Written by Cláudio Afonso | LinkedIn | X
Shares of the electric vehicle (EV) startup Faraday Future are spiking over 15 percent on Monday as the company started urging shareholders to favourably vote on the Proposals number 3 and 4 which aim to execute a reverse stock split and increase the number of authorised shares.
These two are the most crucial proposals that the company is seeking approval from shareholders after the approval from FF’s Board on executing a reverse stock split with a ratio ranging from 1-for-2 to 1-for-40.
If approved, the ratio will be defined by the company’s Board of Directors later this quarter allowing the company’s stock to regain compliance with the Nasdaq listing rule.
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In the statement released on Monday morning, the company explains, “The reverse stock split is mathematical and doesn’t change your relative ownership in the Company, but it does affect the number of shares outstanding and the price per share”.
“While 40 to 1 is the maximum ratio that the Company’s Board of Directors may approve, we believe it would be prudent to provide a margin of safety over the longer term with respect to Nasdaq’s minimum bid requirement given it is not possible to predict how Faraday Future’s stock price will develop,” Faraday Future added.
Faraday will also seek approval to increase the number of authorized shares of Class A and Class B common stock from 463,312,500 to 4,169,812,500, and the total number of authorized shares of common and preferred stock from 473,312,500 to 4,179,812,500.
Shareholders will also vote to elect five directors to serve until next year’s annual meeting as the board also seeks ratification of Macias Gini & O’Connell LLP as the independent accounting firm for the current fiscal year.
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Another item on the agenda is an amendment to the 2021 Stock Incentive Plan to increase the number of shares of Class A Common Stock available under the plan by 88,252,926 shares.
Las Friday, the company announced it will host an investor community day at its headquarters in Los Angeles on July 20, eleven days before the Annual Meeting.
To attend the investor community day in Los Angeles, shareholders can register until Wednesday, July 17. In a statement, Faraday Future invites the investors to “experience and learn more” about its luxurious electric model FF 91 2.0 and “meet with executive leadership”.
On Friday, the company also said it entered into a $4.9 million lease financing arrangement with Utica Leaseco, as revealed in a SEC filing.
The agreement aims to support the EV maker’s operational and production capabilities. Year to date, the company has delivered only one vehicle as it seeks more funding in the Middle East region.
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Written by Cláudio Afonso | LinkedIn | X
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