Financing of $30 million has been secured by Faraday Future to strengthen its core business and advance its FX strategy
Faraday Future Intelligent Electric, a California-based technology company at the forefront of artificial intelligence electric vehicles (AIEV), has secured a significant $30 million in cash financing commitments is Secured. This new funding will accelerate the company’s growth and further advance its Faraday X (FX) strategy—FF’s vision for launching affordable, high-performance AIEVs that feature cutting-edge technology. The strategy is designed to fill a gap in the U.S. electric vehicle (EV) market, aiming to meet the increasing demand for mainstream electric vehicles.
The financing is structured to support not only the development of the FX brand but also the continued expansion of the company’s operations and product offerings. As part of this initiative, Faraday Future is on track to debut its first two prototype FX vehicles in Los Angeles later this month. These prototypes will be subjected to product development and testing at the company’s manufacturing facility in Hanford, California.
A pivotal moment for the company will be the prototypes’ stop in Las Vegas from January 5 to 7, 2025, where FF will share critical updates on its FX strategy and showcase its progress. This marks a significant milestone in FF’s journey to bring advanced, affordable electric vehicles to the U.S. market.
Details of the Financing
The $30 million financing package is divided into two parts: a pre-funded amount of $7.5 million, which was received in the fourth quarter of 2024, and $22.5 million in new cash commitments. This financing is structured as unsecured convertible notes and warrants for the acquisition of additional shares of Faraday Future’s common stock. Specifically, the conversion price for the convertible notes is set at $1.16 per share, and the exercise price for the warrants is $1.392 per share. Both prices are subject to potential adjustments as outlined in the agreement.
The shares of common stock associated with the financing, including those underlying the convertible notes and warrants, are currently unregistered. They are subject to trading restrictions and are not immediately tradable. The closing of the financing is contingent upon customary closing conditions.
For more details regarding the terms of this financing, investors and stakeholders can review the company’s Form 8-K filing with the U.S. Securities and Exchange Commission (SEC) on December 23, 2024.
Optimism for the Future
Matthias Aydt, the Global CEO of Faraday Future, expressed strong optimism regarding the new funding, saying, “This new funding lays a solid foundation for both FF and its new brand as we approach the end of 2024 and enter the new year. I am optimistic about the opportunities this funding brings, including supporting the ongoing production of our FF 91 2.0 and fueling the growth of the FX brand.” Aydt emphasized that this investment will be crucial in helping the company maintain momentum in the highly competitive electric vehicle market.
Jerry Wang, the President of FF Global Partners and Head of Corporate Development at FFIE, also expressed his support for the financing round. He stated, “We are pleased to have supported FF in successfully completing this round of financing. We are enthusiastic about the promising opportunities ahead for the FX brand, and we firmly believe in FF’s ability to execute its strategy effectively and deliver significant value in the process.”
Regulatory Considerations
The convertible notes and warrants were offered and sold through a private transaction exempt from the registration requirements of the Securities Act of 1933. The transaction relied on exemptions under Section 4(a)(2) of the Securities Act and Rule 506 of Regulation D. As a result, the securities associated with the financing, including the shares of common stock issuable upon conversion of the notes and exercise of the warrants, are restricted and cannot be sold in the U.S. unless an effective registration statement is filed or an applicable exemption from registration applies.
Faraday Future has agreed to file one or more registration statements with the SEC to register the resale of the shares of common stock that may be issued upon conversion of the convertible notes and exercise of the warrants.
