Faraday Future(FFIE) - 2023 Q3 - Quarterly Report

Patents and Technology - FF has been granted approximately 660 patents globally as of November 7, 2023[250]. - FF's advanced Internet Artificial Intelligence (I.A.I.) technology supports high-performance computing and Level 3 autonomous driving readiness[249]. - FF's modular Variable Platform Architecture (VPA) facilitates entry into the last-mile delivery segment, expanding its total addressable market[252]. Vehicle Production and Delivery - FF plans to produce and deliver the FF 81, a premium mass-market electric vehicle, subject to future financing, to compete against Tesla Model S and BMW 5-series[252]. - The FF 71, a mass-market passenger vehicle, is expected to start production and deliveries after the FF 81, targeting competition with Tesla Model 3 and BMW 3-series[252]. - The first FF 91 2.0 Futurist Alliance was delivered in the first half of 2023, marking the start of production for this ultra-luxury electric vehicle[250]. - The company began production of the FF 91 Futurist in March 2023 and started deliveries in August 2023[266]. - FF's B2C passenger vehicle pipeline over the next five years includes the FF 91 series, FF 81 series, and FF 71 series[250]. - All FF vehicles are expected to be available for sale in the U.S. and China, with potential expansion to European markets[253]. Financial Performance - Automotive sales revenue was $0.6 million for the three months ended September 30, 2023, marking the start of vehicle deliveries[282]. - Automotive sales revenue was$0.6 million for the nine months ended September 30, 2023, with vehicle deliveries starting during this period[304]. - The Company reported a net loss of $347.9 million for the nine months ended September 30, 2023, compared to a net loss of$414.7 million in the same period of 2022[303]. - The Company recognized a loss on settlement of related party notes payable of $17.2 million during the nine months ended September 30, 2023, with no prior period loss reported[320]. - The Company reported a loss on settlement of notes payable of$204.9 million for the nine months ended September 30, 2023, compared to a loss of $30.5 million in the same period of 2022, representing a 573$104.7 million for the nine months ended September 30, 2023, due to the completion of R&D activities related to the FF 91 Futurist vehicle[308]. - Sales and marketing expenses increased by 12% to $18.1 million for the nine months ended September 30, 2023, attributed to higher professional services and resource allocation[309]. - General and administrative expenses decreased by 24$67.6 million for the nine months ended September 30, 2023, due to cost-saving measures and reduced professional services expenses[310]. - The company expects R&D expenses to decrease in the near future as it has substantially completed R&D activities related to the FF 91[273]. Capital and Financing - The Company has secured commitments totaling $513.5 million in convertible note financing since August 14, 2022, with$300.2 million funded to date[329]. - FF is exploring various funding alternatives, including equipment leasing and equity offerings, to support ongoing operations and production ramp-up[336]. - The company has an accumulated deficit of $3.87 billion and a cash balance of$6.7 million as of September 30, 2023[326]. - The company had net cash provided by financing activities of $237.6 million for the nine months ended September 30, 2023, a significant increase from net cash used of$40.9 million in the same period of 2022[348]. - The company had operating and financing lease obligations of $37.0 million as of September 30, 2023, with approximately$7.2 million due within the next 12 months[341]. Stock and Shareholder Actions - The board approved a reverse stock split ratio of 1-for-80, reducing the number of authorized shares of Common Stock to 154,437,500[260]. - The Class A Common Stock began trading on a split-adjusted basis on August 28, 2023, under the symbol "FFIE" with a new CUSIP number[261]. - FF sold 837,500 shares of Class A Common Stock for $7.3 million under the Standby Equity Purchase Agreement during the three and nine months ended September 30, 2023[333]. - The Company plans to issue up to$300 million in Class A Common Stock and/or warrants under a Shelf Registration declared effective on June 28, 2023[334]. Cash Flow and Liquidity - The company reported net cash used in operating activities of $240.4 million for the nine months ended September 30, 2023, compared to$355.1 million for the same period in 2022, indicating a reduction of approximately 32.3%[344][346]. - The company experienced negative cash flows from operations primarily due to investments in research and development, with 87.5 million allocated to R&D expenses for the nine months ended September 30, 2023[345]. - As of September 30, 2023, the company had cash on hand totaling 6.7 million, which is intended for working capital and general corporate purposes[342]. Debt and Liabilities - As of September 30, 2023, the company had outstanding notes payable to related parties totaling $12.2 million, with$3.8 million due on demand and $5.1 million scheduled to become due in December 2023[340]. - The company was in default on the Secured SPA Notes as of September 30, 2023, but the holders subsequently waived the default[338]. - The company has been in breach of its debt agreement with Chongqing Leshi Small Loan Co., Ltd., with an outstanding principal balance of$4.5 million, resulting in an increased interest rate of 18% per annum[338]. - The company had $135.1 million in aggregate principal amount of notes payable to third parties as of September 30, 2023, with$4.8 million due on demand[340].