TL;DRFaraday Future raised $25M in convertible notes for its robotics pivot. Half is locked in investor-controlled accounts.
Faraday Future announced on Thursday that it has raised $25 million through convertible promissory notes, bringing its total financing over the past two months to $70 million. The company says the capital is sufficient to fund Phase 1 of its robotics business plan through the end of 2026. The stock, which trades on Nasdaq under the ticker FFAI, closed below $1 per share and is currently under a Nasdaq deficiency notice for failing to maintain the minimum bid price requirement.
The structure of the raise warrants attention. Of the $25 million, only $12.5 million goes directly into the company’s operating account. The remaining $12.5 million is deposited into control accounts held by the investors, and will be released to Faraday Future only upon satisfaction of certain undisclosed conditions. The press release describes “institutional investors’ confidence” in the company’s prospects but does not name any of the investors. The shares underlying the convertible notes are unregistered and subject to trading restrictions. The company’s own risk factors, filed with the SEC, acknowledge that it currently lacks sufficient share capital to execute its strategy and that obtaining stockholder approval for additional shares could result in “substantial additional dilution.”
