SEC Filing | Faraday Future

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ffie-20220930

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
			For the quarterly period ended September 30, 2022


☐			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: 001-39395

Faraday Future Intelligent Electric Inc.

(Exact name of registrant as specified in its charter)


Delaware						84-4720320
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification No.)

18455 S. Figueroa Street, Gardena, CA						90248
(Address of Principal Executive Offices)						(Zip Code)

(424) 276-7616

Registrant’s telephone number, including area code

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


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Class A common stock, par value $0.0001 per share	FFIE	The Nasdaq Stock Market LLC
Redeemable warrants, exercisable for shares of Class A common stock at an exercise price of $11.50 per share	FFIEW	The Nasdaq Stock Market LLC

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	☒

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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 Exchange Act). Yes ☐ No ☒

The registrant had outstanding 386,256,244 shares of Class A common stock and 64,000,588 shares of Class B common stock as of November 17, 2022.

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INDEX TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


		Pages
FARADAY FUTURE INTELLIGENT ELECTRIC INC.
Part I Financial Information
Item 1.	Condensed Consolidated Financial Statements (Unaudited)
	Condensed Consolidated Balance Sheets as of September 30, 2022 and December 31, 2021	3
	Condensed Consolidated Statements of Operations and Comprehensive Loss for the Three and Nine Months Ended September 30, 2022 and 2021	4
	Condensed Consolidated Statements of Commitment to Issue Class A Common Stock and Stockholders’ Equity (Deficit) for the Three and Nine Months Ended September 30, 2022 and 2021	5
	Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2022 and 2021	9
	Notes to the Condensed Consolidated Financial Statements	11
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	17
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	38
Item 4.	Controls and Procedures	38

Part II Other Information
Item 1.	Legal Proceedings	42
Item 1A.	Risk Factors	42
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	55
Item 3.	Defaults Upon Senior Securities	55
Item 4.	Mine Safety Disclosures	55
Item 5.	Other Information	55
Item 6.	Exhibits	56
Signatures		58

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Part I - Financial Information

ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Faraday Future Intelligent Electric Inc.

Condensed Consolidated Balance Sheets

(in thousands, except share and per share data)

(Unaudited)


	September 30, 2022		December 31, 2021

Assets
Current assets
Cash	$	31,766	$	505,091
Restricted cash	2,162		25,386
Deposits	44,530		63,370
Other current assets	23,759		13,410
Total current assets	102,217		607,257
Property and equipment, net	411,657		293,135
Right of use assets	20,202		—
Other non-current assets	6,608		7,040
Total assets	$	540,684	$	907,432
Liabilities and stockholders’ equity
Current liabilities
Accounts payable	65,239		37,773
Accrued payroll and benefits	31,124		21,752
Accrued expenses and other current liabilities	46,104		68,760
Related party accrued interest	12,760		11,231
Accrued interest	541		8,263
Operating lease liabilities, current portion	2,487		—
Finance lease liabilities, current portion	1,807		—
Related party notes payable	12,253		13,655
Notes payable, current portion	5,008		132,372
Total current liabilities	177,323		293,806
Operating lease liabilities, less current portion	18,640		—
Finance lease liabilities, less current portion	6,917		7,570
Other liabilities, less current portion	3,531		3,720
Notes payable, less current portion	46,950		34,682
Total liabilities	253,361		339,778
Commitments and contingencies (Note 11)
Stockholders’ equity
Class A Common Stock, $0.0001 par value; 750,000,000 shares authorized; 345,794,368 and 168,693,323 shares issued and outstanding as of September 30, 2022 and December 31, 2021, respectively	31		17
Class B Common Stock, $0.0001 par value; 75,000,000 shares authorized; 64,000,588 and no shares issued and outstanding as of September 30, 2022 and December 31, 2021, respectively	6		—
Additional paid-in capital	3,603,368		3,482,226
Accumulated other comprehensive gain (loss)	6,603		(6,945)
Accumulated deficit	(3,322,685)		(2,907,644)
Total stockholders’ equity	287,323		567,654
Total liabilities and stockholders’ equity	$	540,684	$	907,432

The accompanying notes are an integral part of these unaudited Condensed Consolidated Financial Statements.

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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,
	2022		2021		2022		2021

Operating expenses
Research and development	$	48,062	$	79,757	$	260,221	$	94,506
Sales and marketing	3,888		6,832		16,272		11,099
General and administrative	28,655		36,725		89,173		64,148
Loss on disposal of property and equipment	—		62,342		1,407		62,987
Total operating expenses	80,605		185,656		367,073		232,740

Loss from operations	(80,605)		(185,656)		(367,073)		(232,740)
Change in fair value measurements	(6,966)		(22,747)		(622)		(60,394)
Interest expense	(663)		(296)		(5,537)		(26,550)
Related party interest expense	(996)		(1,597)		(2,931)		(15,765)
Other (expense) income, net	(6,457)		1,117		(14,307)		(718)
Loss on extinguishment or settlement of related party notes payable, notes payable and vendor payables in trust, net	(7,690)		(94,727)		(7,690)		(96,036)
Loss before income taxes	(103,377)		(303,906)		(398,160)		(432,203)
Income tax provision	—		—		(9)		(3)
Net loss	$	(103,377)	$	(303,906)	$	(398,169)	$	(432,206)

Per share information:
Net loss per Common Stock – Class A and Class B – basic and diluted	$	(0.30)	$	(1.06)	$	(1.20)	$	(2.12)
Weighted average Common shares outstanding – Class A and Class B – basic and diluted	346,575,508		287,951,929		330,878,677		203,686,758

Total comprehensive loss:
Net loss	$	(103,377)	$	(303,906)	$	(398,169)	$	(432,206)
Change in foreign currency translation adjustment	9,864		189		13,548		(487)
Total comprehensive loss	$	(93,513)	$	(303,717)	$	(384,621)	$	(432,693)

The accompanying notes are an integral part of these unaudited Condensed Consolidated Financial Statements.

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Faraday Future Intelligent Electric Inc.

Condensed Consolidated Statements of Commitment to Issue Class A Common Stock and Stockholders’ Equity (Deficit)

(in thousands, except share and per share data)

(Unaudited)


	Commitment to Issue Class A Common Stock	Common Stock					Additional Paid-in Capital		Accumulated Other Comprehensive Gain (Loss)		Accumulated Deficit				Total Stockholders’ Equity (Deficit)
			Class A					Class B
				Shares	Amount								Shares				Amount				Shares				Amount
Balance as of June 30, 2022				—	$	32,900				238,543,475			$	24		64,000,588			$	6			$	3,491,041			$	(3,261)			$	(3,219,308)			$	268,502
Issuance of shares pursuant to the commitment to issue Class A and Class B Common Stock				—	—				20,264,715		—				—		—				—				—				—				—
Transfer of private warrants to unaffiliated parties				—	—				—		—				—		—				186				—				—				186
Amendment of ATW NPA Warrants (Note 12)				—	—				—		—				—		—				1,238				—				—				1,238
Issuance pursuant to commitment to issue registered shares				—	(32,900)				2,387,500		—				—		—				32,900				—				—				32,900
Conversion of notes payable into class A common stock				—	—				64,843,850		6				—		—				67,212				—				—				67,218
Stock-based compensation				—	—				—		—				—		—				3,319				—				—				3,319
Exercise of stock options				—	—				3,137,272		—				—		—				7,181				—				—				7,181
Repurchase of common stock				—	—				(96,759)		—				—		—				(767)				—				—				(767)
Receipt of class A common stock in consideration of exercises of options				—	—				(311,878)		—				—		—				(669)				—				—				(669)
Exercise of warrants				—	—				17,026,193		1				—		—				1,727				—				—				1,728
Foreign currency translation adjustment				—	—				—		—				—		—				—				9,864				—				9,864
Net loss				—	—				—		—				—		—				—				—				(103,377)				(103,377)
Balance as of September 30, 2022				—	$	—			345,794,368		$	31			64,000,588		$	6			$	3,603,368			$	6,603			$	(3,322,685)			$	287,323

The accompanying notes are an integral part of these unaudited Condensed Consolidated Financial Statements.

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Faraday Future Intelligent Electric Inc.

Condensed Consolidated Statements of Commitment to Issue Class A Common Stock and Stockholders’ Equity (Deficit)

(in thousands, except share and per share data)

(Unaudited)


	Commitment to Issue Class A Common Stock	Common Stock					Additional Paid-in Capital		Accumulated Other Comprehensive Gain (Loss)		Accumulated Deficit				Total Stockholders’ Equity (Deficit)
			Class A					Class B
				Shares	Amount								Shares				Amount				Shares				Amount
Balance as of December 31, 2021				—	$	—				168,693,323			$	17		—			$	—			$	3,482,226			$	(6,945)			$	(2,907,644)			$	567,654
Reclassification of obligation to issue registered shares of Class A Common Stock upon adoption of ASU 2020-06				—	32,900				—		—				—		—				—				—				(20,265)				(20,265)
Transfer of private warrants to unaffiliated parties				—	—				—		—				—		—				186				—				—				186
Amended Exercise price of ATW NPA warrants (Note 12)				—	—				—		—				—		—				1,238				—				—				1,238
Reclassification of deferred gain upon adoption of ASC 842				—	—				—		—				—		—				—				—				3,393				3,393
Issuance of shares pursuant to the commitment to issue Class A and Class B Common Stock				—	—				89,152,131		7				64,000,588		6				(13)				—				—				—
Issuance pursuant to commitment to issue registered shares				—	(32,900)				2,387,500		—				—		—				32,900				—				—				32,900
Conversion of notes payable into class A common stock				—	—				64,843,850		6				—		—				67,212				—				—				67,218
Stock-based compensation				—	—				—		—				—		—				9,793				—				—				9,793
Exercise of stock options				—	—				4,100,008		—				—		—				9,535				—				—				9,535
Repurchase of common stock				—	—				(96,759)		—				—		—				(767)				—				—				(767)
Receipt of class A common stock in consideration of exercises of options				—	—				(311,878)		—				—		—				(669)				—				—				(669)
Exercise of warrants				—	—				17,026,193		1				—		—				1,727				—				—				1,728
Foreign currency translation adjustment				—	—				—		—				—		—				—				13,548				—				13,548
Net loss				—	—				—		—				—		—				—				—				(398,169)				(398,169)
Balance as of September 30, 2022				—	$	—			345,794,368		$	31			64,000,588		$	6			$	3,603,368			$	6,603			$	(3,322,685)			$	287,323

The accompanying notes are an integral part of these unaudited Condensed Consolidated Financial Statements.

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Faraday Future Intelligent Electric Inc.

Condensed Consolidated Statements of Commitment to Issue Class A Common Stock and Stockholders’ Equity (Deficit)

(in thousands, except share and per share data)

(Unaudited)


	Common Stock		Additional Paid-in Capital		Accumulated Other Comprehensive Gain (Loss)		Accumulated Deficit				Total Stockholders’ Equity (Deficit)
		Class A		Class B
									Shares(1)				Amount				Shares(1)				Amount
Balance as of June 30, 2021, as recast						107,659,654			$	10		64,000,588			$	6			$	1,973,314			$	(6,650)			$	(2,519,439)			$	(552,759)
Conversion of related party notes payable into Class A Common Stock (see Note 9)					11,566,196		1				—		—				160,436				—				—				160,437
Conversion of notes payable into Class A Common Stock (see Note 10)					7,688,153		1				—		—				98,374				—				—				98,375
Issuance of Class A Common Stock in the Business Combination, net of transaction costs (see Note 3)					27,798,411		3				—		—				170,111				—				—				170,114
Conversion of assumed PSAC convertible and promissory notes payable into Class A Common Stock (see Note 9)					80,000		—				—		—				790				—				—				790
Conversion of liabilities into Class A Common Stock in the Business Combination (see Note 3)					20,666,825		2				—		—				285,335				—				—				285,337
Conversion of liabilities into the commitment to issue Class A Common Stock in the Business Combination (see Note 3)					—		—				—		—				52,338				—				—				52,338
Legacy FF Ordinary Stock exchanged in the Business Combination for a commitment to issue Class A and Class B Common Stock					(117,839,510)		(12)				(64,000,588)		(6)				18				—				—				—
Issuance of Class A Common Stock in the PIPE Financing, net of transaction costs (see Note 3)					76,140,000		8				—		—				692,397				—				—				692,405
Settlement of lawsuit with issuance of vested stock options (see Note 12)					—		—				—		—				8,459				—				—				8,459
Settlement of accrued rent with issuance of vested stock options					—		—				—		—				951				—				—				951
Vesting of restricted stock award for employee bonus					—		—				—		—				14,620				—				—				14,620
Stock-based compensation					—		—				—		—				5,053				—				—				5,053
Exercise of stock options					1,078,495		—				—		—				2,740				—				—				2,740
Settlement of receivables through receipt of Class A Common Stock					(43,096)		—				—		—				(105)				—				—				(105)
Issuance of warrants					—		—				—		—				10,483				—				—				10,483
Foreign currency translation adjustment					—		—				—		—				—				189				—				189
Net loss					—		—				—		—				—				—				(303,906)				(303,906)
Balance as of September 30, 2021					134,795,128		$	13			—		$	—			$	3,475,314			$	(6,461)			$	(2,823,345)			$	645,521

(1) The shares of the Company’s common stock prior to the Business Combination (as defined in Note 1) have been retrospectively recast to reflect the change in the capital structure as a result of the Business Combination as described in Note 3.

The accompanying notes are an integral part of these unaudited Condensed Consolidated Financial Statements.

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Faraday Future Intelligent Electric Inc.

Condensed Consolidated Statements of Commitment to Issue Class A Common Stock and Stockholders’ Equity (Deficit)

(in thousands, except share and per share data)

(Unaudited)


	Common Stock		Additional Paid-in Capital		Accumulated Other Comprehensive Gain (Loss)		Accumulated Deficit				Total Stockholders’ Equity (Deficit)
		Class A		Class B
									Shares(1)				Amount				Shares(1)				Amount
Balance as of December 31, 2020, as recast						93,099,596			$	9		64,000,588			$	6			$	1,817,760		$	(5,974)		$	(2,391,139)		$	(579,338)
Conversion of The9 Conditional Obligation					423,053		—				—		—				2,863				—			—			2,863
Conversion of related party notes payable into Class A Common Stock (see Note 9)					22,454,776		2				—		—				294,794				—			—			294,796


Conversion of notes payable into Class A Common Stock (see Note 10)					7,688,153		1				—		—				98,374				—			—			98,375

Issuance of Class A Common Stock in the Business Combination, net of transaction costs (see Note 3)					27,798,411		3				—		—				170,111				—			—			170,114
Conversion of assumed PSAC convertible and promissory notes payable into Class A Common Stock (see Note 9)					80,000		—				—		—				790				—			—			790
Conversion of liabilities into Class A Common Stock in the Business Combination (see Note 3)					20,666,825		2				—		—				285,335				—			—			285,337
Conversion of liabilities into the commitment to issue Class A Common Stock in the Business Combination (see Note 3)					—		—				—		—				52,338				—			—			52,338
Legacy FF Ordinary Stock exchanged in the Business Combination for a commitment to issue Class A and Class B Common Stock					(117,839,510)		(12)				(64,000,588)		(6)				18				—			—			—
Issuance of Class A Common Stock in the PIPE Financing, net of transaction costs (see Note 3)					76,140,000		8				—		—				692,397				—			—			692,405
Settlement of lawsuit with issuance of vested stock options (see Note 12)					—		—				—		—				8,459				—			—			8,459
Settlement of accrued rent with issuance of vested stock options					—		—				—		—				951				—			—			951
Vesting of restricted stock award for employee bonus					—		—				—		—				14,620				—			—			14,620
Stock-based compensation					—		—				—		—				8,521				—			—			8,521
Exercise of stock options					4,326,920		—				—		—				10,492				—			—			10,492
Settlement of receivables through receipt of Class A Common Stock					(43,096)		—				—		—				(105)				—			—			(105)
Issuance of warrants					—		—				—		—				17,596				—			—			17,596
Foreign currency translation adjustment					—		—				—		—				—				(487)			—			(487)
Net loss					—		—				—		—				—				—			(432,206)			(432,206)
Balance as of September 30, 2021					134,795,128		$	13			—		$	—			$	3,475,314