Core Viewpoint - Faraday Future is facing significant challenges in the electric vehicle (EV) market, including a withdrawal of production forecasts and potential delisting from Nasdaq, despite a recent surge in stock price due to short selling dynamics [1][2][3]. Group 1: Production and Financial Performance - Faraday Future has withdrawn its 2024 production forecast of 1,000 vehicles due to poor market conditions and low funding, resulting in an 11% drop in share price [2]. - The company reported its first revenue of $0.8 million in fiscal 2023, with a significant reduction in operating loss to $286 million from $437 million in 2022, primarily due to cost-cutting measures [4]. - Despite a nearly 99% decline in value last year, Faraday's shares have increased by almost 70% this year, with the stock price now over $1 [2]. Group 2: Market Conditions and Strategic Moves - The EV market is experiencing slowing demand as consumers are opting for cheaper hybrid vehicles amid high interest rates and inflation [2]. - Faraday Future is seeking strategic investors and financing backed by equipment and intellectual property to reduce reliance on dilutive funding [2]. Group 3: Nasdaq Compliance and Delisting Risks - Faraday Future received a Nasdaq letter indicating that its stock had closed below $1 for 30 consecutive business days, with a deadline of June 25, 2024, to regain compliance [3]. - Nasdaq issued a delisting determination after the stock closed at 10 cents or less for 10 consecutive days, and the company plans to appeal this decision [3]. Group 4: Market Sentiment and Stock Dynamics - The stock has a high short interest of 31.45%, which could lead to upward pressure on the stock price if short sellers exit, although the short ratio is low at 0.22 days, limiting bullish impact [5][6]. - The company faces significant challenges due to declining EV market demand and high vehicle prices exceeding $300,000 [6].

Shares of premium electric vehicle (EV) manufacturer Faraday Future (NASDAQ:FFIE) are suffering a severe drop on Wednesday. Management warned that the company may file for bankruptcy if it’s unable to secure additional capital. Unfortunately, the pricing of Faraday’s EVs has translated to a very limited market, as evidenced by the firm’s disappointing sales. Therefore, FFIE stock will likely incur a delisting, barring some lifeline.In a Form 10-K document filed with the U.S. Securities and Exchange Commissi ...

The ride may be over for Faraday Future Intelligent Electric (NASDAQ:FFIE). After FFIE stock surged to unexpected heights earlier this month on short squeeze momentum, the micro-cap electric vehicle (EV) producer is back below the $1 mark today. After the close of markets yesterday, the company reported worse-than-expected earnings for the fourth quarter of 2023. It certainly doesn’t look good that Faraday Future missed Wall Street estimates on revenue, reporting only $800,000, opposite the already-low fore ...

Financial Data and Key Metrics Changes - Faraday Future reported revenue of $0.8 million for fiscal year 2023, with a cost of goods sold of $43 million, compared to $0 revenue and $0 cost of goods sold in fiscal year 2022, indicating the start of vehicle deliveries in Q3 2023 [14] - Loss from operations decreased to $286 million in fiscal year 2023 from $437 million in fiscal year 2022, primarily due to a significant reduction in operating expenses [14] - Net loss decreased to $432 million for fiscal year 2023 compared to $602 million for fiscal year 2022, reflecting improved cost management [14][15] - Total assets increased slightly to $531 million as of December 31, 2023, from $529 million in 2022, while total liabilities decreased to $302 million from $328 million [15] - Cash balance at December 31, 2023, was $4 million, down from $17 million in 2022, indicating ongoing cash flow challenges [16] Business Line Data and Key Metrics Changes - The company transitioned from development to production, with significant milestones achieved in 2023, including the commencement of production for the FF 91 2.0 [5][6] - The FF 91 2.0 passed U.S. Federal Motor Vehicle Safety Standards crash test requirements, with the first phase of delivery beginning shortly thereafter [5] - A leasing program was launched, and a public charging program was rolled out to enhance sales and service capabilities [7] Market Data and Key Metrics Changes - The company announced potential entry into the Middle East market, which is part of its geographic expansion strategy alongside the U.S. and China [8] - Strategic cooperation agreements were established with local partners in the Middle East, indicating strong market interest [8] Company Strategy and Development Direction - The main focus for the company is to stabilize operations and achieve profitability as quickly as possible [24] - The company is considering a dual brand strategy to better target market segments and integrate advanced AI technology into more affordable products [24] - The U.S.-China automotive industry bridge strategy is being explored to leverage strengths from both markets [25][26] Management's Comments on Operating Environment and Future Outlook - Management acknowledged challenges in funding and supply chain, which impacted production volumes [9] - The company is focused on building a direct relationship with users through co-creation initiatives, enhancing product development based on user feedback [9] - Management expressed confidence in the company's ability to ramp up production and improve financial stability with additional capital [22][27] Other Important Information - The company successfully raised approximately $300 million in gross financing through various means, including convertible notes and equity lines of credit [18] - Cost reductions have been implemented across the board, and the company is exploring non-dilutive financing options to improve its financial position [19][22] Q&A Session Summary - Questions regarding the company's future financing strategies and production ramp-up were addressed, with management emphasizing the importance of capital for scaling production [22] - Management reiterated the commitment to maintaining a lean operational structure while exploring additional funding opportunities [20][21]

Core Points - Faraday Future's shares are declining below $1 following Nasdaq's notification of noncompliance and delisting determination [1][2] - The company has filed its Form 10-K but is still facing compliance issues due to its stock price and delayed earnings report [2] - Faraday reported $800,000 in revenue for 2023 but incurred a net loss of $432 million, indicating ongoing financial struggles [2] Compliance and Delisting Issues - Nasdaq informed Faraday on April 24 that it was noncompliant due to a closing price of 10 cents or less for 10 consecutive trading days [1] - The company was previously notified on December 28 about noncompliance for having a closing price below $1 for 30 consecutive business days, with a deadline of June 25 to regain compliance [2] - Faraday's failure to file its first-quarter earnings could lead to further delisting actions [2] Financial Condition - As of May 23, Faraday had only $5 million in cash, with $2 million being restricted, against a net cash usage of $278 million in operating activities for 2023 [3] - The company has substantial doubt about its ability to continue as a going concern due to its cash position and ongoing losses [3]

Group 1 - Faraday Future reported a revenue of $800,000 for the fiscal year 2023, significantly below Wall Street's expectation of $2.59 million, marking the first year the company has reported revenue [1] - The company's net loss improved to -$432 million in 2023, compared to -$602 million in 2022, with EV sales commencing in the third quarter of the year [1] - CEO Matthias Aydt expressed optimism about future growth through efficiency and new market entries in 2023, emphasizing a commitment to enhancing product strength and shareholder value [1] Group 2 - FFIE stock experienced a decline of 31.6% as of Wednesday morning, with 55.1 million shares traded, which is below the daily average trading volume of approximately 95.4 million units [2]

[Company Overview](index=7&type=section&id=01.%20Company%20Overview) Faraday Future details its core technological systems for the FF 91 vehicle and its user-centric co-creation business model [Technical Systems](index=7&type=section&id=Technical%20Systems) Faraday Future outlines its core technological systems for the FF 91 vehicle, including the 'FF aiDriving' system, 'Magic All-In-One' AI body control, and 'Hyper Multi-Vectoring' for advanced propulsion - The FF aiDriving system features high-resolution, ultra-long-range Lidar and a powerful **NVIDIA System-on-a-Chip (SoC) compute platform**, enabling advanced driver-assistance features and future OTA updates[8](index=8&type=chunk) - The 'Magic All-In-One' is an all-terrain AI body control system designed to combine the characteristics of a sedan, SUV, and hypercar, emphasizing **performance and comfort**[10](index=10&type=chunk) - The vehicle incorporates a 'Hyper Multi-Vectoring' system, an **AI-empowered multi-axis torque system** for propulsion, steering, and braking, enabling features such as 'Steering by Propulsion'[11](index=11&type=chunk) [Co-Creation Model](index=12&type=section&id=Co-Creation%20Model) The company emphasizes its user-centric enterprise model, centered around 'Co-Creation Officers' who engage with FF's technologies to provide feedback and assist in brand dissemination - FF's user-centric business model involves 'Co-Creation Officers' who provide feedback, enhance brand visibility, and share in the company's value creation through vehicle purchases or leases[13](index=13&type=chunk) [Business Update](index=14&type=section&id=02.%20Business%20Update) Faraday Future outlines key 2023 operational milestones, including FF 91 production, launch, initial deliveries, and strategic expansion into the Middle East market [Production and Launch Milestones](index=14&type=section&id=Production%20and%20Launch%20Milestones) This section highlights Faraday Future's key operational milestones in 2023, including the start of production, the first vehicle off the line, and the official launch with pricing and reservations - Start of Production (SOP) for the FF 91 Futurist Alliance was announced on **March 29, 2023**, at the California factory[15](index=15&type=chunk) - The first production FF 91 vehicle rolled off the assembly line on **April 14, 2023**[16](index=16&type=chunk) - The FF 91 2.0 Futurist Alliance was launched in **May 2023**, priced at **$309,000**, with reservations opened in the U.S. and China[19](index=19&type=chunk) [Deliveries and Strategic Expansion](index=17&type=section&id=Deliveries%20and%20Strategic%20Expansion) The company initiated deliveries of the FF 91 2.0 Futurist Alliance to 'Co-Creation Officers' and announced its strategic entry into the Middle East market in November 2023 - Deliveries of the FF 91 2.0 Futurist Alliance commenced to various 'Co-Creation Officers,' including celebrities and entrepreneurs[20](index=20&type=chunk) - FF announced its entry into the Middle East in **November 2023**, securing strategic cooperation agreements with Master Investment Group and Siraj Holding LLC[21](index=21&type=chunk) [The FF 91 2.0 Futurist](index=20&type=section&id=03.%20The%20FF%2091%202.0%20Futurist) The FF 91 Futurist is positioned as a 'TechLuxury' vehicle, emphasizing extreme technology and an ultimate intelligent user experience built on immersive, intuitive, and connected pillars [Product Positioning and User Experience](index=20&type=section&id=Product%20Positioning%20and%20User%20Experience) The FF 91 Futurist is positioned as a competitive 'TechLuxury' vehicle, emphasizing extreme technology and an ultimate intelligent user experience built on immersive, intuitive, and connected pillars - The FF 91 Futurist is marketed as a 'TechLuxury' vehicle offering **extreme technology, ultimate intelligent user experience, and a complete ecosystem**[23](index=23&type=chunk) - The user experience is designed to be **immersive, intuitive, and connected**, featuring NASA-inspired zero-gravity rear seats, facial recognition, and seamless 5G connectivity[29](index=29&type=chunk) [Financials](index=24&type=section&id=04.%20Financials) This section presents Faraday Future's 2023 financial performance, including first-time revenues, reduced operating and net losses, and key balance sheet and cash flow metrics [Consolidated Statements of Operations](index=24&type=section&id=Consolidated%20Statements%20of%20Operations) For the fiscal year ended December 31, 2023, Faraday Future reported its first-ever revenues, significantly reduced its loss from operations, and narrowed its net loss FY 2023 vs. FY 2022 Statement of Operations | Metric | 2023 (in thousands) | 2022 (in thousands) | | :--- | :--- | :--- | | Revenues | $784 | $0 | | Loss from operations | $(286,054) | $(437,144) | | Net loss | $(431,744) | $(602,239) | | Net loss per share (Basic) | $(44.81) | $(393.56) | [Consolidated Balance Sheets](index=25&type=section&id=Consolidated%20Balance%20Sheets) As of December 31, 2023, the company's total assets remained nearly flat, while cash and cash equivalents decreased significantly, and total liabilities were reduced Year-End Balance Sheet | Metric | Dec 31, 2023 (in thousands) | Dec 31, 2022 (in thousands) | | :--- | :--- | :--- | | Cash and cash equivalents | $5,188 | $16,568 | | Total Assets | $530,579 | $529,200 | | Total Liabilities | $202,303 | $268,248 | [Consolidated Statements of Cash Flows](index=26&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) For the year ended December 31, 2023, the company reported net cash used in operating activities and a decline in its overall cash position - Net cash used in operating activities for the year ended December 31, 2023, was **$278.2 million**[41](index=41&type=chunk) - The company concluded 2023 with total cash and restricted cash of **$5.2 million**, a decrease from **$16.6 million** at the end of 2022[45](index=45&type=chunk) [Imagery](index=29&type=section&id=05.%20Imagery) This section provides a visual showcase of the FF 91 Futurist through a collection of high-quality photographs highlighting its design and features [Vehicle Photographs](index=29&type=section&id=Vehicle%20Photographs) This concluding section of the presentation is a visual showcase, featuring a collection of high-quality photographs of the FF 91 Futurist, displaying its exterior and interior - This section presents a series of professional photographs showcasing the FF 91 Futurist vehicle[48](index=48&type=chunk)[49](index=49&type=chunk)[50](index=50&type=chunk)

Part I [Item 1. Business](index=4&type=section&id=Item%201.%20Business) FFIE is a global intelligent mobility ecosystem company designing and manufacturing next-generation electric vehicles, with initial FF 91 deliveries starting in 2023 - FFIE is a Delaware holding company operating through U.S. (FF U.S.) and China (PRC Subsidiaries) entities, designing and engineering intelligent, connected, electric vehicles[9](index=9&type=chunk)[10](index=10&type=chunk)[12](index=12&type=chunk) - Key technological innovations include proprietary Variable Platform Architecture (VPA), propulsion system, and Internet, Autonomous Driving, and Intelligence (I.A.I.) systems[13](index=13&type=chunk) - The FF 91 Futurist was upgraded to PT Gen 2.0 in 2023 with **26 significant improvements**, and received its first major OTA upgrades in January 2024, consisting of **752 new additions** and **846 improvements**[14](index=14&type=chunk)[15](index=15&type=chunk) FF 91 Futurist Performance and IP | Metric | Value | | :--- | :--- | | Acceleration (0-60 mph) | 2.27 seconds | | EPA Range | 381 miles | | Patents Granted (as of Dec 31, 2023) | ~660 | | Horsepower (FF 91 Futurist) | 1,050 hp | | Torque (FF 91 Futurist) | 12,510 Nm | - FF's product pipeline includes the FF 91 series (flagship, MSRP **$309,000**), FF 81 series (premium mass market), FF 71 series (mass market), and a Smart Last Mile Delivery (SLMD) vehicle, with future models contingent on funding[16](index=16&type=chunk)[17](index=17&type=chunk)[100](index=100&type=chunk)[104](index=104&type=chunk)[107](index=107&type=chunk) - Manufacturing strategy is hybrid, utilizing a **1.1 million sq ft facility** in Hanford, California (**10,000 vehicles/year capacity**) and a contract manufacturing agreement with Myoung Shin in South Korea for the FF 81[19](index=19&type=chunk)[109](index=109&type=chunk)[110](index=110&type=chunk) - FF launched its **3-phase delivery plan** for the FF 91 in May 2023, with Phase 2 (revenue generation) beginning in August 2023, and is building a direct sales model with online and offline channels[20](index=20&type=chunk)[115](index=115&type=chunk)[116](index=116&type=chunk) - The luxury car market (**$80,000+ MSRP**) is projected to grow at an **8-14% compound annual growth rate** through 2031, with electric vehicles expected to comprise over **75% of new passenger vehicle sales by 2040**[32](index=32&type=chunk)[33](index=33&type=chunk) - FF faces intense competition from both established and new EV manufacturers, many of whom possess greater financial, technical, and marketing resources[141](index=141&type=chunk)[142](index=142&type=chunk) [Item 1A. Risk Factors](index=31&type=section&id=Item%201A.%20Risk%20Factors) FFIE faces severe liquidity constraints, substantial accumulated losses, and significant operational risks, including an SEC investigation and internal control weaknesses - FFIE has incurred cumulative losses of **$3,958.5 million**, has negative cash flows from operations, and an accumulated deficit as of December 31, 2023, raising substantial doubt about its ability to continue as a going concern[153](index=153&type=chunk)[545](index=545&type=chunk) Key Financial Risks (as of Dec 31, 2023) | Metric | Amount (USD) | | :--- | :--- | | Accumulated Deficit | $3,958.5 million | | Unrestricted Cash Balance | $1.9 million | | Negative Working Capital | $169.8 million | | Unfunded SPA Commitments | $211.3 million | | Optional Unfunded SPA Commitments | $327.0 million | - The company is in default on Secured SPA Notes and in breach of a debt agreement with Chongqing Leshi Small Loan Co., Ltd., and is currently ineligible to utilize its 'at-the-market' equity program due to late Form 10-K filing[154](index=154&type=chunk)[549](index=549&type=chunk)[552](index=552&type=chunk) - FFIE faces significant risks of Nasdaq delisting due to non-compliance with minimum bid price and timely filing requirements, which could severely impact its market price and ability to raise capital[405](index=405&type=chunk)[406](index=406&type=chunk)[407](index=407&type=chunk) - FFIE is involved in an SEC investigation and multiple legal proceedings (class action, derivative lawsuits), incurring significant expenses and potential adverse findings[199](index=199&type=chunk)[202](index=202&type=chunk)[204](index=204&type=chunk) - Material weaknesses in internal control over financial reporting have been identified, leading to a restatement of previously issued financial statements and ongoing remediation efforts expected to extend beyond December 31, 2024[393](index=393&type=chunk)[394](index=394&type=chunk)[399](index=399&type=chunk)[923](index=923&type=chunk)[924](index=924&type=chunk)[925](index=925&type=chunk)[926](index=926&type=chunk)[927](index=927&type=chunk)[928](index=928&type=chunk)[934](index=934&type=chunk) - Operations in China are subject to complex and rapidly evolving PRC laws and regulations, including those on foreign investment, cybersecurity, and data protection, posing risks of government intervention and operational changes[12](index=12&type=chunk)[55](index=55&type=chunk)[56](index=56&type=chunk)[57](index=57&type=chunk)[58](index=58&type=chunk)[324](index=324&type=chunk)[325](index=325&type=chunk)[328](index=328&type=chunk)[332](index=332&type=chunk)[355](index=355&type=chunk)[356](index=356&type=chunk)[357](index=357&type=chunk)[361](index=361&type=chunk)[362](index=362&type=chunk)[363](index=363&type=chunk)[369](index=369&type=chunk)[370](index=370&type=chunk)[371](index=371&type=chunk)[373](index=373&type=chunk)[374](index=374&type=chunk)[375](index=375&type=chunk)[376](index=376&type=chunk)[377](index=377&type=chunk)[379](index=379&type=chunk)[380](index=380&type=chunk)[381](index=381&type=chunk) [Item 1B. Unresolved Staff Comments](index=85&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) There are no unresolved comments from the SEC staff regarding the company's previous filings - The company has no unresolved staff comments[459](index=459&type=chunk) [Item 1C. Cybersecurity](index=85&type=section&id=Item%201C.%20Cybersecurity) FFIE's cybersecurity strategy aligns with NIST frameworks, utilizing third-party vendors and annual penetration testing, with no material threats identified to date - FFIE's cybersecurity strategy aligns with the NIST Cybersecurity Framework (CSF) and Risk Management Framework (RMF), utilizing five core functions: Identify, Protect, Detect, Respond, and Recover[459](index=459&type=chunk) - The company partners with third-party vendors (Rapid7, Carbon Black, Cisco) for cybersecurity guidance and employs threat monitoring, detection, and SIEM tools[460](index=460&type=chunk)[461](index=461&type=chunk) - Annual penetration testing is performed by an independent third-party firm, and employees are required to take annual cybersecurity training[462](index=462&type=chunk) - No cybersecurity threats have been identified that have materially impaired or are reasonably likely to materially impair FFIE's operations or financial standing[461](index=461&type=chunk) [Item 2. Properties](index=85&type=section&id=Item%202.%20Properties) FFIE leases all its facilities, including its global headquarters and the Hanford manufacturing plant with a **10,000 vehicle/year capacity**, across California and China - FFIE leases all of its facilities, comprising five locations in California and three in China, used for manufacturing, retail, office, R&D, and strategic planning[463](index=463&type=chunk) Major Facilities (as of Dec 31, 2023) | Location | Approximate Size (sq ft) | Primary Use | Lease Expiration Date | | :--- | :--- | :--- | :--- | | Gardena, California | 146,765 | Global headquarters, R&D, office | April 30, 2027 | | FF ieFactory California | 1,100,000 | Manufacturing | October 19, 2028 | | Beverly Hills, California | 12,947 | Retail | August 31, 2032 | | Beijing, China | 13,993 | Administrative services, R&D, strategic planning | December 14, 2024 | | Shanghai, China | 2,799 | Administrative services, R&D, strategic planning | July 19, 2024 | | Shanghai, China | 9,074 | Administrative services, R&D, strategic planning | July 15, 2027 | - The FF ieFactory California manufacturing facility is approximately **1.1 million square feet** and, once fully built out, is expected to support a production capacity of **10,000 vehicles per year**[465](index=465&type=chunk) [Item 3. Legal Proceedings](index=86&type=section&id=Item%203.%20Legal%20Proceedings) FFIE is involved in various legal and governmental proceedings whose uncertain outcomes could materially impact its business, financial condition, and operations - FFIE is a party to various legal or governmental proceedings, the outcome of which is uncertain and could have a material adverse effect on its business, financial condition, and results of operations[466](index=466&type=chunk) [Item 4. Mine Safety Disclosures](index=86&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) The company is not required to provide disclosures related to mine safety - The company is not applicable for mine safety disclosures[467](index=467&type=chunk) Part II [Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=87&type=section&id=Item%205.%20Market%20for%20Registrant's%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) FFIE's Class A Common Stock and Public Warrants are listed on Nasdaq, with no cash dividends paid or anticipated, and a significant number of shares reserved for equity compensation plans - FFIE's Class A Common Stock (FFIE) and Public Warrants (FFIEW) are listed on Nasdaq; there is no established public trading market for Class B Common Stock[469](index=469&type=chunk) - As of May 17, 2024, there were **439,674,662 shares** of Class A Common Stock and **266,670 shares** of Class B Common Stock issued and outstanding[5](index=5&type=chunk) - The company has not paid cash dividends and does not anticipate declaring any in the foreseeable future, intending to retain earnings for business operations[470](index=470&type=chunk) Equity Compensation Plan Information (as of Dec 31, 2023, adjusted for 1-for-3 split) | Plan Category | Securities to be Issued upon Exercise | Weighted Average Exercise Price | Securities Remaining Available for Future Issuance | | :--- | :--- | :--- | :--- | | Equity Compensation Plans Approved By Security holders: Faraday Future Intelligent Electric Inc. 2021 Incentive Plan | 147,232 | $107.82 | 1,067,189 | | Equity Compensation Plans Not Approved by Security Holders: Smart King Ltd. Equity Incentive Plan | 81,203 | $660.19 | — | | Equity Compensation Plans Not Approved by Security Holders: Smart King Ltd. Special Talent Incentive Plan | 22,551 | $1,505.15 | — | | **Total** | **250,986** | **$412.08** | **1,067,189** | [Item 6. Reserved](index=88&type=section&id=Item%206.%20Reserved) This item is reserved and contains no information [Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=89&type=section&id=Item%207.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) FFIE, an early-revenue stage company, generated **$0.8 million** in 2023 automotive sales but faces severe liquidity constraints, substantial operating losses, and an accumulated deficit of **$3,958.5 million**, raising going concern doubts - FFIE is a California-based global shared intelligent mobility ecosystem company, designing and engineering next-generation intelligent, connected, electric vehicles, with manufacturing in Hanford, California, and exploring contract manufacturing in South Korea and China[480](index=480&type=chunk)[481](index=481&type=chunk) - The company operates in a single operating and reportable segment, with its co-Chief Operating Decision Makers being the Global CEO and Chief Product and User Ecosystem Officer[489](index=489&type=chunk) - FFIE's Board reduced its size from seven to six members in October 2023, and approved a **1-for-3 reverse stock split** effective February 29, 2024, along with an increase in authorized shares[490](index=490&type=chunk)[492](index=492&type=chunk) - FFIE began production of the FF 91 Futurist in March 2023 and started customer deliveries in August 2023, recognizing **$0.8 million** in automotive sales revenue for the year ended December 31, 2023[501](index=501&type=chunk)[523](index=523&type=chunk) Consolidated Statements of Operations Highlights (Years Ended Dec 31, in thousands) | Metric | 2023 | 2022 | Change Amount | % Change | | :--- | :--- | :--- | :--- | :--- | | Auto sales revenue | $784 | $— | $784 | —% | | Cost of revenues | $42,607 | $— | $42,607 | —% | | Gross loss | $(41,823) | $— | $(41,823) | —% | | Research and development | $132,021 | $299,989 | $(167,968) | (56.0)% | | Sales and marketing | $22,836 | $21,689 | $1,147 | 5.3% | | General and administrative | $82,888 | $112,771 | $(29,883) | (26.5)% | | Loss from operations | $(286,054) | $(437,144) | $151,090 | (34.6)% | | Change in fair value of notes payable and warrant liabilities | $89,860 | $(70,512) | $160,372 | (227.4)% | | Loss on settlement of notes payable | $(217,019) | $(73,204) | $(143,815) | 196.5% | | Net loss | $(431,744) | $(602,239) | $170,495 | (28.3)% | - FFIE has substantial doubt about its ability to continue as a going concern due to recurring losses, negative cash flows, and an accumulated deficit of **$3,958.5 million** as of December 31, 2023[543](index=543&type=chunk)[545](index=545&type=chunk) - The company is unable to access its 'at-the-market' (ATM) equity program and Shelf Registration due to its failure to timely file the Form 10-K, significantly limiting its liquidity sources[548](index=548&type=chunk)[549](index=549&type=chunk) Cash Flow Summary (Years Ended Dec 31, in thousands) | Activity | 2023 | 2022 | | :--- | :--- | :--- | | Net cash used in operating activities | $(278,178) | $(383,058) | | Net cash used in investing activities | $(31,109) | $(123,222) | | Net cash provided by (used in) financing activities | $291,446 | $(6,721) | | Effect of exchange rate changes on cash and restricted cash | $3,352 | $1,038 | | Net (decrease) increase in cash and restricted cash | $(14,489) | $(511,963) | | Cash and restricted cash, end of period | $4,025 | $18,514 | [Item 7A. Quantitative and Qualitative Disclosures About Market Risk](index=111&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) As a 'smaller reporting company,' Faraday Future is not required to provide quantitative and qualitative disclosures about market risk - FFIE is not required to provide quantitative and qualitative disclosures about market risk as it is a 'smaller reporting company'[587](index=587&type=chunk) [Item 8. Financial Statements and Supplementary Data](index=112&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) FFIE's audited financial statements for 2023 and 2022 are presented, with the auditor's report highlighting 'going concern' uncertainty due to recurring losses and negative cash flows, alongside detailed notes and subsequent events - The independent auditor's report includes an explanatory paragraph stating that FFIE's recurring losses from operations and continued cash outflows raise substantial doubt about its ability to continue as a going concern[592](index=592&type=chunk) Consolidated Balance Sheet Highlights (as of Dec 31, in thousands) | Asset/Liability | 2023 | 2022 | | :--- | :--- | :--- | | Total current assets | $91,364 | $84,526 | | Property and equipment, net | $417,812 | $406,320 | | Total assets | $530,539 | $529,288 | | Total current liabilities | $261,176 | $268,245 | | Total liabilities | $302,303 | $328,296 | | Total stockholders' equity | $228,236 | $200,992 | Key Financial Data (Years Ended Dec 31, in thousands) | Metric | 2023 | 2022 | | :--- | :--- | :--- | | Net loss | $(431,744) | $(602,239) | | Basic Net loss per share (Class A and B) | $(44.81) | $(393.56) | | Weighted average common shares (Basic) | 9,634,759 | 1,530,227 | | Net cash used in operating activities | $(278,178) | $(383,058) | | Net cash provided by (used in) financing activities | $291,446 | $(6,721) | | Cash and restricted cash, end of period | $4,025 | $18,514 | - As of December 31, 2023, FFIE had an accumulated deficit of **$3,958.5 million**, **$1.9 million** in unrestricted cash, and a negative working capital position of **$169.8 million**[674](index=674&type=chunk) - FFIE is in default on its Secured SPA Notes and in breach of a debt agreement with Chongqing Leshi Small Loan Co., Ltd., with an outstanding principal balance of **$4.5 million** at an **18% interest rate** due to default[683](index=683&type=chunk)[755](index=755&type=chunk) - Subsequent events include the lapse of insurance coverage after December 31, 2023, the issuance of new unsecured notes (some in default), additional SPA funding of **$8.2 million**, and the conversion of **$34.4 million** principal and **$19.5 million** interest into **398.6 million** Class A Common Stock shares[910](index=910&type=chunk)[911](index=911&type=chunk)[912](index=912&type=chunk)[913](index=913&type=chunk)[914](index=914&type=chunk) - A **1-for-3 reverse stock split** was effected on February 29, 2024, reducing the number of issued and outstanding Common Stock shares and adjusting authorized shares to **463,312,500**[915](index=915&type=chunk)[916](index=916&type=chunk) [Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosures](index=175&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20With%20Accountants%20on%20Accounting%20and%20Financial%20Disclosures) There have been no changes in or disagreements with accountants on accounting and financial disclosures - There have been no changes in or disagreements with accountants on accounting and financial disclosures[920](index=920&type=chunk) [Item 9A. Controls and Procedures](index=175&type=section&id=Item%209A.%20Controls%20and%20Procedures) FFIE's disclosure controls and internal control over financial reporting were ineffective as of December 31, 2023, due to material weaknesses, with full remediation anticipated beyond December 31, 2024 - FFIE's disclosure controls and procedures and internal control over financial reporting were not effective as of December 31, 2023, due to identified material weaknesses[921](index=921&type=chunk)[922](index=922&type=chunk) - Material weaknesses include an ineffective control environment, insufficient controls for material misstatement risks, poor communication between departments, inadequate controls for complex transactions (e.g., convertible notes, warrants, sale leaseback), lack of formal accounting policies, ineffective IT general controls, and issues with integrity/ethical values and related party transaction identification[923](index=923&type=chunk)[924](index=924&type=chunk)[925](index=925&type=chunk)[926](index=926&type=chunk)[927](index=927&type=chunk)[928](index=928&type=chunk) - Management is actively engaged in a remediation plan, including hiring finance and accounting personnel, developing new policies and procedures, installing IT systems, and enhancing controls around related party transactions[929](index=929&type=chunk)[930](index=930&type=chunk)[931](index=931&type=chunk)[932](index=932&type=chunk)[933](index=933&type=chunk) - Full remediation of material weaknesses is expected to extend beyond December 31, 2024, and will be time-consuming and costly[934](index=934&type=chunk) - No changes in internal control over financial reporting materially affected the company's internal control during the three months ended December 31, 2023[936](index=936&type=chunk) [Item 9B. Other Information](index=178&type=section&id=Item%209B.%20Other%20Information) FFIE entered into a Consulting Services Agreement with FF Global for **$0.2 million** monthly, which automatically renewed in March 2024, and had no insider trading arrangements in 2023 and 2022 - FFIE entered into a Consulting Services Agreement with FF Global on March 6, 2023, effective February 1, 2023, for a monthly fee of **$0.2 million** plus expense reimbursements, covering strategic and operational assistance[937](index=937&type=chunk)[938](index=938&type=chunk) - The Consulting Services Agreement automatically renewed on March 6, 2024, for successive 12-month periods[937](index=937&type=chunk) - No Rule 10b5-1 or non-Rule 10b5-1 insider trading arrangements were adopted or terminated with officers or directors during 2023 and 2022[939](index=939&type=chunk) [Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections](index=179&type=section&id=Item%209C.%20Disclosure%20Regarding%20Foreign%20Jurisdictions%20that%20Prevent%20Inspections) The company is not applicable for disclosures regarding foreign jurisdictions that prevent inspections - The company is not applicable for disclosures regarding foreign jurisdictions that prevent inspections[941](index=941&type=chunk) Part III [Item 10. Directors, Executive Officers and Corporate Governance](index=180&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) FFIE's directors and executive officers are detailed, with the Audit Committee comprising independent financial experts, and FF Top holding director nomination rights, though some Section 16(A) reports were delinquent Executive Officers and Directors (as of May 17, 2024) | Name | Age | Position | | :--- | :--- | :--- | | Matthias Aydt | 67 | Global Chief Executive Officer and Director | | Yueting Jia | 50 | Chief Product and User Ecosystem Officer | | Jonathan Maroko | 39 | Interim Chief Financial Officer | | Scott Graziano | 53 | Global General Counsel | | Chui Tin Mok | 49 | Executive Vice President, Head of User Ecosystem | | Hong Rao | 52 | Vice President, I.A.I. | | Chad Chen | 41 | Director | | Li Han | 50 | Director | | Jie Sheng | 40 | Director | | Lev Peker | 42 | Director | - The Audit Committee comprises Lev Peker (Chair), Chad Chen, and Jie Sheng, all of whom are independent and qualify as 'audit committee financial experts'[962](index=962&type=chunk) - The Nominating and Governance Committee considers various qualifications for Board nominees, including achievements, skills, and ethical standards, with FF Top having specific rights to nominate directors[965](index=965&type=chunk)[966](index=966&type=chunk)[968](index=968&type=chunk) - FFIE has a Code of Ethics applicable to all employees, officers, and directors, available on its website[969](index=969&type=chunk) - Several directors and executive officers, including Rao Hong, Matthias Aydt, Lev Peker, Li Han, Chad Chen, and Jie Sheng, had delinquent Section 16(A) reports[970](index=970&type=chunk) [Item 11. Executive Compensation](index=183&type=section&id=Item%2011.%20Executive%20Compensation) FFIE's 2023 executive compensation included base salaries, bonuses, and equity awards, with salaries experiencing reductions, while non-employee directors received cash retainers and annual RSU awards - Named executive officers for 2023 included Matthias Aydt (Global CEO), Xuefeng Chen (former Global CEO), Jonathan Maroko (Interim CFO), Yun Han (former CAO/Interim CFO), Chui Tin Mok (EVP, Global Head of User Ecosystem), and YT Jia (Chief Product and User Ecosystem Officer)[971](index=971&type=chunk)[972](index=972&type=chunk) - Base salaries for named executive officers were subject to temporary reductions in October 2023 (to minimum wage of **$66,000**) and further reductions in December 2023 (**30-50% cuts**)[974](index=974&type=chunk)[979](index=979&type=chunk) Summary Compensation Table - Fiscal 2023 (in USD) | Name | Year | Salary | Bonus | Stock Awards | Option Awards | Total | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Matthias Aydt | 2023 | $348,250 | $5,000 | $— | $— | $353,250 | | Matthias Aydt | 2022 | $383,333 | $— | $148 | $1,052 | $384,533 | | Xuefeng Chen | 2023 | $725,207 | $50,000 | $2,407 | $51,606 | $909,492 | | Xuefeng Chen | 2022 | $487,500 | $500,000 | $— | $— | $987,500 | | Jonathan Maroko | 2023 | $165,758 | $100,000 | $13,391 | $— | $279,149 | | Yun Han | 2023 | $390,000 | $325,000 | $— | $— | $715,000 | | Yun Han | 2022 | $73,976 | $200,000 | $4,983 | $— | $278,959 | | Chui Tin Mok | 2023 | $433,250 | $5,000 | $— | $— | $438,250 | | Chui Tin Mok | 2022 | $500,000 | $— | $185 | $115 | $500,300 | | YT Jia | 2023 | $390,750 | $50,000 | $— | $— | $440,750 | | YT Jia | 2022 | $397,900 | $— | $1,148 | $68,988 | $483,764 | - Non-employee directors receive an annual Board cash retainer of **$50,000**, additional retainers for committee roles, and an annual RSU award of **$150,000**[1008](index=1008&type=chunk)[1010](index=1010&type=chunk) [Item 12. Security Ownership of Certain Beneficial Owner and Management and Related Stockholder Matters](index=192&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owner%20and%20Management%20and%20Related%20Stockholder%20Matters) Beneficial ownership of FFIE's Common Stock as of May 17, 2024, shows **439,674,662 Class A** and **266,670 Class B shares** outstanding, with individual and group executive/director ownership below **1%** - As of May 17, 2024, there were **439,674,662 shares** of Class A Common Stock and **266,670 shares** of Class B Common Stock outstanding[5](index=5&type=chunk)[1011](index=1011&type=chunk) Beneficial Ownership of Class A Common Stock (as of May 17, 2024) | Name | Number of Shares Beneficially Owned | Percentage of Class | | :--- | :--- | :--- | | Matthias Aydt | 2,450 | <1% | | Chad Chen | 15,389 | <1% | | Xuefeng Chen | 1,480 | <1% | | Yun Han | 3,228 | <1% | | Li Han | 14,719 | <1% | | Chui Tin Mok | 4,866 | <1% | | Jie Sheng | 15,134 | <1% | | Lev Peker | 10,125 | <1% | | Jonathan Maroko | 4,831 | <1% | | Yueting Jia | 4,777 | <1% | | All executive officers and directors as a group (12 individuals) | 79,620 | <1% | [Item 13. Certain Relationships and Related Transactions, and Director Independence](index=193&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%2C%20and%20Director%20Independence) FFIE's related party transactions include agreements with FF Top granting director nomination rights and borrowings from FF Global, all reviewed and approved by the Audit Committee - FFIE has an Amended and Restated Registration Rights Agreement with PSAC Sponsor, EarlyBirdCapital, FF Top, and Season Smart, granting them resale registration rights for Class A Common Stock[1020](index=1020&type=chunk) - Indemnification agreements are in place with directors and executive officers, requiring the company to indemnify them to the fullest extent permitted by Delaware law[1021](index=1021&type=chunk) - The Amended and Restated Shareholder Agreement with FF Top grants FF Top the right to nominate four directors, influence Board composition, and has provisions for voting power changes and Board expansion[1023](index=1023&type=chunk)[1024](index=1024&type=chunk)[1028](index=1028&type=chunk)[1029](index=1029&type=chunk)[1030](index=1030&type=chunk)[1031](index=1031&type=chunk) - FFIE has engaged in various related party transactions, including **$9.8 million** in related party notes payable as of December 31, 2023, and a Consulting Services Agreement with FF Global for **$0.2 million** monthly[1067](index=1067&type=chunk)[1078](index=1078&type=chunk)[1079](index=1079&type=chunk) - The Audit Committee is responsible for reviewing and approving all related person transactions, considering factors such as the related person's interest, material facts, impact on independence, and benefits to FFIE[1083](index=1083&type=chunk)[1084](index=1084&type=chunk) [Item 14. Principal Accounting Fees and Services](index=197&type=section&id=Item%2014.%20Principal%20Accounting%20Fees%20and%20Services) Mazars USA LLP served as FFIE's independent auditor for 2022-2023, with audit fees increasing from **$557,000** to **$1,265,000**, and all services pre-approved by the Audit Committee - Mazars USA LLP served as FFIE's independent registered public accounting firm for the years ended December 31, 2022 and 2023[1085](index=1085&type=chunk) Audit Fees Billed by Mazars USA LLP | Year | Audit Fees | | :--- | :--- | | 2023 | $1,265,000 | | 2022 | $557,000 | - No audit-related, tax, or other fees were paid to Mazars for the years ended December 31, 2022 or 2023[1087](index=1087&type=chunk) - The Audit Committee has a policy for pre-approval of all audit and permitted non-audit services, and all services provided by Mazars in 2022 and 2023 were approved[1088](index=1088&type=chunk) PART IV [Item 15. Exhibits, Financial Statement Schedules](index=198&type=section&id=Item%2015.%20Exhibits%2C%20Financial%20Statement%20Schedules) This section lists financial statements and exhibits filed with the Form 10-K, noting no separate schedules are required as information is integrated or insufficient, and details various agreements and corporate documents - The report includes consolidated financial statements as part of Item 8 and lists various exhibits in the Exhibit Index[1091](index=1091&type=chunk) - No separate financial statement schedules are required as the necessary information is either not present in sufficient amounts or is included in the consolidated financial statements[1091](index=1091&type=chunk) - The Exhibit Index details numerous documents, including merger agreements, corporate certificates, warrant agreements, registration rights agreements, shareholder agreements, employment agreements, and financial instrument details[1092](index=1092&type=chunk)[1093](index=1093&type=chunk)[1094](index=1094&type=chunk)[1095](index=1095&type=chunk)[1096](index=1096&type=chunk)[1097](index=1097&type=chunk)[1098](index=1098&type=chunk)[1099](index=1099&type=chunk)[1100](index=1100&type=chunk)[1101](index=1101&type=chunk)[1102](index=1102&type=chunk)[1103](index=1103&type=chunk)[1104](index=1104&type=chunk)[1105](index=1105&type=chunk)[1106](index=1106&type=chunk)[1107](index=1107&type=chunk)[1108](index=1108&type=chunk)[1109](index=1109&type=chunk)[1110](index=1110&type=chunk)[1111](index=1111&type=chunk)[1112](index=1112&type=chunk)[1113](index=1113&type=chunk)[1114](index=1114&type=chunk)[1115](index=1115&type=chunk)[1116](index=1116&type=chunk)[1117](index=1117&type=chunk)[1118](index=1118&type=chunk)[1119](index=1119&type=chunk)[1120](index=1120&type=chunk)[1121](index=1121&type=chunk)[1122](index=1122&type=chunk)[1123](index=1123&type=chunk)[1124](index=1124&type=chunk)[1125](index=1125&type=chunk)[1126](index=1126&type=chunk) [Item 16. Form 10-K Summary](index=198&type=section&id=Item%2016.%20Form%2010-K%20Summary) This item is not applicable and contains no summary content - This item is not applicable and contains no summary content[1091](index=1091&type=chunk) [Signatures](index=217&type=section&id=Signatures) The Form 10-K report was duly signed by FFIE's Global CEO, Interim CFO, and several directors on May 28, 2024 - The report is signed by Matthias Aydt (Global Chief Executive Officer), Jonathan Maroko (Interim Chief Financial Officer), and directors Chad Chen, Li Han, Chui Tin Mok, Lev Peker, and Jie Sheng[1128](index=1128&type=chunk)[1129](index=1129&type=chunk) - The signing date for the report is May 28, 2024[1128](index=1128&type=chunk)[1129](index=1129&type=chunk)

One of the most pronounced beneficiaries of the meme trading phenomenon, electric vehicle manufacturer Faraday Future (NASDAQ:FFIE) saw its shares soar around 2,200% in the trailing month. However, prior to the surge, FFIE stock had traded well below the minimum price requirement to stay listed. While Faraday enjoys demand from bullish speculators, that may not be enough to overcome current challenges.At the end of December 2023, Faraday announced that it received a letter from the Nasdaq that stated FFIE s ...

After skyrocketing to truly astounding heights during last week’s meme stock rally, Faraday Future Intelligent Electric (FFIE) stock seems to be running out of momentum. The electric vehicle (EV) producer went from a little-known penny stock that many investors ignored to being the talk of Wall Street. Over the past month, FFIE has surged more than 2,000%, beating the meme stock slump that quickly overtook some of its larger and more popular peers. But now shares are falling again, and data reveals that the ...