Shares of Faraday Future (NASDAQ:FFIE) are plunging lower and back below $1 after the electric vehicle (EV) company provided an update on its Nasdaq delisting determination situation and reported its fourth-quarter earnings and 2023 Form 10-K.
On April 24, Nasdaq informed Faraday that it was in noncompliance with continued listing standards due to FFIE stock having a closing price of 10 cents or less for 10 consecutive trading days. Nasdaq also informed Faraday that it was subject to a delisting determination.
Faraday was given until May 1 to request a hearing to appeal the determination, which it did. That gave FFIE another 15 days on the Nasdaq, although the company also requested an extended stay. Faraday announced this morning that Nasdaq had granted it an extended stay while the company awaits a hearing with Nasdaq’s Hearings Panel.
FFIE Stock: Faraday Reports Earnings, Provides Nasdaq Compliance Update
Faraday was also in noncompliance for not submitting its Form 10-K on time, although this has now been filed. However, the company’s troubles don’t stop there.
Nasdaq informed Faraday on Dec. 28 that it was in noncompliance due to having a closing price below $1 for the previous 30 consecutive business days. Faraday was given until June 25 to regain compliance, which can be regained by having a closing price of $1 for at least 10 consecutive business days. FFIE has not yet been able to do this.
On top of that, Faraday not yet filing its earnings for the first quarter “could serve as an additional basis for the delisting of the Company’s securities from Nasdaq.”
Meanwhile, Faraday disclosed that it generated $800,000 in revenue in 2023, with a cost of goods sold of $43 million after starting deliveries in the third quarter. In addition, the company is still extremely unprofitable, with a net loss of $432 million compared to $602 million in 2022.
Out of Cash, Out of Time
Faraday is also running out of cash.
As of May 23, the company had just $5 million in cash, of which $2 million is restricted. That compares to its 2023 net cash used in operating activities of $278 million. As a result, Faraday has substantial doubt about its ability to continue as a going concern.
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On the date of publication, Eddie Pan did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
