FARADAY FUTURE INTELLIGENT ELECTRIC INC.

Previous wording

All references in this report to “FFAI,” the “Company,” “we,” “us,” or “our” mean Faraday Future Intelligent Electric Inc., together with its consolidated subsidiaries. Unless the context suggests otherwise, references to “Faraday Future Intelligent Electric Inc.” mean the parent company without its subsidiaries.

Current wording

All references in this report to “FFAI,” the “Company,” “FF,”“we,” “us,” or “our” mean Faraday Future Intelligent Electric Inc., together with its consolidated subsidiaries. Unless the context suggests otherwise, references to “Faraday Future Intelligent Electric Inc.” mean the parent company without its subsidiaries.

Previous wording

With headquarters in greater Gardena, California, we design and engineer next-generation intelligent, connected, electric vehicles. We manufacture vehicles at the FF ieFactory California production facility in Hanford, California. We have additional engineering, sales, and operational capabilities in China, and we are exploring opportunities for potential manufacturing capabilities in China through a joint venture or other arrangements. Additionally, we have established an entity in the UAE to manage the assembly and sales support of FF 91 series vehicles, further expanding our market presence in the region.

Current wording

With headquarters in the greater Gardena, California area, we design and engineer next-generation intelligent, connected electric vehicles. We manufacture vehicles at the FF ieFactory California production facility in Hanford, California. We also have additional engineering, sales, and operational capabilities in China and are exploring potential manufacturing opportunities there through a joint venture or other arrangements. Additionally, we have established operations in the United Arab Emirates, including an entity to manage assembly and sales support for FF 91 series vehicles and a facility in Ras Al Khaimah intended to support future FX Super One production, further expanding our presence in the Middle East as part of our “third pole” strategy.

Previous wording

•Our Proprietary VPA: We have designed and developed a breakthrough mobility platform—our proprietary VPA, which enables scalable vehicle development across multiple segments, including the new FX Series.

Current wording

•Our Proprietary VPA: We have designed and developed a breakthrough mobility platform—our proprietary VPA, which enables scalable vehicle development across multiple segments.

Previous 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.

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. As part of our transition plan, we are continuing limited FF 91 deliveries while reallocating resources, manufacturing capacity and engineering efforts toward the planned FF 92 upgrade and the FX Super One. Our strategy emphasizes FF 91 deliveries alongside development of FF 92 while the FX brand leverages the Super One to enter the U.S. MPV market.

Previous wording

•Global Availability: All of our vehicles are expected to be available for sale in the U.S. and the Middle East, with potential expansion to China and European markets.

Current wording

•Global Availability: All of our vehicles are expected to be available for sale in the U.S. and the Middle East. Our Ras Al Khaimah facility in the United Arab Emirates integrates offices, production workshops, and operational hubs and is positioned to support sales and service across the Gulf Cooperation Council countries; this facility has been highlighted as a springboard for the Company’s future expansion into European and North African markets. In parallel, the FF China team is focused on strengthening global supply‑chain management and pursuing strategic partnerships with intelligent‑driving companies, which could eventually support manufacturing and distribution activities in China.

Previous wording

Strategic Operations and Product Development

Current wording

EV - Strategic Operations and Product Development

Previous wording

•In December 2024, we secured approximately$30.0 million in cash financing commitments for the purchase of unsecured convertible notes (the “2024 Unsecured SPA Notes”). Each investor (the “2024 Unsecured SPA Investors”)also received a 2024 Unsecured Incremental Warrant to fund, at the 2024 Unsecured SPA Investor’ssole discretion, additional notes up to the original principal balance the of 2024 Unsecured SPA Notes purchased by such 2024 Unsecured SPA Investor. These funds are intended to support our core business operations and the ongoing ramp-up of the FX strategy. On January 28, 2025, we entered into a letter agreement with certain of the 2024 Unsecured SPA Investors. Pursuant to the letter agreement, prior to our receipt of stockholders’ approval, for the issuance of the Unsecured 2024 SPA Notes, 2024 Unsecured SPA Warrants and 2024 Unsecured Incremental Warrants, such investors agreed not to convert any outstanding 2024 Unsecured SPA Notes at a conversion price less than $1.16, the initial conversion price of the 2024 Unsecured SPA Notes, and we agreed to issue, following receipt of such stockholders’ approval, to such investors who convert any U2024 Unsecured SPA Notes at the $1.16 conversion price prior to our receipt of stockholders’ approval, additional shares of Class A Common Stock as a true-up.

Current wording

Unsecured SPA Investors. Pursuant to the letter agreement, prior to our receipt of stockholders’ approval, for the issuance of the Unsecured 2024 SPA Notes, 2024 Unsecured SPA Warrants and 2024 Unsecured Incremental Warrants, such investors agreed not to convert any outstanding 2024 Unsecured SPA Notes at a conversion price less than $1.16, the initial conversion price of the 2024 Unsecured SPA Notes, and we agreed to issue, following receipt of such stockholders’ approval, to such investors who convert any 2024 Unsecured SPA Notes at the $1.16 conversion price prior to our receipt of stockholders’ approval, additional shares of Class A Common Stock as a true-up.

Previous wording

•In July 2025, the Company publicly unveiled the FX Super One at a global launch event in Los Angeles. The event, which followed a private preview and broad media coverage, showcased the new F.A.C.E. (Futuristic Aesthetic Connected Exterior) LED grille and the FF Super EAI (Extended AI) ecosystem. The Company reported has secured over 10,000 binding deposit commitments to date, reinforcing brand visibility and building momentum as it prepares to transition into production.

Current wording

•In July 2025, the Company publicly unveiled the FX Super One at a global launch event in Los Angeles. The event, which followed a private preview and broad media coverage, showcased the new F.A.C.E. (Futuristic Aesthetic Connected Exterior) LED grille and the FF Super EAI (Extended AI) ecosystem. The Company has secured over 10,000 binding deposit commitments to date, reinforcing brand visibility and building momentum as it prepares to transition into production.

Previous wording

Stock Exchange Compliance & Stockholder and Corporate Actions

Current wording

EV - Stock Exchange Compliance & Stockholder and Corporate Actions

Previous wording

•In May 2025, the Company announced that Global Co-CEO YT Jia and President Jerry Wang each adopted SEC Rule 10b5-1 stock purchase plans, with trades expected to begin in August 2025; Mr. Jia plans to purchase $560,000 and Mr. Wang plans to purchase $50,000 of Class A Common Stock, with both executives committing not to amend or terminate their plans once effective.

Current wording

•In May 2025, the Company announced that Global Co-CEO YT Jia and President Jerry Wang each adopted SEC Rule 10b5-1 stock purchase plans, with trades expected to begin in August 2025; Mr. Jia plans to purchase $560,000 and Mr. Wang plans to purchase $50,000 of Class A Common Stock, with both executives committing not to amend or terminate their plans once effective. Mr. Jia completed the purchase of $560,000 worth of Class A common stock shares during the quarter ended September 30, 2025. Before the plan was cancelled by the broker, Mr. Wang purchased 10,600 shares of the Company’s Class A common stock under this trading plan.

Previous wording

•In June 2025, Mr. Koti Meka, Chief Financial Officer, adopted a Rule 10b5‑1 trading plan on June 12, 2025, providing for the purchase of up to $20,000 of the Company’s Class A common stock.

Current wording

•In June 2025, Mr. Koti Meka, Chief Financial Officer, adopted a Rule 10b5‑1 trading plan on June 12, 2025, providing for the purchase of up to $20,000 of the Company’s Class A common stock. Before the plan was cancelled by the broker, Mr. Meka purchased no shares of the Company’s Class A common stock under this trading plan.

Previous 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.

Current wording

As of September 30, 2025, a significant portion of the Company’s direct materials were sourced from China, exposing the Company to elevated U.S. import tariffs on electric-vehicle components and related inputs. While cost of goods sold was not materially affected for the three and nine months ended September 30, 2025, due to limited production and use of existing inventory, management increased the inventory reserve by $10.6 million and $14.4 million, respectively, including a component for anticipated tariffs. As production scales or if tariff rates broaden or rise, tariff-driven input costs could materially impact unit economics and may necessitate pricing, sourcing, or additional reserve actions.

Previous 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).

Current wording

We have three operating segments—AI Electric Vehicle (“AIEV”), Life Sciences, and Crypto —but only our AIEV segment meets the criteria for separate reporting under ASC 280. 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 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.

Previous wording

Management has identified Loss from operations, as presented in the Company's Unaudited Condensed Consolidated Statements of Operations and Comprehensive Loss, as the primary measure used by the CODMs to evaluate the performance of the business and allocate resources. This measure is critical for a going concern that must carefully manage its cash outflows, particularly given that the timing of its cash inflows is influenced by external investor decisions. We define “significant segment expense” as controllable operating costs that are regularly provided to and reviewed by management, which include the expenses presented in the Unaudited Condensed Consolidated Statements of Operations and Comprehensive Loss as Cost of revenue, Research and development, Sales and marketing, and General and administrative.

Current wording

Management has identified Loss from operations, as presented in the Company's Unaudited Condensed Consolidated Statements of Operations and Comprehensive Loss, as the primary measure used by the CODM to evaluate the performance of the business and allocate resources. This measure is critical for a going concern that must carefully manage its cash outflows, particularly given that the timing of its cash inflows is influenced by external investor decisions. We define “significant segment expense” as controllable operating costs that are regularly provided to and reviewed by management, which include the expenses presented in the Unaudited Condensed Consolidated Statements of Operations and Comprehensive Loss as Cost of revenue, Research and development, Sales and marketing, and General and administrative.

Previous wording

Management closely tracks its expenditure on these key expense categories through regular reviews of cash balances, near‑term cash flow projections, monthly management reports, and project management reports. The CODMs, work in close collaboration with our business leaders to establish critical operational targets, set project timelines, and adjust spending plans. These leaders are responsible for implementing its strategic plans and revising targets and deadlines based on continuous internal communications and review meetings, thereby ensuring that any deviations from target spending or project timelines are promptly addressed. This rigorous oversight supports our strategic objectives to focus business activities on production, sales, and leasing of its FF 91 vehicles, and the planned launch of the FX Series vehicles.

Current wording

Management closely tracks its expenditure on these key expense categories through regular reviews of cash balances, near‑term cash flow projections, monthly management reports, and project management reports. The CODM, work in close collaboration with our business leaders to establish critical operational targets, set project timelines, and adjust spending plans. These leaders are responsible for implementing its strategic plans and revising targets and deadlines based on continuous internal communications and review meetings, thereby ensuring that any deviations from target spending or project timelines are promptly addressed. This rigorous oversight supports our strategic objectives to focus business activities on production, sales, and leasing of its FF 91 vehicles, and the planned launch of the FX Series vehicles.

Previous 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.

Current wording

Through September 30, 2025, we have sold eight 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 sold one vehicle during the six months ended June 30, 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 two vehicle during the nine months ended September 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 and six months ended June 30, 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 nine months ended September 30, 2025.

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 $3.2 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.

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 $4.1 million and $3.0 million as of September 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

As of June 30, 2025, the Company had received approximately 4,000 non-binding, non-refundable B2B pre-orders and 292 B2C non-binding refundable reservations, totaling 4,292 reserved vehicles. By comparison, as of December 31, 2024, the Company had received 299 B2C reservations. The increase in total reservations was primarily driven by the launch of the FX SuperOne vehicle and the expansion of co-creator and reservation programs designed to drive early engagement and demand. The co-creator program leverages early supporters, channel partners, and social media influencers to generate awareness, promote product visibility, and build community participation around the brand and its new product offerings with a particular focus on driving B2C orders.

Current wording

As of September 30, 2025, the Company had received approximately 9,900 non-binding, non-refundable B2B pre-orders and 515 B2C non-binding refundable reservations, totaling 10,415 reserved vehicles. By comparison, as of December 31, 2024, the Company had received 299 B2C reservations. The increase in total reservations was primarily driven by the launch of the FX Super One vehicle and the expansion of co-creator and reservation programs designed to drive early engagement and demand. The co-creator program leverages early supporters, channel partners, and social media influencers to generate awareness, promote product visibility, and build community participation around the brand and its new product offerings with a particular focus on driving B2C orders.

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 $0.3 million as of June 30, 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 insignificant as of September 30, 2025 and December 31, 2024.

Previous wording

Research and development activities represent a significant part of our business. Our R&D efforts focus on the design and development of our electric vehicles and continuing to prepare our prototype electric vehicles to exceed industry standards for compliance, innovation, and performance. R&D expenses consist of personnel-related costs (including salaries, bonuses, benefits, and stock-based compensation) for our employees focused on R&D activities, other related costs, depreciation, R&D services provided by co-creators, and an allocation of overhead. We expect R&D expenses to decrease in the near future as we substantially have completed R&D activities related to the FF 91, offset by increases in R&D expenses related to FX Series vehicles.

Current wording

Research and development activities represent a significant part of our business. Our R&D efforts focus on the design and development of our electric vehicles and continuing to prepare our prototype electric vehicles to exceed industry standards for compliance, innovation, and performance. R&D expenses consist of personnel-related costs (including salaries, bonuses, benefits, and stock-based compensation) for our employees focused on R&D activities, other related costs, depreciation, R&D services provided by co-creators, and an allocation of overhead. While we have we substantially have completed R&D activities related to the FF 91, we expect R&D expenses to increase in the near future as we increases in R&D expenses related to FF 92 and FX Series vehicles.

Previous wording

Sales and marketing expenses consist primarily of personnel-related costs (including salaries, bonuses, benefits, and stock-based compensation) for our employees focused on sales and marketing, costs associated with sales and marketing activities, marketing services provided by co-creators, and an allocation of overhead. Marketing activities are those related to introducing our brand, our electric vehicles, and our electric vehicle prototypes to the market. We expect Sales and marketing expenses to continue to increase as we bring our electric vehicles to market and seek to generate additional sales.

Current wording

Sales and marketing expenses consist primarily of personnel-related costs (including salaries, bonuses, benefits, and stock-based compensation) for our employees focused on sales and marketing, costs associated with sales and marketing activities, marketing services provided by co-creators, and an allocation of overhead. Marketing activities are those related to introducing our brand, our electric vehicles, and our electric vehicle prototypes to the market. We expect Sales and marketing expenses to continue to increase as we bring our electric vehicles (in particular, FX Super One and FF 92) to market and seek to generate additional sales.

Previous 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.

Current wording

Loss 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 (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.

Current 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. In addition, this line item includes realized and unrealized gains or losses related to digital asset transactions, including amounts earned or impaired from crypto digital asset disposals, and any staking income. While such activity is currently immaterial, we expect to execute our crypto-related strategy through AIXC following the completion of AIXC’s shareholder meeting and once we have established majority control of its board of directors. At that point, to the extent crypto operations generate revenue and meet the recognition criteria under ASC 606, such revenue will be reflected in our consolidated results. If crypto operations subsequently meet the quantitative thresholds under ASC 280, they may be evaluated for separate segment disclosure in future periods.

Previous wording

R&D expense increased by $1.7 million for the three months ended June 30, 2025, compared to the same period in 2024. The increase was primarily driven by a $2.8 million increase in salary and headcount costs, as well as a $0.4 million increase in technology infrastructure to support product development and collaboration tools. These increases were partially offset by a $1.9 million reduction in other R&D-related IT costs as part of cost management initiatives.

Current wording

R&D expense increased by $1.5 million for the three months ended September 30, 2025, compared to the same period in 2024. The increase was primarily driven by a $3.3 million rise in operating consumables and equipment rental, including costs related to prototype parts, vehicle purchases for testing, and equipment and services supporting the development of the FX vehicle platform. These increases were partially offset by a $1.0 million reduction in wages, benefits, and related personnel costs, as well as a $0.6 million decrease in other R&D-related IT expenses.

Previous 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.

Current wording

Sales and marketing expense increased by $4.0 million for the nine months ended September 30, 2025, compared to the same period in 2024. The increase was primarily driven by a $4.6 million rise in marketing expenses related to the launch and promotion of the FX Super One, including digital campaigns, content development, influencer engagement, and event activations primarily led by the U.S. team. Additional costs were incurred from expanded marketing activities in the Middle East to support brand visibility in international markets. Compensation costs increased by $0.9 million, reflecting selective additions to sales and marketing personnel and other related payroll costs. These increases were partially offset by a $1.4 million decrease in rent and related expense.

Previous wording

During the three months ended June 30, 2024, we recorded a $7.6 million impairment loss related to lease right-of-use (“ROU”) assets. This loss was associated with our decision to exit a leased store facility, a research facility, and an administrative office in China. These actions were part of broader efforts to negotiate early lease terminations with landlords and streamline our global footprint.

Current wording

During the three months ended September 30, 2024, we recorded a $0.1 million impairment loss related to lease right-of-use (“ROU”) assets. This loss was associated with our decision to exit a leased store facility, a research facility, and an administrative office in China. These actions were part of broader efforts to negotiate early lease terminations with landlords and streamline our global footprint.

Previous wording

During the six months ended June 30, 2024, we recorded a $7.6 million impairment loss related to lease right-of-use (“ROU”) assets. This loss resulted from moving out of a leased store facility, a leased research facility, and an administrative facility in China, as we worked with landlords to negotiate the related lease terminations.

Current wording

During the nine months ended September 30, 2024, we recorded a$7.7 million impairment loss related to lease right-of-use (“ROU”) assets. This loss resulted from moving out of a leased store facility, a leased research facility, and an administrative facility in China, as we worked with landlords to negotiate the related lease terminations.

Previous 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.

Current wording

Loss on disposal of property, plant, and equipment increased by approximately $1.2 million for the three months ended September 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

Loss (gain) from disposal of property, plant and equipment (6-Month Overview)

Current wording

Loss (gain) from disposal of property, plant and equipment (9-Month Overview)

Previous wording

Loss (gain) on disposal of property, plant, and equipment increased by approximately $0.3 million for the six 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.

Current wording

Loss on disposal of property, plant, and equipment increased by approximately $0.8 million for the nine months ended September 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 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.

Current wording

During the three months ended September 30, 2025 we recognized an aggregate day-one loss of $24.4 million related to the initial measurement of SPA Portfolio Notes, Warrants and Incremental Warrants as compared to $9.7 million during the same period in 2024. The 2025 day-one loss was offset by gain from subsequent fair value remeasurement of $58.8 million and $18.8 million, respectively. The downward re-measurement was primarily driven by decreases in the Company’s stock price at the end of the period compared to preceding three month. The increase in gains from re-measurement in the total monetary impact was attributable to the following factors. During the three months ended September 30, 2025 we recognized a $26.5 million gain from the change in fair value of the Incremental Warrants. Comparable instrument outstanding during the three months ended September 30, 2024 were assigned a fair value of zero, as their terms and market conditions resulted in no economic value being attributed to them as of the measurement date. During the three months ended September 30, 2025 we recognized a $14.2 million gain from the change in fair value of the SPA Portfolio warrants compared to a $3.9 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 September 30, 2025 there were 54,718,369 SPA Portfolio liability classified third party warrants outstanding compared to 5,931,638 outstanding as of September 30, 2024.

Previous wording

During the six months ended June 30, 2025 we recognized an aggregate day-one loss of $36.1 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. This loss was offset by a $43.7 million net gain from subsequent remeasurement. Our outstanding notes and warrants were remeasured at predominantly lower fair values due to pricing inputs that use the market price of our Common Stock, which experienced a decline during the period. The fair value of the SPA Portfolio Notes and associated warrants is influenced by the relationship between the Company’s stock price and the applicable conversion or exercise prices. As of June 30, 2025, the stock price was $1.68, compared to a weighted average conversion price of $1.225 for the SPA Portfolio Notes and warrant exercise prices ranging from $1.16 to $1.464. While these instruments remained in-the-money, the narrowing spread relative to December 31, 2024—when the stock price was $2.43 — reduced their intrinsic value. This decline in intrinsic value contributed to the decrease in fair value and the resulting net gains recognized during the period. Specifically, during the six months ended June 30, 2025 we recognized a $23.6 million net gain from the change in fair value of the Incremental Warrants. There was no comparable instrument outstanding during the six months ended June 30, 2024. During the six months ended June 30, 2025 we recognized a $7.1 million net gain from the change in fair value of the SPA Portfolio Note warrants compared to a zero net 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 June 30, 2025 there were 52,596,811 SPA Portfolio third party warrants outstanding compared to 13,355 outstanding as of June 30, 2024.

Current wording

During the nine months ended September 30, 2025 we recognized an aggregate day-one loss of $60.5 million related to the initial measurement of SPA Portfolio Notes, Warrants and Incremental Warrants, as compared to $8.9 million during the same period in 2024. This loss was offset by a net gain from subsequent remeasurement of $102.5 million and $39.7 million, respectively. Our outstanding notes and warrants were remeasured at predominantly lower fair values due to pricing inputs that use the market price of our Common Stock, which experienced a decline during the period. The fair value of the SPA Portfolio Notes and associated warrants is influenced by the relationship between the Company’s stock price and the applicable conversion or exercise prices. As of September 30,, the stock price was $1.30, compared to a weighted average conversion price of $1.66 for the SPA Portfolio Notes and warrant exercise prices ranging from $1.16 to $2.02. While some instruments remained in-the-money, the narrowing spread relative to December 31, 2024 — when the stock price was $2.43 — reduced their intrinsic value. This decline in intrinsic value contributed to the decrease in fair value and the resulting net gains recognized during the period. Specifically, during the nine months ended September 30, 2025 we recognized a $50.1 million net gain from the change in fair value of the Incremental Warrants. There was no comparable instrument outstanding during the nine months ended September 30, 2024. During the nine months ended September 30, 2025 we recognized a $21.3 million net gain from the change in fair value of the third party SPA Portfolio Note warrants compared to a $3.9 million net 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 September 30, 2025 there were 54,718,369 SPA Portfolio third party warrants outstanding compared to 5,931,638 outstanding as of September 30, 2024.

Previous 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.

Current wording

The gain from Change in fair value of related party notes payable, warrant liabilities, and derivative call options increased by $1.5 million for the three months ended September 30, 2025, when compared with the same period in 2024. The increase was primarily driven by a higher volume of related party instruments outstanding during the 2025 period. During the nine months ended September 30, 2025, we issued to a related party 2025 March Unsecured SPA Notes and associated common stock warrants and Incremental Warrants. As of September 30, 2025, all of the common stock warrants and Incremental Warrants remained outstanding. The fair value of our related party instruments decreased during the period ended September 30, 2025, primarily due to a decrease in our Class A Common Stock price over the quarter. This resulted in recognized gains of approximately $1.0 million related to the common stock warrants and approximately $1.1 million, related to the Incremental Warrants.

Previous wording

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

Current wording

There was no significant related party debt or warrant instruments outstanding or activity during the three months ended September 30, 2024.

Previous wording

The Change in fair value of related party notes payable, warrant liabilities, and derivative call options increased by $5.1 million for the six 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 issuance of related party 2025 March Unsecured SPA Notes and associated instruments. We issued $4.6 million of related party SPA Portfolio Notes during the six months ended June 30, 2025. Upon issuance the Company recognized a day-one loss of $3.4 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 $1.8 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 33% in our Class A Common Stock price over the period since the first issuance of 2025 March Unsecured SPA Notes to related parties in March 2025.

Current wording

The Change in fair value of related party notes payable, warrant liabilities, and derivative call options increased by $3.6 million for the nine months ended September 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 issuance of related party 2025 March Unsecured SPA Notes and associated instruments. We issued$4.7 million of related party SPA Portfolio Notes during the nine months ended September 30, 2025. Upon issuance the Company recognized a day-one loss of $3.6 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 offset by net $0.5 million gain from the remeasurement of related party notes payable, related party warrant liabilities, and related party Incremental Warrants as of September 30, 2025. The fair value of our related party instruments decreased during the period ended September 30, 2025, primarily due to a decrease in our Class A Common Stock price over the period since the first issuance of 2025 March Unsecured SPA Notes to related parties in March 2025.

Previous wording

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

Current wording

There was no significant related party debt activity during the nine months ended September 30, 2024.

Previous wording

During the six months ended June 30, 2025 a related party converted various notes with an aggregate principal of $3.6 million in exchange for 3,370,561.00 shares of our Class A Common Stock. We recognized a $3.0 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.

Current wording

During the nine months ended September 30, 2025 a related party converted various notes with an aggregate principal of $3.6 million in exchange for 3,370,561.00 shares of our Class A Common Stock. We recognized a $3.0 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.

Previous wording

During the six months ended June 30, 2024 we 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”), as discussed in Note 8, Related Party Transactions in the notes to the Unaudited Condensed Consolidated Financial Statements. There was no breach of our agreement with Chongqing during the six months ended June 30, 2025 and 2024.

Current wording

During the nine months ended September 30, 2024 we 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”), as discussed in Note 9, Related Party Transactions in the notes to the Unaudited Condensed Consolidated Financial Statements. There was no breach of our agreement with Chongqing during the nine months ended September 30, 2025 and 2024.