Faraday Futures (NASDAQ:FFIE) stock retreated about 2% in premarket trading after the electric vehicle (EV) startup announced that it had discovered that it had previously made accounting errors. The errors were discovered in conjunction with the recent recruitment of the company’s new interim Chief Financial Officer, Jonathan Maroko.
FFIE stock is now seeing a rebound after the market’s opening and is now up over 3.5%.
Accounting Errors
Faraday announced after the market closed yesterday that its 2022 financial results, its results for the third quarter of 2022, and its financial data for the first quarter of this year “should no longer be relied upon” due to accounting mistakes. However, encouragingly for the owners of FFIE stock, the errors made “primarily” relate to “a non-cash and non-operating item related to the change in the fair value upon conversion of… notes.” Consequently, the restatements probably won’t have a major impact on the pre-revenue company’s balance sheet or losses.
FFIE reported that it would issue restatements of its financial results “as soon as reasonably practical.”
The New Interim CFO and His Team
Faraday named Jonathan Maroko as its interim CFO late yesterday. Maroko has been the interim CFO “at several companies during their growth phase,” Faraday reported. The luxury EV maker indicated that Maroko would work together with its current Chief Accounting Officer, Yun Han and its Head of Finance Operations, Edward Darwick, who also recently joined the company, on “investment and financing management, internal controls, [and] financial operations.”
Other Information About Faraday Future and FFIE Stock
On June 27, the company disclosed that it expected to obtain $90 million of new funding from investors and noted that it would receive an additional $15 million sooner than it had previously anticipated.
In the five days, FFIE stock had climbed 18%. However, the shares were still down 27% over the last month and 14% year-to-date.
On the date of publication, Larry Ramer 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.
