Faraday Future(US:FFIE)2022-05-05 16:00Product Launch and Development - FF plans to commercially launch the FF 91 in Q3 2022, followed by the FF 81 in 2024 and the FF 71 in 2025, targeting the premium and mass-market segments [244]. - The FF 91 is positioned as the first fully connected car, offering a unique and personalized experience for each passenger [244]. - FF's B2C passenger vehicle launch pipeline includes the FF 91, FF 81, and FF 71 series, with a focus on integrating advanced technology and connectivity [244]. - The company aims to develop a Smart Last Mile Delivery (SLMD) vehicle, targeting high-growth delivery opportunities in Europe, China, and the U.S., with a launch planned for 2024 [244]. - FF's hybrid manufacturing strategy includes a refurbished facility in Hanford, California, and collaboration with Myoung Shin Co., Ltd. for additional capacity [243]. - FF's proprietary Variable Platform Architecture (VPA) and advanced propulsion system provide a competitive edge in acceleration and range [244]. - Announced contract with Myoung Shin Co., Ltd. to manufacture the FF 81, with production scheduled to start in 2024 [254]. - FF's Hanford manufacturing facility is approximately 1.1 million square feet, expected to support production of 10,000 vehicles per year, with production anticipated to commence in Q3 2022 [252]. - Unveiled the first production-intent FF 91 ultra-luxury EV, marking a significant manufacturing milestone [255]. - Announced Phase I updates to the FF 91 Product and Technology Gen 2.0 Project, including upgrades in major subsystems [253]. - Engaged Munro & Associates as co-creation consultant to assist with the production-readiness process of the FF 91 [253]. Financial Performance and Expenses - FF has not generated any revenue to date and anticipates that the launch of the FF 91 will be its first revenue-generating event [270]. - Research and development expenses for the three months ended September 30, 2021, were $79,757, a significant increase of 2,165.8% compared to $3,520 in the same period in 2020 [283]. - Sales and marketing expenses increased to $6,832 for the three months ended September 30, 2021, reflecting a 2,991.4% rise from $221 in the prior year [284]. - General and administrative expenses rose to $36,725, a 166.0% increase from $13,806 in the same period in 2020 [287]. - The company incurred a loss on the disposal of property and equipment amounting to $62,342 during the three months ended September 30, 2021 [288]. - Total operating expenses for the three months ended September 30, 2021, were $185,656, compared to $17,547 in the same period in 2020 [282]. - The net loss for the three months ended September 30, 2021, was $303,906, compared to a net loss of $33,339 in the same period in 2020 [282]. - Research and development expenses for the nine months ended September 30, 2021 increased to $94,506 from $14,704 in 2020, a change of $79,802 or 542.7% [299]. - Sales and marketing expenses for the nine months ended September 30, 2021 increased to $11,099 from $1,691 in 2020, a change of $9,408 or 556.4% [300]. - General and administrative expenses for the nine months ended September 30, 2021 increased to $64,148 from $32,538 in 2020, a change of $31,610 or 97.1% [302]. - Loss on disposal of property and equipment for the nine months ended September 30, 2021 was $62,987, with no comparable activity in 2020 [303]. Capital and Funding - FF will require substantial additional capital to fund operations and product development until it can generate sufficient revenue [269]. - The company is exploring various funding alternatives, including equipment leasing and equity offerings, to support ongoing operations [316]. - Financing activities during the nine months ended September 30, 2021, included proceeds from PIPE Financing of $761,400 and proceeds from the Business Combination of $229,583 [318]. - The company has been significantly funded by related party notes payable, with a total unpaid balance of $328,162 as of September 30, 2021 [323]. - The company had cash and cash equivalents totaling $666,061, held for working capital and general corporate purposes [313]. - Net cash provided by financing activities was $966,995 for the nine months ended September 30, 2021, significantly higher than $28,327 for the same period in 2020 [334]. - The company issued new notes payable to third parties with an aggregate principal balance of $172,031 during the nine months ended September 30, 2021 [338]. - The company converted related party notes payable with an aggregate principal balance of $90,869 into a commitment to issue 10,888,580 shares of Class A Common Stock [338]. Impact of COVID-19 - The COVID-19 pandemic has created significant volatility in the global economy, impacting FF's operations and supply chain [248]. - The company continues to evaluate the ongoing impact of COVID-19 on its operational and financial performance, including potential delays in production [250]. Corporate Structure and Governance - Completed merger with Property Solutions Acquisition Corp. and began trading on NASDAQ under ticker "FFIE" on July 22, 2021 [252]. - Announced plans to increase employee headcount significantly over the next 12 months following the Business Combination [252]. - Appointed Walter J. McBride as CFO to succeed Zvi Glasman, who stepped down on November 2, 2021 [254]. Cash Flow and Financial Position - Net cash used in operating activities was $237,878 for the nine months ended September 30, 2021, compared to $27,531 for the same period in 2020 [330]. - Cash used by investing activities was $(37,264) for the nine months ended September 30, 2021, primarily for the acquisition of fixed assets [333]. - The largest component of cash used in operating activities was $69,466 for wages and compensation related expenses for the nine months ended September 30, 2021 [332]. - Total notes payable as of September 30, 2021, amounted to $203,123 [324]. - The company had scheduled principal maturities of notes payable totaling $173,451 as of September 30, 2021 [325]. - Total contractual obligations amount to $259,797,000, with $30,202,000 due in 2021 and $193,104,000 due in 2022-2023 [341]. Stock and Equity - The fair value of Legacy FF's Class A Ordinary Stock increased from $0.391 per share in January 2021 to $1.572 per share by June 2021 [355]. - The company anticipates no cash dividends in the foreseeable future, using an expected dividend yield of zero [349]. - The increase in the fair value of Class A Ordinary Stock was attributed to progress towards the Business Combination and increased likelihood of a liquidity event [357]. - The fair value of related party notes payable and notes payable was primarily determined using a yield method, with significant assumptions regarding the probability of a liquidity event prior to maturity [362]. Risk Management - FF is exposed to foreign currency exchange risk through its Chinese subsidiaries, which use the Chinese Renminbi as their functional currency [369]. - FF has not hedged its foreign currency risk but may consider doing so in the future [369]. - The company closely monitors credit risk related to vendor deposits and has written off any deposits deemed unrecoverable [370].