What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2024-08-14 compared with 2024-07-30 · 440 added, 275 removed, 1008 unchanged (41% of the section changed)

3 unchanged sentences

(in thousands, except share and per share data)

March 31, 2024

June 30, 2024

(Unaudited) December 31, 2023

3 unchanged sentences

Accounts receivable — 7

Inventory 29,425 34,229

Inventory, net 28,745 34,229

Deposits 27,134 31,382

4 unchanged sentences

Operating lease right-of-use assets.

net 6,849 16,486

Other non-current assets 3,921 4,877

23 unchanged sentences

443,625,000 and 49,291,667 shares authorized;

159,390,384 and 42,433,025 shares issued and outstanding as of March 31, 2024 and December 31, 2023, respectively

441,264,626 and 42,433,025 shares issued and outstanding as of June 30, 2024 and December 31, 2023, respectively

Class B Common Stock, $ 0.0001 par value;

19,687,500 and 2,187,500 shares authorized;

266,670 shares issued and outstanding as of March 31, 2024 and December 31, 2023, respectively

Preferred Stock, $ 0.0001 par value, 10,000,000 shares authorized, zero share issued and outstanding as of March 31, 2024 and December 31, 2023

266,670 shares issued and outstanding as of June 30, 2024 and December 31, 2023, respectively

Preferred Stock, $ 0.0001 par value, 10,000,000 shares authorized, 1 and zero shares issued and outstanding as of June 30, 2024 and December 31, 2023

Additional paid-in capital 4,257,313 4,180,869

7 unchanged sentences

Faraday Future Intelligent Electric Inc.

Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited)

Unaudited Condensed Consolidated Statements of Operations and Comprehensive Loss

(in thousands, except share and per share data)

Three Months Ended

(As Restated)

June 30, Six Months Ended

2024 2023 2024 2023

Revenue $ 293 $ — $ 295 $ —

5 unchanged sentences

General and administrative 17,201 17,062 31,049 43,575

Lease impairment loss 7,616 — 7,616 —

(Gain)/Loss on disposal on property, plant and equipment 16 — ( 71 ) 3,698

24 unchanged sentences

Faraday Future Intelligent Electric Inc.

Condensed Consolidated Statements of Stockholders’ Equity (Unaudited)

Unaudited Condensed Consolidated Statements of Stockholders’ Equity

(in thousands, except share data)

1 unchanged sentence

Capital Accumulated

Comprehensive

Income Accumulated Deficit Total Stockholders’ Equity

Class A Class B

Shares Amount Shares Amount

Balance as of March 31, 2024

159,390,384 $ 16 266,670 $ — $ 4,202,125 $ 6,094 $ ( 4,006,716 ) $ 201,519

Conversion of notes payable and accrued interest into Class A Common Stock (Note 7) 281,874,242 28 — — 55,071 — — 55,099

Stock-based compensation — — — — 117 — — 117

Foreign currency translation adjustment — — — — — 632 — 632

Net loss — — — — — — ( 108,685 ) ( 108,685 )

Balance as of June 30, 2024

441,264,626 $ 44 266,670 $ — $ 4,257,313 $ 6,726 $ ( 4,115,401 ) $ 148,682

See accompanying notes to Unaudited Condensed Consolidated Financial Statements.

Faraday Future Intelligent Electric Inc.

Unaudited Condensed Consolidated Statements of Stockholders’ Equity (Continued)

(in thousands, except share data)

Common Stock Additional

Capital Accumulated

Comprehensive Income Accumulated Deficit Total Stockholders’ Equity

8 unchanged sentences

Net loss — — — — — — ( 156,902 ) ( 156,902 )

Balance as of June 30, 2024

441,264,626 $ 44 266,670 $ — $ 4,257,313 $ 6,726 $ ( 4,115,401 ) $ 148,682

The accompanying notes are an integral part of these Unaudited Condensed Consolidated Financial Statements.

Faraday Future Intelligent Electric Inc.

Unaudited Condensed Consolidated Statements of Stockholders’ Equity (Continued)

(in thousands, except share data)

Common Stock Additional

Capital Accumulated

Comprehensive

Income Accumulated Deficit Total Stockholders’ Equity

Class A Class B

Shares Amount Shares Amount

Balance as of March 31, 2023

3,495,303 $ — 266,670 $ — $ 3,924,555 $ 2,950 $ ( 3,671,728 ) $ 255,777

Conversion of notes payable and accrued interest into Class A Common Stock (Note 7) 2,431,875 — — — 144,928 — — 144,928

Reclassification of earnout shares from equity to liability on April 21, 2023 due to insufficient authorized shares (Note 11) — — — — ( 2,112 ) — — ( 2,112 )

Reclassification of stock-based awards from equity to liability on April 21, 2023 due to insufficient authorized shares (Note 11) — — — — ( 2,979 ) — — ( 2,979 )

Stock-based compensation — — — — 993 — — 993

Issuance of shares for RSU vesting net of tax withholdings 6,154 — — — — — — —

Cancellations ( 1,031 ) — — — ( 101 ) — — ( 101 )

Foreign currency translation adjustment — — — — — 6,122 — 6,122

Net loss — — — — — — ( 124,928 ) ( 124,928 )

Balance as of June 30, 2023

5,932,301 $ — 266,670 $ — $ 4,065,284 $ 9,072 $ ( 3,796,656 ) $ 277,700

The accompanying notes are an integral part of these Unaudited Condensed Consolidated Financial Statements.

Faraday Future Intelligent Electric Inc.

Condensed Consolidated Statements of Stockholders’ Equity (Unaudited) (Continued)

Unaudited Condensed Consolidated Statements of Stockholders’ Equity (Continued)

(in thousands, except share data)

10 unchanged sentences

Reclassification of February 28, 2023 stock-based awards liability to equity due to authorized share increase (Note 11) — — — — 8,978 — — 8,978

Reclassification of earnout shares from equity to liability on April 21, 2023 due to insufficient authorized shares (Note 11) — — — — ( 2,112 ) — — ( 2,112 )

Reclassification of stock-based awards from equity to liability on April 21, 2023 due to insufficient authorized shares (Note 11) — — — — ( 2,979 ) — — ( 2,979 )

Stock-based compensation — — — — 4,624 — — 4,624

4 unchanged sentences

Net loss — — — — — ( 269,901 ) ( 269,901 )

Balance as of March 31, 2023 (as restated)

Balance as of June 30, 2023

5,932,301 $ — 266,670 $ — $ 4,065,284 $ 9,072 $ ( 3,796,656 ) $ 277,700

1 unchanged sentence

Faraday Future Intelligent Electric Inc.

Condensed Consolidated Statements of Cash Flows (Unaudited)

Unaudited Condensed Consolidated Statements of Cash Flows

(in thousands)

Three Months Ended March 31,

(As Restated)

Six Months Ended June 30,

Cash flows from operating activities

3 unchanged sentences

Stock-based compensation 658 9,272

Lease impairment loss 7,616 —

(Gain) loss on disposal of property, plant and equipment ( 71 ) 3,698

4 unchanged sentences

Loss on foreign exchange 287 164

Gain on forgiveness of accounts payable and deposits, net ( 518 ) —

(Gain) Loss on forgiveness of accounts payable and deposits, net ( 518 ) 135

Non-cash interest expense 1,282 —

9 unchanged sentences

Operating lease liabilities ( 2,081 ) ( 1,097 )

Accrued interest expense 5,114 ( 197 )

Accrued related party interest expense 5,114 ( 127 )

Net cash used in operating activities ( 29,091 ) ( 160,708 )

9 unchanged sentences

Settlement of notes payable transaction costs ( 189 ) ( 1,834 )

Settlement of related party notes payable transaction costs — ( 355 )

Payments of finance lease obligations — ( 673 )

6 unchanged sentences

Faraday Future Intelligent Electric Inc.

Condensed Consolidated Statements of Cash Flows (Unaudited) (Continued)

Unaudited Condensed Consolidated Statements of Cash Flows (Continued)

(in thousands)

The following table provides a reconciliation of cash and restricted cash reported within the Unaudited Condensed Consolidated Balance Sheets that aggregate to the total of the same such amounts shown in the Unaudited Condensed Consolidated Statements of Cash Flows:

March 31, 2024 March 31, 2023

(As Restated)

June 30, 2024 June 30, 2023

Cash and restricted cash

2 unchanged sentences

Total cash and restricted cash $ 1,377 $ 19,396

Three Months Ended March 31,

(As Restated)

Six Months Ended June 30,

Supplemental disclosure of noncash investing and financing activities

Additions of property, plant and equipment included in accounts payable and accrued expenses $ 42,690 20,047

Conversion of notes payable, related party notes payable and accrued interest into Class A Common Stock 9,118 138,180

Reclassification of February 28, 2023 stock-based awards liability to equity due to authorized share increase — 8,978

Conversion of notes payable, related party notes payable and accrued interest into Class A Common Stock (as restated) 17,240 106,458

Issuance of SPA Warrants 10 30,348

Issuance of Secured SPA Notes pursuant to the Exchange Agreement — 16,500

Reduction in outstanding warrants pursuant to the Exchange Agreement — 16,506

Reclassification of liability for insufficient authorized shares related to stock options and RSUs — 8,979

Issuance of Secured SPA Notes pursuant to the Exchange Agreement — 16,500

Change in classification of warrants from Additional paid-in capital to liability pursuant to the Warrant Exchange — 6,811

Reclassification of earnout shares liability to equity as part of authorized share increase — 5,014

Reclassification of February 28, 2023 earnout shares liability to equity due to authorized share increase — 5,014

Reclassification of earnout shares from equity to liability on April 21, 2023 due to insufficient authorized shares — 2,112

Reclassification of stock-based awards from equity to liability on April 21, 2023 due to insufficient authorized shares — 2,979

Supplemental disclosure of cash flow information

Cash paid for interest 465 465

See accompanying notes to Unaudited Condensed Consolidated Financial Statements.

The accompanying notes are an integral part of these Unaudited Condensed Consolidated Financial Statements.

Faraday Future Intelligent Electric Inc.

18 unchanged sentences

Our annual reporting period is the calendar year.

The results of operations for the three months ended March 31, 2024 are not necessarily indicative of the results to be expected for the 2024 full year or any future periods.

Reclassification of Presentation in the Company’s Unaudited Condensed Consolidated Statements of Cash Flow

Certain reclassifications have been made to the prior period in the accompanying Unaudited Condensed Consolidated Financial Statements to conform with the current presentation.

Changes in Inventory is now separately presented under Changes in operating assets and liabilities within the Unaudited Condensed Consolidated Statement of Cash Flows instead of being combined with Other current and non-current assets.

The results of operations for the three and six months ended June 30, 2024 are not necessarily indicative of the results to be expected for the 2024 full year or any future periods.

Use of Estimates and Judgments

7 unchanged sentences

and (iv) valuation of warrants.

Such estimates often require the selection of appropriate valuation methodologies and financial models and may

Faraday Future Intelligent Electric Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

involve significant judgment in evaluating ranges of assumptions and financial inputs.

Such estimates often require the selection of appropriate valuation methodologies and financial models and may involve significant judgment in evaluating ranges of assumptions and financial inputs.

Actual results may differ from those estimates under different assumptions, financial inputs, or circumstances.

Given the global economic climate, estimates are subject to additional volatility.

As of the date of filing the Company’s Unaudited Condensed Consolidated Financial Statements on this Form 10-Q with the SEC for the period ended March 31, 2024, the Company is not aware of any specific event or circumstance that would require an update to its estimates or judgments or revisions to the carrying value of its assets or liabilities.

As of the date of filing the Company’s Unaudited Condensed Consolidated Financial Statements on this Form 10-Q with the SEC for the period ended June 30, 2024, the Company is not aware of any specific event or circumstance that would require an update to its estimates or judgments or

Faraday Future Intelligent Electric Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

revisions to the carrying value of its assets or liabilities.

However, these estimates and judgments may change as new events occur and additional information is obtained, which may result in changes being recognized in the Company’s Unaudited Condensed Consolidated Financial Statements in future periods.

8 unchanged sentences

• recognize revenue when or as the Company satisfies the performance obligation(s).

Revenue, which was primarily related to automotive leasing revenue, was less than $ 0.1 million for the three months ended March 31, 2024.

There were no sales, services and other revenue recognized for the three months ended March 31, 2023.

Revenue, which was primarily related to automotive sale revenue, was less than $ 0.3 million for the three and six months ended June 30, 2024.

Revenue from automotive leasing, services and other revenue recognized for the three and six months ended June 30, 2023, was immaterial.

Automotive Sales Revenue

10 unchanged sentences

The Company provides its customers with a residual value guarantee that may or may not be exercised in the future.

The impact of such residual value guarantees was immaterial to the Company’s Unaudited Condensed Consolidated Statements of Operations and Comprehensive Loss for the three months ended March 31, 2024.

Faraday Future Intelligent Electric Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

The impact of such residual value guarantees was immaterial to the Company’s Unaudited Condensed Consolidated Statements of Operations and Comprehensive Loss for the three and six months ended June 30, 2024.

Co-creation Arrangements

As part of the Company’s Futurist Product Officers (“FPO”) Co-Creation Delivery program that began in August 2023, the Company has entered into co-creation agreements with certain customers.

The arrangement leverages some of the Company’s sales and leasing customers to provide valuable driving data, insights, marketing and brand awareness of the FF 91 vehicle.

The arrangement leverages some of the Company’s sales and leasing customers to share vehicle feedback, driving data, ideas, and experiences with the Company’s engineers, social media posts and other promotions in exchange for specified fees.

For the services performed, the Company compensates the respective customers through a monthly consulting fee payment or a discount on their monthly lease payment.

Faraday Future Intelligent Electric Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

The consideration paid to these customers relate to marketing and R&D services that are distinct and could be purchased by the Company from a separate third party.

Management examined in detail the services provided by each respective customer in accordance with the co-creation agreement, established various data points, and rationally assigned a dollar amount that was deemed representative of the fair value of the services.

Co-creation payments that exceed the fair value of the distinct services performed by the customer are considered consideration paid to the customer and were treated as a reduction in revenue.

Co-creation fees recorded as a reduction to revenue and also within research and development (“R&D”) expenses in the Unaudited Condensed Consolidated Financial Statements were immaterial for the three months ended March 31, 2024.

Co-creation fees recorded as a reduction to revenue and also within research and development (“R&D”) expenses in the Unaudited Condensed Consolidated Financial Statements were less than $ 0.2 million and $ 0.4 million for the three and six months ended June 30, 2024, respectively.

The Company has entered into and may continue to enter into co-creator consulting agreements with its customers under which customers share feedback, driving data, ideas, and experiences with the Company’s engineers, social media posts and other promotions in exchange for specified fees.

6 unchanged sentences

The Company has outstanding leases under its vehicle operating leasing program in the United States.

Qualifying customers are permitted to lease a vehicle under for up to 36 months.

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 vehicle to the Company.

1 unchanged sentence

The Company records leasing revenues to automotive leasing revenue on a straight-line basis over the contractual term, and it records the depreciation of these vehicles to cost of automotive leasing revenue.

For the three months ended March 31, 2024, the Company recognized less than $ 0.1 million of revenue for this program.

As of March 31, 2024, deferred lease-related upfront payments that will be recognized on a straight-line basis over the contractual terms of the individual leases were immaterial.

For the three and six months ended June 30, 2024, the revenue recorded for this program was immaterial.

As of June 30, 2024, deferred lease-related upfront payments that will be recognized on a straight-line basis over the contractual terms of the individual leases were immaterial.

The Company’s policy is to exclude taxes collected from a customer from the transaction price of automotive contracts.

5 unchanged sentences

If collectability of lease payments is not probable at commencement, the Company recognizes the lease payments as deposit liability on the Company’s Consolidated Balance Sheet and does not derecognize the leased vehicle until such point that collectability of lease payments becomes probable.

For the three months ended March 31, 2024, there was no revenue recognized under this program.

For the three and six months ended June 30, 2024 and 2023, there was no revenue recognized under this program.

Customer Deposits and Deferred Revenue

1 unchanged sentence

Refundable deposits, for vehicle reservations and services, received from customers prior to an executed vehicle purchase agreement are recorded as customer deposits within Accrued expenses and other current liabilities on the Company’s Consolidated Balance Sheet.

Faraday Future Intelligent Electric Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

Customer deposits were $ 3.2 million as of March 31, 2024 and December 31, 2023.

Customer deposits were $ 3.2 million each as of June 30, 2024 and December 31, 2023.

When vehicle purchase agreements are executed, the consideration for the vehicle and any accompanying products and services must be paid in advance prior to the transfer of products or services by the Company.

Such advance payments are considered non-refundable, and the Company defers revenue related to any products or services that are not yet transferred.

Faraday Future Intelligent Electric Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

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 w as immaterial a s of March 31, 2024 and December 31, 2023.

Deferred revenue related to products and services w as immaterial a s of June 30, 2024 and December 31, 2023.

The Company provides a manufacturer’s warranty on all vehicles sold.

4 unchanged sentences

As the Company continues to manufacture and sell more vehicles, it will reassess and evaluate its warranty claims for purposes of its warranty accrual.

(in thousands) Three Months Ended March 31, 2024

(in thousands) Six Months Ended June 30, 2024

Accrued warranty- beginning of period $ 684

8 unchanged sentences

Cost of services and other revenue also includes direct parts and material.

There were no automotive sales and as such, no related cost of revenue for the three months ended March 31, 2024 and 2023.

Automotive Leasing Program

25 unchanged sentences

Assets classified as held for sale are also assessed for impairment and such amounts are determined at the lower of the carrying amount or fair value, less costs to sell the asset.

No impairment charges were recorded during the three months ended March 31, 2024 and 2023.

See Note 5, Property, Plant and Equipment, Net for a discussion of disposals of CIP during the three months ended March 31, 2024 and 2023.

An impairment charge was taken during the second quarter of 2024 related to the Company’s right-of-use assets.

See Note 9, Leases for more information.

Stock-Based Compensation

Effective January 1, 2023, stock-based compensation expense is reduced for forfeitures only when they occur.

This change of accounting policy resulted in the recognition of a cumulative increase of prior stock-based compensation expenses totaling $ 1.8 million, which was recorded in the Unaudited Condensed Consolidated Statement of Operations and Comprehensive Loss for the three months ended March 31, 2023.

There was no income tax provision impact on the unaudited Unaudited Condensed Consolidated Statements of Operations and Comprehensive Loss for the three months ended March 31, 2024 and 2023.

This change of accounting policy resulted in the recognition of a cumulative increase of prior stock-based compensation expenses totaling $ 1.8 million, which was recorded in the Unaudited Condensed Consolidated Statements of Operations and Comprehensive Loss for the six months ended June 30, 2023.

There was no income tax provision impact on the Unaudited Condensed Consolidated Statements of Operations and Comprehensive Loss for the three and six months ended June 30, 2024.

The income tax provision (benefit) recognized for the three and six months ended June 30, 2023 was immaterial.

The difference in the Company’s effective tax rate from the federal statutory rate of 21% is due to the ratio of domestic and international loss before taxes.

The Company records a full valuation allowance to reflect limited benefits for income taxes in jurisdictions that historically reported losses and a provision for income taxes in jurisdictions that are profitable.

The Company records a full valuation allowance to reflect limited benefits for income taxes in jurisdictions that historically reported losses and a provision for income

Faraday Future Intelligent Electric Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

taxes in jurisdictions that are profitable.

The income tax provision for each period was the combined calculated tax expenses/benefits for various jurisdictions.

1 unchanged sentence

federal government, the state of California and China.

The Company’s income tax returns are open to examination by the relevant tax authorities until the expiration of the

Faraday Future Intelligent Electric Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

applicable statute of limitations, which is generally three years after the filing of the tax return.

As of March 31, 2024, the Company is not under any tax audits on its income tax returns.

The Company’s income tax returns are open to examination by the relevant tax authorities until the expiration of the applicable statute of limitations, which is generally three years after the filing of the tax return.

As of June 30, 2024, the Company is not under any tax audits on its income tax returns.

All of the Company’s prior year tax returns, from 2017 through 2023, are open under Chinese tax law.

The company did not accrue any interest or penalties related to the Company's unrecognized tax benefits as of March 31, 2024 and 2023, as the uncertain tax benefits only reduced the net operating losses.

The Company does not expect the uncertain tax benefits to have material impact on its Unaudited Condensed Consolidated Financial Statements within the next twelve months.

The Company did not accrue any interest or penalties related to the Company's unrecognized tax benefits as of June 30, 2024 and 2023, as the uncertain tax benefits only reduced the net operating losses.

The Company does not expect the uncertain tax benefits to have a material impact on its Unaudited Condensed Consolidated Financial Statements within the next twelve months.

Reverse Stock Splits and Recasting of Per-Share Amounts

On August 22, 2023, the Board approved the implementation of a 1-for-80 reverse stock split (the “Reverse Stock Split”) of the Company’s Class A Common Stock, par value $ 0.0001 per share (the “Class A Common Stock”) and Class B Common Stock, Par Value $ 0.0001 per share (the “Class B Common Stock,” and together with the Class A Common Stock, the “Common Stock”) and set the number of authorized shares of Common Stock to 154,437,500 (which is 12,355,000,000 divided by 80).

The Reverse Stock Split was effected after market close on August 25, 2023, and shares of the Class A Common Stock and publicly traded warrants (the “Public Warrants”) began trading on a split-adjusted basis as of market open on August 28, 2023.

On August 22, 2023, the Company’s Board of Directors (the “Board”) approved the implementation of a 1-for-80 reverse stock split (the “August 2023 Reverse Stock Split”) of the Company’s Class A Common Stock, par value $ 0.0001 per share (the “Class A Common Stock”) and Class B Common Stock, par value $ 0.0001 per share (the “Class B Common Stock,” and together with the Class A Common Stock, the “Common Stock”) and set the number of authorized shares of Common Stock to 154,437,500 (which is 12,355,000,000 divided by 80).

The August 2023 Reverse Stock Split was effected after market close on August 25, 2023, and shares of the Class A Common Stock and publicly traded warrants (the “Public Warrants”) began trading on a split-adjusted basis as of market open on August 28, 2023.

As approved by the Company’s stockholders at a special meeting held on February 5, 2024, the Company filed an amendment to the Company’s Third Amended and Restated Certificate of Incorporation, as amended, with the office of the Secretary of State of the State of Delaware to effect an increase in the number of authorized shares of Common Stock from 154,437,500 to 1,389,937,500 .

On February 23, 2024, the Board approved the implementation of a 1-for-3 reverse stock split (the “Second Reverse Stock Split”) of the Common Stock and set the number of authorized shares of Common Stock to 463,312,500 (which is 1,389,937,500 divided by 3).

The Second Reverse Stock Split was effected after market close on February 29, 2024, and shares of the Class A Common Stock and the Public Warrants began trading on a split-adjusted basis as of market open on March 1, 2024.

All shares of Common Stock, Public Warrants, stock-based compensation awards, earnout shares and per share amounts contained in the Unaudited Condensed Consolidated Financial Statements and accompanying notes have been retroactively adjusted to reflect the Reverse Stock Split and Second Reverse Stock Split.

On February 23, 2024, the Board approved the implementation of a 1-for-3 reverse stock split (the “February 2024 Reverse Stock Split”) of the Common Stock and set the number of authorized shares of Common Stock to 463,312,500 (which is 1,389,937,500 divided by 3).

The February 2024 Reverse Stock Split was effected after market close on February 29, 2024, and shares of the Class A Common Stock and the Public Warrants began trading on a split-adjusted basis as of market open on March 1, 2024.

All shares of Common Stock, Public Warrants, stock-based compensation awards, earnout shares and per share amounts contained in the Unaudited Condensed Consolidated Financial Statements and accompanying notes have been retroactively adjusted to reflect the August 2023 Reverse Stock Split and February 2024 Reverse Stock Split (collectively, the “Splits”).

In addition, proportionate adjustments were made to the number of shares of Class A Common Stock issuable upon exercise or conversion of the Company’s outstanding convertible debt securities and warrants, as well as the applicable exercise or conversion prices.

See Note 10, Stockholders’ Equity , and Note 11, Stock-Based Compensation , for further discussion regarding the Reverse Stock Split and the second Reverse Stock Split.

See Note 11, Stockholders’ Equity , and Note 12, Stock-Based Compensation , for further discussion regarding the Splits.

Recent Accounting Pronouncements

8 unchanged sentences

The Company is in the process of evaluating the effect of ASU 2023-07 on its consolidated financial statements.

Faraday Future Intelligent Electric Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

In December 2023, the FASB issued ASU No.

4 unchanged sentences

The Company is in the process of evaluating the effect of ASU 2023-09 on its consolidated financial statements.

Faraday Future Intelligent Electric Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

Liquidity and Capital Resources and Going Concern

4 unchanged sentences

The Company has and will continue to devote substantial effort and, to the extent available, capital resources, to strategic planning, engineering, design, and development of its electric vehicle platform, development of vehicle models, finalizing the build out of the FF ieFactory California manufacturing facility, and capital raising.

The Company incurred cumulative losses from operations, negative cash flows from operating activities, and has an accumulated deficit of $ 4,006.7 million, an unrestricted cash balance of $ 0.4 million and a negative working capital position of $ 175.2 million, excluding restricted cash, as of March 31, 2024.

The Company incurred cumulative losses from operations, negative cash flows from operating activities, and has an accumulated deficit of $ 4,115.4 million, an unrestricted cash balance of $ 0.8 million and a negative working capital position of $ 198.7 million, excluding restricted cash, as of June 30, 2024.

During 2023, the Company delivered its first vehicles but expects to continue generating significant operating losses for the foreseeable future.

1 unchanged sentence

Pursuant to the Secured SPA, the Unsecured SPA, the Unsecured Streeterville SPA, the FFVV Joinder, and the Senyun Joinder (collectively the “SPA Commitments”) (see Note 7, Notes Payable and Note 8, Related Party Transactions ), the Company obtained commitments from several investors.

At March 31, 2024, the SPA Commitments totaled $ 554.5 million, of which $ 343.2 million was funded, $ 211.3 million remained to be funded, and $ 93.6 million in principal was outstanding.

At March 31, 2024, Optional Commitments under the SPA Commitments totaled $ 366.0 million, of which $ 40.6 million was funded, $ 325.4 million remained to be funded, and $ 3.0 million was outstanding.

The remaining amounts to be funded as of March 31, 2024, are subject to the achievement of delivery milestones, satisfaction of closing conditions, resolution of 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.

As of June 30, 2024, the SPA Commitments totaled $ 554.5 million, of which $ 343.2 million was funded, $ 211.3 million remained to be funded, and $ 78.6 million in principal was outstanding.

As of June 30, 2024, Optional Commitments under the SPA Commitments totaled $ 366.0 million, of which $ 47.2 million was funded, $ 318.8 million remained to be funded, and $ 9.2 million was outstanding.

The remaining amounts to be funded as of June 30, 2024, are subject to the achievement of delivery milestones, satisfaction of closing conditions, resolution of 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.

The Company may be unable to satisfy the closing conditions under the SPA Commitments or obtain additional incremental convertible senior secured note purchasers under the SPA Commitments or other debt or equity financing in a timely manner, on acceptable terms, or at all.

2 unchanged sentences

Under terms of the SEPA, the Company may, at its option, issue and sell from time to time up to $ 200.0 million (which can be increased up to $ 350.0 million in the aggregate under the Company’s option) of Class A Common Stock to an affiliate of Yorkville Advisors, subject to certain limitations.

As of March 31, 2024, the Company had the right to issue and sell up to an additional $ 192.5 million, or $ 342.5 million if the Company exercises its option under the SEPA, of Class A Common Stock under the SEPA.

As of June 30, 2024, the Company had the right to issue and sell up to an additional $ 192.5 million, or $ 342.5 million if the Company exercises its option under the SEPA, of Class A Common Stock under the SEPA.

In addition, on September 26, 2023, the Company entered into a sales agreement with Stifel, Nicolaus & Company, Incorporated, B.

1 unchanged sentence

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”).

The ATM Program has been the primary source of liquidity for the Company since September 2023.

Under applicable SEC rules and regulations, because FF failed to timely file its Form 10-K and this Form 10-Q, it is not S-3 eligible and cannot access the ATM Program.

The Company’s ability to issue and sell additional shares of common stock or warrants under the SEPA is constrained by the number of authorized shares of the Company’s common stock.

The Company must consider shares issuable under convertible debt, warrants or other obligations with equity rights.

In addition, equity issuances can potentially trigger provisions

The ATM Program had been the primary source of liquidity for the Company since September 2023.

Faraday Future Intelligent Electric Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

under the SPA Commitments that increase the number of shares to be issued upon conversion and reduce the strike price of related warrants.

applicable SEC rules and regulations, because FF failed to timely file its Form 10-K and the Quarterly Report Form 10-Q for the quarter ended March 31, 2024, it is not S-3 eligible and cannot access the ATM Program.

As such, our current primary source of liquidity is the issuance of various convertible note instruments.

The Company’s ability to issue and sell additional shares of common stock or warrants under the SEPA is constrained by the number of authorized shares of the Company’s common stock.

The Company must consider shares issuable under convertible debt, warrants or other obligations with equity rights.

In addition, equity issuances can potentially trigger provisions under the SPA Commitments that increase the number of shares to be issued upon conversion and reduce the strike price of related warrants.

This could result in FF having inadequate authorized shares to meet its outstanding commitments.

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Apart from the FF 91 series, substantial additional capital would be required to fund operations, research, development, and design efforts for future vehicles.

As of and since March 31, 2024, the Company was and has been in default on the SPA Commitments and the Company is presenting the related notes as current.

Since April 2023, the Company has been in default on, and since January 1, 2024, it has been in breach of, its debt agreement with Chongqing Leshi Small Loan Co., Ltd., a related party, with an outstanding principal balance of $ 7.6 million and interest payable of $ 17.4 million as of March 31, 2024.

(in thousands) March 31, 2024 December 31, 2023

As of and since June 30, 2024, the Company was and has been in default on the SPA Commitments and the Company is presenting the related notes as current.

Inventory, net

(in thousands) June 30, 2024 December 31, 2023

Raw materials (net of reserves) $ 28,730 $ 33,345

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Total inventory $ 28,745 $ 34,229

The inventory reserve was $ 2.8 million for each of the periods ended March 31, 2024 and December 31, 2023 .

The inventory reserve was $ 2.8 million for each of the periods ended June 30, 2024 and December 31, 2023 .

Faraday Future Intelligent Electric Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

Deposits and Other Current Assets

(in thousands)

March 31, 2024 December 31, 2023

June 30, 2024 December 31, 2023

Deposits for research and development, prototype parts and other $ 24,374 $ 28,609

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Total other current assets $ 12,815 $ 21,721

Faraday Future Intelligent Electric Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

Deposits for research and development, prototype and production parts, and other are recognized and reported as Research and development expenses in the Unaudited Condensed Consolidated Statement of Operations and Comprehensive Loss when services are provided or as prototype parts are received.

In addition, during the three months ended March 31, 2024, the Company made deposits for inventory and property, plant and equipment items, which are classified out of Deposits upon receipt of title.

Deposits for research and development, prototype and production parts, and other are recognized and reported as Research and development expenses in the Unaudited Condensed Consolidated Statements of Operations and Comprehensive Loss when services are provided or as prototype parts are received.

In addition, during the six months ended June 30, 2024, the Company made deposits for inventory and property, plant and equipment items, which are classified out of Deposits upon receipt of title.

Prepaid expenses primarily consist of software subscriptions and insurance, and Other current assets includes certain deferred expenses.

Other current assets also includes an insurance receivable relating to a legal settlement with a corresponding liability recognized in Accrued expenses and other current liabilities.

Property, Plant and Equipment, Net

(in thousands) March 31, 2024 December 31, 2023

(in thousands) June 30, 2024 December 31, 2023

Land, buildings and leasehold improvements $ 104,531 $ 103,522

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Total property, plant and equipment, net $ 377,047 $ 417,812

Depreciation and amortization expense totaled $ 17.8 million and $ 1.1 million for the three months ended March 31, 2024 and 2023, respectively.

Depreciation and amortization expense totaled $ 18.1 million and $ 13.2 million for the three months ended June 30, 2024 and 2023, respectively, and $ 35.8 million and $ 14.3 million for the six months ended June 30, 2024 and 2023, respectively.

FF announced the start of production of its first electric vehicle, the FF 91 Futurist, on March 29, 2023, at which point the Company classified a portion of its construction in process assets that are available for their intended use in the amount of $ 225.7 million and $ 75.7 million to Tooling, machinery and equipment and Buildings, respectively.

Due to the build out of the FF ieFactory California, the Company has an asset retirement obligation (“ARO”) totaling $ 0.7 million for each of the periods ended March 31, 2024 and December 31, 2023.

Due to the build out of the FF ieFactory California, the Company has an asset retirement obligation (“ARO”) totaling $ 0.7 million for each of the periods ended June 30, 2024 and December 31, 2023.

The ARO is recorded to Other liability, less current portion with a corresponding ARO asset within Land, buildings and leasehold improvements and Tooling, machinery and equipment.

The ARO asset is depreciated to operating expense over the remaining term of the lease through December 2027.

Faraday Future Intelligent Electric Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

Accrued Expenses and Other Current Liabilities

(in thousands) March 31, 2024 December 31, 2023

(in thousands) June 30, 2024 December 31, 2023

Accrued payroll and benefits $ 25,213 $ 28,037

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Total accrued expenses and other current liabilities $ 63,750 $ 62,391

Faraday Future Intelligent Electric Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

Notes Payable

The Company has entered into notes payable agreements with third parties, which consist of the following as of March 31, 2024 and December 31, 2023:

March 31, 2024

The Company has entered into notes payable agreements with third parties, which consist of the following as of June 30, 2024 and December 31, 2023:

June 30, 2024

(in thousands) Contractual

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The Secured SPA Notes were subsequently amended multiple times throughout 2022 and 2023, as further described below.

On May 8, 2023, as further described below, the Company entered into a securities purchase agreement (as amended from time to time, the “Unsecured SPA”) with Metaverse Horizon Limited (“MHL”) and V W Investment Holding Limited (“VW Investment”) (MHL and V W Investment, together with the other purchasers, the “Unsecured SPA Purchasers”) to issue and sell $ 100.0 million aggregate principal of the Company’s senior unsecured convertible notes (the “Unsecured SPA Notes” and, together with the Secured SPA Notes, the “SPA Notes”).

On May 8, 2023, as further described below, the Company entered into a securities purchase agreement (as amended from time to time, the “Unsecured SPA”) with Metaverse Horizon Limited (“MHL”) and V W Investment Holding Limited (“V W Investment”) (MHL and V W Investment, together with the other purchasers, the “Unsecured SPA Purchasers”) to issue and sell $ 100.0 million aggregate principal of the Company’s senior unsecured convertible notes (the “Unsecured SPA Notes” and, together with the Secured SPA Notes, the “SPA Notes”).

In August 2023, as further described below, the Company entered into the Unsecured Streeterville SPA (collectively included with the Unsecured SPA, Unsecured SPA Notes and SPA Warrants in future references), as part of its issuance of the Unsecured SPA Notes.

The terms of the Secured SPA Notes and Unsecured SPA Notes are generally the same, however, the Secured SPA Notes are secured by the grant of a second lien upon substantially all of the personal and real property of the Company and its subsidiaries, as well as guarantee by substantially all of the Company’s domestic subsidiaries.

The terms of the Secured SPA Notes and Unsecured SPA Notes are generally the same, however, the Secured SPA Notes are secured by the grant of a second lien upon substantially all of the personal and real property of the Company and its subsidiaries, as well as a guarantee by substantially all of the Company’s domestic subsidiaries.

The SPA Notes are generally subject to an original issue discount of 10 %, and are convertible, along with any interest accrued, into shares of Class A Common Stock at the conversion price (as defined in each SPA Note), subject to full ratchet anti-dilution price protection.

The principal balance of the SPA Notes is convertible at $ 0.73 per share as of each of March 31, 2024 and December 31, 2023, which represents an amended and reduced conversion price due to the full ratchet price protections, as described below.

The SPA Note conversion price equals $ 0.73 per share for SPA Notes that were issued prior to December 31, 2023, which represents an amended and reduced conversion price due to the full ratchet price protections, as described below and which excludes the impact of the Conversion Price adjustments pursuant to the Unanimous Written Consents, described below and which expired on June 30, 2024.

The SPA Notes bear interest at 10 % per annum (or 15 % if interest or settlement is paid in shares).

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Certain Unsecured and Secured SPA Notes require the payment of interest in cash or shares of Class A Common Stock at maturity.

Unless earlier paid, the SPA Notes entitle the purchasers, at each conversion date, to an interest make-whole (“Make-Whole Amount”), in a combination of cash or Class A Common Stock, at the Company’s discretion, in the amount of the interest that would have been payable if such converted amount was held to maturity.

The conversion price for the Make-Whole Amount is the generally the greater of (a) the floor price, which is $ 10.90 as of March 31, 2024 and December 31, 2023 or (b) 90 % of the lowest volume-weighted average price (“VWAP”) for the five consecutive trading days.

Certain Secured SPA Notes require the Interest Conversion Price to be the lesser of (1) the Conversion Price or (2) the greater of (a) the floor price, which is $ 10.90 as of December 31, 2023 or (b) 90 % of the lowest volume-weighted average price (“VWAP”) for the five consecutive trading days.

Unless earlier paid, the SPA Notes entitle the purchasers, at each conversion date, to an interest make-whole (a “Make-Whole Amount”), in a combination of cash or Class A Common Stock, at the Company’s discretion, in the amount of the interest that would have been payable if such converted amount was held to maturity.

The conversion price for the Make-Whole Amount is the generally the greater of (a) the floor price, which was $ 10.90 each as of June 30, 2024 and December 31, 2023 or (b) 90 % of the lowest volume-weighted average price (“VWAP”) for the five consecutive trading days ending immediately prior to the conversion date.

Certain Secured SPA Notes require the Interest Conversion Price to be the lesser of (1) the Conversion Price or (2) the greater of (a) the floor price, which was $ 10.90 as of December 31, 2023 or (b) 90 % of the lowest VWAP for the five consecutive trading days ending immediately prior to the conversion date.

When calculating the shares issuable upon conversion, the Make-Whole Amount shall be decreased by 50 % of the original issue discount pertaining to such amount.

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The Company elected the fair value option afforded by ASC 825, Financial Instruments , with respect to the SPA Notes because the notes include features, such as a contingently exercisable put option, that meet the definition of an embedded derivative.

The Company expenses transaction costs to Changes in fair value of notes payable and warrant liabilities or Changes in fair value of related party notes payable and warrant liabilities, as applicable, in the Unaudited Condensed Consolidated Statement of Operations and Comprehensive Loss.

Faraday Future Intelligent Electric Inc.

5 unchanged sentences

In accordance with ASC 470-50, Debt—Modifications and Extinguishments , the change in conversion price qualifies as an extinguishment because the change in the fair value of the conversion feature was substantial.

Accordingly, the Company recognized a Loss on settlement of notes payable in the Unaudited Condensed Consolidated Statements of Operations and Comprehensive Loss in the amount of $ 3.0 million for the three months ended March 31, 2023, calculated as the difference between the reacquisition price of the debt and the net carrying amount of the Secured SPA Notes.

Accordingly, the Company recognized a Loss on settlement of notes payable in the Unaudited Condensed Consolidated Statements of Operations and Comprehensive Loss in the amount of $ 3.0 million for the three months ended June 30, 2023, calculated as the difference between the reacquisition price of the debt and the net carrying amount of the Secured SPA Notes.

Pursuant to the Sixth Secured SPA Amendment, the Company entered into an agreement with certain Secured SPA Purchasers (the “Exchange Agreement”) holding a total of 825,542 warrants to exchange them for an aggregate 377,039 warrants and convertible notes (the “Exchange Notes”) with a principal balance totaling $ 41.0 million.

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The remainder of the terms of the Exchange Notes are largely congruent to the existing Secured SPA Notes, including most-favored nation rights.

In connection with the Exchange Agreement, equity-classified warrants were exchanged for warrants that qualify for liability classification per ASC 480, Distinguishing Liabilities from Equity , and were reclassified from equity to Warrant liabilities during the period ended March 31, 2023 in an amount totaling $ 6.8 million (the “Warrant Exchange”).

In connection with the Exchange Agreement, equity-classified warrants were exchanged for warrants that qualify for liability classification per ASC 480, Distinguishing Liabilities from Equity , and were reclassified from equity to Warrant liabilities during the period ended June 30, 2023 in an amount totaling $ 6.8 million (the “Warrant Exchange”).

As a result of the transaction, the Company did not recognize a gain or loss in the Unaudited Condensed Consolidated Statements of Operations and Comprehensive Loss, as the fair value of the instruments exchanged and received were approximately the same.

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As part of the Seventh Secured SPA Amendment, the Company agreed that the original issuance discount related to $ 25.0 million in principal amount of Tranche C Notes and Tranche B Notes would be 14 % and 16 %, respectively.

Eighth Amendment to the Secured SPA

On May 8 and 9, 2023, the Company entered into amendments to the Secured SPA (collectively, the “Eighth Secured SPA Amendment”) with certain Secured SPA Purchasers.

Pursuant to the Eighth Secured SPA Amendment, the parties agreed to amend the floor price of all outstanding Secured SPA Notes, including the Exchange Notes, from $ 50.40 to $ 24.00 and to change the exercise price of the remaining Secured SPA Notes and SPA Warrants from $ 252.00 to $ 214.20 .

In accordance with ASC 470-50, Debt— Modifications and Extinguishments , the change in conversion price qualified as an extinguishment because the change in the fair value of the conversion feature was substantial.

Accordingly, the Company recognized a Loss on settlement of notes payable in the Consolidated Statements of Operations and Comprehensive Loss three and six months ended June 30, 2023 in the amount of $ 11.4 million, calculated as the difference between the reacquisition price of the debt and the net carrying amount of the notes.

Faraday Future Intelligent Electric Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

Unsecured SPA

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The conversion price of interest is the greater of (a) the floor price, $ 24.00 at inception (as adjusted for stock splits, stock dividends, stock combinations, recapitalizations or other similar transactions occurring after the date hereof) and (b) 90 % of the lowest VWAP for the five consecutive trading days ending immediately prior to the conversion date.

Faraday Future Intelligent Electric Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

The Company elected the fair value option afforded by ASC 825, Financial Instruments , with respect to the Unsecured SPA Notes because the notes include features, such as a contingently exercisable put option, that meet the definition of an embedded derivative.

The Company expenses the transaction costs to Changes in fair value of notes payable and warrant liabilities in the Unaudited Condensed Consolidated Statement of Operations and Comprehensive Loss.

The Company expenses the transaction costs to Changes in fair value of notes payable and warrant liabilities in the Unaudited Condensed Consolidated Statements of Operations and Comprehensive Loss.

As part of the Unsecured SPA the Unsecured SPA Purchasers also received warrants consistent with the rights, terms and privileges of the warrants afforded to the holders of the Secured SPA Notes.

First Amendment to the Unsecured SPA

On June 26, 2023, the Company entered into an amendment to the Unsecured SPA (the “First Unsecured SPA Amendment”).

The First Unsecured SPA Amendment enabled the Unsecured SPA Purchasers to postpone or cancel any closing of their commitment to purchase the Unsecured SPA Notes if the Company has not issued a press release or other public announcement confirming that the second phase of the Company’s delivery plan has begun on or prior to August 31, 2023, within 15 calendar days of such date.

The First Unsecured SPA Amendment did not change the cash flows of the Unsecured SPA and is accounted for prospectively with no gain or loss recognized.

On August 9, 2023, the Company announced that it had completed the relevant processes and steps that are needed for the second phase of delivery to begin.

Joinder Agreements

On June 26, 2023, the Company entered into a Joinder and Amendment Agreement (the “FFVV Joinder”) with FF Vitality Ventures LLC (“FFVV”), pursuant to which FFVV agreed that FFVV would exercise its option to purchase $ 20.0 million of Secured SPA Tranche B Notes, subject to certain closing conditions, including the delivery of a warrant to purchase shares of Class A Common Stock equal to 33 % of FFSV’s conversion shares with an exercise price equal to $ 214.20 .

In addition, the parties agreed that if FFSV exercises its option to invest another $ 10.0 million of Tranche B Notes in accordance with the terms of the Secured SPA on or prior to the later of (x) August 1, 2023 or (y) four business days after the meeting of the Company’s stockholders for the required stockholder approval under the Unsecured SPA to increase the Company’s authorized shares of Common Stock, then the Company would subsequently amend the Unsecured SPA whereby FFVV would invest another $ 20.0 million in new unsecured notes subject to terms substantially identical to those provided in the Unsecured SPA.

Pursuant to the FFVV Joinder, FFVV agreed to purchase, Unsecured SPA Notes up to $ 40.0 million in eight installments.

The floor price of the FFVV Unsecured SPA Notes and for each of the notes issued to FFSV (or its affiliates) under the Secured SPA, shall be $ 12.00 (as adjusted for stock splits, stock dividends, stock combinations, recapitalizations or other similar transactions occurring thereafter).

The funding at each closing is subject to various closing conditions, including:

(a) an effective registration statement with respect to the shares of Common Stock issuable upon exercise of the warrants issuable under the Unsecured SPA and the shares of Common Stock issuable pursuant to the FFVV Unsecured SPA Notes and (b) the Company shall have reserved the Required Reserve Amount (as defined in the FFVV Joinder) in full.

In addition, FFVV has the option, for 12 months from June 25, 2023, to purchase Unsecured SPA Notes.

FFVV agreed, on behalf of its affiliates, that FFSV may exchange any Tranche B Notes for either (x) Tranche D Notes, and/or (y) any Unsecured SPA Notes.

The Company agreed to pay FFVV a one-time $ 0.3 million working fee and legal fees not to exceed $ 0.4 million, which shall be paid by netting the purchase price for any new notes with the amount of such fees.

Faraday Future Intelligent Electric Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

On June 26, 2023, Senyun executed a Second Joinder and Amendment Agreement (the “Senyun Joinder”), pursuant to which, Senyun agreed to exercise its option to purchase $ 15.0 million of Secured SPA Notes in accordance with the terms of the Secured SPA Notes.

If Senyun exercises its option to invest another $ 10.0 million of Secured SPA Notes in accordance with the terms of the Secured SPA Notes on or prior to the later of (x) August 1, 2023 or (y) four business days after the meeting of the Company’s stockholders for the Stockholder Approval (as defined below), then the Company agrees to subsequently amend the Unsecured SPA Notes whereby Senyun would invest another $ 20.0 million.

Senyun did not exercise this option.

Pursuant to the Senyun Joinder, Senyun agreed to purchase, under the Unsecured SPA Notes, unsecured notes in an aggregate principal amount of up to $ 30.0 million in eight installments.

The floor price for each note issued to Senyun (or its affiliates) under the SPA Notes, is $ 10.90 (as adjusted for stock splits, stock dividends, stock combinations, recapitalizations or other similar transactions occurring thereafter).

The Company agreed to pay Senyun a one-time $ 0.2 million working fee and legal fees not to exceed $ 0.3 million, which shall be paid by netting the purchase price for any new notes with the amount of such fees.

The FFVV and Senyun Joinders do not trigger any adjustment to the conversion or exercise price of the notes and warrants under the SPA Notes, and Senyun and FFSV waived any such rights to any adjustment to the conversion or exercise price in each of the Secured SPA and/or the Unsecured SPA, as applicable, and the related warrants.

Unsecured Securities Purchase Agreement – Streeterville

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Streeterville has the option, from time to time for 12 months after the date of the Unsecured Streeterville SPA, to purchase up to $ 7.5 million in aggregate (or $ 15.0 million in aggregate with the Company’s consent) in additional convertible senior unsecured notes and warrants on the same terms as the Streeterville Note and Streeterville Warrant.

Additionally, from the date of the Unsecured Streeterville SPA until the five-year anniversary of the date of the Unsecured Streeterville SPA, upon any issuance by the Company or any of its subsidiaries of Class A Common Stock or Class A Common Stock equivalents for cash consideration, indebtedness or a combination of units thereof (subject to certain exceptions set forth in the Unsecured Streeterville SPA) (each, a “Subsequent Financing”), if Streeterville owns at least $ 7.5 million principal amount of Streeterville Notes (when aggregated with any affiliates of Streeterville) shall have the right to participate in the Subsequent Financing, up to an amount such that Streeterville’s ownership of the Company remains the same immediately following such Subsequent Financing as its ownership immediately prior to such Subsequent Financing, pursuant to the procedures outlined in the Unsecured Streeterville SPA.

Additionally, from the date of the Unsecured Streeterville SPA until the five-year anniversary of the date of the Unsecured Streeterville SPA, upon any issuance by the Company or any of its subsidiaries of Class A Common Stock or Class A Common Stock equivalents for cash consideration, indebtedness or a combination of units thereof (subject to certain exceptions set forth in the Unsecured Streeterville SPA) (each, a “Subsequent Financing”), if Streeterville owns at least $ 7.5 million principal amount of Streeterville Notes (when aggregated with any affiliates of Streeterville), then Streeterville shall have the right to participate in the Subsequent Financing, for up to an amount such that Streeterville’s ownership of the Company remains the same immediately following such Subsequent Financing as its ownership immediately prior to such Subsequent Financing, pursuant to the procedures outlined in the Unsecured Streeterville SPA.

Pursuant to the Streeterville Note, the Company obtained stockholder approval, as required by the Nasdaq listing rules, with respect to the issuance of any shares of Class A Common Stock in excess of 19.99 % of the issued and outstanding shares of Class A Common Stock (the “Issuance Cap”), the Conversion Shares (as defined in the Streeterville Note), the Warrant Shares (as defined in the Unsecured Streeterville SPA), and subject to any applicable Nasdaq rules, any shares Common Stock issuable pursuant to the note and warrant issuable in connection with the reinvestment right set forth in the Unsecured Streeterville SPA in excess of the Issuance Cap.

Such stockholder approval was obtained at a special meeting of the Company’s stockholders held on February 5, 2024.

Faraday Future Intelligent Electric Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

Unanimous Written Consents

During the period ended June 30, 2024, the Company’s Board of Directors exercised its authority via written consents (the “Unanimous Written Consents”) to adjust the conversion price of the SPA Notes as it considered desirable.

The Board chose to reduce the principal conversion price from $ 0.73 to 105 % of the listed market price of the Company’s Common Stock at the close of the trading day on which a conversion notice is delivered.

The adjustments to the principal conversion price were temporary in nature and contractually concluded on June 30, 2024.

The Company accounted for the modification of the SPA Notes prospectively with no gain or loss recorded in the Unaudited Condensed Consolidated Statements of Operations and Comprehensive Loss.

The actions of the Board in the Unanimous Written Consents do not trigger any full ratchet anti-dilution price protection in the Company’s debt and equity securities.

Anti-dilution adjustments

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As a result, the fixed-price conversion price of the SPA Notes and exercise price of the SPA Warrants outstanding prior to such financings was reduced to a price equal to the price per share paid in the dilutive financings.

As of March 31, 2024 and December 31, 2023 the SPA Note conversion and SPA Warrant exercise price equals $ 0.73 for SPA Notes that were issued prior to December 31, 2023.

Generally, the Make-Whole Amount is calculated using the floor price, which is $ 10.90 as of March 31, 2024 and December 31, 2023.

Faraday Future Intelligent Electric Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

Excluding the impact of the Conversion Price adjustments pursuant to the Unanimous Written Consents, which expired on June 30, 2024, the SPA Note conversion and SPA Warrant exercise price equals $ 0.73 for SPA Notes that were issued prior to December 31, 2023.

Generally, the Make-Whole Amount is calculated using the floor price, which is $ 10.90 as of June 30, 2024 and December 31, 2023.

End of Period Secured and Unsecured SPA Information

During the three months ended March 31, 2024 the Company received cash proceeds, net of original issue discounts, of $ 1.5 million pursuant to the commitments included in the SPA Notes.

During the six months ended June 30, 2024 the Company received cash proceeds, net of original issue discounts, of $ 7.3 million pursuant to the commitments included in the SPA Notes.

The Company received cash proceeds, net of original issue discounts, of $ 231.1 million in exchange for the issuance of the SPA Notes during the twelve months ended December 31, 2023.

The Company incurred approximately $ 0.0 million and $ 1.1 million in transaction costs during the three months ended March 31, 2024 and 2023 respectively.

During the three months ended March 31, 2024 and the twelve months ended December 31, 2023, the Company issued to the Secured SPA Purchasers and Unsecured SPA Purchasers SPA Warrants pursuant to both the Secured SPA and Unsecured SPA arrangements and in connection with the Warrant Exchange.

As of March 31, 2024, there were 558,689 SPA Warrants outstanding and as of December 31, 2023, there were 556,205 SPA Warrants outstanding.

The SPA Warrants are subject to anti-dilution ratchet price protection and are exercisable for seven years from the date of issuance (see Note 10, Stockholders' Equity ).

The Company incurred approximately $ 0.1 million and $ 0.1 million in transaction costs during the three and six months ended June 30, 2024.

The Company incurred approximately $ 1.1 million and $ 2.2 million in transaction costs during the three and six months ended June 30, 2023.

During the six months ended June 30, 2024 and the twelve months ended December 31, 2023, the Company issued to the Secured SPA Purchasers and Unsecured SPA Purchasers SPA Warrants pursuant to both the Secured SPA and Unsecured SPA arrangements and in connection with the Warrant Exchange.

As of June 30, 2024, there were 568,738 SPA Warrants outstanding and as of December 31, 2023, there were 556,205 SPA Warrants outstanding.

The SPA Warrants are subject to anti-dilution ratchet price protection and are exercisable for 7 years from the date of issuance (see Note 11, Stockholders’ Equity ).

The Company may repurchase certain warrants for $ 0.01 per share if and to the extent the VWAP of the Class A Common Stock during 20 out of 30 trading days prior to the repurchase is greater than $ 3,600.00 per share, subject to certain additional conditions.

There were no SPA Warrant exercises during the three months ended March 31, 2024.

There were no SPA Warrant exercises during the three or six months ended June 30, 2024.

During the twelve months ended December 31, 2023, the Secured SPA Purchasers exercised warrants to purchase 251,649 shares of Class A Common Stock issued pursuant to the SPA Notes, via both cash and cashless exercise.

On March 31, 2024 and 2023 the Company determined that the fair value of the SPA Notes was $ 50.9 million and $ 92.7 million and the fair value of the SPA Warrants was $ 0.1 million and $ 28.5 million, respectively.

The Company recorded a gain in Change in fair value of notes payable and warrant liabilities in the Unaudited Condensed Consolidated Statement of Operations and Comprehensive Loss for the three months ended March 31, 2024 and 2023 in the amounts of $ 28.3 million and $ 97.7 million for the SPA Notes and SPA Warrants.

During the three months ended March 31, 2024, total SPA Notes principal of $ 19.0 million with a fair value of $ 9.1 million was converted to Class A Common Stock.

During the three months ended March 31, 2023, total SPA Notes principal of $ 61.6 million with a fair value of $ 42.7 million was converted to Class A Common Stock.

In connection with the conversions of the SPA Notes the Company recognized a Loss on settlement of notes payable for the three months ended March 31, 2024 and 2023 in the amount of $ 11.6 million and $ 95.1 million, respectively.

On June 30, 2024 and 2023, the Company determined that the fair value of the SPA Notes was $ 53.2 million and $ 69.7 million and the fair value of the SPA Warrants was $ 0.2 million and $ 21.1 million, respectively.

The Company recorded a loss in Change in fair value of notes payable and warrant liabilities in the Unaudited Condensed Consolidated Statements of Operations and Comprehensive Loss in the amount of $ 4.7 million for the three months ended June 30, 2024 and a gain in the amounts of $ 23.6 million for the six months ended June 30, 2024 for the SPA Notes and SPA Warrants.

The Company recorded a gain in Change in fair value of notes payable and warrant liabilities in the Unaudited Condensed Consolidated Statements of Operations and Comprehensive Loss for the three and six months ended June 30, 2023 in the amount of $ 24.7 million and $ 72.8 million, respectively, for the SPA Notes and SPA Warrants.

During the six months ended June 30, 2024, SPA Notes with an aggregate principal amount of $ 34.3 million and a fair value of $ 17.2 million were converted to Class A Common Stock.

During the six months ended June 30, 2023, SPA Notes with an aggregate principal amount of $ 168.0 million and a fair value of $ 106.5 million were converted to Class A Common Stock.

In connection with the conversions of the SPA Notes, the Company recognized a Loss on settlement of notes payable for the three and six months ended June 30, 2024 in the amount of $ 47.0 million and $ 58.6 million, respectively, and three and six months ended June 30, 2023 in the amount of $ 80.5 million and $ 175.6 million, respectively.

Faraday Future Intelligent Electric Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

Unsecured Convertible Notes

During January through March 2024, the Company issued unsecured convertible notes to Senyun and MHL, in an aggregate principal amount of $ 9.1 million.

The notes are due three months from the date of issuance, accrue interest at a rate of 4.27 % per annum, and are convertible into either Class A Common Stock or into an SPA Note at the option of the holder.

During the six months ended June 30, 2024, the Company issued unsecured convertible notes (the “Unsecured Convertible Notes”) to Senyun and MHL, in an aggregate principal amount of $ 18.1 million.

The Unsecured Convertible Notes are due three months from the date of issuance, accrue interest at a rate of 4.27 % per annum, and are convertible into either Class A Common Stock or into an SPA Note at the option of the holder.

If conversion into Class A Common Stock is elected, the conversion price is the latest closing price of the Company’s Class A Common Stock on the conversion date.

The debt is due on demand upon the occurrence of an event of default as defined in the notes.

The Company elected the fair value option afforded by ASC 825, Financial Instruments , with respect to these notes because the Company believes the notes will be exchanged into an SPA Note pursuant to the conversion right included within the notes.

The SPA Notes include features, such as a contingently exercisable put option, which meet the definition of an embedded derivative.

The Company recorded a loss in Change in fair value of notes payable and warrant liabilities in the Unaudited Condensed Consolidated Statement of Operations and Comprehensive Loss for the three months ended March 31, 2024 in the amount of $ 0.4 million for the convertible notes.

Subsequent to the balance sheet date and prior to the issuance of these financial statements, this debt went into default due to non-payment by the maturity date.

The Unsecured Convertible Notes are due on demand upon the occurrence of an event of default as defined in the notes.

The Company elected the fair value option afforded by ASC 825, Financial Instruments , with respect to the Unsecured Convertible Notes because the Company believes the Unsecured Convertible Notes will be exchanged into an SPA Note pursuant to the conversion right included within the notes.

The SPA Notes include features, such as a contingently exercisable put option, that meet the definition of an embedded derivative.

The Company recorded a loss in Change in fair value of notes payable and warrant liabilities in the Unaudited Condensed Consolidated Statements of Operations and Comprehensive Loss for the three and six months ended June 30, 2024 in the amount of $ 2.7 million and $ 3.1 million for the Unsecured Convertible Notes.

This debt was in default as of the balance sheet date due to non-payment by the maturity date.

Fair Value of Notes Payable Not Carried at Fair Value

The estimated fair value of the Company’s notes payable not carried at fair value, using inputs from Level 3 under the fair value hierarchy, approximated their carrying value as of March 31, 2024 and December 31, 2023, respectively.

Faraday Future Intelligent Electric Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

Schedule of Principal Maturities of Notes Payable

The future scheduled principal maturities of notes payable as of March 31, 2024 are as follows:

The future scheduled principal maturities of notes payable as of June 30, 2024 are as follows:

(in thousands)

5 unchanged sentences

These related parties include employees as well as affiliates of employees, affiliates, and other companies controlled or previously controlled by the Company’s founder and Chief Product and User Ecosystem Officer.

Related party notes payable consists of the following as of March 31, 2024:

Faraday Future Intelligent Electric Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

Related party notes payable consists of the following as of June 30, 2024:

(in thousands) Contractual

1 unchanged sentence

Related party notes – China December 2023 18.0 % $ 7,577

Related party notes – Unsecured Other Convertible April 8, 2024 4.27 % 1,632

Related party notes – Unsecured Convertible April 8, 2024 4.27 % 1,951

Related party notes – China various other Due on Demand — % 3,805

3 unchanged sentences

Related party notes payable, less current $ —

Faraday Future Intelligent Electric Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

Related party notes payable consists of the following as of December 31, 2023:

12 unchanged sentences

See Note 7, Notes Payable , for details on the Unsecured SPA.

The Company elected the fair value option afforded by ASC 825, Financial Instruments , with respect to the Unsecured SPA Notes because the notes include features, such as a contingently exercisable put option, which meet the definition of an embedded derivative.

The Company expensed the transaction costs to Changes in fair value of related party notes payable and warrant liabilities in the Unaudited Condensed Consolidated Statement of Operations and Comprehensive Loss.

The Company expensed the transaction costs to Changes in fair value of related party notes payable and warrant liabilities in the Unaudited Condensed Consolidated Statements of Operations and Comprehensive Loss.

Subsequent to the issuance of the Unsecured SPA, MHL funded, net of original issue discounts, $ 20.7 million in exchange for the issuance of the Unsecured SPA Notes and related warrants.

MHL did not fund the Unsecured SPA during the three months ended March 31, 2024.

MHL did not fund the Unsecured SPA during the six months ended June 30, 2024.

In connection with the Unsecured SPA, the Company issued to MHL SPA Warrants to purchase 35,405 shares of the Class A Common Stock.

The SPA Warrants are subject to anti-dilution ratchet price protection and are exercisable for seven years from the date of issuance (see Note 11, Stockholders' Equity and Note 7, Notes Payable ).

During the three months ended March 31, 2024, MHL converted its remaining outstanding gross principal balance, $ 0.7 million, in exchange for 1,324,292 shares of the Class A Common Stock.

In connection with the conversion of Unsecured SPA Notes, the Company recognized a $ 0.2 million Loss on settlement of related party notes payable during the three months ended March 31, 2024, for the difference between the fair value of the shares issued and the fair value of the debt instrument.

MHL did not have any Unsecured SPA Notes outstanding during the three months ended March 31, 2023.

As of March 31, 2024, there were no Related party notes payable issued pursuant to the Unsecured SPA.

During the six months ended June 30, 2024, MHL converted its remaining outstanding gross principal balance, $ 0.7 million, in exchange for 1,324,292 shares of the Class A Common Stock.

In connection with the conversion of Unsecured SPA Notes, there was no Loss on settlement of related party notes during the three months ended June 30, 2024 and the Company recognized $ 0.2 million Loss on settlement of related party notes payable during the six months ended June 30, 2024, for the difference between the fair value of the shares issued and the fair value of the debt instrument.

As of June 30, 2024, there were no Related party notes payable issued pursuant to the Unsecured SPA.

Faraday Future Intelligent Electric Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

Related Party Notes - Unsecured Convertible

In January 2024, the Company issued an unsecured convertible note to MHL in a principal amount of $ 1.5 million.

The note is due three months from the date of issuance, April 2024, accrues interest at a rate of 4.27 % per annum, and is convertible into either Class A Common Stock or into an SPA Note at the option of the holder.

The note was due three months from the date of issuance, April 2024, accrues interest at a rate of 4.27 % per annum, and is convertible into either Class A Common Stock or into an SPA Note at the option of the holder.

If conversion into Class A Common Stock is elected, the conversion price is the latest closing price of the Company’s Class A Common Stock on the conversion date.

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The Company elected the fair value option afforded by ASC 825, Financial Instruments , with respect to this note because the Company believes the note will be exchanged into an SPA Note pursuant to the conversion right included within the note.

The SPA Notes include features, such as a contingently exercisable put option, which meet the definition of an embedded derivative.

The Company recorded a loss in Change in fair value of related party notes payable and warrant liabilities in the Unaudited Condensed Consolidated Statement of Operations and Comprehensive Loss for the three months ended March 31, 2024 in the amount of $ 0.1 million for the related party convertible notes.

Subsequent to the balance sheet date and prior to the issuance of these Unaudited Condensed Consolidated Financial Statements, this debt went into default due to non-payment by the maturity date.

Faraday Future Intelligent Electric Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

The SPA Notes include features, such as a contingently exercisable put option, that meet the definition of an embedded derivative.

This debt was in default as of the balance sheet date due to non-payment by the maturity date.

The Company recorded a loss in Change in fair value of related party notes payable and warrant liabilities in the Unaudited Condensed Consolidated Statements of Operations and Comprehensive Loss for the three and six months ended June 30, 2024 in the amount of $ 0.3 million and $ 0.5 million for the related party convertible notes.

Related Party Notes - China

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(“Chongquing”), a related party.

In 2022, Chongquing agreed to modify the agreement if the Company agreed to make a payment of 10 % of the outstanding principal.

In this modified agreement, the Company received the rights to all interest accrued, a discount in principal balance, and agreed to make payments during 2023 to completely pay the discounted principal by December 31, 2023.

Since the Company did not pay the outstanding principal and interest amount in full on the maturity date, the Company incurred substantial interest and penalties.

Per the terms of the agreement, all outstanding interest and penalties since the inception of the original agreement reverted to Chongquing and the discounted principal balance returned to the full unpaid amount.

As a result, the Company recognized a $ 14.1 million loss on related party notes payable and related party warrants in the Unaudited Condensed Consolidated Statement of Operations and Comprehensive Loss for the three months ended March 31, 2024.

As of March 31, 2024 and December 31, 2023, the outstanding principal balance related to this related party note was $ 7.6 million and $ 5.1 million, respectively and the outstanding accrued related party interest was $ 17.4 million and $ 0.8 million, respectively.

In 2022, Chongquing agreed to modify its debt agreement with the Company agreed to make a payment of 10 % of the outstanding principal.

Under this modified agreement, the Company received the rights to all interest accrued, a discount in principal balance, and agreed to make payments during 2023 to completely pay the discounted principal by December 31, 2023.

The Company did not pay the outstanding principal and interest amount in full by the maturity date of December 31, 2023, and as a result, the Company incurred substantial interest and penalties.

Per the terms of the modified agreement, all outstanding interest and penalties since the inception of the original agreement reverted to Chongquing and the discounted principal balance returned to the full unpaid amount.

As a result, the Company recognized no and $ 14.1 million loss on related party notes payable and related party warrants for the three and six months ended June 30, 2024, respectively, in the Unaudited Condensed Consolidated Statements of Operations and Comprehensive Loss.

As of June 30, 2024 and December 31, 2023, the outstanding principal balance related to this related party note was $ 7.6 million and $ 5.1 million, respectively, and the outstanding accrued related party interest was $ 18.5 million and $ 0.8 million, respectively.

Related Party Notes - Convertible FFGP

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The debt is due on demand upon the occurrence of an event of default as defined in the agreement.

Subsequent to the balance sheet date and prior to the issuance of these Unaudited Condensed Consolidated Financial Statements, this debt went into default due to non-payment by the maturity date.

This debt was in default as of the balance sheet date due to non-payment by their respective maturity dates.

Related Party Notes - FFGP

2 unchanged sentences

The debt is due on demand upon the occurrence of an event of default as defined in the note.

This debt is in default due to non-payment by their respective maturity dates.

This debt was in default as of the balance sheet date due to non-payment by their respective maturity dates.

Fair Value of Related Party Notes Payable Not Carried at Fair Value

The estimated fair value of the Company’s related party notes payable not carried at fair value approximated their carrying value as of March 31, 2024 and December 31, 2023, respectively.

The estimated fair value of the Company’s related party notes payable not carried at fair value approximated their carrying value as of June 30, 2024 and December 31, 2023, respectively.

Faraday Future Intelligent Electric Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

X-Butler previously known as Warm Time Inc.

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According to the agreement between the parties, the Company paid X-Butler for rent and certain services, including catering, room services and organization of meetings, external gatherings and events, for the Rancho Palos Verdes Properties.

For the three months ended March 31, 2024 and March 31, 2023, the Company paid to X-Butler zero and $ 0.1 million, respectively, for rent and business development services rendered to the Company and its executives.

The Company has recorded approximately $ 0.2 million and $ 0.1 million in Accounts Payable as of March 31, 2024 and December 31, 2023, respectively.

For the three months ended June 30, 2024 and June 30, 2023, the Company paid to X-Butler zero and $ 0.1 million, respectively, for rent and business development services rendered to the Company and its executives.

The Company has recorded approximately $ 0.2 million and $ 0.1 million in Accounts Payable as of June 30, 2024 and December 31, 2023, respectively.

On February 9, 2023, the Company made a payment of approximately $ 0.2 million on behalf of Ocean View, an indemnified co-defendant, in connection with a seizure of funds related to the outstanding judgment in ongoing litigation, also involving Han’s San Jose Hospitality, LLC.

1 unchanged sentence

See Note 10, Commitments and Contingencies , for more information.

Following such seizure, the Company paid

Faraday Future Intelligent Electric Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

the outstanding judgment and all accrued interest.

Following such seizure, the Company paid the outstanding judgment and all accrued interest.

The Company received the return of such indemnification payment in April 2023.

8 unchanged sentences

On April 8, 2023, the Company reimbursed FF Global for $ 0.2 million related to legal expenses incurred by FF Global in connection with the Sixth Secured SPA Amendment.

In addition, on April 10, 2023 and May 31, 2023, the Company reimbursed FF Global for $ 0.1 million and $ 0.3 million related to legal expenses incurred by FF Global in connection with unsecured financing.

In February 2023, FF Global requested from the Company legal expense reimbursement of $ 6.5 million for costs incurred related to the governance changes at the Company, which was not approved by the Board as of the date these Unaudited Condensed Consolidated Financial Statements were issued.

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• Assistance in developing its value return and management strategy.

Faraday Future Intelligent Electric Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

• Consultation on and integration of stockholder relations and stockholder resources.

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In addition, FF Global is entitled to reimbursement for all reasonable and documented out-of-pocket travel, legal, and other out-of-pocket expenses incurred in connection with their services, which expenses shall not exceed $ 0.1 million without the prior written consent of the Company.

The Company paid zero $ 0.6 million to FF Global during the the three

Faraday Future Intelligent Electric Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

months ended March 31, 2024 and 2023, pursuant to the Consulting Services Agreement.

The Company has $ 1.0 million and $ 0.6 million of amounts payable to FF Global recorded in Accounts Payable and Accrued Liabilities in the Unaudited Condensed Consolidated Balance Sheets at March 31, 2024 and December 31, 2023, respectively.

The Company paid $ 0.3 and $ 0.5 to FF Global during the three and six months ended June 30, 2024 and $ 0.6 million and $ 0.8 million for the three and six months ended June 30, 2023, pursuant to the Consulting Services Agreement.

The Company has $ 1.5 million and $ 0.6 million of amounts payable to FF Global recorded in Accounts Payable and Accrued Liabilities in the Unaudited Condensed Consolidated Balance Sheets at June 30, 2024 and December 31, 2023, respectively.

Common Units of FF Global

3 unchanged sentences

The awards were valued using the Black-Scholes option pricing model.

The grant date fair value of the units purchased through non-recourse loans was immaterial for the three months ended March 31, 2024 and March 31, 2023.

The grant date fair value of the units purchased through non-recourse loans was immaterial for the three and six months ended June 30, 2024 and 2023.

Advertising Services Payable to Leshi Information Technology Co., Ltd.

The Company has recorded a payable to LeTV within Accrued expenses and other current liabilities on the Condensed Consolidated Balance Sheets in the amount of $ 7.4 million and $ 7.5 million as of March 31, 2024 and December 31, 2023, respectively, in connection with advertising services provided to the Company in prior years.

The Company has recorded a payable to LeTV within Accrued expenses and other current liabilities on the Condensed Consolidated Balance Sheets in the amount of $ 7.5 million and $ 7.5 million as of June 30, 2024 and December 31, 2023, respectively, in connection with advertising services provided to the Company in prior years.

LeTV is a Shanghai Stock Exchange-listed public company founded and controlled by Mr.

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The Company pays for a vehicle lease totaling less than $ 0.1 million annually on behalf of Mr.

The Company owes a total of $ 0.3 million and $ 0.2 million to various related parties as of March 31, 2024 and December 31, 2023, respectively, which is included in Accounts Payable within the Unaudited Condensed Consolidated Balance Sheets.

The Company owes a total of $ 0.5 million and $ 0.2 million to various related parties as of June 30, 2024 and December 31, 2023, respectively, which is included in Accounts payable within the Unaudited Condensed Consolidated Balance Sheets.

The Company determines if an arrangement is a lease at its commencement if the Company is both able to identify an asset and conclude that the Company has the right to control the identified asset.

Leases are classified as finance leases or operating leases based on the principle of whether or not the lease is effectively a financed purchase by the lessee.

A right-of-use (“ROU”) asset represents the Company’s right to use an underlying asset for the lease term and a lease liability represents the Company’s obligation to make lease payments related to the lease.

The Company recognizes operating and finance lease ROU assets and liabilities at the commencement date based on the present value of lease payments over the lease term.

The lease term includes renewal options when it is reasonably certain that the option will be exercised, and excludes termination options.

The Company’s leases do not provide an implicit rate;

therefore, the Company uses its incremental borrowing rate

Faraday Future Intelligent Electric Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

based on information available at the commencement date to determine the present value of lease payments.

The incremental borrowing rate used is estimated based on what the Company would be required to pay for a collateralized loan for a similar asset over a similar term.

The Company’s leases do not include any material residual value guarantees, or bargain purchase options.

To the extent that the Company’s agreements have variable lease payments, the Company includes variable lease payments that depend on an index or a rate in the measurement and classification of a lease and excludes those that depend on facts or circumstances occurring after the commencement date, other than the passage of time.

Lease expense for operating leases is recognized on a straight-line basis over the lease term and is recorded in Operating expenses on the Unaudited Condensed Consolidated Statements of Operations and Comprehensive Loss.

Amortization of ROU assets on finance leases is recorded on a straight-line basis within Operating expenses in the Unaudited Condensed Consolidated Statements of Operations and Comprehensive Loss.

Interest expense incurred on finance lease liabilities is recorded in Interest expense on the Unaudited Condensed Consolidated Statements of Operations and Comprehensive Loss.

The Company has elected not to recognize ROU assets and lease liabilities that arise from short-term (12 months or less) leases for any class of underlying asset.

Additionally, the Company does not separate lease and non-lease components.

Operating leases are included in ROU assets, Operating leases liabilities, current portion and Operating lease liabilities, less current portion in the Company's Unaudited Condensed Consolidated Balance Sheets.

Finance leases are included in Property, plant and equipment, net, Finance lease liabilities, current portion, and Finance lease liabilities, less current portion in the Company's Unaudited Condensed Consolidated Balance Sheets.

The Company’s lease arrangements consist primarily of its corporate office, store, and vehicle lease agreements.

The leases expire at various dates through 2032, some of which include options to extend the lease term for additional 5-year periods.

During the three months ended June 30, 2024, the Company moved out of a leased store facility and a leased research facility while working with the landlords to negotiate the related lease terminations, resulting in a lease ROU asset impairment loss of $ 7.5 million for the loss of use of these two leased facilities.

As of June 30, 2024, the lease liabilities of the two leases remained to be on the Company’s books.

In addition, the Company terminated one of its operating leases in China, resulting in a net lease ROU asset impairment loss of $ 0.1 million during the three months ended June 30, 2024.

Total lease costs for the six months ended June 30, 2024 and 2023 were:

(in thousands) Six Months Ended June 30, 2024 Six Months Ended June 30, 2023

Finance lease cost

Amortization of right-of-use assets $ — $ 273

Interest on lease liabilities — 275

Total finance lease cost — 548

Operating lease cost 2,772 5,915

Variable lease cost — 257

Total lease cost $ 2,772 $ 6,720

Faraday Future Intelligent Electric Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

The following table summarizes future lease payments as of June 30, 2024:

(in thousands)

Fiscal year Operating Leases

2024 (six months) $ 2,712

Thereafter 7,471

Imputed Interest 8,456

Present value of net lease payments 15,699

Lease liability, current portion $ 2,894

Lease liability, net of current portion 12,805

Total lease liability $ 15,699

Supplemental information and non-cash activities related to operating leases are as follows:

(in thousands) Six Months Ended June 30, 2024 Six Months Ended June 30, 2023

Cash paid for amounts included in the measurement of lease liabilities

Operating cash flows from operating leases $ 1,853 $ 5,709

Operating cash flows from finance leases — 275

Financing cash flows from finance leases — 1,016

$ 1,853 $ 7,000

Lease liabilities arising from new right-of-use assets

Operating leases $ 30 $ —

Finance leases — $ —

June 30, 2024 December 31, 2023

Weighted average remaining lease term (in years)

Operating leases 5.6 5.7

Finance leases 0.0 5.0

Weighted average discount rate

Operating leases 15.2 % 15.6 %

Finance leases — 9.2 %

Commitments and Contingencies

2 unchanged sentences

In the opinion of management, the outcome of any such claims and disputes cannot be predicted with certainty.

As of March 31, 2024 and December 31, 2023, the Company had accrued legal contingencies of $ 20.8 million and $ 21.6 million, respectively, recorded within Accrued expenses and other current liabilities for potential financial exposure related to ongoing legal matters, primarily related to breach of contracts and employment matters, which are deemed both probable of loss and reasonably estimable.

For the legal matters involving third party vendors, such as suppliers and equipment manufacturers, the Company recorded an accrual in Accounts payable in the Unaudited Condensed Consolidated Balance Sheets based on the amount invoiced by such vendors, which represents the minimum amount of loss out of the range of potential outcomes in accordance with ASC 450-20-30-1.

As of June 30, 2024 and December 31, 2023, the Company had accrued legal contingencies of $ 22.2 million and

Faraday Future Intelligent Electric Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

$ 21.6 million, respectively, recorded within Accrued expenses and other current liabilities for potential financial exposure related to ongoing legal matters, primarily related to breach of contracts and employment matters, which are deemed both probable of loss and reasonably estimable.

Class and Derivative Actions

3 unchanged sentences

District Court – Central District of California).

On December 23, 2021, a putative class action lawsuit alleging violations of the Securities Exchange Act of 1934 (the “Exchange Act”) was filed in the United States District Court, Central District of California, against the Company and its former Chief Executive Officer and Chief Financial Officer, and its current Chief Product and User Ecosystem Officer, as well as the Co-CEOs of Property Solutions Acquisition Corp.

On December 23, 2021, a putative class action lawsuit alleging violations of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) was filed in the United States District Court, Central District of California, against the Company and its former Chief Executive Officer and Chief Financial Officer, and its current Chief Product and User Ecosystem Officer, as well as the Co-CEOs of Property Solutions Acquisition Corp.

On May 6, 2022, the appointed lead plaintiffs in the Zhou putative class action filed an amended complaint alleging violations of Sections 10(b), 14(a) and 20(a) of the Exchange Act, Sections 11 and 15 of the Securities Act, and related “control” person claims for secondary liability under those statutes, seeking unspecified damages.

On or about July 7, 2022, defendants filed a motion to dismiss the amended complaint, which the court granted in part and denied in part, finding, among other things, that the plaintiffs had failed to sufficiently plead a claim with respect to the alleged statements made as to the expected schedule for the production and delivery of the FF 91 vehicle, but had sufficiently pled a claim for violation of Sections 10(b), 14(a) and 20(a) of the Exchange Act with respect to certain statements made in 2021 concerning Legacy FF receipt of 14,000 reservations for the FF 91 vehicle.

On or about July 7, 2022, defendants filed a motion to dismiss the amended complaint, which the court granted in part and denied in part, finding, among other things, that the plaintiffs had failed to sufficiently plead a claim with respect to the alleged statements made as to the expected schedule for the production and delivery of the FF 91 vehicle, but had sufficiently pled a claim for violation of Sections 10(b), 14(a) and 20(a) of the Exchange Act with respect to certain statements made in 2021 concerning Legacy FF’s receipt of 14,000 reservations for the FF 91 vehicle.

On January 6, 2023, the plaintiffs declined to again amend their complaint to attempt to reallege the claims dismissed by the court, thereby making the operative complaint the one that was at issue in the motion to dismiss absent the judicially dismissed claims.

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On February 6, 2024, the parties filed a stipulation to stay the California Federal Derivative Action pending mediation that was entered by the court on February 12, 2024, and that will stay the case until 30 days after the date of mediation.

On April 11 ( Moubarak ) and April 25 ( Wang ), 2022, putative stockholder derivative lawsuits were respectively filed in the United States Delaware District Court (collectively, the “Delaware Federal Derivative Actions”).

On February 6, 2023, the Delaware Derivative Actions were and remain stayed pending resolution of the pending proceedings in the Zhou putative class action.

Faraday Future Intelligent Electric Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

On February 6, 2023, the Delaware Derivative Actions were and remain stayed pending resolution of the pending proceedings in the Zhou putative class action.

On June 21 ( Wallace ) and December 22 ( Farazmand ), 2023, putative derivative lawsuits were respectively filed in the Delaware Court of Chancery (collectively, the “Delaware State Derivative Actions”).

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Governance Matters

Following the completion of the Special Committee (as defined below) investigation through the date hereof, the Company and certain of its directors and officers have received numerous e-mail communications from a group of self-described “employee whistleblowers” and from various individuals and entities who represented themselves as current investors of the Company.

Faraday Future Intelligent Electric Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

described “employee whistleblowers” and from various individuals and entities who represented themselves as current investors of the Company.

These communications have included various allegations (including, for example, that certain directors have conspired to push the Company into bankruptcy for their own personal gain) and requests for certain organizational and governance changes.

1 unchanged sentence

The independent investigation found that all such allegations have been without merit.

Faraday Future Intelligent Electric Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

Other Legal Matters

6 unchanged sentences

(“Raymond”), an equipment supplier, filed an action alleging that the Company breached its contract with Raymond and refused to pay for warehouse racking equipment.

Raymond requested a judgement in its favor in the amount of $ 1.1 million.

Raymond requested a judgment in its favor in the amount of $ 1.1 million.

The Company defaulted on the payment plan and a trial had been set for July 2024 to resolve the matter.

On April 15, 2024, the Company and Raymond executed a Settlement Agreement in order to release all claims in exchange for the return of racks.

In July 2021, the Company and Palantir entered into a Master Subscription Agreement (“MSA”) that sets froth the terms of the Palantir’s platform hosting arrangement which was expected to be used as a central operating system for data and analytics.

On April 26, 2023, the Company received a letter from Palantir Technologies Inc.

(“Palantir”) providing a notice of dispute regarding the Company’s alleged material breach of the MSA with Palantir.

The letter asserts that the Company has not paid invoices totaling $ 12.3 million of past due fees.

In July 2021, the Company and Palantir Technologies, Inc.

(“Palantir”) entered into a Master Subscription Agreement (“MSA”) that sets froth the terms of the Palantir’s platform hosting arrangement, which was expected to be used as a central operating system for data and analytics.

On April 26, 2023, the Company received a letter from Palantir providing a notice of dispute regarding the Company’s alleged material breach of the MSA.

The letter asserted that the Company had not paid invoices totaling $ 12.3 million of past due fees.

On July 7, 2023, Palantir filed a Demand for Arbitration against the Company with Judicial Arbitration and Mediations Services, Inc., regarding a dispute between Palantir and the Company over the MSA.

Palantir alleges that the Company has refused to make payments under the MSA.

Palantir asserts claims for:

Palantir alleged that the Company had refused to make payments under the MSA.

Palantir asserted claims for:

(i) breach of contract;

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This settlement includes mutual waivers and releases of claims to avoid future disputes.

The Company subsequently failed to make one of the settlement payments in June 2024 and Palantir amended its Demand for Arbitration for failure to pay amounts owed under the Settlement and Release Agreement.

Arbitration is scheduled for August 2024 and the parties are actively engaged in discussions regarding this matter.

On August 9, 2024, the Company and Palantir entered into an amendment to the Settlement and Release Agreement pursuant to which, in lieu of paying the remaining $ 4.8 million in cash, the Company agreed to issue Palantir $ 2.4 million of Class A Common Stock by August 9, 2024, and $ 2.4 million in Class A Common Stock by October 1, 2024.

The August 9, 2024 issuance totaled approximately 11.1 million shares of Common Stock.

The Company further agreed to register the shares under the Securities Act for resale by Palantir.

On May 2, 2023, the Company received a notice of Commencement of Arbitration by Envisage Group Developments Inc.

5 unchanged sentences

The Company is unable to evaluate the amount or range of the potential attorneys’ fees award.

Faraday Future Intelligent Electric Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

On June 12, 2023, the Company received a letter demanding access to the Company’s books and records in connection with (a) the Company entering into the amended and restated shareholder agreement with FF Top Holding LLC n/k/a FF Global and (b) certain other related matters.

3 unchanged sentences

In discovery, the Company has conceded that $ 4.6 million is due and owing under the Purchase Order.

Faraday Future Intelligent Electric Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

July 2024, the parties subsequently filed a stipulated order and judgement totaling $ 8.1 million, plus statutory interest, which was entered by the court.

In July 2024, the parties subsequently filed a stipulated order and judgment totaling $ 8.1 million, plus statutory interest, which was entered by the court.

The parties are engaged in discussions regarding this matter.

The Company has accrued $8.1 million related to this matter in the Accrued expenses and other current liabilities on the Condensed Consolidated Balance Sheets for the period ended June 30, 2024.

On October 11, 2023, Joseph Hof and Scott McPherson filed a class action lawsuit in Supreme Court of the State of New York, County of New York against Benchmark 237 LLC, Benchmark Real Estate Trust, SLLC, Canvas Investment Partners, LLC, Canvas Property Group, LLC, Juliet Technologies, LLC, and the Company, alleging that the defendants engaged in various scheming practices that discriminatorily impacted the plaintiffs and other class members The court granted the Company’s Motion to Dismiss on January 12, 2024, and dismissed the case on January 18, 2024.

2 unchanged sentences

On December 8, 2023, 10701 Idaho Owner, LLC (“Landlord”) notified the Company of rental defaults amounting to $ 0.6 million for the months of October to December 2023, demanding a 5 % late fee and 18 % annual interest on overdue amounts.

Following this, the parties reached a First Amendment to the Lease Agreement dated October 19, 2023 to address the Company’s total rent default of $ 1.1 million, including a $ 125,000 partial payment made on January 26, 2024, and additional late fees and charges of $ 158,771 .

Following this, the parties reached a First Amendment to the Lease Agreement dated October 19, 2023 to address the Company’s total rent default of $ 1.1 million, including a $ 0.1 million partial payment made on January 26, 2024, and additional late fees and charges of $ 0.2 million.

The amendment established a repayment plan requiring the Company to pay $ 1.2 million from February 26 to March 31, 2024, and to either replenish or provide a new $ 0.6 million Letter of Credit.

On March 26, 2024, the Landlord served the Company with a Notice to Pay or Quit, demanding payment of $ 1.0 million within five business days.

On April 10, 2024, the Company made a $ 150,000 payment to Landlord in exchange for Landlord deferring further action in this matter.

On April 10, 2024, the Company made a $ 0.2 million payment to Landlord in exchange for Landlord deferring further action in this matter.

On February 14, 2024, Rexford Industrial - 18455 Figueroa, LLC (“Rexford”) filed a Complaint for Unlawful Detainer against Faraday SPE, LLC in Superior Court of California, County of Los Angeles.

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On March 25, 2024, Cooper Standard GmbH filed a lawsuit against Faraday&Future Inc.

in Superior Court of California, County of Los Angeles, alleging non-payment of the estimated sum of $ 1.5 million, which constitutes a breach of contractual obligations set forth in purchase orders, a Letter of Tool Acceptance, and invoices to facilitate the supply of automotive products and services for the FF 91 vehicle from August 2021 to December 2022.

in Superior Court of California, County of Los Angeles, alleging non-payment of the estimated sum of $ 1.5 million, which constitutes a breach of contractual

Faraday Future Intelligent Electric Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

obligations set forth in purchase orders, a Letter of Tool Acceptance, and invoices to facilitate the supply of automotive products and services for the FF 91 vehicle from August 2021 to December 2022.

Given the early stages of the legal proceedings, the Company is unable to evaluate the likelihood of an unfavorable outcome and/or the amount or range of potential loss.

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On April 19, 2024, an additional formal employee submitted a request for arbitration against the same group of defendants without quantifying alleged damages.

Given the early

Faraday Future Intelligent Electric Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

stages of these legal proceedings, the Company is unable to evaluate the likelihood of an unfavorable outcome and/or the amount or range of potential loss.

Given the early stages of these legal proceedings, the Company is unable to evaluate the likelihood of an unfavorable outcome and/or the amount or range of potential loss.

Other than disclosed herein, as of the date hereof FF is not a party to any legal proceedings the outcome of which, if determined adversely to FF, would individually or in the aggregate be reasonably expected to have a material adverse effect on FF’s business, financial condition, or results of operations.

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Jia’s role as an intermediary in leasing certain properties which were subsequently leased to the Company was not disclosed in FFIE’s corporate housing disclosures.

● In preparing FFIE’s related party transaction disclosures, the Company failed to investigate and identify the sources of loans received from individuals and entities associated with Company employees.

Faraday Future Intelligent Electric Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

following, the Business Combination, and failed to fully disclose relevant information, including but not limited to, information in connection with related parties and corporate governance to FFIE’s former independent registered public accounting firm PricewaterhouseCoopers LLP.

• In preparing FFIE’s related party transaction disclosures, the Company failed to investigate and identify the sources of loans received from individuals and entities associated with Company employees.

In addition, the investigation found that certain individuals failed to fully disclose to individuals involved in the preparation of FFIE’s SEC filings their relationships with certain related parties and affiliated entities in connection with, and following, the Business Combination, and failed to fully disclose relevant information, including but not limited to, information in connection with related parties and corporate governance to FFIE’s former independent registered public accounting firm PricewaterhouseCoopers LLP.

The investigation also found that certain individuals failed to cooperate and withheld potentially relevant information in connection with the Special Committee investigation.

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Such significant influence may increase if and to the extent the current members of the Board and management are removed and replaced with individuals who are aligned with Mr.

Jia and/or FF Global.

Jia and/or FF Global ” in the Form 10-K.

Jia also received a 25 % annual base salary reduction, and his role was limited from a policy-making position to focusing on (a) Product and Mobility Ecosystem and (b) Internet, Artificial Intelligence, and Advanced R&D technology.

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Jia is an “officer” of the Company within the meaning of Section 16 of the Exchange Act and an “executive officer” of the Company under Rule 3b-7 under the Exchange Act;

● Matthias Aydt, then Senior Vice President, Business Development and Product Definition and a director of FFIE, and currently Senior Vice President, Product Execution and a director of FFIE, being placed on probation as an executive officer for a six -month period, during which period he remained a non-independent member of the Board, which probationary period has since ended;

Faraday Future Intelligent Electric Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

• Matthias Aydt, then Senior Vice President, Business Development and Product Definition and a director of FFIE, and currently Senior Vice President, Product Execution and a director of FFIE, being placed on probation as an executive officer for a six -month period, during which period he remained a non-independent member of the Board, which probationary period has since ended;

• the appointment of Jordan Vogel as Lead Independent Director;

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• certain other disciplinary actions and terminations of employment with respect to other FF employees (none of whom is an executive officer).

As of July 30, 2024, FF is continuing to implement certain of the remedial actions approved by the Board.

As of August 14, 2024, FF is continuing to implement certain of the remedial actions approved by the Board.

However, certain of these remedial actions are no longer in effect and no assurance can be provided that those remedial measures that continue to be implemented will be implemented in a timely manner or at all, or will be successful to prevent inaccurate disclosures in the future.

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There can be no assurance that such remedial measures will be successful.

In addition, there can be no assurance that such remedial measures will be fully implemented in light of the recent corporate governance agreements with FF Top and FF Global and the recent assessment by the Board of FF’s management structure, including management roles, responsibilities and reporting lines and changes to the Board.” However, pursuant to the Heads of Agreement, FF has implemented certain governance changes that impact certain of the above-discussed remedial actions.

However, pursuant to the Heads of Agreement, FF has implemented certain governance changes that impact certain of the above-discussed remedial actions.

On October 3, 2022, Ms.

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On January 20, 2023, Mr.

Qing Ye tendered his resignation from the Board, which resignation was effective immediately.

Ye remained a

Qing Ye tendered his resignation from the Board, which resignation was effective

Faraday Future Intelligent Electric Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

consultant of the Company as an independent contractor until November 18, 2023.

Ye remained a consultant of the Company as an independent contractor until November 18, 2023.

On January 25, 2023, Mr.

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An unconditional contractual obligation is defined as an agreement to purchase goods or services that is enforceable and legally binding (non-cancelable, or cancellable only in certain circumstances).

As of March 31, 2024, we estimate FFIE’s total unconditional contractual commitments, including lease minimum payments, financial obligations on sale and lease back, notes payable, related party notes payable, related accrued interest, legal contingencies and other contractual commitments, totaling $ 296.0 million, which included $ 102.1 million for the year ended December 31, 2024, $ 52.4 million for the two years ended December 31, 2026, $ 71.5 million for the two years ended December 31, 2028 and $ 69.9 million thereafter.

As of June 30, 2024, we estimate FFIE’s total unconditional contractual commitments, including lease minimum payments, financial obligations on sale and lease back, notes payable, related party notes payable, related accrued interest, legal contingencies and other contractual commitments, totaling $ 271.3 million, which included $ 87.0 million for the year ended December 31, 2024, $ 45.3 million for the two years ended December 31, 2026, $ 71.3 million for the two years ended December 31, 2028 and $ 67.7 million thereafter.

Stockholders’ Equity

The number of authorized and issued and outstanding shares stock were as follows:

March 31, 2024

June 30, 2024

Shares Issued and Outstanding Shares

10 unchanged sentences

Amendments to the Company’s Certificate of Incorporation

A special meeting of the Company’s stockholders held on February 28, 2023, the Company’s stockholders approved a further increase to the number of the Company’s authorized shares of Class A Common Stock from 3,395,834 to 7,041,667 , increasing the Company’s total number of authorized shares of Common Stock and preferred stock from 13,708,334 to

At a special meeting of the Company’s stockholders held on February 28, 2023, the Company’s stockholders approved an increase to the number of the Company’s authorized shares of Class A Common Stock from 3,395,834 to 7,041,667 , increasing the Company’s total number of authorized shares of Common Stock and preferred stock from 13,708,334 to 17,354,167 .

On March 1, 2023, the Company filed an amendment to its Second Amended and Restated Certificate of Incorporation with the Secretary of State of the State of Delaware to effect such increase.

Faraday Future Intelligent Electric Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

On March 1, 2023, the Company filed an amendment to its Second Amended and Restated Certificate of Incorporation with the Secretary of State of the State of Delaware to reflect such amendment.

Additionally, at a special meeting of the Company’s stockholders held on August 16, 2023, the Company’s stockholders approved a proposal authorizing the Board to effect a reverse stock split of the outstanding Common Stock at a range between 1-for-2 and 1-for-90 shares of outstanding Common Stock, and a proposal stating that a reverse stock split is implemented at a ratio of 1-for-8 or greater.

On August 22, 2023, the Board approved the Reverse Stock Split ratio (1-for-80).

Accordingly, on August 24, 2023, the Company filed the Third Amended and Restated Certificate of Incorporation of the Company to effect the Reverse Stock Split and to set the number of authorized shares of Common Stock to 51,479,167 .

At a special meeting of the Company’s stockholders held on August 16, 2023, the Company’s stockholders approved a proposal authorizing the Board to effect a reverse stock split of the outstanding Common Stock at a range between 1-for-2 and 1-for-90 shares of outstanding Common Stock, and a proposal, if and only if a reverse stock split is implemented at a ratio of 1-for-8 or greater, to amend the Company’s Second Amended and Restated Certificate of Incorporation, as amended, if necessary to reduce the number of authorized shares of the Company’s common stock to a number equal to 12,355,000,000 divided by the reverse stock split ratio determined by the Board.

On August 22, 2023, the Board approved the August 2023 Reverse Stock Split ratio (1-for-80).

Accordingly, on August 24, 2023, the Company filed the Third Amended and Restated Certificate of Incorporation of the Company to effect the August 2023 Reverse Stock Split and to set the number of authorized shares of Common Stock to 51,479,167 .

As a result, effective August 25, 2023, every 80 shares of the issued and outstanding Common Stock were converted into one share of Common Stock, without any change in par value per share, and the authorized shares of Common Stock were reduced to 51,479,167 , composed of (i) 49,291,667 shares of Class A Common Stock and (ii) 2,187,500 shares of Class B Common Stock.

No fractional shares of Common Stock were issued as a result of the Reverse Stock Split.

No fractional shares of Common Stock were issued as a result of the August 2023 Reverse Stock Split.

Stockholders who would otherwise have received a fractional share were instead issued a full share in lieu of such fractional share.

The Class A Common Stock began trading on The Nasdaq Capital Market on a split-adjusted basis for the Reverse Stock Split at the opening of trading on August 28, 2023 under the symbol “FFIE” with a new CUSIP number (307359 505).

The Class A Common Stock began trading on The Nasdaq Capital Market on a split-adjusted basis for the August 2023 Reverse Stock Split at the opening of trading on August 28, 2023 under the symbol “FFIE” with a new CUSIP number (307359 505).

At a special meeting of the Company’s stockholders held on February 5, 2024, the Company’s stockholders approved an increase in the authorized shares of Common Stock from 154,437,500 to 1,389,937,500 , increasing the total number of authorized shares of the Common Stock and preferred stock from 164,437,500 to 1,399,937,500 .

On February 5, 2024, the Company filed an amendment to the Company’s Third Amended and Restated Certificate of Incorporation, as amended, with the office of the Secretary of State of the State of Delaware to effect such increase.

Also at the special meeting of the Company’s stockholders held on February 5, 2024, the Company’s stockholders approved an amendment to the Company’s Third Amended and Restated Certificate of Incorporation, as amended, to effect a reverse stock split (referred to as the Second Reverse Stock Split) of the Common Stock by a ratio of 1-for-3, with such action to be effected at such time and date, if at all, as determined by the Board within one year after the conclusion of the special meeting and a corresponding reduction in the total number of shares of Common Stock the Company is authorized to issue.

On February 23, 2024, the Board approved the implementation of the Second Reverse Stock Split and the Company filed a second amendment to the Company’s Third Amended and Restated Certificate of Incorporation with the Secretary of State of the State of Delaware to effect the Second Reverse Stock Split and to set the number of authorized shares of Common Stock to 463,312,500 (which is 1,389,937,500 divided by 3).

Also at the special meeting of the Company’s stockholders held on February 5, 2024, the Company’s stockholders approved an amendment to the Company’s Third Amended and Restated Certificate of Incorporation, as amended, to effect a reverse stock split (referred to as the February 2024 Reverse Stock Split) of the Common Stock by a ratio of 1-for-3, with such action to be effected at such time and date, if at all, as determined by the Board within one year after the conclusion of the special meeting and a corresponding reduction in the total number of shares of Common Stock the Company is authorized to issue.

On February 23, 2024, the Board approved the implementation of the February 2024 Reverse Stock Split and the Company filed a second amendment to the Company’s Third Amended and Restated Certificate of Incorporation with the Secretary of State of the State of Delaware to effect the February 2024 Reverse Stock Split and to set the number of authorized shares of Common Stock to 463,312,500 (which is 1,389,937,500 divided by 3).

Pursuant to the Certificate of Amendment, effective as of 5:00 p.m., Eastern Time, on February 29, 2024, every three shares of the issued and outstanding Common Stock were automatically converted into one share of Common Stock, without any change in par value per share and the number of authorized shares of Common Stock was reduced to 463,312,500 .

No fractional shares of Common Stock were issued as a result of the Second Reverse Stock Split.

No fractional shares of Common Stock were issued as a result of the February 2024 Reverse Stock Split.

Stockholders who would otherwise have received a fractional share were instead issued a full share in lieu of such fractional share.

The Class A Common Stock began trading on the Nasdaq Capital Market on a split-adjusted basis for the Second Reverse Stock Split at the opening of trading on March 1, 2024 under the symbol “FFIE” with a new CUSIP number (307359 703).

The Class A Common Stock began trading on the Nasdaq Capital Market on a split-adjusted basis for the February 2024 Reverse Stock Split at the opening of trading on March 1, 2024 under the symbol “FFIE” with a new CUSIP number (307359 703).

The Company’s Public Warrants continue to be traded on the Nasdaq Capital Market under the symbol “FFIEW” and the CUSIP number for the warrants remains unchanged.

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The closing of the sale and purchase of the share of Series A Preferred was completed on June 21, 2024 for a purchase price of $ 100.00 .

The share of Series A Preferred is not convertible into, or exchangeable for, shares of any other class or series of stock or other securities of the Company.

The share of Series A Preferred shall not be entitled to receive dividends.

Faraday Future Intelligent Electric Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

The holder of the Series A Preferred is entitled to 16,000,000,000 votes for each share held of record, but has the right to vote only on any share authorization proposal or any reverse stock split proposal (together, the “Shareholder Proposals”) and until such time as the Shareholder Proposals are approved by the stockholders, and will have no voting rights except (i) with respect to the Shareholder Proposals in which its votes are cast for and against such the Shareholder Proposal in the same proportion as shares of Common Stock are voted for and against such reverse stock split proposal (with any shares of Common Stock that are not voted, whether due to abstentions, broker non-votes or otherwise not counted as votes for or against the Shareholder Proposal) and (ii) unless the holders of one-third (1/3 rd ) of the outstanding shares of Common Stock are present, in person or by proxy, at the meeting of stockholders at which the Shareholder Proposals are submitted for stockholder approval (or any adjournment thereof).

The share of Series A Preferred is not convertible into, or exchangeable for, shares of any other class or series of stock or other securities of the Company.

The share of Series A Preferred shall not be entitled to receive dividends.

The holder of the Series A Preferred is entitled to 16,000,000,000 votes for each share held of record, but has the right to vote only on any share authorization proposal or any reverse stock split proposal (together, the “Shareholder Proposals”) and until such time as the Shareholder Proposals are approved by the stockholders, and will have no voting rights except (i) with respect to the Shareholder Proposals in which its votes are cast for and against such Shareholder Proposal in the same proportion as shares of Common Stock are voted for and against such reverse stock split proposal (with any shares of Common Stock that are not voted, whether due to abstentions, broker non-votes or otherwise not counted as votes for or against the Shareholder Proposal) and (ii) unless the holders of one-third (1/3 rd ) of the outstanding shares of Common Stock are present, in person or by proxy, at the meeting of stockholders at which the Shareholder Proposals are submitted for stockholder approval (or any adjournment thereof).

The share of Series A Preferred will vote together with the Common Stock as a single class on any Shareholder Proposal.

1 unchanged sentence

Upon a liquidation, bankruptcy, reorganization, merger, acquisition, sale, dissolution or winding up of the Company, whether voluntarily or involuntarily, pursuant to which assets of the Company or consideration received by the Company are to be distributed to the stockholders, the holder of the Series A Preferred will be entitled to receive, before any payment is made to the holders of Common Stock by reason of their ownership thereof, an amount equal to $ 100.00 .

The Series A Preferred may not be transferred at any time prior to stockholder approval of the Shareholder Proposal without the prior written consent of the Board.

The Series A Preferred may not be transferred at any time prior to stockholder approval of the Shareholder Proposals without the prior written consent of the Board.

The outstanding share of Series A Preferred will be redeemed in whole, but not in part, for a redemption price of $ 100.00 , payable out of funds lawfully available therefor, upon the earlier of (i) any time such redemption is ordered by the Board in its sole discretion, automatically and effective on such time and date specified by the Board in its sole discretion, or (ii) automatically immediately following the approval by the Company’s stockholders of both Shareholder Proposals.

The number of outstanding warrants to purchase the Company’s Class A Common Stock as of March 31, 2024 are as follows:

The Series A Preferred Stock was redeemed on July 31, 2024, following the annual meeting of stockholders.

The number of outstanding warrants to purchase the Company’s Class A Common Stock as of June 30, 2024 are as follows:

Number of Warrants Exercise Price Expiration Date

4 unchanged sentences

Total 9,796,521

There were no warrants exercised during the three months ended March 31, 2024.

There were no warrants exercised during the six months ended June 30, 2024.

The number of outstanding warrants to purchase the Company’s Class A Common Stock as of December 31, 2023 were as follows:

5 unchanged sentences

Total 9,794,037

Insufficient Authorized Shares

From time to time, certain of the Company’s equity-linked financial instruments may be classified as derivative liabilities under ASC 815, Derivatives and Hedging , due to the Company having insufficient authorized shares to fully settle the equity-linked financial instruments in shares.

Faraday Future Intelligent Electric Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

liabilities is necessary due to the Company’s inability to demonstrate it has sufficient authorized shares to settle the equity-linked financial instrument in shares, the Company will reclassify contracts that have overlapping settlement dates with the latest inception date as derivative instruments.

Insufficient Authorized Shares

In such case, the Company applies a sequencing policy under ASC 815-40, Derivatives and Hedging - Contracts in Entity’s Own Equity , whereby, in the event that reclassification of contracts from equity to assets or liabilities is necessary due to the Company’s inability to demonstrate it has sufficient authorized shares to settle the equity-linked financial instrument in shares, the Company will reclassify contracts that have overlapping settlement dates with the latest inception date as derivative instruments.

The contracts reclassified as derivative instruments are recognized at fair value with changes in fair value recognized in earnings until such time as the conditions giving rise to such derivative liability classification were settled or the Company has sufficient authorized, unissued shares to settle such contracts with shares.

The Company has elected to apply the same sequencing policy for share-based compensation arrangements if the Company granted share-based payment arrangements where the Company may have insufficient shares to settle the contract.

On February 28, 2023, upon shareholder approval to increase the Company’s authorized shares, the Company had sufficient authorized shares to fully settle all outstanding equity-linked financial instruments.

On February 28, 2023, upon stockholder approval to increase the Company’s authorized shares, the Company had sufficient authorized shares to fully settle all outstanding equity-linked financial instruments.

Again on April 21, 2023, the Company had insufficient authorized shares to fully settle its equity-linked financial instruments in shares primarily due to the issuance of additional convertible notes and warrants between February 28, 2023 and April 21, 2023.

4 unchanged sentences

Pursuant to the SD SPA, the officer may decrease the amount of the deduction upon notice to the Board.

No shares have been purchased under the SD SPA as of March 31, 2024.

No shares have been purchased under the SD SPA as of June 30, 2024.

Stock-Based Compensation

3 unchanged sentences

At the special meeting held on August 16, 2023, the Company’s stockholders approved (among other proposals) an amendment to the 2021 SI Plan to increase the number of shares of Class A Common Stock available for issuance under the 2021 SI Plan by an additional 861,608 shares.

As a result of the Reverse Stock Split on March 1, 2024, the number of shares of Class A Common Stock reserved for issuance under the 2021 SI Plan, the Company’s Equity Incentive Plan, and the Company’s Special Talent Incentive Plan (the “Plans”), as well as the number of shares subject to the then-outstanding awards under each of the Plans, were proportionately adjusted, using the 1-for-3 ratio, rounded down to the nearest whole share.

As a result of the February 2024 Reverse Stock Split on March 1, 2024, the number of shares of Class A Common Stock reserved for issuance under the 2021 SI Plan, the Company’s Equity Incentive Plan, and the Company’s Special Talent Incentive Plan (the “Plans”), as well as the number of shares subject to the then-outstanding awards under each of the Plans, were proportionately adjusted, using the 1-for-3 ratio, rounded down to the nearest whole share.

In addition, the exercise price of the then-outstanding stock options under each of the Plans was proportionately adjusted, using the 1-for-3 ratio, rounded up to the nearest whole cent.

As of March 31, 2024 and December 31, 2023, the Company had 2,469,957 and 1,067,189 shares of Class A Common Stock available for future issuance under its 2021 SI Plan.

As of June 30, 2024 and December 31, 2023, the Company had 2,586,876 and 1,067,189 shares of Class A Common Stock available for future issuance under its 2021 SI Plan.

At the annual meeting of stockholders held on July 31, 2024, the Company’s stockholders approved (among other proposals) an amendment to the 2021 SI Plan to increase the number of shares of Class A Common Stock available for issuance under the 2021 SI Plan by an additional 88,252,926 shares, subject to proportionate adjustment for stock splits and similar events as provided in the 2021 SI Plan.

SOP/SOD Incentive Plan

On February 23, 2023, the Board approved the Company’s SOP/SOD Incentive Plan (“Incentive Plan”) granting:

(i) cash bonuses to all active employees of the Company that began employment at the Company prior to December 31, 2022 upon the commencement of the start of production of the Company’s FF 91 Futurist on or prior to March 31, 2023 and (ii) cash bonuses and equity incentive awards to all active employees of the Company that began employment at the Company prior to December 31, 2022 upon the commencement of the start of delivery of the Company’s FF 91 Futurist on or prior to April 30, 2023 (“Delivery Condition”).

On August 17, 2023, the Board approved an amendment to the Incentive Plan (“Incentive Plan Amendment”) to reflect the updated timing of the previously announced FF 91 2.0 Futurist Alliance phase two of its Delivery Plan from the end of April 2023 to the end of the second quarter 2023 and subsequently to August 2023.

The Incentive Plan Amendment is available to all active employees of the Company that began employment at the Company prior to July 1, 2023 and reduced the cash bonuses and milestone based restricted stock units (“RSUs”) by 10 % for the internal Company sign-off on requirements to commence phase two of the Company’s Delivery Plan on or prior to July 31, 2023 (“New Delivery Condition”).

Pursuant to the

(i) cash bonuses to all active employees of the Company that began employment at the Company prior to December 31, 2022 upon the

Faraday Future Intelligent Electric Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

Incentive Plan Amendment, RSU awards will be granted after the Company has sufficient additional shares available for such issuance (“Share Issuance Condition”) and cash bonuses will be paid once the Company has received an additional $ 15.0 million in financings.

commencement of the start of production of the Company’s FF 91 Futurist on or prior to March 31, 2023 and (ii) cash bonuses and equity incentive awards to all active employees of the Company that began employment at the Company prior to December 31, 2022 upon the commencement of the start of delivery of the Company’s FF 91 Futurist on or prior to April 30, 2023 (“Delivery Condition”).

Pursuant to the Incentive Plan Amendment, RSU awards will be granted after the Company has sufficient additional shares available for such issuance (“Share Issuance Condition”) and cash bonuses will be paid once the Company has received an additional $ 15.0 million in financings.

The Incentive Plan Amendment includes the grant of RSUs to certain executive officers of the Company upon the Company’s satisfaction of the New Delivery Condition and the Share Issuance Condition with a grant date fair market value of approximately $ 8.0 million, subject to vesting in three annual installments on the first three anniversaries of the grant date, generally subject to the applicable executive’s continuous employment through each applicable vesting date.

In addition, subject to the Share Issuance Condition, upon the satisfaction of the New Delivery Condition and continuing for an eight-year period, certain executive officers will annually receive a grant of fully-vested RSUs with a grant date fair market value of $ 0.8 million, subject to their continued employment through each grant date of the award.

During the three months ended March 31, 2024, the Company recognized $ 0.2 million of cash bonus expense under the Incentive Plan.

During the three and six months ended June 30, 2024, the Company recognized a reduction of $ 1.3 million and $ 1.1 million of cash bonus expense under the Incentive Plan, respectively.

As a result of the Share Issuance Condition not yet being met, no RSUs have been granted under the Incentive Plan.

In addition to the above, during the three months ended March 31, 2024, the Company granted:

In addition to the above, during the six months ended June 30, 2024, the Company granted:

• 763,889 RSUs, which had a weighted-average grant date fair value of $ 0.19 per share.

As of March 31, 2024, the total remaining stock-based compensation expense for unvested RSUs was $ 1.4 million, which is expected to be recognized over a weighted-average period of 0.77 years.

The following table presents stock-based compensation expense included in each respective expense category in the Unaudited Condensed Consolidated Statements of Operations and Other Comprehensive Loss:

As of June 30, 2024, the total remaining stock-based compensation expense for unvested RSUs was $ 0.4 million, which is expected to be recognized over a weighted-average period of 0.72 years.

The following table presents stock-based compensation expense included in each respective expense category in the Unaudited Condensed Consolidated Statements of Operations and Comprehensive Loss:

Three Months Ended

(in thousands) 2024 2023 (As Restated)

June 30, 2024 Six Months Ended

(in thousands) 2024 2023 2024 2023

Research and development $ 81 $ 480 $ 456 $ 6,896

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The standard clarifies that fair value is an exit price representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants.

As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability.

As such, fair value is a market-based measurement that should be determined based on

Faraday Future Intelligent Electric Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

assumptions that market participants would use in pricing an asset or liability.

As a basis for considering such assumptions, the standard establishes a three-tier value hierarchy, which prioritizes the inputs used in measuring fair value as follows:

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Valuations are usually obtained through market data of the investment itself as well as market transactions involving comparable assets, liabilities or funds.

Faraday Future Intelligent Electric Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

Level 3 Valuations for assets and liabilities that are derived from other valuation methodologies, such as option pricing models, discounted cash flow models or similar techniques, and not based on market exchange, dealer, or broker-traded transactions.

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Inherent in a binomial lattice model are assumptions related to risk free rate, annual dividend yield, expected warrant life, and volatility of the Company's stock.

The Company estimated the fair value of the Private Warrants to be $ 0.1 million as of March 31, 2024 and December 31, 2023.

The Company estimated the fair value of the Private Warrants to be $ 0.1 million as of June 30, 2024 and December 31, 2023.

Changes in the fair value of the Private Warrants are recorded in Change in Fair Value Measurements in the Company’s Unaudited Condensed Consolidated Statements of Operations and Comprehensive Loss.

Fair value measurements associated with the Private Warrants liabilities represent Level 3 valuations under the fair value hierarchy.

Faraday Future Intelligent Electric Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

Liabilities due to Insufficient Authorized Shares

1 unchanged sentence

See Note 11, Stockholders’ Equity .

Faraday Future Intelligent Electric Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

Recurring Fair Value Measurements

1 unchanged sentence

The following tables present financial liabilities remeasured on a recurring basis by level within the fair value hierarchy:

March 31, 2024

June 30, 2024

(in thousands) Level 1 Level 2 Level 3

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Notes payable — — 86,712

There were not any transfers of assets and liabilities between Level 1, Level 2 and Level 3 of the fair value measurement hierarchy during the three months ended March 31, 2024 and the year ended December 31, 2023.

There were not any transfers of assets and liabilities between Level 1, Level 2 and Level 3 of the fair value measurement hierarchy during the three and six months ended June 30, 2024 or the year ended December 31, 2023.

The carrying amounts of the Company’s financial assets and liabilities, including cash, restricted cash, deposits, accounts payable, accrued liabilities and certain notes payable approximate fair value because of their short-term nature or contractually defined value.

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Conversions of notes to Class A Common Stock — ( 17,240 )

Balance as of March 31, 2024

Balance as of June 30, 2024

$ 301 $ 74,403

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Diluted net loss per share attributable to common stockholders adjusts the basic net loss per share attributable to common stockholders and the weighted-average number of shares issued for potentially dilutive instruments.

The net loss per common share was the same for the Class A Common Stock and Class B Common Stock because they are entitled to the same liquidation and dividend rights and are therefore combined in the Company’s Unaudited Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited).

Because the Company reported net losses for all periods presented, all potentially dilutive Common Stock equivalents were determined to be antidilutive for those periods and have been excluded from the calculation of net loss per share.

Faraday Future Intelligent Electric Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

Consolidated Statements of Operations and Comprehensive Loss.

The following table presents the potentially dilutive shares that were excluded from the computation of diluted net loss per share of Common Stock attributable to Common Stock stockholders because their effect was anti-dilutive:

Three Months Ended

June 30, Six Months Ended

2024 2023 2024 2023

Shares issuable upon conversion of SPA Notes and settlement of make-whole provisions 172,138,338 1,299,801 172,138,338 1,299,801

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Other than as described below, the Company did not identify any subsequent events that would have required adjustment or disclosure in the Unaudited Condensed Consolidated Financial Statements.

The Company is generally required to maintain certain insurance coverage that, as of and subsequent to March 31, 2024, lapsed due to lack of payment.

On May 17, 2024, FF Adventures SPV XVIII LLC (the “Buyer”), a third-party investment firm affiliated with ATW Partners, LLC, purchased $ 11.9 million of Unsecured SPA Notes from Streeterville.

In connection with the purchase and sale, Streeterville assigned and transferred all rights, title and interest to the Buyer clear of any lien, claim, or encumbrance.

The Company is generally required to maintain certain insurance coverage that, as of and subsequent to June 30, 2024, lapsed due to lack of payment.

Subsequent Unsecured Convertible Notes

Subsequent to March 31, 2024, the Company issued unsecured convertible notes to a third party totaling $ 12.3 million with due dates ranging from July 8, 2024 through October 27, 2024 at 4.27 % interest.

Of this amount, $ 1.4 million is in default due to non-payment, as of the date of issuance of these Unaudited Condensed Consolidated Financial Statements.

Subsequent to June 30, 2024, the Company issued Unsecured Convertible Notes to a third party totaling $ 3.3 million with due dates ranging from October 1, 2024 through October 27, 2024 at 4.27 % interest.

Principal and accrued interest are convertible at the option of the third party into either (a) Common Stock of the Company at a conversion price per share equal to the closing stock price on the trading day immediately prior to the day on which the lender provides a conversion notice or (b) unsecured convertible notes of the Company pursuant to the terms contained in the Unsecured SPA.

On August 2, 2024, Senyun exercised its right to convert the outstanding balance of its Unsecured Convertible Notes into Unsecured SPA Notes pursuant to terms contained in the Unsecured Convertible Notes.

Senyun converted its outstanding principal balance of $ 19.9 million into $ 21.1 million Unsecured SPA Notes.

Subsequent SPA Activity

Subsequent to March 31, 2024, the Company received additional funding through additional SPA Notes totaling $ 6.5 million in aggregate principal amount.

Subsequent to June 30, 2024, the Company received additional funding through additional SPA Notes totaling $ 23.4 million in aggregate principal amount.

In addition, $ 8.8 million of principal and $ 1.6 million of interest of SPA Notes was converted into 46.2 million shares of Class A Common Stock.

Subsequent Waiver Agreement

On August 2, 2024, the Company entered into that certain Waiver Agreement (the “Waiver Agreement”) with certain investors (each, a “Holder” and, collectively, the “Holders”), who (a) beneficially own and hold one or more of the following securities of the Company:

(i) certain secured convertible notes of the Company (including any secured convertible notes issued in exchange therefor, collectively, the “Original Secured Notes”) that were issued pursuant to the Secured SPA, and (ii) certain unsecured convertible notes of the Company (including any unsecured convertible notes issued in exchange therefore,

Faraday Future Intelligent Electric Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

collectively, the “Original Unsecured Notes”, and together with the Original Secured Notes, the “Original Notes”) that were issued pursuant to the Unsecured SPA and (b) have the right to acquire one or more of:

(i) certain additional secured convertible notes issuable in accordance with the terms to the Secured SPA Notes and (ii) certain additional unsecured convertible notes (the “Additional Unsecured Notes”, and together with the Additional Secured Notes, the “Additional Notes”, and together with the Original Notes, the “Updated SPA Notes”), issuable pursuant to the Unsecured SPA.

Prior to the Waiver Agreement, the Company had certain obligations under the Updated SPA Notes to pay accrued and unpaid interest and a Make-Whole Amount in cash in connection with conversions of such Updated SPA Notes.

In an effort to reduce the Company’s ongoing cash obligations pursuant to such Updated SPA Notes and to encourage the continued conversion of the Updated SPA Notes into shares of Common Stock, the Company has agreed to make certain voluntary adjustments to the Updated SPA Notes as described below.

Pursuant to the Waiver Agreement, the Company irrevocably agreed that with respect to each conversion of any Updated SPA Note on or after the effective date of the Waiver Agreement, if the Holder delivers a conversion notice (the “Notice of Conversion”) to the Company at a time that 90 % of the VWAP (as defined in the SPA Notes) of the Company’s common stock as of the trading day ended immediately prior to the time at which such Notice of Conversion is delivered to the Company (each, an “Adjustment Price”) is less than the conversion price then in effect pursuant to the applicable Updated SPA Note (the “Updated Conversion Price”), the Company shall voluntary reduce the Updated Conversion Price solely with respect to such portion of such Updated SPA Note to be converted in accordance with such Notice of Conversion (and not with respect to any other portion of such Updated SPA Note) to such Adjustment Price (the “Voluntary Adjustment”).

The Company also agreed, in exchange for the Holder’s waiver of any accrued and unpaid interest (if any, as of such conversion date) (an “Interim Interest Waiver”) with respect to such aggregate principal of such SPA Note to be converted pursuant to such applicable Notice of Conversion (the “Full Voluntary Adjustment”), to (i) further reduce such Adjustment Price in respect of a Voluntary Adjustment (as adjusted, each a “Full Adjustment Price”);

and (ii) issue a number of shares of the Company’s common stock to the Holder such that the aggregate number of shares of common stock to be issued to the Holder in such conversion at such Full Adjustment Price equals the quotient of (x) the sum of (i) such aggregate principal of such SPA Note to be converted pursuant to such applicable Notice of Conversion and (ii) any accrued and unpaid interest thereon, divided by (y) such Adjustment Price prior to any Interim Interest Waiver.

Such Full Voluntary Adjustment shall be applicable until the fifth (5th) business day after the Company delivers written notice to the Holder electing to revoke such election.

Pursuant to the Waiver Agreement, the Holder irrevocably agreed that instead of receiving the accrued and unpaid interest, each holder of any such applicable Updated SPA Note shall receive upon conversion of such Updated SPA Note an amount in cash equal to all accrued and unpaid interest on such Updated SPA Note to such date of conversion (or such cash amount shall be deemed satisfied in full without any payment of cash by the Company if the Company effects a Full Voluntary Adjustment with respect to the applicable Notice of Conversion) with respect to the applicable Notice of Conversion.

Further pursuant to the Waiver Agreement, a Holder’s right to purchase any Additional Notes in any agreement with the Company (including, without limitation, the Secured SPA and/or the Unsecured SPA, as applicable) shall be extended until the first (1st) anniversary of the effective date of the Waiver Agreement.

The Company also intends to incorporate the changes in the Waiver Agreement into certain of its other existing notes and notes issuable in the future pursuant to existing purchase agreements, as applicable, through one or more waivers, amendments and/or exchange agreements, as applicable.

Subsequent Lease and Other

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In addition, after the 19 th month, F&F may terminate the lease under certain conditions and upon payment of certain fees.

Faraday Future Intelligent Electric Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

Under the Master Lease, F&F retains title to the Equipment, granting Utica a first priority security interest therein.

The Master Lease contains customary representations and warranties, covenants relating to the use and maintenance of the Equipment, indemnification and events of default, including payment defaults, breach of representations and warranties, covenant defaults, cross-defaults, and certain bankruptcy and insolvency events, customary for leases of this nature.

The Master Lease further grants to Utica certain remedies upon a default, including the right to cancel the Master Lease, to accelerate all rent payments for the remainder of the term of the Master Lease, to recover liquidated damages, or to repossess and re-lease, sell or otherwise dispose of the Equipment.

Faraday Future Intelligent Electric Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

Lease further grants to Utica certain remedies upon a default, including the right to cancel the Master Lease, to accelerate all rent payments for the remainder of the term of the Master Lease, to recover liquidated damages, or to repossess and re-lease, sell or otherwise dispose of the Equipment.

The Master Lease and all related arrangements are guaranteed by the Company under a Master Lease Guaranty (the “Guaranty”).

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements