Mullen Automotive Inc. (MULN) SEC Filing 10-K Annual Report for the fiscal year ending Thursday, September 30, 2021

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Mullen Automotive Inc.
Ticker: MULN CIK: 1499961

Exhibit 99.1

Net Element Reports Second Quarter 2021 Financial Results

MIAMI, August 16, 2021 (GLOBE NEWSWIRE) -- via InvestorWire -- Net Element, Inc. (NASDAQ:

NETE) (“Net Element” or the “Company”), a global technology and value-added solutions group that supports electronic payments acceptance in a multichannel environment including point-of-sale (“POS”), e-commerce and mobile devices, today reports its financial results for the second quarter ended June 30, 2021.

Second Quarter 2021 Financial Results

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Net Revenue increased to $33.3 million, as compared to $13.7 million for the same comparable period in 2020

●

North American Transactions Solutions revenue increased to $32 million, as compared to $13 million for the same comparable period in 2020

●

International Transaction Solutions revenue increased to $1.3 million, as compared to $0.7 million for the same comparable period in 2020

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Operating expenses increased to $6.5 million, as compared to $5.8 million for the same comparable period in 2020

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Gross margin increased to $6.7 million, as compared to $4.7 million for the same comparable period in 2020

	●	Net income per share increased to $0.21, as compared to a net loss of $0.08 per share for the same comparable period in 2020
	●	Reflected in net income attributable to common stockholders for the quarter ended June 30, 2021 are two nonrecurring other income transactions totaling approximately $1.0 million. It was comprised of $0.4 million for the PPP Note debt forgiveness and $0.6 million in late fees due from Mullen in connection with the Mullen Merger Agreement.

Results of Operations for the Three Months Ended June 30, 2021, Compared to the Three Months Ended June 30, 2020

The Company reported a net income attributable to common stockholders of approximately $1.3 million or $0.21 per share income for the three months ended June 30, 2021, as compared to a net loss of approximately $325,000 or $0.08 per share loss for the three months ended June 30, 2020. The decrease in net loss attributable to stockholders of approximately $1.6 million was primarily due to an increase in net revenues of approximately $19.6 million and approximately $500,000 in late fees owed by Mullen during the three months ended June 30, 2021.

The following tables set forth the Company’s sources of revenues, cost of revenues and the respective gross margins for the three months ended June 30, 2021, and the same period in 2020.

	Three					Three
	Months Ended					Months Ended					Increase /
Source of Revenues	June 30, 2021		Mix			June 30, 2020		Mix			(Decrease)
North American Transaction Solutions	$	32,015,097		96.2	%	$	12,977,536		94.6	%	$	19,037,561
International Transaction Solutions		1,276,838		3.8	%		741,073		5.4	%		535,765
Total	$	33,291,935		100.0	%	$	13,718,609		100.0	%	$	19,573,326

	Three					Three
	Months Ended		% of			Months Ended		% of			Increase /
Cost of Revenues	June 30, 2021		revenues			June 30, 2020		revenues			(Decrease)
North American Transaction Solutions	$	28,561,909		89.2	%	$	11,016,028		84.9	%	$	17,545,881
International Transaction Solutions		1,020,689		79.9	%		520,759		70.3	%		499,930
Total	$	29,582,598		88.9	%	$	11,536,787		84.1	%	$	18,045,811

	Three					Three
	Months Ended		% of			Months Ended		% of			Increase /
Gross Margin	June 30, 2021		revenues			June 30, 2020		revenues			(Decrease)
North American Transaction Solutions	$	3,453,188		10.8	%	$	1,961,508		15.1	%	$	1,491,680
International Transaction Solutions		256,149		20.1	%		220,314		29.7	%		35,835
Total	$	3,709,337		11.1	%	$	2,181,822		15.9	%	$	1,527,515

Net revenues consist primarily of service fees from transaction processing. Net revenues were approximately $33.3 million and $13.7 million for the three months ended June 30, 2021, and the same period in 2020, respectively. The Company’s revenues, which are largely tied to processing volumes, were materially impacted beginning in the final two weeks of March 2020. Since the quarter ended Dec. 31, 2020, the Company has seen a significant recovery in its end-to-end payment volumes as some merchants began resuming their normal operations.

Cost of revenues represents direct costs of generating revenues, including commissions, mobile operator fees, interchange expense, processing and non-processing fees. Cost of revenues for the three months ended June 30, 2021, were approximately $29.6 million, as compared to approximately $11.5 million for the three months ended June 30, 2020. The increase in cost of revenues was primarily due to a significant increase in net revenues.

The gross margin for the three months ended June 30, 2021, was approximately $3.7 million, or 11.1% of net revenues, as compared to approximately $2.2 million, or 15.9% of net revenues, for the three months ended June 30, 2020. The decrease in the overall gross margin percentage was primarily the result of the competitive pressure in the industry and a large wholesale client converting their merchant processing relationship to the Company’s platform. Net Element’s wholesale platform generally provides for lower margins compared to the Company’s other products and services.

Operating Expenses Analysis:

Operating expenses were approximately $3.1 million for the three months ended June 30, 2021, as compared to $2.2 million for three months ended June 30, 2020. Operating expenses for the three months ended June 30, 2021, primarily consisted of selling, general and administrative expenses of approximately $2.1 million; bad debt expense of approximately $500,000; and depreciation and amortization expense of approximately $500,000. Operating expenses for the three months ended June 30, 2020, primarily consisted of selling, general and administrative expenses of approximately $1.4 million; bad debt expense of approximately $33,000; and depreciation and amortization expense of approximately $800,000. The net increase was primarily due to additional personnel retained to meet the demand of growth, the increase in bad debt expense due to the increase in net revenues, and fees connected with the Company’s Form S-4 filing, which were partially offset by the reduction of compensation of certain employees, consultants and executives of the Company.

The components of the Company’s selling, general and administrative expenses are reflected in the tables below.

Selling, general and administrative expenses for the three months ended June 30, 2021, and the same period in 2020 consisted of operating expenses not otherwise delineated in the Company’s Condensed Consolidated Statements of Operations and Comprehensive Loss, as follows:

Three months ended June 30, 2021

Category	North American Transaction Solutions		International Transaction Solutions			Corporate Expenses & Eliminations		Total
Salaries, benefits, taxes and contractor payments	$	468,053	$	154,778		$	325,100	$	947,931
Professional fees		217,495		32,117			438,633		688,245
Rent		64,178		17,223			4,885		86,286
Business development		37,222		6,559			35,151		78,932
Travel expense		5,474		25,851			15,124		46,449
Filing fees		-		-			16,075		16,075
Transaction gains		-		(36,843	)		-		(36,843	)
Office expenses		54,124		5,934			17,612		77,670
Communications expenses		39,157		34,698			15,808		89,663
Insurance expense		-		-			41,832		41,832
Other expenses		537		8,607			5,477		14,621
Total	$	886,240	$	248,924		$	915,697	$	2,050,861

Three months ended June 30, 2020

Category	North American Transaction Solutions		International Transaction Solutions			Corporate Expenses & Eliminations		Total
Salaries, benefits, taxes and contractor payments	$	536,915	$	91,825		$	118,574	$	747,314
Professional fees		55,336		39,537			241,288		336,161
Rent		13,070		13,325			39,093		65,488
Business development		32,228		-			3,805		36,033
Travel expense		638		9,373			39,894		49,905
Filing fees		-		-			15,525		15,525
Transaction losses		-		(80,512	)		-		(80,512	)
Office expenses		41,976		3,759			16,879		62,614
Communications expenses		40,083		46,374			15,863		102,320
Insurance expense		-		-			42,000		42,000
Other expenses		292		2,104			6,085		8,481
Total	$	720,538	$	125,785		$	539,006	$	1,385,329

Variance

Category	North American Transaction Solutions			International Transaction Solutions			Corporate Expenses & Eliminations			Total
Salaries, benefits, taxes and contractor payments	$	(68,862	)	$	62,953		$	206,526		$	200,617
Professional fees		162,159			(7,420	)		197,345			352,084
Rent		51,108			3,898			(34,208	)		20,798
Business development		4,994			6,559			31,346			42,899
Travel expense		4,836			16,478			(24,770	)		(3,456	)
Filing fees		-			-			550			550
Transaction gains/losses		-			43,669			-			43,669
Office expenses		12,148			2,175			733			15,056
Communications expenses		(926	)		(11,676	)		(55	)		(12,657	)
Insurance expense		-			-			(168	)		(168	)
Other expenses		245			6,503			(608	)		6,140
Total	$	165,702		$	123,139		$	376,691		$	665,532

Salaries, benefits, taxes and contractor payments increased by approximately $200,000 on a consolidated basis for the three months ended June 30, 2021, as compared to the same three-month period ended June 30, 2020. The net increase was primarily due to additional personnel retained to meet the demand of growth offset by the reduction of compensation of certain employees, consultants and executives of the Company.

The following information was filed by Mullen Automotive Inc. (MULN) on Monday, August 16, 2021 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-K Annual Report statement of earnings and operation as management may choose to highlight particular information in the press release.

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