Faraday Future announced on Monday that it had landed an agreement to settle a lengthy dispute with its largest shareholder to fund manufacturing. Electrek reported that it had brought FFIE back on the path towards unveiling its flagship electric vehicle, the FF 91.
The Los Angeles-based EV startup has repeatedly postponed product launches as it looks for additional funding to ensure its survival. In fact, the FF 91 was supposed to go into production in 2018, but Faraday Future never actually launched it.
Aside from that, the company has been seeking funds to keep the business afloat despite losing a few senior executives to rival EV startups.
It is worth noting that Faraday Future announced an operational loss of $137 million in its Q2 earnings, a nearly 400% jump from 2021, and $121 million in cash.
However, the company did point out that in order to maintain operations, it would need to raise $325 million in capital, with a predicted $368 million in cash consumption until the end of this year. Additionally, it stated that in order to keep the company operating until September, it would require more money.
Furthermore, some of Faraday Future’s top investors have begun to ponder why the firm is going through this conflict. The controversy reached its height last week when Faraday Future’s largest shareholder FF Top Holding, filed a lawsuit, alleging that it is “suffering from a crisis of leadership at the board level.” With that, the shareholder is demanding the removal of numerous board members.
Nevertheless, Faraday Future stood by its objectives, saying that the FF 91 would start production by the end of 2022. Fortunately, Faraday Future’s resolution of the lengthy dispute has given the business access to up to $100 million in additional funding.
According to a recent 8K filing, Faraday Future declared it had reached an agreement with FF Top Holding to end the current dispute, which calls for new funding and the dismissal of two directors. The following adjustments to Faraday’s board will be made as per the agreement:
|· Brian Krolicki will step down as director.· Sue Swenson will step down as executive chair.· Faraday Future’s board has been expanded from nine to ten, with Adam He joining.|
Faraday further claims that Senyun International will provide $60 million in addition to receiving $40 million in convertible notes as near-term funding. That said, FF Top Holding will withdraw its case. According to an FF Top spokesperson:
|“FF Top is glad that a resolution has been reached. We look forward to this opportunity for a new start and brighter future for FFIE, and to all parties performing their obligations under the governance agreement, to achieve the best interests of Faraday Future and all shareholders.”|
On the other hand, Faraday Future’s CEO, Dr. Carsten Breitfeld, spoke about the achievement:
|“The resolution of governance and related issues with our largest shareholder is a major accomplishment and an important step forward for Faraday Future and all our stakeholders. We can now focus our effort on building the FF 91. We appreciate all parties’ efforts in reaching this agreement.”|
All things considered, FF Top could be more open to working with Faraday Future now that it has succeeded in dismissing two board members. Instead of fighting against each other, the two companies could now cooperate toward their common goals through the agreement.