Faraday Future Intelligent Electric (NASDAQ: FFAI) shares gained more than 4% to $1.1550 in Wednesday afternoon trading after the company announced definitive agreements to transfer its robotics business to FF EAI Robotics Ecosystem Inc. (NASDAQ: FFR) in an all-stock transaction valued at approximately $200 million.
The definitive agreements, signed on October 12, replace a non-binding term sheet reached in September and establish the terms for moving the robotics business into FFR, an already Nasdaq-listed company controlled by Faraday Future.
Under the transaction, FFR, formerly AIxCrypto Holdings, will issue common and non-voting convertible preferred shares at an agreed price of $2.246 per common-share equivalent. That price represents a roughly 50% premium to FFR’s October 12 closing price of $1.50, while the agreement values FFR itself at approximately $60 million on a fully diluted basis.
Rather than receiving $200 million in cash, Faraday Future will hold a majority stake in the separately listed robotics company. The structure preserves FFAI’s economic exposure to the business while giving FFR a dedicated public-market platform for its operations and financing.
Faraday Future to Retain 65.7% of FFR With Up to $10 Million in PIPE Financing
Following completion of the acquisition and related financing, Faraday Future is expected to own approximately 65.7% of FFR on an as-converted, fully diluted basis. Management and employees would hold about 18.2%, private placement investors 5.5%, and other FFR shareholders 10.7%.
These percentages remain subject to final capitalization and financing terms. The newly issued shares received by FFAI will also carry an 18-month lockup, restricting their sale during that period. Conversion of the preferred shares into common stock requires FFR shareholder approval under Nasdaq rules, which the company plans to seek following closing.
Alongside the transaction, FFR said it secured up to $10 million in its first round of private investment in public equity, or PIPE, financing. The financing is priced at market without discounted shares or accompanying warrants, while participating investors face a six-month lockup and resale-registration restrictions.
The proceeds are intended to support FFR’s robotics development, commercialization, and expansion rather than provide cash directly to FFAI. Faraday Future’s SEC filing also contemplates a concurrent private placement of up to $30 million, although that larger amount has not been announced as secured and the acquisition is not conditional on completing the financing.
The definitive agreements also eliminate a proposed special stock dividend for FFR shareholders that had been included in the earlier preliminary terms.
Because FFAI already controls FFR, the acquisition is a related-party transaction. Special committees of independent directors at both companies approved the deal, and Advanture Capital Solutions, financial adviser to FFR’s special committee, delivered a fairness opinion.
Separate governance arrangements will give FF Global Partners LLC, an affiliate of Faraday Future founder and CEO Yueting Jia, the right to designate four members of FFR’s seven-member board and control more than 50% of the voting power for electing directors through proxies granted by FFAI, Jia, and Jiawei Wang. Those arrangements, subject to their effectiveness conditions, distinguish FFAI’s majority economic ownership from the exercise of board-election voting control.
The companies expect to close the transaction by the end of October, subject to conditions including internal restructuring, key employee agreements and applicable regulatory requirements. The definitive agreement also provides a December 31, 2026, outside date after which termination rights may apply.
Robotics Sales and Revenue Projections Put $200 Million Valuation in Context
The agreement comes as Faraday Future’s robotics business remains in the early stages of commercialization.
By the end of September, the business had recorded cumulative sales and shipments of 817 robotic devices, following the launch of 24 products across three robotic forms. approximately $1.52 million in cumulative robotics revenue as of the second quarter, when its robotics products posted an average gross margin above 30%.
The operating figures provide a measure of the business’s existing commercial activity alongside the agreed transaction valuation.
Under preliminary, unaudited projections prepared by FFAI management, the robotics business is expected to generate approximately $7 million in revenue in 2026, with a projected gross margin of 10%, followed by approximately $45 million in 2027, with a 30.5% margin.
Those projected full-year margins relate to a different measurement period and business plan than the second-quarter historical product margin.
FFR has not independently verified or adopted the revenue projections as company guidance. The estimates cover the robotics business on a standalone basis and exclude FFR’s existing operations and transaction-related expenses, with actual results potentially differing materially.
The restructuring also supports Faraday Future’s plan to place greater emphasis on robotaxi-sharing operations and AI-enabled vehicle cabin technology, while maintaining its ownership interest in the robotics business through FFR.
Execution risks remain tied to the robotics operation’s supply chain. Faraday Future has disclosed reliance on Chinese original equipment manufacturers for all its robotics products, including one manufacturer supplying most of the lineup.
The company has also identified tariff uncertainty, the possibility of U.S. restrictions on Chinese robotics imports, and dependence on third-party manufacturing as risks that could affect product availability, costs, and commercialization.
