Faraday Future: Since its establishment, the company has accumulated a loss of approximately US$2.8 billion

Faraday Future (hereinafter referred to as FF) held a conference call today after FF disclosed its preliminary results for the third quarter in its 12b-25 document issued on November 15, 2021. FF expects that the operating loss for the three months ending September 30, 2021 will increase to approximately US$143 million , while the operating loss for the three months ending September 30, 2020 will be approximately US$ 18 million.

It is estimated that as of September 30, 2021, the company has accumulated losses of approximately US$2.8 billion . The company expects to continue to incur significant operating losses in the foreseeable future.

The conference call was attended by FF CEO Dr. Carsten Breitfeld, CFO Chuck McBride and Mark Connelly, Vice President of Investor Relations.

Chuck McBride, CFO of Faraday Future, said that first I will talk about our preliminary third quarter results released on November 15, 2021 in 12b-25. I want to remind everyone that we are still reviewing the relevant financial data to complete the submission of 10-Q and S-1/A. Since the submission of 12b-25, we have not had more financial updates.

As stated in the document submitted by FF to the US Securities and Exchange Commission on November 15, FF expects that our operating loss will increase to approximately US$143 million in the three months ending September 30, 2021, and as of September 30, 2020 The operating loss in the three months was approximately US$18 million. The increase in this data is mainly due to the increase in Hanford manufacturing facility costs related to the full commercial mass production of the Hanford plant. This includes the completion of production and manufacturing molds, the implementation of the supply chain, the further improvement of engineering, testing, certification and verification capabilities, as well as more expenditures incurred in the development and production of future electric models. Finally, the increase also includes the additional accrued costs of certain company litigation and the disposal of corresponding property and equipment losses due to the disposal of certain FF91 project assets.

We expect the net loss for the three months ended September 30, 2021 to increase to approximately US$280 million, while the net loss for the three months ended September 30, 2020 is approximately US$33 million. The increase in net loss was due to the substantial increase in operating expenses, the fair value measurement of bills payable by related parties, the loss incurred by the company choosing to use the fair value option to account for bills payable, the loss from warrant liabilities, and the elimination of bills payable by related parties, The net amount of the above-mentioned amount of the losses arising from the bills payable and the trust supplier's payment has been previously announced by the company and completed on July 21, 2021 with the Property Solutions Acquisition Corp. ("PSAC") Converted to equity when the business is merged.

In terms of assets and liabilities, Faraday Future expects total assets of approximately US$1.1 billion, including approximately US$667 million in cash and cash equivalents as of September 30, 2021, and total assets of approximately 316 million as of December 31, 2020 Dollar. The increase in total assets was due to the completion of the business combination with PSAC and the completion of related PIPE financing at the same time. We expect total liabilities as of September 30, 2021 to be approximately US$354 million, while total liabilities as of December 31, 2020 are approximately US$896 million. The decrease in total liabilities was due to the completion of the settlement of supplier trusts, certain notes payable and notes payable by related parties through the issuance of stocks and the payment of cash.

Since its establishment, the company has incurred accumulated losses due to operations and negative cash flow due to operating activities. It is estimated that as of September 30, 2021, the company has accumulated losses of approximately US$2.8 billion. The company expects to continue to incur significant operating losses in the foreseeable future.

We have revised the estimated amount of additional funds required to achieve positive profit and cash flow in 2024. On November 12, we updated our estimate that we will need USD 1.5 billion in additional funding, which is higher than our previous estimate of USD 1.4 billion. This additional funding will be used for FF81 and FF71 projects, and has nothing to do with the first car project FF91.

Compared to the business plan we launched before the business combination, we expect increased costs. These increases are mainly due to certain product improvements and upgrades related to the enhancement of FF91 product capabilities, accelerated expenditures related to the preparation and development of the FF81 project, as well as increased construction and labor costs, rising raw material prices, semiconductor chip shortages, tariffs and other supply chain restrictions Factors including recent macroeconomic challenges. We believe that we have sufficient funds to complete the FF91 project, and the project's production time goal is still July 2022 .

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