FFAI · Faraday Future Intelligent Electric Inc.

Faraday Future secured $45 million in financing through a sophisticated note structure with Streeterville Capital, providing immediate $15 million cash access via the A-1 Note while ring-fencing $30 million in a controlled deposit account for the secured B Note. This hybrid unsecured/secured approach mitigates investor risk on the larger tranche via DACA at Lakeside Bank, pledge of FFAI Holdings equity, and subsidiary guaranties, with Investor gaining control over funds upon triggers. The 9% rate on A Note reflects higher unsecured risk versus 3.5% on B, both with daily compounding and prepayment premiums (110%/105%). Equity redemption features post-Benchmark Date (Oct 17, 2026) enable Investor to convert up to $750K monthly or $5M limited amounts into shares at Nasdaq Minimum Price (per Rule 5635(d)), subject to Floor Price ($0.0603) cash election, posing Nasdaq-compliant dilution risk tied to note balances and stock performance. Company's Note Exchange right incentivizes A Note reductions to unlock B funds, but requires strict Exchange Conditions including $5M shareholders' equity/market cap, Share Reserve maintenance, no triggers, Nasdaq compliance (grace on bid price), and stockholder Approval—barriers that could limit flexibility. Placement fees to Univest (8% + expenses) add cost. Overall, this provides critical liquidity but introduces conversion overhang, collateral encumbrances, and default accelerators (18% interest, Trigger Effect), signaling distressed financing dynamics for investors to monitor closely amid ongoing Nasdaq challenges.