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LOS ANGELES - Faraday Future Intelligent Electric Inc. (NASDAQ:FFAI) has secured approximately $105 million in new cash financing, the electric vehicle maker announced Wednesday. According to InvestingPro data, this financing comes at a crucial time as the company has been quickly burning through cash, with a concerning current ratio of 0.41 indicating short-term obligations exceed liquid assets.
The funding includes $82 million in new financing commitments, primarily through unsecured convertible notes and warrants, plus $22 million in cash from previous investors who converted securities from prior financings. The company, currently valued at a market capitalization of $200.12 million, has shown strong momentum with a 32.68% return over the past six months despite ongoing challenges. InvestingPro analysis reveals 20+ additional key metrics and insights available for deeper understanding of FFAI’s financial position.
According to the company, the capital will support the launch of its new product, FX Super One, scheduled for July 17, and accelerate development of its FF and FX brands and AI-related technologies. Analysts tracked by InvestingPro anticipate significant revenue growth, with forecasts suggesting a remarkable 1130% increase in the current fiscal year, though the company remains unprofitable with a last twelve-month net loss of $325.48 million.
"The $105 million in additional funding will significantly strengthen the company’s ability to launch FX Super One and scale up the production readiness," said Jerry Wang, Global President of Faraday Future, in a statement released by the company.
The financing is mainly funded by existing institutional investors, including Master Investment Group, the company’s Middle East strategic partner. The transaction features what the company described as more favorable terms compared to previous financings, including reduced warrant issuance to limit dilution.
In a separate disclosure, Faraday Future revealed that the company, two current executives including Wang and YT Jia, and two former employees recently received a Wells Notice from the Securities and Exchange Commission. The notice indicates SEC staff has made a preliminary determination to recommend enforcement action for alleged violations of anti-fraud provisions of federal securities laws.
The allegations relate to purportedly false or misleading statements connected to the company’s 2021 PIPE and SPAC listing, specifically regarding related party transactions and Jia’s role in the company. A Wells Notice is not a formal charge but indicates potential enforcement action.
Faraday Future stated it plans to engage with the SEC about why enforcement action is not warranted.
The convertible notes and warrants from the new financing will be offered in a transaction exempt from SEC registration requirements.
In other recent news, Faraday Future Intelligent Electric Inc. has amended a significant agreement with its investors, allowing for changes in the registration and closing conditions of securities. This amendment, disclosed in an SEC filing, involves the sale of convertible notes, warrants, and Series B Preferred Stock, totaling $41 million. Additionally, Faraday Future announced an event titled "FFAI Investor Community & FX Developer Co-Creation Day," featuring a keynote by Founder Yueting Jia, aimed at fostering collaboration with investors and developers. The event will be available via live stream and emphasizes the company’s commitment to partnership and innovation.
In another strategic move, Faraday Future has entered into an agreement involving the sale of a newly designated Series A Preferred Stock. This stock, sold to investor Matthias Aydt, carries 3 billion votes specifically for the Share Authorization Proposal, which seeks to amend the company’s Certificate of Incorporation. The unique voting rights of this stock could influence the outcome of the proposal by mirroring the common stockholders’ voting results, excluding abstentions and non-votes. The stock is non-convertible, non-dividend-paying, and will be automatically redeemed following the proposal’s approval. These developments reflect Faraday Future’s ongoing efforts to engage with its investor community and navigate its financial arrangements.
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