Faraday Future Grants extended Nasdaq suspension during compliance hearing

Written by Claudio Afonso | LinkedIn | X

Troubled electric vehicle startup Faraday Future announced Tuesday that Nasdaq had granted an extended stay of suspension pending a hearing before Nasdaq’s Hearings Panel.

FF filed its delayed 10-K today after being notified by Nasdaq in mid-April of the missed deadline, which could lead to a delisting.

The company is at risk of being delisted from Nasdaq due to failure to meet several key listing requirements. Over the past six months, the company has received several notices from Nasdaq highlighting critical issues that threaten its status on the exchange.

On December 28, Faraday Future was notified by Nasdaq’s Listing Qualifications Staff that the Company did not meet the minimum bid price requirement under Nasdaq Listing Rule 5550(a)(2).

This rule requires a minimum bid price of $1.00 per share for 30 consecutive trading days. As of November 9, 2023, FF’s Class A common stock has consistently closed below this crucial threshold.

Under Nasdaq Listing Rule 5810(c)(3)(A), FF was initially granted 180 calendar days from the notice date to restore compliance with the minimum bid price requirement, but further complications arose.

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On April 18, 2024, Nasdaq FF notified that it had failed to file its Form 10-K, in violation of Listing Rule 5250(c)(1). This deficiency served as additional basis for potential delisting under Listing Rule 5810(c)(2)(A). The failure to file underscored broader compliance issues within the company and heightened investor concerns.

On April 24, Nasdaq sent another critical letter stating that FF had violated Nasdaq Listing Rule 5810(c)(3)(A) because the closing price was at or below $0.10 for ten consecutive trading days.

To resolve these issues, the startup filed a motion for a hearing to appeal the delisting decision on May 1. This motion temporarily suspended the suspension of FF’s securities for 15 days, providing a brief respite.

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To restore Nasdaq listing requirements, Faraday Future conducted a reverse stock split for the second time in five months earlier this year.

The Company has received repeated warnings from Nasdaq for failure to meet its bid price and delays in filing its 2023 Form 10-K. The Company’s securities remain listed as it seeks an extended stay of suspension pending a hearing before Nasdaq’s Hearings Panel.

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Written by Claudio Afonso | LinkedIn | X