Shulou(Shulou.com)11/24 Report--

Thanks to CTOnews.com netizens for the delivery of clues about the past. CTOnews.com, June 21 (Xinhua)-- Faraday Future recently announced that the delivery time for the second phase of FF 91 2.0 Futurist Alliance, "FOP Co-creation delivery", will be updated from the end of the second quarter of 2023 to August 2023, causing panic in the market and causing its share price to plummet.

Jia Yueting, the future founder of Faraday, posted a long post on Weibo this afternoon, responding to the current doubts. The summary of CTOnews.com deserves attention as follows:

Jia Yueting said that the delay in the delivery of the second phase reflects the urgent need to improve the industrialization and financing capacity of the FF team. After repeated consultation and communication with large institutional investors and financial advisers, the company decided to take measures related to stock merging and share expansion to break the three major technical bottlenecks of FF: too low share price, insufficient number of issuable shares and too long time for share registration.

Jia Yueting promised to go all out to achieve the second phase delivery and capacity climbing of the "all-around aiHypercar" FF 91 2.0 Futurist Alliance in August; to comprehensively and rapidly improve the team's supply chain capacity and production capacity; to thoroughly solve the three major technical restrictions on financing, to raise sufficient funds in a timely and rapid manner with the fastest speed and lower cost; and to promote the landing project of FF China.

To all investors: communicate one question and two opportunities honestly

-- share merging and share expansion to break the capital bottleneck and promote the realization of the strategy of "subverter + founder"

Dear FFIE investors, Hello, everyone!

On Friday, the company issued an announcement revealing an important step in introducing a package of institutional and strategic investors, namely stock merger and share expansion. And updated the delivery time of the second phase. The management of the company and I have received a lot of inquiries, and many shareholders have expressed their concern and even dissatisfaction through various channels. Thank you very much for your great concern about the development of the company. Without your support, FF would not be able to get to where it is today. Why did we make the right decision that may be misunderstood by some shareholders, but to ensure that the long-term interests of FF and all shareholders are maximized? I want to communicate with you frankly about one problem and two major opportunities.

One problem is the delay in the delivery of our second phase. The two major opportunities respectively refer to the unique historic opportunity of 1.FF in the oncoming wave of overturning the luxury market of intelligent tram technology, and the major opportunity of 2.FF to realize the strategy of "subverter + pioneer" by merging and expanding shares to break the capital bottleneck.

1. The delay in the delivery of the second phase reflects the urgent need to improve the industrialization and financing capabilities of the FF team.

I would like to apologize for the delay in the delivery of the second phase of FF 91 2.0 Futurist Alliance until August.

How to solve the above specific problems and start the second phase of co-creation delivery as soon as possible, FF Global CEO Chen Xuefeng will make a specific introduction. I would like to focus on how to address several deeper systemic reasons for the delay, namely, the lack of industrialization capacity and financing capacity of the FF team.

First of all, how to improve the industrialization ability of our team? While rapidly improving the ability of the existing team, speed up the recruitment of relevant talents from traditional spire car companies.

FF 91 2.0 Futurist Alliance is a silicon-based new species and new category "omnipotent aiHypercar" based on "FF aiHyper 6x4 Architecture 2.0", which poses a great challenge to the industrialization ability. However, after a hundred years of precipitation, the industrialization system capacity of the automobile industry has been very mature and is likely to be improved rapidly when resources are in place. As long as there is a reasonable capital investment, we are confident that we can rapidly improve the overall ability of the new and old industrialization team of FF.

Secondly, how to solve the lack of financing capacity of FF? Since the end of last year, it took our team only six months to complete the FF 91 2.0 pre-production iterative upgrade, SOP, the first car off the line, and the final release and launch of the first phase of the five major milestones, reflecting strong capital management ability and use efficiency, but the top strategy of Chi Chi Technology needs timely funding and support. Next, I would like to share two major opportunities facing FF, including how to completely break the funding bottleneck.

Second, "decisive victory over the five forces", the unique historic opportunity of FF in the oncoming wave of overturning the luxury market with the technology of intelligent trams.

From the perspective of industrial fundamentals, the change and competition of the market space below the spire of the travel industry in the future has reached a white-hot stage, only the spire market is still blue sea. At present, the subversion of the traditional automobile spire market is coming, and FF is the only enterprise that has made almost all preparations in the face of this historical opportunity. Over the past nine years, we have accumulated the strategic positioning of extreme wisdom technology and the "decisive five forces" composed of product strength, technical power, brand power, sales force and user power, which determines that FF is most likely to become a subverter of this market.

"full AI, all Hyper, omnipotence and co-creation" will become a major change trend in the top luxury travel industry of intelligent tram technology, which is highly consistent with the product route and technical route that FF has adhered to since its inception, and we have made full preparations for the next explosive development.

As a California-based global intelligent electric car company, FF has realized the integration of basic technology in the United States and Internet application technology in China, the integration of talent advantages in relevant industries between China and the United States, as well as the integration of China and the United States as the top two top electric car markets in the world. Triple demarcation and rebellion, as well as our unique 24-hour 24-hour sunset working mode between China and the United States, have created FF's unique competitive advantage in the spire market. At the same time, there are so many entrepreneurs and Futurists looking forward to our success, and we are ready for the full outbreak of the unique dual-genetic and dual-home advantage of China and the United States.

Today, as we continue the first phase of delivery and prepare to enter the second phase of delivery, FF has formed an end-to-end closed loop from research and development, manufacturing, supply chain to user acquisition and user operation. The company will soon formally generate sales revenue and enter a new stage of development, coupled with the business goals of co-creation, sharing and high gross margins, which will be different from the previous stage. Now, as long as the new funds are in place, we can quickly achieve the climbing of production capacity and sales, the growth of income, and the rapid increase in value, which is different from the money-burning model of other new power car-building enterprises, and realizes the positive cycle of low investment and high yield. maximize the interests of shareholders and investors. After the stock merger and share expansion are approved by shareholders, the fundamentals of FF will improve in an all-round way and usher in the best golden time to introduce institutional investors and strategic investors. FF is ready for the rapid landing and value growth of the strategy after the introduction of institutional investors and strategic investors.

Third, it Brooks no delay. The capital bottleneck of stock merging and stock expansion is a great opportunity for FF to realize the strategy of "subverter + founder".

Enterprise value and investor return will be affected by macroeconomic fundamentals, industrial fundamentals, corporate fundamentals and capital market fundamentals, while the three major financing technical bottlenecks of stock price, number of shares and share registration have a significant impact on the acceleration and improvement of FF fundamentals.

From the perspective of macroeconomic fundamentals, the fundamentals of the global economy are becoming stable, the expectations of controlling inflation and interest rates are becoming clear, and capital market funds are gradually opening up to fast-growing technology companies. opportunities are beginning to emerge and valuations are beginning to repair.

From the perspective of the fundamentals of SPAC technology listed companies, since 2020, the SPAC industry sweeping Wall Street has gone through three years from fanaticism to precipitation. for these companies that have survived and entered the rising channel after the big waves, their system capabilities have been improved and their strategic value has also been verified. however, the market capitalization of many of these enterprises is at an extremely low point in history, and their value is seriously undervalued. It is a good opportunity for strategic investment to maximize profits. FF, which is reborn after being tempered by fire, is one of the representatives of this kind of high-tech listed companies.

I have analyzed the industry fundamentals and FF fundamentals earlier, and we can see that while the four fundamentals that determine the value of FF and investor returns continue to improve, we can see from the low cash balance in several consecutive quarters of the past year ($15.42 million at the end of December last year, $30.26 million at the end of the first quarter of this year, $16.23 million at the end of the second quarter of this year), the company's extremely tight funding situation has seriously hurt the rapid progress of our strategy. The funding problem must be thoroughly solved in order to keep the company's value moving forward on the rising high-speed channel and achieve FF's position as the top luxury market leader.

After repeated consultation and communication with large institutional investors and financial advisers, the company decided to take measures related to stock merger and share expansion, so as to break the three major financing technical bottlenecks of FF: too low share price, insufficient number of issuable shares and too long time for share registration, which has a decisive impact on the rapid improvement of FF fundamentals, and is also the fundamental consideration for the company to seek approval from shareholders for stock merger and share expansion.

First, the merger will quickly change the state of low share prices to pave the way for the introduction of large institutional investors.

Large investment institutions pay little attention to companies with a stock price of less than $5, but because the stock price is too low to introduce large institutional investors, coupled with the low cash flow operation of FF for a long time, it is difficult to achieve a sharp rise in the stock price in the short term and maintain the stock price above $5 or even higher. So the company took action to seize the current fleeting financing window. This is completely different from the starting point and urgency of our previous survey on the stock merger plan sent by the FF community on the lowest share price of $1 in order to meet the Nasdaq compliance requirements.

The merger itself will not change the total market value of FF and the value of investors' holdings. We have conducted a comprehensive analysis of the stock price performance of American listed companies that have merged shares from April 2020 to May 2023. The data show that the overall stock price of listed companies with a high proportion of shares merging above 1:25 is higher than that of stock merging at the end of one month, and is obviously better than that of low-proportion listed companies. This shows that although the stock price may be in labor pains in the very short term, after the implementation of the merger, the capital market has played a positive role in paying more attention to listed companies and increasing potential investment opportunities.

The current merger ratio proposed by FF management is between 1:2 and 1:90. After being approved by shareholders, the board of directors will determine the merger time and proportion according to the actual situation. At that time, the company's outstanding Class A shares and Class B shares will be merged in the same proportion.

Secondly, sufficient number of issuable shares is the basic prerequisite for successful financing and the technical guarantee for the introduction of strategic investors.

In order to quickly break the capital bottleneck and promote the successful landing of FF's top luxury strategy, reasonable share expansion is not only the prerequisite for the introduction of institutional investors and the release of FF's "decisive five forces", but also the technical guarantee for the introduction of strategic investors. Only when the lack of financial capacity is substantially improved, ensuring business development and strategic landing, can the operating fundamentals of FF be improved rapidly, thus creating high returns for shareholders and investors.

After the implementation of the merger, the company's 1.69 billion authorized Class A shares will remain unchanged, which will reserve sufficient equity space for strategic financing, and the company will determine the number of additional shares according to the volume of institutional investors and strategic investors. More importantly, our rights issue is based on the principle of fairness and transparency, and any additional share issue that accumulates more than 20% within six months needs to be submitted to the general meeting of shareholders for approval, so as to protect the rights and interests of investors. The interests of the company are highly consistent with those of all shareholders, and we hope to dilute as few shares as possible to raise funds.

Benefiting from the timely disclosure of financial results for more than a year, FF has been able to register shares through SMUE 3, which will effectively solve the problem of long registration time and increase the attractiveness of the merger plan to institutional investors, giving the company the opportunity to use a new, cheaper and more efficient financing tool, which the company hopes to use to raise the $300m financing quota announced on Friday.

As long as all the above plans are completed, we believe that the market capitalization growth multiple will be much greater than the equity growth multiple, bringing investors due long-term value returns. FF, which enters the delivery and sales phase, forms an operating closed loop and will soon achieve sales revenue, which has greatly increased its appeal to institutional and strategic investors, and now is an excellent time for them to achieve the highest return on investment.

Fourth, the next step is to quickly promote the following seven aspects of work, so as to realize the full return of the value of FF, and achieve the strategic goal of being the best in smart science and technology as soon as possible.

1. Delivery and climbing: go all out to achieve the second phase of delivery and capacity climbing of "all-around aiHypercar" FF 91 2.0 Futurist Alliance in August.

two。 User acquisition and user operation: continue to maintain the leading output climb of user acquisition capability, so that more and more FF 92.0 users can "experience the ultimate dance steps of elephants on the track" as soon as possible. Through extremely intelligent user operation, continue to create higher value for users.

3. The pinnacle brand and user reputation of "extreme wisdom technology extravagance": by creating the invincible product power and technical strength of FF, we will comprehensively establish the ultimate user reputation of the pinnacle brand of extreme wisdom technology extravagance.

4. R & D, "FF developer Co-creation" and "FF Global track Conqueror Program-Elephant Ultimate Dance step": FF products and R & D teams work together with external developers to achieve continuous iterative upgrades of "FF aiHyper 6X4 Architecture 2.0" and "all-around aiHypercar" while driving Hyper and aiHyper capabilities continue to enhance. Let the elephant FF 91 2.0 conquer all the world's famous tracks, including New North, Le Mans, Silverstone and Indianapolis, one after another, setting a new record, the FF Global track Conqueror Program.

5. Industrialization capacity improvement: comprehensively and rapidly improve the team's supply chain capacity and manufacturing capacity.

6. Financial support: we will thoroughly solve the three major technical restrictions on financing, and raise sufficient funds with the fastest speed, lower cost, and timely and rapid financing.

7. FF China Landing: we are making every effort to promote the FF China Landing Project.

I regard FF as my life, and I have been doing my best to protect FF and ensure that the interests of all shareholders of FF will not be harmed. Let's work together to seize the unique historic opportunity of FF in the oncoming upside wave of smart tram technology to build FF into a pioneer of the super pinnacle market of extremely intelligent technology in the era of intelligent trams, and a subverter of the traditional super-luxury car civilization represented by Ferrari and Maybach. We will maintain the most frank communication with shareholders, listen to the views of shareholders, and try our best to create maximum value for shareholders.

Thank you.

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