FARADAY FUTURE INTELLIGENT ELECTRIC INC.

Previous wording

•FF 91 Launch: We believe that the FF 91 Futurist (the "FF 91," "FF 91 Futurist," or "FF 91 2.0 Futurist Alliance") is the first ultra-luxury electric vehicle to offer a highly-personalized, fully-connected user experience for driver and passengers. We started production on the first FF 91 Futurist and delivered the first FF 91 2.0 Futurist Alliance in 2023.

Current wording

•FF 91: We believe that the FF 91 Futurist (the "FF 91," "FF 91 Futurist," or "FF 91 2.0 Futurist Alliance") is the first ultra-luxury electric vehicle to offer a highly-personalized, fully-connected user experience for driver and passengers. We started production on the first FF 91 Futurist and delivered the first FF 91 2.0 Futurist Alliance in 2023.

Previous wording

•In April 2025, we initiated a comprehensive company-wide organizational and governance overhaul aimed at enhancing execution efficiency and value creation. The initiative, publicly launched through a company-wide town hall, was designed to eliminate historical inefficiencies, increase strategic clarity, and improve performance across operations, amid ongoing external uncertainty and market pressure.

Current wording

•In April 2025, we initiated a company-wide organizational and governance overhaul, publicly launched through a town hall, to increase strategic clarity and improve execution amid ongoing external uncertainty. The initiative, publicly launched through a company-wide town hall, was designed to eliminate historical inefficiencies, increase strategic clarity, and improve performance across operations, amid ongoing external uncertainty and market pressure.

Previous wording

•In January 2025, we filed a filed a Certificate of Designation of Preferences, Rights and Limitations of Series A Preferred Stock (the “Series A Certificate of Designation”) with the Secretary of State of the State of Delaware. The Series A Certificate of Designation designated one share of our Preferred Stock as Series A Preferred Stock, and established and designated the preferences, rights and limitations thereof. The Series A Preferred Stock is not convertible into any other series of stock, but votes at a rate of 3,000,000,000 votes per share.

Current wording

•In January 2025, we filed a Certificate of Designation of Preferences, Rights and Limitations of Series A Preferred Stock (the “Series A Certificate of Designation”) with the Secretary of State of the State of Delaware. The Series A Certificate of Designation designated one share of our Preferred Stock as Series A Preferred Stock, and established and designated the preferences, rights and limitations thereof. The Series A Preferred Stock is not convertible into any other series of stock, but votes at a rate of 3,000,000,000 votes per share.

Previous wording

As of March 31, 2025, a significant portion of the Company’s direct material purchases were sourced from suppliers based in China. This concentration presents an ongoing risk given elevated U.S. import tariffs on electric vehicle components. While the Company’s cost of goods sold was not materially affected for the three months ended March 31, 2025, due to limited production volume and the use of existing inventory, continued reliance on China-based sourcing may result in higher input costs and materially impact the Company’s cost structure as production scales.

Current wording

As of June 30, 2025, a significant portion of the Company’s direct material purchases were sourced from suppliers based in China. This concentration presents an ongoing risk given elevated U.S. import tariffs on electric vehicle components. While the Company’s cost of goods sold was not materially affected for the three and six months ended June 30, 2025, due to limited production volume and the use of existing inventory, continued reliance on China-based sourcing may result in higher input costs and materially impact the Company’s cost structure as production scales.

Previous wording

We operate in one operating segment and one reportable segment. Our Global Co-CEOs, acting jointly serving as co-Chief Operating Decision Makers (“CODMs”), regularly evaluate our financial performance using consolidated financial information at the total-company level. The CODMs receive regular financial and operational reporting that focuses primarily on our consolidated loss from operations, overall cash flows, liquidity, and strategic initiatives.

Current wording

We operate in a single operating and reportable segment. Through August 12, 2025, our two Global Co-Chief Executive Officers (“Global Co-CEOs”) acted jointly as Co-Chief Operating Decision Makers (“CODMs”) and regularly evaluated the our financial performance using consolidated information at the total-company level, including consolidated loss from operations, cash flows, liquidity, and strategic initiatives. Effective August 13, 2025, in connection with temporary governance adjustments approved by the Board, Mr. Matthias Aydt serves as our sole CODM for purposes of ASC 280 (see Note 16).

Previous wording

Through March 31, 2025, we have sold six and leased eleven vehicles. As a result, we will require substantial additional capital to develop products and fund operations for the foreseeable future. Until we can generate sufficient revenue from product sales, we will fund our ongoing operations through a combination of various funding and financing alternatives, including equipment financing of the FF ieFactory California, secured syndicated debt financing, convertible notes, working capital loans, and equity offerings, among other options. The particular funding mechanisms, terms, timing, and amounts are dependent on our assessment of opportunities available in the marketplace and the circumstances of the business at the relevant time. Any delays in the successful completion of its FF ieFactory California will impact our ability to generate revenue. For additional discussion of the substantial doubt about our ability to continue as a going concern, see Note 2, Liquidity and Capital Resources and Going Concern in the notes to the Unaudited Condensed Consolidated Financial Statements and for further details on liquidity, please see the “Liquidity and Capital Resources” section below.

Current wording

Through June 30, 2025, we have sold seven and leased eleven vehicles. As a result, we will require substantial additional capital to develop products and fund operations for the foreseeable future. Until we can generate sufficient revenue from product sales, we will fund our ongoing operations through a combination of various funding and financing alternatives, including equipment financing of the FF ieFactory California, secured syndicated debt financing, convertible notes, working capital loans, and equity offerings, among other options. The particular funding mechanisms, terms, timing, and amounts are dependent on our assessment of opportunities available in the marketplace and the circumstances of the business at the relevant time. Any delays in the successful completion of its FF ieFactory California will impact our ability to generate revenue. For additional discussion of the substantial doubt about our ability to continue as a going concern, see Note 2, Liquidity and Capital Resources and Going Concern in the notes to the Unaudited Condensed Consolidated Financial Statements and for further details on liquidity, please see the “Liquidity and Capital Resources” section below.

Previous wording

We began the production of our FF 91 Futurist in March 2023 and started making deliveries to customers in August 2023 and have leased one vehicle during the three months ended March 31, 2025.

Current wording

We began the production of our FF 91 Futurist in March 2023 and started making deliveries to customers in August 2023 and have sold one vehicle during the six months ended June 30, 2025.

Previous wording

In certain circumstances, we provide customers with a residual value guarantee which may or may not be exercised in the future. The impact of such residual value guarantees was immaterial to our Unaudited Condensed Consolidated Statements of Operations and Comprehensive Loss for thethree months ended March 31, 2025.

Current wording

In certain circumstances, we provide customers with a residual value guarantee which may or may not be exercised in the future. The impact of such residual value guarantees was immaterial to our Unaudited Condensed Consolidated Statements of Operations and Comprehensive Loss for thethree and six months ended June 30, 2025.

Previous wording

We have outstanding leases under our vehicle operating leasing program in the U.S. Qualifying customers are permitted to lease a vehicle for up to 36 months. At the end of the lease term, customers are generally required to return the vehicles to us. We account for these leasing transactions as operating leases. We record leasing revenues as automotive leasing revenue on a straight-line basis over the contractual term, and we record the depreciation of these vehicles as cost of automotive leasing revenue. As of March 31, 2025, deferred lease-related upfront payments which will be recognized on a straight-line basis over the contractual terms of the individual leases were immaterial. Our policy is to exclude taxes collected from a customer from the transaction price of automotive contracts.

Current wording

We have outstanding leases under our vehicle operating leasing program in the U.S. Qualifying customers are permitted to lease a vehicle for up to 36 months. At the end of the lease term, customers are generally required to return the vehicles to us. We account for these leasing transactions as operating leases. We evaluate whether a lease contract should be combined with other agreements — such as co-creation arrangements when leasing contracts are negotiated together and are economically interdependent. We record leasing revenues as automotive leasing revenue on a straight-line basis over the contractual term, and we record the depreciation of these vehicles as cost of automotive leasing revenue. As of June 30, 2025, deferred lease-related upfront payments which will be recognized on a straight-line basis over the contractual terms of the individual leases were immaterial. Our policy is to exclude taxes collected from a customer from the transaction price of automotive contracts.

Previous wording

We have outstanding leases accounted for as sales-type leases under accounting standards codification (“ASC”) 842, Leases (“ASC 842”). Customers have the right to purchase the vehicle at the end of the lease term, which is usually 36 months. A customer qualifies under this program if the purchase option is reasonably certain to be exercised, and we therefore expect the customer to take title to the vehicle at the end of the lease term after making all contractual payments. We recognize all revenue and costs associated with the sales-type lease as automotive leasing revenue and automotive leasing cost of revenue, respectively, upon delivery of the vehicle to the customer when collectability of lease payments is probable at lease commencement. If collectability of lease payments is not probable at commencement, we recognize the lease payments as deposit liability and do not derecognize the leased vehicle until such point that collectability of lease payments becomes probable.

Current wording

We have outstanding leases accounted for as sales-type leases under accounting standards codification (“ASC”) 842, Leases (“ASC 842”). Customers have the right to purchase the vehicle at the end of the lease term, which is usually 36 months. A customer qualifies under this program if the purchase option is reasonably certain to be exercised, and we therefore expect the customer to take title to the vehicle at the end of the lease term after making all contractual payments. We recognize all revenue and costs associated with the sales-type lease as automotive leasing revenue and automotive leasing cost of revenue, respectively, upon delivery of the vehicle to the customer when collectability of lease payments is probable at lease commencement. If collectability of lease payments is not probable at commencement, we recognize the lease payments as deposit liability and do not derecognize the leased vehicle until such point that collectability of lease payments becomes probable. We evaluate whether a lease contract should be combined with other agreements — such as co-creation arrangements when leasing contracts are negotiated together and are economically interdependent.

Previous wording

Our customers may reserve a vehicle and preorder certain services by making a customer deposit, which is fully refundable at any time. Refundable deposits, for vehicle reservations and services, received from customers prior to an executed vehicle purchase agreement are recorded as customer deposits (Accrued expenses and other current liabilities). Customer deposits were $3.0 million and $3.0 million as of March 31, 2025 and December 31, 2024, respectively. When vehicle purchase agreements are executed, the consideration for the vehicle and any accompanying products and services must be paid in advance prior to our transfer of the products or services. Such advance payments are considered non-refundable, and we defer revenue related to any products or services that are not yet transferred.

Current wording

Our customers may reserve a vehicle and preorder certain services by making a customer deposit, which is fully refundable at any time. Refundable deposits, for vehicle reservations and services, received from customers prior to an executed vehicle purchase agreement are recorded as customer deposits (Accrued expenses and other current liabilities). Customer deposits were $3.2 million and $3.0 million as of June 30, 2025 and December 31, 2024, respectively. When vehicle purchase agreements are executed, the consideration for the vehicle and any accompanying products and services must be paid in advance prior to our transfer of the products or services. Such advance payments are considered non-refundable, and we defer revenue related to any products or services that are not yet transferred.

Previous wording

Deferred revenue is equivalent to the total transaction price allocated to the performance obligations that are unsatisfied, or partially unsatisfied, as of the balance sheet date. Deferred revenue related to products and services was immaterial as of March 31, 2025 and December 31, 2024.

Current wording

Deferred revenue is equivalent to the total transaction price allocated to the performance obligations that are unsatisfied, or partially unsatisfied, as of the balance sheet date. Deferred revenue related to products and services was $0.3 million as of June 30, 2025 and December 31, 2024.

Previous wording

Loss (gain) on disposal on property, plant, and equipment relates to the abandonment of certain FF 91 Futurist program construction in progress assets, primarily vendor tooling, machinery, and equipment, due to the redesign of the related FF 91 components and implementation of our cost reduction program. Charges associated with disposals are recognized within operating expenses in the Unaudited Condensed Consolidated Statements of Operations and Comprehensive Loss.

Current wording

Loss (gain) on disposal of property, plant, and equipment relates to the abandonment of certain FF 91 Futurist program construction in progress assets, primarily vendor tooling, machinery, and equipment, due to the redesign of the related FF 91 components and implementation of our cost reduction program. Charges associated with disposals are recognized within operating expenses in the Unaudited Condensed Consolidated Statements of Operations and Comprehensive Loss.

Previous wording

Other income, net consists of foreign currency transaction gains and losses and other expenses such as bank fees and late charges. Foreign currency transaction gains and losses are generated by revaluation of debt and the settlements of invoices denominated in currencies other than the functional currency. We expect other expense to fluctuate as we continue to transact internationally.

Current wording

Other income (loss), net consists of foreign currency transaction gains and losses and other expenses such as bank fees and late charges. Foreign currency transaction gains and losses are generated by revaluation of debt and the settlements of invoices denominated in currencies other than the functional currency. We expect other expense to fluctuate as we continue to transact internationally.

Previous wording

Revenue increased by $0.3 million for the three months ended March 31, 2025, compared to the same period in 2024. There was no automotive sales revenue for the three months ended March 31, 2025 and 2024. Automotive leasing revenue was $0.3 for the three months ended March 31, 2025 compared to an immaterial amount for the same period in 2024. Additionally, one vehicle was delivered during the three months ended March 31, 2025, compared to none for the same period in 2024.

Current wording

Revenue decreasedby $0.2 million for the three months ended June 30, 2025, compared to the same period in 2024. Automotive sales revenue was zero million for the three months ended June 30, 2025 compared to $0.3 million for the same period in 2024. Automotive leasing revenue was $0.1 million for the three months ended June 30, 2025 compared to an insignificant amount for the same period in 2024. Additionally, one vehicle was delivered during the three months ended June 30, 2025, compared to three for the same period in 2024. The vehicle delivered in the current period was sold under an arrangement that was combined with a co-creation agreement and accounted for as a single arrangement. As a result, no automotive sales revenue was recognized for this delivery, and the related consideration was presented net of co-creation fees in marketing expense.

Previous wording

Cost of revenue increased by $0.7 million for the three months ended March 31, 2025, compared to the same period in 2024. This increase was primarily driven by higher depreciation expenses as equipment and expenses related to FF ieFactory California lease agreement, which commenced in late 2023, and the Collateralized Loan financing, initiated in 2024.

Current wording

Cost of revenue increased by $5.9 million for the three months ended June 30, 2025, compared to the same period in 2024. This increase was primarily driven by higher depreciation expenses as equipment, an increase in inventory reserves, and expenses related to FF ieFactory California lease agreement, which commenced in late 2023, and the collateralized loan financing, initiated in 2024.

Previous wording

R&D expense decreased by $0.3 million for the three months ended March 31, 2025, compared to the same period in 2024. The decrease was primarily driven by a $2.3 million reduction in salary and headcount costs, including the reassignment of R&D personnel to production roles, and a $1.6 million decrease in information technology expenses. These reductions were partially offset by a $2.4 million increase in R&D expense due to less allocations to cost of revenue in 2025, resulting in more expenses remaining in the R&D category this year.

Current wording

R&D expense increased by $1.4 million for the six months ended June 30, 2025, compared to the same period in 2024. The increase was primarily driven by a $2.5 million increase in salaries and headcount costs and a $2.4 million increase resulting from lower allocations to cost of revenue in 2025. These increases were partially offset by a $3.5 million decrease in information technology expenses. Overall, these shifts resulted in more expenses remaining in the R&D category this year.

Previous wording

Sales and marketing expense increased by$0.2 million for thethree months ended March 31, 2025, compared to the same period in 2024. The increase was primarily driven by a$0.7 million rise in marketing expenses—largely related to the launch of the new FX line—and a$0.4 million increase in compensation costs, despite a reduction in sales and marketing personnel. These increases were partially offset by a$0.5 million reduction in rent, a$0.2 million decrease in professional services, and a $0.1 million decline in sales and marketing consumables.

Current wording

Sales and marketing expense increased by $0.2 million for the six months ended June 30, 2025, compared to the same period in 2024. The increase was primarily driven by a $1.7 million rise in marketing expenses related to the promotion of the new FX line and a $0.2 million increase in compensation costs, despite a reduction in sales and marketing personnel. These increases were partially offset by a $1.3 million reduction in rent.

Previous wording

General and administrative expense decreased by $0.2 million for the three months ended March 31, 2025, compared to the same period in 2024. The decrease was primarily driven by a $2.8 million reduction in insurance costs—mainly due to lower directors and officers’ insurance premiums, a $0.8 million reduction in allocation to cost of goods sold, and a $0.8 million decrease in information technology expenses. These reductions were partially offset by a $2.6 million increase in compensation and a $1.3 million increase in professional service fees.

Current wording

General and administrative expense decreased by $3.3 million for the six months ended June 30, 2025, compared to the same period in2024. The decrease was primarily driven by a $5.8 million reduction in insurance costs—mainly due to lower directors and officers’ insurance premiums—a $4.3 million reduction in allocation to cost of goods sold, and a $0.8 million decrease in information technology expenses. These reductions were partially offset by a $4.8 million increase in compensation and a $1.3 million increase in professional service fees.

Previous wording

This net decrease reflects our ongoing cost-optimization initiatives aimed at improving the efficiency of general and administrative operations. Key actions include renegotiating vendor agreements, consolidating office space to lower occupancy costs, and restructuring portions of our workforce. These efforts have enabled us to reduce certain overhead costs, such as insurance and IT, while still supporting strategic investments in personnel and advisory services needed to execute on core business priorities.

Current wording

This net decrease reflects the continued impact of our cost-optimization initiatives aimed at improving the efficiency of general and administrative operations. Key actions during the period included renegotiating vendor agreements, consolidating office space to lower occupancy costs, and restructuring portions of our workforce. These measures have allowed us to reduce overhead in areas such as insurance and IT, while preserving investment capacity for critical personnel and external advisors supporting the Company’s core business objectives.

Previous wording

Loss (gain) from disposal of property, plant and equipment

Current wording

Loss (gain) from disposal of property, plant and equipment (3-Month Overview)

Previous wording

Loss (gain) on disposal on property, plant, and equipment changed by $0.1 million for the three months ended March 31, 2025, compared to the same period in 2024. We dispose of equipment when the assets become obsolete, costly to maintain, or are replaced by more efficient technologies.

Current wording

Loss (gain) on disposal of property, plant, and equipment increased by approximately $0.3 million for the three months ended June 30, 2025, compared to the same period in 2024. We dispose of equipment when the assets become obsolete, costly to maintain, or are replaced by more efficient technologies.

Previous wording

During the three months ended March 31, 2025 we recognized a $13.6 million gain from the change in fair value of the Incremental Warrants. There was no comparable instrument outstanding during the three months ended March 31, 2024. During the three months ended March 31, 2025 we recognized a $6.4 million gain from the change in fair value of the SPA Portfolio Note warrants compared to a $0.2 million gain during the same period in 2024. This increase was largely driven by the year-over-year growth in the number of SPA Portfolio Note warrants outstanding. Beginning in the second half of 2024, we began issuing SPA Portfolio Note warrants equal to 100% of the shares issuable upon conversion of the aggregate principal amount of the applicable SPA Portfolio Note, significantly increasing the number of warrants outstanding year over year. As of March 31, 2025 there were 35,260,186 SPA Portfolio Note warrants outstanding compared to 13,968 outstanding as of March 31, 2024.

Current wording

During the three months ended June 30, 2025 we recognized an aggregate day-one loss of $12.5 million related to the initial measurement of SPA Portfolio Notes, Warrants and Incremental Warrants. By contrast, during the same period in 2024, these instruments were calibrated to the cash proceeds received and did not result in a day-one loss. The 2025 loss was further impacted by $31.8 million loss from subsequent fair value remeasurement. The re-measurement was primarily driven by increases in the Company’s stock price during the period compared to preceding three month. However, the increase in the total monetary impact was attributable to the following factors. During the three months ended June 30, 2025 we recognized a $8.7 million loss from the change in fair value of the Incremental Warrants. There was no comparable instrument outstanding during the three months ended June 30, 2024. During the three months ended June 30, 2025 we recognized a $14.3 million loss from the change in fair value of the SPA Portfolio warrants compared to a $0.2 million gain during the same period in 2024. This increase was largely driven by the year-over-year growth in the number of SPA Portfolio warrants outstanding. Beginning in the second half of 2024, we began issuing SPA Portfolio warrants equal to 100% of the shares issuable upon conversion of the aggregate principal amount of the applicable SPA Portfolio Note, significantly increasing the number of warrants outstanding year over year. As of June 30, 2025 there were 52,596,811 SPA Portfolio third party warrants outstanding compared to 13,355 outstanding as of June 30, 2024.

Previous wording

The Change in fair value of related party notes payable, warrant liabilities, and derivative call options increased by $0.3 million for the three months ended March 31, 2025, when compared with the same period in 2024. Significant driving factors include (1) The issuance of the related party 2025 March Unsecured SPA Notes, warrants, and Incremental Warrants and (2) the recognition of day-one losses upon the issuance of related party 2025 March Unsecured SPA Notes and associated instruments during the three months ended March 31, 2025. We issued $1.9 million of related party SPA Portfolio Notes in March 2025. Upon issuance the Company recognized a loss of $1.1 million, as the combined fair value of the SPA Portfolio Note, SPA Portfolio Note Warrant, and Incremental Warrant exceeded the cash proceeds received. These issuance-date losses were offset by gains from the remeasurement of related party notes payable, related party warrant liabilities, and related party Incremental Warrants as of March 31, 2025. The fair value of our related party instruments declined during the period ended March 31, 2025, primarily due to a 53% drop in our Class A Common Stock price over the quarter, including a 13% decline during the three months ended March 31, 2025 when related party debt activity occurred.

Current wording

The Change in fair value of related party notes payable, warrant liabilities, and derivative call options increased by $4.8 million for the three months ended June 30, 2025, when compared with the same period in 2024. Significant driving factors include (1) an increase in related party activity, such as issuance and conversion of the related party 2025 March Unsecured SPA Notes, warrants, and Incremental Warrants and (2) the recognition of day-one losses upon the issuance of related party 2025 March Unsecured SPA Notes and associated instruments. During the three months ended June 30, 2025 we issued $3.0 million of related party SPA Portfolio Notes. Upon issuance the Company recognized a day-one loss of $2.3 million, as the combined fair value of the SPA Portfolio Note, SPA Portfolio Note Warrant, and Incremental Warrant exceeded the cash proceeds received. These issuance-date losses were further increased by a $2.7 million loss from the remeasurement of related party notes payable, related party warrant liabilities, and related party Incremental Warrants as of June 30, 2025. The fair value of our related party instruments increased during the period ended June 30, 2025, primarily due to a 48.7% increase in our Class A Common Stock price over the quarter.

Previous wording

There was not significant related party debt activity during the three months ended March 31, 2024.

Current wording

There was not significant related party debt outstanding or activity during the three months ended June 30, 2024.

Previous wording

During the three months ended March 31, 2025 a related party converted a $1.5 million note in exchange for 1,352,767 shares of our Class A Common Stock. We recognized a $1.2 million Loss on settlement of related party notes payable for the difference between the fair value of the shares issued and the fair value of the debt instrument During the three months ended March 31, 2024 a related party converted notes payable, with an aggregate principal balance of $0.7 million in exchange for 33,107 shares of our Class A Common Stock. We recognized a $0.2 million Loss on settlement of related party notes payable. In addition, as discussed in Note 8, Related Party Transactions in the notes to the Unaudited Condensed Consolidated Financial Statements, we also recognized a $14.1 million loss on related party notes related to interest, penalties, and principal increases resulting from our breach of the agreement with Chongqing Leshi Small Loan Co., Ltd. (“Chongqing”).

Current wording

During the three months ended June 30, 2025 a related party converted a $2.1 million note in exchange for 2,017,794 shares of our Class A Common Stock. We recognized a $1.9 million Loss on settlement of related party notes payable for the difference between the fair value of the shares issued and the fair value of the debt instrument. There were no related party debt conversions during the three months ended June 30, 2024.

Previous wording

Related party interest expense decreased by $5.1 million for the three months ended March 31, 2025, compared to the same period in 2024. The decrease was primarily driven by our default in the first quarter of 2024 on the loan with our related party lender, Chongqing, which triggered retroactive interest charges and penalties under the prior agreement. Under the revised loan agreement, no interest is incurred unless the Company defaults.

Current wording

Related party interest expense decreased by $1.5 million for the three months ended June 30, 2025, compared to the same period in 2024. The decrease was primarily driven by our default in the first quarter of 2024 on the loan with our related party lender, Chongqing, which triggered retroactive interest charges and penalties under the prior agreement. Under the revised loan agreement, no interest is incurred unless the Company defaults.

Previous wording

Other income, net increased by $1.3 million for the three months ended March 31, 2025, compared to the same period in 2024. During 2025, the U.S. dollar’s continued strengthening against the Chinese yuan (CNY) resulted in a foreign currency transaction loss within Other income, net. However, the extent of the dollar's appreciation was less than in 2024, leading to a smaller foreign currency transaction loss and contributing to the overall reduction in Other income, net.

Current wording

Other income, net increased by $1,336 for the six months ended June 30, 2025, compared to the same period in 2024. During 2025, the U.S. dollar’s continued strengthening against the Chinese yuan (CNY) resulted in a foreign currency transaction loss within Other income, net. However, the extent of the dollar's appreciation was less than in 2024, leading to a smaller foreign currency transaction loss and contributing to the overall reduction in Other income, net.

Previous wording

We have and will continue to devote substantial effort and, to the extent available, capital resources, to strategic planning, engineering, design, and development of our electric vehicle platform, development of vehicle models, finalizing the build out of the FF ieFactory California manufacturing facility, and capital raising. We have incurred cumulative losses from operations, negative cash flows from operating activities, and we have an accumulated deficit of $4,324.6 million, an unrestricted cash balance of $9.5 million and a negative working capital position of $112.3 million as of March 31, 2025. During 2025, we funded our operations and capital needs primarily through the issuance of notes payable and related party notes payable convertible notes (see Note 7, Notes Payable and Note 8, Related Party Transactions), and the sale of Class A Common Stock.

Current wording

We have and will continue to devote substantial effort and, to the extent available, capital resources, to strategic planning, engineering, design, and development of our electric vehicle platform, development of vehicle models, finalizing the build out of the FF ieFactory California manufacturing facility, and capital raising. We have incurred cumulative losses from operations, negative cash flows from operating activities, and we have an accumulated deficit of $4,449.3 million, an unrestricted cash balance of $13.2 million and a negative working capital position of $146.0 million as of June 30, 2025.

Previous wording

SPA Portfolio Notes: We have issued various financing arrangements collectively known as the SPA Portfolio Notes. These are categorized as follows: (i) Secured SPA Notes; (ii) 2023 Unsecured SPA Notes; (iii) Junior Secured SPA Notes; (iv) and 2024 Unsecured SPA Notes. As of March 31, 2025, the SPA Portfolio Notes were in good standing.

Current wording

SPA Portfolio Notes: We have issued various financing arrangements collectively known as the SPA Portfolio Notes. These are categorized as follows: (i) Secured SPA Notes; (ii) 2023 Unsecured SPA Notes; (iii) Junior Secured SPA Notes; (iv) 2024 Unsecured SPA Notes (v) and 2025 March Unsecured SPA Notes. As of June 30, 2025, the SPA Portfolio Notes were in good standing.

Previous wording

Pursuant to the SPA Portfolio Notes commitments (collectively the “SPA Commitments”) (see Note 7, Notes Payable and Note 8, Related Party Transactions), we obtained commitments from several investors. On March 31, 2025, the SPA Commitments totaled $655.5 million, of which $427.7 million was funded, $227.8 million remained to be funded, and $45.8 million in principal was outstanding. On March 31, 2025, optional commitments under the SPA Commitments totaled $467.0 million, of which $50.9 million was funded, $386.1 million remained to be funded, and $2.5 million was outstanding. The remaining amounts to be funded as of March 31, 2025 are subject the achievement of delivery milestones, satisfaction of closing conditions, resolving disputes with investors, and satisfaction or waiver of other conditions, including for a portion of such financing an effective registration statement for the shares underlying the applicable notes.

Current wording

Pursuant to the SPA Portfolio Notes commitments (collectively the “SPA Commitments”) (see Note 7, Notes Payable and Note 8, Related Party Transactions), we obtained commitments from several investors. As of June 30, 2025, the SPA Commitments totaled $655.5 million, of which $449.3 million was funded, $206.2 million remained to be funded, and $33.3 million in principal was outstanding. As of June 30, 2025, Optional Commitments (including incremental warrants) under the SPA Commitments totaled $467.0 million, of which $60.9 million was funded, $406.1 million remained to be funded, and $10.0 million was outstanding. Of these amounts, $189.2 million of SPA Commitments and $305.1 million of Optional Commitments expired unfunded after June 30, 2025, but prior to issuance of these financial statements. The remaining amounts to be funded as of June 30, 2025 are subject to the achievement of delivery milestones, satisfaction of closing conditions, resolving disputes with investors, and satisfaction or waiver of other conditions, including for a portion of such financing an effective registration statement for the shares underlying the applicable notes.

Previous wording

In addition, on September 26, 2023, we entered into a sales agreement with Stifel, Nicolaus & Company, Incorporated, B. Riley Securities, Inc., A.G.P./Alliance Global Partners, Wedbush Securities Inc. and Maxim Group LLC, as sales agents, to sell shares of Class A Common Stock, from time to time, with aggregate gross sales proceeds of up to $90.0 million pursuant to the Registration Statement as an “at-the-market” offering under the Securities Act (the “ATM Program”). Under applicable SEC rules and regulations, because we failed to timely file our Form 10-K for the year ended December 31, 2023, as well as our Form 10-Q for the quarter ended March 31, 2024, we will not be eligible to access the ATM Program until August 1, 2025, at the earliest.

Current wording

On September 26, 2023, we entered into a sales agreement with Stifel, Nicolaus & Company, Incorporated, B. Riley Securities, Inc., A.G.P./Alliance Global Partners, Wedbush Securities Inc. and Maxim Group LLC, as sales agents, to sell shares of Class A Common Stock, from time to time, with aggregate gross sales proceeds of up to $90.0 million pursuant to the Registration Statement as an “at-the-market” offering under the Securities Act (the “ATM Program”). Under applicable SEC rules and regulations, because the Company failed to timely file its Form 10-K for the year ended December 31, 2023, as well as its Form 10-Qs for the quarters ended March 31, 2024 and June 30, 2024, the Company was previously ineligible to access the ATM Program. However, as of August 1, 2025, the Company regained eligibility to access the ATM Program.

Previous wording

We project that we will require substantial additional funds to continue operations and support production of the FF 91, and we also plan to initiate production of our FX Series of vehicles. If additional capital is not secured, we will not have sufficient resources to meet our obligations and continue operations, which could result in bankruptcy protection and asset liquidation, with equity holders receiving little to no recovery. However, the anticipated start of FX Series production is expected to generate new revenue streams and enhance operational performance, thereby partially mitigating near-term cash flow pressures. However, if additional capital is not secured, we will not have sufficient resources to meet our obligations and continue operations, which could result in bankruptcy protection and asset liquidation, with equity holders receiving little to no recovery.

Current wording

We project that we will require substantial additional funds to continue operations and support production of the FF 91, and our FX Series of vehicles. If additional capital is not secured, we will not have sufficient resources to meet our obligations and continue operations, which could result in bankruptcy protection and asset liquidation, with equity holders receiving little to no recovery. However, the anticipated start of FX Series production is expected to generate new revenue streams and enhance operational performance, thereby partially mitigating near-term cash flow pressures. However, if additional capital is not secured, we will not have sufficient resources to meet our obligations and continue operations, which could result in bankruptcy protection and asset liquidation, with equity holders receiving little to no recovery.

Previous wording

In addition, elevated U.S. import tariffs on electric vehicle components sourced from China could increase our future manufacturing costs as production of the FX Series and other future vehicle models are introduced. While tariffs did not materially impact cost of goods sold for the three months ended March 31, 2025, due to limited production volume, continued reliance on China-based suppliers may contribute to higher input costs, pressure gross margins, and increase the Company's future funding needs.

Current wording

In addition, elevated U.S. import tariffs on electric vehicle components sourced from China could increase our future manufacturing costs as production of the FX Series and other future vehicle models are introduced. While tariffs did not materially impact cost of goods sold for the six months ended June 30, 2025, due to limited production volume, continued reliance on China-based suppliers may contribute to higher input costs, pressure gross margins, and increase the Company's future funding needs.

Previous wording

As of March 31, 2025, our principal source of liquidity was cash on hand totaling $9.5 million, which was held for working capital and general corporate purposes. We also have access to various sources of additional capital, including the SEPA and the SPA Commitments. Our ability to access these sources of capital and further information on amounts available is discussed in Note 2, Liquidity and Capital Resources and Going Concern, of the notes to the Consolidated Financial Statements included in this Form 10-Q.

Current wording

As of June 30, 2025, our principal source of liquidity was cash on hand totaling $13.2 million, which was held for working capital and general corporate purposes. We also have access to various sources of additional capital, including the SEPA and the SPA Commitments. Our ability to access these sources of capital and further information on amounts available is discussed in Note 2, Liquidity and Capital Resources and Going Concern, of the notes to the Consolidated Financial Statements included in this Form 10-Q.

Previous wording

We have been significantly funded by notes payable from related parties and third parties. The related parties include employees as well as affiliates of employees and affiliates and other companies controlled or previously controlled by our founder and Chief Product and User Ecosystem Officer (who, as of April 2025, became Global Co-CEO). For more information on the outstanding related party notes payable and notes payable as well as the related schedules of maturities, see Note 7, Notes Payable, and Note 8, Related Party Transactions, of the notes to the Consolidated Financial Statements included in this Form 10-Q.

Current wording

We have been significantly funded by notes payable from related parties and third parties. The related parties include employees as well as affiliates of employees and affiliates and other companies controlled or previously controlled by our founder and Chief Product and User Ecosystem Officer (who, in April 2025, became Global Co-CEO). Effective August 13, 2025, during the pendency of the SEC investigation, Mr. Jia was temporarily excluded from oversight of the finance, legal, accounting, and public reporting functions (see Note 16). For more information on the outstanding related party notes payable and notes payable as well as the related schedules of maturities, see Note 7, Notes Payable, and Note 8, Related Party Transactions, of the notes to the Consolidated Financial Statements included in this Form 10-Q.

Previous wording

We continue to experience negative operating cash flows as we advance the design and development of our vehicles and expand our infrastructure in both the United States and China. Our operating cash flows are significantly affected by fluctuations in working capital components, including changes in personnel expenses, accounts payable, accrued interest, other current liabilities, deposits, and current assets. For the three months ended March 31, 2025, net cash used in operating activities was $20.3 million, compared to $14.7 million for the same period in 2024, reflecting a$5.6 million increase in cash outflows.

Current wording

We continue to experience negative operating cash flows as we advance the design and development of our vehicles and expand our infrastructure in both the United States and China. Our operating cash flows are significantly affected by fluctuations in working capital components, including changes in personnel expenses, accounts payable, accrued interest, other current liabilities, deposits, and current assets. For the six months ended June 30, 2025, net cash used in operating activities was $43.6 million, compared to $29.1 million for the same period in 2024, reflecting a$14.5 million increase in cash outflows.

Previous wording

Net Loss: The reduction of $37.9 million in Net loss is an improvement in 2025 compared to the same period in 2024; however, this figure includes various non-cash transactions that are excluded when calculating cash flow from operating activities.

Current wording

Net Loss: The reduction of $21.9 million in Net loss is an improvement in 2025 compared to the same period in 2024; however, this figure includes various non-cash transactions that are excluded when calculating cash flow from operating activities.

Previous wording

Non-cash adjustments: Non-cash adjustments decreased by $29.3 million for the three months ended March 31, 2025 compared to the same period in 2024. This decrease was comprised of a $23.6 million decrease in fair value adjustments on Change in fair value of notes payable, warrant liabilities, and derivative call options, and a $13.1 million decrease in Loss from settlement of related party notes payable. These adjustments were partially offset by a $4.5 million increase in Loss from settlement of notes payable. As these adjustments do not represent actual cash changes, they are disclosed for reconciliation purposes consistent with the cash flow statement.

Current wording

Non-cash adjustments: Non-cash adjustments decreased by $12.0 million for the six months ended June 30, 2025 compared to the same period in 2024. This decrease was comprised of a $20.0 million increase in Loss from settlement of notes payable, a $15.3 million decrease in fair value adjustments on Change in fair value of notes payable, warrant liabilities, and derivative call options, decrease in Loss from settlement of related party notes payable, and a $7.6 million decrease in Loss from settlement of related party notes payable. These adjustments were partially offset by a $15.3 million decrease in fair value adjustments on Change in fair value of notes payable, warrant liabilities, and derivative call options, a $5.1 million increase in Change in fair value of related party notes payable and related party warrant liabilities and a $3.8 million inventory reserve adjustment. As these adjustments do not represent actual cash changes, they are disclosed for reconciliation purposes consistent with the cash flow statement.

Previous wording

Changes in working capital: Changes in working capital decreased by $13.6 million for the three months ended March 31, 2025 compared to the same period in 2024. For the three months ended March 31, 2025, changes in working capital included unfavorable shifts in our operating assets and liabilities. Notable contributors to the change were a $4.4 million change in Inventory balances, a $8.8 million change in Deposits, and a $5.1 million change in Accrued interest expense. These were partially offset by a $5.2 million change in Accrued expenses and other current and non-current liabilities. While these figures are detailed in the cash flow statement, they underscore the critical role that effective working capital management has played in reducing our operating cash outflows. The reductions in cash outlays for working capital purposes result from our cost-saving and cash management measures.

Current wording

Changes in working capital: Changes in working capital decreased by $23.8 million for the six months ended June 30, 2025 compared to the same period in 2024. For the six months ended June 30, 2025, changes in working capital included unfavorable shifts in our operating assets and liabilities. Notable contributors to the change were a $4.9 million change in Inventory balances, a $5.9 million change in Deposits, a $5.2 million change in Accrued related party interest expense, and a $8.1 million change in Accounts payable. These were partially offset by a $3.6 million change in Accrued expenses and other current and non-current liabilities. While these figures are detailed in the cash flow statement, they underscore the critical role that effective working capital management has played in reducing our operating cash outflows. The reductions in cash outlays for working capital purposes result from our cost-saving and cash management measures.