Faraday Future reported third-quarter financial results with a net loss of $304 million

On May 7, The Day Future Intelligent Electric Inc., headquartered in California, USA. ("FF", "Faraday Future" or "the Company") today reported financial results for the third quarter ended September 30, 2021, with a net loss of $304 million. The publication of the financial results was delayed as a result of the special committee's previously announced investigations.

"The third quarter of 2021 is significant for Faraday Future as we completed our merger with PSAC as a public company, with sufficient capital and a good balance sheet at the end of the third quarter." Dr. Fukang Bi, global CEO of the company, said, "We have made great progress in the construction of our manufacturing facility in Hanford, California, and the construction of the production area is progressing as planned.

In a challenging supply chain environment, we continue to work closely with our supply chain partners and make outstanding progress. We have strengthened our management team by hiring key employees who help us navigate the challenging logistics environment, and we have strengthened our capabilities in other key areas such as manufacturing, development, finance, and more. ”

Dr. Bifukang further emphasized: "After the end of the third quarter, we achieved the first four milestones to SOP at our manufacturing facility in Hanford. We remain confident in delivering the FF 91 in the third quarter of 2022 and firmly believe that Faraday Future is positioned to redefine the most advanced smart electric vehicles. ”

Comments on the special committee's review

Dr Bi Fukang added: "A special committee of independent directors completed a previously announced investigation into allegations related to historical disclosure and submitted its findings and recommendations to the Company's Board of Directors. The Board of Directors accepted the findings and the implementation of the remedial measures was proceeding smoothly.

On behalf of the entire management team, I would like to thank the Special Committee, our financial and legal advisors, and the members of the Board of Directors for their hard work and their commitment to bringing the company to the highest ethical and ethical standards. I would also like to thank all my colleagues, suppliers and investors for their support and trust. I believe this review and the changes we make will help us build a stronger, better company. ”

Key highlights for Q3 2021

Faraday Future focuses on FF 91 delivery and completion of the business plan and continues to make progress. The following were published for the third quarter ended September 30, 2021:

Completed acquisition with Special Purpose Solutions Acquisition Corp. ("PSAC") merge.

FF's common stock (code "FFIE") and warrants (code "FFIEW") began trading on nasdaq on July 22, 2021.

Completed a 2,270-mile vehicle testing and validation trip along historic U.S. Route 66, which winds from Chicago, Illinois, to Santa Monica, California, traversing multiple U.S. states.

Announced plans to partner with Qmerit, a leader in the green energy transition industry and the largest supplier of electric vehicle charging network installations in the United States.

FF has partnered with Qmerit to meet the home charging needs of future FF 91 users and other future energy-related installation services.

Matt Tall was hired as vice president of manufacturing.

He is responsible for leading all aspects of FF production and manufacturing, overseeing the sprint phase of plant construction, parts tooling installation, staff recruitment and FF 91 production at the Hanford Manufacturing Facility.

●Liu Yuchao was hired as senior vice president of supply chain for FF China.

He will help FF drive the production and delivery of FF 91.

● Hired new leadership members to continuously grow the team:

Including Senior Director of Energy Storage and Charging;

Head of Software Engineering, ADAS and Autonomous Driving;

Head of vehicle quality.

● Announced plans for large-scale recruitment within 12 months after the merger with PSAC (completed in July 2021).

Recruitment focus areas are manufacturing, engineering, supply chain, design, marketing, branding, sales, finance and accounting, as well as potential higher-level management positions.

●The first "919 Futurist Day" annual co-creation ceremony was held at FF headquarters in Los Angeles, California.

Hundreds of attendees from FF users, partners, car enthusiasts, and FF employees and their friends and family around the world gathered to celebrate FF's success and exchange products, technology, people, innovations and user-centric ideas.

Outlined the major milestones for the Hanford manufacturing facility to soop and regularly provided milestones and other progress updates through video playback and live streaming on public media channels and FF APP.

Major events after the third quarter

From September 30, 2021 to December 31, 2021, FF completed the following key milestones:

●The installation of test equipment was completed in the pilot production construction area of the Hanford manufacturing plant.

The Hanford manufacturing facility covers approximately 1.1 million square feet and is expected to have the capacity to support the production of 10,000 vehicles per year when completed.

Based on the current timeline, FF management expects production at the Hanford manufacturing facility to begin in the third quarter of 2022.

●Officially obtained the Certificate of Occupancy for the pre-production area of the Hanford manufacturing plant

Obtaining the certificate means that FF has been allowed to carry out key construction activities, including the manufacture of more quasi-production vehicles at the plant.

●Infrastructure construction began in other production areas of the Hanford manufacturing plant, including bodywork, powertrain, warehouse and final assembly.

The indoor infrastructure in the production area has been largely completed and major mechanical systems, including electrical and plumbing, are being installed.

Announced a partnership with Munro & Associates, which will act as co-creation consultant for FF and assist in production preparations for the FF 91 through comparative analysis and quality assessment.

● Community Day and Job Fair were held at Hanford City Hall on November 3, 2021 and November 10, 2021, respectively.

Announced HSL Italia as a supplier of exterior lighting.

HSL Italia will work with the company throughout the production process to ensure the provision of high-quality, innovative exterior lighting systems.

●After December 31, 2021, FF completed the following other major milestones and made certain personnel and organizational changes:

Announced that it has signed a contract with South Korea-based automaker Myoung Shin Co., Ltd. to manufacture Faraday Future's second car, the FF 81, with the FF 81 scheduled for the 2024 SOP.

●The first FF91 quasi-production car was completed.

This marks Faraday Future's fourth manufacturing milestone and continues to build more quasi-production vehicles for final engineering validation and certification.

● Obtained a sales license from the State of California for online sales throughout the United States.

● Signed a lease agreement for FF's flagship store in Beverly Hills, California, and identified a design company.

The initial lease term is 126 months and the lessee is entitled to two five-year renewals.

In addition, FF announced that it is actively looking for a second flagship store location in the United States.

Appointed Susan Swenson as Executive Chairman and Jordan Vogel as Lead Independent Director of the Board.

The FF Board of Directors consists of nine directors, five of whom are independent directors.

Announced that following the retirement of Benedikt Hartmann, Mathias Hofmann will take over as the new Head of Global Supply Chain, effective February 25, 2022.

Mathias joined FF after nearly 30 years at BMW, where he served as Vice President of Global Sourcing and Plant Management.

He has worked on four continents and also has experience in China, and before joining FF his most recent role was Director of The Brazilian Factory.

He has extensive experience in plant operations as well as direct and indirect procurement.

Becky Roof was appointed Acting Chief Financial Officer (CFO) and a subsidiary of AlixPartners was engaged to assist in the expeditious implementation of the Special Committee's recommendations for rectification, including financial controls and remediation of material deficiencies.

Ms. Roof is an experienced Finance Officer who has served as Acting CFO in a number of public and private companies.

●Announced that the number of vehicles booked as of March 31, 2022 is 401 units.

The reservation is a fully refundable, non-binding booking for the FF 91 Futurist Alliance and/or FF 91 Futurist originally sold by the Company to users in the United States and China.

To book the FF 91 Futurist Alliance, a $5,000 deposit is required for U.S. users and a 50,000 RMB deposit is required for Chinese users.

To book FF 91 Futurist, a $1,500 deposit is required for U.S. users and a 20,000 RMB deposit is required for Chinese users.

Results for the third quarter of 2021

Operating expenses for the third quarter ended September 30, 2021 were $186 million, compared to operating expenses of $18 million for the three months ended September 30, 2020. Operating expenses increased significantly, mainly due to increased investment at the Hanford manufacturing plant in preparation for full-scale commercial production.

Net loss for the third quarter ended September 30, 2021 was $304 million, compared to a net loss of $33 million for the same period last year. The increase in net loss was primarily due to a significant increase in operating expenses, losses on changes in the fair value of notes payable, notes payable denominated at fair value, losses on fair value changes in warrant liabilities, and losses arising from the processing of related party notes payable, notes payable and supplier payments payable.

As of September 30, 2021, the balance of cash and cash equivalents was $666 million. Cash balance as of March 31, 2022 was $276 million, including $97 million in notes and planned interest payments.