By Michael Elkins
Electric Vehicle startup, Faraday Future (NASDAQ:) had a difficult start Tuesday, falling 8% in pre-market trading to reach a new all-time low at $0.9500. The dip follows another delay for the start of production to the fourth quarter of the year.
Faraday Future completed its IPO in July 2021 via a merger with SPAC Property Solutions Acquisition raising around $1 billion. At the time, the company said the proceeds would be used primarily to deliver the first units of the first FF 91 model until July 2022, a goal that the company missed.
Faraday warned last week that “certain equipment needed to fully ramp production is currently scheduled to arrive later this year.” However, management claimed that the delay would not affect the timing or rate of the production ramp-up, saying that it received all equipment required for the start of production while pointing it for the fourth quarter of the year.
“The Company has taken actions to preserve its cash position, including reducing spending, extending payment cycles, and implementing other similar measures. As of August 26, 2022, the Company’s U.S. cash balance was $47.2 million and restricted cash was $1.5 million. The timing and amount of additional funding raised could impact the timing and rate of our production ramp, which could substantially impact expected production volumes,” the CEO said.
Even as the company seems strapped for cash, the EV startup will receive an initial $52 million of committed funds from a definitive agreement and said it “continues to have active discussions with multiple capital providers for potential significant additional near-term funding.” The agreement, announced Monday, is for a new financing facility with total potential funding of $600 million in a convertible secured notes structure. Funds managed by ATW Partners, a U.S.-based institutional investor, led the transaction.