Electric car startup Faraday Future Intelligent Electric Inc.
said on Thursday that its company leaders are facing death threats and a disinformation campaign as they try to raise money for the production of their first vehicle.
Faraday’s statement comes after one of the biggest shareholders of the Los Angeles-based startup sued in Delaware Chancery Court on Monday, alleging that its current board has “destroyed the company” since merging with a special-purpose takeover firm, or SPAC. , earlier this year. The group is seeking the resignation or removal of two directors, including executive chairman Susan Swenson.
The shareholder group, FF Top Holding LLC, controls about 36% of Faraday’s voting power. SPACs, also known as blank check companies, have no operations and are designed to merge with private companies to make them public.
“Unfortunately, efforts to raise capital have been impacted by a disinformation campaign of completely unfounded allegations that certain directors are conspiring to seek unnecessary bankruptcy for their own personal gain,” Faraday said in his statement.
Faraday has faced delays in launching its flagship FF 91. It has also racked up substantial debt and lost top executives to a rival electric vehicle startup. The company said last month it would need more funds until early September to continue operations, and since then it has focused on cutting costs and preserving its cash position.
The company’s shares hit an intraday record low on Thursday of 74 cents. Trading has been down since July 18, when the stock hit an intraday high of $7.85, with a brief rally in early August, according to FactSet.
The startup said it hired a law firm to conduct an independent investigation into the allegations against its directors, but deemed them “without merit”.
But the allegations continued and “threats that started with lawsuits turned into threats of physical violence and even death threats,” Faraday said.
The startup said it was referring to threats to law enforcement authorities, including the Federal Bureau of Investigation and the US Securities and Exchange Commission, as well as the Department of Justice and international authorities.
Faraday earlier this year said that some employees and members of his management team received subpoenas from the SEC regarding an investigation into the startup’s financial statements. In June, the company said it also received a preliminary request for information from the Department of Justice.
FF Top said in its lawsuit that Faraday missed his own prediction that he would start production of his FF 91 model in July and squandered the company’s money. The company said Faraday is “suffering from a leadership crisis at the board level” and that urgent changes are needed before the company raises more capital.
Faraday’s spokesman, Mark Connelly, said the dispute with FF Top limited Faraday’s ability to raise money in a difficult market.
“We are in active negotiations with various parties to raise funds,” he said. “The council’s focus is on raising funds and getting the car on the road.”
FF Top representatives did not immediately return a request for comment.
write to Will Feuer at firstname.lastname@example.org and Kathryn Hardison at Kathryn.Hardison@wsj.com
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