Jia Yueting .
"FF is working hard to submit Q3 10-Q as soon as possible, and it is expected to return to the normal state under the Nasdaq rules soon." On the evening of November 29, FF responded to the Beijing News Beike Finance reporter that all listed companies that postponed financial reports will receive warnings. Now, FF is maintaining close contact with Nasdaq and is confident that it will return to the normal state in the short term. As long as the company resumes normal SEC documents in a timely manner and submits them on time, there will be no actual risk of stock delisting. What caused FF to fall into a delisting warning storm was a short report. In early October 2021, a short-selling report by J Capital Research, a well-known American short-selling institution, once again pushed Jia Yueting to a critical moment. In response, Jia Yueting had earlier responded that this short selling was "cold and hot-selling, nonsense."
Although FF was unable to submit financial reports within the specified time, the company still disclosed its performance on a small scale. In the third quarter, FF expects the company's net loss to increase to about $280 million, compared with the company's net loss of about $33 million in the third quarter last year.
Closed on November 26, Eastern Time, FF's stock price fell 2.83% to US$6.17, with a market value of US$2 billion, compared with the first closing of listing on July 22, which shrank by more than 50%. At the close of November 29, FF fell another 0.81%, closing at US$6.12 with a market value of US$1.985 billion.
FF delayed disclosure of third-quarter report due to short-selling report
"We do not think FF can sell any car." In early October, a short report from the well-known American short-selling agency J Capital Research once again pushed Jia Yueting to a critical moment.
The institution released a short-selling report about FF's company. The reporter found that the short-selling institution questioned FF's vehicle orders, factory construction commitments, financial data, and management team.
short selling agency asserted that FF could not sell a car and expected the company to face a large sell-off. This conclusion comes from its large number of on-site visits, combined with analysis of financial data and executive management capabilities.
Its visit found that FF's six factories were planned to be abandoned, and the factories in Zhejiang were also overgrown with weeds, and they were closed at some time. Compared with Tesla , the factory was silent before FF was put into production.
The agency also stated that FF's $495.7 million in liabilities have been converted into fully vested shares , of which $109.6 million comes from the seller's trust payable, but it needs to be conducted between a 30-90-day lock-up period. "We expect these holders to sell quickly. The entire lock-up supplier will end on October 20, 2021." The prospectus mentioned that FF expects almost all of its existing debt to be converted into equity .
In addition, the institution also questioned the professional ability of the executive team. The questioned executive in the prospectus has received an annual salary of tens of millions.
"Hot fried cold rice, nonsense". Faced with the doubts of short selling institutions, on October 8, FF founder Jia Yueting angrily said on his personal social platform that "is not the first time J Capital Research has been slapped in the face."
FF said that the company has now established a special committee composed of independent directors to investigate allegations of inaccurate disclosure, including claims included in the short seller report released on October 7, 2021.
However, the impact of short reports has continued. FF recently announced that the company cannot submit financial reports within the specified time. Subsequently, FF received a warning letter saying that FF did not submit its third-quarter financial report within the specified time limit and was listed as a listed company that did not meet the requirements. After
FF received the delisting warning, the company publicly responded to the matter on November 29 and said that "Nasdaq requires FFIE to delist" is a wrong interpretation.
FF clarified that the Nasdaq warning letter is only related to FF's delay in submitting Q3 financial reports, which is a normal procedure. Within 60 days of receiving the Nasdaq warning letter, FF will submit a compliance program to Nasdaq, which will help FF obtain a grace period of up to 180 days from the initial deadline for submission of 10-Q to submit 10-Q or any other unfulfilled documents. Once FF submits a compliance plan to Nasdaq in a timely manner within the time specified in the plan, FF will return to the normal state under the Nasdaq rules.
FF said that the company is working hard to submit Q3 10-Q as soon as possible, and is expected to return to normal under the Nasdaq rules soon, and is looking forward to mass production and high-quality delivery of FF 91 as scheduled in July 2022.
net loss in the third quarter increased to 2.8850 million . is expected to have a cumulative deficit in the first three quarters 2850 million
Although FF cannot submit financial reports within the specified time, the company still disclosed its performance on a small scale.
FF expects that the company's third-quarter operating loss will increase to approximately US$143 million as of the end of September this year, while the operating loss in the third quarter ended September 30, 2020 was approximately US$18 million.
FF introduced that the company's manufacturing plant in Hanford, California enters full commercial production, including completing production and manufacturing tools, performing its supply chain work and further enhancing its engineering, testing, certification and verification capabilities.
FF also expects the company's net loss to increase to about $280 million, compared with the company's net loss of about $33 million in the third quarter of last year.
Despite FF's losses, the company's total assets increased significantly. The company expects its total assets to be approximately US$1.1 billion, including approximately US$667 million in cash and cash equivalents as of the end of September this year, while its total assets as of about US$316 million as of the end of last year. FF attributes the increase in total assets to the proceeds of completing business mergers with PSAC and related PIPE financing completed simultaneously with the merger of the business.
Meanwhile, FF's total liabilities as of the end of September this year are expected to be US$354 million, while its total liabilities as of the end of last year were approximately US$896 million. The reduction in total liabilities is due to the settlement of seller trusts and certain notes payable , as well as related party notes paid through the issuance of shares and payment of cash.
FF admitted that since its establishment, the company has generated cumulative operating losses and negative cash flow of generated by operating activities. The company expects a cumulative deficit of approximately US$2.8 billion as of the end of September this year. The company is expected to continue to incur major operating losses.
Interestingly, there is a major loss, and the company itself is not sure whether it can hold on. FF said that based on the company's regular operating losses since its establishment and continued operating losses in the foreseeable future, the management concluded that there are major doubts about whether the company is able to continue operating its business.
The good news is that the company said management expects the net cash on hand to complete the final stages of the development and production of FF 91 electric vehicles, and the company's continued operations after the launch of FF 91 in July 2022 will require the company to raise additional funds. FF said it could not guarantee that the company will successfully implement its strategic plan.
Obviously, FF will also be short of money in the future.
Currently, FF is exploring various alternatives to raise additional funds and fund its ongoing operations, including potential equipment leasing, construction financing of the company's production facilities in Hanford, California (including but not limited to after-sales leaseback), -guaranteed syndicated debt financing, convertible notes, working capital loans and stock issuances, and other options. The specific type, terms, time and amount of financing or financing depends on the company's assessment of the opportunities available in the market and the business situation of the relevant time.
Beijing News Shell Finance Reporter Lin Zi Editor Xu Chao Proofreading Lu Qian
