The shares of the EV startup Faraday Future Intelligent Electric plunged nearly 17% on Tuesday after reporting its financial results for the second quarter of the year. The company returned to timely filing status with Nasdaq and said it had 399 preorders as of June 30 for its first model, the FF91.
The stock closed at $2.320 per share, down 16.85% on the day and is now raising 3.45% in Wednesday’s pre-market session to $2.399 per share as of press time.
The EV startup expects to deliver the FF 91 model to customers in the third or fourth quarter of the year after a capital raise of $325 million.
FF projects to use $368 million in the second half of the year in order to launch the model and is now seeking to raise capital of $325 million from fundraising efforts currently underway to supplement its cash on hand.
“We made encouraging progress during the second quarter at our newly renamed “FF ieFactory California,” our manufacturing plant in Hanford, California. Mechanical, electrical, and plumbing systems are in place, and equipment installation and construction in final vehicle manufacturing areas is nearing completion,” said Dr. Carsten Breitfeld, Global CEO of Faraday Future.
CEO Breitfeld added, “During the second quarter of 2022, we also received our dealer license from the State of California and announced our Flagship Brand Experience center which will be located in Beverly Hills. Importantly, we also became current with our financial statements and regained compliance with NASDAQ listing requirements. Fundraising efforts are underway, and we currently expect to deliver the FF 91 to customers in the third or fourth quarter of 2022.”
Earlier in the day, the company said it entered into a definitive agreement for a new financing facility with total potential funding of $600 million in a convertible secured notes structure.
The EV startup will receive an initial $52 million of committed funds and said it “continues to have active discussions with multiple capital providers for potential significant additional near-term funding”.
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Earlier this month, the company’s major shareholder FF Top Holding executed “a non-binding term sheet for a proposed convertible term loan facility” to raise up to $600 million. Last week, the company filed a 8-K form saying it will delay the start of production and the first deliveries of the FF91, the first model for the California-based company.
The mass production was scheduled to start this month and is now delayed to the third quarter or the fourth quarter of the year depending on when the company can secure additional funds.
FF Top unveiled that has received non-binding indications of interest from two financial investors that may invest via the Potential Lead Investor and is in discussions with the Potential Other Investors warnings that is nothing confirmed so far.
The EV startup — that in March had only 401 preorders for its first model — has been struggling with internal issues namely the removal of Brian Krolicki from the Board of Directors.
Recently, FF Top Holding delivered a notice of removal of the Top Designee Brian Krolicki from the Board of Directors. Krolicki was the 33rd Lieutenant Governor of Nevada (from 2007 to 2015) and a Board member of Faraday Future since April 2020.
FF Top said recently it has attempted to address the Board of Directors of the EV maker for the “concerns regarding the performance and direction of FFIE under the Board’s leadership” and “hopes that FFIE will constructively engage with FF Top and FFIE’s other shareholders to address these concerns”.