A recent 10-Q report filed with the SEC shows that Faraday Future, the electric car company that began producing vehicles at a 1 million square-foot facility in Hanford at the end of March, shows the company has generated over $6 million in income in the first quarter of 2023.
The company operated at a loss of $153,098,000 during the quarter ending in December of 2022, but cut down its operating expenses by 60 percent in the most recent quarter.
Faraday Future's income this quarter does not come from sales, however, as the company does not expect Faraday Future to begin generating revenue until the end of June. The 10-Q filing, a quarterly, unaudited report on a company's performance, shows that Faraday Future generated over $94 million in fair value measurements. The accounting process involves adjusting the value of a company's assets which is then taken directly to a company’s income statements.
Faraday Future previously announced the receipt of $100 million in funding via unsecured convertible notes in May.
According to a previous statement by the company, the funding received from the deal would be put towards increased production and development of its sales and service system for its flagship vehicle, the FF91 Futurist.
The company also said in its 10-Q filing, however, that they have had to implement “expense reduction and payment delay measures” because of the difficulty finding even more funding the company needs to complete deliveries of its flagship FF91 Futurist, including reducing employee headcount at Faraday Future.
“Although FF [Faraday Future] has successfully obtained commitments since August 2022 from several investors totaling $267.0 million in convertible note financing, subject to certain conditions, and continues financing discussions with multiple parties, FF has experienced delays in securing additional funding commitments, which have exacerbated the supply chain pressures on FF’s business,” the filing reads.
The 10-Q warned the company may go through additional layoffs depending on market conditions.
The company currently has about $31,769,000 in cash on hand. This is up from December 2022, when Faraday Future had about half of the amount.
It’s down from from March of last year, though, when the company had $276,374,000.
John Schilling, global director of public relations and communications at Faraday Future, confirmed that the target for the company’s first phase of its three-phase delivery process is at the end of May. Vehicles will be shown to what are called “industry expert Futurist Product Officers” during the first phase. The officers will not be allowed to take possession of the vehicle, but they can pay to reserve it.
According to a recent shareholder’s letter distributed by Faraday Future, the second phase, where the officers can actually take possession of the vehicle, will mark the turning point at which Faraday Future will become a revenue-generating company. Faraday Future says it’s hoping to start this phase at the end of June and will train the officers in how to use the vehicle.
The general public won’t be able to get their hands on an FF91 Futurist until the third phase, but Faraday Future doesn’t currently have the necessary financing to reach this stage of the operation.
The company is also letting some of its self-imposed discipline against top executives at Faraday Future go. In 2021, Faraday Future was accused of making inaccurate disclosures and inaccurate statements created by Faraday Future founder and former CEO Yueting Jia. According to the filing, Jia told investors the company had received 14,000 reservations for the FF91, when thousands of these reservations were completely unpaid.
After an internal investigation using independent legal counsel and a forensic accounting firm was completed in early 2022, some executives resigned or had salaries reduced and Jia was removed as an executive officer while continuing with the company as its chief product and user ecosystem officer. Many executives at the top of the food chain started reporting to Susan Swenson, who was appointed executive chairperson of Faraday Future.
But Swenson resigned in October 2022, and Jia was restored as an executive officer in March, according to a previous statement by the company.
The filing also says the company plans to develop two more models in its lineup in the future, an FF81 and FF71, designed to go head-to-head with more relatively mainstream vehicles such as the Ferraris and Maybachs that Faraday Future says their FF91 Futurist competes against. The development of these vehicles, too, depends on whether the company can receive more financing.