Faraday Future Intelligent Electric Inc. (Nasdaq: FFIE) (“FF”,
“Faraday Future”, or “Company”), a California-based global shared
intelligent electric mobility ecosystem company, has released the
following notice according to THE UNITED STATES DISTRICT COURT,
CENTRAL DISTRICT OF CALIFORNIA, WESTERN DIVISION:
UNITED STATES DISTRICT
COURT
CENTRAL DISTRICT OF
CALIFORNIA
WESTERN DIVISION
IN RE FARADAY FUTURE INTELLIGENT ELECTRIC
INC. DERIVATIVE LITIGATION,
Lead Case No. 2:22-cv-01570-CAS-JC
vs.
Consolidated with
Case No. 2:22-cv-01852-CAS-JC
This Document Relates to:
EXHIBIT D
ALL ACTIONS,
SUMMARY NOTICE OF PENDENCY AND
PROPOSED SETTLEMENT
OF
STOCKHOLDER DERIVATIVE ACTIONS
TO:
ALL RECORD HOLDERS AND BENEFICIAL
OWNERS OF FARADAY FUTURE INTELLIGENT ELECTRIC INC. (“FARADAY” OR
THE “COMPANY”) COMMON STOCK AS OF JULY 19, 2024 (“CURRENT FARADAY
STOCKHOLDERS”).
PLEASE READ THIS NOTICE CAREFULLY AND
IN ITS ENTIRETY. THIS NOTICE RELATES TO A PROPOSED SETTLEMENT AND
DISMISSAL WITH PREJUDICE OF STOCKHOLDER DERIVATIVE LITIGATION AND
CONTAINS IMPORTANT INFORMATION REGARDING YOUR RIGHTS.
IF THE COURT APPROVES THE SETTLEMENT OF
THE DERIVATIVE MATTERS, CURRENT FARADAY STOCKHOLDERS WILL BE
FOREVER BARRED FROM CONTESTING THE APPROVAL OF THE PROPOSED
SETTLEMENT AND DISMISSAL WITH PREJUDICE, AND FROM PURSUING RELEASED
CLAIMS.
THIS ACTION IS NOT A “CLASS ACTION.”
THUS, THERE IS NO COMMON FUND UPON WHICH YOU CAN MAKE A CLAIM FOR A
MONETARY PAYMENT.
YOU ARE HEREBY NOTIFIED that the following stockholder
derivative actions (the “Derivative Actions”), are being settled on
the terms set forth in a Stipulation and Agreement of Settlement
dated July 19, 2024 (the “Stipulation”): (i) the above-captioned
action, titled In re Faraday Future Intelligent Electric Inc.
Derivative Litigation, Lead Case No. 2:22-cv-01570-CAS-JC; (ii)
Wang v. Breitfeld et al., C.A. No. 1:22-cv-00525-GBW (D. Del.);
(iii) Moubarak v. Breitfeld et al., C.A. No. 1:22-cv-00467-GBW (D.
Del.); (iv) Wallace v. Krolicki et al., C.A. No. 2023-0639-LWW
(Del. Ch.); and (v) Farazmand v. Breitfeld et al., C.A. No.
2023-1283-LWW (Del. Ch.).
The Derivative Actions allege that, inter alia, between January
28, 2021 through April 14, 2022, at least, the Individual
Defendants1 breached their fiduciary duties by issuing and/or
causing the Company to issue materially false and misleading
statements (including by soliciting a materially false and
misleading proxy statement allegedly in violation of Section 14(a)
of the Securities Exchange Act of 1934). Plaintiffs allege that the
Individual Defendants failed to disclose material facts to the
public regarding, among other things, the extent of Defendant
Yueting Jia’s involvement within the Company following the Merger,
and the number of reservations the Company had received for the FF
91, its flagship vehicle, and failed to maintain adequate internal
controls. The Derivative Actions allege that, as a result of the
foregoing, the Company experienced reputational and financial harm.
Defendants have denied and continue to deny each and all of the
claims and allegations of wrongdoing asserted in the Derivative
Actions.
Pursuant to the terms of the Settlement, Faraday agrees to
implement and maintain certain corporate governance reforms that
are outlined in Exhibit A to the Stipulation (the “Reforms”). The
Reforms shall be maintained for three (3) years. The independent
members of Faraday’s Board approved a resolution reflecting its
determination that the Settlement, and separately, the Reforms, are
in the best interest of Faraday. Faraday and its Board acknowledge
and agree that Plaintiffs’ efforts, including investigating,
preparing, commencing, and prosecuting the Derivative Actions, were
the cause of the adoption, implementation, and maintenance of the
Reforms. Faraday and its Board also acknowledge and agree that the
Reforms confer substantial benefits on the Company and its
stockholders.
After negotiating the principal terms of the Stipulation,
counsel for the Parties, with the assistance of the Mediator,
negotiated the attorneys’ fees and expenses to be paid to
Plaintiffs’ Counsel, subject to Court approval (the “Fee and
Expense Amount”). In light of the substantial benefits conferred
upon the Company and its stockholders, Defendants’ insurers shall
pay to Plaintiffs’ Counsel seven hundred and seventy-five thousand
dollars ($775,000.00) for their attorneys’ fees and expenses,
subject to Court approval. Defendants also agreed not to object to
the request for the Court to approve Service Awards of up to two
thousand dollars ($2,000.00) for each of the five Plaintiffs, to be
paid from the Fee and Expense Amount.
On November 4, 2024 at 10:00 a.m., a hearing (the
“Settlement Hearing”) will be held before the Honorable Christina
A. Snyder at the United States District Court for the Central
District of California, Western Division, United States Courthouse,
350 W. First Street, Courtroom 8D, 8th Floor, Los Angeles,
California 90012, for the purpose of determining whether the
Settlement should be approved as fair, reasonable, and adequate and
whether the Court should approve the agreed-to Fee and Expense
Amount and the Service Awards for Plaintiffs. Because this is
not a class action, except as otherwise provided for in the
Stipulation with respect to the Plaintiffs, no Current Faraday
Stockholder has the right to receive any individual compensation as
a result of the Settlement. Upon final approval of the
Settlement, the Plaintiffs will voluntarily dismiss their
respective complaints in the Derivative Actions with prejudice.
This Summary Notice provides a condensed overview of certain
provisions of the Stipulation and the full Notice of Pendency and
Proposed Settlement of Stockholder Derivative Actions (the
“Notice”). It is not a complete statement of the events of the
Derivative Actions or the terms set forth in the Stipulation. This
summary should be read in conjunction with, and is qualified in its
entirety by reference to, the text of the Stipulation and its
exhibits. For additional information about the claims asserted in
the Derivative Actions, and the terms of the proposed Settlement,
you may inspect the full Notice and the Stipulation and its
exhibits and other papers at the Clerk’s office in the Court at any
time during regular business hours. In addition, copies of the
Stipulation and its exhibits and the Notice are available on the
Investor Relations page of the Company’s website,
https://investors.ff.com/.
The Court may, in its discretion, change the date, time, or
format of the Settlement Hearing without further notice to you. If
you intend to attend the Settlement Hearing, please consult the
Court’s calendar or Investor Relations page of the Company’s
website, https://investors.ff.com/, for any change in the date,
time, or format of the Settlement Hearing.
Inquiries about the Derivative Actions or the Settlement may be
made to: Timothy Brown, The Brown Law Firm, P.C., 767 Third Avenue,
Suite 2501, New York, NY 10017, Telephone: (516) 922-5427, Email:
tbrown@thebrownlawfirm.net.
You may enter an appearance before the Court, at your own
expense, individually or through counsel of your choice. If you
want to object at the Settlement Hearing, you must be a Current
Faraday Stockholder and you must first comply with the procedures
for objecting that are set forth in the Notice. Any objection to
any aspect of the Settlement must be filed with the Clerk of the
Court and sent to Plaintiffs’ Counsel and Defendants’ Counsel no
later than October 14, 2024 (21 days before the Settlement
Hearing), in accordance with the procedures set forth in the
Stipulation and the Notice. Any Current Faraday Stockholder who
fails to object in accordance with such procedures will be bound by
the Order and Final Judgment of the Court granting final approval
to the Settlement and the releases of claims therein, and shall be
deemed to have waived the right to object (including the right to
appeal) and forever shall be barred, in this proceeding or in any
other proceeding, from raising such objection.
PLEASE DO NOT CALL THE COURT OR DEFENDANTS WITH QUESTIONS
ABOUT THE SETTLEMENT.
ABOUT FARADAY FUTURE
Faraday Future is the pioneer of the Ultimate AI TechLuxury
ultra spire market in the intelligent EV era, and the disruptor of
the traditional ultra-luxury car civilization epitomized by Ferrari
and Maybach. FF is not just an EV company, but also a
software-driven intelligent internet company. Ultimately FF aims to
become a User Company by offering a shared intelligent mobility
ecosystem. FF remains dedicated to advancing electric vehicle
technology to meet the evolving needs and preferences of users
worldwide, driven by a pursuit of intelligent and AI-driven
mobility.
FORWARD LOOKING STATEMENTS
This press release includes “forward looking statements” within
the meaning of the safe harbor provisions of the United States
Private Securities Litigation Reform Act of 1995. When used in this
press release, the words “estimates,” “projected,” “expects,”
“anticipates,” “forecasts,” “plans,” “intends,” “believes,”
“seeks,” “may,” “will,” “should,” “future,” “propose” and
variations of these words or similar expressions (or the negative
versions of such words or expressions) are intended to identify
forward-looking statements. These forward-looking statements, which
include statements regarding co-investment in an office building
development, the timing for breaking ground on and taking occupancy
at the development, operations, sales and manufacturing in the UAE,
, are not guarantees of future performance, conditions or results,
and involve a number of known and unknown risks, uncertainties,
assumptions and other important factors, many of which are outside
the Company’s control, that could cause actual results or outcomes
to differ materially from those discussed in the forward-looking
statements.
Important factors, among others, that may affect actual results
or outcomes include, among others: that the development of the
contemplated office building could be delayed or not occur at all;
the Company’s ability to continue as a going concern and improve
its liquidity and financial position; the Company’s ability to pay
its outstanding obligations; the Company's ability to remediate its
material weaknesses in internal control over financial reporting
and the risks related to the restatement of previously issued
consolidated financial statements; the Company’s limited operating
history and the significant barriers to growth it faces; the
Company’s history of losses and expectation of continued losses;
the success of the Company’s payroll expense reduction plan; the
Company’s ability to execute on its plans to develop and market its
vehicles and the timing of these development programs; the
Company’s estimates of the size of the markets for its vehicles and
cost to bring those vehicles to market; the rate and degree of
market acceptance of the Company’s vehicles; the Company’s ability
to cover future warrant claims; the success of other competing
manufacturers; the performance and security of the Company’s
vehicles; current and potential litigation involving the Company;
the Company’s ability to receive funds from, satisfy the conditions
precedent of and close on the various financings described
elsewhere by the Company; the result of future financing efforts,
the failure of any of which could result in the Company seeking
protection under the Bankruptcy Code; the Company’s indebtedness;
the Company’s ability to cover future warranty claims; the
Company’s ability to use its “at-the-market” program; insurance
coverage; general economic and market conditions impacting demand
for the Company’s products; potential negative impacts of a reverse
stock split; potential cost, headcount and salary reduction actions
may not be sufficient or may not achieve their expected results;
circumstances outside of the Company's control, such as natural
disasters, climate change, health epidemics and pandemics,
terrorist attacks, and civil unrest; risks related to the Company's
operations in China; the success of the Company's remedial measures
taken in response to the Special Committee findings; the Company’s
dependence on its suppliers and contract manufacturer; the
Company's ability to develop and protect its technologies; the
Company's ability to protect against cybersecurity risks; and the
ability of the Company to attract and retain employees, any adverse
developments in existing legal proceedings or the initiation of new
legal proceedings, and volatility of the Company’s stock price. You
should carefully consider the foregoing factors and the other risks
and uncertainties described in the “Risk Factors” section of the
Company’s Form 10-K filed with the SEC on May 28, 2024, as amended
on May 30, 2024, and June 24, 2024, as updated by the “Risk
Factors” section of the Company’s first quarter 2024 Form 10-Q
filed with the SEC on July 30, 2024, and other documents filed by
the Company from time to time with the SEC.
1 All capitalized terms that are not otherwise defined shall
have the definitions as set forth in the Stipulation.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240913531184/en/
Investors (English): ir@faradayfuture.com
Investors (Chinese): cn-ir@faradayfuture.com
Media: john.schilling@ff.com
Faraday Future Intellige... (NASDAQ:FFIE)
Historical Stock Chart
From Oct 2024 to Nov 2024
Faraday Future Intellige... (NASDAQ:FFIE)
Historical Stock Chart
From Nov 2023 to Nov 2024