Faraday Future Reports Financial Results for Third Quarter 2021

May 6, 2022

– Successfully Completed Public Listing, Securing Gross Proceeds of ~$1.0 billion

– 2,270 Mile Test Drive Confirmed Market-Leading Performance and Technology –

– Hanford Facility Build Out on Track –

– FF 91 Production Launch Expected Q3 2022 –

LOS ANGELES--(BUSINESS WIRE)--May 6, 2022-- Faraday Future Intelligent Electric Inc. (NASDAQ: FFIE) (“FF,” “Faraday Future” or “the Company”), a California-based global shared intelligent electric mobility ecosystem company, today announced financial results for its third quarter ended September 30, 2021. Results were delayed as a result of the previously announced Special Committee review.

“The third quarter of 2021 was eventful for Faraday Future as we completed our merger with PSAC and became a public company, ending the quarter well-capitalized with a strong balance sheet,” said Global CEO of Faraday Future Dr. Carsten Breitfeld. “We made strong progress building out the Hanford manufacturing facility and production area construction is advancing on schedule. We continued to make excellent progress with our supply chain partners in a challenging supply-chain environment. We significantly bolstered our management team with key hires who will help us navigate the challenging logistics climate, and strengthened other key areas in manufacturing, development, finance, and elsewhere.”

Dr. Breitfeld continued, “After quarter end, we marked our first four milestones toward SOP at the Hanford manufacturing facility. We remain confident that we will launch the FF 91 in the third quarter of 2022 and believe that Faraday Future is positioned to redefine the state-of-the-art in intelligent electrified mobility.”

COMMENT ON SPECIAL COMMITTEE REVIEW

Dr. Breitfeld added, “The Special Committee of independent Board members completed its previously announced review of past disclosures and allegations and submitted its findings and recommendations to the full Board. The Board accepted the findings and implementation of remediation actions is well underway. On behalf of the entire management team, I want to thank the Special Committee, our financial and legal advisors, and my fellow Board members for their hard work and for their commitment to holding the Company to the highest standards of ethics and conduct. I also want to thank all of my fellow employees, our suppliers, and our investors for their support and confidence. I believe that this review and the changes we are making will help us build a stronger, better company.”

KEY COMPANY HIGHLIGHTS DURING THIRD QUARTER 2021

Faraday Future continues to make progress towards the launch of the FF 91 and accomplishing our business plan, and made the following announcements during the three months ended September 30, 2021:

KEY EVENTS SUBSEQUENT TO THIRD QUARTER END

Subsequent to September 30, 2021, and through December 31, 2021, FF accomplished the following major milestones:

Subsequent to December 31, 2021, FF accomplished the following additional major milestones and made certain personnel and organizational changes:

  • Announced that Myoung Shin Co., Ltd., an automotive manufacturer headquartered in South Korea, has been contracted to manufacture Faraday Future’s second vehicle, the FF 81, with SOP scheduled for 2024.
  • Unveiled the first “production-intent” build of the FF 91. This marks Faraday Future’s manufacturing Milestone #4, pre-production builds for final engineering validation and certification, now referred to as production-intent vehicles.
  • Received dealer and distributor license from the State of California, for online national sales.
  • Signed the lease for FF’s flagship store in Beverly Hills, California, and confirmed the design firm for the store. The initial term of the lease shall be 126 months, with two five-year tenant extension options. In addition, FF announced the active search for a second flagship store in the U.S.
  • Appointed Susan Swenson as Executive Chairperson and Jordan Vogel as Lead Independent Director of the Board of Directors. FF’s Board of Directors consists of nine directors, five of whom are independent under applicable rules.
  • Announced that Mathias Hofmann became the new Head of Global Supply Chain after the retirement of Benedikt Hartmann effective February 25, 2022. Mathias comes to FF after a nearly 30-year career with BMW, where he served as a Vice President with global responsibilities in purchasing and plant management. He has worked on four continents, including China, and was most recently Plant Director in Brazil. He has extensive experience in both plant operations and direct and indirect purchasing.
  • Appointed Becky Roof as Interim Chief Financial Officer (CFO) and engaged an affiliate of AlixPartners to accelerate the implementation of Special Committee recommendations including, but not limited to financial controls and material weakness remediation. Ms. Roof is a seasoned financial executive who has served in an interim CFO capacity at numerous public and private companies.
  • Announced 401 preorders as of March 31, 2022. Preorders are fully refundable, non-binding, paid deposits for the FF 91 Futurist Alliance Edition and/or the FF 91 Futurist vehicles available initially for sale to customers in the US and China. FF 91 Futurist Alliance Edition preorders require a $5,000 deposit for customers in the US and an RMB 50,000 deposit for customers in China. FF 91 Futurist preorders require a $1,500 deposit for customers in the US and an RMB 20,000 deposit for customers in China.

RESULTS FOR THIRD QUARTER 2021

Operating expenses for the third quarter ended September 30, 2021, were $186 million compared to $18 million for the three months ended September 30, 2020. The increase is primarily due to an acceleration of costs to bring the Hanford manufacturing facility to full commercial production. Net loss was $304 million for the third quarter ended September 30, 2021, compared to a net loss of $33 million in the prior-year period. The increase in net loss is attributable to the significant increase in operating expenses, the loss relating to fair value measurement of related party notes payable, notes payable which the Company elected to account for using the fair value option, warrant liabilities, as well as loss on settlement of related party notes payable, notes payable, and vendor payables in trust.

Cash and cash equivalents were $666 million as of September 30, 2021. The cash balance as of March 31, 2022 was $276 million, which includes the repayment of a $97 million note and accrued interest on schedule.

EARNINGS CONFERENCE CALL

The Company plans to host a conference call open to investors after it files its Q1 2022 results in mid-May.

Customers can preorder an FF 91 now at: https://www.ff.com/us/preorder.

ABOUT FARADAY FUTURE

Faraday Future is a class-defining luxury electric vehicle company. The Company has pioneered numerous innovations relating to its products, technology, business model, and user ecosystem since its inception in 2014. Faraday Future aims to perpetually improve the way people move by creating a forward-thinking mobility ecosystem that integrates clean energy, AI, the Internet, and new usership models. Faraday Future’s first flagship product is the FF 91 Futurist.

FOLLOW FARADAY FUTURE:

https://www.ff.com/
https://twitter.com/FaradayFuture
https://www.facebook.com/faradayfuture/
https://www.instagram.com/faradayfuture/
www.linkedin.com/company/faradayfuture

NO OFFER OR SOLICITATION

This communication shall neither constitute an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of securities in any jurisdiction in which the offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of any such jurisdiction.

FORWARD LOOKING STATEMENTS

This press release includes “forward looking statements” within the meaning of the safe harbor provisions of the United States Private Securities Litigation Reform Act of 1995. When used in this press release, the words “estimates,” “projected,” “expects,” “anticipates,” “forecasts,” “plans,” “intends,” “believes,” “seeks,” “may,” “will,” “should,” “future,” “propose” and variations of these words or similar expressions (or the negative versions of such words or expressions) are intended to identify forward-looking statements, and include (among others) statements regarding the expected timing of the launch of FF 91 and FF 81 vehicles and anticipated production capacity of the Company’s Hanford, California facility. These forward-looking statements are not guarantees of future performance, conditions or results, and involve a number of known and unknown risks, uncertainties, assumptions and other important factors, many of which are outside the Company’s control, that could cause actual results or outcomes to differ materially from those discussed in the forward-looking statements. Important factors, among others, that may affect actual results or outcomes include the outcome of the SEC investigation relating to the matters that were the subject of the Special Committee investigation; the Company’s ability to satisfy the terms of the Nasdaq exception and to file Form 10-K by May 16, 2022 and its ability to regain compliance with the Nasdaq continued listing standards; the implementation of the Special Committee’s actions and related internal review by the Company; the Company’s ability to execute on its plans to develop and market its vehicles and the timing of these development programs; the Company’s estimates of the size of the markets for its vehicles and cost to bring those vehicles to market; the rate and degree of market acceptance of the Company’s vehicles; the success of other competing manufacturers; the performance and security of the Company’s vehicles; potential litigation involving the Company; the result of future financing efforts and general economic and market conditions impacting demand for the Company’s products; the ability of the Company to attract and retain employees. The foregoing list of factors is not exhaustive. You should carefully consider the foregoing factors and the other risks and uncertainties described in the “Risk Factors” section of the Company’s registration statement on Form S-1 (File No. 333-258993) filed with the SEC on October 4, 2021, and other documents filed by the Company from time to time with the SEC. These filings identify and address other important risks and uncertainties that could cause actual events and results to differ materially from those contained in the forward-looking statements. Forward-looking statements speak only as of the date they are made. Readers are cautioned not to put undue reliance on forward-looking statements, and the Company does not undertake any obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

Faraday Future Intelligent Electric Inc.

Condensed Consolidated Statements of Operations and Comprehensive Loss

(in thousands, except share and per share data)

(Unaudited)

 

 

Three Months Ended
September 30,

 

Nine Months Ended
September 30,

 

2021

 

2020

 

2021

 

2020

 

 

 

 

 

 

 

 

Operating expenses

 

 

 

 

 

 

 

Research and development

$

79,757

 

 

$

3,520

 

 

$

94,506

 

 

$

14,704

 

Sales and marketing

 

6,832

 

 

 

221

 

 

 

11,099

 

 

 

1,691

 

General and administrative

 

36,725

 

 

 

13,806

 

 

 

64,148

 

 

 

32,538

 

Loss on disposal of property and equipment

 

62,342

 

 

 

 

 

 

62,987

 

 

 

 

Total operating expenses

 

185,656

 

 

 

17,547

 

 

 

232,740

 

 

 

48,933

 

 

 

 

 

 

 

 

 

Loss from operations

 

(185,656

)

 

 

(17,547

)

 

 

(232,740

)

 

 

(48,933

)

Change in fair value measurements

 

(22,747

)

 

 

1,394

 

 

 

(60,394

)

 

 

10,056

 

Interest expense

 

(296

)

 

 

(8,505

)

 

 

(26,550

)

 

 

(22,955

)

Related party interest expense

 

(1,597

)

 

 

(7,030

)

 

 

(15,765

)

 

 

(24,902

)

Other income (expense), net

 

1,117

 

 

 

(2,260

)

 

 

(718

)

 

 

(2,697

)

(Loss)/gain on settlement of related party notes payable, notes payable and vendor payables in trust, net

 

(94,727

)

 

 

609

 

 

 

(96,036

)

 

 

295

 

Loss before income taxes

 

(303,906

)

 

 

(33,339

)

 

 

(432,203

)

 

 

(89,136

)

Income tax provision

 

 

 

 

 

 

 

(3

)

 

 

 

Net loss

$

(303,906

)

 

$

(33,339

)

 

$

(432,206

)

 

$

(89,136

)

 

 

 

 

 

 

 

 

Per share information:

 

 

 

 

 

 

 

Net loss per Common Stock – Class A and Class B – basic and diluted

$

(1.06

)

 

$

(0.21

)

 

$

(2.12

)

 

$

(0.57

)

Weighted average Common Stock outstanding – Class A and Class B – basic and diluted

 

287,951,929

 

 

 

157,060,201

 

 

 

203,686,758

 

 

 

157,055,242

 

 

 

 

 

 

 

 

 

Total comprehensive loss:

 

 

 

 

 

 

 

Net loss

$

(303,906

)

 

$

(33,339

)

 

$

(432,206

)

 

$

(89,136

)

Change in foreign currency translation adjustment

 

189

 

 

 

(3,169

)

 

 

(487

)

 

 

(1,392

)

Total comprehensive loss

$

(303,717

)

 

$

(36,508

)

 

$

(432,693

)

 

$

(90,528

)

Faraday Future Intelligent Electric Inc.

Condensed Consolidated Balance Sheets

(in thousands, except share and per share data)

(Unaudited)

 

September 30,
2021

 

December 31,
2020

 

 

 

 

Assets

 

 

 

Current assets

 

 

 

Cash and cash equivalents

$

666,061

 

 

$

1,124

 

Restricted cash

 

25,083

 

 

 

703

 

Deposits

 

50,221

 

 

 

6,412

 

Other current assets

 

13,246

 

 

 

6,200

 

Total current assets

 

754,611

 

 

 

14,439

 

Property and equipment, net

 

261,562

 

 

 

293,933

 

Other non-current assets

 

7,287

 

 

 

8,010

 

Total assets

$

1,023,460

 

 

$

316,382

 

Liabilities and stockholders’ equity (deficit)

 

 

 

Current liabilities

 

 

 

Accounts payable

$

36,180

 

 

$

86,601

 

Accrued expenses and other current liabilities

 

47,343

 

 

 

52,382

 

Related party accrued interest

 

10,140

 

 

 

82,260

 

Accrued interest

 

5,062

 

 

 

36,030

 

Related party notes payable

 

13,463

 

 

 

332,355

 

Notes payable, current portion

 

103,505

 

 

 

149,199

 

Obligation to issue registered shares of Class A Common Stock

 

22,511

 

 

 

 

Vendor payables in trust

 

 

 

 

110,224

 

Total current liabilities

 

238,204

 

 

 

849,051

 

Capital leases, less current portion

 

35,988

 

 

 

36,501

 

Other liabilities, less current portion

 

4,129

 

 

 

1,000

 

Notes payable, less current portion

 

99,618

 

 

 

9,168

 

Total liabilities

 

377,939

 

 

 

895,720

 

Commitments and contingencies

 

 

 

Stockholders’ equity (deficit)

 

 

 

Class A Common Stock, $0.0001 par value; 750,000,000 shares authorized; 134,795,128 and 93,099,596 shares issued and outstanding as of September 30, 2021 and December 31, 2020, respectively

 

13

 

 

 

9

 

Class B Common Stock, $0.0001 par value; 75,000,000 shares authorized; no shares and 64,000,588 shares issued and outstanding as of September 30, 2021 and December 31, 2020, respectively

 

 

 

 

6

 

Additional paid-in capital

 

3,475,314

 

 

 

1,817,760

 

Accumulated other comprehensive loss

 

(6,461

)

 

 

(5,974

)

Accumulated deficit

 

(2,823,345

)

 

 

(2,391,139

)

Total stockholders’ equity (deficit)

 

645,521

 

 

 

(579,338

)

Total liabilities and stockholders’ equity (deficit)

$

1,023,460

 

 

$

316,382

 

Faraday Future Intelligent Electric Inc.

Condensed Consolidated Statements of Cash Flows

(in thousands)

(Unaudited)

 

Nine Months
Ended

September 30,
2021

 

Nine Months
Ended

September 30,
2020

 

 

 

 

Cash flows from operating activities

 

 

 

Net loss

$

(432,206

)

 

$

(89,136

)

Adjustments to reconcile net loss to net cash used in operating activities

 

 

 

Depreciation and amortization expense

 

4,268

 

 

 

3,046

 

Stock-based compensation

 

8,521

 

 

 

7,066

 

Vesting of restricted stock awards for employee bonus

 

14,620

 

 

 

 

Loss on disposal of property and equipment

 

62,987

 

 

 

 

Change in fair value measurements

 

60,394

 

 

 

(10,056

)

Loss on cancellation of lease

 

 

 

 

206

 

(Gain)/loss on foreign exchange

 

(1,823

)

 

 

3,234

 

Gain on write-off of accounts payable and loss on write-off of vendor deposits, net

 

(4,191

)

 

 

 

Non-cash interest expense

 

36,478

 

 

 

47,920

 

Loss/(gain) on settlement of related party notes payable, notes payable and vendor payables in trust, net

 

96,036

 

 

 

(295

)

Gain on forgiveness of vendor payables in trust

 

(1,731

)

 

 

 

Reserve for unrecoverable value added taxes

 

6,404

 

 

 

 

Changes in operating assets and liabilities

 

 

 

Deposits

 

(35,796

)

 

 

(7,075

)

Other current assets

 

(15,260

)

 

 

1,984

 

Other non-current assets

 

(3,186

)

 

 

(45

)

Accounts payable

 

(40,434

)

 

 

11,713

 

Accrued expenses and other current liabilities

 

5,874

 

 

 

4,041

 

Transfers between vendor payables in trust and accounts payable

 

1,167

 

 

 

(134

)

Net cash used in operating activities

 

(237,878

)

 

 

(27,531

)

Cash flows from investing activities

 

 

 

Proceeds from payments of notes receivables

 

 

 

 

3,600

 

Payments for property and equipment

 

(37,264

)

 

 

(589

)

Net cash (used in) provided by investing activities

 

(37,264

)

 

 

3,011

 

Cash flows from financing activities

 

 

 

Proceeds from issuance of Class A Common Stock in the Business Combination

 

229,583

 

 

 

 

Proceeds from issuance of Class A Common Stock pursuant to the PIPE Financing

 

761,400

 

 

 

 

Transaction costs paid in connection with the Business Combination

 

(23,148

)

 

 

 

Transaction costs paid in connection with the PIPE Financing

 

(61,130

)

 

 

 

Proceeds from related party notes payable

 

200

 

 

 

10,132

 

Proceeds from notes payable, net of original issuance discount

 

172,031

 

 

 

25,621

 

Payments of related party notes payable

 

(38,217

)

 

 

(1,000

)

Payments of notes payable, including liquidation premium

 

(48,210

)

 

 

 

Payments of notes payable issuance costs

 

(3,355

)

 

 

(2,554

)

Payments of vendor payables in trust

 

(27,722

)

 

 

(2,231

)

Payments of capital lease obligations

 

(2,691

)

 

 

(1,806

)

Transfers between vendor payables in trust and accounts payable

 

(1,167

)

 

 

134

 

Proceeds from exercise of stock options

 

10,492

 

 

 

31

 

Payments of stock issuance costs

 

(1,071

)

 

 

 

Net cash provided by financing activities

 

966,995

 

 

 

28,327

 

Effect of exchange rate changes on cash and cash equivalents and restricted cash

 

(2,536

)

 

 

(784

)

Net increase in cash and cash equivalents and restricted cash

 

689,317

 

 

 

3,023

 

Cash and cash equivalents and restricted cash, beginning of period

 

1,827

 

 

 

3,354

 

Cash and cash equivalents and restricted cash, end of period

$

691,144

 

 

$

6,377

 

Faraday Future Intelligent Electric Inc.
Condensed Consolidated Statements of Cash Flows
(in thousands)
(Unaudited)

The following table provides a reconciliation of cash and cash equivalents and restricted cash reported within the Condensed Consolidated Balance Sheets that aggregate to the total of the same such amounts shown in the Condensed Consolidated Statements of Cash Flows:

 

Nine Months
Ended

September 30,
2021

 

Nine Months
Ended

September 30,
2020

Cash and cash equivalents

$

1,124

 

$

2,221

Restricted cash

 

703

 

 

1,133

Total cash and restricted cash, beginning of period

$

1,827

 

$

3,354

 

 

 

 

Cash and cash equivalents

$

666,061

 

$

5,664

Restricted cash

 

25,083

 

 

713

Total cash, cash equivalents and restricted cash, end of period

$

691,144

 

$

6,377

 

 

 

 

Supplemental disclosure of noncash investing and financing activities

 

 

 

Conversion of related party notes payable and related party accrued interest into Class A Common Stock

$

294,796

 

$

Conversion of notes payable and accrued interest into Class A Common Stock

 

98,375

 

 

Issuance of warrants

 

17,596

 

 

490

Conversion of assumed convertible and promissory notes payable into Class A Common Stock and Private Warrants

 

1,080

 

 

Conversion of The9 Conditional Obligation into Class A Common Stock

 

2,863

 

 

Acquisitions of property and equipment included in accounts payable

 

270

 

 

491

Conversion of related party customer deposit to related party notes payable

 

 

 

11,635

 

 

 

 

Supplemental disclosure of noncash investing and financing activities related to the Business Combination

 

 

 

Exchange of Legacy FF redeemable preference stock for a commitment to issue Class A Common Stock

$

859,182

 

$

Exchange of Legacy FF convertible preferred stock for a commitment to issue Class B Common Stock

 

697,611

 

 

Settlement of notes payable and accrued interest for a commitment to issue Class A Common Stock

 

68,541

 

 

Settlement of related party notes payable and related party accrued interest for a commitment to issue Class A Common Stock

 

69,218

 

 

Settlement of vendor payables in trust for a commitment to issue Class A Common Stock

 

96,186

 

 

Settlement of accounts payable for a commitment to issue Class A Common Stock

 

2,879

 

 

Reclassification of deferred transaction costs paid in prior periods against the proceeds received in the Business Combination

 

7,865

 

 

 

 

 

 

Supplemental disclosure of cash flow information

 

 

 

Cash paid for interest

$

5,837

 

$

63

 

Mark Connelly
Investors: ir@faradayfuture.com
John Schilling
Media: media@faradayfuture.com

Source: Faraday Future Intelligent Electric Inc.