Greetings. Welcome to Faraday Future Intelligent Electric Inc. Fourth Quarter 2022 Earnings. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] Please note this conference is being recorded. I will now turn the conference over to Charles Hsieh, Investor Relations. Thank you. You may begin.

Thank you and welcome to Faraday Future’s fourth quarter 2022 earnings call. We issued a press release reporting our fourth quarter and annual 2022 results this afternoon, March 8, 2023. Joining the call today from Faraday Future is our Global Chief Executive Officer, XF Chen; Matthias Aydt, Global SVP of Product Execution; and our Chief Accounting Officer and Interim Chief Financial Officer, Yun Han. You can find a copy of the Q4 2022 press release now and a replay of this call later today in the Investor Relations section of our website, investors.ff.com. 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 dates. 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. In addition, during today’s call, our management team will give their prepared remarks and answers to investors’ questions in English. A translator will provide simultaneous Chinese translation, which can be used accessed through investors.ff.com. All translations are provided for convenience only. In the case of any discrepancy, management’s statement in English will prevail. With that, I will turn the call over to XF Chen, Global CEO of Faraday Future.

Thank you, Charles and thanks to everyone for joining us today. This is my first earnings call as FF Global CEO and I want to let you know that I plan to make it a priority to have consistent and open communications with investors moving forward. I would like to begin today’s call with what is FF. FF is a pioneer of ultimate tech-luxury ultra-spire market in the intelligent EV area and a disruptor of the traditional ultra-luxury car civilization optimized by Ferrari and Maybach. FF is not just a EV company, but also a software-driving company of intelligent internet AI product. Ultimately, FF aims to become a user company by offering here intelligent mobility ecosystem. We envision the growth of FF in three phases. Our Phase 1 goal is to deliver to our global ultra spire users, the FF 91 Futurist alliance, FF 91 Futurist and FF 91 with high-quality and high product power thereby distributing traditional auto luxury brands like Ferrari, Maybach, Rolls-Royce and Bentley and ultimately become the top leaders in the global spire user market. We are in the process of developing our 5-year business plan. The company’s goal is to create a profitable business with operating cash flow breakeven in 2025. As we introduced more upcoming vehicle models, the user ecosystem will begin to take shape and we expect our hardware revenue will grow under equal revenues, which include internet APP software and sharing. We also grew as well. Our Phase 2 goal is to establish ourselves as a major player in the high value user market. During Phase 3, FF intends to suspend the growth of its hardware revenue and equal revenue, which we believe will constitute an increasingly substantial portion of the overall profit. With this mid to long-term strategic plan, we aim…

Thanks, XF. I would like to take a few moments to elaborate on our innovative product the FF 91 Futurist. The FF 91 Futurist provides unsurpassed user experience and offers industry leading performance metrics. The FF 91 Futurist has bespoke electric drive units, with a fully integrated design, active oil cooling and offering independent rear-axle drive and 2050 horsepower propulsion system is driven by FF in-house developed software and control algorithms, optimizing the performance, stability and safety. The cars also boast an EPA certified range of 381 miles of range, which is almost 50 to 70 miles more than our direct competitors in a comparable priced category. The FF 91 can go from 0 to 60 miles per hour in a blistering 2.27 seconds. In addition to performance, the FF 91 Futurist has true mobile connectivity, which is unrivaled in the industry. You can think of FF 91 Futurist as a smart device on wheels, a game changer in the automotive industry that sets a new benchmark for both the driver and passenger experience. The FF 91 Futurist offers a rear intelligent internet system and the revolutionary user experience designed to create a mobile connected intelligent and luxurious third internet living space and user mobility ecosystem platform. It’s interior cabin features unique rear zero gravity seats inspired by NASA offering the largest rear legroom area in the industry and can recline up to 60 degrees for maximum comfort, it also offers a revolutionary and immersive driving experience coupled with an unsurpassed passenger experience, a total of 100 plus inches across 11 displays, including a 27-inch ultra light rear display to deliver a portal to passengers in every seat. Rear seat passengers in the FF 91 would be able to lower and raise industry leading rear presenter display with a simple…

Thank you, Matthias. I am excited to be working with the entire Faraday Future team. I would like to begin by providing a financial overview, followed by a discussion on our funding effort, cost-cutting strategy and our focus on ensuring that all the SEC filings are up-to-date as well as our plans in place to address weaknesses in internal controls over financial reporting. First, I would like to summarize our financial results for 2022. Faraday Future reported an operating loss of $451 million for the full year 2022 as compared to operating loss of $354 million for the full year 2021. Operating expenses for Q4 2022 were $84 million compared to $121 million for Q4 2021. The overall increase in operating expenses for the year was mainly due to the increase in research and development expenses. The decrease in operating expenses for Q4 2022 in comparison to Q4 2021 are mainly due to timing as the significant research and development expenses were incurred in the first 9 months of the year. Net loss increased to $552 million for the full year in 2022 as compared to $517 million for the full year in 2021. The increase is mainly due to the increase in research and development expenses and the non-cash mark-to-market changes of certain notes payable and warrant liabilities in 2022 compared to a one-time loss on conversion of certain notes payables in connection with the closing of the business combination in 2021. Net loss for Q4 2022 was $154 million compared to $84 million for Q4 2021. The increase is mainly due to the increase in non-cash changes in fair value measurement of certain notes payable and warrant liabilities in 2022 and again of settlement on certain notes payables compared to a one-time gain on forgiveness of company’s payroll…

Thank you, Yun. FF appreciates the trust shown by investors and would like to thank them for their loyal and ongoing support of the recent governance structure, Board of Directors and management. We are looking forward to the upcoming SOP milestone at our Hanford facility. And we will be delighted to have you visit us in the coming months. Thank you for your time and interest in Faraday Future. And I look forward to providing you with the further updates as we move closer to launch.

Operator, we are ready to take questions.

Thank you. [Operator Instructions] Our first question is from Michael Ward with Benchmark. Please proceed.

Thank you. Good evening, everyone and thank you for doing the call. Maybe just starting with a big picture question and then getting a little more specific on the cash side. First of all, on the big picture side, has your definition of your market changed? How are you defining like your key customers? Are you still assuming you are going to go down and produce the 81 and 71 or is something shifted?

Okay. This is XF I guess I am probably top of the facility. But so, sorry, could you repeat your question, because I got a little bit of trouble.

No problem. Just a big picture type thing as you define your market and your key customers, has – what are the key things you are looking at? Has it changed? Are you still looking out at coming out with the 81 and also the 71? What do you – how would you define your market the way you are seeing it over the next 2, 3, 5 years?

Well, okay, it’s a very good question. FF, we are designing our product as a very high-end premium product. First of all, that will be our FF91 Futurist. We designed auto tech-luxury vehicles and we are aimed at the top segment of the market. That’s our first product we want to bring into the market this year, but for the development for the 3-year, 5-year this kind of a cycle plan or this kind of mountain plan as a company have also to consider how we apply it – how we apply the platform technology and our mobile advanced AI technology into the FF81, FF71, because we do think FF has a very unique design and we will build very strong brand and with our very strong performance of the car as much as just introduced. So, we will get to the FF91 as the first strong brand position for the higher – very high segment in the market. And then we will get the price does their position down to meet they plug as a premium brand segment and also they enter premium segment to provide that kind of similar experience to our diverse level of customer. So, this is our another strategy. We are still working on that. Did that answer your question? Sorry.

Yes, it does very much. Thank you. And then now it sounds like do you have full approval to sell the vehicle in the United States? And it sounds like you are still waiting on final approval in China. Is that right?

Well, first of all, we have got a plan to launch a car by end of this month. And in parallel, with that kind of funding raising arrived. We got the plan and the opportunity to deliver the car by end of – that’s right, we have a plan to launch the car by end of March, actually this month, end of this month. And there was that kind of a condition, once we got the funding raised, and also we got the supplier deliver our value requirement, we will deliver the 91 Futurist by end of April, next month.

So, you have all Federal approvals in the U.S., it’s met all the regulatory approvals?

Not 100%, because some of the testing is still ongoing, and the result will be available by end of this month, and some of them will be early next month. But people – and our people wait to the start of delivery in America by the end of next month, or all the FMVSS, the U.S. National requirements have to be finished. So, that’s our current plan. And we do have a very robust plan and a high confidence for that one. In parallel for your question about the China market, as I stated in my NASA speech, I think right after the U.S. delivery to the customers, we will accelerate the delivery for China market, that’s the biggest EV market in the world. To the credit seminar sales, we also have a plan to take over the China communication and regulation related application. We have had a very good relationship with one of the China agency and we will go through all of this kind of technical detail and have a very robust plan. During – in the coming months we will plan – we plan to ship the car to China to do this kind of testing for the general market. As a result, this and also February, or late February, we are getting one car to China to do some of the charging system performance testing. So, you can say that right after the U.S. market delivery, we will no doubt accelerate our China strategy.

Okay. And what kind of cadence do you expect for deliveries in the U.S. and China as we go through 2023?

Well, this one, because internally, we do not pull this as disclosure information yet. So, I really like your question, but I probably cannot answer.

That’s fine. No problem. On the cash side, I just wanted to see if I because there were a lot of different commitments in dollars thrown about. So, I want to see if I got this right. You have mentioned I think you ended the year with about $18 million in cash. And now you have $38 million. And so was some of the – it sounds like in the first quarter, you have received $10 million in the first quarter, but the $112 million in gross proceeds. Did some of that come into the first quarter, into January, February, I guess you are ending March at like $38 million, I am sorry, beginning of March is $38 million, right? Okay.

Yes. So, this is Yun. I can take this one. Yes. So we, in the beginning of March, we had about $38 million on hand. And we are through March and April, we are expecting to get additional committed funding. So, with the committed funding, we have another $10 million coming in March, and then also $55 million upon the effectiveness of the registration statement. And then amount, other things, we are still – we scheduled the second special stockholders meeting to approve the cap of 90%, 99% and that to be scheduled by the end of the March.

Okay. So, what’s the…

Go ahead.

Is the $135 million in new commitments, is that in addition to the $150 million to $170 million, you announced back in December?

We announced $150 million to $170 million. And with the $135 million, they will get us used, enough through SOP and as well as SOP. And we are currently finalizing the span of the remaining of the year. So, we can’t tell you the remaining, but at least with the $135 million that get us through SOP. And then as you know, we also have access to HELOC, that is up to $350 million. But we got to be very careful on how we use it. That’s for the certificate holders and then we also have $150 million, that’s at option of investors, so that is also likely to come. So, we have a few things going on. And we are currently consulting…

Okay. I just want to make sure I got this straight. So, there are four different parts to it. In December, you announced $150 million to $170 million of funding, right. Now, on February 5th, you announced an additional $135 million. And then you have additional funding, it sounds like, different raises and from investors and from – it looks like another $50 million or so from investors. And then you have the equity purchase agreement the $350 million. So, it looks like it – just on paper, it looks like, if you get to start of delivery, you get those vehicles delivery, the cash flow, then you have the capital flexibility to get through this year to push them into ‘24 and ‘25. Am I reading that correctly?

Well, I just want to clarify that $150 million to $170 million is the fund we need to get into SOP. That’s the announcement…

Okay. Got it. Okay. That’s what you said you needed. I thought that was a commitment you received. That’s what you are looking for.

That’s what we are looking for as subsequently we got $135 million. And so now, obviously, we also get from other fundings, and that will get us through SOP.

Got it. Now I understand that. Thank you. That’s where I was confusing. Okay. So, that’s getting you through SOP, and then the next steps as needed. And hopefully, you will start – the cash will start coming in the door as well.

Yes. We have strengthened our capital market group, hired more people. We also have hired more experienced consultants, financial advisor. So, we are working hard on getting more funding in the future.

Getting the product out the door is the first step, right?

Yes. And offer value to our funding will be, hopefully we will have access with a lower cost of capital.

Alright. I really appreciate it. Thank you for your time. Thank you very much.

Thank you, Mike.

Thank you. This will conclude today’s question-and-answer session. And this will conclude today’s conference. You may disconnect your lines at this time and thank you for your participation.