- The Company is proposing a reverse stock split ratio of up to
40:1. The Company may defer or not implement a reverse stock split
if its stock price naturally gets the Company into compliance with
Nasdaq’s minimum bid requirements.
- The Company is also proposing an increase in authorized shares
that would enable it to better pursue equity and equity-linked
strategic financing.
- The Company is considering hosting a retail investor community
day.
Faraday Future Intelligent Electric Inc. (Nasdaq: FFIE) (“FF”,
“Faraday Future”, or “Company”), a California-based global shared
intelligent electric mobility ecosystem company, today announced
that its Board of Directors (the “Board”) has approved a proposal,
among other proposals, to be submitted to stockholders for approval
at the upcoming annual meeting of stockholders, to authorize the
Board to effect a reverse stock split of the Company’s common stock
(“Common Stock”). The reverse stock split proposal includes a
proposed range between 1-for-2 and 1-for-40 shares of outstanding
Common Stock, and a corresponding reduction in the total number of
shares of Common Stock the Company is authorized to issue. The
final ratio will be determined by the Board after stockholder
approval, with the option to abandon, delay or postpone the reverse
stock split.
FF's stock price fell below Nasdaq's minimum bid price
requirement for listed companies for 30 consecutive trading days
last December resulting in a deficiency notice from Nasdaq. The
Company subsequently did not timely file its 2023 Annual Report on
Form 10-K and its stock price dropped below $0.10 for ten
consecutive trading days. This resulted in another deficiency
notice and Nasdaq’s determination to delist FF’s securities. The
Company requested a hearing with the Nasdaq Hearings Panel to share
its plans to regain compliance. While the Company is waiting on the
decision of the Nasdaq Hearings Panel, it remains fully committed
and dedicated to complying with the Nasdaq and SEC rules and
requirements and carrying on with all supporting actions.
Securing Full Nasdaq Compliance
The Company has taken actions to regain compliance, including
filing its 2023 Annual Report on Form 10-K at the end of May,
engaging a new independent auditor, filing a preliminary proxy
statement with a proposal to effect a reverse stock split, and
committing to file its first quarter Form 10-Q no later than the
end of July. In addition, the Company intends to timely file its
second quarter Form 10-Q.
If the Company becomes current in its public filings, the only
other current Nasdaq non-compliance issue will be the minimum bid
price requirement for the Company’s stock. For the benefit of all
FF stockholders, FF wants to keep the Company listed. The proposed
reverse stock split is intended to increase the market price of the
Common Stock to mitigate the risk of being delisted from The Nasdaq
Capital Market. Nasdaq has several continued listing criteria that
companies must satisfy in order to remain listed on the exchange.
Nasdaq Listing Rule 5550(a)(2) requires that the Company maintain a
closing bid price that is greater than or equal to $1.00 per share.
Companies are considered out of compliance with this requirement if
the closing bid price is below $1.00 per share for 30 consecutive
trading days. In addition, companies are considered out of
compliance with Nasdaq Listing Rule 5810(c)(3)(A)(iii) if the
closing bid price is below $0.10 per share for 10 consecutive
trading days. Per Nasdaq rules, to regain compliance, the bid price
for the Common Stock must close at $1.00 per share or more for a
minimum of 10 consecutive trading days, which the Company has
requested that Nasdaq extend to August 30, 2024. The Company
informed the Nasdaq Hearings Panel that it would target a
post-reverse split stock price of at least $5 per share. If the
stock price naturally meets this threshold, the Board may elect to
defer or not implement a reverse stock split.
While FF cannot predict at what prices the Common Stock will
trade in the coming weeks, it is proposing a range between 1-for-2
and 1-for-40 shares of outstanding Common Stock to have a robust
margin of safety with respect to Nasdaq’s minimum bid requirement.
Including during extreme conditions, such as significant
fluctuations. The Company believes it would be prudent to provide a
margin of safety for the stock price over the longer term.
This reverse stock split will not affect stockholders’ ownership
or voting power, except for fractional share conversion, but it
does affect the number of shares outstanding and the price per
share. The higher the stock price is on the day the Board
determines the reverse stock split ratio, the lower the ratio could
be. The completion of the reverse stock split is subject to market
conditions and stockholder approval, with no guarantees of the
intended effects. The Board can choose not to proceed if a reverse
stock split is no longer in the Company’s or stockholders’ best
interests.
Strategic Financing and Increase in Authorized Shares
The Company continues to seek strategic financing, including
from the Middle East, but is constrained by a lack of available
authorized shares. To that end, the Board has approved a proposal,
among other proposals, to be submitted to stockholders for approval
at the upcoming annual meeting of stockholders to amend the
Company’s Certificate of Incorporation, as amended, to allow for an
increase in the number of authorized shares.
A core purpose for this proposal is to clear a barrier to
securing equity-based or equity-linked strategic financing,
including in the Middle East. If strategic investments are secured,
this could allow for a ramp up in production and delivery of the FF
91 and could support the development of the FF China-US Automotive
Industry Bridge strategy that is being developed.
FF would like to restore stockholders' confidence through the
business performance itself. The entire FF team has been working
diligently to ensure the Company's survival and growth. The Company
has faced many challenges but has always persevered. FF’s
stockholders drive FF, which is why the Company is asking for their
support in the upcoming annual meeting for these proposals, as well
as the others described in the preliminary proxy statement.
The Company is also considering hosting a retail investor
community in the near future.
ABOUT FARADAY FUTURE
Faraday Future is the pioneer of the Ultimate AI TechLuxury
ultra spire market in the intelligent EV era, and the disruptor of
the traditional ultra-luxury car civilization epitomized by Ferrari
and Maybach. FF is not just an EV company, but also a
software-driven intelligent internet company. Ultimately FF aims to
become a User Company by offering a shared intelligent mobility
ecosystem. FF remains dedicated to advancing electric vehicle
technology to meet the evolving needs and preferences of users
worldwide, driven by a pursuit of intelligent and AI-driven
mobility.
FORWARD LOOKING STATEMENTS
This press release includes “forward looking statements” within
the meaning of the safe harbor provisions of the United States
Private Securities Litigation Reform Act of 1995. When used in this
press release, the words “estimates,” “projected,” “expects,”
“anticipates,” “forecasts,” “plans,” “intends,” “believes,”
“seeks,” “may,” “will,” “should,” “future,” “propose” and
variations of these words or similar expressions (or the negative
versions of such words or expressions) are intended to identify
forward-looking statements. These forward-looking statements, which
include statements regarding the Company’s plan to regain
compliance with Nasdaq listing standards, the Company’s intended
reverse stock split and increase in authorized shares, the
Company’s intention to hold its annual meeting, the Company’s
planned financings, and the Company’s growth strategy in the U.S.,
China and the Middle East, are not guarantees of future
performance, conditions or results, and involve a number of known
and unknown risks, uncertainties, assumptions and other important
factors, many of which are outside the Company’s control, that
could cause actual results or outcomes to differ materially from
those discussed in the forward-looking statements.
Important factors, among others, that may affect actual results
or outcomes include, among others: the Company’s ability to
continue as a going concern and improve its liquidity and financial
position; the Company’s ability to satisfy the conditions for
continued listing set forth by the Nasdaq Hearings Panel; the
possibility that stockholder approval for the reverse stock split
and/or the increase in authorized shares will not be obtained; the
possibility that factors unrelated to the reverse stock split may
impact the per share trading price of the Common Stock; the
Company’s ability to regain compliance with, and thereafter
continue to comply with, the Nasdaq listing requirements; the
ultimate decision of the Nasdaq Hearings Panel; the Company’s
ability to pay its outstanding obligations; the Company's ability
to remediate its material weaknesses in internal control over
financial reporting and the risks related to the restatement of
previously issued consolidated financial statements; the Company’s
limited operating history and the significant barriers to growth it
faces; the Company’s history of losses and expectation of continued
losses; the success of the Company’s payroll expense reduction
plan; the Company’s ability to execute on its plans to develop and
market its vehicles and the timing of these development programs;
the Company’s estimates of the size of the markets for its vehicles
and cost to bring those vehicles to market; the rate and degree of
market acceptance of the Company’s vehicles; the Company’s ability
to cover future warrant claims; the success of other competing
manufacturers; the performance and security of the Company’s
vehicles; current and potential litigation involving the Company;
the Company’s ability to receive funds from, satisfy the conditions
precedent of and close on the various financings described
elsewhere by the Company; the result of future financing efforts,
the failure of any of which could result in the Company seeking
protection under the Bankruptcy Code; the Company’s indebtedness;
the Company’s ability to cover future warranty claims; insurance
coverage; general economic and market conditions impacting demand
for the Company’s products; potential negative impacts of a reverse
stock split; potential cost, headcount and salary reduction actions
may not be sufficient or may not achieve their expected results;
circumstances outside of the Company's control, such as natural
disasters, climate change, health epidemics and pandemics,
terrorist attacks, and civil unrest; risks related to the Company's
operations in China; the success of the Company's remedial measures
taken in response to the Special Committee findings; the Company’s
dependence on its suppliers and contract manufacturer; the
Company's ability to develop and protect its technologies; the
Company's ability to protect against cybersecurity risks; the
ability of the Company to attract and retain employees; any adverse
developments in existing legal proceedings or the initiation of new
legal proceedings; and volatility of the Company’s stock price. You
should carefully consider the foregoing factors and the other risks
and uncertainties described in the “Risk Factors” section of the
Company’s Form 10-K filed with the Securities and Exchange
Commission (“SEC”) on May 28, 2024, as amended on May 30, 2024 and
June 24, 2024, and other documents filed by the Company from time
to time with the SEC.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240624073912/en/
Investors (English): ir@faradayfuture.com Investors
(Chinese): cn-ir@faradayfuture.com Media:
john.schilling@ff.com
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