FARADAY FUTURE INTELLIGENT ELECTRIC INC. 8-K

What Happened

• On May 15, 2026 Faraday Future Intelligent Electric Inc. (FFAI) entered into and closed a Securities Purchase Agreement selling $25 million of senior convertible notes to institutional investors. The Notes accrue interest at 8% per annum (15% if a default occurs), are convertible into Class A common stock at the noteholders’ option, and mature one year after issuance (with limited extension rights). The Company agreed to file a registration statement within 45 days to register for resale 200% of the shares issuable upon conversion and to seek effectiveness within 105 days. The Notes are secured by Deposit Account Control Agreements (DACA) giving investors certain control rights over specified accounts. Univest Securities, LLC served as placement agent.

Key Details

• Aggregate principal: $25.0 million; Closing/Signing Date: May 15, 2026.
• Interest: 8% per year (computed on 360/12) payable in shares on Interest Dates; Default Rate = 15% if default occurs.
• Conversion: noteholders may convert at their option; conversion includes 108% of the principal/interest amounts being converted (includes an amount representing interest through maturity). Floor Price = $0.15528/share (company may reduce consistent with Nasdaq rules). Alternate conversion can use a lower VWAP‑based price subject to the Floor Price.
• Ownership limits: beneficial‑ownership conversion cap = 9.99% (holder can adjust down or up to 9.99% with notice); exchange cap tied to Nasdaq rules ≈ 19.99% without shareholder approval.
• Protections/rights: Floor Breach Event mechanics allow holders to demand cash redemption if VWAP conditions persist; company optional redemption available at an 8% premium; bankruptcy default triggers mandatory 8% premium cash redemption.
• Other: Notes secured by DACA (investors may direct disposition of funds in Accounts); placement agent fee plus $125,000 expense reimbursement to Univest.

Why It Matters

• This financing provides near‑term liquidity ($25M) but creates potential near‑term dilution because noteholders can convert into common stock (and interest may be paid in shares). The one‑year maturity means the company will likely need to refinance, convert, or redeem the Notes within about a year, which could accelerate dilution or cash needs.
• The DACA security and investor control rights over accounts strengthen investor protections and may limit the company’s use of certain funds. Floor Price and Floor Breach mechanics give noteholders pathways to cash redemption if the stock trades below set thresholds, which could pressure FFAI’s cash position.
• Registration obligations (file within 45 days; effective within 105 days) will permit resale of shares issued on conversion, increasing liquidity for noteholders and the potential public float of the common stock once effective.