What's up guys and welcome back to the channel from my first video of 2023 and what a video this
is today I'm looking at Mullen automotive (nasdaq:muln stock) and doing an muln stock analysis this video might
be one of the most important Mullen stock videos that you are going to see this month so today I
will be looking at the form 10K and explain the massive importance of this annual report I will
break down the most important facts to show you exactly why the stock is going to see massive
movement this coming week and I will touch on what is going to happen on the 19th of January
and the effect that this will have on MULN stock price and I will explain why Mullen is
hiring staff and signing all the deals they have signed over the past few months this is
extremely important to understand and you need to know this now before it's too late and I will
give you my opinion on the valuation of modern stock and my muln stock price prediction so if
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any new content like this now let's get into it so on Friday Mullen Automotive released the form 10K
annual report now this came very late in the day so this 10K was due to be filed back in December
but Mullen Automotive filed the document allowing them an extension up until the 13th of January
the company just about got the filing in on time in order to not be penalized going forward now I
fully expected this to be filed on time because the consequences had this not been violent time
would have been detrimental to everything that David mitchery is trying to achieve and what I
mean by that is not exactly what most of you will be thinking right now from Mullen filing this
formulate would have been a disaster even more of a disaster than the actual 10K is and I will talk
about this more in a moment but first a little understanding of why Mullen could not afford for
this to be filed late so this article popped up on invest in his place on Friday stating that Mullen
has until 5 30 pm to file the form and the shares of Mullen stock closed lower by eight percent now
this was edited later in the day because Mullen filed its form 10K after the market closed but
before 5 30. and the fact that the stock proceeded to drop a further 16 in after hours should tell (NASDAQ:MULN STOCK)
you nearly everything you need to know about the general idea of what is in the 10K but there is
a few massive points that nobody else is talking about first of all it was vital that 10K was first
on time because firstly Mullen would lose rule 144 eligibility the company would also lose the power
to file a form S3 and a form S8 according to 100 F Street Mullen will regain rule 144 eligibility
and the power to file these forms once the 10K was received the reform S3 is used in certain types of
offerings not just through Capital raisings through secondary offering or the exercise
of outstanding warrants and as we will see in a moment warrants play a big part in modern's annual
report but losing the power to fire the form S3 could Spell particular trouble for Mullen at the
company's upcoming special meeting of shareholders on January 19th it is proposed several Provisions
relating to raising Capital proposal number two seeks to increase authorized shares from 5 billion
to 1.75 billion while proposal number 4 seeks to issue 150 million dollars in notes and up to 190
million of additional series D preferred stock now before I go into the financials just take
a moment to realize just how much dilution that would actually involve going from 1.7 billion up
to 5 billion shares is basically a 200 dilution if this was all done in one go and let's say for
example you own 30 of the company before this you would now only own 10 so that is massive but that
is not at all surprising after all Mullen started 2022 with only 28 million shares and by September
they had 1.7 billion which is about 6 000 delusion in less than nine months again to put this in
clear terms if you owned say 30 of modern stock at the beginning of 2022 and you didn't buy or
sell any stock you would now own less than half of one percent of the overall Company stock right now
now this level of delusion is incredible but everyone keeps saying that this is a growing
EV company and dilution is needed to bring money in and grow the company further so let's look now
at the form 10K and see exactly what Mullen have done with all this raised Capital so first let's
start with the balance sheet but I will look at this in more depth in a moment as we can see here
the company now has total assets of 302 million and total liabilities of 145 million which gives
total stockholder Equity of 156 million dollars now the very first thing that I want to point
out here is that the net asset valuation of 156 million dollars is still multiple times below the
current market cap of 594 million so even after Mullen stock plummeting on Friday this stock is
still grossly overvalued but this is just the beginning we can see here that the company's
two largest assets are intangibles and Goodwill now this is something that you never want to see
this is an EV company supposedly they're factories their inventory cash and Investments should be the
biggest assets not Goodwill and intangibles so let's start with the Goodwill Goodwill is
effectively the price that is paid above the value of what you have bought so if you paid
300 million to acquire something worth say 200 million you record the asset at 200 million and
put the other 100 million to Goodwill but in effect Goodwill is where you pay more
than something is actually worth now sometimes this makes a lot of sense think about a company
buying out a competitor company they might pay above the odds but then they are controlling
a bigger market share as I said sometimes it makes sense but generally Goodwill is not good
and generally this will get written down or even completely written off so I tend to Discount
Goodwill from any valuation calculations so seeing this as the company's biggest asset is a massive
Red Flag by the way if you are a member of my Discord group I have talked about this over the
past few months I have fully expected this to be the case after the ball and shoot deal was done
because it's ridiculous valuation so if you're not a member of the Discord check this out there is a
link in the description below the Mullen paid 148 million for 60 of Bollinger Motors and what they
have got is 60 of the following there is no real assets here this mainly consists of things that
are very hard to put a real value on such as IP and patents by the way none of this was present
on Bollinger Motors financials that Mullen filed back in November so this is extremely interesting
it seems as though Bollinger Motors has gone from a value of 643 thousand dollars up to a
valuation of 246 million in the space of a few months without doing anything other than making
losses so you can make your own mind up on this acquisition in my opinion this valuation is an
absolute joke but before we look at the income statement for the year which is quite frankly
pathetic let's look at the other major assets which is intangibles now this is mullen's single
biggest asset 93 million dollars which is IP and patents acquired from Bollinger Motors
so that is more than 180 million of Mullins assets made up of Goodwill and intangibles the
company has stockholder Equity of 156 million as I said a moment ago now I tend to remove Goodwill
from calculations when I am valuing any company and in this case it would be wise to also take
the intangibles with a pinch of salt this is a company with a market cap of over half a billion
I wouldn't value this company at even a small fraction of this in my opinion it's not worth
it I expect this to crash so much over the next few months so let's look at the income statement
now the first thing that stands out here is the 780 million net loss for the Year this is quite
simply insane but a lot of this loss does not affect the company's cash flow this is one of
the rare times that I'm going to say something remotely positive about Mullen the majority of
this loss is not detrimental to the company's operations however that does not mean that these
warrants are not detrimental to the stock value and to shareholders interests but the company has
made a real loss fair in excess of 130 million for the year when we remove these warrant liabilities
this is absolutely huge I wouldn't touch the stock this is this is a disaster waiting to
happen which is funny because the stock is down like 97 percent since going public but in my
opinion this could very easily drop another 80 or 90 percent in 2023 as I said earlier they are
planning to dilute from 1.7 billion shares up to 5 billion shares but look at what they have
actually got for the 1.7 billion of delusion that has already taken place for most of 2022
molenstock was trading Fair above one dollar and only dropped below 40 cents late in the year
so even if all of the dilution came at let's say 40 cents a share that would fund the company with
about 680 million dollars and oh my God this is a low figure this is a low estimate that I'm giving
here this should be and in reality probably is far higher than this but where has that money gone
they have 300 million of assets and nearly 200 million of that is Goodwill and intangibles this
is an absolute joke look at these figures paid in capital of 947 million dollars with accumulated
deficit of 889. pretty much everything that has flowed into this company from retail investors
has already flowed back out I have been warning of this for nearly a year by looking at the history
of management and its main investors in the stock you get an idea of showing exactly what
was likely to happen and it is going exactly like it did for all of David mitry's previous companies
which leads me on to something very very funny in these financial statements just in case you have
read this 10K and might be thinking that maybe David is running this company into the ground
and maybe someone else would be better suited to Ron Mullen look here on page 36 we are highly
dependent on the services of David metri our founder and CEO Mr metri is the source of many
if not most of the ideas and execution driving us if Mr metri were to discontinue his Services
due to death disability or any other reason we would be significantly disadvantaged wow just wow
I don't think I've ever seen a statement like this in any financial statement I don't think I've ever
seen Tesla (nasdaq:tsla stock) say anything like this about Elon Musk or Microsoft ($msft stock) about Bill Gates even Steve Jobs got
ouster from Apple ($appl stock) at one stage so I find this incredibly funny after all for his
role in driving this stock into the ground David metri has had a nice pay rise from 2.3 million
up to 6.3 million for 2022 which is mainly in shares and as it says here no other compensation
6.3 million dollars in total for the year except wait this is not all that David metri has received
in 2022 despite all of the compensation here showing a zero all of these deals that Mullen
have signed have also earned the CEO more shares as we can see here deliver a pilot vehicle join
the Russell two thousand and three thousand indexes and the other Milestone every deal
that modern has signed has given the CEO an extra one or two percent of the entire company and as
the company's share count goes up he gets more shares which as you can see here adds up to 107
million shares or 30 million dollars so David's real compensation for 2022 is actually about 36
million dollars for the year now it is usually a good thing for a CEO to get shares for a bonus it
aligns the interest of management with that interest of shareholders but David has been
selling his shares all year long pretty much the maximum that he is allowed to sell under the SEC
rules now there is plenty more that I could talk about in this video from this 10K alone and from
mullen's other filings what this video would go on for hours however with this week being a big
week for shareholders considering a huge day later in the week what do you expect is going
to happen drop a comment and let me know what you think let me know if you are buying this
talk if you are holding this stock or if you are selling this stock and if you're new here
consider subscribing to the Channel smash the like button and I'll catch you in the next one