties represent and warrant that they have read the Agreement and that each of the undersigned has full and complete authority to execute this Agreement. The Parties further represent and warrant that they have not sold, assigned, granted, or transferred to any other person, corporate or natural, any claim, demand, or cause of action encompassed by this Agreement.

13. <u>Entire Agreement</u>. This Agreement constitutes the entire agreement between the Parties, and all prior negotiations and agreements are merged herein. This Agreement shall be binding upon, and inure to the benefit of, the Parties and their heirs, successors, assigns, stockholders, officers, and directors. The provisions of this Agreement may be waived, modified, or amended only by the mutual written agreement of the Parties. The Parties further acknowledge that they are aware that they may hereafter discover facts related to this Agreement or the Lawsuit that are unknown, different from, or in addition to, the facts which they now know or believe to be true, but that it is their intention that this Agreement, including without limitation the releases and consideration given herein, shall remain enforceable and in full force and effect notwithstanding the discovery of any such unknown, different, or additional facts, and each of the Parties hereby waives any rights to rescind, revoke, or otherwise unwind this Agreement on that basis.

------

14. <u>Construction</u>. The Parties hereby agree that this Agreement was the result of arms-length negotiation between the Parties. Each and every provision of this Agreement shall be construed as though the Parties participated equally in the drafting of this Agreement, and any rule of construction that a document is to be construed against the drafting party shall not be applicable to this Agreement.

15. <u>No Waiver</u>. No delay or failure by any Party to exercise any right under this Agreement, and no partial single exercise of any right shall constitute a waiver of that or any other right, unless otherwise expressly provided herein.

16. <u>Severability</u>. If any term or provision of this Agreement shall be determined to be invalid, illegal, and/or otherwise unenforceable, such invalidity, illegality, or unenforceability shall not affect any other term or provision of this Agreement.

17. <u>Governing Law</u>. This Agreement shall be governed by, and construed in accordance with, the laws of the State of Michigan and any action relating to, or arising out of, this Agreement shall be maintained in a state or federal court located in Wayne or Oakland County, Michigan.

18. <u>Attorneys</u><u>'</u> <u>Fees</u>. Each Party shall bear its own attorneys' fees and costs incurred through the execution of this Agreement. In the event of any litigation to enforce the terms of this Agreement, however, the prevailing party will be entitled to recover its reasonable attorneys' fees and costs.

19. <u>No Admission</u>. The Parties understand and agree that this Agreement is a compromise of disputed claims and that the execution of this Agreement, and the payments provided herein, are not to be construed as an admission of liability on the part of the Parties.

20. <u>Confidentiality</u>. The Parties agree to keep the terms and conditions of this Agreement confidential and agree that they shall not disclose the contents of this Agreement to any person or entity not a party to this Agreement. Notwithstanding the foregoing, the Parties may disclose the terms of this Agreement to such individuals as such Party may owe a fiduciary, contractual, or other legal obligation to disclose such matters, as well as to their legal and tax advisors where necessary. The Parties further agree that other than as necessary to enforce the terms of this Agreement, including dismissal of the Lawsuit as discussed in Paragraph 9, this Agreement shall not be used or disclosed in any court, arbitration, or other legal proceeding. If asked specifically by an person about the dispute resolved by this Agreement, the Parties each agree that they will state only that "they have resolved their differences and the terms of the settlement are confidential," or similar words to that effect.

21. <u>Non-Disparagement</u>. The Parties shall refrain from disparaging each other, or any of their officers, owners, stockholders, agents, principals, or representatives. Additionally, the parties shall not make any reference to, or make any complaint about, the Action, and if asked about the dispute, they shall simply state that the matter has been resolved.

22. <u>Legal Counsel</u>. The Parties acknowledge and represent that they are and have been represented by legal counsel in connection with the consideration and execution of this Agreement or have determined that they do not wish to consult legal counsel prior to executing it and have knowingly declined to be so represented. The Parties represent and declare that, in executing this Agreement, each Party relied solely upon said Party's own judgment, belief, and knowledge, and the advice and recommendation of the Party's own independently selected legal counsel concerning the nature, extent, and duration of said Party's rights and claims, and that said Party has not been influenced to any extent whatsoever in executing this Agreement by any representations or statements not expressly contained or referred to herein.

------

23. <u>Further Assurances</u>. Each of the Parties hereto shall execute and deliver such additional documents, instruments, conveyances, and assurances and take such further actions as may be required to carry out the provisions hereof.

24. <u>No Duress or Coercion</u>. The Parties hereby acknowledge and agree that they have entered into this Agreement of their own free will and volition and were not coerced to do so, nor under any duress at the time of executing this Agreement.

25. <u>Execution in Counterparts</u>. This Agreement may be signed in counterparts, meaning that not all signatures need appear on the same page of the Agreement for it to be effective. Electronic or facsimile signatures shall be deemed to operate as originals.

IN WITNESS WHEREOF, and upon signature, the Parties have made this Settlement Agreement effective as of the date written first above.

---

| | |
|:---|:---|
| For Robert Bollinger:<br>*<u>/s/ Robert Bollinger</u>*<u> </u><br> Robert Bollinger | For Bollinger Motors, Inc. & Borrower:<br>*<u>/s/ Gene Kohut</u>*<u> </u><br> Gene Kohut, Receiver |
| For Mullen Automotive, Inc.:<br>*<u>/s/ David Michery</u>*<u> </u><br> David Michery, CEO |  |

---

## Exhibit 31.1

**Exhibit 31.1**

**CEO Certification**

**Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002**

I, David Michery, certify that:

&nbsp;&nbsp;&nbsp;&nbsp;1. I have reviewed this Quarterly Report on Form 10-Q/A of Bollinger Innovations, Inc.;

&nbsp;&nbsp;&nbsp;&nbsp;2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

&nbsp;&nbsp;&nbsp;&nbsp;3. Based on my knowledge, the financial statements, and other financial information included in this report fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

&nbsp;&nbsp;&nbsp;&nbsp;4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

&nbsp;&nbsp;&nbsp;&nbsp;5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

---

| | | | |
|:---|:---|:---|:---|
| Date: | August 15, 2025 | By: | /s/ David Michery |
|  |  |  | David Michery |
|  |  |  | Chief Executive Officer |

---

## Exhibit 31.2

**Exhibit 31.2**

**CFO Certification**

**Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002**

I, Jonathan New, certify that:

&nbsp;&nbsp;&nbsp;&nbsp;1. I have reviewed this Quarterly Report on Form 10-Q/A of Bollinger Innovations, Inc.;

&nbsp;&nbsp;&nbsp;&nbsp;2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

&nbsp;&nbsp;&nbsp;&nbsp;3. Based on my knowledge, the financial statements, and other financial information included in this report fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

&nbsp;&nbsp;&nbsp;&nbsp;4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

&nbsp;&nbsp;&nbsp;&nbsp;5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

---

| | | | |
|:---|:---|:---|:---|
| Date: | August 15, 2025 | By: | /s/ Jonathan New |
|  |  |  | Jonathan New |
|  |  |  | Chief Financial Officer |

---

## Exhibit 32.1

**Exhibit 32.1**

**CERTIFICATION**

**PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO**

**SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002**

In connection with the Quarterly Report on Form 10-Q/A for the period ended June 30, 2025 of Bollinger Innovations, Inc. (the "Company") as filed with the Securities and Exchange Commission on the date hereof (the "Report"), each of the undersigned, in the capacities and on the dates indicated below, hereby certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to his knowledge:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of and for the periods presented in the Report.

---

| | |
|:---|:---|
| By: | /s/ David Michery |
|  | David Michery |
|  | Chief Executive Officer |
|  | August 15, 2025 |
| By: | /s/ Jonathan New |
|  | Jonathan New |
|  | Chief Financial Officer |
|  | August 15, 2025 |

---