Ladies and gentlemen, thank you for standing by. Welcome to Faraday Future Intelligent Electric Inc. Fourth Quarter and Full Year 2023 Earnings Conference Call. At this time, all participants are in a listen-only mode. [Operator Instructions] Please note this conference is being recorded.

I would now like to turn the conference over to Jonathan Maroko, CFO. Thank you. You may begin..

Welcome, everyone to Faraday Future's fourth quarter and full year 2023 earnings call. My name is Jonathan Maroko and I serve as Faraday Future's Interim CFO. Joining me on the call today is our Global Chief Executive Officer, Matthias Aydt. We'll be sharing details from today's press release reporting our fourth quarter and full year 2023 results.

That press release can be found in the Investor Relations section of our website at investors.ff.com. A replay of this call will also be posted there later today. Please note that on this call we will be making forward-looking statements based on current expectations and assumptions, which are subject to risks and uncertainties.

These statements reflect our views only as of today, should not be relied upon as representative of views as of any subsequent date, and we undertake no obligation to revise or publicly release the results of any revision to these forward-looking statements in light of new information or future events.

These statements are subject to a variety of risks and uncertainties that could cause actual results to differ materially from expectations. For further discussion of the material risks and other important factors that could affect our financial results, please refer to our filings with the SEC.

With that, I'll turn the call over to Faraday Future's Global CEO, Matthias Aydt..

Thank you, Jonathan, and thank you, everyone for joining our earnings call. I'm excited to share with you an update on our progress in Faraday Future, highlighting key milestones we achieved in 2023 and our strategic initiatives to continue moving forward. 2023 was a milestone year for Faraday Future.

We transformed from the development phase to the production and revenue generating phase, establishing FF as a participant in the ultra-luxury and high-performance electric vehicle market. Production milestones were significant this year.

On March 29, we will commence production of our flagship FF 91 2.0 and by April 14, the first production vehicle rolled off the line at our FFIE factory, California. The FF 91 2.0 passed U.S. Federal Motor Vehicle Safety Standards crash test requirements on May 25 with the first phase of delivery beginning shortly thereafter.

In our pursuit of innovation, we launched the ultimate AI tech luxury FF 91 2.0 Futurist Alliance and the aiHypercar+ on May 31, open for reservations in both the United States and China. To date, we have delivered 11 vehicles to our valuable users.

As we move through the balance of the last year, we established a close loop operation from user acquisition and delivery to user operations and began engaging industry leaders as FF 91 owners has been invaluable in helping to refine our products and services and demonstrate our commitment to our user-focused approach.

To complement our brand building efforts, we've also focused on enhancing our sales and service capabilities. We launched a leasing program with Luxury Lease Partners, obtained a Bureau of Automotive Repair license, activated home charging installation program and rolled out a public charging program.

These initiatives are designed to provide a seamless and luxury experience for our customers. Late in the year, we announced our potential entry into the Middle East market, a significant step in our expansion strategy. This included strategic cooperation agreements with Master Investment Group and Siraj Holding LLC. The response has been phenomenal.

With the potential entry into the Middle East, FF would add a third leg to our geographic strategy that also includes the U.S. and China, all markets known for their strong appetite for cutting-edge, high-end products.

Shortly after announcing our Middle East entry, we announced a collaboration with the Abu Dhabi Investment Office to bring our generative AI and advanced intelligence electric vehicle capabilities to the UAE's Smart and Autonomous Vehicles Industry cluster.

In April of this year, we further solidified our commitment to the Middle East by establishing a sales entity in Dubai. More recently, we announced the addition of Werner Wilhelm as our Executive Launch Director.

Werner brings significant experience and success in vehicle launches and executive management with multiple OEMs and will lead the FF team as we look to ramp up FF 91 production this year. The challenge of funding to support our supply chain resulted in production volumes lower than anticipated.

We are now working to show up that supply chain to support production. Let me talk about co-creation.

Instead of the traditional one-way sales and marketing approach from manufacturer to dealer to consumer, which is common in the automotive space and complicates the direct relationship, FF is focused on building a direct and reciprocal relationship with our users.

On August 12, 2023, FF celebrated the delivery of the first FF 91 2.0 Futurist Alliance. The company has teamed up with notable personalities like Jason Oppenheim, Chris Brown, Sean Lee and Justin Bell to gain their feedback and input regarding FF 91.

The insights from our co-creation officers have provided valuable learning ranging from technical suggestions to brand strategy and user outreach. We started a quality campaign accompanying our ramp-up. In addition to our branding goals, FF's operational initiatives also continue to progress. The primary focus in 2024 is the ramping up of production.

2023's factory successes included commissioning our Robotic Body Shop and Paint Shop equipment and streamlining our vehicle assembly process to increase throughput capability.

To strengthen the voice of quality, we combine supplier quality, manufacturing quality and aftersales quality organizations to improve communication and to shorten the response loop. Quality assurance has been enhanced in every phase of the company to help embed a culture of continuous improvement.

We are building a stronger quality culture focused on providing our users with improved satisfaction. This meticulous attention to detail is carried over to the finer quality checks as each vehicle undergoes comprehensive static, dynamic and functional inspections to guarantee that we fulfill our quality promise to our users.

As such, our final quality Customer Craftsmanship Audit referred to as CCA improved by 50% compared to our first CCA scores.

Significant improvements continue to be made in vehicle build quality in terms of fit, finish and vehicle functionality under the discerning eye of automotive manufacturing veteran, [Shaoyang Ming], who continues to make incremental improvements in our manufacturing facility.

I'm profoundly proud of the outstanding dedication demonstrated by our FF team, their relentless commitment and resilience have been pivotal in advancing our strategic goals amidst formidable challenges. Jonathan will now provide us with an overview of our financials.

He will also cover our fundraising efforts and detail the measures we have implemented to reduce costs and strengthen Faraday Future's financial position. Now without further ado, I would like to turn the call over to Jonathan..

Thank you, Matthias. I'll first summarize our financial results for fiscal year 2023, then discuss our financing activities over this period and close with an overview as to where the company is today financially.

Faraday Future reported revenue of $0.8 million for fiscal year 2023 and cost of goods sold of $43 million compared with the 0 revenue and 0 cost of goods sold in fiscal year 2022. This reflects the fact that the company began delivering vehicles in 3Q '23.

Loss from operations came in at $286 million for fiscal year 2023 as compared to loss from operations of $437 million for fiscal year 2022. It was primarily driven by the significant reduction in operating expenses, which registered at $244 million in fiscal year 2023 compared to $437 million in fiscal year 2022.

The overall decrease in operating expenses for the year was primarily due to lower research and development expenses as the company completed product development and moved to focus on manufacturing, production and sales. As a result, net loss decreased to $432 million for fiscal year 2023 as compared to $602 million for fiscal year 2022.

Turning to our balance sheet. Total assets on December 31, 2023, were $531 million compared to $529 million as of December 31, 2022. Total liabilities were $302 million versus $328 million on December 31, 2022.

Since inception, the company has incurred cumulative losses from operations and negative cash flows from operating activities and the company's accumulated deficit was approximately $4.0 billion as of December 31, 2023. Net cash used in operating activities for 2023 was $278 million compared to $383 million in 2022.

The capital expenditures were $31 million for fiscal year 2023 compared to $123 million for fiscal year 2022. Net cash provided by financing activities for fiscal year 2023 was $291 million compared to net cash used in financing activities of $7 million for the full year in 2022.

Cash balance at December 31, 2023, was $4 million, including restricted cash of $2 million. This compares with a cash balance of $17 million at December 31, 2022. As of May 23, 2024, our cash position was approximately $5 million, which includes restricted cash of $2 million.

In summary, fiscal year 2023, in addition to being our first year of revenue, saw a reduced operating loss, a reduction in cash used in operating activities and an increase in assets and decrease in liabilities as compared with fiscal year 2022.

These results paint a picture of major cost reductions and cost discipline, which have continued into fiscal year 2024. The next step is to increase our production and deliveries while continuing to have a very disciplined mindset regarding all expenditures.

To recap on the financing activities for 2023, we successfully raised approximately $300 million of gross financing through a combination of convertible notes, equity lines of credit and at-the-market financings.

In addition to equity and equity capital, we successfully tapped into asset-based financing through the exercise of an option that resulted in the sale and leaseback of our Hanford, California facility, unlocking up to $12 million of non-dilutive capital.

We did not sell any physical assets in this transaction as we were already leasing the facility and simply changed landlords. Operations of the factory were unaffected. Beyond 2023, we brought in additional capital through convertible notes and other unsecured debt financing.

We are currently exploring other debt and equity financing opportunities and other non-dilutive financing options. Throughout our challenging cash flow period, the company has demonstrated the capacity to cut costs and manage cash flow as additional investors are attracting.

Cost reductions implemented across the board have been painful, but necessary. We have rightsized our operational footprint and workforce based on the current operational requirements and funding situation. Now, let me give you a financial overview of Faraday Future in recent months.

Since our last earnings call in November 2023, the company has been very focused on reducing costs and becoming as lean and efficient as possible. It has been an incredible challenge both for us and for our shareholders. We thank our shareholders, both new and old, for their unwavering support.

We continue to in-source work wherever reasonable and possible and have resourced suppliers to help lower our cost structure. We are working to build a great business. Payment challenges with our landlords are being addressed as we continue to rightsize personnel and facilities.

We believe the company is in a more stable position today than it was in the prior few months. And we've done all of this without accessing the ATM at all in 2024.

One thing I would like to add in terms of shares outstanding and authorized shares, effectively, all of the shares authorized at our last shareholders' meeting have already been issued and there will be no meaningful further issuance of shares unless we receive shareholder approval to increase our total authorized share count.

Recently, we've seen a dramatic revaluation of our stock by the market. In our view, we believe the stock was previously undervalued and we welcome this adjustment. The revaluation has drawn the attention of many investors as we continue to pursue additional significant strategic investors in the Middle East and throughout the world.

Equipment and IP-backed financing are also being investigated and we look forward to potentially reducing our reliance on dilutive funding. We continue to believe our biggest barrier to vehicle sales and profitability is the capital required to produce vehicles at scale.

If our funding picture improves, we believe our production, delivery and revenue picture can all follow and be updated to reflect that positive movement. Given our lean cost structure, each new dollar invested in Faraday Future will be targeted toward maximum efficiency used more productively than ever before.

Now, it's just a matter of raising additional capital and executing. With that, I will hand it back to Matthias..

Thank you, Jonathan. Let me give you a look ahead. Our main focus remains on stabilizing and strengthening our operations. Key is achieving profitability and independence in the shortest possible time. To be able to achieve a higher market penetration in future, we are exploring multiple avenues and scenarios.

We are considering adjusting the company’s strategy by going back to the earlier 2 brand setup to distinguish market segments. This will enable the integration of our high-value ultimate AI tech luxury solutions and features of our AI technology into vehicles in a more affordable mass market product segment.

As part of FF’s Dual Home market strategy, we will leverage FF’s unique bridge value to integrate the strength of the U.S. automotive industry with those of Chinese car companies and supply chains. We plan to share the details of the U.S.

China automotive industry bridge strategy, the Phase I strategy of the FF Automotive industry bridge strategy in about a month or so. This synergy aims to create original incremental value for the U.S. and Chinese automotive industries, FF strategic partners, OEMs, supply chains and FF itself.

The company has had preliminary discussions with several global OEMs and suppliers about how FF can help build a bridge between U.S. and Chinese automotive industry through industrial, coordination and collaboration. For FF, the U.S.-China automotive industry bridge is envisioned to be allied asset fast-paced, high-value model.

FF could provide 4 major technology systems from the FF aiHyper 6x4 Architecture 2.0 and 5 of the 6 major technology platforms. These AI technology platforms and complete vehicle software systems, which serve as the intelligence, soul and neuro-network of the car.

Besides expertise and capabilities in product and technology, others and such as regulation processes, a full state-of-the-art manufacturing plant, the FFIE factory in Hanford and user ecosystem establishment could be all possible contribution to this strategy.

Looking forward and filled with excitement for the past that lies ahead, we remain steadfast in our pursuit of growth through efficiency and are dedicated to elevating stockholder value. The journey ahead promises significant opportunities. And with our talented team at the helm, I’m confident in our ability to achieve and exceed our objectives.

We continue to believe the FF 91 is unlike anything on the road today. We look forward to the potential for ramping up production in 2024 to help the rest of the world come to the same realization. We will inform on a regular basis, the development and progress of the topic shared.

FF appreciates the trust shown by investors and would like to thank them for their loyal and ongoing support. Thank you for your time and interest in Faraday Future and I look forward to providing you with further updates as significant events unfold. Thank you, everyone..

Operator:.