FF "internal fighting" ends: The financing of the big shareholder reorganization is still the primary goal

21st Century Business Herald reporter Bai Yang Beijing report

On September 26, Faraday Future (FF) announced that it had reached a binding governance agreement with the company's major shareholder FF TOP, which resolved a series of issues related to corporate governance.

It is reported that the content of the agreement includes FF TOP agreed to immediately withdraw a lawsuit against the FF board of directors, adjust the size of the board members and the size of the board of directors, and the relevant revision of the shareholders agreement between FF and FF TOP.

This means that FF has come to an end of the "internal fighting" for a while, but this does not change the current situation of its capital shortage. As of the closing of US stocks on September 26, FF's stock price rose by 9.57%, still only 0.84 US dollars per share, which has fallen 94%from the price on the first day of listing.

In addition, in terms of cash, FF had $ 505 million at the end of last year, and as of August 9 this year, the account was only $ 52.2 million. There are only a few days before the end of the third quarter, and FF has previously promised to mass production in the third quarter, and it seems to be postponed again.

Big shareholders propose to remove directors

One month ago (August 18), as a major shareholder of FF, FF TOP and its affiliated parties announced that a preliminary attorney statement was submitted to the special shareholder meeting of the company, and it was clearly proposed to dismiss the FF director and former chairman of the former chairman. Brian Krolicki.

Participants who submitted the attorney's statement include FF TOP, FF Global, and Pacific Technology (collectively referred to as "FFGP entities"). Among them, FF Global is co -owned by its 19 members, including the company's current and former employees and executives, and and of the company. Managed by the board of directors consisting of six managers.

At the same time, FF Global is a managing member of Pacific Technology, and Pacific Technology is the manager and indirect of the FF TOP.

As of August this year, FFGP physical benefits holding FF ordinary shares for a total of 11770,569 shares, accounting for about 35.9%of FF.

FF TOP stated in the attorney that in the past year, FF's operating performance has not achieved the goals set in the company in public documents, and this situation has not improved. This poor performance is largely due to the negligence of Krolicki and a member of the board of directors who maintains the same action with him -Sue Swenson, Scott Vogel and Jordan Vogel.

From the perspective of FF TOP entities, Krolicki promoted, supported, or promoted the decision -making of the board of directors. These decisions showed that the leadership was weak, the maximum interests of shareholders, the failure of corporate governance, and lack of financial prudential.

In addition, FF Top believes that it requires the removal of Krolicki, which is based on the rights given by the "Shareholder Agreement" signed with FF in July 2021.

Two shareholders support

In fact, in the process of promoting FF with the FF TOP agreement, the company's second largest shareholder Season Smart also played a role.

On August 24th and September 10th, Season Smart sent two letters to the FF board of directors to express support for FF TOP. Season SMART said that FF's current financial situation is a problem that it is very concerned about. At the same time, it is also very disappointed with FF's previously announced convertible bond financing clauses. It is believed that the terms are extremely unfavorable to the company and will also form a major dilution to the company's shareholders.

Season Smart believes that FF TOP has the right to remove Brian Krolicki's contract, and quickly executes removal is also the clearest way to restore the order of the board of directors.

Earlier August, FF refuted the power of attorney submitted by FF TOP. FF believes that FFGP entities distort many facts in its attorney, including distorting FF TOP's rights under the shareholders' agreement with FF.

On September 22, FF issued a statement, saying that the company's board of directors raised funds to support FF91 production, and was affected by false information promotion.

FF said that these false information accused some directors of the company conspiring unnecessary bankruptcy for personal interests. At the same time, the threat of external lawsuits was also upgraded to the personal violence threat or even death threat to certain senior staff and directors.

But after a few days, FF announced an agreement with FF TOP to reach an unanimous governance resolution.

Specifically, the FF TOP will withdraw a lawsuit against FF and its board, and after receiving a net financing of $ 13.5 million, FF will resign from the post of FF Executive Chairman and Chairman of the Board of Directors. After the amount of financing commitments and a net financing of $ 35 million, Sue Swenson and Brian Krolicki will resign from the board of directors.

Who is controlling FF?

In addition, FF also announced that two financing agreements will be implemented on the same day, and the total amount of new financing commitments will be $ 100 million. According to the first financing agreement, FF will obtain a recent financing of US $ 40 million in the form of convertible guarantee bills and equity certificates.

According to the second financing agreement, the FF will obtain an additional 60 million US dollars of additional recent financing from Senyun International LTD., Daguan International LTD, to meet the relevant conditions in the form of convertible guarantee bills.

FF said the company is discussing financing with potential investors to financing by the end of 2022 and later operations. As a part of the preparation of cash and reducing expenses, FF recently implemented measures to reduce employees and other expenses and delay payment measures. Next, the company may take measures such as further reducing employees.

After a period of game, the internal governance disputes of FF ended up with the victory of the major shareholder FF TOP. According to the agreement, the FF TOP and its related parties will also control FF's board of directors in the future.

It is worth noting that in the documents submitted by the FF to the US Securities and Exchange Commission, the person signed by the FF Top, FF Global, and Pacific Technology is Wang Jiawei, and the position of Wang Jiawei is the founder of the FF founder. Jia Yueting's nephew.

In April this year, Wang Jiawei, then Vice President of FF Global Capital Market, resigned from the company's position for three months after being suspended for three months. Now, Wang Jiawei returned to FF as the controlling shareholder. Similarly, although Jia Yueting no longer held FF equity in his personal bankruptcy reorganization, his right to speak in FF still existed. For example, in the official press release issued by the FF on September 26, the picture is a photo of Jia Yueting and FF 91.

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