Faraday Future executives have been subpoenaed by the US Securities and Exchange Commission for allegedly publishing inaccurate information and may delay its annual report

2022-08-03 0 By

Faraday Future executives have been subpoenaed by the U.S. Securities and Exchange Commission for allegedly providing inaccurate information to investors, according to a March 31 SEC filing.FFIE also said it did not expect to meet the deadline to submit its annual report for the year ending December 2021 due to delays caused by an internal investigation.Eastern Wealth data showed FFIE closed down 3.29% at $4.99 a share on March 31.FFIE said on March 31 that members of its management team and employees recently received a subpoena from the SEC in connection with a formal investigation into inaccurate statements the company made to investors.It is understood the investigation is related to FFIE’s internal investigation.In February, FFIE said an internal investigation had found that it had made inaccurate statements to investors overstating pre-orders for its forthcoming vehicle, the FFIE 91.It found that only a few hundred of 14,000 FF 91 orders had been paid for.In response, FFIE cut the base salaries of Carsten Breitfield, chief executive, and Jia Yueting, founder, by 25 per cent each.Jia is currently a partner and chief product and user ecology officer, according to the company’s website.FFIE also said it would miss the deadline for filing its 2021 annual report because of delays caused by an internal investigation.FFIE expects to submit its 2021 annual report and its 2021 third-quarter report for the period ending September 30 by May 6, 2022.FFIE said it expects its operating loss for the quarter ending September 30, 2021 to increase to approximately $186 million from approximately $18 million in the same period a year earlier, primarily due to higher charges related to increased production at its Hanford, Calif., facility, additional litigation accrued charges and the abandonment of certain FF 91 program assets.FF expects total assets of the Company to be approximately $1 billion as of September 30, 2021, including approximately $666 million in cash and cash equivalents as of September 30, 2021, compared to approximately $316 million as of December 31, 2020.In October 2021, J Capital Research, an American short seller, issued a short report on FFIE, which expressed its doubts about FFIE from several perspectives, such as FFIE’s production capacity, Capital performance, r&d investment, and jia Yuting’s punishment in China.The report notes that in eight years of operation, FFIE failed to deliver a single car and repeatedly said “next year”.In addition, the company has reneged on promises to build five plants in the United States and China, and the construction of a sixth plant has been repeatedly delayed.FFIE is being sued by dozens of suppliers for failing to pay;Meanwhile, FFIE failed to disclose the fact that its Chinese assets had been frozen by a local court and Mr Jia appeared to be running the company behind the scenes.The report also noted that in January 2021, FFIE reported receiving 14,000 orders for its vehicles.But a week later, hindenburg, an investigative agency, said in its public inquiry report that orders from Lordstown, an electronic car company, had been forged.In fact, 78 percent of the 14,000 orders came from the same private company, which paid the deposit through notes payable.FFIE refuted the allegations and said there was no fraud.The first quasi-production vehicle of FFIE’s FF 91 was completed on February 23.FFIE officials said the FF 91 is targeted at low sales compared to some of its competitors’ mass-market cars, so the booking method is different.”The pre-order reflects interest in the FF 91, and all pre-orders are considered high potential owners.”The chief said.Founded in 2014, FFIE focuses on smart electric vehicle development and is headquartered in Gardena, California, USA.On July 21, 2021, FFIE was listed on nasdaq via SPAC (special purpose acquisition Company).Just over three months after going public, FFIE received a nasdaq warning letter in November 2021.FFIE clarified that the nasdaq warning was only related to FFIE’s delay in filing its third-quarter results, which is normal procedure.FFIE said it is looking forward to mass production and high quality delivery of FF 91 in July 2022.Editor: Yu Hongbo