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2024-09-08 Update From: AutoBeta autobeta NAV: AutoBeta > News >
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AutoBeta(AutoBeta.net)09/28 Report--
Faraday Future (Faraday Future) issued an announcement on September 26th US time, reaching a final settlement with the company's major shareholder FF TOP on financing and board restructuring.
The announcement shows that the company and the major shareholder FF Top have formally reached a package of governance structure adjustment agreements, including restructuring the board of directors: FF Top will withdraw the lawsuit against the company and its board of directors; the current executive chairman Sue Swenson and director Brian Krolicki will take the blame and resign; Adam He will be appointed as a new independent board member.
This means that Jia Yueting regained future control of FF Faraday. On Sept. 27, Jia Yueting forwarded the official article and commented: to set things right and get back on track is another major inflection point for FF. I would like to express my heartfelt thanks to all the investors, partners, executives and employees who worked together to save FF. Next, let all futurists join hands with global suppliers to rush the mass production delivery of FF 91 Futurist to create maximum value for shareholders, users, employees, partners and the industry.
In response to this incident, FFCEO Bifukang said: "reaching a resolution on governance and related issues with our largest shareholder is a major achievement and an important step forward for Faraday Future and all our shareholders. We can now focus on building FF 91. "
While regaining future control of Faraday, FF also received up to $100m in institutional financing, which not only gave FF more respite, but also accelerated the landing of its China project, according to the Financial Associated Press.
Jia Yueting founded Faraday Future, but his power was cut and even the post of chief executive was removed. In October 2021, J Capital Research, an American short seller, issued a report on FF. The report expressed doubts about FF from the aspects of production capacity, capital operation performance, R & D investment and other aspects. The report said bluntly that "FF can not sell a car."
Since then, Faraday in the future set up a special committee of independent directors to investigate. The results showed that there was no evidence to support the previous short report by J Capital Research, but admitted that only a few hundred people had paid for Faraday's future 14000 orders, a statement that misled investors. To that end, Faraday in the future, at the request of the board, demoted or suspended a number of responsible people, cut the base salary of the company's CEO, Carsten Bradfield (Carsten Breitfield) and founder Jia Yueting, and asked them to report to the newly appointed executive chairman, Susan Susan Swenson.
In addition, Faraday also announced a restructuring of the board of directors in the future, with Sue Swenson as executive chairman of the newly established board of directors, Brian Krolicki as a member of the audit and remuneration committee of the board of directors, Jordan Vogel as the chief independent director, and Scott Vogel as chairman of the audit committee, corporate governance and nomination committee of the board of directors.
On April 14, the US Securities and Exchange Commission released documents revealing that the board of directors has adjusted Jia Yueting's position. Jia Yueting will no longer hold the post of executive officer and retain his post of chief product officer. At this point, Jia Yueting's power has been lost.
In June, FF Top, the future largest shareholder of Faraday, submitted a power of attorney to SEC of the United States, and then filed a lawsuit in court to dismiss other board members such as Susan Swenson and chairman BrianKrolicki. "the current board of directors has pushed the company into a corner," FF TOP said.
In addition to major shareholders, Shi Ying, the future second shareholder of Faraday (a wholly owned subsidiary of Evergrande Motor), wrote to Faraday's future board of directors twice on August 24 and September 10, requesting the board of directors to cooperate with the major shareholders' request to convene an extraordinary general meeting as soon as possible, and to complete the removal of the relevant independent directors as soon as possible. At the same time, strong dissatisfaction was expressed about the financing terms of convertible notes approved by Faraday's future board of directors on August 25, which seriously diluted the interests of all shareholders, as well as the suspected deliberate delay in convening an extraordinary general meeting.
In addition to the two major shareholders, future Faraday employees asked for the removal of a number of board members at the same time. On August 23rd, some employees issued a petition requesting the removal of four directors, Sue Swenson, Brian Krolicki, Scott Vogel and Jordan Vogel. According to the petition, Faraday successfully listed on NASDAQ on July 22, 2021 and raised nearly $1 billion. Over the past year, however, its share price has plummeted, its market capitalization has lost nearly 95%, employees' shares have become worthless, and all investors have suffered heavy losses. The board of directors is the first responsible body for all these catastrophic losses. Since IPO, the above four directors have used an excuse to launch an internal investigation and set up a special committee. Through investigation and rectification, Sue Swenson became the executive chairman, holding the highest decision-making power in the operation of the company, and the other three people also held core positions, but their lack of industry experience was the main cause of the company's current difficulties. Therefore, the employees of the company demand that the board of directors immediately stop maliciously promoting the bankruptcy of the company, immediately stop maliciously preventing normal financing, immediately hold the annual general meeting of shareholders, replace incompetent directors, and investigate all legal responsibilities of the relevant personnel. and make full compensation for the economic losses caused by the company, employees and shareholders.
On August 18th, FF TOP called a special shareholders' meeting to demand the removal of Brian Krolicki. On September 15th, Shi Ying Company (a wholly owned subsidiary of Evergrande Motor), as the second largest shareholder, submitted a 13D announcement to SEC of the United States, urging the convening of the special shareholders' meeting and annual shareholders' meeting as soon as possible, and reaffirmed that FF Top, as a major shareholder of FF, fully has the right to remove BrianKrolicki and Sue Swenson in accordance with the shareholders' agreement. On Sept. 20, FF Top sued FF for the dismissal of two board members. The lawsuit said FF's board faced a leadership crisis and demanded the dismissal of Sue Swenson, chairman of the board, and Brian Krolicki, a member of the board. On Sept. 26, FF announced that FF had signed a "Heads of Agreement" with major shareholder FF Top to address a range of corporate governance concerns of FF Top, while FF Top agreed to immediately withdraw its lawsuit against Faraday's future board of directors. At this point, Jia Yueting finally returned to the helm of FF.
Jia Yueting is back at the helm of Faraday's future or good news, but the bad news is that delivery of the first model, the FF 91, may be delayed again and there is no hope of delivery this year. In order to save cash and reduce some of the expenses, a series of cost-cutting measures have recently been implemented, including layoffs and extended payment cycles, and further cost-cutting measures may be taken in the future, according to the Securities and Exchange Commission (SEC). In view of this, Faraday is not expected to start delivering the FF 91 in the third or fourth quarter of 2022.
It was only one foot away from mass production and kicked for several years. It is understood that FF91 was officially launched in January 2017, after which the company announced the completion of a $1 billion round of financing, with Jia Yueting, founder of Leeco, as the global CEO and chief product officer. In 2018, Faraday announced delays in future delivery, saying on its official Weibo that it "firmly believes in our ability to deliver FF91 to global booking users by 2019." In 2019, Faraday said in the future, "delivery is scheduled for 2020." Now in 2022, Faraday's future is still the same, from "ensuring the completion of the delivery target in July 2022" to "still confident that it will be delivered in the third quarter of 2022", and when it will be delivered is still unknown.
However, according to the latest news, Faraday has also received US $100 million in institutional financing in the future. This new financing will indeed solve the current financial dilemma for Faraday in the future, but it still needs a lot of financial support, and the continuous postponement of its first model, the FF 91, is not a good sign for Faraday's future. According to statistics, Faraday's cumulative loss in the future has reached 3.2 billion US dollars. As of August 9, 2022, Faraday's future cash balance is only $52.2 million, with a cash limit of $1.6 million. In fact, the outside world doesn't seem to care whether Jia Yueting can build a car. Of course, for Jia Yueting, it is still necessary to tell capital stories as well as possible.
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