Faraday Future Intelligent Electric Inc. (FFIE) reported significant financial challenges in its latest 10-Q filing for the quarter ending September 30, 2024. The company recorded a revenue of $9,000 for Q3 2024, a drastic decline of 98% from $551,000 in Q3 2023. For the nine months ended September 30, 2024, total revenue was $304,000, down from $551,000 in the same period the previous year. The decline in revenue was primarily attributed to a reduction in automotive sales, as the company did not generate any automotive sales revenue in Q3 2024, compared to $551,000 in Q3 2023.

Despite the drop in revenue, FFIE reported a net loss of $77.7 million for Q3 2024, slightly improved from a net loss of $78.0 million in Q3 2023. For the nine-month period, the net loss was $234.6 million, a significant reduction from $347.9 million in the prior year, indicating a $113.4 million improvement. The company’s operating expenses also decreased substantially, from $50.9 million in Q3 2023 to $3.8 million in Q3 2024, reflecting cost-cutting measures and a shift in focus from research and development to production.

Total current assets decreased to $79.7 million as of September 30, 2024, down from $91.4 million at the end of 2023. Total assets also fell to $449.1 million from $530.5 million. The company’s total stockholders’ equity decreased to $156.8 million from $228.2 million at the end of 2023, while total current liabilities were reduced to $247.9 million from $261.2 million.

FFIE has been actively restructuring its operations, including a focus on transitioning production capabilities to include both luxury and more affordable electric vehicles. The company launched its second brand, Faraday X, aimed at producing electric vehicles priced between $20,000 and $50,000. Additionally, FFIE entered into a Junior Secured SPA for approximately $30 million in September 2024, which included warrants to purchase shares at an exercise price of $6.29.

The company continues to face liquidity challenges, with an unrestricted cash balance of $7.3 million and a negative working capital position of $168.3 million as of September 30, 2024. FFIE has been in default on various debt obligations, including a $7.7 million debt agreement with Chongqing Leshi Small Loan Co., Ltd. The company is exploring various funding alternatives to support ongoing operations and production of the FF 91, with substantial additional capital needed to avoid potential bankruptcy.

In terms of governance, FFIE has made several leadership changes, including the appointment of Koti Meka as Chief Financial Officer and Aaron Ma as Acting Head of EV R&D. The company is also working on remediating identified material weaknesses in its internal control over financial reporting, which have been a concern following a Special Committee investigation into prior disclosures.