On May 10th, Faraday Future announced on its official Weibo account that it has signed the final agreement for a $100 million unsecured convertible bond financing. The cash raised from this financing is expected to support the continued production ramp-up, sales, and service network development of the flagship vehicle FF 91. The completion of this financing transaction is subject to certain conditions and limitations on executability.
Metaverse Horizon Limited (an independent investment fund whose investors include FF Global Partners (“FFGP”)) and V W Investment Holding Limited (an affiliated entity of a long-term shareholder of the company) are the main investors in this unsecured convertible bond financing.
FFGP is a partner company consisting of 20 current and former executives of FF, and as a cornerstone investor in this round of financing, it has pledged to invest $80 million.
Faraday Future stated that, according to the financing agreement, the initial settlement amount is $15 million, which will be completed within five business days after the applicable delivery conditions are satisfied or waived by all parties. These delivery conditions include, among others, effective registration statements related to the shares involved, sufficient authorized, unissued, and uncommitted Class A common shares, and the company reaching certain delivery milestones. There will be seven more deliveries after that, and each delivery will be made within fifteen business days after the applicable previous delivery date.
FF has a third-party beneficiary right in the equity commitment letter between FFGP and V W Investment Holding Limited, which allows it to enforce delivery or seek compensation under certain specified conditions. If these investors breach their obligations in their respective equity commitment letters, the company may not be able to recover losses resulting from such breach, and the company may not be able to obtain the capital injection due to such breach. For details on the terms, conditions, and funding schedule of unsecured notes and warrants and related securities purchase agreements and equity commitment letters, please refer to the 8-K form submitted by the company to the US Securities and Exchange Commission.
The company also signed the eighth amended agreement to the securities purchase agreement and amended certain secured notes and warrants, including waiving certain preemptive rights and full-ratchet anti-dilution price protection related to unsecured notes, warrants, and employee stock purchase plans, and unifying the conversion price and interest compensation of secured and unsecured notes.
The first production FF 91 from Faraday Future was officially rolled out on April 15th. The FF 91 series includes three models: the standard FF 91, the FF 91 Futurist, and the FF 91 Futurist Alliance Edition. Faraday Future has postponed the delivery time for the first batch of production FF 91 Futurist. The new car, originally scheduled for delivery in April, needs to be postponed until the end of May due to supply chain issues.
