Faraday Future Issues Series A Preferred Stock in Key Agreement

GARDENA, CA – Faraday Future Intelligent Electric Inc. (NASDAQ:FFAI), an electric vehicle manufacturer currently valued at $79 million and trading at $0.93 per share, announced on Monday that it has entered into a significant agreement involving the sale of a newly designated Series A Preferred Stock. The company, which InvestingPro analysis shows has been facing significant financial challenges with a weak financial health score, disclosed in an SEC filing that it reached a Purchase Agreement on April 17, 2025, with an investor named Matthias Aydt. Under the terms of the agreement, one share of Series A Preferred Stock was sold for $100.00.

The Series A Preferred Stock carries a substantial 3 billion votes but is limited to voting on a specific proposal: the Share Authorization Proposal. This proposal seeks stockholder approval to amend the company’s Certificate of Incorporation to increase the number of authorized shares of Class A and Class B common stock. According to InvestingPro data, this move comes as the company grapples with a concerning current ratio of 0.37 and total debt of $102.55 million, suggesting potential liquidity challenges. The unique share of Series A Preferred Stock will vote in the same proportion as the actual votes cast by holders of common stock, excluding abstentions and non-votes, on the Share Authorization Proposal.

This strategic move could potentially influence the outcome of the Share Authorization Proposal by mirroring the voting results of the common stockholders, effectively neutralizing the impact of abstentions and non-votes. The share of Series A Preferred Stock is non-convertible and does not receive dividends. In the event of a company liquidation or similar proceedings, the holder of the Series A Preferred Stock is entitled to a preferential payment of $100.00 before any distributions to common stockholders.

Additionally, the Series A Preferred Stock cannot be transferred without the Board’s consent before stockholder approval of the Share Authorization Proposal, and it will be redeemed automatically following the approval of the proposal for the same purchase price of $100.00.

This transaction was exempt from registration under the Securities Act of 1933, as the purchaser is an accredited investor. The filing also indicates that the sale has material implications for the rights of security holders, as the new share class will participate in the voting process for the Share Authorization Proposal, altering the dynamics of stockholder approval.

The information provided is based on a press release statement and an SEC filing by Faraday Future Intelligent Electric Inc. InvestingPro subscribers have access to over 20 additional key insights about FFAI, including detailed analysis of its financial health, valuation metrics, and growth prospects. Get access to the comprehensive Pro Research Report, which provides expert analysis and actionable intelligence for smarter investing decisions.

In other recent news, Faraday Future Intelligent Electric Inc. has secured a new cash financing commitment of $41 million, marking the third funding round in six months and raising over $100 million since September 2024. This funding is aimed at corporate growth, development of the FX brand, and AI advancements, with Univest Securities, LLC acting as the exclusive placement agent. Additionally, Faraday Future has announced changes to its corporate structure, implementing a new class of preferred stock, Series B Preferred Stock, which affects shareholder rights and is detailed in a filing with the Securities and Exchange Commission. The company is also testing its FX 6 prototype vehicles in the United States, focusing on performance, technology, and user experience, as part of its strategy to produce Advanced Intelligent Electric Vehicles for the mass market.

Moreover, Faraday Future plans to enter the New York State EV market with its FF 91 model and potentially additional FX models, offering premium leasing services with flexible terms. The company’s strategic expansion includes opening an office in the New York Metro area to support its Investor Relations function. In another development, Faraday Future is seeking shareholder approval to increase its authorized Common Stock by 24% at an upcoming Extraordinary General Meeting. This move is part of a broader plan to meet obligations to holders of convertible notes and ensure compliance with Nasdaq Listing Rules. CEO Matthias Aydt emphasized the significance of this share increase for the company’s dual-brand strategy, which includes the premium FF 91 program and the new FX mass-market initiative.

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