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Subsequent Events
12 Months Ended
Dec. 31, 2024
Subsequent Events [Abstract]  
Subsequent Events Subsequent Events
The Company evaluated subsequent events and transactions that occurred after the balance sheet date up to the date that the Consolidated Financial Statements were issued.
Subsequent SPA Portfolio Notes Activity
Subsequent to December 31, 2024, the Company issued 2024 Unsecured convertible notes to a third party totaling $20.0 million with due dates ranging from December 31, 2029 through January 22, 2030 at 10.00% interest. Principal and accrued interest are convertible at the option of the holder into Common Stock of the Company at a conversion price per share equal to the lower of a) stated conversion price or b) lowest VWAP of the five trading days immediately prior to the day on which lender provides conversion notice. Additionally, $18.6 million of principal and $1.1 million of interest of the Company’s SPA Portfolio Notes were converted into 17,034,826 shares of the Company’s Class A Common Stock.
Related Parties Unsecured Convertible Note
On February 11, 2025, $1.5 million of principal and $0.1 million of interest under Unsecured Convertible Note held by MHL were converted into 1,352,766 shares of Class A Common Stock pursuant to the terms of the agreement.
Letter Agreements
On January 28, 2025, the Company entered into a letter agreement (“September Letter Agreement”) with certain Junior Secured SPA Investors. Before stockholder approval, these investors agreed not to convert outstanding notes below the initial $5.24 conversion price. In return, the Company agreed to issue “True-Up Shares” after approval to adjust for any pre-approval conversions, based on a formula considering accrued interest and market pricing.
On the same date, the Company entered into a similar letter agreement (“December Letter Agreement”) with certain 2024 Unsecured SPA Investors, modifying terms related to their previously disclosed investment. These investors agreed not to convert outstanding notes below the initial $1.16 conversion price before stockholder approval. The Company agreed to issue True-Up Shares post-approval using a similar adjustment formula. Additionally, if a resale registration statement becomes effective, and the conversion price exceeds the prior day's closing bid price, the conversion price will be adjusted downward.
Both Letter Agreements include a provision preventing the issuance of shares if the Company's available authorized stock is insufficient. However, the Company must deliver the shares once sufficient stock becomes available.
Settlement and Release Agreement
On January 17, 2025, the Company entered into a Settlement and Release Agreement with HSL s.r.l. (“HSL”) to resolve outstanding claims with HSL. As part of the Settlement and Release Agreement, Faraday agreed to issue €1.15 million (approximately $1.185 million) worth of Class A Common Stock (the “Compensated Shares”) to HSL, with the number of shares based on a per share price of $1.53, which was the closing price of the Class A Common Stock on January 16, 2025, the trading day prior to the signing of the Settlement and Release Agreement. On January 17, 2025 the Company issued 774,183 shares of Class A common stock in lieu of the settlement. These shares remain restricted until the Registration Statement becomes effective. The settlement also included the cancellation of purchase orders and the resolution of claims related to items without associated purchase orders. Additionally, the Company may issue extra shares or provide additional cash to HSL if the market value decreases by more than 5% between January 17, 2025, the issuance date of the Compensated Shares and the date when the Registration Statement is effective.
Second Series A Preferred Stock
On January 28, 2025, in connection with a purchase agreement entered into with Mr. Aydt, the Company’s Global CEO, the Company filed a Series A Certificate of Designation with the Secretary of State of the State of Delaware. The Series A Certificate of Designation designated one share of the Company’s Preferred Stock as the Second Series A Preferred and established the preferences, rights and limitations thereof. The closing of the sale and purchase of the share of the Second Series A Preferred was completed on January 28, 2025 for a purchase price of $100.00. See Note 12, Stockholders’ Equity.
2025 Senior Unsecured SPA Notes
On March 21, 2025, the Company entered into a Securities Purchase Agreement with institutional investors for the sale of $41.0 million in senior unsecured convertible notes (“2025 Senior Unsecured SPA Notes”), of which approximately $39.5 million will be paid in cash and $1.5 million will convert from a prior loan. The financing includes common stock purchase warrants, Series B Preferred Stock, and incremental note purchase warrants, with closings expected to occur in four
tranches subject to certain conditions. The Company may issue up to an additional $10.0 million in notes if additional investors join before the first closing. Faraday Future also agreed to register for resale the shares underlying the convertible notes and warrants within 45 days and maintain an effective registration.
Uni vest Securities, LLC is acting as placement agent and will receive a cash fee of up to 8.0% of gross proceeds and warrants equal to 7.0% of the shares underlying the issued notes. The placement agent warrants have a five-year term and exercise prices ranging from $1.548 to 120% of the prior day’s closing stock price, depending on the tranche. The Company agreed to reimburse up to $0.2 million in expenses related to the transaction.
Increase in Authorized Shares and Elimination of Preferred Stock
On March 10, 2025, the Company amended its Certificate of Incorporation to increase authorized shares to 139,245,313, consisting of 129,245,313 shares of Common Stock and 10,000,000 shares of Preferred Stock. Additionally, the Company eliminated the previously designated Second Series A Preferred Stock following the redemption of its sole outstanding share on March 7, 2025. The eliminated share was returned to authorized but unissued Preferred Stock. See Note 12, Stockholders’ Equity.