BOLLINGER INNOVATIONS, INC.

We own the manufacturing facility located in Robinsonville, Tunica County, MS. The Manufacturing Center is 124,000 square foot engineering facility on 100 acres.

On November 30, 2022, the Company purchased an automobile manufacturing facility in Mishawaka, St. Joseph County, IN. The site gross area is 1,392,395 square feet. The 660,000 sq ft Mishawaka assembly plant consists of a body shop, paint shop, general assembly area, and water treatment plant.

The Company leases 59,034 square feet of office space in Troy, MI for the Commercial Leadership and Engineering team. The lease payments are $62,724 per month.

On November 1, 2023, the Company entered a 5-year lease agreement for premises of approximately 122,000 sq. ft. in Fullerton, California, designated for manufacturing and distribution of electric vehicle batteries. Base rent was $2,992,000 for the first year (and increases approximately 4% every year). Security deposit paid to the landlord is approximately $1 million. Rent was prepaid in full for the first year, but is now $260,000 per month beginning November 2024.

Bollinger Motors maintains its offices within a 36,300 square foot building located in Oak Park, MI and has operated at this facility since August 2020. On August 1, 2023, Bollinger Motors executed a 5-year lease agreement for a building at 26650 Harding Ave, Oak Park, MI, adjacent to their Oak Park headquarters for an additional 10,774 square feet for engineering development, supplemental warehousing, vehicle storage and repair, and office space. The lease payments for these facilities are approximately $42,742 per month. Additionally, Bollinger Motors still maintained a lease in Ferndale, MI from where the company previously operated prior to August 2020. The lease payments for this facility were approximately $6,000 per month in 2023. However, the Ferndale facility was subleased for the entirety of 2023 with sublease income of approximately $7,000 per month.

As security for payment of the amounts due and payable under the Senior Secured 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. For further information about $50 Million Senior Secured Convertible Notes and Warrants (and Additional Investment Right), see “Note 7 – Debt” of the notes to the consolidated financial statements included elsewhere in this Annual Report on Form 10-K.

• Our financial results may vary significantly from period to period due to fluctuations in our operating costs and other factors.
• We have not paid cash dividends on our common stock in the past and do not expect to pay dividends on our common stock in the future. Any return on investment may be limited to the value of our common stock.
• We may not be able to maintain compliance with the continued listing requirements of the NASDAQ Capital Markets.
• A reverse stock split may decrease the liquidity of the shares of our common stock and may have a dilutive effect on the ownership of existing stockholders.
• Following a reverse stock split, the resulting market price of our common stock may not attract new investors, including institutional investors, and may not satisfy the investing requirements of those investors. Consequently, the trading liquidity of our common stock may not improve.
• Our common stock may be subject to the “penny stock” rules in the future. It may be more difficult to resell securities classified as “penny stock.”
• We may issue additional shares of common stock, including under our equity incentive plan and our commitments to issue shares of common stock or securities that are convertible into shares of common stock may cause significant dilution to stockholders and present other risks.
• Stockholder equity interest may be substantially diluted in any additional equity issuances.
• Our commitment to issue shares of common stock pursuant to the terms of our preferred stock, Notes and Warrants and stock-based compensation arrangements could encourage short sales by third parties which could contribute to the future decline of stock price.
• Sale or issuance of our common stock pursuant to the ELOC Purchase Agreement
• may cause dilution and the sale of the shares of common stock, or the perception that such sales may occur, could cause the price of our common stock to fall.
• Substantial blocks of our total outstanding shares may be sold into the market. If there are substantial sales or issuances of shares of our common stock, the price of our common stock could decline.
• Our stock price has been volatile, and the market price of our common stock may drop below the price you pay.
• All of our debt obligations and our senior equity securities will have priority over our common stock with respect to payment in the event of liquidation, dissolution or winding up, and our outstanding senior securities restrict our ability to pay dividends on our common stock.
• Our Certificate of Incorporation designates specific courts as the exclusive forum for certain stockholder litigation matters, which could limit the ability of our stockholders to obtain a favorable forum for disputes with us or our directors, officers or employees.
• If securities or industry analysts do not publish research or reports about our business or publish negative reports about our business, our share price and trading volume could decline.
• Risks Related to our Business and Operations
• We have a limited operating history, have not yet manufactured or sold a significant number of vehicles to customers, and have limited experience in high-volume manufacturing of commercial EVs, all of which makes evaluating our business and future prospects difficult for potential investors.
• Potential acquisitions may disrupt our business and dilute stockholder value.
• We may be unable to develop and manufacture commercial EVs of sufficient quality to appeal to customers on the schedule they expect or may be unable to do so on a large scale.
• We are dependent on certain principal suppliers and vendors in China for a significant portion of our vehicle components, and the inability of these vendors to deliver necessary components of our products according to our schedule and at prices, quality levels and volumes acceptable to us, or our inability to efficiently manage these components, could have a material adverse effect on our financial condition and operating results.
• Our vehicles will make use of lithium-ion battery cells, which have been observed to catch fire or vent smoke and flame, and, if such results occur, bodily injury or death could result and could subject us to lawsuit, product recalls, or redesign efforts.
• The efficiency of a battery’s use when driving electric vehicles will decline slowly over time, which may negatively influence potential customers’ decisions whether to purchase an electric vehicle
• We are substantially reliant on our relationships with a limited number of OEMs, suppliers and service providers for the parts and components in our vehicles, as well as for the manufacture of our vehicles. If any of these OEMs, suppliers or service partners choose to not do business with us, then we would have significant difficulty in procuring and producing our vehicles and our business prospects would be significantly harmed.
• Because we are currently dependent upon a limited number of dealers/customers, the loss of a significant dealer could adversely affect our operating results.
• We rely on complex machinery for our operations and production involves a significant degree of risk and uncertainty in terms of operational performance and costs.
• We rely on the development and functionality of complex software and technology systems, in coordination with vendors and suppliers, in order to produce our EVs. There can be no assurance such systems will be successfully developed or will be reliable.
• We may be negatively impacted by any early obsolescence of our manufacturing equipment.
• We may be negatively impacted by any early obsolescence of our vehicles.
• We are dependent on our suppliers, a significant number of which are single or limited source suppliers, and the inability of these suppliers to deliver necessary components of our vehicles in a timely manner and at prices and volumes acceptable to us could have a material adverse effect on our business, prospects and operating results.
• If any of our suppliers become economically distressed or go bankrupt, we may be required to provide substantial financial support or take other measures to ensure supplies of components or materials, which could increase our costs, affect our liquidity or cause production disruptions.
• Our business model has yet to be fully tested and any failure to successfully commercialize our strategic plans would have an adverse effect on our operating results and business, harm our reputation and could result in substantial liabilities that exceed our resources.
• We may not be able to accurately estimate the supply and demand for our vehicles, which could result in a variety of inefficiencies in our business and hinder our ability to generate revenue. If we fail to accurately predict our manufacturing requirements, we could incur additional costs or experience delays.
• We could experience cost increases or disruptions in the supply of raw materials or other components used in our vehicles. If we are unable to establish an arrangement for the sustainable supply of batteries for our vehicles, our business would be materially and adversely harmed.
• If our vehicles fail to perform as expected, our ability to develop, market, and sell or lease our electric vehicles could be harmed.
• We have minimal experience servicing and repairing our vehicles. The inability to adequately service vehicles may adversely affect our business.
• Our services may not be generally accepted by our users. If we are unable to provide quality customer service, our business and reputation may be materially and adversely affected.
• The automotive market is highly competitive, and we may not be successful in competing in this industry.
• The automotive industry and our technology are rapidly evolving and may be subject to unforeseen changes. Developments in alternative technologies, including but not limited to hydrogen, may adversely affect the demand for our electric vehicles.
• Our future growth depends on the demand for and upon the dealers' end customer, fleet managers’ willingness to adopt our electric vehicles.
• Changes in tax laws may materially adversely affect our business, prospects, financial condition and operating results.
• The unavailability, reduction or elimination of government and economic incentives could have a material adverse effect on our business, prospects, financial condition and operating results.
• If we fail to manage our future growth effectively, we may not be able to develop, manufacture, market and sell or lease our vehicles successfully.
• Insufficient warranty reserves to cover future warranty claims could materially adversely affect our business, prospects, financial condition and operating results.
• We may not succeed in establishing, maintaining and strengthening the Mullen brand, which would materially and adversely affect customer acceptance of our vehicles and components and our business, revenues and prospects.
• Doing business internationally creates operational and financial risks for our business.
• We are highly dependent on the services of David Michery, our Chief Executive Officer.
• We are exposed to risks relating to relationships with related parties.
• Our business may be adversely affected by labor and union activities.
• Our business could be adversely impacted by global or regional catastrophic events.
• Our business could be adversely impacted by the cancellation of our contracts involving the sale of commercial vehicles.
• Failure of cybersecurity and privacy concerns could subject us to lawsuits and penalties, damage our reputation and brand, and harm our business and results of operations.
• We may need to defend ourselves against patent or trademark infringement claims, and we may not be able to prevent others from unauthorized use of our intellectual property, which may be time-consuming and would cause us to incur substantial costs and harm our business and competitive position.
• Our future patent applications may not issue as patents, which may have a material adverse effect on our ability to prevent others from commercially exploiting products similar to ours.
• We may be subject to damages resulting from claims that we or our employees have wrongfully used or disclosed alleged trade secrets of our employees’ former employers.
• Our vehicles are subject to motor vehicle standards and substantial regulation, and the failure to satisfy such mandated safety standards or regulations, or unfavorable changes to such regulations, would have a material adverse effect on our business and operating results.
• We may become subject to product liability claims, which could harm our financial condition and liquidity if we are not able to successfully defend or insure against such claims.
• We face risks and uncertainties related to litigation, regulatory actions and government investigations and inquiries.
• We are or will be subject to anti-corruption, anti-bribery, anti-money laundering, financial and economic sanctions and similar laws, and non-compliance with such laws can subject us to administrative, civil and criminal fines and penalties, collateral consequences, remedial measures and legal expenses, all of which could adversely affect our business, results of operations, financial condition and reputation.
• Failure to improve our operational and financial systems to support our expected growth, increasingly complex business arrangements and rules
• governing revenue and expense recognition and any inability to do so will adversely affect our billing and reporting.
• Failure to build our finance infrastructure and improve our accounting systems and controls could impair our ability to comply with the financial reporting and internal controls requirements for publicly traded companies.
• We are subject to various environmental laws and regulations that could impose substantial costs upon us and cause delays in operating our manufacturing facilities.
• Changes in U.S. and international trade policies, including the export and import controls and laws, particularly with regard to China, may adversely impact our business and operating results.
• Our ability to utilize our net operating loss and tax credit carryforwards to offset future taxable income may be subject to certain limitations.