Business Context and Reporting Period
This Form 8-K is filed by Property Solutions Acquisition Corp. (PSAC) on July 15, 2021. The filing addresses a material update regarding the proposed business combination with FF Intelligent Mobility Global Holdings Ltd. (Faraday Future). PSAC is a Delaware corporation and an emerging growth company. The report details changes to the private placement financing intended to support the merger.
Key Financial Metrics and Transaction Details
The filing focuses on a private placement transaction rather than standard operating financial metrics (revenue, profit, cash flow), as PSAC is a special purpose acquisition company (SPAC) and Faraday Future is a pre-revenue entity in this context.
- Total Private Placement Size: Approximately $795 million for 79,500,000 shares of PSAC common stock at $10.00 per share.
- Original Tier One Investor Commitment: 17,500,000 shares valued at approximately $175 million.
- Securities Registered: Units (PSACU), Common Stock (PSAC), and Redeemable Warrants (PSACW) trading on The Nasdaq Stock Market LLC.
- Warrant Exercise Price: $11.50 per share.
Material Changes Versus Prior Period
The primary material change reported is the reassignment of a specific portion of the private placement due to regulatory hurdles:
- Regulatory Obstacle: On July 11, 2021, the "Tier One Investor" (a Chinese tier one city investor) notified PSAC that it likely could not obtain necessary regulatory approval from the State Administration of Foreign Exchange of the PRC to convert Renminbi to USD in time for the closing.
- Resolution: The 17,500,000 shares (approx. $175 million) originally subscribed by the Tier One Investor were fully assigned to other mutually agreed strategic and financial investors. This reassignment removes the requirement for Chinese regulatory approval for this portion of the funding.
- Continued Discussions: Faraday Future and the Tier One Investor remain in discussions regarding a non-binding memorandum of understanding, which is not impacted by the inability to close the equity purchase.
Guidance, Outlook, and Risks
Transaction Timeline:
- Stockholder Vote: Scheduled for July 20, 2021.
- Merger Closing: Scheduled for July 21, 2021.
- Private Placement Closing: To occur immediately prior to the merger consummation.
- Termination Date: Subscription Agreements will terminate if the merger does not close by July 27, 2021.
Risks and Contingencies:
- Forward-Looking Statements: The filing includes standard disclaimers that actual results may differ due to risks such as the inability to complete the transaction, insufficient cash post-redemptions, failure to meet Nasdaq listing standards, and Faraday Future's ability to execute vehicle development plans.
- Regulatory Risk: While the specific Chinese regulatory hurdle for the Tier One Investor was bypassed via reassignment, general regulatory approvals remain a condition for the merger.
- Financing Risk: The transaction is conditioned on the closing of the private placement and other customary conditions.
Investor Verification Checklist
- Verify the final list of "strategic and financial investors" who replaced the Tier One Investor for the $175 million tranche.
- Confirm the outcome of the PSAC stockholder vote scheduled for July 20, 2021.
- Review the definitive proxy statement/prospectus (Form S-4) for detailed risk factors regarding Faraday Future's vehicle development and market acceptance.
- Monitor the status of the shelf registration statement required for the resale of shares by Subscription Investors.
- Check for any updates on the non-binding memorandum of understanding between Faraday Future and the original Tier One Investor.